Some people love their job and going to work each day is a reason to wake up bright-eyed and bushy-tailed. The thrill of the task at hand excites them and keeps them busy with to-dos, meetings, and projects. They will likely retire someday, but the urgency isn't forcing them to cross the days off the countdown calendar.
Then there are those folks who cannot wait until retirement rolls around. The 9-to-5 has gotten stale, stress is through-the-roof, and they relish in the day when they can sit on their back porch, lemonade in hand, with their days free for whatever life may bring.
However you may feel about working, the idea of retirement has surely crossed your mind at one point or another. As great as your job may be, retirement sure sounds dreamy. And if the last time you'll clock in will be as exiting as getting your first paycheck, retirement seems like a trip to paradise.
While the average age of retirement in the U.S. is 63, some people have the luxury of retiring sooner. And retiring early, while not commonplace, certainly has its perks. Here are three benefits of retiring ahead of the curve.
Improved Mental Health
While working keeps our minds active, it is also a major source of stress for many. Not to mention the tension of working with people we may not agree with, pushy bosses, demanding schedules, and commuting chaos. These things will be over and gone come retirement.
As per The Motley Fool, "More than 50% of Americans consider themselves unhappy at work. Of course, unhappiness comes in varying forms and degrees, but if your job is a major source of stress, retiring early might actually be a smart move health-wise."
You'll also likely get more sleep, keeping you on the ball and invigorated. You won't be as cranky or short-tempered, creating a more mentally-sound you. De-stress, decompress, and delight in your mental health boost while your mind is still young and sharp!
Time for Personal Interests
After a long day at work, there is little time left for hobbies, passions, and non-work-related goals. Although you may have weekends and a bit of free time after work to pursue personal interests, your job usually comes first. You need to make money, and that trumps tending to your garden, hitting the free weights, or brushing up on your Spanish. Travel is limited to set vacation days and you can't practice with your church choir if rehearsals are at two in the afternoon on Wednesdays.
According to U.S. News & World Report, "Having free time when you are still relatively young is better than having those same hours when you are older. An early retiree will have more energy to travel, perhaps live in exotic places and try out physically demanding new hobbies. Maybe you will find a new hobby that ends up turning into a lifelong passion."
You may even want to start a new career. As Investopedia notes, "If you dream of switching fields or starting your own business, sooner may be better than later. You'll be a more desirable job candidate to many employers the more years you have ahead of you. And if you want to be your own boss, you'll have more time to get your business off the ground."
Improve Relationships… and Form New Ones
More hours at home means more quality time available to spend with family and friends. Reconnect with people you have not seen in a while, bring back the romance with your partner, and give your kids an opportunity not many have by being there day in and day out as they grow.
U.S. News & World Report adds, "Not everybody can make it out during the week, but don't underestimate the number of people who don't work on a 9-to-5 Monday to Friday schedule. You will find new people to socialize with in your area who have similar schedules."
Most importantly, you can get to know yourself all over again. When focus is shifted from work to retirement, you can take a deep look inside and rediscover what makes you tick. Doing this earlier in life can leave you with fewer regrets that you didn't live up to your full potential on your own terms.
Would you retire early if you could?
While it's possible to be frugal with many aspects of your lifestyle, there are certain events and possessions that will require you to spend a substantial amount of money. Thus, a wise course of action is to begin saving well ahead of time while thinking about your goals for the future. This way, you'll be able to maintain a stable financial state even when faced with those large expenses. The following are a few major life purchases that you should plan for.
Marriage is a joyous occasion that many people look forward to. However, a wedding can be quite expensive, often costing thousands of dollars. Your family and your future spouse's family will often contribute to covering this, but you should still prepare to spend a good deal of your own money on the ceremony. If you're in a serious relationship and are considering marriage, you should plan where the funds for the wedding will come from and take the necessary actions to accumulate them. It's also crucial to discuss financial matters with your partner, since your property will merge once you get married.
A New Car
Automobiles remain one of the top modes of transportation. As a result, you may want to purchase a new car at some point in your life. Although you may be fine with an old or used vehicle at present, you may one day be motivated by a desire to acquire something nice for yourself or by the practical needs that arise as you raise children. Whatever the case, obtaining a new car is a major life purchase that you should plan for.
In addition to setting aside funds to eventually put towards a vehicle, you should also aim to build you credit score. This is because your credit score will determine your available car loan options. The higher your credit score, the more you may be able to lower your interest rates on your car.
Owning your own residential property is a worthy objective that you may hope to make a reality one day. Ideally, you should save about 20 percent of the total cost of a house before you buy it. This will allow you to make a larger down payment and thereafter face less interest on your mortgage.
