42-year-old millionaire: I tried to retire early at 34—but failed. Here’s what went wrong

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In 2012, I decided to quit my six-figure job in investment banking and retire at 34. I had amassed a net worth of about $3 million that generated roughly $80,000 in investment income per year.

For seven years, I lived a charmed life in early retirement with my wife, who also retired from her finance job three years after I did. Together, we earned roughly $250,000 in passive income streams per year — mostly from dividend-paying stocks, interest from savings, municipal bonds, and rental income.

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Fast forward to the end of 2019, and my wife and I are no longer comfortable living the early retirement lifestyle, especially in a big, expensive city like San Francisco.

According to a report from the California Association of Realtors, you now need a minimum household income of $309,400 to afford a median-priced home in San Francisco, which is around $1.6 million. So even with our annual passive income of $250,000, we’re still short nearly $60,000 per year.

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Here are the main reasons I now need to retire from early retirement:

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We had a child.

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Also, when you have to start paying $2,000 per month for preschool, not using your six to eight hours of free time finding ways to cover that cost just doesn’t feel right.

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If all else fails, we will relocate to Honolulu in 2022, when our boy is eligible for kindergarten. The median price for a single-home family in Honolulu is $835,000 — or 47% lower than in San Francisco. Meanwhile, the price of a private school education (around $25,000) there is also 30% to 45% less.

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