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Did you ever do the mental exercise of wondering what you would tell a much younger version of yourself if you could go back in time?  Or how about wondering what a younger you would have put in a surprise time capsule for you to open today?  The latter of those two actually happened to me recently!  My wife was digging through her home office file cabinet and found an old manila folder marked “Re-evaluations[Personal]” and “Private”.  And inside was a journal of sorts, written by me over the first eight years of my career.  These were centered around my annual performance reviews, which at my company, included my annual raises.  I also wrote about my feelings each time I received a review.  It was fun taking a journey back through time, of more than three decades of my career.

I’ve always maintained in this blog that I loved my job right up until the end, and while I worked over thirty years at the same place this should put me to the honesty test about the first eight years, at least.  It starts with my first review six months after I started.

After six months:

  I started work six months ago at an initial salary of $18,000.  Today I had a re-evaluation of my salary with a 10% increase in pay to $19,800.  My boss gave me an excellent overall rating.  The one weak area he pointed out was that I needed to come back to him with questions when I was stuck in a vaporous project with no clear path ahead and needed to keep him apprised of my progress more. But overall, I received a lot of praise which rescued me from a bout of bad vibrations I thought my boss had been sending me. Turns out he’s just like that, pretty much a frowner by nature. 

Takeaway No. 1    Don’t imagine the worst, your boss probably thinks you are doing great even if she doesn’t say so every day.  If you aren’t sure, ask her. 

After 1 1/2 years:

One year later, how can a whole year have gone by so fast? Boss gave me an 8.1% raise.  He said little about weak points and was very pleased with my work.  The only areas that he saw that needed to improve were things like needing more experience, which will come naturally in time. He did caution me that my biggest strength, incredible speed at getting things done, sometimes let mistakes slip into my results.  He predicted a good future for me. My thoughts about my job one and a half years in?  I’m lucky to have a great boss, I have a huge opportunity for advancement and I am happy. 

Takeaway No. 2   Having a good boss makes a huge difference in how you feel about your job.

After 2 1/2 years:

I feel conservatively ecstatic. I received the highest rating yet from a boss who does not rate people very highly, normally.  And the series of raises this year are by far the highest I’ve ever gotten, a total of 19.7%!  My boss had zero areas that he felt I needed to improve in, and considering he is pretty tough on most of my peers, that’s impressive.  But my areas I am assigning myself to improve in are: don’t let up, expand my responsibilities, present projects to management in neat, well documented and concise form (my boss loves that!)  Show my ability to work with less supervision, the appearance of ability to self-supervise is important going forward. 

Takeaway No. 3   Don’t just try to meet your manager’s goals, set your own goals too.

After 3 1/2 years:

This has got to be the best evaluation yet!  4 out of 4 average scores from a boss who has rarely given anyone even a single top rating.  I also scored the top of all the engineers at the facility in a new comparative rating system. The annual salary increase is also very good at 25.6%.   I consider it staggering how well I’m being treated by the company! I do communicate the frequent job offers I’m receiving from head hunters and other companies, which I’m not seeking out (they seek me out). My emotional outlook?  Happy and excited about the future.

Takeaway No. 4   When you get other job offers, pass that information on to your manager.  It will give him the ammunition he needs to get you a better raise.

After 4 years:

Yesterday my boss gave me my 4 year review.  I received the max rating again.  I was also given a promotion to Senior Engineer and another excellent raise of 14.5%.  A head hunter/professional recruiter who called after the raise told me I was now priced out of the competitive market for engineers of my experience level.  How do I like my job?  It is great! There is a nice amount of travel, prestige and appreciation.  I do note that the stress and strain are sort of proportional to the success, though. 

Takeaway No. 5   It is normal to feel some stress even if you love your job. After all they do call it work for a reason.

5 years:

I just had my evaluation.  I received an 8% increase which was above the average for the company and for the department. From here on I’m a player in a game with a lot of other people.  My long-term success is no longer dependent on just my boss but on all of upper management.  I have to achieve visible and valuable results for the company on my own.  This coming year the budget is tight and there isn’t much project money so I’ll have to achieve things that I can do without spending very much.  The pressure is on but I think I’ll have some good things to look back on in another year.

Takeaway No. 6   Pleasing your boss is the main thing at first, but it isn’t enough after a while.   Soon you will need to also show your value to all of your upper management team.

Year 6:

Times are tough around the company, there is basically a wage freeze right now.  We’ll go 22 months without an increase.  My evaluation was excellent and while not getting an increase is not fun, I’ve got a lot of company.  Even the head hunters aren’t calling.  How do I feel about my job? Better than last year, and that’s saying a lot because I loved my job a year ago! 

Year 7:

Things are different.  My boss has been out of the picture much of the year on special projects.  I’ve had to basically run the department at times.  The mystery of running an engineering department is gone, it turns out it is actually very easy and my manager has seen I have a knack for doing it well.  I did get a 9% raise so my pay is still competitive. The entire industry is in the doldrums right now so going somewhere else wouldn’t change anything.

Takeaway No. 7   Most business sectors experience regular cycles of prosperity and recession, it doesn’t mean you are in a bad job when it happens.   There is still opportunity to grow in hard times.

Year 8:

First evaluation with the new owners.  My boss is now the new big boss and I was promoted to fill his old job!  The sale of the company to the new guys was very good for both of us.  I received a 9.3% raise on top of last years nine percent increase.  Salary wise things are still good.  My feelings about my job?  I love it! It is what I always wanted.  I’ve got interesting work, influence, good pay, huge office, fun travel and an expert team working for me.  I was very lucky that this sale happened but in truth it wasn’t all luck.  I had to be prepared for a promotion so that when the job came open, they would pick me for it.

Takeaway No. 8   Getting lucky has a lot to do with being prepared for opportunity when it comes out of nowhere.

Although I worked for decades after, I only kept these journals for the first eight years.  What strikes me most was the fact that every time I addressed my outlook or feelings about my job, it was mostly positive.  I did mention stress but not as much as I mentioned being happy. In the interest of historical accuracy,  those double -digit raises I received were partly a result of the crazy double digit inflation that occurred way back then.   Also, a starting pay of $18,000 per year now is not anything to brag about, but at that time it was among the highest offers received by graduates from my university of 12,000 people.  In current dollars that would be about like a starting salary of $70,000.

When my wife found them, I had no idea what my notes from the past would tell me.  Reassuringly, it told me I was the same person I thought I was, the same guy I still am.  I’m no longer dedicated, maybe obsessed, with winning the career game, but I’m still hyper competitive at sports and games.  I’m still someone who keeps score with money but who was never really in love with spending it on things.

In the years after these journal entries, I went on to manage the entire facility and later the corporation which included several other companies. I also lived through another ownership change that again benefited my career.  However, everything important in my career was due to what I learned in those first eight years.  And most of that was due to having a boss and mentor who held me to high standards but also fervently wanted me to succeed.  And it was a great ride, if I could go back in time, I would not change a single thing!

What about you, do you journal about your feelings regarding your job?

If you had to list the one or two things you’ve learned from your first job what would they be?

