Written by: Jarod Anderson, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
How would you like to shave about five to ten years off of your retirement age? Have you ever stopped to consider why you don't have much say about when YOU retire?
After about ten years of work, I knew there was no way I make it through the traditional 30 to 40-year career span. It felt like someone had already been planned out the bulk of my life and left me a few years discretionary years in retirement. Something about that didn't quite sit right with me.
When I reached a place that I started feeling burnt out and unfulfilled, I knew I had to search for a new direction for my life.
I had seen far too many people struggle to make it to retirement only to find out they didn't have the money or the vitality to enjoy the lifestyle they had worked so hard to obtain. I wasn't willing to take that chance. I went in search of the path less traveled.
I discovered that the biggest obstacle to uncovering a new path was unlearning some of the things I was taught growing up about work, time, money, and retirement. Once I began challenging these old beliefs, I saw retirement differently and subsequently began to think about how to creatively achieve financial independence as opposed to retirement.
Below are four commonly held beliefs I had to unlearn before being open enough to pursue a pathway to early retirement.
1. Retirement is determined by how many years you work.
Let me ask you a question: If someone gave you a million dollars, would you continue working? Chances are you wouldn't. Why? Because you have enough money to secure your financial present and future. Retirement has nothing to do with the number of years you work. Instead, it has more to do with having enough income, savings, and investments to secure your desired lifestyle in retirement.
The challenge is, there are no guarantees you won't get laid off, fired, burnt out, or experience a recession in the markets. That's why it makes more sense to pursue financial independence. If you can generate enough extra income in addition to your salary, you can position yourself to retire whenever you please. Once I understood this, my retirement goal became a financial freedom goal
2. The end goal of working is to save enough to retire.
What good is it to work your whole life and still not have enough to live your desired lifestyle upon retirement? Instead of pressing your way to complete 40 years of work, give your attention to generating as much income as possible in your working years so you can invest and begin compounding your money.
This is clearly better than just putting all of your money away in a retirement account. Ideally, you would save your work earnings and invest extra income your garner from a business or side hustle. This gives you a snapshot of what type of pay you could expect in retirement. Wouldn't it feel good knowing you would have more than enough coming in "before" it was time to retire?
3. Living from one stream of income.
Going to school, getting a degree, and then selecting a career pathway conditions you to accept one means of compensation. This may have worked for the Baby Boomers, but times have changed. Pensions are a thing of the past, layoffs and inflation are sky high, and retirement savings are subject to stock market fluctuations.
That's why I believe multiple streams of income are vital in today's economy. Isn't it funny how we were taught NEVER to put all of our eggs in one basket, yet that is precisely what we do where our jobs and retirements are concerned? Multiple streams of income are your hedge against the uncertainties of your job and life.
4. Focusing on saving at the exclusion of aggressively investing.
If all you are doing is saving money, you are losing money. Why? Inflation is eroding the purchasing power of fiat currency every day. When I was a kid, I could go across the street to Handy Dan's and buy a Snickers bar for $.42. Now, I can't even purchase a stick of gum for that price.
Money is losing value, and if you are only saving, inflation and interest on debt are eating your money. Now, I am not implying you shouldn't save, but I am saying that you have to couple it with some smart investing to outpace inflation. And I don't mean just giving all of your hard-earned money to someone else to invest for you. You should be actively engaged with your financial numbers and investments.
Of course, I would love to share much more with you, but I think you get the picture. If you desire to take your pursuit of retiring early to the next level, I invite you to join the Early Retirement Challenge with me.
Jarod Anderson, Executive Contributor Brainz Magazine
Jarod Anderson, also known as "The 9-to-5 Exit $trategist" is a mindset coach and author who challenges and empowers working professionals to live financially independent of their 9-to-5 by changing how they think. After getting laid off from his first job, Jarod knew he had to script out a different direction for his life because the "go to school and get a well-paying job" path would not position him to live the lifestyle he desired. Hence, he committed to changing his mindset about education, work, time, and money so he could one day be in a position to live independent of and ultimately leave his 9-to-5. Jarod officially transitioned from his 9-to5 in June of 2021 and now spends his time showing others how they can do the same through his courses, books, and coaching programs.