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Pop Quiz – How Serious Are You About Early Retirement?


Pop Quiz - How Serious Are You About Early Retirement?Let’s have a little fun today about a “serious” topic. I’ve got a pop quiz for you. A quiz is never fun when you’re in school, but this is an easy Cosmopolitan magazine type of quiz. Don’t worry, it will be easy to answer and you can finish in just a few minutes. Besides, wouldn’t it be interesting to see how your score compares with the rest of our readers? Today’s quiz will be – How serious are you about Early Retirement?

You need to keep track of your own score for this quiz. The questions are just TRUE/FALSE. You get a point for every TRUE. Then simply put your score in the poll at the end.

The Basics

1. You know your net worth

It’s important to know your net worth because it can tell you how close you are to early retirement. Generally, your net worth needs to be at least 25x your annual expense before you can consider early retirement. This means you can withdraw 4% of your investment to pay the living expenses. Historically, the retirement portfolio has a very good chance to last over 30 years with the 4% withdrawal rate. Of course, everyone’s situation is different and some people may need more or less.

One easy way to track your net worth is to let Personal Capital* do it for you. I update our net worth on my Excel spreadsheet every month, but I also check my Personal Capital account almost every day to get a quick update.

*Disclosure: We may receive a referral fee if you sign up for a service through the links on this page.

2. You have a Roth IRA

The great thing about the Roth IRA is you won’t have to pay tax on the gain*. Also, it’s an easy way to access your retirement account without having to pay the 10% early withdrawal penalty. You do this by building a Roth IRA ladder. If you’re planning to retire early, then a Roth IRA can be very useful. Here is how to start a Roth IRA in case you don’t have one.

*No tax and no penalty once you’re older than 59 ½. However, your contribution can be withdrawn at anytime with no penalty or 5 years after rolling over from an IRA.

3. You have no consumer debt – car, credit card, etc…

Here is a big one for a lot of people. The average US household owes $17,000 in credit card debt, $30,000 in auto loans, and $50,000 in student loans. That’s a lot of debt. They’ll have to pay interest on all these debts and it’s tough to invest for the future with the drag.  We don’t have any consumer debt and I love it. We don’t have to worry about the car payment or paying down the credit cards. Life is a lot simpler with zero consumer debt.

I think it is okay to have mortgages. The rate is still low and some people prefer to diversify. I don’t want our house to be our most valuable asset because it’s not generating any income. A student loan is probably okay too if you got a good job out of it.

4. You have a “retire by” date

Setting a goal to retire by a certain date or year will help you focus and make it real. I was 36 when I made the goal to retire by 40 and I was able to quit my engineering career 2 years later. Having a goal to shoot for will help motivate you and get you through those tough days. You can always change the date if it’s too aggressive.

More Difficult

5. You have a side hustle or two

It’s important to increase your income at the main job and most of us should focus on that. However, having a side hustle can be very helpful too. The extra income can go straight into an investment account and accelerate your time to early retirement. Another huge benefit is that the side hustle can help pay the bills after retirement from your main career.

I started blogging when I was working full time and didn’t really expect to earn much income. Luckily, Retire by 40 grew and the blog income will help cover a significant portion of our expenses in the years to come. Thanks to my online income, we’ll be able to minimize withdrawal from our retirement accounts after Mrs. RB40 retires.

6. You have passive income

When you first start working, you should focus on increasing your earned income. However, passive income becomes a lot more important when you want to retire early. You really need to focus on passive income because early retirement can last a very long time. You don’t want to erode your principal if you can help it.

If your passive income covers your expenses, then you’re set for early retirement. You don’t have to draw down your principal and you won’t have to worry about money anymore.

For some passive income examples, here is how we’re generating passive income this year.

7. Your investments are worth more than your house

A house is a liability, not an asset. There are a bunch of expenses associated with owning a home. We have to pay the mortgage, insurance, property tax, utilities, maintenance, and all kinds of stuff. It costs a lot of money every year to live in a house. A primary residence is not an asset because we can’t make any income from our house. It’s best to think of a home as shelter and not an investment. Having a house forces people to save and that’s probably the best thing about it. Appreciation is nice, but you can’t count on that.

If you’re serious about early retirement, then your investment should be worth more than your house. People achieve this in different ways. Steve from Think Save Retire lives in an RV and his investment is worth a lot more than his residence. We live in a small condo and invest in stock and rentals. Our investments are also worth much more than our home. Personally, I don’t think it’s wise to have more than 50% of your net worth in home equity. You need to diversify and you can generate income from other investments.