As with acquiring a car, the mortgage options that you'll have can change based on how strong your credit score is. You'll want to increase your score as much as possible in the years leading up to buying a house so that you can get more favorable interest rates. In addition to contemplating down payments and mortgages, you must also remember that you'll need to deal with property taxes, insurance, maintenance and repair fees, and sometimes homeowners' association charges.
It's also necessary to hire a real estate agent to help you with the buying process. There are different types of real estate professionals. You should know how to distinguish between buyer's agents and seller's agents so that you can obtain favorable prices on homes as well.
Many people live together before getting married and have begun the process of combining accounts and sharing responsibilities. However, some people wait to do this only after marriage, and others wait until they're married to live together. Whichever path you've chosen, it's still crucial to know a few tips to manage money together as newlyweds to determine where you should begin and how you can remain on the same page.
Discussing Money Motivations
As we begin to share money with our significant other, we soon find out what one person may rank as a priority regarding money and the other may not. As such, sitting down and discussing money motivations is important. Two people who cannot agree on how to handle money may cause serious issues. This should include:
- How to deal with money following payday. Is a percentage put into savings? Is that the day to splurge on dinner, drinks, and more?
- The frequency and size of payments made to debts. Some people like to pay minimums, whereas others pay in full or make double payments.
- What do you each consider money well spent? Is it a new 70" 4K television? Is it an investment? Is it paying as much debt off as possible?
- How do you go about consulting each other before making purchases over a certain amount?
Establishing Financial Goals
After you evaluate the motivations behind your money and how it should be spent, you'll need to spend time together hashing out financial goals. As newlyweds, there are certain things on your list that you're going to want to save for. How do you go about that? How much of each paycheck will you dedicate to a particular fund?
Some things in the future worth making a financial plan for include savings and paying down debts. This is the time to be honest about your current financial standing. If you're looking to buy a home, you'll want to assemble a first-time homeowner financial checklist to begin to develop topics of conversation. Some of the things to consider setting goals for are:
- Student loans
- Car loans
- Future children
- A house
- Medical bills
- Delinquencies on credit reports
- Vacation and rainy-day funds
- Emergency funds
The more honest and open you can be with each other about the money you have and now the debts you share, the better. Implementing plans for the best ways to have the things that you both desire while still taking care of existing demands is important. These can be uncomfortable things to talk about; however, these conversations are necessary.
Following these tips to manage money together as newlyweds will allow you to have a starting point for conversations that can be tough to start. The sooner you and your partner get on the same page with finances and the responsibilities that come with them, the easier the transition will be and the sooner you'll find success.
It's the dream: money you can count on to keep rolling in, even while you sleep.
Passive income isn't entirely passive, of course. You'll put in work up-front to get the profits rolling, so don't relax in your recliner just yet. But with so many potential sources of passive income available to you, picking one or several will mean that the day you can finally kick back will draw steadily closer.
Real estate is a tried-and-true wealth builder for a simple reason: people will always need somewhere to live. Research the market in a growing community until you know a good deal when you see it. You can maximize rent by fixing up a deteriorating property or upgrading a mediocre one. The key is to hire a property manager to do all the day-to-day landlord duties for you—and you'll need a good one. Smart investors put their profits in another property and repeat the process until they have a diverse portfolio.
A YouTube Channel
You can start a blog if you're more comfortable hiding behind a computer, but consumers are more likely to prefer video content. Post a series of “how-to" videos to answer questions about whatever you're an expert in.
You can put up any content you want, but if you don't want to commit to regularly updating it, focus on “evergreen" topics that will draw clicks for eternity. Ads will create your income, especially if your channel grows in popularity. Better yet, sign up for affiliate marketing. If you recommend a product and provide a link to buy it, you'll get a small percentage of those transactions.
If you don't mind vinyl-wrapping your car with an ad for a company, you can get cash just driving around and running your errands. Make sure you contact a reputable company that doesn't ask for any money from you; if they're the real deal, they'll evaluate your car, your driving habits, your area, and more. Bonus: the brighter the ad, the easier it'll be to find your vehicle in the parking lot.
What's something that people will pay for but doesn't require shipping on your part? Finding that item is what can supplement your income indefinitely. Write an e-book, charge for your cross-stitching patterns, design prints that people can digitally download, invent an app, record a “masterclass," or whatever else you want. Every time someone new discovers it, the cash register rings. With a little more effort, this is a potential source of passive income for you that can continue to grow. Once you build up a customer base, they might want more products. The good part is that it's up to you whether you wish to give it to them.