Home > The Master Plan > An Actual Recipe for Grandeur

An Actual Recipe for Grandeur


They say we only use about 10% of our brain.  Have you ever wondered what might happen if you could access 100%?  What if you had a plan attain Financial Independence in your 30’s?

Limitless was a semi-successful thriller about a guy who finds a drug that allows him to learn instantly and recall anything he’s ever seen whenever he needs it.  Turns out, he’s able to do some incredible shit and eventually runs for president to try to save the world…

Most people tell me that I’m nuts when I talk about my goal of retiring in my 30’s (I’m 24 now).  They tell me they didn’t do it, they’ve never seen anyone do it, and therefor, it can’t be done.  I believe the possibilities are truly limitless when I set my mind to something.  So here is how I’m going to do it.

Early Retirement

Over the past two years, I’ve committed myself to a goal of figuring out how to retire in my 30’s.  It’s not that I dislike my job.  I love it and I hope that I’m able to do it for as long as I choose.  I just figured that if I’m making all this money, I might as well do something useful with it, like buy my financial freedom.

After months and months for diligent research, I’ve got my plan.  I tried to make conservative assumptions, and I”m sure I’ll be way off on a few pieces, but it’s starting to look more and more realistic as time goes on.

My favorite quote from the movie Limitless is “I don’t have delusions of grandeur. I have an actual recipe for grandeur.”  So here it is…

My Recipe for Grandeur

Here are my known quantities.

And here are my assumptions.  I tried to make the conservative, but who knows.

  • Effective Tax Rate: 25% (This should get me in the ballpark)
  • Annual Raise: 3% (I’m assuming I’ll average out to 3%, so far the average would be 4%)
  • Emergency fund Return: .95% annual
  • Mutual Fund Return: 5% annual
  • Expected retirement contributions from my employer
  • Working for 14 years (until I’m 37)
  • $0 income after retirement (I’m sure I’ll still do something, this is just being conservative)

My model is much more complicated than these inputs, but this should give you a good idea of the basics.  Check out the chart that my model spits out.

My Recipe For Grandeur

The Results

Obviously my Net Worth is going to grow differently than this.  Of course the stock market doesn’t return exactly 5% each year, but this should capture the general trend.  There are a few points I’d like to make about this chart.

  • Even though this model has me working for 14 years, I’ll start to throw off enough passive income to cover all my expenses as in 11 years.
  • This is a very conservative model, so if I can increase my average annual raise by more than 3%, the number of working years should decrease
  • Everything will change if I end up meeting a woman, get married and have some kids.  Expenses might go up dramatically, but income might also go up dramatically.  I have no idea how this might turn out.
  • When I throw in the model of an unanticipated windfall into the model, it decreases the number of years I’ll have to work.  I’m an optimist so you never know!

Anything can happen over the course of a decade, but we’ll see if how my recipe for grandeur works out.  Let me know what you think?

  1. Canadian Performer's Money
    January 7, 2013 at 1:32 PM

    I admire your focus. Wish I was as focused at a young age.

    I put your numbers in an online calculator and got about half the number you got. Wondering how you got your figure?

    If you make $50k and spend $23k that leaves you with roughly $20k to invest after paying 25% to taxes. $20k invested = $1,666 per month, compounded over 14 years at 5% = $488,000 (before inflation) not the $900k you have listed.

    What math did you use?

    • January 7, 2013 at 7:01 PM

      You make a great point. I think there are two factors that I may have failed to mention in my post.

      I am anticipating a 3% raise each year – which may be a little too aggressive, but we’ll see.

      I also have an extremely generous profit sharing retirement plan at work. After I’m vested I get about 17% of my salary deposited into my retirement account each year.

      When I eliminate those perks from my model, it yields pretty much what you just gave me. That’s actually why I felt like I needed to build my own model, because my retirement account doesn’t look like most people’s.

    • Canadian Performer's Money
      January 7, 2013 at 9:45 PM

      Man… 24 and making $50k a year and investing half. You make me jealous. When I was 24 I was earning $20k a year and spending $10k a year on beer and women (the rest I just wasted).

      But how are you able to work so hard and invest so much when the system is rigged for the 1% and nobody else has a chance? 🙂

      • January 8, 2013 at 6:03 AM

        Well thanks for the compliment. haha, I like to think that we’ve all got a shot if we really put our minds to it!

  2. January 7, 2013 at 2:01 PM

    Do you own or rent? I have always considered renting a bit of a waste. Ok to rent at your young age but where is there money in the budget for a future home?

    It is great that someone your age actually has a plan.

    • January 7, 2013 at 7:23 PM

      That’s a great point. Here’s what I’m thinking. I am currently renting because I’d like to move cities within the next 4 years, so I plan on renting for the foreseeable future.

      By the time I am ready to buy a house, I’m hoping I can buy a small fixer-upper with a small mortgage that will take the place of rent in my budget. Hopefully at that point a $40K-60K down payment wouldn’t set me back too many years.

      What do you think?

      • Canadian Performer's Money
        January 7, 2013 at 9:48 PM

        There’s no rush to buy. Ask those smart home owners who bought homes in 2008 how that turned out for them. Or read this blog from “the small investor”


      • January 8, 2013 at 7:00 AM

        That’s a great article. While I will say that having mortgage payments may be a good way for less financially inclined folks to save, there are better investment vehicles if you do your homework. And for me, renting is a win on all fronts. I have no maintenance work, no worries about losing value, and I can up and leave when my lease is up if I choose. Thanks for the recommendation!

      • Canadian Performer's Money
        January 8, 2013 at 9:29 AM

        I think you are smart enough to crunch the number which most people don’t do. Just don’t listen to anyone over 40 that keeps repeating “your home is your best investment, your home is your best investment… ” no matter what is going on in the financial world. 🙂

  3. January 8, 2013 at 12:04 AM

    “Recipe for grandeur” . love it!

  4. Sweta
    January 8, 2013 at 10:18 AM

    Non sequitor, but I just wanted to say I read your case study on MMM a while ago. That was one of my favorite posts. I think you did a great job making all those changes after reading his blog.

    • January 8, 2013 at 8:23 PM

      Well thank you! I’ve honestly never had anyone or anything change my life as randomly stumbling onto mrmoneymustache.com.

      I only only started blogging after I was encouraged by the comments on the post. I can’t say all the stuff I write is completely unique or groundbreaking, just an honest account of my journey, which seems to be good enough.

  5. Sweta
    January 8, 2013 at 9:20 PM

    I hope this question isn’t too personal but I was just wondering if you’re dating anyone and how you combine being frugal with dating?

    • January 8, 2013 at 10:02 PM

      Well my only experience with frugal dating was this past summer when I dated an actress. I had just started my frugal streak and she didn’t have much money to begin with. We did stuff like walking through the park, went to a forest preserve, and volunteering with Habitat for Humanity together… Although I don’t know if I’d take my advice on the matter because I am single at the moment.

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