Is retiring at 30 possible?
Ever thought about what you would do if you don’t have mortgage, debts, and any other responsibilities?
Perhaps, you’ll live your ideal life. What would it be?
If you would ask me five years ago what my ideal life is, I’d tell you this: I would spend my mornings without haste. Drink my cup of coffee, eat my breakfast, read books, study, or travel. I’ll meet friends and we’ll talk about life from tea time until dinner. But I still would love to work so maybe, half of my time I’d be working on my projects.
Have you ever imagined this kind of life?
I have actually daydreamed about my ideal life almost every day. If only I was financially independent, I didn’t have to deal with this kind of office stress.
At that time, I couldn’t quit my job because I was buried in debt. I had a mortgage to pay, and I wasn’t doing well in my career. There was a big rock between me and my goal. However, I knew that my dream can only come true if I play my cards right.
We are fortunate to live in a century with unlimited choices, far from how our parents live their lives. With technology, it is even possible to start a business without renting an office that requires 3-month advance payment. We only have to strategize to make the system work for us, and not the other way around.
Get to know yourself and ask what kind of life do you want to live. If you want to retire when you’re 30, you better start strategizing at 20. Start working on your mindset and visualize your ideal life. E.g. Draw how you see yourself in five years.
Invest in your education – does not have to be the expensive one. Online workshops are often discounted or free nowadays. Read books and learn from successful people, but take caution on taking information too. Some of it are dated and does not apply in the modern world.
You must surround yourself with people with the same goal. You can learn from each other and be accountability partners until you reach your goals.
Pay off your debts.
I used to believe what Robert Kiyosaki wrote in his book, Rich Dad, Poor Dad. There are good debts and bad debts. Bad debt is anything that decreases its value the minute after you buy it. This can be the clothes or the flat-screen TV you swiped your credit card for.
While a good debt increases your net value or has future value. It refers to mortgage, student loans, and small business loans, to name a few. If you think about the good effects of good debt, you’d be inclined to take out a loan because maybe one day, you’ll get your money’s worth back.
But take note, that a debt is still a debt and if you can’t pay for it, you will incur interest and that would turn your good debt to a bad debt.
Whatever kind of debt you have, you better pay it off fast! Having debts will only cause you sleepless nights because you will be thinking about how are you going to pay for it.
In the world of retiring early, you would want to minimize your expenses monthly, and that should not include a monthly due for your loan.
Save for an emergency fund.
The usual calculation is your monthly salary x 6 months. My recommendation is your salary x 12 months because it would give you much more comfortable. If you take the current pandemic and recession, surely your six-month salary would leave you penniless by the end of the year.
Saving for an emergency fund will require you to live a little frugally and work more side-hustles. Forget about going to the cinema and instead, make use of Netflix. Forget about dining in expensive restaurants if you can cook it at home. Do you really need a new designer’s bag? Do you really need to spend for that big wedding?
You don’t have to deprive yourself too much. If it is really necessary for you to spend on these things then you better work harder. It may take a toll on your health physically and mentally so you have to be careful in navigating towards financial independence. If I have to lose some to win some, then I’d rather compromise my time at the shopping mall.
Develop streams of passive income.
This is a type of income derived from rental properties or enterprises which you are not actively involved. Instead of working for your money, why not make your money work for you? Having multiple streams of passive income will increase your cash flow which means you don’t have to rely on your monthly salary alone.
Before embarking on a journey on creating a stream of passive income, you should first know what you are getting yourself into. You have to invest your time in researching about it and knowing the ins and outs of it. And of course, you have to be interested in it.
My favorite forms of passive income are writing books and creating e-courses because I am passionate about writing and teaching business. These are my Passion Hustles. I only have to exert effort in the beginning and the rest of the time, it will work out income in itself.
If you have a family to support, retiring early may not be an option for you. Expenses can skyrocket, especially if you have children you have to feed until they are able to feed for themselves. In this case, you may think about mini-retirements as mentioned in the book, The 4-Hour Workweek by Tim Ferris. This is where you take a vacation for a while to do the things you want. This will require proper and realistic planning, and if done well, it can be rewarding and you’ll have more time to spend with your family.
Finally, I respect our older generation for their hard work and determination. If not because of them, the younger generation today won’t have the freedom to even think about retiring early – especially in our 30s or 40s. From them, I learned the valuable lesson that you only have one life and that you should not spend it working until you are 60.
Thank you for reading until the end. Let me treat you with a free Passion Hustle worksheet, which will help you in identifying your brand, the first step in starting a Passion Hustle. Good luck!