19 Best Early Retirement Tips To Help You Retire Early

Are you interested in financial independence and/or early retirement? Today, I’ve asked some of the top personal finance experts to share their personal top tips for retiring early.

Retiring early may sound like a dream, but as part of the FIRE movement, more and more people are trying to retire early. FIRE stands for Financial Independence, Retire Early.

There is a lot of debate about financial independence and early retirement, especially about what it really means and how to achieve it.

This doesn’t necessarily mean you have millions of dollars in the bank and will never work again. If this is your goal, then great, go for it! But the idea is more about living the best life possible and no longer being controlled by money.

For some, this means being completely debt-free—no credit card debt, mortgages, car loans, student loans, etc. Others have a precise number in mind that they want to achieve, such as $1 to $2 million in savings.

And, to the surprise of many, early retirement doesn’t necessarily mean you stop working forever. Early retirement can be about quitting a job you hate and pursuing something you love.

There are many reasons why a person might want to retire early or become financially independent, such as:

• Be able to pursue your passions without worrying about income

• More time to travel

• Have freedom

• Spend more time with family and your loved ones

The people I asked to share their early retirement tips were bloggers, authors, and business owners who had been working toward financial independence and/or early retirement. These people are experts at finding ways to make more money and save money.

For example, you’ll learn early retirement techniques including geographic arbitrage (the ability to be location-agnostic so you can save money by living in a lower-cost-of-living area). There are also tips for early retirement planning that can help you understand the math of FIRE—it might surprise you!

One of the most important things you’ll learn from these experts is that achieving FIRE is about changing the way you think.

You have to really find a reason to break away from your normal 9 to 5 routine. You must be motivated and goal-oriented. Some people have to be willing to drastically change their lifestyle to retire early.

Being financially independent is an incredible feeling and I love that I can travel more, live on my own terms, and retire whenever I want (not that I plan on it anytime soon – I love what I do!).

Although it is an amazing feeling, achieving financial independence is not easy for everyone. That’s why I’m sharing these actionable early retirement tips with you today.

You’ll learn the early retirement tips that helped these experts get started, how they stay motivated, it’s never too late to start working toward FIRE, and more.

Most importantly, you’ll learn that there is no direct path to financial independence or early retirement. 

Here are the best early retirement tips.

1. Go for FIRE.

“After achieving financial independence and retiring at age 30, I have three main pieces of advice for anyone who might be interested in FIRE:

1. Go all out

When I talk to friends and family about my FIRE journey, some of them respond that it’s great, but they love their job or love working for their company. While I am happy for them, I also gently remind them that nothing lasts forever. The job you love may change, your company may be acquired, and your industry may experience mass layoffs. Change is the only constant in life.

Pursuing financial independence is a great goal for anyone because it provides financial stability to cope with the inevitable changes the world will throw at you. So I advise everyone to try it, even if early retirement is not their goal, and even if they have no intention of stopping working. Having a safety net is never a bad thing.

2. Figure out what you want

Inertia is a powerful force. When I was living in New York and just trying to survive, I didn’t take the time to stop and think about what I really wanted. I was recently offered a new position that included a promotion and a 37% raise, and I was told that the way to enjoy life was to spend it – so that’s what I did.

My friends told me I should buy heels (I’m not comfortable walking) and a wallet (I rarely use them). After I spent money like a wild woman, I sat down and realized that the way I was spending it wasn’t making me happier.

So I figured out what truly makes me happy. As it turned out, I was spending time with the people I loved and flying first class around the world. So I put money into those things and even figured out how to do the latter without falling into travel hacking. Based on my experience, I recommend not listening to what others say will make you happy, but figuring it out for yourself—and then spending your money accordingly.

3. Don’t wait

After you figure out what you want in life, I recommend you start down that path now. My partner introduced me to the idea of FIRE in 2013 – and I ignored it for two years. Doing so is the biggest financial regret of my life.

Timing of entry is important and I don’t want to calculate how much more money I would have made if I had listened to the idea in 2013 instead of giving up on it, or when I would have exited the rat race.

