Those who turn 40 will have a more mature mentality, and at this age should also plan for retirement in the future. Even though you’re still years away from retirement, or even longer, if you’re not prepared, you might regret it later.
Li Xianyan is from the financial industry in China, has 20 years of investment experience, survived the stock market crash and has an annual return of more than 10%. However, he stressed that saving money is more important than investing and expressed that retirement planning should be done as early as 5 to 10 years before retirement.
For those looking to retire early, he has five tips.
1. Save money with discipline
Ly Hien Ngan must own 3 million USD to achieve financial freedom at the age of 38 and retire at the age of 42. He revealed to be able to have such “free freedom”, it all depends on saving + adjustment + investment. He admitted: “I’m really good at saving money, when I earn 1.2 million, I can save 1 million.”
Among his assets of more than 3 million USD, there is 1.5 million that he saved little by little. He said: “Those who start from zero should learn to save first, because when the capital is small, it will not make money. With large capital, even if the profit rate is low, the profit is still positive.”
2. Live simply
Ly Hien Ngan shared that after graduating from the institute in 2005, he had accumulated $454,000, and spent just over $30,000 to $45,000 per year excluding overseas travel.
He believes that each person’s conception of investment, financial management and critical value influence each other: “If you have a problem with your values, buying luxury goods indiscriminately, then there will be problems with financial management as well.”
Because he believes that “the variable of savings is controllable, but the variable of return on investment is the market to control”. So don’t pursue materialistic desires, save quickly and spend slowly so that you can achieve financial freedom soon.
3. Spending Statistics: A must for those who want to retire early!
Spending statistics is an extremely necessary step. Tian Lin Bin is also a famous early retiree in China. He has suggested that if you want to retire early, get in the habit of clearly documenting your expenses today. He said: “Revenue and expenditure must be recorded every day in a disciplined manner.”
The habit of making daily spending statistics for more than 3 years has allowed him to quickly draw out his financial vision in detail for the future. If you maintain this habit, you will be able to guess how much pension you need to prepare, and the numbers in and out each month will also become clearer.
4. Complete asset allocation
Perfectly allocating assets can have a positive impact on getting rich. However, black swans in the market are difficult to predict and asset allocation must be stable to withstand unpredictable events.
In this volatile economy, Ly Hien Ngan gives a reference example as follows: 60% cash on hand, 25% stocks and 15% gold.
“The right way to allocate assets can help you survive in any situation,” he revealed.
5. Stay away from 4 big risks
If you want to retire early, experts say that you must avoid incurring 4 big risks, including: Health, inflation, market and policy. That is, you should avoid situations that are not planned, like “retire too soon, save too little, spend too quickly, health is too bad”.
If you decide to retire at 40, you need to be more active in investing. But in fact, for ordinary people, they should extend the time, choose a stable and long-term rich tool, plus the compound interest effect to complete the retirement plan well. It is also not recommended to buy or sell investments or investments that are too profitable and/or too reckless.
The above 5 suggestions are for those who want to retire early in their 40s. If you are still young, adjust your income and expenditure habits as soon as possible and save money first!
According to orange.udn
at Blogtuan.info – Source: Soha.vn – Read the original article here
