Money is the Easy Part

There are hundreds of talented bloggers in this space that can tell you dozens of variations on how you can become Financially Independent before you reach conventional retirement age.  I can tell you the short version in one sentence.  Spend much less than you earn, invest the balance in your own choice of stocks, bonds, real estate or your own business until your mix of investments provides you more than enough to live the way you want.  And enough so you can live that way without having to work a full time job.  And while that requires time and discipline and usually saying “no” to yourself fairly often, the math is indisputable.  As long as you have a reasonable income and do not get viciously sideswiped by Murphy it is pretty much a lock.  

That’s what my wife and I did and we did it with three kids and a single income. Admittedly it was a pretty nice income, but not a huge one.  And while I did not retire much earlier than most, I could have. But I was just having too much fun at my job.  And judging from the number of people who self report their amazing progress towards financial independence, the plan seems to work for a wide range of incomes and family situations.  In fact, I think getting enough money to retire early is not the hard part, it is the easy part. 

The hard part is…what comes next?  I know this, because I spent about two years in a job I was falling out of love with, paralyzed by not knowing who I would be if I quit.  I was the classic big fish in a small pond.  I ran the largest employer in my town, one of a handful that large in our entire state. Everyone knew my name in my town, in my state capital and to a small extent I was even known in Washington D.C.  I was on television, in the newspapers and on YouTube.  But all of that was because of my job.  I was a personality because I was the face of a well known regional corporation.  I was treated better than others by my barber, my doctor, police officers, senators, governors and other business leaders. I had a few billionaires on my contact list and they’d take my calls. 

If I let my passport expire I could have a new one the next day just by making a call.  I did not go out of my way to try to use the notoriety to my advantage but you don’t have to, it just happens.  It is the essence of privilege, that it runs in the background, like some amazing app that removes everyday friction from your life.   I  received nice gifts, free invitations to cool events, seats in football luxury boxes and  people would answer my phone calls, or call me back in five minutes. It was not celebrity status, I was not famous by any stretch, but I had just enough of something like it to realize it made almost everything in my life easier and better.  And I will admit it, I did not want to give that up.  Why would anyone want to give up that kind of treatment? 

Now that was me, and your world might look different.  If you are not surgically attached to your career like I was then leaving it behind may not induce that much fear.  But even so you still spend most of your time working.  Most of your social interaction is while you are at work and it is likely that many of your friends work there as well.  You know people are going to ask you that question, “What do you do?” because that’s what we ask everyone when we meet them for the first time.  And if you retire you will not have an easy answer.  If you retire young then you will really confuse everyone.  Half will think you were a secret trust fund baby and the other half will figure you are growing marijuana in your backyard.

I did not have as big an issue with retiring early in this regard as most do.  And that was because, along with the local celebrity status, came the idea that I must be making millions in my job.  In fact I was well paid, but on the low end for the position I held, because  I worked for a  family owned company for most of my career.  The stock options and huge corporate bonus structure common in upper management today  just did not exist at private companies like it did when we sold to a Fortune 500 firm.  I’m not complaining, I chose to stay there because I loved it and it paid me more than I actually needed. I had to save fairly aggressively to become financially independent, but so do all but a few people. But because of my job everyone thought I was rich, including my truly filthy rich friends.  All that to say that it wasn’t unusual for “rich” people to retire early and our part of the state has a lot of rich people who no longer work due to the presence of large oil fields.  So most people probably wondered why I worked even as long as I did since I was undoubtably sitting on huge piles of money.

The benefits work brings are status, pay checks, health insurance, friends and a structured way to spend your time.  Retiring means you lose all of that.  No more paychecks until you get old enough for Social Security, or perhaps a pension.  No insurance of any kind unless you pay for it.  You lose most of your work friends, trust me that you’ll be lucky to keep even a couple of them.  But the real biggie is you lose that structured way to spend your time.  That probably sounds great to you now if you are in a job you do not love.  But there is security in the familiar, even if the alarm early Monday morning makes you grimace you still get up with a plan.  It is not a plan of your own making but it is a plan to do just what you’ve done for the last 51 Monday’s in a row, go to work.  As hard as it is to feel that concept from where you are sitting right now, it is real.  When the alarm stops going off and you wake up with nothing you have to do it can feel even worse than your old workday Monday morning.