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I know I’m an outlier, because I read many blogs and listen to many podcasts and some of what seems mainstream in today’s world seems puzzling to me.  I’m in step when it comes to frugality, financial independence and retiring early but I’m totally out of the loop on some other things.  So, at the risk of alienating my readership I’m just going to testify, brothers and sisters, about things I do not comprehend!

Work stress is awful and potentially deadly?  No, it isn’t.  Stress really just means you care about how something turns out.  So, let’s say you have a stress-free job. Do you think that will make you dance a happy dance every day?  I do not think so, and here is why.  Having no stress means that there is no chance of anything going wrong.  That means your actions have no consequences, either good or bad and no impact on changing anything.  Think Grey’s Anatomy, lots of stress in that show because every episode people live or die depending on what Meredith and her fellow health care workers do.  But faithful fans, like my wife, love the victories and mourn the failures, because the show represents jobs that matter and people who handle the stress of saving or losing lives.  My job was not as glamorous as an emergency room doctor or surgeon, but I had a lot of people to lead and develop and sometimes things caught on fire and sometimes we had life threatening situations develop. Those times were highly stressful when someone could die based on my decisions.  Fortunately, that never happened but it could have, and oddly I never felt more alive than when I was responding to those crises.  And when I had to fire someone, that too, was stressful, and not fun in the least. But it did not wreck my health and spiral me into a funk.  I just did what I felt was right and let it go.  I think a stress-free job would be the most soul sucking, horrible thing in the world.  My job was fun because it was a high stakes proposition.

Work is something to tolerate until you don’t have to anymore.  It doesn’t have to be.  My career ranks up there as one of the best parts of my life.  I got to go from summer intern to managing hundreds of people and several companies.  I got to mentor and help develop some truly gifted engineers that are lifelong friends.  I got to travel all over the US and meet with a president, several governors and more senators and representatives than I can count.  I was on YouTube and network television and testified to congressional committees.  I enjoyed going in to work on Mondays and enjoyed getting the weekend off on Fridays.  Those were my favorite two work days, in fact.  I met brilliant and fascinating people from all over the world. I do not think I could have possibly had such a life of rich experiences without my career.  I worked well past financial independence because I simply wasn’t ready to leave the fun behind.  And my kids are great grown adults I did not neglect, and my marriage is still strong after 40 years.  I wouldn’t change anything about my work.  I still choose to keep earning money I don’t need consulting part time, because I enjoy working.

Cities are the place to be.  Not for me they aren’t!  I grew up in what passed for a large city in Arkansas.  But it wouldn’t even qualify as a decent suburb of Dallas or Chicago, much less San Francisco.  And my wife grew up outside of a town of 300 people, way outside.  We both got good public school educations and college degrees and I chose a small town in Arkansas for my first job specifically because it looked possible to live there for an entire career without limiting my advancement possibilities.  And I’ve been here for 40 years.  Maybe I could have made more money in the big city, but I doubt I could have amassed the net worth we have because life here is so inexpensive.  And I made big city wages with rural living costs.   Things we have learned not to need are lots of restaurants, a close by airport, specialized medical care, traffic, noise, crime, smog, crowds and a high cost of living.  We don’t have to keep our doors locked and our neighbors are like family, often walking over in the evening to sit on our patio and chat without invitation.  We’ve never had a break in or crime in the neighborhood in 40 years. It is quiet, and there is that 800 acres of woods behind our houses, with beaver, deer, bobcats, bears, otters, mink, coyotes and foxes.  And lots of poisonous snakes! We travel often to cities here and overseas and always, after a few days, we crave getting back to our neighborhood in the woods.  You really could not pay me to live in a big city.

Minimalism is a key to happiness. What can I say, it does not spark joy in me.  While minimalism is wonderful for many, my wife and I are very happy and we are far from living a minimalist life.  I only work a day a week, that leaves six to do nonwork stuff.  So, we do a lot of that.  We distance run, we extreme hike and bushwhack, we fish, we ride off road trails, we play tennis, we ski, we pickleball and we travel. And all of that requires some gear to do at a high level.  We have running shoes, trail running shoes, hiking shoes, tennis shoes, dress shoes and work shoes.  We have 16 fishing rods and reels!  Because we bass fish, crappie fish, trout fish and ocean fish and it takes a lot of tackle to cover all that.  We have eight tennis racquets and two pickleball paddles because there are two of us and we break strings all the time, plus in 100 degree heat the handles get so sweaty you have to switch to a dry racquet at changeovers. We have hiking poles, packs, gps apps and a satellite panic transponder for our hiking in the middle of nowhere.  We have a fishing boat and trailer and an off road side by side all terrain vehicle and trailer.  My wife is a wood worker and craftsman so she has a table saw, a router, a radial arm saw, drills, wrenches, screwdrivers and a dozen other tools.  She is a seamstress so she has a sewing machine.  We live on two acres and have a garden so we’ve got a tiller, a lawnmower, a chainsaw and all the normal hand yard and garden tools.  We each have a notebook PC, an iPad and a smartphone.  I’ve also got an iPad Pro which I use in my volunteer work.  We’ve got four television sets.  Worst of all, shudder, we have three cars between the two of us!  Even worse still we have three empty bedrooms we rarely use and two of our four bathrooms that we don’t even turn on unless we have guests.  What can I say, everything I’ve listed is something we use almost constantly, except the extra rooms in the house, and those are paid for.  We like where we live and have no financial incentive to downsize.  All those rooms were very well used when we had three teenage animals living with us. 

Maybe because we are boomers there is no hope for us to get in step with a more modern mindset?  And maybe it doesn’t matter anyway since we are happy and fiscally quite sound in spite of our peculiar preferences.  I hope these candid confessions do not make me sound like a terrible person.

What about you, do you agree with anything I’ve said? 

Are there, perhaps, some popular mainstream trends that don’t do it for you? 

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I tripped over a couple of statistics the other day that made me rethink the plight of the average American retiree. First, the average couple on Social Security gets over $28,000 per year. Secondly the median net worth of Social Security age couples is $228,000. Now it gets more complex than this in the real world but if you combine those into a total net worth of sorts it turns out the normal American who has retired at the conventional sixty something age can actually make a claim at being a millionaire, with a tiny amount of rounding up!

Here’s my math, first the 4% rule indicates that your annual income from investments can be safely 4% of their total value in a year. So if Social Security pays you $28,000 a year then by definition it is roughly equivalent to $28,000/4% which is $700,000. If you add your median net worth of $228,000 to that you are sitting with a net worth of $928,000. Most people would consider that within throwing distance of being a millionaire! So where is this retirement crisis we keep hearing about? These are real numbers, the median net worth is of households 65-75 years old and the Social Security payments are straight from the Gov. It tells me that the median retired family today is doing absolutely great, they are basically millionaires. Their kids are grown and gone, they are on Medicare and their income is not taxed nearly as highly as younger people’s. They’ve got this, they are fine!

But what about the hysteria over total lack of preparation for retirement, maybe we should look at the people who are almost about to retire? Surely they are all drowning in negative net worth? Well, their median net worth is still around $190,000 and there is no reason to suspect their median Social Security checks will be much different from the already retired folks is there? I would expect them to be in just as good of shape as today’s retirees.

