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How to Save for Early Retirement

By The Lynx | Life Lynx | 30 Jun 2021

I am on a pathway to save for early retirement. I have a plan and I am sticking to it. I know that I may have to move the goalpost at some point, but I will get there.  I believe that most people can do this if they are disciplined and follow these seven steps.

  1. Live within Your Means. This is probably both the most obvious as well as the most difficult step to take. Yet, it is the most important. No matter how much money you make, you cannot save if you spend more than you make. There is a man from my area that won several hundred million dollars in the Powerball lottery. Where is he today? Dead, along with several of his family members—several from drug overdoses. They partied. They bought ridiculous houses. They spent, spent and then over-extended themselves. This led to debt, bankruptcy, and a miserable life. You may think that you would be different. Perhaps you would. But if you cannot handle living within your means with less, what makes you think you would be able to live within your means with more? Most of us can learn to live with less; most of us can live with less without living like a pauper.
  2. Save Creatively. When you get a paycheck, pay yourself first. If you make more than $50,000 a year as a single person, you should easily be able to save more than 20% of your income. If not, then you need to find a way to spend less. Even if you can only save $100/month, do it. If you are scraping by from paycheck to paycheck, look closely at your credit card or monthly bank statements to see where your money is going. You may be able to eliminate some expenses, especially in the entertainment category. Here are a few ways to save for early retirement:
    1. Open an IRA on TDAmeritrade (or through some other institution). I am sorry to say that I waited a long time in life before doing this, but I am glad I did finally get around to it. I do not have to pay taxes on the money I put into it now. I can just pretend it is not there while it grows.
    2. Have emergency funds so that you are not tempted to dip into your other savings accounts. Keep jars with spare change. Find a place to safely stash spare cash for emergencies that will come up. If you plan for emergencies, they will not break you financially when they occur.
    3. Look for savings accounts that grow interest. These are hard to come by these days, but they do exist. You can also safely store funds in the form of cryptocurrency in a secure exchange like Coinbase or Kucoin. Then move your savings into a stablecoin that can gain you interest.
  3. Explore Side Projects for Cash. We all have different means of income. If you have a job or two in which you are putting in more than 40 or 50 hours a week, then this may not apply to you. However, you may still find that you have time or ways to squeeze in a project or two. Here are a few that I have done over the years:
    1. Odd jobs. I have mowed grass during the summers for extra cash. I do one yard that takes me a little over an hour for $80/week. Not bad. 
    2. Crypto faucets. Some of you hate faucets, and that is fine, but I keep these running on my laptop and have made a profit. You might be surprised how this spare time activity can earn you extra crypto (especially if you have time for surveys). Recently, I have found PipeFlare to be a lot of fun and somewhat profitable, although Cointiply, (with an emphasis on Theorem surveys) has been the most profitable for me.
    3. Profit on your talent. I do art and music. I also write. Your talent may be different, but there is probably something you do (or could learn to do) for which someone out there would pay you money.
  4. Enjoy the Journey (with common sense). I believe in being resourceful and conservative with my hard-earned money; yet, I also enjoy life. I go out to eat. I go on trips. I buy things. I just do these things in a way that will not break me. I have a friend that got a second loan on his house in order to buy his wife a bigger diamond ring. Hmmn. Another friend goes to Disney World every year and spends about 10K. Ok. Fine. But living that lifestyle on a normal income is not going to put you in a position to save for early retirement. You are not doing your kids a favor either by over-extending yourself. They will learn their habits from you. Have fun. Just use some common sense.
  5. Manage Debt. Speaking of getting a second loan to buy your lady a bigger rock, well, did I say use common sense? Did I say live within your means? Avoid debt if you can. Buy a used reliable car instead of a new one (that loses 15 to 20% of its value when you drive it off the lot). Refinance your home if you have a mortgage that is too high. Make sure it is a fixed loan (no adjustable interest rates please). Pay off credit cards every month (or just don’t have them if you cannot be disciplined with them).
  6. Learn from your Mistakes. We have all made financial mistakes. If we learn from these mistakes, we can begin to see them as expensive educational lessons that will save us down the road. Most of us have regrets in life. Move on. You cannot change the past, but you can have some say about your future.
    1. Periodically review your accounts to see where your money is going. You may be able to eliminate some services that you do not use. You may be able to negotiate that insane monthly internet price down a bit. I do it all the time. We recently cut a couple of streaming services that we were not using much (or at all). We cut cable and our landline years ago. There is no need to pay for extra services that you do not need.
    2. Have a budget. It is a mistake to not have at least a general budget. For example, I am not a detail guy that will do a line item for everything I spend. I do, however, follow the 50-30-20 principle (Spend 50% on necessities, 30% on wants, and 20% on savings).
  7. Be nice. This last point may seem strange to have on this list. However, I believe that being a nice person is the way to go. By “nice” I mean honest, hard-working, charitable, and compassionate. Although greed may be the driving force behind the world-view of some financial advisers, I disagree. I believe that helping those in need and not taking advantage of people that are less fortunate is a better way to live. It’s not only the ethically right thing to do, it will help you sleep at night. And if you believe in karma or “you reap what you sow” (from the Bible), well, I think you get the point.

Of course we could add other obvious points, like "make more money," but this isn't really going to change anything if we don't live within our means or manage our debt. This may not be mind-blowing information that you have never heard before, but I believe that these seven bits of advice can help you reach you goals. We all need reminders from time to time. You may have some other points to add in the comments. Thank you for reading and follow me on Twitter for more advice from time to time.

The Lynx


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The Lynx
The Lynx

A musician, artist, writer, hiker, gamer, avid reader, and NFT creator. I am a person always seeking for new ideas. My name "Lynx' goes back to a nickname in college. I have an online support group for those suffering with grief:

Life Lynx
Life Lynx

This blog is about living life to its fullest with thought-provoking essays that will touch on faith, philosophy, art, and fun.

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