By David Ning
The idea of retiring early can
seem so far-fetched you've never considered trying to get there. Still,
this select group of people is worth emulating in many ways, even if
kicking back early isn't on your radar. Here are a few traits of early
retirees you should consider adopting:
They save a lot. There are an exceptionally lucky few who inherit their wealth, but the vast majority of early retirees spend years saving
to increase their stash, plugging away towards their goal until they've
saved enough to buy their freedom. While you may not care to retire
before everybody else, having a big cushion can give you the necessary
ammo to take significant risks that can pay off
big time. Perhaps it's a new job opportunity with a better career path
that requires a short-term pay cut, or taking time off to obtain
additional certifications to significantly lift your salary trajectory
for the rest of your life. Whatever it is you want to do, having the
comfort of not running out of money as soon as the paycheck stops offers
choices.
They understand their spending habits.
Talk to enough people who are financially independent and you'll
realize they have a pretty firm grasp of how much they spend. After all,
how could anyone who's not a billionaire know they can afford their
lifestyle indefinitely unless they know how much they are spending? Yet,
how many people know where their money is going? The good news is that
once you start tracking your expenses, you are likely to find many areas
to cut spending without affecting your quality of life.
They have an investment plan.
No one is going to live off their savings for 40 to 50 years with all
their money hidden under a mattress because inflation is relentlessly
chipping away at their wealth. While not every early retiree is an
expert in finance, they've all had to come up with a way to finance
their lifestyle using their portfolio as the primary source of funds
and deal with market volatility along the way. By learning about
investing, you'll be able to increase your wealth much faster than if
you just stick everything in a savings account thinking that's the
safest place to put your money.
They pursue happiness instead of more income. It's obvious that quitting the rat race early is leaving salary on the table, but that's fine with those who retire early because they value freedom much more than a higher account balance. Unfortunately, many people in our consumer society do just the opposite, slaving away for long hours while sacrificing their health, family ties and happiness. The new smartphones sure are nice, but are they more important than all the other things you could be doing with your time?
They are optimistic.
With the heavy reliance on investment returns to sustain a long
retirement, you have to put quite a bit of faith in the stock market to
leave your job. Early retirees are willing to make the leap, while
pessimists who fear running out of money might work longer in order to
save more and shorten the period of retirement they need to finance. But
the power of optimism goes way beyond expecting lucrative investment
returns. A positive attitude will help motivate you, which can lead to
better opportunities, more promotions and ultimately a better retirement.
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