Yesterday, I met my friend Lance for a smoothie. We were fellow ‘greenies’ striving to turn the tide of complacency at the Western Cape Government. Sadly, he’s now the sole ‘greenie’ in a sea of ‘couldn’t give a shits’.
Sorry Lance, the private sector was calling and I couldn’t say no. 😉
We hadn’t seen each other in a while and so I was catching him up on my new job and regaling him with my urban hippie adventures (specifically the time I dropped the compost bucket off before work and managed to get my shoes covered in mud). Good times.
Early Retirement Really is Possible
The conversation segued to our early retirement plans. Lance was immediately fascinated (though more than a little skeptical) when I suggested it was perfectly doable for him to retire at 45. He’s 31 now.
I sometimes wish I knew at 31 what I know now, but then where’s the fun in that? If we have it too easy we don’t learn and grow. And besides, now I get to be proud of the fact that we dug ourselves out of a really deep hole.
In 2008 (when Sporty and I started this journey) we weren’t in a position to retire at all, never mind early. Back then we were up to our nipples in debt, with not a cent of savings between us. I’m happy to report our finances are in way better shape now.
Our debt is long gone, we have a growing nest egg, thriving investments and respectable retirement annuities.
How did we get here so quickly when our circumstances back then were so dire? Well it boils down to four things, three of which anyone can apply and benefit from.
The fourth is a bit of a luck of the draw scenario, but I’m including it here because if you’re fortunate enough to be on the receiving end of a large sum of money, you’d better have the financial streets smarts to hang onto it. Unlike these poor sods who had it all and lost everything.
A Lucky Break (Thanks Mom and Dad)
My parents left Sporty and I a small inheritance. We’re extremely fortunate to have had this cash injection at a time when we really needed it, but there’s two really important things to note regarding it.
First. We earned that damn money. My parents were both super sweet (in their own quirky way) and I’m blessed to have had them for parents. My childhood was way more normal, not to mention more pleasant, than, say, Augusten Burroughs, whose mom gave him to her psychiatrist, thus freeing herself up to question her sexuality in peace.
Compared to Mrs Burroughs my folks were a doddle, but they were still hard work and the cause of a much of my gray hair. Though if you consider what they had to put up with from me, the scales are tipped squarely in my favour.
Second. And this is the important part. That inheritance wouldn’t have helped one jot had Sporty and I not first learnt how to properly manage our finances. Prior to getting out of debt this last time, we’d previously managed to go from being in the black to swimming in the red at least three times. THREE TIMES!
Three Steps to Early Retirement
Retiring early boils down to three key factors*, two of which are immediately doable and one which takes a bit more planning and
hard work focused attention. At this point I’d like to ask you to keep an open mind, because bar for the third one, the suggestions I’m about to make aren’t the usual common or garden variety type stuff you’ll find on most finance blogs.
If you want that kind of advice then you need to read a finance blog, Mostly Mindful is about the (mis)adventures of two urban hippies. And as such only very occasionally breaks with protocol by posting something vaguely useful. Like now.
*There are obviously a bunch of other things to factor in as well, but I these three provide a much-needed launch pad to early retirement, which is why I’ve been so bold as to say they’re key.
Step1: Become a Minimalist (Live Frugally*)
*Frugal is not the same as miserly. I’m not suggesting you never ever buy another new thing again, and I’m certainly not saying you have to dumpster dive or be that relative who always shows up uninvited at mealtimes. It’s simply about being smart with your money and not buying just for buying’s sake.
Pare down. If you have stuff around the house you no longer use, sell it. Don’t buy new stuff to fill the empty spaces.
That’s a really simplistic take on what it means to become a minimalist and live a more frugal lifestyle, but that’s essentially what it comes down to. Save more, spend less. Enjoy more, want less.
In my now famous (I believe all my cousins have finally watched it) TEDx Cape Town talk on minimalism I expand on the concept: the less you own, the more you have. But I’ll give you the gist of it here in case you’re too busy to watch it.
