Posted by Dave on March 4, 2014
About a month ago, my workplace laid off around 15% of the employees in my 400 person company, with no warning to the staff of the company (as is usual in these type of circumstances). I was not affected by this move, but it created quite a lot of anxiety internally with my company, as there were very few departments which weren’t impacted by the corporate “shuffle”.
Due to our fairly low monthly spending amounts, compared to the amount of money we bring in, my wife and I are able to cover all “fixed” expenses through either one of our salaries. We set up our budget like this purposefully, as in the past, my wife has had a couple of terrible jobs. I would rather she (or I) have the flexibility and freedom to leave this kind of situation, instead of feeling stuck due to our lifestyle requirements.
Stressing over money (or anything really) isn’t healthy. I recently read a book called “The Cholesterol Myth” – in it, the author described two kinds of stress. The first kind of stress is the kind you’d get being chased by a lion – once you lose the predator, the stress is removed from your life and you go back to “normal”. The second kind of stress is the dull, persistent stress experienced through work and personal relationships – the kind of thing that doesn’t have an easy fix and stubbornly nags at the back of your mind. It’s the second kind of stress that leads to health problems and is one of the main drivers of heart disease today (besides terrible diets being consumed by most people).
My wife and I would rather not have to worry about money. We think it’s healthier for our relationship and allows us to enjoy our daily lives much more. There are some things we do that would seem ridiculous to others – like having a bunch of money sitting in a high interest savings account rather than being invested, but these are done to reduce the impact of major life occurrences to our normal spending “curve”.
We are also responsible only for ourselves – we don’t have children, or even any pets that are dependent on our ability to create wealth in order to eat every day. This type of arrangement also offers some additional flexibility in our financial decisions – we can act more selfish in our spending and saving.
I am by nature a bit of a worry-wart when it comes to money, perhaps borderline paranoid when it comes to the possibility of extended unemployment. The benefit of our goal of Early Retirement, is that even if we only get part way to the goal by the time we reach age 45 (our hopeful date of financial independence) – we will hopefully continue to live a financially stress-free life.
Do you stress about money? Have you in the past?
Posted by Dave on February 18, 2014
A couple of weeks ago, a reader asked the following question in response to one of my posts:
It sounds like you are comfortably in the “Esteem” phase according to Maslow’s hierarchy of needs (maybe you disagree?), do you think that you will ever want to get all the way to the top? I have given this topic a lot of thought lately. For example, you are obviously a very productive member of society and I for one really appreciate the fact that you bring an income to Canada and pay taxes. Do you think you will ever [feel] this way about your contribution to society? Further, do you think that you have not achieved your potential? Finally, do you think that you are/will ever become a “drain” on society?
I have put some thought into this over the last little while and thought it would be appropriate to create a blog post as a response, as it seemed in-line with some of the topics that are discussed here. There were several questions asked, but I’ll focus on the one that I found most interesting, and the one I thought about the most – “Do you think that you have not achieved your potential?….Do you think you are/will ever become a “drain” on society?”
Like most people, I really don’t know what my potential is. If my life potential has everything to do with my career and income I can bring in – then I am definitely not achieving that. I care about my job and the work I do to a certain point, but when I leave the office at the end of the day, I’m done – I have no interest in working long hours or attempting to strategically climb the corporate ladder. I can do the best job I am capable of in my current and future jobs, but beyond that, I’m not going to “push” myself in the workplace.
The second part of the question, whether I think I am or will become a “drain” on society, is a little more ambiguous. From a social point of view, my wife and I, by choosing to not have children, have, to a certain extent dropped out of society. Once we’re gone (in hopefully 50+ years), there will (from a genetic point of view) be no record of us left. Couple this lifestyle decision, to the fact that we haven’t really bought into the whole “work until you drop” mentality that resonates in North American culture and you could say that we don’t have a lot in common with the vast majority of people we come across.
My overall goal with my Early Retirement plan is to be able to learn and carry out exactly what I would like to do in a day, without having to trade a good chunk of my waking and productive hours to making money to feed and house myself. My intention is to have enough money that I will not become a drain, financially or otherwise to society. I will have paid a substantial amount in taxes by the time I retire and will hopefully not require any assistance from the government/society to support me as I age.
So, that was kind of my long winded answer. I guess a simple TLDR answer would be I’m not sure what is entailed in reaching my potential, and no, I don’t think I am or ever will be a drain on society.
For anyone else out there, do you feel you will end up being a drain? What would happen if everyone carried out an Early Retirement plan?
Posted by Dave on February 4, 2014
Winter, especially the current winter that Southern Ontario has experienced has made for a pretty crappy time. I don’t necessarily get depressed, I just get bummed out by the cold, miserable weather. I would prefer to be out and about – golfing, or walking or sitting on a patio somewhere, rather than hiding inside, trying to keep my fingers and toes attached.
In order to combat the winter lows, I make a fairly big deal about Super Bowl. For me, it’s a day that I can celebrate all things that I am very interested in – food, drink and gambling. I take the day after the game off, creating my own holiday weekend and really enjoy myself. This year, I slow-smoked a couple of racks of ribs, along with a bunch of sausages and had more snacks than I really needed. I had made two different kinds of homebrew to try for the first time for the game – I have basically turned what is just a boring day in February into something I look forward to every year.
Early Retirement planning is like my Superbowl long weekend, but for my working life. Planning for, and hopefully executing my plan will lead to more leisure time and allow me to take part in more of the activities that I want to – more time to read, learn and take part in hobbies that I currently do in my time away from work.
For the most part, I don’t dislike the work that I do – I would prefer to not have to do it though. Having a strategic exit plan gives me a “hard out” number – once my investments are (hopefully) creating enough cashflow to match my budgeted expenses I can leave. For me, having this plan in mind is much like having a made-up Superbowl party – it gives me something to look forward to in the relative short term.
Even if my plan doesn’t work and I have to work well past age 45, at least I’ve been working towards something – to finish my Superbowl party analogy – there have been years where I regrettably overindulged in the festivities and really don’t remember the game I had planned on watching.
For me, I like the process – the “game” of paying off my house as fast as possible – of creating the retirement cash flow as soon as I can in order to win. I like having something to look forward to – even if it is a bit of a lame party in the middle of winter.
Is your retirement plan a game? How do you incentivize a long-term savings plan that may not work?