Retire at 24?! You’re thinking, “Come on, He can’t be serious!” But I am serious. Just not in the sense of retirement that we are all used to. Normally, you retire near the end of your life. I am retiring now. Usually, you work almost your entire life to save for retirement, so you can relax and enjoy your final years. Something just didn’t sit right with the path of the deferred life plan. I decided to find a way to make a mini quarter life retirement possible. This is how.
How much do you spend each month and what on?
I saved money and “bought” my freedom. How!!?? The first thing is to know how your money is being spent each month. Then ask yourself, “How much on average it takes for me to keep my current lifestyle going each month?” Most do not know. Most of us have a general idea, but these vague thoughts do not give us a handle on our personal finances. Keep track of everything. YES, every single expense. Every dollar, every penny. You’ll be surprised to find where your money actually goes. Start looking at an expense not just in dollar terms, but also in terms of your time. If you make $10 an hour, that $5 coffee had you working 30 minutes in a job you don’t like. If you make $20 an hour, you had to work 15 minutes and so on. This also assumes no taxes. If you take into account your after tax income the amount you have to work is even higher. Take an incremental $100 spent on rent. Assuming a tax rate of 20%, you have to earn $125 in order to take home $100. ($100/.8) = $125. At $10/hr this is 10 hours of work, at $20/hr this is 5 hours of work. This spirals quickly. Once you have your list of expenses you will then have an idea of where your money goes. Now divide your expenses in each category, etc by your hourly wage so you can get an idea of how many hours you spend at your job for each purchase, category, etc. You can make this as simple or as complicated as you’d like.
Cut down those expenses!!!
Once I had an idea of where my money was going, I started cutting expenses to the bone. Giving up comforts was easier when I looked at how I would be able to use that money in the future to liberate myself from having to be dependent on a steady stream of income. Save 1/3 of your current expenses for 3 years and you can live the same lifestyle for one year without having to work. Lower the expense of your lifestyle and you can stretch that even further. I was excited to see how far I could lower my expenses. The lower they were, the more I would save, and the quicker I would be able to “buy my freedom”. There are a million ways to save money. Here are some of mine. I started bringing my lunch to work every day. I cut out my gym membership. I stopped buying new clothes. I ate out less, and when I did, I tried to get something reasonable on the menu. I significantly curtailed pricey drinking at bars. This became easier as I started salsa dancing, and when you go out dancing you don’t want to drink or you’ll be sick or not as coordinated. Note*** I started salsa dancing because I liked it. I didn’t start to save money. I still had to pay for lessons. I considered this an investment in a skill. I didn’t cut back on these investments in skills, but mainly on the consumption of material goods, impulse buys or fleeting purchases I would never see again once consumed, (expensive dinners, etc.). I cut down my cell phone plan. I remember the day I got rid of internet on my phone. It seemed so hard at the time, but I don’t even think about it anymore. I sold as much stuff as I could on Amazon, eBay, and Craigslist. I signed up for every focus group I could find to make some extra money. I did whatever I could to lower my expenses and earn extra income. I even circulated dollar coins to get free airline tickets. Dollar coins are heavy, and all that lugging them around made for some good exercise .
You Can Buy Your Freedom
You can, but it will be in your own way and on your own schedule. There’s no right or wrong way. There’s no right or wrong time. There will be expenses that are necessary to you, but considered discretionary to others, and vice versa. You may think it’s impossible, but it’s not. There are many outside factors (including point in one’s life, current income, obligations, loans, etc.) that can make this more or less difficult to achieve. I believe that “where there is a will there is a way” and that if you put your mind to it, you can leverage the power of your will along with the tools of the world to find your way.