I Retired Young: 25 Things I Know, That Most People Never Figure Out
Financial freedom doesn’t happen by chance, it happens through choices. Every decision you make sets the tone for your future. I know this because I’ve walked the talk.
In my teens, I mapped out an early retirement strategy. Throughout my 20s and 30s I made it happen. Then, I retired at 42.
Now, I spend my days raising my kids, running, writing on here to pay it forward, and doing whatever I want. I am living proof that financial independence is possible.
No one gave me a cent. I didn’t make $50,000 a year before I was 30. So how was I able to retire early? I think differently.
None of this was handed to me. I’ve made my fair share of mistakes, ignored “good advice”, and found my own way by focusing on what works. I didn’t follow the crowd, I followed a path that made sense for my goals.
The lessons I’ve learned aren’t just about money, they’re about designing a life that fits your values and priorities.
If you’ve ever wondered what it takes to buy back your time and secure your future, the answer lies in small, intentional steps. These are the same lessons I’m teaching my kids, and they’re principles anyone can apply to create a solid financial foundation.
In this guide, I’m sharing 25 financial lessons designed to help you or the next generation take control of their financial future. Each tip is practical, tested (by me!), and focused on building independence and freedom.
Ready to take the first step toward a better financial life? Keep reading, you won’t regret it.
Table of Contents
💵 1. Spend less than you earn
This is where everything starts. No budget or investment strategy will save you if you’re consistently spending more than you make.
The key isn’t just cutting back, it’s knowing what really matters to you.
Spend on what brings value and joy to your life, and cut the rest without guilt. A simple strategy is to automate your savings first and live off the rest. If your income increases, avoid the temptation to inflate your lifestyle.
Instead, use that extra money to invest in your future. The sooner you make this a habit, the more options you’ll have down the road.
📈 2. Start investing early
The earlier you invest, the longer your money has to grow, and trust me, time is the secret ingredient. Compounding works like magic, turning small amounts into life-changing sums over decades.
You don’t need to be an expert or time the market perfectly. A low-cost index fund or ETF is all you need to get started. Even if you only have $50 or $100 to invest each month, do it. Over time, those small amounts add up to serious money.
Most importantly, stay consistent. The market will have ups and downs, but the longer you stay in, the more likely you are to win.
Related: 9 Mental Shifts for a Successful FIRE Journey (According To Early Retiree)
🚫 3. Avoid bad debt
Not all debt is bad, but some of it will chain you down and keep you from moving forward. High-interest debt like credit cards is a trap, it eats away at your wealth faster than you can build it.
If you have credit card debt, focus on paying it off as fast as you can, starting with the highest interest rates. Good debt, like a mortgage on a rental property or a reasonable student loan, can be a tool to build wealth, but only if you use it wisely.
Before taking on debt, ask yourself: “Will this make me money or improve my future?” If the answer is no, think twice. Debt is a double-edged sword, handle it with care.
Related: A CFA’s Take on Dave Ramsey’s Baby Steps: A Young Retiree’s Comprehensive Analysis
🤖 4. Automate everything
If you don’t see the money, you won’t spend it. Automation is one of the simplest ways to stay on track financially. Set up automatic transfers to your savings and investment accounts the day your paycheck hits.
That way, your goals are taken care of before you even think about spending. Automate bill payments, too, so you never miss due dates and rack up fees. Automation doesn’t just save you time, it removes the temptation to overspend or “forget” to save.
You’re creating a system that works in the background, even when life gets busy. Remember, consistency is key, and automation makes consistency effortless.
💡 5. Know opportunity cost
Every financial decision you make comes with a trade-off, even if you realize it or not. That $5 coffee isn’t just $5, it’s what that $5 could grow into if invested. Over 20 years, even small, unnecessary purchases add up to thousands of dollars.
Does that mean you can never treat yourself? Absolutely not. It just means being mindful and intentional with your money. When you evaluate your spending through the lens of opportunity cost, it gets easier to prioritize what truly matters.
Sometimes, the best decision isn’t about what you’re buying now, it’s about what you’re giving up later.
