How do I convince my partner we can retire early?

Today’s question comes from Christina. She asks:

I’m trying to get my partner on board with the idea that we can DO this. We live in different states — I make 57k, he makes nearly 100k. I’m 37 years old, he’s 35.

My net worth is only about 80k at this point, but I’ve only been in the workforce for going on 4 years (I spent my 20s making serious financial mistakes, and then 6 years of grad school earning my doctorate). He’s a lawyer and just wrote a check for 100k to pay off his loan.

When I began working in 2014, my net worth was in the negative — by 20k or so. Getting to 80k in 3 years ain’t too shabby!

So, 35% of my take home goes to retirement, and I probably save — all together — very nearly 50% of my take home pay. He saves a substantial amount as well. Maybe not 50%, but I’d call it nearly 40%. He invests for retirement, but only saves for his liquid (I’m trying to get him to invest the rest, as you put it, because savings account do nothing other than depreciate your net worth. I think I’m coming close to convincing him).

The way I see it, I think we can — together — be financially secure and able to reconsider working by the time I’m 45 (that is, if we pool our savings / investments). He is skeptical, and “wants to do more research”. The problem is, for every guy like you, there are a million who say this can’t be done — and in his “research” he’s going to find those guys first.

I’m not saying I’ll be a millionaire, but I do not need a million to survive. My living expenses are between 22k and 25k per year, including rent. His are about the same.

Do you have favorite posts, or favorite resources that I might send his way, that will do a better job to get him on board with the idea that we might be able to be financially free in about 7 years?

I think knowing that you are communicative and that the resources came hand-picked and delivered by you personally will help my cause. I have been up and down your site, but am wondering as to what you see as the absolute top writings on this topic — the topic of getting someone skeptical on board.

Together you make $150,000 but you’re only spending $50,000, so any fifth-grader on the planet can tell you you’re saving $100,000.

You’re really good at living below your means, and anyone who lives below their means as good as you can retire early.

Because if you get really good at living below your means you get a double win.

First, every dollar you save is a dollar you can invest, and that causes your investments to grow faster.

Meanwhile every dollar you invest decreases your spending, so you need less in your investment account to support your standard of living.

Make sense?

Think about it like this. If you make $150,000 and spend $150,000 then, well, you’re one paycheck away from living on the street.

If you make $150,000 but spend $100,000 then you need $2.5 million to support your standard of living. Getting to $2.5 million takes about 20 years.

But spend just $50,000 and the amount you need gets slashed to $1.25 million. That takes just 8 years.

Like I always say, it’s all about the relationship between your numbers.

And there’s plenty of people who have done this sort of thing.

Heck, Benjamin Franklin officially retired at 42. Then he got involved with science, politics, and public affairs.

More recently you have Paul and Vickie Terhorst who retired at 35. In 1988 they published Cashing In On the American Dream: How to Retire at 35. One of Mark Cuban’s favorite books.

Or take Joe Dominguez who retired at the age of 31. He and Vicki Robin published Your Money or Your Life in 1992 — the book that changed my life.

So I can sit here and give you example after example, but I’m not sure how that helps you if your partner doesn’t buy it.

What I think you need to tell him is if he wants any chance of retiring, and we’re not even talking early retirement, then he needs to invest.

The longer he waits the harder it will be, and I know this because people I coach who have tens or hundreds of thousands in cash are too afraid to invest it. They let the number get too big.

Additionally, the whole premise of retirement is based on the fact your money is invested while you skim what you need off the top.

Pretend you have $1.25 million in cash when you retire.

That means you can withdraw $50,000 for 25 years and then it’s gone. Have that money invested and you can withdraw $50,000 a year, adjust for inflation, and never run out.

It’s nuts not to invest.

So if all that makes sense, forget about convincing him you can retire early and just convince him to start investing.

He needs to see how it works, and the only way to see how it works is to experience it, and the only way to experience it is to do it.

Once he sees how money compounds he’ll realize that’s what early retirement is. That you don’t have to work for money because your money is working for you.