Everyone wants to have enough time to enjoy the good things that this life has
to offer nobody wants to work forever things like spending more time with
their families or traveling around the world to discover new places are just a
few things you can do when you have ample time and money unfortunately
living this dream lifestyle is impossible if you still have to work
every day to keep yourself afloat financially but luckily boss in this
video I will share with you how to save money and retire early and if you're new
to the channel then hit the Subscribe button below for more life-changing
content most people think of retiring early as a pipe dream but think of all
the wonderful things you can do with your time you don't have to wait for
summer before you can go on vacation you don't have to wait for a paycheck at the
end of the month to buy the things that you need think of all the wonderful
adventures you can go on when you have this Freedom now the easiest way to
attain Financial Freedom is to follow the same steps as those who have retired
early before you that's why in this video you you will learn how to attain
Financial Freedom by Saving more money and retiring when you want to the first
step to retire early is to set a goal a goal makes it easier for you to Achieve
Financial Freedom and retire at the age that you want a goal will help you
answer the question of when you want to retire and how much money you need
before you can retire you may want to work for 10 years and retire at age 30.
it is possible you may also want to retire at age 50 and that's okay too
knowing what age you want to retire will make you plan well and know how much you
need to set aside for retirement when you know how much you need for
retirement and you know the minimum amount that you need to save to meet
your goal it becomes easier to retire early you also need to understand that
it is not about how much money you make it is about how much money you save that
means if you make up to five thousand dollars per month and spend forty five
hundred you are not better than the person who makes three thousand dollars
but spends just fifteen hundred if you do the math you will realize that the
price person who makes 5000 was only able to save 500 well the other person
is able to save fifteen hundred this is a numbers game the more you were able to
save the faster you'll be able to retire that is why the most important way to
retire early is to save more money and the easiest way to save money is to
reduce your spending but how do I reduce my spending you may ask the first step
is to keep a record of all the things that you spend money on by doing this
you will be able to tell where you spend your money you will also realize that
some things that you spend your money on are not necessary for instance most of
your recurring expenses are actually not important you can simply cancel most of
your subscriptions and limit buying another shirt that you don't need so
that you can save more money at the end of the day better yet if you want to
understand how to cut your spending then you must understand the rule of 300.
this rule is simple and you can use it to calculate how much will be enough for
your retirement is the amount of money that you need to save to meet monthly
expenses when you were retire the actual amount of money you must save to meet
your monthly expenses in retirement is approximately 300 times that expense
don't get confused I am going to explain everything you need to know about this
concept how they come about the number and also how to estimate your monthly
expenditure the rule of 300 can be traced back to the four percent rule the
four percent rule states that it is safer a retiree to withdraw up to four
percent of their retirement account in a year for example it is safe for a
retiree who has saved up 1.5 million dollars to withdraw sixty thousand
dollars every year that is five thousand dollars every month this amount is equal
to four percent of the total amount at this rate someone would be able to
withdraw their money steadily for up to 25 years from the above calculation the
amount of money their retiree needs in a month is five thousand dollars to get
the total amount of money they will need in a year you will have to multiply it
by 12. the answer is five thousand dollars times twelve and is equal to
sixty thousand dollars 12 is the first multiplier and it is the number of
months in a year based on this assumption he can withdraw money for up
to 25 years that makes 25 our second multiplier 12 times 25 is equal to 300
and this is where the famous rule of 300 comes from if you should reverse the
calculations You can predict how much you need to save to have enough money in
your retirement account you don't need to do complex mathematics you only need
to calculate how much you spend in a month and multiply the answer by 300.
