4 Steps To Becoming Rich And Retiring Young

As the new year is just starting up many people are starting to make new year resolutions about their health and their finances, and why not? What better way to jump-start your year by getting on track for financial success?

So why not make 2012 the year you start your journey to getting rich? Here is a simple 4 step plan to prove that retiring young needn’t be a luxury afforded only to the super rich.

Step 1: Get Out Of Debt

The first step of course for financial success is getting rid of expensive debts like overdrafts and credit cards and if you have these it really doesn’t make sense to worry about anything other than clearing it.

If this sounds like you, consider starting 2012 with a resolution not to go out or spend any money you don’t have to. It won’t take forever and if you work hard you might clear your debt faster than you thought possible.

Step 2: Start Investing

The next step is to start building a savings fund – start with a little amount in a savings account but also start looking at other ways you can invest, there are more options than I can list in this post and it might be worth asking for financial advice if you are unsure.

Interest rates might be low right now, but that means that mortgage payments are low too – any money you can invest at a rate higher than you pay on your mortgage is money well invested. Any savings (above an emergency fund) that earn less than your mortgage costs should be paid off the principal or invested.

Step 3: Write A Budget

I mean a long term budget too. Start by planning your daily finances – you know how to do this already I’m sure. Figure out how much you can save/invest/pay-off each month and then create a cash flow forecast for yourself. It doesn’t need to be super accurate, just a guide.

Plot your mortgage payments (or hypothetical payments if you don’t yet own a house) and your investments and figure out what sort of income (in today’s money) you might actually need to live off come retirement age. This might seem like a way off, but knowing what you need to achieve is very motivating.

Step 4: Go Live A Little

The curse of the rich (in most cases) is workaholism, so once you have a plan, make sure you take the time to do fun things (within your budget of course), get exercise and learn new things. A large part of retiring young is staying young as you age.

In 2012, start your journey to long term financial success, but also take up a hobby that will benefit you now. Enjoy your year!

About The Author
This post was written by Mark from www.currencyconverter.co.uk

Comments

  1. Ben Johnson says

    I think one of the biggest things about getting rich is planning and being organised. If you drive yourself to meet set targets then you are far more likely to get rich. There’s little point aiming for $1 million, you need to start by aiming to make $10,000 then $50,000 and so on. Baby steps as it were.

    Ben

  2. says

    Great tips for anyone Mark, I wish I would have gotten them 10 years ago. I’ve managed to stay out of debt, which is a plus, but I have been investing my money in my own ventures, so of which just haven’t worked out. I should have diversified a bit.
    Thanks,

    -Joe

  3. says

    Though I’m just in my first year of working, I know how important it is to make a budget. Overspending and debts start when you make unplanned purchases. I know it’s not fun to stick to the budget all the time, but if you want to retire rich and young, you have no other option but to do that.

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