Semi Early Retirement Extreme?

[dot_com_vet]

Chilly, good to see someone with similar ideas! The rates on the freelancer site are really low. If you live in at least a medium sized city, I'd think one could do much better at local companies.
I'm of the opinion and experience one shouldn't have to take a big rate cut to go part time, at least in IT. I guess it's just finding the right niche.
I'd bring up your proposition to your current company when you're ready. They might just go for it.

[Chad]

@HSpencer

That is only one version of the consultant. The other one is that the boss hires the consultants to create a plan or bless a plan. That way if the plan fails the boss can blame someone else. No risk for them, as they just get in trouble for spending a few thousand on consultants.

[prosaic]

I do this right now -- I work 17.5 hours/week for a university and receive full benefits. I hadn't thought of it as semi-retirement, but I do view it as the vehicle by which my husband is able to escape *his* corporate job.
My problem is the 80/20 issue and boredom that Jacob describes.

[OTCW]

Semi early retirement is my plan. I am about three years away from FI, but plan on asking my employer for part time (1 day a week status) when I am about 6 months away. I have a detailed plan worked out that I will be presenting. I don't want health benefits, 401k match, holiday/vacation pay, etc. Just 1/5 of my salary (almost exactly my living expenses) in exchange for 1 day a week.
I determined I actually like about 20% of my job, while the rest of it centers around bureaucratic drudgery. I am going to suggest that they can take the my benefits and the remaining 80% of my salary and hire another (younger) full time employee with it. Shouldn't be hard to do as I will be about 20 years into my career with a salary that reflects that.
If they don''t go for it, I make plans to leave and look for another part time position somewhere else. Even if I don't find one, I will be FI and the whole work thing is moot anyway. That is the main attraction of FI to me - it opens up a world of possibilities and gives you the upper hand.

[HSpencer]

@OTCW
I like your take on having the upper hand in things. The absolute best way to have a job of any kind is to not need it in the first place. Too many people are so leveraged by debt and lack of having their own money. This makes them a servant to the source of their feed, and have no choice but to toe the line and show up for what ever they do. I like, and have even done, work for people for no pay. I work for my son in law in his tile and flooring business for nothing, just because I love the gist of the chaos he operates in. I would not miss it for the world. I love his cool manner between the builders, the buyers, the loser people he has to hire, and the whole thing of it all. I don't do it a lot, but I go out and help him as sort of "an unbiased attendee" at his jobs. I certainly could not enjoy this if I needed money which I don't. Every day is different, some more chaotic than others. Working with him, my face is in the picture (I do enjoy doing this work) but I am not a pure part of it. I could drop my hammer at any time of the day and go get my teeth cleaned or something. I can't get him not to pay me, he can't just not do that. He pays me with Lowe's gift cards. I have a stack of them on my dresser.

Yes, get FI, stay that way, and life is a bed of roses. Fun too!!!

[TheLuckyWizard]

As much as ERE is a goal most of the projects I'm planning on doing look like jobs so I guess that counts as SRE
On consulting http://daveola.com/Resume/Joke.html

[wolf]

It's great to see that there has been already a topic about semi-ERE back in 2011.
The idea of semi-ERE was born together with ERE.
I too work towards semi-ERE. For me it is working part-time in a field similiar as today. Work would be highly integrated in my Web-of-Goals. Work-Life-Balance/Integration would be in place.

[Jin+Guice]

@wolf: Good to see an old journal about someone having the same idea. As Jacob points out the idea is also in the book. Something about how you should work 5 years of your life or 5 hours a day. Sometimes I think Jacob really thought of everything.

[classical_Liberal]

Something about how you should work 5 years of your life or 5 hours a day.

Woah, woah, hold your horses there Mr Motivation! It's five hours per week! Five hours a day is for those spendy-pants MMM folks.

[Jin+Guice]

God damn it, I'm going to ruin my whole self imposed semi early retirement evangelist with this type of slip up. That's what I get for posting after a gig when I'm half in the bag.

