How this 41-year-old went from 'living on credit cards' to retiring early with $3 million in California
When Jeremy Schneider graduated from college in 2002, the FIRE movement — short for financial independence, retire early — wasn't really a thing.
But the computer engineering student, who went on to get his master's in computer science the following year, couldn't help but notice that his peers were finding ways to retire well before turning 65.
During the dotcom boom, "I would see these young people just a few years older than me who were making millions with tech startups," Schneider tells CNBC Make It. Though he hadn't heard of financial independence, "I definitely heard of selling an internet company for a lot of money and being financially set."
That's exactly what he ended up doing. In 2004, he founded RentLinx, an advertising network for rental properties. He'd sell the firm 11 years later — a transaction that netted him about $2 million.
Schneider quit his 9-to-5 job not long after, but found that while he had the financial flexibility to retire, he enjoyed the fulfillment of working on projects he was passionate about. Today, the 41-year-old lives in San Diego, has a net worth of $4.4 million and runs a small business selling financial literacy courses online.
Here's how he did it.
Budgeting while building his business: 'I was living on credit cards'
When he graduated from college, Schneider decided to bet on himself. Instead of taking a $74,000-a-year gig with Microsoft, where he'd interned as a software developer, he started his firm. "I preferred to start my own company where if I worked 10 times harder, maybe I would get 10 or 100 times more money," he says.
Between a track scholarship and help from his parents, Schneider graduated with no student debt, and had about $6,000 in savings from summer jobs. But that, combined with the $14,000 in revenue his website brought in during its first year, wasn't enough to pay the bills.
"I was living on credit cards," he says. "I accrued about $10,000 of credit card debt in my first year. And the second year that $10,000 became $12,000."
But things turned a corner in year three, and profits began taking off.
For the next eight years, even as the company continued to grow, Schneider kept his salary at $36,000 per year. "For basically the entire time I was running my company, I was as frugal as possible. I wasn't even really budgeting because I had no money to budget," he says.
That meant driving a paid off 1999 Ford SUV, spending as little as he could on food and living in a converted garage to keep his rent low.
Even with his restricted income, Schneider still managed to stash some money away, contributing $5,000 to $6,000 per year to his Roth IRA. By 32, he says, he had about $120,000 in his account, a mix of contributions and investment gains.
In 2015, Schneider fulfilled his goal of selling a company when a competitor offered to buy his business for just over $5 million. Because he owned about 70% of the firm at the time, his take after taxes was about $2 million.
Retiring early: 'It started to feel a little bit empty'
Schneider worked for another two years for the company that acquired his, pulling in a six-figure salary and helping integrate his former employees at the new firm.
But he noticed that the profits in his portfolio, composed almost entirely of index funds, were outpacing his salary. "My $2 million had grown to $3 million just from the growth of the market," he says. "It dawned on me that I don't need to work anymore."
Following the so-called "4% rule," which says that retirees can withdraw 4% of the value of their portfolio per year in perpetuity without running out of money, Schneider could live on $120,000 annually — "twice as much as I'd ever spend in a year."
So, did Schneider, then 36, take his money and ride off into the sunset? For the first year after he quit in 2017, he tried, splitting his time between playing video games and going on trips. But the novelty wore off quickly.
"As the year dragged on, I found that, there's something missing in my life. There's no tension," he says. "I wasn't working towards a goal or any progress. And it started to feel a little bit empty."
In 2019, Schneider started an Instagram account where he shared daily personal finance and money tips. Soon, the excitement was back.
"Some people like kite surfing or paragliding or skydiving, and I like Roth IRAs and index funds," he says. "If I can talk to someone for 30 minutes and change their financial future, it's still pumps me up every single day."
By mid-2020, the account had grown to 90,000 followers, and Schneider found many of them were sending in the same basic finance questions. In response, he made a video course, which he began selling later that year for $79. Within a week of launching, he'd made $110,000.
"It took me four years of my first company to make $110,000," he remembers thinking. "So this might actually be a real business."
That business, The Personal Finance Club, has brought in about $1 million in sales since it began generating revenue in October 2020. Schneider and his two full-time employees on the project each bring in $70,000 per year, plus additional payouts in the form of bonuses and profit sharing.
For Schneider, continuing to work despite having reached financial independence beats laying on a beach somewhere.
"I don't really see retirement as the goal. I think financial independence is the goal," he says. "I want to be able to direct my time as I see fit and do the things that I feel passionate about."
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