How to retire early is a question that many people ask many times during their working lives. Unfortunately it is not achieved by too many people in terms of the concept of traditional retirement of stopping work and having sufficient income to just potter around day-to-day. However concept raises two interesting points what does "to retire" and "early" mean to you?
The few people who achieve the financial means to be able to retire early are usually the ones that are very driven. They have established a career or business, not just to make money, but as a passion and life mission. Another group that achieve the financial means early in life are sportsman or entertainment celebrities. The final category of people who can consider early-retirement can thank their fathers or grandfathers for their adequate legacies.
However there is a large group of people for whom retirement does not fit the traditional concept. These are those who have decided that the corporate lifestyle, or first world environment living, can be replaced by more laid-back lifestyle. In pursuit of this ideal there is a growing number of people who decide cases to move abroad, not considering it as an escape but to open up new opportunities and choices.
Although in some cases this is considered retirement, it is really just a lifestyle change. Providing more freedom, more flexibility of time, and possibly the opportunity to have a portfolio type lifestyle. The internet providing a fantastic opportunity to generate an income for these so-called 'retirees.'
However it is also possible to consider how to retire early by following a few simple rules:
- Take on as little debt as possible throughout your life. Live your life within your means. Even if this doesn't provide all the financial resources it will teach you the financial fundamentals you will need for an early retirement.
- Reduce expenses where ever possible. It is not necessary to keep up with your friends, neighbours or colleagues driving the latest car and living in the fanciest house.
- Learn about investing. Traditional retirement funds and investment vehicles are never going to make anybody wealthy enough to retire early. Don't follow traditional methods or you will get traditional results … not much! It has been calculated that costs wipe out most of your real returns. These costs wiping out as much as 75% of the real value of your retirement savings in a 40 year period.
- Start your own business. Unless you are lucky enough to be employed by Goldman Sachs or some other financial institution. Remember the quote "if you want to be rich don't rob a bank start a bank." A business is a good hedge against inflation while building capital value as well.
So the question "how to retire early?" generally depends on your luck or redefining the meaning of retirement. To achieve this status requires great ingenuity and drive and when you achieve it - it's unlikely that you're going to give it up and retire!
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