Residing close to the shoreline, with a loyal canine companion by his side and ample room to strum his ukulele, might be considered an idyllic post-career life for many.
However, for Ethan Nguonly, this is just the starting point.
At the young age of 22, Ethan is an avid participant in the FIRE (Financial Independence, Retire Early) movement. In fact, one could argue that his journey towards fiscal autonomy commenced long before he reached adulthood.
While the concept of early retirement might not have been clear to an 11-year-old Ethan, that tender age marked the genesis of his comprehension and esteem for the art of investment. The foundational knowledge, implanted and nurtured by his parents, revolved around the quintessence of stock investments and the magical prowess it possesses to augment one’s financial resources.
“My parents elucidated the concept quite profoundly,” Nguonly shared with CNBC Make It. “They illustrated the predicament of leaving money dormant in a savings account, emphasizing its inevitable depreciation over time.” His parents underscored the imperative of learning the skill of diverting funds into profitable ventures, illustrating that investment isn’t just an option but a necessity to safeguard, and potentially augment, the value of one’s financial assets.
Initiating his investment journey early and consistently, coupled with navigating through college with a hustle to sidestep debt and economizing by residing with family, has propelled Nguonly significantly towards his ambitious objective of accumulating $5 million and bowing out of the professional arena by age 35.
Nguonly’s financial portfolio is currently burgeoned by approximately $135,000, strategically dispersed across retirement and various investment accounts. Additionally, his assets include properties in Florida and California, with aspirations to burgeon his real estate holdings imminently.
Based in Orange County, California, meticulous and intentional expenditure is Nguonly’s mantra, ensuring maximum allocation of resources to his diverse investment portfolio. His professional stint at Google garners him an annual remuneration of approximately $194,000. This income, comprising a base salary of $134,000, a 15% annual bonus, on-call allowances approximating $10,000, and $30,000 in restricted stock units, facilitates a comfortable lifestyle.
However, Nguonly is no profligate spender. His financial philosophy is anchored in frugality, a balanced approach that optimizes saving without undermining the essence of quality living. “My expenditure is as restrained as possible, yet without compromising the qualitative aspects of my existence,” Nguonly affirms.
Investing from a young age
In the initial stages of his investment journey, Nguonly was guided by his mother’s wisdom. She presented him with a selection of companies, subsequently acquiring stocks on his behalf in line with his choices. As he matured, the earnings accrued from tutoring younger pupils found their way into his burgeoning brokerage account.
Reflecting on his younger self, Nguonly recalls an epiphany that struck him. “I was mesmerized by the realization that my wealth was escalating, augmenting, without the direct intervention of labor on my part,” he expresses. “This was my inaugural exposure to the profound concept that my investments possessed the intrinsic capacity to generate income autonomously, negating the necessity for my active labor.”
This revelation that capital could be cultivated passively, without the incessant demands of active toil, was pivotal in shaping Nguonly’s perspective on wealth accumulation and financial independence.
The tutelage in fiscal responsibility that Nguonly received extended beyond his adolescent years. As the prospect of college loomed, his parents laid out a condition: they would finance two years of his education, but he would need to shoulder the responsibility for the remainder. Keen to sidestep the snare of student loans, Nguonly embarked on a mission to earn his bachelor’s degree in a compressed timeframe of two years.
Come May 2021, he had triumphantly navigated through the computer science program at the University of California, Berkeley, slicing through the standard duration and emerging debt-free, a feat accomplished by intensifying his academic workload and enrolling in summer classes.
However, the journey was not without its disruptions. The COVID-19 pandemic imposed an abrupt pause, propelling him back home amid his freshman year. The lockdowns, while unavoidable, left Nguonly with a tinge of regret. “There’s a part of me that wishes for a richer, more comprehensive experience of that chapter of my life,” he confesses.
Yet, the accelerated academic journey, though rigorous, is not a source of regret for Nguonly. The sacrifice, in his view, was a worthy exchange. “It was a trade-off that elevated my financial aspirations to the forefront, propelling me swiftly along the path of financial self-sufficiency,” he articulates. “Given another chance, I’d willingly embrace the sacrifice once more.” The abbreviated college journey wasn’t just an academic acceleration; it was a leap towards financial autonomy.
