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How to Make the Dream of Retiring by 40 a Reality

Retire Before 40: If your goal is to retire by the time your 40, you’ll need to follow a process that puts you ahead of the bunch. The following is your go-to, step by step guide on how to put down the tools by 40 years old.

A dream, but with a deadline

The dream to retire by the beach sipping cocktails on a Wednesday afternoon is one we all crave, albeit the economic experts say most people of our generation will be working until they’re 80… that’s right, 80! The question arises, how do you move this deadline forwards by 4 decades or so to retire by 40? The answer: by following a distinct process with some structure and methodology to get ahead of the game. Here are 5 tips to ensure you arrive at the party before it even starts.

Step 1: Find out what retirement really means to you

Most think retirement is about having enough assets to keep you comfortable into the future – the fact is: once you get to the level of retirement, the game changes significantly. This game changes so much that it’s not about you versus your bank account, it’s about you versus you. Being completely retired and drinking Pina Coladas on the beach, being able to step out of the office when you want, or having the freedom to travel 6 months of the year are all forms of retirement. For the labour or love, you have to find out what you want and what you’re working for.

As host Andrew Baxter describes when he retired at 29 only to play golf every day and develop a serious love affair with the fridge, ‘it wasn’t what I expected it to be…you have to have a purpose in life as well”.

Step 2: Generate enough cash flow

The trick to retirement, as host Andrew Baxter outlines, is to ensure you have enough cash flow where you don’t have to sell your time for dollars. If you can do something that gives you enough cash flow where you can buy your time back, you are already on the right track. And don’t get this mixed up – it’s not about having a stream of millions roll in each year – it may just being able to generate an extra $1,000 a week so you can work less in your primary employment. Doesn’t seem too bad, right?

Step 3: Understand and move through the cash flow quadrant

For anyone who hasn’t come across Robert Kiyosaki’s “Rich Dad Poor Dad” – do yourself a favour and read it. Amongst many wise comments made by Robert throughout this extremely successful novel, Robert created a paradox known as the ‘cash flow quadrant’. Lucky enough to tour and spend time with Robert personally over the last decade, Andrew Baxter lives by the cash flow quadrant in his business and investing life.

Here, Robert Kiyosaki talks about moving from being an employee, to being self-employed, to owning your own business and to finally to be an investor. Quite simply, as you move along the quadrant you give yourself more freedom to do what you want, with the notion of being an investor as the overarching goal.

Step 4: Invest in yourself

It is true that the best investment you can make is in yourself. Often, achieving such large goals like retiring before 40 is one that you simply can’t do on your own. You need someone to guide you through and most importantly keep you accountable to see how they can help you do this). Whether this is upskilling yourself in the investment space, finding out your side hustle, or just simply restructuring your business to make you most tax effective are all ways to inch towards retiring before 40 years old.

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Step 5: Start NOW

Whether your someone who just graduated university and is starting their first job, or someone who has tens of millions of dollars in the bank – the moral of the story is to start immediately. In order to reap the rewards of freedom and travel through retirement at 40 – you’re going to have to start doing some leg work NOW.

This may come in the form of contributing some extra cash to your Super each year, having a stringent savings goal or most importantly – starting to invest. Doing each of these, as examples, are methods to set yourself free long-term. Yes, they require some tough work in the early beginning, but as we all know – money makes money. We mentioned earlier that this goal of retirement at 40 is you vs. you – you have the power to make it a reality, just ensure you have some framework around it so make sure you stay on the right track.


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