Likewise, when talking about FIRE, a lot of my friends over the years have told me “oh I should look into that” and now that I have completed my retirement journey 5 years later they are suddenly asking “how?!” They could have been Walk this path with me. Just start and before you know it, time will be gone. “Purple” in “Purple Life”, she/her.

2. Grow the gap.

There’s a lot of debate in the personal finance and FIRE communities about whether to increase your income or reduce your spending. Ignore the debate and consider widening the gap between the two. To reduce your spending, pick low-hanging fruit and plug glaring holes in your budget. Don’t Fall into being stingy – 80/20 your spending and move on. Use your precious mental bandwidth to think about ways to make more income. Michelle is great at this. She has lots of side hustle advice on this blog. Once the gap between your income and expenses grows, then invest in that gap. How about that? Invest in an index fund, a rental property, or reinvest the money in your own business or side hustle

3. Start investing now.

1) Invest as soon as possible. Many people have heard that “you have to be absolutely debt-free” to invest, but that’s not true—especially if you get an employer match through your 401(k). Invest as soon as possible, even if it’s a small amount, It also means less grunt work over time.

For example, I achieved my goal of investing $100,000 when I was 25 years old. Even if I never contributed a penny, I would have over $1.5 million by the time I’m 65 (retirement age).

2) Don’t be afraid to change jobs. Loyalty to your company is a thing of the past, and when you first negotiate your salary, you have more influence than ever. I always tell my clients: If your company is not loyal to you, why should you be loyal to them? They’ll let you go, they’ll cut your hours, they’ll replace you – don’t let “loyalty” blind you to a high-paying job.

4. Know your why.

I’ve been writing about financial independence and early retirement for over a decade. Since then, I’ve come to believe that there are only two things you need to know about this topic.

First, there’s math. Basically, FIRE is all about creating a gap between your income and expenses. The wider that gap is, the faster you can achieve financial independence (or any other money goal you may have set for yourself). People who take fire seriously often try to save half or more of their income. But if you can’t save half, don’t worry. Start where you are. Save what you can. Stick to it.

Secondly, there is psychology. Yes, the math of early retirement is important, but in my experience the hardest part is the mental aspect. Achieving this goal is not like a sprint. It’s like running a marathon. This takes a long time. You will encounter obstacles along the way. Overcoming these obstacles will be much easier if you have a reason to overcome them, if you have a reason to achieve financial independence. Simply wanting money for money’s sake is not enough. So, be clear about your purpose and why you want to retire early.

That’s it. Before you get started, know why you want to pursue financial independence. Then, once you make the leap, do everything you can to widen the gap between your income and expenses.

5. Design your ideal life.

I often see people overemphasize the financial aspects of FIRE (while undervaluing their quality of life).

The whole purpose of financial independence or early retirement is to live your absolute best life (which doesn’t necessarily require you to retire early). That’s why I recommend making sure you focus on designing your ideal lifestyle while also saving and investing to keep you on fire.

First, start creating your vision of your ideal life. There are many steps you can take to create and refine your vision. You can reflect on your ideal day and week, think about your top experiences so far, start trying new things, learn about different flexible career options, and more.

Most lifestyle design choices are available long before early retirement. So once you start creating your vision, you can figure out how to incorporate elements of your ideal life into it now and work toward making your vision a reality in the long term.

For example, our vision is to build a location-independent base. We hope to slow down and travel around the country and world, do meaningful work, and maintain strong friendships. The goal is to make so many small shifts toward this ideal lifestyle that when we finally reach our full FI number, we don’t have to change anything. We already live the ideal lifestyle.

Over the past two years, we’ve made some small but steady shifts to make this a reality. I took a part-time job so that I would have more free time to grow my business. I grew my business to the point where I felt comfortable quitting my job. Now, I am focused on generating enough revenue in my business so that Mr. Fioneer can quit his job and join me as a location independent entrepreneur.

We will live our ideal life for a few years before reaching full firepower. 

