👨‍🌾 On a paid holiday

What is the recent buzz about early retirement? Is it even possible to retire at 30? Let us find out and crack the code of being on a paid holiday.

It's been really long that I have written about finance blogs and finally here is one. 😄

Early Retirement?

Early Retirement is when you find a sustainable way to fully live your life in the present moment, without sacrificing any of that time in exchange for future rewards.

To simplify, retirement is not about spending time in the Maldives or on a cruise. To me, retirement is when you have control over your finances and over your time. You don’t need to run a business or work nine to five to make money.

“I find that when people earn their freedom from money constraints, they usually don’t stop working. Instead they start doing their best work"

- Mr Money Mustache

🔥 F.I.R.E

The word of the town is F.I.R.E - Financial Independence, Retire Early. The FIRE movement is a lifestyle movement with the goal of gaining financial independence and retiring early.

So I would like to pitch in a few soundbites that can help achieve FIRE.

1. Save as much as you can. If you follow a lot of market gurus, they would suggest saving 50% of your earnings.

2. Invest your money. Invest in safe assets like Index and Mutual Funds or any other safe asset class that should give you a decent return of ~10%. Or at least the return that you get should break even the inflation rate of your nation’s economy.

3. Live like a beggar. You need to cut your costs and lead a life like a beggar or atleast as a student.

There are complications with the FIRE and it is not as piss-easy as we hope. What are the challenges?

1. I am kind of sceptical about saving money. 50% is a huge number when it comes to savings and it is seriously impractical to save half of your earnings. Anywhere around 30% would be ideal to save your earnings. But if you are able to do more than that, then felicitations you have cracked the code. However, inflation going up, education, marriages, and building a house can make a tangible dent in your savings.

2. With the current economic conditions, finding an investment that can even meet inflation is not even possible. It is gonna be a nightmare to invest in an inflation-beating-investment.

3. Living in a metro city, even the beggars can’t live like beggars.

But how to retire early then? I have been very hitting hard on the faces for quite a long. Now let me paint an optimistic view on retiring early.

1. Take charge of your cash flows - See, holding a credit card or taking a loan isn’t bad, provided you know how to rotate your money and escape from the interest rates. You should be aware of your cash flows - where and when the money comes in, and when and where it goes out.

2. Invest in hard assets - Such as real estate. Increase your rent rate or the lease rate according to the inflation.

3. Make your 9 to 5 your hobby. You need to work your asses off to earn more. And here is my personal view on this -

I reason that if I can

• make more money,

• reduce my burn rate by trying to minimise lifestyle and keep my wants and desires minimal, and

• make sure I’m doing work that I really enjoy, then that’s pretty close to being retired.

Here’s the way I think of it - I’m retired if the things I’m doing day-to-day are identical to what I would be doing if I’d won the euro millions lottery and had $100 million in the bank. I’m not at that point yet, but as long as I work on these three solutions, I think I’m getting there.

TL;DR - There is nothing called early retirement unless you love the work that you do. Because if everyone leaves their jobs and retires early, then there is no manpower to do jobs.

“If everybody retired early like those Mustachians” , the lament goes, “there would be nobody left to do the work.”

- Mr Money Mustache