Related: My Relationship with Money: The Hoarder Mentality That Led to Early Retirement
🙅♂️ 6. Learn to say no
Saying no is hard, but it’s one of the most powerful financial habits you can develop. When you say no to unnecessary expenses or social pressures, you’re really saying yes to your financial goals.
Teach your kids this skill early, delayed gratification leads to bigger rewards down the road. It’s okay to skip a vacation, a dinner out, or the latest gadget if it doesn’t align with your priorities. Being financially free means making decisions that serve you, not others.
Every time you say no to something that doesn’t matter, you’re building a life filled with the things that do.
Related: No One Wants To Be Told No
📊 7. Track spending
If you don’t know where your money is going, it’s impossible to take control of it. Tracking your spending isn’t about being restrictive, it’s about awareness. Start by writing down every dollar you spend for a month, yes, every single one.
Then, review your expenses to identify patterns and areas where you can cut back without sacrificing what you value. A rolling 24-month average is an excellent tool for spotting trends and keeping your financial plan realistic.
Tracking gives you clarity, and clarity helps you make smarter decisions. Remember, what gets measured gets managed.
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🚨 8. Build an emergency fund
Life has a way of throwing curveballs when you least expect it. That’s why having an emergency fund is non-negotiable. Aim to save 3-6 months’ worth of living expenses in a high-yield savings account.
This money isn’t for vacations or impulse buys, it’s your safety net for true emergencies like job loss, medical bills, or car repairs. Having this cushion will give you peace of mind and prevent you from going into debt when life happens.
Start small if you need to, $500 is better than nothing. Over time, grow your fund until it’s enough to weather life’s storms.
Related Video: How to Build an Emergency Fund That Truly Safeguards Your Future
🎉 9. Value experiences > things
Things break, go out of style, or end up collecting dust, but experiences stay with you forever. Instead of focusing on material possessions, prioritize creating memories that bring joy and meaning to your life.
A family camping trip, a weekend exploring a new city, or even a simple picnic at the park can leave a lasting impact. Not only do experiences bring you closer to loved ones, but they also teach you to value connection over consumerism.
The next time you’re tempted to buy something new, ask yourself if it’s worth more than the experience you could have instead. Remember, the best investments often aren’t in things, they’re in moments.
📚 10. Teach money skills
If schools aren’t teaching financial literacy, then it’s up to us. Start by modeling good money habits like budgeting, saving, and investing, so your kids can see it in action. Talk to them about the importance of spending wisely and setting financial goals, even at a young age.
Use real-life examples like comparing the cost of buying lunch every day versus bringing it from home to show the power of small decisions. As they grow, introduce more advanced concepts like compound interest, credit, and the basics of investing.
The earlier they learn, the more confident they’ll be with managing money as adults. Financial literacy is one of the best gifts you can give the next generation, it sets them up for a lifetime of opportunities.
Related: How I Teach My Kids About Money Using a Lemonade Stand
🔑 11. Define “enough”
One of the biggest traps in life is always chasing more, more money, more stuff, more success. But if you don’t know what “enough” looks like for you, you’ll never feel satisfied. Take the time to figure out what truly makes you happy and what your financial goals are.
Is it retiring by a certain age? Having the flexibility to work part-time? Spending more time with your family? Once you define “enough,” you can stop wasting time and energy on the endless pursuit of more.
This doesn’t mean you have to settle, it means you get to focus on what matters most. Clarity about “enough” is the key to both financial freedom and peace of mind.
Related: If You Always Want More, You Will Never Be Happy
🔨 12. Money is a tool
Money is a means to an end, not the end itself. It’s not about comparing yourself to others, it’s about using money to create freedom and opportunities. This could involve paying for your kids’ education, buying back your time, or building a safety net, money is there to serve a purpose.
If you treat it as just a number to chase, you’ll always feel like you’re falling short. Instead, think of money as a tool to design the life you want. Spend it on what aligns with your values, invest it to secure your future, and use it to help others along the way.
