When Matt Ross got his first job after college as an investment banker, he did something few people at any age are able to do: He saved and invested over half of the money he earned in each paycheck.
“Instead of having direct deposit into one account, I set it up so that more than half my paycheck would go directly into savings, then I lived on the remaining 40%,” says Ross. “It trained me not to think about the majority of my paycheck and let me be disciplined about sweeping that portion of it into stocks and ETFs.”
Obviously, having an investment banker’s salary is helpful if your goal is to save and invest over half of what you earn—but the concept of disciplined, early-career saving and investing applies to everyone. And it’s set up the 28-year-old Ross to be in a position to retire before he reaches the age of 40.
Matt Ross
Perhaps the most important component of Ross’s journey toward an early retirement is his success as an entrepreneur. Despite the fact that he enjoyed working as an investment banker—and was receiving increasingly large paychecks—Ross ultimately decided he wanted to build his own company. A few years ago, he and a business partner launched Slumber Yard, a mattress-review website and YouTube channel, to help arm the increasingly large numbers of consumers buying mattresses directly online with the information necessary to make good choices. Today, Slumber Yard employs 12 people and, last year, had revenues north of $2.5 million.
Ross approaches building wealth and preparing for an early retirement through entrepreneurship in a slightly different way from other startup founders—his focus is on disciplined saving and diversification. “Founders of startups are obsessed with raising capital, and any dollar of profit gets reinvested in marketing and other ways to grow the business—and that’s why they lose money the first few years,” he says. “But with our experience in banking and with watching so many companies go downhill, we don’t reinvest every dollar we make back into the business.”
Instead, Ross and his business partner use the distributions from their company’s profits to make other investments. “It’s a way for us to de-risk so not all of our eggs are in one basket,” he says. “We could be a bigger company with a bigger staff right now, but I’m glad we’ve approached things this way.”
If all goes well, this approach will allow Ross to continue building his company while simultaneously readying himself to retire before he reaches the age of 40.
A former editor at Los Angeles magazine, Chris Warren has written for publications ranging from Institutional Investor and Forbes to National Geographic Traveler, Oxford American and Greentech Media.
Inset photo courtesy of Matthew Ross.
Read how one couple is saving for retirement through their small business or how a millennial is using serious penny pinching to save for early retirement from our Super Saver series.