What if you can't go back to work?

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neemap
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What if you can't go back to work?

Post by neemap » Mon Dec 11, 2017 10:44 pm

One concern I have about ERE is the potential event that you may have to go back to work.

Example: Lets say you retired at 37 as a software engineer. You made all your calculations and you figured you can not work for the rest of your life. But lets say 15 years later, you're 52 and you realize that the numbers aren't working out. Maybe the market took a shit, maybe you spent more than you thought, maybe inflation was much higher than anticipated, or maybe there was some unfortunate life event (medical bills, etc etc).

Now you're 52 and you've completely forgotten how to do your job (much less work). In the software engineering field, your skills can be become stale, rusty and out of date very quickly (even within 5 years). Shit in this field can churn fast.

Now you've essentially ruined your life because you thought you could ERE too early. Is this a fear some people here have? How do you mitigate this?

CS
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Re: What if you can't go back to work?

Post by CS » Tue Dec 12, 2017 12:14 am

The best way to is to have multiple income streams, i.e. many ways to bring in money, verses just living off savings.

That way, you can adjust your path if you find things going a little off kilter, rather than waiting until you're mid fifties and crapola has exploded everywhere from its trip through the fan.

Jacob had copy writing that would pay enough to live off of. I'm doing writing next year, once this medical field assignment is done. I had a programming career years ago that I cannot go back to, for all the reasons you listed. For me, writing will be the ultimate in getting anti-fragile. Right now I'm in this lucrative field that requires me to travel to work, with the pay off (besides money) being short assignments verses committed employee servitude. However, 8 am is just too dang early. ;)

Is there anything you are interested in doing that you can make money from? It doesn't need to be much - just enough to supplement, or perhaps even enough to cover the annual bills, so your nest egg can grow.

neemap
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Re: What if you can't go back to work?

Post by neemap » Tue Dec 12, 2017 1:05 am

For me, my main income stream when I retire will be 3-4 properties that I own. I'll still have my 401k but I have no plans on touching that till later, my real estate should be enough.

But, tennants can leave, properties can burn down, etc etc.

I can't think of anything I love enough that will bring in some kind of income, but I haven't really thought too much about it....teaching?

CS
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Re: What if you can't go back to work?

Post by CS » Tue Dec 12, 2017 1:11 am

Right. Those things can happen to properties, but there is insurance for fire, and the rental market is tight right now and probably will be for the foreseeable future. So you have two good legs - current job and rental - perhaps three with your savings.

Teaching could possible work. There are people who teach all sorts of writing courses online and seem to make money from it. Could you teach programming at the local community college? Just trying out ideas.

It might take some time to find something. You could experiment with a few different things, or more, at a time to see what pays, and what you like. You don't need them all to pay off... just one! Jacob has at least one posting about how he had many irons in the fire at the same time when he first retired from Physics.

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Seppia
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Re: What if you can't go back to work?

Post by Seppia » Tue Dec 12, 2017 3:00 am

Just add more margin of safety.
My personal plan is to quit my "regular" job when in theory I could survive on a 3% SWR, but still continue to work for stuff I like and enjoy (mainly: teaching math and english to kids, and being a part time tourist guide).

When your expenses are low, almost any job can cover them, and if you have a large nest egg, you don't need to save.

It will be hard enough for me to have a 0% savings rate* as even when I started my career (and was technically almost poor) I still saved 20%. I could never quit working completely and have no income whatsoever, unless I somehow won a lottery I don't play and found myself with 250 years of expenses

*excluding dividend income

Did
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Re: What if you can't go back to work?

Post by Did » Tue Dec 12, 2017 7:43 am

I must admit I'm sniffing around a bit to increase the cash 4 years after I quit at 38. It is difficult to return to your career. People aren't so keen when you've been out a while. And you get older and it's harder and harder to get employed by people younger than yourself.

But I still have no regrets. We just need to look around, throw lots at the wall, and see what sticks, as Jacob has said.

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Chris
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Re: What if you can't go back to work?

Post by Chris » Tue Dec 12, 2017 1:34 pm

neemap wrote:
Mon Dec 11, 2017 10:44 pm
In the software engineering field, your skills can be become stale, rusty and out of date very quickly (even within 5 years). Shit in this field can churn fast.
I actually think that software engineering is ideal for ERE: it results in a high salary during the earning years, and is a skill that can be continued after FI. Open source, tinkering projects, start-up ideas... all things to hack on without any special equipment or location-dependence. Once work requirements are gone, you are free to pursue software projects of personal interest, which is what Mad Fientist is doing.

But if you're looking forward to FI because you detest software engineering, that's another story...

Scott 2
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Re: What if you can't go back to work?

