Home Finance & The City Money Five tips for an early retirement

Five tips for an early retirement

With the retirement age forever going up, a lot of people are considering ways to retire early without having to work until you are sixty plus, which is probably why you are here. Here are some of the best tips to help you with that.

Savings

This goes without saying and is why it is at the top of the list. It is a no-brainer and very easy to do. Let’s say you are on an annual salary of £20,000 pound a year, the best way to save that is putting 10% of it into a savings account. This will be £2,000 per year which does not sound a lot at all. However, say you got that salary over 10 years that would be £20,000. Which sounds like a lot more now but you probably won’t get that same salary over the next ten years, if anything it will go up due to career progression and all that.

Saving is the most simple yet effective way of making your early retirement plan more realistic. The earlier you start saving for your retirement, the earlier you are more likely to retire.

Investment

Another great way of gaining money without having to actually do anything for it. Think of it as a way of saving but gaining ridiculous amounts of interest on it. If you do that then you are well on your way to get that extra money for your retirement.

There are different ways of investing such as the stock market, cryptocurrencies, or real estate but whichever you do, you have got to do your research. For example, if you invest in real estate and buy into a property, one thing you have got to establish is the condition of the building. One way to do this is schedules of condition which allows both the tenant and the landlord to agree on the state of the building. If you do this then there will be less conflict between you and the tenant. Which means your investment will be a lot less stressful.

Another example would be forex trading, this is difficult to understand at first but if you put in a good amount of research into how to do it then expect to see some extra 0’s in your bank account.

Start Early 

So far, both putting money away into a savings bank account and investing in stocks/ real estate have been recommended. Now the best way for making the most money is by starting them early. The reason why the annual salary was so low because that could be a rough average between the ages of 20-25 years old. You will probably start a bit less than £20,000 but there’s every chance you will earn more by the age of 25. The early you start means more and more value over the years for your stock or property

Monitor your finances 

This is arguably the most important. This is what prevents you from going into debt with any bills or unexpected allowances that crept up out of nowhere. Always be prepared for the boiler breaking or your car breaking down.

 Having that savings in your bank account that you want for your pension might come in handy earlier on. Some debts have nasty interest rates that you do not want so make sure you do not have any and if you do then make sure you are able to pay them off straight away.

Last but certainly not least

Multiple incomes into your bank account are one great way to put you on the path of early retirement. Having a full-time job and a part-time is a great way to the top. Having that part-time job can pay for your nights out or that meal that you have been wanting to go on. Maybe even buy you a new car.

An extra 6 hours a week at £10.00 an hour is £60 a week. Obviously, depending on what age you are obviously going to gain more. However, that example is an extra £240 per month to your annual salary. Save that up for three months and there is your expenditure for your next holiday.

To conclude

The earlier you start the better and the more knowledge you have the better. Investing your money in the right places and putting in the hours can certainly benefit you in the long run so make sure you start sooner rather than later.