Many of us dream of retiring a millionaire or at least earlier than normal. There’s a growing segment of people that are actually living this exact dream.
After making their money as a self-made millionaire, some people are also retiring as early as their late 20s and early 30s. If you want to set up a similar future for yourself, here are some of the money habits these millionaire retirees practiced to achieve their goal.
Taking a Financial Inventory
Leif Dahleen, a blogger and proponent of the Financial Independence and Retiring Early (FIRE) movement, said that early retirees should start their journey by taking inventory of their current finances.
The former anesthesiologist, who retired at 43, recommended that everyone calculate their net worth and how much they spend each year. These two numbers would help you craft a plan that gets you on the path to financial independence.
Meanwhile, J.P. Livingston, a blogger who retired at just 28, also advises you to keep track of your net worth to see which areas you can improve on.
Strategic Frugality
Making strategic frugal choices allowed retired teachers Joe and Ali Olson to live on just $200,000 and leave the workforce in their 30s. This meant that they didn’t spend money buying new cars or eating out frequently like many people tend to do.
With a similar philosophy in mind, aspiring retiree Angela Rozmyn has found ways to cut her entire family’s food budget from $2,000 down to $800.
Increased Earnings
While cutting down on expenses is a good way to save money, nothing beats increasing your income in bringing you closer to early retirement. You can do this by switching to a career that pays more, negotiating for a raise, or going to work for yourself.
For early retirees like podcaster Grant Sabatier, who left the workforce at age 30 with a $1.25 million nest egg, earning more means he can invest more and more often.
Spending on Experiences
Instead of buying material things that quickly lose value, early retirees prefer to spend their money on experiences. To people like Steve Adcock, this means taking the time to travel.
Adcock, who left a six-figure job to retire at 35, shares that he and his wife give each other the ‘gift of experiences’ instead of regular gifts by taking trips to local tourist spots.
Moving to Save
Another thing many early retirees do is leave the city to move to an area with a lower cost of living. Not only will doing this help you save on living expenses to save for your retirement fund, but it would also make your money last longer in retirement.
