Do you want to retire young with good health, travel the world and be financially free? If YES, here are 7 proven strategies on how to retire early and rich.
Before I go about sharing tips that will help you develop your own retirement strategy; I want to appreciate my mentor “Robert Kiyosaki” for stirring up my entrepreneurial spirit and making me see the need to retire young and rich. Robert Kiyosaki’s book “Rich Dad’s Retire Young, Retire Rich” had a major influence on my life; it changed my perception and made me see the possibility in retiring young and rich.
I also want to acknowledge successful entrepreneurs such as Larry Ellison, Mark Zuckerberg, Michael Dell, Richard Branson and Bill Gates because not only did they take the pain to build big business empires and retire young, they were also humble enough to share their business success secrets with young entrepreneurs all over the world. They are my greatest source of inspiration in my quest to retire young and rich and I say thanks to these entrepreneurs for setting the pace for people like me.
Now for those who have never given a thought about retiring young and rich, I think it’s time you do. I have personally set a goal to retire young, early and rich; and I think you should do the same for yourself.
However, this article was not written for me; I wrote it to help you fashion out your own retirement strategy. I wrote it to help you retire early and rich. Nobody can help you retire early and rich except you, so you have to plan and execute your own retirement strategy.
Now I don’t know how old you might be as at the time of reading this article; all I want you to know is that it’s never too late to aim for something. After all, Colonel Harland Sanders did not start a business (Kentucky Fried Chicken) until he was 66 years of age. So no matter your age bracket, you can always start something for yourself. Now why do you need to retire early, young and rich.
Of recent, I have always stressed the need to have a “why” before embarking on any venture or project because your “why” will be your major source of motivation; it can turn out to be your candle in the dark.
Before I proceed; I want to state clearly that retiring early and rich is not all about the money or lifestyle, it’s all about freedom and time. Freedom to do what you want; freedom from fear, freedom from the pressures of life and above all, retiring early is all about the feeling of fulfillment.
Retirement Strategy: How to Retire Young, Early and Rich
1. Desire to Retire Early
“Desire is the starting point of all achievements.” – Napoleon Hill
The first step to retiring early is to desire it. No individual that retired early and rich became so suddenly; they desired it, planned it and worked it out. To retire young and rich, you must have a burning desire for it because that desire is the fuel that will drive you towards making that dream a reality.
Aside the desire, you must have a strong reason why you want to retire early and rich. Why do you want to retire young and retire rich? Are you doing it for your loved ones? Are you doing it for self actualization and fulfillment sake? The point I am trying to emphasize here is that you must find your “why” before embarking on the journey to early retirement.
“People who dream small dreams continue to live as small people.” – Rich Dad
2. Prepare your mindset for early retirement
“Getting rich begins with the right mindset, the right words and the right plan.” – Rich Dad
So you want to retire early and rich; then prepare your mindset for it. I hope you know that retiring early and rich does not come on a platter of gold; it’s a process that requires not just hard work but also smart work. You must prepare to stick it through no matter the obstacle you encounter; you must be prepared to keep going when the going gets tough.
Just as there is an entrepreneurial process to building a business from scratch; there’s also a process to quest to retiring early and rich and that process requires discipline, focus and persistence. Just as starting a business requires the right mindset; so does the process to retiring early and rich require the right mindset.
“One of the great things about being willing to try new things and make mistakes is that making mistakes keeps you humble. People who are humble learn more than people who are arrogant.” – Rich Dad
To retire early and retire rich; you must keep an open mind. You must be open to opportunities and above all, you must be willing to learn; you must also be willing to expand your thinking capacity. You must be able to see possibility in your quest to retire early and rich. Your cup must never be full.
“Thinking is hard work. When you are forced to think, you expand your mental capacity. When you expand your mental capacity, your wealth increases.” – Rich Dad
3. Set your retirement date
After you have prepared your mindset to undergo the process to retire early and rich; you need to set a time frame within which you will retire. Setting a retirement date begins with you answering the question below:
How old do you want to be when you retire?
Setting a retirement date for yourself is very important to the process of retiring early and rich because without a targeted time frame; you will never achieve the goal to retire early and rich. And if care is not taken, you might retire in death without getting a feel of what life in retirement is.
I also want to add that age may not be the only target time factor on which you can retire. For instance, I chose to retire young and rich by year 2020; and that decision was not influenced my age bracket.
I chose to retire in the year 2020 because the federal government of my country Nigeria came up with a growth plan tagged “Financial Strategy 2020” and the aim of this initiative was to position Nigeria to be among the top twenty economies in the world.
And with that initiative being vigorously pursued by government, there’s been a massive influx of foreign investors into the country. Now instead of being left behind, I strategized and aligned my goals with the “FSS 2020” and that was how I came up with the decision to retire by the year 2020.
My retirement plan also includes fast plans and strategies that will capitalize on any economic strategy and incentive being put up by the government for the actualization of its goals. Now this was how I came up with my retirement time frame; you can also use the same approach or a different one to set your own retirement date.
However, it’s advisable that your chosen retirement date should be realistic and achievable. My retirement date is realistic and achievable because I will be leveraging on the government’s effort and other external factors. So set a realistic retirement date for yourself; not one that will demoralize and burn you out in the short or long run.
4. Set a specific amount on which to retire on
After setting a target retirement date; you need to determine a fixed amount on which to retire on.
- How much do you want to have when you retire?
- At what financial level do you want to retire?
These two questions above are very important to your retirement goal and only you can answer them. We all have different dreams and aspirations so I can’t decide your financial exit strategy for you. However, I must add that you must be specific with the amount you want to retire on.
“Always start at the end before you begin. Professional investors always have an exit strategy before they invest. Knowing your exit strategy is an important investment fundamental.” – Rich Dad
- Are you going to retire rich or average?