When you see money as a tool, not a measure of worth, it becomes a lot easier to manage.
Related: 13 Common Habits of Millionaires: How Many Are You Doing?
⏳ 13. Time > money
You can always earn more money, but you can’t get back lost time. This is why financial independence is so powerful, it buys you time to spend on what matters most.
Be it with family, pursuing a hobby, or simply slowing down to enjoy life, time is your most valuable resource.
Don’t trade all your time for a paycheck. Instead, think about how you can maximize the value of both your money and your time. Passive income, smart investments, and financial planning are tools to help you prioritize time over money.
In the end, what you’ll remember most isn’t the hours you worked, but the moments you lived.
💬 14. Learn to negotiate
Negotiation isn’t just for high-stakes deals, it’s a skill that can save you money and improve your life in countless ways. This could mean discussing your salary, negotiating a car purchase, or asking for a discount.
The ability to advocate for yourself is invaluable.
Start by doing your homework, know the value of what you’re negotiating and back it up with data. Approach every negotiation with confidence and a mindset of collaboration, not confrontation.
The goal is to find a win-win solution where both parties feel good about the outcome.
Don’t shy away from asking for what you’re worth, be it a higher salary or better terms on a contract. Even small wins add up over time, and the more you practice, the better you’ll get.
🐑 15. Don’t follow the crowd
Most people live paycheck to paycheck, but that doesn’t mean you have to. The average person spends recklessly, saves little, and invests even less, but average isn’t your goal.
Financial independence requires making decisions based on your goals, not what everyone else is doing.
Just because your friends buy expensive cars or take lavish vacations doesn’t mean you need to keep up. Instead, focus on living within your means and investing the difference.
Being different isn’t always easy, but it’s worth it when it leads to freedom. Remember, following the crowd rarely leads to success. Choose your own path.
Related: Stealth Wealth: The Key to Keeping Your Wealth and Your Freedom
📈 16. Avoid lifestyle inflation
As your income grows, it’s tempting to start spending more, bigger house, nicer car, fancier vacations. This is what’s called lifestyle inflation, and it’s one of the biggest obstacles to building wealth.
Instead of letting your expenses grow with your paycheck, keep your lifestyle simple and save the difference. Invest that extra money into assets that will grow your net worth instead of fleeting luxuries.
The more disciplined you are about managing lifestyle creep, the faster you’ll reach financial independence. Living below your means is the fastest way to buy back your time and freedom.
🌍 17. Diversify income streams
Relying on one paycheck is risky. If that source dries up, what happens to your plans? Diversifying your income streams through side hustles, investments, rental income, or freelance work adds layers of security to your financial life.
Even small amounts from additional sources can make a huge difference over time. It also gives you more options if you want to step away from a traditional job.
Don’t put all your eggs in one basket; spread out your income sources to create stability and resilience.
The ultimate goal is to have multiple streams of income working for you, so you’re not reliant on just one.
Related: My Roadmap to Early Retirement: Achieving Financial Freedom on Your Terms
💰 18. Pay yourself first
Before you pay bills, buy groceries, or splurge on that new gadget, set aside money for yourself. Paying yourself first means prioritizing savings and investments above everything else.
Start with a percentage, say 10-20% of your income and automate it so you don’t even have to think about it.
When you consistently pay yourself first, you’ll be amazed at how quickly your wealth grows. It also forces you to live on what’s left, which keeps your spending in check.
This isn’t about depriving yourself, it’s about ensuring your goals are met before anything else.
Treat your future self like a bill that must be paid, and watch how it changes your finances.
🧐 19. Be skeptical of advice
Not all advice is good advice, and not everyone giving it has your best interests in mind. Some people are trying to sell you something; others just don’t know what they’re talking about. Always question the source of financial advice and ask yourself, “Who benefits from this?”
For example, a broker might push you toward expensive investment products because they earn commissions. Do your own research and seek out unbiased information. If something sounds too good to be true, it probably is.
Stay informed and make decisions that align with your goals, not someone else’s agenda.
