The 30 Second Retirement Guide

In the world of instant information via Google we all want the easy answers, so I recently thought how can I describe what I’m doing in less than 1200 posts and almost five years of writing.  This is what I can up with.

  1. Decide you are retiring early.  No really without a full blown commitment to pulling this off you are wasting your time.  If you can’t keep a diet or budget for longer than a week, you likely won’t make this, so give up the dream now.
  2. Downsize your house.  If you have more than 400 sq feet per person or spent more than 3 times your annual salary on your mortgage: you can’t afford you house and still retire early.  Sell the house and go smaller.
  3. Keep your car.  You don’t need a new car every few years.  Drive yours for a ten years and see the savings.
  4. Stop all your spending for one week. Not one cent for a week, stock up on food and gas if you must prior to doing this, but don’t skip this step.  You will learn in one week two things: you can still be happy and not spend money, as well as you are not your stuff or your money.  There is life beyond a mall.
  5. Hack your spending.  During you no spend week you likely broke several bad habit you had with spending.  Don’t lose this now, instead cut until it hurts your quality of life and then back off slightly on things that matter the most to you.
  6. Earn more and be happy.  More work isn’t a bad thing if you love it or you use it to buy experiences you love. Yes it will likely mean you won’t be ‘normal‘, but let’s face it early retirement isn’t normal either.

Is there anything else you would add?

21 thoughts on “The 30 Second Retirement Guide”

  1. “Run the numbers” – I’ve known people who have the dream and even do some of your steps but not enough based on what they’d need.

  2. What about the value of having spread sheets and itemizing every expense even a coffee at Tim’s to see how much and where the money is going?

  3. I would agree with Jacq here, this is a perfect outline to get you launched towards your goal of ER, But determining what that goal is, is of utmost importance. Seeing the goal getting closer is what keeps you disciplined and without a goal you won’t really know when to quit working. 🙂 For me it was two fold, determining the goal (debt free, passive income/nest egg required) and then determined when I want to achieve that goal by.

  4. One of our first steps after we paid off our debts, was to track every penny for 3 months just to see where the money was coming from and going to. It is very hard to do, normal budgets should be a little more flexible to make them easier to follow. But tracking every cent is a real drag. Very few of the people I have recommended this to were willing to even try, because they didn’t really want to know how much they were wasting. They might feel guilty about the things that comfort them (Tims coffee). In fact we found out when we did it, that we were spending $400.00 per month at the coffee shop. You can’t be an “ostrich”, with your head in the sand, and still retire early.

  5. I was wondering which bank gave you a mortgage that COST you THREE times what you make – maybe that should read having a mortgage principal that is greater than three times your income.

    as to Rob – 3 months tracking expenses – how about 27+ YEARS tracking – the numbers are very interesting and collecting them was not a drag – I’d estimate total time spent per month was 20-30 minutes, and that’s on the high side, to get wonderfully accurate and custom planning numbers. The planners that say you need 70% of your income in retirement are full of it – during my working life we never spent more than 50% of gross income and usually it was in the 35-40% range. And I know precisely where it all went. And no our combined gross annual income was not huge – never exceeded 100K per year.
    Simple piece of paper with 25 categories( as per candianinvestor suggestion) – capture expenses daily to the sheet of paper, transfer to spreadsheet monthly and aggregate – couldn’t be simpler

  6. You don’t even need a spreadsheet, you can use one of the free buget/spending tools online such as Mint to track all spending and income as well as most investments. Makes tracking everything painless.

  7. Oh, and the corollary to running the numbers may be realizing that you don’t even have to do any or all of the steps you mentioned. Having said that I did do all of them at one point in time or another, so YMMV. 😛

  8. yes Kal you could use a site like Mint but what happens when they fold, disappear or are hacked? not so painless then. Maybe I’m too old school but I prefer my data to stay in my control – I laboured 30 years in IT and I’m not comforted by current trend of placing a lot of trust in organizations that are beyond my reach. IT, even the best of them, screw up all the time.

    And you are also correct in that a spreadsheet is not required – my first few years of data were pencil, paper and a trusty calculator

  9. The key to controlling your expenses is to TRACK THEM! I’ve spent about 30 minutes a week since 1994 tracking my expenses in Quicken. This was well worth it and has paid off big time, allowing me to understand what I’m spending my money on, and make adjustments as necessary. I’m now 43, and getting very close to being able to retire comfortably.

  10. Tracking all expenses is good. But it is like driving while looking in the rear-view mirror. My wife and I spent some time every Sunday evening planning every expense for the coming week. Then we stuck to the plan — week by week.

  11. The retail world has such a hold on Canadians – especially under the age of 60. If we were to turn off the TV, listen only to CBC Radio, never open a newspaper, only eat at home, and don’t click on any advertising for an entire month, I would think that the overall national household debt would reduce substantially! The media tries to make us think that we would be happier, healthier, richer if we BUY their products! Gosh – they tell me I can buy it on sale. YEAH!

  12. Please tell me what 25 categories you are using! I have been using Quicken since 1993 and I have SO many categories, I forget what half of them are.
    I am currently retired but working 3 mornings a week for a friend. I don’t need to work but … keeps me busy.
    I would like to re-organize my finances in Quicken and make them easier to understand — fewer categories. I looked at Canadian Investor but, unless you subscribe, I could not find where the info about the categories might be…. Any suggestions?

  13. @NowRetired – how do you what to spent on and how much if you don’t have a history?
    Zero Base Budgeting to the extreme?
    or is it a case of I have X and must spend all of it?

    I personally do not subscribe to budgets because they are easily broken/ignored – history however has a way of being a bit more stable ( revisionism aside) and can give you a base to go forward with.

    And looking in the rear view mirror is a good idea – tells you if the semi is about to rear end you 🙂

    here are my categories – they are not gospel – oh and btw I don’t use Quicken for expenses – swatting flies with a sledgehammer IMO – print a sheet with the categories, capture amounts daily or as they occur, summarize monthly into a simple spreadsheet ( or into Quicken if you must 🙂 I don’t care to keep the granularity of individual expenses unless they are unusual in which case I make a small margin note/comment e.g. I bought a new amplifier (~$250) which bumped the audio category one time so it go a little note.

    My Categories (don’t know if they align canadianinvestor)


    Cable (if you must don’t use it myself)


    Food Out/Restaurant

    Clothing me
    Clothing partner

    Personal Care


    Gift & Donations







    Books/Newspapers/ subscriptions



    Transport (buses and such)



    Bank Charges

    Insurance – breakdown if you want

    Other – as it says – but if this more than 2-3% of total look critically at whats going in here – it should really be for non-occurring one off type stuff e.g. Xmas tree purchase in December

    guess its more like 30 but they are what suits me

  14. GCAI: Thanks for the categories… I have all of them with slightly different names. I also have categories for my kids (gifts, etc.)
    I really need to consolidate them somehow. Maybe I will consolidate/merge the categories together — that should work. Although the other day, my daughter wanted to know what we had spent on her post secondary schooling and I had to separate everything out for the 3 different schools she has been to!

    Judy M: I like your comment about only listening to the CBC! I live in the North and we have only CBC and 2 small local stations. It is nice to talk to my daughters and realize they were listening to the same program while driving in the car as I was!


  15. Starting to merge “salary” categories for my late husband (died 2004). I don’t think I need all that info separated any more! You can merge the category and delete it at the same time

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