How to retire early in 2022

From The Great Resignation to the FIRE (Financial Independence, Retire Early) movements, the idea of giving up a 9-5 job is gaining popularity around the world, including Australia – and I’m not surprised.

For this generation, we’ve never had so much time to ourselves at home as we have in the past two years. When you have that time, people start to make changes – be they voluntary or involuntary. For many, it was a long, overdue opportunity to make a necessary change; to leave a career that had plateaued or a job they were not passionate about, which is a great thing.

For others who are resigning without thinking too much about it, or being swept up in the movement, then it’s probably a good time to realign, think about what it is you always wanted to do and start seizing the day!

Financial Independence, Retire Early – is it possible?

For those who may not have heard of “FIRE” before, this is a movement of people who aim to retire young, living extremely frugally to achieve this and also being satisfied with living frugally thereon in ‘retirement’. While this pathway is not for me personally, I do commend their aspiration and their diligence in saving and investing as much income as possible – in real estate or index funds etc – to build the passive income stream they need to retire.

At Ironfish, we set our aspirations a little higher; it is still absolutely possible to retire earlier than conventional standards. It may mean you need to make some sacrifices now – though more moderate than the FIRE movement – but the idea is that in 10-15 years, you can enjoy the fruits of your labour and more luxuries in life. I know travelling the world in a Kombi van isn’t for everyone!

What I’ve also observed of customers, business colleagues and friends who have achieved financial independence is that most of them are not travelling or playing golf full time. Most of them are still working, because they would probably find a lifetime of leisure too boring! Life is about leaving a mark and bringing value to people; work that you are passionate about can often be part of that. I know of some kids from wealthy families who are effectively born into retirement and are low on energy for life. Others who work long hours but are full of energy and positivity. In China we say it’s the balance – yin and yang – of leisure and work. The key is choice: you can work because you want to and on your terms, not because you have to.

How is early retirement achievable?

I believe retiring early is a very worthy goal to commit to; apart from gaining personal independence and removing the burden of support from the government, you have the ability to contribute to the economy, spend and support local business and projects.

It is also very possible to achieve even in 2022, as a younger person. To retire early there are a few key steps you need to follow.

1. Commit to the goal of retiring early and be prepared to do what it takes to achieve it.
2. Define what retirement means to you; what type of lifestyle do you want?
3. Figure out how much income you will need to be able to do those things.
4. Work out how much net asset you need that will deliver that income
5. Assess where you are at now, what you need to do to get there and by when
6. Build a strategy – having the right people to support you in this is critical.

For many, this strategy will involve working really hard for 10-15 years in your career and continuously building up your income. At the same time, investing 10-20% of that income into appreciating and income producing assets, such as property, which is one of the safer ways if not safest of investing in Australia. There are still affordable entry points to property and while interest rates may rise but they are still historically low. It may take you a little longer, but there are plenty of resources and education to support you along the way.

Retirement = happiness?

What I will advise though, is that happiness isn’t “not working 9-5”. Lots of happy people do 9-5 and feel very happy to do so.

Happiness is peace in your heart, feeling confident about yourself, being helpful and valuable to other people and living life on your own terms.

If 2022 is the year you make a retirement goal for yourself, then do speak to us; we’d love to help you put a strategy in place to make it happen.

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