During one of my seminars where I had attendees ranging from age 25 and above, one of them asked me if I had any money advice that young adults should follow. Without hesitation, I said “Work on your retirement as early as now.”
Due to time constraints, I hadn’t had time to expound my answer so I thought of writing this post to prove my point.
Myth about retirement planning
In the Philippines, the Retirement Law states that the compulsory age is 65 unless stated otherwise by an employer. This is prolly why most Filipinos think of retirement as the time when you are old and frail, when you can finally leave your job and start enjoying life like spending time with loved ones, living peacefully in the province, and making up for lost time on forgotten hobbies.
Unfortunately, this is a myth a lot of people believe in probably due to what the previous generation has passed down to us. The good news is that people nowadays are able to retire as early as in their 30s with the aid of technology and the multitude of passive income streams available right at our fingertips.
New definition of retirement
So let’s get this straight! Retirement isn’t just about leaving your job when you turn 60 or 65 because that’s the retirement age mandated by law.
Instead, it’s about reaching a point where you don’t need to work anymore, but you still choose to because it sparks joy, purpose and fulfillment.
You may want to read that again in case you didn’t absorb it well. Then consider this:
Oprah Winfrey is a multibillionaire and at the age of 70, she is still producing a movie called The Color Purple.
Madonna, a legendary singer, in 2023, is still making music and concerts.
Why do these ultra wealthy people keep on working instead of just enjoying the fruits of their labor? It’s because they don’t buy into the traditional idea or the OLD DEFINITION of retirement that most people do.
- OLD DEFINITION: Retirement is when you reach 65 years old. You finally quit working and enjoy life.
- NEW DEFINITION: Retirement is that stage in your life when you have created sources that help pay for your needs and wants, regardless of what age you are. You don’t need to work anymore, but you still choose to because it brings you purpose and fulfillment.
This is where the FIRE (Financial Independence & Retire Early) Movement comes in. Incorporating this lifestyle entails prioritizing extreme saving and investing to retire earlier than traditional methods. I know it may be hard to fathom the FIRE narrative especially when it is your first time hearing about this but there are really people, as early as 30 or 40, who have already retired.
Why? Because they have shifted to the new definition of retirement. And how? By creating multiple passive income streams that will shoulder their everyday expenses for a lifetime. Some have put up rentals and are living off on rental income. Some have grown their wealth into millions and are just living off on the interest income of time deposits. Some have heavily invested in the stock market and are living off on the dividends. Others have businesses that earn well without needing to always actively monitor these. There is no one-size-fits-all scheme to achieve FIRE but know that it is possible as long as you set your heart and mind to it.
When you achieve FIRE, you may start doing the things you love even if you are still young and vibrant. And because we are multi-faceted individuals, then living life to the fullest will mean pursuing many passions and interests throughout our retirement – our lifetime.
I was working as banker and sales agent until I felt no professional growth. Then things got boring and stressful. One thing led to another until I needed to give up my career to take care of my child.
I wanted to pursue blogging and so I created this blog which has been up and running since 2018. On the side, I currently work as a freelancer, author, keynote speaker, and financial literacy advocate.
I do these things because I enjoy doing them. And because I have savings, investments, and different sources of income, I can choose to work on any of them whenever I want to. It was something I planned during my late 20s and have achieved during my 30s.
How then can you achieve this pursuit of being work-optional and doing what you love? Through retirement planning as early as now. If you start working on your retirement goals now, who knows? You might end up retiring in 5 or 10 years’ time.
Featured Photo by René Porter on Unsplash