Strategies for Building Wealth and Retiring Early

At a recent holiday gathering, I ran into a friend who had also retired in his forties. We compared notes on what strategies enabled us to retire early. There seemed to be two recurrent themes in our discussion:

Paid ourselves first. Essentially, we put money in savings before paying bills and other spending. I have posted before about why I believe this is a great saving strategy, which has helped us build wealth.

Lived below our means. Our lifestyles were a conscious decision. Even though we could afford more, we would have lifestyles that were below our peers. We would drive less expensive or used cars, live in moderate housing, and avoid extravagances. As a result, we didn't use debt to expand our lifestyle.

Even in these economically challenging times, he and I have managed to stay in early retirement, for four and two years respectively. I'd like to think it is the results of a good execution of the above two strategies :-)

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This is not financial advice. Please consult a professional advisor.

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