Posted by Robert on March 28, 2011
This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
I didn’t begin my career thinking, “I want out as quickly as possible.” I’ve been fortunate to be able to work in financial advice, where I have a real interest. I enjoy talking with people about their finances and helping them organize for more efficiency and a greater probability of success. Having said that, it was my second choice, and I’ve always wanted to live with my family overseas. That’s my dream, and when I started thinking (over two years ago) how to realistically achieve it, early retirement presented itself as an idea that would allow me to mitigate as much of the risk as possible. If I’m financially independent, then I know my family will be stable, working only to cover the cost of the kids’ school and any extras, such as travel. But how do I explain this unorthodox life choice to others?
My concerns were first, that people wouldn’t understand. Why would I want to limit my lifestyle to a fixed income, when I could continue to be successful at work and earn six figures? And second, that people would feel jealous, wondering why I’m able to stop working before 40 when they’re uncertain about being able to retire at 65. I first had to tell my parents, since I work with my father and we will be moving their grandchildren far away. I must admit they were shocked. When we sat down with them, in our house, and explained what we wanted to do, the timeline we had in mind (six years) and the amount of money we have and need, they were surprised by the audacity of our plans, but also supportive that we were able to find something to be excited about and to work towards.
I work in a small office of under 10 people. Everyone at work knows of my plans, but I have explained that “I’m going back to school to become a teacher in a couple years, then moving abroad.” I leave out the “retirement” aspect, because I don’t know how to answer the obvious question, “How did you manage that?” and the implication, “and why am I nowhere near?” But it keeps coming up in little ways. Recently, one of the administrators came to me and said, “We got a notice that your life insurance isn’t paid for and will expire. Aren’t you going to pay it?” I explained that my house is paid for now, so it became unnecessary. She asked, “How did you manage that? Did you sell some investments?” Actually, I had, so I agreed with that, but she paused and asked, “Don’t you need the insurance to take care of your wife and kids?” They’re already taken care of because we are working toward financial independence. But I just said, “Don’t worry, we’ve thought of that and they’ll be taken care of.” I didn’t want to say more, and she left it at that.
A few weeks ago, my wife and I met up with a friend of my parents, whose family I had grown up with. We’re both involved in some similar projects around public education, so we were describing to her our plan to go back to school and then teach in international schools. She thought that was great, but pointed out that I have a good paying job and asked why I would leave it. “I’ve gone as far as I can in this job” is something I like to say. “I’ve enjoyed it and I’ve really learned a lot. Now I’d like to move on to something new, something that makes a difference in another way.” She liked that, but she’s smart. She asked about the money, and I admitted that we’ll have enough. “To retire?” she asked. She had guessed what I meant and she was impressed. I realized that many people equate money with intelligence and assume that smarter people have more money and people with money must be smart (not necessarily true). But I wouldn’t expect her to be jealous, since she has a six figure government income and her husband has a public pension.
A couple of my clients at work were personal friends before they became clients. One in particular seems to be on the traditional hamster wheel: earn more, spend more, repeat. I know that he’s worked quite hard to have more money, which he seems to use to have some of the nicer things in life. But he doesn’t seem to understand the fundamental idea of saving and investing. He asked me just the other day: why do you seem to be transitioning out of the business? I found it easiest to explain that I’m planning on going back to school. For him, this seemed to be a fully satisfactory response.
With all the people above, I don’t have a standard explanation of my situation and plans. I still don’t feel comfortable explaining that if I had to stop working, I’d be financially secure, and that will allow us to launch the next part of our life. There’s no secret how to get to this point (earn good income, stay out of debt and live below your means). But not everyone can do it and I fear that people may feel jealous of what they don’t have and don’t understand. Maybe that’s selfish and irrational and I should use my situation as an example for those around me. What do you think?