In a recent post I laid out some money myths designed to keep people trapped in wage slavery. I want to talk today about how to buck those myths and try to achieve early retirement extreme.
One of these myths is that the government sets the retirement age. Some people use the age at which you can collect Social Security as their benchmark. They live their lives with this as the artificial and arbitrary endpoint of their working life.
But what if there was an easier way? What if you didn’t need $2 million in the bank and 40 years of work under your belt for permission to retire?
Early Retirement Extreme
So what is early retirement extreme? The phrase is actually based on a popular website and forum of the same name. Now essentially defunct (because the retiree who ran it actually decided to unretire), it was a place for people to share their stories about retiring VERY early.
From this description we can establish that early retirement extreme doesn’t mean you retired at 62 instead of 65. It means you retired at 40, 45 or even younger.
If you want to learn more about it, check out the book by Jacob Lund Fisker.
How to Retire Early
Retirement can be voluntary, or it can be forced.
Essentially, the only way to retire on your own terms is to reach that point where you are no longer dependent on income from a paycheck. This means you have saved up a lump sum to last you the rest of your years, or you have some saved up but enough passive income streams like rental income or dividends to allow you to meet your daily needs.
Obviously retiring very young leaves you with more pressures. You will live longer and require more money for expenditures.
So how do you minimize the pressures of retiring early?
You cut out all the middlemen in your life and become your own supplier.
Grow and raise your own food. Generate your own power. Other than healthcare, what else do you really need?
By cutting out the middleman, we are cutting out uncertainty – uncertainty over inflation and how much these products will cost in retirement. By doing this, we are taking control of our retirement and not waiting for the retail markets to raise the prices on us.
Retiring early is going to require some conscious spending. We are going to need to spend large sums of money before we are retired (without debt). This will allow us to take advantage of lower prices today.
So what are we going to be spending our money on?
This will depend on what type of retirement you want to have. For me, it means first buying a large tract of land. From what I can tell, this will probably cost twenty to fifty thousand dollars.
Once the land is purchased, the next step will be to save up to build a fully sustainable and off the grid homestead. This will require the capabilities of wind power, solar power, a well for water, etc.
As we save and spend, we get closer to that time when we need no more income to support our lives. Of course this can only be achieved by actually saving up for these items, not taking out loans or notes on them.
Is Early Retirement Extreme for Everyone?
Most people will not ever even consider such a retirement. That’s okay. The hard work of others can prop up the system while you drop out.
Most people want to live an extremely social life. They want to move up in society as their peers do. They don’t work hard to retire – they work hard to afford the social trappings that come with money.
Early retirement extreme requires a sense of adventure and a great deal of independent spirit. It also requires a dropout attitude in a culture that invests so much into making sure new generations toe the line and help support those who came before them.
Make no mistake that early retirement extreme is a dangerous threat to the Ponzi scheme that is America.
If you try to engage in it, you will not find any support. More likely you will find criticism and thinly-veiled jealousy.