On March 8, 2017 I celebrated five years away from Corporate America. I also finally collected 100% of my remaining severance package on March 31. To celebrate, I’d like to share some insights into what I’ve learned since leaving the rat race. I’ll then share some more insights since 2017 as well.
Initially, if anybody asked, I told them I had retired. However, I soon realized how obnoxious it sounded for a 34 year old to say he was retired. I could sense their resentment, so I decided to say I was unemployed and following my dream to be a writer instead.
When they heard I was jobless and pursuing a highly unlucrative career, people’s attitudes changed. They offered advice and introductions to other people.
Some even invited me to stay at their vacation homes out of pity. It was interesting to observe how much more empathy people have when they perceive you not doing as well as they.
Related: Are You Smart Enough To Act Dumb Enough To Get Ahead?
Nowadays, few consider me an early retiree because I’m busy writing and doing many other activities. This post may be particularly useful to those who can’t break free due to the one more year syndrome. However, I suspect there’s something here for everyone.
Reflecting On Five Years Of Early Retirement
1) Early retirement gets easier over time.
During my first year after leaving Corporate America, I often wondered whether forsaking a steady paycheck and a growing career was an optimal financial move. This was understandable because I hadn’t been away from the workplace long enough to appreciate fully what else was out there.
But as each month passed, I became more confident about my decision. My severance package was still getting paid out once or twice a year and I was doing things I could not do while working full-time e.g. consulting in fintech, writing more openly online, traveling for more than three weeks at a time, coaching high school tennis, managing home improvement projects, etc.
During years two and three of early retirement, while I continued to feel fear and uncertainty, I was also experiencing excitement and hope. The door for returning to full-time work continued to be left open, even if now it was only a crack.
By the time year four rolled around, I’d found acceptance and clarity. It was the first time I resolved never to go back, especially after a terrible interview experience with a life insurance startup. After five years, I’m feeling tremendous joy because I’ve come to fully embrace the early retirement lifestyle.
Wife Retiring Was Huge
The inflection point came when my wife joined me in early retirement in 2015. We made a pact when I left in 2012 that if I still felt the water was warm by the time she turned 34, she’d jump on in as well. Here’s here story on how she was able to negotiate a six-figure severance as a high-performing employee.
Once she retired, there was some initial adjusting we had to do as we weren’t used to seeing each other 24/7. But we made things work and she’s now the CFO/COO of our company.
We both get the intellectual challenge of doing something exciting while also having the ability to spend more time raising a family. I could not ask for a better life partner, especially now that we have two young children under 4!
2) You won’t believe you worked so hard and took so much risk.
Looking back, I find it crazy I on average worked 60-70 hours a week at my corporate job for 10 years straight out of college, plus an additional 20 – 30 hours a week on the side during my last three years after I launched FinancialSamurai.com.
It’s no wonder I had so much chronic pain in my back, jaw, elbow, and foot! Seriously folks, the health benefits of early retirement are priceless. If you are finding yourself physically and mentally struggling, you owe it to yourself to find another job.
When you’re desperate to change your life, you tend to do everything you can to achieve your goals. Nowadays, I feel working 25 hours a week on things I enjoy is the ideal amount of time for maximum happiness.
It now seems incredibly risky to take on a $1,220,000 mortgage at the age of 28. After purchase, I could have been easily laid off or fired from my highly cyclical finance job.
Further, after the $304,000 (20%) downpayment, I was left with no cash buffer for emergencies. I actually had to borrow some money from my grandfather to seal the deal in December 2004. I paid him back a couple months later with interest once I got my bonus in February 2005.
Manage Risk Better
What also surprises me about my housing purchase back then is that 10 years later (2014), I bought a 18% cheaper house with a much smaller mortgage, despite being ~8X wealthier!
Normal folks would have probably upgraded to a nicer house in a fancier neighborhood. Not us. We wanted to move to the western part of San Francisco where we could see the ocean and avoid the madding crowds.
Today, I would never invest $60,000 in a single private company like I did in Bulldog Gin as a 29 year old. Especially not if the company was led by a first-time entrepreneur.
