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Sounds click bait-ish doesn’t it? But it absolutely is the truth. I’ve written about my career many times. I’m a chemical engineer and spent much it running a large chemical complex in a rural southern state. It was my only 9 to 5 job after graduating college and when I finally stopped enjoying it I was already in the financial position to never have to work again. Blogging is one of my non-monetized hobbies and I also consult a little for entertainment. So how and why did a billionaire personally save me from making a big mistake?

To make sense of that I need to start at the beginning. When I got out of college with my engineering degree I already knew where I wanted to work, at the place I had interned between my junior and senior years. I explained why I picked that place in my last post, but in short it was because it was a growing company run by chemical engineers, like me, and one in which they were poised to do a lot of hiring. I was going to get in the door first and have a competitive advantage over all the ones hired after me. I also liked the guy who would be my boss. He was a fast mover and I felt the chances of following him up the corporate ladder were excellent. All that worked flawlessly and I was able to develop a tremendous skill set by designing multi-million dollar improvements to the complex almost from the day I walked in the door. It was a Fortune 500 publicly traded corporation but still had a family feel to it. I could not believe I had my dream job when most of my classmates seemed lukewarm at best about their jobs at other companies.

I was promoted twice and given large raises and when the corporation sold us my boss was promoted, just as I had expected. And I got his old job which was arguably the number two position in the company. The new owners were much different than our previous ones. They were a private company, owned by a single individual. In fact he owned some 60 companies, although ours was the newest and largest in the stable. He was in his sixties and had some of his grown kids in the business too, but none of them were engineers. That was important to me because that meant that there would not be a problem with nepotism being a barrier, at least not prior to hitting a C-suite level job. They did not pay quite as well as publicly traded companies but I was still treated to very good raises. And I enjoyed my first few years working for them just as much as I loved working for the original owners.

After awhile though I began to tire of turning down recruiters on the phone who were offering me higher paying jobs and jobs equivalent to my bosses position. I also worried about the market segment we were in. While it looked to be around for a few more years the writing seemed to be on the wall as far as the glory days being in the past. My skill set fit extremely well with a similar industry that was poised to greatly expand in the future and so for the very first, and only time in my career, I decided that maybe I should change industries. I interviewed with an exciting company in Dallas and they loved me! I went as far as tentatively accepting the job, but had not told my employer yet. If any one reading this remembers the television series, Dallas, that had the infamous J.R. Ewing as the main character, the golden tinted windowed building in the opening credits for the show was where my office was going to be. Only I was going to work for the real company that lived there and not for the evil J.R.

I apologetically told my boss about my plans to leave, I felt I owed my employer quite a lot. They had been very good to me but just did not have a job open imediately at the level I was ready to fill. He did not say much but the next day I got a call from the owner. THE OWNER! I knew him because in spite of the 60 companies he owned he always spent most of his time at his newest prize, which was us. But he rarely called me, I was several levels below him on the organization chart.

To give you some perspective of this man, this billionaire, he had started with virtually nothing as a young adult. But he was a tremendous entrepreneur and risk taker. Over the next forty years he went from flat broke to billionaire status. How wealthy was impossible to pin down because all his companies were privately owned, by him. But Forbes magazine listed him on their top 200 Richest in America list. He had a jet. He had an impressive vacation compound on a private island at the beach. He had his own yacht and a large private hunting preserve. Yet he would show up at our facility at 5 AM, when he was in town, and hand deliver dozens of donuts to our hourly workers. He would ride a bicycle around our plant and stop and talk to every employee he met about their family, their job or sometimes just the weather. He really cared about his employees to the point that he even kept one of his unprofitable companies in operation until the very last elderly employee retired, because he had never laid off a single employee in his life. He would also write personal checks to individual employees that had suffered a medical or family crisis above and beyond what company insurance covered. He was an amazing individual but also a shrewd businessman and expected hard work in return for your paycheck. He demanded the best from everyone but also helped inspire us to deliver it. He had no patience for laziness or dishonesty but he never fired anyone for a lack of talent, as long as they tried to perform.

The next day when my phone rang and it was him, I wasn’t sure if I was going to hear harsh words or kind ones. He simply said he understood what my plans were and asked if it would be OK for him to hop on his jet and come to my office the next day. He said he thought he had information I would be interested in. It felt like Jeff Bezos was calling and telling me he had heard I had some problems with my last order on Amazon and was there anything he could do to help. This man was a legend and I was still just an engineering department manager, nobody that should ever pop up on his busy radar. Of course I said yes and immediately began to wonder what in the world he was going to say to me in person.

He came into my office the next morning with a bulging file folder and got right to business. He said I needed to know something about the company I had agreed to work for and began to lay out some profit/loss charts. Then he showed me the debt history of the company. I have no idea where he got all of the information but it painted a very different picture of the other company than I had been given on my interview trip. They were bleeding out financially, had enormous debt and were making no money at all. In fact, based on the numbers, they would be bankrupt in a matter of months. Then he switched to talking about me. He told me that I figured into their plans for the future greatly. They wanted me to move up rapidly and already had plans for my next promotion. He told me he hoped I would stay with them and help them build the company but that either way, thanks for what I had already contributed. Then he got up, shook my hand and drove back to his jet.

I decided to stay, I reasoned where else in the world would I ever find a company whose billionaire CEO/owner would personally try to prevent me from making a bad career decision? Ironically an industry friend ended up taking the job I had originally accepted but then turned down at the debt ridden corporation. And just as my owner had predicted they went bankrupt a few months later. Instead of becoming unemployed I was given a large raise and it was not long until I received the first of several promotions. These eventualy led me to becoming a corporate officer and in charge of that division of the company. I felt fortunate that someone so important and so busy took the time to help keep a young man from making a career mistake. Over the years I saw him take that same kind of interest in many others. His life was not about making money, he had made more than any human could ever spend. He passion was in building things and in building people to run them for him.

He was a great leader, one who genuinely did not think he was better than you because he had more money. He remembered not having any money at all. He honestly felt that by building successful businesses he was serving others and serving his employees in particular. And while we were never close friends, he taught me more about leadership than anyone else I ever worked with.

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Have you ever worked for an inspirational leader, or for someone who changed the course of your life?

Are there even still people like this around in the business world?

Part one of this post was partly a defense of the good old 9 to 5, so I won’t go there today.  Today I’m going to assume that if you are reading this you are either excited or resigned about the need to get a J.O.B.  as opposed to becoming an entrepreneur, at least for now.  It also dealt with getting the right training or education to set yourself up in a high paid career.  But today I’m going to talk about picking a dream job as your first job, or your next one. 

You have already gotten the training you need to qualify for a career that you can excel in, because as I said in part one, you don’t try to fulfill your passion with a job.  You find a job you can excel in and as you become world class you grow a passion for that job, in the classic virtuous cycle manner.  Michael Jordan wasn’t the greatest basketball player of his day because he loved basketball, his love for basketball grew as he mastered it and only because he could master it.  Your work is going to be like that too.  No matter how much you want to be something, if you pick something you can’t gain mastery in you will not find fulfillment in it.  The world is full of untalented and unhappy actors and singers who just don’t have the skills and talents to succeed at their “passion”.  Leave any passion that doesn’t fit your talents in the hobby closet. 

So you know what you are good at and you’ve gotten equipped to start doing it.  What’s left to do?  Just selecting the place to work and the entry job that will let you start on the path to excellence.  First, and this is huge, do not go to work anywhere where the top guys, the guys in the C-suite, aren’t older versions of you.  I was a chemical engineer so I looked exclusively at oil and chemical companies because their top leadership included a lot of chemical engineers.  I could have worked at an insurance company or a firm that built integrated circuits and computers but those companies were managed by finance majors, accountants or electrical engineers.  There is a simple reason for limiting your consideration to companies run by people with your credentials.  Prejudice!  Not in the sense of the evil racial , gender or ethnic kind.  This is the simple business preference that everyone considers their own qualifications to be the best ones, all the way up to the CEO.  And they will always promote people with the same qualifications as their own over people who are, in their subconscious opinions, misfits or less qualified.  That probably isn’t fair and it might even be an evil kind of prejudice but it is reality and you can make it work for you or against you. 

