Is early retirement extreme? Does it sound extreme? Depending on who you are, it might be. It might sound completely unattainable. Or, just not for you.
But, here’s the thing: There are no rules to achieving financial independence and early retirement. There are, however, several ways to make retiring early less extreme and easier to handle.
This was a heck of a lot of fun to write, and I’m curious if you have any other ideas for making this whole ER business easy. If you do, lay ’em on me in the comments.
Is early retirement extreme? Here are 17 simple ways to make early retirement easier
1. Focus on the goal, but appreciate the present
In the early retirement community, we tend to get caught up on the future goal of quitting our jobs and living out the rest of our lives in jobless bliss. And truthfully, that’s good. We SHOULD be focused on the end goal. After all, anything that we can do now to better position us for early retirement will come back to us in spades after we finally cut the cord.
But, that also doesn’t mean we need to completely ignore our present selves. Sacrifice is necessary to retire early, but it’s not all we do, either.
It is important to treat and reward ourselves along the way by celebrating those smaller achievements. Early retirement might be years away, but these small victories are achievable throughout the years, and we need to take a step back, relax, and pat ourselves on the back every once in a while. Trust me, it’ll make the march toward early retirement much easier!
2. Get excited about the smaller things in life
Similar to rewarding yourself along the way, appreciating the small gifts in life helps relieve stress and keep us focused.
I approach my life’s “spice” a little different than what tradition might tell me to do. I look for things to get excited about – anything. Then, I make myself excited for them. Usually, it’s something small, maybe even inconsequential. But, it gives me something to look forward to, something to say “I can’t wait for the game on Sunday – I think my team can pull out a victory in this one!”
Whether they actually can or not is completely beside the point (I’m looking at you, Cleveland Browns fans). You are wiring yourself up to show some emotion. Yell or curse at the TV, who cares. The point is, get yourself into it and have some bloody fun!
I live in Arizona and follow the Arizona Cardinals pretty closely. During football season, I don’t just watch their football games. I get downright giddy about them. I plan my day around these games. For 3 hours on Sundays, my life is completely consumed by one thing and one thing only – Arizona Cardinals football. Everything else waits until the game is over. 🙂
And I kinda have a man crush on Larry Fitzgerald.
3. Maintain relentless optimism
If you’re looking to retire early and enjoy a life outside of the office, you gotta be pretty damn optimistic about the future. The thought that your stash will last you 30, 40 or even 50 years or more without having to work means you’re generally positive about the future and believe that things will work out.
This level of optimism applies to everything in life, not just early retirement. Early retirees take a glass half full approach to most things, from making life-altering decisions about work to picking the right wine to sip on during dinner – and everything in-between. They expect things to go well, and as we know from the powerful placebo effect, this phenomenon is very real.
Except when it comes to my fantasy football team, I’m a damn positive person. So is my wife. We believe in the general goodness of the world and don’t let the evening news cloud our outlook on life. Over the years, we have realized that attitude is an important key to keeping your head on straight, and our positive attitudes help to bring us through each and every day as we work towards financial independence and early retirement (achieved in 2016).
4. Ignore the hate
It’s sad I even need to include this one, but there’s a significant element in society that hates people who choose a different path in life…a path different from mindless consumerism, working until you’re 65 and collecting social security.
Don’t get me wrong – you’re not “mindless” if you work until 65. Not at all.
But, consumerism in the first world is absolutely an emotional element that strips so much of our hard-earned money out of our wallets each and every year. We all know it, too. And, that’s why our society strikes back against those who reject conventional wisdom.
I’ve been called every name in the book. I’m accused of “living off the fat of the land”. Of living my life in destitution. Of barely skirting the lines of poverty just to avoid work.
Yada yada. If you let the hate get to you, you’ll wind up frustrated and stressed. While easier said than done, ignoring the hate – just like conventional wisdom – makes early retirement much, much easier.
5. Destroy as many debts as possible before retiring
Debt murders our chances of living out the rest of our lives without any income. Owing people money sucks. Though there are debts that are worse than others, you’re putting yourself at a disadvantage by borrowing money that you don’t have. Limit debt, especially on depreciating assets like cars. If you already have debts, prioritize getting them paid off as quickly as possible.
6. Find something to do
I cannot stress this point enough, and if you read enough early retirement blogs out there, this is a very common theme. You can’t retire to nothing.
In other words, don’t simply quit your job because you hate working but have nothing lined up to carry you through your days at home (and I’m not talking about money!). We humans need to feel productive and accomplished like we are contributing something positive to society.
Instead of retiring from, retire to. This could be a hobby of yours, like woodworking, or building houses, or doing consulting work. Whatever it happens to be, make sure you’re busy or you will most likely find yourself back at work or, in the worst case, depressed and frustrated.
Check out my one-year early retirement performance review for what keeps me busy.
7. Establish your personal business card
To help with #6 (find something to do), create your own personal business card for post-retirement. What is it that makes you tick? What do you do?
