1. Be frugal. I'm going to follow the simple rule of not spending more than I earn. Even more specifically, I'm going to try to save as much money as possible (while also not being so cheap that I don't enjoy the journey along the way).
2. Contribute towards my 401(k). At a minimum, I'm going to contribute to get the full employer match, which is 5% in my case. Currently, I am contributing 12% to my 401(k).
3. Contribute towards my Roth IRA. I have been contributing the full amount to my Roth IRA for several years now, and I plan to continue doing so. Why? Contributions to the Roth IRA are post-tax, but all distributions are tax free after the age of 59.5.
4. Invest in rental real estate. Nothing like an income producing asset that you can touch with your bare hands and visit. Real estate that you own will never go out of business or file for bankruptcy. It's physically tangible and it's yours. I plan to use rental properties as a way to generate income to finance my retirement. The only down side to rental properties is dealing with maintenance on the property, dealing with tenants (or even worse - bad tenants), and dealing with vacancies, which leads to my fifth point...
5. Invest in dividend growth stocks. With stocks, there's always a risk that a company might go out of business, but I have a strategy set up to find only companies of high quality - specifically dividend growth stocks. These are companies that pay increasing dividends year after year. This will serve as another source of income to finance my retirement.
And there you have it. That's my 5-prong approach to retire by the age of 56. I will post my stock purchases, the dividends received, and updates on the market value of my 401(k) and Roth IRA. I've already begun this journey, but now I've decided to put it in writing to keep myself accountable and hopefully be a source of encouragement to anyone who reads this.