My Story: Retirement By Age 34 – Part 1

Hi, it’s Andrew (Uncle Pennybags).  Here’s my story of how I went from $20,000 debt in 2007 to traveling the world and 3rd world financial independence by 2017.  I say 3rd world financially independent because I have enough money and income to technically retire for the rest of my life in Manila.  I didn’t win the lotto, get rich with stocks, or inherit my money.  It’s been a long road where I feel I was kind of just blindly teaching myself what to do with my money.  I was fortunate to have a loving family who led me to a great education, acquire good paying jobs along the way and now I thought I’d share my story.  I don’t consider myself a huge success, but I’m still working on it!

After College Purgatory

After I graduated from UCLA in 2005, I didn’t know what to do with my life.  I had a Electrical Engineering degree from UCLA with a 3.0 GPA, but I didn’t much like electrical engineering nor did I really understand a lot of it.  I definitely wasn’t one of those kids on top of their shit going to on campus interviews.  I rode my entire life up to this point on an escalator with a goal to graduate college.  Now I ended up doing I guess what a lot of millennials did and moved back in with my parents.

I was always a bit of a dreamer and I remembering witnessing at that time, that if I opened a savings account at then ING Direct, I could earn 5% on my money!  To me I didn’t know if this rate was high or low, but I did know if I could put in $1M, then I could earn $50,000 a year doing nothing!  If I get that to $2M, then it would be $100k / yr!  Man I miss those interest rates on savings…

Now I didn’t have anywhere near $1M.  In fact, after college, I was $20k in debt, which actually was a pretty reasonable amount compared to nowadays.  But I had dreams to do something big to earn that $1M.

2005 – 2007: Struggles

This was about the time when I started witnessing what I considered fairly simple web companies selling for millions of dollars.  Flickr, Myspace, Youtube, and lots of other companies were selling from $10M – $200M, so when my friend called up wanting to team up to start an internet company, I was definitely interested.  It sure beat having to make and take interviews for electrical engineering which I didn’t enjoy.  I was an avid computer fan and took a few basic programming classes in college.

Thus began in the bay area, which was a restaurant website guide back in 2006 when other restaurant sites like yelp and grubhub were fledglings as well.  Long story short, we were too young, too inexperienced, and honestly too lazy to make it work.  During this time I borrowed $10k from my dad to jump start the venture and by late 2007, I was out of money.  During some of this time I was eating on about a $1 / day budget, living on my friend’s couch, and growing ever more frustrated with my partners.

It was worth it in my book

Now I didn’t have to budget myself to $1 per day on food.  Although I didn’t have the money I could always move back home. But I was young, full of pride, and made it a game to accomplish to get by on such low means.  It was kind of a game and like Jay-z had said, he’d rather tight his belt then beg for help.

What I did gain was a love of startups, foundational knowledge of web technologies, and a financial frugality through necessity which I feel all have shaped me.  I left leaving the experience that I learned more in those 2 years than I did in 5 years at UCLA.

2007 – 2010: First Taste of Making Money

After having to move back in with my parents AGAIN in 2007 even more in debt, I started to look for jobs, but this time in software rather than electrical.  I managed to land my first professional job at Truveo at AOL (now dead) in SF hungry to make some money and with my new sense of frugality.  I guess my dream at this point was to just make money to eat and not have to live with my parents. 😝

I got my first SF apartment in the heart of SF in Japantown (my favorite part of SF) for a whopping $1650/month. $1650 a month was definitely over what I wanted to pay, but I really liked the location and a quick commute to work. $1650 is steal of a price now as i’m sure it’s probably going for over $3500 now.   Anyway after saving for a few months and paying off credit cards, parents, security deposit 1st and last month’s rent, I had saved up my first $10,000, living and working in SF, and I got my first iPhone.  What a time to live! 🤣

Stock Market Crash of 2008

After I first used Apple’s iPhone I felt this was by faaaaaaar the best phone ever and there was no competition.  I liked it so much, that after talking with some people I decided to put my hard earned first $10k into buying Apple Stock at $187 a share.  Wow, what bad timing as the market crashed and I ended up selling at like $90 for a 50% loss.  Needless to say it turned me off to investing a bit but after witnessing the recovery and knowing what I know now, I wish I just left it in! In fact you the whole idea of investing in the market is hold and wait. 🤦

Compensation and Taxes

As this was the first time I was making any significant amount of money, I was shocked to see that nearly 35% of my money was withheld for taxes.  This came as a bit of shock as did how much my company was paying for health insurance for me.  I was previously without health care.  Also the 401k was introduced to me with a 50% match up to 10%.  Free money?! I feel like my previous financial struggles led me to caring more about these kinds of perks.

Even though I lost 50% in the stock market in 2008, I still had my job!  I just earned more money, got raises, switched companies and was getting paid even more.  In 2010 I switched companies and was given some stock options as part my compensation package.  I was enjoying my 2os in SF making decent money and going out with friends.  In the back of my head though, I still had this yearning to make enough money to earn passive income off of to gain financial independence.

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