Extreme Early Retirement

You wake up one day at the age of 35 and are dreading one more day at the grind. You spend a few more moments in bed dreaming about a beach and a hammock, but then the snooze alarm goes off again and you force yourself out of bed.

Why not make this your day to decide to retire early…by 45! Yes, that is ten years. It CAN be done.

Much of this is going to be determined by where you are in life right now. If you are married with six kids and a huge mortgage and debt up to your eyeballs, it is going to be very hard work and maybe a bit painful for everyone but you can still make it happen earlier than age 65.

early retirement

If you happen to be reading this when you are single or even married with no children, you definitely have the advantage. The time to seize the opportunity is now to secure your financial future, and potentially your family's financial future.

Retiring at 45 when you are 35 may seem like a dream but to get there is not going to be a dream. It is going to require tough decisions, giving up creature comforts, and downsizing your expenses to a major degree.

To begin this journey you will need to be highly motivated towards this goal and you will need to have real priorities in place. This is going to mean telling yourself (and family members) “no” to a lot of things. The great thing is, saying “no” now will allow you to say “yes!” to more fun things down the road much sooner than your friends and neighbors.

Step One - Stop Spending and Start Saving

Stop spending money. Period. Hopefully you have very little debt, because the sooner you pay off your debt the faster you will be to retirement. Regardless of where you are on the debt scale, you just have to stop spending money. Every available penny needs to be put towards paying off your debt. Start with the smallest amount of debt first because once you pay that off, you can use that same amount of money to pay the next one off along with the payment you have been making. It snowballs in such a way that you pay your debt off much faster.

If you are single or if you are married without children, get a second job. If you have children, find a way to make extra money at home. That second paycheck should all go towards your debt. If you make the necessary cuts to your spending and you are very strict about paying down your debt, even if you have large debt, you should be able to pay this down fairly quickly.

Step Two - Live Frugally

Live frugally. Be a tightwad; be proud of your cheapskate ways because they are going to allow you to have a life like no other much sooner. There are a million ways to live frugally. There are only hundreds of blogs and message boards for frugal living. Go check them out and learn how to save. A penny saved is a penny earned. To get you started, stop eating out. That is the biggest money pit in terms of extraneous spending. Downsize. If you live in a 2700 square foot house and it is just you and one or two other people, buy a smaller house. Not only will your payments be less (maybe even able to buy it from the equity of the sale of the other?) but you will save thousands in heating, cooling, and cleaning costs.

Get rid of the car. Or if you have to have one, get rid of extra cars. You will save thousands in gas and insurance. Look for free items and used items for things you need. Don’t accumulate anything that you do not need. Turn off the cable, don’t shop, repair rather than replace, make it rather than buy it, and there are a million other ways.

Step Three - Invest, Invest, Invest!

Once you have paid off all your debt, work with a couple of investment advisors that are reputable. Have them help you choose your investments with the understanding of when you want to retire. They can help you get there, but always have second (and third) opinions. Sometimes advisors are only looking out for their commissions, not your best interest.

Retire! Now you have time to do even more frugal living. Create a garden and can and freeze the extras. Have a couple of hens that provide fresh eggs. Keep your stay-at-home job just to keep an inflow of money, but don’t spend it on nonsense, invest it.