The main reason why I’ve gotten more conservative with my investments is not because valuation for the S&P 500 is near an all-time high and earnings growth is decelerating.
Nor have I gotten more defensive because housing inventory has shot up across major parts of the country and prices are clearly declining.
No. The main reason why I’ve gotten more conservative with my investments is because I’m very close to retiring for a second time.
Let me recap my background and share some retirement preparation plans if you’re also planning on retiring soon.
The Return To Retirement Living
After first retiring in 2012, I spent about nine months living the early retirement lifestyle. I wrote a book about my experience negotiating a severance and my wife and I traveled around the world for about 12 weeks.
By the beginning of 2013, I no longer told anybody I was retired. People gave me funny looks whenever I mentioned I had left corporate America for good. I also felt stupid saying I was retired in my mid-30s.
I longed for more purpose and a more acceptable identity that didn’t require explaining my background each time. So I decided to pivot from early retiree to full-time writer and entrepreneur.
Almost immediately, I felt better about my new role in the world. Growing Financial Samurai all these years has been incredibly fun.
On average, I spend about three hours a day on the site, which is one of the main reasons why it’s been so enjoyable. If I was forced to work 10 hours a day on FS and commute, I’d have probably started hating it after a year.
Having something intellectual to do, especially after my son was born in early 2017, has been a blessing. Being cooped up in the house all day is no fun for this stay at home dad.
Another thing I’ve enjoyed doing in my second career is mastering everything that relates to online publishing. From writing, to marketing, to business development, I now have a strong grasp on all the things it takes to build and run an online media company from the ground up.
Although it’s been seven years since I left full-time work, it’s been almost 10 years since I started Financial Samurai in 2009.
Back then, I had told myself that if I could reach various stretch goals by the summer of 2019, I would give myself the luxury of taking it easy once again.
The main stretch goal was to regularly generate over one million organic pageviews a month.
As fate would have it, I have the option to let go this summer and fully retire once more.
The Origin Of Luck And Fear
What I realize now is that whether by coincidence or on purpose, I’m living my life in 10-year cycles.
I first got a job out of college in 1999. Getting a job at a major investment bank was mostly luck because graduates out of a non-target public school usually don’t get these front office jobs in NYC.
Although there was the dot com bust in 2000, the 10-year journey from 1999 to 2009 was an overall positive for my career.
After about two years at the first investment bank, I got my second lucky break when a recruiter placed me at a new firm in 2001 in San Francisco. If I had not changed jobs, I would have been kicked to the curb after my two years were up.
Then, of course, everything started crashing in 2008 – 2009. I was scared for my future given Lehman Brothers, Bear Sterns, Washington Mutual, and a bunch of other firms had collapsed. Friends were losing their jobs, their houses, and their savings.
Somehow, I managed to escape seven rounds of layoffs in a two year period at my firm. My immediate boss had left the firm to become a client the year prior. Thus, if the firm was to lay me off, it wouldn’t have had anybody to run the business. Another lucky break.
I was so worried about my future in 2009 that I decided to finally start Financial Samurai, an idea I had had since graduating from business school in 2006, but had been putting off.
If you look at the chart of when Financial Samurai was started, you’ll see that it was started at the exact bottom of the previous financial crisis in July 2009.
To start Financial Samurai at the bottom of the last financial crisis and then have a massive bull market help propel the site forward was also tremendously lucky.
Yes, I’ve spent many hours developing this site, but I fully admit that most of the growth is serendipitous. Living in San Francisco, the epicenter of technology and financial innovation has also helped me develop some key industry relationships.
If you started something in 2009, it would be relatively hard not to have successfully grown your business or your wealth.
The tailwind is like having a mentor who is actually the CEO of your company and also happens to be your dad who wants to give you the company. In such a scenario, how can you fail?
Since 1999 I’ve constantly wondered when my luck will run out. I’ve already talked about experiencing survivor’s guilt after my friend passed away when I was 15. All the good that has transpired since has only made me wonder more about the future.
Don’t Push Luck Too Far
Despite the good fortune, 2009 still burns deep in my psyche because of how badly my finances got crushed. Perhaps this is how survivors of the Great Depression felt for the rest of their lives.
I don’t want to ever again suffer through a 2009-like experience. I recently got a taste of temporarily losing lots of money in 2018, and that was enough.
I’m so thankful we’ve recovered and I no longer wish to push my luck.
