Most people hate the rat race and dream of escaping into an early retirement. Unfortunately, most people never realize their dream, and they work until they are old. In reality, a person can develop a strategy to retire earlier than their peers. In fact, one can quit working at an early age when they give it a full effort. Here are four things one can do to leave the rat race and live the dream.
Sadly, most people do not put money in their accounts until they are in their later working years. Ideally, a working age person should start contributing to a 401k or IRA right out of school. When doing so, one can take advantage of compound interest and make substantial gains without effort.
In old age, most people do not need a sprawling house with a massive yard. Instead, when downsizing, a smart person will get rid of high energy costs and cash out some of their equity. This is a great step for one to take since most people foolishly keep a large family house into retirement. To make matters easier, some retirees opt to move to a foreign country or lower cost of living area. Remember, when retired, one does not need to live in a major metropolitan with a large house.
To retire in comfort and style, one must pay off all their unsecured debts. This means that one should not carry any balances on their credit cards. Of course, to take it further, one should pay off their car and home loans. Remember, debt is a tool, but during retirement it can cause plenty of problems.
When a person is in their later working years, they will usually have a solid and reliable income. For this reason, one should save the maximum amount of money they can. When doing this and taking advantage of catch up provisions and see their 401k and IRA balances rise rapidly.
When heeding this advice, one should have no trouble retiring early and in comfort. Fortunately, these four steps should be easy for the average person to follow. Remember, it is all about slow and steady. When starting early and having a goal, one will realize their dream and escape the 9-5 forever.