Ben Nash has revealed five steps to help you get the financial freedom to retire early. · Getty/Ben Nash
Most Aussies think the key to retiring earlier is simply to “earn more” money. But the reality is that most people already have all the ingredients for an early retirement.
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.
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.
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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.
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.
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.
Ben Nash has encouraged people to review the legal ways to reduce their tax. (Source: Getty) · alfexe via Getty Images
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.
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.
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.
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.
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