8. You have a post retirement plan – volunteer, etc..

Some people dream of retiring and don’t have a lot of plan after that. This is a mistake because early retirement can last 50+ years. You need to have a post-retirement plan so you won’t be bored or dissatisfied. I planned to become a stay-at-home dad and blogger after I retired and it worked out beautifully. These activities keep me busy and my retirement has been fulfilling. There are a lot of things you can do when you have more time, but I think you need at least one huge long-term project to work on. It’s a mistake to just focus on the retirement date and neglect what comes after.

Advance FIRE

9. You save 50% of your household income

This one is tough! Saving 50% of your income requires special conditions. You’d have to make a lot of money and/or live very frugally. This isn’t possible for a lot of people. However, if you can save 50% of your income, you’ll be able to retire much earlier than an average person. The key here is that you’re spending a lot less than your peer and you won’t need as much to fund your retirement.

For this question, let’s just go with 50% of your take home income (after taxes, health insurance, and other payroll deduction.) If you can save 50% of your household gross income, that’s even better (give yourself an extra point!)

10. You have backup plans

Here is another one about planning for early retirement. “No battle plan survives contact with the enemy.” That’s a military strategy quote, but it applies to any plan. You never know what’s going to happen so you need to have some type of backup plan and be flexible. What happens if you retire early and the stock market crashes down 30%? Would you be able to stay retired? Every early retiree hopeful should have some backup plans in case things don’t work out as expected.

No, going back to work isn’t a contingency plan. That means you couldn’t make early retirement work. However, I count working part-time as a good backup. You have to use your own judgment here.

Bonus point – You cut your own hair

Cutting your own hair shows commitment to the frugal lifestyle. It’s much easier to go to the salon and get a haircut, but why pay so much? The hair will just grow back anyway. Hair is so superficial. It also trains you to not care what people think. You’ll need thick skin when you retire early. I admit, this one is a lot easier for guys. We just need a buzzer and even I can cut my own hair. That’s why it’s a bonus question. J


Okay, how did you score? Don’t get upset if your score is low. That just means you have room for improvement.

  • 0-5: Skeptic. You’re probably here for the free stock or found us through Google. It’s fun to read about early retirement, but you don’t really believe in it.
  • 6-7: Novice. Alright! You’re in the beginning phase, but you should be able to reach FIRE if you keep at it.
  • 8-9: Committed. You’re committed to early retirement and you’ll make it work.
  • 10+: Driven. If you aren’t retired yet, you’ll get there very soon. Congrats!

Poll – What’s your score?

How serious are you about early retirement?

View Results

Loading ... Loading ...

What do you think of our first early retirement pop quiz? Should I add anything? I’ll keep updating this and repost occasionally. It’s a fun and easy quiz.


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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.

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{ 103 comments… add one }
  • Mustard Seed Money May 18, 2017, 3:16 am

    I am in the committed category. I haven’t quite taken the plunge to cut my own hair yet although there are days that I think about styling it much different as in buzzing it off for simplicity sake. But my wife says while I still have hair why cut it all off. So I figure I’ll pay a premium to keep my hair looking nice for her 🙂

    • retirebyforty May 18, 2017, 9:30 am

      Happy wife, happy life. 🙂 Yes, you’ll have plenty of time for the buzz cut when you’re older.

  • Michael @ Financially Alert May 18, 2017, 3:22 am

    Nice Joe! I think you captured a lot of the essentials of early retirement.

    For advanced FIRE, perhaps legacy planning (i.e. trusts, wills, etc) could be included? It’s not a requirement to FIRE but it could be an indicator of sorts.

    BTW, I didn’t score too well with the bonus question. 😉

    • retirebyforty May 18, 2017, 9:32 am

      I don’t really agree with legacy planning. That could wait a bit when you’re really focused on early retirement. It’s a good idea to do it, though.

    • David @ VapeHabitat September 7, 2018, 12:51 am

      That kid is very cute)) Must be your son.

  • The Tepid Tamale May 18, 2017, 3:25 am


    That’s a great quiz! Like you said, it gives you a quick picture of where you are at. I scored an 8. I gave myself the point for the side hustle, even though I am a new blogger and not sure how that will all pan out. Another good bonus point would be 1 car for multiple people. I know saving the 50% kind of covers this. But cars are a HUGE expense, and making changes to survive on one is a great indicator of commitment to the cause.

    As always, thanks for the great articles!

    • retirebyforty May 18, 2017, 9:32 am

      Having 1 car for multiple adults is a good indication too. Thanks for the input.

  • [email protected] May 18, 2017, 3:28 am

    I won’t go near those scissors – so no bonus points for me! Early retiring in 43 days and just turned 50 – so I guess I’m pretty committed 😉

    • retirebyforty May 18, 2017, 9:33 am

      The school year is almost over. I’m sure you’ll enjoy your early retirement.