And that explains a lot to me, why the streets are not full of starving senior citizens. They are not doing so badly, they are essentially living off of millionaire portfolios with less taxes (some of Social Security is not taxed) and have hugely subsidized health care. The same will hold true for median couples within ten years of conventional retirement. I find it amazing that I can present such a positive outlook on retirement while the mainstream press decries it an absolute national crisis, using exactly the same data. But the facts are what they are.

But does that mean everyone is fine? No, unfortunately it does not. It means that the median couple is. But half the US couples live below the median and half live above it. About all you can say is that at least half of current and near future retired couples will be fine with the savings they already have, and that is without a single source of income except Social Security and their net worth. The other half have less, and some have much less. And it doesn’t take 50% to make a crisis, if even 5% of the population are homeless in their senior years that’s a national crisis. If even one is destitute and starving that is a personal crisis and a moral one for all of us. So do not think I’m saying “We are all rich, everything is OK!” Because I’m not. What I am saying is that most Americans would seem to be absolutely fine and well above any serious financial risk in retirement. And that makes perfect sense when you consider that for the last 100 years the US has been one of the richest countries in world history. It is also a testament to Social Security having achieved its goal for most of us.

So why the disconnect between popular opinion and the fact that median retirees, half of the retired people in the US, are living the financially independent life? At the very least they are living the lean FI life. There are dozens of bloggers in this space whose FI target number is one million dollars or less. That will provide them exactly the same lifestyle as the median retiree has, and they’ve shown it is a pretty ample life if lived frugally. I think, in part, it is the fact that bad news sells and good news bores people. Also to say that the only thing you need to do to become financially independent is to survive until 66 years of age isn’t very sexy. Plus, while my wife and I are still pretty good athletes at sixty plus, most younger people can’t fathom how anyone over fifty can even get around without a walker. There are countless studies that show that fear and pain impact us more than pleasure. So I suspect that we will all still harbor a secret fear that we might be eating cat food in our eighties if we aren’t extremely careful with our money today. Even if the numbers do not support that gloomy outlook.

What is your experience, are over half of the seniors you know destitute and living in abject poverty?

Does a nearly million dollar net worth in today’s dollars provide a decent living for retirees?

Will these same numbers hold true for Gen X and Millennial retirees? They do depend on Social Security remaining unchanged.

Side gigs are all the rage for millennials in today’s world.  With high student debt, salaries flat versus inflation for years and an increasingly regimented and unfulfilling corporate work place it is no wonder that people are looking for more.  More satisfaction and more money are on almost every worker’s wish list.   Having a second job that is flexible, that you can do where you are and when you want, that pays great and makes you feel good about yourself sounds pretty good doesn’t it?  And being able to do that on your current employer’s time clock so that it doesn’t require a lot of additional work hours sounds even better. 

“Wait”, you say, “that’s dishonest.” If I try to run a side business when I’m being paid to do something else, by someone else, it is kind of like stealing isn’t it?   That would get me fired!”  No, in fact if you do it the way I did, it is more likely to get you promoted and to get you some really bountiful raises.  So, listen up, and I’ll share a novel way to start your side gig up today while you are at work and already being paid.

How can you morally and honestly set up a side hustle during working hours?  It is the easiest thing in the world but it does have some short-term drawbacks.  And a really big one is that you cannot get paid for doing it, at least not at first because you’ll be doing it as part of your regular job.  Let me give you an example.  Early in my career I started volunteering to represent my company every chance I got.  My company was a chemical plant that was a big employer and particularly a big science, technology, engineering and math (STEM) employer.  That provided opportunities to judge science fairs, speak to high schools on career day, tour school kids though our plant and give talks to civic clubs.  These were things nobody else wanted to do because they did not see them as part of their job and because many of our engineers and chemists were introverted types who were terrified of speaking in front of groups.  That was an opportunity for me to do something I enjoyed, and since nobody else saw it that way I got to do them a lot. Sometimes they fell on my own time but I considered it an investment in my future.  I was actually starting a side gig as a corporate spokesman even though it was not anywhere in my job description and nobody asked me to do it. 

Over time I got to be a pretty fair speaker and learned how to read my audience and adjust my presentation to not be boring.  Believe me if you can talk chemistry to high school kids for ten minutes and not have their eyes glaze over you can handle nearly any group of adults!  I also met the movers and shakers in our little city. I became friends with the Mayor and the principals of the schools and the visiting politicians.   The other business leaders began to see me as the face of my company.  First that was just local, but in time it grew to where the Governor, our congressmen and the other leaders in our small southern state got to know me as well.  I found myself giving keynote presentations to thousands of other tech nerds and testifying for and against legislation in front of senate and house committees in D.C.  I got on YouTube doing stuff that mattered a lot to my industry leaders and I became friends with many of them.  Company spokesman, lobbyist and public speaking were side gigs I enjoyed but I never billed a penny for doing them. 

We were highly regulated by an alphabet soup of local, state and federal agencies.  Nobody liked the regulatory work.  It could be tedious and scary since individuals could be held to civil and even criminal penalties if the agencies decided that your information was wrong or misleading.  That sounds fair enough except in most cases even the regulators could not explain what the regulations meant or how to comply with them.  They could come back a year later and second guess any permit you had applied for or any reports you had made.  But because it was absolutely necessary to have a good relationship with the regulators and to be trusted to report honestly and accurately, I volunteered for just about every regulatory problem that came up.  I built a reputation with agencies like the EPA and OSHA and also with state agencies that helped our company avoid unnecessary conflict or penalties.  Not in my job description but it built me a network of valuable contacts and gave me negotiation skills that led me into other areas.  The company began to use me to testify in civil cases, to negotiate contracts with our union, to set up business deals with other companies.  None of that was in my job description when I took it on but after a while, I was the go-to guy at making deals, particularly regulatory ones.  It become another side gig.  I didn’t get paid to do it but I did it on company time and it was fun. 

The final area of personal growth I enjoyed was being on the committee that handled our profit sharing and 401K plans.  Again, no extra pay but I got years of free education from financial industry experts, and a charlatan or two, and experience at managing portfolios in the tens of millions of dollars.  I was witness to the wise and insanely stupid moves people made with their money and gained an understanding of what diversifying a portfolio looks like and of the importance of compound interest.  All for no pay, but I considered it a great side gig. 

So that was how I executed my plan.  I volunteered unceasingly for assignments outside of my job description as long as they were in my sweet spots of talent and passion.  And instead of becoming an experienced chemical engineer with some management experience I became a multi-talented corporate representative who could comfortably appear in a television business show, write an Op-Ed for a national magazine and testify before Congress in our nation’s capitol.  I did not turn my back on my engineering skills, I was as good as they came on that score, but I did not limit myself to that narrow a skill set.  I wanted a much more marketable talent set for that time in the future when I might walk away from corporate America. 

Why?  Why take on all those unpaid side gig assignments?  Why not just do the minimum and devote that extra effort to side gigs that you can do on your own time and can get paid for?  Glad you asked, I had two huge reasons.  One, a highly skilled technical engineer can rise to a certain level in most corporations.  That is a well paid $150,000 per year job in most cases in today’s dollars.  Most side gigger’s struggle to make even $50,000 on their gigs. The sum of those two wasn’t enough in my mind, I knew I could do even better than that in just my day job pay and not have to devote hours after work on a second job.  A broad socially skilled engineer who also had the technical chops and who could influence both coworkers and adversaries in a positive way will earn multiples of that amount if he rises far enough in the management ranks.

