Us here at Financial Uproar (me and my 52 helper monkeys) are no fans of retiring super early.
There are a number of reasons why. First, I LURVE money, and want to make more of it. I see no reason to stop doing so early. I’ll just go do something else if I get bored.
I also think taking our hardest-working and most motivated employees from the workforce in their prime working years isn’t good for anyone. Somebody with FU money is far more likely to stumble upon something truly remarkable than the guy who is 14 different kinds of screwed if he gets fired. The wealthy guy can afford to take a few risks; to try and create something worth creating. The poor guy is going to play it more safe than a Mormon on prom night. ZING HE’S STILL GOT IT.
But, alas, no matter how much I shout, y’all don’t care. I know very reasonable people who insist on hanging up their proverbial skates right when their working lives are about to get really interesting. HOW DARE THEY DON’T LISTEN TO ME. I ought to murder them all…with love. And axes.
While most of us don’t have the desire to permanently stop working in our 30s, I think many of us would like the freedom to change jobs, take a year or two off, or be able to start a business without worry. I know I went from working for the man to self-employed, and it was terrifying. Let’s not talk about how many times I wet myself.
So rather than retiring early, allow me to propose another option.
I can’t take much credit for the originality of this idea. Tim Ferriss came up with it before me, and he probably ripped it off of somebody else. I’m pretty sure the first guy who came up with the idea was Benjamin Franklin, but keep in mind my research skills are about as through as a 7th grader throwing together a last-minute homework assignment.
The concept is simple. When working, save your ass off. Create that huge savings rate everyone is always talking about. And then when you inevitably get tired of your job, quit it without hesitation. I’d recommend not playing your boss’s head like a bongo drum on the way out the door, but hey. I’m not your mother.
At that point, you’re free to do whatever you want. Fancy a trip to the French Alps? Go ahead, Captain Pretentious. Want to start your own business? Feel free to work really hard before throwing up your hands and getting a real job. Wife about to have a family? Cool beans. Somebody’s going to have to get yelled at.
And so on.
The whole key is what happens next. After taking a few months or even a year or two to recharge your batteries, it’s time to get back to work.
This arrangement offers the best of both worlds. It allows someone to have the advantages of spending some of their prime years traveling, learning a new craft, or one of the million other things folks who retire in their 30s end up doing. And then it makes sure they get back to work before their resume turns to dust and they become unemployable.
Imagine you were an early retiree who wrapped up your working career at 35 during the top of a long bull market. You have $1 million in the bank. Suddenly, stocks are down 40%, and you’re only looking at a nest egg of $600,000. The whole plan looks shot.
So you decide to go back to work. But the combination of a poor job market and the giant gap in your resume make you all but unemployable. What’s an early retiree to do?
I’m sure plenty of these retiring early folks have planned for such contingencies. Still, backup plans are good. I’ve always found work comes easy when I’m not exactly looking. The opposite is true when I’d really like to find something.
Let me tell you a secret
Come close. I’m going to tell you kids something that’ll blow your collective minds.
There’s no such thing as people who retire in their 30s.
Every last one of them has something that keeps them busy. Some build an online presence. Others build houses. Some freelance. And some take care of the house/kids. The point is all of them end up working in some sort of capacity again. The work might not be paid, or very glamorous, but they do it.
When you’re financially independent, you can make the decision to switch from a very demanding career to an easier one. You can take a break from working. Or you can travel. You can do anything you desire, including retiring.
The point? Get financially independent and then let the rest take care of itself. Once you get to that point, all sorts of options open up. I’m a fan of taking time off between jobs myself, but hey. Whatever floats your boat.