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Monday, September 26, 2016

Hanging On

Posted by Tim Stobbs on September 8, 2016

I can always tell now when I have had a particularly bad week when I start running calculations on what would happen if I just quit now?  Previously when I would look at the results I would end up being disgusted and give up the idea, but recently as I get closer to my long term savings goal the result come back in the realm of reasonable.  Ugh, now what?  How do I hand on when leaving is starting to look good.

So I have had to change tactics with the fantasy of just quitting tomorrow and take a step back and consider the big picture.  Right now I’m in my peak earning and compounding phase, which basically means for terms of saving and investing money that is doesn’t get any better than this.  So then I start to play a little game with myself that goes like this:

Could you last another month?  Yes, no big deal.

How about three months until after [insert life event or holiday]? Mmm, yah, I guess.

So what’s the big deal about a few more months after that? If there is little difference between 1 and 3, or 3 and five, why is there any more or less between 10 and 13 months? Ugh, damn you logical mind.

The debate really isn’t about logic, but rather emotions.  When you are tried, stressed or feeling a bit down, it becomes easy to image all the worlds problems melting away just because you no longer have to go to work.  Yet of course that really doesn’t happen, some problems will remain regardless of your job.  Early retirement is NOT a cure all.  It won’t make you sexier, happier and achieve enlightenment.  Rather it may give you time to get into working out more, do more things you enjoy and meditate, but the fact of the matter is you still need to do something other than quit your job to achieve those.  Which of course if you worked on them now you may actually be sexier, happier and achieve enlightenment even with your job.

People who go after early retirement like to demonize work and blame it for lots of things, but often it isn’t all to blame.  It may not help things or compound other issues going on in your life, but work itself isn’t a bad thing or a good thing.  Rather it is a means of making money.  We attach a lot of other things to it, but in its pure form we do it because we get paid.  Full stop that is it.  There are other good things about work satisfaction from solving problems, working with good people and expanding your knowledge base but those are side issues, not the main point.

In the end, these those about ‘leaving tomorrow’ to me are an alarm bell.  I’ve been pushing myself too hard and I need to slow down a bit and enjoy life.  It really isn’t the fault of my work, but rather myself.  After all, the point of early retirement is to have more time for life so how does not having a life help you out?  Simple, it doesn’t help.  So don’t mind me while I go for a walk to clear my head and perhaps read a book.  I’ll feel better tomorrow.

How do you deal with hanging on when you are close to the end of a goal?

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?