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Sunday, August 28, 2016

The Dark Fears

Posted by Tim Stobbs on August 24, 2016

I’m now finally towards the end of my long goal to save enough money to retire early at some point in the next year or two.  So on the one hand, I do fully admit to being a bit excited by that idea.  On the other hand I notice little bursts of fear and doubt surfacing periodically that for a moment crush that excitement in a burst of negative emotions.

Of course I think to myself: Dude, what’s your problem? You should be thrilled to be this close to done.

Yet those dark fears that I don’t spend much time thinking or talking about still bubble up.  Some of those thoughts include: Do I have enough money saved? What if I forgot something in my calculations? Can I actually pull the trigger at the end or will I fall to saving for one more year? Or even worse, if things go really well could I change my plan and pull it earlier than I’m planning? Should I save a bit longer and just don’t worry about some part time work?

Then after those thoughts burst through my head I remind myself that doubt is normal.  Hell even fear is completely normal in the case.  I’m planning to alter the single biggest part of my week days and leave full time work and the career I have always know for a completely uncharted area of my life.  So yes, fear is perfectly normal.

Yet acknowledging the fear as normal doesn’t make it go away.  So instead of avoiding these thoughts I have decided to spend some time in them looking at those questions in detail and trying to determine some idea of what that uncharted part of my life will look like.

In effect, I’m down into the weeds for a while looking at:

  • How exactly will I take the money out of the investment accounts to live on? Monthly, every quarter or yearly?  Which accounts do I use first?  How do I keep our income tax to a minimum?
  • I’m also looking at fears.  So I retire and the stock market tanks immediately – what do I do?  How much of a reduction in the markets do I tolerate prior to using that plan B?
  • What if I fail at retirement?  At what point do I go back to work full time?
  • What if I fail at writing fiction? Do I keep at it or switch to non-fiction? Or do both?
  • What else do I want to do with my life?  I’ve gained over 25 additional years without work, so what exactly do I want to accomplish with it?

Some of those are easier to answer by just writing up an investment plan that includes what do do when the stock market drops 5%, or 10% in a year.  I’ve also created a fairly detailed model of the first five years of retirement and stress tested various scenarios so I can see what happens if I don’t do any work at all during that time.

But even as I look at some of those questions I’ve come to realize something important.  You can’t always know everything in advance.  Some questions can’t really be answered in advance of that uncharted area of life.  I don’t really know what I will accomplish in the next 25 years of my life and well that isn’t that much different that most people.  I can’t know everything that could go wrong in the next 25 years with the stock or bonds markets. I can’t know government policy that will make things better or worse for me.

But I do know that I’ve learned to be more flexible about things.  I have managed to handle of lot of stressful situations in my life such as a 10 week premature baby, or working several jobs at once.  Yet I found a way to make it all work and I’m not about to really lose that skill set all of a sudden.

So in the end, I do think things will work out.  After all, why I’m considering all these dark thoughts I seem to forget something equally important: what if things turn out better than I expect?  After all I’ve been saving for over 10 years now towards this goal and I’ve consistently beaten my targets (hello, the title of the blog of free at 45, but I’m now looking at leaving before 40).  If I earn some extra money I will likely save it, since that is a really hard habit to get out of.  I’ve never spent everything I have earned and I really don’t think that will change in my retirement.

What are some of your dark fears about your retirement plans and how do you deal with them?

Over Saving and Fear

Posted by Tim Stobbs on July 29, 2016

I read a lot of stories in forums and blogs about people who retire early.  I often notice is in a few years after they leave work and they reflect back on what they did to retire early they often conclude they over saved.  So if this is often the case, and people know this, why do people who pursue the early retirement goal keep over saving?

While I’m not a mind reader, so I actually don’t know I think the thoughts in peoples head I think it goes something like this: they are afraid.  I think fear is driving many of them to keep working past what they actually need.

Now what is causing that fear can obviously very from person to person.  For some it is the fear of losing their primary identity (aka: their job),  while others it is fear of not having enough saved (or running out of money).  Yet I think the biggest fear of people who do early retirement is having the plan fail and then having to go back to work.  That scenario chills their blood in their veins and drives them to keep doing the very thing they are afraid of work.

Sort of ironic right?  That a fear of working, causes people to keep working longer than they need.  So why is that?  Well I would guess their thoughts go something like this:

Once I stop working I’m going to fall in love with all that free time and after a few years I don’t think I could even entertain the idea of coming back to my job to earn more money.  So I rather spend another year working now and be sure I never have to come back.

