The 3 Secrets to Early Retirement

3 SECRETS TO EARLY RETIREMENTI’ve been traveling this month through Thailand, Bhutan, and Nepal. For me, traveling means meeting lots of new people. And sooner or later, they all ask: “so… what do you do?” When my husband and I respond “we’re retired”, it inevitably generates lots of questions. And the most frequently asked question on this trip has been: How is that possible? You look too young to be retired!

The simple answer is:

  • we read a book,
  • we followed the steps in the book, and
  • we retired.

People love that answer because it sounds straightforward, easy, and the outcome is highly desirable. But upon further questioning, the details sound mind-numbing and the process took us a long time. These two items often bring a quick end to any interest people have in the reality of financial independence and early retirement (FIRE).

I believe that it’s both the boring technical aspects and the requisite long-term commitment that keep many people who initially get excited about FIRE from getting started or sustaining momentum over time to reach their goal.

So let me say this with love: FIRE is neither easy nor does it happen overnight. That’s because it is a profoundly counter-cultural path that require aspirants to:

  1. rethink your beliefs about work and money,
  2. adjust your relationship with spending, saving, and investing, and
  3. change your day-to-day behavior in ways that most people in your life will neither understand nor support.

Because of these three factors, I’ll refrain from offering a list of one-off tips and tricks to early retirement. Instead, let me share the 3 secrets that truly supported us in our long and hard journey to early retirement.

Secret #1: Pick One System & Stick To It For At Least 1 Year

Once the light-bulb has turned on in your brain that FIRE is possible and you want to make it your goal, you’ll want to choose a well-established system to follow that has a proven track record of success for other people like you.

Why? Because the most straightforward way to shift your mindset and behavior is to follow an organized system of steps to get from where you are now to FIRE. The problem for most people is that they spend a huge amount of time reading books, commenting on blog posts, and listening to podcasts instead of doing the work to FIRE.

Inevitably, you’ll tweak and adjust whatever system you chose to fit your needs. But it’s better to start with an explicit, organized and actionable system that will become the foundation for your path to FIRE, then to procrastinate moving forward while you “do more research”, “read another book” or “listen to another podcast”.

I recommend that you start with one book: Your Money or Your Life. I am totally biased because this is the book I relied on to guide my path to FIRE. I feel comfortable recommending it because it worked for me and I’ve seen it work for all kinds of people over the past two decades (kids/no kids, wide range of incomes, various education levels, etc…). All you need to do is:

  • get the book
  • study it
  • do the steps
  • discuss only with other people who are committed to the same goal

Once you’ve moved into action, feel free to read additional blogs, podcasts, and additional reading for motivation, inspiration, and ideas. But don’t let every shiny new tip, trick, and hack  get you to change your foundational strategy.

Secret #2: Join A Community of Believers

Whenever you set a big goal (especially one that goes against prevailing social norms), you are most likely to meet that goal if you surround yourself with a community of others who: a) have the same set of values and beliefs, b) are working towards the same goals, c) are deeply committed to achieving those goals and d) want to support one another.

Having a supportive community is critically important to achieving any big goal. That’s why first-time marathoners join running groups, aspiring novelists join writing groups, entrepreneurs join incubators, and those who want to climb Everest don’t start hiking alone. And it’s why you’re unlikely to achieve FIRE by trying to figure it out yourself and moving forward in isolation.

Instead, consider that the key to starting, staying, and succeeding on the FIRE path is belonging to a community of people with whom you can interact on a regular basis to ask questions, share information, and brainstorm creative solutions.

The great news is that there are many online communities you can plug into immediately. In these communities you’ll find committed people you can interact with who are at various stages on the FIRE path. To keep you from getting overwhelmed by listing all the existing communities, here are a few to get you started:

When we were just getting started on our FIRE journey, there were no online communities. But FIRE came alive for us when we joined a local community of people in Boston dedicated to following the steps in Your Money or Your Life. We were blessed to be mentored by people who had already FIRE’d and generously volunteered their time to help others get their financial house in order. It’s hard to describe, but there’s just something about seeing a diverse array of people FIRE’ing, in a high cost of living area, without some extraordinary circumstances (inheritance, won the lottery, etc…) that made it seem possible for us.

So by all means, join an online community. And if you want to turboboost your progress, consider joining  a face-to-face community in your local area. There are plenty of FI and debt-free meet-up groups (check your local meetup.com or reddit). As much as I love online communities, there’s nothing like meeting up with other FIRE walkers in person to support the ongoing shifts in thinking and being that will be required to retire early.

Secret #3: Create Accountability

Choosing a system and joining a community are critically important, but when you drop this third piece into place, it is the game changer! No matter how well read, well connected, and engaged you are about FIRE, if you add accountability to the mix you will find your movement accelerated.

By accountability, I simply mean having another person (or group of people) who hold each other accountable to monthly financial goals, tracking progress, and asking each other the hard questions that you won’t ever ask yourself. They’re people who commit to walking this path with you, celebrating your successes along the way, encouraging you to get back up when you fall, and consistently holding your feet to the fire.

I mentioned previously that we participated in a locally-based community that was organized around Your Money or Your Life. That group didn’t just meet up to discuss implementation strategies, they also organized accountability groups. The groups were composed of 4-6 households, all of whom had been tracking their data for at least one year. For an entire year, we met once a month to focus on one household’s finances. The household in the hot-seat prepared a summary of their financial data that was shared with the group (prior to the meeting). Then during the meeting, the other households asked them powerful questions to help bridge the gap between their desired goals and their current financial reality.

This accountability group was transformative for us. First and foremost, there’s nothing like knowing you’ll be sharing your financial data with other people for keeping you motivated and on track! Our group members kicked our butts every time we were in the hot-seat. So much so that I cried every time. But their analysis of our data, questioning of our logic, and interrogating our limiting beliefs about money moved us further and faster than we ever would have on our own.

There are many ways to build accountability: buddies, virtual accountability groups, local accountability groups, transparent tracking, etc… The only limit is your imagination.

Ultimately, FIRE doesn’t happen over night. It requires a long-term commitment and you’re most likely to succeed if you follow one system (instead of trying to patch together a wide range of tips and tricks), you’re embedded in supportive community of believers who share your goals, and you create accountability structures to ensure consistent forward momentum.

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