In June 2012, at the age of 34 and after 13 years in investment banking, I wanted out. So I decided to negotiate a settlement, retire early, and live on passive income through my rental properties, stock dividends, and e-book sales.
But just a year later, I realized that the life of travel and free time I thought I wanted wasn’t for me. I was bored and felt a loss of identity. I needed an outlet and wanted to do work that I was personally invested in.
Although it’s been more than 10 years since I stopped working full-time, I wouldn’t say I’m retired. Instead, I refer to myself as a “fake retiree” because I ended up taking on some side jobs to fill my time.
Here are six surprising lessons I’ve learned after 10 years of “bogus retirement”:
1. There’s no shame in being “faking retired.”
I’ve shared a lot about my journey into early retirement, and one of the biggest hits I get from readers goes something like, “You’re still doing some kind of job and getting paid for it, so don’t actually retired.”
That’s a valid point, which is why I think more people should embrace the term bogus retirement. Many of us early retirees write blog posts, record videos, create e-courses, write books or sell art. I still run my blog, Financial Samurai, and have just spent two years working on my personal finance book, Buy This, Not That.
Many early retirees are working harder than ever to build their online business, even if it’s just a short-term passion project. The extra money they make may not be a necessity, but it’s a nice bonus.
By labeling myself a “fake retiree,” I’ve mastered the criticism. Yes, I could sit on the beach drinking piña coladas all day if I wanted to. But not me. I want to work and be productive during the week, which is about two to three hours a day for me.
2. Your financial needs will evolve—and likely grow—over time.
When I retired I was happy with my $80,000 a year passive income. But in 2015, my wife came to me for early retirement. We calculated that we would need to generate $160,000 in passive annual income to cover the loss of their income.
We also wanted to start a family. Our son was born in 2017 and our daughter in 2019, so our financial needs grew. Paying $2,200 a month in unsubsidized health premiums — plus $5,000 a month for preschool — adds up.
With inflation at a 40-year high, we need to start generating more revenue again. That’s three major revisions to our budget in just 10 years. To keep pace, we have purchased more rental properties and invested in assets that continue to appreciate in times of inflation, such as: B. Healthcare stocks.
3. You may still feel the pull of traditional work.
Since 2012, I’ve fought the urge to go back to full-time work several times. The first time was less than six months after I left my job. I lacked the camaraderie of working as a team toward a common mission.
The second time was after the birth of our son. I worried that we would not have enough money to provide for our family. I also struggled with how hard it was being a stay-at-home parent. I figured having an office to go to could serve as a “time-out” from the stress of being a new dad.
The third time happened a year after the pandemic began. So many friends working from home seemed to have a work-life balance that made them happy.
But eventually I realized that even if I got a remote job that allowed me to go to the beach in the middle of the day, I still had someone to account to.
Think of all the times you’ve had to shut up at work because you didn’t want to jeopardize your raise, promotion, or reputation with your employer.
One of the greatest benefits of being financially independent and not having to conform to company rules is the opportunity to express yourself fully.
In addition, you can confidently reach out to people who could use your support. For example, when I was approached by a producer about doing an audiobook version of my book, he was adamant about choosing three white males to narrate.
But as an Asian, I wanted someone who looked and sounded like me. We ended up with a Chinese-American narrator. Had I not felt safe enough to speak out, this narrator would not have had the opportunity.
Early retirement gives me more time to be alone with my thoughts. When I was no longer limited to a 40-hour week, I was able to reflect on what was truly important to me – and the legacy I want to leave behind.
For some people, that could be a scholarship to their alma mater or making a difference with a charity. For me, it’s sharing financial advice that can help other people achieve their life goals.
The only thing that kept me going after the pandemic lockdowns began was the certainty that one day my kids would bring my book to show and tell.
I have found that as you support the causes that matter most to you, share your blessings, and mentor others, your legacy will flourish.
Do what you can now to give the “future self” as many opportunities as possible. Save and invest as much money as you can so you have plenty of options when you’re ready to quit your job.
And maybe you won’t retire entirely. You could switch to a lower-paying job that makes more sense, or take a few years off to take care of your parents. Or you can opt for a “fake retirement” like I did.
Simply put, try to think of the future in terms of probabilities, not absolute numbers. I have a 70/30 decision-making philosophy that has seldom led me astray: If I believe there is a 70 percent chance I will make the right decision, I will go for it.
At the same time, I have the humility to know that there is a 30% chance that I’m making the wrong move. And I agree with that; Mistakes are not failures if you can learn from them and make better decisions in the future.
Sam Dogen worked in investing banking for 13 years before starting financial samurai, his personal finance website. His new book “Buy This, Not That: How to Spend Your Journey to Wealth and Financial Freedom” is out now. Follow him on Twitter @financialsamura.
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