It’s now just over one month since I decided that I was going to retire early! It’s been a great month and it’s exciting to already see the progress that I’m making on my path to financial freedom. I decided that I was only going to keep on in the rat race of corporate life for ten more years, so I still have 119 more months to go to hit my target.
The main reason I started this website was to help others in the same boat as me by sharing what I’ve learned. And wow, I’ve learned a lot in the last few weeks. More than I can be bothered to share in this post, and more than you would have the patience to read through in one sitting. But here are some of the main things I’ve learned that have been vital to the progress I’ve already made.
This sounds obvious, but so many people have dreams but then never do anything about it. Cliche alert: If you don’t take that first step you’ll never get your destination. Since I took the step to go for it and pursue early retirement, I’ve suddenly realised that it’s more achievable than I first thought. I’d think I’d always harboured a vague desire of having financial freedom but I never started trying to do anything because it seemed such a huge mountain to climb.
There are no guarantees I’ll be able to retire in 10 years with the lifestyle I want. However there is not a shadow of doubt that I’ll be there a lot quicker now. I’m saving at least 20% more of my gross salary each month than I was just two months ago – that will have a huge impact. And perhaps most surprisingly to me I’ve achieved that without any real pain so far.
Keep your partner involved
Partnership is not a posture but a process-a continuous process that grows stronger each year as we devote ourselves to common tasks.
John F. Kennedy
If you do have a partner, then aiming for early retirement could be a difficult and stressful thing to try and do by yourself. On a purely financial level of course it will be more difficult to achieve if only one of you is trying. But more than that if you both have a different approach to money then you’ll find most decisions in life difficult to agree on.
M wife and I are are very different in many ways, but she does allow me to rabbit on about the things I’m learning or planning for our future. I’m definitely the driving force for this adventure, but she has my back and can see the potential opportunities we might have in the future.
Know your goal/s
I find myself thinking about my financial freedom lifestyle a lot more now. Doing this has had two main benefits for me,
- It keeps me motivated. I’m not going 100% frugal, but I find it much easier now not to spend money. I have a reason to save. And I find it easier to weigh up the cost of buying something compared to the future benefit I’ll get by saving the cash. Weekend away with the wife to celebrate our anniversary? Tick – that will bring clear joy to us both and give us time together. Eating out for lunch every day at nice healthy restaurant? Nope – it was nice, but it doesn’t really fundamentally add anything to my enjoyment of life.
- It is helping me prepare for my future life My goals keeping on changing as I mull things over. The realisation that I’ll probably have around 30+ years to fill once I retire has made me change my expectations. By not ignoring retirement and thinking about it I’m excited because I know I’ll have plenty of things lined up that can turn my hand to when I retire. Some will just be plain fun, some will be productive, and some will help other people. By thinking about these things now it means we can continue to prod our thinking and make sure we are really going to retire into a life we want to. Or at the very least make that as likely as possible!
Know your numbers
At the very least you need to have a rudimentary understanding of your financial situation. As an accountant I’ve enjoyed this aspect. In particular I’ve found modelling all of the future scenarios and options really fascinating. For instance, at first I planned to just stop work completely when I retired. But when I saw the impact of earning some money in early retirement I realised I should work out a way to earn money in a way I enjoy. Similarly, at first I was clear I would not work a day over ten years. I’m still holding to that ten years, but then I realised working one extra year would net me an extra £100k of investments. Now I know if I need to I could be flexible and work one extra year if some other elements of my plans have’t quite worked out.
Understanding my financial situation and the impact of my choices and options has really helped to let me see what flexibility I have in hitting my target.
I’ll be expanding on some of these points over the coming weeks. And of course I’ll be learning more and more as each week passes. I hope you can join me on my path to financial freedom!