Woman shares top tips for financial freedom after semi-retiring in her 30s

‘I knew I wouldn’t be able to travel and enjoy my life when I’m older, so this really drove me to make a change,’ Rachel, who shares her advice on TikTok, (@rachel_moneytalks), told NeedToKnow.online.

‘I still saved and invested where I could in my early years, but not with the aggressive drive I had [later on].

‘Immediately upon graduating, my parents told me I need to use my 401k, a workplace retirement plan which invests money in a variety of choices. All throughout my 20s, I used my company-sponsored matches and invested for my retirement.

‘Initially, my goal was to retire someday, but as time passed, I wanted to opt out of the corporate system and be able to own my time in whatever form that worked out to be.’

Below are her top financial tips.

Be clear

Many of us are looking for cheap deals to help save extra pennies every month.

However, Rachel says it’s crucial to keep a very close eye on outgoings, no matter how small.

‘You need to be super clear on your expenses, as if you don’t know where all your money is going, you won’t be able to design the life you desire,’ she explained.

‘The easiest way for me to do this was to stay in the same housing for long periods of time, as I knew how much it would cost to be there. I also only ate my favourite foods and I knew how much I would need to pay for vacations or something similar ahead, so I’d also be aware of how much I had to spend on the trip.’

Focus on growing

Rachel believes that while saving is important, it’s more beneficial to find ways to grow your income.

‘I found the easiest way to do this is by asking for a raise or promotion,’ she said.

‘You’ll have to demonstrate that you deserve the extra money and you probably already do – it’s a matter of proving it. If you also apply for jobs which pay more and have the confidence to say how great you are, then that will also help boost your income.

‘I’m not a huge fan of side hustles, because I like to protect my free time, but that works very well for many people too who are able to put in some extra hours.’

Rachel now works up to 75% of a ‘normal’ work week with her freelance business – but claims she wishes this was done sooner.

She said: ‘I wish I had changed careers and found something less stressful, or possibly launched my own business earlier.

‘Now, I enjoy work so much that it doesn’t feel like a burden. I’ve realised that it’s not about never working again, but about finding work or purpose that feels like joy and allows room to grow, as well as flexibility.

‘I spent far too long stuck in my career because I was too afraid to make a big change and instead, I waited until I had enough money to live off before quitting.

‘Full retirement isn’t the goal for me anymore, it’s about financial stability and flexibility.’

Enemy mindset

Rachel says gaining financial wealth can only be done with a positive mindset.

‘If you focus on believing that you can get wealthy by reading books or getting familiar with how the wealthy think, it’s attainable,’ she added.

‘But only if you believe you can do it. Understand your goals and why you’re working toward them, as if you don’t have a solid path, you won’t be able to get there.

‘Also, you need to have some patience – this was a 14-year journey for me and I was more aggressive in the final seven.

‘Every week that you put off starting your financial freedom, works out to years of extra work before retirement.’

Spend money to make money

While it seems counterintuitive to depart with savings during the cost of living crisis, investing can benefit a financial situation in the long-run.

It’s a risky game, but investing small amounts over a long period of time can help to boost your income greatly.

‘No, you don’t have to be Warren Buffet to be a successful investor and it’s actually more of a hands-off approach that’s better in the long run,’ she explained.

‘Instead, learning about investing in things like low-cost index funds or tax-advantaged accounts like ISAs, is a great place to start. The simplest approach is often the best approach when it comes to investing.

‘Before I quit working, I invested in multiple accounts every month for seven years and in total, I’ve been investing for 15 years.

‘To this day, I still use tax-advantaged accounts to invest in low-cost index funds and that approach continues to be the soundest, most reliable strategy to build wealth for both the average person and the wealthy.’

Valuable expenses

Rachel believes there’s a difference between unnecessary, frivolous expenses and expensive, worthwhile ones.

Although an item or experience might cost a lot of money now, it’s deciding whether the purchase will benefit in many years to come or if it’s something that will be forgotten.

‘I find testing “cutting” things out of your life the best approach,’ she said.

‘Ask yourself: “How does it feel to cook simple meals?” rather than going out multiple times a week, does this make you feel better in more ways than one?

‘Look at the big picture, how much money will that save you over the year? Look at the cost per use.

‘For example, a good quality coat that you’ll wear daily is likely a good investment, but killer stilettos for a friend’s wedding? Probably not a great purchase.

‘I’m able to stretch a dollar when I need to. I have cut back on the things I no longer need and I don’t buy many clothes or drink alcohol nearly as much as I used to.’

Her tips have helped her to secure financial freedom and she now runs her own freelance coaching business.

For Rachel, one of her favourite things about early semi-retirement is being able to wake up without an alarm and taking time to practice the hobbies she loves.

‘I love going to the grocery store in the middle of the day and taking long walks whenever the mood strikes me,’ she added.

‘I’ve been really enjoying building my business and learning about the world of online entrepreneurship without the pressure of knowing I must succeed for my bills to be paid.

‘Money is the most important tool in the belt, as it influences our ability to do so many things, both good and bad.

‘I wanted my own time, as I’m not sure how long my body will remain healthy and taking advantage of every opportunity is key for me.

‘If you already know working full-time isn’t for you, then what are you waiting for? Take action to change your own future.’

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