Advice to My 23 Year Old Friends: The Young Professional’s Strategy for Early Retirement with Mucho Travel

Brandon laying across some chairs in an airport in London, about to go to sleep.

Hey 23 year-old self: Thanks for being willing to sleep in airports to save 32 year-old me some money. You did some good things but you could have done better.

I think a lot of young people come out of college, get a job, and float aimlessly through their 20s, haunted by restlessness and feelings of “what am I doing with my life?” The job is fun and interesting at first, and there are plenty of distracting work parties and weekend getaways with friends. At 23 you’re brimming with energy, but you’re stuck behind a desk for at least 8 hours a day, so you join after-work sports leagues and binge drink on the weekends. Everyone needs the money, so you show up on Mondays and compete with other young professionals for your slice of the pie. But life may begin to feel directionless and a little too open-ended. The vast years sprawled out ahead of you appear like an obstacle course littered with traps and you don’t feel like Indiana Jones, at 23 you feel more like his pudgy sidekick Satipo, bound to step in the wrong place.

Ages 14 to 26 were clear and goal-driven – do well in school, go to college, get a job. Now you’ve done that and you’re comfortable to be working in your chosen career path. You’re putting in serious effort at work and making a name for yourself and are proud of what you have accomplished (as you should be). But there is a grey area ahead. Ages 26-30 are a bit murky. Marriage? Kids? Buying a house? And beyond age 30 the future is a black hole. Forget about imagining your life at 40 and 50 and 60. So what are you working toward? You know for sure that you want to travel. But you’d rather travel while you’re young and healthy. You know you’ll need money and time but you’re unsure of where to get either.

Knowing what I now know, I would have used the reasonable strategy outlined below to ensure my 20s were productive, money-saving years interspersed with an appropriate amount of life-rejuvenating travel.

The First 3-5 Years

Be comfortable with the concept that you are committed to working in your career for at least 3-5 years. You just spent the last four years (or five years in my case) getting a degree and you might as well use it for it’s intended purpose and find out what being a professional is all about. Use these years to learn everything you can about your particular industry. Dedicate large amounts of time to career growth and developing relationships. If possible, find a niche within your industry that you can master. Maintain a detached attitude from your career – do not allow your self-worth or your ego to become intertwined with your job. Be proud of the things you produce. You don’t necessarily have to stick with one company, so if a more interesting or more lucrative offer pops up go for it. However, be aware of company policies regarding retirement accounts, as with some companies you are not fully vested until a few years in.

Choose a career with maximum flexibility. Good options include engineering, construction, nursing, and accounting, among others. Any career that is project-based or seasonal will do. Unless you want to dedicate your 20s and 30s to more school and debt, I’d avoid becoming a doctor or lawyer due to the length of schooling and commitment to your practice that those professions require. If you want freedom and money, avoid getting your Masters or PhD. You’ve spent the last 23 years paying (or not paying, if you’re lucky) for organized education. Dedicate the next 23 years to getting your real-world MBA by working, reading about things that interest you, and participating in life.

Take short, local trips to save money. If you want to be very adventurous you could start your career in another city but be aware of the cost of living and any additional costs that you may occur living so far away from your home base.

Work hard and stay fit. If you feel the need to pursue creative projects do so at your own pace. Don’t feel pressure to create your masterpiece. You’re 23 years old. You have time.

Start tracking your expenses using one of the automated budget tools out there like Mint.com. Pay attention to where your money goes. Automate all recurring bills including credit cards and utility bills so that you never miss a payment. Save a $5k emergency fund in cash, not to be touched for anything but the direst circumstance. Do not buy a brand new car. Do not lease a car. Ride your bike until you can pay for a car with cash or get one with a small loan ($5k-$6k). You can buy a $30k car once you can pay cash for a $30k car. My guess is after you know what it feels like to save $30k you will not want to spend it on a car. Move closer to work if you can’t ride your bike.

Set up a Roth IRA through Vanguard and max it out every year. After 5 years you will have access to the principal contributions tax-free. Make sure you are at least getting the full match from your employer’s 401k. Work toward maxing your 401k. Do not feel entitled to anything. This is the time for you to earn it, to produce, and make money. Consider your 20s to be your peak saving and investing period. Realize that, due to the magic of compounding interest, $10k earned and invested at age 23 is worth far more than $10k earned and invested at age 50. Like $21k more assuming an interest rate of 7%. You can calculate that here.

Dream all you want. Dream every day. Think about all the places you want to go. Research the ones that call out to you. Check out guidebooks at the library. While young, concentrate on the more inexpensive areas like Central America, Southeast Asia and Eastern Europe. You can save the trip to the pricey Galapagos Islands for a time when you’re older and have more money.

