If you ask someone "what is your financial goal", there's a high probability that they use the term, retiring early. It is a common goal amongst all of us to reach a point of financial security as early as possible. Now when I say retirement, I don't mean totally stopping work, or the career you love. I simply mean, getting to a point where you no longer HAVE to work if you don't want to because you have enough investments and residual income to cover your monthly necessities.
This has been my main focus since I was a teenager. I was introduced to the stock market at 18, and became completely addicted to the idea of investing money. I learned I could invest money and literally do nothing as it increased in value or paid out dividend income. After learning more about the financial markets, I realized there's countless other investment and business opportunities to have similar results, and additional income streams.
After almost a decade of experimenting with pretty much every investment possible, and building multiple businesses in Pittsburgh, I've learned a very simple strategy to reach retirement early.
First, you must have an income that is greater than your expenses. If every month, there's nothing left to show for your hard work, you won't be able to invest, thus you'll be fully dependent on working forever. The only way to reach a state of financial freedom in Pittsburgh is to create additional streams of income outside of your job or business. So step one is to take on a second job, build a business on the side, or work as an independent contractor. This require tons of sacrifice and hard work, but it will create additional income for you to work with.
Next is all about sacrifice. Once you start accumulating this excess cashflow each month, the first thing you'll want to do is go out, buy new clothes, buy a new car, travel, etc. This is called immediate gratification. That is where most people stumble. The key is to accumulate as much excess income as possible, knowing it is all dedicated to your end goal of retirement. That money has only one destination, and it is to create wealth and residual income for you. If the purchase you're considering doesn't do one of the two things, it cannot be bought.
As you continue to accumulate excess savings from your hard work, you need to put it to work to reap the rewards. The question of where to invest it starts to arise. Everyone is different and has different skill sets. If you are analytical and good with your finances, I suggest the stock market and understanding how to finance deals. If you are great with construction and like a more hands on approach, I would recommend real estate and the various investment options in that asset class. Regardless of which investment you choose, the key is to not only dedicate your extra savings to it, but your time. You must master the ins and outs of that investment. Understand the tax complications, speak with professionals, read books, learn from your mistakes, and continue to gain an expertise in the investment vehicle.
Once you've dedicated enough time to one investment, you should have reaped some of the benefits as well as mastered the skill of investing. It's time to then take that income source, and outsource as much as possible to free up your time again. At this point, you now have not only extra income from your "side hustle", but now there is additional income from your first investment venture. Take both of these streams of income, and use that to diversify to another asset class. Move to stocks, mutual funds, real estate, private financing, building businesses, etc. Continue to expand your investments not only to diversify and produce additional income, but to expand your knowledge on investing and the economy as as whole.
Continue this process over and over, and eventually, all those investments and streams of income will cover not only your bills, but the additional work you were doing to fund them. This is when you officially hit retirement and can look back at the machine you've built. At this point, you are receiving income from many sources, getting tax breaks from different investments, and will have an expertise in investing that maybe only 5% of society enjoys. It is a snowball effect, and after compounding interest and adding more and more over time, you'll officially reach the goal we all have of financial freedom.