I retired at the age of 36 – the two simple rules I followed to get there and it works for everyone
RETIREMENT may sound a long way off if you are just starting out your career, but it's never too soon to start thinking about the golden years.
So says one personal finance expert, who was able to retire at the ripe young age of 36 by following his own two rules.
Jeremy Schneider is the founder of Personal Finance Club.
It's an online forum teaching people how to invest wisely and how Schneider spends most of his time these days.
However, he recently shared his best advice on how to get rich with CNBC: "Live below your means and invest early and often."
He said living by those golden rules, along with being able to sell his first company - a startup called RentLinx - helped him be able to retire in his mid-thirties.
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Schneider told CNBC he had a good foundation when it came to cutting down on expenses.
How he did it
During college he worked side jobs and thanks to help from his parents and scholarship money, he was able to graduate without any student debt.
That's an accomplishment as more than about one in five Americans hold student debt, according to the Washington Post. That's about 45million Americans.
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After graduating, the personal finance expert made a risky decision.
Instead of taking a full-time job offer at Microsoft and get into the grind, he decided he wanted to be his own boss.
He chose to set out on his own as an entrepreneur.
That meant some belt-tightening on his part all through his twenties, he revealed.
He told CNBC he lived a very modest lifestyle, paying himself an annual salary of just $36,000 - well below what he would have made at Microsoft.
At the same time, he followed his parents' advice by continuing to invest as he had done since he was 16 years old - by investing in low-cost index funds inside a Roth IRA.
While those strategies helped him accumulate wealth, it was being able to sell his startup in 2015 - at the tender age of 34 - for $5million, that helped him on the road to retirement
Schneider then put more than $2million into his pocket and continued working at the same company for a short time, before deciding to take a sabbatical.
The self-made millionaire then did what a lot of young millennials do with their down time. He started playing video games and traveling.
He did all that while still making his investments work for him, as he continued to be heavily invested in market-tracking index funds.
That caused his net worth to swell even further.
After a year away, he created the Personal Finance Club, which now as more than 408,000 followers on Instagram.
This is all because he touted his simple two-step plan.
He provides free information on the site.
Everything from investing in index funds to tips on how to pay off your credit card debt are included, and includes comparisons about net worth comparing those who follow his tips and those who don't.
If you're looking to invest, keep in mind that you're not guaranteed to make money and your assets could actually fall in value.
This means it's important to never invest more than you can afford to lose.
How to live below your means
Many financial experts and advisors agree there are simple things you can do to help you stay under budget so you increase your savings:
To get you started, here are eight tips to help you live below your means
- Create a budget - and stick to it
- Track your spending using apps like Budgyt or OnPlan
- Don't rely on credit cards. Experts especially advise making sure you pay off your credit card bill in full every single month
- Cut out unnecessary spending
- Negotiate bills and rates
- Find a second source of income
- Downsize your home or apartment, which will result in substantial annual savings
- Avoid eating out as much as possible
- Cancel unnecessary subscriptions.
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