When somebody says they are about ready to retire, what do you picture? Probably somebody with gray hair, their fair share of wrinkles, and a 40+ year work history. We all naturally think of a retiree as somebody that has worked for a very long time and probably has a few hundred thousand dollars in the bank for their retirement years. This is, in fact, the typical retirement, so it makes sense that we would all have this mental image when we think about retirement. But, if you have read my posts recently, you should understand that retirement has nothing to do with age. It actually has very little to do with your years on this earth, but it has everything to do with your finances and your mental readiness to leave your job.
Extreme Early Retirement
If you would Google, “Early Retirement”, you might find stories about how people retired at age 55 or 57. Sure, they retired before the age of 65, but is this really all that early? I mean, you’re still working a job for more than 35 years, and at that age you really aren’t agile enough to do all the fun things that you might have done in your early 30’s (you know, like hike up a mountain or something). No, I would much rather dig into extreme early retirement and look at living life a little differently.
As I have been paying down my mortgage and have thought about the next steps of my financial plan, I have really had to take a step back and ask myself, “What’s next?” Sure, I have thought about investing in rental properties (and I still do plan on this), but with additional income coming in from rental properties should I start to consider doing something other than my regular full time job? Would I better enjoy something else? This is when I stumbled upon extreme early retirement.
Apparently, there is a little cluster of people in this world that have retired in their early 30’s and have never looked back. People like J.D. Roth, Jim Collins, Mr. Money Mustache, and the Mad Fientist (he’s very close anyway) have all looked at life a little differently. They have decided to live frugally, save intensely, and have left their careers very early in life so that they could blaze a trail of their own. Some still earn money by writing, others invest in real estate, and still other just live off the money that they have saved up for the last 7-8 years. By living the way that they do they can still have some fun and more importantly, they can flat out choose to do whatever they want! Does this sound intriguing to you? I know it does to me, especially since I am moving closer toward complete debt freedom.
What Does It Take To Leave Your Job?
My coworker recently asked me why I live so frugally. Why do I think it is so important to pay off my debts? Basically, he wanted to know “What’s the point?” Since everyone else lives in the moment from day to day, my mindset around the office is quite strange. Some think I just want to hoard my money and sit on the huge balance all my life. Others actually think that I am not financially savvy because I am paying off my low interest rate mortgage. Very few actually understand what I am trying to do (ha, and even at times, I might have to put myself in this category as well!).
My initial response to my friend’s question was simple: “Options. I am paying down debt, saving up money, and investing to give myself options to do whatever it is that I want to do.” Perhaps in 10 years I won’t be all that interested in corporate finance and might want to try something else. At times I think I might like to try my hand at writing, and maybe even speaking to help others with their personal finances. If I have no debts, have $5,000 a month in real estate income, and a savings account with $20,000, it would be pretty safe to try something new wouldn’t it? This is what extreme early retirement is all about. It certainly isn’t about doing nothing. Rather, it’s about doing what you love without having to worry about the money.
How does extreme early retirement sound to you? Do you think you’ll ever try to retire early?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.