Chris Reining isn’t your average retiree. He said goodbye to his working years at 37, and is now financially independent, he is living his life on his own terms.
Growing up in a middle-class family in Illinois, Reining says he did well in school, earned scholarships, and attended the school that paid him most. Unlike many other young people, he graduated with only $4,500 debt, which he quickly paid in full once he started working.
Eventually he found a well-paying job working in cyber-security, took out a mortgage and bought a condo, and financed a BMW. But then he started to wonder: is this all there is?
“I finally said, ‘I can’t do this for 40 years,'” recalls Reining.
In his late 20s, Reining started searching for alternatives. He read the book, “Your Money or Your Life,” by Joe Dominguez and Vicki Robin. “It helped me realize there’s a way to arrange your life so you don’t have to sit in this cubicle for 40 years and the idea of becoming financially independent became real.”
By 35 he felt he had enough to live the rest of his life on his savings and investments without having to work again. It took two more years of showing up at the cubicle for him to be sure. Then, at 37, he finally walked away.
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People who have reached financial independence can make it look easy.
But Reining is blunt about the prospects of making it to what he and others in the early retirement community call “financial independence, retire early” or FIRE.
“It’s not possible for everyone,” he says. “If you’re tapped out by your expenses, it isn’t realistic.”
Also, he says, getting to FIRE isn’t a sometimes thing. “It takes commitment,” he said. “The people who are most successful at it have compelling reasons for why they want it. The people who aren’t going to get there, even though by the numbers they could, are the ones who don’t have a compelling enough reason to make the hard decisions.” It takes commitment and discipline.
“It does take a lot of small daily habits that you need to practice, day after day,” Reining says.
His strategies for financial independence are to the point. Earn more, save more and invest better.
Tips and advice:
Retiring by the age of 40 is an ambitious goal that requires careful planning, disciplined financial habits, and strategic decision-making. Here are some tips and advice to help you work towards achieving early retirement:
- Start Early: The earlier you begin planning and saving for retirement, the better. Compound interest will work in your favor, allowing your investments to grow over time.
- Set Clear Goals: Define your retirement goals and envision the lifestyle you want to lead. This will help you determine how much money you’ll need to save and invest to support that lifestyle.
- Create a Detailed Financial Plan: Outline your income, expenses, and savings goals. A well-structured financial plan will provide a roadmap for achieving your retirement goal.
- Live Below Your Means: Practice frugal living by spending less than you earn. This enables you to save a higher percentage of your income, accelerating your retirement savings.
- Eliminate Debt: Prioritize paying off high-interest debts like credit cards and loans. Being debt-free will free up more of your income for savings and investments.
- Increase Your Income: Look for opportunities to increase your income through side gigs, freelancing, or even starting a small business. Additional income streams can significantly boost your savings rate.
- Invest Wisely: Educate yourself about different investment options and strategies. Consider a diversified portfolio of stocks, bonds, real estate, and other assets that align with your risk tolerance and financial goals.
- Maximize Retirement Accounts: Contribute the maximum allowable amount to tax-advantaged retirement accounts like 401(k)s, IRAs, or other retirement vehicles available in your country.
- Take Advantage of Employer Benefits: If your employer offers matching contributions to your retirement account, be sure to contribute enough to take full advantage of this benefit.
- Monitor and Adjust: Regularly review and adjust your financial plan based on changes in your income, expenses, and investment performance. Flexibility is important as life circumstances evolve.
- Minimize Lifestyle Inflation: As your income increases, resist the temptation to inflate your lifestyle. Redirect the extra income towards your retirement savings instead.
- Healthcare Planning: Consider how you’ll manage healthcare costs before you reach the age when you can qualify for government-sponsored healthcare programs. Health insurance is a crucial aspect of retirement planning.
- Emergency Fund: Maintain an emergency fund to cover unexpected expenses, so you don’t need to dip into your retirement savings.
- Educate Yourself: Continuously educate yourself about personal finance, investing, and retirement planning. The more knowledgeable you are, the better decisions you can make.
- Seek Professional Advice: Consult with financial advisors and experts who can help you create a tailored retirement strategy based on your unique situation and goals.
- Stay Disciplined: Early retirement requires discipline and sacrifices. Stay focused on your goal and remind yourself why you’re working towards it.
- Stay Flexible: Life can be unpredictable. Be prepared to adapt your plans if necessary while keeping your retirement goal in mind.
Remember that achieving early retirement by 40 requires a combination of careful financial planning, disciplined savings, and strategic investments. It’s important to balance your desire for early retirement with maintaining a good quality of life both before and during retirement.
Retired for the past two years, Reining spends his time writing about financial independence on his website.
