How I Retired at 33 | Starting From $0

This year at 33 years of age both I and my wife retired from the workforce completely and we did it without rich parents, a trust fund, or that whole fire movement where you live off ramen noodles in a barn that you bought for $60,000 in the middle of nowhere. No, our retirement has been awesome. We have multiple dream homes around the world, we travel when we want, we eat at the world's best restaurants, we basically do what we want when we want. So in this video I want to share my story of how we got here at such a young age. how we spend our time now that we're retired, and at the end of the video, I'll walk through how we built our infinite money machine that literally just prints money 24-7 while we travel. So if you want to retire early, you first have to understand the mechanics of how early retirement is actually possible. You see, since I was 17, early retirement has been one of my dreams, and I had previously tried to get there with passive income. I thought, you know, if I can just get to a certain income level... that supports my lifestyle, that gives me all the dreams and hopes that I wanted, then I'll be good. And when I was 22, that dream actually came true. I built a business up to about $1,000 a day and I was living in Japan and Thailand. I did some time in China, India. I thought I'd made it. But around three months into this amazing passive income lifestyle, it all grinded to a halt. And I ended up going from $1,000 a day to $0 a day. Because what I learned the hard way is passive income can exist, but only in short windows of time. What usually happens is you tap into some unmet need, some niche, you build a business there. But of course, your competitors want to take that market. They want to enter into the space that you're operating in. And so if you just sit back and enjoy your passive income, it's not really retirement. It's just a couple of months if you're lucky. So to actually retire early properly, you need to build a money machine. This is essentially a portfolio of various assets like real estate. stocks, bonds that throw off enough income for you to support your lifestyle without ever having to work. The typical rule of thumb for early retirement is 4%, meaning you can withdraw 4% of your portfolio every year and live forever. But in practice, this doesn't actually work that well and later in this video I'll cover why, but the general idea is that you can build a portfolio and withdraw a certain percent of it every year to live off for the rest of your life. Now, when I was setting my goals, I didn't know about the 4% rule or the more correct rule that I'll get to later. So I set a 6% goal. My idea was I'm going to make 6% returns and I will live off that for the rest of my life. With that in mind, I took a step back and I said, okay, well, what does my dream life actually look like? And I got really specific. What cars do I drive? Do I have multiple cars? Where do I store them? What house do I live in? Do I have multiple houses? Are they penthouse apartments? Are they mansion estates? I listed it all out. How many trips do I go on? You name it. And I built basically a spreadsheet of showing everything I wanted and how much it would cost me. And I didn't settle in this process. Like, one of the things that drives me nuts with these like financial independence retire early movements is they want you to settle on ramen noodles and this like cheap lifestyle. No, I went big. For God's sake, live a little. So when I ended everything up that I wanted in life, it looked like it would cost me about $300,000 a year to support that lifestyle. Of course, this was before I got married. I hadn't... quite yet experienced the true depths of how expensive life can be. But with my $300,000 goal and a 6% withdrawal rate, the math works out to a $5 million portfolio. So with this $5 million goal set, I became obsessed. I needed to find a way to make $5 million and I wanted to do it as quick as possible. Life is ticking by and I didn't just want to retire when I was 65. However, I had a big problem. My businesses at their peak had only generated low six figures and after expenses and taxes and everything else I could only save forty fifty thousand dollars a year which meant it would take me a hundred years to reach my goal. So I started looking for better ways. You know one of the keys that you can apply to your life is whenever you want something you often just need to look at the evidence trail left behind from other people that have done the same. They will leave you clues on what you can do as well. It's kind of like a recipe. I may not be able to bake the world's most amazing cake, but if you give me the recipe from the world's greatest cake baker, I can bake you something that's at least a little bit close as long as I follow the same steps, same ingredients, same timing, you name it. And so the recipe I was looking for was I wanted to see young people getting rich. I wanted to find these stories. And the more I read about it, the more I saw Silicon Valley seems to be the place that... Something is going on. The year was 2014 when I was doing this research and at the time Instagram had just made headlines for selling for a billion dollars and the founders were young. And then you had Snapchat turned down four billion dollars. Again, super young guys. And then WhatsApp gets acquired for 16 billion dollars. And you could be an idiot, but you can still see a pattern here. Somehow out in Silicon Valley, there are these young guys making billions of dollars. in their 20s. And I'd read all the books, you know, Think and Grow Rich and so on, and so I knew I