Retire in your 30s, 40s or 50s

You don't have win the lottery or receive a big inheritance. Money magazine interviewed seven people who are getting financial independence on fairly average salaries.

"They are followers of the popular personal finance FIRE movement (financial independence retire early)" who are saving rigorously, investing sensibly and enjoying a modest lifestyle.

The article describes the FIRE movement as "the opposite of working flat-out through-out your life, piling on debt, living beyond your means and consuming voraciously."

"While most Australians rely on drip-feeding their ... retirement account FIREs are aggressively saving much more outside super."

So who are these people doing it so well?

Kate is 22, aiming to retire at 40.

Pat (32) is on track to retire at 35.

Dave retired at 28 having left school in year 11

Leo (34) and Alisha (32) will retire this year on 90k/year

Serina (48) retired at 46 with a family on 60-70k/year

Jason (48) is nearly at his 90k/year goal

Joanna retired at 51 and lives on 18k/year. She can afford more but hasn't needed to - so her savings have even grown 20% in retirement.

What do they all have in common?

Saving. While they each invest differently the common factor is simply that it's very achievable to live on way less than your earn.

By investing the savings these people are getting (or have gotten) to the point where their money is generating more than enough to live on.

Comments

How to waste a year's wages

A friend recently asked me why it is that so many people (on good incomes) are struggling to save. Often the big three money areas are housing, transport and food. In one sense these are necessary items. But what we spend on them is often way more than necessary. I crunched some numbers on how much extra my wife and I could spend on these things - if for some reason we wanted to burn our money. 1. Housing Our apartment is fairly nice, but also cost-effective. I've mentioned how choosing it saves us $1,800 per year , compared to a similar one we saw. The high end of 2-bedroom apartments in our suburb is $305 per week more than our apartment. Not $305 per week. $305 per week more than ours is. I cannot get over that. Sure it's new and modern-looking, but that's a lot of money. It's an extra $15,860 per year above what we pay. 2. Transport The Australian Automobile Association lists the costs of owning and running a car. It includes many often-overlooked c...

How much super will we have?

Will we be OK in old age? How much will we have? One of the great things about living in Australia is superannuation. Our employers are required to pay into an investment account for our retirement. In recent times, my wife and I have been in several conversations with friends who are wondering (or worried) if their balance will be enough. That's what inspired this article. Great question It's a great question to ask, especially around the age of 35 to 40. At that point, old age is less of a distant abstract concept. It's becoming a medium-term reality. At 35 the number of years of living off super is possibly more than half of your remaining years. At 40 you may consider yourself about half way through your working life. Looking at your balance, it's easy to think that twice that balance may not be enough. Read on, because I have good news for you. It's better than you might think As I've mentioned in earlier posts, compound growth means the investment grows f...

Why millionaires don't "feel" rich

We're wealthier than ever - so why don't we feel like it? Australia has gone almost three decades without recession. The stock market recently hit a record high. Our wages are record highs. Home loan rates are at record lows. We live in one of the richest countries in the world at the richest point in history. So what's wrong? Comparison Wealth is relative. So what do we compare to? Where we expect to be? "When your wages growth is only 2 or 3 per cent, you don't feel as well-off as when it's going up 10 per cent. That's that nominal distortion that people often suffer from" , says economist Shane Oliver, and that "expectations have grown a lot faster than reality." We're earning more than last year, but we want even more. So compared to our imaginary situation, we see ourselves as worse off. What we see around us? Shane Oliver again. "If you think about it - Australians today are a lot wealthier. They're living far ric...

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