Youth’s Advantage in taking action to reaching Financial Freedom

At what age do you plan to retire?

This is what I often ask several people I meet to talk about investing. Most of the time, I get fascinating response.

I’m planning to retire at age 35, or 40, or 45, or 50.

Interesting enough, in my generation, nobody will say they plan to retire at age 65. Never! Not in a million years! That’s how ambitious we are, and that’s how idealistic we can be.

But this goes to show as well that nobody really plans to work their ass off until age 65 and end up not enjoying their retirement –  like spending most of the time traveling, eating different food from different culture, and those sort of things. At age 65, all those physical deterioration comes into play – limiting our body to enjoy what we said few decades ago we wanted to do.

We don’t plan to work hard for the rest of our lives. In fact, we prefer working smart and retire as early as we possibly can!

Since you’re planning to retire early, what are you doing today to prepare for your retirement?

For those people that I’ve been talking to, the answer is obvious. They contacted me and meet me to discuss how they can start their preparation – that’s the very first step of those people who are ready to take action.

But that’s not always the case, there are still those who keep saying this “I’ll retire at age 40″ mantra and still decides to do nothing. Or probably, they haven’t yet found the right motivation to go on, yet.

The power of youth plus the magnificence of compounding

Young people has these advantage over the seasoned elders.

  1. Time – being that far from retirement, say in 20 to 30 years, we, young professionals, can afford to make mistake and be as aggressive as we can be, and still have enough time to mend and correct those mistakes and failures.Relating to investing principles, our capacity to be aggressive offer us the probability of gaining more (the higher the risk, the higher the return), because at this point, time is still on our side.
  2. Free of Major Financial Responsibilities – most of us are still single who only worry about our own personal financial needs. Aside from luxuriously following every technological trend, and dining on fancy restaurants, we really don’t have much to spend for. Once we learn to live without those unnecessary luxuries in our lives, we tend to begin to save a lot, which can provide great value for our planned early retirement.
  3. Open Mindedness - our generation believes in many different things. We believed that Multi-Level Marketing is real and not just a scam. We believed that with the right idea, imagination, and creativity, we can build the next Facebook. All these things are real. Our fresh mind is willing to accept what the seasoned elders deemed not possible. Our mind is open to believe that we really should make a plan because we know that failing to plan is planning to fail!

Having that time advantage and the two characteristics mentioned above, a young professional can start preparing for his retirement even with just a small amount. The key, as anything else in life, is consistency.

It may be  hard to imagine, but P1,000.00 consistently invested in a month, do that for just even 10 years, could give you millions when you’re 65. That’s how the power of compounding intensifies your investment most especially when you’re still young.

Most of the time, it’s not just a matter of how much you could invest. To achieve your goal, you should be able to create a habit of consistently making a move, no matter how small each step is.

Start one small step at a time with 1k a month.

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    hi sir….how i wish i could really start …..but how to do that?

  • sheryl

    retirement children education, hospitalization etc. hmmm we might need bigger than 1000 :)

    • Nick Raquel

      Correct.. Pero syempre, everybody needs to start somewhere :)