2019 is the year where I plan to retire again after 10 years of running Financial Samurai. I’ll either sell the site, write less, or hire talented staff writers or guest writers to write using the Financial Samurai principles.
It’s been a great run, and I want to leave on an up note. If you are thinking of retiring for a first or second time, here are some things you should consider.
Retirement Planning Checklist
1) Adjust your risk exposure down.
As with any classic retiree in their 60s or 70s, it’s important to take down risk exposure because you no longer have the ability or the desire to work any longer.
Measure your risk tolerance in terms of the Financial SEER ratio. In other words, how many months are you willing to work to make up for a potential loss in retirement.
Once you’ve retired, you don’t want to be forced to go back to work. Giving up precious time for money is one thing, but so is the embarrassment of having to go back to work because of poor financial planning.
Debt should be completely eliminated or reduced to a level that will never be able to sink your finances.
2) Calculate your various income streams.
If after taxes, your income streams can sustain your desired retirement lifestyle, you’re golden. If not, keep working or build more side hustle income. To be conservative, it’s best to have at least a 20% cushion above your living expenses.
Plan out a tax-efficient safe withdrawal strategy based on a combination of your pre-tax and post-tax retirement accounts.
Those who want to stay conservative should try to only live off their after-tax passive income and never touch principal. Only when Required Minimum Distributions are in effect should you start drawing down principal.
3) Make sure you’ve accomplished all your goals.
When you leave your profession, you want to leave with as few regrets as possible. The best way to leave with few regrets is by fulfilling your stretch goals.
One of the reasons why professional athletes retire after winning the Super Bowl, a Major, or the NBA Championship is because there is no greater glory. During the rare times when such a champ tries to make a comeback, it’s often a sad affair filled with struggle.
If you cannot reach the pinnacle of your profession, one thing you must ask yourself is whether you’ll be leaving the place better than when you first started. If the answer is no, then you must take measures to rectify or continue working.
Retiring when your fund or company burned to the ground will make you feel like an unsettled ghost, unable to rest in peace. You want to go out on your own terms, which is why negotiating a severance can be incredibly powerful to your mental well-being.
4) Ensure your legacy will be left in good hands.
The longer you’ve worked, often the harder it is to walk away. The transition is made easier if you have someone you’ve trained or trust to take over once you’re gone.
The last thing you want is to have all your good work get undone by someone with a completely different philosophy. If this happens, you will feel as if you wasted many years of your life. Find an excellent successor and don’t leave until you do.
5) Have a next purpose.
You don’t want to retire into nothingness. Going from working 12 hours a day to having all the free time in the world can be very disconcerting. After being so used to structure for so long, you might start wondering what else is there to life. Some of you might even get depressed if you don’t have purpose.
Instead, diligently map out your retirement goals months or even years before you retire. You want to retire to something, not from something.
Start talking to people in the fields that interest you when you still have a job. Once you retire, it may be tougher to build relationships because society tends to look down on those who no longer work.
Having a clear purpose in retirement will make your remaining days at work even more meaningful. You’ll also experience a much more joyful retirement life.
Retire As Many Times As You Can
There doesn’t need to be only one retirement in your life. Instead, I encourage you to retire multiple times because that means you’re challenging yourself with new endeavors.
Whether you decide to retire for six months or for six years is up to you. There’s nothing more professionally fulfilling than mastering a new skill and enjoying its accompanying rewards.
Skills are highly fungible today thanks to technology. So long as you’re able to work hard, communicate intelligently, get along with others, and produce more than you cost, you can do well at almost anything because the rest is learned on the job.
I truly hope we never see another 2008 – 2009, nor am I anticipating a correction of such magnitude. I’m just not willing to take unwarranted chances given I’m satisfied with what I have.
With now a wife and son to take care of and potentially zero active income if I sell Financial Samurai, I can no longer afford to take any excess risk. To go through another 40% loss as I did in 2009 at this stage in my life would be devastating.
Our passive income should keep us afloat, but I haven’t truly been able to means test it yet due to my severance that paid out from 2012 – 2017 and the active income I’ve been generating from Financial Samurai.
From July 2019 – July 2029, I plan to spend my 40s primarily focused on raising my boy and spending time with my parents. If we relocate to Hawaii, we’ll have more than enough activities to keep us busy in our second go around.
Let’s pray the next 10 years are as lucky as the past 10!
