5 things to do to maximise your chances of retiring early

Now focused on helping Millennials and Gen Zs amass their own wealth through his recently launched book, Risk Required, Ed reveals how he took control of his own life and built his own financial cushion while providing practical steps to help readers escape the endless grind of the nine-to-five. Here, Ed provides five top tips to maximise your chances of retiring early:

Save up before you buy

Many people put a big purchase on their credit card and then pay it off very slowly over time. A large purchase on a credit card should ideally only happen when you have the money to pay it off in full when that card becomes due. Spending money you don’t have on a credit card should only be done in the biggest of emergencies. The best way to make a large purchase is to save up each month so you have the cash before you buy the item. Do not be fooled by the schemes where you pay monthly or in “three easy payments", these are literally there to get you to buy things you cannot afford yet, which puts you at greater risk of spiralling debt when unforeseen costs come along.

Pay off your expensive debt

If you have credit cards and bank overdrafts at 30% APR or more these are really high priority to pay off straight away. The cost of not paying these off will cripple you. Make a list of all your debt and how much it costs (the APR %) Pay down the most expensive cards first while keeping up minimum payments on the rest. Pay down a card at the beginning of the month and then spend on it later in the month or preferably spend on a cheaper card later in the month. Even having paid part of it down for 2 weeks will save you interest costs. Consider borrowing at a cheaper rate to pay off the more expensive debt.

Maximise your cheap debt

Once your spending is under control and your expensive debt is out the way you can consider maximising the use of cheap debt to free up some capital to invest. For example, you may be better off not over-paying your mortgage and investing the money instead. You may want to do a zero percent money transfer and invest that in a savings account. Or even, as I did, taking out another mortgage to invest. There are a lot of nuances here so read my book for more detail but it can make you a significant amount of money!

Invest

The way to get rich is to have your money making you money. Eventually your money may end up earning more than you do at which point you can sit back and relax. So, it is really important that you start investing, start small, make mistakes and learn from them. Getting comfortable with investment risk is key to escaping the 9-5 and retiring early!

Use your available tax breaks

There are a huge number of tax breaks available for investors as the government wants to incentivise investing in high growth businesses. Have a look at Venture Capital Trusts (VCTs), Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS) and Investors’ Relief.