Early retirement



I hesitated for a week before finally posting this. Is it normal for a blog on the musings of a CFO to include a section on retiring early?

The more I thought about it the more I concluded that it was normal.

I’m a financial manager of my company and so why shouldn’t I also have opinions on retiring early?

Now there are some great blogs and websites that advocate ways to get out of the work environment and into early retirement. Check out Mr Money Mustache  or Financial Samurai for some great content.

The first blog, Mr Money Mustache, follows the adventure of a guy who saved hard and retired at 30. Yes, you read that right, he retired at 30. Before you smirk about that, an important point of background:

His definition of retirement is probably way different to your own. His is not travelling the world on his yacht, or lazing around next to the pool in front of his beach house. His life is pretty much going on as usual, but he isn’t focusing his energy on working in a job he doesn’t like, but rather he has the financial security to follow the “jobs” he does like. In fact the financial security blanket he was able to rapidly create gave him the ability to make a decision for himself and allowed him to follow his many passions.

You see he still does work, yet the definition of the work he does is not the definition most people would have. He doesn’t have set hours, he doesn’t need to wake up and get in the car or metro or train every morning to go to an office or some other site to perform tasks everyday. He is able to pursue his version of work as he pleases.

The second blog, Financial Samurai is from a guy who was previously an investment banker. It seems he made some really good money, but had another passion and so he followed it, again because he had the financial security to help him make a hard decision that most of us might not be willing to make.

While both these sites are really interesting and the writers entertaining in their own ways, the common theme of following your passion is easy to spot though probably overlooked by most observers.

If one really loves his/her job in the corporate world, if one feels he/she is making a real difference and that point is personally important as a life goal, then retiring early to become a farmer probably won’t cut it, will it? And most probably the person in question won’t even be asking the question about retiring early in the first place.

Now if one hates their job, does not feel fulfilled and wishes they were doing something different, but has no idea what that something different really is, or isn’t certain about it or maybe does know what it is, then that person is probably scrambling for possible ways to “retire” early to then have the luxury of looking at the various possibilities that come to mind or doing them.

The question that all this raises for me is simple.

Are you doing someone you love doing?

If not, are you willing and/or able to change it?

The second question is probably harder to answer and Blog number 1 above helps identify concrete ways to make it easier to answer that question. You see, for most of us, as we age and get married and have kids and take on “responsibilities” like a mortgage, annual holidays, schools etc, we get into and then get used to a way of life.

Changing that or putting that at risk can be daunting.

Because we don’t know what the consequences would be by taking a decision to change things. Would we be able to maintain our lifestyle? Could we afford those things we had taken for granted?

And hence the notion of retiring early or changing evaporates and we get stuck back into what we are doing.

So should we not think about it? This change, if we don’t like what we are doing?

To the contrary, I believe one should. I believe that being fully engaged in your job requires you to find utmost satisfaction in it. So I see two solutions if you find yourself contemplating a change or “retiring early”.

  1. Find the changes in your job that make it more rewarding, more passionate to what you think is important in life.
  2. Start small incremental changes in aligning your world with the world you see yourself in.

I believe both of the above are attainable and realistic. You just need to be clear on what the ultimate destination is for the journey you are on. Then you start correcting your direction bit by bit.

Maybe an example will clarify. This doesn’t cover all situations but it should be transportable to most.

John believes that his family is the most important thing, but that his job takes his time away from them and so wishes he could retire early to spend more time with his wife and kids. But he can’t afford to save, so he feels hopeless in being able to change his lot. John then realizes that technology exists for him to be able to do part of his job from home. He approaches his boss and they decide to give it a go. John changes his rhythm and works from home on certain days of the week. Given that he eliminates the hourly coffee break with his colleagues and the longer lunch break, John becomes much more productive and is able to stop work at 4pm when he works from home so that he can spend the entire afternoon with his kids.

Jill longs to be a photographer, but his job as a bus driver just doesn’t give him the ability to even start contemplating breaking into the photography world.  One day Jill comes across a blog started by someone in a similar situation who had managed to work out of their day job and into being a full time photographer. Jill starts taking her camera to work and whenever she has a break takes pictures of random travelers. She starts a website and uploads the pictures after each voyage. Traffic to the website slowly increases and Jill starts selling some of her pictures and putting selected adverts on the site. Jill realizes she has become a photographer.

Both the above have been inspired by true events. Both the above happened when the people in question decided to proactively start change happening in their lives. Both were able to “retire early” but not in the way you might imagine.

Now, I also have some ideas on how to make concrete changes in your current job to make it more passionate and ideas on how to plan to ensure your financial nest-egg gets big enough so that you can pull up a chair next to the pool at your beach house and laze the days away, but I’ll save that for another time.







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