Don’t feel the pressure to get married and have kids. Date lots of people and have plenty of healthy, safe sex. Be honest about your intentions.

After 3-5 years, if you are debt-free, take a mini-retirement. Quit your job, sell most of your stuff, cancel the lease to your apartment, book a flight using miles and go vagabonding. Choose one of the more inexpensive areas to travel. Travel slowly and live cheaply. Assume you’ll need about $2k a month cash savings to be comfortable. Choose a trip duration that feels right. Three to six months is an appropriate amount of time for this age. That’s enough time to really let loose and disconnect from the corporate world. If you’ve been doing short local trips and keeping up with friends and family then you won’t feel the need to do much of that during this mini-retirement.

The Next 3-5 Years

Do it all over again. Find another, higher paying job in the city of your choice. Live close to work and start stacking cash. I prefer to keep my investment capital in Index funds due to the more flexible and liquid nature of that investment but you may be more interested in buying property to live in and to rent later. Grow your assets. Take short local trips and dream about your next big move. Continue to learn how to live a simple, fulfilling life.

At this age you may want to start experimenting with side projects that may or may not earn you income. If one of those projects takes off, you may be able to quit and travel again sooner than you think. Only do things that fill you with joy and excitement. That way, if your side project does take off, it’s not a burden to maintain. Read The 4 Hour Work Week. It’s nice to know that if you fail, you’ll most likely still have your stable career to fall back on. By this time you should have many friends within your industry who will know you as a dedicated worker and whom you can reach out to in order to explore other opportunities.

At the end of this five years, if you’ve played your cards right, you should have a healthy nest egg stacked up, lots of contacts and opportunities in your industry, and some side projects to pursue. Take your next big trip. Go wherever you want for as long as you want.

The Rest of the Years

If you’re anything like me, the years after age 30 are an undefined black hole of openness. Ages 18-30 were pretty clear – go to school, get a job, earn and save money. Even as I sit here at the ripe old age of 32 I have trouble envisioning anything for my life beyond the next 6 months. I don’t know if this feeling ever goes away. My Mother tells me to this day that she still does not know what she wants to be when she grows up. In a way I think all adults are just kids that have had a ton of experiences thrown their way and all of us, even the most “successful,” are still just fumbling through this thing trying not to fuck shit up too much.

The silver lining to all of that is that it’s a long life and you don’t have to complete everything before you turn age 30. You’ll still have tons of energy and probably even more money at age 40 and 50 to do all the things you want to do now. So allow yourself to slow down and take your time with it. Just continue to work hard, save money, and follow your dreams.

Since I can’t actually travel back in time and share this advice with my younger self perhaps you know someone that can benefit from this message? Please share!

What advice would you give your younger self? I’d love to hear about it in the comments!

 

  • Very wise advice for young people. As a millennial, gen y, or whatever they call us these days, people like to make you feel bad for wanting a different path than the 40+ year grind until 65, then retire. I think there’s nothing wrong with working your ass off for a few years at a time and save a ton and be able to take mini-retirements in between just to keep your sanity and rejuvenate.

    After only 2 years of working my corporate accounting job out of college, I had that urge to take a break and traveled to Thailand for 3 weeks. I saved diligently and wasn’t worried when I quit without another job lined up. People all around me thought I was crazy, including my parents. Little did they know that I was such a diligent saver that it was nothing if I wanted to take a few months off. I came back, reentered the workforce, and had a higher salary. It’s so freeing to be able to choose the work you want and when you want.

    I think that your advice about saving and investing are spot. It’s unfortunate that they don’t teach this stuff when you are in school.

    Curious…do you have thoughts of starting your own business?

    • Brandon Cronan

      That’s very cool. Congrats on having the cojones and self confidence at such a young age to do something that most people would consider to be a risky move. Regarding starting my own business I’ll say this: I am always looking to create healthy, fun, low-effort, income-generating relationships.

  • Adam Johnson

    Great post! A quick note about the Roth IRA. You don’t have to wait 5 years to touch direct contributions, only funds you rolled over or converted from another IRA. Don’t touch the earnings, but it’s my understanding that you can withdraw the principle any time.

  • uniquename72

    “By this time you should have many friends within your industry”

    This line hints at something that the rest of the post mostly ignores, and the most important part of success, including the author’s: Being good at — and liking — dealing with other people. Most success will be a result of your social network. Yes, you can succeed as an introvert, but most likely not the way this author describes.

    Given the choice I’d spend my life in contact with only a handful of other humans, but (fortunately for me) I’ve become good at faking it. Others will not be so lucky.