Retiring in your 30s seems like an unreachable goal for most Gen-Zs and Millenials due to the rising costs of bare essentials, lack of affordable housing and free-healthcare, exuberant student debt loans, and the stagnant rise of the minimum wage. Today, it just seems unrealistic to retire before the age of 60 or 70.
However, people can retire in 10 years if they set their mind to it. Retiring at the age of 30 will require a different type of mindset and lifestyle choices. Early retirement requires a hearty fortitude.
How Can I Retire Early?
Get Into the Habit of Saving More and Spending Less
We’ll start with the obvious. The less you spend in retirement, the longer it takes you to retire. If you want to retire by 30 years old, you will need to save most of your after-tax money.
This strategy means that you will need to save at least 50 percent of your savings. Fifty percent might sound a lot, and certainly, it is. But, keep in mind this will allow you to retire much earlier than if you would only save 20 percent of your after-tax money.
The trick to this method is to find compromises that work for you. A good example would be biking to work or getting a roommate.
The name of the game is all about making short-term sacrifices for long-term gains. Yeah, sure. You might not be able to go to the Bahamas for your vacation, but ten years from now, the money you would’ve spent on the holiday could be paying for your retirement for the years to come.
Get Professional Help
Although you might still be in your 20s and have an ample amount of time to do what you want, there’s no harm in already having a clear plan in mind for your future. Most young adults will usually spend on many of their experiences in the present moment without thinking of the future. If you’re not quite sure how you’re going to outline your finances, you might want to ask for professional help and supervision.
It’s important to have a clear direction of where you’re headed when it comes to your savings and your monthly spending. Fortunately, there are personal financial planning experts that can help you manage your finances. Remember: the key to a brighter future with your family is smart with your spending in the present moment.
Find Other Sources of Income
When saving for retirement, it is essential that you find other sources of income. The downside to saving is that there are certain comforts in life that you will, unfortunately, have to miss or forgo without.
This doesn’t always have to be the case; if you have a unique skill, hobby, or talent, it can be turned into a side hustle that will generate passive income. Are you a great writer? You can try to find writing gigs online, writing blog posts, or writing search engine optimization articles. The content marketing industry has been soaring in popularity in the past few years, especially when businesses are starting to.
In the era of information and technology, the streams of income are infinite. Think of the internet as one of your ultimate profit-making tools. Use it often and use it wisely.
Invest in the Stock Market
Investing in the stock market is one of the sure-fire ways to ensure that your income makes you more money. However, the stock market can be finicky and will require vast amounts of research before diving into it. It also helps to diversify your investments and not put all your eggs in one basket.
A good rule of thumb when investing in the stock market is to invest in company’s that play for the long run because you’re doing the same. Stocks like McDonald’s, Apple, and Berkshire Hathaway are just some of the many examples of long-term investments that are bound to pay-off.
Calculate, Calculate, Calculate
Before you can actually start saving, you have to calculate the total cost it will take for you to retire early. There are multiple ways to do this. However, the best one is to use an online retirement calculator. Using this tool will enable you to more accurately get a feel for how much you need to save and for how long.
Early retirement is a daunting task, but it isn’t impossible. It will require you to be aggressive in your investment and frugal in your lifestyle.
It would help if you also kept in mind that short-term fluctuations are something that you should rarely worry about because you are playing for the long-term.