10 Personal Finance Tips to Get You to Early Retirement

I retired early at 35. Along the way, I’ve heard more than my fair share of well-meaning, but unhelpful financial advice. Some of it is bad, some is just outdated. 

When it comes time for you to make a major financial decision, whether it is about your career trajectory, or buying a home or investing for your future, you want to make sure that you are operating from a position of strength, not relying on outmoded advice that didn’t even make much sense when it was popular. 

I think that a big reason why I’m a self-made millionaire today is because I ignored the conventional wisdom that didn’t ring true for me. 

I’ve found that these 10 pieces of financial advice are actually keeping people from achieving their full money-making potential. Here’s why, and what I’ve done instead. 

1. Follow your passion

Passions can be wonderful outlets, but often, they won’t pay the bills. When you think about your career trajectory, consider and lead with your strengths, rather than your passions.

The distinction between passions and strengths can be tough to uncover. For me, I ask myself a simple question: “Would I do this job for free?” If the answer is yes, it’s probably a passion. 

From passions and hobbies, you can also identify concrete and practical strengths you can apply in a job market. Maybe you are an artist. Your creative perspective could lend itself to figuring out unexpected solutions, and problem-solving is a money-making skill that every employer needs. 

I’ve always had a passion for photography. But my facility with information technology was my marketable strength. In my case, the income potential between these two career paths is very wide. Ultimately, I decided I wanted to pursue photography on my own time, without tempering my enjoyment of it with the stress of having to earn a full-time income from it. 

2. You can’t get rich working a 9-to-5 job

While it’s true that the world’s wealthiest tend to be business owners rather than 9-to-5 workers, a 9-to-5 can offer a wealth of opportunities to get rich. Starting with a company-sponsored 401(k) or a Roth IRA option. 

Both the 401(k) and Roth IRA are great ways to save money for retirement, and many companies use automation to make these contributions easy with every paycheck. All you need to do is set it up and let it grow. 

I did this throughout my career, starting from day one. Over the years, I amassed over $500,000 in these retirement accounts without lifting a finger. I never had to remember to fund my 401(k) or Roth IRA because it was all automatic. 

Early on in my career I started investing only 10% of my income, keeping in mind that old adage “invest 10% and you’ll be set.” But due to inflation, I soon discovered that was not going to be enough. I boosted my investment number to more than 25% mid-way through my career, which amounted to $20,000 to $30,000 every year.

My best advice is to aim to invest 20% or more, which is what I was able to do midway through my corporate career. If you can’t get there yet, don’t worry. Start with a little bit at a time if you need to, then slowly boost your investments over time as your income grows.

3. Don’t worry about saving, just earn more

Throughout my life, many people also told me that if I earned enough money, it wouldn’t matter how much I saved, because my cash flow would take care of everything. 

High incomes are wonderful, but only if that money is put to good use. Investing for the future is how wealth is built. A high income cannot make up for unsustainable spending habits.

My recommendation is to save six months of living expenses in a dedicated savings account, invest at least 20% of your income in the stock market, and if your employer offers 401(k) or Roth IRA investment opportunities, take them.

4. College is useless

Between the emergence of the gig economy, the rise of the cost of a college degree and the state of student debt in the U.S., there is a major conversation happening right now about the value of higher education.

Depending on your industry, having more education doesn’t necessarily mean you’ll be earning more money. But a 2021 report from Georgetown University found that graduating high school puts workers on a track to earn a median of $1.6 million in their lifetime, while a bachelor’s degree holder can earn a median of $2.8 million.

My 4-year degree is in information technology. It’s one of the best decisions I’ve ever made because it set me up in a high-paying career field at 24 years old, which allowed me to save and invest. 

Today, I don’t regret my choice. But since it can be such a fraught investment, my best advice is to think carefully about the type of education that will set you up for the greatest chance of success. It may not be a traditional degree, but learning on your own terms is always valuable. 

5. You have to read a ton of books a year

I started to pursue financial independence about 15 years ago. My goal was to quit my full-time job and live off investments while traveling the United States in an RV. I thought that I had to read as many books as I could to help me get there. And I love to read, but I soon realized that absorbing the information wasn’t enough.

