Can you imagine being able to retire by the time you’re 30 years old? If you’re already 30, can you imagine being able to retire in five to 10 years or less? Think about what early retirement would mean for your family and for the rest of your life. How amazing would it be if you could work only if you want and have the peace of mind of knowing that you don’t need the money.
Today, I’m going to show you it’s much easier than you think to retire early. This new trend that’s sweeping the nation is helping thousands reach these retirement goals quickly. I’m going to give you the three steps you need to be able to do the exact same thing.
I am going to give you my best tips to accomplishing early retirement by putting your money to work for you. It’s easier than you think. Trust me, it is doable.
THE OLD RETIREMENT MODEL
In order to kind of get a grasp for what early retirement looks like, the first thing we must understand is that our current model is broken. The old idea that if you go to school, get good grades, get a good job, save for retirement, retire 65 is broken. That system no longer works. If you understand that the old system of retirement doesn’t work, then you’re going to be more inclined to go find a new solution.
We know the old system doesn’t work because we have proof. Today, the baby boomer generation, which is the largest segment of the population, are reaching retirement age. There are about 10,000 baby boomers per day that are retiring now.
Baby boomers have basically grown up with the retirement at 65 model, right? They went to school, they got good jobs, they saved for retirement, and it didn’t work for them. As a matter of fact, 45% of baby boomers have no retirement savings. Can you believe that roughly half of baby boomers have no retirement savings? Now, a lot of it’s not their fault. A lot of people got wiped out by the various market crashes in the last 20 years, and they were not able to recover. A lot of the ability to retire has to do with being lucky and being in the right time at the right place. And, so, a lot of them, it wasn’t their fault, but it doesn’t change the fact that half of them have no retirement savings.
The other half that do have some retirement savings, half of them have less than a $100,000. A hundred thousand dollars is not enough money on which to retire. With $100,000, you’re probably going to have about $5,000 a year of income. $5,000 is not going cover very much and it’s not going to be enough to live on.
HAVE YOU THOUGHT ABOUT RETIREMENT
In polls, we’ve seen that less than half of Americans have thought about retirement. Have you thought about it? Do you have a plan for how to achieve the retirement that you are dreaming about? Do you even have a goal for your retirement? If you don’t have a goal, how do you know when you’re going to get there? You don’t. Maybe retirement is more of a dream than a goal for you right now. A dream is just like one day, hopefully, maybe I’ll achieve it. Whereas a goal is something that’s more actionable that you’re working towards. We want to turn that dream into a goal. I want to show you how you can achieve your goals in about five years.
FIRE MOVEMENT
There’s this move new movement that’s been sweeping across the country, and you’ve probably heard about it. It’s called FIRE movement. The FIRE movement is about people gaining financial independence. Retiring early is attaining financial independence. The FIRE movement is aggressive though. Basically, what the FIRE movement suggests, is that you need to be an aggressive saver. Aggressively save to the tune of 75% of your income, so that you can retire early.
There are stories of people doing this. The people who ascribe to this movement are mostly living really meager lives. The FIRE movement does work, but that’s only one way to accomplish early retirement. I am recommending this method to you. Saving 75% of my earned income is not my preferred way to retire early. I’m going to show you a much easier and sustainable way.
I’ve been talking about building cashflow for a long time. My financial journey to early retirement got started from Robert Kiyosaki, the author of Rich Dad Poor Dad. That book is an amazing book. If you haven’t read it, I highly recommend that you read it. It changed the course of my life. Rich Dad Poor Dad changed the way I thought about everything. The book talks about cashflow a lot and about the different types of income that you can have. Reading this book changed the way that I’ve built my investments and my financial life. Having a good handle on cashflow streams makes retiring much easier than you think.
WE DON’T WANT TO LIVE OFF OUR SAVINGS
Again, the brainwashing you’ve been given is just wrong. No longer do people go to school, get good grades, get a good job, work hard in a safe job for 40 years, and retire to live a long, comfortable life at 65. That retirement paradigm doesn’t exist for most people, any longer. The good news is retirement reality is much easier to achieve if you know how to do it.
A majority of those that have thought about and saved for retirement are under the assumption that you save your whole life and then you live off that savings. I am here to tell you that that’s not what you want to do. First of all, it takes too long to accumulate. Second of all, there are a lot of things that can interrupt that plan- market crashes, death or illness. I don’t want you to live off your savings for the rest of your lives, so we will aspire to a new goal.
The goal that I’m going to show you is to build cashflow and that cashflow will become enough to pay all your living expenses. By having enough cashflow to pay your expenses, you will be financially free. The great news here is that you can always continue building additional cashflow to increase your lifestyle from your baseline expenses.
WHAT CASHFLOW DO YOU NEED
Building cash flow to sustain you can be accomplished really quickly. I can show you how to do it in less than five years. For some people, five years might be too aggressive, and 10 years might be more realistic. No matter who you are, 10 years sounds much better than the 30 or 40 that you normally have to save for retirement. Your personal timeline really comes down to how fast you want to do this and how well you can work the plan.
