How to retire young?
What if retirement wasn’t something you waited decades for, but something you planned for now?
That’s the thinking behind early retirement, reaching a point where work becomes optional rather than essential, a stage of life where time is truly yours, whether you spend it travelling, building something of your own, or simply stepping away from the 9-to-5 routine.
Movements like FIRE (Financial Independence, Retire Early) and new ways to earn online show that retiring young isn’t a dream, it’s a plan. With discipline, smart habits, and tools like SwissBorg, it’s more achievable than you might think.
This article breaks down how to get there: how much you need, how to build wealth, and how to make your money work for you.
Understanding the FIRE Movement
If you’ve ever searched for ways to retire early, you’ve probably come across the term FIRE. It’s a growing movement that helps people take control of their money and time.
The idea is simple: save and invest as much as you can, so you no longer need to rely on a job to live well. Instead of spending more as you earn more, you keep your lifestyle simple, save 50-70% of your income, and invest in assets like stocks, property, or crypto and build up wealth for the future.
There are some variations of the FIRE approach:
- LeanFIRE – Retire early with a modest lifestyle and lower living costs.
- FatFIRE – Retire early but keep a more comfortable or luxurious lifestyle. This means saving more.
- CoastFIRE – Save a lot early in life, then let your investments grow while you cover your daily costs with work you enjoy.
- BaristaFIRE – Reach a point where part-time work covers your needs, and your investments do the rest.
Source: FIRE profiles
Each version suits a different lifestyle. Still, all of them focus on one thing: freedom, having more control over your time, your choices, and your future.
You don’t need to be perfect, just have a goal to aim for. A few good questions to ask yourself are:
- How much do I spend each month today?
- What would my ideal lifestyle cost per year?
- Where would I like to live when I retire?
- Am I aiming for a simple lifestyle (LeanFIRE) or something more comfortable (FatFIRE)?
- How soon do I want to reach financial independence?
Answering these can help you set a clear target and make the path feel much more real.
Remember that apps like SwissBorg can help you track your investments and stay on top of your progress along the way. You can view all your assets in one place, monitor how your portfolio is growing over time, and see clear charts that show your performance.
Building Smart Financial Habits
Once you have a clear goal, the next step is building the habits that will help you reach it.
One of the best habits is to try to spend less than you earn. Even a small gap between your income and your spending is where financial freedom starts.
To make sure you stick with it, set up a regular transfer into your investment account as soon as you get paid, so saving happens automatically, without effort.
Another key habit is resisting the urge to upgrade your lifestyle every time you earn more. Keeping your expenses stable while your income grows is one of the most effective ways to build long-term wealth.
For example, imagine you earn €2,000 a month and get a raise to €2,500. Instead of spending more right away, you keep living on €2,000 for the next six months. By doing this, you would save an extra €3,000, without needing to change your lifestyle. After that, you could choose to spend a little more if you want, but now with a stronger financial base.
Once you have this extra cushion, you can start making your money work for you. Start investing early, even if you can only put in a small amount.
Source: Good financial habits
Time and consistency matter more than trying to “time the market”. Imagine an intern who starts investing €100 a month at age 22. Meanwhile, a manager earning much more waits until age 35 to start investing €300 a month.
Assuming an average annual return of 4.56%, a realistic estimate based on long-term returns from cautious pension funds across Europe, as reported by organisations like BETTER FINANCE , the intern would invest for 23 years, while the manager would invest for 10 years.
By the time they both reach age 45, the intern could have a portfolio worth around €48,646, compared to €45,504 for the manager.
Even though the manager contributed a higher amount each month, the intern’s longer time in the market allowed compound growth to do most of the work.
And don’t forget to build an emergency fund, so you’re not forced to sell your investments when life gets unpredictable. Most financial experts, including organisations like the Money Advice Service (UK) , suggest that your emergency fund should cover at least three to six months’ worth of essential expenses.
Once you have that safety net in place, you can focus fully on growing your investments. Tools like the SwissBorg app can help you track your portfolio, monitor your growth, and stay focused on your long-term plan.
Passive Income
Once you’ve built good saving and investing habits, the next step is to make your money work for you while you sleep.
This is where passive income makes a real difference. It’s money you earn with little effort once everything is set up and while it takes time to build, it can speed up your wealth growth and give you more freedom as you move forward.
Some of the most common ways to create passive income include:
- Investments that pay interest or rewards: Holding assets like stocks, bonds, or crypto can generate income over time. Platforms like SwissBorg Earn let you earn daily rewards by simply holding assets like USDC or Ethereum in your account.
- Rental income: Buying a property and renting it out is a classic way to earn steady income each month. Imagine this, imagine you purchase a small flat for €120,000. In many areas, rental income typically covers around 5–6% of the property’s value per year. That would mean collecting about €500 to €600 per month in rent.
- Digital income streams: Some people create content like e-books, online courses, or YouTube videos that keep earning long after they’re published. Others build small online shops selling printed t-shirts or digital downloads. For example, if you sell digital products for €10 each and manage five sales a day, you could make around €1,500 a month.
You don’t need to do all of these. The best passive income idea is one that matches your skills, interests, and the time or money you’re able to invest at the start. Over time, these extra streams can bring freedom, flexibility, and a faster path to your FIRE goals.
Avoiding Common Traps
As you move closer to early retirement, it’s important to stay focused and avoid slipping into habits that can slow you down or throw you off track. Some mistakes are more common than you might think, watch out for these along the way:
- Chasing quick wins: Trying to “get rich fast” often leads to risky bets, scams, or burnout. Focus on slow, steady growth over time.
- Ignoring risk: Putting all your money into one thing, like a single crypto or stock can undo years of saving. Spread your investments to lower the risk.
- Spending more as you earn more: Lifestyle inflation can feel harmless, but it eats into the money you could be saving. Keeping your spending stable is key.
- Not having a clear plan – You don’t need to plan every detail, but having a clear goal gives you direction and helps you stay focused.
Mistakes will happen and that’s okay. What matters is that you learn, adjust, and keep going.
Conclusion
Early retirement starts with a decision to take control of your finances and build a plan that reflects your goals. The process doesn’t require perfection, just consistency, discipline, and patience.
Now’s a good time to assess where you stand. Look at your income, your spending, and your habits. Set clear targets that match the life you want to create, and start building towards them step by step.
Along the way, stay curious. Keep learning, stay open to change, and adjust your strategy as life evolves. Flexibility and self-awareness matter just as much as setting the right savings goals. The tools you use can make a real difference too. SwissBorg helps you manage your investments, earn passive rewards, and track your progress clearly, all in one place.
