This topic for blog came into my mind when I recently went to a College Reunion, where my friends were discussing their life goals and career goals. We were very excited as we were meeting after so many years.
‘I want to retire at 45.’ Sahil, one of my friends said.
This is one of the top things on the bucket list of my friends. I think in general also, this wish has gained popularity over time. I have seen people working really hard and they also become successful in their career. But then the question here is, why do they want to retire early?
Hence, I asked Sahil, a Banker, why he wants to retire early? And more importantly, what he wants to do after retirement? But, as expected, he had no practical and logical answers to my questions.
My other friend, Vijay joined us, who was working with MNC. I asked him about his life and career. He said he had resigned from job two years ago and now he is living a retired life. I wondered about that. After a few seconds, Vijay replied that now he is the owner of a restaurant in which the College Reunion was arranged. His reply stunned me and Sahil.
Our conversation started with a delicious Welcome drink…….
By the end of our conversation, I finally found the answer to my question and off course the topic for my next blog.
Why do people want to retire early? The main reason is that they don’t love their work or work is an obligation for them. But, the second question is more important and that is, do they really retire early? Maybe not.
The reason why people CANNOT retire early is that they are doubtful about their future. They are afraid of taking risks and last but not the least, they are unaware about the importance of planning which is a real solution. Hence, don’t Plan for it.
Planning in this context means Financial Planning as well as Time Planning.
If you want to retire early, you have to plan your finances in advance. As the general Life Expectancy is around 70-80 years, you have to plan for almost 25-35 years. Further, your money has less time to grow if compared to others as you will stop working early. You cannot retire early, if you don’t have adequate money to fulfill your and family’s needs and future financial goals. Hence, Financial Aspect is inevitable here.
It means Time Management, Day Designing and to know what I am going to do after retirement.
Mostly, people don’t know what they are going to do after retirement. Whenever people think of ‘Early Retirement’, they consider it ‘No Work’ or ‘Only Relaxation’. But this is a completely wrong interpretation. Hence, they failed to achieve this goal.
Here, responsibility is even more. You have to rigorously work on the Financial and Time aspect.
The secret of having this Freedom to retire early, lies in the ‘Passive income’. Passive income is the income for which you don’t have to actively work. It can be rental income, interest income, dividend etc. Passive income should be enough to take care of your household / living expenses.
The wish of early retirement will get transformed into Freedom, only if you have an ability to manage money matters in a right way, which my friend Vijay did perfectly.
Being in the Finance field for more than 20 years, I thought this topic deserves attention. Hence, a little try from my side. Happy Future!