The idea of early retirement as a life goal is flawed. Putting too much emphasis on retirement as the source of all happiness will likely leave you feeling shortchanged when you discover it isn’t the light at the end of the tunnel you dreamed about. Many, if not most, arrive at retirement and realize that they still yearn to fulfill a purpose that isn’t simply a year-round vacation.

Ensuring you have sufficient funds is not about retirement planning. We recommend clients create a lifelong financial mindset that enables them to set their funds up to bear fruit much faster and begin making freedom-based decisions much earlier in life.

With that in mind, here are four things that can help you achieve this and create freedom earlier (retired or not).

1. Keep more of what you earn (nail your spending plan)

Your spending plan is hands down the most crucial part to get right. An effective spending plan has two key elements: the right behavior and the right system. As Atomic Habits author James Clear notes, “You do not rise to the level of your goals, you fall to the level of your systems.”

The right system includes automated money decisions,  maintaining pure clarity on how those decisions link to your best life. It also means you don’t second guess a thing, it’s cruise control. You need the tools to make quick, confident, intentional decisions, and move on.

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The crux of every spending plan we build involves four key components:

• Budget: It’s about being conscious of what’s coming and going, and more than anything it’s about aligning your spending with your values.

• Categorize: We follow a very simple split of categories: either it’s fun (lifestyle costs) or it’s boring (living costs).

• Accounts: Your bank accounts align with the above categories, plus your major spending components in your budget (think bills and expenses; travel; personal expenses; gifts).

• Automate: You are human – don’t let this fact ruin your big plans. You can fully automate your finances by setting up which account you’re paid into, direct debits for bills, automatic transfers into other accounts and automated investments. It sounds so simple, but this is really the difference between achieving or falling short of your big financial goals.

2. Get clear on strategy

We call this your ‘Mad Stacks’ strategy. This is making focused and intentional contributions toward the areas of your financial picture that align with your ultimate goals and definition of sufficient funds. That is, stacking up your funds where it matters to you.

The four stacks of Sufficient Funds are:

• Debts: eliminating debt (whether it’s credit cards, personal loans). Getting on top of these is crucial.

• Savings: having a clear spending plan in place.

• Investment: putting your money to work and building solid foundations.

• Superannuation/Retirement funds: making intentional contributions to secure funds away for retirement age.

At any point in time you would rarely be targeting only one stack. In fact, I would argue that unless you’re swimming in debts like credit cards, personal loans or ‘buy now pay later’ debt, you’re likely to need at least two or three of the stacks at all times. Think about this as literal stacks of cash on the table in front of you, but with very specific rules and purposes for each. Get this strategy  right and you’re on the path to freedom-based decisions.

3. Focus on investment outside of superannuation

If early retirement is part of your version of living a sufficient life, you’re going to need to bridge the gap between your early retirement date and when you can access superannuation. It’s therefore critical that you have sufficient investment outside of superannuation. Ideally you are building assets (read: shares, property and so on) outside of superannuation – and outside of your home – so you have financial security and freedom way before you get too old to enjoy it.

4. Remember that superannuation is critical for the long-term, so don’t neglect it

One major benefit of contributing to superannuation is that it is essentially ‘forced savings’. Apart from a few early-access options in very specific circumstances, superannuation can’t legally be spent earlier than retirement. This is the stack you want most of your retirement funds sitting in, as once you reach preservation age (you are old enough), accessing it becomes tax free up to a certain limit, which in Australia is currently US$1.25 million per person.

Whether you retire early or not, channeling your energy and funds into these areas will fast-track your path to financial freedom, allowing you to live life on your terms much earlier than you might think.

This commentary is provided for general information purposes only and should not be construed as individual investment, tax or legal advice.