Becoming a Millionaire in Health, Wealth, and Happiness

Early retirement sounds like a crazy fantasy. And people are now adjusting their lifestyles in pursuit of Financial Independence and Retiring Early.

Need for Early retirement?

So what really urges people to become financially independent and retire early. Here are some benefits of retiring early,

1. Healthy Life: You no longer have to sacrifice your health which is the worst part of your job(not for everyone but for most of us)
2. Spending time on what you love: Yes! Time is all yours. You can prioritize things you love the most and no one’s out there to block your calendar with useless meeting invites(Most of us hate meetings more than work)
3. Enjoy your savings: Savings/Passive income is much needed to be financially independent and to enjoy your retirement. If planned correctly, by the time you retire you’ll have plenty of money and it’ll be the time to have money work for you
4. Travel: Everyone loves vacation and the good thing is after your retirement you can travel around the globe and nobody can stop you(COVID does but it’s only temporary)

But wait!!! What can get you wrong?

• Planning for early retirement will come with some cost — you’ll end up sacrificing your present expecting a better future
• In this rapidly changing world, do you think it’s easy to forecast the next 20-30 years and plan for early retirement?
• Inflation is a monster — decrease in purchasing power of your money

Let’s look at these 3 points in detail and learn what can go wrong and how to avoid them.

Sacrificing today for a better tomorrow?

Most people who plan for early retirement makes this mistake. You’ll start extending your work hours, sacrificing health and family time with the hope that in a few years everything will be changed and you can start to live with your passion. No, it doesn’t work that way, you’ll end up enjoying your short term success and work even harder for the next milestone which you were never interested in.

Remember hearing something like this “Just a few more years of hard work, after which you can enjoy all your lifetimes”. By this time you’d have realized that this is the greatest myth you’ve ever heard. Don’t let this continue till your retirement.

Tips: Focus on long term goals, learn new skills and technologies, develop a routine, plan your day, be focused and complete your work as per schedule, spend more time with your friends & family.

What future holds for you?

We all know that life’s very uncertain. In that case, sacrificing your present for a better future can be a big mistake. Let’s go to the extreme with both pessimistic and optimistic way to see what could be the future.

Pessimistic way: We’re already seeing a calamity in 2020 and this is not the only threat to humanity.

• Obesity and sleep deprivation which came as an unintended outcome of industrialist society are the immediate problem our generation is facing now. Both of these could eventually lead to death, better not sacrifice your sleep, and also avoid unhealthy food and lifestyle.
• There’s been a lot of discussions about nuclear/bio war, most historians say that war is not a thing in the 21ˢᵗ century because it’ll affect global trade and capitalists will not get profited from it. But not guaranteed.
• Technological singularity: Artificial Intelligence taking over humans, while there’s been a lot of research into building AI systems to help humans we may end up building a system that’s stronger than humans which could eventually take over humans. We have seen a lot of sci-fi movies on this like ex-Machina, eagle eye, A.I. Artificial Intelligence. Things won’t get worse as it’s shown in these movies but it’ll affect people through automation. Learn more about AI and Technological singularity here.

These are some extreme negative scenarios that could plausibly destroy your plans. Now think once again whether you want to sacrifice your present for the future which is uncertain.

Tips: Enjoy every moment, Focus on your health more than anything else, be more adaptable to change(survival of the fittest)

Optimistic way: Personally I love some of the things(Technologies❤) that our current research is focused on. Here are some plausible scenarios that could come based on current research:

