4 Must-Do Tasks To Retire by 60
(The following guest article is written by my Dad, whose frugal lifestyle and financial habits have been well documented on my blog! Editors’ Note: My Dad talks the talk and walks the walk, and has enjoyed financial freedom in retirement since age 60. Thanks Dad!)
Most people are not going to hit the lottery or inherit a million dollars from their family. Because of this one needs to strategically consider ways of acquiring enough assets or an income stream that would allow for retirement at age sixty. From my experience this requires incremental steps and not one investment that by itself provides enough funds to retire early. I will describe some of the rather small things I have done to accomplish this end.
1. Save a Percentage
Regardless of income one needs to save a percent of each months pay. It helps if you can do this by way of pre-taxed dollars such as an IRA. Another investment strategy is to take advantage of leveraging. This is done by way of an investment, with a small down-payment, to control an asset with a larger value. From my background, I saved $50 a month from my check until I had enough money to make a down-payment on a triplex rental apartment house. This allowed me to stop paying rent while I rented the other two units. The triplex went up in value and I traded it for a larger apartment building.
2. Live Within Your Means
Another strategy to accomplish early retirement is to live within your means or even below your means. By not having to have the most expensive car, or the most expensive anything, the savings starts to add up really fast. Of course you must buy a dependable car but these are often less expensive than the top of the line autos. Other examples of living within your means are taking camping vacations rather than staying in resorts. Also, consider buying clothing from discount stores rather than buying designer styles. Back to my triplex investment, the one bedroom in the triplex was much smaller than where I had been living but it saved me considerable money each month.
3. Don’t Take on New Debt
If you are successful at living within your means, it should naturally lead to avoiding taking on debt. By paying cash for purchases or paying off your credit card balances every month you avoid paying interest. An exception to this is an investment that produces monthly income which essentially pays the interest and principal payment for you. If purchased correctly, a rental real estate investment can accomplish this. An excellent goal to strive for is only going into debt for your personal residence.
4. Become a Do-It-Yourselfer
Another technique to keep money in the family account is to do as many things for yourself as possible. Things like mowing the lawn, brown bagging it for lunch, repairing leaky faucets, changing oil in the car, cleaning the house, and even larger jobs like painting the house. The more you do such chores the more confident you become and are able to take on even larger projects. You may know people that complain of not being able to save money but at the same time they pay others to mow the lawn or clean the house. Over time these savings are considerable.
Some would argue that by following these suggestions your lifestyle would suffer due to the restraints on spending. Others would say that doing things for yourself takes important time away from your family. My response to these concerns is to get the family involved in as many of these things as possible. At the end of the day, because they advance your family’s financial situation, these suggestions will actually enhance your lifestyle considerably and help you meet your financial and retirement goals.
What steps have you taken to meet your retirement goals? I look forward to your comments.If you enjoyed this post, make sure you subscribe to my RSS feed!
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