# 35 and no goals, no career, need some advice.



## twowheeled (Jan 15, 2011)

I really need some people to bounce this off of, and I don't really know of any forums to discuss such topics. I figure with the crowd here I'd get some good answers, or at least some good heckling.

I'm going through my midlife crisis. I'm 35 and married, no kids. I was brought up in a strict household. Throughout school I was always in the top of my class, never through determination or drive but always through fear of my parents retribution. I finished a university and started working as an engineer. I've had many different jobs with many different companies. I've always started the same way, by putting my head down and working hard. Impressing my managers. I've always seen the doors and opportunities being offered to me for advancement and I've always avoided taking them, and soon after quit or was laid off. "what do you mean you don't want this promotion?"

The truth is, I've had many jobs that have challenged me, stimulated me, have been rewarding.. I was making a meaningful contribution to a company. Where the days flew by and I would lose myself in my work. I've also had jobs where I have been paid a lot to sit around and do nothing. *I have never once enjoyed any of it. *Every single job I have, I just can't wait to get home at the end of the day. I drag myself out of bed in the morning with a deep depression. I see coworkers striving to succeed and rise through the ranks. I can't relate to any of them. I make a fantastic wage, and I mean that in the most humble way. This is not a thread to brag. I make around 185k a year. I have built a nest egg of $500k, I have no debt, no house. In my current job I've been praised by all my managers and the director of the company about how I turn heads and the quality of my work. Its all a lie. I only work hard because someone is watching. I fear "falling behind" in life, letting my wife down, disappointing my parents, being looked down on by my friends and family. Not having enough saved, having to work into my senior years.

The truth is, I don't want to work at all. I want retire in a poor country like Mexico or Thailand and spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot. It is so terrifying to admit this because people look at you as if you've admitted to being a pedophile. Throughout the years I've taken 3 sabbaticals each about a year long, when I've just been too fed up or exhausted from working. And the honest truth is that those years were the happiest of my life. I never felt bored or for want of things to do, as each month went by I only found more ways to pass my time. The only thing that drew me back to work was again this fear of falling behind in the rat race. I've admitted this to my parents and they told me they were ashamed of me.

I don't covet nice things or a big house. I mentally do the math and think that 400k mortgage could let me retire 10 years earlier if I lived in a trailer park. The thought of working until 65 makes me ill. I was raised in a poor family and I never felt like I missed out on a childhood, and yet I could probably work another 5 years and provide for my future children the same way my parents did for me. Am I nuts? Does anyone else feel this way?


----------



## Topo (Aug 31, 2019)

First, you should hold your head up high. You have achieved a lot and are contributing immensely to the society. Everywhere I look, I see and use what has been created and perfected by engineers like you: this computer, houses, cars, roads, appliances, etc. So for that alone thank you! 

It seems to me you could be suffering from burnout. Do you know exactly what is it about the work that makes it difficult. Does it involve the tasks itself? Is it the pace? Is it your colleagues? Your boss? the commute? There are steps you can take that would improve your situation, even if it means a reduction in compensation. A lateral move to a different department with different tasks, retraining to attain new skills, becoming a contractor, going part time, moving closer to work, etc. 

It seems to me you are very capable and a high achiever, as evidenced by your earnings and the promotions that you are offered. At the age of 35, a portfolio of 500k is reasonable, but it would be difficult to support early retirement, except maybe somewhere with a very low standard of living or under extreme circumstances, a la Mr. Money Mustache. However, as a young and capable engineer there is a lot that you can do and you may be able to contribute to societies in third world countries. 

One last recommendation: consult a professional before making any major changes to your life, such as retiring. If you are truly suffering from burnout, a life coach or career coach or something similar may prove well worth it.


----------



## m3s (Apr 3, 2010)

twowheeled said:


> I want retire in a poor country like Mexico or Thailand and spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot. It is so terrifying to admit this because people look at you as if you've admitted to being a pedophile. Throughout the years I've taken 3 sabbaticals each about a year long, when I've just been too fed up or exhausted from working. And the honest truth is that those years were the happiest of my life.


Have you heard of FIRE? Financial independence / retire early. There appear to be many like minded people in online FIRE discussions such as the sub reddit r/financialindependence

Besides "early retirement" you could also consider a job optional lifestyle or "coast FIRE" where one decides to earn just enough to cover their expenses while their investments continue to grow. This could mean working less, off and on, or at a less stressful or more enjoyable job that happens to pay less

If you really don't want to work and don't mind a radical lifestyle change you could look into "lean FIRE" This is absolutely possible with $500k and less if you think outside the box and ignore the sheeple. Slow travel, low cost of living regions, house sitting, tiny house, sailboats and many other "alternative" lifestyles already thriving

Having lived in many corners of the world I also wouldn't underestimate the impact of your environment.


----------



## peterk (May 16, 2010)

Not to make light of your concerns, twowheeled, but in solidarity, I'd say that this sounds like it is just typical man problems. Nothing unusual or surprising.

Without children to raise and teach, without a job or passtime that builds something useful for your community (does your job actually do this?) and without a spiritual pursuit towards seeking knowledge of what is good and true, life is left pretty meaningless, and can lead you to thinking dark thoughts about wasting your life on a beach in Mexico.

All three of these aspects are pretty important, but you can pick away at any and all one by one or at the same time, and good things will start to happen to you emotionally.

Rejecting work promotions that bring you a bit more money but take you even farther away from building for your community or pursuing what you know is good and true, is a very wise move on your part.

Finding happiness on your sabbaticals lead you to thinking you enjoyed drinking on the beach and not working... Was that really the right conclusion? Or did your happiness come from some place deeper, where you were allotted the time and freedom to pursue what you thought was good and true activities, thoughts and conversations with other people to properly understand the world, from which your job was holding you back from doing?

Not everyone can have a career that brings about the satisfaction where these factors successfully coalesce together. It's really very rare. So don't feel shame in the fact that you don't want to work for money in the current state of this economic machine and the corporate world. But do realize you need to make money to live off of and pursue more worthwhile things in your life.

The trick is to not let your work dissatisfaction grow so much that you truly start to believe that your life is meaningless and your desire for drinks on the beach and pleasant hikes through nature are all that matters in the world.


----------



## m3s (Apr 3, 2010)

There is no shortage unhappy couples with children so that is no guaranteed golden ticket. Be weary of recommendations that validate one's own decisions as the only way

Many people have children to add meaning and purpose to their lives. Many people seek out religion for similar reasons. Many people have done either or exclusively and even neither who found even greater meaning and purpose in many different ways. Not everyone is the same.

There are many paths to a meaningful life but the heard always seem to disagree. Why does the misery heard always desperately try to convince others not to break away? Meanwhile those who have just smile and encourage you to actually just listen to yourself. That yes you can do it and it is possible.

Just look up what happened to peter's self-help expert Jordan Peterson. He has some good advice but the more I looked into it I realized it was sugar coating on a preachy core.


----------



## Prairie Guy (Oct 30, 2018)

twowheeled said:


> The truth is, I don't want to work at all. I want retire in a poor country like Mexico or Thailand and spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot.


Spending the next 40 or 50 years sitting in a hammock drinking beer will turn you into a fat slob, and you'll probably get bored quickly. If it was me, I'd move to an inexpensive place...maybe small town or rural area to minimize expenses, work a few more years so bank a little more money, and then spend the winter in Mexico or Thailand.


----------



## Beaver101 (Nov 14, 2011)

I wonder what the wife (or where is she?) says about all of that .. in post #1.


----------



## Rusty O'Toole (Feb 1, 2012)

You say you have $500k saved up. Invested in dividend stocks @ 4% that would give you $20,000 a year. What about other assets, do you have equity in a home, cottage, etc? If you sold everything and invested the money would you have enough to live in Mexico or your choice of low cost countries? If so, what are you waiting for? If not, do you have a plan to accumulate what you need?

How is your family with this? If your wife likes the idea, and you can raise and educate your children and launch them in life then your other main obligation is to yourself.

Incidentally if you do 'drop out' and quit your job do so without burning your bridges, it may turn out that after a year or so of loafing you want to go back to work again. I know it seems repulsive now but you want to keep your options open.


----------



## Mortgage u/w (Feb 6, 2014)

I've had that feeling.....trying to impress others; seeking validation, self-worth.....

You need to sit back and reassess your life. Find what truly makes you happy or gives you satisfaction in life. No, sitting in Mexico is not it. Find meaning in what you do. No one wants to work for fun. But we need to do something to earn money.

You're working a job that lives up to someone else's satisfaction. You don't like what you do. I sense you will be good at everything and anything so take this time to reassess. I'm no doctor but I feel you're headed in a depression. You will want to speak to a professional to a) resolve the issues you have that were caused by your upbringing and b) regain happiness and stability in your life.


----------



## m3s (Apr 3, 2010)

twowheeled said:


> Throughout the years I've taken 3 sabbaticals each about a year long, when I've just been too fed up or exhausted from working. And the honest truth is that those years were the happiest of my life. *I never felt bored or for want of things to do, as each month went by I only found more ways to pass my time. *The only thing that drew me back to work was again this fear of falling behind in the rat race. I've admitted this to my parents and they told me they were ashamed of me.


NA work/life balance is weighted quite heavily on the work side. People commonly say how busy, how much overtime and how many years it's been since they took a vacation as a mark of pride. They barely give themselves free time, never experienced a better work/life balance or sabbatical and now have never truly found real things to do with free time. When they retire they feel lost without their only job identity. There are probably many other hive mind, cultural, and personalty factors.

Then there are people who either have a different personality, broader experience and/or different ways of thinking outside the cultural hive mind herd box. There are far more of these people than you think already out there doing what you are considering. You don't really see them because they have time to get further from the crowded paths and peak seasons and don't feel the need to validate their lifestyle by convincing everyone to do like them. Why would they?


----------



## MrMatt (Dec 21, 2011)

Mortgage u/w said:


> You need to sit back and reassess your life. Find what truly makes you happy or gives you satisfaction in life. No, sitting in Mexico is not it. Find meaning in what you do. No one wants to work for fun. But we need to do something to earn money.


I'd second that, I know very few layabouts who are actually happy. 
You should try and find something, also you might be experiencing depression.

Just to touch on a previous post, as a parent, having kids is the most thankless job. I don't think it's for everyone, or even most. That being said, I love being a teacher/mentor/coach, so having kids is actually my dream job. It helps if they're actually awesome (like mine).


----------



## Longtimeago (Aug 8, 2018)

Well I can't comment on any issues you have regarding your parents and how your upbringing may have affected you psychologically. You would need to talk with a psychologist about that obviously. But it does sound to me as a layman as if it has and is having an ongoing affect on you. So first, I would say it may be worth consulting a professional in that regard.

I can comment on what you say you would like to do, "_The truth is, I don't want to work at all. I want retire in a poor country like Mexico or Thailand and spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot. It is so terrifying to admit this because people look at you as if you've admitted to being a pedophile."_

I did pretty much exactly what you say you would like to do. I retired at 43, hit the road with no plan or expectations and have never regretted it in the 31 years since then. My 'Eureka Moment' came out of nowhere one day when I was 35 as well. Somehow, something triggered the thought, 'is this what I want to be doing till I am 65 and then retire to drop dead on the golf course at 67?' The answer of course was no.

So then I asked myself what I did want to do and the answer that came to me was that I wanted to be free to get up in the morning and decide what I wanted to do that day and to be able to do that every day. That led to the question of how can anyone have that freedom and the answer to that in the world we live in is that you have to have financial freedom. That simply means having enough income without having to work. That then leads you to asking, well how much income do I need and how can I have that income without working.

There are many different ways to achieve financial freedom and each individual may find a different way that works for them. I'm not going to go into any great detail on that since it is an individual thing. I started on a 10 year plan to financial freedom at 35 and managed to achieve it and retire at 43 as I said.

At this point, I would say you do have to give serious thought to what you say you want really being what you want. You probably know the saying, 'be careful what you ask for, you just might get it.' Having a goal to work towards is good but you need to be sure it is the right goal for you.

A word on marriage. If you and your wife are not on the same page as to your future life goal, that will obviously create a problem. I was married when I decided I wanted to retire early and my wife was sure she was also on board with that goal. However, when the time came to pull the plug, she was reluctant and ultimately unable to do so. Her response was, 'just one more year' and after 3 years of that, we parted ways. What it ultimately came down to for her was not the money aspect of 'packing it in', it was the lose of Position Power she would have to give up. She was a high flyer and particularly so as a woman in a 'man's world'. I can't suggest any answer for that problem. Nor do I think can anyone else. Either you both have the same shared goal or the end is inevitable.

Other than how to get to the financial goal necessary to quit working, there is the question of what lifestyle you want to be able to have. If you are happy to live a very frugal lifestyle, never venturing far from home, etc. then you need less income than if you want a less modest lifestyle. On that I would say it is easy to say as many of those you will find in the Mr. Money Mustache forum say, 'I'm happy to live on $10k a year income.' The question is, if you get to the financial goal necessary to achieve that income, will you actually be happy living on that income or not? I would suggest to you that it may be OK while someone is younger but may wear a bit thin as time goes on. My advice is to aim for a medium/average income. You can always live on less than your income if you are happy to do so but can also spend more if you grow tired of eating Kraft Dinner and rice dishes.

I also know that it takes a big leap of faith to pack it all in when you are 'successful' as defined by the majority of people and when you talk about doing it, they look at you like you are crazy. You need to have the strength of your convictions and the self confidence to ignore them. Your comment about your parents saying they were ashamed of you when you have voiced this topic do not bode well in this regard. 

My Mother told me that she worried I was going to become a 'beach bum'. She was serious to a degree but not to the degree of pushing her objections onto me or expecting that her disapproval would actually make me change my mind. She knew I would do what I decided to do. I was in charge of my life, not anyone else. If you find you give in to outside pressure, that's a problem that has to be addressed.

I read some of the comments above that say things like, 'no, sitting in Mexico is not it' or 'you need to find a work/life balance', etc. and say poppycock. Those kinds of comments are simply voicing another version of, 'what you say you want to do is crazy'. Because one person cannot see how lying in a hamock in Mexico or wherever might be entirely satisfying to someone else, they think you must have it wrong to be saying it would satisfy you.

They make the assumption that how you have expressed what you want to do is an absolute. You are going to lay in a hammock every day for however many years you will live into the future and do nothing else. Life doesn't work that way.

When I first hit the road, I went to Europe with no plan of what I would do beyond where I was first going and why. I knew I wanted to visit Europe just as a traveller and was quite content to start with that and just see where it led me. I could easily have written, 'I want to go to Europe and bum around forever'. Someone could have easily written, 'Find what truly makes you happy or gives you satisfaction in life. No, bumming around Europe is not it.' That simply shows a lack of common sense to me. I don't need anyone to tell me it isn't likely that anyone would just continue to do that forever. The statement is not meant to be taken literally. No one knows what will happen down the road whether they follow the herd or just decide to leave and bum around Europe. As the saying goes, 'life is what happens when you are busy making other plans.'

