For professional skiers the best time to retire is when they start to go downhill. But what about the rest of us? Well for most people the question isn’t at what age we should retire, it’s at what income. 😉 People who want to retire early seem to have a clear and consistent focus to grow their wealth so that it can provide them with enough passive income to sustain their lifestyles forever. This can be done through a number of ways such as reducing living expenses, increasing income, and making high investment returns. 🙂
I recently read a CNBC article that featured a couple, Carl and Mindy, who retired in their early 40s with a million dollars. And they did it pretty much the same way as most other early retirees.
In 2012 the husband-wife duo with 2 kids already had $570,000 saved up. But they were inspired to retire early so they set a clear goal to build a portfolio of $1 million and no debt. And earlier this year in 2016, they have accomplished their dream. 🙂
The CNBC article suggests that “anyone can do the same — and you don’t have to be an investment banker raking in millions. All it takes is smart decisions along with intelligent saving and investing.”
Here are some steps the couple took to reach their financial goals.
- Track spending – “My wife and I wrote all of our expenses in a book,” says the husband.
- Live in an affordable location – The couple resides in a low-cost area in Colorado, and lives on $2,000 a month for the whole family. They mention this would not be possible in San Francisco or Manhattan.
- Cut bills – “I learned that you don’t need a lot of money,” said the wife. “My quality of life has not changed since we became laser-focused on cutting out our expenses. I don’t need the cable TV. I don’t need a super-expensive phone plan. I don’t miss all this stuff because it didn’t really add to my life,” she said.
- Invest in appreciating assets – The couple bought a $176,000 fixer upper home that they estimate is now worth over $400,000. They also I bought 2,000 shares at Facebook at $30 a share which is now worth around $120 a share!
- Consistent savings – They’ve continuously put away $2,000 per month into their investment portfolio.