‘If I could get into Google, my life would be complete’
Nguonly’s fervor for computer science was ignited long before his collegiate journey. During his middle school years, a robotics project undertaken for a science fair was the catalyst that sparked his enduring interest in the domain. Throughout high school, he meticulously honed this intrinsic aptitude.
“Computer science wasn’t just an academic pursuit; it was a passion embedded deep within me, one that I not only excelled in but also derived immense pleasure from,” Nguonly shares. “The convergence of personal enjoyment and professional viability in this field made me realize my fortunate circumstance.”
In the aftermath of his expedited undergraduate journey, Nguonly’s credentials and zeal earned him a position at Qualtrics, a renowned software entity. Concurrently, he embarked on a quest to attain a master’s degree in Information and Data Science at UC Berkeley.
Nguonly’s modus operandi remained unaltered — a swift, financially prudent pursuit of academic excellence. Employing a blend of determination and strategic academic engagement, and juggling professional commitments, he secured his master’s accolade in August 2022, barely a year into the program. The agility and financial prudence that characterized his undergraduate sojourn were evidently mirrored in his postgraduate endeavors.
In the thick of his master’s journey, another ambition simmered within Nguonly: securing a position at the tech behemoth, Google.
“To be a part of Google has been a harbored aspiration for as long as I can remember,” Nguonly confesses. “I’ve always been in awe of Google’s colossal footprint in technology and its relentless pursuit of pioneering innovation. To me, earning a place in such an esteemed institution equated to the culmination of my aspirations.”
In December 2021, the realization of this long-held dream came to fruition. Nguonly transitioned into the role of a software engineer at Google, marking a pivotal milestone in his professional trajectory. The fiscal discipline ingrained in him coupled with a tuition reimbursement perk from Google, enabled him to finance his master’s degree journey devoid of the encumbrance of student loans.
The intertwining of disciplined saving, corporate support, and relentless ambition not only facilitated Nguonly’s academic progression but also underscored a narrative of triumph over financial and professional hurdles. Every step, from his early investments to academic expeditions and the realization of his Google dream, was marked by a meticulous balance of ambition, preparation, and financial prudence.
From his family’s homes to a house of his own
While the remuneration from Qualtrics and an initial salary of $118,000 at Google afforded Nguonly the financial leeway to afford his own living space, he opted for the economically prudent route of residing with family for two years post-graduation. This decision was instrumental in maximizing his savings and investment potential.
Despite the financial benefits, the arrangement wasn’t devoid of its challenges. Living with family while navigating the initial phases of adult independence presented a unique set of constraints. Nguonly candidly shares, “There are inherent limitations. The autonomy to host guests or live unrestrained isn’t as pronounced.”
Yet, the fiscal dividends of this living arrangement were significant and justified the temporary inconveniences. “I maneuvered through the constraints because the financial upshot was too substantial to ignore,” he admits. “The ownership of two properties is a testament to the efficacy of that decision.”
By opting to reside with his parents in Virginia and subsequently with his great-grandmother in California, Nguonly’s savings swelled by an estimated $60,000 over two years. This economic fortification underscored the delicate dance between immediate comfort and long-term financial prosperity, a balance that Nguonly navigated with precision and strategic forethought.
As 2022 unfurled, Nguonly embarked on a significant milestone – the purchase of his first home, not for personal habitation, but as an investment property located in Riverview, Florida.
While it’s common for first-time homebuyers to purchase a primary residence, Nguonly’s strategy was fueled by foresight. “I was acutely aware that the financial commitment of a substantial monthly mortgage could potentially stymie my saving momentum,” he explains. “The strategy was to amplify my investment portfolio prior to anchoring myself to a residential property.”
The acquisition was further streamlined by a familial connection; Nguonly purchased the property directly from his uncle, a move that eliminated the need for realtor commissions. For his uncle, it meant relief from the responsibilities of property maintenance in retirement, while for Nguonly, it marked the inauguration of his real estate investment journey.
However, the geographical separation posed a distinct set of challenges. Owning property from afar necessitated a reliance on a network of local professionals. “Being a remote landlord isn’t without its complexities,” Nguonly admits. However, a handyman and a realtor in Riverview became his eyes, ears, and hands on the ground.
