how to retire early if you want to retire early then you should be aiming to have at
least 30 times your annual expenses invested or save somewhere this amount could be higher
or lower depending on the lifestyle you want to have after retirement to achieve your targets of
retiring early you have to live below your means and you have to find avenues of increasing your
income also you have to make sure you've cleared all debts before retiring you don't want to be in
your 70s and struggling to pay off things like a mortgage the road to retiring early isn't easy it
takes time and incredible discipline to earn save and invest as much as you possibly can with that
said let's see if we can speed up your retirement and get you into those swim trunks basking in a
nice tropical island and enjoying your retirement as soon as possible but before we start are you a
subscriber if not you're missing out big time on loads of useful information that will improve the
value of your life now let's begin step 1 define early retirement retiring early could mean a lot
of things to you for most people early retirement means not having to work a 9 to 5 just to put food
on the table in most cases early retirement refers to being financially independent without having
a job you report to but in some cases early retirement could mean having the freedom to
do something creative with your life which could be a hobby traveling or whatever other activity
that could satisfy your needs your path to early retirement should be guided by defining what it
means to you start by establishing your ideal scenario of early retirement whether it means
quitting your corporate job to run a business or not working at all but having some income
constantly flowing into your pockets once you define early retirement in your terms you can
proceed to the next step step 2 time for numbers the next step which is one of the most important
is establishing your target numbers this is where you determine how much money you need to make your
plan a reality most early retirees and self-made millionaires suggest you stash up to 30 times your
yearly expenses whether in savings or investments grants Abbate a a self-made millionaire states
that you should have a year's worth of expenses money in cash in his award-winning bestseller book
financial freedom a proven path to all you'll ever need he shares the formula he used to generate his
target numbers which was later broken down into daily weekly and monthly saving goals while this
may be hard to determine due to the unexpected effects of an unanticipated recession it is
possible to work with estimates there are several financial planners that are online and free which
could help you crunch the figures and give you an ultimate actionable plan which is achievable
step 3 adopt ways to live below your means it will be impossible to acquire a substantial amount of
wealth if you end up spending more than you earn while you work towards achieving early retirement
it's imperative to live below your means but what is living below your means really mean in
the simplest terms it means spending less than you earn the easiest way to do this is to first
start by analyzing each and every one of your expenses next you want to evaluate the biggest
expenses and see how they can be reduced also identify the unnecessary expenses and eliminate
them completely doing this can go a long way in your efforts to increasing your savings and
investments pool step 4 leverage income streams it's important as you take on this journey to
cut costs down as discussed earlier but you can only cut them down to a certain degree to make a
bigger difference you have to increase your income streams cutting down your costs and expenses is
a short term solution which is important but to make the real change you need more money coming
in creating a positive cash flow is a long-term solution that will help you achieve your early
retirement targets much sooner take up a second side hustle to increase your income streams some
of the most lucrative streams with high returns include passive income if you don't know which
one to start with watch one of our videos titled 10 ways to make passive income another lucrative
income stream is real estate real estate has for years been the best form of investment with
some of the highest returns if you don't have the capital to invest in property you can identify our
EITS which are less capital intensive and still well rewarding step 5 max your retirement accounts
in all financial independence and early retirement strategies you have to have a retirement savings
account there are employer sponsored retirement plans such as IRAs which offer unparalleled tax
benefits and great investment growth the best part about these accounts is that you get a tax
to section of your yearly tax returns so instead of giving all your money to the government you end
up saving a whole lot through the deductions for example you can contribute up to nineteen thousand
dollars on your 401k account and six thousand dollars to your traditional IRA and end up with
bulk savings the only issue with such accounts is the withdrawal restrictions but in the long
run it's actually a good problem to have you will only be able to make withdrawals without
penalties when you turn 59 and a half if this is too much you can dip into your Roth IRA which is
funded by after-tax money and withdraw at any time step 6 invest invest and again invest once
