Welcome to the third blog post of: Podcast of the Week. Thanks for taking an interest! If you have not yet: please check out the other Podcast of the Week blog posts: link. This blog post is about the possible ways to retire early with passive income. Rachel Richards will tell us about her journey to financial independence. In essence, we will discover what we can learn from her situation.
Money Tree Investing
The third podcast that I recommend is from the Money Tree Investing Podcast. I have been listening to this podcast for the past three weeks. This podcast has to sole goal to inform people about investing. It consists of four panel member who interview experts on a wide variety of topics. After the interview the panel members give their perspective on the subject. This appeals to me because you get five different perspectives in one.
Why do I recommend this Retire Early episode?
In this episode the panel interviews Rachel Richards, she managed to retire early at an astonishing age of 27. She did this by investing in real estate with her husband. She was strongly inspired by Robert Kiyosaki’s book: Rich dad, Poor dad. Alongside real estate she wrote two books on personal finance herself. By doing so she created two passive incomes streams, royalty income and rental income. Giving her the flexibility to do what she wants, when she wants. Now she runs a community; Women on FIRE. Including an extensive course, that aims to help women achieve financial independence. Nice and all, but: Why did you recommend this retire early episode?
I recommend this episode because we discover what we can learn from Rachel. She explains how passive income can help you become financially independent, alongside your job. In my opinion she also has a really positive outlook. She thinks in opportunities opposed to impediments. By example there is a bit in the interview where she talks about the options to become financially independent: There is plenty of free information online to start a side hustle, beside that you can use your own network to test ideas and get thoughts from different people. I find this outlook inspiring.
Besides reaching FI they also talk about the meaning of early retirement. How do you retain meaning and circumvent the tremendous amount of anxiety it can cause. Since work also gives a sense of purpose, it’s important to deal with this and think about it before you reach FI.
What are the key takeaways to retire early?
1. Grow the gap on a young age.
It gives alot of flexibility and possibility to build wealth. But it takes time. “If you focus on saving early on, you can take more risk later on”. Living up to your means will limit you, this is a natural desire. But you should save when your pay check goes in, pay yourself first. Develop this habit, you will adjust your behaviour towards it. You will acclimatize, without keeping up with the Joneses. In doing so discipline is very important, it is hard and means sacrifices. Side note: From my own experience I can tell you this is true, you won’t miss money that goes out as soon as the pay check comes in. The tricky part is growing the gap, by either spending less or earning more.
2. Don’t be cheap.
There is a difference between frugality and being cheap. When your time becomes more valuable you should be looking for ways to outsource. This will help you to free up your time. Rachel is talking from the perspective of real estate management, but this also applies to other types of business.
3. Know where your money goes.
Being a spreadsheet warrior also has it’s upsides, but not everyone likes spending a load of time on them. Knowing where your money goes is important when you are trying to build wealth for the long run. By having the insight it’s easier to see in which areas to spend less.
4. Spend on values.
You shouldn’t spend less on everything. Life should be enjoyable while trying to reach FI. Be intentional, spend on your passions.
5. Have purpose in your life after reaching FI.
Find something to put your energy in when you retire early. Create a multi layered retirement, a new step in your career. See it as a shift, where you may work less. Its more like a phase 2 of your carreer. Ask yourself the question: I have met my financial goals, now what. Hence: Think about the value you want to add and how it relates to your purpose.
How does retire early relate to Know Act Invest?
This podcast episode is about the Act and Invest part of Know Act Invest. From personal experience Rachel explains how she reached FI, in which assets she invested / how her journey looked. Beside investment advice she explains which behaviour (Act) she adopted to reach FI. While doing so she gives recommendations, these are described in the key takeaways.
To wrap it up
this podcast episode does a great job of converting personal experiences to broader takeaways, supported by different perspectives from panel members. It gives some concrete takeaways to work towards passive income, to eventually retire early.
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Further Reading on Retire Early with Passive Income
Book references mentioned in the podcast episode
- Rich Dad, Poor Dad by Robert Kiyosaki
- The Millionaire Next Door by Thomas Stanley
- 4-Hour Work Week by Tim Ferris
- Millionaire Fast Lane by MJ Demarco
- Passive Income Aggressive Retirement by Rachel Richards
- Money Honey: A Simple 7 Step Guide To Getting Your Financial $hit Together by Rachel Richards