[AxelHeyst]

I've been seeing questions about the origins of semiERE come up recently, and I've been wondering myself. I DAFS'd and this appears to be the first mention of semiERE on the forum. The answers to my questions are:

• semiERE is contained in the book, it just isn't called that. It's listed as an alternative to accumulate>FI ("work 40hrs/wk for 5 years or 5hrs/wk for 40yrs") .
• The term appears to be coined in this thread in 2011, in the same era when the term ERE was often used as as destination much like FI ("I haven't quite ERE'd yet, but I'm hoping in another 2 years..."). No one now uses the term that way - it's used as a set of behaviors and mindsets, regardless of one's current NW/relationship to work. e.g. Basuragami or Wolf are ERE AF but they still work FT.
• This last point might explain some of my confusion, as a newcomer, and why I initially didn't like the term. When I first heard it, I thought it implied that semiERE'rs lacked the "full" set of ERE behaviors or mindsets - they had fallen short, in some way. But in the original use, the term had more close relation to the term "semi-retired".
• I think that people choose to semiERE for many unique reasons. One of those reasons might be a fear of turning into a loser upon FI because of lack of external structure in life. I think that this might be a zeroth order goal for some, but it is not necessarily the reason for semiERE.
• If I had to pin the zeroth order reason for doing semiERE common to all semiERE's, it would be "because life is too short to spend even 5 years at EvilCorp or BoringCorp", to paraphrase JnG. There's a lot that could be unpacked here; for myself, I lack confidence in market returns and therefore don't trust even the conservative math of 3%SWR, so investing>FI is decentralized (not rejected!) in my approach compared to skill-building and multiple-streams-of-income building. FTE is a major obstacle to both of those efforts, and I already have ~20x stashed, so I chose to stay laid off when than happened and embrace a semiERE approach.

The main argument against semiERE that I perceive is that there's a quantitative difference between 100% employed and 20% employed, but there's a qualitative difference between 20% employed and 0% employed. A metaphor might be, you've gotten out of the cave, but you've got one of those gps tracker anklets, so you can't wander too far afield of the Cave, as you're essentially on parole. (My particular answer to this is to strive to find enjoyable activities for which income generation is an incidental yield, thus achieving an "as-if FI" status. We'll see how that goes.)

[Lemur]

To add to this:

1.) Some people (like my younger brother for instance) cannot maintain a job that requires compartmentalizing their true selves away for 40 hours a week for years on end. Even if it is just 5-6 years with a high savings rate. SEMI-ERE would appear to those types I think with a high sensitivity to connecting values & work. Or to those that have so much disdain to the "system" that full-time work is just too much mentally to deal with.

2.) My main argument against SEMI-ERE would be a a pure financial flavor...compound interest and really not much to say beyond that. There is a lot to be gained by serving under Caesar for a few years and getting over it (I'm paraphrasing this quote somewhere on this forum so not sure if that is right). One could then always turn to Semi-ERE after this period was up anyway but if you start with Semi-ERE you're looking at a lot more work in the aggregate...

Point 2 is close to what Axel said but from a different viewpoint (coming from my $ minded brain).

[chenda]

I semi-EREed in 2016 because I didn't have the capital for full-ERE. But I now am aiming for full ERE in a few years, as things have changed and I'd like to cut the leash rather than just have a long one, and covid has opened up new possibilities.

[Ego]

The main argument against semiERE that I perceive is that there's a quantitative difference between 100% employed and 20% employed, but there's a qualitative difference between 20% employed and 0% employed.

The reverse is true as well. Having to go from 0% to 20% (or more) is much harder than having to go from 20% to 100% (or less).

The world is changing fast. That rate of change is accelerating. What works today is incrementally less likely to work tomorrow or the next day in a world with accelerating change. Each additional year of early retirement adds more risk of a black swan to force the 0%er back to work.

It is far easier for someone who has worked 20% to increase to 50 or 70% than it is for someone who worked 0% to work 20%. The 20%er has recent employment history. They maintained contacts in the work world. They are still able to meet expectations and deadlines. They have not lost the ability to bite their tongue or don a forced smile when necessary.

[AxelHeyst]

@Lemur good point, I forgot to include it but agree.

Although - at semiERE, you pay much less in taxes, so you earn much more efficiently. I should do a calc to see what the real delta is - tax efficient earning vs compound returns. Accumulate>FI almost certainly wins from a $ perspective but I wonder by how much.

[BookLoverL]

Interesting to see this old thread about semiERE.

