I’m ready for FIRE, aka Financial Independence / Retire Early…. Well, I think I am. I know I’m financially ready. I’ve reduced my expenses down to a reasonable level at less than $15,000 per year. I have no dependents and no debt, including no mortgage on the house I own and have lived in for over 15 years. This low level of expenses, as well as a healthy savings account, gives me the ability to be financially independent and not have to work to pay my bills every month. By having the flexibility to not work, I have opened the door to a variety of choices I can make for myself.
No One Understands Me!
I’ve been contemplating lately how to tell others that I want to retire early or that I’m not going to pursue a new job after I’m done with this contract job. The response I get from people is often negative. I hear – “Oh, you’re lazy” or “Why would you do that? You’re going to be so bored.” Or my favorite: “That’s stupid.” Thanks for your support everyone!
I know I’m only in my early 40’s, and although the people I talk to range in age from 20’s to 60’s, it seems that at any age the concept of leaving the corporate world early baffles most people. Even the concept of leaving a permanent corporate job for contract work is a hard concept for most people to grasp. Personally, I think these people have blinders on and don’t understand that no job is truly permanent, you can be laid off at any time. Since you can never be truly secure in any job, you always need to look out for yourself, and you need to protect yourself financially. See my post starting small for big savings to help get you on the right track.
Drive for FI (Financial Independence)
My drive for financial independence was largely related to living a more simple life, one filled with frugality because it is something that I truly find joy in. Yes, saving money is fun (for me), but enjoying my life based on my frugal life choices is enlightening and fulfilling. My dislike for consumerism, trading my time for unnecessary stuff, playing corporate office politics, and dealing with all the corporate bureaucracy has also been a huge driving force in my journey towards financial independence. I choose to live differently than most people which has been a huge win towards becoming financially independent.
To retire early by becoming financially independent, you must solve the following problem: your annual expenses < 3% of your invested savings. You can solve that equation either by reducing your expenses or by working longer to save more money. In general, most people’s expenses match to their income regardless of how much they make. To retire early, you have to avoid this. Can you be happy without doing what everybody else is doing? ~Early Retirement Extreme
I doubt I will be “retired” in the traditional sense where we picture the stereotypical man leaving the working world and not doing anything more productive than toting around on a golf course all day or a retired couple traveling the world. For most people, after working day-in and day-out for 40+ years at a job they can barely tolerate, they generally don’t plan to do anything significant in their retirement years. Unfortunately, if you are not retiring to something, you risk the possibility of becoming unhappy, lonely, and even (gasp) an early death.
I always have had the desire to be doing something – whether it’s educating myself on something new, meeting new people, working out, solving puzzles, or reading a book on my 500+ to-read list. My “retirement” will probably entail me doing volunteer work, taking on odd jobs (like a dog walker or freelance writer), or joining group exercise classes to get some socializing in. The best part is that I will be my own boss, dictating what I do every day. Of course my to-do list probably differs from most people – I don’t have kids and I don’t have large family demands – but there are so many things to do besides working.
My Solution? Taking a Sabbatical!
Next year, I have decided to take a sabbatical from work. I don’t see any reason why I should delay fun and rewarding activities for another 20-25 years if I can do them now while I’m young, healthy and can truly enjoy them. Most people are too busy making money to pay for all their stuff, they don’t have time to think about what they would do if they could afford to not work for an extended period of time.
So what do I plan to do during my “sabbatical”?
- Freelance work in accounting, tax, finance, bookkeeping. I’m a nerd and find this kind of work fun, but I’d prefer to do it on my own schedule with lots of flexibility, hence the ‘freelance’ part.
- Teach classes – explore opportunities to teach others about business, accounting, personal finance; Volunteer, Community Colleges.
- Odd jobs – dog walker, mystery shopping, focus groups, research opportunities.
- Take classes – find opportunities to learn new things. Explore the local libraries, community center (YMCA), online classes in areas like investing, crafts and art, and technology.
- Learn Spanish – schedule a “meeting” with myself to study a little every day.
- Be creative – find DIY projects, learn to paint or draw.
- Walk and hike more with my dog.
- Adopt a new dog and/or volunteer at a local shelter.
- Group exercise classes – find classes I enjoy and people to socialize with on a routine basis.
- Reading – organize and prioritize my to-read list by author, series, etc. Maybe create a book review blog.
- Cook – find ways to be creative in the kitchen.
As I’ve learned over the years, everyone has different goals in life. Additionally, everyone is also motivated differently – including some people that aren’t motivated to do a damn thing in life. I’ve been motivated by different things and most recently it was finding a path toward financial independence. Living frugally, while also living a happier, simpler life, has enabled me to reach FI sooner than I expected. (Full disclosure – the stock market returns over the last few years has also helped tremendously.)
Life is all about options. You have the ability in this life to choose what you want to do. Once you reach financial independence your ability to choose increases substantially. For me, permanently retiring early is an option, but so is taking a sabbatical. I’m excited to take on a new journey in my life and find out what early retirement, albeit temporary in the form of a sabbatical, has to offer.