We usually look for financial tips when there are things that we want to improve in our financial life. Regardless of how much you are earning or financial need, there is always something that we can improve on our finances.
Fortunately, there are so many sources of financial advice on the Internet. The challenge here is to know which ones you will follow. Some people end up failing to improve their financial situation because they followed the wrong advice. You need to filter the advice that you get and consider carefully your options if they are applicable to your unique situation.
When you are faced with financial tips, it is important for you to know who it is coming from. Who wants to get advice from a failure, right? Obviously, you want to get it from someone who actually lives the life that you want to have. You want to emulate someone who has turned your financial aspirations into a reality in their own lives.
In an article published on NextAvenue.org, two Internet sensations are giving tips that helped them get to where they currently. And what, you may ask, makes them legitimate financial advisers? Simple.
They are early retirees.
Jacob Lund Fisker and Pete (a.k.a. Mr. Money Mustache) both have huge followings online because they were able to retire at an early age. In fact, Pete was able to retire at the age of 30 – and he is not single. He and his wife are raising a child and they are comfortably living out their retirement without worrying about money and how they will provide for their monthly needs.
Why money management tips from early retirees are valuable
If someone says that they are able to retire at an early age, wouldn’t you want to get financial tips from them? After all, this is the very reason why we are toiling hard right now. We want to have a bright future for ourselves and our family.
Although some of the early retirees are not certified financial advisers, they are credible simply for what they have accomplished. Let us discuss two important reasons why you should listen to what these early retirees have to say.
They symbolize what most of us want to achieve.
We all want to retire early. This is especially true for those who are tired of working every single day. We want to be free from being forced to get up in the morning to do the same thing over and over again. We long to be in a financial situation wherein money is no longer something that we chase after. We want to be content with what we have and not worry about the fact that we are failing to live life to the fullest.
These aspirations are something that early retirees are enjoying. This is why they are great financial advisers. They have reached a certain level of financial happiness that makes them feel like it is okay for them to get out of the corporate rat race.
They know how to manage their money so they become financially independent.
The two early retirees that we mentioned earlier did not come from rich families. Their parents are not millionaires. They did not win the lottery either. They are simply great managers of their money. They lived on what they had and made smart decisions about how they will use their money.
If you notice, most financial tips will discuss how you can be a great manager of your finances. You cannot improve your financial situation unless you become a better money manager. When it comes to financial management, you will learn a lot from early retirees – especially when it comes to building their source of income to a point where they reach financial independence.
What can you learn about finances from young retirees
Now that you know that early retirees can be legitimate sources of financial tips, what exactly are the lessons that you can get from them?
We can think of three important lessons that you can emulate.
They do not let their income dictate their lifestyle.
In the About Me page of MrMoneyMustache.com, Pete said that we display a very odd behavior. We force ourselves to live expensive lifestyles only to end up feeling confused that there is nothing left of their income. The key to improving your finances is to make sure that you are not spending all of your money. Just because you are earning a 6-figure income, it does not mean you have to spend all of it. Oftentimes, when we get a raise from work, we are quick to upgrade our lifestyle. This should not be your practice. If you want to improve your finances, do not use your income as a basis for your lifestyle. Instead, you should only concentrate on what is necessary for you to live comfortably. Anything that is beyond that should not be spent on. Whatever you do not spend should not be put aside to be forgotten. You need to learn how to put it to good use.
They know how to use their extra money.
One of the important financial tips that you will learn from early retirees is knowing what to do with the extra money that you have. If you have successfully downsized your life so you live below your means, the next step is putting your money to work. Look for ways to invest your money. Put it in stocks, bonds or mutual funds. Buy a house that you can rent out for a recurring income. Do not use your extra money to fund that expensive vacation in a posh ski resort. Do not use that extra money to buy a luxury car. Use it to put more money in your pocket.
If you think about it, retiring early is a possibility for everyone. We just have to know how to manage our finances and control our consumerist ways. Here is a video that will give you an idea about how you can retire early. It is a simple math that you can do to help you identify just when you can afford to retire.
They learned how to beat the consumerist system.
Finally, you should learn from early retirees how they live without falling prey to the consumerist system. In the blog of Jacob Fisker, EarlyRetirementExtreme.com, he said that he found great satisfaction in knowing that he does not have to work if he does not want to. He is also satisfied with the thought that his life is not filled with stress coming from jobs, debts and bills. He learned how to make the things that he needed.
This is something that a lot of us may have a problem with. It is difficult to not give into the convenience that comes with spending. Why toil under the hot sun trying to grow your own produce when it is readily available in the market? But that is the reason why we are in need of financial tips. We need to stop relying on our money to make our lives comfortable. It makes us lazy. There are many expenses at home that have economical alternatives. Do not waste your money if you know that you can do something yourself. That is how you liberate yourself from the need to slave away just to earn an income to finance products and services that you can do for free.
One thing that makes saving for retirement intimidating is our perception of how much we need to live comfortably. Well, that may no longer be a huge target – at least, not as much as we initially thought. According to an article published on ThinkAdvisor.com, the usual computation is 80% of our pre-retirement income. Well, this might not be so true anymore. The article revealed that spending declines when a person is retired. For one, their commute to work is no longer there. Also, they have more time for do-it-yourself activities. That means more time to plant their own produce or make their own cleaning products. This saves money on groceries. They also have more time to make meals from scratch. This makes for a healthier meals and cheaper too.
Think about all of these financial tips when you are trying to improve your finances. Remember that it does not matter how much you are worth. In the end, what is important is to know how to use what you have and knowing that luxury does not necessarily equate to a higher quality of life.
Once you have grasped that, then there is a huge possibility that you can afford an early retirement.