I am definitely pursuing a semiERE strategy, mainly because I found myself unable to put up with full time or near-full-time work for more than 3 months without getting exhausted, burning out, impulsively quitting, and taking at least 3 months off doing not much before being in a state to find something else. If I could have managed to do even a year at a stretch full time maybe I'd have taken a more conventional FIRE route, but since I can't, it's a lot better for me mentally to think of myself as "already semi-retired right now in my 20s" with my roughly-half-time job that starts soon (especially since I'm part-owner of a house now and likely to stay that way) than to be thinking "dang, at this income level I can't early retire for decades!"

So I'm focusing a lot on the lifestyle design part and trying to work my way towards proper systems thinking, and also fortunately my new job is something that I don't have a particular ethical problem with and that I can travel to on bus or foot, so while it's not something I'd choose to do if I didn't need income, it's not something that's going against my values.

Ego's point about it being harder to get work if you've been completely out of work than partially out of work is definitely true. If I ever manage to increase my income enough to move to full FIRE, then I'd consider setting up as self employed and getting something like 2-3 customers a year just so that if I needed to get another job at any point I could say I'd had work history even though it technically wasn't very much. They don't ask you to write how many hours a week you worked on your CV.

[Jin+Guice]

for myself, I lack confidence in market returns and therefore don't trust even the conservative math of 3%SWR, so investing>FI is decentralized (not rejected!)

This was the initial reason I joined this forum and it is still a major concern for me and reason for semiERE.

I lack confidence in market returns and therefore don't trust even the conservative math of 3%SWR, so investing>FI is decentralized (not rejected!) in my approach compared to skill-building and multiple-streams-of-income building. FTE is a major obstacle to both of those efforts, and I already have ~20x stashed, so I chose to stay laid off when than happened and embrace a semiERE approach.

I think skill building and multiple streams of income building is more robust than living from investments alone.

The main argument against semiERE that I perceive is that there's a quantitative difference between 100% employed and 20% employed, but there's a qualitative difference between 20% employed and 0% employed. A metaphor might be, you've gotten out of the cave, but you've got one of those gps tracker anklets, so you can't wander too far afield of the Cave, as you're essentially on parole. (My particular answer to this is to strive to find enjoyable activities for which income generation is an incidental yield, thus achieving an "as-if FI" status. We'll see how that goes.)

In the end, which path to chose comes down to temperament and initial conditions. I don't think this is accurate though. I think semiERE gives the opportunity to escape the cave quicker and more readily than fullERE in most cases. 10-20% employment with multiple years of expenses in the bank is qualitatively different than not that. Freedom comes down to mindset and opportunity. IMO, particularly for this crowd, having multiple years of expenses saved and having multiple skills where you can earn what you need to eat and sleep in a few hours a week is the optimum point where mindset can meet opportunity.

2.) My main argument against SEMI-ERE would be a a pure financial flavor...compound interest and really not much to say beyond that. There is a lot to be gained by serving under Caesar for a few years and getting over it (I'm paraphrasing this quote somewhere on this forum so not sure if that is right). One could then always turn to Semi-ERE after this period was up anyway but if you start with Semi-ERE you're looking at a lot more work in the aggregate...

I disagree with this in two ways. The stock market is not a compound interest machine. If compound interest were guaranteed I would personally place more emphasis on accrual, but it's not. Compound interest requires skill and risk tolerance, and that skill acquisition and risk tolerance can be focused elsewhere.

Secondly, if we assume that you have acquired adequate skill that the stock market can be treated as a compound interest machine (but at low rates of return), I'm not sure it's true that it requires more work. Taxes, increased wages as you age and knowledge of real investment returns are some of the factors that would influence this, off of the top of my head. For certain people full-time work is a better choice, but I don't think it is the less risky (which @Lemur, never said!) or optimal (in terms of working the least possible amount) choice.

It is far easier for someone who has worked 20% to increase to 50 or 70% than it is for someone who worked 0% to work 20%. The 20%er has recent employment history. They maintained contacts in the work world. They are still able to meet expectations and deadlines. They have not lost the ability to bite their tongue or don a forced smile when necessary.

I think @Ego's point is technically true, but if you don't just retire to retire, but retire to build skills and become more actively engaged with the world, employment opportunities will always abound.

I am definitely pursuing a semiERE strategy, mainly because I found myself unable to put up with full time or near-full-time work for more than 3 months without getting exhausted, burning out, impulsively quitting, and taking at least 3 months off doing not much before being in a state to find something else. If I could have managed to do even a year at a stretch full time maybe I'd have taken a more conventional FIRE route, but since I can't, it's a lot better for me mentally to think of myself as "already semi-retired right now in my 20s" with my roughly-half-time job that starts soon (especially since I'm part-owner of a house now and likely to stay that way) than to be thinking "dang, at this income level I can't early retire for decades!"

