I was reading an article on Yahoo Finance the other day providing tips on how to retire before the age of 40. (The exact title: ’5 Ways to Retire Before Age 40′)
I laughed when I saw this headline. I am 42, and I cannot imagine our family having enough money to retire. The article did say that it is an uncommon feat to achieve, but the headline made the idea seem plausible to the everyday Joe.
The five pieces of advice are listed below. The italics are my personal opinions on each tip.
- Ignore what people think. The article states you may find resistance from family and friends. (Yes, ignore that your friends and family don’t mind that you live on their couch and that you spend your evenings practicing Freeganism to provide food for yourself.)
- Save as much as possible as soon as possible. (Really? Assuming you start employment after college at the age of 22, that gives you 18 years of saving to provide for 45 years of leisure. You actually better start saving at birth, if not sooner.)
- Earn as much as possible as quickly as possible. (Yes, in this economy, it is really easy to get that $200k job right out of college. As a matter of fact, get 2 jobs that pay $200k so you can live a life of leisure later.)
- Avoid fees while investing. (I agree that fees can eat away at your savings, but I can’t imagine that getting that extra 2 percent a year, compounded over 18 years, is going to financially liberate anyone.)
- Consider a new definition of retirement. (Ok, I can buy this. I truly believe it is possible to have paid off your debt by the age of 40 and be able to leave the corporate world to do a job you truly enjoy. It is still ‘working’, but probably doesn’t feel as much like it if it is a job you love and created for yourself.
Here are some additional tips from me:
*Don’t have kids. If you do, don’t spend a dime on them for their entire existence.
*Don’t get sick- ever.
*Be incredibly lucky.
I don’t mean to be such a cynic. However, I think chasing the goal of such an early retirement would require sacrificing quality of life when you are young and healthy. I cringe to think of what we would have missed out on had we lived the way it would require to actually retire at the age of 40. Keep in mind, I agree with the advice given in the article for general saving. However, I think it would take a lot more to reach financial independence so young, and to me, it wouldn’t be worth it.
What do you think?