6. Calculate your FI number.

Finding your FI (Financial Independence) number is the best place to start on your FIRE journey. Once you know your number, you have a concrete place to start planning for retirement. You can do this by calculating your annual fees and multiply that number by 25 to find your FI number. This calculation doesn’t control for variables like inflation or your investment returns, but it at least gives you an idea of what you need. My FI number is $900,000, but since With inflation and the cost of medical care for my chronic illness, I’d like a little more than that number. It’s important to consider what might happen in retirement. Although you may not have a mortgage, you may need to fill an expensive prescription. Me My top ten retirement investing tips detailed here

7. Review your financial data.

One of the best ways to make progress with your money is to set aside an hour each month to review your financial data. Make it a fun date (even by yourself) to check in on your financial plans and goals, and review the last every month and make adjustments. One of my favorite financial numbers to track is the “GAP” number. This is the difference between your monthly income and your monthly expenses. Then each month figure out a way to slowly increase your GAP number , by cutting back on some expenses, doing a 30-day spending challenge (like not eating out for a month), or finding ways to increase your income or add new income. A monthly GAP digital audit will help you be more creative and purposeful Improve your GAP number as much as possible. You can use this money to pay off debt, start saving for retirement, or other big goals. Once your GAP number reaches 30-60% of your income, you’re already on the road to financial independence.

8. Our wealth = income + investments – lifestyle

To achieve FIRE, start by understanding the wealth-building equation. It looks like this:

Our wealth = income + investments – lifestyle.

Building wealth is our path to financial independence, which is an implicit requirement we need to achieve before we can retire early. FI means we no longer need to earn an income to fully support our lifestyle.

Our revenue is the first step in the process, but it doesn’t stop there. When our earnings are invested in appreciating assets, such as the stock market or real estate, we can build wealth faster through the power of compound interest.

However, the factor that many people forget is lifestyle. The costs of our lifestyles (aka: our expenses) reduce our wealth. The more we spend and the more debt we hold, the less wealth we have and, therefore, the further away we are from achieving the Fire.

Goal: Maximize income + investments and minimize lifestyle expenses. When the two are combined, you’ll build wealth quickly, develop healthy habits without draining your wallet, and give you the freedom to retire early for decades of your life.

9. Grow your income.

Work hard to increase your income. For most people, this means focusing on your career. Your career is an asset worth millions of dollars (most people work for 30-40 years) and if If you nurture it carefully, you can make it significantly increase in value, thereby accelerating your path to FIRE. In my experience, there are seven proven steps to increasing your career income that, if implemented consistently over the long term, will result in substantial gains. Extra income. After that, just control your spending, bank the growing difference, and you can ride a rocket to early retirement!

10. Figure out what you really want out of life.

My top tip for reaching FIRE is to figure out what you really want out of life. On the surface, this doesn’t look like financial advice, but when you dig into it, you’ll see how useful it is for your finances How important is the freedom journey. If you don’t even know what you want, how do you know what your FIRE number is? Instead of limiting yourself and sacrificing everything you enjoy in pursuit of financial independence, figure out your life What are your goals and calculate your firepower numbers based on those goals. You may even realize that you need a lot less money than you originally thought, or that your FIRE lifestyle will include other sources of income that you didn’t consider . There’s another important reason to set goals in life. If you only focus on money goals and don’t intentionally design your life after work, you’ll end up being just as unhappy as you were at work. So instead, explore your passions and make sure you’re prepared The good news is that you can live a fulfilling life once you become financially independent

11. Cut three major expenses.

My main advice for those seeking financial independence and/or early retirement is to identify your top three expenses and cut them as much as possible. If you are like most people, your top three expenses will It’s housing, transportation, and food. If you can lower those expenses while maintaining a fulfilling life, you’ll save more money than skipping $5 lattes and cutting coupons.

Most Americans own too many houses with rooms that are unused or used for storage. The average car purchase price in the United States is now over $37,000, and a $10,000 used car will satisfy most people’s needs. Most people eat out too much, draining their budgets and damaging their health.