I bummed around Europe for about a year and then ended up on a Greek island. I expected to stay perhaps a week or so and then move on as I had up to that point. I never actually decided to stay longer, one day just turned into another day and I still hadn't decided to leave yet. If the goal is to have the freedom to wake up each day and decide what you want to do that day, there is no MUST on any morning. I stayed on that island for 7 years without ever deciding to stay and then one day I decided I wanted to be somewhere else for a specific reason(a woman, now my wife, who lived in another country) and so I moved on. 

That is the freedom of choice that financial freedom gives someone and whatever the initial thoughts were as to how you are going to live your future life just swinging in a hammock or whatever, you will find yourself making choices along the way just as everyone else does in their life whether they follow the herd or not. When I first hit the road, there is no way I could have predicted the choices I have made since then. 

As for Mother and her fear of my becoming a 'beach bum', my response was, what's wrong with being a beach bum if you can afford to be. How many do you know who could afford to do so for decades if they wanted to? It takes as pretty wealthy person to afford that actually.' I will say though that of all the other potential beach bums I've met over the years, I never met one who only had very little income, who remained happy with that once they started to get older.


----------



## calm (May 26, 2020)

If I was young and choosing a career I would choose refrigeration and air conditioning/heating.
Everybody has a fridge.
Huge money.
Huge demand.
3 year course at George Brown College.


----------



## Longtimeago (Aug 8, 2018)

calm said:


> If I was young and choosing a career I would choose refrigeration and air conditioning/heating.
> Everybody has a fridge.
> Huge money.
> Huge demand.
> 3 year course at George Brown College.


What relevance do you think your comment has to a guy who is an engineer earning $185k a year and looking for a life change? Do you think a change to refrigeration will appeal to him?

Do you post any comment that comes into your head without regard to its relevance?


----------



## calm (May 26, 2020)

.
I am sorry. I read the post as somebody who desired a "Complete" change of career.
Maybe I did not read the post properly.
No big deal. I tried.


----------



## james4beach (Nov 15, 2012)

peterk said:


> Not to make light of your concerns, twowheeled, but in solidarity, I'd say that this sounds like it is just typical man problems. Nothing unusual or surprising.


I agree and it sounds awfully similar to a thread I posted here a couple years ago. About dragging myself out of bed, going into work, and coming home exhausted (basically non-functioning) at the end of the day.

I think what twowheeled described is a very common experience. I'm in my late 30s and have felt the same. I've even heard very similar things from women I know, also around the same age.

There's probably no one-size-fits-all solution. What helps me is focusing on things I really want and that make me happy. For me that includes travel, hobbies, outdoor sports and side pursuits. These days, I view work as a necessity (to earn income) but not as something that's supposed to be too deep or meaningful.

When I was experiencing that exhaustion, I started tracking some stats. I discovered that there's a certain number of work hours at which I start feeling worn down. For example, if I work 20 or 30 hours in a week, I am often very energetic and lively. However, once I get closer to 40 hours, or exceed it a bit, the exhaustion appears.

I then took this experiment further and negotiated my working arrangement at my office to work closer to an average 30 hours/wk. I worked at the same pace as before, so each hour of work was as busy and efficient as normal. I used the extra time to take some vacations and day-trips.

Example: I took a Friday off to go skiing. And I frequently took an afternoon off here and there, perhaps quit work Wednesday at noon, to go hiking -- _I loved that _and I felt more alive and happy the moment I set foot on the forest trails.

I also sometimes just took an afternoon off to go sit at a coffee shop I like, and play around on the computer -- reading other random stuff, news, playing with investments. It seems that the change of scenery from the office, and taking some time for myself, really helped. So it was not entirely about physical/outdoor time, but really about making some *more time for myself* and working a wee bit less.

More than once, I quit work early (maybe 3 pm) to meet up with a friend or just go for a walk. I tried to time these outings with good weather, and reserve bad weather / rainy / cold days for office work.

Without question, this approach worked great for me. It seems that I was spending too many of my waking hours on uninterrupted office work. When I reduced the work hours, and reallocated some of the hours to myself (to use on things I want to do) I felt a lot better.

Since then, I quit that job, and took it easy for 2 months. After that I actually found I was drawn to working again, and currently am self-employed with a different freelance job. It's less than 30 hours a week as well, but is extremely similar to my last job.

So it turned out that I have no complaints about the actual nature of my work, or the kinds of tasks. I just needed more time for myself, and more breaks / interludes from office work.

~~

P.S. with your high income, save aggressively, invest prudently, and then you'll have enough capital to quit jobs you don't like, so that you can find work that's more appealing to you. You can see my money diary here if you're curious about my approach to spending/saving.


----------



## james4beach (Nov 15, 2012)

twowheeled said:


> Throughout the years I've taken 3 sabbaticals each about a year long, when I've just been too fed up or exhausted from working. And the honest truth is that those years were the happiest of my life. I never felt bored or for want of things to do, as each month went by I only found more ways to pass my time. The only thing that drew me back to work was again this fear of falling behind in the rat race. I've admitted this to my parents and they told me they were ashamed of me.


You're not alone on this, by the way. I've had the same experience when I quit previous jobs and took a few months off. The happiest times of my life!

What you describe about the rat race and your parents are just old-school social pressures. I believe that these pressures can "trap" people into living the standard lifestyles. These pressures will always exist and there's not much you can do about them.

So what if your parents are ashamed of you? My dad was a workaholic and I'm ashamed _of him_, because I think he went down a wrong/harmful path with that lifestyle. Which of us is correct?

As @m3s points out, the North American lifestyle is way too heavily weighted towards work. So yeah, if you ask people around here (especially in conservative circles) they will sing the praises of hard work. Who cares? These are arbitrary standards.

One thing I keep reminding myself is that everyone is unique. A cookie-cutter template won't work equally well for all humans. If working nonstop for 35 years to impress other people works for someone, that's fine... but I know it does not work for me.


----------



## the_apprentice (Jan 31, 2013)

james4beach said:


> Since then, I quit that job, and took it easy for 2 months. After that I actually found I was drawn to working again, and currently am self-employed with a different freelance job. It's less than 30 hours a week as well, but is extremely similar to my last job.


I can directly relate to this and took the same approach as you did. The time off made me extremely motivated to re-enter the workforce in a completely different sector. It was also the beginning of my successful new career change. Many people feel the same way the original poster does, not many of them seek to change.


----------



## Longtimeago (Aug 8, 2018)

The OP has given a specific description of what he wants to do. He isn't asking about a career change, so why does anyone want to suggest one? He states clearly, that he wants to STOP having to work for a living. It's as if people read the words and then ignore them.

Read his lips so to speak: _"The truth is, I don't want to work at all. I want retire in a poor country like Mexico or Thailand and spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot. It is so terrifying to admit this because people look at you as if you've admitted to being a pedophile."_

That is what he is asking for comments on. If someone wants to write, 'I don't think you should pursue that dream', that's fine, they can make their case for why he shouldn't do it. That's on topic. But ignoring it is not on topic.

Regardless of whatever some posters here may think, the OP is not alone in his desire to stop working. When someone writes something like, "These days, I view work as a necessity (to earn income)", that is an assumption and a false assumption. Work is NOT a necessity, it is a CHOICE. There are plenty of people who can give the lie to that assumption. It's called 'retired' or 'financially independent' and some people do that in their 20s for crying out loud. 

Twowheeled, clearly you are not going to get much useful input from most of the posters in this forum. They can't conceive of not having to work for a living. There are forums specifically for what you are interested in doing. Some at the extreme end of the spectrum like Mr. Money Mustache where particpants are trying to figure out how to retire on an income of $5-10k a year. Others are more conservative in approach like early-retirement.org. In those kinds of forums, they start from the ASSUMPTION that someone doesn't want to work for a living and proceed from there as to how to achieve that goal.

I FIREd 31 years ago and have never had a regret. Ignore those such as parents, friends, colleagues and most posters here, who cannot see outside of the herd bubble and start looking for those who can see what you envision or are already living that life.


----------



## the_apprentice (Jan 31, 2013)

*Stop talking about it and fucking do it!*

Do it - quit your job, go live overseas, enjoy your life. Hopefully your wife is on board because that will make things easier. Your happiness is more important than any social pressure.

You wouldn't believe what you'll learn about yourself and how many people around you may feel the same way...


----------



## Longtimeago (Aug 8, 2018)

The OP is basically asking about early retirement in this thread and I don't see why some posters are not addressing that subject. It's not as if he is alone in his thinking. Many people retire in all age groups from their 20s on up. They don't sit there believing comments like, "_But we need to do something to earn money._" They ignore any such comments as irrelevant to their goal.

Forums exist as I said for those who want to pursue a path to not having to work. Mr Money Mustache is one such forum but I disagree with the majority view of that forum since it focuses on retiring on as little as possible as soon as possible and ignores what the situation might be when the 30 year old guy who retired on $10k income a year gets to be 60+. What was acceptable in the lifestyle of a 30 year old is probably not going to be acceptable at 60. So I consider much of that forum's thinking to be unrealistic.

Other forums like early-retirement.org are more realistic in their income goals but rely too much on the stock market and Safe Withdrawal Rates (SWR) of capital in my opinion. I don't believe in drawing down capital. In times like the Depression of 2008, many of them found themselves needing to go back to work when they saw their capital drop by 20+% and their 4% withdrawal was no longer enough to live on.

I hope twowheeled will return to comment. I find his situation much like my own was at 35 except I already didn't care what others thought about my plans.


----------



## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> I read some of the comments above that say things like, 'no, sitting in Mexico is not it' or 'you need to find a work/life balance', etc. and say poppycock. Those kinds of comments are simply voicing another version of, 'what you say you want to do is crazy'. Because one person cannot see how lying in a hamock in Mexico or wherever might be entirely satisfying to someone else, they think you must have it wrong to be saying it would satisfy you.
> 
> ...
> As for Mother and her fear of my becoming a 'beach bum', my response was, what's wrong with being a beach bum if you can afford to be. How many do you know who could afford to do so for decades if they wanted to? It takes as pretty wealthy person to afford that actually.' I will say though that of all the other potential beach bums I've met over the years, I never met one who only had very little income, who remained happy with that once they started to get older.


In general, I agree with LTA's comments, particularly those in the first paragraph above. Those in the next preceding paragraph, less so, as explained below.

If becoming a beach bum in Mexico calls to you, then just do it. 

When I moved to a remote off-grid location years ago, having always lived in big cities in 3 different countries before that, some thought I had taken leave of my senses. They could not see doing it _themselves_, hence anyone else doing it had to be wrong. I was asked more than once "but what if you don't like it?" That kind of thinking seems to hold people back from trying new things. Maybe it won't be great, won't work out, whatever, so they maintain the status quo and do nothing. And maybe, for them, that is the right decision. If they are timid, maybe they should remain that way, if it suits their comfort. Not my place to tell them to break out of their comfort zone. 

What I always said to the "what if you don't like it" types was, quite simply: "If I don't like it, then I will change it." I tend not to see too many decisions in life as committing one to a course of action forever. So, if now, being a beach bum in Mexico appeals, go do it. What others think is irrelevant. If, after some time, it starts to pall, then change course. 

With regard to LTA's comments in the second paragraph I have quoted, not so sure I agree about the effluxion of time having a dampening effect on one's enjoyment of the not-too-well-heeled beach bum life. The thought seems to be that you will want more as you get older. Some will, no doubt. But is that universal? Some might want less.

Now, in truth, I have not known a whole lot of beach bums, layabouts or others of that ilk in my time. But some. From my limited observation, the older ones have grown quite accustomed to living on a shoestring and do not find it a hardship. Some of those who have had living on a shoestring thrust upon them in later years have found the adjustment tougher. But I know one 65-year-old who lost everything in the circa 2008 economic meltdown and now says (quite possibly rationalizing to some extent) that it was the best thing that could have happened to him. He said he realized how unhappy he had been going off every day to a job he did not like, to make the income to support the big house, cars, etc. Once all of that was gone, he realized that he no longer had to stay on that course. He looked at a few SE Asia countries and, in the end, made the move to Mexico. He always lived in the U.S. before that and he now lives on social security, and little else, of about USD1,300 a month. He has no $500,000 nest egg. So, later in life, he went from having a lot to a little in terms of finances, yet seems content. But that's just one individual. 

In the end, it's very much an individual exercise. We must each set our own course. Upthread, disdain is expressed for those who work long years and long hours. The view is, apparently, that working hard is some wrong-headed relic of a bygone era and it's now seen as shameful. Yet, I have seen some who seem to thrive on it. From what i can see, there seems to be a fair amount of support for the view that dwelling at either pole is shameful. The beach bum and the workaholic are equally deserving of opprobrium and rebuke. I see both as at liberty to live as they see fit, untrammelled by the views of others.


----------



## cainvest (May 1, 2013)

I'll throw in my 2 cents ...



twowheeled said:


> Am I nuts? Does anyone else feel this way?


Are you nuts ... nope.
Do others feel that way ... yes.

Bottom line ...
It's your life, do what you want to be happy. You're not here to live it as others think you should.


----------



## Topo (Aug 31, 2019)

From what I have read, those who retire *to* something are generally content and happy with their retirement. Those who retire *from* something, sometimes have difficulty adjusting to the new circumstances. It would be beneficial to the OP to figure out their underlying motivations.

I would not discount the role of a well-funded portfolio in early retirement. Before retirement, it is often the problems at work and resentment that is dominant. Retirement comes as a relief, the feeling of being "free." After retirement, when things settle a bit, retirees start feeling relaxed and happier, which leads to them wanting to do more things, like traveling around, snorkeling, visiting the casinos, etc. Many of these activities cost money.


----------



## james4beach (Nov 15, 2012)

I think there's some good advice in this thread. I'm working a lot less than before (less employment income) but I didn't retire in my 30s. I've thought about it, but decided I'm too young to stop working. Some reasons, from most important to least important:

*I don't have enough retirement savings*. I've saved very aggressively and have a few hundred K, but I don't think it's enough. It would be enough if I'm confident I can live on 35K of annual expenses forever, but I'm not sure that's true. If I get some kind of health problems later in life I might have to spend more. If I decide to have kids, I might have to spend more. Or if there's some misfortune / accident / bad luck, including poor performance in capital markets, or high inflation. There are so many possible scenarios here.

*Working is a kind of risk diversification*. Big picture, there are three possible sources of cash to live off: savings/assets, employment, and inheritances. A diversified investment portfolio is great, but the ability to generate cash from both investments & working is undeniably superior ... it's better diversification.

*Other people might be right*. It's possible that people are right when they say that stopping working, and doing nothing, leads to laziness and some kind of descent and deterioration. So I'd like to keep my options open and not swear off working entirely.

*I enjoy the social aspects of working*. I still visit my old office and hang out with people, and one of my previous coworkers is currently a business partner. I don't like every aspect of work, but I really do like working together with good people, and I like the friendships that have come out of this.

