This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
A week or so ago, Nelson from Financial Uproar wrote a post titled “In Defense of Normalcy“. In it, he noted that people on early retirement blogs “cannot wait to throw off the shackles of (gasp!) having a normal job” – he goes on with a quite graphic description of what these type of blogs describe retirement as. I’m not sure if he was specifically targeting this blog, but I left a somewhat lengthy response on the post. I really enjoy Nelson’s writing and would recommend his blog to anyone who enjoys penis jokes and intelligent personal finance discussion, including some excellent stock-purchasing insights which I find particularly informative. My response to this post is essentially – what else will I spend my money on?
I don’t live a lavish life. I don’t have very expensive tastes, and besides my wife’s love of essentially disposable clothing (which thankfully is also relatively inexpensive) she doesn’t really spend that much money either. We like a nice dinner out sometimes, but “nice” to us is sometimes Swiss Chalet (which I’m sure would not qualify as nice to other people) or a relatively inexpensive dinner at a local diner. Our vacations are generally inexpensive – with the main goal being to head someplace warm, rather than fancy, and other than that we don’t really spend that much money. If I wasn’t saving for retirement I don’t know what else I would spend my money on:
I could work less hours: This isn’t really an option with my current job, but given my low expenses, I could probably live on about 1/3 of what I currently make and not have that much of a change in my lifestyle, if my house was paid off. This wage would allow me to save for retirement over the next 30+ years with about a 10% savings rate.
I could spend more: Generally, people’s comments around high savings rates are something like “I want to live right now, not be poor forever”. I don’t really equate my consumer purchases with a lot of happiness. I could repeatedly by the newest Apple products like some people, get a fancy car, a bigger house, see more of the world or find some other way to spend the extra money.
I could stockpile it: If I didn’t save for an early retirement, and instead went for a more “normal” life, working until I’m 65 and having a massive war-chest of savings to ensure there are no money problems in my late years.
The problem with all 3 of these options is that I would essentially be working for nothing, just for the sake of working. This outcome doesn’t seem all that exciting to me. I have no end goal of being wealthy, of owning fancy things, nor of working to age 65 so I carry on with my current financial plan. Nelson states that blogs like this are selling a “dream”. Other than the blog’s name I don’t think this is the case. I don’t think that the writers on this blog really try to sell the dream, we simply state what our particular choices are in some instances with regards to spending, as well as attempting to provide some guidance to individuals who are interested in following a similar financial plan.
Is your financial goal early retirement? If not, where do you spend your money? Are you choosing to live “in the now”, or feel you just can’t afford an early retirement?