Hey profiteers, in this episode we’re back for week 3 with my Mastermind Hunt co-founder, Sean Merron. Today we’re here to talk about FIRE, or financial independence and retiring early. We touched upon this two weeks ago, so if you haven’t checked out that episode, go ahead and listen to that first. We’ll talk about what you can do to cut your expenses and grow your income, so you can retire in your 40s or even 30s!
What We’re Chatting About This Week
FIRE is a huge movement with a lot of people involved, including Sean. He’s on track for FIRE in his 30s, and today we’re going to pick his brain and get some of his expertise on the matter. Let’s dive into his 3 tips to help you get on track with your own FIRE plan!
Understand Your Expenses
It’s important to know where you are today in order to make improvements for the future. Even more important is accepting where you are today. You have to get over that fear of pulling up your credit card account and seeing how much you owe. So go ahead and pull up all of your accounts, run a free credit report, and understand where your money is going.
Sean uses Mint, which is a free tool you can use to monitor all your accounts and transactions in one place. He categorizes all of his transactions into different budget categories. This will give you a better sense of where your money is going. From here, you can set a budget for each category. Also, check out my guide on how to build your own personal balance sheet to help you track your money.
Get Your Mind Right and Know Your End Goal
Make sure you keep your goal in mind and don’t let yourself get distracted. Also, figure out what your early retirement roadmap looks like. What are you going to do when you retire? Why do you want to retire early? How much money do you need? What will you do with your money? Ask yourself those questions. Once you have your end goal, you can just fill in the steps to get there.
Controlling your emotions is another key part to getting your mind right. For example, if the stock market isn’t doing too well, don’t let it get the best of your emotions. Accept the situation and come up with a plan to move forward.
Accelerating to Pace to Early Retirement
If you are on pace to retire at 65, but you want to retire much sooner, there are a couple things you need to consider. First, you need to consider expenses- how much you will need to retire. Then you have your income- consider how much you can increase your savings towards retirement.
On the expense side, cutting back on your housing costs is a big way to save. Cutting back on utilities and eating out are also great ideas. Since you can only cut back your expenses so much, earning more is a faster way to accelerate your retirement plans.
It’s very possible to retire early with your 401K or Roth IRA savings if you are an employee. But if you are a self-employed business owner, that’s a faster way to retire. Think outside the box, come up with a side hustle to earn more on the side!
Side note: If you’re interested in early retirement, check out this great post by Jeremy Biberdorf of Modest Money. He shares how to use a conversion ladder technique in order to gain access to your retirement funds before age 59 ½ without penalty!
This Week’s Guest
I’m the author of The Early Retirement Roadmap, creator of FIREAgeCalc.com and co-host of The 2 Frugal Dudes Podcast. Once I discovered that I could access my long-term retirement accounts without a penalty before the age of 60 to retire early using my family’s middle-class income, I never looked back. There are so many people that still don’t know this is possible so I’m paying it forward, sharing my past mistakes and priceless knowledge I’ve gained over the years from my finance research and college education to help more people retire early.
I specifically chose not to become a certified financial advisor so that there would be no special interest to sell you products I’d get a commission on that don’t put your best interest first. I call myself a “self-insurance” broker, teaching people how to save and invest their money to tackle any situation with the power of savings. I finally found my purpose and want to help you reach yours through financial freedom.
My family had $80,000 in consumer debt that we were able to pay off in just over one year and now compound interest makes us tens of thousands of dollars per year in passive income. We were living the typical American dream we’re supposed to live before we broke out of the mold and took our time back.