Today I came across a very interesting article posted by Mr. Money Moustache .For those of you who don’t know him, he’s the guy who retired from full time work at the age of 30 (yes, 30 is correct)! He talks about the amount you need to “retire” early. To clarify: by retirement I don’t mean the traditional meaning whereby you go on painting or walking holidays and buy your grandchildren ice-cream. You can do this too. Primarily I’m focusing on the concept of early retirement which gives you the opportunity to be free, live a happier and more accomplished life and enjoy every day of your life without walking up to a Monday to Friday alarm. My purpose for wanting to retire early is simply, freedom. Freedom of choice and more time to spend with my loved ones as well as more time to do what I love. Living life rather than watch it go by. What’s yours?

Take a moment to visualise yourself free from any debt, mortgage or financial commitment…What do you see? How does it feel? Who are you sharing your precious moments with?

“He who has a why to live can bear almost any how.”Friedrich Nietzsche 


So, how badly do you want this early retirement lifestyle? Research shows that you can retire once you accumulate a large enough nest egg. This is ideally 25 times your annual salary / living expenses (a pot of money which you invest). At a safe withdrawal rate of 4% you can life off the interest/dividends paid back to you from your nest egg. Now take a calculator and work out how much you need to live off per month and times that by 25. Bingo! That’s your number. For instance, if I need £30,000 a year × 25 = £750,000. This pot of money invested through an online platform charging low cost fees such as Moneyfarm or Nutmeg at 4% withdrawal rate gives me a yearly income of £30k. Note that my money remains intact and I’m simply living off the interest generated. Last year the stock market averaged a 10% return overall. That £750k invested would have generated a £75,000 yearly interest. Amazing, isn’t it?

You’re probably thinking: how on earth am I going to get £750k? The secret is to start saving & investing TODAY! Open a separate account with www.nutmeg.com or www.moneyfarm.co.uk and make a start! With Moneyfarm you can start with as little as £50 and build from there. With Nutmeg you need a minimum of £500 starting pot. I made £10 with Nutmeg in my first 2 weeks after initially investing £500. Pretty good comparing to any High Street UK bank. As we go through this journey together I will continue to share useful tips to help you get out of the rat race.

Until then, stay brilliant & make a start, just do it!

To Your Financial Success,

Renate

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