I remember saying loudly and proudly, “I never want to grow old.” So sure, of myself and my youth, I saw no advantage to growing old and wise. Now I see the importance of planning ahead, and I look forward to growing old and creating a legacy for my family. What changed?
I found investing. Investing changed my views on the world and my ideas of what happiness could be. I loved the idea of planting seeds, making decisions, and reaping the benefits in the future; this is what investing is all about.
Now, I should clarify, I am not excited about growing sore and stiff, working until I’m 70. No, I plan to retire early and enjoy my older years. I am excited to spend time with my family and friends and cement a future for my grandkids.
Yeah ok, big shot, how do you plan on retiring quickly and early? Well, my friends, its relatively straightforward, so let’s get into it.
Home is where the heart is.
If you want to retire quickly, you can’t be paying off someone else’s mortgage. No, you need to find the best value home loan and strive to own your home as quickly as possible. Finding a home loan with the right features is vital, you will want the lowest rates possible and the shortest loan length you can afford.
The shorter the home loan, the more expensive the repayments will be, BUT you will be paying far less interest. This is a key strategy in investing, sure you might have less money to spend on beer at the end of the week, but that money is going into your debt, not interest.
Ok, so you found the best home loan, with all the right features, and you are working towards owning the home as soon as possible. Well done! You are on the fast track to early retirement. Now, you could just sit back and let your pension look after you or, you could gear up for the lushest retirement possible. How? Investing of course.
Is a home a good investment? You bet! An even better investment? Another home! Australians are blessed with some enticing tax breaks for investment properties, and with some planning it’s possible to build up a portfolio of investment properties, with rent charged to help fund your early retirement.
It does sound good, becoming a landlord, being realistic though there are some less cash-intensive investments you should consider. A classic investment is a term deposit, simply deposit a lump sum of cash into a term deposit account, and watch your money grow (very slowly.)
We have talked about investing and making money, but we should have started at budgeting. If you aren’t saving any money, its pretty well impossible to make any or invest. Be real with yourself, curb unnecessary spending and start a savings account.
If you aren’t already a saver, it may come as a shock to see how much money you could be saving and investing instead of blowing on a night out. You can party now when your young and poor, or you could party when your old and wealthy where fewer people judge you and bouncers don’t check your id — just kidding!
Early retirement sounds like a fantasy to some, but it shouldn’t be. For nearly every Australian, retiring early is a very real goal that can be achieved. Be real with your self and start saving. Owning a home is a very big step towards early retirement and offers many tax breaks for the savvy investor. Be happy, be real, and ill see you by the poolside bar in a few years time.