Next, realize that you may have some strong preferences about lifestyle yourself and do not pick a job that will compromise them unless you do it as a great adventure.  In my case I was engaged when I graduated from college and my wife was from a rural farm literally  in the middle of nowhere.  She had less than twenty people in her high school class.  Neither of us liked big cities and our hobbies of tennis, fishing, hunting and hiking and our dislike of crowded conditions meant that I chose a job in Arkansas over Chicago, Houston, Tulsa or Dallas.  I also chose a job where I could probably stay put without hurting my career advancement or transfer to Colorado if I wanted to (we both love to ski!).  I had interned at this company while in college and noticed that many of the top leadership had stayed in the same rural location for most or all of their careers, so that was a plus for me.  Had I not been about to marry I might have taken the Chicago job because it was a very elite offer and after a couple of years stint there I would have been on the international team working all over the world.  That might have been fun for a single guy but not for my wife and keeping her happy is a top priority.  In the same way think hard about how much travel you would have to do in a job and if that works for you.  The job I took had me on the corporate jet from my very first year of work and that’s an amazing and fun way to travel!

Make sure that the pay and benefits are not the only things you consider.  In my case the pay for Arkansas was exactly equal to what Chicago offered me so that was not an issue.  In fact it was a plus because the cost of living in Arkansas is very low, and big city wages in tiny town really let you ramp up your savings rate without extreme frugality.  Besides pay and benefits find out about the biggest benefit of all, how fast can you grow your skills in that job?  As an intern I was already getting a chance to do senior engineer work and I had not even gotten my degree.  It was obvious that I could advance as fast as I was capable, and there were mentors galore in that location that just loved to teach newbies.  Plus it seemed like everyone there was constantly being sent off to industry leading training seminars all over the country.  Week long, very expensive training was provided to everyone every year, sometimes several times a year.  Being a fairly small company in an industry dominated by  giants, our management realized they had to train hard to compete.  The company spent over $200,000 training me across my career, adjusted for inflation the number is probably closer to $500,000 in today’s currency.

Pick your boss.  When you consider a job consider your supervisor.  Again as an intern I got to know the players and it was easy to see that the person who would be my boss if I took the job was on his way up the corporate ladder.  He was a genuine genius full of money making ideas for the company and it stood to reason that if I worked for him and became his right hand guy, then as he rose, I’d rise.  That is exactly what happened.  If you take a job working for someone who isn’t progressing then don’t expect to either.  He will likely have realized his career is stuck in the mud and will not be very productive.  And his reputation will rub off on you despite your best efforts.  Don’t take a job unless you are going to be managed by a thoroughbred, if you are hitched to a mule you better get used to going slow. 

Finally, pick your competition.  That was a big reason I ended up at a smaller company.  I had offers from huge corporations but they had something I preferred to avoid if at all possible, strong competition.  The small company I chose was beginning to flourish but they had seen some hard times for the previous decade so they had not hired any new engineers during that period.  That meant there was a ten year gap between me and the next youngest worker.  They had plans to hire a lot of people and I was going to be the first of several.  Being the first guy in and being someone who had modern skills they lacked when it came to computerization and coding let me establish my reputation (in their minds) as a rocket scientist, so that when the next dozen engineers were hired they just had no chance of competing with me.  It is unlikely you can find a field quite that fertile but the principle is still valid.  Given a choice, pick a place where you do not have strong competition.  If you are the fourth one hired into a team and the others are brilliant and have a year or two experience advantage on you you’ll spend your entire career working for them and will have to change companies to get ahead.  I saw that happen to most of the people hired in after me. Whenever that next great promotion came up it always came to me first. 

So that’s what I learned during my 9 to 5 days, which blessedly are almost three years to the day behind me now.  Now I work a day a week consulting for entertainment and money I don’t need, I volunteer a couple of days because it helps people in need and I blog and pursue a bunch of outdoor activities for fun.  I credit having had an exciting career that was one of my favorite hobbies for three decades, to my selecting the right career and the right company. And I credit that to my using the thinking I put in this post and the previous one (part one).  At least I can say it worked for me. 

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What about you?  Do you agree with these tips ?

What has worked for you in landing a dream job?

One thing is for certain about this personal finance, financial independence, retire early, control spending, accelerate savings, career building and solopreneur community I blog in.   And that is there is no universal truth that everyone agrees on. There are the ultra-frugal who propose saving your way to wealth, the career maximization coaches who recommend earning your way to wealth, the retire early experts who think working past 40 is unfortunate and the FI crowd who don’t care what you do with your life after you reach financial independence as long as you meet that goal. And there are dozens of other related concepts that don’t elegantly mesh with each other.  That has always confused me because I have an opinion on everything and never have determined why everyone else doesn’t naturally see how right I am, all the time!

A theme that is certainly not universal but is widely held in this tribe of seekers is that the typical corporate job in America is a dull, gray, lifeless, soul sucking slow form of death.  It is characterized by Dilbert quality bosses, mean spirited co-workers, self-centered managers and disengaged senior leadership.  It is an existence in which you are merely a tool to be mis-used to the breaking point and then discarded.  Of all the opinions I’ve seen in this space this is one of the ones most puzzling to me.  Because, you see, I had a great job!  For over thirty years I truly enjoyed going to work and I generally felt overpaid.  My bosses treated me with great respect and even genuine affection.  I had some of my best friendships there and achieved some of my proudest accomplishments in my workplace.  I achieved a lot of my best growth and development as a person there. 

What is with all the current hate of the 9 to 5?  Somebody is clearly not seeing things right or perhaps we are looking at two different pictures? Perhaps the explanation is that most corporate jobs in America are, well, bad.  But along with that maybe some of them are very nice indeed, and maybe I was one of the lucky few who found one of the rare, awesome, unicorn jobs.  After a ponderous amount of pondering that is where I have landed.  Working for the man is usually not that great but if you are lucky, it can be all that and a bag of chips.   So how can you work that luck part to your advantage?

Here is what I think I have learned from my own career experiences about finding a dream job.  First, it might not exist for you.  I had several friends and coworkers who started out in the workforce and stuck with it just long enough to build a valuable skill set and a network of contacts, who then left to start up a business of their own.  Some of these are millionaires now when they might never have been had they stuck to their 9 to 5 path.  They range from chicken growers to construction company owners and fit the model of the Millionaire Next Door.  They did not hate their jobs but they knew deep down that life had more for them if they could just be their own boss. 

But being your own boss and being an entrepreneur or a solopreneur is a scary way to go.  The failure rate is astonishingly high and from most of the personal accounts I’ve seen it usually takes a few fails before the first win is achieved.  Becoming an overnight success usually takes ten to fifteen years.  It never appealed to me, at least not until I had saved and invested enough that I did not need an income. At that point it is pretty hard to fail at doing things you enjoy because they do not have to make money.  I can blog forever, for instance, because I don’t do ads or monetize my site at all, I just pay to keep it open.  Can’t really fail at that, can I? But for someone starting out in adult life you have to pay the bills so frequent failure is a painful path and it is definitely not for everyone. 

