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My Wealth Builder had a very interesting post about his observations on people in the Early Retirement Forum.
It is a forum for people who have either retired early or plan to do so. He picked up the following things while going through some threads there:
- Members show above average understanding of financial matters.
- They are regular people with regular jobs.
- Frugality is the main theme.
- Do it yourself investing is the norm.
I was encouraged by these observations because none of this is rocket science. If you put your heart to it, you could develop all these habits and skills.
Even if you don’t want to retire early, these are good habits to have anyway, and will serve anyone good over the long haul.
I think the most daunting thing among these is probably developing an above average understanding of financial matters. But I think that is not too hard either. I don’t know what he had in mind when he wrote: above average understanding of financial matters, but I am guessing that someone who knows when he will be charged bank overdraft fees, is familiar with cost of mutual funds and ETFs, savvy enough to hunt for best interest rates, cheap brokerage houses and such would qualify as a person who has above average financial knowledge.
You don’t really need to know what LIBOR is, or how options prices are calculated to be money savvy. You need to have a general awareness of things going around you, and learn about how to get good deals, make the most out of your investments, avoid paying high fee or expenses etc.
This is really not too hard, and all it needs is a willingness to apply yourself. But, it is the application part that is probably the hardest (at least for me anyway).
I normally tackle problems by breaking them down into smaller problems, and then attacking the hardest one first. When I am fresh and new at something, I have the highest chance to go all the way. So, that way the hardest thing gets done first, and when I see that objective met, it is much easier to get through the other things also. The fact that the problem has been broken up makes it a lot less daunting and a little more manageable.
So, take your pick among one of these four things, break it down into smaller problems, and attack the hardest one first.Â This might be your first step in the journey of a thousand miles!
4 thoughts on “Traits of early retirees”
We’re aiming for early retirement and fortunately we fit all of those traits! I think it’s funny that frugality takes a bashing by many “financial experts” yet it is key to long term financial security. Being frugal means having more money left over to save and invest and means needing less to live on when you do retire. I know it doesn’t solve all of life’s problems but becoming frugal is what helped me kick the debt habit and fix my finances.
Frugality is not sexy and that’s probably the reason it takes a bashing plus its not easy to be frugal either, so that adds up too I guess.