Jason Parker interviews Jonathan about his journey to an early retirement. Jonathan is 54 years old and he recently retired this past June from a major semiconductor manufacturing company after 24 years in the industry. He is married with one son who just finished college and is starting his first full-time job. Jonathan’s wife has been a stay-at-home mom since they married, but she also volunteers at their church and in their community. Since his retirement Jonathan has been traveling to both domestic and international destinations, and believes his traveling may slow down some after a year or so. He and his wife want to live abroad for a few month at each location they visit and get fully immersed in the culture. After traveling he says he would like to focus on volunteering, learning to play a musical instrument and enjoying the great outdoors.  

Below is the full transcript:


Announcer: Welcome back, America, to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence and freedom as you prepare for and transition through retirement. And now, here is your host, Jason Parker.

Jason: Welcome back, America, to another round of Sound Retirement Radio. I’m your host, Jason Parker, and we have Episode 066. These episodes, these opportunities that I get to speak with real people around the country that are listeners of Sound Retirement Radio to share their journey. I love this, and this is one of those episodes. We’ve got Jonathan’s journey to an early retirement today. Jonathan is … I think you guys are really going to hear his story. I just want to be upfront with everybody. Jonathan and I don’t work together in any way. He’s not a client of ours here at Parker Financial or Sound Retirement Planning, but he’s somebody that listens to Sound Retirement Radio, and so we had the opportunity to connect. I heard his story and I thought, man, our listeners would really like to hear this. Jonathan’s journey to an  early retirement at age 54.

 Before we get into this too much, as you know I like to start the morning right, and renew our minds. Today I’m going to share with you Matthew chapter 5, versus 3, 4, and 5. God blesses those who are poor and realize their need for Him, for the kingdom of heaven is theirs. God blesses those who mourn, for they will be comforted. God blesses those who are humble, for they will inherit the whole earth.

 Man, that’s awesome. I was thinking this morning when I woke up … Sometimes I think that in this world that we live in, we try to … We look for hope through politicians, and I don’t think we’re ever going to find hope for America in politicians. We think that we can find less evil through legislation, and again, I just don’t think that’s where we’re going to find less evil in our world. Then freedom … The other one I think about is freedom because that’s a part of my purpose statement for our company, and I think sometimes we think we’ll find freedom in a location or destination. When you get to certain place or when you have a certain amount or … Freedom isn’t any of those, either.

 I just appreciate our listeners. I appreciate you tuning in and giving me the opportunity to share some of my thoughts here. I also like to share a joke with everybody. I heard recently about a drum and a cymbal that fell off a cliff (ba dum tss). We’re getting good over here when we’ve got sound effects to go along with our bad jokes.

 With that, let’s go ahead and get started. I’ve got Jonathan on the program. Jonathan, welcome to Sound Retirement Radio.

Jonathan: Thank you. Thank you to be invited here.

Jason: Jonathan, I appreciate you reaching out to us and making the connection. I appreciate you being a listener of Sound Retirement Radio. You have a pretty amazing story and I thought if we could just start out, and for you to paint a picture for our listeners, for them to understand a little bit more about who you are, and how you were able to retire at age 54.

Jonathan: Sure. I came to this country to go graduate school from Taiwan. After several years of school, I started my first job in U.S. when I was age 30. Now, after working for 24 years in the semi-conductor industry, I retired this past June at age 54. One of the main reason that I decided to retire early is that there are quite a few things that I wanted to do in life, which I think I would not be able to accomplish if I continue to work in the high-tech industry. For example, I always want to learn how to play a musical instrument, such as guitar. My wife and I dream about leaving abroad for two months to learn the cultures of different countries, not just being a tourist. We also want to go along 80 West for 16 months visiting different cities and national parks, of course, but that’s not the least. I want to be able to volunteer and then share my experience to more people.

Jason: Okay.

Jonathan: I’m going to share few key learnings from my preparation to early retirement. This is just my personal learning and I hope will be helpful to your audience, Jason. It might not work for everybody, just my situation. I hope it will give you something and then some learning as well.

Jason: All right, let’s do it.

Jonathan: Okay. When I first started my job I knew I had to save for retirement because my parents always talk about that when I was young, but I had little knowledge about investment. Fortunately, when I first join the company, they had this 401K investment saving training class that I first learned that I could contribute to the 401K plan and defer income tax. That sounds pretty good to me. I also remember clearly in the 401K brochure, it states in the bold face, “You could save 100 dollars of take home, just 67.”