Since I think a 9 to 5 might be your best first option or even your best lifetime option let me share some thoughts about why my corporate job was in many ways the best ride of my life.  Finding a dream job starts with putting yourself in a place where the most likely outcome is success.  Oh wow, that’s pretty, duh, obvious,huh?  Well sure, but it is a lot deeper than you are probably thinking.  Let me tell you how I did that because it worked for me and I can prove it.  I’m sitting at home typing this on my kitchen table and I’ve been doing only the things I want to do for the last three years with exactly zero money worries.  The hardest thing I’ll do today after drafting this blog will be playing doubles tennis and researching a wireless stereo system for Christmas for my son and his wife and a new vacuum cleaner for us since ours just died this morning. Oh, and no alarm went off this morning, I stayed in bed as long as I liked because I don’t have a job any more. 

How to get in a job where success is almost automatic? Believe it or not I was thinking about this in my earliest high school days.  My dad had suggested I read Dale Carnegie’s “How to Win Friends and Influence People”. That was decades ago and DC had been dead for a long time even back then, but the book was full of timeless principles.  After all, technology may have changed but people have not changed at all at their most fundamental level.  It impressed on me that if you think things through that you can have an unprecedented impact on your own success in life.  While it was more about selling than about the work I chose, it taught that me that you do not have to let life happen to you, you can happen to life. 

So, at that early age I thought about placing myself in an area where I could succeed.  I took aptitude/personality tests and took the hardest courses I could in the areas where I seemed to be a natural but where most others seemed to struggle.  In my case anything related to math, chemistry, physics and writing seemed to comprise a sweet spot that made me a little unique.  And that was my unique, yours will likely be different.  The point was, I focused on the areas that were my natural strengths. Then as I approached the end of high school and the start of college, I began to consider what options I had for a college major that both played to my math and science skills and also promised a lot of career opportunity.  It became clear that there was a big shortage of engineers at that time and that it was one of the ultimate challenges for someone with the right technical talents. And it also paid extremely well, in fact at the time chemical engineering had the highest starting pay of any four-year major in the country. 

I did not get any information about chemical engineering from my high school counselors.  I got it from my parents, and from a favorite teacher whose son was a chemical engineer and from looking up information about it.  I got even more information when I went up to the state university for a freshman orientation and by the time I signed up for the first introductory class I was certain I was in the right place for me.  That class had only nine students and out of those, only two graduated as chemical engineers.  In such a small class we got to know each other pretty well and I was the only one who had chosen the major after careful study.  The rest did not have any idea of what they really wanted to do and as soon as they understood just how incredibly difficult, and boring to some, the course work was going to be they left for other majors.  I lost touch with all but two of those classmates. One is a lifetime friend who stayed in chemical engineering and the other was a best friend who switched majors. He became extremely successful in that field, right up to the day the corporate plane he was the only passenger on crashed, taking his life. 

There is much advice about following your passion in seeking a college major.  I think that is one of those things that sounds nice but results in much more harm than good.  It presupposes much that simply doesn’t exist for most of us.  Most of us have no all-consuming passion in high school.  Maybe I had passion for the head cheerleader that didn’t know I even existed (ok, that’s getting way too personal) but not passion for a career or a college major.  At the very most we might have some insight as to what our strengths are and what we absolutely hate.  I did not particularly enjoy history, foreign language, art and I hated public speaking. I enjoyed math, science and writing on the school newspaper and yearbook.  But my passion was bass fishing and hunting and that cheerleader, sigh.

 My advice and what served me well was to view college as a vocational school only there to place you as a likely candidate for a job that does what jobs are supposed to do.  A job that will pay you enough money to become financially independent and that will allow you to use and grow your natural skills to achieve excellence.  And that is where passion comes in.  In my opinion you will automatically become passionate about any career that allows you to use your natural talents to achieve excellence.  Passion follows achievement.  Doing it the other way no doubt works out for some great talents, but can you imagine anything worse than chasing a passion that you are severely untalented at? If you are honest you know some people that are just plain awful at the thing they profess great love for.  That is a real risk you avoid if you follow your strengths to a career and let the passion develop organically over time as you excel at the work. 

That was part one.  Picking the right college major or technical training.  Part two will be about picking the right job after you graduate. 

What do you think, is not following your high school passion a soulless sell out to the man or is it just the most brilliant idea ever? 

Do you believe that if you pick a major that fits your natural talents that it will lead you to passion eventually? 

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Tell me if you have heard this before.  “In the old days jobs were different. My grandfather could count on working for one company his whole life and then retire with a gold watch and a fat pension.”  Of course you have, it is a common narrative to explain why Boomers, Gen X and the Millennial crowd are all struggling with ever being able to retire.  And it is true to some extent but you might be surprised to know that even as early as 1950, the height of the pension era, only about half of the private sector employees in the United States were covered by pension plans.  But half is still a lot higher than the 14% of private sector employees who have access to a defined benefit pension now.

 

And that is a big change.  My dad, a member of the Greatest Generation, and my mom, a public school teacher were both covered by pensions.  And it really mattered.  In fact, even when they were running up bills as high as $8,000 per month at the nursing home they were still seeing their net worth go up each month due to their pension and investment income.  It was an amazing deal to keep getting paid after you stopped working, plus they also got Social Security.  Wouldn’t that be great?  Well, suck it up Buttercup, odds are you aren’t getting anything like that from an employer when you leave the company.  Neither am I.   And that’s one big fat change in what it means to be an employee.  But wait, there’s more!

 

In addition to pretty much zero benefits from your employer after you retire there is also a change in the employer/employee contract while you are working that has just as big an impact on life.  And this one is much more subtle than losing a pension plan.  It is a little hard to define, but as a guy who worked at one company for well over thirty years before slightly early retiring, I’ve seen some stuff and I think I have a handle on this.  So please bear with me.  When I started working at the chemical plant as an intern I was adopted by several experienced mentors.  I did not have to seek them out, they saw bringing the next generation into the “family” as part of their job description.  They invited me to their houses to eat, they even put my girlfriend up at their place when she came to visit me.  It was very much a family.  We all went to each other’s weddings and funerals.  If somebody had a house fire we took up a collection and people reached deep to make it meaningful.  If you were moving to a new apartment you had more offers to help than you could use.

 

 I remember being told that the reason they were very picky in who got hired was that they felt that they had to be sure you were someone everyone liked, because firing people was not an option.  And they did not want to hire some dead weight or someone who was a jerk because they’d be a dead weight jerk for forty years before they could get rid of them.  I’m serious about this, firing people was not an option, it was a last resort that was only available if someone was stealing or careless about the safety of others.  If they were just lazy or untalented, they were not at any risk of being terminated.  I’m not saying this was a good system, I’m just saying that was how work was back in the day.

 

 

It was a family model. Think about it, you do not get to pick family.  If you have a child, that kid is yours no matter how he or she turns out a few years later.  And if your uncle is a cretin, he is still your uncle and will still be there for Thanksgiving.  That’s what our company was like.  And it shaped everything we did.  We stretched ridiculously around the unmotivated or incapable employees to make sure the work got done in spite of their lack of productivity.  And the family model got abused over time.  Once someone figured out they were not going to go any higher in the organization or see much higher pay they often just started mailing it in.  About the worst they could expect was a stern talking to but everyone knew, we did not fire people.  On the plus side, if you got sick the company would go to crazy lengths to preserve your job and the owners would even write personal checks to help you pay your bills while you were off work.  As a junior employee, just one unknown worker out of hundreds, I remember the top guy in our company giving me a toaster oven when I got married.  I was probably six levels below the man, I’m not sure even how he knew I was getting married but I suspect he did that for every employee.  And it felt good to be noticed.  I would have done anything for him after that, not for a toaster but for the recognition and the feeling of belonging that came with it.

