Alex Trias and his wife Noki bought an apartment in Lisbon, Portugal in 2015. Now retired, he lives off his stock dividends and enjoys a relaxed Portuguese lifestyle.
Photo: João Estevez (CNBC Make It)
If you want to retire early, your goal is to achieve a certain net worth on a limited schedule, so there’s little room for financial mistakes.
A big investment that doesn’t pay off or a big unnecessary purchase can derail your progress and delay your plans to quit your job.
With careful planning, Alex Trias was able to avoid such setbacks on his way to retirement at age 41.
“I actually don’t have any regrets about how I spent money in my 20s, mostly because I didn’t spend it very often,” Trias told CNBC Make It.
The former tax accountant earned a six-figure salary, but before retiring, he said he tried to keep expenses down by buying clothes at discount retailers, taking public transportation and keeping his home furnishings to a minimum.
But there are also economic lessons that could have been learned earlier. Here, Trias shares his three regrets from his 20s, and advice on how to avoid similar mistakes.
Trias has learned that it is not always worth trying to deviate from the norm, both in career and personal finance.
“In my 20s, I wasted too much time and energy trying to be extraordinarily creative instead of extraordinarily competent,” he says.
He learned this lesson early in his legal career from a mentor who used the analogy of shucking an oyster. Trias’s job is to shuck as many oysters as possible, and while it might be more fun to imagine he’s looking for pearls, he says, “If you just focus on shucking the oysters… It will be much easier.”
In his work, Trias has found that “best practices” are sometimes called that for a reason. He had the idea that you could only advance in your career by standing out or rethinking proven tactics. But the old adage, “If it ain’t broke, don’t fix it” is more true than you might think.
“My biggest financial regret was not my spending, but my mindset,” Trias says. “Before, I would always think of investing at a lower price, waiting and then selling at a higher price. I can’t explain the anxiety and waste this kind of mental framework causes.”
Rather than trying to time the market, Trias recommends making saving and investing a habit.
“One thing that really works is the almost pointless habit of saving all your money and investing it over and over again. [time] “I get paid regardless of what’s going on in the global economy or whether stocks are overvalued,” he says.
Trias says that for everyday investors, it’s not worth the time and stress of constantly monitoring and worrying about your investments.
“I think you’re trying to be careful. [to your net worth] “Continuing month-to-month or even year-to-year is probably counterproductive. Focus less on the end result and more on the habits you’re forming,” says Trias.
Trias says that when he and his family first moved abroad, they were surprised to find out how little money they actually needed to live in terms of material and financial needs.
“I always thought I needed four bedrooms to be happy, otherwise I would fill in the blanks. I had a huge list of things I needed,” he says.
Thankfully, it didn’t take long for him to realize that he could live happily with less money.
“It took me about six months of living in a much more rational way to realize that I didn’t need it, but I realized that I didn’t actually want it. I didn’t need it. “I don’t need anything close to what I thought I was going to retire,” he says.
You may be different. Perhaps your idea of a comfortable retirement includes being able to afford a personal chef or eating every meal at a restaurant.
Think about what you actually want your retirement life to look like while you’re young, and think about what it will take to get there. It may be easier than you think.
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