*I do it for show*. By doing a small amount of work, I can usually tell people "this is the kind of work I do", and this generally makes people shut up.


As a counterexample, one of my ex coworkers actually did retire very young. Here's one article on him, and another article. The office environment we worked in was pretty brutal, and I personally think he suffered some burnout and then a euphoria upon being free from it. I've analyzed his numbers and I don't think he's set up for a sustainable retirement. To pull it off, he will have to maintain an extremely frugal lifestyle, and I don't think he has enough margin of safety on it.


----------



## Longtimeago (Aug 8, 2018)

My views are based on my own personal experience of early retirement and also augmented by having met a considerable number of others who chose to retire quite early in life. That does not mean I have empirical evidence but it does I think mean I can draw certain conclusions based on simple common sense that is backed up by SOME actual real life examples at least. 

One saying that is really applicable to early retirement is, 'you can't see there from here'. That applies in so many different ways. Someone might want to go and lay in a hammock in Mexico today but there is really no way of knowing if they will still want to do that tomorrow. They may or they may not but if they have the financial independence to choose to do so if they do want to, then where is the problem? If tomorrow they decide that is no longer for them, then they simply change what they do to whatever they want to do today. 

I agree with Mukhang pera's comment that, "_I tend not to see too many decisions in life as committing one to a course of action forever."_ What many people who can't see lying in a hammock as fulfilling do however is respond as if the person saying it was stating an absolute that is intended to hold true forever. That assumption defies common sense.

Similarly, my comments about someone retiring on $5-10k per year income perhaps not working for them later in life, are again based on common sense. Some might still be happy on that later in life but what if they are not? What I am saying is that having more than enough is never a problem but having less than enough is. The more income you have the more freedom of choice you have. As we age, our needs and wants will inevitably change. That may result in needing more income or it may not. Should you plan for only the 'may not'?

So in terms of the answer to the question that always gets asked about early retirement, 'how much is enough', it is about balance and a reasoned analysis. You don't want to get caught in the 'one more year' that is also a common issue with early retirement but you also don't want to get caught short down the road. In that regard, my advice to anyone contemplating early retirement is that even if you are happy to retire today on $10k per year, you may not be tomorrow, so pick a more balanced number. Not $10k, not $100k, somewhere in between that you can achieve in the amount of time you are prepared to continue working for.

I decided at 35 to retire early. I did not just pack it in and let tomorrow take care of tomorrow. I came up with a 10 year financial plan that I thought would get me to a point where I would have more than enough income to live on in the way I intended to live at least initially. As it worked out, I achieved my goal in 7 years, not 10 and when I got there I did pack it in. The point here is that even though I would have liked to retire at 35, I did not find it difficult to continue on till 43, because I knew it was not going to go on forever. The goal made the interim time span quite bearable. And the income I had when I did quit was more than enough for my needs. There is no problem figuring out what to do when you have more money than you need. 

Another aspect that often gets overlooked by those who think, 'you'll get bored' or 'you need a purpose in life' etc. is again in regards to looking at it as an absolute. Financial freedom means not HAVING to work. It does not mean you cannot work if you CHOOSE to do so. In my 31 years of being retired, I have fallen into several different things that earned me money. I never went looking for work and I was never bored with not working but things happen in life to everyone whether you are working for a living or not. Life doesn't stand still just because you no longer need to work for a living. I am quite sure that I have had as many 'life altering' experiences and made as many decisions in that regard as anyone else would in 31 years, whether needing to work or not.

The bottom line is simple. Financial freedom means you are free to CHOOSE. There is no other way to achieve that freedom in the world we live in.


----------



## MrMatt (Dec 21, 2011)

Longtimeago said:


> Another aspect that often gets overlooked by those who think, 'you'll get bored' or 'you need a purpose in life' etc. is again in regards to looking at it as an absolute. Financial freedom means not HAVING to work. It does not mean you cannot work if you CHOOSE to do so.
> 
> The bottom line is simple. Financial freedom means you are free to CHOOSE. There is no other way to achieve that freedom in the world we live in.


I edited, but I think those are the important parts.
You should try and find "something", it doesn't need to be paying. But for most people, having some sort of goal or purpose is very beneficial.


----------



## Longtimeago (Aug 8, 2018)

james4beach said:


> As a counterexample, one of my ex coworkers actually did retire very young. Here's one article on him, and another article. The office environment we worked in was pretty brutal, and I personally think he suffered some burnout and then a euphoria upon being free from it. I've analyzed his numbers and I don't think he's set up for a sustainable retirement. To pull it off, he will have to maintain an extremely frugal lifestyle, and I don't think he has enough margin of safety on it.


I will comment on the last part. 

Again, as I have said, 'you cannot see there from here'. You cannot analyze someone's numbers (or your own) today and predict where they will be tomorrow. What you do in those cases is predict tomorrow based on today's world. You assume no change will occur and that simply doesn't make any sense, change will most definitely occur. The only question is whether an individual is able to adapt to those changes. 

I see the couple in the links as having a very good chance of making it work. They seem resourceful and confident of their own abilities. They are likely to be willing to jump on an opportunity if one presents itself and adapt to whatever changes life throws at them. It's about the person, not the money. 

In contrast to them, my view of someone who would write, " _I've analyzed his numbers and I don't think he's set up for a sustainable retirement. To pull it off, he will have to maintain an extremely frugal lifestyle, and I don't think he has enough margin of safety on it.", _may well be a person who could not make it work. A self-defeating attitude most often results in a self-defeating prophecy which almost invariably proves to be true. 

They are making it work; they intend to continue to make it work; they appear to believe they can continue to make it work; they most probably will continue to make it work. Will they continue to make it work using the financial strategy they are currently using, most likely not. Things will change they will change with them. But anyone who looks at what they are doing now and says, 'I don't think it will work down the road' is simply selling them short.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> .... The point here is that even though I would have liked to retire at 35, I did not find it difficult to continue on till 43, because I knew it was not going to go on forever. The goal made the interim time span quite bearable. And the income I had when I did quit was more than enough for my needs. There is no problem figuring out what to do when you have more money than you need...


The key for the OP is how to manage those interim years (from decision to action) without getting burnt out. Is his situation manageable? Does he have good support from his wife and friends? How could his situation be improved? 

I agree that once he is FI, then it is his (and wife's) decision to do what he wants with the rest of his life. He shouldn't keep working in jobs that make him miserable. Power to him for living on the beach! He earned it.


----------



## Longtimeago (Aug 8, 2018)

MrMatt said:


> I edited, but I think those are the important parts.
> You should try and find "something", it doesn't need to be paying. But for most people, having some sort of goal or purpose is very beneficial.


I achieve little goals every day. Today I cut the grass. That is a goal achieved and there is pleasure derived from doing it, why should I need a 'higher purpose' than that? Is your goal of world peace likely to give you more pleasure today than my goal did? Few people have no goals at all MrMatt and that is what you seem to be suggesting happens if you do not have a 'real' goal or purpose.

Do you know the saying, 'work expands to fill time available'? The same is true of goals. Whether it is a major goal or a minor goal, a goal is a goal and achieving it provides the same pleasure whatever it is. When I was living in Greece, I had to deal with Greek bureaucracy which is elevated to a high art form there. Just getting one official to stamp one piece of paper as part of a process that might span months and require many visits to City Hall, etc. was a goal and an achievement when I got that paper stamped.


----------



## Longtimeago (Aug 8, 2018)

Topo said:


> The key for the OP is how to manage those interim years (from decision to action) without getting burnt out. Is his situation manageable? Does he have good support from his wife and friends? How could his situation be improved?
> 
> I agree that once he is FI, then it is his (and wife's) decision to do what he wants with the rest of his life. He shouldn't keep working in jobs that make him miserable. Power to him for living on the beach! He earned it.


Well, OK, you can see that as key but I would have thought the answer to that is evident. Committing to the goal makes it manageable. So the only question in my mind is whether the OP will commit or not. Most just continue to complain about life and then actually do nothing.

I always remember getting a coffee one day, in the lunchroom of the last company I worked with. Two guys were doing the usual complaining about work. I asked them, 'if you aren't happy with your work here, why are you still here?' The answer was the typical, 'well I have responsibilities, a wife and family to support, a mortgage to pay, car payments, etc. etc, I can't just up and quit my job.' I replied, 'no just up and quitting would be foolish but what is stopping you from taking steps to find another job? All I hear you doing is complaining but you are doing nothing about it.'

That just got me a dirty look and as you might guess, those same two guys were commiserating over the same complaints up until the day I retired. The KEY Topo is to DO something.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> Well, OK, you can see that as key but I would have thought the answer to that is evident. Committing to the goal makes it manageable. So the only question in my mind is whether the OP will commit or not. Most just continue to complain about life and then actually do nothing.


I agree with you that the OP has to commit to improving their financial position to truly enjoy the beaches of Mexico. There is a path for them to do so; with a 500k portfolio plus a good portion of savings from the 185k of earnings and some investment luck, they could be there in a few years. 

I am just not sure simply committing to the goal will make it manageable for the OP. Maybe it does, maybe it doesn't. It depends on the circumstances. Regardless, a life coach, family support, and adjustments to the work environment may help lessen the pain in the meantime.


----------



## MrMatt (Dec 21, 2011)

Longtimeago said:


> I achieve little goals every day. Today I cut the grass. That is a goal achieved and there is pleasure derived from doing it, why should I need a 'higher purpose' than that? Is your goal of world peace likely to give you more pleasure today than my goal did? Few people have no goals at all MrMatt and that is what you seem to be suggesting happens if you do not have a 'real' goal or purpose.
> 
> Do you know the saying, 'work expands to fill time available'? The same is true of goals. Whether it is a major goal or a minor goal, a goal is a goal and achieving it provides the same pleasure whatever it is. When I was living in Greece, I had to deal with Greek bureaucracy which is elevated to a high art form there. Just getting one official to stamp one piece of paper as part of a process that might span months and require many visits to City Hall, etc. was a goal and an achievement when I got that paper stamped.


I know a few people who stopped working and didn't figure out the next goals and ended up very unhappy, despite significant financial wealth.
Nothing wrong with small or meaningless goals. I think you could be happy and satified by consuming pot as a form of high art. But no goals and no ambition at all is problematic in my experience.

As far as the Greek bureaucracy, I'd take on world peace, it's the easier of the two challenges.


----------



## Mukhang pera (Feb 26, 2016)

Looks like twowheeled has wheeled on out of this thread. Started it and never returned, so apparently not a serious post. Just intended to be a time-waster. But, even so, it has sparked some interesting comments.

I doubt any will read all that follows given its unconscionable prolixity, but having typed it, I'll post it anyway.

James, I followed the links you posted concerning a former colleague. I found Ms. Shen's video a bit hard to take. 

She speaks of her friend "Agnes", who spent 14 years getting a PhD in a field, apparently with scant demand for graduates. What does that prove? That her friend was not too bright. And 14 years to accomplish? I have a doctoral degree and I did not spend nearly that much time to get it. Yet Agnes was "top of her class" but "$100,000 in debt". If she was top of her class she should have been on full scholarship and no debt. And even sans scholarship, in 14 years she should have been able to earn and pay as she went. Something radically wrong there. Moreover, if she was a top-of-class doctor of psychology, was she so bereft of drive, ambition and innovation that she had to simply await, dejectedly, for a job offer, as she apparently did? Even in a low demand field, the best and brightest should be able to _create _a job.

Next we are told the sad story of "Amanda" who stupidly worked 60-80 hour a week on promise of a promotion, then got dumped at the end of the year. And what, she agreed to work an average of 10 hours or more every day for 365 days straight with nothing in writing to back it up? If that nutty story is true, what were the results of her wrongful dismissal action? Just curious. Of course, there's a possibility that her action was dismissed on grounds of stupidity.

Then we are told of friend "Jack" who worked "decades" for a company and then, just one year (one year, repeated by Ms. Shen for dramatic emphasis), they laid him off. The inference we are invited to draw is that his pension was forfeited and apparently that was accepted without question. I suspect there's more to that story.

Ms. Shen's contempt for and hatred of all "boomers" is scary. It's palpable. She is doing what she blames boomers for doing. Tarring all with the same brush. I am a "boomer" (not that I care for any such classifications) and I have never called "millennials" or any other age group lazy or narcissistic. No doubt some are, as in every group. I had to look up the term "millennial" to write this, since I could not say before what constitutes a "millennial" and I did not care. I tend to see people as people and not as belonging to some well-defined age or generational group that sets them apart. 

In the second article linked, we are told of Ms. Shen "As a teenager, she chose to be a computer engineer, ignoring her dream to be a writer, based on a formula she devised to rank the best value university courses based on tuition fees versus future pay." So, she elected to go after money to the exclusion of all else, and ended up, as she calls it, chained to a job she hated. Good planning there. But still, the boomers' fault.

That article also relates: "And as an adult, any domestic disagreements with her husband, Bryce Leung, are generally won or lost based on who makes the best mathematical case." Not a life or domestic arrangement that would hold any appeal for this kid. Might suit Mr. Spock (for a few oldies here who might get that reference).

And the underlying premise of being chained to pay a monster mortgage applies, as set out in what is written, primarily in Toronto or Vancouver. Apparently for Ms. Shen, there is no world outside Toronto or Vancouver. A bit of tunnel vision there perhaps. 

Ms. Chen admonishes "Stop giving your time to a job you hate", suggesting that no one has ever found work they like. I know quite a few of varying ages who are quite happy with their work, many in jobs/businesses they have created. 

To me, Ms. Shen comes across as a bit too smug when she says she knows the clear path for all millennials to follow. She asks, rhetorically "How do I know? Because I did it." I say she has only just started doing it. Come back in 50 years and tell us how you did it. But in the interim, tell us about how others can have an investment portfolio of $1 million by age 31. Must one follow a course of study one hates to get a job one hates but will pay $250,000 a year or so from the get? You purport to be leading the millennial financial freedom revolution. Kindly provide a step-by-step guide that any can follow. The "I did it so anyone can do it" notion rings hollow. 

She says she lives nomadically and travels the world. She says she can live in a different country every month (that sounds horrible to me, but different strokes I suppose). And she can afford such endless travel on their dividends? 

I doubt the travel thing is possible today. Lots of travel not happening right now. I doubt she has a world visa that lets her go anywhere any time in this C-19 world. So maybe now she has to pay rent somewhere. If in Toronto or Vancouver, that might put a bit of a bite in the old budget. 

I looked on the Shen _et ux._ website and there was mention of how are people who want to follow their lead are coping in the C-19 world. We are introduced to "Patrick" who, _inter alia, "_went from making £18,000 per year to £140,000 per year in less than 5 years!". So sure, if he can do it, anyone can do it, and they can sock away a million bucks and be out by age 31, to live forever on dividends and travel the world until they die. 

As a bit of an aside, Patrick's story about his girlfriend being "shocked" to learn he had no savings account comes across as one of the more inane and unbelievable bits of prose I have read for some time. What tripe.