I actually understand their logic, but at the same time there is a bit of flaw to that sort of thinking.  Who said you ever have to go back to your current job?  Even if you retire and the stock market tanks 20% and you need to go back after two years, you are not required to go back to your current workplace.  Actually depending on how fast your particular industry changes you may not even be able to go back.

Instead you can likely pick up some other kind of paid employment, and with your current savings you could likely do very well on a term position or even part time hours.  If you are 80% financially independent you have a lot more options than most people.  And even if you for some reason came back to your current workplace you would know going in it won’t be forever.  Heck you might even be able to estimate down to the month how long you have to be there.  My point is work itself isn’t evil.  Granted your current job may feel that way, but like I said you don’t have to go back to it.

Once I realized this myself I actually went back to my assumptions in my calculations for early retirement and cut back a lot of my padding based on fear.  This is why I shifted my aim to doing semi-retirement sooner rather the putting in the extra few years to be fully early retired.  I don’t fear work anymore.  I understand it is me trading my time for money and all the emotional baggage about work: disliking paperwork, tasks I don’t enjoy or working with people I don’t care for all exist in my head.  I can let it bother me or not.  I can always quit at anytime.  So with that particular safety cord in mind, just about anything gets easier to deal with.

So do you fear work?  If so, why?

What I’m Going to Do With All That Time

Posted by Tim Stobbs on July 22, 2016

Oddly, I’ve noticed that number one question I get from someone when I mention my early retirement plan is: what are you going to do with all that time? Which I find odd, since I would likely ask: how do you make that work?  But anyway, I thought perhaps I should address the first question on what are my plans around my bucket loads of extra time when I no longer have a day job.

To address the issue I’ve considered that a person needs a bit of balance to your life.  You can’t just do one thing and do it all the time.  As I’ve already noticed in my life I go through periods of heavy interest in one thing for a month and then that drops off as I pick up something else for a while.  I tend to cycle through my interests on a regular basis.  So I need a few interests to allow me to cycle through them and so far here is a list of ideas broken out by some rough sections.

House projects – painting, new flooring, refinish kitchen cupboards, minor repair jobs, new front patio, expand the garden plot, replace patio doors with garden doors, new front door…really this doesn’t end.  I also want to look into perhaps designing and building a tiny writing studio in the backyard.

Writing & Reading – My want to read list for books is well endless, I’ve never managed to clear it off.  Then writing wise I, of course, have this blog and about five different novel ideas which I have developed into some general plot planning. Then I would like to do a follow up to Free at 45 book on the actual transition from work to retirement.

Friends and Family -Hanging out more with my own immediate family, since right now it feels like we are just barely managing to squeeze in some time on a weekend to do something together.  I would also like to get better at visiting my friends and extended family or just having more time to help them out with their projects.  But some of them require some long trips to see which I will suddenly have lots of time to do so.  Some of this will overlap with my next point.

Travel – My kids love to camp and I think it would be fun to start of list of places in Western Canada we want to try out and work our way through that list. Not to mention getting back to places we have seen, but want to go back and of course everyone has a list of international locations they want to see.

Gaming – I’ve always loved games (tabletop, or video games), but I don’t have much time to play them currently.  So I have developed a nice stash of ~30 video games I would like play for longer than an hour or two a week. And I won’t mind getting in some more board game time in with friends.

Movies and TV: I have always loved to watch movies, but do you think I have ever gotten close to finishing My List on Netflix..nope.  Then add in my library account holds and well I might catch up…someday (well at least for a day until something else gets my attention).

Learning: I have a serious thing about learning new skills or expanding my own knowledge base.  So given lots of free time I could do more online learning, workshops and other learning options. For example, I have never taken a class on economics, but I would like to learn more.  I would even have time to get a certificate or another degree if I really wanted.

Physical – You know how it is hard to make time for your workout every day.  Well imagine if that isn’t the case? Hello running, yoga, roller blading, swimming and perhaps learn a bit about something fun and out there like sword fighting.

Work – As I have stated more than a few times, I don’t mind work.  I just don’t particularly enjoy full time work.  Some places I plan to look into are: libraries, bookstores, micro breweries, micro distilleries, publishers, an election worker and well just about anything else that catches my interest.  Part time hours and short contracts would actually be ideal.

Then of course I have my current pile of interests: brewing beer and wine at home, cooking, and managing the investments.  Then add in the usual stuff you need to continue to do like cleaning, yard maintenance and guess what I’m more than filled up my 40 hour work week.  If anything, I expect the same problem I have now: too much to do and not enough time.

So what would you do if you didn’t have to do your day job?