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How to build a Life you don’t have to Retire from

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Members of Gen X are getting closer to retirement age, but a lot of us aren’t ready for it. A majority of Gen Xers (56%) have less than $100,000 saved for retirement and not a lot of time left to add to it. Only a third of us think we can retire by 65. Things are only getting worse with high inflation and the changing economy. Retirement looks bleak for Gen 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 by 65. That’s easy to say, but almost impossible to do. If you haven’t been saving for retirement, there is no chance you can increase from 0% to 50% saving. However, that’s not the end of the world. We’re the rebellious generation. If you can’t retire like your parents, then you need to find a rebellious alternative. Instead of languishing in a leisurely retirement, build an engaging life you don’t have to retire from. 

Build a life you don’t have to retire from

What is a life you have to retire from? The basic idea is to figure out a way to thrive financially without your day job. Yes, it is possible. Many people have done it. I don’t have a day job anymore, but I’m still working part-time. I’m doing well financially and don’t have to deal with a toxic work environment. I’m enjoying life now instead of waiting for the traditional retirement. Here is how to build a life you don’t have to retire from.

Build your non-job income

The first step is to build your non-job income. Most people depend solely on their day job to provide 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 income streams outside of the day job. This isn’t easy and the amount of income will be very small when you first start out. You need to keep working on it and eventually, the income streams will percolate into a substantial sum.

Here are some ways to make money outside of your job.

  • Invest in real estate– Here is a tip for everyone. Your home isn’t 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 isn’t a great investment. It doesn’t generate any income. For real estate, I invest with CrowdStreet and my investment is generating a nice passive income. Check them out to see what projects they are offering.
  • Rental property – A lot of people retired early with rental properties. Once you have a few rentals with good income, then you’ll probably be able to leave your job. Being a landlord is not for everyone, but it is one of the best ways to make money outside of work.
  • Dividend stock – I love my dividend portfolio. This year it will provide us with over $10,000 in passive income and it doesn’t require much effort. The stock market can be volatile, but good dividend stocks will keep putting 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 lending. I try to add some money to our I-bond account every year. After Mrs. RB40 retire, we can draw from this account.
  • Sharing – The sharing economy is booming. You can rent a room out, share your car, rent out your parking spot, and sell your old stuff. These are all great ways to make a little money on the side.
  • Drive – If you’re a good driver, this is an easy way to make extra income.
  • Freelancing – Work part-time on the side on projects you enjoy.
  • Blogging – I don’t recommend blogging. It’s a lot of work and you need to be pretty lucky to make 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, house sits, or a dog kennel. The possibilities are endless. Try different things and see what works.
  • Hobby income – You can leverage your hobby to make money. One of my friends deejays on the side and makes a little money while having fun. You’re the expert with your hobby and newcomers will gladly pay for it.
  • How do you make money outside of your job?

There are many ways to make money outside of your day job. You just have to try different things and see if you like it better than the day job.

Reduce expenses

It’s great to make extra income on the side, but it will take a very long time to surpass the income from your day job. I have never been able to surpass my old salary, but that isn’t a huge deal because I have passive income. Luckily, we don’t have to surpass the income from our day job. We just need to be able to pay for our monthly expenses and that can be controlled. The key here is to reduce your expenses to a level that you’re comfortable with. Some of us can live on $5,000 per month and some of us can’t.

Since I’m married, I just aimed for 50% of our expenses. We spend about $5,000 per month and my non-job income can cover 50% of that when I retired in 2012. Fortunately, our investments had tremendous gains since then. Now, our passive income can cover 100% of our expenses. Mrs. RB40 can quit her job whenever she wants. However, she wants to work until our son goes off to college. It’s still nice to have options.

Of course, the less you spend the more money you’ll have to save. I saved all of my take-home income for two years before I quit my job. This gave our passive income a big boost and also boosted my confidence that we’d be fine.

Not retiring

There you go. That’s one way to build a life you don’t have to retire from. You need to 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 spending reasonable. This is the new retirement and more people are taking up the challenge. We are enjoying life and working on things we want to. The traditional retirement isn’t very enticing to us and we’d rather work a little every day. As we get older, we’ll reduce our hours and work less. I probably keep working a little bit even after 65. That’s coming up sooner than I’d like, but that’s life.

Are you taking up the challenge to build a life you don’t have to retire from?

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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