Related Video: 13 Pieces of Bad Financial Advice (That Most People Still Believe)
💖 20. Give back
Wealth isn’t just about what you can accumulate, it’s also about what you can contribute. Giving back doesn’t have to mean writing big checks, it can be as simple as sharing your time, knowledge, or resources with others.
Helping someone else reach their goals is incredibly rewarding and reminds you of what really matters. Teach your kids the importance of generosity too, it’s a value that will serve them well throughout life.
Giving back not only makes a difference in your community, but it also gives you perspective on your own journey. The more you give, the more fulfilled you’ll feel.
💼 21. Max out your 401(k)
If your employer offers a 401(k) with matching contributions, it’s like free money, don’t leave it on the table. Start by contributing enough to get the full match, then work toward maxing out your contributions each year.
Tax-advantaged accounts like 401(k)s allow your money to grow faster because you’re not paying taxes on your gains. Over decades, that tax advantage can mean the difference between retiring comfortably and just getting by.
If you’re self-employed, consider similar options like a Solo 401(k) or SEP IRA. Remember, the earlier you start maxing out your retirement accounts, the more time your investments have to grow. Your future self will thank you.
Related: Should I Max Out My 401k? A CFA Who Retired Young Answers
💸 22. Don’t ignore taxes
Taxes are one of the biggest expenses most people face, but too many of us don’t plan for them. Learning how to minimize your tax burden can save you thousands over your lifetime.
Use strategies like contributing to tax-advantaged accounts (401(k)s, IRAs, HSAs), taking deductions, and using tax-loss harvesting for your investments. If you’re unsure where to start, consult a tax professional, it’s an investment that can pay off in spades.
The goal isn’t to cheat the system, it’s to understand the rules and use them to your advantage. Smart tax planning puts more money in your pocket to invest, save, or enjoy.
🤔 23. Become immune to FOMO
The fear of missing out (FOMO) can lead to impulsive decisions, such as jumping on the latest investment trend or splurging on luxury items simply because “everyone else is doing it.” The truth is that chasing trends rarely pays off.
Stick to your financial plan and focus on your long-term goals, even when others are getting caught up in the moment. Remind yourself that social media often shows a highlight reel, not the full picture.
The best way to combat FOMO is to be confident in your choices. Your journey doesn’t have to look like anyone else’s, and that’s okay.
If you follow me on Twitter, you know that I often say, “how was I able to retire early? It is because I am immune to FOMO”
✔️ 24. Master “satisfice”
“Satisficing” means finding a solution that’s good enough, instead of chasing perfection. When it comes to finances, this is a game-changer. Instead of stressing over getting the “absolute best” deal or timing the market perfectly, focus on making solid, informed decisions.
For example, a low-cost index fund is “good enough” for most investors, there’s no need to chase after complicated strategies. The same applies to spending, find a balance that works for you and your goals.
By aiming for “good enough,” you save time, reduce stress, and keep your momentum going. Progress always beats perfection.
Related: What is Satisfice?
📦 25. Don’t overcomplicate investing
Investing doesn’t have to be hard, and you don’t need a PhD or CFA to do it well. Stick to the basics: low-cost, diversified investments like index funds or ETFs.
Avoid the temptation to chase trends, time the market, or pick individual stocks unless you’re prepared to take the risks.
Complexity often leads to higher fees, more stress, and worse results. The simpler your investment strategy, the easier it will be to stick to it for the long haul.
I am a Chartered Financial Analyst, and I don’t even do complexity investing. Keep it simple.
Remember, your goal isn’t to beat the market, it’s to build a portfolio that grows steadily over time. Simplicity is your best ally in investing.
🔥 Take Control, Build Your Future
Financial freedom isn’t just about money, it’s about reclaiming your time and designing a life that aligns with your values. These lessons aren’t quick fixes, they’re tools to help you build a solid financial foundation.
Start small, stay consistent, and focus on what truly matters to you. Every smart decision today brings you closer to a future where you call the shots. Teach these principles to the next generation so they, too, can thrive.
The path to financial independence starts with a single step, take it confidently.
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