I’m on a permanent sabbatical, financially independent, retired, or perhaps a bum – whatever label you want. Since the ripe old age of 29 I haven’t worked a real job.
Back when I did most of my working life was behind a stove in restaurants. I would work 60 or 70 (and sometimes more) hours per week, which is normal for cooks and chefs. It was fun.
Actually, working 60 or 70 hours per week is ridiculous.
There are better ways to pay life’s bills. This is a deliberate demonstration of an alternate mode of living compared to the normal American model. My life goal is maximize time spent doing all the other things I’d rather be doing instead of slaving away at a job.
How I retired early
To accomplish this I’ve minimized many unnecessary expenses, and only spend on the things that actually matter to me. No keeping up with the Jones’s for me, thank you. I don’t need a new car or a bigger television, it won’t actually make me happier. We all don’t need massive houses with overflowing garages, that also won’t make us happier. Buying new clothes to follow the latest fashion, that fancy watch, new computer… none of these will make you happy, at least not in the long-term.
Once you cover your basic needs acquiring more/newer/bigger/faster/more trendy stuff won’t actually make your life tangibly better. If anything acquiring more makes life harder as you’ll have to work harder to buy and maintain and store and dispose of these things.
Once you stop buying junk and make a few other minor adjustments to your lifestyle, you’ll find you have some cash left over.
Learn how to invest
Invest that leftover cash every time you have any. Grandma gave you $20 for your birthday? Cool, invest it. Getting a tax refund this year? Great, invest it. Just got a raise? Invest the increase in earnings. Just discovered some long-lost change in your couch? You get the point.
Don’t worry so much about where and how you invest, just start. Paying off debt counts also. Exponential growth is the name of the game here, time is the most important factor. You will make lots of mistakes as you learn and that’s ok. Start saving today, even if it’s only $5.
With time you will soon have a pile invested. Keep saving and investing and keep growing that pile, and whatever you do don’t dip into it just yet. This pile is like snow slowly rolling down a hill. It will be a little itsy bitsy marble for a long time, than a tennis ball, than a beach ball sized orb, and eventually it will grow to a massive avalanche if you let it. It will take a while, but perhaps less than you imagine.
It takes less time than you think
I went from living paycheck to paycheck and having a fair amount of debt, to being able to leave work behind forever in about five years. You don’t need a high income to retire early, but it speeds up the process. During those five years I was making a fairly low average hourly rate of about $12 per hour, but I worked a lot. (I looked at my old time-slips and tax returns and after calculating the numbers I am fairly depressed by this wage, in the US chefs and cooks don’t earn shit. I should have been a server)
It is possible to do this with low earnings, and downright easy with any job that pays an actual fair wage.
People will think you are crazy or a liar
Going against societal norms isn’t easy. Most people are comfortable with the work-spend-consume-die system. It’s the only way they know. They are too busy running on the hamster-wheel to realize that they are actually going nowhere.
They will make excuses as to why they need their frivolous expenses. Nobody can find time to cook, they eat out constantly instead. That membership they rarely use is non negotiable. They will talk about the “investment” they just made in that new TV, (what? that’s an expense.) They will show off lots of new toys, new collections, new hobbies, new clothes.
There are lots of ways to rationalize why they can’t possibly save anything. Lots of “I can’t because______” statements. Let’s try a few:
- I can’t save because I’m already in debt, there is no point in even trying.
- I can’t save because I want to live in the moment.
- I can’t save because I’d rather be a slave for the rest of my life.
They will say that they “love” their job – which is bullshit. Perhaps they love the sense of purpose having a job provides, but not the job itself. It can be hard to understand the difference.
Mostly you need to ignore them, and that is the hardest part about early retirement. These are your friends, your co-workers, your family. They don’t get it, and they probably never will. Worry about your choices, not theirs.
Retiring early is hard
If it was easy more people would do it.
A higher income makes retiring early easier, but you will also be more likely to succumb to a higher lifestyle inflation. Since you earn more, you probably spend more. And therefore you need to save more.
With a lower income it is much harder to save, but you will already know how to live well on less. You earn less, spend less, thus need to save less.
Either way, you need to save a significant portion of your earnings. By significant, I mean pretty much all of it. If you only save a few percent each year you won’t get there anytime soon. Aim for something more like 50% and go up from there. If you can’t save that much get that second job, or change jobs. Hustle to make it happen, you are going to have to work hard to make it happen.
While you’re at it, keep making optimizations to your spending habits. It’s a lot easier to spend less than it is to earn more. Spending is not a surrogate for things you care about, rather spend on precisely what you do care about. Lowering expenses is the fastest way to retirement. Cut the excess, you wont miss it.
By lowering your current expenses you will also increase your savings rate in the process.
Since you are now working so hard, you have even less time to spend money. Keep your head down and keep investing. Soon you’ll have enough accumulated to pay for your expenses with just the dividends from your investments. Maybe you will decide to own rental properties instead, or perhaps a combination of both. It doesn’t really matter how you get to this point, just so long as you do.
Money can’t buy me love
You’ve made it. You no longer have to work since your passive income pays for your living expenses. And you will be happier right? Probably only marginally happier. More money doesn’t actually make you happy, at least not in the long-term. See above under: stuff.
Now I rarely wake up with an alarm. Sleeping in makes me happy. I no longer have to stress about working just to keep up with the bills. No more phone calls at four in the morning from the fish delivery truck driver saying he’s lost his key, again. I have lots of free time to do whatever I want, that definitely makes me happy.
With all of that free time I read, I try to think for myself, I learn new skills. I ride bikes, hike, ski, cook lots of good meals, eat lots of good meals, meet lots of new friends, visit old friends, build things, invent things, break lots of things, fix some things. I putter around on farms, I putter around with investing and other forms of passive income, I putter around with pretty much anything that is interesting to me.
I don’t putt, golf is dreadful. I don’t sit around on beaches either, this isn’t that kind of retirement.
I travel often
There are long road trips, plane trips, trips to new places, trips to see really old places. I stay places as long as I want since there are no time constraints, no job to rush back to in two weeks time. Travel isn’t your thing? Great, do something else with your time. Write that novel, compete in that triathlon, sleep in, go sailing, do nothing, build your dream house. Do whatever you want with your time.
Noodles & Fish
Here we talk about optimizing costs, and the specifics on how you can also choose a different path in life if you want. We look at ways to make your money work for you as opposed to you working for your money. We look at spending/saving and our societal norms. Finally, we compare ourselves to some of the other cultures in the world; how they consume less than Americans yet often have a better quality of life.
We talk about the costs to travel the world, and ways to cut some of the larger expenses involved. I give glimpses of some of the places I’m visiting, but hopefully only enough to whet your appetite. A blog is not analogous to real life experiences – choose your own adventure damn it.
But start today.