 

And we had parties all the time.  The big boss would rent a local restaurant at least once a month and the drinks and the steaks flowed like water.  There were cook outs and departmental get togethers, just like one giant family staying in touch with each other. I am struggling to convey how this felt because things are so different now.  Maybe the best way to say it is when I got up on Monday morning to go into work, I was happy to be going there.  I loved my weekends too, but I did not see going into the plant on Monday as a chore.  It was more like going to see family.

 

Things were like that for a very long time. I guess the family feel of work waned slightly over time but not greatly.   Things stayed warm and fuzzy at work until late in my career when “it” happened.  Our owners sold us to a Fortune 500 corporation and it changed our world. I went along as part of the sale, it was actually part of the contract.  By that time, I was the senior guy and they did not want to lose the institutional knowledge I carried.  I was actually pretty excited at first, because the pay got better and there were added bonuses like compensation tied to the price of our stock. When that stock took off like a skyrocket, we had a lot of happy employees who saw their compensation double overnight.  But it was not all good, because the world of publicly traded companies did not follow the old family model.  They had a new paradigm, I call it the professional team model.  In a family think about how loyalty runs. Blood is thicker than water, even siblings that don’t get along have each other’s back if an outsider pushes them around. You stick by family because you are stuck with them, they stay your family forever. But not so with the professional team model.

 

I like football so let me use the New Orleans Saints as an example.  They are a great team, they win more than they lose but who do you think the New Orleans Saints owners and management is loyal to?  They are loyal to Drew Brees, arguably one of the all-time great quarterbacks in football, aren’t they?  No, they aren’t.  The day Brees is no longer the best quarterback they can put on the field he’s history.

 

Management is loyal to the team, not the players.  They treat the players great as long as they are on the team but the second they feel like they can replace a player with a better one they will.  And then that replaced player, well, he’s basically dead to them.  And I’m not picking on the Saints, I could have picked any professional or college sports team in the country in any sport.  Teams are only loyal to the team, not to the individual players, if they lose a step.  And that’s not illogical, teams are about winning and you can’t win if you carry a bunch of worn out has-beens on your team.  It makes perfect sense.  And it is what most modern Fortune 500 corporations use now as their model.   Hire the best you can and weed out inferior talent constantly.  And it works for them, usually.  Having a bunch of Drew Brees types at your company is going to make you money.  As for the people that get cast aside?  Those people aren’t your problem any more, they are no longer on the team, so they no longer matter.

 

I’m not going to weigh in on the morality of the family model versus the team model of business.  There are pluses and minuses to both.  I enjoyed being part of a family company more but I made a more money working when we switched to a team model.  I also fired more people in my first year on the “team” than I fired in thirty years of being part of the “family”.  And that part was awful, but I did it so I have to take responsibility for it.  I do think it helps explain why the millennial generation generally views the corporate world with distaste and explains a lot of the impetus behind the FIRE movement.  I never considered trying to get out of my family style corporation as early as possible.  It was a warm, safe and entertaining place where I felt at home.  But after a couple of years in the team style company I was ready to go.  I did not like the fact that I was only worth what I offered the company today.  No matter how well I had done yesterday, only today mattered.  I will give the team model credit for my slightly early retirement.  If we had stayed a part of the family model I would probably still be happily working and would have missed the last three years of my retired life which I now know to be much better!

 

If you are part of the 9 to 5 world, or have been, does your company feel like a family or a professional sports team? 

 

If you are a “senior” member of the workforce have you seen a transition from being part of a family to something that has lost most of its loyalty to you as a worker? 

 

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Once in awhile you just have to go first class!  Of course, there are a lot of If’s attached to that. If you can afford it, if it is worth it and for some people…if you are debt free, if you are financially independent and if you are no longer part of the 9 to 5 world because you saved enough to purchase your freedom.  I can check all of those boxes and so can seven of my favorite friends, so when one of them texted an invitation to me and to the other six about spending a weekend in New Orleans to enjoy the haute cuisine and also one of the premier NFL matchups of the year (Saints vs Rams), I said sure!

 

What does a weekend for eight in New Orleans cost?  Well the 8 game tickets were $3,050 for Bunker Club 40 yard line lower deck seating.  It is unbelievable how big those NFL guys are when you see them up close!   The hotel bill was $2,800.  That’s only half of what it could have been because we always room two together to add to the camaraderie of our sports outings. Food was a biggie, because you know it is New Orleans and the Redfish Grille and Court of Two Sisters aren’t budget restaurants.  All in eats and drinks ran about $4,300 for the weekend.  Transport, since we are within driving range was about $1,600 for the four vehicles involved.  Miscellaneous shopping was around $800.  That adds up to $12,550 or about $1,570 each, for a football weekend.

 

The better part of two grand is a lot of money for a 3 hour football game and a couple of days walking around the French Quarter.  On the other hand, it is an insignificant part of my world at this point in my financial journey.  And for the others it is merely pocket change.  The group included three former CEO’s of large corporations, a surgeon, the owner of a large company, a wealthy accountant, a former C-suite executive of a Fortune 500 and me.  While I have a reasonable amount of assets by most people’s standards, I cannot measure up to any of them financially.  But these are warm, wonderful guys and they treat me just like they treat each other, with the same razor sharp wit and sarcasm you’d expect from any group of close friends.

 

We all match the image of the old American dream, each of us started in modest circumstances and each of us have become financially independent as a result of our careers, no trust fund babies in the group.  In my case my dad was middle class and I worked my way up in the corporate world because I was the rare engineer that could also write and speak well before groups.  The former CEO’s were born in Podunk little towns and worked hauling hay or on the docks.   One even obtained his law degree in night school while working a full-time job. The trucking company owner worked with his dad to build a profitable operation out of nothing.  The doctor got his medical degree courtesy of the Army and served our country for many years in return.

 

In the conversations over the weekend I noticed a few things that were common traits.  Reading was one, we all were voracious readers of non-fiction.  Another was fitness, everyone was a gym rat to some extent, except for me and I am a runner and tennis player.  Strong family ties were another common trait.  Even though not every marriage had worked out they were great fathers and very committed to their kids and spouses.  Adventure travel was a common theme. Most of us enjoyed  hiking,  mountain trekking, running or cycling and had traveled more of the world than average, although I was bringing up the rear in that category.

 

There were differences too.  I was the only STEM guy in the group unless you count the doc. By majors we had one engineer, one lawyer, one physician, one accountant and four business majors.  Six or seven of the group were former Greeks, as in fraternity members.  Only the engineer, me, and one of the others never pledged and never wanted to. The other seven were popular kids in high school and on their school sports teams, I was a late bloomer and only found my groove once I was launched on my career.  None of them were overnight successes and none of them were millionaires in their thirties.  None of them retired early or even slightly early, except me.  For most of them work was their main hobby and it was a hobby they loved.  In spite of that all of them seemed to truly enjoy their retirement.  However, retirement for them included being on corporate boards for which they receive significant compensation as well as volunteer work.  And in my case retirement involves paid consulting a day or two a week and much non-paid volunteer work.

 

Two of them have not retired, and not surprisingly they are the two that own their own companies.  One is the surgeon who owns his own clinic and practice and one owns a trucking company and has a lot of real estate.  They both are struggling a little bit with what retirement will look like for them since they have no heir apparent to take over their business if they stop working.  The surgeon can scale back his hours, and in fact has already begun to do that but the trucking guy, that’s a harder problem to solve.  His is a business he built with his dad, and walking away from something like that is not an easy choice to make.  There are far too much blood, sweat and tears invested.

 

Are they happy?  I am, and I believe they all are.  It is a ridiculously optimistic group and for good reason.  They can base their anticipation of future joy on a lifetime of past successes.  All of them have faced tough situations but the pattern of their lives, and mine, is winning more than we lose.  And of learning from losses and getting back up and moving forward again.  We are all boomers so we share parents that were of the Greatest Generation even though they are almost all gone now. In each of our cases they patterned grit and perseverance for us and left us with family names that we dare not tarnish.

