The Snowball of Early Retirement – it is a remarkable concept that strikes deep at the heart of how people achieve financial independence and early retirement. It’s a phenomenon that makes ER easy and no assembly required. Just add momentum.
I stumbled on this phrase quite by accident writing a blog comment.
The comment was written on Our Next Life‘s post about the magic is real. Basically, these folks are kicking ass. They are way ahead of the game financially and have fully prepared themselves to tackle early retirement head on – and ahead of schedule.
Like Mr. and Mrs. Our Next Life, Courtney and I are also ahead of schedule, blowing passed our net worth goal several months early. We overachieved in our goal, just like they did.
And here’s the remarkable part in all this.
We are not the only ones who hit our goals early. As I become more involved in financial independence and early retirement, the more I realize how common this is. Most of us achieve our goals early. The majority of early retirees lean into retirement with more than they had anticipated.
And that’s truly wonderful! But it also begs the question: why? Are we just some special breed of people who magically win at everything we do? Trust me, if there was some Easy Button to early retirement, I would learn how to reproduce them and sell it on eBay for millions.
The Snowball of Early Retirement
Early retirement is propelled by the snowball effect. We tend to achieve our goals early not because of some magical force that only a few of us possess, but because things get easier the more we do them. Strangely enough, this is a very common phenomenon in many walks of life.
When we first learn to play football, for example, we suck. We don’t know how to tuck the ball and run. We don’t finish tackles. We couldn’t lead a wide receiver and place the ball right in the numbers to save our lives. But, the more we practice, the better we get.
And the better we get, the more dedicated we become. Naturally, we humans like doing things that we are good at. We like to succeed. It feels great. The better we get, the more we practice. The more we practice, the better we get. It’s one of those good “spirals”, pun very much intended.
Though the competition might get tougher, the skills required to play the sport have become second nature. Soon, we can lay out for a 50-yard bomb and make the catch. We begin to anticipate the defense. We recognize formations.
It becomes a part of our life, and momentum builds.
Early retirement is no different, and it begins with a goal. The goal may be financial: “The second I become a millionaire, I’m retiring”. Or, it may be time-based instead: “I’m retiring in two years come hell or high water” (<– although we do have a “number”, this is more us).
Whatever the goal is, we begin work to achieve it. We practice. And, things become easier the more we practice. We begin to track our spending, set up automatic savings account transfers, max out our 401ks, etc. Basic retirement stuff.
The first time we say “No” to an expensive dinner invitation might be tough, but the second time it is less difficult. And the third feels even easier.
We get better at achieving our financial goals the more we try. The terrain becomes less rocky.
We achieve our goals early because…
Still no Easy Button, but it’s the next best thing.
We achieve our goals early because of our momentum gained through relentless practice. Momentum has propelled us further than we had anticipated. Remember that when our goals were created, we were not nearly as practiced as we are now. We sucked at this stuff, at least comparatively.
Our expectations for success were different. We did not have the skills that we now have. We had no idea that refusing bullshit social engagements could be so easy. And we may have also underestimated how powerful our investments worked for us.
It’s like estimating the duration of a hike, and all we’re looking at is the beginning of what seems like a difficult, uneven rocky trail that ascends for two miles. We give ourselves two full hours. But as we begin walking, the trail gets easier. Fewer rocks to climb up. Less of an incline. Until eventually, the trail becomes dead flat with nothing standing in our way. We make it in an hour and 15 minutes instead of two hours.
Thanks to our goals, the skills that we acquired snowballed into something wonderful. We are better at early retirement than we were before. With each financial accomplishment, the snowball builds. And the bigger that the snowball gets, the easier it is to accomplish our next goal.
Until eventually, our snowball becomes damn near unstoppable.
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.