FIRE (Financial Independence – Retire Early) has been a goal of mine for the last few years. For a lot of people, their first view of anything FIRE related is often reading an article online or seeing a blog post or even listening to a podcast for financial independence (FI), early retirement (RE), or both. FIRE is spreading; well, at least the ideas of it seems to be catching on based on more media exposure and the personal finance blogging community I’ve been following over the last few years. However, the beginning of my journey started when I became witness to several co-workers retiring early and following their true passion in life. My first thought: “Sign me up!”
Of course there are a lot of haters out there that think ‘retiring early’ is a sign of laziness and unwillingness to work, as well as the haters that say the mere concept of retiring early is a dream, a goal that no one could ever achieve unless you won the lottery or something. To which I say: “Stop the hate, feel the passion and join the journey!”
The Journey to FIRE
In 2013, I started to track my expenses by pulling all of my credit card statements for the year and putting everything in different categories. Thankfully for me, recording the expenses was easy because I rarely use cash for anything, so I didn’t end up with a big “ATM – Cash” category. It was an eye-opening experience to see where my money was going. My total expenses in 2013 were just over $46,000. I had just purchased a brand new luxury SUV in 2011, so I was still making car payments until I paid it off in 2014. The mortgage on my house was very low (under $500 with insurance and taxes) since I’d been in my house for over 10 years and refinanced it a few years prior. However, I quickly found that I spent a lot on things I didn’t need like lots of clothes, shoes, make-up, food I didn’t eat, massages, and salon hair cuts. I was paying for services and stuff I didn’t really use and never even tried to negotiate better rates. By 2016, I had paid off my mortgage and reduced my annual expenses to just under $13,000. (Note this doesn’t include health insurance or a “fun” allowance.)
I worked hard on trimming expenses and adjusting my lifestyle over the last few years to accomplish my goals. The desire to become financially independent was so strong; I definitely pushed myself hard to see how quickly I could save more money to get there. And I got there sooner than I thought I would, which was partly driven by the amazing stock market returns we’ve had over the last several years. Thankfully, as a risk-adverse person, I didn’t pull the trigger once I hit my saving goal. I had seen the 2008-2009 recession decimate investment portfolios, including my own, so I definitely wanted a nice safety net. From late 2007 to early 2009 the Dow dropped by more than 50 percent. Scary times. To me, this means giving myself a nice cushion in my portfolio since it is essential to ride out any turbulence that market corrections could have on your investments.
Once I’d reached my FI goal, I had my own internal conflict of whether I was ready to Retire Early. FI is all about the numbers, and is surprisingly simple to calculate once you know how much you spend. Check out the post on The Shockingly Simple Math Behind Early Retirement which gives an in depth analysis of how simple it is. The most important concept he points out is that cutting your spending is the most powerful part of being able to retire early because it “permanently decreases the amount you’ll need every month for the rest of your life.” It’s an amazing feeling to know that I finally have enough money to not have to work another day because I have to. Now, it is my choice, do I want to work?
In early 2017, I decided I was ready to retire early and went to HR at work and discussed that I was ready to leave. I was able to negotiate a transition period over several weeks as well as a nice severance package. I couldn’t believe I did it; it seemed so surreal. I had my “retirement” date set, April 28, 2017. I talked to various people around the office about my plans after I was leaving… I’m taking time off, I’m going to do some volunteer work, I had various hobbies to ‘work’ on, I wanted to start a blog, then maybe I’ll do some contract work (in the future). The funny thing is that very few people really heard me and the majority wanted to help me find a new job… probably because that what everyone does right? They work until they can’t work anymore, or until they die. No one believed me when I told them I didn’t want to do a corporate job anymore, I WAS DONE! The general consensus… Everyone was deaf to my words of early retirement… they did not believe me.
Guess I’m Not Retiring
I guess they were right! A friend from work said he had a great opportunity for me. It was a company that had recently been purchased and they were transitioning their accounting work to the new company. All of the company’s personnel were being severed (a brutal truth in the corporate world today) and they were bringing in contractors to help finish the transition. He said send him my resume and he’d take a look and send it off to his contacts. I thought, what they hell – why not? It can’t hurt. So I sent it to him, he modified it a little and he sent it off. The company called me and they were definitely interested and wanted to meet with me. It was the quickest “interview” I ever had, and the next business day, April 24, 2017 just a few days before my “early retirement” date, they offered me the contractor position starting on May 1, 2017.
I took the position for a couple of reasons. #1 it was a short-term engagement – no longer than the end of the year and the transition was complete and #2 it would cushion my investment portfolio just a little more and I could loosen the purse strings a bit more. The position also offered health insurance benefits, and I figured if I didn’t like it, I could leave anytime since I didn’t really need it. To my surprise, I actually found the people great to talk to and hang out with. No early retirement for me yet!
Transition Slowly to Retirement
I feel like I continue to be sucked in to the corporate world. It won’t let me go, or maybe I can’t let go. The company keeps extending my contractor assignment. In fact, I will probably be the last person standing from the old company as my role encompasses worldwide reporting through the end of the restructuring transition in early 2019. It’s funny how now that I am financially independent and do not need to work for a living, I end up with a position that other people are in envy of. The fortunate thing for me is that since they need me since no one else can do the work I’m currently doing; therefore I was able to negotiate and work part-time and at home instead of going into the office every day. This is a luxury that most contractors do not get, but knowing my value makes it easier to negotiate what I want.
So, although I’m not fully retired, I feel that this will give me a great transition. The reduction in hours and working from home will give me a much better idea of how I will spend my days as an early retiree. It’s only another year, and now with the market in an unpredictable state (correction, recession?), I’m thankful for this opportunity to slowly transition myself into my future retirement passions.
I’m ready and, seriously, this will be that last of the corporate jobs. Yes, really. I’m putting my foot down this time. No more corporate BS, no more office politics. Done! Finito! Just one more year…
Me in 1 Year!!!
(But didn’t I say this last year at this same time… uh, oh. Deja vu.)