 

On the other hand, we recognize our privileges. We are white males, we had stable two parent homes and our parents paid for our college educations so we graduated debt free.  We also had outgoing personalities and lots of confidence and built networks that gave us a huge advantage over the less connected people we competed with.  Nobody feels apologetic about their success any more than those NFL players have to apologize for their incredible speed, coordination and strength.  Just like them, our success has been a combination of things we did nothing to earn along with things we worked hard to develop. All of us have a desire to see others reach their full potential and all of us volunteer in areas that help others in need.

 

It was a great football game, perhaps the game of the year in the entire 2018 NFL season to date.  Certainly, it was two of the most talented teams in football going toe to toe in a game with drama to spare.  And it turned out well for the eight of us since we live in New Orleans Saints territory!  Who dat say dey gonna beat dem Saints?  But the value of the weekend had little to do with football.  It was about the stories we told each other about our parents, our kids and ourselves.  Just as our parents have mostly passed, we are now rapidly becoming the “old guys”.  And old guys are much more reflective on the past.  I’m very happy that our reminiscing is about the good times we have had so far on this journey and the ones still ahead.  There was scarce little regret voiced about the past in spite of some divorces, spouses that died out of time and kids who are still trying to get life sorted out.  It occurred to me that these men did not spend much time worrying about things they could not change but focused on the best future they could imagine.

 

It is often said you are the average of the five people you hang around with.  I hope so, because my friends are the kind of people I want to be.  Their positive, optimistic and giving natures are good examples and they inspire me to be a better person.

 

What about you?  Do you have a group of quality friends that you want to be more like? 

 

Or are you spending more time with people who are going nowhere?   

 

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My brother and I were blessed with good parents.  They had a knack for mixing just the right amount of freedom and control to guide us from childhood to becoming young adults.  They were healthy and happy and we had a calm and peaceful home, even during our teen years.  They paid for our college educations and that led to our both having good careers.  My dad was a particularly good example of financial discipline and even though he only made middle class wages as a traveling salesman for household products and then later as an insurance salesman, he became a millionaire due to diligent saving and investing.  He only owned one house and paid for cars and all our consumer goods with cash.  He paid every credit card off in full every month and while he had some nice tools and a nice fishing boat and my mom had her diamonds, they were generally quite frugal.

 

My parents liked to travel after we left the nest, at least at first.  But fate dealt them cruel blows when my mom developed a fear of travel and of strangers, perhaps a sign of early onset dementia, and my dad developed Parkinson’s.  Parkinson’s is a devastating disease which slowly but inexorably robs you of control of your body.  It was particularly ironic that it happened to him, because my dad was very health conscious.  He ate well and was slim and even got up and walked 3 miles daily in the early mornings.  Yet he was awarded the silver bullet of a terminal and incurable disease with no known cause or cure.  We watched the decline, which began slowly, limit his mobility and his ability to use the computers he so loved.  He had been a computer fan since the very first personal computers came on the market, yet eventually he could no longer type on a keyboard and was wheelchair bound.  And that brings me to the Dollar Store.

 

One of the things Parkinson’s victims have to come to terms with is a relentlessly shrinking sphere of capability. As he lost mobility he focused on the hobbies he could do while stationary.  Those were photography and computers.  He had an assortment of digital cameras and photographed waitresses, store clerks and all of the nursing home staff.  He’d then print 8 x 10 glossy portraits that he would give away.  People loved it when he’d hand them a photo of them at work. He became known as the “camera man” by the retail and food workers at the places he would frequent.  Eventually he no longer maintained the dexterity to operate cameras or to print out photos.

 

My dad was not a brilliant guy but he was creative and a good problem solver and it was no accident that the last hobby he was able to maintain was shopping at the Dollar Store. He wanted to go every week and my wife or I would take him.  He would buy toiletry items and office supplies, things he had used in his daily and working life.  He did not need them, there were piles of them in his room at the nursing home that the staff were constantly removing to make a place for his next shopping trip.  But it was a profound act of “doing something” for him.   He pointed at what he wanted as I pushed him through the store and I would put it in the cart.  And he would pay for it himself.  It was one of the few meaningful activities he could still pursue at the end.  Honestly now that he is gone, it makes me cry reliving dozens of trips like that.  It was sad and uplifting at the same time.  Sad that it was all he could do and uplifting because I got to help him do it.

 

He had lived a life most of us can only imagine.  He was a WWII disabled veteran with some serious war injuries.  He ran the radar on an aircraft carrier in the Pacific Campaign in that war while Kamikaze airplanes dove on the ship trying to sink it and submarines narrowly missed with torpedo attacks. After the war he attended and graduated from a highly rated liberal arts college on the GI bill.  He married a brilliant and beautiful lady and stayed married to her for 63 years until death stole her from him.  He worked jobs he did not particularly enjoy for fifty years to provide for his family.  He never had a cent of consumer debt, paid the house off early and became a millionaire on middle class wages.  He paid his two sons’ way through college so they could graduate with no student loans and modeled for them how to be successful with money.  He never said a mean or angry word to his wife, our mom, and always treated her with respect. Until he was unable he always opened her car door and gave her a kiss.  In a world that was very much racially divided I never heard him utter a single slur or derogatory remark about someone of another race. I never heard him speak badly about his boss, his friends or our neighbors.  I did not realize how special he was until later in life.

 

My generation of boomers is one of the first to be horribly prepared for retirement.  We started work in a world where retirement was a promised fat company pension, only to see those plans dismantled early in our working careers to be replaced by 401K’s.  In my case I had been in the work world for ten years before I even had access to a 401K and my fat pension, well, I was cashed out of that after seven years for the tidy sum of $2,000.  Like most of my fellow boomers I was positioned for disaster.  I had three kids to put through college and aging parents, a perfect sandwich of responsibilities that has wrecked many of my generation’s financial futures.  Yet I’m good, I’m fine.  My dad never needed a penny from my brother or me.  In fact, he left a million dollar legacy for each of us in spite of my parents burning through the better part of ten thousand a month for their health care the last few years of their lives.  We are supremely fortunate that he turned middle class wages into a small fortune by doing exactly what the FIRE community preaches now.  Spend less than you make and invest for growth.  It worked for him, one of the greatest generation, it worked for me and my brother, boomers, and it is working for gen Xr’s and millennials.

 

I was always proud of my dad, I knew he was a good guy, principled and dedicated to his family.  I knew without a shadow of a doubt he loved me and was proud of me.  In a lot of ways my success in business and as a parent are things I owe to him.  He taught me to naturally like other people.  To be inclined to appreciate their good points without worrying much about their flaws.  And he taught me to save and invest and to spend frugally.  But I did not realize how special he was at the time, I just thought everyone was like that, until I later realized that almost nobody is.  It was so sad to see his abilities collapse in on him as Parkinson’s took its toll on his body.  But it never conquered his will.  At the end his trips to the Dollar Store were the highlights of his week.  And while that was profoundly sad on one level I am eternally grateful that I was able to take him on those trips where he could be in charge and could do something normal, something we all take for granted.  It mattered to him, it was all he had left.  And strangely, it was enough.  I miss you Dad.

While I often write about money I also write about my personal experiences.  One of my favorite posts was about how one seemingly small step out of my comfort zone changed my whole life.  Today I want to write about a pivotal email I wrote seven years ago that led to the biggest promotion in my career and to the slightly early retirement I enjoy today.

