5 Strategies For “Early Retirement”

  I actually never want to retire, I like doing good work.  There is an inherent joy in creating something or working with a group of people to add value in some area of life.  The Money Vikings seek financial freedom, but do not like the concept of retirement and sitting around doing nothing all day.  I like working, but it is best to be able to work on your own terms.  This is why the phrase “early retirement” is in quotes.  That said, everyone is different.  The strategies below will benefit you whether you want to sit on a beach for the rest of your life or work part time as a freelancer doing something you love.  I kind of think people go a little crazy when they do not have work, we seem to need something to focus on and work on each day.  Even our favorite early retiree personal finance bloggers are still doing some kind of work each day, raising a family, writing, building, learning, etc. No matter your ultimate goals, here are 5 strategies that one could employ to reach financial freedom:
  1.  Housing.  Housing is typically the single greatest expense one ever has.  We live in a high cost of living part of the Country and this greatly adds to the challenge of saving and investing.  Whatever your situation, attempt to wrangle this beast!  For one, stop watching those home remodeling shows that I believe are simply ongoing commercials to get you to constantly change and upgrade your home.  It is just shelter, it is not a reflection of your worth to society.  It is shelter, it is not who you are as a person.  Get the idea?  I am afraid in America it has become that, and it drives people nuts and drains their bank accounts, by design.  I grew up watching that show “Lifestyles of the Rich and Famous” and glad I shook that off later in life.  In fact, Warren Buffet has lived in the same house he bought in 1958 for $31,000 ($250,000 in today’s dollars).  The richest man in the World (this fluctuates, but the top 3) lives in a very nice upper middle class house.  My aim was to find the right size, in a neighborhood with good schools, at a price and interest rate I could manage each month.  Next, I plan to pay it off as fast as possible by adding an extra couple hundred a month to pay down principal.  This reduces the life of the loan by about 8-10 years.  I confess, the one show I will watch is “Tiny Houses”, I am intrigued by the folks that can pull it off.
  2. Automate.  We will say it all the time!  We as humans are our own worst enemies and we have to set ourselves up for success.  We automate as much money as possible to be regularly pulled from our hands and stashed in low cost index funds that are well balanced.  Not many folks are struck by lightning and magically are handed a huge ton of money.  This is fun to read about in the fairy tales, with the flick of a wand a pumpkin turns into a carriage or little Harry Potter has a trust fund account.  Very lucky for those characters, but the rest of us Vikings have to get up and do it ourselves each day.
  3. Find your way to combat commercialism.  Americans are bombarded with 24/7 commercials and brainwashing tactics.  The smartest and most strategic advertisers in the world are literally spending 24/7 strategizing how to seperate you from your money.  Did you ever watch Mad Men?  I loved that show, it clearly illustrated how the advertising industry manipulates a message to get everyone to believe they must have XYZ product or their life is not complete.  We are not perfect, we all fall into it.  Find your way to manage this constant messaging that you may not even know is happening.
  4. Develop a side hustle.  Developing side hobbies and business ideas seems to sharpen our minds into a mindset that we are never taught in traditional school.  Take your business education into your own hands.  I believe whether this actually generates revenue or not, it puts one in the mindset and trajectory to become wealthier.  I have failed at this many times, and will probably fail several more times.  But, we can learn from the experiences and grow our skill set.
  5. Cars.  I have a confession to make, I bought a new car last year.  I know, I know as I hang my head in shame.  What kind of personal finance blogger buys a new car?  I can’t say I regret it for a couple reasons and we did a couple things right:  The family needed a safe reliable car where we live.  I paid it half off in cash.  Have a low interest rate.  And plan on keeping it for 20 years.  It is also a practical Japanese model, not some German luxury vehicle!  I plan on writing in more detail about this decision in its own post.  On the self critical side, I probably could have been a little smarter financially.  I could have bought used first of all.  You get the point though.  Cars are a huge waste of money, so truly think about the long term costs of your purchase.  The sales person will tell you it’s only XYZ amount more per month, but that “small amount” to the sales person is a lot to you who has to actually work for it.
Whether your goal is to sit on a beach and do nothing or work on your own terms, these strategies can help.  Another key factor that effects many people is health insurance.  I know some people who work simply for the insurance benefit.  This is something that we will explore in later posts.  In the meantime, get the 5 strategies above right and it may help you on your journey.

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