Retire at 50 with these 9 money habits
At the beginning of your career, it may seem like a stretch to start planning for your retirement. However, if you plan to retire early or wish to live a secure and relaxed lifestyle after retirement, it becomes crucial to start cultivating healthy habits of savings and investment from the beginning. Here are 9 tips that you can follow to help you achieve your goal of retiring early. 1. Start investing early to take advantage of the power of compounding It is important to start saving and investing early, especially if you plan to retire early. While investing, it is better to invest in securities that provide compound interest on your investments. 2. Create a healthy investment plan Before you start investing for the long term, it is extremely crucial to define your duration of investment, risk appetite, and the amount you wish to invest. Determine how you plan to employ your returns. Formulate a plan which takes into account all these factors and stick to it. This shall help you reap the maximum returns, knowing that you are investing in the best possible places. To further reduce your risk and maximise your returns, learn the importance of Portfolio Diversification. Read more on how to employ this strategy in our blog here.
3. Avoid early withdrawal Avoid taking debts and try to not take money out of your retirement account or investments. Early withdrawal from retirement accounts comes with a great deal of tax liabilities. A premature withdrawal from investments may even attract penalties, while also causing you to miss out on long-term gains. 4. Set up alternative streams of income It is to your benefit if you set up alternative sources of income. It may be rental income from your real estate property or earnings from a side hustle that you enjoy. This is done to add to your salary and to fuel your total income. It helps you set aside more savings for your end goal. Download Tejimandi App Now