Despite the increasingly turbulent times we live in, more and more people are determined to reach financial independence and retire early. And who can blame them?
But what advice is available for those hoping to retire early and reach the goal of financial independence. Allow us to introduce you to a few of the more achievable routes to financial independence.
Following the FIRE movement
Standing for ‘Financial Independence, Retire Early’, you would think that the FIRE movement would have been sent into disarray by the COVID-19 pandemic.
However, the movement’s ideals of saving often and being frugal with spending have perhaps never been more on-trend.
The idea of retiring young is something that everyone plays with at one point in their lives but in a post-pandemic world, more of us are likely to be stuck in less than ideal employment situations – situations we want out of ASAP.
Pay off debts first
It’s likely that you’ll have worked up some debts over the course of your working life. Whether that’s credit card debt or your mortgage, these are debts that will come with interest.
That’s why you can’t really start to consider financial independence until you’ve paid off all your debts.
We understand that paying debts can feel a little daunting but as long as you take the time to sit down and work out a payment plan, you should be able to get out on top of them sooner than you think.
We all like to put a little something away every once in a while for a nice holiday or a new car. But this is not that. This is thinking about your retirement.
Look into long-term savings accounts that offer high rates of interest and set aside at least a few hundred quid a month. In a couple of decades, that will have blossomed into a sizable retirement pot.
Keep spending down
The amount of money the average person will fritter away in a lifetime is simply staggering. One thing that the constant lockdowns have taught us, however, is that we don’t necessarily need to be spending lots of money on expensive holidays and nights out to be living a fulfilling life.
Keep spending to an absolute minimum and budget everything. We appreciate this will be easier for some than for others but that’s the bottom line here. Escaping from work early isn’t for everyone, after all.
Finally, it’s important to actually create a plan so you can visualise what your early retirement is going to look like.
Put together the earnings of you and your spouse and make a cash flow graph that also includes work pensions, state pensions, private pensions, asset liquidation, savings and investments and you should be able to map out your financial independence in a long weekend!