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6 Smart Money-Saving Tips From Early Retirees

6 Smart Money-Saving Tips From Early Retirees

By    |   Monday, 11 November 2019 10:03 AM

It takes financial savvy to retire early. So when someone who has managed to do that offers financial advice, it is worth listening to.

Several early retirees recently spoke with Business Insider to share their top money-saving tips. Here are their six best pieces of advice that could help you follow in their footsteps, or at the very least use to build for a comfortable retirement.

1. Focus on your spending habits, not your income. Being rich is not about what you earn, it is about what you do with that money that counts. Self-made millionaire Chris Reining, who retired at 37, says there is a difference between "living rich" and "being rich" and it all comes down to bringing in an income that well exceeds your standard of living.

"Getting rich, and staying rich, is overwhelmingly a game of living below your means. If you can do that you'll enjoy a freedom that people living rich will never experience," he says.

2. Work hard and make sacrifices for your nest egg. There is a massive difference between having no money and having little money, explains JP Livingston, who used her nest egg of $2 million to retire at 28. 

"More money means more options open up to you," she says. "Better options. The more money you have means you accelerate faster and faster toward massive wealth. Money begets money, so it's worth the hard work and sacrifice to build that first small nest egg."

Her advice? "Do everything you can to accumulate that first $10,000, $20,000, or $100,000," she explains. "It will create a snowball that speeds you toward wealth far faster than you can imagine."

3. Save and invest your earnings. John (whose full name has not been shared) retired at 52 with a $3 million net worth. He knows a thing or two about early retirement and he suggests working hard to earn an income, then save and invest as much of it as possible. He notes that making "solid money moves over time" leads to wealth.

4. Get out of your comfort zone. Many of us adapt our lifestyle according to our earnings and it is easy to get into a rut of increasing spending habits according to pay increases. We grow accustomed to certain luxuries that suddenly seem like necessities but this is not how you get wealthy.

"Spending is an addiction, and people's minds keep planting the seeds of comfort within the decision-making process," says Steve Adcock, who runs the blog Think Save Retire. "In other words, early retirees make decisions that are in line and supportive of their financial goals and do not let society or friends/family affect their financial situation — even if those decisions are uncomfortable."

5. Invest in yourself. Relying on external things to bring you happiness will probably leave you feeling unfulfilled and chasing the next best thing.  This is a mistake Carl Jensen made until he realized that happiness came from within. The epiphany helped him retire at 43. "I was counting on an external event (leaving work) to bring me happiness when I should have been working on it internally the whole time," he says. "I now know that happiness needs to come from within. Work on yourself now. Find beauty in life every day. Live with meaning, purpose, and intention."

6. Have a goal. Having a net-worth target goal makes sticking to your financial plans much easier. "Everybody should have a net-worth target to shoot for by age, work experience, and income," says early retiree Sam Dogen. "Targets will help you stick to your financial plan and motivate you to do more if you're falling behind."

At issue is that many people only "wake up 10 years later and wonder where all their money went," he continues. "If only they could have a net-worth guide they could print out and stick on their refrigerator to keep them on track."

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It takes financial savvy to retire early. So when someone who has managed to do that offers financial advice, it is worth listening to.Several early retirees recently spoke with Business Insider to share their top money-saving tips. Here are their six best pieces of advice...
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Monday, 11 November 2019 10:03 AM
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