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942: Why Retire Early, and Can You Do It? by Chris Reining on How To Achieve Financial Independence

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This is optimal finance daily episode nine forty two why retire early and can you do it by Chris rining of Chris Rining Dot Com and I'm Dan I'm your host here on show and this is where I read to you from some of the very best personal finance blogs on the planet and before we get to today's post from Chris Thing for today thank you so much for listening hope you have a great rest of your day and I will see you right back here tomorrow where your optimal life awaits have the choice to retire early that's twenty thousand in Annual Expenses Times Twenty five five hundred thousand whatever amount it needs to be an income generating assets so you can't count your Car Your House or your stamp collection income can come from things like stocks bonds reits MLP's or real estate but the best solution for three months of fees waived for now let's get right to our post as we start optimizing your life five equals how much money you need for example if your annual expenses are twenty thousand dollars then you need five hundred thousand dollars to consider yourself financially independent and become financially independent you could be the sole decision maker on who you work with what you work on when you work or even if you work at all sounds pretty good right early and if so why the reasons why I chose to make financial independence a top priority in my life were one complete freedom to explore skill set the three the ability to lead an exciting life style that allows me to travel and live abroad whenever I want and meet amazing people in the process some people might not have why retire early and can you do it by Chris rining of Chris rining dot com. There's a ton of new MR everyday dollar readers welcome question I received frequently from readers is how much money do I need to retire early. The math is actually quite simple to compute this answer your annual Expenses Times Twenty five the truth is it takes self discipline hard work conscious decision making and the ability to be okay with living unconventional life but the result can and will be that no one has any authority over your life but you why retire early this is the first question you have to challenge yourself to answer do I want to retire of course does but becoming financially independent isn't easy accumulating enough money to live on for the rest of your life may seem like an insurmountable goal but I assure you it's doable most folks is to park their extra money in vanguard funds where does the twenty five in the calculation come from the general rule is that four percent is the safe withdrawal as you can safely withdraw four percent a year from your income generating assets five hundred thousand dollars times four percent equals twenty thousand dollars and you can do this every year do that doesn't challenge you anymore and may be soul-sucking or do you find it frustrating that every morning five days a week your inbox is full of emails asking you to do things any reason to retire early and that's okay perhaps the truly love their job and find it fulfilling or perhaps conquering the corner office is the top priority in their life can I do to multifamily apartments in La and each real estate project is carefully vetted and actively managed by fundraisers team of real estate pros fundraise is the future rate or Swr so the twenty five comes from taking one and dividing it by point zero four using the example from a moment ago the swr mean interests and hobbies and not be pigeonholed into one job forever to time to share and help others lead a richer fuller life by choosing minimalism and frugal `ISMs So I wanted to take an opportunity to cover the general idea of early retirement how do you feel about the job you've held for the past fifteen years the one you now loathe going you don't really want to do or presenting you with fee problems that have somehow become your responsibility to solve what if I told you that by making the choice yes it is a choice it the answer to this question is that yes it is realistic some people have done it in their late twenties a few more have done it in their thirties and many have done it in their forties of real estate investing so visit fundraise Dot Com Slash O. F. D. that's F. U. N. D. R. I S. E. dot com slash o f t to have your first will accelerate reaching your number or if you're in debt paying that off first reducing expenses and increasing income the first factor is to reduce expenses dramatically until you die so what's the plan now that you have your number you're probably wondering how you can possibly save that amount of money people may have different starting place the great thing is that the plan is the same no matter if you're in debt you have little to no savings or you have a hefty two hundred thousand dollars saved already there are two factors that there are books and blogs like this one that cover cost-saving tactics like lowering your property taxes choosing a low cost high deductible health plan and drinking the increase income the most successful way to do that is to start your career debt free then throughout your career don't limit yourself to measly raises instead learn how which also means that savings are low relative to expenses if you truly want to retire early you have to avoid the paycheck to paycheck model of matching expenses to incur Che's box wine so I'm not going to spend much time on how to do it just know that you have to look at all your expenses and start challenging yourself to live with less the second factor is negotiate huge raises my buddy Ra meets Sadie does this the best about half of Americans live paycheck to paycheck. This means that expenses are

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