How I Plan to Retire from Office Life Before I Turn 35

My plan for early financial independence requires a three-pronged attack on current income, cost controls and passive income. Here's my approach.

If I am going to do this Hustle Escape – and I mean really do this – I’ll need a lot of income fast, but I’ll also need a lot of income later. 

I’ll have to be pragmatic and relentless in my pursuit of immediate income and I’ll have to be frugal in making the most of every slice of that income. But critically I will also need to work to secure sources of longer-term passive income to safeguard my future wealth.

With that in mind, I see the Hustle Escape as dividable into three core pillars, each feeding into my overall vision for 2025. They are all ‘must-win’ battles, but they will require different capabilities and different levels of emotional and physical investment.

#1: Active income: Relentless pursuit of gains in the present

I’ve thought a lot about how I’m going to earn more current income over the next six years and it’s clear that I’m going to need to focus in on ‘Big Wins’. I’ve considered lots of the usual ‘side hustles’ for earning money, but the time-to-reward payoff on many of these activities just isn’t good enough to achieve my ambitious vision.

So you guessed it: I will need to focus in on salary increases and negotiation.

I’m going to have to be ruthless and relentless in salary negotiations ‘in-house’, or otherwise move between jobs elsewhere to sustain the required salary growth. And at the heart of this revamped approach I will adopt a simple principle: always negotiate.

But my core salary won’t be enough on its own. I’ll need to supplement this income growth as I develop some more sustainable sources of passive income. And some of these sources of income are likely to offer current income returns as well as future income gains (but more on that later).

#2: Cost control and debt reduction

Whilst my approach will hopefully have me earning more, I’ll also need to get smarter with my spending. I want to do this without becoming a hermit and without compromising my happiness – that would defeat the whole object of my Hustle Escape.

So I’ll focus on cutting clear non-value add costs, firstly by tackling the quick wins and secondly by pinning down areas where I can change my spending behaviours for longer-term savings gains.

I am aware that this journey will in many ways require a change in my savings mindset, so I’ll embrace the different and expose my spending habits to proper scrutiny. And to facilitate my change in approach, I’ll start a process of proper record keeping and tracking of costs to identify opportunities for savings when the quick wins have dried up.

Alongside this increased focus on costs, paying down my debts is going to be of paramount importance. So I’ll focus in the near-term on using additional income to aggressively overpay on my mortgage, while my income increases in my pay check will also proportionally take greater chunks from my student debt.

While I’ll pay down my mortgage earlier, I’m also cognizant of the opportunity costs of overdoing this. So I’ll weigh up investment opportunities carefully as my periodic mortgage burden reduces.

#3: Passive income: Developing income streams to safeguard future wealth

Perhaps the single most important pillar of this Hustle Escape is passive income. Early ‘retirement’ in 2025 will require stable sources of passive income to compensate for a sudden loss in income from the corporate world. I will need these to be bedded down and reliable income streams by the time I reach 2025.

Some of these sources of passive income, like renting a room to a lodger in my home, should be easy wins, but this is going to be a much longer journey for securing passive income from other sources. I’ll need to think carefully about where to invest my time and money for the best chance of long-term success here and I see my view of these sources of income evolving over the coming years.

Then there is the smaller matter of an actual pension when I reach real retirement age. The salient point here is that I cannot underestimate the importance of investing in my company pension scheme while I am still working.

I will, wherever possible, sacrifice a portion of my salary in order to maximise my employers’ matching percentages on workplace pension schemes. I’d be a fool not to.

Some substantive targets

This is all well and good, but without some solid targets to drive my progress, I’m likely to come unstuck before I’ve even started. So I’ve given lengthy consideration to what I consider to be the key priority areas as I progress towards this target.

Here are the main objectives I’ll pursue as I define my investment, income and savings strategy over the coming years.

  • Student debt eliminated by 2021
  • Mortgage reduced to 30% of property value by 2025
  • A savings rate of 80% until 2021, increasing to 90% thereafter
  • Post-tax income growth of 10% per annum until 2025
  • Total workplace pension balance growth of 25% per annum until 2025
  • Passive income streams that fully cover living expenses by 2025

Granted, some of these targets are a little more clear-cut than others. My passive income goal, in particular, will be a key focus area as I gather momentum towards 2025. But they provide the core basis I need to take me forward.

So what now?

So there you have it: the three pillars of my early financial independence pursuit. I believe that if I can nail these areas, I will nail my plan for early financial independence.

As you’ve seen, under each of these three pillars I have set myself some financial targets. I’ll monitor my performance closely against these goals and I’ll provide an update on how I’m doing against them every so often.

The challenge now is to put this all into practice. With this core structure I can begin to build my approach – and you can too.

Of course, our personal circumstances are all different, but the basic principles of pursuing gains in these areas hold true. Some of you will require a longer timescale and some of you might feel you are in position to achieve this even quicker. The point of a framework and some overarching targets is that with the makings of a plan, you stand a much better chance of doing so.

Here it goes!

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