How did he do it?

Joe claims that there were three key reasons:

1. No kids. He's not recommending that people have no children. It's just that he and his wife didn't want any. It goes without saying that all the money that people don't spend on kids — clothing, food, medical expenses, college — can go a long way toward financing early retirement.

2. Living below your means. Joe surely did not live like a pauper. He has traveled to all 50 states and to more than 65 countries. He lived in a nice house and frequently bought new cars. But the house was a two-family, so he always had rental income to cover taxes and repairs. His new cars were not Mercedes or Cadillacs, but economical Fords, Nissans and the like. And when traveling, he chose clean, smaller hotels and motels, bypassing the Hiltons.

3. A disciplined, thoughtful savings and investment program. Joe did not really begin this program until he was 30. He bought two two-family houses, renovating them and living in one unit while renting out the others. The rest of his savings were mostly invested in mutual funds.

Although he made a good deal of money over the years on the investment properties, he doesn't recommend this strategy for everyone. "Owning income-producing real estate is not just an investment; it's a part-time job that requires an investment," as he puts it. "The time, trouble and grief involved can be substantial. You may want to pass this up."

With his mutual fund investments, at first Joe made the mistake that most beginners make: playing follow the leader. He would fall for ads touting the recent hot performance of a fund — just before its style was ready to cool off. Then he would jump to the next hot fund.

After a few years, Joe finally recognized the folly of this approach and developed a sensible investment plan. He learned about the benefits of asset allocation, choosing a mix of stocks, bonds and cash, and adhering to the percentages assigned to each asset class rather than trying to time the market. (At age 53, he's now about 72 percent in stocks, 20 percent in bonds and 8 percent in cash.)

He further diversified his holdings among domestic and foreign stocks, as well as real estate investment trusts.

Joe also began to follow the advice of Vanguard founder John Bogle by heavily investing in broadly based stock and bond index funds. The advantages of the index funds (which typically invest in all the stocks of the Standard & Poor's 500) include, as he notes:

• Very low costs.

• Small taxable capital gains distributions.

• Over the long term, a performance that is generally much better than that of the average, actively managed mutual fund.

My friend receives a state pension, but the amount was severely reduced because of his young retirement age. But his income will be boosted considerably when he and his wife begin receiving Social Security payments in a bit over eight years.

So, that's Joe's "secret" to retiring early — no children, living below your means and putting all that extra money to work in a knowledgeable way.