Today, the maximum I’d ever invest in an individual company is $25,000. I’ve seen way too many failed businesses to be an angel investor anymore. Being naive allows you to take more risks!
As a retiree, I like taking minimal risk. Give me a bond that holds its value and pays a 4% or higher gross yield a year and I’m happy. Life is better when you don’t expect too much.
Work hard when you are younger because you won’t want to when you are older. Take many calculated risks when you are younger because you won’t have the guts to do so when you’re older.
3) Following your passion no longer becomes cliché.
“Follow your passion, and the money will come” is bad advice for most people. Instead, it’s much better to pursue a field you like that’s in high demand so you can build your financial empire and get out before you become too old and bitter to change.
As a retiree, you’ve presumably optimized your budget, track your finances like a hawk, earn enough passive income to cover your expenses, and have some side hustle to fill any income or time gaps. Once your finances are set you can easily pursue what you love. If you pursue hard enough, money might eventually come rolling in.
For the first two years, Financial Samurai hardly made any money. I remember high-fiving myself whenever I made $10 bucks! But that was OK because I had a steady job and some passive income. Once I left work, my online income grew rapidly because I was in love with what I did.
Today, my online income is greater than my passive income. On a weekly basis my wife and I pinch each other’s butt cheeks to remind ourselves how lucky we are to have such an unanticipated income stream. Each year we keep thinking it’ll go away, yet so far it continues to be the best performing asset.
There’s no greater professional joy than making money in an activity you’d do for free. Therefore, work on that passion project while you have a job, especially if you don’t particular like what you do.
4) You’ll naturally find your groove.
Besides the fear of running out of money in retirement (totally overblown), boredom and loneliness are the other fears many retirees deal with, especially those on the younger end of the spectrum.
For so long, we’ve been conditioned to hang out with other people with day jobs. The reality is, there’s a huge ocean of people who work irregular hours and who make money doing irregular things. If you go on Meetup.com, you’ll instantly find a group that meets your interest.
Since retiring, I’ve met a plethora of other early retirees who earn income from their pensions, rental properties, dividend investments, and businesses. Further, there are plenty of people who don’t work traditional jobs and are living wonderful lives.
Don’t fear boredom. If you were motivated enough to retire early, you will be motivated enough to keep busy doing the things that interest you most. Many early retirees I talk to are even busier than while they were working!
5) You’ll experience a next level of happiness.
After the post, Scraping By On $500K went bonkers, a newish blogger asked “whether it was easier dealing with trolls the longer you’re online.” I was surprised by the question. I hadn’t considered anyone who disliked my article to be a troll.
Rather, I thought it fascinating to observe the different types of responses. Several readers also left comments asking whether I was doing OK. OK? I felt so energized that I decided to write a follow up post about peoples’ comments on my post!
See: A $500K Redo: How One Couple Got Their Mojo Back!
If I was still working or in the first two years of early retirement, I think I’d probably feel highly agitated by those authors who came from tremendous privilege twisting my message because in those days I was less confident in myself.
But today, I’m ecstatic that anybody is bothering to talk about my stuff. It’s an honor I’ll never take for granted. It’s why I still comment all the time on much smaller sites who show some love.
The day you decide you have enough is the day you’ll catch yourself smiling for no good reason. It’s the same reason why it’s very difficult to tell other people to f*ck off once you have f*ck you money. You already feel bad for the person hating on you because something in his life is bothering him. There’s no need to make him feel any worse by arguing.
The longer you survive early retirement, the happier you become. And when you reach the point where you’re no longer counting your pennies, wondering whether you’ll be able to make it until your 401k pays out, your happiness will explode!
Don’t Forget Why You’re Working So Hard
Rich or poor, never forget your WHY. As long as you are clear on your reasons for why you’re making all these sacrifices, life gets easier.
Since I was about 32, I’ve had this vision of one day being a stay at home dad. I want to be the dad who has no problems staying up all night to swaddle, change diapers, and soothe his baby so mom can consistently get 2-3 hours of sleep between feedings.