The property hasn’t been exempt from the usual trials of homeownership. Significant repairs, including a roof replacement and fence repair following Hurricane Ian, alongside a recent air conditioning overhaul, have somewhat diluted the investment’s profitability. Yet, Nguonly remains undeterred, netting approximately $200 monthly from the rental income and valuing the learning curve and long-term appreciation potential inherent in property ownership.
A year subsequent to venturing into the realm of real estate investment, Nguonly marked another significant milestone – he became the owner of a primary residence situated in La Palma, California. The acquisition, a spacious 3-bedroom townhome, came with a price tag of $647,000. It’s here that Nguonly finds solitude and companionship with his Samoyed puppy, Sakura.
For Nguonly, homeownership isn’t merely a financial investment but also a sanctuary of stability, an escape from the incessant escalations of annual rent. The townhome, nestled in the heart of Orange County, offers more than just a living space. It’s a personal haven where hobbies and relaxation converge, complete with a backyard that serves as a playground for Sakura, and ample indoor space that accommodates Nguonly’s diverse interests, from the melodic strings of his ukulele and piano to the liberating rides on his skateboard.
“I’m enamored by the eternal embrace of sunshine that graces Orange County and the mesmerizing allure of its beaches,” Nguonly expresses with a tone of contentment. Here, in his own purchased abode, financial prudence intertwines with the qualitative richness of life – a harmony of fiscal intelligence and life’s simple, yet profound, pleasures.
How he spends his money
- Housing and utilities: $6,740 between his two mortgage payments, homeowners association fees, internet, electric, gas and water bills
- Debt repayment: $1,000 toward his only outstanding credit card balance from repairing the air conditioning at his rental property. He has about $10,600 total left to pay off.
- Transportation: $639 for his Tesla payment
- Savings and investments: $442 toward his brokerage account and health savings account
- Insurance: $328 for dental, vision, life, pet and car insurance
- Food: $363 mostly on takeout, plus some groceries
- Subscriptions: $290 on ping pong lessons and Spotify
- Discretionary: $122 on dog food and grooming every couple of months
Nguonly’s financial strategy is dynamic, adapting to his evolving fiscal landscape. While his predominant focus has generally been on bolstering his investments, recently, the young investor’s attention has pivoted towards liquidating his credit card debt.
His approach to retirement savings is notably strategic. Rather than dispersing contributions to his 401(k) throughout the year, Nguonly frontloads his investment. The initial paychecks of the year, complemented by a bonus received in January, are channeled to max out the 401(k). This tactic is engineered to swiftly secure his company’s 50% contribution match, optimizing the growth of his retirement nest egg.
On the transportation front, Nguonly’s choice of a Tesla is both a nod to luxury and an escape from the recurring expense of gasoline. However, this comes with the trade-off of a heightened electric bill, approximately $200 monthly, attributed to the home charging of his electric vehicle. While the option to charge at Google’s campus exists, the occasional queues deter him.
In the realm of personal expenditure, Nguonly’s spending is meticulous and intentional. The autonomy of living independently hasn’t swayed his commitment to fiscal discipline. Expenditures are meticulously curated, with Spotify and ping pong lessons constituting his recurrent subscription expenses.
The gastronomical benefits at Google, offering complimentary breakfast and lunch, further alleviates his food expenses. Nguonly’s culinary routine is a blend of home-cooked meals and occasional takeout, a balance that sustains him without imposing a substantial financial outlay.
Every element of Nguonly’s financial conduct, from his investment strategies, debt management, to daily living expenses, is orchestrated with a nuanced balance of immediate gratification and long-term fiscal prosperity. It’s a dance between the present and the future, choreographed with precision, discipline, and strategic foresight.
Nguonly’s financial philosophy is underpinned by a discerning attitude towards consumption. “I’m immune to the allure of brand-name attire and upscale streetwear,” he articulates. To him, the appeal of opulent branding is eclipsed by the pragmatic elegance of simplicity and functionality. His wardrobe epitomizes affordability, underscored by an unyielding commitment to purposefulness over prestige.
