After going on about the zen and glory of padded envelopes for some time now, I have realized that a refresher on how to retire extremely early (for those who are younger than 35) and how to retire in short order (for everybody who is older) might be in order. After all, this is this blog’s name, so here is a step by step guide on how to retire in 5 years in just 6 incredibly tough quantum leaps (sorry, no babysteps, kids).

1. First build up the required dose of motivation. In my experience, at least 800 milliJacobs(*) are required, but more is always better. The reason for your motivation is not so important. Maybe you are tired of paying for your friendly banker’s kids’ college education. Maybe you think the focus on consumption has gone haywire with the introduction of the electric can opener. Maybe you just want to do things that are more interesting that padding resumes and worm^Hking for the man. These are all good motivations.
2. Get your priorities straight. You are not going to get there through small changes and the eternity of babysteps. Nobody becomes an Olympian by taking the easy path. Early retirement must take precedence over creature comforts and other spurious needs that advertising and marketing tells you to have. No pain, no gain.
3. Stop spending money. Ideally you should spend money on a place to sleep and a place to eat. Early retirement and financial independence is largely incompatible with having a personal game room or taking out a second mortgage to install a bowling alley in the basement. Allow $50 for food a month. If you run out, stop eating (refer to points 1 and 2). It builds character! I’m just joking, but watch what you eat, you can only benefit. You should allow about $5 a month for transportation. This will easily be enough to resole shoes or get new tires for your bicycle. I’m not joking.
4. Achieving financial independence is like taking on a second job. People have been so accustomed to buying products that they can not make anything themselves anymore. Well, it is possible, but it requires some effort. To assist with this effort, throw out your TV. This gives most people an average of 4 hours a day: First to learn how to live without buying everything at Walmart. Second, to apply those skills. Learn how to cook very nice meals for $50/month. You should also get back in shape to actually be able to ride a bicycle without suffering from heart attacks or sweat for that matter. Learn about money and learn to network for things: my ironing board for your bicycle. Learn how to do simple repair jobs, mending socks, fixing a broken radio, toilets that won’t flush. Make that one toilet. After all, how many do you really need?
5. Watch your bank account grow by staggering amounts as you spend less than $500 out of your paycheck a month, mostly on rent, while pocketing the difference.
6. Multiply your monthly expense by 300 and compare it to your bank statement. Once the latter is higher than the former, you are free! Come join us other early retires as we wonder what makes someone want to work for 40 years of their life while only having a pile of stuff to show for it at the end.

(*) Meaning I probably used about 25% more tenacity than was absolutely required.

I would say in summary that for me the path to early retirement was more of a journey to an unknown destination. I did not have a plan of what to do, when I decided to become financially independent. In fact that was not even my original plan (I just wanted to avoid mortgaging myself to a job). Practically everything out there, books, retirement plans, tax laws, is tailored towards having people work and work and work with, as I see it, consumption of stuff being the only justification for their existence. Has anyone else noticed how politicians refer to people as consumers rather than citizens? Wow! I mean, just wow! I guess it’s true that respect has to be earned then.

People’s situation are complex, but one thing, I think, that many people don’t realize is that they have a lot more control over their own life than they think they do. If they knew this would they really choose the option of working from dawn until sunset merely to fill their homes with more and more things?

I wouldn’t and I haven’t. All it took was a decision.

Originally posted 2008-08-14 17:45:14.