Engineers plan, it is one of the main parts of almost every one of our job descriptions, planning.  And from early in my career I had been making plans for retirement and for keeping my marriage strong.  My wife and I cultivated shared active hobbies, things like tennis, running, hiking, fishing and a half dozen more.   I also had studied my dad’s retirement and the fact that he got great pleasure from working part time into his 70’s.  In fact the income he brought in after he retired allowed a guy who never got close to making six figures to become a millionaire and to be able to watch his portfolio grow until the day he died.  When my company sold to a large Fortune 500 corporation I knew I might lose my job, in fact I expected to.  Usually my level of upper management was swept away and replaced with “their people”.  As fate would have it the people running the new company were old friends of mine and I was spared, in fact I was promoted.  But I did not know that at the time we were sold. I had two pretty fun years with the new guys and enjoyed the extra financial perks that came from stock awards and bigger bonuses but the extreme management style started to wear on me. The fact that I realized I was past needing any more of their money finally sunk in, so I pulled the trigger on retirement in spite of my fears of becoming someone else without my title and my position.

And my plans have worked out well for the first three years of my retirement.  Because I stepped straight into a consulting agreement with several large companies in my region I kept some of my public image and many of my business and political contacts even though I only work a day or two a week. I don’t have all the perks of my previous life but I still have most of them and can gradually slide toward being totally unemployed at some future date at my own pace.  I also make, on an hourly basis, about the same amount I made during my highest earning year, though the work I do now is low stress and enjoyable.  My wife and I spend more time on all of our hobbies.  We just got back home this Saturday morning after a seven mile run together with several other friends. She’s headed across the state later today to play on a tennis team and I’m typing my blog.  This last week we hiked, visited the Grand Canyon of South Arkansas (very top secret, you won’t even find it on the internet!), played pickle ball and tennis several times and I squeezed in a couple of days of lobbying at the state capital where the legislature is in session. 

I spend a lot of time chairing a college board and a charitable foundation board, both of which do great life changing work and the combination of paid work, non paid volunteer work, active hobbies, blogging and keeping track of our three grown and out of town kids leaves me and my wife pleasantly busy but with as much down time as we want.  Sometimes I think there is maybe one more thing I need to find to round things out or that maybe I should replace my side gigs with something more important but I’ve got the rest of my life to figure that out.  Our finances are on autopilot, the consulting pays all our bills so we just let our portfolio reinvest itself and grow.

In short, the planning paid off, it is all working just the way I hoped it would.  But what would life have looked like now if I had failed to plan?  Financially would I be happy if I had not saved enough to know that I’ll only need a mathematically sound withdrawal rate to support my lifestyle if I stop earning completely? If I had not invested years in the volunteer work I’m doing could I have stepped into those positions after retirement?  If my wife and I had not run thousands of miles together over the last decades and hit millions of tennis shots  since college would we be fit enough to do the extreme hiking we do and competitive enough to play on tennis teams with people twenty years younger? If we had not invested the time and required the accountability we did with our three now grown kids would they all be the self sufficient and fiscally sound adults they are today or would we still be having to help support them? It occurs to me that I love my life, to a large extent, because I built a life I love. 

It bothers me that so many people in this space talk about their jobs like prisoners talk about their incarceration.  They seem motivated solely by the desire to escape.  But escape to what?  I fear that the reason they hate their jobs isn’t just about their jobs but it is about their not knowing how to design a life that they enjoy.  The job becomes an easy excuse for the real problem, the fact that their life has no meaning to them because they haven’t taken any steps to make it meaningful.  Somehow they make the intuitive leap to thinking that if they just escape from the tyranny of work they’ll be happy.  To me that’s crazy thinking.  You better figure out how to be happy at work and happy with your life now and then plan your post work years.  Plan them to contain more of the best parts of your current life and plan them to avoid most of the worst parts.  I started developing non-core work skills thirty years ago that now make my side gigs possible.  I started running over two decades ago, and played tennis and fished my entire life.  I’ve been doing my volunteer work for twenty years and now am an integral part of both organizations.  I can’t imagine what waking up on day one of retirement without any idea of what I need in my life to be happy and fulfilled.  I am glad that is not how my retirement started, and I hope you take steps to plan your retirement starting today. 

What about you, if you are retired did you plan your next life or did you just plan to wing it? 

Are you still years, or decades away from retiring?  If so what planning are you doing? 

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