Simple Steps to Reaching Financial Independence and Retiring Early

 

But it all begins when you're doing what you love.

There's a reason, after all, why Steve Jobs said "...do what you believe is great work. And the only way to do great work is to love what you do."

 

That's what I believe. But nonetheless. Coming back to your question...

 

(BTW, reaching financial independence and retiring early are two different things. For instance, Jeff Bezos is financially independent -- and so are almost all rich people -- but most of them are still working, right? Warren Buffet is another prime example. The man is 88 years old and he still leads one of the world's largest companies by revenue (Berkshire Hathaway). But for the sake of this answer, let's treat them the same!)

 

 

 

Here are simple steps to reach independence and retire early:

 

You're in for a very long-term plan right now. And you must do your maths correctly. At what age do you want to stop working? When do you want to retire? What kind of lifestyle do you expect to live post-retirement? How big would be your family? What kind of expense can you anticipate? What would be the inflation rate in the next few decades? Do the maths. Have a number that you would require after retirement to live the way you want. And then move about to plan your financial independence around the numbers.

 

Planning for retirement is all about investing in income-producing assets. The stock market is a go-to for this. (Of course, mutual funds are good too!). So, start exploring the stock market. Invest in high-yield shares for the long term. Do your research well. Be smart in your decisions. Diversify your investment across different companies and industries.

 

Residential (and commercial) properties could be one of the best decisions when planning for retirement. Even when the housing market tanks, in the long run, the market will correct its course and the valuation of the properties will be sky-high in the next decade or two. So, explore the real estate scene and invest big in the right properties. And then rent them. You will have a passive source of income, which you can save or invest in other assets.

 

If your resume is solid, you will have no problem finding a high-paying job. Even if you're not super-qualified and experienced, you can still climb to the top of the ladder by making smart career decisions (and networking). Meaning to say, don't settle for mediocre jobs that pay you less. Keep pushing the boundaries and demand more from your employers. At the same time, keep investing in your personal and professional proficiency. The more competent you make yourself, the higher will be your salary and equity share.

 

Entrepreneurship is sexy today. But if you're looking for early retirement, that's NOT the way to go. Yes, there's potential for big revenue. And you will be economically stable. However, when you start a company, you often feel compelled to keep on working. That's your baby after all -- an idea that you have nurtured with your sweats and tears. You wouldn't want to leave it, would you? In one way or another, you will always feel attached to it. And in the end, you might feel claustrophobic, with no way of exit even when you have a good successor.

 

Get with your spouse and plan a family carefully. A large part of your future expense will go in running a family. Kids, their school and medical, their demands and well-being -- these are all very costly. Plus, as they grow, and the family grows, the expense might blow off the roof. So, plan a family carefully. In fact, don't omit the possibility of living a single life.

 

 

 

If you're really serious in achieving financial independence and planning for retirement, this is a must. More is if you're weak in finance. Hire an expert or company who offers retirement-specific services. There are plenty more ways how you can grow your fortune for your retirement. For instance, ways to save more on tax, ways to invest in different schemes, and so forth. Plus, with more analytical prowess, they can help you plan better and much more efficiently. Sure, they would charge a fee. But having one such individual by your side who's proficient in money can be a complete game-changer.

 

These are 7 steps on how you can reach financial independence for a retirement plan.