 My pay rose from what I started for, to 24 times that amount in my career.  Sure, some side gigs might have done that well but not very many make that much money.  I think I can make a strong case that at least 50% of my income was due to my work sponsored side gigs and that nearly 100% of the time I spent on them was company time I was already getting paid for.    And, secondly, I did not intend to stay in the corporate world forever and knowing myself, wanted to have pre-prepared marketable skills that would provide me entertaining work on my own terms. 

And that is exactly what happened. Once I was well past being financially independent and lost some of my interest in my corporate position, I retired slightly early and immediately started getting paid for the same side gig’s I had developed on my company’s time clock.  I used the same network, the same skills to solve the same problems for other companies that I had been solving for mine.  In fact, I kept solving some for my old company too, but on my own terms and schedule.  I do not need the money it makes me but I enjoy earning in spite of that and usually limit my work to a day or two a week, whatever suits me.  And remember I wasn’t finally getting paid for the side gigs, they were always partially responsible for my high pay at work.   Now that I had retired, they just kept on making me money doing things I loved to do. And as far as the financial planning I learned about from managing money for our employees, it made me money by keeping me from making emotional moves in the 2000 and 2008 financial crises.  It also gave me future content for this blog, which is not monetized but is a favorite nonpaid side gig in retirement.

How do you determine if you would best be served by an internal side gig you do not get paid for but that might greatly increase your paycheck over time?  Or if you are better off with the normal kind of side gig that earns you money for doing things on your own time that have nothing to do with your day job?  I think you have to be brutally honest with yourself.

 In my case, the first day I walked onto the job I already had a plan in place to be running the company by the time I was 40.  If I succeeded then my compensation was going to be in the mid six figure range in today’s dollars.  That made having a side income an unnecessary distraction from the rigorous corporate competition I would face to climb to the top of the heap.  And that decided the issue for me, I needed full focus on the prize and I needed to separate myself from my competition by developing skills outside of what it took to excel at the job I had now.  Skills that would make me look perfect for the jobs I wanted in the future. Skills I could take with me after my corporate days were over. 

I sized myself up as well as the competition and knew I could win the top company job and that’s exactly how things went.  But if you look at yourself and cannot see yourself in the CEO role or as the head of a division of a Fortune 500 company because of a lack of desire or talent then it is a bad plan for you.  Outside side gigs unrelated to work are a much better bet if you are not ideally positioned to run your 9 to 5 corporation some day.  And that means for 90% of you the path I took is not a good one.  But if you are in that 10% that love what you do and crave advancing to the top in your field then I think it is a superior plan to buying rental real estate, internet sales, blogging or coaching others. 

The reason I say it beats conventional side gigs is because, its fun most of the time, and rarely feels like work if you are moving up, getting big raises and bonuses and lots and lots of praise from your superiors.  It doesn’t take long hours because you get to do almost all of it on company time.  I never worked killer hours, probably less than most of my coworkers. Some of them had rental units or worked second jobs, I couldn’t have stood the hours they worked on their side gigs on top of their day jobs.  And I did not have to, I could just go home after work and relax.

If you decide to try the route I took, how do you decide what internal side gigs to build at your job?  First let me stipulate a principle that I think is universal.  You never get ahead in life by trying to turn your weak points into great personal strengths.  Every study I’ve seen says that the best choice is to run with your greatest strengths and talents and to compensate for your weaknesses as best you can.  You need to develop a depth of self awareness and self knowledge.  What are your areas of talent that you enjoy pursuing?  It may not be public speaking, it might be in researching issues or in developing procedures, not my favorites.  But you have to know what you enjoy, because if you volunteer for things you hate it will not work.  You will not do a good job at things you dislike and instead of impressing your management with your ambition and skill you’ll just destroy your reputation by looking incompetent.  Once you know the areas you are talented and inspired to pursue then you have to put the same level of intense effort to find ways to volunteer for projects at work that will allow you to showcase them.  It is not easy and takes years to accomplish but the payout can be fantastic. 

What do you think?  Is there a case for pursuing nonpaid side gigs on company time? 

Or is it possible I would have done better and retired with more wealth if I had settled for a less intense career path and focused on outside gigs to build wealth or passive income? 

As usual, if you don’t see a comment box then click on the post title and it should get you there.  Someday I’ll figure out Wordpress!

In my career I worked with a lot of engineers and also with a lot of hourly blue-collar technical workers. The engineers I knew made from $60,000 to $1.5 Million, with most clustered way closer to the lower end of that range.  Only my boss’s boss made the $1.5 Million, and another small handful of the higher paid engineers like me eventually made it up into the multiple six figure range, though most topped out in the $100-150k range by the end of their careers. The hourly workers started for around $40,000 but within a few years could be making over $100k if they worked significant amounts of overtime.  However, that was as high as they could go in that job, there are only so many hours in the day you can work if you are getting paid by the hour. 

So, at any given time a lot of my younger engineers and some of the older ones actually made less than some of the hourly guys they helped to run the plant efficiently.  And that was appropriate, the higher paid hourly guys had a wealth of knowledge they had gained both by experience and intensive on the job training and they earned their pay. I sometimes pondered who had the better deal, the non-degreed hourly worker, who could usually totally forget about the plant during his off hours or me, an engineer, who sometimes carried the worries and problems of the plant home with me.  We’d see that dynamic play out in the hourly workers as well.  We promoted from within whenever we could so it was possible for an hourly worker to move into a salaried management position, even up into a corporate officer’s position without a college degree of any kind.  In fact, I watched two of my hourly friends do just that and they earned far more than $100k in their VP jobs.  But to get there they had to work their way through several lower and middle management jobs that paid only slightly better, if any, than their old hourly ones and I think they suffered more stress in the management roles where there was no union protection against being fired. 

It wasn’t unusual for hourly employees to turn down “promotions” to managerial jobs because there was little or no extra pay and zero overtime pay.  In spite of no overtime pay there was plenty of mandatory overtime work required when there were problems.  And when you work in a chemical plant that runs 24x7x365 hours per year, including every holiday, there are always problems resulting in people being called in to do extra work.  Hourly workers could at least soften the pain of being called to work on their days off by the fact that they received 50% higher than normal pay but salaried workers got no extra pay for extra work on their days off.  In theory there was some compensation built into the salaried workers’ pay to account for overtime but in practice almost nobody thought it was sufficient compared to the number of extra hours worked.

 With the uncertainty and probable higher stress, why would any hourly worker take a salaried job?  I think there are two main reasons.  One, a natural desire to achieve as much as you can.  Leading a team brings a different kind of growth and experience versus being one of the ones being led.  And secondly, moving into a salaried management position can be a first step in a longer path of promotions and increased compensation.  My two friends who ultimately became corporate officers were eventually compensated with stock bonuses and large annual bonuses that brought their total compensation to a level much higher than their previous hourly jobs.    It is a common debate at most plants in the chemical and refining world as to whether staying as a highly paid hourly worker isn’t preferable to moving into a salaried position with more potential future growth.  It is a tough decision to make because usually there is no second chance to choose again.  Just last year I met an hourly union worker at a plant in Texas that made $185,000 that year and had not made less than $140,000 in each of the previous two years.  That’s a lot of money!  But I also have met people who promoted from hourly jobs to salaried ones and ended up multimillionaires due to their rising to the top of their companies. 