Related Posts:
The First Rule Of Financial Independence: Never Lose Money
The Fear Of Running Out Of Money In Retirement Is Overblown
Readers, anybody on a 10-year cycle like me? How do you plan to ensure good fortune for the next 10 years of your life? Anybody retire a second or third time? How long did each retirement last and what did you do? What else should people do to prepare for retirement?
Congrats on the great run, Sam!
It will be interesting to see which of these you chose:
“I’ll either sell the site, write less, or hire talented staff writers or guest writers to write using the Financial Samurai principles.”
Sorry our paths never crossed. Somehow, I always figured they would. :)
Enjoy the next decade!
Nice to hear from you JL! If you come by San Francisco one day, I’ll buy you a beer. Cheers
Congrats, Sam – I’m a long-time reader and have drawn a ton of inspiration from your site. I’ll be 45 in November and tendered my early retirement letter on March 1st, effective on June 30th. Planning on taking the rest of 2019 to re-charge then figure out what’s next. My wife has been incredibly supportive – she’s the only one who knows the toll that executive-level work for a long duration has taken on me (and us). I’ve been extremely lucky as well. Wish you all the best.
Exciting and good luck to you! It’s always good to take a step back and recharge.
Sam, in your interview with Art of Manliness podcast you recommended an asset mix of
for a family in their 30’s/40’s
5-10% CDs/money market
30-40% Equities
30-40% Real Estate
What about bond/fixed income was that included in your 30-40% Equities mix or was bonds not included at all? This was different from your recommended networth allocation by age framework articles that included bonds.
Seemed kind of off it was not included.
The podcast was edited as he asked about what type of asset allocation I recommend. The thing is, the asset allocation depends on your age, risk tolerance, etc.
So I’d follow the charts and posts I’ve writing on FS for specifics. thx
Regardless of your decision, I wish you nothing but happiness. I would also like to share an article with you that I put on Quora, that was later published on Business Insider that I think speaks to this point: https://www.businessinsider.com/the-most-common-regrets-in-life-from-people-who-have-them-2015-9#parenting-7
Talented people such as yourself will never have a problem making money – unfortunately, none of us can make more time.
I only wish I had done the same.
Thanks for sharing. It is partly because I fear regret, that I’ve been so diligent in planning for the future. For example, I’m a HS boys tennis coach partly because I want to know what it’s like to coach/mentor teenage boys in preparation when my boy is a teenager 12 years from now. I want to understand how they speak, their insecurities, what they like etc.
I know I can’t account for all variables, but I’m pretty methodical in my efforts.
Retiring is no easy decision, but to play 6 months ahead and write everything out is helpful b/c other people help highlight some blindspots.
I read the BI post and I know I’ve done the best I can in most of those categories… and i certainly don’t want to regret not spending as much time with my boy as possible. thx for the share.
Sam, I am a new comer to your news letter. Love your combo of personal and professional, esp. parenthood. Selfishly wish you’d write once a week.
But I get it. You are ready to dive into full time parenting so to speak. Coaching. Homework. Driving. Friggin driving everywhere. Hey— your child deserves your full attention if you are so lucky to be able to give it.
I retired early from social work, in time for my daughter at age 11. Teen years are just as important if not more than elementary school. I meet her friends after school. I attend all her BB games. The other parent must hate me cause they have to work full time and do all this. It is the biggest luxury in the world.
In case you didn’t hear me THE BIGGEST LUXURY IN THE WORLD
so THANK YOU for the time and wisdom you shared. You will not look back.
Thanks Beth! Enjoy the time spent with your daughter! I bet the time has flown by.
i blinked my eyes and……from diapers to kindergarten to snarky tweens to friggin driving lessons and boys.
ps what makes me happiest? my kid talks with me. not every day but enough.
Cool. Hmmmm…. I hope my boy doesn’t stop talking to me. That would be so sad! Is it really that hard for kids to talk to their parents? Hope not.
Sam,
Thank you for the many insightful posts you have written over the years.
Maybe you could post 1 – 2 times a week instead of 3 – 4 times a week. I feel that you could still maintain or even continue to grow your readership while posting half as much. You could try that till the end of the year to see how it goes and then make a decision. Just my 2 cents worth.
No problem. Yeah, it’s something I’ll know what to do once I cross the July 1, 2019 finish line. But I won’t know for sure until I get there.
Personally, I was thinking that if your son shows the same interests as you why not keep the site and pass it down to him at a later date? You have the platform already built and he could just take over (you even mention leaving a legacy in good hands in your post). I’m sure there are plenty of people here that could offer to post guest blogs in your place and allow you as much freedom as you need. Either way, good luck Sam.
