To retire early: Change old habits

To retire early: Change old habits

Might as well retire when you are still young. Financial independence is needed. Here are some tips...

The old-fashioned piggy bank is one way of saving money. (Source: Wikipedia)


The race for retirement


Tientip Subhanij

September is the last working month for a lot of people. After several decades of full-time work, this should really be a month to celebrate. Sadly, a lot of retirees I know are just retiring rather than reaching financial independence.

Saving is generally a difficult decision. Saving for retirement is even tougher, as we tend to spend today rather than keep it for the future. Despite working from 9am-5pm until 60, many of us end up having virtually no retirement savings.

Thai society is admittedly ageing rapidly. About 12% of the Thai population is now over 60 years old, and by 2040 a quarter of the population could be over 65, more than the number of working-age people. In an ageing society, saving money for a comfortable retirement becomes even more crucial. But only a few have actually managed to save enough once they clear their desks for the last time.

Thais generally have a positive view about their retirement but unfortunately start preparing themselves too late - usually only in their mid-40s. Mostly, they are faced with a critical question: how much can I safely spend each year after I retire?

Retiring is obviously much harder now than before. We have come a long way from the high-interest-rate environment our predecessors enjoyed. The global recession and consequent period of low interest rates have further added an adverse impact on retirees and near-retirees, whose major investments are in the form of low-yielding deposits. Interest rates on deposits were 10-15% two decades ago, while the rates are currently just 1.5% to 3%. Although the rates of return for other savings choices such as provident funds, retirement mutual funds and others are higher, they are rather volatile in today's uncertain market environment.

Given this, it may be time to think about the alternative - retiring sooner rather than later. Retirement should not be about staying at home after working tirelessly for 40 years. Instead, it should be about reaching financial independence as quickly as possible.

There are some people I know who did retire very early - in their 40s or before. However, these are as rare in the working population as Olympic medallists are among athletes. And just as Olympic medallists need a lot of practice and perseverance, those aspiring to retire young must do the same. After all, what is necessary for financial success are serious financial planning, determination and actions. Here are some tips for retiring early:

1. Define your goal: First of all, you need to ask yourself: what would early retirement mean to you? For some people, it may mean travelling the world while they are still relatively young, while for others it would just mean spending more time with their families. You may also want to volunteer for your favourite activities, start your own business or work part-time. Once you decide on your goals, you can figure out how much you will need to save to fund your retirement.

2. Estimate how much you spend: It is probably best to start with how much you are spending now and then think about how those expenses might change in retirement. To see how your money is spent, go through your bank and credit card statements of the last couple of months and get some idea about your average monthly expenses. Then add in non-regular expenses such as holidays, health care or social events. Examining your spending habits can be quite an eye-opener.

3. Save hard and early: The sooner you start saving, the more time your money can grow and the more benefits you can reap from your investment. Thanks to the power of compounding, 100,000 baht saved by a young worker is worth much more in the future than 100,000 baht saved by a 50-year-old. Retirement is expensive. So if you are genuinely serious about leaving the workforce by 40, you need either a lot of capital saved up or a very robust passive income stream. Saving up enough capital or generating enough passive income to last you for life requires radical changes of habits.

4. Earn more income quickly: With more income, you can save more money early and retire faster. For this you may need to work more hours or take an additional job or two. People do this in different ways. Examples include e-commerce, real estate investment, teaching, consulting and direct sales. You may also want to invest in dividend stocks to receive regular dividend income and protect your wealth all through retirement.

Last but not least, 5. find like-minded individuals. The hardest part of early retirement is probably ignoring what other people think. The minute you decide to retire very early, you will face resistance from family and friends. It is important that you find people whose advice and encouragement help you to get through this big decision.

Early retirement is an achievement most people will not accomplish. Very few have the courage and ability to break away from a nine-to-five lifestyle. Leaving the workforce very early requires extraordinary dedication, intensity and a willingness to live differently. But if life is really an adventure to be lived fully rather than being let down when retire. You may as well take action now.

Dr Tientip Subhanij holds a PhD in economics from the University of Cambridge and has a dual career in banking and academia. She can be reached at

