The other day our Stacking Benjamins podcast roundtable team was discussing an article on a popular mainstream financial website about how to retire early. I especially loved the story’s first recommendation: “Start saving as early as you can.”
Let’s face it: For many people, early retirement is the holy grail of personal finance goals. To be sure, it certainly has an allure that most folks find irresistible.
Frankly, I find the entire concept to be a bit, well … squishy. For example, if you’re relying on a time-consuming side hustle – or constantly picking up odd jobs – in order to ensure you won’t outlast your nest egg, well … that doesn’t count as being “retired” in my book. But that’s just me.
Semantics aside, there are a host of other debatable issues that many twentysomethings and other young folks should consider when evaluating early versus delayed retirement. For example, one of the biggest is that the longer timelines associated with early retirement introduce additional planning uncertainties. Of course, that means increased financial risk.
That being said, for those of you who simply can’t get the romantic notion of early retirement off your mind, I’ve cobbled together my own list of brilliant tips that will, hopefully, help your dream become reality:
- Minimize your debt. (I know — but I’m just getting warmed up.)
- Gain the skills to get a well-paying job; after all, it’s harder for fry cooks to quickly build a retirement nest egg than doctors, dentists, lawyers, accountants, engineers and investment bankers.
- Maximize your 401(k) contributions from the very first day of employment; in 2015 it’s $18,000.
- Learn to appreciate the joys of a used car. Then buy one to get around — but only if truly necessary.
- Marry a spouse who not only works, but also has the same retirement goals as you do.
- Don’t have any kids.
- Work lots of overtime.
- Create passive income streams.
- Make sure your spouse is a doctor, dentist, lawyer, accountant, engineer or investment banker.
- Never get married.
- Get super-chummy with a rich old relative.
- Develop an impeccable sense of market timing.
- Learn to live on $40,000 per year — but preferably less. Much less. (And be happy doing it.)
- Fix your plumbing: Get a vasectomy … or your tubes tied.
- Keep yourself gainfully employed.
- Develop a strong aversion to luxury cars — and avoid cohabitating with anyone who insists on owning one.
- Use a bicycle to get around town and funnel the gas money you save into your retirement accounts.
- Be willing to live somewhere that has a relatively low cost of living — because it’s easier to retire early in Salina, Kansas, than New York City.
- Buy low and sell high. Every time.
- Never loan money to anybody.
- Remember: condoms and birth control pills are your friends.
- Pray for a long bull market uninterrupted by any catastrophic market crashes.
- Never get sick or injured.
- Make friends with the Federal Reserve Bank chair and then encourage her to artificially boost market returns with lots of cheap money.
- Contribute the maximum amount into your traditional or Roth IRA; in 2015 it’s $5500.
- Get a second job — or three.
- Don’t even think about having kids.
- Do your best to emulate your suburban next door millionaire neighbor.
- Win the lottery — just don’t play too often.
- Avoid any and all bad luck that life will indubitably toss your way.
- Ensure your favorite charity is you.
- Always live below your means.
- One word: abstinence.
- Find at least a few low-cost hobbies you truly enjoy — because after you retire early, you’re going to quickly discover that life is really really long.
Then again, if you were truly forward-thinking, you could simply strive from the onset to earn a living doing what you love to do.
Of course, that would make any quest for “early retirement” moot, wouldn’t it?
Photo Credit: stevendepolo