In an early article, I issued a business card challenge…something like this:
Here’s the challenge: Design your own personal business card. Don’t just think about how it might look. Design it. Use a service like Vista Print and come up with your personal business card. Pick a theme. Decide on the font. But more importantly, what does it say? What message does it convey? What is it that you do?
You don’t actually need to order your personal business cards. This challenge isn’t about spending money on something that you might not need, at least yet. This is about getting everyone to think about themselves and what you DO. Forget work. Forget your degree.
This is about you. If you retired tomorrow, what would your new card say?
Then, take a screenshot of your personal business card and share it with me – either through Twitter, or email, or heck, write your own post on your blog about what you came up with. Trust me, it’s sorta a fun exercise.
8. Don’t rely on discipline to save; instead, automate
Automation removes the element of discipline from the equation of saving money. With automation, we don’t have to remember to move our money to where it needs to go. We aren’t manually transferring our cash every single month, which definitely takes discipline. We don’t need to lift a finger after we set up an automated process to save money. It’s all done for us, like clockwork.
How does automation work? Payroll deductions are often the easiest way to automate your savings. If your company offers a 401k plan, you’ll probably be able to setup auto-deductions from your paycheck to fund that account for your retirement. An IRA account can work the same way. But, even if your company doesn’t offer these retirement savings accounts, banks often support monthly automated transfers that can be easily setup by logging into your bank’s website.
For more on how automation works, check out my automation resource.
9. Make damn sure to pay yourself first
Face it: Budgets aren’t the most exciting things in the world. They take time and effort to create and maintain. And, they typically cause so many of us to manage our finances completely backward. Maybe it’s time to ditch the budget.
Traditionally, budgeters take their money and pay other people or entities first. That could mean the government through income taxation, social security taxes, property taxes, etc – or loan repayments, or monthly service fees, or anything else. Those things tend to come first. Then, whatever we have afterward becomes ours to do with as we please. To spend. To save.
What if we turned this phenomenon on its head and funded OUR futures first, then worry about paying our bills?
Paying ourselves first means we fully fund our retirement accounts before paying anyone anything…yes, even the government. And best of all, there is nothing illegal about it. It’s called a 401k (or a 403(b), or SEP IRA) plan.
We max out our 401ks and IRAs. If those aren’t available to us, we fully-fund a brokerage account or any other long-term investment account. Our savings account. Our emergency fund. We continue to build our FU money fund each and every paycheck, eventually accumulating at least six months of living expenses. All this comes first.
Then, we can spend the remainder on things that provide true value.
10. Forget the experts and focus on your goals
There is no one way to get out of debt, build wealth and achieve financial freedom. Period. I don’t care what the experts tell you. If they believe there’s a one-track path to success (probably their way that’s available in their book for the low, low price of $9.95), remove yourself from that conversation and never seek their advice again. Why? It’s B.S.
I’m a big fan of the “try it and see” method. If an expert says that you gotta get up an hour earlier in the morning in order to be successful, then try it if you’re properly motivated. If it’s working for you, then keep doing it. Otherwise, re-gain those 60-minutes of sleep and put your effort toward something else.
Don’t blindly focus on what financial or so-called early retirement experts tell you (yes, that includes me…though, I don’t consider myself an “expert”). Do what works for YOU.
11. Don’t worry about being a “minimalist“
“Minimalism” to me is a negative term. Nobody wants the bare minimum.
After all, if you’re eating healthy, do you make yourself a “minimal” dinner or a sensible dinner? If you’re looking for a new car, are you looking for a ride with just the bare minimum in features, or the right balance between cost and comfort? Do you go on “minimal” or sensible vacations?
You get the idea. Minimal is just the wrong word.
The concept of minimalism I think is a good one – living with less, or living within your means (not necessarily below it). I think most of us could get behind that statement. It does not take a barely adequate lifestyle to retire early. There is no need to compare every one of your possessions to some amorphous definition of minimalism. Becoming a minimalist is not the key to a lifetime of happiness and jobless bliss.
Be sensible, not minimal.
12. Talk about the future…all the time!
Before my wife and I retired early, we talked about the future all the time. We kept our eye on the prize. Every. Single. Day. During the spring and summer, we walked our dogs every evening after dinner and, naturally, chatted about our future. We batted ideas back and forth and talked about our budget and what tweaks can be made to squeeze a little bit extra out of it. We discussed our short term and long term goals openly and honestly, and we did it almost every day.
Heck, we still discuss our futures even though we achieved ER-status.
Communication is critical in every relationship regardless of retirement plans. But, this kind of communication becomes even more important when the stakes are higher. The truth is both my wife and I would like to spend more than half of our lives living happily and comfortably without a job, and this sure as hell demands conversation.
We like it. One of the reasons why plans for our future kept coming up when we’d walk our dogs is because we enjoyed the journey. Every day that we got closer to our dream was an accomplishment that was made possible not by some “ingenious” plan to retire early, but with the understanding that our future is more important than our present.
