Early Retirement Case Studies / Scenarios

*work in progress

Early retirement case studies and scenarios

Dont believe me?

Good – question everything you see, read and think about early retirement and financial independence.

But that being said, let’s run a couple of scenarios and case studies to prove my point as numbers are very honest – they don’t lie.

Reference points, based on

  1. 4% withdrawal rate
  2. 25x of annual expenses (20x suffices, invested into a conservative 5% ROI per year post taxes

Case Study / Scenario #1: $3k/month + 35% savings rate + 5% ROI and 20x

Some assumptions:

  1. Assume you earn $3000/month after taxes
  2. Assume you’re able to save 35% of this which is $1050 per month and $12,600 per year
  3. This assumes you’re able to live on $1950/month, per annum = $1,950 x 12 = $23,400
  4. When worked backwards on accumulation target at 25x annual expenses, you need to accumulate $23,400 x 25 = $585,000
  5. Assume you invest this amount into a dividend stock that pays you 5% per year
  6. You reinvest the 5% returns every year

How many years before your annual dividends can match your annual expenses?

In 22 years with 5% ROI reinvested year on year, you’d have $509,423.99.

  • 5% on $509,423.99 = $25,471.19 dividends per year
  • divided by 12 months in a year = $2,122.599 a month

According to this simple case study, you’d be able to retire in 22 years. So if you started at 20 years old, you’d be able to retire at 42 on a very simple calculation.

***

Case Study / Scenario #2: $5k take home + 40% savings rate

Some assumptions:

  1. Assume you earn $5000/month after taxes
  2. Assume you’re able to save 40% of this which is $2000 per month and $24,000 per year
    • this assumes you’re able to live on $3,000/month = $$36,000;
    • when worked backwards on accumulation target at 25x annual expenses, you need to accumulate $36,000 x 25 = $900,000
  3. Assume you invest this amount into a dividend stock that pays you 5% per year
  4. You reinvest the 5% returns every year,

How many years before your annual dividends can match your annual expenses?

In 22 years with 5% ROI reinvested year on year, you’d have $509,423.99.

  • 5% on $509,423.99 = $25,471.19 dividends per year
  • divided by 12 months in a year = $2,122.599 a month

According to this simple case study, you’d be able to retire in 22 years. So if you started at 20 years old, you’d be able to retire at 42 on a very simple calculation.

I didn’t/hadnt even factored income from annual increments, promotions (woohoo!) and side hustles. Add these into the investments and you’d retire waaaaaaay faster and with more capital.

So my idea, as you can see, it isnt powered by hope or magic – it’s direct, and powered by the 8% wonder of the world (compound interest) mixed with less wasteful spending.

Voila, financial freedom at younger age.

Where To Next?


  • Subscribe to my newsletter – no spam and just my best stuff. Unsubscribe anytime.
  • Go to Homepage of nigelchua.com
  • If you like videos, head to All Videos – all the latest (and all) videos are uploaded there.
  • Visit the Blog to read the latest articles and videos. You can see all / my entire list of previous articles here: Archive
  • Head over my Resources page to the products and services I use to improve business, relationships, health and more.
  • Contact me if you like to thank me for helping you in some way (please, always tell me – it’s such emails that I truly look forward to), interview me, ask me to try a product, or media inquiries.
  • If you like my work and want to support me / my cause by giving a tip / donation or choose to buy stuff at my products and tool page – thank you for your support. You keep me going.