You too can retire young and enjoy your golden year if you stick to the 4 lessons below.

A grandfather retired at the age of 56 and is proof that it's possible to become a millionaire by living within your means, managing your cash flow, and saving. 

Here are 4 lessons to early retirement and financial security.

1. Start Saving Early

If you start saving at 18 you will have a nice saving by the time you are 30. Try to save at least 15% of all income you earn. Saving early gives your money time to grow, allowing you to take advantage of compound interest.

Fidelity Investments says saving 15% of your income starting from age 25 can prepare you to retire at age 67. If you start saving just five years later (at age 30), you'll need to set aside 18%. At age 35, that amount jumps to 23%.

2. Live with cash, avoid credit

Ask yourself, "Is the debt really worth it?" If you're taking on credit card debt, ask how will that debt hold you back in the future? When considering getting another degree, ask if it will increase your salary? 

During College try to work both on campus (work study) and off (part-time job). Try to graduate with less $10,000 of student loan debt.

3. Investing is a long-term game

Invest in a diversified portfolio and opt for a diversified mix of index funds for long-term investments to avoid the ups and downs of individual stocks. 

"Be willing to take risks in the market so you can benefit from the returns." Limit risk by keeping a small in potentially risky investment (no more than 10% of total portfolio).

4. Keep and Emergency Fund

Create an emergency fund to cover unforeseen expenses or a job loss, and keep it in cash. Also, set aside any money that you would need in the next three to five years (such as money to purchase a car). Keeping it in cash, won't make it subject to market fluctuations.

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Economics, Finance and Investing