I want to be that dad who takes his baby for a stroll in the park in the middle of a weekday. I want to be the dad who watches every single one of his kid’s soccer games at 3pm. There’s no place he’d rather be than rooting for his son.
Sounds like a romanticized fantasy? You better believe it! Once I have a dream, I do my best to make it come true. Not having a job is the only way I can achieve this vision.
Early retirement is no longer about me, but about everybody I care most deeply about. There’s nothing more valuable than having an abundance of time to spend with family.
Now in 2021, I want to finally get back at living the early retirement lifestyle. Once lockdowns began in March 2020, I decided to spend more time trying to make more money online. But I’m tired now. It’s time to enjoy life to the max once all my family members have received their vaccines!
The Dark Side Of Early Retirement
How To Retire Early And Never Have To Work Again
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Related post: The Best Passive Income Investments For Retirement
I retired this year at 52. I am single. The company subsidizes my health insurance until Medicare, so I pay about $2,500/year for that. I’ve got enough cash/cd’s to easily last until age 60, and then when I can start withdrawing from the 401k I will have more $$$$ than I’d ever need in 2 lifetimes. People who work years longer than they need to are total morons, assuming their job is anywhere as close to stressful as mine was, as an engineer. I’ve had uncles and grandparents that didn’t make near the money I did, yet died with several hundred thousands in the bank at age 80 or so. A lot of good that money did them, working till they were 70 or whatever. A person can easily live on 50 – 100K a year for the last 20 – 30 years of their life if they save up for the first 50 years. The folks who warn against early retirement are usually working for brokerage firms who have a vested interest in your continued income. Also, relying on stock market returns of 8% year in & year out are a fool’s dream. If you are going to get married, insist that your spouse work to contribute to a savings plan. One-sided marriages are probably one of the top 3 reasons why people don’t have squat for money by age 40 or 50.
Aparna @ Elementum Money says
The post that led me to this one was “The Dark Side of Early Retirement”. It’s quite interesting how perspective changes with the life stage. What I like is how honest you are about that change in perspective.
Which life insurance startup did you interview with? I am in the Bay Area too and did interview with lots of startups over the years. HealthIQ was one of them and is in the life insurance business. Wondering if that was it.
“On a weekly basis my wife and I pinch each other’s butt cheeks . . .”
This was nice.
Great post about the reality of early retirement! I am currently on a mini-retirement stint. I stay at home with my 3-yr old daughter but also doing an online MBA program (education grant with income). I had to put my career (as an engineer) on hold and slowed down our progress towards FI but I’d rather take this time off now when she is not in school yet. So effectively, FI has moved down a couple of years. It was weird at first to not go to work but once school started, I felt that my life was more balanced and that I absolutely made the right decision.
Not a big money guy, don’t come from money, and never had any grand ideas about retirement or retiring early for that matter.
I “retired” overseas from the military at earliest opportunity (20 years), age 38. Had squirreled away about $50k the last 7 or so years on active duty. Lucky fall into contracting work right after that, made some “good” money (for my social/education status) in low to mid 6 figure range for about 6 years, then dropped out at 44/45 years old. Remain living overseas in a low cost country/scenario.
Didn’t lead the typical life I guess. No kids. No houses/mortgages in the US, car loans, ex-wives…. bit of a nomad really. When I was on good money/packages, company paid for everything, so the wife and I basically lived on the military pension. I kept stashing the corporate salary away every month, and accrued a tidy sum in that time. It’s invested now, producing a second, passive income exceeding the mil pension. I leave portfolio on reinvest about half the year, then take divs the other half to fund more extensive/expensive travel, and keep the cash reserves topped up for contingencies. Otherwise, 90% of our life at home is still funded by the mil pension.
5 years into the “not working” lifestyle, seems to be going OK financially. My sense is it should continue to be OK as long as I maintain fiscal/portfolio discipline, and nothing too catastrophic happens in the market or political/government policy arena.
