It is a brand new year and a lot of people are going back to work with a slightly depressed feeling in their gut. This is completely normal after weeks of vacationing and is not something to worry about.
However, many people have thoughts of retirement on their mind. They just can’t wait until they can stop worrying about money and start enjoying life to the fullest. Although retiring at 65 or 70 may be the norm, that doesn’t mean it’s for everyone. Here are four hacks that millions of people use each year in order to retire as early as 30.
1. Real Estate
Real estate is likely the number one way that people plan a successful retirement. If done correctly, real estate investments can make money now, and continue making increased amounts of money for the rest of your life.
You don’t have to be rich enough to own an apartment complex either. It can start with one small, single-unit rental and expand from there. Every state has areas where rent is more than the average price of a mortgage. Simply find where that is in your state and start looking.
Financing real estate is also significantly easier than most people realize. There are dozens of tips and tricks that people can use to get cheap real estate properties at almost no cost to themselves. Most people don’t invest in real estate simply because they never take the time to learn.
Imagine if you could invest money, and double your investment overnight. Who wouldn’t take advantage of something like that? As crazy as the concept sounds, that is exactly what a company-matched 401(k) is. You put in a portion of your paycheck, and your company will contribute the same amount. In effect, you have doubled your investment, something that normally takes 7-10 years.
Take full advantage of any 401(k) offerings your company allows. They will manage all of the asset allocation and investing and you simply tell them how much of your paycheck you can afford to invest (up to a point).
If you do not work at a company that offers a 401(k), as many don’t, then there are other options as well. One of these is called an IRA. The benefits of IRAs are mainly taxes and compounding your investment. You can open an IRA anytime after you turn 18 and don’t have to have a perfect understanding of investing to do so. Simply choose a stock broker (there are quite a few) and then sign up for an IRA. You can set it to pull a certain amount every month. With many brokers, they will also do most of the investing for you. You simply tell them your age and when you plan on retiring, and they will invest in funds that are proper for your current situation.
It is important to have your money in financial markets (like stocks) because of compound gains. Compounding gains are essentially a way to make your money increase by 10 percent each year. This means $500 invested today can be worth $5,000 by retirement if invested correctly.
4. Start a Business
One of the best ways to retire early is to start a business that can be your cash cow. Many people make significant amounts of money for the rest of their life through extremely boring business ideas. For example, someone can purchase fabric at a discount in China, sell it to people in the U.S. via Amazon, and pocket the difference. It isn’t sexy, but it can be completely automated and can make plenty of money. There are many different online classes that teach people how to do just this thing.
The key for all of these is motivation. Set a plan for how you want to retire early and then write down the specifics. Figure out what route you are most interested in and then make it happen. It will be worth it someday!