How You Can Retire at a Young Age

“There’s more to life than increasing its speed.” — Gandhi

All this talk about early retirement extreme has gotten me excited.

I’ve decided to retire at 25 for now. With early retirement extreme being the newest trend, I decided that I needed to give it a try myself. Thankfully, according to the following definition of early retirement, you don’t have to be fully out of the workforce:

“Retirement refers to leaving the workforce and the freedom to control your work, instead of having your work control you.”

Early retirement is all about freedom. You need to make your own decision because the official retirement age is getting later – Australia has announced it will move from 67 to 70 – http://www.industrysuper.com/understand-super/retirement/retirement-age/. Every part of the world is different.

How can you retire at 25?

Deal with student debt.

This is exactly what holds back most young folks. If you graduated with debt, you absolutely must pay off your student loans before you can do anything else. Until you kill off your student loans, you’re going to be stuck at work because you have to make your payments somehow. Debt really strangles you and forces you to work a job that you don’t care for.

While you’re dealing with student debt or credit card debt, I recommend that you check out tools to help you get out of debt fast with a clear plan.

Work like an animal.

You absolutely have to work like an animal for an extended period of time (I say five years!). You can’t avoid this. You have to bust it for five years straight.

Working like an animal involves holding multiple jobs, working weekends, picking up extra shifts, freelancing on the side, and increasing your salary over time. If you want to retire early, you have to work for it. You have to earn your freedom. Stop chasing random passive income ideas and get realistic.

Set goals.

It’s natural to think that everything will work out. We often just go on default mode and do what we’re comfortable with, hoping for the best.

We say to ourselves…

“One day I’ll make lots of money and pay off all of this debt.”

“I’ll get better at dating eventually. I have time to learn.”

The truth is that you have to set goals, push yourself, and step out of your comfort zone. You can’t wait around expecting something to happen.

I always tried set goals for myself so that I would save X amount in six months from now on or learn more about a new topic by the end of the month.

If you don’t set goals, you never really work towards anything.

Watch your spending.

You’re not cheap if you don’t want to buy expensive drinks at a pretentious night club. You’re not cheap if you get a bare bones phone package. Watching your spending is not about being cheap.

I’m not a frugality zealot, but I believe that you should keep a rough idea of your expenses. When I last wrote about how to budget your money, I stressed the importance of paying your bills, saving a bit of your money, and then spending the rest on anything that comes to mind.

Don’t be afraid of sacrifice.

Sacrifice is about exchanging one thing for another. I often would prefer to avoid a night out by working because I’m always saving up for a next trip or some sort of an adventure.

Sacrifice doesn’t mean that you have to live like a miser in garage. You just have to cut back on the useless expenses and passionately put money towards everything that you care about.

Living simple is key.

Cheap living is important. It’s far too tempting to buy a home instead of renting right out of college when you have money coming in. It’s tempting to want to spoil yourself for working hard.

You don’t have to stay with your parents until you’re 30 or 40. There are other options to live simply. You can rent out a smaller unit, share a place with buddies, or travel around third world countries (known as a vagabonding).

So that’s how you can gain freedom over your work at an early age. What do you do next? You still have lots of time to kill…

How can you sustain early retirement at a very young age?

Multiple income streams.

The trick that I gathered from all of my research is that you have to setup multiple income streams. This is helpful because if one source dries up you don’t have to stress about becoming homeless.

What are some good income streams that you should try to build?

  • Invest your savings into a simple savings account with Capital One 360 (safest).
  • Looking into starting an online business (riskiest).
  • Invest your money into the stock market (pretty risky).
  • Buy a rental property (sort of risky, has worked out well for me).

What streams of income will you build?

Work part-time.

You can work a side gig where you have flexible hours and don’t have to devote all of your time to working. This will also help keep you sane because you’ll be able to deal with real human beings and interact with friends on a consistent basis. You’ll also have a little bit of money coming in to have more spending money.

Just one more quick note on early retirement extreme. 25 is just an arbitrary number. You have to work hard for five years. So if you start at 25, then you can retire at 30.

Oh and I must admit that I’m totally clueless here. I could find a job next month and be out of the early retirement world. The general idea here seems like something I would enjoy being apart of.

I also wanted to beat the early retirement movement with the youngest number possible. Beat 25!

7 thoughts on “How You Can Retire at a Young Age”

    1. Hey Joe, I love travelling and will continue to go on many trips per year. My only problem is that I can’t live in another country. I would miss my friends, family, and gf too much to leave for a few years. I’m going to fill up my time with a part-time job, working on my online projects, hanging out with friends, and various forms of training at the gym.

      Have you added any new activities to your life since you quit?

  1. Good post Martin. I almost feel like I’m partly retired teaching in Korea because I get to go on a lot of trips around Asia! (But not really, because I still an dependent on my teaching income and have student loans.) I like your ideas. Especially that little streams of income can add up to a big river! Freelancing is also a great option because you can work wherever you want and set your own hours. When are you coming to Korea? I am planning to leave this place in August of 2013.

    1. Thanks for the visit Ryan. Always love to have you stop by. I’m coming to Korea as soon as I can. What a lame answer, eh? I’m telling you, I need to stop making excuses and go on more trips.

  2. This is really cool Martin. Are you still retired or are you back in the workforce? It’s neat to see someone else pursuing the early retirement dream at 25. I thought I was the only one out there looks like there’s at least one other, probably a bunch that don’t want to have their own blog. I second the third world country trips.I’m in Ukraine right now and a ridiculous luxury standard of living is running me about $15 a day.

    1. So cool to hear from you. I’m from Poland and would love to visit Ukraine. I’m working a bit at the moment. Trying to save up huge money for my condo that closes in the fall and then back to traveling. That’s the beauty of freedom. You can pick and choose your work. I’m also having a blast pursing pro wrestling.

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