28-Year-Old Software Developer Who Retired After Working Just 7 Years Shares His Stock Portfolio and Story–'I Do Not Regret It One Bit'

As living costs soar, many Americans are rushing to save and invest to achieve financial independence or ensure a comfortable retirement. A recent Gallup survey reveals that nearly half (47%) of U.S. non-retirees doubt social security will suffice for their retirement needs.

Investing in the stock market provides a way out. Earning more and investing wisely in the stock market can allow you to retire early and live comfortably. 

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Last month, someone asked investors on r/Dividends – a community of over 600,000 members on Reddit – whether anyone has leaped to live off dividends. The post received about 200 comments, with several investors sharing their success stories. One investor's story stood out and got our attention.

A 28-Year-Old Investor's Escape Plan

This investor, who said he was 28 years old and retired, started working as a software developer in the IT industry when he was 21. Initially, his income was low and he quickly realized he could not remain in the workplace culture without "sacrificing my happiness."

So he made an escape plan based on some calculations.

"So I created an excel spreadsheet that automatically imports all share data into it, with my primary focus on the current dividend yield," he said. Based on the math, the investor estimated he would be able to call it quits in seven years.

 "I told my boss at my new job that I started within the first four months, that I will be resigning in 7 years from today and he laughed."

‘Delayed Gratification Was Totally Worth It'

Day after day, he clocked in the hours and kept investing his savings in the stock market. Fast-forward seven years and lo and behold, he handed in his resignation.

"When I reached age 28, I handed in my resignation. The feeling is unexplainable (every emotion hits you at once), as constantly looking at that spreadsheet for seven years, which literally had the days automatically counting down till I could retire, felt like a prison sentence. The delayed gratification was totally worth it."

‘I Do Not Regret It One Bit'

The retired 28-year-old investor said when he resigned, he was offered a salary of over $200,000 because people had started delegating their work to him and depending on him. 

"But I was adamant about my goal, so I chose to retire early and I do not regret it one bit," he said.

Mistakes and Lessons from the Investing Journey

The investor said he made "many" mistakes during his investing journey. According to him, chasing high-yield ETFs was the most costly mistake, as this led to a decline in net asset value or dividend cuts. Fear of selling and focusing purely on growth stocks were some other major mistakes he made during these years. 

Today, the investor lives off 80% of the dividend income he receives and reinvests 20% of it in the stock market.

"Even though my portfolio is primarily dividend growth ETFs only, this 20% gives me the peace of mind that it can be inflation-proof and legacy-proof for future generations."

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Preferring Passive Dividend ETFs Over Active Ones

The dividend investor was then asked about his portfolio details. He said his portfolio consists of "passive" ETFs that pay monthly dividends and he avoids active funds. 

"My portfolio originally started with active ETFs and funds, as I preferred them initially over passive ETFs. It was great as they provided steady dividend growth and good yields too. However, when the dividend cuts happened, I felt that they never recovered. It was primarily due to them being great but then new portfolio managers or acquisitions occurred, which changed the active ETFs trajectory too much for me to want to hold long term," the investor explained when asked why he avoided active funds.

He said he felt the need to choose ETFs with the certainty to continue on their "trajectory" that cannot be changed. 

"Essentially, I needed something I could sleep at night holding, without waking up because of a major change. I felt this was also important for my last will, as the next person who inherits my portfolio will probably not even bother to learn anything about stocks, so it has to be as simple as “never sell and just live off the income it provides."

There are just three ETFs in the investor's portfolio. Let's analyze them.

Invesco High Yield Equity Dividend Achievers ETF

This ETF was among the top holdings of the 28-year-old investor who retired and lives off dividends. PEY exposes investors to high-yield stocks with at least 10 years of consistent dividend increases. Altria, Verizon, Walgreens Boots Alliance, Pfizer and United Parcel Service are among the fund’s top holdings. The ETF has a dividend yield of over 4.5% and is up 18% over the past year.

The Global X Nasdaq 100 Covered Call & Growth ETF 

This ETF tracks the Nasdaq-100 and generates income by selling call options on the underlying index. It has a dividend yield of about 5.7% and pays monthly. The ETF provides a way to generate dividend income and capital gains via stock growth, as its portfolio consists of technology companies. Some of the biggest holdings of the fund include Apple, Nvidia, Microsoft, Broadcom, Meta Platforms, Tesla and Amazon, among many others.

VictoryShares Dividend Accelerator ETF

VictoryShares Dividend Accelerator ETF is ideal for investors looking for exposure to dividend growth stocks. The fund tracks the performance of the Nasdaq Victory Dividend Accelerator Index, which includes companies with strong fundamentals and a high likelihood of increasing dividends. Altria, Franklin Resources, Hormel Foods, Chevron, Kimberly-Clark, Bristol-Myers Squibb and Duke Energy are among the ETF's top holdings.

Better Yields Than Some REITs?

The current interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through publicly-traded REITs.

Arrived Homes, the Jeff Bezos-backed investment platform, has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. It paid 8.1% in August. The best part? Due to high demand the maximum investment amount is currently $5,000 with a minimum investment of ONLY $100.

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.