Please Sam, don’t go. I just found your amazing site less than a year ago, and I’m a loyal follower and first time commenter. You have shared so much invaluable knowledge that has really educated and made a difference in many of our lives.
Please stay with us, we need you. Don’t sell. If you don’t want to publish as often, then don’t, maybe once a week instead of 3-4 times a week…but please, for the greater good, stay with us.
Hi Nicole – Good thing for you is that there is 10 years of content to go back through!
It’s like finding a good show on Netflix after its heyday and realizing there are 10 seasons!
Sell the blog…
An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The Mexican replied, “only a little while. The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”
The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”
The Mexican fisherman asked, “But, how long will this all take?”
To which the American replied, “15 – 20 years.”
“But what then?” Asked the Mexican.
The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”
“Millions – then what?”
The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”
Right on. Done.
Sam, I’m still hoping it’s an early April Fools joke…but in the event you are really getting out…Thank you. I’ve been a background reader since the earliest days. I rarely comment, but I’ve read weekly for nearly the entire ten years. There are a handful of “super” saved links that I pull up regularly. I read many others blogger too, but never a week goes by without checking for new articles on MMM, MadFIEntist, ESI, JLCollins, and your site FS. Your writing would be seriously missed.
You should know your impact… We have been happily FIRE’d for two years. We were able to do so because of knowledge you and others have shared on your sites. Your impact reaches farther than you can imagine. My two late-20 year old daughters are now also well on their way to FI also thanks to the many articles and posts provided by a small group of people who dared to do something different. If you are truly retiring, I hope you enjoy retirement as much as we are enjoying ours. You deserve it! Thank you…and Cheers!
Great to hear it’s been two years! Glad to have helped in some small way.
What a wonderful feeling it must be to know your daughters are on their way to FI.
Cheers
Best wishes, and thanks for your years of compelling ideas and content. I have a seven year cycle- changed careers every 7 years or so. I think that once you get past the excitement of the learning phase and achieve some degree of mastery/maintenence, it’s time to find a new “S curve” to climb up, whether work or personal. When I leave this Earth, it will be in the middle of trying to learn a new challenge. Your website helped me redefine success and what is important. Working on guitar right now (son is teaching me), along with tax optimization, etc.
Yeah, I get it. After a while, you just want to move on and learn and master something new.
I should probably create more products under FS. But what a PITA. Let’s see.
Go for it, Sam. Financial independence is, as they say, having FU money to do what makes you happy. One thing that sticks in from my time in management is that we do our tour of duties, and for everything, even good things, there’s a natural end. Our next tour of duty may be in the same company, or completely different, but it’s good to have closure and new beginnings.
You should do what makes you happy and feel like is best for your family. You have a curious mind, and no doubt will find things to keep you busy and to earn income. With that said, I would miss reading your columns.
Sam, I’ve been thinking for a while that you would be smart to sell. I’m older and seen so many cycles of “sure bets”. The opportunity to realize a big pile of principle is rare. Don’t pass it up.
That’s what I’ve been thinking too. Like selling stocks, real estate, anything you bought in 2009. What a ride. Not like I can’t just start another site and share some thoughts right?
More of a lurker here, been perusing the blog for about a year as you have some different insights compared to other FI bloggers which I appreciate. I think that 10+ years is a long time to do any one thing and finding new challenges is great. You have a lot of somewhat “evergreen” advice that I look forward reviewing in the future. I want to take a minute to thank you and wish you well on your future endeavors.
Sam, thank you so much for all your posts. I’ve been reading your blog religiously several times a week for the past 1.5 years since I’ve discovered it. I’ve recommended your blog to all my friends and family. I’ve learned so much and much more useful knowledge than I have ever learned in college and my MBA program. Wishing you the best with your family in Hawaii.
Wonderful to hear! Thanks Ceci for sharing my work.
Sad to hear you are thinking of no longer writing here.
I’ll join others in saying that I don’t particularly care about reading posts 3x/week, but when you released an extra profound/detailed/contrarian post that you clearly enjoyed writing, I also greatly enjoyed reading it. If the schedule were changed, even to “when I feel like it”, I’d be quite happy with that (although I recognize the change is for what makes YOU happy, not me!)
I also wouldn’t mind more writers – the guest posts you have selected in the recent months have been great. You could even get some VA/writer to massage your voice-to-text into a nicely structured post (I believe you often use this for commenting, right?) Less editing, more writing.