 

My entire thirty plus year career was with a single company.  But I also worked for three different chemical companies during my career.  Say what…?  No, it is not a clever riddle, I just worked for a company that was sold off twice while I worked there.  Corporation A owned our company when I was a summer intern and later a graduate engineer.  Corporation B bought our company from Corporation A six years later.  Corporation C made Corporation B an offer they could not refuse and my company once more became part of something new.  This post is about my last four years of work, at Corporation C and how taking action to do one little thing made all the difference.

By the time Corporation C bought the plant I had already done just about every job imaginable for our company.  I was an intern, an engineer, a senior engineer, a supervising engineer, an engineering manager, a plant manager, a Vice President of Operations and the Vice President of Government Affairs.  My career had been a fast and steady climb up the corporate ladder and had only recently been derailed slightly when I was transferred from VP of Operations to the Government Affairs position.  It isn’t that I didn’t like being in a lobbyist role.  I did, it was fun and extremely different than my previous work but it was clearly a step down and the kind of sideline role given to a fast riser who has topped out in terms of his advancement potential.  As a super competitive personality type I did not like being shunted off to the side.  Also, the position was something of a luxury for a company our size and was very vulnerable to being eliminated during future hard times or if our company was sold to a larger corporation.

And of course that is exactly what happened when Corporation C decided to buy our company.  I was in a precarious position because Corp. C already had a Vice President of Government Affairs and probably did not need two of us!  For the first time in my career I was scrambling to save my job.  Fortunately, I had just discovered that there was a possible way to get a thirty million dollar tax break for the company and was able to convince our new masters that we should take a shot at it.  I was assigned to work with one of their executives and between the two of us we turned about 12 weeks of work into a $36 Million profit!  It was a huge win, one of the largest of my career, and it did get me noticed by the CEO. However, it was obvious he was all about the future and did not think I would be able to repeat that once in a lifetime bonanza.   And to be truthful it was not likely I would ever stumble over something that big again.

Six months later the CEO and his team put together a list of redundant people.  I was on the list, as was our company attorney, and several other people that had duplicates in the Corp. C ranks.  He called each of us in for an interview, actually he visited us in our offices instead of the other way around.  He just walked in with no warning and asked me “What do you do here, and why should you stay?”  No pressure, right?  As a lobbyist I usually had a glib answer for any question but I was kind of stumped.  The fact was I never volunteered for the job and always felt my skills were better used running the company than influencing legislators and regulators.  That apparently showed through whatever lame answer I made and I could tell he was mentally crossing my name off the list of people to keep. I left that interview feeling very defeated.

The last thing he asked me was “How did you get so beat down?”  I was floored because until that moment I did not realize that I had been feeling “less than” for the last few years.  I knew I had been diverted off to the side, away from where the really big decisions were being made.   But I was winning a few fights and what about the $36 Million I had just brought in?  But he was right, I had gone from being a shining star at the company to being in the administrative backwaters.  I was the guy who had run the whole place, and this 40 year old CEO could not imagine how anyone with talent could allow themselves to get derailed from the fast track. He walked out and all the things I should have said flooded into my brain…too late.

I have to step aside from this story to tell you about my dad.  My dad was a believer in writing letters (this was before email!).  If a company did something really cool, he would write the CEO a personal letter.  He loved to fish and it occurred to him that fishing gear tackle boxes ought to have wheels on them like rolling suitcases.  So, he wrote the CEO of the leading tackle box manufacturer a letter suggesting that. The CEO wrote him back and said they agreed and to expect a package in the mail.  They sent him the factory prototype of a huge rolling suitcase type tackle box that they decided against making, because it was too big, but they wanted him to have it.  Another time I was riding in my car listening to a guy who used to have the radio program with the most listeners of any program in the world, Paul Harvey.  He mentioned my dad’s name in one of the commercial breaks, and then he mentioned my name and my brother’s.  Ten’s of millions of people were listening as he went on to explain that my dad had written him a letter about a product he advertised, a Bose Acoustic Wave machine. It was a very nice compact stereo system in its day, that Dad had given to me and my brother and it made for a great commercial.  Those are just two times, out of many, that come to mind when my dad, a man who wrote letters, got surprising results.

 

Back to my story. I was looking at being fired from the only company I had ever worked at.  A company where I had gone from part time intern to running the entire operations. A prestigious company that was a household name in the region with billions in sales and hundreds of employees.  Getting fired because I was redundant and irrelevant!  What to do?  I thought about my dad and I wrote a letter.  I wrote an email of course since letters are kind of 1985, but same thing.

 

The email opened with thanking the CEO for pointing out something I had been blind to.  I had indeed lost my mojo accepting a job that did not inspire me.  But I had talent, I knew the plant, the logistics and the people and I could lead.  I told him if he gave me a job, any job, I’d show him.  That’s pretty much all I said, I made no excuses.

 

A few days later he walked into my office again, unannounced as usual, with just one thing to say, “You wrote me an email.” And then he walked out of my office, that was all he said.  Later that day his number two guy came into my office, sat down and asked me if I’d agree to run the company again.  I said yes and that started the most exciting, profitable and intense part of my entire career leading up to my early retirement four years later.

 

Life swings on such little things.   Early in my life everything changed when I stepped out of extreme shyness to act in a play.  And then decades later after a terrible interview I threw a desperation long pass toward the end zone and life changed again.  Most people placed in the position I was in would have been fired.  Because they wouldn’t have written the email.  I certainly would not have sent it except for my dad, the man who wrote letters and achieved surprising results.  Maybe you need some surprising results in your life?  Sometimes it pays to go to straight to the top with what is in your heart.  What do you have to lose?

 

What about you, have you ever written an email that made all the difference?

 

Did you ever face a crisis, and then realized what your dad would do, and did it? 

 

Please leave a comment by clicking on the title of the post.

If there is one company’s name that pops up in more blog posts than any other it surely has to be Personal Capital. One reason might be that this generates some micro-income for bloggers but more likely it is because Personal Capital’s free suite of personal finance tools are arguably the best thing since Diet Mountain Dew.  Let me assure you I get nothing for promoting Personal Capital or any other entity (including PepsiCo).  I pay for this website because I like to write and I do not monetize anything associated with this hobby.  I do have some hobby side gigs that are profitable but they don’t include blogging.

Just because I’m not getting paid does not prevent me from being a fan. But unlike most in this community I am not only a user of Personal Capital’s tools to track my net worth, income and expenses I am also a paying client.   And because I have over $1 Million under their management I’m also in their Private Client group. Yesterday my wife and I hopped in our $7,000 car and drove five hours to attend a private client appreciation event in Dallas, TX.  We checked into a brand new Hampton Inn in Plano and killed a couple of hours reading then headed to the restaurant.  Let me apologize here for destroying your dreams of what life is supposed to be like if you have millions of dollars and spend your time however you want, free of a 9 to 5 job. Yes, we do have a 2008 model car with 170,000 miles on the odometer and I stay in a lot of Hampton Inn’s, both on leisure and consulting trips.  In fact,  it was a very nice new hotel and it was only $87.  And for people that do not think older cars are reliable we just got off of a 3,050 mile road trip in that car without a single problem so driving five hours to Dallas was no big deal.

 

The restaurant was new to us, a place called Jasper’s, and it had great ambiance, terrific service and excellent food.  Although we were being treated by Personal Capital I did look up the menu and the prices were lower than I would have expected for the quality that was delivered.  We valet parked and were led to the room that had been reserved for the event and found ourselves in the company of about 30 other private clients with at least a million under Personal Capital’s management.  It was a little odd, how often are you ever in a room where everybody is a millionaire?  It was fascinating to mingle and observe these millionaires in their native habitat, a trendy swank restaurant.  I do not know the net worth of the group but the median account in Personal Capital’s private client group is about $2 Million.  Also, most people, like me,  have other million dollar accounts in their portfolio besides their Personal Capital investments so it is reasonable to assume that everyone there was a multi-millionaire.  It was almost all husbands and wives together with only a few singles.  The average age was probably late 40’s, at 62 we were among only a handful of boomers there. Everyone looked very fit and slim and the preponderance of the group were involved in IT as engineers, network specialists or in sales.  There was no dress code specified on the invitations and people ran the gamut from faded jeans to suits.  I think I was the only oil and chemical guy in the group which surprised me considering Dallas is, well, Dallas.  And Dallas used to be all about oil, now not so much.