  • Nicoleandmaggie May 18, 2017, 3:54 am

    Apparently being rich but not wanting to retire puts one at 5.

    • retirebyforty May 18, 2017, 9:33 am

      You’re rich so you don’t have to care about the result. 🙂

  • John C @ Action Economics May 18, 2017, 4:12 am

    I’m at 9. Our house is still above the value of our investment accounts, that should shift in about 3 years. Our savings rate last year was “only” 47% so I just missed the 50% savings rate, but I did pick up the bonus point for cutting my own hair. Every couple months 3/8 guard all the way around, been doing it for close to 10 years now.

    • retirebyforty May 18, 2017, 9:34 am

      9 points is great and you’ll get to 11 points in just a few years. Nice!

  • Brandon May 18, 2017, 4:14 am

    I got every point except #3. I have a car loan at 0.99% with no money down. I would rather invest the 15K and turn it into passive income or something rather than sink it all into a car that loses value.

    • Michael Arnold May 18, 2017, 6:20 am

      I was a 6 but with a similar situation. I have a new HVAC system which I could pay for in cash (but would take a healthy dent out of my savings) but I have a 60 month, no interest loan. I am making aggressive payments on it so it wont get anywhere near that length (probably paid in full within 24-36 months), but its 0% interest so I would rather keep my savings level up and letting that grow. I realize this is a personal decision as some people don’t like debt, but from a math perspective, it makes sense.

      I also dont have a roth (yet), but part of that is we are still working to max our 401(k)s.

    • retirebyforty May 18, 2017, 9:35 am

      I’ll bet you’ll be very glad once you don’t have those car payments anymore. 1% is really good, though.

  • Matt @ Optimize Your Life May 18, 2017, 4:46 am

    I missed two, and they are both in the basics category! I don’t know if that is better or worse than missing the hard ones. I have student loan debt and I haven’t set a retirement date and yet I save over 50% of my income and have backup plans.

    I have debated back and forth on the cutting my own hair. On the one hand, it seems easy enough to do it on my own. On the other hand, I spend under $100/year on it. Is $8/month really worth it?

    • retirebyforty May 18, 2017, 9:36 am

      Maybe you’re shooting for FI and not early retirement. It’s not quite the same goal. It sounds like you’re doing very well.

  • Physician on FIRE May 18, 2017, 4:46 am


    • Dividend Growth Investor May 18, 2017, 6:39 am

      Haha, 11 too 😉 (though I get help from Mrs DGI around the neck area) She is just a 10 😉

    • retirebyforty May 18, 2017, 9:37 am

      As you should! Great job!

  • Lazy Man and Money May 18, 2017, 4:46 am

    I fell in between novice and committed. Some of the questions left a little grey area (or what I felt was grey area).

    We have consumer debt on auto loans, but they are at about 1% interest combined. We are also financing solar panels at 2.375%.

    A retire by date doesn’t work well for our family. There’s some golden handcuff things to figure out.

    I’ve never calculated the percentage of income we save. It’s kind of a “is this the best decision to make?” approach. I did an article on our expenses for the next 45 years recently and we’re really front-loading a lot not (solar panels and 15-year mortgages). We probably could save 50% if the kids were old enough to be public school and we had a more traditional 30-year mortgage, but it’s not important to hit some kind of arbitrary number.

    • S.G. May 19, 2017, 8:22 am

      I don’t have a “retirement” date, but I have a “FI” date which I considered good enough for the spirit of the quiz, especially if it’s a few years out.

      • Lazy Man and Money May 20, 2017, 8:59 pm

        I would say that we are technically FI now. The math for us is a little difficult because we choose to invest a LOT more than most people on education of our children. It’s borderline.

        In a couple of years my wife is eligible for a military pension that will be worth around $40K a year.

        There are a couple of other things (investment properties and such) in the mix as well.

        My point is that we don’t have one particular date in mind. There are around 3 or 4 dates that we discuss.

  • Apathy Ends May 18, 2017, 4:47 am

    We are a 6, but will move to an 8 next year when our debt disappears and those payments turn to savings.

    Next up – passive income focus!

    • retirebyforty May 18, 2017, 9:37 am

      See, lots of room to move up. 🙂 Keep at it!

  • Ms. Frugal Asian Finance May 18, 2017, 4:48 am

    I am nowhere near early retirement. My net worth is minimal, and my retirement account is tiny to say the least. I really need to step up my game. Although I don’t see myself retiring anytime soon, it’s great to know that I have that option if I get tired of working 9-5 one day. 🙂

    • retirebyforty May 18, 2017, 9:37 am

      You’re still young so you have plenty of time. Good luck!

