Have a SMART goal in mind.
S.M.A.R.T. is an acronym standing for specific, measurable, attainable, relevant, and time-based. These goals are designed to keep you on track and motivated to achieve what you want in life. They work because instead of just having a general idea of what you want (i.e., “I want to retire early”), they make you think about the path of how to actually get there.
For example, if you want to retire early, how early? Does retiring early mean retiring at 60? 55? 45? You need to set an end date to create a sense of urgency. This will also help you reverse engineer your goal to see if it’s realistic/attainable. You’ll need to figure out how much you need to live off of per month or per year and then can use cool tools like the 4% rule to see how much money you need invested to hit your retirement goal. Are you ok living off of $40,000 per year ($3,333 per month) or do you need $80,000 or more? What expenses will you have when you retire? In addition to basic living (food, water, transportation, cell phone), will you still have a mortgage payment? Don’t forget you’ll likely need to pay for healthcare. Using the 4% rule, you’ll need $1,000,000 invested if you want to live off a $40,000/year income.
The good news is that if you’re young, you have a lot of time to make good financial decisions and allow those good decisions to compound over time. The bad news is, it’s a long time to stay focused on a goal. So Instead of taking a straight line to where you want to go, it might be more of a winding road.
How do you stay focused for 20 years? To do this, you have break it down into more manageable chunks (having “milestones” to look forward to), celebrate the wins once you achieve those milestones, review your goals regularly, have an accountability partner to make sure you’re not straying too far off your path, understanding that sometimes you’ll have to delay gratification, not worry about what others think and stop comparing your life to theirs, and have a strong reason for wanting what you are stating is your goal. Do you want to retire early only so you can sit in front of the tv all day or do you want to enjoy life with others? If it’s the latter, who’s to say you can’t do that now?