The 5 Effective Habits of People Who Retired Early

//The 5 Effective Habits of People Who Retired Early

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Most of the people who retired early have a lot of the same habits in common. I am not a financial planner but rather just a mom, wife and friend. I did retire over a decade early, and I would like to help you do the same. In fact, I know you can retire earlier than I did if you give retirement careful thought earlier in life. It is almost impossible to obtain an early retirement if you do not have a percentage of the money you make working for you. You can’t achieve early retirement if you are living from paycheck to paycheck each month. If you get your money working for you now, then you can earn money even while you sleep. The best way to do this is with compound interest.

people who retired early

Let’s look at some habits of people who retired early.

1. They Never Pay Interest

The people who get rich are the ones who are earning interest not paying it. Some people think nothing of taking a loan to buy a new car or buying the latest electronic gadget on their credit card knowing they still have credit left. All of this adds up to paying interest. Not something you want to do if you ‘re going to get ahead in your early retirement.

Cars are expensive to own so make sure you need one before buy. I recommend saving your money and buying a good used car. New cars may be fun to drive, but they are not a good investment. A 2 to 4 year old vehicle is a much better choice and makes it easier to pay cash.

Never purchase TV’s, furniture or anything similar with credit. People who retired early do not spend their money on interest by carrying credit card debt month to month.

people who retired early


Mortgage and Education Interest is Hard to Avoid

Two things that can be difficult to buy without a loan and paying interest are housing and education. Consequently, it may be necessary to have a student loan for college. Education is something I feel you can go into debt for. If you do, make it your goal to pay it off as soon as possible. Work a part-time job on the weekends and use all of that money to help pay off the loan quickly.

Sometimes, getting a mortgage to buy a home is an ok investment and other times not. If I were buying a home today, I would look for an undervalued one in the area I would like to live in, maybe a fixer-upper. In addition, I would only buy it if I thought I would be staying in that home for five or more years. Remember when determining the total cost of a home to include closing costs to both buy and sell the home. Most of your house payments in the first five years will go towards interest so you may owe almost as much as you borrowed after five years.

Houses can appreciate, and your best chance of that is with time and by buying something that is below market value and not the most expensive house in the neighborhood. It is ok to buy if the cost of owning the home, including taxes, insurance, maintenance and closing costs is less per month than what rent would be. Just remember, the way the worldwide economies have been, there’s no guarantee of appreciation in 5 years or less of home ownership.

people who retired early

We Did Everything Right, and Things Still Went South

We bought our first house the year we got married. Then we moved six times in 25 years and always used the equity/appreciation from one home to buy another. We even made two extra house payments a year. Then while we owned our sixth house, we found ourselves having to sell our home during a down housing market. We lost all of that equity we had built up. At this point, the money we had spent on buying, maintaining, improving and selling homes was nothing more than rent.  Remember there are no guarantees.

people who retired early

2. They Max out Employer Matching 401K Investments

A 401K is a great way to save for retirement. Many companies have a matching program where for every dollar you put in, the company will match it with .25, .50 or even a dollar up to a certain amount. Therefore, you should never pass up this free money. Always contribute to receive the maximum matching possible. Employer matching 401K programs are so powerful that this should be a significant consideration when looking for employment.

people who retired early


3. They Save in Other Ways

If your goal is to retire early, before 59 1/2 years old, you will need to have money saved that is accessible to you penalty free and without age restrictions. Which means having part of your after-tax savings in a standard brokerage account. Or invest in rental property. Rental property is excellent to own since it gives you a monthly income you can use for early retirement. Or you can just sell the property outright at retirement time. Others we’ve know have sold their small businesses and used that money to retire early on. The point is, you need to have money outside of age-restricted retirement investments that you can live on for an early retirement.

