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I’ve always been fascinated with money and have always been good with it. I always did what I thought you’re supposed to do… save it. Well, over the years, I’ve learned that that’s only a small piece of what you need to do if you want to retire early. Sure you can save every penny and live like you’re in poverty for your whole life, but who wants to do that?!
I’m not here to tell you that you have an easy climb to retire early, but I can tell you that it’s much easier than you might think.
I have this tendency to get stuck in a rut and feel almost trapped. Don’t get me wrong – I have a great job that pays pretty well, I work the regular 9-5 shift so to speak, and have a lot of flexibility if I need to work from home periodically, etc. The problem is that I feel like I’m trapped and life is just passing me by. I don’t think there’s any law that says you need to have a regular job and just work your life away, so what do you do?
When I was in my late twenties, my mom actually helped point me in the right direction. I would talk about these things and one day she happened to see this guy do a guest spot on the news and told me I should check him out. Oh great – another get-rich-quick scheme… here we go!
But, I decided to dig in a little more anyway… what could it hurt? His name was Robert Kiyosaki and he apparently had all the answers. He was promoting his new book at the time, Rich Dad’s Prophecy: Why the Biggest Stock Market Crash in History Is Still Coming…And How You Can Prepare Yourself and Profit from It!, which now is in a reprint edition. I was looking for some direction so I thought I would give it a skeptical read.
Boy was I in for a surprise! This guy takes a lot of criticism from the media because he doesn’t give a step-by-step process on how to get rich , but he really has the answers if you’re willing to look and learn. Since that book, I’ve read almost all his books, including his most famous book, Rich Dad Poor Dad, and his teachings really stuck with me. And that’s what helped me to understand the key to becoming financially free…
The answer to be able to retire early is to buy assets.
That’s it… the whole kit and caboodle. That one sentence is all you need to do to find your way to financial freedom… the road to be able to retire on… your ticket out of the rat race.
Now, I know that sounds too simple and as we take this journey together, I’m going to go into more depth on this, but that’s the big component you need to know.
So, what’s an asset? As defined by Kiyosaki, an asset is something that helps put money in your pocket, while a liability is something that takes money out of your pocket. As he says in a later book, if you lose your job, an asset will help you to eat, while a liability will eat you alive. Some examples of assets are rental houses or apartment buildings, dividend stocks, and big businesses.
The flak he usually takes is that by his rationale, your house that you live in is not an asset. People really get upset about this, but I have to agree with him – if you’re out of work, your house payments aren’t going to stop coming and that’s how many people lose their houses. Yes, hopefully your house will appreciate over time and will help you to make some money when you sell it, but that isn’t going to help you pay the bills in the meantime.
The more assets that you have, the more passive income you’ll have coming in. And once that passive income becomes more than your expenses, you’re now financially free and can get out of the rat race and actually enjoy life.
I’ve done the math now and figured out that, conservatively, I’ll be able to retire by the age of 50. The goal is to be able to do this sooner, but that should be a worst-case scenario.
My plan is continue blogging but when I want and where I want… maybe from a beach somewhere or on a cruise ship in the Caribbean. I keep my banner image on this website as a reminder of the goal.
My next several posts will discuss some of the things that I’ve done and learned from in order to make this dream a reality and what you need to do to follow suit. And for many of you, you’ll be able to retire at an even earlier age than I can!
Thanks for listening!
8 thoughts on “Are You Ready to Retire Early?”
I like this most more than you seem to. It sounds quite a bit like my first one also!
I read Rich Dad Poor Dad when I first started working and the lessons mostly stuck with me. I love his definition of an asset being income producing. It makes so much sense.
There’s nothing wrong with owning a house but if you buy more than you need as an “investment” it’s not likely to get you rich.
It’s not horrible, but it’s funny to see how much my writing style has changed over the years (hopefully for the better!). I was the same way where his concepts just clicked with me. It seems like Kiyosaki and Mr. Money Mustache seem to be the two biggest eye-openers for folks in the FI community and they’re complete opposites in their philosophies.
Lol this wasn’t a bad first post! Quite nice. I got started when I felt stuck in life as well. Wanted out of the proverbial rat race we find ourselves in sometimes. Rich Dad poor Dad definitely can set you on the road to FI and freedom. It’s interesfing the people you meet who’s books are Kiyosaki’s. My first book was retire rich retire young, read at 21…? lol.
I forgot about the “Retire Young Retire Rich” Kiyosaki book! It’s funny how much of an eye-opener his books have been. They’re definitely not meant to be step-by-step books, but they make you take a step back and realize there are other paths you can be heading down.
Sorry, the system isn’t letting me respond back to you for some reason, so I’m responding here.
Do you think if more schools incorporated most of the books that the FI community espouses, kids would grow up making more sound financial decisions than they do now?
Because I remember from middle through high school we read Shakespeare once a quarter, but we don’t really use him after that. If we read one FI book a quarter, kids could internalize and use it for life.
That would definitely be a great start. The transition would be the hardest part though. Just like a good majority of everyone else, a lot of teachers don’t have a good financial education either. Once on board, though, that would be key to a lot more folks understanding FI as an option.
Imagine if FIRE people just got together and started their own school system? 🙂 Combine with a little bit of Montessori + Google + Ancient Greek Eudaimon style learning and you’ve got a pretty decent Kickass education system for kids.
Now you’re talking! 🙂