6 Must-Read Books That Will Help You Retire Early
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Most of us, if we’re being honest with each other, would love to leave the rat race behind and live life on our own terms. And the sooner, the better.
These six books, and one honorable mention, have been widely used and cited in the FIRE, or Financial Independence and Retiring Early, community. They’re popular and influential for a reason — because their advice works, and you don’t need a physics degree (or even a college degree) to understand it. Consider them must-read starting points on your path to a happy, healthy, and financially stable retirement at any age.
#6: The Smartest Retirement Book You’ll Ever Read (Daniel Solin)
Daniel Solin is a prolific finance writer and consultant, and this book is just one in a seven-book series on investing and personal finance topics. This book is on the shorter side, at 270 pages, because Solin doesn’t waste your time getting to the point.
The Smartest Retirement Book offers a great roadmap to overall financial success and is packed with useful personal-finance tips for those who may not yet be fluent in the particulars of retiring comfortably. If you already know the ins and outs of retirement, you might not need this book, but most people will come away from it with a great deal more knowledge and understanding of how to approach retirement to maximize your financial security.
Don’t get this book for detailed tips for complex investing strategy; get it to understand why you (probably) don’t need one.
#5: The Automatic Millionaire (David Bach)
There are some ways in which David Bach’s bestselling financial-independence book resembles Solin’s, but where they diverge is in the sheer accessibility of Bach’s writing.
Automatic Millionaire offers actionable guidance aimed at people like “the McIntyres,” a couple that never made more than slightly-above-median income and yet still managed to retire in their early 50s. This couple anchors the first chapter, and their simple approach to wealth-building is the foundation for the rest of the book.
The “automatic” part of Automatic Millionaire is something so simple that anyone can make use of it. It’s not about trying to flip a switch in your brain so much as it is about getting you to set and forget a strategy that will add money to your retirement accounts, paycheck after paycheck, until you’ve got built up money to live comfortably, without having to work, for the rest of your life.
#4: The Behavior Gap (Carl Richards)
If you’re a visual learner, you’ll love Behavior Gap. Carl Richards first came to my attention years ago as one of my Motley Fool colleague Morgan Housel’s favorite financial writers, and it’s easy to see why.
The mark of a great financial writer is their ability to express complex subjects in accessible ways, and Richards has made a name for himself by turning these subjects into napkin sketches. You can’t get much more accessible than that.
More importantly, this book tackles a subject that was, until recently, barely covered despite its criticality to wealth-building success: the psychology of investing and building wealth.
If you’re trying to retire early without working to create the mindset you’ll need, both before retirement and after, you’ll be setting yourself up for disappointment and likely failure. Read this book to understand why people do what they do with their money as well as what they should do. If you can master your emotions, you’ll master your money.
#3: Your Money or Your Life (Vicki Robin and Joe Dominguez)
Another psychology-focused book, Your Money or Your Life goes further than Behavior Gap by picking apart the entire structure of modern capitalism. Are you working to live, or living to work? Are you chasing money to have “more,” or do you really just want “enough”?
Robin and Dominguez wrote this book in 1992 as the world was starting to move on from the Cold War, and it’s more relevant than ever in a post-Great-Recession world in which job security is never guaranteed, and in which it can seem like getting ahead can sometimes mean selling your soul.
It’s not a book that offers a lot of step-by-step guidance to building a nest egg, but what it does offer is a way of viewing the world that can help you approach retirement with a healthier mindset. The book’s guidance is so compelling that a New York Times writer wrote a feature on it earlier this year, saying that it had “changed [her] relationship with money.”
There are plenty of people who want to tell you how you can make more money. It’s more valuable to understand why you need more money, and what you really need that money for.
#2: The Magic of Thinking Big (David Schwartz)
The other books on this list focus more on the financial side of things, but The Magic of Thinking Big is a classic in the personal-development genre now dominated by gurus like Tony Robbins. It’s been in print for nearly 60 years, but David Schwartz’s guidance is full of timeless advice on how to change your attitudes and your habits in order to improve outcomes in your life.
You can’t retire early without the right mindset, after all, and this book is the one out of the five on this list that will work most directly and comprehensively to help you create that mindset.
This is worth a read, even if you’re the type to shun self-help books. Most people put up psychological roadblocks between themselves and their goals, and the guidance in The Magic of Thinking Big can help you break through those roadblocks — and help you stop putting up more of them in the future.
#1: Work Less, Live More (Robert Clyatt)
Clyatt’s book is subtitled The Way to Semi-Retirement, and that should give you some indication of its contents. The other books on this list focused on building towards “retirement” as a final destination, or on building the psychological toolkit to achieve that retirement.
Clyatt, on the other hand, offers a sort of how-to guide for living well in a state of “semi-retirement” that’s likely to involve occasional or part-time work — the sort of active financial independence I mentioned earlier, where ambitious folks transition from full-time labor to providing their expertise on an on-demand contract basis.
While it’s aimed at older adults nearing the standard retirement age, Work Less, Live More can help anyone working towards an early retirement, even if they haven’t seen a single gray hair on their heads yet. If you know you want to retire early, but you’re not quite sure what you’d do afterwards, pick this book up and see what it can teach you.
If you’re reading books about how to retire early, it’s a good idea make sure you understand exactly what retirement means to you, and what you’re willing to sacrifice to achieve it.
Some people try to chart their own path to retirement with entrepreneurship. This offers the highest ceiling of any wealth-building endeavor you’re likely to try. However, it also brings with it plenty of stress.
Others will save and invest the lion’s share of their take-home pay while living like monks. Sure, it can be fun brewing beer and learning to chant rhythmically. Unfortunately, most of us can’t deprive ourselves for decades while working, just so we can deprive ourselves for decades more without having to work.
For the rest of us, there are middle grounds between extreme risk and extreme frugality. An early retirement is the one you take when you don’t feel like working anymore, and you can afford not to indefinitely. An ordinary retirement earns you subsistence-level payments from Social Security in your golden years, plus whatever you’ve managed to save and invest over the course of your career.
In between these alternatives is something akin to financial independence. My view of financial independence is that you’ve reached a point in your life where you can work only when you feel like it, and you can still live comfortably off of the combination of your earnings and your investments, even if you don’t feel like working very often.
Most people who can retire early will wind up living in a sort of indefinite state of financial independence, barring some major financial calamity. The drive and dedication you need to retire on your own terms is hard to turn off at any age, so many “early retirements” wind up being professionally active, with books or blogs written and consulting provided.
There are, of course, many more books than these that can help you on your path to a successful early retirement. Consider these six a foundation, onto which you can layer any number of other how-tos and helpful guides that make sense for your particular situation.