Post by Scott 2 » Tue Dec 12, 2017 3:14 pm

Absolute worst case - you got 15 years in the prime of your life to live as you want. Even if your only option at 52 is death due to zero resources, that's not totally awful.

I'd offer that you ought to be paying attention to the net worth more closely and adjusting along the way.

If in the US, you also only have a 10-15 year gap to bridge till social security and medicare. As a presumably high earning individual, with now low expenses, it's likely those can carry you through old age.

You're probably also capable of becoming under-employed relative to your prior profession. Teach computer classes at the library or community college, sell laptops at best buy, pick up work on utest, etc.

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Re: What if you can't go back to work?

Post by Farm_or » Wed Dec 13, 2017 8:40 am

"Maybe you should keep your electrical license?" One well intended friend told me, that didn't understand the whole strategy. That was five years ago.

Diversify. I have four AG related assets, plus the real estate, and the stock market.

Opportunity. I have run across more than a few good opportunities that I would not have had a clue about if I was working. I've also had two interesting job offers that I ultimately declined, but had to look twice.

If you are not hiding in your mom's basement, there's a whole lot of opportunities out there. And I live in a sparsely populated, economically depressed environment...

Parsimonious. When you have minimal expenses, you won't require the highest paying gig.

Augustus
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Re: What if you can't go back to work?

Post by Augustus » Wed Dec 13, 2017 2:55 pm

My plan is to embellish the truth a bit :) I've run a consulting/contracting firm for 8 years. No one has to know I ever stopped contracting, and I plan on picking up 1-2 month gigs every year after I quit anyways, partly out of fear of what you described, I want to keep my skills sharp, as I feel like that's an insurance policy of sorts. I don't know about you but I have a handful of tiny clients that only want a few hours of work a year, that's enough for me to legitimately say that I've been in business even if I have really been retired. I've been using pluralsight to keep skills sharp from a tech knowledge perspective, they run a deal once a year where it's 199 annual, around black friday. Just put on your resume "Independent Contractor" or some such and find a 10-20 hrs of work a year, that will be enough to satisfy HR people, I never specifically say how much I work, I just say oh on this last project I used this technology or that technology. It is important to get projects that use current technology though so you can say you have real work experience.

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Sclass
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Re: What if you can't go back to work?s

Post by Sclass » Wed Dec 13, 2017 5:07 pm

My plan is to cut my living expenses. I baked in a big factor of safety that I can just ditch if life gets tough. Mainly I rent an expensive place that I can move out of in a month.

Lucky C
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Re: What if you can't go back to work?

Post by Lucky C » Wed Dec 13, 2017 7:38 pm

I'd hate to never do any work again. I just don't want to work a full-time office job. With all the free time I will have, it should only take a few years to figure out some decent income stream doing something I like doing, whether it's working from home, working in a more interesting (but probably lower paying) job, or just finding some boring job but only doing it part time. After several years of intensely studying new skills and forgetting my old work skills, I figure if things didn't work out financially I would be better off trying a completely different type of job than trying to go back to my old type of work.

Farm_or
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Re: What if you can't go back to work?

Post by Farm_or » Thu Dec 14, 2017 9:16 am

This topic reminds me of one of my all-time favorite movies, The Edge.

It's about guys crashing in the wilderness, stripped of all of their possessions and having to rely upon what's between their ears to survive.

In the movie, like in life, people rarely change. Those who depend on others still do and those who provide are expected to continue, no matter what the circumstances.

Where does your confidence come from? What has made you successful in your current situation will do so again, if it's the right stuff.

Is it urban myth about the guy who walked away from his millionaire lifestyle to start all over and four years later was right back where he started?

IlliniDave
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Re: What if you can't go back to work?

Post by IlliniDave » Thu Dec 14, 2017 6:09 pm

In the case I can't go back to work ...

15 years from when I retire I'll be 70 and in my line of work it is a virtual certainty that there's no going back, so to me that's a given.

My plan is twofold: accumulate way more than I need to support a lifestyle (for this purpose as defined by spending) that I have a degree of confidence I scale back on the order of 50% and still be relatively content. I don't think that's what you'd call "the ERE way".

If I screw it up, I'll be a 70-year-old living under a bridge, and at the latitudes at which I plan to retire, the problem (and I) will be short-lived.

EdithKeeler
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Re: What if you can't go back to work?

Post by EdithKeeler » Thu Dec 14, 2017 7:40 pm

DBF retired relatively early at age 45. He had a pretty large law practice--owned the buildings, had several lawyers working for him, etc.-- and then some stuff in the law changed, he had some personal issues, and ultimately cashed out and quit. He lives off his money and some rentals, but when his youngest son went to college, he got a job at a friend's firm doing trying small cases and doing some legal research, etc. to pay for his son's tuition. Did that for 4 years then re-retired. He continues to do his continuing education to maintain his law license, and he dabbles a bit here and there, drafting a will for for someone, helping someone with child support, etc. He earns a little cash here and there, but from what i can tell, it's mostly favors for friends, or barter with guys who do repairs on his houses and stuff.

