There is a dream that many are achieving at a much younger age than previously seen before: F.I.R.E., which stands for “Financial Independence, Retire Early.” By early, that does not mean a few years, but a few decades.
One generation that has embraced this trend are millennials, who are cashing in on their finances and getting out of the workforce while they are still young.
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One hurdle F.I.R.E. millennials are encountering, however, is how to make ends meet while they wait to qualify for Social Security benefits, which won’t kick in until they are in their early-to-mid 60’s.
As a savvy age group who is known for being scrappy when it comes to making their money in unique and unorthodox ways, millennial retirees have some good advice for anyone else looking to jump into the F.I.R.E. with them.
Here are three things millennial retirees are doing financially until they receive Social Security:
3. Minimizing Money Out, Maximizing Money In
As with much advice for anyone looking to expand their personal wealth, it’s best to stick to a budget of what you are willing to spend on expenses while opting to find the most ways to get the highest amount of money in your bank account.
One way to start is by getting rid of any debt hanging over your head.
“If [your] interest on the student debt is say 9% APR, paying that down as fast as possible me guarantees you 9% ROI on your money,” recommended retired millennial Reddit user Eth_The_Future. “Debt free, then continue that lifestyle of saving to build your portfolio.”
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2. Continuing To Earn Income
It might not be full time or steady and it might be passive or semi-active, but it will be income. This can be a freelance gig, a side hustle or a part-time job with a traditional company.
That’s what Lauren Keys and Steven Keys, millennials who quit their full-time jobs in their 20s, are currently doing.
According to an interview with Business Insider, Lauren took on a social media client that provides her with a couple of hours a month of steady work. Steven does freelance work for his former employer, but spends the majority of his time devoted to an online-tutoring service he co-founded last year.
Together, they run a blog about financial independence, as well as get rent paid to them on a piece of property they invested in and have fully paid off.
1. Let the Interest Compound
It might be tempting to cash out your investments and live a lavish lifestyle while you are still young, but doing that will only make it harder in the future to pay your bills.
As a millennial, it might feel like it will take ages for the interest on your investments to actually show some substantial growth, but patience is the key.
“Compound interest doesn’t compound very hard when you have little, but it is working,” posted mrpushpop, a retired millennial on Reddit. “Your money makes money. Once you see it working you will double down, it just will take a bit to see it at the start.”
Lots of millennial retirees continue to add to their portfolios and investments even after retirement so that the compounding interest can grow even faster, with dividends getting bigger and bigger as they get closer to claiming Social Security.
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This article originally appeared on GOBankingRates.com: I’m a Millennial Retiree: 3 Things I’m Doing Financially Until I Can Receive Social Security
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