 I knew two guys who wrestled with this very decision, decided differently, and had very different outcomes.  Donnie was a process operator.  His job was to control a complex set of equipment through a computer control system to make the most amount of product possible, safely and with the least input of energy and raw materials.  He had only completed a high school degree but he was very intelligent, had studied with diligence on the job and was a talented operator. He worked overtime when it was available and made right at one hundred thousand dollars a year, in today’s dollars.   Bob, Big Bob we called him, because he was six foot five inches tall and well over 300 lbs, was likewise a high school graduate and a very intelligent operator.  Donnie and Bob had one other thing in common that was unique to the two of them.  Both of them had finished over three years of college in engineering but for their own reasons had dropped out prior to graduation.  And both had wondered for years if it made sense to go back to school and finish up their degrees. 

As it turned out one of them, Donnie, decided to do that.  He returned to college and a year later he obtained his chemical engineering degree and went to work for another chemical company.  But Bob considered the cost, and although he was only one semester away from completing his electrical engineering degree, he decided to stay in his hourly position.  Both paths were open to both men and one took chose to return to college and the other stayed in his hourly job.  So, how do you think their careers worked out? 

These are real people, people I worked with for many years and I can vouch for this story. The results were somewhat surprising to me.  Donnie, when he earned his chemical engineering degree, applied for work at our company. At that time, we did not have an opening and, frankly, his technical skills did not impress us when we interviewed him.  There were a lot of jobs available and he easily found a position somewhere else.  We kept in touch for years and I followed his career until we saw the sad news that he had died unexpectedly.  I never tried to ascertain his actual compensation but I hired enough engineers to know what the kinds of positions he held paid, and I’d say he ended up making in the low one hundred thousand range.  Good money but not much higher than he would have made staying in the hourly operator position and probably less than had he promoted up into management.

Big Bob kept his hourly job and in time he did promote to a first line salaried supervisor position.  And he was a very good manager.  Over time he was given more responsibility, more promotions, and he and I basically rose up in the ranks together.  When they eventually split our company into a manufacturing division and a transportation one. I ran the plant and he ran everything else.  His pay was in the multiple six figure range even though he never finished his college degree.

So why did his career go so much further than Donnie’s?  The short answer is that Bob was a better leader and manager and offered more value.  Donnie had the technical degree but his soft skills were not as good as Bob’s. That isn’t a severe criticism of Donnie, Bob was truly exceptional.  Also, Donnie started over at the midpoint of his career and that left him less time to move up. In addition, I would guess that engineering students that leave college during their final year do so because they have realized they are not a great fit with engineering. Either the technical demands of their courses exceed their ability or it just does not interest them.  In either case it does not bode well for a top tier engineering career.

If you stay as a technical person and are judged to have median technical skills, which is where Donnie was, your engineering pay will cap just like an hourly operator’s pay.  Your market value will just stop growing and so will your paycheck.   But, if you keep rising in responsibility like Bob, which in most cases means management, the sky is the limit.  Bob and I had hundreds of people we were responsible for so our pay was a small thing to our CEO. If we could get better performance out of our teams then the CEO was happy to pay us for that.  In a way moving up the management ladder is a way of decoupling your pay from the number of hours you work because you are leveraging the efforts of your entire team.  If you can get the team to perform 1% better and your team is hundreds of employees then that’s a lot of return to your shareholders and is likely to come back to you as far more than a 1% raise.  I know it did for both Bob and me.

What’s the point of this true parable from my past?  There are several, I think.  First, make career decisions carefully.  Both Donnie and Bob were proficient at what they were doing as hourly operators but maybe not cut out to excel at engineering.    Going into any job that you’ll never be better than average at is a bad choice in my opinion.  If engineering doesn’t light you up and get you excited, then don’t try to be an engineer.  I have to think that if engineering had excited them, they would not have dropped out of college prior to graduating, in the first place.  However, working in the plant did light up Bob, and he was a joy to work with for all those around him.  And that made him a great leader, which propelled him to a great career.  A career that far outshined what he could have accomplished as an “average” electrical engineer.      

With Donnie the situation might be more complex.  I do not think his plant job satisfied him but he also would not have been a great management candidate, because he did not demonstrate Bob’s leadership ability. Maybe he really did enjoy his engineering career, even if it went along an average-ish path.  Or perhaps there was a third choice he should have gone toward.  It is impossible to know since his path was cut tragically short.

I’m not trying to impart great wisdom here, only to say that in Bob’s case the lack of a college degree cost him nothing, in my opinion.  He had a great career both in terms of compensation and job satisfaction.   In Donnie’s case I think going back and completing his degree was an accomplishment he was proud of but I’m not sure he enjoyed his career any more than he did being an hourly operator.  The lesson I’m sure of though, is that both of them made a conscious decision about finishing up their education.  And maybe the lesson is simply, do not just drift.  If there is a decision you know you should make, then think it through and make it.  Even if the decision ends up being to just stay where you are and grow where you are already planted. 

What about you, have you had friends who left their secure jobs to do something difficult or risky? 

Or do you know people, maybe you, who contemplated making a drastic detour to finish college or start up a new venture but decided it wasn’t what you wanted to do.

Did it work out awesomely like Bob’s choice not to finish college? 

Or did it work out more, meh, like Donnie’s where there is satisfaction with finishing but maybe still failing to find that dream job they were looking for?

As Usual if you don’t see the comment box just click on the title at the beginning of the post!

Ok, enough with the suspense, it is off roading. You may not even know what that is, so let me tell you about it. First, my wife and I love the outdoors. We enjoy extreme hiking. If you do not know what that is, it is hiking where there are no trails or only barely trails, but lots of cliffs, thorny vines, water crossings and terrain that can kill you if you make a misstep. And we are runners. We have run many marathons and go on runs with friends several days a week. We both play tennis and are very competitive for our age. Our favorite vacations, whether in the US or overseas involve hiking outdoors. We are skiers, though she stays within her skills and I push the envelope some on the slopes. Basically we are outdoors and fitness types. So how did driving a high powered side by side ATV become a favorite hobby? Above is a picture of our RZR still on the trailer in our driveway, just back from having gone off roading in north eastern Tennessee.

It happened kind of by accident. As a former hunter I had owned a few four wheelers in my life, the kind of ATV you ride like a four wheeled motor cycle. And on a trip back from hiking the high desserts in Utah we stopped in Moab and rented a side by side all terrain vehicle and drove in the world famous off road park there. It looked like a Jeep but was much smaller and had no windows or roof, totally open to the weather. It was a huge kick! It felt terrifying but the machine could scale rock slopes like a mountain goat and it was actually quite safe and just a whole lot of fun. We were strapped in with shoulder harnesses and protected by an elaborate roll bar cage. It combined the speed of downhill skiing with the terrain of extreme hiking and we enjoyed it a lot. It isn’t totally unlike riding on horseback as far as being able to go where there are no roads but without the extreme burden of care that comes with a owning a horse.

