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Friday, April 28, 2017

Peak Earnings

Posted by Tim Stobbs on April 25, 2017

I was chatting the other day with someone about my plan to retire early and they noted that if things go wrong that “You may never earn this much ever again.”

To which I frowned and then replied, “But that doesn’t matter.  I’ve NEVER spent my entire salary, so who cares if I fail and go back and earn less? I don’t.”

You see that is perhaps why I’m a LOT more relaxed about my plan to retire early than most people.  I’m not obsessing about the fact I’m currently at my peak earning potential in my life.  That I believe is the logical flaw that sucks in a LOT of people who fall into the one more year syndrome.  They erroneously assume you have to keep working since you can potentially never earn this much income again.  They confusing having to work again in the future with having to have the same income and/or career.

The issue comes down to this, even if things go horribly wrong and I have to go back to work for a while I am under no obligation to go back to my current career or pay range.  Honestly, I earn currently north of six figures and only spend a bit over $30K a year.  So in reality if I have to go back to work to save some more money my actually target is to earn more than $30K a year to allow some savings while paying the bills.  So any job that pays $31K or more will work.  It’s just a matter of how much do I want to save and when I quit again.

Of course this ignore the reality that we already have substantial assets and I would likely notice things going wrong sooner than later.  Thus in fact I won’t even need to earn more than $30K to pay the bills, the fact of the matter is earning ANYTHING would result in me saving some money.   So even some mindless minimum wage job at half time would be enough to help build up my savings again.  It would just be at a slower rate than I’m doing right now.

So yes, I’m currently riding my peak earnings towards my early retirement date and if that is the case, so be it.  I can give up the really high saving rate and roll the dice on my current plan.  Yes, I may lose and have to go back to work at some point doing something, but if I win I will have an additional 25 years of time to do things that interest me.   I know what I’m choosing.

So what about you?  Would you spend an extra year or two working at my current job to buffer against ever working again or take the risk of having to do some work in the future? Would you care if you worked again in the same field or not?

Exit Stage Left

Posted by Tim Stobbs on March 27, 2017

Conforming is easy. You don’t have to think that much about your choices. In fact the world provides a lovely little template for you to follow. Go to school, graduate high school and then continue into some kind of post secondary education. Then after picking up lots of debt from that post secondary education, get a job to pay that money back. Oh, but don’t forget you also need to find a spouse, buy a house, get into even more debt and then spend the next 40 years paying it all back and saving just enough money to eventually retire. Yet at that point the script stops. No one tells you what to do in retirement except some meaningless advice like playing golf and relaxing.

Odd, you say? Try having your script stop 25 years earlier. That is the plight of the early retiree. We have abandon our script and walk off stage left before the audience is ready. Then everyone, including ourselves, is wondering: what the hell happens next?

Early retirement only offers the terror of being bound by nothing. The conforming part of your life is gone. The structure of your life is blown to bits when you leave work and your forced for the first time in a very long time to actually face some of the hard questions: who am I? What am I here for?

Facing a sea of endless choices it becomes easy to get lost in the options. What time would you like to get up? What does it mean to achieve something when playing a video game was all you did for a day? Is that productive? Does being productive even matter? Then you finally have to face the big question of your day: do I need to take something out of the freezer at noon to make supper?

In some regards I understand why people continue to keep working. It’s easier to keep pushing back that retirement date and just work. You may not like everything about your work, but it does provide some meaning to your life and some structure to most of your week with no effort at all. You know when you have to get up as you have to plan when to arrive at work, you know how long your lunch break is, you have a series of tasks provided to you by your thoughtful workplace which also provides a wonderful metric on your progress so you know if you have been productive or not.

But the early retiree doesn’t have that so what do they do? There are various ways to impose some order to your life and the most obvious solution is to take the nod from work: borrow order imposed by others. In my case, my wife’s plan to continue working provide a nice excuse to get out of bed and get dressed each day. Of course, after that I’m on my own but at least it’s start. The kids will of course also contribute to the structure of my week by having activities that I can get involved with or at the very least take them to.

The other way to insert some meaning into your life is pick a mission. Unlike your job where that is approved by a board of directors, you get to define your own mission statement. It can be to help save the world or be as minor as been the best napper in your house (beating my dog on that could be a serious challenge). The point is you can choose your mission and then change it as you like. You could spend a year learning a new language and pick a new one the year afterward. Or in my case, you can write stories about things that never happened to people that don’t exist in pretend worlds (see isn’t fiction fun).

Then finally there is the last way to assign meaning to your life: choose not to. Instead just let the days roll past and relax. All this talk of life purpose may make your head hurt. So just get up when you want, do what strikes your fancy and sort it all out later on. While this may work very well as an initial strategy while you detox from work and discover the cool thing of actually having a enough time in the day to exercise, get enough sleep, eat right and finally floss everyday. Meaning after all is arbitrary, what we focus on life is our meaning. You can pretend otherwise, but by choosing to watch TV for 20 or more hours a week you have chosen that as your meaning to life. I didn’t say it was a good answer, but it is an answer.

So dear early retiree, chose wisely. What you do is your life.

The Decision

Posted by Tim Stobbs on March 10, 2017

I’ve done more math on this problem than any other in my life.  I’ve got spreadsheets, data and analysis until my eyes want to bleed saying that I can reasonably leave work this year, but I haven’t actually committed to that yet.  I keep second guessing myself.  I have a plan but I can’t bring myself to commit yet.

Is this the right thing?  Should I work just a bit longer?  One month more or maybe three.  Or can I shorten things by another month, what happens then?  I do stress tests on my assumptions and answer a mine field of ‘what if’ questions.  I know exactly how I can fail at this but I’m still not sure I can do it, because in fact I haven’t make the choice yet.

Then the feeling of uncertainty slowly morphs into something darker over the months.  I’m angry at my job.  I don’t want to be there.  I find myself staring out into space hating being where I am.  I want to leave now, why I am doing this any longer?  Why not just go NOW? My soul blackens and I can barely sit in my chair some days.

Then like a sunbeam from between the clouds it hits me: because I have chosen this.  There are no guns to my head keeping me at my job, no chain on my leg attached to the desk or fence keeping me in my grey cubicle at work.  I can walk tomorrow if I so choose, but I must accept the consequence of that choice.  Besides I realize that despite the frustration of waiting to finish up my last part of savings that there are things I still want to do at work.  I don’t hate my job, and I don’t want to screw anyone over.  I want to leave with my head held high that I set my workplace up to succeed with out me.  It won’t be perfect, but life never is.

And suddenly the tension is gone as I realize that I accept that I will work a bit longer.  I will leave full time work this year.  I have chosen to try my hand at a different life and yes that is a bit terrifying but also very exciting as well.  I have in fact gone from thinking about leaving work to deciding to leave work.  And it is as if the world remakes itself in my head I let go of the anger and frustration and I’m left with a feeling of calm.  I actually smile for the first time in days.

Than a quote comes to mind from the movie ‘Shawshank Redemption':

He strolled, like a man in a park without a care or a worry in the world, like he had on an invisible coat that would shield him from this place.

It’s going to be alright.  I have made my decision.