Chris Reining buckled down on his finances in his late 20s in order to retire before 40. In short, he worked his way up to saving and investing more than half his income, built a $1 million portfolio by age 35 and officially left his IT job in 2016 at age 37.
But how did he know he had enough to fund his expenses for the rest of his life?
Reining, now 39 and based in Madison, Wisconsin, used a simple formula: the "4 percent rule," which says that in most cases you can safely withdraw 4 percent a year from your retirement savings portfolio.
Flipping the 4 percent rule can help you figure out how big your portfolio needs to be, or what's called your "magic number." Simply divide your annual spending by 0.04 (or multiple it by 25) to get your target.
"It really came down to, once I have enough money where I can withdraw 4 percent, then I can walk away," he tells CNBC Make It. "I typically spend somewhere between $30,000 and $40,000 a year, meaning I needed to get to $1 million ($40,000 / 0.04)."
Saving that much "can seem overwhelming for most people," says Reining, "but it just comes down to being disciplined and making saving and investing a habit — and the easiest way to do that is to spend what's left after investing, instead of doing what most people do which is trying to invest what's left after spending. That just never works."