Reduce these “big three” expenses, invest the savings in a broad range of low-cost index funds that track the entire stock market, and let compound interest do its work. 

12. Geographic arbitrage.

One of the most underrated strategies for helping people achieve financial independence is geographic arbitrage. Basically, if people are able to work remotely and move to a low-cost area (or even a low-cost country), they can increase their savings rate because their The cost of living has dropped, but their income has not.

Before the pandemic, this was relatively rare because most jobs required you to be in the office by default, but now that companies are forced to adopt work-from-home policies, the potential for geographic arbitrage has opened up. There are many others.

Remote working may not be for everyone, but if you can, try to make it permanent after the pandemic is over, especially if your job is in an expensive city like San Francisco or New York. By relocating to a low-cost country like Mexico or Thailand, you may find yourself going from barely getting by to saving so much money that you don’t know what to do with it all! 

13. Think about your why and how.

Financial independence and philosophy go hand in hand. So the first actionable tip I recommend to achieve financial independence is to think about why you want to achieve FIRE. Then, think about how you want to spend your time once you achieve financial freedom.

By thinking about why you want to retire early and how you’re spending your time, you can properly frame yourself for your own version of financial independence. Because there’s more than one way to light a fire.

For example, if you save 50% of your income, you can take one year off for every two years you work. Alternatively, if you prefer a more balanced journey, you might consider the slow FI route. Or, you could consider doing Barista FIRE and working a part-time job so you have more time now.

Personally, I have been testing Mini Retirement and Barista FIRE for a year. I prefer Barista FIRE because it allows me to have more time now, but I still enjoy the lifestyle I want.

My part-time job now averages 17 hours a week, and I’m lucky enough to be able to work from home. The rest of the week I invest, blog, and work on building other income streams. In my experience, Barista FIRE is the perfect alternative solution to achieving financial independence.

But remember, financial independence starts with getting yourself in the right financial situation. To put yourself in the right position, just keep your expenses low and start paying yourself first.

If you save diligently enough and keep your expenses low, you’ll start to open up other options. Suddenly, working a part-time job doesn’t seem so intimidating.

Additionally, I recommend building additional sources of income through side hustles or investments. My sources of side income are blogging and dividend investing.

If you keep your expenses as low as possible, pay yourself first, and build additional sources of income, you’ll be on the road to financial independence in no time.

14. Calculate your net worth.

FIRE isn’t just for the young! There’s a late-starter group, some of us starting out on the financial journey in our 40s and 50s and looking to retire early.

Retiring earlier than the traditional retirement age of 65-67 is a bonus!

Start by calculating your net worth – this will tell you where your finances stand. For example, I found that most of my net worth was tied to my house and superannuation (Australian Retirement Account).

Unfortunately, I won’t be able to access my retirement accounts until I’m 60. So if my goal is to retire at 55, I need to start investing outside of my superannuation.

The road ahead is simple, but not easy. We need to come up with extra money to invest and/or pay down debt. Regardless of age, the “formula” is the same for everyone. Even in our 40s and 50s, compound interest still works.

Increase the difference between expenses and income and invest this difference wisely.

At this stage of our lives, increasing our income can be a little difficult. Many of us are making top dollar right now. Burnout is a real concern. Negotiating a raise may mean more responsibility. Working on a side hustle can also be unpleasant, especially if you already have very little free time.

Spending less is something we can start doing right away – and no, there’s no need to eat rice and beans with every meal. But most of us have succumbed to lifestyle changes over the years. As our incomes increase, our tastes and lifestyles improve to accommodate our higher incomes. So the good news is that we probably have a lot of expenses that can be cut.

I am a spender at heart. For me, tracking my spending and learning to spend mindfully has made a huge difference. Knowing what I do and don’t value in life also means I’m happy to spend money on things that bring me joy, like travel, rather than on things I don’t care about, like clothes.

Consistent action is the most important step towards achieving FI.

It’s never too late to start.