Jason: Uh.

Jonathan: That has a major impact to my thinking. Since then, in the early ’90s I max out my 401K contribution every year and buy mutual funds. In addition to maxing out 401K, I find opportunities to pull more money into mutual funds, such as non-deductible IRA’s or Roth IRA whenever it is possible.

Jason: Okay.

Jonathan: I think maxing out the tax-deferred contribution was a pretty good basis to save into mutual fund.

Jason: Yeah.

Jonathan: Later on, pretty soon I realized that when I had the money in the plan, what do I invest? Very early on I subscribed to the Money magazine and the same kind of magazine to educate myself on investments. Once in a while I will go to library to look for more information. I read the investment kind of books and listen to radio shows, and audio books during my commute to work. Lately, in the past few years, podcasts have become very popular. I listen to podcasts, quite a few of them, especially like yours, Jason. I listen to them and after a while, I kind of believe them because I learn and I move on to something different field. Jason, yours is kind of like stayed for quite a while and I think I enjoy your show quite a bit.

Jason: I appreciate that.

Jonathan: You’re welcome. I also pick up a lot of market information from Yahoo Finance. I want to check on some performance of stock and I want to check on some discussion news, and I think that’s a very handy tool that I look at Yahoo Finance.

Jason: Wow.

Jonathan: Jason, I would say that I learned quite a bit from various sources. I always feel that time and money spent to educate myself on investment has a tremendous return and help me to understand why and how to invest.

Jason: Jonathan, I want to really dig in deep here and especially for the first 25 minutes. For our listeners that are regular listeners, they know that they’re going to be able to access this entire interview at SoundRetirementPlanning.com, Episode 066. For the people driving down the road in Seattle right now that are tuning in to the radio station, I want to make sure that we really get as much out of our time together as possible.

 There’s a couple of things that fascinated me about your story that I really want to make sure I understand more of, and that our listeners do. The first one is you came to this country at 23 years old, and then you went to school for seven years, and you didn’t enter the work force until you were 30 years old.

Jonathan: Correct.

Jason: Then you retired after 24 years. I mean, that in and of itself is amazing. I really think for people that are focused, it gives them a lot of hope. Help our listeners understand how is it that somebody can come to America and only work for 24 years, and then be retired. What’s the secret ingredient? Why would you say you were so successful in retiring so young?

Jonathan: Sure. Let me explain a few learning here and how I prepare to share that with your audience, Jason. The first one is power semi-budget. This is kind of different, not orthodox, not like everybody saying that every family have a budget. We really don’t have a line-by-line budget in our house but we make absolutely sure that there’s a positive balance in our checking account, and we pay our credit card balance every single month. In fact, lately we put it in the over-payment, so we don’t even have to worry about it. Then the credit card payment get withdraw on the [inaudible 00:09:59] account every month. I did try to balance our checkbook and then reconcile every spending for a few times, but find it is very tedious and the time is not worth spending. But I think again this could be debatable item for many others.

 Why don’t we have a budget? This is because my wife and I are limited to what is in the checking account If we have a straight positive balance in the account … The key is we buy what is needed not what we can afford or what others are buying. If we use a budget, we have a tendency to spend whatever we can afford.

Jason: Uh.

Jonathan: If we stay to … do we really need this or we can do something else.

Jason: Yeah.

Jonathan: That way, we don’t have to spend up to a maximum amount a month. Let’s say you make three thousand dollars this month and you spend three thousand dollars next, then what do you have left? You may not have left a whole lot. But, we spend whatever is needed not what we can afford.

Jason: Okay. For our listeners, getting back to … However you budget, whatever that looks like, the fact is that Jonathan has a plan. He and his wife have a structured system that they follow for saying, “Here’s how much we’re going to spend.” In their case, they just … They don’t spend more than what we put into the checking account and they only buy what they need, not just buy whatever they want. I think it gets back to this idea of telling your money what to do instead of your money telling you what to do. That’s awesome, Jonathan.

 Part of your story, too, that really fascinated me, when we talked about early retirement, is you mentioned that when you were going to school as a child, that you were passionate about … You wanted to learn music and you were never given that opportunity because the emphasis was on science and math, and those subjects.

