Lifestyle Lessons for an Early Retirement

When it comes to retirement savings, re-evaluating your operating expenses is as critical as increasing sales. These suggestions can help fund your early retirement:

Lifestyle Lessons for an Early Retirement

Lower utility costs. Consider installing sensor lights and low-flow toilets. Check to make sure your windows and doors are weatherproofed, turn down the heating a degree or two, or — better yet — use a programmable thermostat for real savings during off-hours. Get the most out of your heating and cooling systems by scheduling regular system checks and filter changes.

Negotiate with vendors. Rather than lose you as a client, most vendors will look for a way to save you money, especially if you’ve built a strong, long-standing relationship with them. Ask about bulk-purchasing discounts. Vendors may appreciate advance, bulk orders to boost their numbers at different times of the year.

Minimize debt. NerdWallet advises that there may be times when taking on debt is the wiser choice. For example, if you can borrow at a lower interest rate than you can make on your investments, borrowing is a
money-wise decision. Additionally, you’ll help strengthen your credit.

Use a rewards credit card. See which card best fits your company’s needs. Be sure to pay off your balance at the end of the month.

Invest as soon as possible. You’ve heard the saying, “what a difference a year makes,” right? Well, imagine the difference 20 years can make. Of course, no one can guarantee how inflation will affect spending power, but you can use the Bureau of Labor Statistics CPI Inflation Calculator to see that you would have needed $76,601.34 in January of this year (2019) to equal the spending power of $50,000 in January of 1999. Start investing now.

Take a hard look at your team. This is a hard one and no one enjoys discussing it, but it’s necessary. Have the needs and direction of your company changed and does your existing team possess the right talent? If not, hire it. If you have non-producers who have great potential, but need additional training, this is worth the spend. If you have employees who have great potential, but need additional training, this is also worth the spend. If you do have non-producers who are never going to be more than that, start documenting warnings and let them go. The cost to replace an existing employee, while difficult to calculate exactly, encompasses many expenses, from advertising, screenings, and training, to lowered morale of remaining employees. Reducing churn and investing in your existing staff will help to keep your business profitable.

Use freelance/contract workers. You’ll pay them on an as-needed basis and they pay for their own health insurance, sick/holiday/vacation days, and social security. Typically, freelancers use their own equipment and require little to no training and there’s no cumbersome onboarding process. Because they are regularly challenged with new experiences, freelancers bring knowledge from other clients and industries to your projects. One caution, however, is that some freelancers can be unreliable. Test a new freelancer with a small project with plenty of time for completion, and always use a contract. When hiring a new contractor, you might structure payment based on a price-per-project basis instead of an hourly rate.

Embrace telecommuting. This is truly a win-win. Employees save commuting time and fuel costs. You win with lower utility expenses and happier, more energized, and better focused employees. If your employee works from home on Tuesday and also gets a couple loads of laundry done, that’s one less distraction while he or she is working on site on Wednesday.

FIRE up your retirement plan. You’ve probably heard about the FIRE (Financially Independent, Retire Early) craze. There’s a lot being said about it online these days. Mr. Money Mustache, known for retiring at the age of 30 by saving two-thirds of his and his wife’s tech job salaries, is a well-known guru among the FIRE crowd. While his strategy may not be feasible for everyone, he runs a fun site that will provide you with endless tips and motivation. Also, this Retirement Calculator is a quick way to estimate what you should be saving to keep your personal retirement goals on track.