    • Kevin @39months.com May 18, 2017, 12:01 pm

      Just keep working it. I was not in good shape at 36 years old, but started working on it. By 40 I was maxing out 401K, fully funding two Roth IRAs, and reducing debt significantly. Twelve years later, I’m at a 7.5/8 and “39 months” from FI.

  • Pennypincher May 18, 2017, 4:59 am

    RB40jr looks so serious (and cute!) in that photo. A real man about town. As if he’s about to say-feed me NOW! ha,ha.
    #7-So true. I see a lousy ROI on my house. Gotta live somewhere though. I see people around town pouring big bucks into their homes. Crazy. Why? To impress? I want to yell over to them-Your money is far better off in the S&P500! : )

    • retirebyforty May 18, 2017, 9:38 am

      Haha, I love that photo. The housing is very location dependent. Some places just do so much better than others.

  • Master Duke May 18, 2017, 5:11 am

    Nice and easy quiz with reminders to get dedicated to one’s finances!

    For the 50% number in your savings (gross income), do you include 401K as savings? We do since more contributions means less money in your pocket.

    • retirebyforty May 18, 2017, 9:39 am

      Yes, I’d include the 401k as savings. That’s your money.

  • Duncan's Dividends May 18, 2017, 5:29 am

    I’m at a 7.5, my side hustle just started with my blog and while I’ve only been at it a couple months, I’ve got a shiny new nickle sitting there waiting until I hit my first $100 for my first paycheck. I know I can’t get the bonus, if I did I’d look like a homeless guy or mental institute patient. Neither of which seems like a good look for me.

    • retirebyforty May 18, 2017, 9:39 am

      Good luck with your blog! It’ll probably take a while to build traffic, but I’m sure you’ll get there if you keep at it.

  • David Cox May 18, 2017, 5:43 am

    A good quiz… I did OK, in the committed category, but I’ve already retired – I wonder if I’m not maxing the quiz do I have to go back to work??

    A question that I would add (for those with a partner) is whether the early retirement plan has been fully discussed with them, and are they 100% on board with the plan? A no against these questions may make things a bit tricky!

    Take care, David

    • retirebyforty May 18, 2017, 9:41 am

      I think it you’re already retired, then it’s really hard to save 50% of your income. Maybe we should give that one to people who already retired.
      You’re right about the partner. I assumed that’s already a prerequisite. There is no way I could have retired early without a buy in from Mrs. RB40.

  • Grant May 18, 2017, 6:13 am

    9. No significant passive income and not quite to 50%. Compared to the cost of living in Raleigh, NC the daycare costs are pretty steep.

    Nailed the bonus question. Eighth grade was my last paid for haircut.

    • retirebyforty May 18, 2017, 9:42 am

      Still pretty good! Hopefully, you’ll be able to save more after daycare is over. It’s not cheap here either so I was very happy when our kid starts public school.

  • Dads Dollars Debts May 18, 2017, 6:38 am

    Man I am a novice, but I knew that. Something about the $170k in student loans I am still paying off and my expensive California home is keeping me from moving to the big leagues!

    I like the post. Gets me thinking about the steps we are taking. As far as cutting my hair, my first attempt last week led to a buzz cut. Not sure I am ready to try again this week.

    • retirebyforty May 18, 2017, 9:43 am

      Lots of room to move up! I’m sure you can do it if early retirement is your goal. The expensive CA home is tough, though. Good luck with the hair cut next time. 🙂

  • Al May 18, 2017, 6:47 am

    Investments worth more than my house is a tough as real estate has out performed investments for the past decades.

    How do you account for a pension? If my exoenses are for example $5000 and my pension is $5000, my 20x is zero.

    Also how about a pension and social security in net worth? ?

    For example, $60K a year times 30 years is $900K. We could also do a future value (FV) but its speculative because we do not know how long we are going to live.?

    Since I am retired already, I am driven for sure. The ship has sailed. It left port. Ready or not.?

    You missed a big one. Are you healthy?
    Health costs is or was the number one cause of bankruptcy. If you are not healthy enough or a love one is extremely ill, early retirement might not be a good idea.

    Nevertheless, as heath insurance becomes less affordable, this diminishes with time. If you have to pay for it anyways, what difference does it make.

    Meanwhile, heading for Portugal and Spain Saturday.?

    • retirebyforty May 18, 2017, 9:45 am

      I don’t account for pension and social security benefit because this is an early retirement quiz. 🙂 Most of us can’t access those things. Maybe just give 20x the annual pension payment? That’s a tough one.
      Health is a big one. Thanks for that input. Enjoy your trip!

