Being a perpetual hamster turning the cogs round and round with each monotonous day of work is not someone’s dream. Sure, some of you may have jobs that are more fulfilling than others, but isn’t the whole idea of working so that you can eventually quit and spend time with your friends, family and doing things you love? While most people feel that their retirement age is around their fifties (or even sixties), fortunately in reality it could be just in their thirties! Check out these top ten ways to retire early and enjoy life the way it was meant to be lived!
10. Start a profitable side venture
Making money on the side is an excellent way to really boost the amount of savings you’re accumulating over the years. Depending on what your skills are, you can even turn your side venture into a full time business that you thoroughly enjoy and continue building for many years! Some side ventures, such as scrap metal collecting, handyman jobs, and even tutoring can bring in just a few extra hundred a month, but when you add that money into your retirement fund or use it to pay off your house early, you’ll notice a massive difference made with just a few extra hours a week!
9. Start investing early
The earlier you start investing your money, the better. Investing your money in risky ventures such as the stock market can mean that you get a huge payout, or that you lose every penny. Avoiding riskier ventures is a way to ensure that you can actually keep your savings, rather than watch it disappear with the flick of a few stock points. Either way, if you’re able to start investing in your early twenties, or even thirties, the more you can invest and the earlier you can invest, the higher your payouts will be! Don’t wait till you’re in your forties or later to begin investing because it will be a lot harder and you won’t see anywhere near the profits.
8. Set up continual revenue sources
If you’re looking to retire, an ideal situation is that you’ve got a continual income source still fattening up your bank account for extra spending money. A great example of a continual revenue source is a rental property. If you start investing in properties early and set up rental housing for local tenants, you can even hire a landlord so you get a few extra hundred each month on a continuous basis. Once you get all of the details such as insurance and contracts in place, your rental properties can lead to huge income over the years with almost no input from you at all!
7. Get a decent paying job
Let’s face it, it’s going to be incredibly difficult to retire in your thirties if you’re only making minimum wage. With bills and rent taking a good portion of your monthly earnings, it doesn’t matter how much you cut down, you’re just not making enough to ensure that your early retirement dream becomes a reality. Now, this doesn’t mean you need to make a doctors salary, in fact you can safely make anywhere from $30-$80k a year and retire early if you do it right! So, if extensive years in schooling aren’t an option, and you want to boost yourself into a higher pay bracket, then consider a technical school where you can enjoy just a few months of training and still get placed into a decent job for your skill sets!
6. Always pay debts off early
If you own a house or are paying off a car, your number one priority is to get that done as soon as possible. Not only does this mean you pay a significantly lower amount in interest when all is said and done, but this also means that once the debt is all paid off, you can put the extra money in your pocket each month directly into savings. Having two hundred extra from your car and four hundred extra from your house means that you’re retirement fund is getting almost an extra ten grand each year put in just from the extra savings!
5. Wait to have kids
Now this may seem a bit odd, but if you think about it, it makes perfect sense. If you’re looking to retire in your thirties, then you’re going to need to work and save a heck of a lot in your twenties. This is entirely possible if you know how to save properly and if you make the most of what you have, but when you add children into the mix this all becomes so much more difficult. Childcare cost an outrageous amount, and adding in those extra times for being off work and extra expenses means that your savings is going to drop dramatically. If you can wait till after you retire early, or until the very few years before you’re set to retire, then you can save thousands on childcare because you’ll be able to stay home every day with your child!
4. Save 60-75% of your income
A great way to really retire early is to dramatically increase the percentage of your income that you save. If you’re making $50k a year, then you need to be saving $37.5k each year. Put these savings into your home so you can own it, a reliable car that will last you for many years, and also into a retirement fund. Living on $12.5k a year may sound impossible, but when you take some of the teachings from Mr. Money Mustache, then you learn how frivolous most people are with their money. Don’t upgrade your phones each year, grow your own garden if you can, bike to work if possible, and become self-reliant in a lot of ways to really ensure that you’re saving as much as you possibly can each year!
3. Win the lottery
Just kidding! Granted, winning the lottery is a sure fire way to retire early and have most of your money problems evaporate temporarily (or at least until you spend it all), but actually if you’re looking to retire early then you should avoid gambling and wasteful spending of all kinds. Don’t drink, don’t smoke, don’t gamble, and don’t spend money on excessive items. When you stop all of your excessive wasting, then you are able to maximize your savings and actually put a significant amount of money into your retirement!
2. Live on the bare essentials
Our society is all based on what’s hot, what’s new, and getting the latest gadget or model on the market. This excessive spending on both foods and material items means you’re truly spending far more than you should and focusing on things that really don’t make you happy, but just give you temporary relief. Living on bare essentials is truly the way to maximize your savings. Don’t buy your children every new toy on the market, don’t upgrade your house just because you can, and don’t bother with a TV subscription if you can enjoy streaming TV from your internet instead! Make the most out of the least amount you can, and learn to be happy with it!
1. Choose your retirement fund carefully
Instead of automatically investing in a 401K plan that will penalize you heavily if you pull out funds before the allotted time (like 55-65), consider talking with your employer and seeing what different plans are available. Additionally, there are many retirement plans where an employer or government body will actually match a certain portion of how much money you put in – this means you can double the savings without actually paying double yourself! Choose carefully and make sure you decide on the best plan that will allow you to retire as early as possible! Think Index funds: low fee S&P 500 Index funds (Vanguard).
Remember The key to early retirement: slash you spending! Learn more from Mr. Money Mustache!