If you’re like most people, you’re grateful for your job and generally enjoy it, but you can’t wait for weekends and vacations.
Taking it to the next level, you also can’t wait to retire – and may even be planning on an early retirement. If you are, then you need to invest your money wisely so you can live comfortably and securely once you leave the workforce. There are some sound, tried-and-true tips that you should follow when investing for early retirement.
Many tips on investing for early retirement really boil down to common sense.
- Don’t live beyond your means. In essence, spend less than you make – the less the better – and put that unspent money into your savings and investments, such as 401ks, CDs, mutual funds and IRAs.
- Avoid debt. The best and easiest way to do this is to put your credit cards somewhere that you can’t get to them easily, and use them only for emergencies. Accruing credit card debt is a major problem for many people, and one that can spiral out of control, especially if you abuse a credit card with high interest rates. “Good” debt, like a low-rate mortgage loan or other value-oriented long term investment, is different from the debt of pure consumption of goods and services – even if you’re buying them with a low-rate credit card.
- Start saving and planning early for your early retirement. The sooner the better, in fact. If you begin the process of saving and investing for an early retirement in your 20s, you’re going to have that much more money than if you start in your 30s or 40s. Again, pure common sense dictates that plans for early retirement will have a greater chance of success if they’re implemented as early as possible.
- Think about tax-deferred retirement plans. These kinds of plans take the money out of your paycheck and put it into your 401k or IRA before you actually get paid, so the hard task of parting with your money is done for you, before you even get your check.