13. Maintain a giant pot of FU money, not F ME, money
I like to use descriptors traditionally used for food to describe every day, non-food related topics, and this one is no different. FU money is delicious. It’s like mashed potatoes and gravy, or those slightly burnt (only slightly!) portions of pie crust. It may not be gourmet, but it’s comfort food to the max.
FU Money means you can effectively put a stop to full-time income immediately and still remain financially independent, at least for a while. It doesn’t necessarily mean or imply that you can flat out retire. But, it does give us options, and lots of ’em! FU money is good money.
F ME, money is not good money. It means that money controls your life. It probably means that you are living paycheck-to-paycheck and beholden to a full-time job in order to maintain your lifestyle.
The large majority of us start out with F ME, money. As youngsters fresh out of high school or college, we begin our accumulation phase without a lot of money and, thus, we are forced into the position of required full-time work even if we think our boss is a prick. We can find other work, but our ability to rage-quit by spitting obscenities as we gracefully walk out the door to the envy of our co-workers like a superhero isn’t quite there yet.
And, that’s okay. We all start somewhere. To retire early, we can’t let our money screw us over.
14. Love your work, but not necessarily your job
Jobs are like your three-year-old child – some days your job is literally the best thing in the world, and the very next day it seriously tests your patience. WTF, you were doing so well!
Jobs are fragile things. Sometimes they are the best things ever, and other times they suck so hard it’s tough to get out of bed in the morning. Don’t get me wrong, there’s nothing wrong with loving what you do for a living. In fact, a genuine love for your work makes your career that much more enjoyable. It’s awesome doing a job that you love each and every day.
For most of us, your job is nothing more than a means to an end. Your job enables your work. It puts into action the thing that you love doing. But, jobs come and go. They also suck sometimes. If you are like most of us, you’ll probably move around within your industry, too (in fact, that’s how significant pay increases tend to happen!). Jobs come and go.
If you love your JOB, rather than your work, then you might be setting yourself up for quite the roller-coaster of emotions. These emotions might send you into early retirement before you’re truly ready.
15. You cannot – repeat, CANNOT, compare yourself to others
As human beings, each of us has a different life story. We were all brought up in our own unique ways. Some of us had a wonderful childhood while others had worse. Some of us went to college while others didn’t. We all make different amounts of money. Come from all sorts of walks of life. Exposed to different things. Biased perceptions. Whatever, you get the idea.
All these differences mean we won’t achieve financial independence and/or early retirement at the same time. We can’t compare ourselves to others. Just because Johnny retired at 32 doesn’t mean the guy or gal who retired at 42 is any “less smart”. We’re all different.
And the only difference that truly matters in the question of FIRE is Determination. And, focus. Remain both determined and focused on your life, not the life of your neighbor, or friend, or that entrepreneur, or blogger, or…
The more energy that we spend focusing on others is less energy we’ll have for ourselves.
16. Have a plan if the shit hits the fan
What happens if everything fails in early retirement? Hopefully, you realized the discouraging trend before it got really bad and you’re able to recover or stave off the worst of it. But if not, what will you do if nothing works as planned after calling it quits?
You may not be able to just go back to the job you were doing. After all, if you’re out of work for five years, how realistic are your chances of rejoining the workforce doing what you were doing before you peaced out?
Do you reduce your spending? Does your lifestyle lend itself to a drastic reduction in expenses in relatively short order? If it does, you’re probably in good shape if things don’t work as planned.
For my wife and I, we have a couple of tricks up our sleeves. As full-time travelers, our lifestyle can be almost as cheap as we need it to be. We might boondock more to save on campground fees. Or, perhaps we’d consider work camping at a campground, which puts you to work around the campground in exchange for a free full-hookup campsite. I could also hustle more with my blog and a few other opportunities that I could call in.
17. Draft your own “I Quit” letter
One of the most entertaining things I did before I retired early was writing a fictional “I Quit” letter to my boss. In fact, I had so much fun with it that I posted it on the blog.
Please note: The letter I wrote was very unprofessional and I would never deliver that letter to my boss. This was a 100% fictional letter that got me thinking about WHY I wanted to quit my job and pursue a life of freedom outside of full-time work. It was an exercise that I thoroughly enjoyed, but believe me, I delivered a much more professional letter to my boss when I officially gave him notice.
To be honest, my boss was a heck of a person and completely understood. They handled it with extreme professionalism and honesty. I consider myself lucky to have worked for them in the last full-time job that I’ll [hopefully] ever have.
This article was originally published May of 2018 but has been republished under the Revise and Republish content strategy.
Steve is a 38-year-old early retiree who writes about the intersection of happiness and financial independence. Steve is a regular contributor to MarketWatch, CNBC, and The Ladders. He lives full-time in his 30′ Airstream Classic and travels the country with his wife Courtney and two rescued dogs.