My Income Streams in Early Retirement (And Why I Won’t Share the Exact Numbers)
I retired at 42. That was four years ago. A reader from my (forever free) newsletter recently asked me: “What do your income streams look like?”
It’s a fair question. Most people expect to work into their 60s, some can’t even imagine stepping away earlier.
Most people that talk about their retirement number talk about net worth. I never do. I talk about cash flows.
So it’s a good question.
Here’s the thing, I didn’t stumble into this. I started planning as a teenager. I read The Millionaire Next Door, I thought about what kind of life I wanted, and I designed a financial path that could get me there.
My system was simple: two buckets.
- One taxable bucket to cover my 40s and 50s.
- One tax-deferred bucket (IRAs and 401(k)s) for everything after 60.
That plan worked. By my late 30s, I was a liquid millionaire. At 42, I walked away from the career path completely.
And for the past four years, my family of five has lived comfortably on multiple steady income streams.
This is the story of those streams.
Table of Contents
The Foundation: Real Estate + Maxing Out 401k.
In my early 20s, I started buying rental houses with no money down. My total out-of-pocket investment across those deals was just $800.
Tenants covered the mortgages, the houses appreciated, and over time, I built a portfolio that served two purposes:
- Pay Off The Mortgages. Rent covered expenses and added a cushion.
- A Liquidation Strategy Later. When the time was right, I sold them.
By my late 30s, I started liquidating those properties. That was the bridge that carried me to financial independence.
That’s how I became a liquid millionaire by 38.
All along I maxed out my 401k. I didn’t make $50k a year until I was 30, but I still maxed it out in my 20s How? I had roommates.
Related: How I Used Real Estate to Retire at 42 (And Believe It Still Works)
Living Expenses: Why Ours Are Manageable
Before I get into my income streams in early retirement I need to talk about our expenses.
We’re a family of five living in a nice neighborhood, but our expenses are much lower than people assume. Not because we’re extreme frugalists, but because we’re smart with money.
A few examples:
- Long-Term Utility Savings. I invested substantially in solar and very high-efficiency HVAC. This saves us hundreds of dollars a month. That means less income needed to cover expenses.
- Mortgage Strategy. When we bought our house, I negotiated the seller to buy down the interest rate and then bought it down further myself instead of paying points. The result? A very low mortgage payment. It’s almost paid off.
- Lifestyle Choices. We don’t need six figures of annual expenses to feel comfortable. We focus on value, not appearances. We buy what we want but we do not waste money.
- Satisfice. I love and live the idea of Satisfice. It means spend enough to make you satisfied but not a penny more. Each additional penny spent it worth less than a cent.
This is one of the most overlooked truths about financial independence:
Income matters, but expenses matter just as much.
The reason I can sleep at night isn’t just because I have income streams. It’s because my family’s needs are aligned with those streams.
Related: I Retired at 42 Because I Never Spend Money on These Things
Now let’s get into the income streams.
Income Streams 1-3: The Taxable Trust Account
The bulk of my real estate proceeds went into a taxable trust account invested in a diversified portfolio of stocks that aligns with my family’s risk tolerance and time horizon.
Here are the income streams it provides:
- Income Stream 1: Dividends. I am not a dividend investor. I am still young and have a long time horizon. But I do receive five figures of dividend income annually. I reinvest it.
- Income Stream 2: Capital Appreciation. The market has almost doubled the account since I funded it.
- Income Stream 3: Liquidity. If I need to sell shares, I can. But I’ve barely touched it.
In fact, in four years of retirement, I think I’ve only withdrawn from it twice, once for taxes and once for a small personal need.
This account is the engine that ensures I don’t have to stress about market swings.
Related: How Much Do You Actually Need To Retire Early? The Simple Math Behind Early Retirement
Income Streams 4 & 5: The Savings Account (Yes, Really)
When I sold my last house, I just left the proceeds in a high yield savings account. Nothing fancy.
Why? Because sometimes the simplest option is the best option.
That account generates interest. Given the size of the account, and it’s a high yield savings account, the interest is meaningful.
