How to retire early with minimalism.
This post is part of a series on early retirement and financial independence. You can see all of the Early Retirement posts here. Of course, I need to clarify here that I believe it’s a pretty privileged life that allows one to retire early. Many of these early retirees are very high income earners and have a lot of advantages many people don’t.
What can minimalism give you? Beyond the space and peace of mind, it can bring some people many years closer to not working for a pay cheque. Call it financial independence or early retirement, but the end result is the same: work becomes a choice and your living expense are covered by income from investments. I’m super curious about minimalism and early retirement/financial independence.
Why am I so curious about retiring early? My husband and I cut some time off of our ‘need to work’ years when we decided to leave the city and move to the mountains. I’ve always been curious about early retirement but didn’t think it was in our future. Even with our minimalist-ish ways, retiring early felt incredibly out of reach. Like many people, we muddled our way through our 20s and 30s financially and didn’t have that golden rule of two years salary saved by 35. But some hard work and big luck (thank you Vancouver real estate) have put us, now at ages 40 and 48, in a pretty good position. Could we make a plan to be financially independent in the next 5 to 10 years?
Using the power of less to attain a huge goal like financial independence is also really inspiring. Making those daily choices to live a bit leaner, with a bit less, to not be concerned about what everyone else is doing isn’t always easy. But many of these early retirees did just that. And they did it for some really amazing reasons. Not to simply sit and bide time until they die or to sleep in every day. It’s interesting that the focus of an early retirement plan is heavily weighted to paid work – saving as much as you can from your pay cheque – but many people dream of financial independence so they can do more unpaid work. That reward of financial independence, to give more of your time freely, really speaks to me.
Viewing minimalism as a path to early retirement can also be a new motivation for some people. If you’ve lost your lust for living simply, if you have fallen back into old ways of spending just a bit more than you make, the goal of early(er) retirement may just give you a new push to do more with less. It also ‘gamifies’ living with less. I’m not about the extreme but for us, tracking our finances and seeing that we were really spending less and saving more with a minimalist lifestyle, was incredibly motivating.
Here’s how other people used minimalism to retire early:
- This woman retired 8 years ahead of schedule by moving to tiny house. I know, I know, not for everyone. But downsizing is a very real option for many and if selling the family home and buying a one bedroom condo gives you the freedom to quite your job, why not?
- Another real estate story: this family of five “house hacked” to financial independence in their 30s. They got creative to finance buying homes in Seattle and eventually “house hacked” their way to financial independence. *And I have a great interview with them coming up!
- Bikes are the money printing fountain of youth. Per Mr. Money Mustache in this Forbes article. That’s one of his strategies for being financially independent at 30.
- This simple equation of spending and living simply can lead to early retirement. ThinkSaveRetire explores how his spending and lifestyle has changed because of his early retirement plan.
- They live in really cold houses. Kidding. Sort of. Tanja of Our Next Life details their super frugal habit, one of many, that helped them retire before 40.
- They avoid lifestyle inflation. Slow Sipping Coffee examines his friends and neighbours buying logic and lifestyle creep in comparison to his living well below his means plan to get to early retirement.
These are just a few examples of people using a minimalist lifestyle – owning less and living smaller – to achieve financial independence. There are so many more out there and I’ll share more in further posts in this series. Does minimalism figure into your retirement or financial independence plans? Eliza shared how she downsized and lived simply to retire very early from her MD job. I think the only way my husband and I will retire is to live even more simply: ie. I don’t think we will own a house in retirement. Airstream? Apartment? Cabin in the woods? Who knows!
Ooooo… another great post! I think I have my day planned now – exploring all of those links!
I am living proof that you do not have to be a high earner in order to retire early. You do have to be willing to make some choices that would probably be off putting for most folks, but it is totally doable.
It wasn’t until the last few years before I quit my job that I finally made it up to the median income level. And here’s the supreme irony, my income nearly doubled after I quit working because I had so much more time and energy to put into my own pursuits! Although, that’s pre-tax income, you do pay a LOT more in taxes when you actually make money! 🙂 That level of income didn’t last more than a few years, as I did finally learn how to relax, but it did allow me to sock a away a nice chunk of money.
Full disclosure, I did inherit a bit of money when my mom died 5 years ago – but I mostly just see that as additional cushion. I haven’t spent any of it and don’t plan to unless something unforeseen happens. I also started my hyper frugal ways straight out of college, so I didn’t really have to learn to live on less – I just fairly successfully avoided getting into the habit of living on more! 🙂
I love hearing this! Thanks, as always, for sharing.
I find this super interesting. We have used minimalism and a lot of similar ideas to above (i.e. living below our financial means, buying less, etc) to be almost mortgage-free (I’m guessing within the next 8 months or so). I am 33, and we have 3 young children. But our plan isn’t to retire early…but instead to work part-time, travel lots, spend time with our kids, volunteer with and pursue our passions now, as opposed to waiting until retirement. We will likely still retire earlier than average (55 or so) but will also enjoy the next 20ish years in the ways many retired folks do! I loved this read…lots of inspiration!
When we made our move out of the city my husband liked to say he was “semi-retiring” – essentially leaving full-time work to work part-time/consult. I think what you’re describing is similar to where we are at now. We’re self-employed with irregular income so it’s hard to say when we will be financially independent. But we’re less focused on the ‘not having to work’ part and more focused on the ‘work less than full-time’ part. It feels a bit backwards to be doing life this way as most of our friends are deep in very demanding (and rewarding) careers and eyeing that next big promotion. But we also have a kid that needs a lot of interventions/therapy/help right now and likely will for the next 5-6 years. We couldn’t put that work off. He needs it now.
Congrats on being almost mortgage free!!