Saturday, 16 November 2019

How To Retire Early - 3 Secret Step To Follow

Retire Early

The average Americans retire around age 62 or 63. But how is it that some people are able to retire at age 50, age 40, and even in some cases in their upper 20s or early 30s. How is this possible. I'm going to share that with you in this article. There are 3 simple steps that you can follow in order to shave 5, 10, 15 years off of your project retirement dates.

Let Get Started

1. Proper Budgeting

Most people think that the first step to retiring early is to make more money. To get a pay raise, to increase your income so that you can retire at an earlier age, but to be honest, that's not the number one step, that's not the first step that you should be taking, and the reason for that is because there's something called lifestyle inflation.

This is the exact reason why a lot of lottery winners go broke 5-years later. This is why a lot of professional athletes go broke after they ended their careers. And the reason for that is because they inflate their lifestyle as their income goes up. So number one step it's not making it. It is a factor. It's obviously an important factor that goes into it, I'll talk about that later in this article.

But the first step towards retiring at an earlier age is by cutting expenses and budgeting correctly.

I want you to hear me out on this. A lot of people when they get their paycheck, they just spend everything and at the end of the month, they don't have any money to save. But what you should be doing is setting money aside for retirement or for savings before you spend it on any of your needs or wants or anything else that you might be doing.

Read: How Much Should You Spend Annually In Retirement? 4% Rule & Safe Withdrawal

The best way to do this, there's a strategy called the 50/30/20 rule. You can read the article below.

Read: How To Manage Your Money - 50 20 30 Budget Rule

But let me explain this to you, I think this could help you out a lot and you know what, if most people follow this simple rule, they would probably retire even earlier than the average American which is about 62 or 63, just by following this you could probably shave off a few years because most people can't even do this.

Again, read. How To Manage Your Money - 50 20 30 Budget Rule

Take the first step of cutting your expenses and budgeting correctly, without being Scrooge, without being a weirdo, but able to do that. I think if you're not running a budget this creates such a problem because thinking about a business.

Imaging a business trying to run themselves without tracking their expenses, without running a budget, without having a balance sheet. Run yourself like a business, you don't want to be weird about it but understand where the money is coming in, where it's going out, and if you can track that, you're going to be so much better off for success.

2. Increase Income

After we think about saving or budgeting and then we can start thinking about ways to make more money. There are a couple different strategies for this but the best routes to go for is by finding a way to monetize a hobby. 

If you're working a job that you already don't like, I think the statistics are about 80% to 85% of people aren't very satisfied with their job. So if you're working a job that you're not very happy with, then maybe picking up a side hustle or a job after work or on the weekends might not always be the best option because you don't want to just work 80 hours a week of something that you're enjoying. There's really no point in that.

But maybe find a way to monetize a hobby. For example, if you enjoy making homebrew, you can start a little microbrewery and start selling that and making money on the side and then take that money and put all of that money from your side hustle, your side job, your side business, put it directly into your retirement.

Instead of the 50 30 20 rule, if you read that article, you could almost make it the 50 30 50 rule. You're taking that extra 20% of your income that's coming in on top of your regular income and putting all of it directly into your retirement funds, or your savings, your investment, so that you can get to retirement so much faster just by doing that. Find a way to monetize something that you enjoy.

3. Smart Investments

It's really important to think about ways to get your money to work for you. Maybe you don't trust the stock market right now, maybe you don't want to get into real estate. There are other options to at least keep up with inflations, whatever you're doing you want to put it into something that's gaining a little bit of a return on your investment versus just saving it in a bank account it's not going to get you to retire early. It's hard to save your way towards retirement.

Hopefully, this article helps you out a little bit.

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