Secret to retire five years earlier 'without earning more money': 'Not sexy but it works'
It's not about making more money. It's about using the money you already have in a smarter way.
You can retire years earlier without getting a single extra dollar in your paycheque, by simply making better decisions with the money that's already coming into your bank account.
It's not sexy, but it works.
There are five things you need to focus on to retire (at least) five years earlier.
RELATED
One change that could leave Aussies $830,000 better off at retirement
Expert's 'crucial' money tactic to retire with $2.9 million
Australia's 'ancient enemy' returns sparking major Centrelink warning
It's a decision-making problem
If you earn the average income (or more) in Australia, you're not struggling with options - you're struggling with strategy.
People that earn well often still feel trapped because they've got the balance wrong between investing and lifestyle spending.
Your mortgage, school fees, car, and sprinkle in some entertainment spending and the odd bit of travel… It all stacks up, and before you know it you get stuck.Retiring early doesn't need to mean drastic lifestyle sacrifices - but it does mean turning off autopilot.
Every financial decision, whether and how much to invest, upgrading your home, paying down debt vs saving - they all have a compounding effect.
And most people are compounding in the wrong direction.
ACTION STEP: List your five biggest financial decisions from the last year.
Then be honest with yourself - did these moves make the future you wealthier, or just maintain your comfort today?
You need to shift your focus forward.
It's about control vs income
If you were to track every dollar that hits your bank account over the next year, then intentionally reallocate 10 per cent to 20 per cent of this money to setting up your future - think investments, debt recycling, or strategic super contributions - the numbers start to look very different.
Particularly if you're coming into your peak earning years of your 40s and 50s, finding a way to free up a solid chunk of money each month, and then investing it into growth investments like shares can have you building a seven-figure portfolio well before retirement age.
If you start in your 40s, and you can easily set up to pull back from work at 55 rather than 60, maybe even sooner.
And that's without touching your super, selling your house, or relying on an inheritance.
The secret isn't hustle, it's discipline.
ACTION STEP: Set up a bank account system with separate accounts to automate your saving and investing success.
Use one account for fixed costs, one for your lifestyle, and another for savings and investing.
Automate your transfers to remove decision fatigue and save first and spend after, not the other way around.
Tax savings are the accelerator
If you want to retire sooner, it's critical you reduce your annual ATO donation.
There are legal, smart ways to reduce your tax bill; using negative gearing, debt recycling, investing through trusts, and salary sacrificing to super.
Most Aussies are leaving tens of thousands of dollars on the table every single year - and that's money that could be working for you to set up your early retirement.
It's common in our planning work, particularly for higher income earners, for their financial position and strategy to evolve randomly over time.
We find that by tightening up their tax strategy, they're often able to free up $2,000-$3,000 monthly that can then be funnelled directly into income producing investments.
When you follow this process through over time, it will often mean financial security years sooner.
ACTION STEP: Learn and action the key tax-smart strategies like negative gearing, debt recycling, and tax effective investing.
These aren't just buzzwords, they're powerful tools you can use to keep more of your income and grow your investments faster.
You don't need to become an expert, but you do need to understand the game well enough to play it smarter.
Play offence not just defence
Too many people focus only on saving, budgeting, or paying down debt.
That's defence, and it's absolutely necessary, but it won't win you the game.
Instead, you've got to play offence - and that means investing.
I don't mean gambling on crypto or trying to pick the next Afterpay.
I mean boring, consistent investing into assets that will grow in value and generate you an income that can replace your salary.
To put it another way, no one retires early because they cut out their daily latte.
People retire early because they built assets that work harder than they do.
ACTION STEP: Pick an EFT or managed fund to align with your investing goals, and set up a recurring direct debit.
Even a modest amount invested consistently can change everything.
Decide on purpose
Early retirement isn't about cutting back, it's about clarity.
You need to be laser focused on what you want your money to actually do for you.
Once you're clear on this, every decision becomes easier.
Do you need the $2 million house, or the $1.5 million property that allows you to invest an extra $500,000 over the years ahead?
Do you want the $5,000 per month lifestyle now, or a $10,000 per month lifestyle at 55 with no boss?
There's no right answer for everyone, but there is a right answer for you.
And if you're not asking those questions you're just drifting, and drift is expensive.
The wrap
You don't need more, you need to use it better.
This isn't about scraping by, it's about taking control.
If you've already built a decent income, the hard part is done.
