I've been thinking alot lately about what type of ERE lifestyle I want. Why do I want to 'retire'? What do I want to do with my life? Where do I want to be? I've narrowed it down to a few different ideas but the one that really speaks to my heart is buying a RV and hitting the road full-time. While this is not the cheapest of my options, it is the one that allows me to do the most things on my bucket list. If my numbers hold true, I should be able to do this in 2 years when I have enough savings to buy a full rig and have about a years worth of expenses in the bank. At that point, I should be able to live my RV lifestyle on half of my current income. So essentially, work 6 months, travel 6mos. Being a programmer it shouldn't be too hard to find 3-6mo contract gigs now and then. On paper, this all looks feasible and while I'd love to quit programming altogether, I really don't want to wait the 7+ years it would take for full ERE. So this seems like a nice compromise. So what's the problem? FEAR.
I keep finding myself thinking that this is completely nuts and thinking of a million things that could go wrong. It's the fear of the unknown that is really bothering me. So now I'm trying to find a way to put those fears to ease. I keep coming back to the question: What's the worst that could happen if I do this? While I was brushing my teeth this morning, I came up with a long list of things that could go wrong. Then I tried to come up with ways to handle those problems (alot of which would have nearly identical solutions if they happened to me today as I type this). In the worst case scenario, I wound up back in square one working full-time.....uh, gee...I guess I'm already in my worst case scenario ;D
ERE Goals and Fear
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George the original one
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jacob
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"I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear."
I can think of many bad things that could happen. These should be put in the perspective of having a job, where most of these things could also happen. The only different between me and a full-time worker is that I get paid by the company's dividend as long as it gets declared and the worker gets paid by wages as long as he has a job. I have 20 different dividends though---the worker only has one job.
There seems to be examples of people retiring early and then returning to work for a few years a few years later. Then taking time off again, etc. Seeing that I have only been out for 1.5 years though, that hasn't happened to me yet, but I expect it to happen.
I can think of many bad things that could happen. These should be put in the perspective of having a job, where most of these things could also happen. The only different between me and a full-time worker is that I get paid by the company's dividend as long as it gets declared and the worker gets paid by wages as long as he has a job. I have 20 different dividends though---the worker only has one job.
There seems to be examples of people retiring early and then returning to work for a few years a few years later. Then taking time off again, etc. Seeing that I have only been out for 1.5 years though, that hasn't happened to me yet, but I expect it to happen.
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JustChristine
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@George yes, I had thought of not being able to work or find a FT job in the event that I needed one but those are the same problems I could face today. I can manage the risk the same as I do today with an emergency fund and adequate insurance. I guess what I was getting at is that there is roughly the same risk with my current situation as there is with my dream sitation. Actually, in my ERE plan, I think it's a little less risky. I won't be bound to one geographical region to find a job and there is the potential to reduce my expenses lower than I could today.
@Jacob That's a perfect quote.
@Jacob That's a perfect quote.
@JustChristine,
If you haven't read the 4 Hour Workweek, you should check it out. Skip the outsourcing/automation/marketing hype, etc., and really listen to what the author has to say about fear, accepting risks, taking risks, and the trade-offs between mini-retirements and full blown retirement. I think it's all extremely relevant to where you're at right now.
If you haven't read the 4 Hour Workweek, you should check it out. Skip the outsourcing/automation/marketing hype, etc., and really listen to what the author has to say about fear, accepting risks, taking risks, and the trade-offs between mini-retirements and full blown retirement. I think it's all extremely relevant to where you're at right now.
@akratic, @JustChristine
I don't disagree with your tout of Ferriss' 4HWW, but the problem I have with his antidote to fear is his untested assumption that the worst case scenario is returning to square one, i.e. if you quit your job to experiment with a mini-retirement or a business venture, you can always resume FT employment. His worldview is a product of his young age. Those in their late thirties or early forties who take time off from a FT job will find it much more difficult to return to the workforce. Despite laws against age discrimation, it is the hardest form of employer bias to successfully prove in a civil law suit. And discrimination against late-forties and older is rampant because these are the folks who skew the cost of benefits like group life insurance and group health insurance, not to mention the general demand for higher wages relative to twenty-something workers.
If you want to ERE, you cannot be cavalier about the prospect of returning to the workforce after a multi-year hiatus. I operate on the belief that becoming FIRE is the key to overcoming the type of fear JustChristine is mulling over. Once you have enough passive income to cover life's necessities, you are never beholden to anyone else for a FT job or its associated income. Maybe you'll still want to work, and maybe someone will be glad to offer you that opportunity. But if you need a job and go years without one, the impact will likely be quite severe. I've read more than one article recently about folks who were laid off in their mid-to-late fifties and were forced to take Social Security at 62 simply because they had wracked up debt and couldn't make ends meet otherwise.
