Can you retire before 40 in Australia? These two Australians argue anyone can get rich young

The early retirement dream for Australians is getting further out of reach as strong inflation and soaring property prices mean savers must work harder than ever to build a nest egg.

Still, David Gow, a personal finance blogger and 36-year-old resident of Perth says it’s possible to retire before the age of 40, if you follow the popular Financial Independence, Retire Early (FIRE) lifestyle and financial strategy.

It advocates aggressively saving and investing from a young age to achieve financial freedom and has soared in popularity over the past 20 years.

Mr Gow quit his own job aged 28 in 2017 after working as a forklift driver for 10 years. But admits the lifestyle-change is getting harder to achieve as the Reserve Bank warns inflation is set to reach 4.2 per cent in the June quarter to follow a 3.8 per cent rise in the December 2024 quarter.

“Since the pandemic FIRE’s definitely got harder, as inflation has been higher than in the 2010s and rental and property prices have grown faster than wages. That’s a tough combination for people who’re trying to save and invest,” he said. “So now you have to maybe find a way to earn more money, stay at home longer, or stay in a rental house longer to spread costs.”

Australia has also experienced regular quarters of per capita recessions since the pandemic, where total economic growth is slower than the rate of immigration to signal average real wealth is not increasing.

Mr Gow quickly realised living payday to payday made him unhappy so he sought an alternative financial lifestyle. “It terrified me and after a while, I simply could not accept this future for myself,” he said.

His passion for ultra-saving and investing helped him and his partner build a portfolio of seven investment properties across Australia’s east and west coats, despite Mr Gow only ever earning a modest warehouse worker’s salary.

Since 2017 the couple have moved to sell the properties in exchange for a share portfolio they think pays passive income without the additional maintenance, agent fees, and strata costs landlords typically face.

Perth man plans to retire before 30

Other Australians believe FIRE involves too much sacrifice of life’s pleasures at a young age. As the movement also has a reputation for extreme saving hacks such as recycling tea bags, or not buying bin bags, toiletries, or clothes, as much as necessary.

However, Peter Cheng a 20-year-old marketing executive from Perth is an self-confessed FIRE devotee and believes he can quit working for his employer in eight to 10 years if he follows its financial strategy.

Mr Cheng says he saves 70 per cent of his salary after tax and plans to keep investing it in shares and eventually a second investment property.

He adds that spending at restaurants or pubs is a waste of money. And also thinks university is a waste of money as the fees are high and opportunity cost in losing his salary too great.

“My mates don’t go to pubs so I don’t feel pressured,” he said. “So, I don’t even drink alcohol and a lot of my mates don’t drink. The ones that live in Sydney do, but not so much in Perth. I like to go for walks, cycling, the gym, watching NBA. I don’t drink coffee, but that’s not to save. I rarely eat out, like once every couple of months, I enjoy cooking and eating at home with my family.”

Moreover, Mr Cheng says he’s a big financial winner from Perth’s ballooning property prices. “I own a house in Perth, I bought two years ago and it’s gone up $200,000. I paid $465,000 and I think it’s now worth about $660,000 to $670,000. So, I think rising prices are good, you’ve just got to get into the market as fast as you can.”

Mr Cheng now reckons he can retire on a passive annual income of $50,000, if all goes to plan.

In 2025, Westpac said the average age of its first home borrowers had climbed to 34, versus 32 at the start of the pandemic in 2020. One-in-five first home buyers are now more than 40, according to the bank’s lending data.

Starting young

To escape the rat race quickly, Mr Gow says starting to save as early as possible is critical as it gives your wealth more time to compound. This is the financial phenomenon that means a 12 per cent annual rate of return will double your investment after six years, but jump 32 times over 30 years, as earning interest on your incremental capital gains makes your money grow exponentially faster over time.

Therefore finding ways to earn a higher income and invest at a high rate of return is much more important to your success than scrimping on everyday essentials, says Mr Gow.

Once he got to the age of 23 he and his partner still bought coffee out, went to restaurants, and enjoyed the odd holiday, he says.

“The best way to protect yourself against inflation is shares or property,” he says. “Property prices rise with inflation over time, building costs are related to inflation and it feeds into labourers’ wages. Investing in [shares] is also good as companies have pricing power, so they can raise their prices and profits in line with inflation. So, if there’s costs in your life not really adding much to your lifestyle, you should save that money to invest.”

Mr Cheng also thinks higher inflation is more structural since the pandemic, therefore Australians have to be prepared to adjust.

“For me personally I don’t worry about higher inflation,” he said. “I feel like with housing going up it’s harder for young people to get a deposit, so other friends and families they’re worried about their kids not being able to get a property and are all thinking about how they can save a deposit.”

Whlie Mr Cheng may want to retire before he’s 30, according to Australian Bureau of Statistics data, the average age for Australians to retire is 63.8 years old in fiscal year 2025. The long-term trend since the 1970s is for people to work longer, before they retire.

Mr Gow insists it doesn’t have to be that way but admits the examples of Mr Cheng and himself are extreme.

“Really FIRE is about retiring anytime earlier than 65,” he says. “Some people might earn $100,000 a year and retire earlier than people who earn $350,000 a year. You can easily spend $350,000 a year if you have the mindset where the more you earn, the more you spend. So success is really a combination of things.”