He was really successful initially as a lawyer and was fortunate to make a good bit of money with some large personal injury cases, but he absolutely hated full-time lawyering, and didn't particularly enjoy the 4 years he went back to work, but keeping his license made it possible. He keeps enough contacts in that world that if he needed to, he can work full time again, most likely, but I think it would have to be a dire situation for him to go back. It really stresses him out.

I think the point is, if you have a skill like a law or accounting or something, if you keep your certifications and contacts current, you could probably find a job doing SOMETHING, though it won't be as high-powered or prestigious, maybe, as your current situation, but you could probably make some coin. I guess other things probably have an expiration date--programming, maybe, yet a lot of companies try to run old systems as long as possible, so you might end up having a good niche.

I'm an insurance claims adjuster, and there's actually a pretty good shortage of experienced people right now. I could probably quit and come back in a couple years if I needed to, though I wouldn't make the kind of money i make right now.

Personally, I think that, barring some cataclysmic recession situation, a person with work experience and a good job history will always be able to find SOMETHING to earn some cash. It may not be big bucks, but then again, knowing what you know having achieved early retirement, you may not need big bucks.

SustainableHappiness
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Re: What if you can't go back to work?

Post by SustainableHappiness » Sat Dec 16, 2017 9:22 am

Just had a brainwave for this topic.

If you think that you'll be skill less 15 years into early retirement then all you have to do is look at another group of skill less employees (on paper) and see what they are doing. These are things you could do (barring great recession as mentioned). For me, I look back to high school. I had very little money, very few skills and no work experience. What did I do?

- Hustled for bursaries and scholarships (i.e. free money/writing)
- Studied to gain skills or employability (school)
- Worked at a convenience store (learned how to juggle)
- Worked at and helped manage an ice cream store and kitchen (became damn good at cooking fries)
- Drank a lot and did some drugs (Learned ????, probably not to do this for long)

See? If the first 4 things don't work out, you can always just resort back to number 5.

classical_Liberal
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Re: What if you can't go back to work?

Post by classical_Liberal » Sun Dec 17, 2017 4:42 pm

I have had many, many different jobs in my working life. Anecdotally, I basically see that any job you stick with (private sector anyway) follows a single path trajectory if you put effort into them. Once you have the height requirement/barriers to entry met (education, social contacts, whatever) and are able to get an "entry level" job in a certain field; it takes 2-3 years to maximize income in that field. After which you hit the next glass ceiling which houses the next barriers to entry. This assumes your goal is to maximize income, nothing else.

Unskilled burger flipper to a restaurant store manager in about 2-3 years. New RN to a specialized travel nurse in 2-3 years. Personal Banker to specialized Mortgage, Investment, or Commercial Banker 2-3 years. Sadly, my list goes on.

No doubt age discrimination is real and this pattern will be difficult to replicated after a certain age. Until then, worst case is bankrupt to ERE in 5 years in a different field. This allows a couple years of highest possible income without more wasted time training. Also assumes an ERE-esque spend rate, particularly in the lowest barrier to entry jobs as the max pay is less.

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conwy
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Re: What if you can't go back to work?

Post by conwy » Fri Jan 05, 2018 5:14 pm

Why go to either extreme of staying full-time in the game vs. completely quitting work?

Maybe an alternate solution is to maintain or improve your employability/flexibility/adaptability part-time, so that if you do need to go back to work, it'll feel like taking an easy ramp rather than three flights of stairs.

So say you're a software engineer, you never totally drop coding, but keep working on small side projects, preferably always using up-to-date tech. That way when you do need to dip back into the job market, you won't be starting from zero.

Of course, the pay might not ever be as good as when you were in your prime, but that's what savings and frugality are for, right? ;)

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unemployable
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Re: What if you can't go back to work?

Post by unemployable » Mon Jan 08, 2018 2:34 pm

neemap wrote:
Mon Dec 11, 2017 10:44 pm
Now you've essentially ruined your life because you thought you could ERE too early.
My idea of "ruining your life" is sitting in a cubicle during the prime of it hoping your boss will allow you to use your vacation days.

Anyway, if you're ERE your expenses should be low enough (or you can make them low enough) that just about any job will do. If you're worried about a stock market crash, that's why we diversify, across asset classes and countries.

James_0011
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Re: What if you can't go back to work?

Post by James_0011 » Mon Jan 08, 2018 7:30 pm

Once you’re fi, any job will do. Personally, I’d rather take the “risk” than spend the best years of my life as a slave.