needed to get around these people. Environment matters so much. So I packed my stuff and got out to San Francisco as fast as I could. I literally moved there so fast, I still had an apartment in South Carolina where I was living at the time, and I still had a car there. I was paying double rent the first four months, but I knew I needed to be in the place where people were making this happen. So I landed in San Francisco and the next big question was, okay, what business do I start? I had my goal of five million dollars and I just wanted to find what is the fastest way to get there from a business model perspective. So again, I started looking at clues, seeing what have other people done and what started to emerge was this idea of building a software company. Now I had no experience building software companies, I'd never built a software company before, but I realized that if you build something in a old unsexy market and build software that actually helps them with their job that makes their life easier, you get a couple big benefits. First, there's lower competition. You're not trying to build the next Snapchat, the next Facebook. You're building something in a market that is sort of untapped or ignored by other entrepreneurs. The second is there's very low luck involved. You don't need to go viral. You don't need to have some amazing New York Times feature. You just sell your software to these business owners and get them to use it. And the last is high exit multiples. If you want to sell a business for $5 million and it's a e-commerce business, you might have to be doing $7-8 million in annual sales just to get that $5 million payout. Or if you want to sell an agency, again, you need to be doing $5-10 million. But in a software business, you could be doing $300,000, $500,000 a year in revenue and actually sell it for more than $5 million. It has what's known as a very large exit multiple, which basically just means the amount you can sell the company for is many, many multiples of your actual revenue. So with that in mind, I picked a market. Mine was car dealerships. You know, car dealerships in the US sell over a trillion dollars of cars sold every year, but it's still one of the most painful consumer experiences. So I figured if I can build something that actually makes that better for people, makes them enjoy buying. the cars, then I can build a real business here. And I don't want to glamorize the journey. Listen, it was really hard. I built that business for six years and there were so many lows where I just wanted to quit. But one of the things that kept me going is I had on my wall all those dreams that I had set out to achieve when I first moved to Silicon Valley. I had the cars I wanted, I had the homes I wanted, I had the net worth figure that I was aiming for. And in those low moments, I would just look at that and say, okay, I can do this another day. I know that the pain today will be worth the payout that I'm going to get in the future. And after six years we ultimately sold that business for $110 million. However, wait just a second if you think I just sold the company and now slowly draw down my earnings. I actually haven't touched a single dollar from the sale of the company for my lifestyle. And the reason being, if I just took the money that I got when I sold the company and just drew it down over time and lived off of that, I'd have a great life for quite a while but I'm young. I was 31 when I sold the company. And so eventually if I live to be 80, 90, 100, I will run out of money. That's kind of the worst case scenario. You retire early when you could still be working and then you run out of money when you actually can't work anymore. That's the last thing I wanted to happen. So this brings me back to the concept I mentioned earlier, which is building an infinite money machine. I wanted something that whether the markets were good, the markets were bad, inflation was high, inflation was low. It printed money for me so I could literally enjoy my life and not worry about what the markets are doing, what the latest headlines are. So I went on this massive journey to figure out how to rich people actually invest. I read tons and tons of books. I actually interviewed 15 of the world's top financial advisors, the guys that manage billions and billions of dollars and had each of them build a custom portfolio just for me, as well as interviewing, you know, friends that were millionaires, decamillionaires, even a couple of billionaires who shared their portfolios with me, showed me exactly how they invest. And here's what I've learned. There are three ways to build a money machine that makes you money in retirement. First is how much of the value of that portfolio grow by the end of each year. And then second is that value. How much did you actually get to take for yourself after taxes and taxes matters a lot when you're living off your portfolio because different assets and different income is taxed at different rates. So the first way to do it is actually to sell assets out of your portfolio and just live off those sales. The positive to this approach is it's basically the simplest. Every year you look at how much money you need, you sell some of the portfolio and you live off of it. It's also very tax efficient. Almost every country has what's called a capital gain tax. And the capital gain tax is basically a tax on the value that your portfolio has gained when you sell it. The capital gain tax is often much lower than ordinary income. So people that are actually working for a living pay usually double taxes of what you might be if you're selling your portfolio. However, this method has a