The two other couples at our table were both involved in networking IT, the husbands quickly found common ground having both worked for Cisco in the past.  One wife worked for a big bank and the other maintained a vow of silence all evening so we never learned anything about her. Interestingly one of the two guys was currently unemployed which doesn’t fit most people’s millionaire model.  Neither professed a plan to retire early.  Neither couple professed any frugal tendencies and the houses they mentioned were 4,500 square foot McMansions.   They were very bright, good conversationalists and nobody seemed interested in one upping anyone else.  They all complained about Dallas traffic on their commutes.  I did not meet anyone else there that was retired but I only got to speak to a few of the attendees.

 

Our main host was one of the big dogs at Personal Capital, Michelle Brownstein.  She was young, brilliant and is the Director of Private Client Services.  She had a couple of representatives from the Dallas office with her as well.  While we ate Michelle and her teammates presented on the current markets, Personal Capital’s newest tools and some “inside baseball” on how the company functions.  It was very interesting and I came away feeling even better about their management of one of my investment accounts.  Was it worth ten hours of driving and a night in a hotel?  Yes it was, and especially valuable to my spouse who knows where every penny is but who prefers to let me direct where we invest.

You may wonder why I pay anyone to handle my investments and it is a fair question.  After all, I currently help manage  $65 Million in foundation trust investments as a volunteer and have managed two similarly sized company retirement plans in my working past, plus I’m a personal finance blogger.  I have the knowledge to handle this myself and not pay anyone else a fee to do it yet I have most of my portfolio split up between Personal Capital, Vanguard Managed Accounts and Betterment, all of whom charge management fees.

Why do I pay fees?  I do it because I do not enjoy managing my money, I prefer to trust professionals and the fees at my stage of life are not going to significantly impact my net worth.  Plus, wives outlive husbands in most cases and if I take a misstep on one of our extreme hikes or ski off a cliff (again) she can just leave everything on auto-pilot if she so chooses and be assured that all will be well.  Personal Capital charges me 0.79% for managing my account because it is over one million.  There is another fee discount for accounts higher than three million and I may move enough money to qualify for that at a future date but I’d like to ride out a major correction or bear market with all three and see how their different takes on diversification hold up.

Now my wife would be upset with me telling you this next thing, if you knew who she was. But since my anonymity is still iron clad I’ll go ahead.  My wife and I had ribs, one of three choices on the event menu.  We are runners and tennis players and cannot afford to haul around any extra pounds so we are pretty light eaters.  The four-high stack of rib clusters on each of our plates was twice what we could scarf down on our best day, so as usual, we left half of our food untouched even though it was incredibly tasty.  When the waitress picked up our plates she asked if I’d like it boxed.  I usually would not do that at a social event because, I don’t know, it seems way redneck? But since she asked I thought, why not? She took the plates away and discretely handed us our doggy bag on the way out.  So, half of last night’s meal is riding in our cooler in the back seat as I type.

I am pretty sure nobody else did that and I would not have if the waitress had not made the suggestion, but I’m glad we did.  Wasting food always feels wrong and eating leftovers from a nice restaurant meal feels kind of like finding a ten dollar bill on the sidewalk.   We are not strict frugalists by any stretch but compared to most of the others in the room we were.  We have a modest house and older cars and we do get left over doggie bags frequently when we eat out.  We stay in borderline budget hotels.   And there was one other difference.  We have both been retired for several years at a slightly earlier than conventional retirement age, and the other people at the event did not seem to even realize that was possible.  The unemployed fifty-something multimillionaire sitting next to me was actively promoting himself to the guy on his other side as a job candidate for another 9 to 5.  It had not even occurred to him that maybe he did not need a job.  Being immersed in the FI and FIRE communities I had come to think that most millionaires probably were just like the rest of us and saw money as giving them the option to hang up the 9 to 5 in favor of something new and exciting.  Sitting in a room with thirty multi-millionaires has convinced me that most do not think they can afford to retire.  I felt like the odd man out or maybe the only one in the room that really “gets it”.

As an aside I’ve heard people speculate that the Millionaire Next Door model of the discreet stealth wealth millionaire, who used to be represented by the small businessman who ran a scrap metal yard or a small plumbing business is now more likely to be an IT person.  By far the majority of the people at the client appreciation event were in the IT or corporate sector.  I did not meet anybody that met the old small family business stereotype.  I think that the model has changed since the world has become so small and interconnected by the web.  Yesterday’s scrap metal guy is today’s app coder or search engine optimization expert.

I am a Personal Capital fan because I like their investment philosophy but I also hedge my bets by having Vanguard and Betterment do their own unique style of investing with my other investment accounts.  My wife and I started out with nothing except our college degrees. We got here by living below our incomes, saving aggressively and avoiding lifestyle creep.   And in no small part due to the fact that I found a career that I loved and that loved me back with affirmation and strong compensation. We used all the investment vehicles available to us including 401k’s, IRA’s, Roth’s and taxable brokerage accounts.  The simple truth is how you invest is relatively unimportant compared to how much you invest and how early you start investing.  But if you are not keen on managing your own investments then Personal Capital is one place you might want to check.  They have a fairly unique stock investment plan that is not market cap weighted.  That means I am not so concentrated in Facebook, Amazon, Netflix and Google as an S&P 500 index fund would be.  They have great tools and are growing exponentially in the amount of money under their management.

 

So what about you, is anybody else a client of Personal Capital’s money management services? 

 

Does it surprise you that a room full of multi-millionaires was not familiar with the concepts of financial independence or aware of the early retirement movement? 

 

As always, if you’d like to make a comment just click on the title of this post!

I listen to a lot of podcasts on financial independence, investing and early retirement.  Today I listened to one and I was shocked at the podcaster’s response to a question.  I do not know this podcaster personally but I have listened to many of her podcasts and I think she is bright, knowledgeable and very entertaining.   Also, I know myself well enough to know that just because I disagree with someone doesn’t mean they are wrong, so let me paraphrase this person’s question and the podcaster’s answer and you tell me if you think she missed it or if I’m just out of my mind.  Because I am not going to throw mud at someone I enjoy listening to I’m going to call my unnamed and androgynous podcaster Heather and I’ll call the person who asked her a question Seth.

 

Seth from San Francisco called in to her show and gave Heather these facts.  He and his wife have no kids and a $400,000 combined income.  They have a paid for house or condo worth $300,000 and no debt of any kind.  They have $2.6 Million dollars in investments and savings and will grow that by another $400,000 by the time they reach their planned retirement age of 52 in four years. About half of the money is in tax deferred accounts and the other half is in Roth and taxable accounts.  They will be able to access over a million dollars of the money with no age restrictions and the rest will be available when they reach 59.5 years of age.   In four years they plan to retire early and will sell their place and move to a low cost of living area and use the sale proceeds to purchase another home.  They can live comfortably on $50,000 per year plus whatever health insurance costs.  Seth’s question to Heather was, “Is $3 million enough to retire on at age 52?”

 

Now as a listener to this podcast at that point I did what you do, I immediately tried to guess the expert’s answer before she revealed it.  And again, like you, I mentally reviewed the dozens of podcasts and blog posts I have read where people gave their “number”, the magic amount they had determined would fund the rest of their lives without working, at the standard of living they wanted.  These are usually based on multiplying the annual living cost of the family by 25. This in turn is based on studies that show you can withdraw an inflation adjusted 4% of your investments every year and generally you won’t run out of money either for 30 years or probably forever.

