Retiring early is not for the faint of heart, but it should be the goal of everyone out there.

By working hard and living frugally, you can save and invest enough money to retire in your 30s or 40s.

There are several advantages to this:

  • You can finally work because you enjoy the work you do and not because you have to.
  • You will retire early enough to finally go and do the things you enjoy such as travelling.
  • You will not have to rely on social security when you finally hit 62.
  • With the right amount of savings, you can continue living your lifestyle well into your old age.

Even though it may sound like a pipe dream, early retirement is quite achievable.

Jacob Lund Fisker coined the phrase “Early Retirement Extreme” and he retired at the age of 33. Another success story is that of Mr. Money Mustache who retired at the age of 30. This begs the question, ‘How do you do it?’ Well, here are 6 steps to get you there:

1. Cut Down on Your Expenses

Do not live within your means but below your means.

You don’t have to be earning millions to retire early.

You just need to keep your expenses low and save much more than most people do.

This money should then go into your retirement savings.

2. Experience Frugal Living

This does not mean taking all the joy out of life, but making certain sacrifices in order to reduce costs.

It may mean making your own soap, shopping a little more carefully for the lowest price without sacrificing on quality and the like.

Differentiate between your wants and your needs.

3. Get out of Debt or Minimize Debt

You need to get this down so that you can free up your money to go into savings and investments.

The average saver puts away 5% of his income annually, you need to save much more, between 30% and 50% or higher every year.

4. Increase your Income

If you are finding it difficult to lower your day to day expenses then you should go the other direction and increase your income.

You can negotiate your current salary, save a percentage of your annual raise, or get a side hustle to make extra income.

5. Make Wise Investments

This may take some research on your part in order to find out where the good investment deals are.

Have about 33% of your net worth in cash and the rest in a variety of investment vehicles.

Be sure that you select something that works based on your age and how well you tolerate risk.

6. Execute your Plan

Your plan is a working document, so be open to making adjustments as you go.

Always remember your goal and then stay passionate about achieving early retirement.

If there is something out of whack, find out what it is, carry out some research and then carry out your new idea.

What you are looking to do is not what the average Joe is doing. Most people would not ever consider extreme early retirement but are trudging through life accumulating debt, saving their 5% and hoping that the government will take care of them in their old age through Social Security. As such, you need to think differently and out of the box with your eye steadfastly on the prize.

A frugal existence is not a miserable existence and there are plenty of rewards in the end. In addition, you get to watch your nest egg grow year after year until you can finally retire to do what you love.

Retirement planning is something that each person must consider and if you are a couple, you should sit down together and work out what it will take to retire young and rich. The main goal though, is to ensure that once you are retired, you will be able to maintain your standard of living, or live better than you do right now.

Unfortunately and sadly for most people, when retirement comes knocking they will have to adjust their lifestyle downwards since they do not have much in retirement and social security is all they have.

About the Author:
Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He regularly writes for blogs at MoneyForLunch, Biggerpockets, SocialMediaToday, NuWireInvestor & his own blog for Self Directed Retirement Plans. He writes about topics related to retirement planning, investing, and securing future.