Now it's time to get intentional with how you use that money.
Align your spending with what actually matters, reduce the drag, and invest with purpose.
Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth. Ben's new book, Virgin Millionaire; the step-by-step guide to your first million and beyond is out now on Amazon | Audiobook.
If you want some help with your money and investing, you can book a call with Pivot Wealth here.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
5 hours ago
- Yahoo
Upward spending trend unlikely to shift needle on rates
Australian spending habits will help the Reserve Bank fill in its picture of the nation's economy, with another rate cut expected at its next board meeting amid global tariff woes. All eyes will be on the monthly spending indicator for June as it becomes the main measure of retail trade when published by the Australian Bureau of Statistics on Tuesday. Household spending rose 0.9 per cent in May when consumers splashed out on clothes, shoes and new vehicles with borrowing easier since the RBA began cutting rates in February. This trend is expected to have continued in June, with Commonwealth Bank economists predicting a rise of one per cent. The data could seal the deal for the central bank's August interest rate decision following a rise in unemployment in June and a fall in inflation for the quarter, with the trimmed mean figure dropping from 2.9 per cent to 2.7 per cent. RBA deputy governor Andrew Hauser on Thursday hailed the "very welcome" data, as the central bank had been searching for more evidence of inflation returning to the midpoint of its two to three per cent target band. A host of new and increased US tariffs are expected to come into effect later in the week after nations scrambled to try lock down trade negotiations with President Donald Trump ahead of his August 1 deadline. Australia has been spared a higher tariff and though most of its goods will continue to face a 10 per cent levy, no US trading partner has a lower rate. This continuation is a "relief" according to AMP chief economist Shane Oliver, who noted Mr Trump has previously foreshadowed further tariffs on pharmaceuticals - one of Australia's biggest exports to the US. Increased tariffs on Australia's trading partners could also have indirect impacts for the domestic financial markets. "The surge in US tariffs still poses a significant threat to the global economy, which will likely become more evident in the months ahead," Mr Oliver said. Wall Street investors were feeling the pinch on Friday as new tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure. The S&P suffered its biggest daily percentage decline in more than two months, with an 8.3 per cent tumble in shares after it posted quarterly results but failed to meet lofty expectations for its cloud computing unit also weighing on equities. Australian share futures dropped 32 points, or 0.37 per cent, to 16,231. The benchmark S&P/ASX200 index on Friday dropped 80.8 points, or 0.92 per cent, to 8,662.0, while the broader All Ordinaries fell 81.9 points, or 0.91 per cent, to 8,917.1. Profit reporting season also begins this week, with major companies such as News Corp, AMP and QBE Insurance set to reveal earnings results. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
6 hours ago
- Yahoo
Is It Too Late To Consider Buying VEEM Ltd (ASX:VEE)?
VEEM Ltd (ASX:VEE), is not the largest company out there, but it saw a significant share price rise of 30% in the past couple of months on the ASX. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let's take a look at VEEM's outlook and value based on the most recent financial data to see if the opportunity still exists. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. What Is VEEM Worth? According to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. We've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 26.85x is currently well-above the industry average of 20.67x, meaning that it is trading at a more expensive price relative to its peers. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since VEEM's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market. View our latest analysis for VEEM What kind of growth will VEEM generate? Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With profit expected to grow by 62% over the next couple of years, the future seems bright for VEEM. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. What This Means For You Are you a shareholder? VEE's optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe VEE should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed. Are you a potential investor? If you've been keeping an eye on VEE for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for VEE, which means it's worth diving deeper into other factors in order to take advantage of the next price drop. So while earnings quality is important, it's equally important to consider the risks facing VEEM at this point in time. At Simply Wall St, we found 1 warning sign for VEEM and we think they deserve your attention. If you are no longer interested in VEEM, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
7 hours ago
- Yahoo
12 Midwest Cities Where Rent Costs 30% or Less of a Middle-Class Income
