Since I started on my path or own little adventure, if you will, of retiring before the age of 37, many people have been asking me the same thing. In different ways, or using different wordings, but always with the same thing in mind. What’s the secret? What’s the key to retire early and live the life you’ve always wanted? Are there some steps you can take like in those self-help books?
I can assure you there are no particular steps you can actually take. Think about it. Life is not one yellow brick road at the end of which you end up in an Emerald City full of dollars. Life is also not a paint by the numbers type of situation. If it were like that, everyone could retire before 37, and we could all fill Florida with people in their 40s going to raves.
Therefore, no. There aren’t any steps you can take. However, there are some actions you can start doing right now and which will bring you a lot closer to your goal. Provided you can stick to them, that is.
In this article, I am going to list for you seven things that you can do if you want to retire before the 37 mark. I’m also going to provide you with a link that will take you to another one of my articles, where you will find a lot more details about that action in particular. Let’s do this!
1. Think of Ideas to Generate Creative or Passive Income
I marked this one first one my list because it’s important you understand two things here.
First of all, even though you retire, you will still need to be able to make some income out of something. Seeing as you still have some 40 or 50 years of life left, you cannot possibly rely on your savings to live.
Second of all, no matter how good it sounds, you will soon discover that you are not ready to waste away by the pool starting at the age of 37. You will crave an occupation, no matter what that occupation might be.
Therefore, why not combine the two? Find a creative outlet that can generate some income at the same time. You need some ideas? I’ve got plenty of those. You can also check out my other, more detailed piece about passive income.
- Write an ebook
- Try to keep a blog with affiliate links, of course
- Start to invest
- Host an e-commerce store
- Start a book reviews website
- If you have it, rent a room or part of your house
- Start manufacturing your own stuff and sell them
- Buy some keyword rich domain names.
And the list could go on. So let’s.
2. Avoid Personal Debt
Ok, that moment when you applied for a car loan, appliance loan, student loan, mortgage, or anything else really, got the money, and paid for the thing, might have been one of the happiest in your life.
However, remember. A loan is still a loan. You are still paying interest on it. And that only means that all the money that you could now be using to cement your financial independence are going to a bank or some lender.
Therefore, pay off your debts as soon as possible. Yes, even if we’re talking about a credit card!
3. Try to Live Frugally
Living frugally here actually means living below your means so that you can put some money aside for when you retire early. The equation is extremely simple. At the end of the day, you need to be making more money than you spend, if you wish to retire before you’re 37.
Evidently, this doesn’t mean that you have to start taking the bus everywhere and eating college student ramen noodles, so don’t panic. There are a lot of ways in which you can save money on gas, energy, food, shopping, holidays, and so on.
4. Start Investing Early
But how early is early? And what else do you need to know? Well, actually, one thing I found out in my own time is that there is no such thing as ‘too early’ when it comes to investing. Mostly because this is vastly important if you want to retire early.
The earlier you start to invest, the more time your investments will have to grow. Therefore, my best advice is for you to start investing in your early 20s. You can try investing in your 401(k), which is the safest way to ensure you will have money when you retire, in your Roth IRA, some rental properties if you have any and absolutely anything else you want to.
5. Quit Your Job
Now we’ve come to one of the, if not the biggest and most challenging steps of all. It’s not difficult per se, as it is challenging more from a psychological point of view. Quitting your job. Society has so far thought us that one needs to have a typical 9-to-5 job so that he or she can fit into the molds. It seems to be just about the only way we can put our minds at ease and earn some reassurance that we can live a ‘normal’ life.
Therefore, striding off the beaten path is first and foremost an exercise of the mind. As such, when you have this one all figured out, the rest will be a walk in the park. Take a look at some more details about how you can get ready to quit your job right here.
6. To Retire Early, Avoid Financial Mistakes
Last, but definitely not least, I’ve prepared a list of financial mistakes you need to avoid when you’re young. In this way, you can steer clear of financial trouble and retire early. I made it a point of leaving this topic as the last part of the article.
You see, it’s easy to make mistakes when you’re young. Apart from that, it’s even easier to make mistakes that you don’t even know can qualify as mistakes until someone (like little old me, for example) comes and points them out.
Like I’ve said, I’ve prepared an entirely separate and more detailed piece on this which you can find here, as I feel you deserve to know a lot more about these mistakes. Still, here is a little preview. For instance, try not to get a divorce, if you can help it. It will put an immense strain on your finances. Apart from that, if it so happens that you don’t have a prenup, then half of what you own goes to your spouse. Instead, build a team with him or her and make it a common goal to retire by the age of 37.
Don’t buy too large a house when you’re too young, don’t take up hobbies that will cost you a lot of money, definitely don’t get into expensive cars, set some financial goals for yourself, don’t waste time and much, much more.
There you have it. The seven things you need to know if you want to retire early. If I missed anything, please do let me know in the comments below. This topic is one best approached by us as a community. Therefore, let’s help each other!