How to Retire Early: The Shockingly Simple Math

The premise behind retiring early is investing your money to the point where your investments are making enough each year for you to live on. Then you are ready to retire.

These investments could be stocks, bonds, real estate, or any other type of investment vehicle.

Get to know your savings rate: how much you make, minus your expenses. If you spend 100% of your income, you’ll never be able to retire because you’ll never be able to invest any money that will earn money for your retirement. The goal is to get to the place of living in a way in which you don’t need to make any additional money.

The percentage of your income that you can save annually has a direct impact on how many years until you’ll be able to retire. If you want to retire in 10 years, you need to invest 66% of your income.

Cutting your spending rate is way more powerful than increasing your income.


About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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