How to retire early
Who doesn’t want to retire early? Well all of us do, isn’t it true. Well, let's see what can we do to achieve this goal?
Start Saving – You might think that I am already doing this. But how seriously that’s the question. The more we save during the early years of our lives the better it's for us when we get old. It’s a habit and if not made then we might lose a lot. Start by small and keep increasing as much you can!
Know your expenses – You want to know why the first step is not working for you then take a close look at your outflow. When you list down the expenses, you would be surprised to know that you had never thought that you were spending your money on many of the things which you don’t even need. Let me give you an example; When you enter a store of these mega retailers you take a right turn and that’s where they put their most profitable items. Simply, because they know your habits. Stop gratifying yourself with instant purchases.
Avoid the ego trips – If your neighbor or a friend has got an expensive car that you also want but don’t need it then don’t make a mistake of buying one. You know your worth and don’t look for others approval to prove it.
Getting the right medical and Insurance coverage – Insurance can help you in case of a major catastrophe. It’s for the security of your kids, spouse, and dependents. What if you get disabled, critically ill in your 20s or 30s? You need to have coverage for that.
Start Investing Early – Let me give you an example of compounding and you will be amazed to know the results.
If you want to retire at the age of 65 and have $1m then this is how much you need to start saving per month @6% Rate of return; at the age 20 - $361, at age 30 - $698 at the age 40 - $1435 and at the age 50 - $3421.
Hence the earlier you start the better it is.