hey everybody on Phil town from rule 1 investing and today I want to talk to you about how you can retire before age 65 and live comfortably you so here's the thing retirement planning is obviously something that can be kind of tricky but I want to start out by selling you this it really it's possible to have enough money to retire early you don't need to win the lottery that's the big thing right because it's good news or you don't need to have a big inheritance you don't need anything like that you just have to be smart and disciplined with your money that's what you've got to do so the first step you can take on this path to early retirement is to start living below your income whatever is coming in you got to spend less than that it isn't enough to just budget your money so you're not spending more than you're making you've got to take it a step further and you got to spend below what you're making you got to hang on and keep the belt tight and no matter if you're currently living comfortably if you manage to increase your income always buffer your budget live as if you're not making that amount of money one way people do it is you know they just get a raise and they don't spend the extra and gradually this starts to open up a nice buffer I worked in the Grand Canyon I was making $4,000 a year you guys and at the time what I had going for me is that I could live out of a duffel bag on that income everything I owned was in the thing about this big so it was pretty easy for me to just keep the belt tight when I started investing and just saved money and just kind of keep it all in the game so they could get that high rate of return so keeping your belt tight what it basically means is that you analyze your income and your expenses and then you just reduce that spending and you got to ask yourself what am i spending money on that isn't essential and you start making your cuts there I got a friend of mine that is all about you know cutting out the lattes in you know David Baucus great guy and he's right you could do that but it's also kind of throughout the entire spending process often you know the latte isn't the thing it's just that kind of a metaphor but throughout the spending process you've got to find ways to cut it down you know four bucks a day may not do it with 4 bucks a day is $100 a month right of course look at when you're spinning goes down your savings automatically go up that's the idea right so it's best to first use that surplus money to do what pay off your debt so that's a big burden that can really prevent you from achieving your financial dream interest on bad debt like credit card interest is stealing your money from you it is absolutely compounding the opposite direction so you're really losing at the rate of compounding which is giant so the sooner you can pay off debt the more you're going to have the same for early retirement now there's good debt there's bad debt so let's be sure we understand the difference good debt that's debt that's going to be an asset that's going to make money for you down the road so good debt is education you know I go into college that's good debt even offers you know just go get a degree in sociology or maybe compared to religion like my daughter so you got to have good debt which is to basically create an asset that's going to ultimately make you money bad debt is buying stuff you don't need to impress people who don't like you anyway so stop doing that and that brings me to my next point you should start saving as early as you can and this is advice that I got as a kid didn't listen to it and then of course life intervenes and you got all these things you got to spend money on but the earlier you start that habit the more opportunities you're going to have to grow your money and everybody will tell you that's true it's a really tough discipline I can admit it it's very hard but every dollar that you can get in that retirement account now is going to make a huge difference for you down the road and that is the power of compounding working in your in your benefit I got to tell you you know there's a great story about Warren Buffett looking down at a penny in an elevator these other guys were looking at the penny Buffett was looking at the penny and everybody in the elevator was wondering if Warren Buffett this billionaire was going to pick up the penny and he didn't and the elevator doors open he gets out he turns around looks and he looks at the guys in the smiles and bends down and picks up the penny and he says started the next billion and the fact of the matter is if you can learn to compound money at a high rate of return which is what we think we can teach you to do right following in the footsteps of this family of investors that Buffett has been teaching us about for 60 years if you can learn to invest money like that where you have a high rate of return and everything you can get in the kitty right now is going to result in a huge huge amount of money down the road so if you have to you just start small as long as you start you just start now that's the critical thing you cannot believe impact of $1,000 now 30 years down the road if you've been compounding money at a high rate of return so accuse an amount of money to set-aside that's just you know it's comfortable even if it's $5 just to start getting in the habit then as you get more comfortable you start getting more money from reducing your spending and you start paying down your debt then you start to increase that amount just gradually increase it so you get rid of all that consumer debt that doesn't it's not buying assets they're going to you know result in a high rate of return and cash flow down the road and then that will increase the amount of money you have available that will result in cash flow down the road now in rule 1 investing you guys every little thing counts and it'll only grow if you continue to work at it the reason every little thing counts is because we target a very very high rate of return we're looking at a minimum of 15% a year which will double your money every five years and we're targeting 26 which will double your money every three so you start putting a pencil to that level of compounding over time you can see how a guy like me starts with a little bit of money like a thousand dollars instead and get basically gets rich so last thing is just you got to learn how to invest there's no shortcut around this you don't have to be a genius investor to be able to retire early you just need to find a few wonderful businesses that can generate a really great return for you because you're buying them when they're on sale most people think that you can't do that but that's all about fear it's all about believing what the financial services industry is trying to do to you which is to just make sure they keep your money and it's all about not knowing where to start so if you're already investing you're on the right track which is great however if you have a financial advisor you're probably not making the returns that you could be making the financial advisors all come from the same school which is the school of efficient market hypothesis or theory which basically says you can't beat the market so they don't try they don't train to try they don't know the value of a business they don't have any idea how to price a stock they just diversified diversified diversify now the key to return early isn't just about saving earlier it's about putting your money in the sum that's an investment that can maximize the growth of that money the velocity of that money grows and grows and grows at higher rates of return you can start investing your money properly and take advantage of your investment account by making 15% a year with rule number one you can do it everybody out there can do it I've had many students now who have doubled and tripled their retirement fund and are actually retired early simply from using the rule on strategy over a few short years if you want to learn more about investing there's a simple place to do it you guys just visit my website and check out my free resources to get you started now I'd love to hear from you guys when would you like to retire that's the question so if you don't leave a comment below with your answer I'll be sure and follow up with you I really appreciate you watching now go play and if you enjoyed this video you feel it was valuable and teaching you more about investing would you please subscribe to this channel and share the video with your friends or anybody else you think might benefit from this information