ZJ Thorne says
It sounds like you’ve really gotten into the swing of early retirement, which is unsurprising. Knowing yourself and taking good care of people who matter to you is vital to a good life.
Canadian Girl says
Thanks for the great articles. I’m so envious that your wife also retired with you. It’s interesting that the majority of comments are from men that want to retire early. I’ve been planning for myself and my husband to retire at 35 for the past 10 years. We are now actually financially independent! I’m 35 now and we just had our third child. The problem is that my husband refuses to leave his job. He thinks I’m ridiculous for even considering retirement. Our friends also mocked me last month for discussing it. Here in Canada, we have maternity leave for one year, so I was planning on retiring once maternity leave was over in ten months. My main issue is if my husband continues to work, I feel like I can’t retire – I just become a stay at home mom which honestly is harder than working. So unless I can convince my husband to stop working – we will both work for the sake of working. So frustrating! I will continue to live my retirement dreams through your blog. Thanks again!
Master Duke says
What do you think your biggest lesson has been since retiring? Has retiring been better than you expected or met your expectation?
I’m currently working full time and started this blog with my best friend who loves personal finance as much as I do. We enjoy reading your blog and trying to find our niche to inspire people to prioritize their finances to live a better life, we think if they don’t its bonkers, yet so many people follow the path of who immediate gratification instead/
You’ve been inspiring to us to keep following our side hustle while working full-time, hoping one day to enjoy the future as you are enjoying the present!!
Financial Samurai says
The fear in your head is greater than reality. We are taught to be conservative, but it is the calculated risk-takers that make great strides. Good luck on your side hustle!
Master Duke says
Thanks for the lesson – so so so so true. Thank you !!
Financial Samurai says
Thanks! I’m excited for y’alls early retirement journey! You guys will have a blast, especially since you’ve already got your site and writing gigs lined up. You’ll easily be able to fill your day with stimulating stuff!
Thanks for sharing your experiences Sam. They’re always instructive. It’s nice to get the view from the other side. Thanks again! :)
In regards to #4 after 8 months of *retirement* I’m still trying to find my groove as I was part of a corporate downsizing effort at Megacorp (31 yrs).
I was of retirement age so am drawing a pension that covers 80% of my overall expenses. Net worth is ~ $1.4M if you include my house (just paid it off). $725K in my 401K. I’m far from rich but not starving yet.
Because the retirement was not on my terms it’s a bit weird not going into the office M-F but I’m slowly adjusting. Have not ruled out PT work (was a financial analyst then IT project manager at the end of my career).
Reading lots of helpful forums like yours to get tips so to speak. Appreciate your post.
Financial Samurai says
Sorry to hear about the involuntary downsizing, but 31 years is a good run! Hopefully they gave you a decent severance? A paid off house and a pension covering 80% of your overall expenses is great.
You are feeling more of the temporary ego hit and routine disruption, which is totally normal. But your finances are rock solid, so time to shine a lantern on your situation and EMBRACE being unemployed!
Be unemployed and proud I say. You deserve it! Think about all the income taxes you are saving too :)
Erith at Cracking Retirement says
For me Early Retirement is about choices. You’ve certainly made the most of your choices!
I passed my 5 years anniversary last October. Except I only retired at 56, so only a few years early. Like you, I had ceased to enjoy work, realised I didn’t need the money, so I just left. (No negotiated exit package though!) Those 5 years have just been amazing. I feel so much richer in body and spirit as a result.
My experience over the last 5 years, is that Retirement doesn’t mean I have stopped. I still want to ‘do’ things. I make things in metal, large & small. I walk daily. I read widely. I travel loads. I even started a blog a few months ago. (I dream of 1,000 page views a month, let alone 100,000 a month!)
The difference is, the deadlines I set are my own, I can choose to do something or not.
I smile every morning when I wake up!
Financial Samurai says
Erith, I smile reading your comment! Well done on your ER journey as well and congratulations for doing so.
Great job taking the initiative to start your site. The most fun thing about starting off is that there’s nothing but upside! Growth can be huge, so cherish it! You’ll naturally find your people and become buddies with them.
