Alex Trias and his wife Noki bought an apartment in Lisbon, Portugal in 2015. Now retired, they live off their stock dividends and enjoy the relaxed Portuguese lifestyle.
Photo: João Esteves for CNBC Make It
If you want to retire early, there isn’t much room for financial mistakes since you’re aiming for a specific net worth in a compressed time frame.
A large investment that doesn’t pay off or a major unnecessary purchase could derail your progress and delay your plans to quit your career.
With careful planning, Alex Trias managed to avoid such a setback on his path to retirement at age 41.
“As far as spending money in my 20s, I don’t regret it because, for the most part, I didn’t do it very often,” Trias tells CNBC Make It.
Although the former tax lawyer had a six-figure salary, he said he bought clothes at discount stores, took public transportation and kept his home’s furnishings to a minimum to keep his costs down before he retired.
However, there are financial lessons he could have learned sooner. Here are three things Trias has regretted since his 20s and his advice for avoiding similar mistakes.
Both throughout his career and in his personal finances, Trias has learned that it’s not always worth deviating from the norm.
“In my twenties, I wasted far too much time and effort trying to be exceptionally original rather than exceptionally competent,” he says.
He learned this lesson early in his legal career from a mentor who used an oyster-shucking metaphor: Trias’ job is to shuck as many oysters as possible, and while it might be more fun to imagine him searching for pearls, “it will.” It would be a lot easier for you to just focus on shucking those damn oysters.
In his work, Trias recognized that sometimes “best practices” are called that for a reason. He had the idea that the only way to advance in your career is to excel or try to rethink tried-and-true tactics. But the old saying, “If it ain’t broke, don’t fix it,” is truer more often than you think.
“My biggest regret from a financial perspective wasn’t my spending, but my thinking,” says Trias. “I used to think all the time about investing at a low price, waiting and then selling at a higher price. I cannot begin to explain the anxiety and waste that this type of mental framework caused.”
Instead of trying to time the market, Trias recommends making saving and investing a habit.
“One of the things that works really well is the almost pointless habit of saving and investing over and over again [time] “You get your paycheck regardless of what’s happening in the global economy or whether you think stocks are overvalued,” he says.
According to Trias, for ordinary investors, it’s not worth the time and stress of constantly watching and worrying about your investments.
“I think I’ll try to pay attention [to your net worth] Month after month or even year after year is probably counterproductive,” says Trias. “Don’t focus so much on the end result as on the habits you develop.”
When he and his family first moved abroad, Trias said, he was surprised to learn how little they actually needed to get by in both material items and pocket money.
“I always thought we needed four bedrooms to be happy, or fill in the blank – I had a long list of needs,” he says.
Luckily, it didn’t take long for him to realize he could live happily with less.
“It took about six months of living in a much more orderly way to realize that not only do we not need this, but it turns out we don’t want it. “We don’t need anything even close to what we thought we needed when we retire,” he says.
You could be different. Maybe your idea of a comfortable retirement is being able to afford a personal chef or being able to eat every meal at a restaurant.
Start exploring what you actually want your retirement to look like from a young age, then consider what it will take to get there. It might be easier than you thought.
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