people who retired early


4. They use Credit Cards to Earn Points

The first thing I said was that you should never pay interest. Many people get into financial trouble with credit cards. I think credit cards are great. Their convenient in that you don’t need to carry around a lot of cash. Most credit cards offer some reward for using them. With some cards, you earn airline miles or points, and others pay you cash back. I say use credit cards to pay for everything that you possibly can and then pay the balance off each month. Credit card points are a great way to get free travel and buy gifts.people who retired early

people who retired early

 5. They Have a Budget and Stick to it

If it is your goal to be like one of those people who retired early than you have to know how much money you have each month for savings and spending. Consistently overspending will wreck your ability to invest for retirement. Budgets are great for seeing where your money is going each month. You may want to make it a game by trying to come in under budget each month. And if you do come in under budget, take the money you saved that month and invest it. Because every little bit today will make a big difference in the future.

people who retired early


People Who Retired Early

Most people who retired early have certain habits in common. They avoid paying interest whenever possible. These people use credit cards extensively to earn points or cash back while paying the balance off each month. They understand the value of compound interest, and they know where they are spending their money. Work is rewarding and enjoyable, but there are many other things you can do with your time. Make sure you are giving yourself the option of retiring early if you want too. It’s easy, and anyone can do it at any age with a little discipline.

If you liked this post, check out How to Retire Early in 6 Easy Steps

people who retired early

About Tina Paul

As far back as I can remember I was adventurous and wanted to see the world. The first time I traveled outside the country was with Keith just after high school graduation. After that, I was hooked. Throughout my career I was just like many of you, I wanted to work less and travel more. Keith and I made early retirement a reality. Now, I am here to help you retire early and find the inspiration to venture out and see the world.

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2017-12-19T13:39:10+00:00By |


  1. Explorer Whiz December 21, 2017 at 6:03 am - Reply

    This is really great. Keep it up. I really enjoyed reading it. It is simply brilliant.

    • Keith December 23, 2017 at 8:38 pm - Reply

      You’re welcome. We are happy you enjoyed it.

  2. HiCinko LLC December 21, 2017 at 6:04 am - Reply

    This concept is simply brilliant…simply loved it.

    • Keith December 23, 2017 at 8:38 pm - Reply

      Thanks for the kudos!

  3. Buy Business Class December 21, 2017 at 6:06 am - Reply

    I really think that this idea of retiring early is simply phenomenal.

    • Keith December 23, 2017 at 8:39 pm - Reply

      Early retirement is great. Glad you enjoyed the article.

  4. Heart Surgery in Ranchi December 23, 2017 at 3:08 am - Reply

    Thank you to tell us so much useful information. I’m glad to read it.

    • Keith December 23, 2017 at 8:37 pm - Reply

      You are welcome. We are happy you enjoyed it.

  5. Hotels in Ranchi December 28, 2017 at 1:18 am - Reply

    Thanks for sharing the very useful information

    • Keith December 29, 2017 at 9:07 am - Reply

      Thanks. We’re happy you found it useful

  6. Linzi Clark December 30, 2017 at 2:49 pm - Reply

    Some very sensible tips and advice here, hope to follow in your footsteps in nine years time!

    • Keith December 30, 2017 at 6:48 pm - Reply

      Wow, 9 years, that’s great. I’m glad you enjoyed the article.

  7. Shivendra Tarkar January 10, 2018 at 8:15 am - Reply

    Thanks for sharing useful information. I’m happy to read it

    • Keith January 10, 2018 at 11:39 am - Reply

      I’m happy you enjoyed the article Shivendra

  8. Lara January 23, 2018 at 6:39 pm - Reply

    I’m close to retiring and liked the information… and What a beautiful place this is in the photo… very beautiful. Seeing this photo gave me a strong desire to take a tour of this region, the view of the sea is breathtaking. 🙂

    • Keith January 23, 2018 at 6:47 pm - Reply

      Lara, that’s great news that you are getting close. Hopefully, you’ll be able to travel in retirement and see the world!

  9. Jagdish Bhatia January 30, 2018 at 8:50 am - Reply

    Thank you for the great tips. One need both, money and time to see the world.

    • Keith January 30, 2018 at 9:18 am - Reply

      That is true Jagdish. That’s why people need to plan and save. Thanks for the comment

  10. farenexu February 1, 2018 at 6:05 am - Reply

    This is really awesome. Keep it up. I really enjoyed reading it. Thanks for sharing

    • Keith February 7, 2018 at 11:57 am - Reply

      Thanks so much for the kind words.

