We have three main resources in life: our time, our health and our money and out of this we have to construct happiness. When you’re younger you need to earn money and you have an abundance of time and you are in good health, and you are more than happy to trade time for money on someone else’s terms. But as you progress through your life continuing to make this trade, our time and your health will start to become your most scarce resources and there will become a point where continuing to work is actually costing you far more in terms of its impact on your mental and physical health, your happiness and your finite time. There are many reasons to retire as soon as possible, but I believe this is a very compelling one.
Picture this: a world where time is your most precious asset, and you have the autonomy to allocate it as you see fit. To retire as soon as possible will open the door to a realm of possibilities, allowing you to explore passions long relegated to the sidelines, travel to far-flung corners of the globe, or simply revel in the serenity of a quiet day spent pursuing hobbies that truly ignite your soul. It’s not merely about escaping the daily grind; it’s about embracing a lifestyle that prioritizes experiences over possessions, moments over meetings. The choice to retire as soon as possiblre is a radical declaration that your life is too valuable to be confined within the walls of an office, and that your potential extends far beyond the boundaries of a traditional career.
Imagine a life where each day is not a countdown to the weekend, but a canvas upon which you can paint the masterpiece of your existence. Early retirement isn’t just a luxury for the financial elite; it’s a strategic move that can redefine the very essence of your existence. The idea of retiring as soon as possible, once considered a privilege reserved for the affluent, is now gaining traction as a viable option for individuals seeking a more fulfilling and balanced lifestyle. This is the essence of the Financial Independence Retire Early (FIRE) movement.
I want to show you why you should retire as soon as possible.
Reason number one is time. We have already recognized that time may now be your most precious resource (or you may be more likely to run out of time before you run out of money). Is time the true currency of life?
If you don’t value your time that highly then you need a passion project or two to get you motivated.You need a stronger purpose in life that will make you feel more connected to the world around you.
Identify the things that are important to you in life and how much time you are currently allocating to them. If you want to spend more time doing the things that you love with the people that you care about then do something about it, instead of just plodding along not realizing how much those extra years of work are really costing you. There is a huge opportunity cost to working for an employer on their terms in your 50s that might exceed any financial rewards.
Retiring as soon as possible liberates you from the constraints of a 9-to-5 schedule, allowing you to reclaim your time and allocate it according to your own priorities and aspirations.
This newfound freedom opens up a world of possibilities. Whether it’s pursuing hobbies long neglected, embarking on travel adventures, or simply enjoying leisurely mornings without the pressure of deadlines, early retirement empowers you to savor the present moment and craft a life aligned with your true passions.
Reason number two – investing opportunities. You can lock in to some fantastic dividend yields from dividend hero investment trusts that have increased or maintained their dividends each year for twenty or more years so that includes things like the global financial crisis. A yield of 4% is possible which is in line with the maxim of living off 4% of your wealth. This is true passive income.
This is a set and forget portfolio but you need to research it thoroughly before you invest. See my portfolio coaching for more information.
Reason number three – worries are often unfounded. The future is uncertain it always has been. Stock market indices in the developed world have always recovered even though it might be the case that the components of those indices have changed dramatically. You need to act with certainty in an uncertain world to minimise turbulence in your wealth.
It is natural to fear the unknown. Retirement can be seen as step into the unknown as we leave the comfort of our employer, their structure and their remuneration behind.
Stepping back and gaining a broader view can help put worries into context.
But we have great coping mechanisms, we can handle most of what is thrown at us. We are natural problem solvers.
Reason number four – to retire as soon as possible is that you need to set better goals. Arbitrary goals like retiring when I’m 60 or, when I have £700 thousand mean nothing. Age is just a number and money is just pieces of paper (or plastic) that ebbs and flows in and out of your life. Waiting a couple of years won’t achieve anything.
Retirement is much more about having a growth mindset. This refers to the belief that one’s abilities and intelligence can be developed and improved over time through dedication, hard work, and learning. When you fully understand this then retiring as soon as possible becomes less daunting.
Reason number five – you are probably in a much better financial position than you think you are. You have a state pension to draw on. You have pensions from past employers that you can take control of consolidate onto a lower cost platform and manage yourself. Your spending in retirement will probably fall in real (purchasing power) terms over time, particularly in your later, less active, years of life.
Taking all this into account you might be able to retire at an ealier date than you think, particularly if you are able to monetize a hobby in retirement.
A retirement calculator can help you visualise what retirement would look like for you. It can give you the confidence to take the leap from the corporate world into a happier and more fulfilling life. For more details click here.