There is a void in early retirement you might experience. This void in early retirement needs to be filled if you want to feel happy and productive.
Over the past one and a half years since leaving Corporate America I've done some deep thinking about early retirement through posts such as:
When you're used to working 12 hour days every day for 13 years it's very hard to suddenly downshift from sixth to first. You'll blow up your engine if you do. There needs to be a gradual progression whenever large life changes are made.
Filling The Void In Early Retirement
The first six months of retirement I was second guessing myself on whether I made the right move. I had just turned 35 years old and short-circuited my career in finance. I wanted to travel and do my own thing. I worked my ass off to finish writing my book on “How To Engineer Your Layoff.” Therefore, I could at least say that I produced something meaningful if all went to hell.
My doubts began to calm down during my second six months of retirement. I was able to take a 2.5 week long business trip to Europe to research the happiest people in the world. Traveling while writing and maintainigg my online business helped crystallize why I decided to leave Corporate America in the first place – more freedom!
The final six months have been an absolute blast. With six weeks this summer in NYC, Mallorca, and Switzerland (links to FOMO, finding perfect summers, and eradicating apathy) and four weeks this winter in Hawaii all the while working of course. There's absolutely no law against having fun while traveling to understand different cultures. The key is moderation.
One Thing Missing From The Accomplishment Belt
We always want what we don't have, and what I don't have on my resume is working for a startup.
I've lived in San Francisco for 12 years now. During this time I've seen a number of fantastic Bay Area startups go public. I remember seeing Sergei Brin from Google speak about his company's growth during an investor roadshow luncheon back in 2004. My firm was one of the many joint book runners. Google has gone on to be a 10 bagger and created thousands of multi-millionaires and several multi-billionaires in the process.
In the meantime, financial stocks basically went nowhere since 2000 thanks to all the financial meltdowns. Financial services professionals got paid OK during this time. However, it sure would have been nice if we got paid OK and saw our company's stock rocket higher like our tech/internet brothers. By 2008, it was clear that not only would financial stocks continue to perform poorly with increased regulation, but compensation was also going to decline. It wasn't as fun to be in investment banking anymore so I left.
Startup Life In San Francisco
To live during San Francisco's internet golden age and never experience first hand what startup culture is like would be a shame. That would be like living in New York City and never trying your hand in finance, food, acting, or law. I've always imagined startups hum with a casual dress atmosphere dominated by enthusiastic individuals working nonstop towards making their product come to life. I want to contribute to such a culture.
Some of you may be wondering what's wrong with me since I'm in the thick of my very own startup, my portfolio of sites on the web and YakezieNetwork.com, a finance advertising network. I'm the CEO of the business and make all the decisions.
The business could sell for millions of dollars if I generate enough revenue. But selling isn't on my mind. I treat my business like a companion for 2-4 hours a day during retirement. I've come to realize that despite a 10 handicap, I dislike golf. I always feel the need to be productive for just a little bit every day.
The Solution To Filling The Void In Early Retirement
Companies have become much more careful in hiring full-time employees because of the difficulty of letting employees go if things don't work out. The proliferation of freelance workers has also made it harder for folks to find full-time work. When you don't have to pay for health insurance and unemployment insurance, provide a 401(k) match, or give vacation benefits, it makes the decision to hire and fire someone much easier.
There are too many disaster stories when a company realizes they've hired the wrong person after several months. They can't do anything immediately to get rid of them without a potential lawsuit due to the need for enough documentation for misconduct. You'd think “at will employment” would make firing easy. But the reality is much trickier when friendships, feelings, and politics get in the way.
If you're not looking to work primarily for the money and benefits, the solution is for employees to work part-time. I used to daydream during my last couple years of full-time work how nice it would be to always get Fridays off every week plus my six weeks off a year. If that were the case, I'd probably never leave! Perhaps the next best thing is to simply work part-time for several days a week for part-time money.
The Benefits Of Working Part-Time In Retirement
* Flexibility. The three or four day weekends, every weekend can suddenly become a reality. Perhaps you can negotiate half days, or the ability to telecommute from home. For mothers and fathers, I imagine part-time work could be ideal, especially if the spouse works full-time. Flexibility is very important for employers who would like to keep costs down and have the option of terminating if the fit isn't good.
* Participation. Although you are a part-time worker, you still get to participate in luncheons, company parties, business meetings, and interact with people. One of the hardest things about running my online business is that it gets lonely doing everything on your own sometimes. Employers should try and hear perspectives from part-time employees more often as they might be less afraid of speaking their mind. Part-time work is filling the void in early retirement.