 Tim Ferriss, he wrote a book called “The 4-Hour Workweek” and one of the phrases he talks about in there that really captured my imagination was he called it “The Deferred Life Program.” This idea that we to work and that we defer all of our dreams out into the future, to some future point, when we retire. I want to ask you about that. Do you feel any sense of regret? You mentioned one of your dreams here, one of your goals is to learn a music instrument, something you’ve wanted to do since you were a child. Do you regret not doing that earlier and focusing so much on going to work?

Jonathan: Yes and no. Right now I feel that I may not be that quick in picking up, actually learn a new musical instrument. I try. It’s taking me a lot longer than the younger guy in the club, I realized that. But I think it also gave me some inspiration in work, if you will, because I spend more time studying. I probably have more than average income job. Like I say, I have some regret, I wish I learned more, but I also appreciate that I spent the time to be able to go to a school, get a good grade, get a good job, and then get to retire early. If I didn’t do that, maybe I won’t be able to retire early now.

Jason: Uh.

Jonathan: It is both good and bad.

Jason: I guess I know for me, personally, I love the work that I do. It’s hard for me to imagine actually retiring from this, because I get to talk to awesome people like you and hear your story, and hear what’s important to you. But at the same time, I think, well jeez if you work for 24 years and the goal is to retire from what it is you’re doing, is that really … Is that the best way to spend our lives? I think about those things.

 The other thing I wanted to ask you about that I really found interesting was part of your diversification strategy was to invest in real estate. You’ve had some success in real estate, so tell our listeners a little bit about how you invest in real estate, and how that’s an important component of your overall retirement strategy.

Jonathan: Sure. Let me talk a little bit about diversification. I truly believe in diversification. Right now, my stock and mutual funds I divide it into three portions. First one is managed by a major brokerage firm that they pick and choose a stock ETF, more like a active investment. Of course, they don’t trade everyday, but they look at portfolio and they sell a few shares here and there based on the performance, it’s time to harvest the gain every quarter. The second part is more of a passive investment is also managed by another company. They are famous for this low-cost index mutual fund. It’s more of a passive investment. They are just buying the index funds for me. The rest I manage it myself, so those money that those funds that will be able to support me for my next five years of living expense. By doing that, I’ll be able to tell the account manager and say, “Go invest. I will not touch those money for five year.” So instead of tell him I need five thousand dollars out every month or so, I just tell them go ahead, I will not touch money. Makes the goal and is certainly a lot easier for them.

Jason: I love that. That gets back to this idea of diversifying your time horizon. The money that you don’t need for the longest amount of time, you can take the most risk with. That’s a concept that I teach in my book, “Sound Retirement Planning.”

Jonathan: Right. Also, that way, I don’t really need to add particular investment style. You just buy mutual funds and buy stocks, and you do day trading. That way … Of course, I don’t do day trading. It takes too much time and may not be a success. I kind of spread out. I do myself a little bit, maybe buying more bonds so that I can be sure of the return. If I follow the bond to maturity, then somebody that .. After they pick they buy their stock and funds, the other party is the low cost index fund, they are just doing the index fund, low cost strategy. That is diversification to me.

 For rental property, when the market when down in 2008-2009, I learned that was the first time in history, the past 100 years, that both stock market and the housing market has substantial decrease at the same time. When I realized that, I have only one retirement got stuck, nothing can go up and down, so I really need to expand my diversification. Then I start to look for rental properties. I bought a few of them, and then right now my retirement income, half of the income is provided by the cash flow from rental property. Again, I couldn’t stress enough of diversification. I also want to say that one income is probably not good for all kinds of people. If you don’t want to deal with tenants or a lot of care issue, that’s not good for you. However, you can always hire somebody to do that, but then the cost associated with it. If you ask me why I continue to invest income property, I probably not, but I definitely get out of it when I’m getting older, when I really don’t want to work with all the everyday issues. But right now it’s being handled by a property management, so I’m kind of isolate from that. That’s a good thing.

Jason: You really like real estate. What are some of the advantages that you see to invest in real estate as a tool for helping you plan for your retirement?

Jonathan: Real estate, in my opinion, it’s inflation protected. If you look at the housing price index in the 45 years or so, the home price, regardless of the price up and down of course, that the home price is kind of beat the inflation a little bit. So say you bought the house 40 or 30 years ago, it’s price will appreciate somewhat due to inflation. That means then the house price, if you constitute the principal would appreciate with inflation, so you’re protected there. For rental property, at the same time, you will get income, so to me, that income at the percentage still better than 10 year [inaudible 00:20:07] which is 10%. It’ going to be 4 to 5% right now. To me, it’s a better return income. But like I say, rental property has it’s own risks as well, like the property can go down.