• Immortality: There’s been a lot of money invested in biotechnology to reach immortality. Even if we don’t get there in this century there’s a lot of possibilities that we could invent something that can extend our lifetime by 10 years or so. This technology will be much costlier and to afford this your passive income and savings after retirement should be very high
• Average life expectancy: Average life expectancy is gradually increasing every year. As per 2016, the average is 68.9 in India, 78.54 in the USA, and 83.98 in Japan. It may get affected due to the COVID pandemic yet the average life expectancy is increasing all over the world (For example Average life expectancy in India during 1960 was 41.42 and by 2025 it may get doubled). If it gets increasing every year and you plan to retire in 2040(say age: 45), your average life expectancy at that time could be 90 years. Do you think your 25 years of savings and investment will be enough for the next 45 years?
• AI and Bionics: As mentioned earlier, there’s been a lot of research on building AI systems to facilitate humans like health monitoring systems, self-driving cars which could help extend your lifetime by a few years. Similarly, there’s a lot of work on bionic and artificial implants like neuralink, advanced bionic limbs. While they’re very impressive and helpful to humans, they’re not easily affordable. Do you think the money you have in your pockets during retirement will be enough to buy these things to make your life much easier and to extend your lifetime?

Tips: Keep yourself updated and be more open to change, before planning consider every possible scenarios, retiring early is awesome but make sure your passive income is much higher that what’s need for spending

We have seen some possible scenarios and questions which need to be considered while planning for your future, and at the same time don’t procrastinate your actions hoping for a clear answer. Learn to be more adaptive to the situation which is the single most thing I would recommend.

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change

Inflation monster

Inflation is like cancer that eats the purchasing power of your money. The average inflation of 4.5% every year could cut in half the purchasing power of your money every 16 years.

Let’s take apples as an example, in 1939 apples priced at 1$ is now 44.47$ meaning a 43.47$ increase in value. Source

Things to consider now,

• Your investment should beat the inflation rate. If you’re putting all your savings into Fixed deposits, soon inflation will eat your wealth.
• You should consider investment options like Bonds, equities, and gold

Now that we’ve seen some things that can go wrong with your early retirement. Let’s focus on things that could help you not just to retire early but also to build a substantial fortune without sacrificing your health.

Start planning and start living

• Extreme Frugality: Learn to live a minimalistic life, reduce your expenses, and try to save at least 30% of your income.
• Multiple Sources of Income: It’s better to find some other income options that are specific to you, try to make money out of your hobbies and passion. Will discuss more on this in the next section.
• Actively Investing: Explore various options to achieve financial freedom and choose the best options that fit you. Be more consistent in investing, a small percentage of your income invested wisely and regularly could bring you a fortune. If you’re in India, check out this blog to get more insights on investment options.
• Upgrade yourself: Focus on learning new skills and technologies to upgrade yourself. As an unintended outcome, you’ll earn more and more.
• Retire only when your Passive income >> your spending

The more you Learn

The more you Earn - Warren Buffett

Multiple Sources of Income

This should be your major area of interest if you want to retire early in 21ˢᵗ century.

• Everyone is passionate about something but only a few are fortunate enough to pursue that as a career. But you can make money with things that you’re passionate about. Example: If you’re a movie freak and spend most of your free time watching movies, you can start to analyze movie scripts, research about each storyline and film making, and create video essays on them, build a community of people who’ll get benefited from your work. Eventually, you’ll start earning money directly from the people who consume your work or through advertising and recommendations.

Your knowledge and talent is a unique product.

Stop being a consumer and Start being a producer

Find the right set of people, who’ll benefit by consuming your product.

• Your knowledge and thoughts are always helpful to some people. Find them!

If you’re good at something, never do it for free -joker, Batman: Dark knight

• Freelancing: Freelancing the same work that you do at your day job can be painful. Example: If you’re a programmer working for a product company and plan to do freelancing it’ll be hard to manage work-life balance. Instead, you can use your prior experience and be a consultant who can design or propose solutions. Or you can help beginners by guiding/mentoring them.

There are various options to produce content like YouTube, blogs, podcasts, live webinars. There’s no free lunch theorem. Explore and find what suits you best.

To summarize, we’ve seen:

• What early retirement is all about — Enjoyment❤
• Things to consider in the 21ˢᵗ century — Adaption☺
• Stop sacrificing and Start living — ikigai (happiness in being busy)
• Financial freedom — Spend less, Invest wisely
• Generate Income — Learn, Produce, Repeat❤

Happy learning!!!