Regardless the choice is, of course, yours. Just some feedback that I hope will be useful.
I have been reading a couple of books recently – Zen and the Art of Motorcycle Maintenance, and Atlas Shrugged. About the idea of quality – how it’s instantly recognizable – and about the morality in doing quality work. Although I’d be sad to see your ‘final’ post, I’d be reassured to know you would simply carry this quality to another domain of life. Until then, I will keep reading.
Thanks.
Sam, have you done any analysis instead of retiring bottom of the market in 2009, if you would have continue to work and retired today… what would be your net worth , financial independent and importantantly quality of life…
I think I would’ve been poorer bc I wouldn’t have bought my Golden Gate Height fixer in 2014 and I wouldn’t have been as focused in growing FS.
I definitely would be much more stressed and unhappy. I was developing a lot of health issues due to the stress of work as well.
I don’t think it matters how much more or less wealthy I would’ve been as a result. After a certain threshold, enough is enough.
https://www.financialsamurai.com/the-health-benefits-of-early-retirement-are-priceless/
Congratulations on your success, and good luck with whatever you choose to do with FS. You’ve gone far and wide, covering excellent topics, in great depth and analysis, and with a unique perspective. All other financial blogs are pure fluff, and are marred with dishonestly, conflicts, mundane useless garbage and self promotion. You are not afraid to take a stance, as you have arrived at it through much research and testing. I know that you work hard on these posts, the comments, and follow-ups – it clearly shows. I also understand that this hard work can wear you down, and at some point it makes sense to do something else, if the finances allow it. Personally, I couldn’t do what you do, it is hard work and you have to appease random strangers on the internet in order to build pageviews and readership. Yes you don’t have a ‘boss’ and that is awesome, but your advertisers, financial sponsors and readers are in a way clients/bosses and you do have to answer to them in some way. Hiring people, editing their posts and managing them would be an entirely new headache. If I were you, I’d do what you are proposing to do. Sell the blog. Finish out at the top. Retire to something new and exciting. Move to Hawaii, maybe Virginia. You’ve been great, and congratulations again on your success and impeccable service you have provided to readers like myself.
Ride off into the sunset….. yes! I see it. All good things come to an end. To hold on is suffering. But to let go is bliss. Thanks.
Though I haven’t always agreed with your articles, I have always benefited greatly from the perspective and experiences shared. Therefore, I better say much thanks before it’s too late and best of luck with your next endeavor.
Rock on!
Interesting reading these comments. It makes one wonder what is the true marketable value of FS? Most commenters seem to feel that YOU are FS. I would also acknowledge that fact.
Curious then- How would it be marketed? How do you get potential suitors to see the value and pony up what you would need to part with it?
If a company value is so tied to the founder, how do others leverage the brand and keep the advertisers that ultimately are needed to create the value? If you walked, would advertisers stay?
Good questions. ~70% of the traffic comes from organic search, while the rest come from other websites like CNBC, newsletters, and direct traffic b/c the person heard of FS somewhere.
Less 1% of traffic comes from regular commenters and people who ask me for things etc. To be operationally efficient, I would eliminate comments, which also eliminates all spammers (1000X normal commenters), make contact info hidden etc.
This would save me lots of time. For example, it’s taken me time to read your comment, filter out spammers, and write a reply. So far I like the camaraderie and reading different perspectives. But this might change after year 10, b/c often, when I respond to a comment and ask a question back, there is no response or appreciation of my response.
It’s extremely easy to invite more guest posters and hire staff writers and just pop in on occasion and share my thoughts like usual.
How about you? How is your side hustle or business being run? What are some contingency plans you’ve thought of? thx
Thanks so much for reading my comment and talking time to reply. I very much appreciate it and am even humbled a bit that you would do this.
My side is hustle is consulting with small companies on setting up programs to ensure good liability and product safety/certification practices. This is done to stay current in the field, I like the work and I enjoy the clients. The money made is a bonus. When I am done, the practice dies. I have no plan nor intention of turning this into anything more.
Although your questions got me thinking – hmmm.
Respectfully, I offer a contrarian view. The most enjoyable posts for me, and the ones I learned the most from, are those that offer a “case study of stupid” if you will. In particular, the high earners in NYC who are “poor” because they don’t budget. The article, and the 100+ comments, made for great reading and I really learned something.
So comments add value for me. They are half the fun of most of the stuff I read on the Internet.