Jason: Uh.

Jonathan: It could have damage, they have repair, they have earthquake. It’s not like annuities, the only possible risk is probably insurance company itself.

Jason: Right, and one of the …

Jonathan: And account diminish.

Jason: One of the things you talked about too, was this idea that instead of using something like an annuity for guaranteed cash flow, that you’re using real estate to provide that annuity type of income for you. So far that’s been pretty stable.

 I want to remind our listeners, as you’re driving down the road this morning, you’re listening to Episode 066. I’m interviewing Jonathan. He’s a listener of Sound Retirement Radio. This is one of my favorite things to do is … I believe that collectively, we are better together than we are as individuals. If we can bring somebody like Jonathan onto the program and share his story, his journey, the things he’s done well, the mistakes that he’s made to help you get to that destination point that much faster, then I’m excited about that. I hope more of you will reach out to me.

 I want to remind you, too, that on the website, SoundRetirementPlanning.com, we’ve got two really important resources that you need to plug in to. Number one, I have a free chapter of my book where you can learn how to maximize your social security benefits. And number two, we have a video series that we’ve created called, “The Sound Retirement Planning Blueprint.” When you visit SoundRetirementPlanning.com, that’s on the right-hand side, and those are free resources to you. We want you to plug into those, we want you to see what a good retirement plan should look like, and we want you want to maximize your social security because retirement’s all about cash flow.

 Jonathan, I’m realizing too, just so you know, we’re right about 22 minutes, so we’re going to probably have to extend our interview for our podcast listeners, the people that listen online, so we can really dig into the details. I really want to understand some of the metrics that you’re looking at when you’re buying real estate, and how much leverage you use when you’re buying that, and what you look for in cash flow.

 When we were talking in our pre-interview time, you mentioned two books that you read that helped you clarify and determine that this is the time for you to retire. Would you mind sharing the two books that really had an impact on you as you were trying to make that determination as to whether or not you should retire?

Jonathan: Sure. One of them is a book called, “Halftime” by Bob Buford. I’m sure that it’s a popular book. That book really strike me and say that I could really have a second half in life, you don’t have to just have one career. We are not stuck with whatever we’re working on here. I’m a person like a little diversification, I like do something different. My previous job pay pretty well, but I have, like I say, learning instruments and traveling, I want to be able to have time and the schedule to experience that. To me, that is part of experiences in my life. That goes to the second book that …

Jason: Jonathan, before we get into the second book, unfortunately we’re at that time where we have to cut our time for the radio short. Soon as we come back we’ll talk about the second book that had that impact on your life.

 Folks, you’ve been listening to Sound Retirement Radio. This is Episode 066.

 Jonathan, stick with us. Thank you for being a guest on Sound Retirement Radio this morning.

Jonathan: Okay. Thank you.

Announcer: Information and opinions expressed here are believed to be accurate and complete. For general information only, and should not be construed as specific tax, legal or financial advice, for any individual, and does not constitute a solicitation for any securities or insurance products. Please consult with your financial professional before taking action on anything discussed in this program. Parker Financial, its representatives or its affiliates have no liability for investment decisions or other actions taken or made by you based on the information provided in this program. All insurance related discussions are subject to the claims-paying ability of the company. Investing involves risk.

 Jason Parker is the president of Parker Financial, an independent fee-based wealth management firm located at 9057 Washington Avenue Northwest, Silverdale, Washington. For additional information, call 1-800-514-5046, or visit us online at SoundRetirementPlanning.com.

Jonathan: Yes, I’m here.

Jason: We’re back, recording for Episode 066. Thank you, again for being a guest on the radio show this morning, and for this extra special edition that you bring to our podcast listeners.

 What was the name of that first book that you mentioned?

Jonathan: Bob Buford, “Halftime.”

Jason: “Halftime,” by Bob Buford.

Jonathan: Yes.

Jason: The second one that had the big impact, you were just about to share with us that one. What was that?

Jonathan: It’s called “The Purpose Drive Life” by Rick Warren. I’m sure a lot of you know about that book. That book really gave me, and kind of strike me about each one has a purpose, even by God. It’s not just by accident we’re here, there is really something that God designed us to accomplish in life. I really want to experience that, seeking his purpose of my life, and be able to not only to experience my life to its fully, but also feel what I was created for.

