4 Must-Do Tasks To Retire by 60

February 11, 2013 · Filed Under Frugal Living, Guest Post · 16 Comments

(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.

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Comments

16 Responses to “4 Must-Do Tasks To Retire by 60”

Angela on February 11th, 2013 4:12 pm

Your Dad is a smart man! These are some great common sense approaches to building real wealth over time. It amazes me that people still ignore a couple of these tips. Especially living at or below your means.

[Reply]
Jacob Lyons on February 11th, 2013 4:15 pm

Agree Angela. Although his tip of buying real estate by saving $50 a day is a little outdated. When was that, 1953?

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Kim@Eyesonthedollar on February 11th, 2013 5:09 pm

Most people I’ve met who retired early like your Dad have invested in some type of real estate. I think that is a great way to build wealth. How wonderful to have such a good role model.
Kim@Eyesonthedollar recently posted…7 Steps to Take Before You Put Your Home on the Market

[Reply]
Kyle Reply:
February 19th, 2013 at 1:57 pm
Agree Kim. Especially with the down housing market, there are some really good investment opportunities out there right now.

[Reply]
KK @ Student Debt Survivor on February 11th, 2013 8:05 pm

Good for dad. Imagine that, living below your means! I’m not sure that most people even know what that means anymore. Who knew you could save money when you don’t spend your whole paycheck each month?
KK @ Student Debt Survivor recently posted…My $30,000 Student Loan Mistake

[Reply]
Kyle Reply:
February 19th, 2013 at 1:58 pm
I know right? What a novel concept.

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The Happy Homeowner on February 12th, 2013 1:02 pm

Great tips/advice! I am an avid DIYer–I agree that you can save hundreds (if not thousands!) by learning how to do simple household repairs/maintenance yourself.
The Happy Homeowner recently posted…I Quit the 9-5…Forever

[Reply]
Kyle Reply:
February 19th, 2013 at 1:58 pm
Plus you get a lot of satisfaction out of doing the work yourself…at least I do.
Kyle recently posted…4 Simple Ways I Plan to Cut My Spending This Year

[Reply]
Johnny Moneyseed on February 12th, 2013 3:08 pm

My aim is to be fully retired by age 35. All of these rules apply to my goals as well. Below your means is necessary for saving and necessary for retirement.
Johnny Moneyseed recently posted…Credit Card Churning

[Reply]
Kyle on February 12th, 2013 4:41 pm

Hey Johnny, would love to know your plan to retire by 35. Is it outlined on your blog somewhere?

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Justin@TheFrugalPath on February 12th, 2013 6:16 pm

It’s amazing how many people don’t follow these simple rules for retirement. Unless you live below your means and save for it, retirement won’t happen. It doesn’t just fall in your lap.
Justin@TheFrugalPath recently posted…My Quest for Financial Independence

[Reply]
Johnny Moneyseed on February 12th, 2013 6:21 pm

Kyle, our 7 year plan looks like this: http://www.johnnymoneyseed.com/early-retirement/the-moneyseed-7-year-plan/

This is a rough, big numbers, kind of plan. It is subject to change, and subject to real life. We are working on making a final draft that has the real details of our plan which will be available on our site soon! Thanks for asking!

[Reply]
Kyle on February 14th, 2013 12:05 pm

Cool, thanks for sharing Johnny, I’ll take a look at your plan.

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Roxann Johnson on February 27th, 2013 12:36 am

Best advice yet for retirement. ty for sharing!

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Raye W on February 27th, 2013 2:00 am

Great tips! I’m putting all these tips into practice now.I’m learning day by day how to DIY, and it really gives me a feeling of accomplishment as well as saving money.

[Reply]
willis flanagan on March 4th, 2013 1:19 am

I am trying to retire now. I hope your Dad is right because I am closing on my first property this week.

[Reply]

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