Serial entrepreneur Rick Orford didn’t follow the classic career path. But he did follow a few basic financial rules to enjoy early retirement by his early 40s.
Explore More: 6 Ways To Lower Expenses in Retirement While Still Living a Luxury Lifestyle
Read More: 4 Genius Things All Wealthy People Do With Their Money
Today, he lives in Italy with partner Andrea and spends much of his time traveling. You don’t have to follow any of the exact moves Orford made, but keep these broader rules in mind if you want to win the game like he did.
Also see places to retire abroad that are cheaper than the United States.
Wealthy people know the best money secrets. Learn how to copy them.
Consider Starting Your Own Business
In his early 20s, Orford started his first business: “I started a web hosting, design and registry company in 2004 that I sold in 2007. Was there an element of luck? Sure. But if you don’t put yourself out there in the first place, you can’t benefit from luck.”
Orford walked away with enough money to think a little bigger about what came next, but not enough money to retire and do nothing.
“My partner and I saw change on the horizon in the telecom industry with the advent of VoIP — voice over internet protocol,” he said. “So, in the late 2000s, we dove in and built a business phone service that would work from anywhere.”
Early success in the booming space allowed him to acquire a few other businesses in the industry. That made his business too big to ignore among the larger players, who eventually made Orford a seven-figure offer he couldn’t refuse.
“Don’t get me wrong: Entrepreneurship isn’t for everyone,” Orford said. “In many ways, it’s a harder path to earn an income than just getting a full-time job. But it also comes with much higher upside potential.”
Find More: Robert Kiyosaki’s 5 Side Hustles You Can Work From Anywhere in the World
Don’t Spend Like the Average Person
According to data from the Bureau of Economic Analysis, the average personal savings rate in the U.S. was just 3.2% at last count.
Spoiler alert: You won’t get rich or retire early with a single-digit savings rate.
“If you want to consistently build wealth, and quickly, you need to save a high percentage of your income,” Orford said.
The higher your savings rate, the faster you’ll reach your financial goals. It’s not fun. It’s not glamorous. Often, it means driving an old car while your friends show off their shiny new rides or living in a modest home while your friends host extravagant housewarming parties.
You’ll get the last laugh, though, as your net worth starts compounding long before theirs does.
Build Passive Income Streams
Like many early retirees, Orford is a vocal proponent of passive income.
“One of the most important things about retiring isn’t just having a seven- or eight-figure bank account; it’s about having an income,” he said. “We’ve all heard of folks winning the lottery only to go bankrupt a few years later. The same goes for athletes, singers and anyone who got rich quickly. A retirement where you sleep well at night means having diversified income from businesses, real estate and — my personal favorite — stocks with long histories of paying dividends.”
Other passive income sources might include bonds, notes, private equity funds or even royalties — which, it turns out, Orford also earns.
Plan Your Post-FIRE ‘Calling Work’
After selling his VoIP company and technically reaching financial independence and retiring early (FIRE), Orford didn’t plop himself on a beach to drink margaritas for the rest of his days.
He wrote “The Financially Independent Millennial: How I Became a Millionaire in My Thirties,” and then launched a personal website around that brand. Later, for marketing reasons, he rebranded it to simply RickOrford.com.
Today, Orford earns most of his income from dividends, his website and a niche consulting business. He’s also increasing his portfolio of short-term rental real estate investments.
“Very few people retire in their 30s or 40s and never do any work again,” he said. “You get bored and your life loses meaning without some type of contribution. So after spending a few months traveling or celebrating, most people who retire young go back to work. But they do it on their own terms.”
That’s better news than it sounds. It means you don’t need as much money as you think you need, because you’ll still earn active income even after retiring from your high-stress day job.
Start thinking about what your post-retirement work might look like and what you can earn from it. You may be able to quit your day job much sooner than you thought.
Consider a Lower-Cost Lifestyle in Retirement
Orford spent his younger years living in Canada with its a high cost of living. Today, he lives in Italy, where his nest egg stretches further.
“Most people plan their retirement expenses around their current living expenses,” he said. “But no one says you have to keep living in the same house, the same city or even the same country. Think bigger. Look farther afield. The less you spend in retirement, the less money you need to retire.”
Again, you could be closer to early retirement than you think — if you’re willing to cut your lifestyle costs.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: I’m a Self-Made Millionaire: Here Are 5 Things I Did To Retire in My 40s
Source Agencies