We have drawn down on this account as needed to cover expenses.
Related Video: How I Went from $0 to Liquid Millionaire by 38 (And What Still Works)
Income Stream 6: The Website Investment
A few years ago, a friend told me about his side investment. He had purchased a website for $120,000, and it generated about $3,500 a month with only an hour of work per week.
That stuck with me.
So my wife and I bought a lifestyle blog for six figures. It’s not DadisFIRE, it’s a separate site. And here’s what made it brilliant:
- It’s 17 Years Old. That’s an eternity in internet years. It has history, authority, and momentum. It had a long track record of stable traffic, even without touching it, and then ad revenue off that traffic.
- It Requires Minimal Effort. It is actually managed by a mentee of mine. He is on his journey of wanting to go from $0-> wealth and I am trying to help him get there. In exchange, he runs my site.
- It Creates Tax Advantages. Because it’s a lifestyle blog, we can expense things. I am very conservative with it, but it is meaningful.
For example, if we rent an RV we can review it and then expense the trip because the site makes money on the review. If I was in a different place in my life I could also have the RV company sponsor the trip, but I’m just not hungry to work anymore.
We could also expense our meals and given the traffic on our site we could even have our meals paid for, etc. Having a lifestyle blog lets us lower our taxable income when we write about things.
It’s not just income, it’s also a shield. And in retirement, that mix of cash flow and tax efficiency powerful.
Related: 19 Profitable Side Business Ideas You Can Start Right Now
Summing Up Phase 1: My Six Income Streams From Age 42->60 Something
So, what are my income streams today? They fall into six main categories:
- Dividends. From stocks and funds across both taxable and tax-deferred accounts.
- Capital Appreciation. My taxable and retirement accounts keep growing as markets rise.
- Liquidation of Real Estate. Selling houses gave me the base capital that funds everything else.
- Interest. From savings accounts and other safe holdings.
- Savings Account Withdrawals. We have a very sizable savings account that we withdraw from when needed.
- Website Income. The lifestyle blog we purchased generates passive cash flow and tax advantages.
That mix provides both income and stability.
Related: Income Streams of Millionaires, According to the IRS
Phase 2: The IRAs: My Career-Long Discipline
While real estate was my accelerator, retirement accounts were for my future. I maxed out my 401k for my entire career, even in years when I made less than $50,000.
How did I do this? I had roommates during my entire single life, and I owned the house we lived in.
My wife also maxed out her 401k during the few years she worked before choosing to be a stay-at-home mom.
Today, those contributions have grown into well-funded IRAs. They sit there quietly, compounding, throwing off dividends, and appreciating in value.
And here’s the key: I haven’t touched them once.
They’re the second bucket, the one that kicks in when I hit 60. Until then, they’re just quietly doing their job.
Related: Should I Max Out My 401k? A CFA Who Retired Young Answers
Why I Won’t Share Exact Numbers
I know this is the part some readers really want: the actual dollar amounts.
Here’s why I won’t share them:
Comparisons Are Pointless. My numbers aren’t your numbers. My expenses aren’t your expenses. My mortgage isn’t your mortgage.
If I give you numbers, all you’ll do is measure yourself against them. That doesn’t help you. In fact, it can mislead you.
The point isn’t to copy or judge my numbers, it’s to copy the principle.
Create multiple income streams. That’s what sustains a comfortable life. That’s what keeps you from lying awake at night, worrying about a single job or a single asset.
The details are mine. The lesson is yours.
Related: What Is Your Magic Number To Retire Early? Hint: It Isn’t Net Worth!
Freedom Isn’t a Number, It’s a System
When I was a teenager, I knew I didn’t want to work until 65. I built a plan that gave me flexibility: taxable money for the early years, retirement money for later, and side streams that provided resilience.
Four years into retirement, that plan has worked. My family of five lives comfortably, not extravagantly. We don’t chase every dollar, but we also don’t waste them.
If you want financial independence, don’t obsess over my numbers. Build your own system. Think in streams. Diversify. Lower expenses smartly.
The Millionaire Next Door taught me this truth: wealth is about habits, not headlines.
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