{"id":91861,"date":"2017-09-05T11:01:28","date_gmt":"2017-09-05T17:01:28","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=91861"},"modified":"2024-02-13T18:34:49","modified_gmt":"2024-02-14T01:34:49","slug":"gift-retirement-closer","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/gift-retirement-closer","title":{"rendered":"Financial Freedom is Closer Than You Think"},"content":{"rendered":"

If you grew up in an American household, you have an idea of what the \u201cAmerican Dream\u201d entails. You\u2019re born into a middle-class family. You go to school for the first 18-22 years of your life. You enjoy a nice career for 40-50 years. All while getting married, having kids, and climbing the corporate ladder. You retire at age 65 and have a nice nest egg to tap into so you can live out your remaining years \u201cfinancially free.\u201d<\/p>\n

Sounds great, doesn\u2019t it?<\/p>\n

40 Years?!?<\/strong><\/h2>\n

Rewind the tape \u2026 40-50 years?!?<\/p>\n

Am I the only one that thinks that\u2019s an incredibly long time?! Let\u2019s break that down. The average American life is ~80 years <\/a>.<\/p>\n

It can be segmented into 3 parts: school for the first 22 years (assuming a Bachelor\u2019s degree), work for the next 40-50 years, and then retirement thereafter. To help visualize, check out the box below:<\/p>\n

Conventional American Life = 80 years<\/strong><\/h3>\n

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Look at that box. For about 80% of your life, most of your time is dedicated to achieving that final 20%. By the time you reach that final 20% (age 65), you will not be able to move like you once did, your kids are likely adults and your parents have either passed or are extremely old.<\/p>\n

In other words, of the 80 years that you will live, only 15 of those years are doing things that you truly love with the people you truly enjoy. Most of which, you likely will not be healthy enough to fully appreciate.<\/p>\n

Not to mention, you may not make it to 65. I don’t mean to be morbid, but there are countless stories of hard working people dying in their middle-aged years. Whether it be from a tragic accident, an illness, a natural disaster, etc.<\/p>\n

If this is the \u201cAmerican Dream,\u201d I need to either leave this country or wake the hell up.<\/p>\n

For now, I will choose the latter.<\/p>\n

Related:<\/strong> Behind on the Path to Financial Freedom? Here’s the Good News You NEED to Hear<\/a><\/em><\/p>\n

A Different Approach: <\/strong><\/h2>\n

If you have not read Scott Trench\u2019s book, Set for Life<\/a><\/em>, you are doing yourself a serious injustice. $20 and a few hours of your time will save you multiple years of hard work making your boss rich.<\/p>\n

I promise that I do not get paid a penny for plugging Scott\u2019s book. It is legitimately a fantastic book that everyone who desires early financial freedom (or retirement) should read. Even if you are approaching the conventional retirement age where the concepts may not apply, you can give it a read and instill wisdom in the generations to follow.<\/p>\n

By living frugally, saving at least 40% of your income, and investing in high yielding, passive income streams (i.e. real estate) you can significantly expedite your \u201cretirement\u201d or achieve \u201cfinancial freedom.\u201d And I\u2019m not saying retire at 62 instead of 65. I\u2019m saying retiring in the next 5-10 years. Depending on your age, this could be as early as your late-20s or early-30s.<\/p>\n

Let\u2019s see how this \u201cbox of life\u201d looks.<\/p>\n

Life of the \u201cFinancially Free\u201d<\/strong><\/h3>\n

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With the Set for Life<\/em><\/a> formula, you are tripling your \u201cfreedom\u201d time and halving your \u201cworking\u201d time. You will have the optionality<\/em> to do whatever the heck you want for 45+ years (age ~35-80).<\/p>\n

You can dedicate 100% of your time to your family. You can travel, golf, ski, or play video games whenever and for as long as you\u2019d like.<\/p>\n

Heck, you can still work if that\u2019s what you prefer.<\/p>\n

But you will be able to work wherever you want because the pay will not matter. You will know that in the back of your mind, you do not NEED that job. As a result, your stress levels will be significantly lower than those who could not survive without one.<\/p>\n

Not only that, but you will be doing something you love. For many people, that\u2019s much more fulfilling than a fat pay check.<\/p>\n

It\u2019s NOT baloney: <\/strong><\/h2>\n

As you embark on your journey, I’m sure you’ll get excited and try to explain your goals to friends and family who are living conventional lifestyles. You will soon find that most of them will not understand. Most will call, \u201cbaloney\u201d or shrug you off and say, \u201cyeah, okay.\u201d<\/p>\n

That\u2019s fine. Do not<\/strong> let them bring you down. If you feel like you need someone to talk to who has a similar mindset, jump on BiggerPockets<\/a>\u00a0and message someone in your area for coffee. There’s a high probability they will think similarly and re-motivate you if you feel you need a lift. I do this ALL the time.<\/p>\n

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The Numbers:<\/strong><\/p>\n

If you’re reading this and you think I’m full of baloney – or if you believe me, but want to show the non-believers the numbers, read on.<\/p>\n

Let\u2019s run the numbers with the following assumptions:<\/p>\n