Since we were close to early retirement and had quite a bit of excess funding above what we needed we bought our own Polaris RZR about a year before I retired, a very sporty off road vehicle. Power steering, bucket seats and shoulder harnesses so that even if you run into something or off of something you are not likely to get hurt. It cost us about $15,000 with a trailer to pull it on and we’ve been riding off road several times a year ever since. We ride alone and with others we’ve met who enjoy the sport. Arkansas has some of the premier places to ride in the country but we’ve been as far west as Colorado and just got back from riding (and hiking) in eastern Tennessee.

I know some natural purists do not appreciate the noise and dust associated with off road vehicles but their use is strictly limited to areas that are maintained and groomed for off roading, almost like ski resorts, and the negative impact on wildlife is not significant since vehicle use is restricted to marked trails just as is other traffic. In Tennessee the elk barely even bothered to look at us when we stopped on the trail to take photos of them. The vast majority of woods and forests are exempted from vehicular traffic and the amount open for off road use is relatively insignificant and is not in areas containing endangered species. While I love long hikes in pristine and silent woodlands I also love driving technically challenging trails in our ATV. It is just a different sport, and we enjoy them both. I do not see a conflict, personally. But then, back in my hunting days, I saw no conflict between being a hunter and also an avid nature observer. There are plenty of people who cannot reconcile those two hobbies either and I wouldn’t try to change anyone’s mind on how they view humans and outdoor wilderness recreation.

That said, it is an exciting sport that combines both speed and skill, offering many chances to stop and hike to waterfalls, overlooks and even elk viewing towers. You can carry more gear than you can hiking and noon time stops by rushing creeks or mountain overlooks for a picnic lunch are mandatory. Another advantage is that after a few days of extreme hiking our “senior” legs are begging for a little less strenuous activity and while it has plenty of thrills, the work required to drive off road is mostly mental. With power steering and an engine there isn’t much physical effort unless you get stuck and have to winch your way out.

Is it for everybody? Heavens no. It absolutely terrifies many and others just don’t like noisy or gasoline powered sports. Plus you have to have a high tolerance for getting muddy and dusty. And I mean muddier and dustier than you’ve ever thought about. But if you think it might be something you’d like to try then the best way to do that is to rent a Polaris RZR or a Can-Am or an Arctic Cat or Honda or Kawasaki or any of the other side by side sports off road vehicles. Most areas that have trails that are legal for ATV’s have rental shops nearby and there isn’t much of a learning curve to driving a rig. If you can drive a car you are more than capable of driving off road. Just go slow and be careful while you are getting a feel for things and obey all trail traffic rules. Helmets are advisable, but not always required. Who knows, you might really like it. Used rigs can be bought for a fraction of what we paid for ours new, but even done as inexpensively as possible it probably doesn’t meet anybody’s idea of a frugal hobby. We only took it up once we were well past financial independence and it represents an insignificant part of our annual expenses. But international travel, another hobby of ours, is also quite expensive, but worth it in our opinion.

It is also a very social sport with many people meeting on the trails and campgrounds forming friendships for life and joining up to ride together year after year. We have met some great people that way. And if we ever do have grandkids we’ll be trading our two seater in for a four or six seat model because the trails are full of extended families camping and riding together.

So have you ever ridden off road?

Do you think it is possible to reconcile hiking and off roading as mutually enjoyable sports?

As always, please comment in the comment box or, if you don’t see one just click on the title of the post and it should take you there.

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? 

As usual, to leave a comment just use the comment box or click on the title of this post.

A common theme is that Social Security is a rip off, a nearly worthless and totally unreliable pipe dream that will not be there when you need it.  According to the Motley Fool the average Social Security recipient only received $16,848 in 2018.  That’s an Alpo/Hamburger Helper kind of budget!  But is it really that bad for everyone?  It might surprise you to know that I can claim, without fear of contradiction, that when I receive my first Social Security check, it will be the largest one the United States Social Security Administration has ever written to anyone, in history. 

The only person’s Social Security information I have access to is mine, and my spouse’s.  Since she became a stay at home mom early in her career, she will be drawing a Social Security benefit that is half of mine because that is larger than her nine years of earnings would pay her based upon her contributions.  What will our checks look like when we decide to start drawing them? 

According to the my social security account site when I start drawing Social Security in seven years, my annual benefit will be just over $47,300 and hers will be half of that or $23,700.  The total for the two of us will be $71,000.  That is a whole lot higher than the average benefit of $16,848 but it is right from the horse’s mouth and since I will begin drawing my benefits well before the trust fund goes under, I think it is pretty secure.  Now if you are a millennial, I agree, all bets are off, but I think the chances of Congress getting anything done to help or hurt the status quo in the next few years are pretty slim.

So, an inflation adjusted benefit of $71,000 annually is a pretty fat pension and unlike private, state and local government backed pensions mine is backed by the people with the printing press that prints money.  In fact, the majority of people on the early retirement journey in this community are probably planning on living on less than $71,000. So, if I were marginally more frugal I could comfortably sail into retirement with nothing but my Social Security checks.   And where have you heard of anyone living comfortably on just Social Security?

Now to tell the whole truth, in my case I will not be limited to Social Security for my retirement spending. I can also safely withdraw six figures from my investments at a 3% withdrawal rate.   And that is because I saved aggressively and invested over quite a few years. However, the main point I am trying to make is that my numbers are in conflict with the commonly held belief that nobody can live decently on just Social Security.  I think almost anyone in a low cost of living area who has no child care expenses and a paid for house could live decently on $71,000 a year.  Because, remember when you are drawing Social Security you are either already eligible for Medicare or only a few years away.  Health insurance prices aren’t a factor at that point.

From reading blogs in the early retirement space, I know that a great many FIRE advocates are planning on living expenses of $25,000 to $50,000 per year and also plan on using a 4% withdrawal rate.  That means their target amount of invested assets only needs to be from $625,000 to $1.25 Million.  My Social Security income stream at $71,000 is going to be equivalent to $1.775 Million dollars of investments!  I think many, maybe even most in this community would feel pretty good about pulling the trigger on retirement with a portfolio of nearly $2 Million.  It would not be sufficient for a high cost of living area, the awesome Financial Samurai has shown that $5 Million or more is not an unreasonable amount to shoot for if you don’t want to run out of money in the most expensive metro areas of the US.  But I live in a rural part of a poor state and $71,000 is larger than the median family income in these parts.     

This all begs the question of why all this talk of massive savings rates and frugality in the FIRE community?  Why not just spend every penny you earn because Social Security is going to provide you a very healthy income, even if you don’t have a single dollar in savings when you retire?  Why not indeed.  Well, there are a few obvious problems with my logic and a few others that you might not know about.  First, I’m talking about Social Security income.  And for some mean-spirited reason the federal government makes you wait until you are at least age 62 to qualify.  And unless you wait until 66, or better yet 70 years of age, you will be penalized with reduced benefits.  FIRE devotees are not planning on working until they are old, nobody wants to do that except Warren Buffett who is way past 70.  So, the Financially Independent, Retire Early crowd still has to come up with some way to survive between leaving their 9 to 5 and making it until they are senior citizens when those fat SS checks start rolling in. 

