Retiring young as a millionaire is easier said than done, but it is not impossible. We have witnessed success stories of young wealthy individuals because they chose wise financial decisions. Jen Glantz of the Business Insider’s Personal Finance spent most of her 20s figuring out how to retire young. Then, in her 30s, she discovered different ways of working towards her financial plans.
Here are the five main strategies she’s doing to retire young and wealthy:
1. Reducing Credit Card Debt
After falling into some credit card debt in her 20s, Jen Glantz vowed to be more strategic about spending her money and planning big purchases and unpredictable emergencies. To meet big saving goals and monthly contributions to the retirement fund, she suggested not prolonging any credit card debt.
Here is a simple rule: Schedule a few credit-card-free days during the week and pay with cash only. Glantz also said she unlinked her card from her favorite online stores to avoid impulsive purchases.
In addition, building an emergency fund helps save money you can use during unplanned and costly expenses.
2. Focusing on Retirement Contributions
It wasn’t until Jen Glantz was almost 30 years old that she decided to start contributing to her retirement fund seriously. Since then, she religiously makes regular contributions to SEP- IRA, prioritizing putting money into that account and budgeting for it monthly.
While Jen’s income as an entrepreneur varies month-to-month, she tries to work on increasing the amount that goes to her retirement fund by at least 15% annually.
This strategy will help you benefit from compound interest, making money grow at a more rapid pace.
3. Diversifying Investments
Another strategy that helps build a retirement fund is diversifying your overall investment portfolio. Jen Glantz, for instance, put cash in the stock market, index funds, and mutual funds. She also bought cryptocurrency and NFTs and has started educating herself more regarding real estate investment.
Ms. Glantz shared that she made A big money mistake in keeping too much cash in her savings account. “By putting more money in investments, my finances have the opportunity to grow exponentially year after year,” she explained.
4. Watching Spending Habits
Jen Glantz conducted an assessment of her spending pattern. Then, she realized one of the most significant factors in how to retire young and financially independent is by sticking to a budget.
“For the past year, I’ve mapped out how much I allow myself to spend for the month and track purchases every week. I am using a homemade Excel spreadsheet. And if I overspend one week, I adjust my weekly budget to spend less to meet my savings goal for the month.” – Jen Glantz.
This method has drastically changed her financial mindset. It has allowed her to be more strategic with daily and monthly spending habits.
5. Increasing Passive Income Streams
The average millionaire has at least seven income streams, according to the IRS. As an entrepreneur, Ms. Glantz had to constantly find ways to bring in income in different ways. It ranges from providing products to services, coaching to speaking engagements, freelancing, and selling online courses. In short, persistent efforts and perseverance yield gratifying results.
These five realistic strategies could answer “how to retire young as a millionaire?”. That is if taken into action seriously and persistently.
About Jen Glantz
Jen Glantz is the founder of Bridesmaid for Hire. She’s also an author, host of the podcast titled “You’re Not Getting Any Younger,” and the creator of some newsletters. Follow her adventures on IG: @jenglantz.
