how to retire early if you want to
retire early then you should be aiming
to have at least 30 times your annual
expenses invested or save somewhere this
amount could be higher or lower
depending on the lifestyle you want to
have after retirement to achieve your
targets of retiring early you have to
live below your means and you have to
find avenues of increasing your income
also you have to make sure you've
cleared all debts before retiring you
don't want to be in your 70s and
struggling to pay off things like a
mortgage the road to retiring early
isn't easy it takes time and incredible
discipline to earn save and invest as
much as you possibly can with that said
let's see if we can speed up your
retirement and get you into those swim
trunks basking in a nice tropical island
and enjoying your retirement as soon as
possible but before we start are you a
subscriber if not you're missing out big
time on loads of useful information that
will improve the value of your life now
let's begin step 1
could mean a lot of things to you for
most people early retirement means not
having to work a 9 to 5 just to put food
on the table in most cases early
retirement refers to being financially
independent without having a job you
report to but in some cases early
retirement could mean having the freedom
to do something creative with your life
which could be a hobby traveling or
whatever other activity that could
satisfy your needs your path to early
retirement should be guided by defining
what it means to you start by
establishing your ideal scenario of
early retirement whether it means
quitting your corporate job to run a
business or not working at all but
having some income constantly flowing
into your pockets
once you define early retirement in your
terms you can proceed to the next step
step 2
time for numbers the next step which is
one of the most important is
establishing your target numbers this is
where you determine how much money you
need to make your plan a reality most
early retirees and self-made
millionaires suggest you stash up to 30
times your yearly expenses whether in
savings or investments grants Abbate a a
self-made millionaire states that you
should have a year's worth of expenses
money in cash in his award-winning
bestseller book financial freedom a
proven path to all
you'll ever need he shares the formula
he used to generate his target numbers
which was later broken down into daily
weekly and monthly saving goals while
this may be hard to determine due to the
unexpected effects of an unanticipated
recession it is possible to work with
estimates there are several financial
planners that are online and free which
could help you crunch the figures and
give you an ultimate actionable plan
which is achievable step 3 adopt ways to
live below your means it will be
impossible to acquire a substantial
amount of wealth if you end up spending
more than you earn while you work
towards achieving early retirement it's
imperative to live below your means but
what is living below your means really
mean in the simplest terms it means
spending less than you earn the easiest
way to do this is to first start by
analyzing each and every one of your
expenses next you want to evaluate the
biggest expenses and see how they can be
reduced also identify the unnecessary
expenses and eliminate them completely
doing this can go a long way in your
efforts to increasing your savings and
investments pool step 4
leverage income streams it's important
as you take on this journey to cut costs
down as discussed earlier but you can
only cut them down to a certain degree
to make a bigger difference you have to
increase your income streams cutting
down your costs and expenses is a short
term solution which is important but to
make the real change you need more money
coming in creating a positive cash flow
is a long-term solution that will help
you achieve your early retirement
targets much sooner take up a second
side hustle to increase your income
streams some of the most lucrative
streams with high returns include
passive income if you don't know which
one to start with watch one of our
videos titled 10 ways to make passive
income another lucrative income stream
is real estate real estate has for years
been the best form of investment with
some of the highest returns if you don't
have the capital to invest in property
you can identify our EITS which are less
capital intensive and still well
rewarding step 5
max your retirement accounts in all
financial independence and early
retirement strategies you have to have a
retirement savings account there are
employer sponsored retirement plans such
as IRAs which offer unparalleled tax
benefits and great investment growth the
best part about these accounts is that
you get a tax to
section of your yearly tax returns so
instead of giving all your money to the
government you end up saving a whole lot
through the deductions for example you
can contribute up to nineteen thousand
dollars on your 401k account and six
thousand dollars to your traditional IRA
and end up with bulk savings the only
issue with such accounts is the
withdrawal restrictions but in the long
run it's actually a good problem to have
you will only be able to make
withdrawals without penalties when you
turn 59 and a half if this is too much
you can dip into your Roth IRA which is
funded by after-tax money
and withdraw at any time step 6