      • Al May 18, 2017, 10:57 am

        Okay but if we dont account for pensions at 40 or 50, what exactly is early retirement then?
        If one went into the military at 18 and retire at 40. Is that early retirement?
        If one work for the state, law enforment, firemen, or medical and could retired at 50 with full salary. Is that early retirement?

        Point is that there is more than one way to do things. People and things vary.

  • Financial Coach Brad May 18, 2017, 6:55 am

    Great write-up.

    Something else to consider: The bulk of your investments SHOULDN’T be in retirement accounts. Otherwise you can’t access them until 59.5 without a penalty. If you REALLY want to retire early, you need a healthy taxable investment account to draw from.

    I’m not suggesting go taxable over tax-preferred, but rather max retirement and try to put the same amount into a taxable account.

    • retirebyforty May 18, 2017, 9:47 am

      You’re right. You need some money in the taxable accounts as well. Although, a Roth IRA ladder is a great way to access your retirement accounts. We’ll probably do that when Mrs. RB40 retires.

  • Al May 18, 2017, 7:00 am

    Here is an interesting evaluation of Home Prices versus S&P 500 over time.


    Data shows real estate ROI at about 10% while S&P 500 at 8%. The analysis varies depending on the situation.


    • retirebyforty May 18, 2017, 9:48 am

      That’s investment real estate, not primary residence. For most of us, the primary residence is not a very good investment.

  • Roseanne May 18, 2017, 7:12 am

    I’m in the Novice stage. Mostly because of your suggestion to start my own blog. I have been able to save almost 50% of my wages since our house is paid off. I’ll keep working toward that end goal. ~smile~

    • retirebyforty May 18, 2017, 9:48 am

      Saving 50% of your income is really great. That one probably should be worth more than one point. Good luck!

  • freebird May 18, 2017, 7:36 am

    I got #1,3,6,7, and 9, so my score is ‘skeptic’.
    #2 sounds like a good deal but I recall income limits apply. And no employer match.
    #4 is open although a pending management change might decide it.
    #5 the ‘h’ word doesn’t sound like retirement to me.
    #8 if I did I wouldn’t be here at work.
    #10 I think I have enough padding that I don’t need a backup plan.

    • retirebyforty May 18, 2017, 9:49 am

      The quiz won’t work for everyone. 🙂

  • FinancesWithPurpose May 18, 2017, 7:38 am

    That was fun! Apparently I’m pretty serious; I hit 10. (Got the bonus point, but missed one point.)

    • retirebyforty May 18, 2017, 9:49 am

      Great job! That’s a lot of points.

  • kindoflost May 18, 2017, 8:06 am

    8… need a plan!

  • Dave May 18, 2017, 9:15 am

    Wow, I have not scored 100% on too many tests in my life. I did not pass on the haircut. However, I go to a barber that charges $10 + $5 for a tip.

  • [email protected] Turtle May 18, 2017, 9:58 am

    I’m a novice. I don’t have a roth IRA, but I have a regular IRA. I also don’t have a “retire by” date. Mostly because I feel I’m so far away from actually retiring. I always just say retirement is 10-15 years, but in reality I’m hoping it’s less than 10 years away. I should be FI in 5-7 years, so add a few more years to build a healthy buffer and I’m at 10 years.
    I also don’t have any passive income. I’ve thought about investing for dividends, but I’m too busy putting all my money in retirement accounts-401k and IRA. Actually now that I think about it, I just have my IRA reinvest any dividends, so does that count as passive income? Then I’m “committed!”

  • Sarah Li Cain May 18, 2017, 10:33 am

    I started cutting my own hair and I can’t believe I didn’t do it before! I am sitting my husband down to calculate some numbers for FI plans and our goal is to do it in less than 10 years. I think I’m being more conservative because of my lack of confidence in my earning potential more than anything.

  • libby Vasquez May 18, 2017, 10:49 am

    Love your blog, still a novice but should be on fire by end of year. 🙂

  • Jon May 18, 2017, 10:51 am

    9.5. My wife has $3K left on her car payments and I only trim my hair, so I get haircuts twice a year. Don’t see a reason to pay off the car fast since the interest rate it low enough that I make more investing than paying it down.

  • Amy @ Life Zemplified May 18, 2017, 10:54 am

    This was fun, Joe! I came out with 10 points. Don’t quite make #9 but my husband and I cut our own hair.

  • Tawcan May 18, 2017, 11:13 am

    I did pretty good.