About equal numbers of people seem to think you can safely pull as much as 5% or maybe only 3% depending on your own risk tolerance and how well the markets do over the next few decades.   I think the lowest magic number I’ve seen was around $350,000 and I’ve seen a lot of people who felt $400-$450 thousand was more than adequate.  I’ve seen a few people propose that the number could be as high as one million or perhaps as high as $1.5 million.  And one of the great ones, the Financial Samurai, points out that if you intend to live in San Francisco you are going to need a lot more than you think! But remember, Seth expressly said he and his spouse are moving to a low cost area somewhere in the US.  In fact they were making exploratory trips right now to locate the ideal retirement spot.  And to top it all off they are kid free and plan to stay that way.

 I expected Heather to say, “You’ve got this!  You don’t even have to wait to age 52 you are good to pull the trigger on retirement today!”  That would be in keeping with almost every bit of advice I’ve seen floated in this community of bloggers and podcasters.  Instead she said it was “pretty risky to call it quits at age 52 with three million”.   Yikes!!!    Further she suggested they either consider continuing to work until age 55 or plan to work part time in retirement.  Double Yikes!!!

 

What do you think?  Did Heather step in it this time?  I’m not really sure because usually when I question an expert it becomes very apparent why they are the expert and I am the grasshopper.  But when I look at the facts as presented I cannot find a shred of risk in Seth’s plan.  Remember, he is not going to stay in high cost San Fran, he is headed for somewhere where costs are low.   If he can indeed live on $50,000 per year comfortably (plus health insurance) then using the conventional rules of thumb let’s run the numbers.  First take health insurance, my wife and I are older than Seth so our insurance is more expensive than theirs will be.  Using our costs of $16,000 per year added to their base cost of living of $50,000 results in a total cost of living of $66,000 per year.  Applying the 4% rule Seth needs only $1.65 Million in investments to fund retirement but he will have $3 Million!  Instead of a 4% withdrawal rate Seth’s actual withdrawal rate will be only 2.2%.  Or to look at it another way Seth could afford to spend $120,000 per year safely from his investments and he is only going to need to spend about half of that.

 

Very few people, as in absolutely nobody, as far as I know, until now, have suggested that a safe withdrawal rate of 2.2% is “risky”. Barring the Zombie Apocalypse or the Illuminati Uprising Seth should be solid gold with his numbers. Think about it,  if the Seth’s, with no kids, three million dollars, no debt, paid for house, willing to move to a low cost area, and perfectly happy at $50k plus insurance annual cost, can’t retire at 52 then how can any of the thousands of thirty somethings and forty somethings out there be doing it right now with only a fraction of three million dollars?  So am I missing something or did Heather (not her real name!) just jump the shark?

 

Somebody help me here, explain why this retirement plan is too risky to execute, because I’m just not seeing the problem. 

 

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We are all supposed to have an elevator pitch for who we are and what we do.  At least that’s what the entrepreneurial community I blog in fervently advises.  And I get that, because one of life’s most common, awkward, “getting to know you” questions is, “What do you do?”  That is a tough one for me, maybe for you, if you have walked away from the 9 to 5 world too.  Sometimes I say I’m retired, sometimes I say I am a consultant and sometimes I find myself giving a detailed answer to what was a polite social question from someone who does not want all of my details.

 

Maybe it is because as an engineer I have an overwhelming addiction to precision, making me uncomfortable implying something that is not accurate.  Retired, that implies I stopped working for money.  That is not true.  I’ve made twice the median income each of the three years I’ve been “retired”.  Consultant, that implies I’ve got a job.  Jobs consume something like 40 hours a week, often even more.  I work maybe 12 hours a week, or 20 hours one week and then zero the next.  That is not a real job.  Most accurate might be to say, I work part time.  But part time sounds like I’m an associate at Walmart (no offense Walmart nation).  It also sounds like somebody who did not save enough money and is barely scraping by without resorting to cat food sandwiches (My generation is not sure exactly what Ramen noodles are.)

 

I have experimented with things like, consulting is my “hobby job” but people look at me like I’ve lost touch with reality when I say that.  Apparently, the concept of a hobby and the reality of their jobs do not intersect.  I’m sure if my retirement side gig was mountain rescue or photographing super models it might resonate with working people but technical consulting, a hobby, really?  And it is not really a hobby.  My hobbies are tennis, distance running, hiking, fishing, off roading, downhill skiing, watching sports, reading and blogging, in no particular order.   Hard to explain what my side gig work is to me, even now as I try to express it to you.  Even calling it a side gig is wrong, it is my only gig.

 

Last week I went to a part of South Louisiana miles and miles away from anything remotely resembling civilization (no offense Cajun nation).  I spent three days there at a facility reviewing drawings and information about a new expansion they were building at the site.  I had lunch everyday at the only restaurant within driving distance and ate take out in my motel room every night.  I’ll spend a day or two more on that writing a report and probably hosting a conference call to explain it to their engineers and they will send me a check for five days of work plus expenses.

 

I had fun doing that project, but not the skiing down Birds of Prey at Beaver Creek Colorado kind of fun.  And the money, well it is nice to earn six figures. Most people never get to do that, especially for a part time gig.  But I saved a high percentage of my income for decades and invested it well just so I would never need a paycheck after I retired.  And it worked, I do not need to earn any more money. But it still feels good to get paid.

Which still leaves me with the question, why work if you do not need the money?  Unfortunately, the answer is one of those overly detailed ones that doesn’t fit in an elevator pitch, but here goes.  The things my consulting part time hobby job work gives me that I enjoy are these:

Being an expert.  I was never a great athlete in school but I had a very bright mind.  It was easy to see early on in life that most of the time I was one of the smartest guys in the room.  That got me nowhere with the girls in high school but once I made it into the business world it paid off.  I was quick, clever and intuitive and I liked it when people recognized that.  It got me promotions good pay and lots of responsibility at work, in political circles and in all kinds of volunteer endeavors.  As a consultant I still get to enjoy being the guy who can walk in with his leather backpack and rescue people from their problems.

Expenses paid by others. My awesome computer gear, cell phone, software, travel costs, fine dining, entertainment, hotels, airline tickets, gasoline, etc.  are all paid for by my clients.   Sure, I could afford to buy a lot of that but everything is more fun when it is free, or part of the job.   I like my tech toys, I like travel and I like eating out. Even take out in swamp country is kind of fun.  The alligator was not bad!

Keeping my brand alive.  Most people who were connected while they were working find that network falls apart pretty quickly after they retire.  I still work with the same business and government leaders I worked with before so I’m still in the game.  The fact that I only do it a day or two a week is not obvious to them.  If I ever needed to rejoin the rat race I easily could (no offense rat nation).  I’ve turned down some great job offers every year since I retired and expect to keep doing that because my network doesn’t see me as a retired guy.

Some of you do not like your jobs, maybe most of you that are in the 9 to 5 world do not.  And I know your version of life 2.0, after pulling the “financially independent and retire early (FIRE)” trigger, imagines nothing but travel, hobbies and passion projects.  I have hobbies, we travel around this country and around the world as much as we care to, and I do some very worthwhile volunteer work that helps people in ways I can see with my own eyes.  But it is not enough for me, just doing those things.  None of that gives me what work does.  Work gives me an identity and a feeling of significance, of being useful.  Work lets me do things I’m excellent at, and that is very satisfying to me.  And because my work involves lots of different people it provides me a social experience that I know is good for me.

 

What about you?  Do you think you will work after you no longer need to? 

Or maybe you are already financially independent.  If so and you still work, why do you do it?

 

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