Becoming minimalist means more money, more time and less stress.
I’m not saying it’s always easy. Sporty and I often want to say screw it, we’re just going to go out for dinner or we’re just going to buy lunch instead of pack our own, but then we remind ourselves of the marshmallow test and suddenly steaming vegetables and making a salad doesn’t seem like such a chore anymore.
You don’t need the stuff. The stuff’s not going to make you happy.
What will make you happy is quitting your job and travelling the world. Which you’ll be able to do a lot sooner than you think if you’ll just stop shopping for things you don’t need. If you want some inspiration, more information or simply want to see if what I’m suggesting is even possible then just Google ‘early retirement’ or ‘how to retire early’ and see what comes up.
Sporty (aka the numbers half of our duo) recommends reading How To Retire Early: Your Guide to Getting Rich Slowly and Retiring on Less by Robert and Robin Charlton. This couple retired at the age of 43 and it took them just 15 years of focused effort to achieve their goal of financial freedom.
The days of a gold wristwatch and a handshake are long gone. Instead, let’s look at how we can escape the rat race while we’re still young and fit enough to enjoy ourselves.
Step 2: Eat a Plant Based Diet
I bumped into our friends Heino and Johnny at the Waterfront a couple of weekends ago. They were shopping for food for a braai later that afternoon (I was between coffee stops) and Heino was bemoaning the cost of groceries.
“Even vegetables are expensive now!” He said, shaking his head in dismay.
“Um…” I smiled, not sure what to say exactly, since I hadn’t really noticed.
I relayed the conversation to Sporty.
“Yes,” she agreed, “everything is more expensive.”
“Hmmm…really?” I tried to at least look like I’d given the matter serious consideration.
She saw right through me, but came to my defense anyway.
“It’s because I do the budget, I can see how much more we’re spending every month.”
“Oh. Right.” I nodded as if I understood, which thankfully I did. Sort of.
“Wow, how lucky are we that we’re vegan?” I expounded a few seconds later when it dawned on me that we’re really lucky to be vegan.
South Africans in general are a meat eating nation. We take to the task with gusto and Heino and Johnny are no exception. So it’s no wonder Heino was upset, because it certainly wasn’t the spinach or celery that was pushing his grocery bill to unprecedented heights.
Sporty and I always give the meat section a super wide berth when we go shopping, so we have no idea what it costs. However even as a kid I remember my mom complaining about how expensive meat was. So I can’t begin to imagine how exorbitant today’s prices must be.
Want to retire early? Eliminate all animal products from your diet. Not only will you be healthier, but you’ll save a ton of money too.
If you’re concerned about finding interesting veggie recipes, worry not. Head over to Bosh.TV, where you’ll find plenty of vegan recipes. If you’re old school, you can always grab a copy of their cookbook.
Step 3: Get Out of Debt
Up until 2009 Sporty and I were always in debt. We had periods of being debt-free, but then one thing invariably lead to another and before we knew it we were back in debt again.
Nothing tastes as good as thin feels. It’s the same with not owing money. There is absolutely nothing we could buy that would give us the same pleasure as being debt-free. If we want something we buy it with our own money, not the bank’s. And if we can’t afford it right now, we save up until we can.
Becoming minimalist helped us pay of $95 000 worth of debt and there’s no way we’re ever going back down that road again. Living pay cheque to pay cheque is stressful in the extreme. We got caught up in that vicious circle because we weren’t living mindfully. While never big shoppers, but we spent without thinking and lived beyond our means.
It’s really not that hard, it just takes a certain amount of focus and a decent plan. The first step is making a budget. Sporty created an awesome spreadsheet for tracking our monthly expenses.
I’m sure she can be persuaded to share it, so let us know if you’d like the template.
If you’re feeling overwhelmed by it all, get yourself a good financial advisor or bribe the numbers nerd in your family to help you. It won’t happen overnight, but if you stick to your budget you’ll eventually be debt-free. Then all you have to do is remain debt-free. Easy peasy.