If I wanted results, I needed to start putting my knowledge into action. 

When I read “The 7 Habits of Highly Effective People,” by Stephen Covey, I decided to use it to help make a plan. I actively applied the lessons to the book to how I made persuasive arguments at work, and how I managed my emotions and engaged with my colleagues in the office. I can draw a straight line from those changes I made based on what I learned from the book, to my promotion to director of information technology. 

6. You need to buy a home in order to grow wealth 

Homeownership can be more expensive than many of us realize. There are a variety of costs, before you move in and once the place is yours, that can make a dent in your bank account. These expenses range from down payments, closing costs, property taxes, insurance homeowners association fees, mortgage interest, and home maintenance and repairs. 

In some areas like New York, the high cost of living can put homeownership out of reach for many. Which can make renting a much better financial option.

There is also something to be said for the flexibility of not being tied down to one place. 

For three years, I traveled the country in an Airstream with my wife and our two dogs. We sold both of our homes and set off adventuring around the country in any direction we chose for that day. Making a change like this isn’t for everyone, but this time in our lives provided freedom unlike anything else, and it taught me the power of location independence.

7. Never use a credit card

Credit cards can sometimes be a way to rack up debt, but if used intentionally, they can also help you save, and offer cashback rewards that can be redeemed for  Many credit cards offer perks such as cash-back rewards and points that can be redeemed for rental cars and plane tickets. 

My advice? Don’t spend extra money just to rack up more travel points. Instead, use credit cards for the things you would have purchased anyway.

My wife and I use a single credit card for most of our purchases and wind up with hundreds of dollars every year in rewards points that we use for travel. We haven’t paid out-of-pocket for a rental car in many years. And we make sure that we are paying the balance in full every month. 

8. Your credit score doesn’t matter

Many people told me in the past that unless you are making a major purchase, your credit score doesn’t matter. But your credit score has more of a significant impact on your life than you might think. 

If you buy a home, your credit score can affect the interest rate you’ll get on a mortgage. Credit scores can also help you secure auto loans with better terms. Employers, landlords, cell phone and utility companies and insurance providers have all been known to use credit checks to get a better picture of your financial background, or decide if they require a bigger security deposit from you 

For me, a top financial priority is always making sure that I am paying my utility and credit card bills with the full amount and on time, every month. I also regularly keep tabs on my credit score to make sure that there are no mistakes that could be affecting it. 

9. All investing is gambling

With investing there is always a risk, but it can be a calculated one. History has shown that investing in the stock market is one of the best ways to build wealth over time. For instance, the S&P 500, considered the benchmark of U.S. stock performance, has returned around 10.5% every year since its inception in 1957. 

That does not mean stocks don’t go down. The S&P 500 fell over 45% during the 2008 financial crisis, but recovered to all-time highs in 2021, even in the wake of the pandemic. 

So when it comes to investing, it is important to know your risk tolerance, and to understand that nobody knows what the future holds, especially when it comes to things like cryptocurrencies. Time in the market beats timing the market. The longer that your investments sit, the better the chance you have of growing your wealth over time.

Maintaining a diversified investment portfolio that includes a variety of stocks, bonds, mutual funds and cryptocurrencies is a solid long-term approach that has worked well for me over time.

10. You have to hustle 24/7

I believe that 24/7 hustle culture is toxic. It implies that the only valuable way to spend your time is to always be working. 

This all-work-no-play mentality can be harmful to both our productivity and overall mental health. A 2020 FlexJobs survey found that 75% of workers have experienced burnout. And nearly 7 in 10 believe that the pandemic has made it worse.

I have found that it is critical to take time for ourselves. If you want to sink down onto your couch at the end of the day to relax or watch one of your favorite shows or movies, that is perfectly healthy. Watching Netflix won’t make you broke. Money is important, but you won’t be able to enjoy the fruits of your hard work if you’re exhausted. Self-care is what matters most.  

Steve Adcock retired from full-time work at 35 and writes about personal finance on his blog and is a regular contributor to CNBC, MarketWatch, and Business Insider. He travels the country and lives in an off-grid home in the desert with his wife Courtney and two dogs. You can find him on Twitter at @SteveOnSpeed.

The views expressed are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses, or sales charges. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses.