Invest Now and Retire Early

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I recently sent a letter (yes, a real letter) to my 20-year old nephew encouraging him to start saving for his retirement today. With time and compound interest on his side, his options are endless. In order for him to reach financial independence, he’ll need to invest and adopt some crucial money-smart habits early on in his life.

Cross your fingers for me that the message resonates with him!

You’re back for your junior year this fall. That’s such an exciting time for you. I absolutely loved my time at college. Enjoy every minute of it.

I know the last thing you’re thinking about right now is investing for retirement, but humor your Uncle and hear me out.

You’ve probably heard of the typical person retiring when they’re 60 or 70, right? Well, I want to share with you how you could retire at 40 years old.

Since you haven’t entered the full-time working world quite yet, the idea of early retirement might not sound appealing to you. If it doesn’t, you can put this letter away and maybe open it again if you have a rough year at work in the future.

If the idea of only working 20 years of your life instead of 40 sounds intriguing, read on.


Steps to Early Retirement for a 20-Year Old

The steps to early retirement are quite simple, but not everyone will do it. You know why? Because it takes patience and willpower. As you graduate and enter the work world, you may find that a lot of your colleagues lack these two traits. Hell, I lack these traits most days, but I’m at least aware that they’re crucial when you want to do something incredible in your life.

Whether it’s running a marathon, negotiating with your 3-year old to eat their breakfast or reaching financial independence … these major feats all take time and a whole lot of determination.

So at 20 years old, you have something that a lot of people don’t have:  TIME! Let’s take advantage of it and set yourself up for early retirement.



I put this first because I want to express the urgency of investing. If you have an earned income this year, you can take advantage of a Roth IRA. This type of investment vehicle currently allows you to contribute up to $5,500 per year. That may seem like a lot of money for you now, but you can steadily increase your contributions year-over-year until you’re able to completely max it out.



You’re gonna run into a lot of temptation to take on debt in many forms and fashions over the next 20 years of your life. Do your best to steer clear of it. Live by the mantra of “If I don’t have the money, then I can’t buy it.”

Short-term loans, payday loans and credit cards can all be slippery slopes in college and in the years following. These are fast and easy ways to get cash, but they have crippling interest rates that will leave you paying on them for years. Don’t have the money? Don’t buy it. This goes for cars, clothes, boats, fancy dinners, vacations, etc.