Personal experience: how to retire in 40 years
Chris Reining is not your typical retiree. He completed his working career at the age of 37 and is now financially independent, living life the way he wants, he writes Money.
Reining grew up in a middle-class family in Illinois, did well in school and received scholarships. He graduated from college with a debt of just $ 4 500, which he quickly paid off as soon as he started working.
In the end, he found a well-paid job in the field of cyber security, took a mortgage loan and bought an apartment and a BMW car. But then he wondered "what's next?".
“I finally said to myself, ‘I can’t do this for another 40 years,’” Reining recalls.
He read the book "Your Money or Your Life" by Joe Domingues and Vicki Robin.
“It helped me understand that there is a way to arrange your life, and you don’t have to sit in this office for 40 years, so the idea of becoming financially independent became real,” the man recalls.
By 35, Reining felt he had enough savings to live the rest of his life on them without having to work again. It took him another 2 of the year to make sure of his assumptions, and then he retired in 37 years.
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The following is Reing's early retirement strategy:
1. Save money
Everyone heard about this rule. But even with a rational approach to spending, many people succumb to lifestyle inflation, says Reining.
"The more money you make, the more money you spend, and you don't save anything," he says.
Reining advises to approach the costs really. Find an acceptable standard of living and, with increasing income, do not increase your expenses.
2. Earn more
Your actual job is only part of your job. You should focus on increasing your career growth.
This may include the acquisition of new skills, certificates, degrees, which will help to get a higher salary and promotion on the career ladder.
“It’s important to understand your weaknesses. I found mentors who helped me see my capabilities,” says the man.
Mentors helped to relate to a career strategically, which led to more profitable work.
“It is worth thinking about the time spent and earnings. What is better, to spend time on yoga for $ 25 per hour, or to study, in order to continue to receive a promotion of $ 10 000 or $ 20 000? ”.
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3. Invest
Most people already have a mechanism for investment - the employer sponsors 401 (k).
In 2018, the maximum contribution increased to $ 18 500 compared to $ 18 000 in 2017.
You can also invest in a Roth IRA, a retirement account for after-tax contributions up to $ 5500. Both earnings on the account and withdrawals after 59 years without taxes. Investing should not be too difficult, it just needs to grow.
“I like to keep things simple. I have a 401(k) when I reach age 60. The money is there for the next 20 years. The rest of my money is included in a taxable investment account,” says Reining.
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