First off, it’s not a race. Please don’t go to your parents and say, “I bet I can retire before you!” But if this idea sounds attractive or appealing to you, then make it your own secret goal. Just make sure you give your parents ample warning of your retirement so they have time to plan your party around their work schedules.
The idea of being able to retire early is not a new one. And the idea is gaining a lot of steam in our country. It’s not a pipedream. It IS possible and realistic. I know several young people who have achieved financial freedom, thus being able to retire as early as in their mid-twenties.
The way to achieve this is not hard. It just involves some hard work and simple math. If the idea of hard work scares you, then ask yourself this question:
“What is more difficult: working hard for 5-10 years to achieve financial freedom thus allowing me to retire or working for 45+ years because I have no choice but to work?”
You may have answered that question either way. There is no right answer. And very intelligent people will find themselves answering that question differently.
If you believe the best route for you is to have to work until retirement age (commonly agreed upon today as age 65), then you can ignore the rest of this article. (But please continue to read this blog as many of the ideas and strategies will help you either way.)
But if you are someone who is not afraid of some hard work with the reward of retiring early in life, then read on my friend!
First off, let’s review a couple of ideas.
“Financial Freedom” and “Financial Independence” are the same thing. And they are achieved when your passive income is greater than your expenses. Once you have achieved Financial Independence (FI), you can retire. For more of a refresher, you can read Post #2 about Financial Independence and Post #4 about Passive Income.
Also, when you do achieve FI, no rule says you have to retire. If you love your job, you always have the option to keep working. Or you could switch to part-time. Or you could start your own business in that industry. Or you could take a year off and travel and then start working again. The KEY is that once you have reached FI, you have a multitude of options.
So how do you do this?
Here’s where the simple math comes in. If you spend an average of $3,000 per month, then you need to build up your passive income to be greater than $3,000 per month. There are several ways to earn passive income. Some are:
- Invest in real estate
- Invest in businesses (like a laundromat or car wash)
- Invest in the stock market (dividend-paying stocks)
- Create a business
- Build a following on social media or the internet and charge money for endorsements or for being an influencer
- Write a book
- Lend money and charge interest
- Create an e-book, audio course or video course
- Sell stock photos
- License music you’ve created
- Buy and operate vending machines
Of all these passive income options, real estate is BY FAR my favorite for three reasons.
- Even an 18-year-old can invest in real estate
- There are many, many ways to invest in real estate which build passive income
- It’s fun
If you are interested in knowing more about how to build up passive income through real estate and begin your path towards FI, then this blog and the SheeksFreaks Instagram page is where you should be. Welcome! The next post will talk about one specific example of a friend of mine who achieved FI through real estate at age 26.
“Do not fear failure, but please be terrified of regret.”
Deshauna Barber; Miss America 2016