Jason: Wow. Has that become more clear to you since retiring, the purpose that you feel that you’ve been placed here for?

Jonathan: Yeah. I think so. Once I started to realize that retirement is near, I started think about what would I be doing, why am I at this point? There are quite a few things that I can share with your audience. One thing is that money is not meant to be kept, it’s meant to be spent. If you are just keep making money, then put it in the bank account, it’s like burying treasure in the ground. I don’t plan to die rich. We know that we are just a [inaudible 00:27:02] of the money that have been given to us God. We don’t own it and we can’t take it to heaven. That’s pretty clear to us, so why not just experience a full life and at the same time, share the wealth, knowledge, and the experience, the story with others, which is the purpose. A lot of times we can experience the joys of giving and of helping others at the same time.

Jason: Wow.

Jonathan: I think about why I’m retiring, why I want to do this way, and I think I about I and my wife traveling to experience different cultures, and then be able to help others through volunteer work at church, and see how it goes. I don’t have a solid plan right now, but I have a few thinking. I’m just going to try and see how it goes, because I just retire for four months, and I’m feeling a traveling mode at this moment. I’m testing a few things like sign up for music instrument learning class. I just bought a harmonica yesterday and see how it’s going to play out.

Jason: Oh boy, that’s fun. You know, as a kid growing up, my dad was a great … he is a great harmonica player. He has this little wooden puppet, kind of, and he would put this little paddle under his leg, and he’s play the harmonica, he would have this little superman puppet dancing up and down on his … It was so much fun as a kid. I remember thinking back about that.

 I want to ask you, because you’re a Christian, and that’s an important part of who you are and your purpose. I find that there’s a lot of people that listen to this program that are Christians. There’s probably a lot of people that listen to it that aren’t, as well. Were you born a Christian? Was your family a Christian family? Was that what you were raised to believe to be the truth?

Jonathan: No, I wasn’t. I was from Taiwan like I say, and it’s more of a Buddhism, Taoism society. It’s not until I came to the States, meeting my wife, and she’s a Christian, so that’s how I accepted Christ.

Jason: That a …

Jonathan: It’s amazing.

Jason: That is awesome. If you don’t mind, maybe just sharing that a little bit more. How old were you when you came to know Jesus?

Jonathan: I was 39, so it’s only 15 years ago.

Jason: Wow. Was there anything in particular that just kind of captured your heart and made you look that direction?

Jonathan: No. I think that I’m an analytical guy. I went to church a few times with my wife. In the beginning I wasn’t very interested and I dozed off Sunday morning. But after a while, I realized that wow, what the pastor say makes sense. When I start looking at the Bible it all makes sense. It’s simple because I have engineering background so I’m very analytical, very logical. One metaphor that I use and drew myself is that, if you look at us, we are created by God. It’s like humans create computers. How to teach the computer to work the best is to look at the users. Many created by the designer of the computer. For us, how do live the life fully is to look back and look at how we are created. There are many printed in our Bible that … this is the way that we are created and this the way you’re supposed to live your life.

Jason: Wow. I tell you, that is so inspiring. There’s people out there, maybe they knew, they were raised in a Christian family and they fell away from it, maybe they’ve never known it. I just love the fact that at 39 years old … You said it was 39, right?

Jonathan: Yes.

Jason: At 39 years old, somebody that’s very smart, obviously, that has accomplished a lot in their life, who’s very analytical, can find that relationship with Jesus and just have this renewed sprite, this renewed love of life. I’m so inspired by that. I appreciate you sharing that story.

 This all seems kind of trivial when we switch back to finances, coming from something like that. I do want to ask you about investing in real estate because you own several rental properties now. Help our listeners understand, what are some of the metrics you look at when you’re looking at real estate as an investment, and the cash flow from that. How do you do that?

Jonathan: Like I say, I use rental property primarily for a cash flow purpose. I leverage the properties, meaning that I borrow money from banks, and because that generates a better return. Instead of buy one property with cash, I’m buying four properties, each one has a 25% down. I purposely stagger the mortgage maturity date, spread it out, so as time goes on, some of the property will be paid off. That means my cash income will not only increase, by the word increase, so inflation as well. Also once in a while, a few years, every two year, the property will have bank loan paid off and I don’t have the mortgage payment, so I get a boost in my cash flow as well.