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  • accomplish: to achieve something - ทำได้สำเร็จ
  • achievement: something very good and difficult that you have succeeded in doing - การบรรลุผลสำเร็จ
  • activity (noun): a thing that you do for work, interest or pleasure, or in order to achieve a particular aim - กิจกรรม
  • actually: used for stressing what is really true or what really happened - ตามความเป็นจริง
  • additional: more; more than was first mentioned or is usual - ที่เพิ่มขึ้น
  • admittedly: it is true that -
  • adventure: an unusual, exciting and possibly dangerous activity such as a journey or experience, or the excitement produced by such an activity - การผจญภัย
  • adverse: having a negative or harmful effect on something - ในทางลบ, เป็นผลร้าย
  • advice: an opinion or a suggestion about what somebody should do in a particular situation - คำแนะนำ
  • ageing: growing old - สูงวัยขึ้น
  • alternative: another choice - ทางเลือก, ตัวเลือก
  • aspire: to want to achieve something or to be successful - ตั้งปณิธาน
  • athlete: someone who is good at sports and takes part in sports competitions - นักกีฬา
  • average: ordinary; not unusual or different in any way - ธรรมดา, ปกติ
  • benefit: an advantage you get from a situation; a helpful or good effect, or something intended to help - ผลประโยชน์, ข้อได้เปรียบ, ผลดี
  • capital: a large amount of money that is invested or is used - ทุน, เงินทุน
  • celebrate: to do something enjoyable in order to show that an occasion or event is special - ฉลอง
  • clear (verb): to move things away from a place or area - ทำให้ว่าง๒, ลบล้าง
  • compound interest (noun): when the interest earned on an investment is added to the investment and interest next time is earned on this added money also, has great potential for much higher returns -
  • consequent (adjective): happening as the result of something, the result of - ที่เป็นผลที่ตามมา
  • consulting: giving expert advice about something to other people - ให้คำปรึกษา
  • couple: two things or people - สอง, สองสิ่ง, คนสองคน
  • courage (noun): the ability to do something that you know is right or good, even though it is dangerous, frightening, or very difficult - ความกล้าหาญ
  • crucial (adj): extremely important because it effects the result of something - สำคัญยิ่ง
  • currently: at this time; now - ในปัจจุบัน
  • decade: a period of ten years - ทศวรรษ, ระยะเวลา 10 ปี
  • dedication (noun): the hard work and effort that somebody puts into an activity or purpose because they think it is important - การอุทิศ
  • define: to describe clearly and exactly what something is - กำหนด, ระบุ, ทำให้ชัดเจน
  • deposit (noun): money kept in a bank account - เงินฝาก
  • determination: the quality that makes you continue trying to do something even when this is difficult - ความตั้งใจ, ความมุ่งมั่น, ความตั้งใจมั่น
  • direct sales: selling goods and services directly to customers rather then through stores or suppliers -
  • dividend: a share of the profits of a company, paid once or twice a year to the people who own the company’s shares - เงินปันผล
  • encouragement: words or actions that give someone confidence or hope - กำลังใจ; คำให้กำลังใจ
  • environment: the place in which people live and work, including all the physical conditions that affect them - สภาพแวดล้อม, สิ่งแวดล้อม
  • estimate (verb): to say what you think an amount or value is or will be, either by using available information or by guessing - คาดคะเน, ประมาณการ
  • examine: to look at somebody/something closely, to see if there is anything wrong or to find the cause of a problem - ตรวจ
  • expenses: money spent in doing a particular job, or for a particular purpose - ค่าใช้จ่าย
  • extraordinary: very unusual and surprising - เกินธรรมดา, ผิดธรรมดา
  • eye-opener (noun): something that happens that makes you very surprised -
  • favourite (adj): something/someone you like the best of all similar things - ที่ชอบมากที่สุด, ที่โปรดปราน, ของโปรด
  • figure out: to be able to understand something or to solve a problem - คิดออก
  • financial: involving money - เกี่ยวกับเงิน, ทางการเงิน
  • full-time (adj.): a job that uses 40 or more hours a week (opposite: part-time) -
  • fund: to provide money for something - ให้เงินทุน
  • generate: to produce - ก่อให้เกิด
  • genuinely: really; sincerely; honestly - โดยแท้
  • global: throughout the world - ทั่วโลก
  • habit: a thing that you do often and almost without thinking, especially something that is hard to stop doing - กิจวัตร, สิ่งที่เป็นนิสัย, สิ่งที่ทำเป็นประจำ
  • ignoring: deliberately failing to pay attention to - เพิกเฉย เอาหูไปนาเอาตาไปไร่
  • impact (noun): an effect or influence - ผลกระทบ
  • income: money that someone gets from working or from investing money - รายได้
  • independence (noun): freedom from control by another country, organisation or person - ความเป็นอิสระ
  • individual: a person considered separately rather than as part of a group - บุคคล
  • intensity (noun): strength - ความเข้มข้น
  • interest rate: the percentage that a bank or other financial company charges you when you borrow money, or the percentage it pays you when you keep money in an account - อัตราดอกเบี้ย
