Wouldn’t it be amazing if you could retire by the time you are 40? It sounds like a pipe dream, but it’s not impossible, and you don’t need to win the lottery for it to be your reality. Many ordinary people have managed to pull it off, they just managed their money better than the average person.
It’s entirely possible for you to do the same, have a read of these tips from other people who managed to retire before they were 40.
You need multiple streams of income
To retire early you will need to have a large amount of savings behind you, and a way of making money passively, so you don’t have to keep working. Having a high salary certainly helps when it comes to having money to save, but it’s not necessarily the only way of saving lots of money. So what can you do to make money on the side? Think about your skills, what can you offer to business in need? Think about using social media to make some extra cash, if it takes off you could be earning more than you do in your day job!
You need to make investments
Once you’ve got a steady income coming in, with some savings set aside, you need to start to think about maximising your money. Making investments is one of the most effective ways of getting your money to work for you. Rather than thinking about money as something that you need to spend or hoard, think of it as something you need to invest. Thinking this way will stop the temptation to spend as soon as you get some spare cash.
Track your expenses
Do you have any idea on how much you’re spending every day, including on small items like coffee or subscriptions? You’ll be surprised just how much money is spent on small, throwaway items every month. If you save the same amount you spend on things that, quite frankly, you won’t miss if they are not there, you could be hundreds of pounds better off each month. Use an expense tracker like Expensify to keep an eye on your spending.
Learn to love freebies!
Overall, if you want to retire by the time you are 40 you are going to have to stop spending so much money. If the thought sounds miserable to you then you might not be ready to make the commitments you need to be able to retire early. If you are not too phased by cutting back, then you can certainly make this work. Learn to enjoy not spending money. Remember, everyone is after your cash, and the goal is to not let them have it! Find out what’s going on near you for free, cut back your spending on entertainment by at least half. Look at local web pages and newspapers for things you can do that won’t cost you any money. Check out TimeOut for loads of free things to do in your city.