  11. farenexus February 1, 2018 at 6:07 am - Reply

    This is really awesome. Keep it up. I really enjoyed reading it. Thanks for sharing

    • Keith February 7, 2018 at 12:05 pm - Reply

      Thanks, I’m happy you enjoyed it

  12. HiCinko LLC February 14, 2018 at 2:48 am - Reply

    Truly amazing.

    • Keith February 14, 2018 at 10:05 am - Reply


  13. book cheap flight to spain February 16, 2018 at 2:20 am - Reply

    hey, such a fantastic blog your blog’s appearance is its USP, it’s easy to read and it’s insightful. the way you molded your experience into
    words is amazing. and it is motivating bloggers to go ahead and follow their passion. keep motivating us and thanks for recognizing. I too write a travel blog. it will be so supportive if you give a review on this.keep writing

    • Keith February 16, 2018 at 2:05 pm - Reply

      Thank you for the compliments and I’m happy we’re motivating.

  14. HiCinko LLC February 21, 2018 at 11:33 pm - Reply

    We really liked the image in which you have shown the credit card thing.

    • Keith February 24, 2018 at 10:21 am - Reply

      Thank you HiCinko!

  15. irene March 5, 2018 at 7:38 am - Reply

    I never thought early retirement can have some great kickbacks, don’t even need to wait for the retirement seminars organized by employer. great advice!

    • Keith March 5, 2018 at 8:40 am - Reply

      Thank you Irene. I’m happy you enjoyed the article. We might be coming to your hometown in Nairobi this October. Working on the plans now.

  16. Andrew March 30, 2018 at 4:51 pm - Reply

    Great article. All great advice. We met at the TBEX in Ireland. It was a pleasure.
    I’ve since taken a break from my blog. I just had a fusion done in my neck. I’m starting a redesign on my blog on April 2nd. I hope to run into you in the future. Take good care and enjoy your retirement!

    • Tina March 30, 2018 at 5:02 pm - Reply

      Glad You liked the post Andrew. I remember you! Gosh, I hope you are doing well. I know that surgery can be rough, my sister-in-law had it done. We have moved from an apartment to a house since we were in Ireland. We have a very busy travel schedule starting in 2 weeks. Our site is going to have a giveaway at the end of April…watch for a post coming out around April 22. Take care!

      • Tom May 6, 2018 at 7:57 am - Reply

        My wife and I are 54 & 55 and pretty much have lived by the advice in this article. My wife is a public educator and eligible to retire in 1 year. We want to travel. I lived in Quito, 50 years ago and would like to check out Ecuador as an adult. My dad worked in the jungles exploring for oil. I have a blow gun that is now missing the bone mouthpiece and the tar exterior coating is pealing, Would like an authentic repair.I am not sure what to do with it. Also have a spear. As we have been frugal enabling us to retire early, do you have any advice for traveling to Ecuador cost effectively?

        • Keith May 7, 2018 at 3:05 pm - Reply

          Hi Tom, I’m happy to hear you’re getting close to an early retirement. Fascinating story about your dad and that you lived in Ecuador before. I don’t have any guidance on the blowgun repair but if you retire or travel here, I’m sure you can ask around for some advice. Traveling or living in Ecuador is so much less than in the US. The biggest expense is airfare. After getting here, you can vacation cheaply if you are OK with staying in hostels. In Cuenca, hostels are about $15 a day and include breakfast. And these aren’t sharing bathrooms or bunkbeds but rather private room and baths. I also know that you can get Airbnb’s very inexpensive so check them out also. Food is very cheap as long as you stay away from restaurants geared towards tourists. Email us at [email protected] with any other questions you have or if I didn’t answer your questions good enough. We are happy to help.

  17. Mick Krug June 11, 2018 at 6:44 am - Reply

    Great article on early retirement. I agree with you on all points. Especially about putting money away for your retirement. If one doesn’t plan for their retirement, they are in for a shock! Getting rid of all debt for starters is a must.

    • Keith June 11, 2018 at 3:46 pm - Reply

      We agree Mick. Thanks for the comment.

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