The current Retirement age in the US, for anyone born after 1960, is 67 and I wouldn’t be surprised if that increased by the time you or I reach that age. That means if you graduate college at age 22, you’ll have 45 years to work until you can enjoy your time off. Since at that point you’ll have to work double the years you’ve even been alive, the thought of spending that much time doing work you don’t love seems utterly depressing! There are two solutions to this problem. The first is to find work you love so that you don’t feel like you’re working at all, and the second is to gain your freedom by figuring out how you can retire early. This section of Planting Dollars is devoted to just that idea, which is very possible with the right attitude and plan. I’ll show you just how it can be done.
What Exactly is “Retiring Early?”
Retiring early does not mean you quit your job, or you stop working. It is simply the point in which your passive income streams are equal to or more than your expenses.
Why Retire Early?
Early retirement is not about sitting around doing nothing, it’s about giving yourself freedom of choice in your life. If you want to spend three months wandering around southeast Asia, you can. If you want to join the peace corps, you can. If you want to help a family member who is ill or having a tough time, you can. By achieving the freedom of early retirement you open the door that more possibilities in your life. Early Retirement about taking control of the power in your own life and not having your fate tied to one person’s decision making on where your money comes from. If you’re not in the drivers seat of where your income comes from, you’re essentially a slave to those who write your paycheck.
How Can You Retire Early?
Retiring Early is simply figuring out a basic math problem. How much income do you need to sustain the lifestyle you want to lead, then how much do you make in passive income streams? Much like a balancing scale you can either raise your passive income streams or lower your expenses to eventually meet what is known as the crossover point. If you make more money than you need, and you can project with a considerable margin of error then early retirement may be something you can consider. There are basically four ways of doing this:
My personal story with early retirement.
Ever since I learned about compound interest in high school I’ve been fascinated with the idea that your money can work for you and grow without you doing much of anything. The cliche idea of “making money while you sleep” was a great motivator. Einstein even referred to compound interest as the eighth wonder of the world.
Examples of People Who Have Retired Early
I’ve compiled a list of articles, blurbs and commentaries on folks around the world who have retired well before the standard age. I encourage you to read some of their stories and learn from them while becoming inspired to start your own journey towards early retirement.
Further Reading on Planting Dollars About Retiring Early
-I like what I do for a living, why should I care about retiring early?
-I’ve reached my crossover point, can I retire immediately?
-401k’s, IRA’s, and the tax consequences of retiring early.
–Retire early by through real estate investing.
Recommended Books About Retiring Early
I’ve read hundreds of personal finance books and by far the one I most recommend with this concept is Your Money or Your Life. Joe Domingaz does an excellent job showing how he was able to retire early and explain the process in depth.
Another book I would encourage you to consider is Early Retirement Extreme. The content can get a bit dry, and the author does take his concept to the extreme bare minimum, but the principles are strong and lessons can be learned from the book. I believe life is about balance and Jacob, the author, loses sight of this in his book.