I want to give you three things that you need to do in order to get this accelerated retirement going as soon as possible. The very first thing that you have to do is you have to find your number. What does that mean? What’s your number? If you don’t have a goal, you’re going to miss it every time. Your goal should be simply how much money do you need? You need to get out a piece of paper and you need to look at all your expenses: rent, car payment, insurance, food expenditures? From there, you need to come up with two numbers.
MINIMUM LIFESTYLE NUMBER VS IDEAL LIFESTYLE NUMBER
Your numbers should be your minimum lifestyle number and your ideal lifestyle number. Your minimum lifestyle number is amount of money that you could get by with if you absolutely had to. The ideal lifestyle number accounts for all the extras that you want to make a comfortable life with concerns for things that are important to you like travel or hobbies.
I like to look at both of those numbers on a monthly and a yearly basis. And so maybe that number for you is $5,000 a month or maybe that number for you is $15,000 a month. Once you have a firm number in mind, you can move on to the second step.
BUILD YOUR CASHFLOW
Step number two is that you need to start building cashflow to sustain your lifestyle number. How do you do that? Well, luckily, there’s a bunch of ways that you can do that. My main way method of building cashflow has been real estate investing.
REAL ESTATE
Real estate is not for everyone. You might be thinking, I can’t do it or I don’t have enough money or I don’t have enough time. It doesn’t have to be that way. In order to make this work for you, look at real estate as something that you’re doing as an investment, not a job. That means you don’t have to invest in your area. You don’t have to go on your weekends to go change out toilets and unclog sinks. There are ways to make this investment work for you.
Let’s say that, right now, you don’t have even $5,000 to put down on a house. You don’t want to deal with property management. You don’t want to be a landlord. There are crowdfunding real estate options where you can put as little as a hundred dollars down, $1,000 down, $5,000 down and you can still make about the same returns as you could by owning a home. The obvious perk here is that you don’t have to have all the headaches that come with managing the tenants and repairs.
Real estate is a really good way to get that cashflow coming in. I encourage you to do a little more digging on how to make that work for you.
STOCKS, BONDS, AND PRIVATE EQUITY LOANS
Another fantastic cashflow opportunity is buying dividend paying stocks. There’s many, many top-level blue-chip stocks that pay 6-7% dividends. You can just buy those stocks right through your E-Trade account. It might not seem like much now, but the dividends are excellent, and it adds up over time.
Bonds have been traditionally a way to earn income, but the bond market’s been pretty bad lately. Private equity loans are worth taking a look at, as well. I primarily do a lot of private equity loans in real estate where I’m not actually owning the real estate. Instead, I’m loaning money for real estate. The returns on those are quite good. Peer to peer lending is another way to increase cashflow. That is where you can loan directly to the person who needs it and through matchmaking peer to peer lending sites. The rates peer to peer lending rates can be 10+%.
DIGITAL COURSES
My new favorite way to increase my cashflow is through digital courses. I create digital courses by recording a bunch of videos, creating tools, resources, et cetera. When my courses are created, people pay to go through those courses. It’s a one-time input for an extended output. Another new favorite cashflow opportunity lately, is my YouTube channel. I turned the monetization on my channel about four or five months ago. I make a couple thousand dollars a month from my videos alone.
As you can see, there are many ways to create monthly cashflow for yourself. Your particular method has a lot to do with the goals that you set yourself.
SPEED UP YOUR TIMEFRAME
DECREASE EXPENSES
My third tip is that you want to try and speed it up to accommodate your timeframe. So how do you do that? There are three different levers that will allow you to accelerate your plan. The first is you need to keep your expenses as low as possible. The FIRE movement people are saving 75% of their income. That’s one way to keep expenses low. The better way accommodate your timeframe is to learn to make more income. Earning more is our second lever. Save more or earn more. Maybe do both at the same time.
INCREASE YOUR MARKETABLE VALUE
The best way to make more money is by having high value tasks. So, I don’t know what you do for work, but if you want to make more money, you want to have high paying job skills. Typically, those high paying job skills are around something around sales and marketing. You can be a sales rep, do online sales, or phone sales, or marketing, etc. These are skills that you can easily learn on the side. You can learn those skills by simply watching YouTube videos. Once you learn those skills, you can offer those to businesses to make side money. If it really takes off and you enjoy it, it can become your full-time career.
GET BETTER RETURNS
The third lever is that you need to get better returns. A 3% return on your money is not going to get you to retirement quicker. Even a 7% is not going to get you there as quickly as you want. If you want to retire quickly, you want to continue to search out better returns. That’s why I hunt for real estate in different parts of the country that give me the best returns. The better my returns, the sooner I can meet my ultimate goal of meeting my cashflow needs.
HOLD YOURSELF ACCOUNTABLE
Those are our three steps to retiring early. You need to pick your goal, first. Once you’ve picked the goal, you need to keep track of the goal. Once you establish what cashflow you need, you can work toward it and track your progress. It’s important to tell other people about your goal. Telling other people increases your likelihood of holding yourself accountable for it.
Finally, you want to track the progress towards your early retirement goals. Every month I look at my profit and loss spreadsheet. My spreadsheet also keeps track of my cashflows and expenses. I will even share my spreadsheet with you because I want you to be successful.
To your success. I’m out.