Can you afford early retirement?
Many young people are very optimistic that they can retire young and retire early.
However, their lifestyle shows that they know nothing about early retirement. They think that they can spend all they want, and still have enough for retiring early.
Many adults realize that they cannot even afford to retire at mandatory retirement age when they are in their 40s.
They realize too late that the inflation rate is eating up their income, and they have savings for just another few years of unemployment.
Retirement income never features high in their past. They used to think that saving 10% of income is good enough.
If you really want to retire early, you have to save half your annual income, and use the money to produce a return higher than the inflation rate.
It is only when your yearly dividend or rental income or other investment income exceeds your basic salary, then you can decide to retire.