If I was 30 years old with no savings, I’d go flat out to put that right. I reckon it would still be possible to get rich and retire early, even starting from scratch at this age. There are five things I would do to make it a reality.
1. Get started now to retire early
The earlier I get cracking, the better. That’s for the simple mathematical reason that my money has got so much longer to compound in value.
I reckon there’s still time enough at this age. Today’s 30-year-olds are likely to reach state pension age at 68, which means they’ve got 38 years to build up the money they need. That’s enough time, but I wouldn’t waste it.
2. Work out how much I could put away
My next step would be to work out how much I can afford to invest each month. I’d look at my bank statements to see where I’m spending money, and how I can cut back. I’d also look at ways of generating cash, like a side hustle. Then I’d invest the maximum I could. Again, it’s simple. The more I save, the more likely I am to get rich and retire early.
3. Take out a Stocks and Shares ISA
If I was an employee, I’d start by investing in my company pension, taking advantage of any employer matching contributions. Otherwise I might take out a Self-Invested Personal Pension (SIPP) and claim tax relief on my contributions.
After that, I’d try to max out my annual £20,000 Stocks and Shares ISA allowance. I’d set one up through an online platform such as Bestinvest, Hargreaves Lansdown, Interactive Investor or Fidelity, after first comparing charges. That way my money can grow free of all income tax and capital gains tax.
4. Use FTSE trackers to get rich
I would want to get started quickly, and the easiest way to do that would be to buy a tracker fund following a major index such as the FTSE 100 or FTSE 250. Fund managers iShares, HSBC, Vanguard and many others offer these. I’d look for the ones with lowest charges, so I could keep more of the returns for myself. I would also buy a few exchange-traded funds (ETFs) or investment trusts targeting the US, Europe, and emerging markets. They’d also help me get rich and retire early.
5. Build a balanced portfolio of mostly UK shares
As well as passively investing in stock market indexes, I’d want to get active. I would do that by building a balanced portfolio of UK shares. I would start by researching FTSE 100 favourites such as Aviva, Lloyds Banking Group, GlaxoSmithKline, and Unilever.
Over time, I would explore FTSE 250 stocks, then smaller companies, to generate faster growth and accelerate my plans to get rich and retire early. Then I’d stick at it because what’s the alternative? Stay poor and retire late? I don’t fancy that.
