We are all naturally interested in ways to allow us to retire early – no one wants to work any longer than necessary. Some years ago I used to work in an automotive plant, and the CIP principles they employed there stuck with me for life. Continual improvement process (CIP) can be defined as a permanent on-going effort to improve the effectiveness and efficiency of a task or objectives.
Break your goal down to a task and subtask
Our overall goal is to retire early by achieving financial independence. We achieve that by:
- Reducing expenditure allowing us to save and invest more
- Earning extra money allowing us to save and invest more
How can I reduce my housing costs?
- Lower my mortgage costs by switching to a cheaper provider/ use a broker/ offset mortgage against savings
- Rent a spare room if possible to gain income/ help to pay mortgage
- Do I really need this size of house? Can I move to a smaller house/ apartment and/or to a cheaper area?
- Do I need to own my home? Would renting be a cheaper option and one that allows me to invest more capital?
- What is the smallest and most affordable rental acceptable that will allow me to save even more?
- Can I house or property sit or do some work in exchange for accommodation that will allow me to save the maximum possible to retire early?
Lets have a go at transport costs, for example:
How can I reduce my car expenses?
- Lower my car insurance costs by switching provider/ using a broker
- Lower my car maintenance costs by switching from a main dealer to an independent
- Reduce my fuel costs by searching for the cheapest outlets
- Reduce fuel and maintenance costs by undertaking an ‘efficient driving‘ style
- Do I need this car? Can I switch to a smaller or more affordable model that will be cheaper to insure and maintain?
- Learn to do basic car maintenance to save on servicing costs
- Is it essential that I have a car? Can I use alternative public transport that will enable me to save more?
- Can I manage my transport needs simply by cycling or walking to save the maximum amount, speeding up my ability to retire early?
Finally lets take a look at food costs:
How can I reduce my food costs?
- Can I reduce my regular trips out to restaurants?
- Do I really need to eat out at restaurants? Can I reduce my costs by substituting for more affordable takeaways or supermarket ready meals?
- Do I really need to buy ready meals? Can I learn to cook my own meals that are fresher and more affordable?
- Can I switch to a more affordable/budget supermarket chain to save more?
- Can I switch from branded to unbranded items and take advantage off promotional and reduced offers to save further?
- Can I grow my own vegetables, fruit and other produce to save the maximum possible and potentially sell or trade some to provide a small income?
Lets now apply it to making money:
How can I make more money?
- Can I negotiate a pay rise in my existing job or learn additional skills to get one?
- Can I work overtime to gain additional income?
- Can I switch to a different company or job role that will allow me to gain a higher income?
- Can I take on a second part-time job to achieve more income?
- If I own a property, can I rent a spare room for additional income?
- Start a small side business e.g Ebay/Amazon to gain extra income.
- Invest my money to provide me with a passive income stream.
CIP and the ability to retire early
You can see that CIP is a continual and never-ending process. By breaking tasks down into smaller individual sub tasks you can make substantial incremental changes and large capital savings overall. You keep drilling-down to maximise efficiency, which will supercharge your power to retire early. The frugally minded will benefit exponentially from this principal.