I don't disagree with your tout of Ferriss' 4HWW, but the problem I have with his antidote to fear is his untested assumption that the worst case scenario is returning to square one, i.e. if you quit your job to experiment with a mini-retirement or a business venture, you can always resume FT employment. His worldview is a product of his young age. Those in their late thirties or early forties who take time off from a FT job will find it much more difficult to return to the workforce. Despite laws against age discrimation, it is the hardest form of employer bias to successfully prove in a civil law suit. And discrimination against late-forties and older is rampant because these are the folks who skew the cost of benefits like group life insurance and group health insurance, not to mention the general demand for higher wages relative to twenty-something workers.
If you want to ERE, you cannot be cavalier about the prospect of returning to the workforce after a multi-year hiatus. I operate on the belief that becoming FIRE is the key to overcoming the type of fear JustChristine is mulling over. Once you have enough passive income to cover life's necessities, you are never beholden to anyone else for a FT job or its associated income. Maybe you'll still want to work, and maybe someone will be glad to offer you that opportunity. But if you need a job and go years without one, the impact will likely be quite severe. I've read more than one article recently about folks who were laid off in their mid-to-late fifties and were forced to take Social Security at 62 simply because they had wracked up debt and couldn't make ends meet otherwise.
Life evolves, crap happens, things change. Looking back, I could have done one of two things: Better, or Worse. I am really glad I did not spin off on some of my wild-eyed ideas, like buying a chicken farm. Later to find out my sinus condition would not let me go in the houses. Ammonia allergies.
I have a lot of friends that have retired to the mountains, lakes, beaches, and some are "Full Timers" in RV's (or were at one time).
As you age, your ambitions give way to your moods and body. Instead of thinking "cabin on the lake" your thinking "how many miles to see my doctor?"
You go from a career as a beach bum to wanting an upper-scale lifestyle in a moderate beach townhouse, where you sit on the balcony and sip rum and coke.
10, 20 years and your doing a 180.
I have a lot of friends that have retired to the mountains, lakes, beaches, and some are "Full Timers" in RV's (or were at one time).
As you age, your ambitions give way to your moods and body. Instead of thinking "cabin on the lake" your thinking "how many miles to see my doctor?"
You go from a career as a beach bum to wanting an upper-scale lifestyle in a moderate beach townhouse, where you sit on the balcony and sip rum and coke.
10, 20 years and your doing a 180.
@Maus, I actually did test this out with my life. I took a 1.5 year mini-retirement from age 25 to 26 to travel and try to start businesses. All the businesses failed (pretty much) leaving me to fall back on a full-time job when I was running low on money. Except not only was this job easy to find, but I got a huge raise from what I was making before my mini-retirement.
The reality is that the demand for people who can both communicate and program dramatically outstrips the supply, and I personally don't think that's changing any time soon. Of course, this is specific to the programming industry that JustChristine and I are in. Also I was still young enough to dodge ageism, etc.
That said, whatever youth and naivette blinds Tim Ferris also blinds me.
The reality is that the demand for people who can both communicate and program dramatically outstrips the supply, and I personally don't think that's changing any time soon. Of course, this is specific to the programming industry that JustChristine and I are in. Also I was still young enough to dodge ageism, etc.
That said, whatever youth and naivette blinds Tim Ferris also blinds me.
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JustChristine
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@Kevin I have former co-workers and managers scattered all over the Chicago/Milwaukee areas. I need to work a little more in the 2 years at maintaining those connections.
@akratic I read '4hr work week' a number of years ago but was in a very different mindset at the time. I think I will take a walk to the library tomorrow and pick it up for a re-read.
@Maus Switching between PT and FT isn't as big of a deal in the IT world since alot of people consult and take some time between positions. As long as you keep your skills fairly current (which I plan on doing) you're good. Although I'm really hoping that I can sell PT work to my current employer.
@akratic I read '4hr work week' a number of years ago but was in a very different mindset at the time. I think I will take a walk to the library tomorrow and pick it up for a re-read.
@Maus Switching between PT and FT isn't as big of a deal in the IT world since alot of people consult and take some time between positions. As long as you keep your skills fairly current (which I plan on doing) you're good. Although I'm really hoping that I can sell PT work to my current employer.
"And discrimination against late-forties and older is rampant because these are the folks who skew the cost of benefits like group life insurance and group health insurance,"
I have a few friends who are older programmers (i.e., over 40) and they definitely experienced problems moving to new jobs which they believe is due to age bias. I don't think they are wrong to believe that either, especially for a field like programming.
