The following post comes from MyMoneyDesign.com, a personal finance blog that is all about making the most of your money and opportunities.
It wasn’t all that long ago that I made a simple observation.
I was a young man just starting out my career as an engineer. I had a wife and my first child on the way. My starting compensation was roughly about one-third of what I receive now.
All around me I found myself in the company of people who were much older than me and by all rights should have been happily retired by now. But instead of waking up next to the shores of Florida, they were still working cold, hard hours in the unforgiving auto industry.
Why were they doing that? Because of money, of course.
They were still being forced to work because they depended on their order checks to get them by, and they would do anything their bosses told them to do in order to keep receiving them.
Retirement? It wasn’t even something they dared to think of. It was like a thing they were promised but unfortunately realized they would never receive. They were mad, and they blamed their employers, the government, and just about anyone else they could point a finger at.
(Everyone except themselves that is.)
I felt like I was looking into the future, and the future was NOT good. Unless I was going to make some sort of change, my fate would be the same as theirs.
That’s when the question of how can I retire early first popped into my head.
From then on it became something of obsession for me. It became a singular goal to which I am constantly trying to improve my speed to reach.
At first my goal was age 55. Then it became 50. Now it’s 45.
If you’ve ever felt the same way about your future or desire to retire long before everyone else you know, you’re not alone. Early retirement has been one of the central themes of my blog and a common goal for all my money making /money saving activities.
But How Can I Retire Early?
For starters: You could copy what I’m doing. If you’d like to have a look at my complete plan for becoming financially independent, then follow the link and you can see it all for yourself.
But there’s one thing you won’t see in the plan that was extremely critical: All the passion and planning that went into it.
You see each time I asked myself how can I retire early and then ran into some kind of problem, I didn’t let it stop me there. Instead I just kept on looking for the answer.
For example: When I learned that you couldn’t take money out of your 401k until after age 59-1/2, I was stumped for a while because I thought it meant that my money was frozen. But then I got to learn more about the 401k withdrawal rules and found out that there are actually a number of ways you can get access to your money long before then (such as a SEPP).
When I wasn’t making enough money, you want to know what I did? I just made more! I:
- I worked harder at work which resulted in several promotions and bigger profit sharing checks over the years.
- I looked for ways to turn my current savings into more money. I found out that basic investing was a great way to grow my money way beyond what any bank could ever offer me.
- I tried my hand at being an entrepreneur. I started a blog and have continued to learn the ropes ever since. I’m far from being successful but yet still have managed to add five extra figures of income to our family compensation each year.
Family and Budget:
You might ask: But what about kids? What about all my bills every month?
My answer: Lots of people live very happily on less than what you make. Set a budget and learn to deal with it!
I know – easier said than done. But there’s something that really helped me to put things in perspective: I had to keep asking myself what my priorities are? How badly do we need those “things” that other people have?
A bigger house? A new car? Lots of other toys?
Do any of these things actually compare to how badly I want my family to escape the bleak fate I painted earlier? Of course not.
A funny thing happens when you filter your purchases against something like your early retirement plan: You learn to simply appreciate the little things in life. As cheesy as it may sound, there are lots of days where a rented movie, day at the park, evening board-game, or any other similar activity completely outshines waiting 2 hours to get into some fancy restaurant to spend $100 on dinner.
As I’m sure you know – it’s your budget. How you prioritize it is your business. But just make sure you do it in a way that benefits your family. Make sure you do it in a way that will help you retire early and find financial freedom. No one’s going to want that more than you!
Readers – What makes you want to retire early? At what point in your financial journey did you decide to prioritize your retirement savings over other ways you could have spent your dough?
Images courtesy of FreeDigitalPhotos.net
Thanks again Pauline for hosting my post!
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
I don’t necessarily want to retire early, but I do want to have the choice of whether i am working in my 50s or not. I also want to be able to choose WHAT I do for work instead of doing something out of necessity.
DC @ Young Adult Money recently posted…How I Plan on Fast-Tracking Financial Independence
DC – I’m the exact same way. I want to say I’ll “retire” at 45, but to me this means just picking something extremely rewarding to do with my time. I’ll still be doing something for $$, but it will be 100% on my terms!
Derek at MoneyAhoy recently posted…How to Write and Publish an Ebook – Top Tips
Same here. Retiring early is what I’m loosely calling it. Despite if I keep on working or just live off my savings, I want the choice. That’s all I’m after.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
Great post. Early retirement or financial freedom has been on my mind a lot recently. I have a long commute to work and work is work. I work in government as I can get a nice pension at about 55 though many stay because they still depend on their higher paychecks. I don’t plan on staying any longer…though leaving earlier is tough as that pension is a golden handcuff. We’ll see…
Andrew@LivingRichCheaply recently posted…My Journey to Financial Literacy
I know the feeling on both fronts! I too have a long 1 hour commute each way to and from to work. Talk about a big waste of time.
My wife is also a government employee and has the same handcuff to her pension. Fortunately the minimum age for her plan is 48 to get full benefits.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
This post really hit home with me. I’ll have to start reading your blog!
