April 12, 2022
Early retirement is something most people would gladly agree to, so long as they are able to live a comfortable life post retirement. However, this can be easier said than done, as the fast-paced modern life and a rising cost of living get in the way of long-term financial plans.
Retiring a decade or two before reaching retirement age can be extremely rewarding both mentally and physically, as it allows people to leave the workforce while they still have sufficient energy to spend quality time with family and friends, travel, plan ahead, etc.
But what are the steps you can take to accumulate wealth and retire early and just how realistic is it?
Preparing for an early retirement starts at a very young age - Ideally while starting out with your career. Assessing the realistic prospects of your occupation and average pay can be a great way to start, while also creating a rough estimate of what early retirement would look like in your case and just how much money you will need to get there.
Luckily, thousands of people have already achieved this and shared their experience of how they managed to retire in their 40-s and in some cases, even as early as late 30-s.
The sooner you start investing and growing your savings, the better chance you stand at actually achieving your goal of retiring early. A combination of relatively risky trading and savvy investing can be the key to making the most of both opportunities.
For example, while long-term investments in stocks and bonds are great and come with less stress, it also means that your savings will peak by the time you are already reaching retirement, which is suboptimal.
Developing long-term financial trading strategies can be challenging, but it can also teach you a lot about managing your finances, your risk tolerance and your capacity to stay calm and collected when facing challenging market conditions.
Another approach you can take is to be strategic with the biggest purchases in your life. Thinking of buying a house or an apartment? - Numerous financial data software solutions measure the health of the property sector of your desired area. Make sure to check the historic prices of real estate in your area to assess if the property you are interested in is reasonably priced.
In many cases, property markets are cyclical, which could lead you into the trap of buying a home at a high valuation, only for the market to start correcting in a couple of months. Therefore, it is very beneficial to be mindful of market data and use it to your advantage.
If you have a job that pays a decent wage, it is always advisable to save some of your disposable income and keep it in term deposits and long-term investments, such as bonds and dividend stocks.
While the gain on your investments is unlikely to be very large, you can reinvest the profits and compound the growth of your assets over time.
Alternatively, if you prefer a more hands-on approach to investing, you can pick stocks to invest yourself and cash in on any substantial gain you are able to generate. If you have a decent amount of experience on the stock market, you can try your hand at swing trading as well. However, make sure you are aware of the inherent risks involved in trading and that you could lose a substantial amount of money in the process.
Building wealth and retiring early can be an attractive but challenging prospect for most people. However, savvy investing and savings, coupled with some risky trading on the side, can help you get the best of both worlds and give you a chance to increase your savings at a faster pace.
It is worth noting that there is no one clear cut route to early retirement and entrepreneurs typically stand the best chance to retire a couple decades earlier, if they wish to do so.
You can dabble in a wide range of financial instruments to get ahead, including stocks, forex, crypto and bonds.
It is important to understand when to choose a particular instrument and how to take advantage of the shifts taking place on the financial markets.