let us assume that for every month the total amount of money that you need is
forty five hundred dollars do you know how much you need to save for retirement
multiply the amount by 300. the answer is one million three hundred and fifty
thousand dollars that means that you need to save up one million three
hundred and fifty thousand dollars to retire although this calculation is
simple it doesn't take some things into consideration for example it only
considers that you're going to live for 25 years after you retire this may work
for people who retire at an old age let's say 70 years old but your goal is
to retire early so if you were to retire at 30 then this calculation would only
get you to age 55. chances are you will surpass the sage with good health
therefore you have to calculate for more than 25 years of retirement luckily this
is an easy calculation to perform instead of multiplying your monthly
expenses by 12 and then 25 instead multiply them by 12 and then the number
of years you will be retired so if you want to retire at 40 and plan to live
until 90 then the calculation would be your monthly expense times 12 times 50.
using the last example of a forty five hundred dollar monthly living cost you
would need 2.7 million dollars to retire at age 40 if you intend on living until
90. now obviously no one knows how long they will live but it is generally
recommended to Target at an age that is at least five years past the current
average life expectancy given that advances in medicine can see humans
living longer over the next several decades moving on another thing that the
rule of 300 doesn't take into consideration is inflation the value of
the money you have today will not be the same in the next 25 years if you
calculate the amount of money you need for your retirement without giving
consideration for inflation you will end up losing money you have to adjust the
amount you have to save for inflation to save enough money there are other
reasons why you need to save more money too your lifestyle may not always remain
the same it is important to spend less and save more but sometimes you may want
to satisfy some of those things you desire you may want to live out some
dreams but these dreams will likely cost you money and perhaps that's money you
haven't accounted for in your retirement plan saving more money will also prepare
you for emergencies such as health issues you are at risk of developing
various health challenges as you grow older to treat health conditions are
usually expensive and can cost more money than you have planned for I
believe you now know how to calculate how much you need to save and how to
retire early you also need to understand how to save money like I said earlier in
this video the easiest way to save more money is to cut down on your spending
you can always cut your spending by considering your recurring expenses
recurring expenses are payments charged automatically on a monthly basis they
usually require a one-time setup and after that payments are deducted
automatically they include subscriptions on membership services such as gym
memberships and the monthly payment for your cable there is a saying that a
dollar per day is actually worth nine thousand dollars assuming you have a
recurring bill that charges you just thirty dollars a month that is like a
dollar a day and sounds very affordable however applying the rule of 300 which I
already explained will have you find out that the actual value in retirement is
nine thousand dollars you'll need nine thousand dollars in savings to keep
paying for a subscription of thirty dollars per month when you retire before
you spend your money on any subscription or any recurring payment multiply the
value by 300. ask yourself if you really want to pay that amount of money in the
subscription when you retire if your answer is no you should cancel the
subscription you need to understand the reasons why recurring payments are
important you can save a lot of money if you only cancel some of your recurring
payments one of the things you need to understand when it comes to recurrent
payments is that it is automatic meaning that the process requires little or none
of your time to function this is an advantage if you consider how it helps
you save time for paying for services every month however it is a disadvantage
when it comes to saving money the company designed it like this as a
strategy to keep you as a customer even when you no longer need their services
don't get carried away these companies that offer recurring subscriptions know
that they must make money too that is why they make it easy for you to
register sometimes all you have to do is fill out a form online and that's it but
they are not designed to be easy to unsubscribe from you may need to write
to the company or make a phone call before they cancel your subscription
since the process of payment for recurring payments is automatic it is
possible for you to forget that you register for them there's some Services
you no longer need but that doesn't stop the payment from being deducted the
money is usually small but it becomes big when viewed from the retirement plan
perspective so you see that you need to take recurring expenses seriously if you
want to save more money and retire early also remember to ask yourself if it is
worth it before you commit yourself to any recurring payment some of the most
common recurring expenses include memberships maintenance subscriptions
insurance telephone services rental fees and utilities take a look at them and
see which of them you can do away with or reduce to save money see boss it is
possible to retire early and live the life of your dreams all you need to do
is save more money and cut down on your spending and I believe this video on how
to save money and retire has shown you how to do just that hey it looks like
YouTube thinks this next video is the one that will change your financial life
forever give it a watch end let's see if they're right