Are you planning to retire early with financial freedom?
If Yes, congratulations because you’ve taken the first step to making it possible.
In today’s world of rate races, working professionals get stuck in the day-to-day operations that do not allow them to live a life with freedom, do things they are passionate about, start new habits, and all.
Luckily, there’s a way that people can achieve financial freedom and retire early.
In this guide, we will explore everything about early retirement, why it’s important, and how can i invest my money to retire early with financial freedom by investing in some best investment options.
Let’s dive in!
What is Early Retirement?
Early retirement is referred to as retiring before the Medicare eligibility criteria of 65. In early retirement, people generally plan to retire in their early 40s and 50s to give more time to live a peaceful life and enjoy their precious time with their family while enjoying and traveling.
Also, a new trend has recently started a FIRE movement that stands for Financial Independence, Retire Early. In this movement, employees/workers straightforwardly save and invest 50-75% of their income to retire in their early 30s or 40s.
After knowing the early retirement process, now you’re thinking “How can i invest my money?” here’s the ans below.
Read More: Best Investment Plan for Retirement in India
How Can I Invest My Money to Retire Early?
After follow the given steps below, you’ll get answer of how can i invest my money:
Step 1: Evaluate and Adjust Your Current Financial Budget
First, properly evaluating your current financial budget for your day-to-day expenses is essential. It will help you understand the current state of your cash flow and then manage them depending on how early you want to retire. Some people think adjusting the budget only means cutting down their expenses and then relying on their 50% income to save money for the future. However, you should focus on investing and working on other side hustles.
Step 2: Estimate Your Annual Retirement Expenses
Now, you must look at your current expenses and figure out how much money you need during retirement. Remember, you can not depend upon the same amount of money during your retirement period, as inflation will increase the prices. Also, you will surely add more expenses to your list, including your kid’s school fees, unexpected medical fees, etc. Calculate the monthly and then set up annual expenses.
Step 3: Calculate How Much Money Exactly You Need To Retire
Once all your expenses are calculated, you need to estimate how much you will need to retire early. An estimated amount will give you the figure to save for a tension-free retirement. A thumb rule of 25 indicates that you should have 25X savings of your annually estimated expenses in your retirement period. Imagine, if you have planned to spend ₹10,00,000 in your first retirement period, you should have a minimum savings of ₹25,00,000. It will help you sustain yourself better.
Step 4: Seek For The Required Investment and Saving Options
Collecting an enormous savings amount for your early retirement is not possible only with consistent saving money from your monthly income. To collect such a big amount for your early retirement, you must consider various ways to invest in different places, including Mutual Funds, Real estate, and much more. Thus, you have to make some smart investments considering your long-term growth.
Step 5: Seek Financial Advisor Assistance
Financial advisors thoroughly understand all the fundamentals and concepts of finances and investments. Keeping yourself in touch with these financial advisors to plan your early retirement will be your best move. Taking a professional’s assistance always helps us to keep on the right path and accomplish our goals.
So if you’re someone who ask yourself “how can i invest my money to retire early” then follow these steps and make your life financially free with freedom.
Top 3 Investment Options for Early Retirement with Passive Income
If you’re still wondering, How can I invest money to retire early? Then here are best three investment options you should consider:
1. Renewable Energy
Renewable energy is the world’s absolute future, as people will eventually rely on it for survival and growth. Therefore the renewable energy sector is also taking the pace and holds very high potential. If you’re looking for smart investment tips for renewable energy, check out SustVest to better understand its future scope.
2. Mutual Funds
Mutual funds are among the best places to invest your money and create passive income. Mutual funds can provide additional dividend income while creating profitable assets for your future. However, it is not as easy as it sounds; you must properly study how to invest in equities, bonds, etc., to create a reliable and profitable.
3. Real Estate
Still, stuck with “How can I invest money to retire early”?Real estate is the best option to increase your capital value and create a passive income source. , Real estate (properties) will increase their values with time, generating a consistent rental income till then. This also provides numerous tax benefits.
After knowing these three best investment options, you don’t need to ask “how can i invest my money” just consider these options and start your investment journey towards financial freedom.
What is the best way to invest to retire early?
If you want to retire early with financial freedom, invest your money in a long-term investment option to get higher returns, long-term profitability, low risk, and passive income. One of the best options is renewable energy. It’s a rapidly growing sector that the government promotes to make that shift and switch the world for a sustainable future. It’s the right time for investors to invest in renewable energy to ensure higher returns and retire early.
How much money is enough for retirement in India?
If you want to retire in your 40s, understand your yearly expenses and consider the inflation rate. For example – If your yearly expenses are Rs.10 lakh with a 7% inflation rate, you need Rs.3 crore for your early retirement.
Why is it good to retire early?
When you retire early financially, you have a life to live on your terms. You can do whatever you want, be healthy, enjoy life, make memorable moments, work on your passion, and much more. There are countless benefits of early retirement.
Taking steps towards early retirement is one of the best things everyone should do. It unlocks various opportunities in your career and allows you to live a life with full potential without worrying about finances. You should invest smartly in the right Investment options to achieve that financial freedom. However, there are so many investment options available then it’s challenging to find which one is suitable. You can start your early retirement journey by investing in the renewable energy sector.
Get in touch with SustVest to let experts guide you and make informed investment decisions for higher returns and long-term profitability.
Founder of Sustvest
Hardik completed his B.Tech from BITS Pilani. Keeping the current global scenario, the growth of renewable energy in mind, and people looking for investment opportunities in mind he founded SustVest ( formerly, Solar Grid X ) in 2018. This venture led him to achieve the ‘Emerging Fintech Talent of the Year in MENA region ‘ in October 2019.