    The Basics – 4/4. Well don’t have specific “retire” date mapped but in the next 10-15 years.
    More Difficult – 3.5/4 – working on more value in investment portfolio than housing but the damn house value in Vancouver keeps going up like crazy. 🙂
    Advance FIRE – 1.5/2 – we don’t actively track our savings rate but our rate is high.
    Bonus – Yes Mrs. T cut my hair every 1.5 month or so.

    Pretty good I think. 🙂

  • Wes May 18, 2017, 11:47 am

    I cut my own hair for the first time last month. I also was offered two new employment opportunities, after I cut my own hair.

    Yes, there were a few mess ups and I’d do it a bit differently when it grows back out.

    But IMO – this is proof that going to a salon is a luxury.

  • Kevin @39months.com May 18, 2017, 11:58 am

    I’m sort of a 7.5. I don’t have a side hustle, I’m not saving over 50% till next year (I’m around 40%), and I’m halfway done with emergency plan. I will definitely be in the “committed” by 2018.

    • retirebyforty May 19, 2017, 1:39 pm

      40% is really good. Keep at it. It’ll be awesome when you hit 50%.

  • Friendly Russian May 18, 2017, 12:14 pm

    I am not only cutting my own hair, I even got rid of ’em and became bald 🙂
    And yes, I shave my own hair and Mrs. FR does her own haircut as well.

  • Jason in Vancouver May 18, 2017, 12:40 pm

    Just a 6.
    No side hustles and no backup plan as I’m just factoring in extra degrees of safety. I’m working an extra 5 years to get to a <3% withdrawal rate from my nest egg that would cover our current combined average yearly spend. This does not include the missus' savings nor government benefits.
    No definitive post retirement plan.
    Investments not quite worth more than the assessed value of the house as housing prices in Vancouver have been insane.
    The missus used to cut my hair but she felt it was too much stress.

  • Oliver @ Appreneurinvestor.com May 18, 2017, 2:16 pm

    great article hah. I’m technically “retired”, but looks like i’m around a 9.5. My post retirement plan is pretty much how I’m already living…so I gave myself a 0.5. Just want to live a normal/stealthy life and continue to do what I love doing! 😀 Definitely can’t do my own haircuts. I’ve tried before and the only thing I can do is shave it! Not going to do that since I want to keep some of hair! It’s what keeps us looking semi-young right??? lol. Also haven’t been able to backdoor my roth since I own my own business…where we maximize the profit sharing to hit that $54K 401K maximum (x2 if you’re married!)…but I gave myself that point since I’ve done it in the past.

    • retirebyforty May 19, 2017, 1:38 pm

      I need to revise the quiz and give a bonus point to someone who’s already retired. 🙂
      Great job with your business. That’s a great way to save a lot of money.

  • Steve Traylen May 18, 2017, 3:44 pm

    I scored a 9. I have just retired early 45, partly by choice and partly through being part of the oil crash. It was going through a very similar list of questions with my wife that enabled me to pull the plug rather than stressing about searching for something new.

    We are looking forward to the journey.
    (And I’ve been cutting my own hair for years!)

  • Budget on a Stick May 18, 2017, 3:44 pm

    Only a novice…for now!

    Definitely copying the quiz to Google docs and going to figure out estimatated dates for hitting each of those!

    • retirebyforty May 19, 2017, 1:37 pm

      Good luck! Keep at it.

  • Mr. Tako May 18, 2017, 4:07 pm

    I got all 11 Joe! But that’s not exactly fair, because I’m already early retired 😉

  • Jordan May 18, 2017, 5:08 pm

    In number 1 you’d mentioned, “Generally, your net worth needs to be at least 20x your annual expense before you can consider early retirement. This means you can withdraw 4% of your investment to pay the living expenses.”
    I was thinking 25x annual expense. Am I missing some expected return on investment in my calculation?

    • retirebyforty May 19, 2017, 1:36 pm

      Thanks for catching that! It should be 25X.

  • Buy, Hold Long May 18, 2017, 7:17 pm

    I ended up with Novice, which isn’t too bad for me. I started tracking my Net Worth and being serious about early retirement in October 2016, so in less than a year getting 7? I don’t mind those results at all. Looking forward to continuing my journey, thanks.

    • retirebyforty May 19, 2017, 1:36 pm

      Great job! 7 is really good for someone new. That shows you’re pretty serious about FIRE.

  • Revanche @ A Gai Shan Life May 18, 2017, 10:11 pm

    I’m low on the scale but I knew that before starting ?

    I’ve been doing tons of research for when we free up cash after we deal with the home situation but it’s also quite a setback in our FI/ER? plans. We need a safe home and it’ll be the one we stay in so I’m not going to gripe about it. We’ll just keep working away at investing and saving while the dust settles and then I’ll set up the next steps in our new plan. We’ll get there one way or another!