I’m excited for you!!
Tim Fox says
Your personal “why” is awesome. So many FI bloggers talk so much about “independence,” but what does “independence” really mean? A buddy of mine recently left education to focus on his burgeoning real estate empire. It was a difficult decision for him because he loves kids, but it has allowed him to focus on his own family and still work on projects that benefit kids in need. I’ve come to realize that my retirement number has less to with an exact million dollar figure and more to do with my “why.” Another great post.
Financial Samurai says
Thanks Tim. I’m really enjoying my Why right now, and I’ll share some experiences in a future post. So long as we know our Why front and center, life has so much more meaning. Blessed.
I think the part about remembering WHY you’re working may be the most important part. The vast majority of Americans hate their jobs, and part of it is because of the soulless and pointless nature of modern work. We dedicate our time, health, and lives to an employer for the privilege of continuing to be able to do so. We’re there for a paycheck, not a purpose. When you’re every action and effort is without purpose, it makes you feel depressed.
It may not be about financial freedom or end goals, but I think one of the keys to happiness at work is to be able to ask “Why am I here?” and answer with something other than “for the paycheck”.
ARB–Angry Retail Banker
Financial Samurai says
Definitely. When one is here just for the paycheck, that’s when your soul kinda leaves your body. I had this moment at 25-26, especially after 911 happened a couple years earlier. Then I had the same moment in 2011. I felt little purpose at work anymore. Had to move on. So much happier now being able to connect with normal folks looking to get ahead. It’s one of the main reasons why I spend hours responding in the comments section of all 1,300+ posts over the past 8 years!
Excellent message about retiring early and the stigma that it has. It seems you’ve learned that what truly matters is YOUR happiness and providing the type of life for your family that you’ll all benefit from. The money is just a tool used to accomplish that.
Working on my tools now :)
Adriana @MoneyJourney says
I’ve always compared having an online income stream with having a real job.
Many don’t understand it (I’ve actually had friends pity me for preferring to spend my free time working on blogs instead of watching TV!) but what others think doesn’t really matter.
Kudos for being able to spend time with your family by retiring early!
I used to be under the impression the many people roaming the streets were probably unemployed. It took a while to realize they might be small business owners who actually have the time to enjoy a sunny day in the middle of the week! :D
Financial Samurai says
It’s definitely good to view building an online income stream like having a real job if you want to grow your income stream. I enjoy the growth, but I enjoy the writing and connecting more. What I do is write something that’s on my mind, and then look for business partnerships that fit my writing, instead of the other way around. It’s much more enjoyable this way, with a lower burnout rate.
The folks roaming during the middle of the day have figured it out! Going against rush hour is a huge happiness booster.
Brian - Rental Mindset says
Flexibility was a big reason I left the traditional workplace 6 years ago. So much was getting pushed off to the short weekend, including chores, fun, and even a full night of sleep. I spent the majority of the time surviving, not thriving. And even though I didn’t even have a girlfriend at the time, ya I knew things weren’t heading towards a happy family life.
Also – I’d love a full article on the Bulldog Gin story! Must have been quite a pitch.
Financial Samurai says
I’m impressed you left the workplace 6 years ago. That was in your mid-to-early 20s right? I wanted to leave at 25, but didn’t feel it was the right thing and I was of course scared. I wanted to work until I didn’t like my job, then I wouldn’t look back and wonder.
I may expand on the Bulldog Gin story (https://www.financialsamurai.com/protect-your-net-worth-from-financial-distortion/) in a future post. Getting my distribution supposedly on 4/21/2017. But it’s a disappointing return actually!
Private equity investors beware. Save your money.
All very insightful information from someone who has been on this road for 5 years. I’m looking forward to have my own financial independence reflection once we get there in the near future. :)
Mr. Enchumbao says
I really enjoyed reading this post. You described the stage that I’m at right now very precisely. Now that we reached financial independence and the money pile continues to grow no matter what we do, I feel pity for others that don’t understand our lifestyle choices. Reaching this point feels different than I thought and in a really good way. I guess that with great FU money power comes great responsibility.
