Will Not Show You How To Retire by Age 40

retire too early is not going to offer advice on how to retire by age 40 or how to save money by cutting your cable bill. There are plenty of other sites dedicated to those ideas; many of which I read and sometimes follow their advice.

Instead is going to assume that you are like 95%+ of your fellow Canadians who want to enjoy spending as much money as possible on things and experiences but want to be able to retire comfortably by age 65; somewhat sooner if you are willing to forgo some spending when you are young.

For the vast majority of people, retiring at a very early age (for some reason age 40 seems to be the favourite age for extreme early retirement):

  • is not realistic (can you really find a spouse who believes in this extreme level of frugalness?)
  • involves too many trade offs (sorry Sally, you can’t play rep hockey)
  • requires a inordinate level of long term commitment and good luck (oops, Uber just made me obsolete!).
  • may lead to feelings of regret and lack of purpose (I am soooo bored!) especially for men, who have more trouble staying socially engaged after retirement

On the other hand, being smart with your money and cutting out the huge fees that mutual funds and investment advisors charge will allow you to, perhaps:

  • Quit a job you don’t like to start a business you would enjoy more
  • Work part time to spend more time with your family or a cause you believe in
  • Splurge once in a while of some thing or some experience that is frivolous but gives you pleasure without jeopardizing a secure retirement or stressing you out

I’ve mentioned it before: the fees charged by the financial services industry are huge and can add up to hundreds of thousands of dollars over your working life. This amount of money can make the difference between a happy secure retirement and one that is filled with running out of money phobia. Learning to D.I.Y. Invest is not hard, involves little time and is recommended by many financial professionals and academics who are not trying to sell you anything.

When Warren Buffett, the world’s greatest investor is no longer able to manage his money, he have given instructions for 90% of his money to be placed into a US market index fund and the other 10% in cash for emergencies.

Research shows this simple strategy will beat 85% of the mutual funds available. And don’t forget, it is virtually impossible to predict which of the thousands of funds available will be in that lucky group of 15% who beat the market.

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