Jason: That’s awesome. Just so I understand there, when you’re buying properties, you put 25% down initially when you buy them, from a cash flow standpoint. You had mentioned just briefly some of the metrics that you look, like when you use Zillow as a tool at understand whether or not something’s going to cash flow. You also found that after a home gets to a certain size, the cash flow starts to diminish. Tell our listeners a little bit more about that research you’ve done there.

Jonathan: Sure. You should know that rental income is very local. What that means, obviously I can explain. Where I am now in Washington state, I look for properties that not too old because old properties tend to have lots of repair and I’m not very handy, so I don’t like to repair the house that was just rented out and get a decent income from that and make it stable. I look for properties, single house dwelling, three bedroom, not one or four bedroom because if you have too many bedroom you got bad returns. The rent to price the house, rental price ratio will degrade. I don’t buy very expensive homes, so I just make sure that the rent-to-price ratio somewhat in the sweet spot. To us in our area that’s like two bedroom to four bedroom, not more than four bedrooms. Has a single house, not duplex, although I may have to look at duplex later. I also have a rule of myself, I don’t want to buy too many rental properties that I could not pay off the loan.

Jason: Uh.

Jonathan: Although I owe bank money, but I could pay them off. The reason I have loan is to improve my cash flow.

Jason: Uh-huh. You talked about a rent-to-price ratio. Would you mind sharing what that looks like for you?

Jonathan: It’s about 15. Maybe, say you buy a house and you rent it out, and receive 10 thousand dollar in rent income. You take that 10 times 15 or 20 and that equals to your house price. I think it’s normally all the rent you receive in a year to the price of the house you pay for. Now a rate is about 15 to 20. It may not be the best in the country. In the city in the South it could be as low as 10 or 8. But I don’t like to go to places far away from where I can see everyday.

Jason: Let me make sure I understand that. You take the rent income that you’re going to receive. If it’s total of 10 thousand dollars in a one year period of time …

Jonathan: Right.

Jason: You multiply that by 15 or 20 …

Jonathan: Right.

Jason: Then that determines the price of the house. If you are spending more than 150 thousand dollars, 120 thousand dollars … Help us break down those numbers exactly.

Jonathan: Sure. I think you’re doing it right. Don’t forget the rent income you receive, you have to pay property tax. I pay management fee. I have to pay HOA, the association fee. All the repair. You may get 80% or 75% as an income from your tenants as monthly income.

Jason: That rent number that you’re talking about, that’s your gross income. It’s not the net income …

Jonathan: Correct.

Jason: … after fees and taxes, and insurance, and all those different things.

Jonathan: Correct. After you pay all the fees then if you have a mortgage on the house that you have to pay the bank. The mortgage has two parts, right? Everybody knows that it’s principal and interest. The interest is gunk, the principal is increase the equity of the house, so that’s not your cash flow. But when you sell the house, you get that principal back. Even if you buy a house, then you have very little cash flow. You don’t generate lots of cash every month, you are putting money into the equity of the house. Say you have 15 years or 30 years loan, when the loan matures, you get the house free and clear.

Jason: The rent-to-price ratio ultimately it’s gross income, in this case 10 thousand dollars. At 15 time says you don’t pay more than … If you can’t get at least 10 thousand dollars of rent from that house, you’re not going to pay more than a 150 thousand dollars for the house. That’s kind of the ratio that you’re looking at there to determine whether or not it’s going to be a good investment for you.

Jonathan: Right. Of course, the location is very important. Looking at the school district and looking at the neighbors, if association is taking care of the area. Do you have people fixing their cars on the street all the time?

Jason: Yeah.

Jonathan: Just look for those things. Ask yourself, would you live there?

Jason: I know you’re a learner. You love to learn and you’ve plugged into a lot of different resources. When it comes to investing in real estate, is there a place where you’d like to go to get information on how to do that better? Is there a book that you read, podcast you listen to, magazines you subscribe to?

Jonathan: No, I did not. I read a book or two. I didn’t finish them, to be honest. I listen to a few podcasts. I think the principle is very straightforward. Just make sure that you track all the income and expenses, put it in a spreadsheet. Like I say, I’m an engineer background. I love spreadsheet, I track all the spending, I calculate the returns, calculate the cash flow, and I’ll be able to track on this house or generate X dollars of cash flow this month. How was it doing last year at the same month.

Jason: Oh.

