The Road to Early Retirement
Let's face it, we all dream of retiring early and enjoying the fruits of our labour. Be it at age 35, 40 or 50, retiring early requires essentially the same kind of planning. According to Bryan Borzykowski, personal finance writer and editor, retiring early isn't nearly as difficult as we think. With some careful planning and a good savings regime, you will be well on your way to making your dream a reality.
Borzykowski suggests the following five steps to help you achieve your goal:
1. Save, save, save
In order to retire early you need to have enough money and this means aggressively putting money aside in a separate account. You still need to cover your current living expenses but anything beyond that should go into a retirement account.
2. Invest in equities
Saving money is one thing, but your money has to grow, too. Playing the stock market can be tricky, but it really is the only way to build up enough wealth to retire early and comfortably. Consider putting your money into dividend-paying companies and then reinvesting those payouts into more stock.
3. Use your RRSP
Making contributions to your RRSP gets you a nice refund cheque. If you want to retire early, put that refund back into your retirement account. More savings=more stock.
4. Be cheap
Cut out things like restaurant visits, new cars and designer clothes. Use your local library to borrow books, magazines and DVDs. Try using Groupon, Craigslist and discount grocery stores to get better prices on the stuff you need. Retiring early means making sacrifices now.
5. Create the perfect plan
Create a plan and stick to it! Keep an eye on your investments to make sure they are performing the way you want them to. Your early retirement plan should help you save enough money each month to reach your goals.
Retiring early isn't for everyone, but if that is your goal and you don't know where to start, check out these helpful books and DVDs (for free!) at the library:
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