When can I retire? That was the most popular question I heard from clients during my stockbroker/investing career. The answer is…It Depends…
It depends on how you prepare for your retirement. It also depends on how you measure readiness. Here are the levers you can pull to speed up your retirement plan.
1. Be Thrifty. Live a frugal life. Spend your money wisely. Read “The Millionaire Next Door” by Thomas J. Stanley and William D. Danko. Don’t confuse Wealth with Income. Be Debt Free.
2. Be a Saver. Don’t save what is left after spending. Instead spend what is left after saving. Make saving an automatic habit. As my Dad used to say: “ Save as much as possible, as soon as possible, for as long as possible.”
3. Be Accountable. Prepare a budget. Keep track of saving and spending. A simple Excel spreadsheet works fine. Dave Ramsey has an excellent budget tool. Some folks like Mint.com.
4. Be an Investor. To become Financially Independent you need your money to work for you. To become a savvy Investor, you need to read and understand personal finance. Some of my favorite authors: Howard Marks, Ben Graham, John Bogle, William Bernstein, Jonathan Clements, Scott Burns. Investors should remember that Excitement and Expenses are their Enemies. Low cost Broad Based Index Funds typically earn higher returns with lower risk than managed investments over an Investor’s lifetime.
5. Be humble. If you get too greedy you may discover that “Pigs get fat…Hogs get slaughtered.” Know that you will make mistakes. Learn from them. You only have to do a very few things right in your life so long as you don’t do too many things wrong. Know the difference between Price and Value. “Price is what you pay, Value is what you get.”
6. Be Generous. Be generous with your time, your praise, your wealth. Generosity leads to Prosperity.
7. Be a Student. Keep learning about personal finance. Ask questions. Think for yourself. Ignore the “Financial Pornography Pundits” on TV, Radio, & at the Newsstand. Remember, if you do what everyone else does…you will get what everyone else gets.
So what do you think? Do you have any other ideas for your Retirement Roadmap? Please share them with us.