There’s something extra sour about retiring this way; it’s like you don’t go out on your own terms, someone else has decided this for you.
Consequently, finding ideas to help you retire early should be high on your agenda. Early retirement means you can call it quits whenever you like, taking control of your life. You decide if you want to carry on working or if you’d rather take a step back and explore different things. The beauty of retirement is that you have so much time to yourself, leaving the door open for loads of projects or things you couldn’t do while you were working. Perhaps you’ve always dreamed of traveling the world but never had the time? Now you can.
Investing: How do you get to early retirement?
With this in mind, we need to approach the idea of early retirement. How can you achieve it? Many people retire early, but the main thing you need is wealth. When you retire, you no longer have a job, so you rely on the state pension and any other pension plans you have to keep paying you.
Speaking of which, a lot of pension plans have rules stipulating you can only access the money when you reach a certain age. So, if you retire early, you technically can’t access your retirement fund until you’re close to retirement age.
What can you do to ensure you’re able to retire as early as possible without worrying about your finances? Here are a few ideas that you may find useful:
Set up an investment savings account
An investment savings account is a bank account where you deposit money and it gets invested for you. It works like a savings account, only the interest is gained by the investments made by an overall fund manager. Typically, when opening your account, you are asked what you’d like to put most of your money into. For instance, stocks, real estate, etc. Then, your money is invested, and you see the benefits through your interest rate.
This is a smarter way of saving money for retirement than using a savings account because you gain more via the interest. Also, as opposed to a retirement fund, an investment savings account lets you access the money whenever you want. Let’s say you retire and need some extra funds, you can dip into this account and take some cash out.
Invest in real estate
Everyone should look to get on the real estate ladder as early as possible in their lives. Investing in property is a surefire way to help you retire early and with money in the bank. With a property, you can start making money by leasing it and getting rental payments back. As a result, you soon earn enough money to afford a deposit on another house, meaning you can invest in it and do the same.
If you’re clever, you can invest in properties and turn them into flats, allowing you to have two tenants and twice the rent! Over the years, you keep getting money into your account via rental payments, generating true passive income. When you retire, you can still have your properties as a source of income. Thus, you can fund your early retirement without needing to do anything at all. If you eventually become sick of managing the properties, you can sell them and get large sums of money to further prop up your retirement savings!
Start a business
A large proportion of people that retire early will do so because they have a business. Business owners can afford to retire as they set their company up, put in a few years of hard work, then step down and allow someone else to take charge. The key is to retain shares in the company, so you still get money even when you’ve retired.
These days, it’s easier than ever to start a business, and there are companies like Virtual Headquarters that provide services to make the process more accessible. Instead of needing the money to hire employees, companies can outsource virtual receptionists or virtual offices for a much lower price. Effectively, you can run a business from your home, but still maintain the lure of a big and powerful company. If you have a look around, you’ll find loads of tools and services that make it easy to start a small business.
Boost your income
If you can’t start a business, or this isn’t something you want to do, the next option is to boost your personal income. This can be done by asking for a raise at work, finding a new job, or taking on an extra job on the side. Yes, working two jobs is challenging, but you have to think about it as an investment in your later years. You put the work in now, with the reward being an early retirement with more years to yourself.
Whichever method you choose, just be sure you increase your income. This is the key to early retirement as it gives you more money to save and invest, helping you grow your wealth year after year.
The trick is learning how to spend and save your money to build your wealth over time. Passive income is essential; whether this is generated by a business idea or investments, you need a steady stream of income that can fill your bank balance. From here, you just need to save as much as you want to live comfortably through your retirement years.