Plenty of financial experts both past and present insist that you should never put more than 30% of your income toward rent. This once was not a terribly tough rule to live by, but now, with costs of living and, specifically, costs of housing soaring across the U.S. (and wages not keeping up), spending only 30% of your income on housing is just not realistic for many. Not even close. A 2024 Redfin study found that more than 20% of Americans are spending their entire paychecks on rent. Check Out: Try This: But there are some cities, including in the Midwest, where folks in the bottom percentile of middle-class earners can spend 30% or less of their income on average local rent. In a new study, GOBankingRates analyzed cities in the Midwest to find those where rent costs less than 30% of the minimum household income required to be middle class. Take a look at the top 12, where the middle class have the most money remaining after covering rent. 12. Powell, Ohio Average rent, monthly: $2,479 Average rent, annually: $29,746 Minimum middle class income, annually: $127,500 30% of the minimum middle class income: $38,250 Leftover savings after 30% of income pays rent: $8,504 11. Northville, Michigan Average rent, monthly: $1,672 Average rent, annually: $20,061 Minimum middle class income, annually: $95,917 30% of the minimum middle class income: $28,775 Leftover savings after 30% of income pays rent: $8,714 Explore More: 10. Carlisle, Iowa Average rent, monthly: $825 Average rent, annually: $9,900 Minimum middle class income, annually: $65,555 30% of the minimum middle class income: $19,667 Leftover savings after 30% of income pays rent: $9,767 9. Zionsville, Indiana Average rent, monthly: $1,705 Average rent, annually: $20,455 Minimum middle class income, annually: $106,084 30% of the minimum middle class income: $31,825 Leftover savings after 30% of income pays rent: $11,370 8. Leawood, Kansas Average rent, monthly: $2,046 Average rent, annually: $24,548 Minimum middle class income, annually: $123,317 30% of the minimum middle class income: $36,995 Leftover savings after 30% of income pays rent: $12,447 7. Parkville, Missouri Average rent, monthly: $1,750 Average rent, annually: $20,998 Minimum middle class income, annually: $113,863 30% of the minimum middle class income: $34,159 Leftover savings after 30% of income pays rent: $13,161 6. Bloomfield Hills, Michigan Average rent, monthly: Average rent, annually: Minimum middle class income, annually: 30% of the minimum middle class income: Leftover savings after 30% of income pays rent: 5. Winnetka, Illinois Average rent, monthly: $1,825 Average rent, annually: $21,900 Minimum middle class income, annually: $128,547 30% of the minimum middle class income: $38,564 Leftover savings after 30% of income pays rent: $16,664 4. Victoria, Minnesota Average rent, monthly: $1,988 Average rent, annually: $23,858 Minimum middle class income, annually: $137,157 30% of the minimum middle class income: $41,147 Leftover savings after 30% of income pays rent: $17,289 3. Lake Bluff, Illinois Average rent, monthly: Average rent, annually: Minimum middle class income, annually: 30% of the minimum middle class income: Leftover savings after 30% of income pays rent: 2. Ladue, Missouri Average rent, monthly: $2,362 Average rent, annually: $28,340 Minimum middle class income, annually: $166,667 30% of the minimum middle class income: $50,000 Leftover savings after 30% of income pays rent: $21,660 1. New Albany, Ohio Average rent, monthly: $1,753 Average rent, annually: $21,035 Minimum middle class income, annually: $155,016 30% of the minimum middle class income: $46,505 Leftover savings after 30% of income pays rent: $25,469 Methodology. For this study, GOBankingRates analyzed cities in the Midwest to find the cities where rent costs less than 30% of the middle class household income. The average rent cost was sourced from Zillow Observed Rental Index for June 2025. Pew Research Center defines middle class income as two-thirds to double the median household income. Using the U.S. Census American Community Survey, the median household income for cities was sourced and used to calculate the middle class income range. Using the finance rule that states that housing costs should cost under 30% of household income, the minimum middle class income threshold was used to calculate the average 30% of household income in each city. The cities with leftover savings after 30% of income covers all of the rent were kept for this study. The cost of living indexes were sourced from Sperlings BestPlaces. Using the average expenditure costs for all households, as sourced from Bureau of Labor Statistics Consumer Expenditure Survey for all households, the average expenditure costs can be calculated for each city. Using the average expenditure costs and rental costs, the average total cost of living for renters was calculated for each city. The livability index was sourced from AreaVibes and included as supplemental information. The cities were sorted to show the largest leftover savings after 30% of household income covers the cost of rent. All data was collected on and is up to date as of Jul. 22, 2025. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 10 Genius Things Warren Buffett Says To Do With Your Money 6 Big Shakeups Coming to Social Security in 2025 This article originally appeared on 12 Midwest Cities Where Rent Costs 30% or Less of a Middle-Class Income Sign in to access your portfolio
