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The Basics

Your 5-minute guide to quitting the rat race

Do you want to downsize your life or even drop out? Here are 22 tips for making that possible.

By MSN Money staff

Looking to get off the paycheck-to-paycheck treadmill or to drop out of the rat race altogether? Here's what you'll need: a solid plan for how you'll spend your time and a way to either earn dramatically more or spend much, much less.

This is not an impossible dream. In 2004, 7.5 million U.S. households had $1 million in assets, not including their homes. While the financial waters have become more choppy still then, you can still steer your way to an early exit from the workaday world.

How do you get there?

  • Set a financial goal and have a long-range plan to reach it. (Find a plan that's right for your age on our "Create a Retirement Plan" Decision Center.)

  • Automate deposits to retirement and savings accounts so you won't be tempted to spend that money.

You can also follow the lead of many of America's newest millionaires and consider starting your own business. A common thread for many of the newly rich of the past 10 years is innovative entrepreneurship. (See "From rags to the world's richest.")

  • Pick partners who complement and enhance your strengths.

  • Write a solid business plan. Find inspiration at Your plan should be able to champion your idea to potential investors.

  • Raise money. Don't depend on your credit card to carry you in the first six months, when you're unlikely to be making a profit.

  • Don't immediately quit your day job.

  • Develop self-discipline. It's a lot harder to meet demands you've imposed on yourself than those of a 9-to-5 employer.

To many, ditching the rat race means downshifting to a less demanding and more fulfilling career. That's understandable. Most Americans spend more time commuting than they do taking vacations.

  • Consider relocating to a more rural area. (See "Rescue your retirement in 1 move") Can you ply your skills in a smaller setting? You'll likely earn less, but the cost of living will be lower and you'll spend less time commuting.

Maybe you're in midcareer and yearn to take an extended work break.

  • Figure out what you want to accomplish and how long it will take. Whether you want to volunteer in a developing country, remodel your house or explore a new line of work, your financial security will take a hit, so you'll want to make good use of the time.

  • Figure out how much your sabbatical will cost, including health insurance and travel, if that's included in your plans.

  • If possible, choose a leave of absence rather than quitting your job. You'll likely be able to borrow from your 401k.

Perhaps your goal is to retire early.

  • Once you retire, experts recommend that you maintain your investment portfolio in three pots: one to provide cash to cover expenses for a year, one in fixed income investments to generate money for the first pot and one in stocks to grow income for the first two. (See "Your 5-minute guide to retirement security.")

  • Have a plan for what you'll do with your time once you have it. You'll want to replace the sense of purpose you gained from work with one that's even dearer to your heart.

If you've got a hint we haven't included or find a factual error, let us know by sending an e-mail to

Updated June 22, 2010

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