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If you dream of taking an early retirement, have you taken any steps towards achieving it?
Often the thought of early retirement remains just that – a thought. Retiring early feels intangible to most people especially with official retirement age becoming ever higher. Today’s contributed post touches on a few ways to help you get to that early retirement goal.
So, you want to retire early?
It is wonderful that medical advancements mean that the population is generally living longer, but often living longer doesn’t eliminate the incidence of chronic illness and disease which can affect mobility and energy levels.
It would be fantastic to be able to retire at an age when still fit and healthy enough to live life to the full. You could travel to the places you have always wanted to visit and learn to participate in activities you have always wanted to try.
There are many obstacles preventing people from retiring early and achieving their dream – mainly financial, but people do manage it, so how do they do it? Sid Miramontes is the President of Miramontes Capital which is a resource offering expert advice in matters relating to personal financial management. Planning and research is key and the earlier you put plans into action the more likely you are to achieve your dream of early retirement.
The following guide will help you plan for the future, but don’t procrastinate – make a start today.
Audit your finances
When it comes to matters relating to personal finance, people have a tendency to bury their heads in the sand or put it off until tomorrow (which never comes, incidentally!). Before you can put plans into place for an early retirement it’s important to know exactly how much money you have in savings, what your earnings are, how much essential expenditure you have and how much debt you have.
This will enable you to create a budget. It will also allow you to identify monthly outgoings which are unnecessary, you may be surprised to find out that you have been paying an insurance policy no longer necessary or a defunct gym membership!
Related: Pay Off Debt And Save Money In 2019
Plan a budget
Saving for an early retirement may initially seem to be a daunting prospect. When you consider how much you currently need to live on each year, the figure seems colossal and out of reach for saving purposes. However when you retire you are unlikely to need your current spending ability, you will no longer have the daily commute to fund and any dependents you have are likely to have “flown the nest”.
Start a retirement “pot” today by budgeting so that you can squirrel away savings on a monthly basis. Get into the habit of putting a little aside each month and don’t fret that the amount is too little. You will be surprised how even small amounts soon add up.
In order to create a budget look at areas of your spending which could be reduced or eliminated. For example your daily cappuccino on your morning commute can add up to a substantial amount over the month. Check to see if you are spending too much on utility bills, phone tariffs and insurances by using comparison sites.
Related: How Much Money Should I Save for Retirement? A Look at Savings Goals by Age
Maximize savings
Make any savings you have “work” for you by clever investments. It is tempting to leave savings languishing in a savings account due to it being a “safe” option, however if you are prepared to take calculated risks you could potentially receive a much greater return on your savings. Stocks and shares can be potentially very lucrative, or you could try your hand at financial trading.
Of course any decisions you take should not be done lightly and it is important to get expert advice from independent sources. The internet has opened up lots of investment opportunities and everyone can have the chance to trade on financial markets which used to be the sole domain of stock brokers.
There are many financial trading platform, many of which allow you to practice trading with “monopoly” money before taking the plunge with your hard earned cash. Any returns on your investments can be added to your retirement fund.
Related: 3 Of The Best Ways To Pad Your Savings Account This Year
Create a side hustle
To add to your retirement fund it may be necessary and useful to create another form of income. This income stream will still have to be declared to the tax man, but any extra cash made will bring your dream of early retirement closer. Many people already possess skills which can be adapted in order to provide an income.
For example web designers and software developers are in demand, meaning that you could work on a freelance basis in your spare time. The internet has opened up many options regarding possible side incomes. You could become a freelance writer, blogger, photographer, illustrator or tutor – to name just a few.
If you are skilled in arts and crafts you could market your products in order to create an income. Another option would be to become a reseller, a reseller sells on items at a higher price than they bought it for. Car boot sales, charity shops and jumble sales are great sources for stock.
Any form of income you create will be a useful addition to your fund. If you enjoy your “side hustle” you could consider continuing once you are retired. This will make the prospect of early retirement more achievable.
Related: How To Make Money: 2019 Guide
Property
If you are a homeowner, it would make good financial sense to have your mortgage paid off before retirement. This will lower your monthly outgoings considerably. Once you have retired you could consider downsizing or moving to a cheaper area in order to release equity. You won’t need to be on the commuter route and dependents are more likely to have moved out, so you will need less space.
We have already mentioned investing savings, another form of investment which could be potentially lucrative is building up a property portfolio for the rental market. Always make sure you take expert advice before signing on any dotted line.
Related: 7 Vacation Rental Money Making Secrets You Should Know
Keep a clear vision of what early retirement will be like. Create a Pinterest board of places you would like to visit and activities you would like to try. This will enable you to remain focused and on track when the going gets tough.
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