65 can seem like such a long time to wait to enjoy the fruits of years and years of hard labor. Of course there is also the common dilemma of reaching the official retirement age and having the money and the time to do all the things a youthful mind can imagine, but being limited by health constraints and a general lack of energy.
It is possible to give up the strain of working a nine to five shift a lot earlier if the right ingredients are present. So what exactly does it take to retire early?
A Positive Attitude
Attitude is possibly the most important factor in achieving early retirement. A positive attitude helps to propel the level of commitment to the life changing habits that will effect a change. If the belief that early retirement is possible is shaky the entire attempt is in jeopardy because sacrifices may seem meaningless.
A Reason for Retiring Early
If early retirement is an abstract concept there will be no motivation to actually achieve it. It must be a concrete vision and it must be tied to solid reasons. For instance, a desire to spend quality family time or to travel while health issues are not on the horizon could be great reasons to want to retire early.
The Discipline to Cut Spending Now
To successfully exit the rat race before the ripe old age of 65 takes extreme discipline. It means curtailing frivolous spending in an effort to chuck extra payments into retirement funds. It essentially means delaying gratification for a bigger prize at an earlier date.
Knowledge of Net Worth
Calculating net worth is important because it provides a clear picture of the funds as they stand now and thus makes estimating how much is needed a lot easier. To calculate net worth simply minus all debt obligations such as mortgage balances and other loans from the list of assets including real estate values, cash and other investments. Understanding net worth calculations can make a huge impact on the financial planning process.
The Smarts to Stop Saving and Start Investing
Robert Kiyosaki, the famous author of the Rich Dad, Poor Dad series of investment books, says simply “Savers are losers.” This is because when the rate of inflation is applied against most savings account interest rates, the return is totally eliminated. To beat inflation and actually build a retirement portfolio means letting go of the safety net of savings accounts and joining the ranks of investors.
The Ability to Develop a Source of Passive Income
Passive income is powerful because it means that effort expended once will continue to generate an income flow into perpetuity. This is almost indispensible to those who wish to retire early, because over time it can replace a salary but it requires no additional work. Investing in real estate to then use as a rental property is one example of passive income at work.
Early retirement can become a reality, but it requires a commitment to pull away from the herd and live a life less ordinary. Forget about what others are buying and enjoying now and invest in a retirement that can be a lot younger than 65.
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