Latest posts by FIRECracker (see all)
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- The Five Stages of Early Retirement - December 4, 2017
Back in 2015, when we blew up our “safe” conventional lives and retired at 31 to travel the world, our friends and ex-coworkers had a few choice words about the whole thing:
“You’re going spending 24/7 together?! Are you nuts? You’ll kill each other.”
“Travelling the world for a whole year? That’s expensive. What are you going to do when you run out of money?”
“Retirement is so boring. You’ll be fleeing back to work in 6 months. That’s what happened during my sabbatical.”
The woman who predicted we’d kill each other? She once asked her husband if they could have lunch together because their offices were so close, and he responded by falling on the floor laughing.
The guy who said travelling the world is expensive? He regularity drops $1800 on home office chairs, has never stepped foot in Southeast Asia or Eastern Europe, and thinks riding the subway in Vienna is “roughing it” because the people there are “too shabbily dressed for Western Europe.”
The dude who said retirement is boring? He spent most of his sabbatical on the couch in his underwear, watching Netflix for 6 months.
A lot of judgy people will tell you why your plans won’t work and why you’ll fail on your path to financial independence.
What they are really doing is questioning their own life decisions and fears. And a lot of these fears are myths with NO basis on fact. And as someone who ACTUALLY retired early and travelled the world, let me debunk these one by one:
Retirement Myth #1: You and Your Spouse Will Kill Each Other
While I get that not everyone wants to spend every waking moment with their significant others (psychopaths mostly), if you need to keep a job JUST so you can avoid your spouse for most of the day, your relationship probably isn’t that strong.
And sure, Wanderer and I have our share of disagreements when we run into obstacles, but working together to solve problems makes our relationship stronger, not weaker.
Relationships aren’t perfect and you do need to work on them, but avoidance isn’t the answer. Instead, work together to overcome challenges and share triumphs. Why? Because that feeling you get when you succeed at something you built together? Priceless.
So not only are Wanderer and I NOT killing each other, we’re KILLING IT (*insert slow sarcastic clap*).
Retirement Myth #2: You Will Run Out of Money
I always find it mind-boggling when people think early retirees would blow through their portfolio once they quit their jobs.
How do you think we got here? By being reckless, impulsive, and NEVER EVER tracking our progress?
Like somehow a 7-figure portfolio and financial independence just MAGICALLY fell into our laps?
Nope. We got here by tracking the shit out of everything, and are we going to change that any time soon? HELL NO!
In fact, by carefully controlling our costs (like we did for the 9 years it took to get here) we were able to travel the world on $40K CAD/year, which comes out to a 4% withdrawal rate, which means we can continue travelling the world FOREVER.
And since we left our jobs, not only did we NOT run out of money, our net-worth actually went UP by $27,000 (and even MORE if you include our side income from coding and writing)! This is because we structured our portfolio to give us a yield of about 3% and kept our traveling costs within 4%, leaving most of the capital value to grow. So yeah, we got PAID to travel the world. Boo-yah!
If you read our Investment Series, you’ll know from the “Sequence-of-returns-risk” post that the biggest risk to depleting your retirement portfolio is withdrawing during a downmarket in the first five years. That has not happened and will not happen, because we can live off the yield without touching the principal.
RUN OUT OF money in retirement? HA! More like MAKE money.
Retirement Myth #3: You’ll be Bored to Death and Desperate to Go Back to Work
Before we quit our jobs, we started writing on the side so that when we did quit, we could pursue our passion without worrying about money. This has paid off in SPADES. Not only did we publish a children’s book with Scholastic, the biggest children’s publisher in the world, we also ended up connecting with a non-profit to develop a book discovery app. And now that we’re no longer working, we have all the time to work on these passion projects and connect with like-minded peeps while travelling the world.
We’re not bored, nor are we desperate to go back to work. In fact, we bound out of bed every morning, excited to code and write.
You can CHOOSE to do nothing, get bored, and go back to work just to have a “forced purpose.” Or you can use this opportunity to LIVE the HELL out of your life and follow your dreams with relentless passion until you succeed.
Which one will you choose?
As human beings, we don’t learn by overthinking or guessing, we learn by DOING.
Had we listened to all the haters, we would’ve never discovered how much LESS it cost to travel the world than live in Toronto. We never would’ve realized that we could travel FOREVER on 40K/year based on the 4% rule. And we definitely wouldn’t have have met so many expats and entrepreneurs living unconventional lives (many with KIDS) who are MUCH happier than our friends and co-workers back home.
Now, you might be thinking, well, clearly we’re all very privileged, and we should be thankful that we even have jobs, and not bother to question the status quo because living in the first world is already a privilege, and people in other, less developed countries, can never do this.
Okay, first of all, if you had opportunities that others don’t, why would you throw it away by following the status quo? Wouldn’t you want to free up your time so you could use it to help others? Or spend time with your kids? Wouldn’t you want to use your passion to help the world rather than be stuck in a job making money you no longer need for the sake of making money? A job is a means to an end. It doesn’t define your whole life. And secondly, don’t assume that only people who live in so-called “first world” countries can do this.
I leave you with this article from the Bangkok post:
The Simple Life
If this guy, who grew up with nothing, ended up finding his passion and living a simple life, even though he has 6 kids to support, what’s stopping you?