I Retired a Millionaire in My 40s: 11 Way Too Easy Tricks To Help You Get Rich
For many Americans, becoming a millionaire — or even a multi-millionaire — is a dream come true. As for those who want to retire early, it’s also a bit of a necessity, given the high cost of living and longer time spent in retirement.
If you’re on the outside looking in, you might not know the best ways to build your wealth and retire early. But while everyone’s path and pursuits are going to be different, there are some relatively simple tricks you can employ to get rich and retire sooner.
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Here’s some advice from three people who retired millionaires in their 40s — a good two or more decades before the typical retirement age. Even these tips they don’t all work for you, they could help you get on track with your own wealth-building and retirement goals.
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Keep Costs Low — Like, Really Low
You might have heard the old adage, “Spend money to make money.” But if you’re going to spend, it should be strategic. Otherwise, your best bet is to keep costs as low as possible so that you have more cash flow for other ventures that can actually make you rich.
“I retired at age 42 after selling my real estate investment company. I had spent over 15 years building the business through purchasing, renovating and selling/renting houses,” said Daniel Cabrera of Sell My House Fast San Antonio TX. “By reinvesting profits and using leverage from private lenders, I was able to build a sizable portfolio of income-producing properties.”
Despite his sizable portfolio, Cabrera and his wife still strived to keep costs low. They lived in a modest home, drove used cars and avoided certain unnecessary expenses — like luxury vacations.
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Save and Invest the Rest
As you keep costs low, you’ll start to find that you have more money for other things — like savings and investments. It can take some time to get a substantial amount of cash, but it’s worth it when you get to retire early.
“My wife and I saved over 60% of our income for the first decade of our careers,” said Cabrera. “We invested in index funds and real estate.”
Set Goals and Run the Numbers
Becoming rich is a great starting goal, but you’re going to need an actual plan for how to get there — and that often starts with running the numbers.
“My advice is to calculate how much you need to save to retire early, develop a detailed plan and stay focused,” said Cabrera. “It will likely require sacrifices, but you can achieve it. Save as much as possible, look for ways to increase income and invest for solid returns.”
Build Passive Income
This isn’t shocking advice, but it’s still sound. The thing about building passive income is that it can be as complicated or as simple as you want — it all depends on which types of income streams you decide to build.
For Cabrera, his primary income streams — beyond his regular job — include rental income, capital gains and side business revenues. All of these, he chose to reinvest to continue building wealth.
You can do the same, but the main goal is to get that passive income going.
“Once your passive income covers expenses and you have ample savings, you’ll have the confidence to retire early,” said Cabrera. “It took constant discipline, but retiring in my early 40s was well worth the effort.”
Choose an Investment — Or Two — That Generate Income
There are plenty of investment options out there, so you’ll want to choose the one — or ones — that most appeal to you. Maybe you want to be more active in your investments. Or perhaps you’d prefer something more passive. Whatever the case may be, take some time to choose your preferred ones and go from there.
Nick Disney, a multi-millionaire who’s planning to retire next year at the age of 44, said his top strategy is to invest in real estate. It might not be the easiest way of becoming rich, at least not right away, but over time, it can really pay off.
“[Investing in real estate] will help you create wealth and provide monthly cash flow that can replace your salary, so you can retire when you are ready. I like this strategy, because almost anyone can do it, you can scale it up to fit your needs, and it is one of the most tried and true methods to create wealth in history,” said Disney.
Listen to Other Millionaires (And Five More Tricks)
If you want to get rich and possibly retire early, there’s no one better to learn from than the experts. That’s what Brenda Christensen, CEO of Stellar Public Relations, Inc., did.
“I abide by Warren Buffet’s template of being frugal. Also, I’m a big fan of Mark Cuban, who I also worked with on another startup,” she said.
Christensen had five simple tricks to help you build wealth, too:
Be frugal. “Forgo pricey restaurants, hair salons and overpriced anything, including coffee cafes and other flash items/lifestyles,” she said.
Invest in your passion — and yourself. “Education and training are essential to getting ahead. I’ve made a fortune in flipping beach real estate and exotic/antique cars, because I love them both,” she said.
Avoid debt at all costs. Only buy the things you love that you can afford and that will bring you true long-term value.
Get those tax deductions. “I rarely go out to restaurants, and if I do, it’s a business expense,” she said. “Same with other big-ticket items like automobiles and the like. All tax deductible.”
And last but not least, don’t retire — at least not officially.
“I’m a big proponent of continuing to work for your mental and physical health,” said Christensen. “Whether it be your passion business project or charity, keep active and engaged.”
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This article originally appeared on GOBankingRates.com: I Retired a Millionaire in My 40s: 11 Way Too Easy Tricks To Help You Get Rich
