A Problem of Terminology

secretwealth · Post by **secretwealth** » Wed Jan 18, 2012 9:52 pm

Before Jacob left us for the high flying circles of high finance, he had complained many times of a fundamental miscommunication with people whose vision of "retirement" was too narrow or different from his own, leading him to prefer the term "financial independence". I realize that this terminology problem is a fundamental disconnect that many ERErs must have with the outside world, because the golf/travel/boat perception of retirement is a fundamental backbone of the American (and possibly European) idea of what retirement is. Retirement is a stage of life for them, not a financial status, which makes a lot of sense in a world of set-benefit company and government pensions given after X amount of years of service.
While that world is no more, the mindset of that world dominates. This is not surprising; people's attitudes tend to lag behind reality since history is their frame of reference.
Thus a new term is more useful for communicating with others about ERE, because it staves off comments like "that's not real retirement" or what have you. And the more I thought about this, after reading post after post on this forum, I began to realize that, according to many in society, what we are going after isn't an early retirement. What we're doing is establishing our own holding companies.
By scrimping and saving, we're amassing a certain amount of capital that will be the assets for our holding company, which we will then work in full time (i.e., managing our assets).
Telling something that this is our goal affirms both preconceptions about the "proper" life cycle and establishes us as respectable, hard-working, independent capitalists.
I haven't talked about this with anyone in real life, because I haven't told anyone (not even family) that I'm planning on retiring in the next 5 years. I'd be very interested to know what kinds of responses people get when they say that they're saving up to establish their own holding company, instead of saying that they're hoping to retire early. I bet the responses would be much more positive.

JasonR · Post by **JasonR** » Wed Jan 18, 2012 10:43 pm

secretwealth · Post by **secretwealth** » Wed Jan 18, 2012 10:51 pm

"People will always find ways to pick things apart."
Yep--this is pretty much why I don't talk to people anymore. At least not about personal things.

HSpencer · Post by **HSpencer** » Wed Jan 18, 2012 10:53 pm

Whether one is dealing with a defined benefit payout, or one's own savings and investments, the bottom line would be the time it took to accrue such assets. I agree that there is a mindset favoring the defined benefit payout after "x" years of service. However, it should be fully acceptable that the years of service could be bypassed by one's own creative savings plan outside of any employer. It is simply that by and large, this is a more tenacious path, and not the one of security, at least for those of such years of service mindset.

This is where the ERE crowd breaks free. The years of service mindset has little to no faith in their own ability to accomplish FI on their own. Hence the trailblazers like Jacob have shown by example how it can be possible.

You would choose: "I want a job with a good retirement plan."

Or: "I want a good retirement plan without a job."

Here your mission would be to define "good".--- Is "real" retirement associated with adequate funding and lifetime security, or is real retirement associated with getting there in five years? Can you accomplish it all in five years, adequate and secure, and then that would be real retirement? Is giving up a third of your lifespan to accomplish adequate and secure considered "real" retirement?

These days, many want to opt out of the lifespan investment and simply sustain on what they are able to push in savings.

This is what the ERE is based on.

chenda · Post by **chenda** » Wed Jan 18, 2012 11:08 pm

I think the FI were once known as 'private gentleman' or 'gentleman of leisure'
Perhaps we need to revive the term, or create a unisex version of it

dragoncar · Post by **dragoncar** » Wed Jan 18, 2012 11:12 pm

I like calling it a holding company, but I don't think that solves the problem of understanding. Because there's no accepted terminology that really communicates all the ideas of ere (and there are many flavors of ere), I think we might as well adopt ERE (not as an acronym, but as it's own symbol, like KFC).
Part of the problem is the multiple aspects of ERE. You pretty much have to separate the ideas of "what do you do with your time" from "how do you get money.".

Spartan_Warrior · Post by **Spartan_Warrior** » Wed Jan 18, 2012 11:14 pm

@secretwealth:

"Yep--this is pretty much why I don't talk to people anymore. At least not about personal things."
LOL--Bingo!
I do like the holding company idea. Even more generic--"I'm saving up to start my own business." They don't have to know the "business" is simply watching after investment income. If they press, you can say you'll be a "personal finance consultant"--again, they don't have to know you're your own client.

dragoncar · Post by **dragoncar** » Wed Jan 18, 2012 11:35 pm

"I'm financing my own trust fund"

Chris L · Post by **Chris L** » Thu Jan 19, 2012 4:14 am

Professional loafing!

buzz · Post by **buzz** » Thu Jan 19, 2012 9:15 pm

> "I'm financing my own trust fund"

Made me laugh.
I have already decided that if I ever tell anyone about my plans, I won't ever use the word "retirement." Financial independence is more accurate, but I also like "portfolio manager"