But the other biggest problem you may not be aware of with planning on relying on Uncle Sam for your main source of retirement income is that you aren’t me.  My work history isn’t like yours, I can guarantee you that because I’m the guy the Social Security people never anticipated. I’m their worst nightmare, which is why they will have to write me an outsized check.  The way the SS folks calculate your benefits is based on your inflation adjusted wages over your 35 highest earning years.  And those wages are only counted up to a maximum amount called the wage base. If you earn over that amount you don’t get taxed on the excess earnings.  Last year that amount was $128,400 but when I started work the maximum wage base was only $17,700.  All that is to say I paid the maximum amount possible into Social Security for every single year of my working life until the year I retired.  And I also worked for 35 years so there is no other person my age on earth who has paid more than I have in Social Security taxes.  And because I paid the maximum theoretically possible, I will also receive the largest benefit possible under the program.  And like I said, you aren’t me.  The only other people likely to be in my place are doctors, and considering the length of their college, medical school, residency and possibly fellowships not many of them are going to have a 35 year career with every single year above the maximum wage base. 

Not only are most FIRE candidates not going to earn over $128,000 every year of their working life but they also aren’t going to work for 35 years.  I mean that is the whole point of FIRE, to be able to escape the daily grind at least by their fifties, if not in their thirties or forties.  Many will continue to earn after they early retire, but a lot of those plan to keep their gross incomes low after they retire in order to qualify for ACA health insurance assistance.  That is going to reduce the size of the Social Security checks that they get someday, when they are old, to something that looks more like today’s average number of $16,848 per year.

Because of that I think FIRE people are generally correct to not count on Social Security as a major contributor to their income in their advanced years.  I think it will still be in existence but I do not think most will have contributed enough to have earned a big monthly check.  And that is not a bad deal because by not giving the government as much in Social Security taxes as I did, they will be able to invest that money at a far higher rate of return than I will get back in my Social Security payments. 

I am unique, I not only hold the world record for the most money any human has contributed to Social Security over my 35 year work history, I will also qualify for the largest Social Security benefit ever earned in this country.  And you won’t, and you should be glad because even though my wife and I will be getting a nice stipend from Uncle Sam in a few years we paid dearly for it. With any luck you will pay a lot less and make way better use of that money!

Is it fair for anyone to get $71,000 from Social Security when they already have more investment income than they will be able to spend and when the average American only gets $16,848 per year? 

Is Social Security a good safety net for elderly people who have no other source of income?

Do you dispute that nobody has paid any more in Social Security taxes than me? 

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I have an unusual side hustle/hobby job in my slightly early retirement.  I assist some large companies in one specific area of their business as a contractor/consultant.  I make one year deals which I have to renew at the start of each year.  I enjoy the work but I do not really like the marketing part where I have to convince them to sign up for my services.  Because of this, my entertainment employment gigs are fun for eleven months but a real pain for that first part of the year.  The work itself is very part time most of the year and gives me the social and networking outlets that make me feel connected.  It also makes me feel productive in a way my volunteer work doesn’t, and my recreational hobbies are more fun when I do not do them all day every day.  So, what is the problem?    It is that my hobby job is only fun 90% of the time.  Poor me!

Then I think about the other things that occupy my time, like my volunteer work chairing a college board of trustees.  Zero pay, lots of meetings, heaping piles of government bureaucracy and bickering board members to placate.  Honestly, I would have to rate it as fun only about 10% of the time, the exact inverse of my paid side gigs.  But it is important, it is a low cost, two year school that almost everyone attends for free. It teaches not just standard academic courses but things like welding and computer technology.  It has been the only ladder out of a hole of poverty for hundreds of people in the time I’ve been there.  I gladly do it because it matters, even if it is hard and often tedious. 

The charitable foundation I chair is probably 50/50 on the pain/fun scale.  It directly spends millions each year helping people who are struggling.  And it is free of most of the red tape and inefficiency that seems embedded in academia.  But we still have over 100 employees and anyone who has managed a large group knows that some people will always find ways to misbehave even if they are saving lives for a living.  I think it is one of the best non-paid charity gigs anyone could ever have.  Like the college it makes me feel like I’m making a difference. But still, half the time it is not fun, just necessary.

My recreational activities like distance running, tennis, off roading, fishing, hiking, bushwhacking, skiing and traveling are probably fun 90% of the time.  But even having fun has some decidedly unpleasant potholes now and then.  The bushwhacking to find waterfalls is tremendously satisfying but there are days when the falls cannot be reached without taking foolish risks of falling to our deaths.  Those are days we limp back to the car bruised and bleeding having failed to reach our goal.  And sometimes the fish don’t bite, the outboard motor won’t start or the boat trailer gets a flat tire in the middle of nowhere.  But usually, 90% of the time it is good day when we are recreating.  Until I started to write this it had not occurred to me that I have about the same level of enjoyment with my consulting side gigs as I do with my recreational hobbies!   But I suppose that makes sense to me because in my previous life as a 9 to 5’er I also had fun most of the time at my job, and a great day at work was just as fun as a great day on the lake. 

I know some people cannot relate to that because they rarely have great days at work and I’m sorry for that.  Spending that much of your life doing something that doesn’t light you up very much, or maybe never does, is tough.  I suppose it is one big reason for the FIRE movement, the pressure to escape, at least for those who hate their jobs.  But work was always a favorite hobby for me even when I worked six days and played one.  Now that I play six and work one it is still all good, neither better nor worse than my previous life.  Strike that, it is better now, just not by an overwhelming margin. 

What about you?  Some of you are retired, some early retired and some years away from being in the financial shape to consider retiring.  Have you started to think about what your weeks will look like when you no longer go to work?  Or if, like me, you only work about a day a week what else will you do?  I thought a lot about it for many years before I triggered my exit strategy.  I cultivated the contacts and skills I would need for my side gigs, because they were not part of my previous job’s core competencies.  I also set up my volunteer positions because, while they aren’t as much fun as the rest of my life, there is value in doing things that help others, even if they are hard and sometimes tiresome things. 

But the thing I did that was most important of all was to invest time and creativity into my marriage.  And my wife did that as well,  much more even than I did.  I can’t imagine being in this wonderful time of life alone instead of with the person who has been my best friend for over 40 years.  I have a good blogging friend who recently lost his wife and my heart goes out to him.  Thoughts and prayers for you, my friend Steve. 

Sure, it annoys me that she easily outruns me on our distance runs and it is getting very difficult to keep beating her at singles tennis.  On the other hand, I’m also pretty proud that she can outrun the other guys, and when I get to play doubles with her as my partner, I really appreciate her skills on the court.

As I consider the path that brought me to financial independence and a happy slightly early retirement it occurs to me it was all about investment.  The time I invested in gaining mastery of my engineering and management skills provided us with a high income on just a single career.  The money we didn’t blow on cars and fancy houses, but invested, freed us from any money worries now.  The time we invested in our family gave us great kids and an awesome best friend in each other. The time we invested helping others added to our sense of purpose and gives us outlets to keep helping people in need.    Maybe it was because I had my boat so close to the dock that I barely noticed the change when I stepped aboard retirement three years ago. I know others write about various stages of adaptation they struggled with upon leaving a career behind but I never had any of that.  Just an incredible feeling of lightness that came with not being the guy they called when something went wrong at the plant.