I have a few friends who are older programmers (i.e., over 40) and they definitely experienced problems moving to new jobs which they believe is due to age bias. I don't think they are wrong to believe that either, especially for a field like programming.
I work as an independent contractor. Legally, I'm employed by a temporary help agency, but I have my own health insurance plan (which is high deductible so that I can contribute to a Health Savings Account). The agency also has a 401K plan that I participate in, but it does not match my contributions.
My contracts read "0 to 40 hours a week" depending on the needs of the client. When the financial crisis hit in late 2008, for example, I was cut back from 5 days to 3 days a week. Although I didn't like the reduced income, I figured 60 percent of a loaf is better than nothing. My latest client has me working 20 hours a week on average, with swings ranging from 5 to 40 hours a week depending on how the projects progress.
I'm in the process of trying to diversify my revenue base by adding more part-time clients and offering additional skills. I currently work mostly from home (I have to go on site once or twice a week) because I'm able to use the Internet for most of my interactions with clients.
Even though I'm semi-retired and could live on my investment income if I wanted to, I believe the "unusual uncertainty" of the next few years means I need to keep the income flowing in whenever I can get it.
I also found out that being fully retired gets boring after awhile. Having something that challenges me intellectually and generates income is a good combination. If the situation at a client deteriorates into political infighting, I just wait for my contract to end and then move on. I can afford to be choosy now with regards to the assignments I accept.
My contracts read "0 to 40 hours a week" depending on the needs of the client. When the financial crisis hit in late 2008, for example, I was cut back from 5 days to 3 days a week. Although I didn't like the reduced income, I figured 60 percent of a loaf is better than nothing. My latest client has me working 20 hours a week on average, with swings ranging from 5 to 40 hours a week depending on how the projects progress.
I'm in the process of trying to diversify my revenue base by adding more part-time clients and offering additional skills. I currently work mostly from home (I have to go on site once or twice a week) because I'm able to use the Internet for most of my interactions with clients.
Even though I'm semi-retired and could live on my investment income if I wanted to, I believe the "unusual uncertainty" of the next few years means I need to keep the income flowing in whenever I can get it.
I also found out that being fully retired gets boring after awhile. Having something that challenges me intellectually and generates income is a good combination. If the situation at a client deteriorates into political infighting, I just wait for my contract to end and then move on. I can afford to be choosy now with regards to the assignments I accept.
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RobBennett
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If the fear is that you will be unemployable after leaving the workforce, you could address the fear by finding a way to keep a hand in things. I could never go back to my corporate job because getting that was all about having the right (conventional) credentials. But if my writing work on the internet becomes sufficiently recognized, I like to think that I might get offers that way. So I still feel that I have a connection to the for-pay workforce in the event that I need to fall back on it.
I always look for a middle ground. I don't like to give in to fears and let them control me. But I also don't like to ignore them. There's usually at least some reason for a fear (although it is often the case that the fear is exaggerated).
Rob
I always look for a middle ground. I don't like to give in to fears and let them control me. But I also don't like to ignore them. There's usually at least some reason for a fear (although it is often the case that the fear is exaggerated).
Rob
@JustChristine - we hire contract developers all the time from anywhere in the world (I work from home about 1500 km from "hq"). If you are good and know java, you can email me at dan at getpeek dot com.
I can't think of anything riskier than having a single income source and being reliant on a potentially emotionally flakey supervisor/manager/CEO for my livelihood. I think its incumbant on all of us with ERE aspirations to learn a craft that can be used outside of the machinations of a modern corporate world (i.e. you aren't a professional middle manager, project manager, sales support professional, business analyst, etc).
For instance, an obscure phd on accreting neutron stars would also probably be a good example of the opposite of this
(I keed I keed)
I can't think of anything riskier than having a single income source and being reliant on a potentially emotionally flakey supervisor/manager/CEO for my livelihood. I think its incumbant on all of us with ERE aspirations to learn a craft that can be used outside of the machinations of a modern corporate world (i.e. you aren't a professional middle manager, project manager, sales support professional, business analyst, etc).
For instance, an obscure phd on accreting neutron stars would also probably be a good example of the opposite of this
(I keed I keed)-
Mr. Overlord
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@Jacob:
"There seems to be examples of people retiring early and then returning to work for a few years a few years later. Then taking time off again, etc. Seeing that I have only been out for 1.5 years though, that hasn't happened to me yet, but I expect it to happen."
I read this comment and I was just wondering why you expect to return to work if you believe you have enough money to pay your expenses for the rest of your life and you have enough commitments to fill all your time? Obviously anything can happen, but why do you expect it to happen?
"There seems to be examples of people retiring early and then returning to work for a few years a few years later. Then taking time off again, etc. Seeing that I have only been out for 1.5 years though, that hasn't happened to me yet, but I expect it to happen."
