I Want To Retire Young!

I Want To Retire Young!

One of my top Quora most read and upvoted answer inspired me on this blog post “I want to Retire Young”. Early Retirement is down to two steps.  1. How to save more money. 2. How to invest savings. In all honesty you need to be 80% in step 1 and 20% in step 2. You can be the world best investor making millions every week but you do not understand the power of savings ain’t going to help in your early retirement plans.

Base on a real family

Once I met a young family of four, where the parents were in their late 30’s with two beautiful kids at the age of 6 and 4. They were  high earning couples who made at least £250,000 a year. To my surprise, these couple monthly spending was as low as £800 a month. No Joke!

This family had plenty of additional side funds for holidays and luxuries. They can pick and choose to spend their money wisely. Yes, sometimes they do get quite annoying being very calculative but that is their their frugal lifestyle. They have been living frugally for the last 12 years of their professional life since university graduation and imagine their savings.

No, they are not retired yet. 

With the savings and investment they could retire today. However they have plans on expanding their property portfolio to ensure maximum growth over their long term investment. They have been hard working citizens and also savers, however lack plans for their passion work which stops them from early retirement.

  • Mortgage = £300
  • Car Loan = £0
  • Credit Card Debt = £0
  • Monthly Groceries = £250
  • Fuel, home bills and others = £250
  • TOTAL = £800
Early Retirement Road Map
Passive income 79%
Yearly Expenses
Outgoings 45%
EMERGENCY FUNDS
18 MONTHS FUNDS 90%
Passion Job
Passive income 19%

Why Retire Young?

Many people wants to retire at a young age simply because they want to spent the 9am till 5pm weekday time doing the things they like. I mean productive work and not simply TV, sleeping or endless partying. Most of us gets stuck in a day job because we are simply doing the job which our education system have driven us. Many young parents are bored of their day job and hoping to spent more time with their young children. However this is difficult when they have endless bills to pay.

Many of us do not know what our ‘Passion Job’ is. Passion job is simply a job you want to do for the rest of your life. It could be charity work, music teacher, writer, travel blogger etc. This is simply a job we could even do for FREE. 

My Personal Early Retirement Plans

  • Spend more time with my children and close families
  • Run 4 Marathons a year
  • Teaching younger generations and be a career advisor on Passion Jobs
  • Drive a restored JEEP from UK to Japan
  • Blog 6 times a week!
  • Learn how to Snowboard

7 Discipline Steps to Retire Young!

  1. Reduce your Debt and Expenses – The lower the outgoings the easier it is to manage savings on a monthly basis. The faster debts are repaid, the less interest you have to return to lender. Always buy a house you can afford not what the banks maximum loan value. Tips on Savings

  2. Emergency Funds – No one can see the future and life is always full of unexpected surprises. With money set aside, it helps to ease the stress and time to rectify the problems. Tips on Emergency Funds.

  3. Start Investing – Investment can help you generate income while you sleep. The risks which you take depends on your age profile. Always invest money which you can afford to lose. Long term investment have more likelihood of success. Tips on Investments.

  4. Side Income – A day job alone cannot make enough money to help in our retirement funds. We need to be productive and make additional income with the available time after work. Tips on Side Income.

  5. Find your Passion – You need an objective to remind why you want to leave your day job? If you do not have a passion job, then its best stick to your “exciting” day job. Why work for someone when you can work for yourself?

  6. Maximise the 24 hours a day – Always get sufficient sleep and exercise. The majority of your time should be spent with friends, families and also your time for self improvements. Only spent time on activities which can help improve and make money. Otherwise delegate and pay someone to do it. Never sit all day and do ineffective activities.

  7. Enjoy live by spending on the right goods and services – Living a good lifestyle does not come with maximum funding. Apply frugal lifestyle and strategies. Eating healthy and plenty of exercise is key. Buy good quality luxury goods for primary needs. Always look for bargain and discounts. Live a fruitful live which you can afford.

Final Words

If you can save up to £1.5 million dollars before 40. You can actually generate a 5% growth which pays you £6,250 a month before tax. I have read a blog by an investment banker in London where she worked hard for 8 years and saved £2m and retired by 35 cause her investment income is generating more cash than her pay. She used her free time to work on her passion like photography and blogging to generated additional income.

I know our circumstances changes like family, career change, new passion etc. If you can be discipline with your savings then you will retire sooner and do your own passion work.
Financial Freedom is about how you save not by the salary you make.
Hope this Helps

From,

Dr Alex Koh
Founder and CEO of MooMooCoo.com
Family Finance Made Simple

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Our mailing address is: alexkoh@moomoocoo.com

2 Comments

  1. Great post and I really like that poster with the 7 steps summarized! I’m definitely printing it out and keeping it as a reminder.

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