I realized recently that I’m on pace to spend over 70% of my adult life working a “9 to 5.”
I started work at age 16. It was a local movie theater and it is still one of the best jobs I ever had. I made $5.15/hr, and you couldn’t convince me I wasn’t rich. I can apply for full benefit social security starting at age 67. Only 33 more working years to go. Not including all the things WebMD says will kill me at any moment, my demographic’s average lifespan is 72. That’s right. After spending 70% of my life working, I will be rewarded with 7% of my life in retirement. For context, in this scenario, I already spent 7% of my life in college.
My early retirement plan means I have the freedom to choose when I work, how I work, or if I’ll work at all. For me, retirement doesn’t mean I’ll never work again. It means following the personal finance habits that allow me to control my own life. An experience I haven’t consistently had since I was 15. If I don’t change my approach to life, what I do with the next 40-hours of the next 52 weeks for the next 33 years will be outside of my control until I’m 67 years old. Sorry not sorry but I’m going to take a soft pass on that life plan.
Economic independence is not supposed to be about scrimping, saving, sacrificing, delaying and deferring, hoping that one day, someday, you can retire with enough money in the bank and die before it runs out. – Garret B. Gunderson
On paper, people tell me, I’m living the American Dream (minus the family and house with the white picket fence). I work a steady job. I make good money. I’m well respected and liked by the pillars of my community. I pay taxes. I follow most laws or at least all of the important ones.
“It could be worse,” my peers reassure me while trying to convince themselves of the same. Maybe this is the natural stage a group of 30-plus-year-olds should experience? We’re the collective of disillusioned young people. What’s next? “Adulting 2.0” someone told me recently: the stage in life where you are responsible for taking care of yourself, your family, and eventually, your parents.
Yes, our friends are right. It could be worse.
Lifestyle Inflation and Golden Handcuffs
Everything that glitters aint gold.
I’m not unhappy. I’m content. I’m bored. I’m going through the motions. But, I’m not unhappy. As a friend advised, I have the “golden handcuffs.” He explained this concept as when you are professionally successful, making just enough money to support my inflated lifestyle; however, I have to keep showing up and being professionally successful or I can’t afford to live my inflated lifestyle. The professional success formula:
- Go to college.
- Get a nice job.
- Buy a nice car and/or a nice home.
- Drive away from your nice home in your nice car (sit in traffic).
- Spend 40-hours or more a week working at #1 so you can continue to afford to pay off #2 through #4.
Years later, I would see the “work causality loop” meme. It has three categories all connected by arrows:
- Hate Work
- Need Enough Money to Quit Working
- Must Work to Make Money
Life comes at you fast. I worked towards what I’ve achieved. I achieved what I worked towards. Now I’ve ascended to the top of the career ladder and as I look out over the professional adult horizon, I can’t help thinking to myself, “Hmmm. I thought the view would be better.”
I Spend the Least Amount of Time Doing What Makes Me Happy
I was conversing with a mentor once. Actually, a conversation implies two people were talking. He was listening, and I was complaining. At some point, perhaps to hear a voice other than my own, he interrupted with a set of questions that changed my entire approach to the next year of my life.
Mentor: What’s your f**k you fund?
Me: Excuse me?
Mentor: How much money do you need to save to walk away?
Me: I don’t know…
Mentor: When are you at your most happiest?
Me: …I don’t know.
I was asking the wrong questions about the direction of my life, so it’s no coincidence I was lost. I had never thought of “walking away,” because I thought that walk wouldn’t begin until I was 67. When life got unbearable, I always took the “it could be worse” approach. “It could be worse. Maybe it could be better, too?” he suggested.
He encouraged me to prioritize figuring out what made me happy, and the answer didn’t have to be work. This was such a foreign concept, it took me almost a full year to figure it out. I started paying attention to the times when I was happiest, and I noticed a pattern. The majority of my happy-hours occurred in the areas I was spending the least amount of my time. My life had become a monotonous cycle: mostly revolving around dreading Mondays and looking forward to Fridays.
I like my career, but I do not derive the same joy from completing TPS Reports as I do from vacationing from work, living life, or spending increasingly valuable and increasingly more difficult to find time with friends and family. The happiness comparison scale between work hours and off-work hours isn’t even close. I began wondering why I was spending so much time doing things that don’t make me happy. Was it in my power to inverse this relationship?
Build Your Parachute and Jump Early
To help better track my spending habits, I recently switched to a 50/30/20 budget. After crunching the numbers, I realized I could retire uncomfortably today. With the right discipline, I can retire comfortably in my 40s.
Due to some lifestyle deflation I’ve been practicing over the years, my annual expenses are around $27,000-30,000. Technically, I can cover all of my bills, home, and food (needs) and still have a little extra income for my wants if I found or did something that netted me $74-82/day. This is an uncomfortable retirement plan. To cover taxes, healthcare, and other unforeseen expenses, I would need to estimate at least 30% for additional overhead. That gets me to $107/day. One hundred and seven dollars stands between me and never working another 8-hour day for the rest of my life.
I prefer to retire comfortably. I don’t want to switch from a temporarily uncomfortable life state only to become permanently uncomfortable. Even accounting for a family I don’t yet have, I estimate that with purposeful change and minor sacrifices, I can still retire in my 40s. This gives me 6 years to save $30,000. This sounds like a lot, but I already paid off over $30,000 in debt in a similar timespan. It’s possible if I remain dedicated and properly motivated.
If life goes to plan, by age 40 I will have vested in two separate employee retirement plans and have a moderately funded 401k (originally 457(b)) plan I started on the side for additional investment around 2014. At best, I’ll be able to take one full year off work. Twelve months later, I can decide if I want to go back to work or, if I haven’t already, find a way to consistently make at least $107/day to support myself and my (possible) family through multiple passive and active (part-time or self-employed work) income streams and smart investments.
It won’t be easy. The math alone means it won’t happen overnight. However, the time is going to pass anyway. If I’m already willing to work and invest 40-hours a week for everyone else, I’m sure I can also manage to spare a few hours to benefit my future self. If you’re perfectly content, I encourage you to change nothing. You should continue to wake up, be awesome, and win at life. If you find yourself saying more often than not, “it could be worse?” The answer is yes, but it could also be better. I encourage you to consider a different choice, put a plan together, and take action. The first questions I would ask?
When are you at your happiest? How much is your f**k you fund?
Marcus Garrett is one-half of the Paychecks and Balances podcast, a certified internal auditor, and author of Debt Free or Die Trying: How I Buried Myself in Over $30,000 in Debt and Dug My Way Out By Age 30. You can find him on Twitter @PayBalances and Facebook: PaychecksAndBalances.