Yet, Nguonly isn’t a stranger to indulgence. His affinity for exploration and discovery is manifested in his travels. Annually, three to four destinations across the globe beckon, offering immersive experiences that transcend the confines of everyday existence. New York, Singapore, and Cambodia are recent stamps in his travel dossier. But even amidst the allure of exotic locales, fiscal prudence isn’t abandoned. Luxury is traded for value, exemplified by choices like opting for a shared Airbnb over the extravagance of opulent hotels. “Every journey is a measured decision, where the experiential enrichment is meticulously weighed against the financial outlay,” Nguonly affirms.
Investment remains a cornerstone of his fiscal conduct. A target to channel 35% of his annual take-home pay into investments is emblematic of his commitment to future financial autonomy. Yet, the acquisition of properties has introduced a new dynamic, rendering the attainment of this investment benchmark a more intricate endeavor.
In the intricate dance between consumption, investment, and lifestyle, Nguonly exemplifies a nuanced balance. Each expenditure, investment, and indulgence is not just a financial transaction but a considered step in the ongoing journey of weaving the tapestry of both his present experiences and future financial security.
His biggest money mistake
Nguonly’s journey toward early retirement, characterized by well-nurtured retirement accounts and an evolving real estate portfolio, is a narrative marked by both triumphs and tribulations. Every stride towards financial autonomy has been accompanied by lessons gleaned from missteps.
The year 2021 bore witness to what Nguonly describes as his most profound financial misjudgment. A speculative leap into the volatile terrains of cryptocurrency, amplified by margin trading, culminated in a financial setback to the tune of $80,000. The loss, comprising $30,000 of his initial investment and an estimated $50,000 in unrealized gains over a seven-month trajectory, was a stark awakening.
“I ventured into the cryptic depths of cryptocurrency with capital that wasn’t inherently mine,” Nguonly confesses. The market’s capricious temperament amplified the sting of loss, offering a sobering revelation on the perils of speculative and leveraged investments.
This experience precipitated a recalibration of Nguonly’s investment philosophy. The allure of rapid gains has since been tempered by a measured, circumspect approach focused on safeguarding assets and fostering sustainable growth. “The evolution of my net worth and investment holdings has instilled a heightened sensitivity to risk,” he notes. The ephemeral allure of swift gains is now balanced against the enduring imperative of asset preservation.
In the aftermath of his cryptocurrency misadventure, Nguonly’s investment focus has shifted. While a segment of his capital still resides in the crypto space, the core of his investment activity is now anchored in the relative stability of ETFs and the tangible prospects of real estate. It’s a transition from the speculative fervor of digital currencies to the measured, tangible prospects of traditional asset classes – a metamorphosis borne from the crucible of financial loss and the enlightening embrace of experiential learning.
Looking ahead
Nguonly’s eyes are firmly fixed on the $5 million prize, a financial zenith he aspires to ascend through assiduous investments in retirement accounts and strategic expansions of his real estate holdings. A new property acquisition every few years is integral to this grand design.
Navigating the intricacies of rental property management is no facile endeavor, a truth Nguonly is intimately acquainted with. Yet, he’s not daunted. In the labyrinth of challenges, he discerns an avenue to a future festooned with passive income streams. “Success, to me, isn’t a terminus but a journey. Each accomplishment is but a stepping stone to loftier summits,” Nguonly muses.
At the core of his early retirement ambition is a yearning for qualitative enrichment, a desire to immerse in the boundless offerings of life whilst in the prime of youth and vitality. The literary insights of Bill Perkins’ “Die With Zero” resonate profoundly with Nguonly. The book’s advocacy for the prioritization of experiences and journeys during the halcyon days of health and energy echoes his own sentiments.
“I’m not enamored by the prospect of embarking on adventurous exploits in the twilight of life. The vibrancy of youthful vigor is the ideal companion for the explorations I envision,” Nguonly asserts.
To him, the allure of early retirement isn’t encapsulated in leisurely indolence but in the liberation to immerse in life’s diverse tapestry, unencumbered by the exigencies of professional commitments. The prospect of scaling mountains, not in the literal sense but as a metaphor for life’s boundless explorations, is most enchanting when undertaken in the bloom of youth, a truth that underscores Nguonly’s quest for financial independence and early retirement.
Source: cnbc.com