Members of Generation X are approaching retirement age, but many of us are not ready for it. Most Gen Xers (56%) have less than $100,000 saved for retirement and don’t have much time left to add. Only a third of us believe that we can retire at age 65. Things only get worse with high inflation and the changing economy. Retirement looks bleak for Generation X.
For those of us who want a traditional retirement, the solution is easy. We just need to save more. Save 50% of your income and you’ll probably be able to retire at age 65. That’s easy to say, but almost impossible to do. If you haven’t been saving for retirement, there’s no chance you’ll be able to increase your savings from 0% to 50%. However, that is not the end of the world. We are the rebel generation. If you can’t retire like your parents, then you need to find a rebellious alternative. Instead of languishing in a quiet retirement, build an engaging life that you don’t have to retire from.
Build a life you don’t have to retire from
What life do you have to retire from? The basic idea is to find a way to prosper financially without your day job. If possible. Lots of people have done it. I no longer have a day job, but I still work part time. I’m doing well financially and I don’t have to deal with a toxic work environment. I am enjoying life now instead of waiting for the traditional retirement. Here’s how to build a life you don’t have to retire from.
Build your non-work income
The first step is to build your non-work income. Most of the people depend solely on their day job to earn a living. This is perfectly fine for a lot of people, but not for those of us who aren’t happy with our careers. I knew I couldn’t handle 5 more years in my old stressful engineering career, let alone 20 years. The way out is to build other sources of income outside of daily work. This is not easy and the amount of income will be very small when you start. You need to keep working on it and eventually the income streams will trickle down in a substantial sum.
Here are some ways to earn money outside of your job.
- invest in real estate– Here is a tip for everyone. Your house is not a great investment. You have to spend a lot of money on maintenance and the value may or may not increase. It’s better than renting, but it’s not a great investment. It does not generate any income. In real estate, I invest with CrowdStreet and my investment is generating good passive income. Check them out to see what projects they are offering.
- Rent – Lots of people retired early with rental properties. Once you have some good income rentals, you will probably be able to quit your job. Homeownership isn’t for everyone, but it is one of the best ways to earn money outside of work.
- dividend stock – I love my dividend portfolio. This year it will bring us over $10,000 in passive income and it doesn’t require much effort. The stock market can be volatile, but good dividend stocks will still put money in your pocket.
- Lend money – There are many ways to lend your money. You can invest in CDs, corporate and government bonds, or hard loans. I try to add some money to our I-bond account every year. After Ms. RB40 withdraws, we can withdraw from this account.
- Exchange – The sharing economy is booming. You can rent a room, share your car, rent your parking spot, and sell your old stuff. These are all great ways to earn a little extra money.
- Drive – If you are a good driver, this is an easy way to generate additional income.
- autonomous – Work part-time on projects you enjoy.
- blog – I do not recommend blogging. It’s a lot of work and you have to be very lucky to earn money. Instead, I think creating video content is a better option these days. YouTube and Tiktok are the way to go.
- start a small business – You can open an online store, boarding houses or a kennel. The possibilities are endless. Try different things and see what works.
- hobby income – You can take advantage of your hobby to earn money. One of my friends DJs and earns a little money while having fun. You are the expert in your hobby and newcomers will gladly pay for it.
- How to do you earn money outside of your job?
There are many ways to earn money outside of your day job. You just have to try different things and see if you like it better than the day job.
It’s great to have some extra side income, but it will take you a long time to top your income from your day job. I’ve never been able to top my previous salary, but that’s not a big deal because I have passive income. Fortunately, we don’t have to exceed the income from our day job. We just need to be able to pay our monthly expenses and that can be controlled. The key here is to reduce your expenses to a level that you are comfortable with. Some of us can live on $5,000 a month and some of us cannot.
Since I am married, I only targeted 50% of our expenses. We spend about $5,000 a month, and my non-work income can cover 50% of that when I retired in 2012. Fortunately, our investments have made huge returns since then. Now, our passive income can cover 100% of our expenses. Ms. RB40 can quit her job whenever she wants. However, she wants to work until our son leaves for college. It’s still nice to have options.
Of course, the less you spend, the more money you will have to save. I saved all of my net income for two years before I quit my job. This gave our passive income a huge boost and also increased my confidence that we would be fine.
There you go. That’s one way to build a life that you don’t have to retire from. You must be able to pay the bills without your day job. The key is to generate passive income, make money doing something you enjoy, and keep your expenses reasonable. This is the new retirement and more people are taking up the challenge. We are enjoying life and working on the things we want. Traditional retirement doesn’t appeal to us much and we prefer to work a little each day. As we get older, we will reduce our hours and work less. I’m probably still working a bit even after I’m 65. That will come sooner than I’d like, but that’s life.
Are you accepting the challenge of building a life you don’t have to retire from?
Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have a lot of projects in the US so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you achieve financial independence.