Jonathan: How was it doing the whole year. I think, again I want to stress to all of the trainee, you can educate yourself or you can get somebody manage your account or assets, but you have to make sure that you have a little spreadsheet that you’ll be able to track that … At least every quarter, look at that. How’s it doing, why is it going down, why is it going up? Like I say, the stock market will go up and down, but you only have one retirement.

Jason: You’re a smart guy, you’re an engineer, you’ve got a lot of spreadsheets, you’re diversified through both stocks, bond, mutual funds, real estate. You retired early at 54, but I want to ask you kind of a tough question here. What’s been your biggest financial mistake, Jonathan?

Jonathan: I was trying to get rich too quickly. Ten or 15 years ago when I started putting money into 401K, I realized that’s not fast enough. I don’t have a lot of patience, so I trying to use the option to get rich quick, and I realize that’s not the right way to do.

Jason: Uh-huh.

Jonathan: You know that options, I bought all options. I lose quite a bit of money. Not a good thing.

Jason: Okay.

Jonathan: Just everybody knows, that options expire, worthless 75% of the time. When you use options to try and get rich quick, be careful.

Jason: Yeah. That’s a good warning. What about, if we could put you in a time machine, and you could go back to that 23 year-old guy that came over from Taiwan and started again, what would you do different?

Jonathan: Sure. I think I can bring up the experience that I have with our son. I think we were playing with time and I picture that I and my wife enjoying our life, and if our son is struggling financially, that wouldn’t be a great picture. I want to share a little bit about how we worked with our son, for him to manage his money.

Jason: Okay.

Jonathan: We sat down with him when he was a teenager. We read a book called “Money Matters for Teens.” That is by Larry Burkett, by Crown Financial, I believe.

Jason: “Money Matters for Kids” by Larry Burkett. Okay.

Jonathan: “Money Matters for Teens.”

Jason: “Money Matters for Teens,” okay.

Jonathan: Right. You can find it on Amazon. The book teaches teenagers on tithing, saving, bank accounts. Very basic, very simple. We sit down with our son to read the book every week, and then in return he gets an allowance. We give him an allowance that he make a decision on the money and he can use the money to buy everything he needs from head to toe. We don’t buy him and we don’t tell him what t-shirt to buy, what jeans to buy, or what sneaker to buy, that’s his decision.

Jason: That’s great.

Jonathan: But at the same time, our house so my wife and I provide him the basics, like he gets to eat at home, he use the same shampoo and tissues that we use. But if he wants a special shampoo, he has to spend his allowance to do that. He can spend all his money, but if he runs out of his allowance, then he has to wear socks with holes in them. So, I think …

Jason: It probably doesn’t bother him one bit if he’s like most teenage boys. Haha.

Jonathan: I think it’s good to educate your son and give them some early learning, and by the way … If our son growing up and he found part-time job, we match his higher-ed contribution 100%.

Jason: Wow.

Jonathan: Since high school, my son has regular contribution to his higher-ed account, then I match it 100%. To answer your question, Jason, I think what I would was say, this probably been say many, many times, start early. Get educated early. It’s never too late. Even before you go to college, start thinking about your investments, start thinking about one step ahead. I think that’s going to help because that money safe. Time will take care of all the market up and down. It’s the best time to invest when you are young.

Jason: This interview could go on for hours, I’m sure. There’s so much that you have locked in your head there, but we’re just about out of time here. I want to ask you, if there’s just one thing that you wanted to leave our listeners, what’s the most important message you want to convey to the folks that are listening to this podcast episode?

Jonathan: Yeah. I can attest that we can make lots of money, can make less money, but we only live one life, and we only have one retirement. Look at this, how do we use this, what we have been provided, and then make it fully and into its purpose. That’s what I would recommend to your audience. At the same time, we’re here for each other. We’re never here by ourselves, that’s why. We share our experience and help each other out, and hopefully we will learn from others. I have learned a lot from others as well, from previous podcasts, from the radio shows, from the books as well.

Jason: That is awesome. Thank you. I really appreciate. I know it’s not easy to be this transparent and share all of this personal information, but what you said really has impacted my life, and I know it’s going to really impact a lot of other people’s lives too, Jonathan. I appreciate you agreeing to be a guest here on Sound Retirement Radio, to share your journey to an early retirement at age 54. You didn’t even enter the workforce until 30, so that’s just awesome. Thank you so much for being a guest.

Jonathan: You’re welcome.

Jason: All right. Take care.

Jonathan: Okay. Thank you.

Jason: Bye-bye.

Jonathan: Bye.