Early Retirement: 3 Simple Rules

I get asked all the time what my secret was: how was I able to retire early?  Well, I didn't win the lottery.  I didn't strike it rich with stock options.  I didn't make a shrewd investment in Indonesian timber or buy Google at its IPO.

But that's good news.  You don't need blind luck or prescience.  Retiring early is possible if you follow these three simple rules:
 

1. Earn a good income

2. Save like crazy

3. Invest wisely

You gotta admit, that's about as simple as it gets.  There is just one problem: it is really, really hard to follow the rules over extended periods of time.  It takes a lot of discipline.  And you can't get away with just doing one or two of them.  To illustrate...

Doctors make really good money.  Easily $200K.  The typical anesthesiologist makes $400K just for putting you to sleep.  (Granted, the hosts of "The View" make even more for basically doing the same thing...)  But these doctors are also notoriously bad with money.  And I have empirical evidence.  Or, I would have if I could remember where I read it.

In any case, I once read about research that showed doctors tend to spend their money to show off their wealth, and have little left to invest.  And when they do invest, they are typically way overconfident in their abilities.  So they invest in stupid stuff.  Great with Rule 1, really bad with Rules 2 and 3.

Disclaimer: I am not anti-doctite.  Some of my best friends know people who are doctors.

Okay, great.  Docs are the bad boys of the three simple rules.  So, what does it take to be rule abiding?  What is a good income?  How much saving is required?  What does it mean to invest wisely?  I'll cover those in future posts.