- Are you going to retire on $1,000,000 or $10,000,000?
No matter what your financial retirement stand point is; just make sure it’s realistic and achievable. I bet you don’t want to die with a feeling of regret. However, the fact that I said your retirement exit point should be realistic and achievable does not mean you should aim for mediocrity. Your financial exit strategy must be realistic but stretching; it’s should be a goal that will force you to expand your context and content.
“A good goal is like a strenuous exercise, it makes you stretch.” – Mary Kay Ash
Your retirement financial goal should stretch you beyond your comfort zone; it should be a goal that will force you to expand your thinking capacity, it should be a goal that is worth pursuing.
5. Develop a retirement plan
In the process of achieving your goal to retire early and rich; this is probably the most important aspect of it because it’s the deciding factor that will determine whether you will achieve your goal or not. Pursuing the goal to retire rich at a young age without a plan is like embarking on a journey unequipped.
- Now what is your retirement plan?
- How do you intend to achieve your retirement goal?
- What vehicle or leverage do you intend to use?
This is the stage where you must put the questions above to rest. There’s more to planning on retiring early and rich than meets the eye; retiring early and rich is not all about the planning, it’s also about strategy and direction. Strategy and direction begins with your core value.
Are you going to retire on net worth value? Or are you going to judge your retirement exit strategy based on cash flow value? These are things you must put in place before proceeding to draw your retirement plan. I also want you to know that choosing a financial exit point at which to retire depends on your core value. What you value most will determine how your retirement process will go.
Have you heard statements such as these?
- I will retire when my retirement funds hit $1million
- I will retire when I amass a net worth of a million dollars.
- I will retire when my saving deposits hit $500,000.
- I will retire when the share value I own hit $1million
Whenever I hear such statements, I instantly know that the individual value and intends to retire based on net worth; and I give them a thumb up because they are definite on their retirement exit point. However, I don’t think I will retire on net worth value because I have a different core value.
“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad
It’s my ultimate goal to retire on “recurring cash flow.” Instead of retiring on a net worth basis; I want to retire on consistent monthly or annual cash flow. Individuals who plan to retire on cash flow have a core value different from those who desire to retire on net worth. People who want to retire on cash flow make statements such as these:
- I will retire when my annual cash flow hits $500,000
- I will retire when my dividend yield hits $100,000 annually
The reason I emphasized the need to decide if retiring on cash flow or net worth value is your retirement goal is because your choice of retirement vehicle depends on your retirement goal.
For instance, individuals who plan on retiring based on net worth value will prefer vehicles such as savings, mutual funds, pension funds, investments in gold and silver, fixed deposits and bonds. While those who intend to retire on cash flow will prefer vehicles such as real estate, building businesses and investing in companies that pay consistent dividends.
“Investing in mutual funds is investing at the end of the food chain.” – Rich Dad
“There are fast ideas and slow ideas, just as there are fast trains and slow trains. When it comes to money, most people are on the slow train looking out the window watching the fast train pass them by. If you want to become rich quickly, your plan must include fast ideas.” – Rich Dad
I intend to retire on cash flow and my plan is to build businesses; reinvest the profits into starting other businesses and invest the cash flow generated from the businesses into real estate.
This is my own retirement strategy and plan; this is how I intend to retire young and rich. I chose this plan and path because it’s suits my goal, aspiration, passion and core value. So find a retirement plan that you are comfortable with; find a plan that leverages your strength and follow it through.
“The moment you make passive income and portfolio income a part of your life, your life will change. Those words will become flesh.” – Rich Dad
6. Identify threats and opposition to the plan
Every plan has its own threats and oppositions; just as entrepreneurs identify business challenges, threats and oppositions to their business plans, you should also do the same to your retirement plan. Identifying threats, oppositions and weaknesses of your retirement plan will help you put a defense strategy in place; it will help you stick to the process unafraid.
7. Execute the plan
“Your future is created by what you do today, not tomorrow.” – Rich Dad
It is one thing to plan but it’s another thing to execute. Every individual on earth has good plans, big dreams and aspirations but only few will dare to give that dream or plan a shot. Just as I said earlier; retiring early and rich is a process and that process has a beginning and an end. Now how can you finish a process without first starting it? It’s impossible.
“Excuses cost a dime and that’s why the poor could afford a lot of it.” – Rich Dad
Executing your retirement plan might entail you learn new skills, expand your thinking capacity and leave your comfort zone; it may also require you invest in educating yourself first. The need and desire to actualize my own retirement plan required I develop my entrepreneurial skills, put up a tough personal standard and become financially intelligent. So whatever is required to actualize your plan; just do it because no pain, no gain.
“A plan is a bridge to your dreams. Your job is to make the plan or bridge real, so that your dreams will become real. If all you do is stand on the side of the bank and dream of the other side, your dreams will forever be just dreams. First make your plans real and then your dreams will come true.” – Rich Dad
8. Stick to the process
You’ve planned and kick started your journey to early retirement but unfortunately, starting does not guarantee success; sticking to the process despite all odds does. There’s definitely going to be obstacles and oppositions to your plan for early retirement; you might feel burned out tomorrow but don’t quit the process.
I’ve been confronted with several challenges since I set the goal to retire young and retire rich; I have had several distractions that sometimes run anti-clockwise with my goal. But as the bible says; the glory is not in the falling, it’s in the rising each time we fall. I have deviated from my retirement goals countless times but I’m always quick to realize by mistakes and get back on track.
So if you share the same goal with me, a goal to retire early and rich; then stick to your retirement plan. Sticking to your plan entails discipline, focus and persistence; once these three keys are locked in synergy with your passion and plan, the sky will be your starting point and you will retire young and rich.