I really enjoyed hearing your adventure during the first years of retirement. I am in a bit of a different situation and wondering what you and others my have for advice. I have saved and saved and have a reasonable passive income. I have wonderful children who are well on their way to success. My husband and I have had a great life and planned for a future of travel and fun with early retirement. The change in the plan is that my husband unexpectedly passed away. Now I am almost afraid to not work. It isn’t about the money it just seems odd to retire early alone, not having the social community of work and then trying to figure out what the rest of the path looks like. My kids are great and I want to visit them, as well as travel. When your spouse passes it is somewhat like getting divorced as your friends that are couples see you different. My girlfriends still have kids at home. I am concerned about retirement and all alone will look like and yes, I do keep myself busy with hobbies and more but retirement brings a lot of available time. Any thoughts?
I’m a never-married, early-retired female, and life is great! I travel a ton on group tours, and meet wonderful people. I live in a condo, and I have excellent neighbors who I socialize with. I power walk 6-8 miles a day, 6 days a week, so I am healthier than I was when I worked. I schedule lunch with friends every couple of weeks to be sure I don’t get isolated. It works.
This is what I hope life will be like if I just get the guts to do it. I have been thinking about the group tours as well. If you don’t mind my asking to you go by yourself without knowing anyone? and do you have any recommendations for tour companies that you have liked? I have done some travel on my own I do like the freedom of doing what I want but I have been considering a tour either through one of the active tour companies like backcountry or one affiliated with a university alumni group.
Thank you for your insight.
I do travel by myself without knowing anyone else on the tour. That’s only the first day, though. I’m relatively extroverted, so I just walk up to people and start talking. I meet really nice people.
I’ve done tours with Viking, Tauck, Gate1, and AAA Sojourns. Travelzoo is a good aggregator, too. I sometimes book on my own or through Travelzoo, and sometimes through AAA. The Bay Area Travel and Adventure Show in the early spring is a good place to get ideas.
v, I’m very sorry for your loss.
One of the guys retired at the legal retirement age and his wife passed away soon after. He came back to work as a contractor because in his words, “You can only walk on the beach so many times.” He needed something to fill in the hours.
I think to overcome this, you need to find your passion because eventually you will reach the retirement age and finding work may be difficult. Unless of course work is your true passion.
Travelling sounds like the best one to start with. Everyone I’ve spoken to has agreed that once you start travelling, you can’t stop. It’s fun and addictive.
And you don’t have to take the guided tours, you have the time to research and plan all your stops (including niche places that the major tour operators skip) and adventures and calculate the costs.
Yes, I think you may be right and travelling may be the answer at least initially. I am wondering how those people on HGTV manage to go to say London for a month, the Australia for a month and then they decide to journey to somewhere else all without a real plan. I need to figure out how that works with the passport/visa process.
Well you don’t need a visa for every country if your country has an visa exemption agreement with them. For example I can enter Botswana, Mozambique and Mauritius without a visa (although in some cases it’s limited for a number of days). In Europe they have the schengen visa, which allows you to enter multiple countries in one go.
I know people without a plan and they are uber spontaneous! They wake up one morning, roll out of bed and decide I’m going somewhere and do it! And when they arrive at their destination, then only they plan where to stay!
Also check out what your hometown offers. For example, my hometown offers whale watching. If ever you want a humbling experience, that is it!!!
Financial Samurai says
I’m sorry for your loss too. Gosh….. that’s terrible :(
Keeping busy, doing what you’ve been doing is a good way to go. Although not family, your co-workers and people you interact with are definitely a good support network that you’ll miss once you’ve left. I do miss the banter with co-workers on occasion.
Check out meetup.com or interest groups outside of work. Early retirement can and will get lonely if you don’t proactively reach out to new people before leaving.
Congratulations on hitting the 5 year mark! While your topics and subject matter vary, each post seems to be well thought out, methodical and exudes the vision that you have painted for yourself so clearly! Please keep the articles coming!