You are on part 1/9 in the Level 1 – The Basics series. Next up: The Basics – Overview
• Why Retire Early?
• Withdrawal Stage
• Your Life in Retirement
From as far back as I could remember, I wanted to retire early.
I remember being a young kid, watching adults go through life, day after day doing something they don’t want to do. To some degree, it was kind of sad. At that point, I was six years old and decided that I would do everything I could to retire early. I quite literally started stuffing dollar bills and spare change into a tin can in my closet.
Later in life, I realized that I don’t really want to retire early, but instead gain my financial independence. Financial Independence or “FI” is when you have enough money saved or being generated by stock investments, real estate rental income, hobbies that make money, etc. that you no longer need to rely on a typical 9-5 job to pay the bills. By achieving financial independence, I will finally be able to spend my time as I please. Personally, I love working hard and find it quite fulfilling, but I despise someone telling me what to work on and when to do it. Hence, my focus on early retirement and financial independence.
Ok, ok. I know you are thinking, “what six-year-old sits back and plots their life towards early retirement?” Now THAT is sad. I know I’m usually alone on this one, so let me see if I can bring a different perspective that may resonate a bit more with others. For those of you that don’t share the financial independence dream, don’t mind their job, or even like their job, consider some of the data below:
• The average human spends 29.75% of their life sitting down (presumably most of which is at work) compared to only spending 6.8% of their time with someone they love (Data)
• The average American spends 52.8 minutes a day commuting to work (Data). Stated another way, 404 days of your life will be spent commuting to work! What a complete waste of perfectly good life. This doesn’t even consider the financial implications of this time, environmental impact or the personal risk posed by spending that much more time in a car.
• Of reported anxiety and depression cases, nearly 52% are caused by work related issues (Data)! Doing something you don’t want to do, day after day, has a remarkably negative, yet stealthy, impact on your long-term health.
• Working from age 22-67, and receiving three weeks of vacation a year, you will spend ~93,000 hours working (Data) while you spend ~131,000 hours during that same period sleeping, assuming you get a full 8 hours of sleep per day
That means you spend nearly 60% of your life between the ages of 22-67 (the prime of your life!!) sleeping or working…between required chores, personal care, and other requirements, when exactly are you supposed to enjoy life?
• Those that work 55 hours a week or more are 1.3 times more likely to suffer from a stroke, and 40% of Americans spend at least 50 hours a week working (Data).
Over the last few decades society has progressed in phenomenal ways. Fewer cigarettes smoked, healthier diets, improved public safety including a dramatic drop in driving under the influence, to name a few (bet they are even lower now, thanks Uber!) (Data). However, hours spent at work continue to climb, and hours slept per night continue to decrease. So, how can we as a society make such progress but fail to acknowledge the serious health and social issues created by working 40 – 50 hours a week, or more?
My guess is that most people don’t know that there is another way. This is where I come in. Retiring early is not something most have considered or, if they have, may think it is only attainable by other people. They resign themselves to working until 67, putting in 40-50 hours a week and not living as fulfilling a life as they could. I mean, what choice do they have? Bills must be paid, that large house needs heat and A/C, and that new car is expensive! All true for the average person.
I am here to tell you there is another way.
Through a bit of education, careful planning and dedication, you can without a doubt reach financial freedom in 10-15 years, regardless of your income, educational background, or current retirement savings. You don’t even have to give up your Starbucks latte! I mean, it would help speed things up, but still!
With a few minor modifications to your life and dedication to what your future life could be, you will reach your freedom in no time. You’ll spend more time with those that you love, be healthier, waste MUCH less time commuting, and most importantly, take control of your life. With life being so short, make sure you use each day like YOU want to.
Take control of your life, and commit to mastering money.
This one is easy: Work can be very bad for you, your loved ones AND takes up all your time. Do not let life pass you.
Your Next Steps
• Track your time for a week or two. How much time do you spend at work, sleep, with friends and family, doing what you want to do?
• Think about your work life balance. Is it where you want it to be?
• Think a bit about what you want your future to look like. Is financial freedom and early retirement right for you, or are you already in a good spot, love your job, and are spending your time like you want (kudos and congrats to you if you are!)