Ms. Shen says all millennials should take her advice. She rails against being called part of the "me generation" (her term, one I have not heard used by others, apart for once or twice on cmf.) But she seemingly extolls the virtue of the mental image the term "me generation" conjures up. Never work. Travel the world (who cares about carbon footprint or anything; leave the boomers to worry about the environment). Not mentioned, but it seems implicit that not having kids is part of the program. So no one should ever have kids or work again. If that couple plans to sign up for OAS and GIS down the road, what will have been their contribution? Maybe there will be one, but not clear.

At bottom, I see this couple following their own plan, their own dream. Fine. I have no quarrel with that. That their commentary is larded with pejorative language and dripping with disdain for the "boomers" makes one question their credibility. That they attribute to all boomers the same attitudes and advice to those coming behind is just plan wrong. I am a boomer with a kid. (Again, I don't like these pigeon-hole terms. I don't see myself as a boomer. Just a person.) I have not done what she says all boomers do, and that is to tell anyone to follow our outmoded dreams, if such they be. Nonsense. My kid is developing into a very different world. That's not really a novel concept. I grew into a very different world from that of my parents. Change is endless. People must adapt. This woman talks about a _modus operandi _that will provide a good income stream and life for many, many years and she claims to know this to a certainty. I do not accept that. Her plan might have to undergo significant modification or it will fail. As I have said, she's only a few years out and already I see the much-vaunted nomadic lifestyle as having been dealt a crippling blow. I do not know how their investments have fared of late. Not all have prospered. There will be other challenges along the way. Adapt or perish. 

Finally, Ms. Chen also decries being called a narcissist, yet her video, to the eyes of some, might seem to smack of narcissism. She talks about the good life of financial freedom as what she and all millennials _deserve. _We are not told just why that is so. I sure as hell don't _deserve _anything I have not worked for or created myself. I lay no entitlement claims. My father, who was born long before the term "boomer" was ever coined, was right as rain when he told us kids that "the world does not owe you a living". While much has changed over time, those words ring as true today as gun barrel steel.


----------



## Mukhang pera (Feb 26, 2016)

I just read a bit more on the "millennial'" website. They do purport to give some how-to advice. An underlying premise is captured in these words on their site:

_So if your expenses are $40K/year, once your portfolio reaches $1 million, you can retire and live off 4% of the investment income per year for the rest of your life._

They tell you to figure out how much annual income you want, then build a portfolio to an amount that will provide that amount at a 4% return. But maybe there's more to come. I'll have to read more deeply. If one takes their 4% advice at face value, there will be a problem if there is any amount of inflation in the rest of your life. Or am I mistaken? Sure, 4% of $1 million is $40,000 and it will be $40,000 in 20 years if the $1 million has not grown. But will $40,000 in 20 years have the buying power of $40,000 today? Not likely. I am sure these two must have a remedy for that. I'll report back if I find it.


----------



## Topo (Aug 31, 2019)

Mukhang pera said:


> I just read a bit more on the "millennial'" website. They do purport to give some how-to advice. An underlying premise is captured in these words on their site:
> 
> _So if your expenses are $40K/year, once your portfolio reaches $1 million, you can retire and live off 4% of the investment income per year for the rest of your life._
> 
> They tell you to figure out how much annual income you want, then build a portfolio to an amount that will provide that amount at a 4% return. But maybe there's more to come. I'll have to read more deeply. If one takes their 4% advice at face value, there will be a problem if there is any amount of inflation in the rest of your life. Or am I mistaken? Sure, 4% of $1 million is $40,000 and it will be $40,000 in 20 years if the $1 million has not grown. But will $40,000 in 20 years have the buying power of $40,000 today? Not likely. I am sure these two must have a remedy for that. I'll report back if I find it.


The 4% rule is meant to be adjusted for inflation each year. Also, it is calculated once at the beginning of retirement. So for a 1m portfolio, you take 40k year one, and 40,800 year 2 (assuming 2% inflation), ...

The 4% was based on a famous study by Bengen in the 90's. It assumed a 30 year retirement. For a longer retirement span and with valuations on both bonds and stocks being high, a 4% withdrawal rate may result in a substantial risk of portfolio depletion. 










The chart above is historical, but it seems that a withdrawal rate of 3% (or at most 3.5%) would be more appropriate for a young early retiree, using a 50/50 or 75/25 portfolio. So the retiree needs to accumulate a portfolio equal to 33 times annual expenses (or 29 times using 3.5%). With a 4% SWR, only 25x is needed.


----------



## Mukhang pera (Feb 26, 2016)

Helpful post Topo. Thank you.


----------



## Longtimeago (Aug 8, 2018)

MrMatt said:


> I know a few people who stopped working and didn't figure out the next goals and ended up very unhappy, despite significant financial wealth.
> Nothing wrong with small or meaningless goals. I think you could be happy and satified by consuming pot as a form of high art. But no goals and no ambition at all is problematic in my experience.
> 
> As far as the Greek bureaucracy, I'd take on world peace, it's the easier of the two challenges.


I would be surprised if you told me those people retired early rather than just retired at the usual 65. If someone has the ambition to retire early and the ability to achieve it, chances are they have no problem with choosing other goals to pursue once they are retired.

Those most commonly unable to adapt to retirement in my experience, are those who have their self-worth wrapped up in what they do for a living.


----------



## Longtimeago (Aug 8, 2018)

Mukhang pera, can you not remember back to when you knew everything that was worth knowing and all old people were stupid? Ms. Shen is no different than young people in every generation have been. She just isn't old enough yet to understand the difference between having some knowledge but mistaking it for wisdom.

She may think she has a financial plan based on a modified SWR that will work forever but she like everyone else 'cannot see there from here', she only THINKS she can see there from here. The question is whether or not she and her husband will be able to adapt to the inevitable change that will occur. Maybe they will, maybe the won't. But I would suggest they probably have a better chance than most.

Which leads me to the oft repeated, 'you can be/do anything you want if you just want it badly enough' that gets trotted out by almost anyone who writes a 'how to succeed' type book. Don't forget, the objective is to sell books, so it makes sense to try and suggest everyone should buy your book and become rich/famous or whatever, like you.

The reality of course is that if I can learn to mow a lawn, there is a high probability that almost everyone else could. But if what I can learn to do is be an astronaut, the chances that almost everyone else can also do so becomes far less likely. Some things simply require more intelligence, ambition, drive, motivation, aptitude, etc. than the average person has. That should be obvious to anyone, but telling them that, doesn't sell your book or nowadays, get followers on your blog.

So I think you could cut Ms. Sheen some slack Mukhang pera, she's just being her age. What we cannot take away from her and her husband is that they have done what they have done.

As for the SWR, that is the current thinking of many who are trying to retire early. It's appeal is that it appears to provide CERTAINTY for those who buy into it. It tells them that if they follow it, they will not go broke before they die. I do not agree that it provides certainty of anything but I can see how it answers the FEAR many have when contemplating early retirement. 'What if' is a strong fear to have to overcome. SWR appears to answer that if someone wants to delude themselves into believing it.

I like to use the trapeze analogy when considering fear and decision making. Two trapezes are swinging towards each other. You are hanging onto one and as your trapeze reaches the zenith of its swing, the other trapeze which is swinging towards you reaches its zenith as well. The problem is, that you cannot reach out and grab that other trapeze without first letting go of the trapeze you are on. It's just a little too far between them. You have to let go of your trapeze and 'lunge' for the other one. It therefore requires a 'leap of faith', literally. 

Some people just can't make such a leap of faith. Now enter SWR which says, you don't have to take a leap of faith, using SWR means the trapezes will always meet and you will be safe. That's a powerful answer that people will obviously want to believe in.

Coversely, to get people to make a leap of faith I like another analogy. That is about something I learned years ago when I used to do technical rock climbing. Every climber learns that no matter how good you are or how well you practice safe climbing, there always comes a time when you KNOW you are about to fall. If you are doing it right, you will only fall as far as the last piece of 'protection' you placed and then by the same distance below that point as you were above it when you fell, plus a bit because the rope will stretch. There is only an infinitesimal chance that you will fall to your death.

However, at that second in time when you KNOW you are about to fall, logic does not apply and the FEAR of dying is 100% real in your mind. Now here's how it applies to decision making. IF at that second in time I said to you, 'make this decision and you will not fall', there is NO decision you could not make instantly. Get married, buy a house, quit your job, or any other 'life altering' decision you were agonizing over making would become easy to make because whatever it was, it would be meaningless when compared to the alternative you believed you would face if you didn't decide, dying.

So when I need to make a major decision and just can't make up my mind I just ask myself the simple question. 'Will it kill me if I get it wrong' and if the answer is not literally yes it will, then I just make a decision and move on. It's a way to make a leap of faith. Of course that may not work for everyone but it's one way to make a decision where certainty cannot be expected.

SWR is for pussies to believe in.


----------



## Longtimeago (Aug 8, 2018)

I do hope twowheeled returns to comment on all of the above. He is not a new poster who might have joined, posted and disappeared when he didn't get instant responses as some newbies seem to expect. Maybe he is just busy or out of town perhaps.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> ...So when I need to make a major decision and just can't make up my mind I just ask myself the simple question. 'Will it kill me if I get it wrong' and if the answer is not literally yes it will, then I just make a decision and move on. It's a way to make a leap of faith. Of course that may not work for everyone but it's one way to make a decision where certainty cannot be expected.
> 
> SWR is for pussies to believe in.


I find this take very interesting, particularly when paired to your earlier comments:



Longtimeago said:


> I decided at 35 to retire early. I did not just pack it in and let tomorrow take care of tomorrow. I came up with a 10 year financial plan that I thought would get me to a point where I would have more than enough income to live on in the way I intended to live at least initially. As it worked out, I achieved my goal in 7 years, not 10 and when I got there I did pack it in. The point here is that even though I would have liked to retire at 35, I did not find it difficult to continue on till 43, because I knew it was not going to go on forever. The goal made the interim time span quite bearable. And the income I had when I did quit was more than enough for my needs. There is no problem figuring out what to do when you have more money than you need.


Would it have been fatal, I mean literally, to retire at 35?

Should the OP do as you say or as you did?


----------



## Longtimeago (Aug 8, 2018)

Topo said:


> I find this take very interesting, particularly when paired to your earlier comments:
> 
> 
> 
> ...


No it would not have been fatal Topo but it would obviously have been STUPID since we live in a world that requires. Money. I could have quit at 35 with far less money and no doubt would have ended up having go back to work whether I wanted to or not.

The point is when you have a decision to make that seems viable either way, that is when I go to the 'will it kill me'. So at 43 when I believed I had enough to retire, I had a VIABLE choice to make THEN, quit or keep working. I could reasonably do either. That is when the fear kicks in and people often get into the 'one more year' cycle. 

This fear and subsequent 'one more year' is very common with those contemplating early retirement. That's when they need a way to deal with the FEAR, the money is not the problem at that point.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> No it would not have been fatal Topo but it would obviously have been STUPID since we live in a world that requires. Money. I could have quit at 35 with far less money and no doubt would have ended up having go back to work whether I wanted to or not.
> 
> The point is when you have a decision to make that seems viable either way, that is when I go to the 'will it kill me'. So at 43 when I believed I had enough to retire, I had a VIABLE choice to make THEN, quit or keep working. I could reasonably do either. That is when the fear kicks in and people often get into the 'one more year' cycle.
> 
> This fear and subsequent 'one more year' is very common with those contemplating early retirement. That's when they need a way to deal with the FEAR, the money is not the problem at that point.


My understanding is that OP is not in the OMY phase yet. I would argue he is in a stage closer to your "35" than "43". So I think discussions on SWR would be appropriate in this setting in preparation for what is to come. Once he gets to stage 43, then he may need to be pushed off the OMY bandwagon to lead a life of leisure on the beaches.

Regardless, I agree with you that if OP decides to call it quits in his current status, there will be no casualties. There will be opportunities in the future to correct course, particularly for someone as young and talented as OP.


----------



## james4beach (Nov 15, 2012)

Topo said:


> The 4% rule is meant to be adjusted for inflation each year. Also, it is calculated once at the beginning of retirement. So for a 1m portfolio, you take 40k year one, and 40,800 year 2 (assuming 2% inflation), ...


Right, it's a very specific recipe. You take 4% of the *initial* amount. Each year, the withdrawal is increased with inflation, for 30 years. You withdraw exactly that amount from the investment portfolio; withdrawals means dividends, distributions, and liquidation.

In these studies, "success" means that withdrawals can be made for 30 years, even if the final balance is zero. If the investment portfolio is down to 3 cents in the final year, that's a successful 4% withdrawal scheme.

I think it's generally acknowledged that 4% is not a sustainable withdrawal rate when the time horizon is longer than 30 years.

There are variations on this approach which are popular among some CMF members: you can add flexibility to your withdrawals. Instead of constant withdrawals, if you go to a variable withdrawal scheme and can reduce your withdrawals (spending) in bad market years, the capital can last a lot longer.



Topo said:


> The chart above is historical, but it seems that a withdrawal rate of 3% (or at most 3.5%) would be more appropriate for a young early retiree, using a 50/50 or 75/25 portfolio.


When I studied all this a few years ago, including doing my own Monte Carlo simulations, I arrived at the 3% withdrawal rate for a very young retirement (say for 60 years of withdrawals).

Currently in my early/partial retirement, I am withdrawing at about 2.0% and earning the rest of the money through employment.


----------



## james4beach (Nov 15, 2012)

I did read @Mukhang pera 's entire post 

I didn't realize this millennial couple had contempt for the boomers. That's unpleasant and I wish Ms. Shen wasn't doing that because I think it's unfair and inaccurate. Overall, I'm concerned that this couple is overconfident about their situation.

I wonder if the couple will change their mind about the need for housing as they get older. But humans are adaptable creatures and there are many ways this can work. If they do any kind of odd job, and get extra income, it can help make it work. My guess is that they _will_ work again at some point.



Mukhang pera said:


> She speaks of her friend "Agnes", who spent 14 years getting a PhD in a field, apparently with scant demand for graduates. What does that prove? That her friend was not too bright. And 14 years to accomplish?
> . . .
> Next we are told the sad story of "Amanda" who stupidly worked 60-80 hour a week on promise of a promotion, then got dumped at the end of the year.


Yeah, the stories don't impress me either. They seem dramatic and not very useful. My guess is that there is some pain or resentment from the couple's experience in the working world, especially with my direct experience in the husband's work environment. It was not a pleasant place to work.



> In the second article linked, we are told of Ms. Shen "As a teenager, she chose to be a computer engineer, ignoring her dream to be a writer, based on a formula she devised to rank the best value university courses based on tuition fees versus future pay." So, she elected to go after money to the exclusion of all else, and ended up, as she calls it, chained to a job she hated. Good planning there. But still, the boomers' fault.


This part is pretty funny. It sounds like she actually succeeded at her own optimization.



