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Thursday, October 8, 2015

Too Independent?

Posted by Tim Stobbs on August 4, 2015

I was reading a book the other day that pointed out something that honestly had not occurred to me as a danger of seeking financial independence: that you can end up being too independent. To which I initially thought: pardon?!?!

Then as I kept reading the author made his point a bit more clear.  Seeking financial independence is a fine goal for anyone to do.  The danger becomes when you apply the same thinking to everything in your life.  When you seek to be independent of everything does the trouble start to come home.

You see you can start to apply the idea of being independent of your job to other parts of your life. For example, why should I buy power from the power company when I can setup my own solar and wind power?   Or why should I buy my vegetables from the store when I can grow my own?  These types of independence aren’t really a bad idea depending on how much you enjoy the project, the costs versus the benefits (not all power generation systems make economic sense) and how much time you have to work on them.

The trouble can really kick in when you start applying the idea to people and think:  I don’t need to be nice to the people I work with since I’m leaving in a few years or perhaps I don’t have to hang out with my friends that spend too much.  This is where you start to become too independent.

“No man is an island entire of itself” – John Donne

It may pain people to recall this but you can’t live without other people.  We are social beings and while I’m a strong introvert even I realize that I need other people at times.  So that means you can’t just focus blindly at savings money and ignore the social impacts of your choices.  By never going out with friends you are social isolating yourself at the cost of a few drinks or a meal out, which really shouldn’t make or break your plan to retire early (because if it is, then your margin is far too thin and you need to go back and increase your spending estimate a bit).

The same idea applies to being a self absorbed egotistical ass to other people just because you are good at saving money and they are not (yes, even I have done this and regretted it).  Everyone has their particular gifts and skills so don’t just burn bridges to stroke your ego, you might find out that you being an ass has a much higher price in your life than you realize.

You see your social network also provides a degree of support to your early retirement plan.  For example, a friend will typically look after our house when we go on vacation.  Or if you need help moving something heavy to the dump a friend with a truck can save you the cost of a rental.  You in turn also help your friends with projects like painting a fence, installing a patio or putting up a garage.  It’s called social capital and it is just as important to have access to as financial capital and it works on a give and take basis…you help others and they help you.  I caution you not to underestimate the value of this…I mean having a friend to call when the world goes to shit on you is nearly priceless at that moment in time.

That same capital even applies outside of your good friends.  Think for a minute about work when you have two tasks to do to help two different people: the first one is for a nice guy who helped you out of jam last month and the other is an over demanding prick who is never helpful back…which one do you help first?  Sort of obvious, right?

So in your focus to financially independent don’t forget to also grow you social capital as well of your financial.  Both will serve you in the long run to getting to a better place in life.  Also there is the nice side benefit of feeling better by helping others…especially those you actually know and like.

Have you ever gone too far and become too independent?  What was your wake up call and how did you turn it around?

What’s the Point?

Posted by Tim Stobbs on July 29, 2015

I was chatting with someone the other day regarding my plans for early retirement and he asked a basic question: what’s the point of early retirement?

Ironically, the person asked that in a more general sense and I of course pointed out that the reason why people go after early retirement is hugely personal.  There are thousands of reasons to go after this goal, but in the end the only one that matters is your reason.  Why do you want to retire early?

There doesn’t have to be a single reason why.  In fact, I think the most successful people planning to retire early have more than a single reason.  The more reasons you have the more motivation you can bring to your plan to help you see it through.  Getting to early retirement is very much similar to training and running a long distance.  At the start you can’t go more than a few blocks before being exhausted, yet over time you get go further and further towards your goal.  But unlike running, the changes to get to an early retirement may span a few decades.  It isn’t an easy feat to do, so you have to be very sure of why you are doing this otherwise you can give up on that dream.

To me personally the best way to summarize my why is: freedom.  I love that feeling on vacation when you do what you like, when you like within a broad context of the amount of time and money you have put aside for the trip.  I just want to expand that feeling to have nearly unlimited time and a modest amount of money to do things.

