The secret to retiring extremely early is not to amass X amount of dollars so you can gradually withdraw it at Y percent like many other guides suggest. What you need to do is have layers of contingency plans like an onion securing your core desire of never having a job again. I say this because very early retirement is not like an old age retirement at all, in many ways you will, and should, continue to work on the projects that interest you. In many instances these projects will be able to net you a significant amount of money. In my “working” life I was a computer programmer, a very common career for those who are able to retire early. Once I stopped working I kept on coding, only for myself this time, which is both much easier and more fun. One of my code projects got my a contract that has been very lucrative in the past year, and that recently ended because of actions out of my control. While I am sad to lose the money it likely won’t change my post-retirement lifestyle at all.
If you are able to retire in your 30s or 20s like me then you already know the great skill of not spending money. Indeed when I was making extra money from my projects I would reinvest it in the stock market. I was able to add extra thousands of dollars to my brokerage. Now, even though I lost that extra money, I can fall back on my diverse portfolio of stocks where I can easily support my lifestyle on a 2% withdrawal rate, about the same as my expected dividend interest. However, that’s still my Plan C. I have many months until my cash reserves get low to work on Plan B, which is to keep working on more of my programming projects. I have many great ideas and it’s likely some of them will be able to generate more income. After already knowing success, I am more motivated to build better and more advanced programs that should work even better!
I feel liberated to use my prime working years to build my own projects *I* care about because I have so much fallback income that it doesn’t greatly matter if I succeed or fail. I’m working for myself and having fun regardless. That’s really the main difference between what people expect early retirement to be like, and what you actually do: Keep working on the things that matter to you. Use the time you’re not working to add more and more sources of income by doing the things you want to do. Eventually you will be so secure in your retirement you will wonder why it took you so long to start living this way.