> But in the interim, tell us about how others can have an investment portfolio of $1 million by age 31. Must one follow a course of study one hates to get a job one hates but will pay $250,000 a year or so from the get? You purport to be leading the millennial financial freedom revolution. Kindly provide a step-by-step guide that any can follow. The "I did it so anyone can do it" notion rings hollow.


They both contributed, so it's more like 500K coming from each person. Definitely very doable for a computer engineer. Back in those years, we were making around 100K gross income but the companies we worked for had generous stock plans. Total compensation might have been maybe 120K to 150K and their household gross income might have been as high as 300K a year!

The main reason I don't like her generalized "advice" is that she seems to gloss over the fact they were two very well paid engineers with enormous income at a young age. How many 30 year olds today are making 150K income?



> That their commentary is larded with pejorative language and dripping with disdain for the "boomers" makes one question their credibility. That they attribute to all boomers the same attitudes and advice to those coming behind is just plan wrong.
> . . .
> This woman talks about a _modus operandi _that will provide a good income stream and life for many, many years and she claims to know this to a certainty. I do not accept that. Her plan might have to undergo significant modification or it will fail. As I have said, she's only a few years out and already I see the much-vaunted nomadic lifestyle as having been dealt a crippling blow.


Those are all valid criticisms. As for her plan: if she had taken more time to read those Trinity studies (about the 4% withdrawal rate) and the follow-up work, she would have learned that this is probabilistic stuff and there are NO guarantees. If markets perform terribly, she's going to have to reevaluate her plan.


----------



## Longtimeago (Aug 8, 2018)

Topo said:


> My understanding is that OP is not in the OMY phase yet. I would argue he is in a stage closer to your "35" than "43". So I think discussions on SWR would be appropriate in this setting in preparation for what is to come. Once he gets to stage 43, then he may need to be pushed off the OMY bandwagon to lead a life of leisure on the beaches.
> 
> Regardless, I agree with you that if OP decides to call it quits in his current status, there will be no casualties. There will be opportunities in the future to correct course, particularly for someone as young and talented as OP.


Actually Topo, the OP has said nothing about their financial situation. They could be sitting with $1 million in the bank or $1000 in the bank, we don't know.

All we do know is the OP says he is not happy and he tells us he wants to go lay in a hammock somewhere. If you read his OP again, you will see that he says in the title he would like 'some advice' but the only questions he actually asks is, 'am I nuts?' and 'does anyone else feel this way?' Both of those questions only require a yes or no answer and do not ask for 'advice'. 

So we are left to guess whether he actually wants any advice as his title suggests, on what to do about his situation or if he just wants validation that how he feels is not nuts, which is what his questions ask. Those responding like you and I, have chosen to guess that he actually wants advice rather than just validation and so we see some posting about how to retire early and some just suggesting, 'maybe you need a change of career, etc.' 

It may be he only wanted validation and is perfectly happy figuring out for himself how to go about achieving his dream. That may be why he hasn't returned to comment. He may not want advice at all on how to proceed. We don't know.

Now to address your point re the 'one more year' issue. We don't know whether he is there or not. He does give us a clue in saying that, "_I could probably work another 5 years and provide for my future children the same way my parents did for me."_ That indicates he believes he is within 5 years of being able to manage some kind of income in retirement that would be sufficient to live on reasonably AND provide for future children.

However, he has no children, so is the thought about 'future children' perhaps a form of 'one more year'? 'What if I have children' is no different really than saying, 'what if I run out of money'. One more year is all about 'what if' in any form.

Really, without the OP returning to comment and add clarity, the thread is now simply about those responding discussing various aspects of early retirement, like the SWR system. We can continue discussing early retirement WITHOUT reference to the OP but we can't continue to discuss it WITH reference to the OP unless the OP chooses to return.


----------



## Longtimeago (Aug 8, 2018)

In regards to SWR, as I have already said, I am not a fan. It may work on paper but if you do some research you will find many examples of people who followed that path and then in the 2008 depression, saw the wheels fall of their wagon.

SWR is a model that does NOT have flexibility. When people talk about following it but being flexible in bad market years, first, either you are following SWR or you are not. If you start changing withdrawals from one year to another, you are on some other model that more than likely is no 'model' at all.

SWR requires some really big 'asks' of people who follow it. When as in 2008 someone sees their capital value drop by say 25%, asking them to 'have faith' and still withdraw the amount the SWR model tells them they can withdraw, is a huge ask. It does not allow for HUMAN behaviour. You have to act like a computer. The model says, 'don't worry, it will come up again and all will be well, you have to stick with it long term'. The number of people who can do that is pretty limited I would say. So as in 2008, you see people leaving the model behind and withdrawing less and perhaps even getting a job as a Walmart greeter to make up the difference.

Making up the 'difference' is another area where those who advocate a 'modified SWR' where you vary the amount of withdrawal, has a flaw. They don't talk about having to get a part time job when you reduce your withdrawal, they usually only talk about 'reducing' your spending. That ASSUMES you can do so. That may be the case where say, you need $x per year to live on but were working with an SWR that gave you $x plus 25% income. But what if you need $x and your SWR plan is designed to provide just that amount? You will have a shortfall that you must make up somehow and can't make it up by reducing spending.

My experience is that a very significant percentage of early retirees have a plan that has them living 'on the edge' in that regard. They figure out that they need $x income to live on and that is how much income their plan covers. It has little or no 'cushion'. If you look at what happened to many British retirees who went to live in their 'villa with a pool' in Spain, you can see what happens. In that case, it wasn't a large drop in the stock market that caught them, it was a rise in currency exchange. Look at the historical exchange rate here:








Euro British Pound Exchange Rate (EUR GBP) - Historical Chart


Interactive historical chart showing the daily Euro - British Pound (EURGBP) exchange rate back to 1999.




www.macrotrends.net





Then imagine you were someone who retired in 2000 when a Euro cost you .61 GBP. You then moved to your villa and started enjoying the good life. The exchange started creeping up on you but you were still OK, maybe you just ate out fewer times etc. Just tighten the belt a little. Then came 2008 and the exchange jumped to as high as .97 GBP to the Euro. A jump of 30% in one year! Your belt ran out of holes to tighten it.

Their are various ways a plan can go off the rails such as a drop in stock values or an increase in exchange rates if you choose to retire abroad. Whatever the reason, if you do not have a substantial cushion built into your plan, you have a problem. Most people do not have such a cushion built in for the simple reason that to do so requires either a whole lot more capital OR a means of generating a whole lot more income from a given amount of capital and SWR certainly isn't about the latter.

I suggest an income allocation based on a 'Rule of 3's'. One third of income covers living expenses, one third is for discretionary spending and one third is for savings. That gives you a 66% 'cushion' for when things go badly. But how many people who plan to follow the SWR model do you think are planning for an income that allows them to put 1/3rd of it back into savings/investments? They plan only to take money OUT, not to have enough to put money IN.

I advocate the Rule of 3s but it is not an absolute, you can vary the allocations. A popular model is the 50/20/30 Budget Rule. That suggests 50% for living costs, 20% for savings, 30% for discretionary spending.








The 50/30/20 Budget Rule Explained With Examples


Learn about Elizabeth Warren's 50/20/30 budget rule; a simple and effective plan for personal money management and wealth creation.




www.investopedia.com




The point is to have a substantial cushion between living costs and total income. 

Consider either of those models vs. SWR. SWR has you in the mind set of 'eating capital' while the models I suggest has you in the mind set of 'increasing capital'. I have been retired now for 31 years and my net worth has increased (with a few little bumps along the way) throughout. Do you think I ever worry about 'running out of money'? I do not think you will find many retirees following the SWR model who never worry about that when they see their stock portfolio drop in value from one day to another.

The SWR model may actually work as many are convinced it does but its biggest flaw in my opinion is that it does not allow for being HUMAN. It requires you to turn of your brain and be a computer. Trust in the numbers and never let fear enter your mind.


----------



## Plugging Along (Jan 3, 2011)

Longtimeago said:


> Actually Topo, the OP has said nothing about their financial situation. They could be sitting with $1 million in the bank or $1000 in the bank, we don't know.
> 
> All we do know is the OP says he is not happy and he tells us he wants to go lay in a hammock somewhere. If you read his OP again, you will see that he says in the title he would like 'some advice' but the only questions he actually asks is, 'am I nuts?' and 'does anyone else feel this way?' Both of those questions only require a yes or no answer and do not ask for 'advice'.
> 
> ...


The OP did provide their very basic information



twowheeled said:


> I'm going through my midlife crisis. I'm 35 and married, no kids...
> I make around 185k a year. I have built a nest egg of $500k, I have no debt, no house.


However, as you mentioned without OP coming back to respond what he is looking for, it's just a guess for all of us. Everyone is both on thread scope and off thread scope. 

@twowheeled No one here can give you much more advice without you coming back into the conversation. 
Could it be burnout or wrong career choice? Maybe
Could it be that haven't found something fulfilling in life whether its work, family, or kids? Maybe
Could it be that you just hate working, and want to retire early and really will be happy drinking beer in another country? Maybe
Could it be that you have baggage from your upbringing? Most likely
Do you have enough? Maybe, depending on what you can get your expenses down too. If I recall way back you were a young project manager that liked spending on his toys. You have to ask will retiring give you the toys you want, or where the toys a distraction?

Everyone is just making assumptions here. It comes down to you taking the time with your spouse to explore what will make you happy. I have personally found running towards something makes you happier than running away from something. You said you didn't have kids, but didn't mention if that's something you and your partner wants. That may be major decision that would impact your choices. 

I think a few years ago, you had posted something similar (more about your spending) and my advice was to save some of your money when you are young and have such a high income so you have the choice to not work later. I think that is the same thing here. You make a great income, so if you hate working, then working on increasing your nest egg from $500K will give you more flexibility to FIRE. That would be my first piece of advice, is figure a way to either reduce your expenses or increase your income or both. While you are doing that, have the conversations of what you and your spouse really want. Come back with some answers.


----------



## Longtimeago (Aug 8, 2018)

Plugging Along said:


> The OP did provide their very basic information
> 
> 
> 
> ...


I did look again at the OP Plugging Along but somehow missed the $500k nest egg. Amazing how the brain can miss what they eyes are seeing.

I agree with all you have written, the OP comes back to engage or the thread lives without reference to the OP.


----------



## Plugging Along (Jan 3, 2011)

Longtimeago said:


> I did look again at the OP Plugging Along but somehow missed the $500k nest egg. Amazing how the brain can miss what they eyes are seeing.
> 
> I agree with all you have written, the OP comes back to engage or the thread lives without reference to the OP.


I miss things in posts all the time. Without the OP, we can just talk about how we would live which probably has little relevance to OP's scenario. 

Because I kind of remember the OP from before. I am guessing he needs a little soul searching. He has to decide what he and his wife wants not his parents. He needs decide what is important to him and his wife, and go from there.

Me: Could my spouse and I live off of $500K at 35. Heck no, we just had our second kid then and our lifestyle choices was much higher at that time. Without kids, could we have lived off $500K at that time, probably, but we would not have wanted to. If we didn't have kids, we could have retired in our early 40's easily. We made the choice to have kids and have a certain lifestyle, so now our retirement date is current based on the anticipated age in which we expect our kids to 'launch'. We planned to help each kid to their first post graduate degree or 25 (whatever comes later). This is irrelevant to OP. Without kids, I can totally see people FIRE, but even that's individual.


----------



## Dilbert (Nov 20, 2016)

Mukhang, I enjoyed reading your thoughts. Never fear though, I believe that Garth Turner manages their portfolios. He’s never set a foot wrong, has he?;-)


----------



## james4beach (Nov 15, 2012)

Dilbert said:


> Mukhang, I enjoyed reading your thoughts. Never fear though, I believe that Garth Turner manages their portfolios. He’s never set a foot wrong, has he?;-)


Oh that's right, I forgot that Garth was involved in all this.

I don't want to sound overly negative. I think it's totally possible to completely stop working and "retire" in the 30s, especially for people like twowheeled, and the couple in the articles, who have very high incomes. It's possible!

But from a financial security standpoint, I think one should stay below a 3% withdrawal rate because of the very long time horizon (see post #44 above). My own calculation looks like this:

Current annual spending: 38k per year
Estimated 'retired' spending: 45k per year (margin of safety)
Withdrawal rate: 3.0%
After tax capital required: 45 / 0.03 = $1.5 million


----------



## twowheeled (Jan 15, 2011)

thanks for all the responses. I have been reading along even though I haven't had the chance to respond yet. There's a lot of valid points and I do agree with some of the numbers suggested. I do believe I would need approx 2-2.5M for the passive income to retire on around 50k per year.

Sleeping in a hammock is an exaggeration. But I wouldn't be bored in early retirement. As someone suggested it is not the allure of being lazy and doing nothing. It is the freedom of having my time entirely to myself, to use as I please that gives me the most satisfaction. I tend to engross myself in my hobbies and learning new skills, but I don't care to mix pastimes and work. On my sabbatical I dedicated about 10 hours a week to professional photography, doing gig work. While not challenging it completely destroyed the passion I ever had for that. Once I am doing something for someone else for compensation, that activity completely changes.

My wife is a recent immigrant from Vietnam. She has dived into the same "work to death" pattern since moving here. I'm away from the apartment for 12 hours a day, and she works 40 hours a week and takes care of the house work. This lifestyle is bizarre to her as well. The most frustrating aspect of this is despite earning a good combined income of ~220k a year, sacrificing our spare time for shift work, we do not at all feel the least bit wealthy. I'm a frugal person by nature and I don't want silly material things like a Mercedes or a country club membership. But things that do bring us real value, being able to *claw back our time,* seems out of reach.

For example, my evenings consist of getting home and having about 3 hours to myself, eating a microwaved dinner, walking the dog, packing my lunch and doing some chores with maybe 30 mins of TV or down time for myself. I can't free up time, the most valuable thing to me. Things like a house cleaner/maid, using uber/cabs, eating out a few times a week still feel out of reach for our income level.

Don't get me wrong, I don't feel entitled to any of these things. I happily do them when I'm off work. But the frustration I'm feeling is that despite earning, what? double the median household income? not having any kids, not having debt hanging over our heads, we still feel like we are only slightly above poverty.

My work isn't physically or mentally demanding. I have a very simple job that I can do well. It is not "burn out". The commute, giving my employer an undivided attention span of 10 hours a day, just maintaining that presence is the majority of the effort. I don't feel that the compensation is adequate for giving away my time in such large chunks. IOW I value my time so highly that to give it away to an employer, I should be able to afford to hire or source out such other necessities as house keeping, cooking, transportation, grocery shopping, etc while still having enough for our inflated housing, retirement savings, etc.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> In regards to SWR, as I have already said, I am not a fan. It may work on paper but if you do some research you will find many examples of people who followed that path and then in the 2008 depression, saw the wheels fall of their wagon.


The SWR concept is just a reference point. A beginning. A way to compare how things would have gone historically under a similar withdrawal rate. It is not the be all end all.