  • investment (noun): the act of investing money in something - การลงทุน
  • lifestyle: the type of life that you have, for example the type of job or house you have or the type of activity you like doing - วิถีทางการดำเนินชีวิต, ลีลาชีวิต, รูปแบบการดำเนินชีวิต
  • like-minded: people who think the same way as you do -
  • major: very large or important - สำคัญมาก
  • manage (verb): to succeed in doing something; to deal with something - สำเร็จ,จัดการได้สำเร็จ, ทำได้สำเร็จ
  • managed to (verb): in the end, did do something, but it was difficult and seemed not possible -
  • mutual fund (noun): an investment fund that invests in a wife range of stocks and bonds, etc, the fund is divided into small units that are bought and sold, usually by people who invest only a small amount of money, in the UK called a "unit trust" -
  • necessary (adj.): essential, needful, something that you must do or have - จำเป็น, ซึ่งเลี่ยงไม่ได้, ซึ่งเป็นที่ต้องการ, สำคัญ
  • nine-to-five job: job of typical office hours - งานทั่วไป
  • obviously: clearly - เห็นได้ชัด, อย่างชัดแจ้ง
  • part-time (adj.): working or doing some other activity that is less than 40 hours per week, that does not use up all your time during the day (opposite: full-time) -
  • passive: accepting what happens or what people do without trying to change anything or take action - อยู่เฉยๆ, ไม่ดิ้นรน, ไม่ดิ้นรน, เฉื่อย
  • period: a particular length of time - ระยะเวลา
  • personal finance (noun): managing the money of a family or individual, including budgeting spending, saving and investment, insurance, paying taxes and saving for retirement - การเงินส่วนบุคคล
  • population: a particular group of people or animals living in a particular area - กลุ่มที่อาศัยอยู่ในที่เดียวกัน
  • positive: hopeful and confident, or giving cause for hope and confidence - ซึ่งมองในแง่ดี
  • practice (noun): doing some activity to improve at it and become more skillful - ฝึกซ้อม, ซ้อม, ฝึกฝน
  • predecessor: the person who had a job or official position before someone else - ผู้ที่ดำรงตำแหน่งก่อนหน้านี้
  • quarter: one of four equal parts of something; 25 percent - หนึ่งในสี่ส่วน
  • radical (adj.): new and very different from what is typical or expected -
  • rapidly: happening quickly - อย่างรวดเร็ว
  • rare: uncommon, unusual - ซึ่งหายาก
  • real estate: property - อสังหาริมทรัพย์
  • reap: to get something as a result of something that you do - ได้รับผลตอบแทน
  • recession: a period when trade and industry are not successful and there is a lot of unemployment - ภาวะเศรษฐกิจถดถอย
  • regular (adj): normal; following a pattern, especially with the same time and space in between each thing and the next - ปกติ, เป็นประจำ, เสมอๆ
  • relatively: somewhat; in comparison with someone or something similar - ค่อนข้าง
  • resistance: a refusal to accept something or allow it to happen - การต่อต้าน, การขัดขืน
  • retire: to stop working because you have reached the age where you are officially too old to work - เกษียณอายุ
  • retiree: a person who has stopped working because of their age - ผู้ที่หยุดทำงานแล้ว, ผู้ที่เกษียณแล้ว
  • retirement: the time when you stop working, usually, but not always because you are officially too old to work - เกษียณอายุ
  • robust: strong and full of determination - แข็งแรง
  • social (adjective): related to society, to people and the way they are connected to each other and interact with each other - เกี่ยวกับสังคม
  • socialise: to spend time with other people - มีการติดต่อกับผู้คน
  • society (noun): people in general, living together in communities - สังคม
  • statement (noun): a list of charges and a bill that you receive at the end of the month for some service you used such as mobile telephone or electricity -
  • stream (noun): a continuous flow of something, e.g., liquid, gas, inflormation or even people - การไหลต่อเนื่อง, กระแส
  • take action: to do something for a particular purpose or in order to deal with a situation - จัดการ, ดำเนินการ, ปฏิบัติ
  • tend: to be likely to behave in a particular way or have a particular characteristic - มักจะ
  • tip: a small piece of advice about something practical - คำแนะนำ
  • uncertain: not feeling sure about what to do, whether something is true etc - ไม่แน่ใจ, คลางแคลงใจ
  • view: a personal opinion, belief, or attitude about a particular situation or subject - ความคิดเห็น
  • virtually: almost - เกือบจะ
  • volatile: of something that may change suddenly or become more dangerous - ที่ปะทุได้ง่าย
  • volunteer (noun): someone who is not paid for the work that they do; someone who does something willingly without being required to - อาสาสมัคร
  • willing: to be happy to do something if it is needed - ซึ่งสมัครใจ, ซึ่งมีความตั้งใจ
  • workforce: all the people who work for a particular company, organization, country, etc. - แรงงาน, คนทำงาน
  • worth: having a value in money, etc - มีค่า, มีมูลค่า
  • yield (noun): the return or total amount of profits and income you get from an investment or a business - ผลตอบแทน, ผลตอบแทนจากการลงทุน
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