For me the time is worth more than the money.  Also putting it into context when I am on vacation, like right now, I tend to focus on doing things that interest my family and me.  A lot of the time these things don’t have to be very expensive like a hike in a provincial park to see a few waterfalls then swimming at the base of the falls.  Of course this doesn’t mean I don’t spend some money on things that we want to do, we just keep in mind the fact we can’t do everything at once.  Besides, I sort of like taking things easy while on vacation.  I hate rushing around so the idea of jamming in as much as possible in a week isn’t fun.

Yet there are other reasons to seek out early retirement for me that include but aren’t limited to:

  • I like to write, but know it doesn’t pay that much. So it takes a lot of time to write a book, but your hourly rate usually sucks.  So I can’t afford to do it full time right now.
  • I dislike waking to an alarm.  Really, I never sleep in that much so why should it matter if I’m 20 minutes late some days for work anyway. (Work has a different opinion, so I keep the alarm clock for now.)
  • I dislike working full time at my day job.  I don’t hate my work, it just loses some of the fun when you have to do it for the majority of your week.
  • I love to read books and watch movies, which with a library is a fairly affordable way to entertain myself.  Add in Netflix and I could happily stay entertained for years.
  • I like to slowly fix things.  Doing a little project over two weekends rather than cramming it into a long weekend.  I like to get things right the first time and have time to think about the project.
  • Savings is natural to me.  Early retirement just defines a bit more of a goal for that money.

Are these great reasons?  Not really, but they don’t have to be as long as they make sense to you.  Find your own reasons and don’t worry if they seem silly.  After all, you only have to convince yourself.  So what are a few of your own reasons?

The Unknown Road

Posted by Tim Stobbs on July 3, 2015

So I finally started down an unknown road at work, figuratively speaking.  During my mid-year performance review with my boss I planted an idea with respect to my career goals.  I actually wrote on the form for near term goal (1 to 3 years): retirement or reduced hours to approximately 50%.  Then I submitted it to my boss to see if any fireworks ensued.

Oddly enough, the entire conversation was oddly civil and straight forward.  From my boss’s point of view he wants to keep me around as long as possible, so if we need to look into options to make that happen he is at least willing to explore them and ask how it could potentially work.  If we can find a compromise that works for both of us, why not look into it.

I made it clear I don’t expect changes immediately (after all I’m still working on building my savings), but I would like to know what options may exist.  Currently we are exploring a few different ways to make something like this happen including:

  1. Cut back to half time.  This would be using the same policy that let me drop down to 90% currently.  The issue here is figuring out how picks up some of the work that I’m no longer doing.
  2. Cut back time and reuse the budget to pick up another employee.  This one is a bit trickier to pull off and requires some help from HR on what is possible and what isn’t.  The idea would be to free up enough budget from my current position to allow another person to come on board and pick up the remaining work.  In effect splitting the budget from my job into two.
  3. Shift to a contractor role.  I had thought of this idea myself a while back but somewhat discounted the idea as the work involved to setup and obtain clients while still working.  This way would be easier as I would start with one client right off the bat, which would make the shift easier.  The downside of course if contractor budgets are often the first things to get squeezed out during budget cut backs.  So my income would be more unstable and there is a risk of me being hung out to dry.

Of course I’m not sure where this is going to end up, but I figured that it would be worth the time to at least explore semi-retirement with my current workplace.  Oddly enough I sort of discounted this idea in the first place as I thought they would shoot it down at once, but the reaction has been more hopeful than I would have guessed.

Anyways, worse case scenario it doesn’t come to anything, I finish my savings and just leave in about two more years.  Best case would be dropping down to 50% by next year and staying in semi-retirement mode for a three or more years until I get enough savings to leave entirely or just get sick of the entire thing and pull the plug.

Has anyone else had much like convincing their employer to allow you to go part time?  Any tips or ideas?