> I suggest an income allocation based on a 'Rule of 3's'. One third of income covers living expenses, one third is for discretionary spending and one third is for savings. That gives you a 66% 'cushion' for when things go badly. But how many people who plan to follow the SWR model do you think are planning for an income that allows them to put 1/3rd of it back into savings/investments? They plan only to take money OUT, not to have enough to put money IN.
> 
> I advocate the Rule of 3s but it is not an absolute, you can vary the allocations. A popular model is the 50/20/30 Budget Rule. That suggests 50% for living costs, 20% for savings, 30% for discretionary spending.
> 
> ...


This is for someone in the accumulation phase. Someone adding to their portfolio. There is no point in taking out of the portfolio to then add to it.



> I have been retired now for 31 years and my net worth has increased (with a few little bumps along the way) throughout. Do you think I ever worry about 'running out of money'?


That tells me that your withdrawal rate is low, which is a good thing. You have also ridden on the coattails of long a bull market in stocks and bonds. 

One of the criticisms of the SWR models is that it is too conservative. Someone following it is likely to leave a substantial inheritance.


----------



## james4beach (Nov 15, 2012)

Topo said:


> The SWR concept is just a reference point. A beginning. A way to compare how things would have gone historically under a similar withdrawal rate. It is not the be all end all.


It offers some good rules of thumb. I've found it useful for wrapping my head around how to convert capital and retirement savings into perpetual cashflow.



Topo said:


> One of the criticisms of the SWR models is that it is too conservative. Someone following it is likely to leave a substantial inheritance.


I'm not sure SWR is too conservative. Yes the odds are that someone withdrawing a constant 4% will end up with a lot of money left over... in something like 95 out of 100 historical runs. But since each of us only lives once, if we happen to be one of those unlucky 5 out of 100, it's a disaster. We don't get a do-over.

Similarly, it's easy for an advisor to say to their client: "I think you can probably withdraw at 5% and you'll be OK". If they give the same advice to many clients, over many years, most of their clients will be fine.

But there might be one retiree who starts his retirement at precisely the worst time, and gets the unfortunate sequence of returns. He will either deplete his savings or have to reduce the withdrawals.

I find it's hard to reason about these probabilities. I'm not sure how comforting it is that 4% withdrawal works in 95% of historical simulations. And that's still based on US market performance, which has been stellar.

Ultimately there are no guarantees of market performance (ever) no matter how well things worked in the past. This is why there is a certain inescapable danger of early retirement if you barely have enough capital.


----------



## Prairie Guy (Oct 30, 2018)

james4beach said:


> I'm not sure SWR is too conservative. Yes the odds are that someone withdrawing a constant 4% will end up with a lot of money left over... in something like 95 out of 100 historical runs. But since each of us only lives once, if we happen to be one of those unlucky 5 out of 100, it's a disaster. We don't get a do-over.


No one is obligated to take the full 4% each and every year no matter what happens. It's a general guideline only. If you're 60 or older you'll probably be okay. If you're young then maybe build in a bit of a buffer. No one should be caught off guard because you can make adjustments at any time if required.

And don't forget CPP and OAS...if your expenses are low or moderate they can cover 1/4 to 1/3 of your needs. Then you only need to withdraw 3% to get by.


----------



## Topo (Aug 31, 2019)

james4beach said:


> I'm not sure SWR is too conservative. Yes the odds are that someone withdrawing a constant 4% will end up with a lot of money left over... in something like 95 out of 100 historical runs. But since each of us only lives once, if we happen to be one of those unlucky 5 out of 100, it's a disaster. We don't get a do-over.


I agree with you. I personally don't think it is too conservative, but some people do. I guess they are willing to take a higher risk of depletion for a better quality of life in early retirement. Personally, I prefer to play it safe. 

I still think a 4% WR is going to be okay for a 30 year retirement span. Probably not for a young retiree, looking at 50+ years. Plus, if faced with an adverse sequence of returns, an older retiree could decide to annuitize to protect their retirement. A younger person may not have that option.


----------



## james4beach (Nov 15, 2012)

Topo said:


> I still think a 4% WR is going to be okay for a 30 year retirement span. Probably not for a young retiree, looking at 50+ years. Plus, if faced with an adverse sequence of returns, an older retiree could decide to annuitize to protect their retirement. A younger person may not have that option.


Looking at the Monte Carlo simulations again...

When dealing with a 60 year time horizon (much longer than those SWR studies) -- conventional 60/40 only appears to support 3.4% withdrawals with 90% successful outcomes.

But it seems you can get up to 3.8% with the Permanent Portfolio, a notable improvement. I used my own allocation of 20% gold, 30% stocks, 50% treasury bonds. Link to Monte Carlo sim here.

Of course, there's lots of uncertainty when dealing with such long time spans, no matter what the simulations say. A lot can change in 60 years.


----------



## Rusty O'Toole (Feb 1, 2012)

.


----------



## Rusty O'Toole (Feb 1, 2012)

I seem to be the only one who doesn't find the original question odd or unreasonable. I decided when I was 16 years old that I wanted to be independently wealthy and some sort of investment program was the way to go. Have been plodding toward that goal now for 53 years. So the idea of retiring at 35 makes perfect sense. I guess I'm just weird.


----------



## Longtimeago (Aug 8, 2018)

james4beach said:


> Oh that's right, I forgot that Garth was involved in all this.
> 
> I don't want to sound overly negative. I think it's totally possible to completely stop working and "retire" in the 30s, especially for people like twowheeled, and the couple in the articles, who have very high incomes. It's possible!
> 
> ...



I've already gave my opinion on SWR and drawing down capital vs. living on ONLY the income your capital can generate and not touching capital, so I won't repeat that. However, I will comment on an expectation that planning for only a 'cushion' of $7k between spending($38k) and income($45k) which is only a cushion of less than 20% is a recipe for disaster.


----------



## Longtimeago (Aug 8, 2018)

twowheeled said:


> thanks for all the responses. I have been reading along even though I haven't had the chance to respond yet. There's a lot of valid points and I do agree with some of the numbers suggested. I do believe I would need approx 2-2.5M for the passive income to retire on around 50k per year.
> 
> Sleeping in a hammock is an exaggeration. But I wouldn't be bored in early retirement. As someone suggested it is not the allure of being lazy and doing nothing. It is the freedom of having my time entirely to myself, to use as I please that gives me the most satisfaction. I tend to engross myself in my hobbies and learning new skills, but I don't care to mix pastimes and work. On my sabbatical I dedicated about 10 hours a week to professional photography, doing gig work. While not challenging it completely destroyed the passion I ever had for that. Once I am doing something for someone else for compensation, that activity completely changes.
> 
> ...


Twowheeled, I'm sure you don't mean to be vague but you are being. Do you want to retire or not? Yes or no? If you do, what do you intend to DO about it?

You say you would be willing to retire on $50k per year and to do so you would need $2-2.5 million. Clearly, you like others here, are only looking at an SWR based plan. Why?

Here's how the equation works. Capital generates income based on how it is invested. People usually use that to determine the capital required for the income they want based on some idea of what return they can expect to generate with the capital they have. 

I suggest a different question being asked than 'how much capital do I have to have?' Ask the question, 'how much return must my capital provide to give me the income I want?' THAT is an entirely different question and will take you down an entirely different road. 

You say that you now have $500k in capital. You say you would be willing to retire on an income of $50k. Can you see where I am going here? IF you can generate a return of 10% on your $500k, then you could retire today with an income of $50k.

People get so hung up on SWR and how much capital they would need to follow that type of plan, that they cannot see it is not the ONLY way to fund retirement. Change the paradigm. Instead of assuming SWR is the only possible way to fund retirement, decide what return you want to get and then find a way to get it. 

When I retired 31 years ago, numbers were obviously different then but the goal was just the same. How to retire as soon as possible with enough income being generated by as little capital as possible. I saw two separate needs. One to generate enough income for the immediate future and two, how to continue to be able to grow the income to stay ahead of inflation. How to do that then were my TWO questions.

The first answer I came up with was to accumulate capital by simply spending less than I earned. You are already doing that. Then invest that capital to get the returns I needed to get to provide the income I needed to retire. In my case, I originally invested in industrial and commercial real estate into which I had a means of gaining entry. This is important, not everyone should be looking to follow the same path in how they generate income but all too often when early retirement is discussed, the only method talked about is SWR.

Again, going back 31 years, I figured I could easily live on an income of $12k (roughly $24k in today's dollars) in a lower cost country but to allow for inflation, I would need to keep increasing my capital to generate the increased income needed, my second question I had to have an answer for.

So I aimed for an income of $36k following the Rule of 3s for budgeting I explained above. One third for living costs, 1/3 for discretionary spending and 1/3 to ADD to my capital and invest to produce the necessary increased income inflation would require.

Next was how much capital would I need to accumulate to generate that $36k income? Again remember this was over 30 years ago when I was going through this. I could reasonably expect to generate 12% on my investments in real estate at that time. So, simple calculation, I would need $300k to generate $36k in year ONE. 

And that is what I did, when I reached $300k invested I was 7 years into a plan that started out as a 10 year plan to get there and that's when I retired, seven years after deciding that is what I wanted to do, starting from near zero capital. Then came year TWO.

In year two and three and four, etc. things would obviously change. But each year what I had to do was look at the income my capital was generating, how the capital was growing as I continue to add 1/3 of my income to my capital, whether I was still able to live on 1/3 of the income or not and how to change whatever I needed to change to make it continue to work.

It is not a 'set it and forget it' proposition any more than anything else in life is. But SWR proponents seem to think that is exactly what the best way to fund retirement is. Get so much capital that it will last forever even though you are making no attempt to grow your capital, you are just drawing it down every year and expecting it to last till you die.

Now go to your own words twowheeled which some here really don't seem to be able to grasp. "_But things that do bring us real value, being able to *claw back our time,* seems out of reach." _TIME is what I am talking about here. How to retire as soon as possible in order to have the maximum amount of time spent in retirement.

SWR plans in fact require the exact OPPOSITE of that from my perspective. They require you to accumulate so much capital that it takes a long time to do so. How long will it take you at your present rate of saving, to accumulate $2.5 million? Then ask yourself if you could figure out how to make $1 million generate the income you want, how long it would take you to accumulate the $1million? Obviously, quite a bit less time. 

So then ask yourself, why am I fixating on accumulating $2.5 million to put in an SWR plan instead of fixating on how to get better returns on my investments and therefore needing less capital and less time to get to my goal of retiring? Change the paradigm!

I saw retirement as no different than working. Each year, you have to decide what to do with your income. Some you have to spend on living costs, some you can spend as discretionary and some you have to save and invest for your future. 

Now look at my way and do a simple compound interest calculation here:








Compound Interest Calculator


Simple compound interest calculator. Calculate compound interest savings for savings, loans, and mortgages without having to create a formula




www.getsmarteraboutmoney.ca





Suppose I started with $300k, lived off the income it provided in year one of $36k while adding $12k of that to my capital for year two and to simplify the calculation, continuing to add $12k each year for 30 years and managed to have an average return of the 30 years of just 3%, how much capital would I have today? Answer, $1.3 million. But I didn't just earn an average of 3% for 30 years and I didn't just add $12k per year to my capital. In some good years I did quite a bit better than that and in no year have I done poorer than that.

Now consider someone who retired 30 years ago using an SWR plan and where they are likely to be in terms of capital. They may have managed to continue to generate the income they wanted but they had to spend more TIME accumulating their capital than I did and it is dwindling by the day while mine is still growing. 

Retirement is not an ENDING, it is just like any other period in your life and yet so many people seem to think when you retire, you fix everything in stone regarding your finances and then just wait to either die or run out of money before you do die.


----------



## Longtimeago (Aug 8, 2018)

Topo said:


> This is for someone in the accumulation phase. Someone adding to their portfolio. There is no point in taking out of the portfolio to then add to it.
> 
> That tells me that your withdrawal rate is low, which is a good thing. You have also ridden on the coattails of long a bull market in stocks and bonds.


You are not listening to what I am saying Topo. Why should you not be in the accumulation phase as you call it, throughout your life? Answer, because YOU cannot see beyond SWR and withdrawing capital. I continue to add to capital as I have for 30 years and THAT is what allowed me to retire far sooner than most here will manage to do following SWR thinking.

I do not have a 'withdrawal rate', Topo. I have an income from my capital (as well as pension income these days) and I live on less than that income. I do not even invest in stocks Topo. Are you not aware there are other ways to invest capital and generate income? I've invested and generated income for 30 years without ever having to work and without ever having bought one stock share. Go figure.


----------



## Longtimeago (Aug 8, 2018)

james4beach said:


> Ultimately there are no guarantees of market performance (ever) no matter how well things worked in the past. This is why there is a certain inescapable danger of early retirement if you barely have enough capital.


There again we see the assumption that early retirement, the stock market and SWR are necessarily all linked together. 
Don't invest in stocks, don't rely on a SWR and what happens to that prediction? It's irrelevant. All that matters is how much income the capital you have generates for you. Some might be amazed at how that can motivate someone to find ways to invest their capital that will generate the income they want and how they can plan to continue to grow their capital at the same time.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> You are not listening to what I am saying Topo. Why should you not be in the accumulation phase as you call it, throughout your life? Answer, because YOU cannot see beyond SWR and withdrawing capital. I continue to add to capital as I have for 30 years and THAT is what allowed me to retire far sooner than most here will manage to do following SWR thinking.
> 
> I do not have a 'withdrawal rate', Topo. I have an income from my capital (as well as pension income these days) and I live on less than that income. I do not even invest in stocks Topo. Are you not aware there are other ways to invest capital and generate income? I've invested and generated income for 30 years without ever having to work and without ever having bought one stock share. Go figure.


Longtimeago, thank you for clarifying this. We are talking apples and oranges. As far as I know, SWR does not apply to a real estate portfolio. I was specifically commenting on a passive portfolio of securities. But I get it when you say you are not a fan of SWR, you mean you do not like a portfolio of stocks and bonds as a source of income. You prefer to invest in real estate.

As you know better than many of us, real estate is not a passive business. There is some work involved, albeit not the typical 9 to 5. However, OP states his goal is to:



> .....spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot.


If he would be willing to start a business, whether real estate, a coffee shop, or something related to his expertise, then SWR would be less important as he would not be relying on his portfolio that much.


----------



## Longtimeago (Aug 8, 2018)

Topo said:


> Longtimeago, thank you for clarifying this. We are talking apples and oranges. As far as I know, SWR does not apply to a real estate portfolio. I was specifically commenting on a passive portfolio of securities. But I get it when you say you are not a fan of SWR, you mean you do not like a portfolio of stocks and bonds as a source of income. You prefer to invest in real estate.
> 
> As you know better than many of us, real estate is not a passive business. There is some work involved, albeit not the typical 9 to 5. However, OP states his goal is to:
> 
> ...


