The most common personal goal I hear about these days is early retirement. Working for another 30 years is overwhelming to the young in their 30s. It is common knowledge that one will not work for the same employer for the rest of one’s life; however, not wanting to work at all is a new concept.
Long hours of labor are the norm in a variety of professions, ranging from high-brow consultancy and private equity to professionally demanding medicine. Even more straightforward occupations, such as call centers , logistics management, sales, and customer service, have begun to demand longer hours. Some people operate across time zones in technology and software, music and composition, writing and content, media and filmmaking, and so on, with no regard for the clock.
Early retirement thus makes sense as more than just the conclusion of a long career, but as a well-earned pivot that allows them to follow their passions.
The 8 money rules to follow for early retirement:
First and foremost, establishing a corpus on which to lean is important. There must be sufficient funds to cover rent, food, utilities, and education, as well as a little excess for luxuries.
Second, accumulating this wealth is not just a result of salary, savings, and investments. It’s about imagining a new way of living. Quitting a job without a solid idea of how different it would be may be dangerous. What older retirees regarded as a lifestyle choice after retirement, the younger generation sees as a new way of life.
Thirdly, retirement should be about finding a new purpose in life. Early retirement may be damaging to one’s mental and physical health if one does not decide what one wants to do to meaningfully connect with the world in which one lives.
Fourth, it’s critical to find a second source of income. One may write, teach math or music, become a farmer, work as a tour guide, or devote one’s life to a cause that is important to them. This can help in generating an income.
Fifth, one must emotionally prepare for the change they are idolizing. Living on a farm encompasses becoming familiar with the other life forms that will share your space; accepting what nature has to offer, such as heat, rain, and other unpredictably changing living conditions, and so on.
Sixth, one must be ready to think about how these lifestyle changes will affect what one does for entertainment, social contact, education, healthcare, and other everyday decisions that urban living allows one to take for granted. Many people want to prioritize travel.
Seventh, one should be open to the possibility of quitting the attempt and returning to the mainstream if necessary. Many people choose to take a ‘pause’ so that they may try out a different option before making a decision.
Lastly, retiring early and starting a new life should not mean abandoning basic personal finance standards. Even if you’ve retired to a more sedentary lifestyle, you’ll still need wealth management and asset allocation; you’ll need to monitor how your assets are performing.
There’s no harm in thinking about retiring early. However, it appears that the components of both fundings and maintaining it are undervalued.