I read this comment and I was just wondering why you expect to return to work if you believe you have enough money to pay your expenses for the rest of your life and you have enough commitments to fill all your time? Obviously anything can happen, but why do you expect it to happen?
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jacob
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@Mr. Overlord - The easiest way to think about it is that there are vocational and avocational activities. It would be hard to restrict myself solely to doing things that aren't paid.
At some point I may no longer have enough commitments to fill my time and decide to do something that is vocational rather than avocational.
Okay, I guess that sounded very intellectualized. Let's just say that on my list of things I'd like to do about half of them would earn money and be in the form of some kind of job.
At some point I may no longer have enough commitments to fill my time and decide to do something that is vocational rather than avocational.
Okay, I guess that sounded very intellectualized. Let's just say that on my list of things I'd like to do about half of them would earn money and be in the form of some kind of job.
@JustChristine
I struggle with this exact same desire except that I have more years saved. It is difficult to sacrifice our youth now for an uncertain future.
I will say this, I do not regret my sacrifices nor do I regret my adventures. It is easy to look back on a degree and wish I had spent the year in Europe before I started college, but now I have a difficult degree which is behind me and the extra year of earnings under my belt. A lot of people get a late start at life (financially). The more I save, the more I am certain I will take the adventure step.
Here is my recommendation:
If you can come to terms that you are comfortable possibly flipping burgers after you run out of money then you have enough money to make the step:) If not, I would continue on the best road to FI if you are not willing to work for minimum wage. I agree with Akratic in that your field is solid, but corporate ladders and compound interest is best taken advantage of while young and while our history makes us look like the "eager" workers. Little do they know I would welcome unemployment to finance my trip across the country!
I struggle with this exact same desire except that I have more years saved. It is difficult to sacrifice our youth now for an uncertain future.
I will say this, I do not regret my sacrifices nor do I regret my adventures. It is easy to look back on a degree and wish I had spent the year in Europe before I started college, but now I have a difficult degree which is behind me and the extra year of earnings under my belt. A lot of people get a late start at life (financially). The more I save, the more I am certain I will take the adventure step.
Here is my recommendation:
If you can come to terms that you are comfortable possibly flipping burgers after you run out of money then you have enough money to make the step:) If not, I would continue on the best road to FI if you are not willing to work for minimum wage. I agree with Akratic in that your field is solid, but corporate ladders and compound interest is best taken advantage of while young and while our history makes us look like the "eager" workers. Little do they know I would welcome unemployment to finance my trip across the country!
This "fear" thread shouldn't be allowed to fade out into cybernetic oblivion; fear is the single biggest factor that both makes people work at jobs they hate and spend money on things they don't want. It demands analysis.
There's the simple financial fear to which the OP alludes. I know this very well because I've been there. In fact I'm still there. How much money do I need before I can relax? What if the market crashes out? What if the roof blows off the house? What if my daughter wants a big wedding?
Then there's the more insidious fear - the fear of what people will say. Easy to dismiss in words but harder in deed. If you value your friends and family than it's natural and right to be afraid of losing their respect and understanding.
There's the simple financial fear to which the OP alludes. I know this very well because I've been there. In fact I'm still there. How much money do I need before I can relax? What if the market crashes out? What if the roof blows off the house? What if my daughter wants a big wedding?
Then there's the more insidious fear - the fear of what people will say. Easy to dismiss in words but harder in deed. If you value your friends and family than it's natural and right to be afraid of losing their respect and understanding.
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George the original one
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The way to deal with fears is to enumerate them, rate them, and address them individually. Divide and conquer.
With specific fears such as "what if the roof blows off the house", you'd examine your insurance policy and learn what the deductible is. Then you'd make sure you have a side pot of money that will cover the chance that you'll have to pay the deductible.
"What if the market crashes out?" is not an insurmountable fear, though it's a bit vague. If you're relying on dividends, distributions, and royalties, then the price of the underlying security is less important than that its payment continues. Keeping a year's worth (or more) of expenses in a bank account is another way to address that problem. Have the backup plan for returning to work while waiting for the eventual recovery to return is another.
With specific fears such as "what if the roof blows off the house", you'd examine your insurance policy and learn what the deductible is. Then you'd make sure you have a side pot of money that will cover the chance that you'll have to pay the deductible.
"What if the market crashes out?" is not an insurmountable fear, though it's a bit vague. If you're relying on dividends, distributions, and royalties, then the price of the underlying security is less important than that its payment continues. Keeping a year's worth (or more) of expenses in a bank account is another way to address that problem. Have the backup plan for returning to work while waiting for the eventual recovery to return is another.