Don't get hung up on absolutes Topo. I wrote that everyone should find their own way of generating their income just as we all did when we got our first job. Did we all stay with that first job for the rest of our working lives? Not likely. I invested in RE initially, that does not mean that has never changed in 31 years. I have changed how I generated my income quite a few times since then. Some such as Greek government bonds that paid 21% were entirely passive while others such as owning a bar were quite hands on.

The OP does state his goal but has returned to clarify that 'laying in a hammock' is just his way of saying what he wants is the FREEDOM to do that if he wants or to do anything ELSE that he wants to do at any given point in time. That is the point of financial freedom, the freedom to CHOOSE.

Let me give you some real life examples of what can happen once you have FIREd. I ended up on a Greek island more or less enjoying the 'beach bum life my Mother worried about. Sitting around one day in my local kafenion (coffee shop), a couple of acquaintances asked me what I planned to do when the upcoming tourist season began again. I replied, I didn't plan to do anything in particular except enjoy my life. They said, 'oh no, you can't do that. You'll end up sitting in bars, chasing women, etc.' I said I didn't see much wrong with that but they kept pestering me saying 'you have to have something to do'. So then I thought, OK, how can I sit in a bar, meet women, enjoy myself but at the same time get paid and LOOK like I was doing something. The answer was to open my own bar with a local partner and that's what I did. Year one was fun, year two was OK and year 3 it was becoming less enjoyable and more like work. So I sold out my half to my business partner at a profit.

Now, during that time Topo, was I 'working'? The answer is no, I was not. As soon as it started to be 'work' I got out. I was free to choose to do that or not do that every day. I was 'lying in a hammock', just a different definition of a hammock.

About the same time as I gave up the bar, my landlord asked me if I would give him a hand around the property, doing various projects like building a new diving board for the pool. I figured 3 layers of plywood, screwed and glued plus a coating of glue on top with sand sprinkled on it to give grip. Then paint it and voila, you have a diving board. Then we built what you could call a garage but was intended as a laundry room for doing all the laundry (sheets, towels, etc.) for his vacation rental apartments. Maybe spend an hour trimming his prize bed of roses. In return for 2 hours a day of this kind of thing, I ended up living rent free for 5 years.

During those same years, another bar owner I knew asked me to spend my evenings in his bar socializing and playing pool with the tourists. In return he paid me 'pocket money' and all my drinks were free. So in the tourist season (Apr-Oct), I got paid to enjoy my evenings. The closest to work that got was having to let the tourists win on the pool table without making it obvious when I was letting them win.

In those same years again, I was living with an English woman who was an English teacher. I contributed the rent so to speak, although I wasn't paying any and she contributed the groceries. So picture it. I got paid to enjoy a social life and had no real expenses for most of the year, every year. As you might guess, it was only costing me a couple of thousand a year to live. All my excess income was just added to my capital.

So there I am living on an 'tropical island paradise', going to the beach in my classic little red MG convertible that I bought in England and drove back to the island and enjoying the companionship of a woman 19 years my junior. You bet I was living life in a 'hammock' Topo.

I could go on Topo with other examples of how in my own case, things just happened and with some I was happy to become involved at least for a period of time and others I just ignored. At no time was I not free to 'lay in a hammock' if that was what I wanted to do.

Life after retirement is no different than life before retirement. The only difference is you are free to choose what you will do or not do. Changes still happen just as they did before and you have to make decisions when changes happen, just as you did before. Some are lifestyle changes, some are financial changes. Some see you spending more and some see you accumulating more. I think this is the part that people contemplating early retirement often don't understand as I have said. They think they will retire with a 'plan' and that plan will then remain the same till they die. I can guarantee it will not. As the saying goes, 'man plans, God laughs.'

So what the OP says his goal is, is to have financial freedom and the resulting freedom to lie in a hammock all day if he chooses to but what will happen in reality is something that no one can predict at all. Life will unfold as it will, the only difference is that if someone has FIREd and is able to adapt to the changes when they happen, then they may well never need to work to eat again in their life.


----------



## Longtimeago (Aug 8, 2018)

I think there are a couple of 'home truths' that should be said in regards to early retirement.

Most people are more risk averse than not.
Some people do not perceive risk where others do.
We don't get to choose where we fall on the risk aversion to risk tolerance scale.

Simple example. When my wife told her work colleagues, friends and family that she was retiring at 52 and at the height of a career in healthcare where she had reached a national level, most were shocked first and then had comments that were all more or less along the lines of, 'oh, I couldn't do that'. Then when she said we were going to sell up and move to another country (Canada), they said, 'oh, you are so brave, what if you don't like it there, I couldn't do that.'

My wife perceived no risk in it at all. Why wouldn't she like being retired and moving to Canada? Why would she worry about our money running out or her hating life in another country or miss the excitement and challenge of her work in a high profile national level position, etc. All the 'what ifs' that people came up with simply didn't occur to her to think about. What she perceived was a new beginning in a new country and that was far more exciting than daunting.

Risk is defined by the individual and as such, each of us will perceive the same thing differently. Early retirement brings up all kinds of 'what ifs' in most people's minds. They perceive all kinds of risks and want to have all kinds of assurances before they even contemplate it. That's why SWR appeals to so many. It appears to remove the risk of going broke before you die if you believe it. It also appears to remove the risk of failure and having to go back to work with your tail between your legs. Don't underestimate the power of the fear of that risk. Humiliation is a big deal for people.

Most people want a 'safe' and 'predictable' life. Early retirement doesn't really offer that even when people think they have figured out how to do it, have enough money, etc. they may still see the risks as daunting. If someone wants 'safe' then perhaps a government job and a good government pension at 65 is what they should be looking for. Early retirement is more likely to require perceiving the risks as exciting, not daunting.


----------



## twowheeled (Jan 15, 2011)

LTA, you're clearly very wise and have some very good points. I have spent many many hours thinking about what you speak of. Yes I would like to retire early, I'd love to be retired in my early 40's. But, this isn't a pipe dream. I have to be a realist and find a way to get from point A to point B as you describe.

_*"I suggest a different question being asked than 'how much capital do I have to have?' Ask the question, 'how much return must my capital provide to give me the income I want?' THAT is an entirely different question and will take you down an entirely different road. 

You say that you now have $500k in capital. You say you would be willing to retire on an income of $50k. Can you see where I am going here? IF you can generate a return of 10% on your $500k, then you could retire today with an income of $50k"*_

This is a very complicated question. I could write a great deal on it but I would sum it up as briefly as possible. I believe we are in such an overextended bull market with high valuations by most measures in all asset classes, that achieving 10% on a forward basis is impossible. Be it in real estate, bonds, or equities, I think the "everything bubble" is a good term to describe the environment we are in to deploy capital. In that regard I would not be surprised if we went nowhere for a decade like Japan. Yes I could live on 10% on my 500k, but I don't think I could realistically obtain that, anywhere. I believe based on measures such as CAPE ratios I can expect around 0-3% in a passive portfolio weighted towards equities, going forward from today. I understand your view, which to me is two sides of the same coin. They differ only in the risk parameters. It is a sliding scale of how much return I require out of an ever smaller net worth. In your example I do not see a difference in withdrawing 36k out and depositing 12k back in for savings vs a reduction of living costs to 24k.

And in regards to the massive accumulation needed for "SWR" or any early retirement, yes I also realize that. And the return I would need to hit my goal in 7-10 years is 20% per year plus saving 50-75k after tax income each year. So there is the realist part, there is no way I can outperform the market like that. As a retail investor, the probability is the longer I take an active role in trying to outperform the market the higher the chances of me underperforming the index. I am likely not the next market wizard they will write a book on.

But there's the dilemma. I want to get from 500k to ~1.5-2M in a short time. It is impossible that I have the talent to outperform the market on even an annual basis let alone a continued batting average of a decade. Yet I have defined the goal and *must *find a solution to achieving the outcome. As you say bluntly:

_*"If you do, what do you intend to DO about it?"*_

Therefore the only strategy that I have with some probability of success is to:
-find an asset class where a retail investor has less of a disadvantage
-employ copious amounts of leverage to make up for lack of time horizon
-speculate for as little time as possible to minimize the probability of average performance.

In other words I have no dreams of being able to play in the NBA. But I might have one shot at making a single free-throw.

As before, I'm hesitate to share this because of the reactions it elicits. I like how you brought risk into the conversation. I spent a lot of time thinking about risk too. Specifically how I do measure risk of financial ruin by making such a "bet" compared to other risks in my life. What I've come to realize is that many people will assign too much risk to financial setback but not enough risk to other decisions that happen on a very regular occurrence. For example, if I told you that I used 300k of margin on top of my 500k of life savings on a single speculation. I think everyone in this forum would say that is an unacceptable risk of losing everything and foolish. And yet if I were to give the example of where a driver had felt fatigued after a long shift at work, or was driving in between cities and felt exhausted but decided to push on for just another half hour to their destination instead of stopping to spend the night in a hotel. I think we can all relate or have been in that situation ourselves and consciously taken that risk. Despite knowing that the failed outcome of falling asleep at the wheel would be serious debilitation or death. Which decision was worse?

Inevitably this will lead most to say, well why don't you just extend your retirement age to 60 years old? And to that I would answer is not solving the problem as it was defined. If I told you to come up with a plan to evacuate your house in 24 hours for an incoming tsunami and your response was that you could be out in 36 that is rather pointless.


----------



## MrBlackhill (Jun 10, 2020)

@twowheeled I haven't read all the replies, but I have read your initial post. I understand your feeling, I have the exact same feeling and many other people do. I don't think it's the mid-life crisis, it's more about the boredom of not having a career to be passionate about. I mean, I've had that feeling ever since I'm out of school. I changed job every 2 years. I continue my path just because of the salary. Meanwhile, I'm desperately looking for other solutions I would be passionate about while providing about the same salary.

You are lucky though. You have a really high income, no debt and you have a pile of cash. Time is money, but money is time. You had the chance to take 3 sabbaticals of one year each. You have a high income that will allow you to retire early if you start living a frugal life.

Not everybody have that chance. My income is not even half of your salary, I'm loaded with my mortgage, I have no money left in my bank account and yet I feel lucky because I plan on retiring early, which in my case means maybe 55, which is still a long way to go. But then I recall myself that most people do half of my salary (a fourth of yours), they also have a mortgage, they have 2 or 3 kids, they also hate their job, they have only 2 weeks of vacation and they will retire at 65.

Therefore, I'm being careful when talking about hating my career while talking about money in the same sentence. I have a friend who absolutely hates his job, but he'll be able to retire at 40 or even before. There are lots of people hating their job, but we are not all equal if you start talking about money. I don't understand where do people see it as taking a risk when they are in a overly healthy financial situation.

Even though this is a money forum, I don't think we should talk about the issue of hating a career and financial freedom in the same thread. If you have a high income and you plan to follow the FIRE movement, that's one thing. If you hate your job and you want to talk about advice on how to live on through your current career or how to find a meaningful career that you will be passionate about, that's another thing.

Mixing both subjects in the same thread brings another kind of response. Knowing your financial situation, my honest advice would be that I'd just stick to that kind of job and retire in 5-10 years. If the financial situation were not mentioned, I'd suppose you do 40k$ a year, you have 2-3 kids and a mortgage and that there's no way for you to retire before 65, so I'd answer with advice on how to live through it. 

I was raised on a farm where my stepdad was working 85h a week, 365 days a year, earning 30k$ a year and taking one week of vacation every 5 years. He could finally retire at 63 from selling the farm. 63 is not old and yet his body is physically totally exhausted because of more than 45 years working too hard. Do you really think the FIRE movement could've been an advice given to him? Definitely not, absolutely impossible. He had to learn to live on during hard times.

Be grateful of your current situation. Do you want advice on how to retire early (since it's possible to you, lucky you) or do you want advice on learning how to live through your current job or do you want advice on how to find a meaningful career to be passionate about?


----------



## Longtimeago (Aug 8, 2018)

twowheeled said:


> LTA, you're clearly very wise and have some very good points. I have spent many many hours thinking about what you speak of. Yes I would like to retire early, I'd love to be retired in my early 40's. But, this isn't a pipe dream. I have to be a realist and find a way to get from point A to point B as you describe.
> 
> _*"I suggest a different question being asked than 'how much capital do I have to have?' Ask the question, 'how much return must my capital provide to give me the income I want?' THAT is an entirely different question and will take you down an entirely different road.
> 
> ...


Two things stand out for me twowheeled. You seem to be fixated on the stock market and on accumulating enough capital to employ an SWR plan. 

Whatever it is we want to DO, we have to find a way to do it in the world we currently live in. You say, _"It is impossible that I have the talent to outperform the market" _In regards to that statement, I would suggest two things. One, self-fulfilling prophecies usually turn out to be true. If you don't believe you can, then you probably won't. Second, you are looking only at the stock market as if it was the only way to invest your capital. That's simply not the case.

Then, having said you can't do it, you go on to say, "_ Yet I have defined the goal and *must *find a solution to achieving the outcome." _That I can agree with but you immediately then return to the stock market for an answer after having said, "_It is impossible that I have the talent to outperform the market" _How do you reconcile those two things? If it is impossible for you to outperform the market, you cannot look there for an answer. You must look ELSEWHERE.

I wrote earlier that each individual must find their own way to accumulate the capital they want. I did not write that each individual must find their own way in the stock market. I gave the example of my own way initially being commercial and industrial real estate. I could do that because I had an 'in', a way of investing relatively small amounts ($25-50k) in multi-million dollar properties that were ether flipped for a quick capital gain or a portion held and most of the property flipped for both an immediate capital gain (from the flipping) as well as an ongoing income stream. It worked well for me.

However, today I would not advise it because we have to find a way to DO what we want to do in the world we currently live in and due to the pandemic, I don't see that path as likely to be a good way to go in the next few years.

I know someone who I do not think has ever 'worked' a day in his life. All he does is buy and sell wine. I've dabbled in that myself a few times with his advice. He started in his 20s, why I don't know but obviously he somehow developed an interest in wine and one thing led to another. Someone could argue he has never retired and someone else like me, could argue he has never 'worked'. In his earlier years I am sure he was putting in the hours while he built up capital but nowadays I think he only does a couple of trades a month if that. 

People find all kinds of ways to invest money and build capital, outside of the stock market. There are two things I believe in that regard. No one is likely to grow capital quickly working for someone else and it is highly unlikely they can do it in the stock market either. It requires some other method of investing in something directly. Often that path requires some specialized knowledge (or access like my 'in') and often that knowledge comes from having an interest in something, like an interest in wine as per the example above.

Take a look at this link and scroll down about a third of the way to 'Lego'. Top 10 Amazing Ways to Earn a 10% Rate of Return on Your Investments Who would think to invest in Lego? Yet those doing so have had returns of at least 11% on average between 1987 and 2015.








