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How to Confidently Retire in 5 years’ time or Less

Hawiian StyleThe greatest equalizer of all, is time.

Regardless of our sex, nationality, physical ability, money, career or up bringing, we all have the same amount of time. And it has always been so.

Nothing has changed. A thousand years ago, people only had 24hrs in a day and seven days a week to do everything they need to do. Today we have the same 24hrs a day and the same seven days in a week.

The other great equalizer is death. Sorry to sound so morbid, however it is the truth when I say no one is getting out of here alive. And I am sure most if not all of us would rather be spending more of our time experiencing what life has to offer rather than working till the day we die.



1. Whether we do or do not, time will pass regardless. With this in mind, working backwards is the first and arguably most critical ingredient for our success.

Be More YouSpecifically defining what our ultimate goal is, then breaking it down into measurable long (yearly), medium (monthly), short (daily) activities, allows us the highest probability of success.

Doing so we can then better benchmark our progress, hold ourselves accountable and motivate us to do the work we need to do to achieve our goal.

For example, if our goal is financially independence in five years, requiring an additional $500,000 in savings alone. Our yearly goal would be to have $100,000 saved. Our quarterly goal to have $25,000 saved. A daily savings goal of $273.97 per day being required to achieve our goal.

By knowing what we need to regularly achieve and benchmarking our actual progress we give ourselves a better opportunity to make not only tactical changes along the way, but we are also better placed to make quicker decisions, silence our distractions, and have greater confidence we are making positive progress towards our goal

2. Money and Time = Financial Freedom. Ultimately financial independence is achieved when passive income from our activities/ investments is greater than our daily living expenses. In business circles this is called Free cash flow.

GoalsFor those of us who achieve this, the world becomes a hugely different experience along with a shift in priorities. Those who have achieved financial freedom often valuing time over money. Their legacy over consumerism. Relationships and experiences over the accumulation of more wealth.

Achieving passive income greater than our expenses can be achieved many ways. We could choose to increase our income and maintain our current living expenses. Maintain our income and choose to reduce our expenses. Or do a bit of both.

In my own experience I have found the third option i.e., increase my income and decrease my expenses has turbo charged achieving financial freedom sooner along with helping me to better prioritise what is important to me on this trip we call life.


3. Aristotle’s “Golden Mean” and knowing when enough is enough. Moral behaviour is the mean between two extremes- at one end is excess at the other deficiency. Find a moderate position between those two extremes, and you will be acting morally”.

Golden PandaThe challenge of many who are still working while at the same time very financially dependent is overcoming their fear of letting go. They fear of losing their own label, importance, and power. Sadly, this fear holds them back from deeper relationships with their families, undermining their own physical/mental health and direct benefits of experiencing the opportunities only they can experience through their own participation.  

The mirroring of this applies to those who are not financially secure and see no value in working. However ultimately the same outcome is experienced i.e., eroded relationships, declining physical/mental health, and a lack of direct benefits due to limiting experiences.

My hope is that out of this covid-19 epidemic, instead of trying to live a work/life balance, we reprioritise our lives to be more of a life/work balance. Both are important and together they enhance our lives and experiences

4. Active vs. Passive retirement strategies. The problem is not one of “Active vs Passive” investing, but rather emotional-based vs. long term disciplined investing.

Emotional investingThis opinion was backed by Dalbar Inc after it had undertaken a study of passive vs active investors over a period of 20 years. There research showing that active share market investors had achieved an annual return of just 3.9%pa vs the market index annualised return of 11.9%pa over the same length of time.

While there is a place for active investment, be it in retirement or while still working considering where one’s best allocation of time, skill and ability is essential to heightening one’s chance of success.

Retirement should be fun, not stressful. So rather than increasing risk and increased losses, considering where you can get the highest gains with the least risk or requiring any of our money.

For example, we may consider a part time/ casual employment in a field you enjoy i.e. substitute teaching that pays $400 per day (50 days per year = $20,000) vs investing $100,000 trying to achieve a 20%pa return. The substitute teaching role required a small-time investment along with no risk to your money.

The point is, especially when retired, consider active activities you enjoy, require only a little of your time and do not risk your investments. Regarding investment decisions in light of the theory soap theory, “the more you touch it the small it gets”.

5. Free cashflow ideas. The following are some strategies to improve your cash flow and help you to retire earlier. 

action always beats intention

  1. Undertake a cosmetic improvement/additional room to an investment property. This would require a financial investment (do not over capitalize) with the intention of a higher rental being received as well as a higher valued property.
  2. Write a book/song/create artwork with prints etc... While all require an initial investment of time the ongoing sales and royalties may be gained and used to support additional passive income.
  3. Withdrawing less income than your investment portfolio generates and reinvesting the difference. This strategy can ensure that your money continues to grow and fund your lifestyle in retirement. To generate additional income some investors will sell futures contracts over the shares they own, however this should only be done by sophisticated investors. Importantly this strategy should only draw down on income/dividends and not your capital.
  4. Arbitrage your living expenses. You may rent out your home for a higher rent and buy or rent a new place of residence in another location. This is becoming increasingly popular with westerns choosing to retire in lower cost of living countries while renting out their family homes while abroad.
  5. Invest in yourself and become an influencer in your field. Education, improving your skill/trade is the best investment one can ever make. Better still if you can use these skills to help others and fund your ideal lifestyle. A win/win outcome.

A long time i.e. 25 years ago, I started on my own journey to retire more confidently. Over these years I have learnt by experience, observing others and through implementing my own strategies to have greater confidence living a life of financial independence.

The best advice I can give is to trust the process, keep learning, be patient, be true to your core values and celebrate your milestones along the way.

If you are stuck in a rut or need some clarity to help you move forward and make better choices and live your ideal life sooner, I look forward to your reply.

Warm regards


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This post was written by Peter Horsfield, as such they are his personal views. Peter helps you to focus on what’s most important, the right strategies at the right time. To learn more about How to become Financially Independent visit Peter Horsfield Smart Advice

About Peter Horsfield

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

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Investsure Holdings Pty Ltd ABN 16 050 286 630 \(t/as Horsfield & Associates\) is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049, who holds an AFSL and Australian Credit License No. 236523.
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