Life after the nine to five is not totally awesome, there are still some things I make myself do that I would rather not.  But it is indeed mostly awesome, most of the time! But only if you have invested wisely with more than just your money.

Do you think you’ll feel the need to do some paid work of some kind after you “retire”? 

If you do, what can you do now to build a path that leads to that work?

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Who are you?  Who is the person reading this right now?  I could guess that you might be a fellow blogger in the personal finance and early, or not so early, retirement space.  Or maybe you enjoy reading blogs for entertainment and information?  Either way that makes you and me not so different at all.  So, let me take you back in time ten years ago to when I posed a question to my wife .  “It is your birthday tomorrow, Honey, what do you want to do?”  I asked that question ten years ago and her answer changed our lives.  “I want to go see some waterfalls!”, she said.

I broke out into a Cheshire Cat smile because again I knew I had won the relationship lottery when she agreed to be my life partner!  That might seem over the top? But there was more to this waterfall hunt than you know, so let me explain.  First, the weather report for the next day was 32 degrees F and rain, all day.  Added to that, Arkansas waterfalls are in remote areas of our state, several hours drive away and involve much strenuous hiking to find.  So, my wife was suggesting that middle aged her and middle aged me hike hard all day in the freezing rain.  I don’t know what your idea of fun is but most people do not suggest driving hours to take a walk in the woods while getting pelted with freezing drizzle as the perfect birthday date. But who wants to be most people anyway?

And that is exactly what we did and it was one of the best days of our married lives!  Because of the rain the falls were swollen with cascading water and because we are outdoorsy people we had sufficient cold weather rain gear to stay moderately comfortable in spite of the inhospitable conditions.  It was fun because it was our idea, it was fun because nobody sane would have done it and it was fun because each of us was with our best friend, our best crazy friend!

We knew where to find the falls because of a book on Arkansas waterfalls by Tim Ernst, a noted Arkansas outdoor writer and photographer.  This book, titled simply Arkansas Waterfalls,   detailed 120 Arkansas Waterfalls including photographs, rough maps, historical information and GPS coordinates for each of them.  After this first waterfall adventure we decided it was so much fun that we would embark on a quest to visit every one of the 120 Arkansas waterfalls in the book. 

A word of caution if you happen to be an Arkansas resident or someone who travels here for recreation.  Getting to all of these falls is not easy and getting to some of them is quite dangerous.  Some of them are simple where you can literally drive up and see them without getting out of your car.  Many of them are on well marked and well travelled trails.  But some of them are dangerous bushwhacks across extreme terrain with only your gps to guide you, in areas where there is no cell phone coverage and very little chance of anyone finding you if you are injured. Some of these are very long treks of up to ten miles on terrain that easily limits your pace to one or two miles per hour with a lot of climbing and scrambling on your hands and knees.

On these bushwhacks you will encounter cliffs, boulder fields, difficult water crossings and horrendous saw briar thickets. There are bears, cotton mouth snakes, copper heads and rattle snakes to add to the adventure.   We carried an emergency transponder beacon like the ones used to locate crashed airplanes by satellite because there was no way either of us could have gotten the other out if we had broken a leg or ankle or worse.  Bushwhacking is inherently dangerous and extremely demanding physically so I would not recommend it unless you are in very good physical condition.  All of that caution aside we never suffered anything more than scratches and bruises though we fell dozens of times on our bushwhacking hikes and we never had to trigger the transponder to call in a helicopter.  Fortunately the book describes the difficulty level of each of the falls treks and is pretty accurate about which ones are inherently hazardous.  Take note that when the author says the hike is dangerous or life threatening, he is not kidding!

That first cold and rainy waterfall adventure was ten years ago on my wife’s birthday and we hiked to the 120^th and final waterfall ten years later, again on my wife’s birthday, earlier this month.   So much of our lives have been lived over those ten years bracketed by our waterfall quest.  Our kids went from from, well, kids, to young adults with six university degrees between the three of them, and the seventh in progress.  We have had a few medical scares that haven’t impacted either of us permanently but have reminded us of the frailty of life.  My wife came within three minutes of qualifying for the Boston Marathon and would have if her inept coach (me) had realized it during the race.  My career went from lobbyist, to corporate executive of a Fortune 500 company, to slightly early retired and very part time consultant.  My wife’s parents and mine passed away. One constant that held us closely together during that decade was the shared dream of completing the journeys to all of the falls. 

 For fun my wife listed how many waterfalls we reached each year of the ten-year period.  And there, plain to see, were the patterns of our lives played out in waterfalls.  The only year we did not hike to a single falls was 2011, the year my employer sold the company and the year my new overlords elevated me from government affairs to running the company.  That was a whirlwind year when I did not  know if I’d keep my old job or be terminated, much less be promoted.  I was not ready to retire and with all the work turmoil there was precious little time for recreation.  Two years later I was very sick, and also had knee surgery, and wasn’t fit for hard hiking.  We only made it to three falls that year, 2013.  In 2015 and 2016, when I realized I was done with work and made my exit  we saw 39 waterfalls.  My focus on my career was over and we were focusing on life! And in this very new year of 2019, which is only a month old, we have already crossed off the last six falls in a furious onslaught, much like the last two hundred yard sprint in each of the marathons we ran together. A last little push when there isn’t any reason to save any of your reserves because the finish line is…right…there in front of you. 

It is bittersweet in a way, like any life accomplishment that matters, it has a bit of an anticlimactic feel to it. You’ve been there too, it could be your child getting married, landing that big promotion, going on that bucket list dream vacation or hitting your financial independence number.  You realize soon after the fact that it was the journey that mattered, much more than the prize.  The trip to the goal was everything, and now that you are there, what next?  Well, of course the answer for us is another quest, another goal, another journey to begin together.

We have been married 40 years and counting and sometimes people remark that it is quite a feat to stay together and to stay friends that long.  Not really, you just have to do things together you enjoy.  In our case they are active sports, hiking, distance running, skiing, fishing, tennis, pickle ball and off roading in our ATV.  But we also cook together, watch movies, go to church together and travel.  We do as much with others and separately as we do together, but we put a premium on the activities we share. 

The waterfalls quest spanned the transition in our lives of going from a high stress corporate executive who was always on call and a stay at home wife to a retired couple with some side gigs and volunteer work.  I think that was the perfect time in our lives to pursue it because it gave us a constant shared vision in the midst of great personal change.  In fact I will go so far as to encourage any of you who are within a few years of retiring or switching from a 9 to 5 to a entrepreneurial lifestyle to start a quest now with your partner.  And one that will take years to complete, hopefully long enough to bridge the transition to your next life.  I cannot explain the magic it brought into our lives, and the peace and the joy of stumbling out of the woods, exhausted, in the late afternoon having visited a breathtaking waterfall few people have ever seen.  Being able to share that with your partner and no one else, all the emotions of having been crazy tired, totally lost, and then delighted with the visual treasure of falling water cascading down to an emerald pool.  How do you stay together for 40 years?  You have to add magic.

What quests have you taken on or considered?

What do my wife and I need to do next, we need another quest!

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