Worst case - you shoot yourself at 52 and you can still say that you lived a better life than most people.

dropoutretire
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Re: What if you can't go back to work?

Post by dropoutretire » Fri Mar 23, 2018 12:13 pm

neemap wrote:
Mon Dec 11, 2017 10:44 pm

The trick is to focus on your expenses and fine tune them more and more everyday. Like the other day I thought, I dont throw away my tooth brush after every brushing, so why would I throw away every piece of floss unless it shreds or breaks ? Why not simply rinse it off with water and use it again ? Remember every little bit helps. lol

EdithKeeler
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Re: What if you can't go back to work?

Post by EdithKeeler » Sun Mar 25, 2018 6:17 am

why would I throw away every piece of floss unless it shreds or breaks ? Why not simply rinse it off with water and use it again ? Remember every little bit helps. lo
Not sure if “lol” means you’re joking about the floss, but it’s actually not a good idea to reuse dental floss. You could reintroduce yesterday’s bacteria under your gums. I’d pick something else to save on if it were me.

NPV
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Re: What if you can't go back to work?

Post by NPV » Fri Mar 30, 2018 5:25 pm

Saw this story on Quora and thought it was pretty relevant. I have two relatives who went through a very similar story, with largely the same main financial mistake: trying to save your failing business with your own cash rather than letting it die and cutting your losses. The main personal mistake seems to be in relationships with someone (in this case friends and wife) who were only with him because of money. Both this guy and my relatives had enough to be FI (in ERE sense; not rich) for the rest of their lives even if their core businesses failed - if they didn't start trying to bail it out with this FI money. All three lost it all and had negative net worth when the businesses they were trying to save finally failed. Both the Quora guy and one of my relatives were okay-ish eventually - once they recognized there was nothing worth salvaging and walked away from the failed businesses - but nowhere near FI. The other, who stuck with it for longest holding on to a dying dream, is still not even okay-ish decades later. So the story is not guaranteed to end well at all. If all of these three examples were familiar with ERE principles at that crucial decision point and thus held on to their savings, all three would have been in an incomparably better place financially and emotionally.

The Quora question is: "What does it feel like to become poor after being wealthy?"
It’s absolutely horrible. I was 50, had recently sold my very successful car washes, had a $1MM in my checking account, the big house, kids in private school and life was grand. I was focused on growing my other business (car wash equipment sales) when the manufacturer we represented lost a client that accounted 1/3 of our business, Hurricane Katrina hit (followed by several other hurricanes), and then the great recession. I had stopped taking a salary and started loaning the company money. I was determined to work through this. I even spent my retirement in a last attempt to turn things around. Fast forward, the company was broke, I was broke, and I couldn't pay the house mortgage. I had to give up the house and shut down the business. A personal bankruptcy soon followed, and then a separation from my wife of 30 years. The stress was unbearable, and I contemplated suicide. The only thing that stopped me was that my dad had taken his life when I was 26, and I knew first hand the pain that my loved ones would bear for my actions.

The worst part is the loss of self confidence and depression, followed by the loss of “friends”. It’s amazing how quickly they disappear! I will say that two friends stuck by me. One in particular would check on me and take me out to ride his motorcycles to help take my mind off of things. I moved into a friend’s rental property and I started looking for work. I had owned my own companies since college, was a past Entrepreneur of the Year finalist, and had never really worked for anyone. At the worst, I was working at a construction company repairing equipment in their yard, collecting food stamps and living alone.

Fast forward a couple of years. My wife and I got back together, we moved to Texas, and I took a job back in my industry (building car washes). We now rent a nice home, and were recently able to buy a nice used car. It gets better every day. I love my job, and I hope to get back into car wash ownership (with investors), while continuing to do what I do.

In summary, there are a couple of important lessons to take from this:

Good times don’t last; bad times don’t last.
Most of the people who claim to be your friend are only there for the good times.
Business associates that you’ve spent millions of dollars with over decades will instantly turn their back on you when the money stops.
Don’t ever stop taking care of yourself. Exercise is great for relieving the stress.
Face facts. Recognize when you have a losing hand and walk away. And if bankruptcy is inevitable, just do it. Don’t procrastinate and stick your head in the sand.
Do not EVER use your retirement money. I used mine to try and save the company, and I am now 60 years old and starting over.
Never stop believing in yourself.
Here is the whole Quora thread by the way: https://www.quora.com/What-does-it-feel ... ng-wealthy

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Re: What if you can't go back to work?

Post by jacob » Fri Mar 30, 2018 5:34 pm


NPV
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Re: What if you can't go back to work?

Post by NPV » Fri Mar 30, 2018 5:51 pm

Absolutely. I think it's the same lesson actually - have that FI money and don't waste it.

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