Retirement in itself only came around in the last century or so. Thanks to programs like social security and people living longer, some people can actually look forward to not working for their entire life. And, not only is retirement possible, its coming even sooner than 65 years of age for some people who can gain financial Independence early in life.
Normally, the earliest retirement age is 65 years of age. Early retirement means, retiring before the age of 65, say, retiring in your early 50’s or early 60’s. And, to take it to even more of an extreme level, some wealthy independents are even retiring even earlier than that, retiring in their late 30’s or early 40’s.
Examples Of Those Who Gained Financial Independence And Retired Extremely Early
Bloggers: Some bloggers started writing early in life before the internet started getting saturated with low quality blogs. Some of these bloggers make millions of dollars just from posting online.
Small Nut + Savings = Retiring Early
Some early retirees gain independence by spending less and downsizing. There are many stories about people living on a small budget of $6,000 to $7,000 a year or so and still being able to live. They might live in full-time RV’s, ride bikes to save on gas, visit thrift stores to save money on clothes, etc. But, they are living the retired life with a small nut, the smaller your nut, the easier it is to maintain.
Although, not all of these retirees on are living on low budgets, some were just smart, made the right moves at the right time and struck it rich.
Although, some don’t consider one retired if they still earn income. However, retirement is actually financial independence with the choice of what they want to do every day. They are not worried about receiving a paycheck.
Usually those who retire much earlier than others are designing their lives, rather than just receiving a salary every two weeks and being locked in to a position. They are designing their lives around freedom and not money.
How Can One Retire Early?
There are three steps to retiring early successfully.
Step 1. Grow your value professionally through career development, work and education. You will need these assets to retire early.
Step 2. Start reducing your consumption and live below your means. Especially when it comes to transportation and housing. You must do these things if you want to have assets that product investment income.
Step 3. Refocus your energy to something you’ll love once you retire. If you want long term happiness, refocusing energy is key. If you love to write, start a blog. If you love to teach, volunteer at a local school. Make sure you choose something that you absolutely love and you can’t go wrong. Also, if that happens to make a little money on the side, there’s nothing wrong with that either.
Most People Think Early Retirement Is Irresponsible Or Impossible To Do.
But, that’s an absolutely false statement! Plenty of people have retired early once their levels of income cover consumption. Depending on how you save, saving 30% per year can have you retiring in 20 years or less. Move that number to 50%, and you can retire earlier than that.
Why Can Some Retire Early But I Can’t?
You can absolutely retire early as well, as long as you start saving now. If you are already past 30, you can still retire by age 50, 15 years before the norm. Lowering consumption is the number one key to saving enough money to invest. Once that investment covers the cost of your consumption, you’re ready to retire.
Most people think that retirees are dead weight and do nothing for the planet. This is false as well. There are plenty of retirees who are still out spending money, living life and having a blast while doing it. Most are out living a life of purpose and are freed from financial burden.
Is It Possible For Everyone To Retire Early?
While I’m sure it is possible in some way, it’s not likely. Not everyone has the capacity, skills or temperament to retire early. Also, some enjoy the fruits of life way too much and aren’t willing to make the sacrifices it takes to lower consumption levels and increase savings. It takes sacrifice and dedication for many years in order to do so, and some people just aren’t cut out for that.
Retirees break the mold of earning vs payout. The extreme early retirees learn how to bring a lot in and put a little out. Many even end up working again but for a deeper purpose.
You should learn something from those who are retiring early, or should I say, retiring early from a 9-5 job, they are not necessarily retiring, but refocusing their energy in a way that brings more happiness and purpose into our lives, even if that does include some work. If the job you are working already brings you happiness and purpose, then great. But if you are like me and want to one day, retire at age 40 or earlier, we better stop spending / consuming as much, and start saving and investing for our future selves. You will thank you past self for doing this!