Posted by Dave on December 10, 2013
I have a ton of problem getting motivated in doing most things that are outside of my comfort zone. Through most of my life, I excelled at procrastination – I gained the ability of putting aside the vast majority of undesirable tasks and filled in that time with hours of video games, internet surfing, recreational reading or otherwise – whatever it took to avoid the activity I wanted to do.
On Wednesday, I am headed to Mexico. Even though the majority of people there speak English (especially since I don’t plan on leaving the all-inclusive resort), I wanted to learn at least a small amount of Spanish, in order to understand a tiny percentage of what was being said around me. The problem with that project was that learning a new language – even just to start learning it is hard work and takes time, which I am able to “waste” very well.
I employed the same method I have implemented in the past couple of years, to get through school and keep a somewhat clean house as well as maintain a wide number of hobbies and interests. I invested 15 minutes a day into learning Spanish, over a 2-month period, the exact amount of time of Pimsleur’s Level 1 Spanish. While I am unable to have a conversation besides confidently saying “I speak very little Spanish”, “One beer please”, and “Where is the washroom?” I at least know I can understand the jist of a simple conversation. From a base of literally knowing zero of the Spanish language, I have built up to maybe a level 10 or 15 out of 100 in Spanish skills (if you were to look at Spanish skills as a video game).
15 minutes is about as much of an undesirable activity I can really talk myself into, unless there is some pressure to get it complete (the lifestyle of a procrastinator). At the end of a year though, 15 minutes turns into 90 hours (if my math is right). From my perspective, 90 hours is more than enough time to get most anything done, mostly because the stuff I would like to get done is really not all that important.
From a personal finance perspective, 15 minutes a day could be enough to learn quite a bit over a year about anything, I could:
- Learn a new or different method of investing – I could read a chapter of a book per day.
- Organize my investment accounts
- Accurately track my spending
- Research a stock
At the end of a week, I would be way further ahead with my finances and financial plan than at the beginning of the week.
How do you fit in “undesirable” activities? Do you leave them until the very last day, or attack them well ahead of time?
Posted by Dave on December 3, 2013
Having what I would classify as a fairly aggressive retirement plan, much of my money is focused to achieving this goal. I would say that most of the time I weigh the opportunity cost of making a purchase against either the time it took me to make that money, or what else I could use this finite resource on.
This kind of overthinking on any kind of purchase decision drives my wife completely nuts. When we first got together, I would start talking about a purchase, research it for a week or so, get excited about it, explain the benefits to my life that this new thing would make…then promptly decide I didn’t really need it anymore. The over-analyzing (I think) has helped me avoid becoming a hoarder, because I, like most people, enjoy a good deal on stuff. Things like useless kitchen gadgets or appliances would be stacked up like cord-wood in my kitchen if I had bought every “cool” thing that I’ve had my eye on (although I still ended up with a graveyard of stuff that I feel bad throwing out once in a while).
Next week, my wife and I are going on a very non-retirement-friendly trip to Mexico. Besides the money being spent, the volume of food and drinks I will more than likely consume while away is probably double what I would normally partake in. Couple the trip with the Christmas parties I have been taking part in, and plan to attend when I get back, and I’m going to be until the end of January before I fit into my pants.
These kind of large expenditures allow my wife and I to better prioritize our finances. I think that having a “side” goal that is relatively inexpensive (and results in a considerable amount of short-term fun) allows for a lot more buy-in for both of us. We have this extensively planned long-term goal of retiring in about a decade, but there are things that my wife and I enjoy doing (trips are more of my wife’s thing) that make the long-term goal more feasible to get to.
Part of the reason that we decided on a retirement age of 45, compared to say 40, was that after reviewing the savings rate necessary to retire at 40, we could see that there would be very little flexibility in our spending – it would essentially result us in being 100% focused on retirement and forgetting about any trips, or large (probably unnecessary) purchases. The 5-year buffer was built in on purpose in order match our priorities.
How do you decide your “fun” expenditures if you’re saving for early retirement? Do you focus entirely on your retirement goals, or do you mix in some of these larger expenditures?
Posted by Tim Stobbs on November 21, 2013
I was having a conversation with a co-worker where we were speculating on the potential failure of a large project and of course the conversation shifted to just how far down the change of command people would get fired over it. Of course I said “Oh, I don’t worry about that.”
“Oh really, don’t you have bills to pay?” My co-worker asked.
“Yes I have bills, but I have enough saved that I roughly don’t need to work for the next decade. So I’m not ever worried about being fired.” I said.
“But what’s the point, why save so much money? What are you going to do? Go on longer trips with it?” My co-worker asked.
“No, I’m planning to only work about 7 more years here and then I’m going to start a second career doing what I love: writing. But then I won’t have to worry about making much money at it.” I replied.
“Really!?!” Apparently the thought of having enough money to not work here had never entered my co-workers mind. Granted when you are in your thirties, the vast majority of people don’t really think that much about retirement. Mmm, perhaps I should consider changing my sales pitch on early retirement to ‘second career planning.’ It seems to go down a LOT easier with people.
The same principle applies to selling ‘early retirement’ to your spouse, family or just about anyone. You need to find a way for the concept to make basic sense to the person in question. For example, my wife really doesn’t care so much for the freedom from work. She loves her job (most of the time), so she isn’t desperate to stop doing it. Instead she loves the idea of complete financial security. The house could burn to the ground, we could both be out of work and we would still be fine financially.
So what are some other ways to sell early retirement to others? Here are a few suggestions:
- Career change – You are going to start over a guide for hikers or other dream job or perhaps you are going to be a private wealth manager (just for yourself to start).
- Small Business – You plan to give you long time small business a shot of being full time or start one.
- Take care of kids or family members – You plan to help care for someone either full or part time.
- Sabbatical – You take a leave and are doing a particular big personal project (but forget to come back).
- Dream Trip – You quit your job to go on the trip of your dreams (you just fail to mention your not going back to work).
- Education – You are going back to school.
- Real Estate – You plan to look after your rentals full time.
- Freedom Seeking – You are far too independent to work for ‘The Man’ and you are seeking your fortune elsewhere (just fail to mention you already have a small fortune).
The point of these alternatives isn’t to lie, but rather make someone at ease with the general idea of you not working all the time. I find if you toss out the early retirement card the conversation almost always grinds to a halt because someone can’t accept it as being even possible. Of course that is why some people prefer the term financial independence, but I find that also often a problem concept. Since often I have to explain the concept.
So how do you sell the dream to people close to you? Are you upfront and honest about your retirement plans or do you keep it on the low down until you pull the pin?