Advice from Mr. Money Mustache who retired at 30 and has been a stay-at-home dad for the past nine years.
For many Americans, the idea of early retirement must sound like a delusion. Our confidence that we have enough money saved for retirement has been at historically low levels according to the 2014 Employee Confidence Survey of the Employee Benefit Research Institute. Although confidence rebounded a little this year, “a sizable percentage of workers report they have virtually no savings and investments,” says the survey.
Meet Pete, a 39-year-old man who lives in Longmont, Colorado. Nine years ago, he and his wife retired at age 30.
Pete writes about personal finance in his popular blog called “Mr. Money Mustache.” The blog gets about 400,000 unique visitors a month.
Here are some bits of Pete’s personal philosophy:
“A bicycle is a money-printing fountain of youth.”
“Nature is indeed free entertainment.”
“My philosophy here is about slowing down, and throwing some challenges at yourself.”
Both Forbes and MarketWatch asked Mr. Money Mustache how he accomplished his early retirement goals.
The main technique to saving a lot of money, he said, was to “buy less stuff.” For example, Pete chose to live within biking distance to work so that he drives less. “Unnecessary driving burns up way more of most people’s incomes than they realize.”
How much money is enough to retire? Mr. Money Mustache said that his hobby on reading stock investing books helped him realize that you need “25 times your annual spending to retire.”
Pete’s advice to people who are worried about their retirement: “The time to reach retirement depends on only one thing: your savings rate as a percentage of your take-home pay. And this depends entirely on how much you spend.”
“So,” he said, “the moment you can learn to live a less expensive life, suddenly the clouds clear up and the financial picture brightens considerably.”
Sources:
How to retire early — 35 years early
How Mr. Money Mustache Retired At Age 30 And How You Can Too
Tags: early retirement, how to retire, how to retire early, retirement
