|Committing to your retirement doesn't
have to be complicated or difficult. Now is the perfect time to get started
on your roadmap for retirement success. We're living proof -- we followed
these simple steps 25 years ago, and they worked for us. Here's what we did
in order to retire early.
1. Track spending.
Take a close look at your spending on a daily basis. Once you start
doing so, you'll be amazed at what you're spending your money on. Businesses
must look at their cash flow in order to stay afloat; why shouldn't you? It
only takes a few minutes a day once you set up your system. After a month or
two, you'll discover where you can reduce your expenses. Within a year,
you'll be in control of future spending.
2. Save a lot.
Once you have control of your spending, save that extra money for
your future. If you're younger than 30 years old, a good target is to save
10% of your gross income -- not your take-home pay, but the full amount of
your salary before taxes and other deductions. After a short time, you won't
miss the difference, but your savings will grow substantially. If you're
over 30, increase your savings rate to 15% or more if possible. Take full
advantage of employer-sponsored plans like 401(k)s, matching contributions,
and any other retirement benefits you receive -- but don't include them in
your savings percentages. That should be on top of what you're already
saving on your own.
3. Invest wisely.
Learn about investments, become your own expert, and keep things
simple. You don't need to impress your friends with financial terms just so
you can look knowledgeable. It's all about your results; if you can't
outperform the S&P 500 Index year after year, take a look at simply matching
it through index investing.
4. Put peer pressure into
Social pressure to spend can be subtle and pervasive, and it
can divert you from your commitment to retire early. Marketing specialists
tell you that if you only buy this new product, car, house, or membership,
your lifestyle will improve. It's reasonably easy to tune out that marketing
message, but you have to handle your friends with a little more tact. Trying
to match the spending of our peer group is a surefire way to derail
financial goals. Decide now that you don't have to keep up with their
consumption to fit into the crowd. The choice is yours -- not theirs.
5. Keep your eye on the prize.
Set realistic goals and keep to your plan. The amount you save, how
you invest, and when you plan to retire may differ from your colleagues and
others. No one will be as dedicated or determined as you are to reach your
objectives. Put these goals somewhere you'll see them often, to remind you
to keep you on course. Every time you get sidetracked by spending a little
bit more, succumbing to peer pressure, or choosing not to put extra money
into your retirement funds, you're literally delaying your retirement date
by weeks, months, or perhaps even years. Stay focused.
About the Authors
Billy and Akaisha Kaderli are
recognized retirement experts and internationally published authors on topics of
finance and world travel. With the wealth of information they share on their
they have been helping people achieve their own retirement dreams since 1991.
They wrote the popular books,
The Adventurerís Guide to Early Retirement and
Your Retirement Dream IS Possible.
information about financial independence and travel, visit our