Retiring using Index Funds - How?

Hello everyone! I am fairly new to the enlightening world of investing for retirement/early retirement, and to generate income.

I do have an investment plan which I will share below (feel free to share feedback), but I wanted to ask the following question:

How do people retire early via Index Funds if the compounding effect takes 30-40 years to generate a substantial amount in an account?

I imagine that the answer is related to monthly/yearly dividends generated from the index funds, however, wouldn’t withdrawing the dividend slow down the compounding effect and result in a smaller “retirement” dollar amount?

I would appreciate any feedback and maybe good resources that can help me better understand index funds/early retirement, etc.

Thank you!

  • Juan

MY FINANCIAL PLAN:

1. Increase income

  • currently own two six figure service-based businesses.
  • grow to increase W2, and K1 distributions.

2. Buy Real Estate:

  • 20 single family homes, 20 doors, Cash Flow Average ~264.11 per unit
  • $5,018.00 cash flow per month.

3. Fund Portfolio - 30 Years

  • Invest $250 to start, and work way up to $500 than $1,000 per month.
  • US Stock Index (VTSAX) 70%
  • International Stock Index (VTIAX) 20%
  • Bond Index (VBTLX) 10%

Any Feedback? Wishing everyone a great, and healthy 2022!

Hi Juan! The key to early retirement is a large savings rate combined with understanding a d tracking expenses. This post dives deeper into that: