When Jeremy Schneider graduated from college in 2002, the FIRE movement — short for financial independence, early retirement — wasn’t really a thing.
But the computer engineering student, who earned his master’s degree in computer science the following year, couldn’t help but notice that his peers were finding ways to retire long before he turned 65.
During the dotcom boom, “I was seeing these young people a few years older than me making millions with tech startups,” Schneider told CNBC Make It. Although he’s never heard of financial independence, “I’ve definitely heard of selling an internet company for big bucks and being financially strong.”
That’s exactly what he ended up doing. In 2004, he founded RentLinx, an advertising network for rental properties. He would sell the company 11 years later, a transaction that brought him around $2 million.
Schneider quit his 9-to-5 job soon 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 your 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 contract with Microsoft, where he had done an internship as a software developer, he started his own company. “I preferred to start my own business where if I worked 10 times harder I would make maybe 10 or 100 times more money,” he says.
Between a scholarship and help from her parents, Schneider graduated without student debt and had about $6,000 in savings from summer jobs. But that, combined with the $14,000 in revenue its website generated in its first year, wasn’t enough to pay the bills.
“I was living on credit cards,” he says. “I racked up about $10,000 in credit card debt the first year. And the second year, that $10,000 became $12,000.”
But things took a turn in year three and profits started to take off.
For the next eight years, even as the company continued to grow, Schneider maintained his salary at $36,000 per year. “For most of the time I ran my business, I was as frugal as I could be. I didn’t even really budget because I didn’t have money to budget,” he says.
That meant driving a paying 1999 Ford SUV, spending as little as possible on food, and living in a converted garage to keep his rent low.
Even with his limited income, Schneider still managed to save money, contributing $5,000 to $6,000 a year to his Roth IRA. At 32, he said, he had about $120,000 in his account, a mix of contributions and investment earnings.
In 2015, Schneider achieved his goal of selling a business when a competitor offered to buy his business for just over $5 million. Because he owned about 70% of the company at the time, his after-tax take was about $2 million.
Early retirement: ‘It started to feel a bit empty’
Schneider worked for the company that acquired her for another two years, earning a six-figure salary and helping integrate her former employees into the new company.
But he noticed that the profits from his portfolio, made up almost entirely of index funds, exceeded his salary. “My $2 million had grown to $3 million just because of market growth,” he says. “It dawned on me that I no longer needed to work.”
Under the so-called “4% rule”, which states that retirees can withdraw 4% of their portfolio value per year in perpetuity without running out of money, Schneider could live on $120,000 per year – “twice more than I ever spent in a year.”
So, did Schneider, then 36, take his money and drive off into the sunset? For the first year after quitting in 2017, he gave it a try, dividing his time between playing video games and going on trips. But the novelty quickly faded.
“As the year went on, I discovered that there was something missing in my life. There is no tension,” he says. “I wasn’t working towards a goal or progress. And it started to feel a bit empty.”
In 2019, Schneider opened an Instagram account where he shared daily tips on personal finance and money. 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, that still motivates me every day.”
By mid-2020, the account had grown to 90,000 subscribers, and Schneider found that many of them were sending the same basic financial questions. In response, he created a video course, which he began selling later that year for $79. Within a week of launching, it had earned $110,000.
“It took me four years of my first business to make $110,000,” he recalls thinking. “So it could actually be a real business.”
This business, The Personal Finance Club, has generated approximately $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 a year, plus additional payments in the form of bonuses and profit sharing.
For Schneider, continuing to work while he has achieved financial independence is better off lying 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 manage my time the way I want and do the things that I’m passionate about.”
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