Skip to content

How Ditching Your Debt Could Lead to an Extremely Early Retirement

Have you been working hard to pay down your debt, but are beginning to wonder, “Is it really worth all this work to become debt free?” Let me tell you first hand:

Yes, it is!

My Story With Debt

ditching debtI started paying down my college debt about 5 years ago. I buckled down, had pretty much zero fun for 14 months, and paid off $18,000 worth of debt. It was a great feeling, but unfortunately that was not the last of the debt. As almost every couple dreams to do, my wife and I excitedly purchased a house. Well, actually, we gave the bank $10,000 and then they bought the remaining $80,000 of our house. I had plans to pay the mortgage down early (because I know that debt keeps me down both emotionally and financially), but unfortunately my wife did not.

As you may have guessed, we had many arguments about money and spending. In a short period of time, she ended up obliterating our future together and left me.

Not only did I have to continue paying the mortgage on the house, but I also went further into debt because she demanded half of our estate! After it was all said and done, I owed my ex $21,000 in cash within a 6 month time frame. Instead of getting out of debt, I was now plummeting farther into it. With the remaining mortgage, I was approximately $80,000 in debt. Financially and emotionally speaking, this was hands-down the lowest point of my life.

Just like with any life event though, I knew that I couldn’t just sulk around, do nothing, and have a pity party. I needed to pick myself up and get to work! Over the course of the next six months, I did everything I could to earn more money. I wrote articles for other bloggers, reached out for advertisements on my site, bought and sold vehicles, and cut WAY back on expenses. In the end, I did come up with that $20,000. Yes, I was tired, but this small win helped me realize what was possible with just a little hard work. Getting entirely out of debt was definitely possible, and could be done even sooner than I thought.

The Quest For Complete Debt Freedom

At the tail-end of 2013, I built up my emergency fund and decided that January would mark the beginning of my push to pay off my mortgage and become completely debt free (again).

The last eight months have not been easy, but I have made quite a lot of progress. The once $60,000 mortgage is now settled at about $27,500 and will dive lower with each passing month. I’m not quite sure that I will get this debt down to zero by December 31st, but it sure is going to be close!

The Realization of What’s Upcoming

In actively pursing a debt free life, I have unintentionally stumbled upon some wonderful discoveries along the way. Some of these realizations are pure feelings, but I will do my best to describe them for you.

1) I don’t need much money to be happy

I recently heard an excellent quote by Jim Carrey that I think sums this point up nicely:

“I wish everybody could get rich and famous and have everything they ever dreamed of, so that they know that it’s not the answer.” — Jim Carrey

Since I wanted to put as much money as I possibly could toward the mortgage, I naturally reduced my expenses to their absolute minimum. I bought less “stuff”, I ate out much less, I started riding my bicycle instead of driving everywhere, and I fired my lawn guy. Anyone reading this list would probably have assumed that my life soon became a living hell, but it just so happened to be quite the contrary. Instead of feeling depressed about my simplistic (and nearly minimalistic) life, my feelings were as follows:

  • With fewer “things”, I was able to keep my home quite orderly (which apparently makes me happy), and everything seemed so spacious and wonderful all of the sudden.
  • When I cut down my restaurant visits from once a week to once a month, I hardly missed it at all. In fact, I began to enjoy cooking healthy meals for myself and saving a butt-load of money! Who knew I could make a plate of food that closely rivaled the top-notch food chains? It was certainly a pleasant surprise.
  • By biking everywhere, the world suddenly seemed to slow down. Instead of hustling from Point A to Point B to accomplish a task, I found myself enjoying the sun on my skin, admiring the beautiful colored landscapes in the suburbs, and I occasionally stopped to take a look at quickly-changing cloud formations when the storms started rolling in. This world we live in is absolutely gorgeous, and I did not realize it until I started pushing those pedals.
  • Instead of paying someone else to mow my yard, I went out and bought a $30 reel motor (you know, those old-school ones with no motor). This little piece of machinery is simply amazing! It’s pretty easy to push, it cuts down my grass with ease, and it only takes up about 30 minutes of my time each week! I now actually find myself encouraging the grass to grow.

Since I don’t need much money to be happy, I can keep my expenses extremely low – well below my earnings potential. And, I can reduce my expenses even more when my debt is completely gone (because duh, I won’t need to make payments anymore!).

extremely early retirement

2. My wages will only keep rising
As the years have gone by, I am beginning to realize that with a strong work ethic and a fair company (not to mention a growing confidence due to my new-found financial solidity), my wages at work will only continue to increase. After just seven years out of college, I have already seen my wages increase by $30,000 per year, and as I continue to move up the ranks at work, the increases will continue to get larger. Heck, even if I never get another promotion, I am still likely to get a 3% wage increase each year!

3. My savings will be obscene 

Many people have a payment for their house, their car, perhaps some appliances, and maybe even a boat. In total, these loan payments can easily add up to $2,000 or more each month. When I am completely free from debt, all of this money (that many people make in payments) will just flow into my bank account and sit uneventfully until I decide to do something with it. Over the course of just one year, I figure that I could have as much as $30,000 saved up! That’s insane! But, that is the power of a no-debt lifestyle.

4. My total income will grow exponentially

As one of my friends put so elegantly, “So what in the heck will you do with all of that extra money?” This is the million dollar question. In my friend’s mind, money is meant to be spent. In other words, he assumed that I only two options for what I would do with my money. I could either (1) sit on it and feel rich or (2) spend it on stuff like cars, boats, and golden faucets. However, I will choose to do neither of these things. I instead will choose the 3rd option and invest it.

