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Time Is on Your Side

Success stories are regular features of our Motley Fool Rule Your Retirement newsletter service, where we share profiles of people who have become financially independent. One of the most remarkable stories we've come across is that of Billy and Akaisha Kaderli. At age 38, they left their fast-track lives and started traveling the world. We caught up with Billy and Akaisha in Lampang, Thailand. Here, Akaisha speaks to those in their 30s who want to make the most of an early start on financial freedom.

"Begin now." That's what we say to those 20- and 30-year-olds who write to us asking how they should prepare to retire early. It may surprise you that we get letters from people still in college or just beginning (or even finishing) their careers. Some ask us what line of work they should pursue to give them a head start on cash savings, or where they might find a like-minded partner!

We find it refreshing and encouraging that these young people are already thinking of their financial futures beyond the traditional consumer periods of life. Although individual cases are different, there is a common thread to each answer we offer. Here are the steps that we think young adults -- and older ones just getting started -- should follow in getting their financial affairs in order.

Make your own decisions 
You don't need to hit home runs with all of your investments, but if you don't do anything at all, you're sure to strike out. Do your research, and make the best decision for yourself and your risk tolerance. No one is more interested in the quality of your future than you are, and becoming your own financial advocate and learning financial terms is paramount. Join an online forum -- such as The Motley Fool's discussion boards -- so you can start to learn from others how to make intelligent investment decisions.

The time is now 
When's the best time to begin preparing for retirement? Right now, no matter what your age. The compounding effect of investments is an advantage that the young have over late starters. Use that advantage. Ignore the noise from the financial pundits on TV. You'll often see doom and gloom everywhere, but the stock market continues to be the best long-term growth investment available.

Find the right match
We can't overemphasize the importance of finding a financially like-minded spouse. If you find someone with complementary spending and savings styles, you will avoid devastating financial wipeouts -- as well as the pain of having to start over. Divorce is costly in numerous ways. Making your marriage last will pay you dividends in many areas.

Avoid debt 
Getting out of debt -- and staying that way -- is another crucial leg of your financial freedom. Simplify your infrastructure, lifestyle needs, and spending choices, and pay off all of your credit card debt. Then you'll have more flexibility. You may not have to feel stuck in a job you dislike just to pay off debt for items you no longer use or need. Always live below your means, and don't ever leverage against your retirement savings. Consider those accounts untouchable. If you have a choice between buying any consumer item or contributing toward your retirement savings, choose your retirement savings. Reaching financial independence more quickly will be your reward.

Know where your money goes
Tracking your spending is a lifeline. No matter what else is going on in the world, you can establish a sense of control, not to mention confidence and peace of mind, by keeping tabs on your spending. Combine this step with downsizing the house, the car, and Uncle Sam, and you will be able to put your extra money toward your financial independence. While you're at it, max out your savings plan at work, and take advantage of every retirement option your employer offers. If your employer doesn't have one, start your own IRA.

Stay focused 
Young people sometimes think they will never retire. Maybe the term "retired" conjures up images of loneliness, disconnection, and aimlessness. That's why we prefer the term "financially independent." When you have financial freedom, you can spend your time as you see fit. There are many ways of making your life significant when you are freed up from a commitment to a 60-hour (or more) work week. You can use that same energy and drive that you applied toward your career, direct it toward meaningful causes or pursuits, and give back to society. Perhaps that's the ultimate goal after all.


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