My Secrets of Retiring Early report, published in the summer of 2000, explains why today’s middle-class worker has opportunities to win financial freedom early in life that were not possessed by any earlier generation. The report was the #1 best-selling report in the history of Soapbox.com.
Set forth below are brief descriptions of each of the 10 secrets explored in depth in the report.
The first of the ten secrets described in the Secrets of Retiring Early report is The Productivity Secret.
The Productivity Secret is that most workers earn enough money to retire early. It was the rapid increase in the productivity of each worker’s labor early in the 20th Century that established retire-at-65 as the norm. The productivity increases have continued at a steady pace ever since.
Some years productivity increases one percent, some years two percent, some years more. Over time, all those percents add up, and you have an economy where each worker–just by virtue of doing his or her job–has earned the right to retirement 20 percent, 25 percent or 30 percent sooner than did those who came before.
The second of the ten secrets described in the Secrets of Retiring Early report is The Spending Secret.
The Spending Secret is that unclaimed money will be diverted to purposes other than the pursuit of financial freedom.
Were there no place else for all the extra money earned by virtue of The Productivity Secret to go, we might be forced into awareness of our happy new circumstances. The money would pile up, and people would start quitting their jobs without having planned to in advance.
As it is, though, the same economic change that created Retire Early possibilities created alternate uses for our new wealth as well.The sellers of goods and services have become systematic in their exploitation of the possibilities opened up by the flood of productivity dollars. New needs demanding immediate attention are discovered each day, advertisers are hired to pitch newly created solutions, and more Productivity Dollars escape from the middle-class worker’s pocket.
The third of the ten secrets described in the Secrets of Retiring Early report is The Opportunity Secret.
The Opportunity Secret is that the New Economy rewards Retire Early planning.
The positive side of our brave new economy is that it promises many new opportunities. But the old model of personal finance does not do much to prepare workers to take advantage of them. To do so, workers need to have more put aside than the minimalist requirements of the 10-percent savings rule-of-thumb. They need to position themselves as if they were small businesses ready to jump into new markets when enticing prospects arise.
The fourth of the ten secrets described in the Secrets of Retiring Early report is The Goals Secret.
The Goals Secret is that a customized vision shortens the process by which financial freedom is achieved.
The Retire Early Idea is as elastic a concept as you need it to be to help you realize a life-altering goal. If you plan to leave the work force altogether in 15 years, you might establish a five-year goal to move to a different, less stressful, type of full-time work. You might anticipate switching to a part-time schedule five years farther along. The idea is to fashion a series of success points keeping you strongly motivated at each step of the process.
The fifth of the ten secrets described in the Secrets of Retiring Early report is The Planning Secret.
The Planning Secret is that Retire Early calculations give you X-Ray money vision.
What does it mean to save $10,000? For most of us, it’s an abstraction. It’s a good thing, of course. But who knows whether $10,000 is going to make much difference in a retirement that is decades and hundreds of thousands of dollars away? Retire Early calculations put the matter in a new perspective. Assuming a 4 percent real rate of return, putting aside $10,000 means having the capital to produce $400 every year of the remainder of your life without working. If your budget shows that you spend about $33 a month on books, periodicals and music, you can now forget about ever needing to work to pay for those items again. You’ve created a personal endowment-fund for them.
The sixth of the ten secrets described in the Secrets of Retiring Early report is The Motivation Secret.
The Motivation Secret is that a personal goal fuels ideas to overcome obstacles.
How often have you heard workers justify their spending as the purchase of little luxuries needed to get through a boring work day? A better reward than expensive coffee for the worker bored with her job would be to think of the day when she will be able to turn on the creative juices; or to spend some time just thinking about the big questions in life; or to take a chance on starting at ground level again in a new field of endeavor. When the goal of your finance plan is one you supplied yourself, there’s not much point to rebellion. To undermine your Retire Early plan is to undermine your own dream.
The seventh of the ten secrets described in the Secrets of Retiring Early report is The Saving Secret.
The Saving Secret is that freedom saving is different from other forms of saving.
Saving devoted to getting out is a new kind of saving, freedom saving. It is saving that goes beyond what is needed to pay for identifiable and required expenses (the costs of a conventional retirement). It’s as if you were setting something aside not to replace a machine that wears out (your body) but to buy a new machine to do the same job (your capital). Once the new machine takes over the task of financing your life’s activities, the old one–replaced while still in working order–is free to go where it chooses and do what it wants.
The eighth of the ten secrets described in the Secrets of Retiring Early report is The Earning Secret.
The Earning Secret is that telescoping the capital accumulation process leverages gains.
By the time that most workers reach their target retirement age, they have discovered how they should have been going about saving for retirement all along. The trick is to accumulate lots of capital fast, and let it do the work, not you. The sad thing is, at the point most workers see how leverage works, it’s too late to change strategies. All the years of allowing increased productivity to be diverted to other purposes are in the past. Those dollars have gone to work for someone else.
The ninth of the ten secrets described in the Secrets of Retiring Early report is The Freedom Secret.
The Freedom Secret is that it’s easier than you think to acquire freedom from wage slavery.
If you have never calculated how much you need to live on, your guess as to what it takes to retire early is probably off the mark. It’s hard for our minds–conditioned as they are by retire-at-65 thinking–to grasp how much each dollar of additional spending costs us in terms of realizing an independence-oriented goal. You need to play with possibilities until the point hits home. Then you’ll be sufficiently encouraged to take up the issue of where to make adjustments to spending.
The tenth of the ten secrets described in the Secrets of Retiring Early report is The Purpose Secret.
The Purpose Secret is that there’s meaning in work outside of paid employment.
Some early retirees are driven to the goal out of a need to accomplish things that cannot be done in corporate or government bureaucracies. This group is not looking for a break, but for a greater challenge. The question is not how to avoid boredom, but how to fit all the critical tasks into the day now that one finally has a chance to act on long-suppressed dreams.