Why I Want To Retire Early

Probably most people will tell you they want to retire early. Visions of sitting on a warm tropical beach, drink in hand, they nod off to the sound of the receding tide cloud their judgement. Early retirement would be great! Unfortunately, you can’t live your life on the beach (well, at least I can’t) and I don’t envision my early retirement being so lazy. I love the beach, but my mind would quickly deteriorate under those conditions. So if the traditional idealized view of early retirement isn’t all it’s cracked up to be, why do it?

Why I Want To Retire Early

Simply put, where most people see early retirement as the freedom to do nothing, I see it as the freedom to do anything. The true goal, then, is financial independence. It doesn’t mean I won’t choose to work on a part-time or even full-time basis, it just means I’ll only do work I enjoy and will have the ability to leave any job that wasn’t personally satisfying without having to consider the practical financial consequences. And I don’t have to wait until I’m middle-age to get there.

Once retired, I will travel. I will take contract jobs for projects that interest me and move on to other projects when the contract expires. I will exercise diligently. I will learn foreign languages. I will write about my experiences around the world (a travel blog, perhaps?). I will blog (and perhaps even earn some non-passive income). In short, I will do everything in life I wish I could do now but for some reason am unable to accomplish. Or at least, that’s the plan.

How I Will Make It Happen

I will formulate a full-fledged early retirement plan in the near future, but the basics of it will boil down to three main points:

1. I will live well below my means – I will have to save and invest a minimum of 1/3 of my pre-tax income in order to retire by 40 (or better yet, 35). More is better, of coure, but 1/3 is an absolute minimum to make this a realistic goal.
2. I will continue cultivating alternate income streams – I have had a fair amount of success the past few years creating a nice online income via blogging and, to a lesser extent, niche mini sites. I will continue growing these income sources until they exceed that of my day job, at which point I will consider managing my online business full-time.
3. I will invest for income – Retiring early necessarily reduces the amount of capital you have to work with since you don’t have as much time to accumulate it. While my focus will continue to be capital appreciation for the foreseeable future, at some point before semi-retirement I will need to figure out how to generate more than the traditional 3% yield from my portfolio. Whether this means dividend-paying stocks, rental real estate, or something else I don’t yet know.