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5 tips to help you retire early from your day job

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I read a great blog post recently from an old colleague whose name is Maynard Paton.

He’s an old colleague and not a current one because, at the beginning of 2015, he gave up his 9-to-5 day job. He’d already paid off his mortgage and aimed to live on the returns from his investments. He was 43 years old and essentially started from nothing – no degree-level education, no inheritance, no rich marriage, you get the picture…

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How did he do it, and can you do it too? Well, he did it by working and saving hard, being careful with his money and by investing in shares on the stock market, an activity that produced some decent annual returns for him over the years.

But he didn’t live the life of a pauper either. Along the way he married, had children, bought a four-bedroom detached house with a double garage — which he owns outright — and ran at least one car. You can read his interesting blog for more details.

Still investing

Admittedly, by his own admission, Maynard hasn’t fully retired financially and still needs to work at managing his share investments to make sure he earns a big enough ongoing return to cover his living expenses. I don’t believe he has the multi-millions you probably need to never have to worry about money ever again. But I’d bet that he has accumulated enough to just bung it into an accumulation index tracker fund if he wants to, which would probably deliver enough to keep his food cupboards full if he truly wished to put his feet up for the rest of his life.

However, I reckon investing for a living could give you much more freedom than grinding along in that day job, whatever it is. And Maynard summed up the approach that delivered his financial and work-life freedom with five points:

Work hard

Nobody really achieves anything without working at it. But I’d add that it’s important not to become obsessed with work and to remember to keep your life and work in balance. One well-known aphorism that has deep layers of meaning for me is Less is More. I personally tend to try too hard at most things, which I find I have to rein in to get the best results.

Save lots

Living below your means and saving as much as you can is an old message. Maynard lived it, and it worked for him.

Keep records

This one helps you budget and gives you hard information to learn from what is working in your investing life from what isn’t.

Invest well

Losses in investing matter, so you need to find a strategy that minimises drawdowns and produces good returns on the upside. If you don’t, your investing effort could lead to nothing.

Don’t stop

Learn from successes and failures and keep going. Many people quit difficult pursuits in life when they are on the cusp of achieving success, but we can draw inspiration from the old saying, The Darkest Hour is Just Before the Dawn. In the world of money accumulation, the process of compounding means the largest absolute returns can arrive towards the end of an investing career.

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Kevin Godbold has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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