Respect Every $10 and You Could Retire in 10 Years

Most people today have a mindset of not wanting to waste money and as a result will do things in their everyday lives with money saving in mind. Whether that be driving an smaller, more economical car to making a pack lunch at home rather than having to eat out around the office. Despite these actions, however, they still don't necessarily bring the average working professional significantly closer to that desirable millionaire status.

If you've ever dreamt of retiring early, then this post might just be the catalyst to help you get started. By respecting every $10 that you earn and using a combination of money saving, compounded interest and determination, it's possible to get yourself into a position to retire in as little as 10 years. Let me clarify though, this is not a get rich quick scheme. Instead it's a sensible and pragmatic way of looking at saving money to help you achieve a state of financial independence within a decade.


Small economic cars are a means to saving money

Do you ever think back to when you were a kid doing small jobs around the house and then getting pocket money, which felt like such a huge amount regardless of how much your parents actually gave you? Well, the starting point for achieving the above mentioned goal of early retirement should be to reset your perception of the value attached to the humble $10 bill. These notes should not be deemed as paper coupons or vouchers that you simply spend by the dozen to buy fast food meals, cigarettes, cocktails, costly branded products etc. No, each $10 is a critical building block in the early retirement fortress that you wish to build.

Believe it or not, it's still possible to retire on a $1 million, so let's make this our 10 year savings total objective. For the purposes of demonstrating how that's possible, I'm going to make two broad assumptions here that: (1) after the 10 year period you have a house worth at least $300,000 which is fully paid off, as well as (2) you're able to generate 8% compound interest annually on your savings.


According to this article, the average family of four in Australia can live comfortably on a net income of $56,000 per year (that's assuming the house in which they live is paid off). To achieve this level of yearly income once you retire, you need about $700,000 which would require you to put aside $1,238 per week for those ten years as well as receiving an 8% compounded annual investment return after inflation.

If that weekly savings figure sounds daunting, consider splitting this with your spouse if they are also contributing to the monthly household income. Doing so in equal amounts would mean that your own weekly saving requirement now drops to $619 per week. Not a small sum, I realise that, but there are many ways to cut your daily expenditure making it possible put away more each month(which I'll get into a bit further down). To start with though, this is where making wise decisions about where you spend all those $10 notes really comes into play.


Foxtel TV LogoSpending less to ensure that you have more left over each month to put towards savings can be achieved in numerous ways. For example, you could start by owning a less expensive car (saving $150 per week per person), configuring appliances at home to use electricity at off-peaks times (saving $15 per week per person), taking lunch to work (saving you $50 per week), getting rid of satellite TV e.g. Foxtel ($10 per month) and only buying one instead of two morning coffees ($50 per month). Cutting back in these five areas alone, means you would only need to put aside $344 per week rather than the full $619.

Many people who are saving adverse will no doubt spend more than what they should be putting aside each week on useless purchases. Spas, manicures, pedicures, Starbucks, wine, shoes, gadgets, cinema tickets, plastic children’s toys, Amazon books instead of using the local library, I could carry on. The $10’s that could be saved on the above expenses define the difference between a typical payday loan individual and an early retiree.

Start respecting your $10’s and you could revolutionise the speed in which you retire. But before you jump the gun and say that not spending a penny is torturous, there is in fact still plenty of manoeuvrability for luxuries.


Australian Bureau of Statistics average monthly earnings in May 2015I'm aware that this strategy may not be possible for everyone, due to financial constraints. However, the ‘Australian Bureau of Statistics” stated that the average monthly earnings for Australian’s in May 2015 was $6,423, implying that for many of us this early retirement strategy is an entirely plausible strategy to achieve retirement in 10 years time.

The key thing to remember (as I've mentioned multiple times) is to focus on every $10 saving that you can think of, adjusted to your own personal situation. I have no doubt that if you take a long, honest, and pragmatic look at everything you're currently spending money on monthly, you'll very quickly find ways to cut back on things that aren't necessities. Worst case scenario, you only cut back to some extent (meaning you'll need longer than 10 years before you can retire) however your saving regime get's a boost and you've already begin to improve your financial situation!

The $10 philosophy should be used to pay for the current expenses in our life before beginning to add more luxuries.



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