I retired at 52 with a $3 million net worth — here's my best advice to stop working in the next 10 years by ESI Money on Jun 12, 2017, 4:49 PM Advertisement
 I love featuring other people's early retirement strategies. The following post is by ESI, an early retiree from ESI Money, a blog about achieving financial independence through earning, saving, and investing. Before we begin let me introduce myself so you know I haven't just fallen off the turnip truck. I reached financial independence in my 40's and eventually retired last year at 52. My assets are arranged so that I'm living off the income they provide — not having to draw them down. So, in theory, they will last forever. My 30-year march to retirement had its ups and downs. I made some great moves and missed others big-time. With the benefit of hindsight, I'll share what I consider to be the key steps to retiring as soon as possible — taking the best of what worked for me combined with what I wish I had done differently. Afterward, I'll give an example of how these steps can play out in the real world. The ESI scale My site is called ESI Money because it focuses on the three areas that drive financial independence: earning, saving, and investing (ESI). As you might imagine, the more you do of these three, the faster you'll get to financial independence. But "do more" as guidance is a bit vague and doesn't provide a clear path to retirement. To reach early retirement you'll need to get specific and determine what level of commitment you can make to each of the three steps, then make a plan to work on those. There are many paths that can get you home, so consider where you can make headway and where you'd rather pull back a bit. The following steps in this post are ones I think give the best chance for quick success, but you'll need to determine whether or not they fit your lifestyle. SEE ALSO: I retired at 52 with a $3 million net worth — here are the 10 worst money mistakes anyone can make Step 1: Create a retirement budget Before you climb a mountain, you size it up. The retirement equivalent of that is setting a post-retirement budget. You need to know what you want to spend in retirement in order to understand what you’re shooting for. Once you do, you’re off to make it happen. If you have a budget now (and the longer you’ve had one the better), setting an estimate should be easy. Developing my retirement budget was a breeze because I had over 20 years of spending data in Quicken. I knew exactly what our family required in every category. Yours will be equally simple if you’ve been keeping a budget for at least a few years. If you haven’t, you’ll need to start from ground zero. You should develop a budget for the next year (we’ll use it more in a few steps) as well as draft an estimate of your retirement spending. The best sources for spending estimates will be bank and credit card statements.
Step 2: Work to grow your career Here are two great pieces of news about your career: • Your career is your largest asset and is literally worth millions of dollars • There are proven actions you can take to make it worth millions more No, I am not over-stating the value of your career. But I am emphasizing it because a career is the engine that drives the early retirement train. There are seven steps that will grow your career and help you earn higher than average raises. The good news for you is that you can start these right away. It took me a couple decades to learn some of them and I was still able to earn over 8% annual raises during my 28-year career. Here’s how to get a raise. The younger you are, you’ll have a big head start on me and thus have the potential to perform much better. Review the seven steps and develop a plan to put them into action. Your bank account will thank you.
Step 3: Scour your budget for savings As your earnings grow, also look to increase the gap between earning and spending by regularly updating and reviewing your budget. As you become more familiar with it and see how the money is flowing out, you’ll be able to identify steps to maximize your savings rate. I recommend reviewing your budget and making adjustments monthly. This is what we did and it was quite effective. By this process of regular review and changes, you’ll ensure your budget is efficient as possible.
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