huge drawback. because markets are not steady, they go up and down. Some years you might sell high, but some years you might sell low because you still need to sell assets no matter how the market is doing to afford your lifestyle. And so if you rely on this method and you retire early and you just have a string of bad years in the market, you could actually have to go back to work because you've sold too many assets in a low period. So a second and common approach is to build a portfolio that actually generates income without selling. These could be dividends. These could be bonds. There's lots of different ways to do this. But the benefit is you don't have to sell anything. Market goes up, market goes down. You're still getting paid. However, it's not very tax efficient because much of the income that you will make from dividends, from bonds and things like that are ordinary incomes. You're taxed twice as high from this method as just selling your assets. But there are some ways to mitigate this. In the US, there are what's called qualified dividends. Qualified dividends actually change your tax basis so that rather than being taxed as ordinary income, it's taxed as a capital gain, even though it's actually ordinary income. This can lower your tax bill by 50% or more, which ultimately just means you have more money to spend. You can retire earlier and enjoy more of life. The third way, and this is usually a way reserved for the ultra high net worth clients of the world, is to take what's called a margin loan. This basically means rather than selling your assets, you borrow against the value of your assets. And when interest rates are low, this is actually extremely favorable. You're usually borrowing at rates of like 1% or 2%. And because you're taking a loan, there are no taxes. People do not pay taxes as loans, even if they look like income. and as an extra benefit, you're not only not paying taxes when it comes in, but the interest that you pay back sometimes is tax deductible. So literally you're borrowing money, not paying taxes on it, and then you're getting a tax deduction by getting that income. It sounds like a win-win, but there's a huge risk, which is what's known as a margin call. A margin call happens when the value of the assets that you have borrowed against drops too much. If you have the S&P 500 and it drops 50%, your loan is still the same loan amount. But because your portfolio has dropped so much, now you might actually be borrowing more than your portfolio is worth. And so the bank will freeze your assets. They will call you up and say you have to repay it immediately. And this is actually one of the ways that you see billionaires go bankrupt. It's one of the few ways you can lose all of your money. So as a rule of thumb, I don't do margin. I have very few rules in life, but one is I will never get margin called. So with all this in mind, we decided we wanted to live a little bit off of selling the assets that we own, but mostly off of the income from our assets. It just feels safer. It's not so market dependent. Markets go up, markets go down. I don't want to worry about that stuff. And to make things safer, we use closer to a 3% withdrawal rate. So we're living off of about 3% of the portfolio value. Now, the exact portfolio construction that I use to make sure that we never run out of money and just live off the income for the rest of our lives is roughly 70% in globally diversified ETFs. These are index funds in the S&P 500, in emerging markets, in developed nations, things like that. After that, 20% is in real estate funds. These are multifamily homes, apartment complexes, grocery stores, like kind of a healthy mix of different types of real estate in the real estate asset class. And those pay pretty good income. And then the remaining 10% is in what's called fixed income. Fixed income vehicles are things that pay you either monthly, quarterly, or yearly, but their whole point is just designed to generate income. For us, that mostly means bonds and debt funds. Debt funds are where we lend money to people and they lend it out and pay us some of that income. So it's a way to... sort of be a lender without actually having to run a lending firm yourself. Now, because 70% of our portfolio is already in public equities, aka stocks, these stocks generally pay 2% to 3% dividends every year. So we're almost making all of our income just off the dividends. And then the real estate and the fixed income just supplements a little bit. And if one year we need a little bit more money or we need some extra cash, then we can sell these public equities. But Typically, we don't plan on touching them. We're just living off the dividends and income from the portfolio. Now, once we had our money machine in place, we had to decide, okay, how do we want to spend it? And this is where it gets really cool. For every dollar I spend, I get about three to four times more value than the average person. And this is because of a concept called lifestyle arbitrage. Tim Ferriss probably summarized it best when he said, earn in dollars, spend in pesos. And I actually first encountered this magic on my trip to Asia. You know, I was living in Dallas at the time and my lease had come up. So I got the renewal paperwork and they were bumping my rent and I looked and I said, this is kind of expensive. I'd always wanted to go to Asia. I hadn't really traveled as a kid. So I said, what if I just went to Asia? How much more would it cost me? And to my surprise, it was actually cheaper. with flights to fly to Thailand for two months and Japan for a month, renting awesome hotels and going on such cool adventures than literally