you've maxed out your retirement funds now get a brokerage account with these accounts you'll be
able to invest direct your money directly in the stock market and withdraw whenever you want to
billionaires like Warren Buffett who have built their net worth through such investments swear
by low-cost index funds index funds our all-in-one investments which will track a specified financial
market and will diversify your investment to minimize risk there are so many online tutorials
and courses that will guide you on how to make these investments but if you feel you can't do
it on your own you can hire a professional to guide you this happens to be one of the best
ways to grow your money and achieve retirement even earlier than planned step 7 pay loans and
mortgage as you plan your early retirement it's a good idea to start by clearing off your debts
one of the first and biggest loans you should start with is your mortgage clearing consumer
debt with a high interest rate is without a doubt a no-brainer but most people don't really consider
the importance of clearing off your mortgage even before the due time the peace of mind that comes
with being liability free will drive you to save and give you more morale to retire according to
your plan most of the people who have retired early only regret one thing that's not paying
off their mortgage in time as you know with most mortgages the payment term is often many
years which is often more than a decade this long period may result in reluctance to clear the debt
much of the whole early retirement process is in the mind mortgage freedom adds another level of
mental freedom you can't get anywhere step 8 get proper health insurance leaving your full time
corporate job means saying goodbye to your current insurance plan if you don't have a spouse whose
insurance covers you then you have no choice but to get your own as you wait for Medicare to set
in at 65 then the best option will be getting a cost-effective yet comprehensive health insurance
the reason why this is so important is because we all know medical costs can be quite high a simple
hospital visit can set you back and you could lose years of savings and investments you could also
consider continuing with your previous coverage if that's an option there are so many other
alternatives that could apply but you will need to do the research to find the most appropriate
in your case step 9 have a back-up plan however much you foolproof your current plan anything
could go wrong at any time also you may not be satisfied with the unstructured days of early
retirement no matter how foolproof your plan may seem consider what could go wrong you may find you
hate the unstructured days of early retirement or the economy could tanked at any time bringing your
entire life savings down with it your investments could go south in a minute if this happens what
will be your backup plan are you willing to cut down on expenses or go back to work considering
the worst-case scenarios it's really essential and imperative when your future is on the line step 10
execute your plan immediately once you've followed through all the steps listed above all that's left
is to execute it you need proper timing and discipline to execute the plans accordingly
start saving and investing immediately but don't forget to enjoy your present as much as your plan
allows you to sacrifice will play a key role as you carry out your plans Steve Adcock and early
retiree wrote on his blog sacrifice is necessary to retire early but it's not all we do either
it's important to treat and reward ourselves along the way by celebrating those smaller achievements
don't forget to keep your head up as you carry on and don't be easily wavered by anything your
peers may influence you otherwise but you have to stay strong and stick to the plan at the end
of the whole process you know what you want out of it it's not an easy journey but it's doable
good things in life seldom come for free in most cases you have to work hard to get them so in
summary in order to retire early you need to step 1 define what kind of retirement you want step 2
establish your financial target step 3 adopt ways to live below your means step 4 leverage
income streams step 5 max your retirement account step six invest step seven pay off your loans in
mortgage step eight get proper health insurance step nine have a back-up plan step 10 execute
your plans immediately thanks for watching if you're still here it means you enjoyed the video
let us know in the comments what you like most about this and what age you would want to retire
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out give us a thumbs up tap the Bell notification and subscribe if you have it that's it for today
until next time how to become a millionaire the reality of the world is that whether young or old
jobless are employed we all desire to be rich a look at some of the world's richest people gives
us a peek into the kind of lifestyles we all wish we had unfortunately only a few of us ever
really get there which means there are certain skills that the rich apply in life that most of
us don't could it be that we're not following the right principles or maybe we're simply not smart
enough or is it that we're just too afraid to give entrepreneurship and the possibility of living the
good life a shot sure it's true you could lose all of your money your job and even become bankrupt
while pursuing your dreams so the question then becomes is your financial freedom worth it