Early retirement is becoming a growing trend, particularly amongst the millennials.
The willingness to make a fortune quickly for tomorrow, millennials are adapting to some crazy techniques!
For novice readers, millennials are also known as Generation Y or Gen Y and follow the Gen X cohort.
They are people who are born between 1981-1996.
We believe with great recession and other large collapses, our parents’ savings have started to disappear.
This has resulted in millennials, like you and me, thinking of early retirement as we believe we can put to use investment management and wealth management in our favor and can afford an early retirement.
In this day and age, life is getting dynamic and for us, a 9-5 job is not the right solution.
FIRE depicts – Financial Independence, Retire Early.
This is increasingly becoming the trend/mantra for millennials and in order to achieve this, millennials are inching towards investments and some crazy ways of saving!
If you are from a city like Mumbai, you would realize how costly the real estate is getting.
Thus, it makes sense to share an apartment as long as you are a bachelor.
While we agree you would want to live life, king size, this is not always possible.
Especially when you have started working newly, these are the ways of saving for a rich and early retirement.
9 crazy millennials are saving for their retirement
#1. Work for long hours, office cafeteria could help!
A lot of workplace provides free breakfast and dinner for employees who come in early or stay up late.
If not free, these meals are subsidized or accept meal coupons that bring in tax benefits.
Thus, try to plan your day accordingly. It not only helps you in cutting down your expenses, but also helps reduce your utility bills such as electricity, internet etc.
#2. Start saying “NO” more often
We believe it is not mandatory to be a part of all outings with your friends/colleagues.
By now you must be thinking of FOMO (Fear of Missing Out), but FOMO, we believe, is stupid. Really!
There are multiple ways of bonding, than spending money on overpriced alcohol and loud places every weekend.
Think differently. Once in a while it is fair, but not every single weekend. One can always chill at home if you have the right company with you!
#3.Know yourself better
Millennials in their mid-20s tend to shop a lot.
Impulsive shopping is not a good way if you plan to retire early.Remember, there are two things – basic necessity and luxury. Fulfill necessity when young.Luxury can wait.
Remember, need-based buying is a practiced learning – don’t just think, start now!
#4. Turning off lights when not in use, not only helps saves energy, it saves more!
You must be thinking who does this to save money for an early retirement?
but you will be surprised to know that people in the west people are more disciplined when it comes to consumption expenditure.
So make it a habit to turn off lights when not in use.
This not only helps save energy but also helps save money. We believe utilities–electricity, gas, Internet, etc.–all add up fast to our monthly bills. Such small steps of remaining more cautious help you lower your bills.
#5. A social gathering with free enter/food is not old-fashioned
In the western world, this is practiced a lot among .
There are plenty of things you can do for fun that doesn’t require an entry fee.
Depending on where you live, there could include street fests, music festivals, religious festival etc.
We believe our economy has more of show-off/standard culture but it is you who needs to decide on your requirement, and your comfort.
#6.Public transport is better than cab/private vehicle
We tend to use our personal vehicle for commutation because it is more convenient for us.
This is a costly affair because of two reasons.
One, it creates immense pollution and depletes the fossil fuel at a rapid pace and second, cost of commutation is high, as compared to public vehicles.
If you’re keen on saving money as fast as possible, this is one of the ways people have been saving.
Again, if we compare developed nations, people also cycle to work as it is cost effective and healthy.
We believe when it comes to transportation millennials should grab a train pass, bus pass and the likes, instead of taking a cab or private car.
#7. Compare before you hit ‘buy’
Online shopping has been increasing rapidly in India.
This is making us habitual of buying everything online right from fruits and vegetables to real estate.
We believe you should compare the price of the product you seek to buy across different platforms.
This shall help you get the product at the lowest price possible.
Now let’s move on to other ways of saving!
#8.Dedicate a fixed amount towards saving
It is advisable you make it a habit to set aside a fixed amount of salary the day it is credited to your account. This needs to be divided into multiple things, such as
These will be liquid funds primarily and will help you shield yourself from any emergency.
2. Investments for long-term
This will be your main source of capital generation.
You should invest in equity funds, particularly funds that invest in small-cap stocks or international stocks.
These funds have the capability of generating healthy returns over the long-term.
3. Investments for short-term
These are investments that would help you book profit at regular intervals and they come with a moderate risk profile and/or tax benefits. This should include balanced funds or debt funds.
To conclude, we believe if you are a millennial and if you are just starting your job, it would make sense for you to plan your expenses properly and also keep a check on small things.
This not only makes you disciplined but also aids to your goal of FIRE.
Disclaimer: The views expressed in this post are that of the author and not those of Groww