    • retirebyforty May 19, 2017, 1:36 pm

      Room for improvement. 🙂 Good luck with your home search. It’s tough in the Bay Area.

  • Adriana @MoneyJourney May 18, 2017, 11:56 pm

    Wow, I got 7 points! Did not expect that 😀 Good going, self!

    Your quiz was fun and, at the same time, an eye opener. It helps knowing where you stand every once in a while.

  • Al May 19, 2017, 1:38 am

    Here is a link to a calculator that estimates the ROI in your home. Please make sure you enter your cost that the price minus your downpayment. You will find out that must people with ownership over 6 years have a return higher than the S&P 500 during those years.

    Mine for example is double digits in both of my properties and that is without giving a price to either the tax benefit or usage of the residence. Trying to kill a myth.


    • retirebyforty May 19, 2017, 1:35 pm

      I plugged my numbers in and our ROI is .8% annually. I don’t think that counts the real estate agent fee when we sell it. We purchased in 2007 and the price is just recovering. It’s really depends on when you buy. It seems like if you hold the house long, the S&P500 would win. If we just look at the average US home. Some part of the country is much better than others too.

  • Alexander @ Cash Flow Diaries May 19, 2017, 7:05 am

    I like to think that I am super driven to early retirement although I dont necessarily fit some of those criteria. I dont have a roth but because I cant stand the idea of being penalized for using my own money if its before a certain age. I also dont have a retire by date but only because to me I just dont see a point. My retire by date is ASAP and I hopefully will continue growing my real estate mini empire to get me financially free within the next few years.

    Ill keep my fingers crossed. 🙂

  • Stockbeard May 19, 2017, 10:27 am

    Hey, I scored “committed” but that’s unfair: as a non US citizen with a plan to leave the country, I intentionally do not have a roth IRA, because I’d have to close it as soon as I leave the country.
    I’ll also be closing my 401k and take the 10% penalty, which for the typical scenario would be considered a blasphemy.
    Sometimes, people have good reasons 🙂

    Good quiz though, it was fun reading through it !

    • retirebyforty May 19, 2017, 1:28 pm

      That’s true. You’re a special case. 🙂

  • SMM May 19, 2017, 12:47 pm

    Question for no. 9: do you mean 50% after your automatic contributions to your work 401k plan? If so, that would be very hard, especially if your contributing let’s say the max.

    • retirebyforty May 19, 2017, 1:27 pm

      The 401k would count as savings.

  • Diva Q May 19, 2017, 12:57 pm

    Very nice post and good exercise Joe!

    I got 9, because I don’t have a side hustle and don’t cut my own hair, my haircut is $14 plus $7 tips and I have my hair cut 5x a year so it’s $105 a year, I think that’s pretty good for female haircut. Is a side hustle an important factor if by the time I want to stop working, I’ll have 3 real estate properties all paid for and will generate about $7k a month in rental income? I make $200k plus a year with my main and only job, therefore, I never thought about the need to have a side hustle.

    Why is a Roth IRA so important? I only have about $50k in my Roth but about $600K in all of my retirement accounts. I own 2 condos and a coops worth about $1.6 mil with a $430k mortgage on 1 condo and the rent from that condo is more than enough to pay for the mortgage and maintenance.

    I think with my net worth and passive income at the moment, I could be in the Driven category because I’m more than ready to retire but I have a very low stress job that pays really well with medical benefits 100% paid for plus extra money to pay for copay and deductible. So I’m planning to retire in 5 years when my last mortgage is payoff and rental income from the 3 properties generate about $7k a month.

    • retirebyforty May 19, 2017, 1:27 pm

      Rental real estate is a side hustle. It takes effort even when you have a property manager.
      The Roth IRA is important because it’s a way to access your 401k and traditional IRA without having to pay the 10% early withdrawal penalty. Read up on Roth IRA ladder if you don’t know about it. If your rental income covers your expenses, then you probably won’t need that. It sounds like you’re doing very well. Congrats!

      • Diva Q May 22, 2017, 12:37 pm

        That’s nice that I’m getting an extra point for side hustle :).

        I know about the Roth and Traditional IRAs pretty well, including the Roth IRA ladder. I guess my first reaction was why Roth is even a factor because I don’t think I’ll need to tap into my IRAs before I’m 59 1/2. I guess a more relevant question is will early retirees need to access their IRAs before 59 1/2? If no, then they get extra point.