15. Look at financial independence as a journey not just the goal.

I think everyone should strive to be financially independent because you can’t achieve the ultimate goal of financial independence without becoming more financially aware, confident, consumer debt-free, etc. When you start to view financial independence as a journey , you won’t be able to achieve your ultimate goal of financial independence.” Just the goal, you will be able to experience financial freedom along the way.

You also don’t have to wait until you achieve complete financial independence to experience joy and freedom in your life. You can decide to slow down or speed up the time it takes to achieve your goals based on what you value and how you want to spend your money and time. If you value certain experiences and/or things, make room for them in your budget. It’s okay to spend or invest in things that are important to you, and investing doesn’t have to be limited to investing in the stock market or real estate market. You can reframe investing as investing in your own happiness, saving time and skills. You are your best asset.

16. Fire is not a competition.

First and foremost, Financial Independence Retire Early (FIRE) is not a competition. Don’t compare your FIRE journey to others, as everyone has different circumstances. Don’t worship fire as a god, and don’t view fire as the ultimate Target.

Specifically, early retirement isn’t just about traveling the world, escaping the stressful 9-to-5 grind, saying “blessings” to your employer, and drinking pina coladas on the beach. No matter what you do or where you go in retirement, you are still you. So, if you’re not happy with your current life, reaching FIRE won’t magically make you happy. Self-discipline is crucial on your FIRE journey.

For FIRE, the concept is very simple. It’s all about spending less than you earn, investing the money you save, and letting that money grow. You want your money to grow and create a passive income stream. Once your passive income stream exceeds your expenses, you can achieve financial independence and, if you wish, retire early.

There’s a misconception that FIRE is all about pinching pennies and reducing your expenses to the lowest possible level. But this is incorrect and completely unsustainable. I believe in a more balanced approach rather than being stingy. It’s okay to spend money on things you enjoy and less on things you don’t enjoy. For example, if you enjoy making your own nutritious food, spend money on high-quality food. If you love traveling, spend money to travel and enjoy the experience. If you don’t like shopping, spend less!

Again, don’t think of fire as a competition. Think of fire as a life journey. Enjoy the journey!

17. Focus on all aspects of your FIRE journey, not just the money.

The nuts and bolts of financial independence involve more than just numbers and calculators. There are a lot of personal and emotional things to figure out. So, our advice: focus on all aspects of your FIRE journey, not just the money.

1. Don’t assume that 4% is a safe withdrawal rate or that someone else’s FIRE number will work for you. Build your own numbers based on your situation and life plans.

2. Create a personal plan for your FIRE journey and life in retirement. Think about where you will live, who and what your life will include, and what it will take to get there.

3. Fire paths can be isolated. Find a community to talk about your finances, plans, hopes and dreams, as well as all your fears and worries. You will need support and encouragement along the way.

4. Keep an open mind…consider all options!

18. Think about what you want your life to be like.

“Reaching FIRE is a little different for everyone, but the basics are the same. The first step is to figure out what you want your life to look like. Spend a little time daydreaming and hypothesizing…then estimate what you want The future costs involved in life, including health care. It would be wise to add an extra layer of uncertainty.

The more money you want to spend, the bigger your FIRE number will be.

Once you have a spending number in mind, you’ll need to find a way to generate that amount each year so that you don’t have to work in the future. You can use the Rule of 25 and the 4% Rule to get an idea of how much you may need to invest and what your safe withdrawal rate is. You can also use other types of passive income (such as rental income) to bring in income each year, which is the route I took.

19. Focus on making more money from the beginning.

“The biggest advice I can give to anyone committing to FIRE is that you need to focus on making more money from the beginning. That’s how you impact some big changes in your financial life.

Think about it: What expenses cost you the most? That’s debt that a lot of people have – credit cards, student loans, mortgages, etc. Making more money is the fastest way to pay off debt, and once your debt is paid off, you can start investing more into your FIRE number.

Another benefit of finding ways to make more money is that you don’t have to choose between paying off debt and investing—you can do both. So you start increasing your long-term wealth flow (investments) while also making short-term changes to save money. You’re basically attacking your finances from both ends.