invest invest and again invest once
you've maxed out your retirement funds
now get a brokerage account with these
accounts you'll be able to invest direct
your money directly in the stock market
and withdraw whenever you want to
billionaires like Warren Buffett who
have built their net worth through such
investments swear by low-cost index
funds index funds our all-in-one
investments which will track a specified
financial market and will diversify your
investment to minimize risk there are so
many online tutorials and courses that
will guide you on how to make these
investments but if you feel you can't do
it on your own you can hire a
professional to guide you this happens
to be one of the best ways to grow your
money and achieve retirement even
earlier than planned
step 7 pay loans and mortgage as you
plan your early retirement it's a good
idea to start by clearing off your debts
one of the first and biggest loans you
should start with is your mortgage
clearing consumer debt with a high
interest rate is without a doubt a
no-brainer but most people don't really
consider the importance of clearing off
your mortgage even before the due time
the peace of mind that comes with being
liability free will drive you to save
and give you more morale to retire
according to your plan most of the
people who have retired early only
regret one thing that's not paying off
their mortgage in time as you know with
most mortgages the payment term is often
many years which is often more than a
decade this long period may result in
reluctance to clear the debt much of the
whole early retirement process is in the
mind
mortgage freedom adds another level of
mental freedom you can't get anywhere
step 8
get proper health insurance leaving your
full time corporate job means saying
goodbye to your current insurance plan
if you don't have a spouse whose
insurance covers you then you have no
choice but to get your own
as you wait for Medicare to set in at 65
then the best option will be getting a
cost-effective yet comprehensive health
insurance the reason why this is so
important is because we all know medical
costs can be quite high
a simple hospital visit can set you back
and you could lose years of savings and
investments you could also consider
continuing with your previous coverage
if that's an option there are so many
other alternatives that could apply but
you will need to do the research to find
the most appropriate in your case step 9
have a back-up plan however much you
foolproof your current plan anything
could go wrong at any time also you may
not be satisfied with the unstructured
days of early retirement no matter how
foolproof your plan may seem consider
what could go wrong
you may find you hate the unstructured
days of early retirement or the economy
could tanked at any time bringing your
entire life savings down with it your
investments could go south in a minute
if this happens what will be your backup
plan are you willing to cut down on
expenses or go back to work
considering the worst-case scenarios
it's really essential and imperative
when your future is on the line
step 10 execute your plan immediately
once you've followed through all the
steps listed above all that's left is to
execute it you need proper timing and
discipline to execute the plans
accordingly start saving and investing
immediately but don't forget to enjoy
your present as much as your plan allows
you to sacrifice will play a key role as
you carry out your plans
Steve Adcock and early retiree wrote on
his blog sacrifice is necessary to
retire early but it's not all we do
either it's important to treat and
reward ourselves along the way by
celebrating those smaller achievements
don't forget to keep your head up as you
carry on and don't be easily wavered by
anything your peers may influence you
otherwise but you have to stay strong
and stick to the plan at the end of the
whole process you know what you want out
of it it's not an easy journey but it's
doable good things in life seldom come
for free in most cases you have to work
hard to get them so in summary in order
to retire early you need to step 1
define what kind of retirement you want
step 2
establish your financial target step 3
adopt ways to live below your means step
4 leverage income streams
step 5 max your retirement account
step six invest step seven pay off your
loans in mortgage step eight get proper
health insurance step nine have a
back-up plan
step 10 execute your plans immediately
thanks for watching if you're still here
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it that's it for today until next time
how to become a millionaire the reality
of the world is that whether young or
old jobless are employed we all desire
to be rich a look at some of the world's
richest people gives us a peek into the
kind of lifestyles we all wish we had
unfortunately only a few of us ever
really get there which means there are
certain skills that the rich apply in
life that most of us don't could it be
that we're not following the right
principles or maybe we're simply not
smart enough or is it that we're just
too afraid to give entrepreneurship and
the possibility of living the good life
a shot sure it's true you could lose all
of your money your job and even become
bankrupt while pursuing your dreams so
the question then becomes is your
financial freedom worth it
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