Retiring at the age of 35 may seem odd to some people, but nowadays, people are doing it more often than not.
It is not an easy task to do and everyone may not be able to do it, but that doesn’t mean that it is impossible.
The financial independence, retire early (FIRE) movement has gained popularity in recent times as many individuals do not want to work 9 to 5 jobs, which are tiring and tedious, till they are 60 years old.
This may seem impossible to many of you, but with the right mindset and devotion, you can also retire at the young age of 35 with the help of the following recommendations.
Change Your Lifestyle
Only imagining the goal is of no use until you actually work hard to achieve it.
Retiring early at a young age is not an easy task and many few individuals are lucky enough to be able to do it.
These individuals drastically change their living standards and work harder than an average person in order to live freely after retiring.
You have to make sacrifices when shopping. You have to be frugal and spend your money wisely. You need to start learning more about investing and saving your money in every aspect of your life.
This may seem boring at first, but if you really are passionate about retiring and gaining financial freedom, this process will be easier.
When young adults start changing their lifestyle as early as when they are in college, what’s stopping you from taking that big leap and trying to make your future brighter for you and your family?
Eliminate Expenses
Cutting the budget off of your favorite things may be difficult for you but when looked at from a broader perspective, this actually disciplines you and teaches you how to control your needs.
FIRE followers save and invest more than 50 percent of their income, but how do they do that?
Shopping from an average clothing store will give you the same clothes to wear at a cheaper price rather than buying from a high-end clothing store.
Your two-year-old iPhone works completely fine, and there is no need to upgrade your iPhone every year.
Rather than maintaining a car, take the public bus or carpool to your office and other places to save money.
Rather than eating outside for many days a week, try to make your food at home and occasionally treat yourself to meals outside the house.
It is better to budget everything and keep tabs on your expenses.
Only spend your money on essential needs and try to save as much as you can by spending wisely.
These types of sacrifices may discourage you to adopt the FIRE movement, but this is necessary for you to retire early.
Invest in Assets
Saving all that money will do you no good as with recent inflations all over the world, that money will start to depreciate in value.
It is better to invest that money somewhere from which, by doing minimal work, you can receive a profit.
You can invest in real estate, stocks, and startups and buy business shares, and appreciated assets.
These will help you obtain healthy profit over time during your retirement and will help you increase your retirement funds rather than slowly finishing them.
It is better to invest in appreciating assets as obtaining a loss during your retirement can make a huge impact on your retirement fund.
It is better to read books and gather resources on investments or get a financial advisor to help you sort out your investments and funds.
Earn Extra Money
One of the most important factors when it comes to retiring early is how much money you spend per annum and how much money you earn per annum.
By downsizing your expenses and investing money in appreciating assets, you will retain a healthy percentage of your total income, but that is not enough!
To retire at the age of 35, you need to look for other ways to increase your income which will enable you to save and invest more.
In your free time, you can start commercializing your hobbies as every person has other interests than their primary job.
You may like to cook, bake, write, take pictures, or do someone’s taxes.
The ideas are endless, so you just have to find your passion and market it.
Let’s say you like to bake. You can start by making an online page or a website, putting up a menu with high-definition pictures of your baked goods, and start marketing your online bakery.
Start small and slowly expand your business.
In a few months of hard work, you can upscale your business and hire staff to do half of the work you do.
In a matter of time, you will be able to hire enough employees and you will have negligible work for your online bakery.
This type of mindset works well with many other online small businesses, and it is a great way to have passive income.
You just have to find a hobby and commercialize it.
If you are an expert at something, let’s say you are an expert in marketing, you can market your intellectual property by creating online courses and e-books that generate passive income after you only do the initial work.
You only have to keep maintaining your resources and bringing them up to date.
If you have products to sell or know a place where you can buy certain products in bulk, you should sell these products on Amazon by joining their FBA program (Fulfillment by Amazon).
When someone buys your product, you just send that product to the Amazon center and they pack and ship the product for you.
However, if you do not want to keep an inventory and minimize your work, you can outsource the packing, shipping, and maintenance of the inventory to a third-party supplier.
This is known as Amazon Dropshipping. With both Amazon programs, you get a source of passive income with negligible work.
Consider Your Retirement Location
Before quitting your job and retiring, think about your living situation.
Do you want to live in the same house? If you have an apartment, do you want to move into the suburbs? Do you want a smaller house that is easier to maintain?
Ask yourself these questions and make a decision while you are working and earning a steady paycheck, as moving and renovating costs will make a huge impact on your retirement savings.
Pay off Debts
Being retired means being financially stable. If you have long-lasting debts on you, it is not wise to retire before not clearing them up.
FIRE movement followers start their journey by clearing all debts and then saving and investing for retirement.
Another biggest challenge for young retirees is how to pay for health insurance.
If your company provided you with health insurance, after retiring, you have to directly opt for health insurance for you and your family.
The company-provided health insurance gives affordable rates with ease but after retiring, these insurance plans will become expensive after living on a budget.
These rates will be higher so you have to choose among different insurance companies and see what rate fits within your budget.
Benefits of Retiring at 35
The only reason why people are working hard towards FIRE is because of the many advantages it offers.
- You do not have to work full-time, like in those 9 to 5 jobs. If you are semi-retired, you work on your own schedule and on the projects that excite you.
- Zero stress and zero debt lead to a physically and mentally healthy life.
- No work obligations mean you can travel more.
- You can spend quality time with your friends and family.
- You achieve financial freedom.
- You can spend your life doing the things that you love like reading, hiking, working out, playing sports et cetera.
Conclusion
Retiring at 60 may seem like the easier choice, but it leaves you with fewer choices and less energy for your future.
Retiring early with a sufficient retirement fund and money invested in appreciating assets will provide you with better options and the freedom to live your life according to your preferences.
They aim to retire as early as the age of 35 and spend the rest of their life doing the things they love.