Retirement; like your parents, but way cooler
In 1991 Billy and Akaisha Kaderli retired at the age
of 38. Now, into their 3rd decade of this
financially independent lifestyle, they invite you
to take advantage of their wisdom and experience.
How to Create Financial Sustainability for
Billy and Akaisha in a
These days, no matter what the topic, the talk is all about
In regards to financial sustainability, there are 3 legs to the
stool. Income, spending and Investments.
Income is derived from money you make through your job using
physical or mental labor or both. Passive income can be created through property
rentals, bond interest, dividends and or capital gains from investments.
Increasing income can be done by learning a new skill, getting a
promotion, or taking on a better or second job. Maximizing your skills and
continued education either formal or on your own is a valuable asset. This could
be as easy as teaching yourself about investments in your down time. There are
plenty of online tools available to learn this.
Also, don’t rule out that
Social Security will be available once
you become eligible.
How much you spend and the debt you carry are two areas that are
completely manageable by you. The categories of largest spending in any
household are housing, transport, taxes and food/entertainment. Depending on
where you live, it might make more sense to rent instead of
buying a home, or
rent out a room in the home you already own, or
renting out a subsection of your
home in order to help with the mortgage. Putting off that remodel of the
bathroom or kitchen, or the re-do of the back yard will also allow you extra
money to put into investments.
Regarding transportation, you could walk or bicycle to work, take
public transportation instead of owning your own vehicle, car pool or use Uber
or a ride sharing service. The cost of
is over $8,000 per year, $706 per month, or $23 per day according to
AAA's 2017 Driving Cost Study.
How much of your day is spent covering your car expenses which according to
Fortune is parked 95% of the time?
Food and entertainment are other expenses entirely under your
control. Brown bagging your lunch to work, although not fashionable, can create
great savings. Not purchasing that specialty coffee daily or drinks after work
is another area of savings. Learning how to cook, which is healthier and a great
skill to learn will payoff for a lifetime. Purchasing products in bulk or on
sale, learning to break down your own meats, or even utilizing the crock pot for
one dish meals all increase your ability to eat well for less.
What you do for vacation options, what kind of digital equipment
or chrome-based toys (cars, motorcycles, boats) you are inclined to purchase and
what you do for fun on weekends all add up. For the most part these items are
depreciable assets. Rarely can you sell them for what you paid or for more.
The choice is yours. You can
invest for your future retirement or
live it up today. This doesn’t mean you cannot enjoy life today, but always keep
an eye on the prize.
Make adjustments in any of these spending areas and you can see
your investments grow measurably.
Debt is an albatross around your neck. It slows down the creation
of your wealth, so get rid of it. Whether it is a student loan, car loan or
credit card debt, pay it down and quickly. Debt servicing fees will eat you
To understand your cost of living it is imperative that you
spending. This simple tool can be a real eye opener. Do you have any idea
how much you spend per day, month or year? This is key to your financial
By knowing the amount of money you need annually to maintain your
current lifestyle will give valuable insight into how much investable capital
you will need to cover your expenses.
These figures are important to know for several reasons.
First, if you can aggressively manage your cost per day number,
then this allows you to put more into investments and savings, or to pay down
your debt. This will help you grow your wealth in leaps and bounds.
Second, if you train yourself now to live below your means, you
will have that self-discipline already in place for the rest of your life. This
seems like a simple statement however as is evident by the amount of household
credit card debt outstanding, this is not so common.
Thirdly, knowing what you spend per year will tell you how much
money you will need to have in liquid assets to pay for your financial
independence. Experts say by investing 25 times the amount you spend per year in
liquid assets such as stocks and bonds for your retirement will create a
sustainable money machine.
Investments = Financial freedom
own money machine
by investing as soon as possible in your life and letting time work for you. If
you are a Millennial,
time is on
and it’s your most valuable asset.
When it comes to creating a financially sustainable environment
for yourself, one must have each leg of the stool being strong, holding its own
weight. This financial independence will create a life of personal freedom and
choice. You could still choose to work if you enjoy what you are doing, and
thereby continue to contribute to your personal wealth. You could have the time
and wherewithal to create a product or service that will benefit others without
the pressure of debt or living expenses. You could travel or
around the world, utilizing your personal skills and abilities.
You would be in charge of your life and not dependent on a job, a
boss, or a particular location with high living expenses or bad weather. Once
your financial life is self-sustaining, then you are a free agent and
opportunities and choices will appear for you.
We believe that financial independence is one of the best things
you could do for yourself and – without sounding dramatic – for the world. Once
you are no longer a wage slave and on the treadmill of working and consuming,
then you have the freedom in both time and money to contribute to those less
fortunate than you. Being self-sustaining often creates the by-product of
consuming less and enjoying more. Acquiring experiences over things has worked
We encourage you to achieve this beneficial goal no matter at
what age you accomplish it.
What's Your Number? - How much money do you need to retire?
About the Authors
Early Lifestyle appeals to a different
kind of person – the person who prizes their
independence, values their time, and who doesn’t
want to mindlessly follow the crowd.
Retire Early Lifestyle Blog
About Billy & Akaisha