just to live in my apartment in Dallas. So when we decided to retire this year, we said, okay, let's still live in world-class cities. Like that's really important to us, but let's also live in places where our dollar just goes farther, where we're getting more value for our money. It's like, why would you pay $5 for a water bottle when you could get the same water bottle next door for 50 cents? I just want to go where there's good value and where I enjoy life. So to figure this all out, we used a website called Numbeo, N-U-M-B-E-O.com. And what I love about this website is you can look at all sorts of things on every city in the world. So you can look at like what's the safest cities, what's the weather like, what's the cost of living like, and you know, it breaks these things down very granular. It allows you to really see what lifestyle you could achieve if you live in these different cities. And while we were doing all this research, we were still living right downtown in Manhattan, New York City. And while it was great, the prices were just a little... it didn't make sense to us. And so going through our research, we stumbled on a few things. First, we wanted to live somewhere with great weather year-round, but that kind of didn't exist. And so what we actually decided is, why don't we get a home in Europe where we can spend our summers, and then a home in Asia where we can spend our winters. It's warmer there, and so kind of have this moderate temperature year-round. And after lots of research and checking out different spots, we ultimately settled on London and Taipei. And I know they're not cheap cities. London in particular is one of the world's most expensive cities. But again, just go on Numbeo and you will see New York rents are 45% higher than London rents and 405% higher than Taipei rents. So we can have these amazing, beautiful homes in the most expensive neighborhoods in London and Taipei and actually pay less than we were paying for a much smaller home in New York. And this lifestyle arbitrage also pays for other things. You know, dining out is cheaper, going on vacations is cheaper. If I want to go on a trip to Spain, it's like a hundred bucks for me to fly there round trip. And so just by living in these cities, we actually save a ton of money and get world-class lifestyles. Now, my biggest fear of retiring early was that I would just sit around and kind of waste away doing nothing. You know, you see these studies in retirement, people spend an average of four and a half hours watching TV. They lose purpose, they lose motivation, they kind of just give up on life. fidgeting around until death finds them. So I knew I wanted a retirement that actually filled my life with passion and joy. The best advice I got on this was to quit to something. Don't just quit to sit around doing nothing. And so after some soul searching and you know trying to figure out what's next, I ultimately quit to this, YouTube. I love making YouTube videos now. It's my passion. It's like I'm not doing it for the money. In fact, I literally lose money every month by making these videos because I have a full-time editor and all this gear. But it's just something I love. It's something that I can do part-time, fill my time up, and just have tons of fun. Outside of that, I'm much more social. I will usually see friends four or five times a week. I've also been getting into shape. I used to hit the gym, you know, once or twice a week. Now, five times a week, I'm in there doing an awesome full workout, chill in the sauna, think about life. It's a much more, not relaxed pace of life, but more deliberate. You can actually savor and enjoy moments. And on top of that, I'm getting to, you know, engage in passions and learn all sorts of new hobbies. I've gotten into racing cars. I'm learning Chinese. I'm going to pick up piano again. All these things that I never had time for when I had this full-time job that was really filling my calendars. I now have time to savor the best parts of life. And then of course, maybe my favorite thing is the fact that we travel a lot. Like we spend at least four to five months a year traveling, going on different trips, trying different restaurants, different cultures, really just, you know, seeing what's out there in the world. And I have to say, like, this is one of those lifestyles, one of those things that I had put on the wall that I had dreamed about for so long, and it still feels surreal to be living it. Like I... I can't believe this is actually my life. It feels so strange to be talking about it on camera, to be explaining it. But listen, I'm not special. Like I didn't grow up with amazing grades or I wasn't that smart in school. I just really had a focus and a determination to make this a reality and I did it. So, you know, my thing for you is if you're watching this video and this inspires you, I just want to say like you can do it. I believe in you and you have me on your side. Like I'm dedicating so much actual money and losing money making videos like this to help people like you. So, you know, watch these, take in the lessons and apply them to your life. Now, if you want to learn more about my story and how I actually went from zero to $110 million by 31, I also just filmed a video on my own story. I'm gonna put a link over here, click that, and I hope it helps.

Watch this next: https://youtu.be/y5ks4FhoGfQ

If you're new here my name's Michia (Muh-ky-uh). I'm a serial entrepreneur and investor. Since selling my last startup for 9 figures, I'm investing my own money into the next wave of founders at my VC firm, L7V. 

I'm sharing everything I learn here so subscribe and stick around.