  • Joe May 20, 2017, 2:52 pm

    10. Those last minute bonus points really helped! I JUST bought a pair of clippers last week for $30 and have cut my hair once. I’ve been telling everyone lately that from now on I’m straight saving $25 per cut!

    Like Steve, we too live in an RV and that has really allowed us to keep most of our earned income.

  • Your First Million May 21, 2017, 11:21 am

    I literally cut my own hair! My wife says I am “mowing the lawn” when I give myself a buzz cut with the clippers every 2 weeks! hahaha.

    Well I am happy that I made the “Driven” category on all of the other measures as well! Great metric RB40!

  • Durga May 21, 2017, 11:07 pm

    I am falling under novice, but I just wanted to be committed. I am in the process of fulfilling the points to be covered in difficult that you have mentioned. I am just trying to have a passive income or any such source from a long time. But as you mentioned being frugal makes you more flexible and makes you near to the early retirement.

  • Amy K May 22, 2017, 10:49 am

    I’m surprised I scored so low! Only a 5 (6 with the bonus question, but I gave myself a 5 in the poll). I lost 1 point because I took a car loan rather than pulling $$ out of the stock market. 1.25% on the loan vs better returns on the market, I stand by my decision. My contingency plan is going back to work so I didn’t get that point. We’re not quite at 50%, etc. etc. Then again, we’re only aiming for retirement at 52, not 40.

    On the topic of hair cutting: I am a woman with chin to shoulder length hair. I bought a bajillion pack of tiny ponytail holders at Dollar tree, portion my wet hair into 6-8 sections with the ponytail holder at the length I’d like the hair. Make sure they all line up and are level when I am looking straight ahead at the mirror , then I cut at/through the ponytail holder. I do cut once across the front to level out the tiny pointy bit. I can’t tell if it’s actually straight in the back, but I have slightly wavy/forgiving hair.

    • retirebyforty May 22, 2017, 12:34 pm

      1.25% is pretty good. I bet you’ll be very happy once the car is paid off, though. It sucks to send the car payment in every month. Good job with your haircut. It sounds a lot harder for women. Keep at it.

  • Akash May 24, 2017, 8:19 am

    Adding to your statement that “it is not wise to have 50% of your net worth in your house”, I also believe that it is not wise to have more than 50% equity in any of your properties when you are trying to build wealth. Having excess equity in properties means that the money is simply sitting there and not helping you build as much wealth.

    Of course, when you are closer to retirement, it may make more sense to simplify life by getting rid of some debt. I know that Sam Dogen from financial samurai has drastically reduced his mortgage debt.

  • Alex May 24, 2017, 9:54 am

    I’d take a 9 or 10. No side hustle and only a rough idea at a retirement date. With money invested it seems you are guaranteed to have at least some passive income unless you are just playing risky non-dividend paying stocks – though in that case it would probably not be wise to have more invested than your house value :P.
    I do buzz my hair and cut my wife’s. At about one cut a year it is still tough to get the hang of layering… We’ve been running between 50-70% net income savings rate, which has been helped by our 7 year run as DINKs which is about to come to a happy end. That also pushed our investments over our home value – though not by a lot considering that we bought in the Seattle area 5 years ago.

  • Finance Patriot May 24, 2017, 10:47 am

    If I only scored a 7, and my final day of work is 7/5, does that mean I have to find another job? Please say it ain’t so Joe.

    • retirebyforty May 25, 2017, 7:02 am

      You get 2 bonus points for retiring early. 🙂

  • Stephanie May 24, 2017, 11:24 am

    Hey that was fun! Scored an 8, but happy with the results. Respectfully disagree with a primary residence not being an asset/money maker though. I’ve had a rental suite in my home for 6 years that covers my mortgage, insurance, and property taxes. At the end of the month it actually makes me $8 ($96 yearly:).

  • BK June 2, 2017, 7:30 pm

    The wife and I save my entire after tax income. We both max out our 401ks. I am hoping to go part time in one year. When I run the numbers we will have to downsize our lifestyle, but will have enough to cover the basics and then dome to travel a bit. We are removing things like cable and expensive phone and cars now. Can’t wait to be FIRE. My plan is to become a chef and learn to write a blog!

  • Darren June 11, 2017, 12:23 pm

    Saving 50% is tough especially when you have two, young school-aged daughters and a wife who has never worked in her life.
    I do cut my own hair, however. I started because no one could cut my hair right. Asian hair is unforgiving if you don’t cut it right because every imperfection sticks out, literally.
    I love the poll, Joe!

    • retirebyforty June 12, 2017, 8:44 am

      Well, you have to do what you can. Even if you save 20%, it will be more than most of the families in the US.
      Good job with the haircut. 🙂

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