Courtesy of Jason and Julie Buckley
Saving your money is key to retiring early, but it's not the only thing that will get you there.
In fact, for many people seeking financial independence — and those who have achieved it — it's often a mindset shift that does the trick.
Below, we highlight some of the best advice early retirees have shared with us, beyond the most fundamental tip, which is to save early and save often.
Resist the herd mentality
Kristy Shen and her husband, Bryce, were able to bank $1 million by age 31 and quit their jobs as computer engineers in Canada to travel the world.
To achieve the milestone, the couple made a habit of tracking their money and resisting the herd mentality — otherwise known as FOMO, or fear of missing out — particularly when it came to buying a house, something many of their fellow 30-something friends felt seemingly obligated to do.
"People are just making decisions, not because it's a good investment, but because they're getting emotionally pulled into saying, 'Oh no! I'm going to miss out! What if other people are in the market and I'm not in the housing market?'" Shen told Farnoosh Torabi on an episode of her "So Money" podcast.
Shen said that working in engineering taught her to focus on math rather than emotion when it came to her money.
"It's separation from the FOMO, which is based on feelings rather than fact, and then stepping up and doing the math and realizing, 'Wait, I don't want to do what everyone else is doing. Maybe they're not right. Just because everyone is doing it, it doesn't mean it's correct.'"
Be content with less
Each in their early 30s, Joe and Ali Olson quit their jobs as public school teachers with $1 million in the bank in August 2015, retiring after just eight years in the workforce to travel with their young daughter.
The couple said they did it by living frugally and investing in real estate, which they started around the time of the 2007 financial crisis when properties were being sold for cheap.
But even as their net worth rose, they didn't succumb to lifestyle inflation. The pair continued to save 75% of their income and resided in their 400-square-foot home, keeping their annual expenses to about $20,000. Their secret? Shift your mindset and learn to be happy with what you have, they told the Mad Fientist.
Joe shared a quote from philosopher John Stuart Mill that stated: "I have learned to seek my happiness by limiting my desires, rather than in attempting to satisfy them."
"For me, financial independence was really easy to get because we were happy just living in our fairly small place, and eating at home, and just being efficient with how we spent money," Joe said. "And so our high savings rate was just because we enjoyed simplicity. And we didn't have to cut our budget. We didn't have to deprive ourselves."
Stay the course
Shepherded by meticulous spreadsheet estimates and years of tracking their pennies, Jason and Julie Buckley retired in 2015 at age 43.
The British couple retired with about £30,000 (~ $36,800) in cash savings and set a modest retirement budget of £15,000 (~ $18,400) a year, Jason told Business Insider.
Since retiring, they've been touring Europe and North Africa in their motor home, which enables them to visit expensive countries "for a fraction of the cost." Currently, the couple lives off of cash flow from investments — rental income, dividends, and interest — as well as advertising and book sales on their travel blog, which they spend just two hours a day maintaining.
If you're aiming to achieve early retirement yourself, Jason says, "You’re most likely going to be swimming against a very strong tide of opinion! If you're infected with an insatiable desire to do it, then be confident you can do it."
They suggest starting with educating yourself financially and putting your plan on paper, tracking spending and cutting all unnecessary costs, and investing.
"As your costs come down, and income from your investments gets re-invested in more investments, at some point you will experience the bewildering and joyful moment when your wealth starts to spiral upwards," Jason said. "At that point your freedom is all but inevitable."
Put your money to work
In 2005, Peter Adeney — better known as Mr. Money Mustache — retired at 30.
Adeney and his wife, Simi, both software engineers, stashed two-thirds of their combined $134,000 take-home pay in savings. After just 10 years in the workforce, the couple had accrued about $600,000 in investments and paid off a house worth $200,000, Adeney told Nick Paumgarten of The New Yorker, giving them a solid cushion to retire on.
The 30-something retiree's secret to financial independence boils down to the habit of thinking about money as something to invest rather than something to spend. In other words, he put his money to work.
"The growing part of my money is pretty simple," he told Farnoosh Torabi on an episode of her "So Money" podcast. "I just like the idea of keeping all money invested. So if I run into a surplus sometime, I don't think of something to buy with it, I think, 'OK, I better get rid of this money and put it to work again.' So, I sweep it out of the bank account and into regular index funds."
While a raise, generous birthday gift, or lucky lottery winnings may trigger a shopping spree for most of us, Mr. Money Mustache's instinct is to invest surplus money, which in part eliminates any spending temptation that may arise.
Check in with your partner
Though it's common for people on the road to financial independence to join forces with their partner — after all, two savings accounts can be better than one — that's not always the case.
Brandon, a software developer and the blogger behind the Mad Fientist — who doesn't use his last name online for privacy reasons — retired last year at 34. He'd spent several years living in rural Vermont, saving and investing 70% of his after-tax income and keeping a meticulous spreadsheet to track his spending, investments, and net worth.
While the prospect of early retirement excited Brandon, his partner Jill loved her job and wasn't interested in retiring early, she revealed on an episode of Brandon's "Financial Independence Podcast."
After discussing their different goals — and their shared ones, like spending more time traveling — the couple opened up a joint account to pay for household expenses, while still maintaining their own separate accounts.
By having "yours, mine, and ours" accounts, Brandon was able to retire early with his own pot of savings, Jill continues to work as an optometrist, and they're able to travel together frequently.
Cut back on your big-ticket expenses
The average American spends the bulk of their money on three things: housing, transportation, and food. For 28-year-old JP Livingston, the key to retiring with $2 million in the bank was cutting back spending on the biggest slice of that pie: housing.
Livingston achieved this feat while living in New York, the second-most expensive city in the world. Though her high salary could have afforded her a much more extravagant apartment, Livingston chose to live with a roommate in a three-floor walk-up on the Upper East Side that cost her $1,050 a month — a reasonable price by New York standards.
"You've just graduated college, you're used to not-the-most-luxurious accommodations," she said. "That was my biggest thing. I know my contemporaries were probably spending $400 to $600 more on rent per month, so that's $7,000 more a year."
Even as her salary increased, Livingston kept her living arrangements modest. She and her husband now share a 300-square-foot one-bedroom apartment in the West Village for $2,400 a month, despite their multimillion-dollar nest egg.
By tackling her biggest expense first, Livingston could save and invest hundreds more per month than her peers. You'd have to cut out 100 lattes a month to achieve the same result.
Additional reporting by Emmie Martin and Kathleen Elkins.