We’re on the path to retire early, too. It’s a bunch of little things driving us there…a more evenly divided day.
Done by Forty recently posted…Wait Till I Get My Money Right…
Thanks DBF! The door is always open for new readers at My Money Design.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
Good post MMD! I think your point about priorities is spot on. So many don’t analyze their priorities and just go with the flow and don’t stop to think what their choices in the present are meaning for their future – or what they even want their future to look like. I don’t know if we necessarily want to retire early, but I’ve been spoiled by working for myself that I know it’s the future I want. If things continue to go the direction they are then it’s definitely possible we could step back from it and have a quasi early retirement.
John @ Sprout Wealth recently posted…How to Start a Side Hustle While in a Day Job
Thanks John. You make working for yourself sound really great … and tempting!
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
I feel fortunate that I stumbled upon PF blogs relatively early in my financial journey. I haven’t really made big life-altering decisions that might set me back, besides going to college and having student loans. I don’t plan on buying a huge house or a fancy car as retiring earlier is a bigger priority for me. I’d like to have a small wedding that I can save and pay for without issue. All of these choices are made based on the premise of having more money later on in life to achieve financial independence.
E.M. recently posted…New Car Envy
I think that delayed gratification is going to pay off for you big in years to come! It’s good to have some fun, but as long as its done with moderation I think you’re going to be thanking yourself later on.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
I couldn’t agree more. My father has faced unemployment numerous times after turning 50, in thinly veiled age-discrimination. He’s an electric engineer (power supply engineer) and at 63, the only jobs he can get now are contract based and not full-time with benefits. They never say it’s his age but with young’uns charging lower salaries, he gets the boot, even with his experience, and they blame the lay-off on the economy.
I want to be able to be in a place when I’m that age that I can keep working but don’t have to worry about it.
Tara @ Streets Ahead Living recently posted…I’ve been everywhere man–how to see North America on the Cheap:
I’ve got to say – the auto industry is notorious for doing that sort of thing to older engineers who are over-paid or not as with it. I see it all the time. Call it a self-made insurance plan, but I think having the option to be able to “opt out” comfortably by the time I’m 50 will be one of the best things I ever “design” as an engineer.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
Love this, MMD. I agree that knowing your priorities is key. Otherwise it’s just too easy to get caught up in always spending mindlessly. What I love these days is how many people want to retire early and are doing the work to make it a reality. I’m part of a generation that was told and believed you worked until your 50-60’s. And 50’s was sort of pushing it! We will are still planning to retire in our 50’s as we intended. We had our children later in life and since my husband and I still enjoy the work we do, we figured it made sense to continue working until they graduated from high school, which is 10 years away from my youngest.
Shannon @ The Heavy Purse recently posted…What Can a Financial Advisor Offer You?
I can understand holding out to make sure your kids are all set. We may also end up working just a little longer/extra to completely pay off our children’s college. But at least we’d have the satisfaction of knowing we had hit a point in our lives that if anything were to happen, we’d have enough money to take care of business for forever.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
While I’m just beginning in this retire early adventure. I always wanted to retire at 50, nobody retires at 50 said the 18 year old me, I’ll start out making small change and then have so much money that retiring at 50 will be all yachts and jets to distand lands. I never planned for it, besides the spending part of yachts and jets, life kicks you in the Olson twins and you regroup, painfully.
I have started the long journey to prioritizing debt payment(aka even steven), while I build my plan for retirement savings/income, this happened about a year ago and is right on track. I started after reading many FI blogs and thinking it wasn’t possible, challenging, then I started putting together my numbers and plans and realized it was possible…..the journey continues. Thanks for the article MMD and Pauline.
Even Steven recently posted…B-U-D-G-E-T-S Where is my Money
The FI really have made quite a difference in my perspective. All these regular people who are making it happen! I used to think that retirement planning was just about putting money aside in a 401k. Now that I’ve been at it for a while, I know that there is so much more you can be doing to get to your goal.
MMD recently posted…Why You’re Not Making Any Website Income and The One Thing You’re Not Doing About It
I have been thinking of retiring for many years. Or at least becoming FI. Now that it is in my grasp, it feel great. Even yesterday, when the company I work for granted everyone a 1 week unpaid furlough, it doesn’t other me.
When you are a working stiff, you are at the mercy of the boss. When you are FI, you are at your own mercy.
No Nonsense Landlord recently posted…Long Distance Property Management
I love this because it is so true. We are trying to become more mustachian with our lifestyle and cutting back. It’s not easy but we are saving a lot of money carpooling and making extra money on the side so we can put more away for retirement
Daisy @ add vodka recently posted…Why I’ve Changed My Mind About Self Employment
I want to retire early so that I can watch my kids play sports or whatever their extra-curricular activity may be. I want to be able to travel when I want. I want to be able to enjoy my hobbies too, without having to fit them in around my job.
I make it a point to question my purchases. It really helps to put things into perspective.
Jon @ Money Smart Guides recently posted…You Are Your Greatest Asset