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How Anyone Can Retire at 32

How Anyone Can Retire at 32

While this may sound like an outlandish statement, this goal remains more than achievable in 2014.

“Sure,” I can hear you say, “you could win the lottery, for example, or inherit a financial windfall from a beloved and wealthy relative.” Each of these eventualities may enable you to retire immediately, while also negating the need for you to ever work again.

While this is true, such a goal can also be accomplished through hard work, frugal living and sound financial planning. This is why early retirement is an option that remains accessible to everyone, although whether you not you choose to chase such a dream is entirely up to you.

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Retirement Age

    Leading by Example: A Template for Early Retirement

    In order to illustrate how this is possible, I will be using the example set by a close family friend of mine. He is now 33 and officially retired last year, although he still likes to invest some of his hard-earned income into profitable ventures and schemes. He no longer works for others, however, and nor does he operate full-time as a freelancer or independent contractor. This is a dream that he pursued relentlessly and strategically from the time when he was studying at university, as he decide at the age of nineteen that he had no desire to work full-time within a soulless corporation.

    The exact inspiration for this life goal is unclear, although he was obviously influenced by the experience of his parents. They toiled hard for an entire generation; retired in ill-health at 65 and barely had enough money to live the comfortable life that they deserved. He drew great inspiration from this, and vowed not to give so much of his life in pursuit of such intangible returns. Instead, he developed a clearly defined and fast-tracked plan for financial independence, which would begin in earnest at the age of 22 and ideally end with his official retirement a decade later.

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    As he was studying marketing, he initially decided to combine his studies with freelancing as a content writer and online consultant. He started during his second year at university, and spent 9 months or so developing his reputation and working for relatively low levels of remuneration. In year 3 he increased his client range and fees, however, and set out to earn £48,000 per annum after taxes during this 12 month period and repeat this throughout the following decade. While this figure was conservative, he would at least be able to avoid VAT liability and higher tax rates in the process.

    Execution and the Importance of Frugality

    In real terms, this plan translated into spendable income of roughly £4,000 per month. This is where the execution of the plan came into play, as he deemed it realistic to save an estimated 70% of this monthly income into a high-yield savings or investment account. The remaining 30%, or £1200 in simple terms, would be used to live on and settle all outstanding bills. This worked seamlessly during his final year of studying, and by the end of this, he had managed to save an annual total of £33,600 at a generous interest rate of 8%.

    Once he had left university, he found it far more challenging as he faced a constant struggle to keep living costs down. Although having just under £15,000 per annum to live on is far from ideal, he felt that his ability to adopt a frugal lifestyle would ultimately determine whether or not this could be done successfully. So he quickly began to minimize costs, initially by moving back in with his parents temporarily and accessing real-time promotions to cut everyday costs, such as food, beverages and those associated with energy consumption.

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    As the years progressed and he continued to hit his savings targets, so too he developed even more frugal living measures. These included embracing the thrift market, and investing in second-hand clothing and accessories. He also decided to travel exclusively on public transport, even cycling or walking where routes and distances permitted. Over time, his seemingly far-fetched dream became an actionable and strategic plan, which quickly evolved thanks to patience, discipline and an ability focus on a single-minded goal.

    How to Use This Lesson to Fund Your Own Retirement

    By the age of 32, my close friend had managed to save £33,600 at a fixed interest rate of 8% for 11 consecutive years. This had created cumulative savings of more than £520,000, which could then be used to fund his retirement and achieve life-long financial goals. Almost immediately, he plowed £150,000 into a modest but functional home of his own, and distributed £300,000 across various investment savings accounts with interest rates with variable risk and interest rates of between 6 and 8%. He then used the remaining £70,000 to create an investment portfolio that included shares and other derivatives, and strived to turn this into incremental profit over time

    He is now enjoying the fruits of his labor, and lives comfortably while having the power to determine when and how he invests. This is a template that can easily be followed by anyone, although each individual must apply their own interpretation and translate this into a retirement plan that suits you. It is imperative that you visualize your retirement and determine exactly what you want from it, before implementing a viable time frame and actionable strategy. You may not wish to invest your capital once you have officially retired from work, for example, which means that you may need to save for longer and create a large fund to live on.

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    Another key lesson to learn is the importance of frugality, which is crucial if you are to turn a seemingly fanciful vision into a realistic and achievable goal. As this example proves, early retirement of any description is only possible if you remain focused and are willing to make significant sacrifices with regard to your lifestyle, as otherwise you will be unable to save the requisite amount for the required period of time. Without a commitment to frugal living, you will be forced to work longer and delay your individual retirement plans.

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    Published on November 8, 2018

    How to Answer the Tough Question: What are Your Salary Requirements?

    How to Answer the Tough Question: What are Your Salary Requirements?

    After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

    But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

    Unfortunately, this is the wrong approach.

    Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

    Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

    Of course, you can’t command a high price without bringing value.

    The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

    1. Hack time to accomplish more than most

    Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

    With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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    Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

    Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

    For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

    Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

    It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

    2. Set your own boundaries

    Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

    Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

    Here are some important traits to consider:

    • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
    • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
    • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

    These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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    3. Continuously invest in yourself

    Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

    You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

    Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

    Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

    Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

    It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

    4. Document the value you bring

    Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

    To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

    A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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    Here are some ideas:

    • joesmith.com
    • joeasmith.com
    • joesmithprojects.com

    Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

    During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

    5. Hide your salary requirements

    Avoid giving you salary requirements early in the interview process.

    But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

    The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

    Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

    6. Do just enough research

    Research average salary compensation in your industry, then wing it.

    Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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    Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

    Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

    7. Get compensated by your value

    Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

    Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

    Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

    You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

    The bottom line

    You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

    You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

    Featured photo credit: LinkedIn Sales Navigator via unsplash.com

    Reference

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