LEGO - The Toy of Smart Investors


We study financial returns on alternative collectible investment assets, such as toys, using LEGO sets as an example. Such iconic toys with diminishing over tim



papers.ssrn.com





I'm not suggesting you start buying Lego or wine but I will go back to your comment that, "_Yet I have defined the goal and *must *find a solution to achieving the outcome." _I do not believe you will find it in the stock market in a time period you will consider acceptable. It is more likely you will need to find a path outside of that which means you have to change your thinking. It doesn't mean you have to gamble your $500k plus a $300k of leverage in one throw of the dice either. But it does mean you will probably need to start thinking 'out of the box'.

Otherwise, you are probably going to be the one who, '_If I told you to come up with a plan to evacuate your house in 24 hours for an incoming tsunami and your response was that you could be out in 36 that is rather pointless." _


----------



## robfordlives (Sep 18, 2014)

Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace


----------



## Pappa Tigger (Apr 17, 2020)

Not sure if this has been mentioned, but what does your wife think? You mentioned future children. Do you want to raise them in a "poor country?" Does your wife? If you were single I would say work towards that goal of yours. Consider taking more vacations especially vacations that more closely mimic the type of life you think you want to live at this moment. Since you have been on sabbaticals I assume that more frequent vacations or less working time isn't really going to help. So think things through, do the math, and develop the courage to make the big move.

But with a wife and thought of future kids then I would suggest you think about what they want. Decisions need to be made together unless you don't care about the consequences which is selfish but it is your life. Your wife may not want to spend her life in a "poor country" or raise kids in one. Combined that with her husband sitting in a hammock all day sipping beer and that might become unbearable for her. Life is a balance. You can but don't have to sacrifice your happiness for anyone else.


----------



## Pappa Tigger (Apr 17, 2020)

robfordlives said:


> Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace


That's similar to how my wife and I approach things. What are we working for? Just money really. I don't care about career development. She doesn't care about promotions that only pays a little bit more. Why bother with the added stress? Then again, like the OP, I don't have a passion for working. I am not looking for a fulfilling job. When asked whether I rather be talented or lucky I always choose to be lucky.


----------



## Longtimeago (Aug 8, 2018)

robfordlives said:


> Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace


Accountants are not noted for their imagination. Understanding why someone might care is probably not your strong suit. 

While you are 'not caring and leaving it all behind at 4.30', I am enjoying ALL my days, evenings and weekends with the hobbies I have. Perhaps the math of that is something you can relate to. You enjoy less than 100% of your total time available and in fact admit that the time you spend working is 'boring, annoying and at times soul crushing', while I enjoy ALL of my time available by having found a way to retire as soon as possible.

So from a purely logical and mathematical point, my use of time is obviously a better choice than yours. The difference is that I made the choice.


----------



## Longtimeago (Aug 8, 2018)

Pappa Tigger said:


> That's similar to how my wife and I approach things. What are we working for? Just money really. I don't care about career development. She doesn't care about promotions that only pays a little bit more. Why bother with the added stress? Then again, like the OP, I don't have a passion for working. I am not looking for a fulfilling job. When asked whether I rather be talented or lucky I always choose to be lucky.


Then my question to you Pappa Tigger would be, so why are you continuing to choose to follow that path? You do realize it is a choice right? 

Try considering this saying, 'you can be the architect of change or the victim of change. What is inevitable is that change will occur.' Most people go through life being the victim of change, they just let things happen to them and when a change is a negative one, they blame it on their 'bad luck.'


----------



## james4beach (Nov 15, 2012)

robfordlives said:


> Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace


I agree. I hate computers, and I'm stuck working with them. Big deal. I get paid well and as I get wealthier, I'm able to work less and less. I think the key thing is to remember that *work is not life,* so you have to make time for life.

The amount of work I have to do has steadily reduced over time:
60 hours/week, initially - this sucked
40 hours/week - doable but tiring
10 hours/week - currently

I do the work to make money. The OP has a high salary (185k) and can definitely do the same thing. In five or ten years, he should be working less than 40 hours.


----------



## Pappa Tigger (Apr 17, 2020)

Longtimeago said:


> I enjoy ALL of my time available by having found a way to retire as soon as possible.
> 
> So from a purely logical and mathematical point, my use of time is obviously a better choice than yours. The difference is that I made the choice.





Longtimeago said:


> Then my question to you Pappa Tigger would be, so why are you continuing to choose to follow that path? You do realize it is a choice right?
> 
> Try considering this saying, 'you can be the architect of change or the victim of change. What is inevitable is that change will occur.' Most people go through life being the victim of change, they just let things happen to them and when a change is a negative one, they blame it on their 'bad luck.'


First off, good for you. Second of all, I think you're conflating "choice" (as in absolute free will) with realistic or desirable choice. You found a way to retire as soon as possible but you assume that anyone can do it or want to do it. I have friends who made a lot of money flipping properties and running AirBNBs. I have older friends who made money collecting rent from commercial real estate. Most people starting to plan their retirement do not have that type of capital to get into that in Vancouver or Toronto over the past few years. There are others who faced with the same "choice" you did who would have retired earlier than you did by cutting back more. There are others who faced with the same "choice" you did who would choose to work a few more years because they think you retired with too little. But sure, I chose to not live a more frugal lifestyle. I'm enjoying life now.

As for your question, I'm not sure I fully understand the question. But I follow that path for many reasons. I think I'm too young to retire so even if I won the lottery I will still continue working. I also don't have enough to live comfortably to retire now. And even if I can retire now, the money I make now allows me to spend in ways that I can't do in retirement. So for me, the "choice" you are thinking of isn't realistic or desirable.

The point I agreed with robfordlives is the idea of work life balance. Our work is relatively easy for us because of both job demands and our abilities. I could move to a bigger company and earn more money but that would surely require more hours and add additional stress to my life. When my wife and I get off work we try not to think about work and we are mostly successful in it. Of course we would spend some time talking about "work" as work and colleagues is a big part of our lives.

But like you said, a lot of it is "choice." That's why I told OP to consider his wife and his future children since the "choice" is he thinking of making will impact most people's marriage and children.


----------



## twowheeled (Jan 15, 2011)

Pappa Tigger said:


> Not sure if this has been mentioned, but what does your wife think? You mentioned future children. Do you want to raise them in a "poor country?" Does your wife? If you were single I would say work towards that goal of yours. Consider taking more vacations especially vacations that more closely mimic the type of life you think you want to live at this moment. Since you have been on sabbaticals I assume that more frequent vacations or less working time isn't really going to help. So think things through, do the math, and develop the courage to make the big move.
> 
> But with a wife and thought of future kids then I would suggest you think about what they want. Decisions need to be made together unless you don't care about the consequences which is selfish but it is your life. Your wife may not want to spend her life in a "poor country" or raise kids in one. Combined that with her husband sitting in a hammock all day sipping beer and that might become unbearable for her. Life is a balance. You can but don't have to sacrifice your happiness for anyone else.


I struggle with this too. My wife is an immigrant from Vietnam as I mentioned. She came here thinking it would be a better life, but after seeing how hard we have to work, our standard of living, absolutely terrible weather 1/2 the year, she also has second thoughts. She would not be against returning home and we could comfortably live on that 4% a year, start a business, travel, etc.

Moreover I think we are really on a secular shift here. I've come to realize that the West's time of prosperity and wealth will likely come to an end and shift back towards Asia by the time my children grow up. Some of the advancement and infrastructure in Asia positively make Canada seem like a developing country. A lot of coworkers from other countries also have also shared the same sentiment. I'm not sure if I have the courage to act on this and uproot our lives, or just watch it unfold in front of me. As a first generation Canadian whose parents immigrated here to escape poverty, leaving the country to pursue a better life seems so bizarre.


----------



## Pappa Tigger (Apr 17, 2020)

twowheeled said:


> I struggle with this too. My wife is an immigrant from Vietnam as I mentioned. She came here thinking it would be a better life, but after seeing how hard we have to work, our standard of living, absolutely terrible weather 1/2 the year, she also has second thoughts. She would not be against returning home and we could comfortably live on that 4% a year, start a business, travel, etc.
> 
> Moreover I think we are really on a secular shift here. I've come to realize that the West's time of prosperity and wealth will likely come to an end and shift back towards Asia by the time my children grow up. Some of the advancement and infrastructure in Asia positively make Canada seem like a developing country. A lot of coworkers from other countries also have also shared the same sentiment. I'm not sure if I have the courage to act on this and uproot our lives, or just watch it unfold in front of me. As a first generation Canadian whose parents immigrated here to escape poverty, leaving the country to pursue a better life seems so bizarre.


It is definitely a big decision. If you don't plan to have kids, one option would be to spend time at both places. Be here when the weather is nice. If you plan to have kids, you might want to think about what you want to do when you have kids. You don't need to make life decisions based on your kids but many do. I have friends who long have plans to come back to Canada for the kids to start elementary school here and following through with it.

I'm actually a bit confused about your priorities but that's probably cause you haven't figured out what you truly want? For someone who doesn't covet nice things should a nation's "prosperity" be the driving force behind your decision? You mentioned you hate working but you also want to start a business? If you're looking to go to a "poor" country so you can live comfortably with what you have is a fast developing economy even a good thing?

I'm obviously biased and I am not familiar with Vietnam but I think life in Canada is simply different. You would know this better than I do since you know both Canada and Vietnam. If Vietnam is home for your wife and you have family and friends then it's certainly normal to prefer life over there. It's actually kind of boring here but it's less crowded. I know that here kids are still growing up pretty stress free compared to many parts of Asia. As your own experience has attested if you work hard you actually can make a decent living. So if you plan to have kids, it sounds like that if you continue to put your head down and work your kid is going to grow up pretty comfortably. They will grow up comfortably in Vietnam too but in about 20 or so years time will you want your kid to study University in Vietnam or in Canada?

Again, I don't know Vietnam but in many Asian countries it's actually desirable to have a foreign education. I have friends who try their best to keep the door open for their kids to either stay and work in Canada or go back to the country where their parents or grandparents grew up.


----------



## james4beach (Nov 15, 2012)

Let's not forget that Canada has some major advantages, and many people immigrate here because of these reasons:

We are a stable country with a well functioning government. There is minimal corruption in our government, and generally, things work very well - meaning that property rights and individual rights are valued and protected. The systems are operating well; we don't have dictators; we don't get hyperinflation. We have great infrastructure and social services and safety nets. One should not overlook how important all of these things are... they result in a higher quality of life.

Secondly, Canada is part of a group of allied nations (US, UK, Europe, Australia) which have a lot of military and economic power. Again, this is very important even though many of us don't think of it in day to day life. There is mutual protection within this group and we all benefit from it.



Pappa Tigger said:


> They will grow up comfortably in Vietnam too but in about 20 or so years time...


I would not say that so confidently. There are risks to children being raised in Vietnam.

China could actually attack Vietnam, so that's a major downside to living there. The economic situation is also more tenuous, and I would imagine that Canada's government operates more smoothly and predictably.

You might say these kinds of things don't matter to you, but I know that they matter to many other people and know many immigrants who chose Canada, sometimes fleeing from war zones and oppressive regimes (examples off the top of my head: Poland, USSR, Chile, Vietnam, Iran...)


----------



## Longtimeago (Aug 8, 2018)

One step at a time. For early retirement, it goes like this.

Step one: Do I want to live my life without having to work for a living? Yes or no? That question must be answered first and the answer must be yes or that is the end of the decision making process.

Step two: Do I have a financial plan to stop having to work for a living? Yes or no? That question must be answered BEFORE moving on to thinking about anything else and if the answer is no, then a plan needs to be formulated.

You could argue that depending on where you will live and with what standard of living, you cannot determine what income will be needed and therefore cannot formulate a plan for step two.

I would counter argue that no, you don't need to determine where or with what standard of living IF you plan for where and at what standard using a high cost country as your baseline and a relatively decent standard of living with that baseline, you do not need to chose a country or a standard of living before formulating your step two financial plan.

I would advise taking that approach for the following reasons. If you can afford to live in say Canada without having to work, then you can afford to live in any equal or lower cost country obviously. If you can afford a reasonable standard of living in Canada, then you can afford the same or better standard of living in any equal or lower cost country. In other words, aim for a high goal and you will have a much larger field of choices when you get to that goal and THEN look at where you want to live and with what standard of living. 

Again, speaking from personal experience and meeting others who have retired early, I've never met anyone who had a problem with moving to a lower cost environment at a later date but I HAVE met people who found later on that they wanted to move to a higher cost country and to a higher standard of living.

What you are happy to accept at 30, 40 or even 50, may not be acceptable any more if and when you get to 65-70. Here is a simple example. Ignoring Covid 19 for the moment, my wife and I like to travel. That has been a significant part of our lifestyle. But with age, we will no longer fly cattle class, we want to fly only direct A to B flights, we want more comfort in where we stay and in general just as little hassle as possible. That translates to paying more. Our interests haven't changed, it is what we are willing to put up with in following those interests that has changed. If we had retired with only enough income to afford to fly cattle class and put up with having 2 or 3 connections to get to a destination because that is what got us the lowest priced ticket, that would mean decreasing our happiness in regards to travel. 

So really what I am saying is plan for a higher cost than you need to begin with. As in my own case, I expected to be able to live on $12k per year initially, I planned for an income of $36k. The only reasonable way to expect to have enough later on is to plan for more than enough to start with. That also eliminates having to decide where you will live or whether you might want to send children to school in a higher cost country etc. as some posters here are saying you have to think about before you start.

It's a kind of 'plan for the worst, hope for the best' kind of thing with 'worst' meaning you need to plan for higher costs and 'best' meaning you never actually get to the point of 'worst' and so have more money than you need. No one ever had a problem deciding what to do with too much money.


----------



## james4beach (Nov 15, 2012)

I agree with the advice above from @Longtimeago and have been doing my planning using similar reasoning. Plan for the worst, and plan for a high cost of living at the outset.

Again I'm not fully retired but am about 80% of the way there.


----------



## Longtimeago (Aug 8, 2018)

I should have made it clear that my plan was intended to allow for continued growth of capital. It was not based on any kind of SWR. 

That's an important distinction. If my plan was based on an SWR, it would have required me to have far more capital before I could retire. If you retire at 40, you would have to amass enough capital to fund an SWR based on at least a 50 year time period. Most people using an SWR plan do not plan beyond 30 or so years.

If you retire at 40 with a plan to continue to grow capital above the rate of inflation, then your income at 40 does not have to cover 50 years of potential inflation IF you are growing the capital above the rate of inflation each year as you go along. That's why as in my example above, I planned for 12/12/12 with 12 being actual living expenses, 12 discretionary spending and 12 for adding on to existing capital. That is an ENDLESS plan.

Early retirement is not an ending, it is simply a beginning of a new phase in our lives. Why then would anyone act as if it were an ending and a countdown to dying? SWR does just that, you count down your capital with the hope that you will die before the capital runs out. 

It all depends entirely on what questions you ask and answer for yourself when you are in the financial planning stage of getting to your early retirement. For example, if you ask, 'how much capital do I need to retire', you will get an entirely different answer than if you ask, 'how can I retire in 10 years from today?' Two simple questions but each will lead you down an entirely different path of questions and answers to get to the goal.


----------

