The majority of Americans will never know the pleasure that comes along with Financial independence and early retirement. The true freedom of waking up and knowing you have enough money to cover all of your spending without having to sit in traffic to get to a job you hate just so you can keep paying those damn bills they keep sending.
But it doesn’t have to be that way. You can turn things around and not only retire wealthy and free but retire young, healthy and full of energy. It is possible to retire before they tell you is acceptable and spend decades enjoying the true freedom very few of us ever get to enjoy.
On this website there are dozens of articles that will give you tips and hacks on how you can take steps towards early retirement. In this article I am going straight up tough love and I am going to tell you all of the reasons you WON”T retire early.
You are just too stupid
That’s right, you’re stupid. Or at the very least your decisions are stupid and many of your decisions are based on a lack of simple financial education. Look, the school system failed to prepare you for your own financial future. But you can’t let that stop you. It is never too late to start learning and something as important as this can’t continue to wait.
You need to take control of your own financial well being. If you don’t look after your money I promise everyone else will and you will find yourself broke and wondering where all the money went. You work too hard to have nothing to show for it. The good news is, it has never been easier to learn. You can learn just about anything quickly thanks to the internet. So what are you waiting for stupid? Go learn something.
You are bad at saving
The average American lives paycheck to paycheck and can’t even handle a $500 emergency without going in to debt. That means, for most of you, if something happens like your boiler breaking down, you can either go into debt to fix it, or learn to live without hot water.
That to me is completely unacceptable. We have gone and turned ourselves into a bunch of spoiled children who get everything they want. I remember when I was a kid. If I wanted a new bike, I got a paper route, earned money, and saved up for a new bike. It was not handed to me. I did not buy the bike and figure out later how to pay for it.
If you are ever going to stand a chance of retiring early, you will need to learn how to be a good little saver like when we were kids. I know some people have it very tough out there. But the vast majority make enough money to be able to put something aside every week.
The problem is….
You are addicted to shopping
Americans love to go shopping. Companies spent over $200 Billion in advertising last year. That is how much they know you love to shop. If you are shopping you aren’t working. If you aren’t working, you aren’t earning money. And if you aren’t earning money AND are out spending money, then where the hell do you think you are going to get all this money to retire early?
I look at it in terms of hours spent not dollars. So for example, If I am only earning minimum wage, that’s $15 bucks an hour. That means every time I go out shopping and spend just $15 bucks, I gotta work another hour. Its actually even worse because you don’t actually make $15 an hour. The government will probably take $5 or $6 before you can even cash your check.
One trip to the mall with your friend on the weekend can cost you an entire day of work. Fifty bucks for a new pair of shoes, $20 on a belt and another $10 for a crappy lunch at the food court. Don’t forget to get your latte frappawastamoney coffee at the stand in the middle of the mall. Before you know it, you just spent more money then you make in a day.
I wrote an article dedicated just to cutting spending that you can read here.
You are living the good life
Perhaps you have been working for several years and have received several pay raises along the way. You are making more money yet you are still struggling to pay the monthly bills let alone save anything extra. You are suffering from the increased standard of living that comes along with salary increases.
It is a gradual thing that you will barely even notice. However, as your career progresses and you continue to grow your salary, so too will grow your monthly expenses.
Your will find yourself driving a nicer and newer car then you did several years ago, maybe your home is a few hundred square feet larger, nicer clothes, more nights a week eating out, etc. Before you know it, its like you never got a raise at all and you are banking the same if not less money then you were years ago when you were earning minimum wage.
You are living high on the hog and enjoying life now at the expense of your future self.
One of the habits of the rich is to save found money and unexpected windfalls. This includes pay raises. I covered this and more in the 7 habits of the rich which you can read here.
Your self image sucks
I’m sure you have heard the saying keeping up with the joneses. That is when you buy stuff just to impress your neighbors. You spend money on a fancy new car or the latest gizmos just because Mr Jones has it too. You need to keep up for fear they might think you can’t afford it.
If you buy stuff just to keep up with the latest trends or because you think you need to look like you are financially well off, then your self image sucks and you will never be wealthy enough to retire early.
You need to be secure enough that you don’t feel the need to spend your hard earned money on crap just to impress someone you probably don’e even like anyway. The truly wealthy person is ok driving a rusted out shit box and using the same smart phone he bought 7 years ago.
The majority of the people,aka the Joneses, are over $30,000 in debt not including their home mortgage. They can’t afford shit. If you want to keep up with the Joneses, that is exactly what you will do.
You have no self control
If you are in the majority, you struggle to save money. This is because you simply lack the self control required to not spend your money as soon as you get it. If you are running to the mall, the bar, or the restaurant every pay day, then you have no self control. If you spend money you don’t have and are drowning in credit card debt, then you have no self control.
You will never get to a place where you are financially secure if you lack the will power to hold on to your earnings. Even if you somehow manage to make it to retirement, you will probably spend the money at a rate faster than what you expected and run out of money early. Self control is a mindset you need to develop now and it will benefit you throughout your entire life.
You suffer from shiny object syndrome
Shiny object syndrome simply means you are easily distracted. Like a small child with a box of shiny new toys. They don’t know which one to play with.
If you are to amass a nest egg large enough to last you over 30, 40 or even 50 years, you will need to remain focused. Unless you hit the lottery or sign a contract to play for the New York Yankees, building wealth takes a long time. Even at a rate of saving $2,000 a month at 7% annual growth, it will take you 20 years to break a million dollars.
You don’t save week after week for 20 years consistently without being laser focused. If you are not laser focused, you might do ok, you might even be able to retire wealthy some day. However, the odds very slim that you can retire at a young age without a worry about running out of money and without ever really having tried very hard to save that money.
You suck at investing
You don’t need to be Warren Buffet to succeed at investing. The truth is, you don’t even need to be able to read a financial report. All you need to do is steadily invest in index funds and watch your investments grow steadily over time.
If you think you are going to open a Robinhood account and pick the next Amazon, Nextflix and Google before they happen, you might as well go buy some lottery scratchers.
The bottom line is, don’t go investing in a bunch of companies you know nothing about. You need to do your research and understand what it is you are investing your money in. Even the index funds. They are some of the easiest to understand and safest investments in the stock market. However, you still need to know what it is you are investing in. There are fees to be paid and taxes to understand. Also you will need to know exactly what it is you are investing into in the first place.
So do yourself a favor, before you go out and try to become the next Warren Buffet, get yourself at least a basic understanding of investing
You don’t really want it
If you are experiencing some of the problems mentioned above, then maybe your heart isn’t into this early retirement thing. Maybe it is more important to you to live life now.
If that is the case then there is no shame in that. You don’t need to be fully immersed into this all or nothing mentality. It is ok to find the happy medium which is what I suggest. It is actually how I did it. Although for the first 15 years I didn’t even realize I was doing it.
The problem becomes when you are doing nothing to prepare for your future. You don’t need to become obsessed with how you are spending every penny and never buy anything to enjoy in the moment. You do however need to become interested in how you will continue to live your current quality of life when you are no longer capable or no longer have the desire to work for wages.
Now that you understand the mindset of people who will never be able to retire early, go read about the wealthy and the 7 habits that help create their mindset.
You might also find helpful the lessons I learned on my way to financial independence.
Thanks for reading
Earl