* Income. Usually people associate part-time work with low pay, but that's not necessarily the case. Often times freelancers can charge a premium because the employer does not have to pay for all the benefits and taxes associated with hiring a full-time employee. Whatever the going rate is, generating some income is always welcome for your time spent. Employers will feel better knowing that their costs are associated entirely with the production of their hire.
* Visibility. It depends on how you negotiate the contract, but you should always come to an agreement about how long your part-time work will last. Let's say you know you have a lot of free time during the summer, you can potentially fill your summer void with a three month part-time contract. If employers are not absolutely sure about hiring you, but still see value in your work, three months is a perfect agreement because it gives both the employer and employee an out. Everything is bearable and negotiable if there's an end date.
The Downsides Of Working Part-Time In Retirement
* No benefits. I have a feeling the majority of employees take for granted their company benefits such as short-term disability, life insurance, health care benefits, 401(k) match, and paid vacation days. It's easy to not appreciate such benefits because they don't have specific dollar signs ascribed to them. As an employer, I see what all these benefits cost, and it isn't cheap at all. (See: Subsidy Amounts By Income For Obamacare)
* No stock options. If your company hits the big time and you work for a long time as a part-time employee, you're probably going to feel pretty bad when you see all your colleagues make big bucks and you get nothing. But the nature of part-time work is that it generally only lasts for under a year. If you are great at your part-time job, more than likely the company will offer to hire you full-time with all the benefits and some stock options. If not, you didn't want to work long term for them anyway.
* Less respect. Your colleagues may treat you with less respect because they think you're not working as hard or will be gone before anything you do really matters. It's up to you to demonstrate your seriousness and abilities to command respect for your work. Lacking acknowledgement or respect was one of my biggest peeves about working in a big corporation. I'd often prefer acknowledgement over a pay raise.
* No promotion. You'll always be exactly the way you are at the company, a part-time employee with no title, and probably not even a business card. When I was working full time, every promotion I received felt the same way as when I got an acceptance letter into college: absolute euphoria! Although the euphoria didn't last for longer than three months, it still felt wonderful. As a part-time worker, the biggest promotion opportunity you'll have is being offered a full-time position if you really love the company.
The Decision To Work Part-Time Or Not
Thesis: Work would be so much more fun if you didn't have to work. I'm curious to know whether or not this is a reality.
Now that we've discussed the pros and cons of part-time work, I'd like to ask you whether you think I should work part-time at a financial tech startup. The idea would be to combine my background in finance with my current interest in technology during my free time.
Even when I'm traveling, my day is always done by 11am if not 10am since I get up by 6am every morning and have a self-imposed four hour work limit. I fill the rest of my day with lunch with friends and tennis since I don't have a family yet. Of course I check my phone to respond to comments, business inquiries, and interact with the community throughout the day, but that's about it for my online activities.
Time Is Valuable
I don't need the extra income, but my time is valuable. For example, I charge several hundred dollars an hour for my personal finance consulting practice. Consulting with two to three clients a month is an excellent use of time because I get to help others directly improve their financial well-being. Earning income is always a positive because it boosts savings, which studies have shown leads to a direct increase in happiness.
The company that ends up hiring me will get a hard working, collaborative, out of the box thinker who is results driven. I will never fail due to a lack of effort. And because I've already achieved financial independence, I no longer have an ego that may generate interoffice conflicts. I'd happily work for someone my junior and promote my colleague's work so they can succeed.
Who knows. I may love working at the startup so much that it may lead to a full-time offer and a whole new joy in life. Even if the part-time job doesn't result in a great match, I'll have met new contacts in the community which could lead to other opportunities.
Resources For Filling The Void
* Negotiate A Severance Package. Never quit your job, get laid off instead if you want to move on. Negotiating a severance package provided me with six years worth of living expenses to help me focus on my online media business. Check out my book, How To Engineer Your Layoff: Make A Small Fortune By Saying Good-bye. It's the only book that teaches you how to negotiate a severance. In addition, it was recently updated and expanded thanks to tremendous reader feedback and successful case studies.
* Start your own business. One of the best ways to keep yourself busy in retirement is to start your own website like mine. It used to cost a fortune and a lot of employees to start your site. Now you can start it for next to nothing with Bluehost. Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. Not a day goes by where I'm not thankful for starting Financial Samurai in 2009.