How to Retire Early Before Age 40

https://www.reddit.com/r/financialind... Ever wondered how to escape the 9-5 grind at your day job to explore the deep jungles of the Amazon, recline on a sandy beach in the Philippines, or own your own business operating out behind a Best Buy? Well, by following these financial tips, you could make an even faster attempt of becoming financially independent and retire early! What is financial independence (FI)? It is typically defined as having enough income (from investments, passive businesses, real estate, etc) to pay for your reasonable living expenses for the rest of your life. You have the freedom to do what you want with your time (within reason). Working (full or part time), hobbies which generate income, or other activities are optional at this point. This specific subreddit focuses on the three knobs controlling getting you to financial independence quickly. Reducing expenses, increasing income, and investing. Reducing expenses - Reducing your living expenses to a reasonable level is the most critical step. Five-star restaurants, vacation homes, and jets are generally not achievable as a reasonable financial independence goal. But if you can realize contentment with significantly lower expenses, your ability to reach financial independence is greatly improved. Increasing income - Forget get rich quick schemes. But many of those on Reddit are early (or before) their career. There are plenty of those underemployed who should look into steps to improve their financial situation. There are choices each of us can make to increase our ability to generate income. Improve your education, ask for a raise, create a side business. Investing - When you're heading towards financial independence, you need your money to work for you. While we don't focus on specific strategies (most here would aim for passive index fund investing), we're interested in long term sustainable investment returns. Money in a savings account won't grow at the necessary rate. Note that if you have questions about real estate, financial investments (e.g., stocks, index funds, crypto), starting businesses, etc. you should ask them on other subreddits like /r/realestate, /r/investing, /r/entrepreneurship, and so forth. I am XX years old and want to be financially independent, where do I start? The basic tenet of FI is to spend less than you earn and invest the difference into things that earn money for you. Spend Less/Save More Minimize taxes to the full extent of the law. Look into 401k/403b/457/IRA/HSA accounts as some examples. Reduce your living expenses. Smaller homes, apartments, rent a room. Avoid lifestyle creep as your income (hopefully) rises over time. Reduce transportation costs. Live close to work if possible. Avoid expensive cars - Consider bicycles, used cars, public transportation, etc. Learn self-sufficiency skills. Beyond the personal satisfaction in achieving something, you'll save money. Consider cooking, mending clothes, home/automobile/bike repair, woodworking, gardening, etc. Earn More If you're in school (whether that's high school, trade school, or college/university), focus on that first. It's easier to be FI on $50k+/yr than minimum wage. Look carefully at your career path. Is this degree going to pay you back appropriately in the future? If you have a job, work more/harder/better/smarter. If you have the time, consider working extra hours and/or accepting challenging and long-distance assignments (family commitments permitting). Negotiate to get paid what you're worth (see point 2 above) Be careful about long term decisions "Future you" may be interested in FI. Part of FI is the flexibility of having choices in the future. Be careful about locking yourself down. If you're not positive you want to live in an area, avoid buying a house. Consider renting. Significantly easier to change your mind later. Many marriages end in divorce. Divorce is expensive. Do what you can to avoid this. Consider what careers are flexible and which aren't. Nursing is known as a great career choice for people who move around (there is a need for local nurses in almost every major city in the world). Software engineering can often be done remotely. Other career choices may have less flexibility in location / availability (e.g. stock broker). Any loan means you are borrowing from "future you". Be very careful about making your future self pay back a lot of money. Loans for depreciating assets (cars, electronics, etc) in particular are generally bad ideas. #bearcoatfinance #retireearly #fire