For some reason, our culture has completely forgotten about investing. I mean sure, many of our responsible citizens put an extra $100 into their 401k each month, but this does not create wealth. Typically, it allows people to retire with only a small pittance of what was actually possible.

By investing my savings into say, real estate, I will be able to add an additional $8,000 to my income in that first year of debt-freedom. In the next year, I will be able to add another $8,000. And then another $8,000 in the third year. In the fourth and fifth year I will add $16,000. In the sixth year, I will be able to add another $24,000 (which – if you haven’t been adding these numbers up yourself – creates a total of $64,000 a year). These passive earnings will just continue to increase with each following year – not at a linear pace, but at an exponential one.

5. Early retirement is certainly possible

With this exponential increase in earnings and a meager increase in expenses, early retirement is entirely possible. And I’m not talking about retiring early at the age of 55. By ditching my debt early in life (and never borrowing another cent for as long as I live), full retirement may even be possible in my 30’s.

I mean think about it. The math is pretty simple. If you only need $25,000 a year to live on and your passive investments (again, like real estate) are earning $50,000 per year, how long will your retirement money last? Hopefully, you aren’t staring blankly at the last sentence, because the answer is simple – your money will last FOREVER! If your investments earn $50k every single year and you only spend $25k, you will actually add to your overall net worth each year.

By living debt free and investing the money early and heavily, you could potentially quit your job and still keep making more than you spend! It definitely isn’t the normal thought pattern, but those that achieve happiness and wealth are typically not normal.

Anyone Can Do It – And That Means You!

Let me fill you in on a little secret – I am not a genius. I never skipped ahead a grade in school or took any advanced courses. I was not a 4.0 student and was never able to retain large amounts of information with ease. But, I have always been pretty good at two things: (1) working hard and (2) ignoring the “normal” lifestyle of society. If you can ignore the strange looks and the occasional backlash of people persecuting you for your debt-free notions and ideas, then you are already well-ahead of the pack. Add some hard work (and a little discipline) and I believe that you’ve got a pretty good chance of becoming debt free and wealthy. It is possible, so why not give it a try?

Are you ready to tackle debt head on and start growing wealthy?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I’m pleased to say that after a serious battle my consumer debt is paid off so I’m onto the next phase of my plan for early retirement. However your post has kind of knocked me off course by underlining that just because I’m debt free now, doesn’t necessarily mean that’ll always be the case – despite my best efforts.

    • I hope my story didn’t scare you Rich. This definitely doesn’t happen to everyone. However, you are correct in that there are often circumstances that are out of your control and may wipe out your entire nest egg (or half of it). It may come in other forms as well – perhaps by a lawsuit or a severe medical complication. We just don’t know. But, it doesn’t mean that we should just throw our arms up and stop planning. We need to prepare ourselves as best we can for the future, and then show flexibility when it takes us out by the ankles.

  2. Derek, I have no idea how old you are and to me it doesn’t matter. I would add a caveat that being singularly focused might not be the healthiest nor the most fun to hang out with. Having said that, if you are good to go with it and aren’t putting the burden of those personal goals on anyone else then it does come down to your decision. Good, bad or indifferent, your choice.

    I would say that your past experiences with a wife means the two of you did not share the same dreams or goals. What you accomplished whether together or not of paying down debt and putting a $10,000 deposit on a home depends on what range of time you are envisioning this all to be to your liking. Just saying. Not trying to be critical but dreams with someone else don’t happen usually unless they are shared dreams.

    • Hi JD. Your comment is pretty pointed, but accurate. In that previous relationship, it seemed that my wife and I were on the same page in that we both had visions of retiring early. While, at the time, I thought this meant we were headed down the same path of saving and investing, she just wasn’t able to handle this over the long-haul and ended up spending a great deal toward the end (which was her natural tendency)…and then left while expecting a massive paycheck.

      I still believe that my method of attaining financial freedom is a good one, but if one wishes to take this path, they must be 100% certain that this is also the dream of their partner. If it is not, then you are right, this plan will simply not work.

  3. I have recently just started riding my bike and jogging/running to places nearby. I had to return a redbox movie and decided to run to the closest redbox nearby.

    • Awesome! Thanks for the great comment Alexis!

  4. Retired by 30… now THERE’s a challenge!

    • Do you think you have a chance at it Myles? Based on your pic, I’d say that you’re pretty young. Take full advantage of learning this information now! Most people never figure this stuff out!

      • You’re right, Derek. I’m amazed how many adults don’t have a grasp of their own finances. I’ve just graduated high school and all my friends have just gone to college, but not one of them has considered the costs and implications: they’re just following each other and doing what’s expected of them. I’m not saying college is a bad thing (or the debt associated with it) but I think you need to understand what you’re getting yourself into before making such a momentous (and potentially expensive) decision. And it’s a decision which could force them to keep working way longer than they would like to. That’s why I’m weighing up my options first, so I (hopefully) don’t end up paying later a rash decisions I make today. And if I can find a way, I’ll certainly be aiming for early retirement.

        • It’s great that you see the expense of college might not be worth the result, but what is your plan? Do you have a road-map for yourself to earn a decent wage without a college degree?

  5. That is a great quote by Jim that I had never heard of. It is so true! Granted I am not “wealthy” but on my journey to it I have realized that simply having things doesn’t make me happy. I have to find happiness in life and it doesn’t come from things. For me, it comes from experiences.

    • Same here Jon. Stuff really doesn’t make me happy. In fact, having a lot of stuff actually makes me a little less happy because I end up thinking about all the space it takes up and the work and money that I’ll have to put into them. I’m a happy guy when I’m out camping and exploring the U.S. And I have so many more places to see!

Comments are closed for this article!

Related posts