So I'm focusing a lot on the lifestyle design part and trying to work my way towards proper systems thinking, and also fortunately my new job is something that I don't have a particular ethical problem with and that I can travel to on bus or foot, so while it's not something I'd choose to do if I didn't need income, it's not something that's going against my values.

To me this is the real reason. It's not about whether it's smarter or less risky, but what fits your mindset more. For those who found this bc they wanted to quit yesterday, semiERE is usually more appealing, I think.




Also, again want to plug the fact that the actual economic freedom/ decoupling gained from having fewer expenditures is much greater than that gained from having a large pile of money.

[jacob]

The whole semi-prefix goes back to Bob Clyatt's book. Semi-retirement.
https://www.getrichslowly.org/fifteen-y ... etirement/

You could also call it partial-FI. Technically FI goes from 0% to 100% and semi- would be some generally agreeable point on that scale usually around 50% (around 15 years of spending) for those who use the term.

Whether it's semi-RE or semi-ERE has come to refer to whether the spending side is based on consumer behavior (WL1-5) or postconsumer behavior (WL6-10). WL1-5 will generally have personal spending over $20k/person (unless living in a car, etc.) WL6-10's spending is under.

The US median salary is currently about $35-40k/person.

I think semi-FI is more attractive when savings rates do not easily fall into the 75%+ range unless you work for EvilCorp. If the savings rate falls into 75%+ with a median income job (you're spending ~1JAFI), the typical outcome is oversaving and NW runaway. It's pretty hard to avoid unless you deliberate try not to by e.g. constantly quitting after 3-6 months on the job and taking a similar break (think Ferris's mini-retirements) to make your de facto yoy savings rate much lower.

Black Swan concerns are not excluded at 100% FI. You're not forced to RE. You can still work.

In runaway mode you have the option of switching to annuities or TIPS/i-bonds when you have enough years left for your remaining lifespan and then some.

[7Wannabe5]

It's pretty hard to avoid unless you deliberate try not to by e.g. constantly quitting after 3-6 months on the job and taking a similar break (think Ferris's mini-retirements) to make your de facto yoy savings rate much lower.

Guilty as charged I've been doing this since I was 21 years old, although for some years under the socially acceptable guise of SAHM.

Seriously, I think many of the P types on the forum are more likely to be true "master of none" style generalists than INTJs, who generally function more in alignment with the Serial Master model. It takes 5 years full time (at least!) to gain mastery of something like astrophysics or software development or applied finance. So, if spending is low, the career arc to mastery and not too painfully beyond into boredom should suffice. OTOH, those of us (Scanner Type Generalist) who always prefer to be doing 5 different things at the same time, tending to bail out before mastery, are never happy with full-time job doing one thing, but are often happy with up to a few different activities that all might produce a bit of money, but not necessarily totaling up to very much.

When I joined the forum, I had already been Semi-ERE for decades in terms of mostly living happily on skimp spending* and successfully avoiding full-time work at one occupation, but I never managed to get my ball of savings up to even 5 years expenses. I have very little will power to prevent myself from almost instantly lowering my paid employment level to match any reduction in lifestyle expense in favor of doing all the other fun things that don't pay money that I want to do. IOW, my "freedom to" and my "freedom from" urges are much stronger than my "need for secure plan with multiple parachutes."

* I believe that my entire lifetime earnings according to Social Security report is less than many members of this forum currently earn annually. And I also managed to raise two kids to adulthood!

[the_platypus]

semiERE could also allow for occupational freedom otherwise non-existent in one's chosen professional field. This could lead to better social opportunities and connections useful for resiliency.

For example, instead of being the only one physically capable of biking to work, or who has any interest in gardening, at Boring Corp, you could instead work with people who are open to/interested in/knowledgeable about e.g. gardening, biking, local food, simple living, etc. It's a huge morale boost not to be the only person in the room who doesn't throw ass nine money at golf clubs, fancy cars, or eating out regularly. Projecting here, but I think the experience can generalize.

So semiERE can up the opportunities for certain kinds of jobs including those where you'd meet like-minded people, translating lost cash into social capital.