Last week the wind changed.
To me, each year this marks the end of the summer… and what a truly glorious summer it has been!
The first day the breeze carries a distinct chill.
The first day I wish that I had brought a jumper or a coat.
The first day I start thinking about switching on the central heating.
Joanne Harris’ book Chocolate beautifully captures this notion of the wind indicating that it is time for a change.
A change in the wind
In years past the change in the wind has indicated it was time to dust off my suit and choose a client with both a tricky problem to solve, and a nice warm office in which to hibernate over the cold wet London winters.
I adopted a semi-retired working pattern a few years ago, after a confronting reassessment of how I invested my time.
all the time in the world… until you don’t
My father chose to postpone much of the enjoyment in his own life until retirement. He bought into the rat race, sought to climb the career ladder faster than his peers. First to arrive. Last to leave. Be seen to be putting in the hard yards. Measure value in time served rather than accomplishment.
He “retired” early. Actually, he was pushed out after backing the wrong horse in his office’s version of Game of Thrones.
It was humbling, a wound to his ego that would never fully heal.
He had grand plans for his retirement. Buy a caravan and join the migratory herd of grey nomads.
And he did. For a little while. Until cancer clipped his wings, before eventually kicking his ass.
Around the same time I had my own brush with mortality, fortunately surviving to tell the tale.
These experiences gave me a newfound appreciation that I didn’t have “all the time in the world”.
I didn’t have all the time in the world. Nobody does.
Introspection and epiphany
That led me to re-evaluate how I invested my time.
Like many people, I spent the majority of my daylight hours earning a living, while looking forward to the weekend for a chance to recharge my batteries before doing it all again. It was well paid, but unfulfilling the much of the time.
My prioritisation approach towards time allocation was flawed.
I had long been triaging tasks based on the financial value of my time. Those that paid the best, or couldn’t be ignored, received the attention.
Now it occurred to me that while this approach may have been logical back when I had no money, it became increasingly less sensible the more my net worth grew.
Once I escaped from the hospital, I ran my numbers through a new scenario.
Changing the game
My traditional focus had been watching my net worth increase. The usual story: spend less than I earned, invest the difference wisely, and wait.
What if I looked at them through a different lens? How much of my time could the free cash flows generated by my investment portfolio afford to buy back, without compromising my lifestyle?
This would require a few tweaks to my forecasting and analysis approach:
- Withdraw dividends rather than reinvesting them.
- Instead of channelling free cash flows from investment properties into overpaying mortgages, use them to pay for groceries and utility bills.
- Reduce money spent on work-related costs: commuting, sandwich shop lunches, dry cleaning, gym membership and corporate entertainment.
- Eliminate the need for school breakfast clubs and full-time school holiday childcare.
The results astounded me.
Semi-retirement was already possible
Without compromising my lifestyle at all, the free cash flow generated by my investment portfolio could comfortably fund my living costs for 8 months of the year!
To translate that into terms used by the FIRE community faithful, I would be living within the “yield shield”. That would be roughly the equivalent of running a 2.5% “safe” withdrawal rate, if selling down capital to pay the bills is your thing.
Initially I sought out part-time engagements that would require only a few hours per week. My theory was that regularly working a little would be preferable to sporadically working a lot.
It turned out that, in my game at least, those types of engagements simply do not exist.
I decided to test out this new working pattern, and give semi-retirement a try.
Semi-retirement was to my liking, though the re-entry challenges I faced when returning to the working world were brutal! After six months away, it was very hard to get excited about status update meetings, cat herding of offshore resources, endless conference calls, and handholding indecisive stakeholders.
I repeated the exercise again the next year. It was even harder to return to work.
The change in the wind tells me I should really be getting ready to suit up once again, after having greatly enjoyed my third semi-retirement stint.
But not today.
Lessons from retirement
Instead here are some observations about “retirement” based upon my experiences:
Decompression takes longer than you think
Running in the rat race is habit-forming. It takes months to undo things like:
- the irrational dread of Mondays
- the waking up early in anticipation of the alarm
- the poor sleep patterns
- the carrying around vast knots in your neck and shoulder muscles.
- the grinding teeth, tension headaches, and acidy stomach
You will be judged
The notion that somebody could afford to cease working in their 30s or 40s, without a large inheritance or a lottery win, simply does not compute for the majority of the population.
I very quickly learned to avoid the awkward conversions that inevitably follow any mention of retirement when asked the dreaded “what do you do?” question.
The response was usually a mixture of anger, disbelief, incredulity, and jealousy. Plus it is really hard not to come off sounding like a boastful asshole.
I adopted the “Stay-At-Home-Dad” label until my youngest child started school.
Since then I’ve gone with unemployed. It may not be how I think of myself, but it is technically true!
Worriers are going to worry
Some folks are prone to stressing about things.
Retirement doesn’t magically change who we are or how we think.
For those folks retirement just sees the office politics and asshole bosses substituted for something equivalent like their apartment building’s body corporate committee and their child’s sports coach.
You spend less than you expect
I had expected my outgoings to increase when I stopped working.
A full-time job occupies our minds for most of the working week. I had expected the activities and distractions that fill up a week of retirement to cost a lot.
They certainly cost a bit, but it turned out to be less than the work related costs of commuting, dry cleaning, and buying lunch every day.
You will mentally slow down
There is a certain Darwinism to corporate life. Your livelihood, and therefore your family’s lifestyle, depends upon your ability to successfully navigate the cut and thrust of office politics. The weak and the wounded are sacrificed for the greater good of the herd, it is survival of the fittest.
When the daily need for this “flight or fight” survival instinct is removed, people seem to slow down. They relax. They drop their guard. They lose their edge. They become road kill.
“Use it, or lose it” is a cliché for a reason.
Anybody who has experienced the retirement of their parents will know what I mean. There are many people who commence retirement as vigorous middle-aged folks… yet quickly succumb to becoming muddle headed senior citizens who struggle to keep their Wifi working or use contactless payments at the grocery store.
“Use it, or lose it” is a cliché for a reason
Eat better, but snack more
Having the time to shop for fresh food, and experiment with cooking new meals has improved my diet considerably. It has been nice to have time to do more than just whip together a quick stir-fry after work, before putting the kids to bed.
At the office the only thing I ate between breakfast and dinner was a quick sandwich at my desk. At home I probably walk through the kitchen dozens of times a day, which lends itself to snacking.
In the end I had to make sure I didn’t have any snacks in the house, or I’d inevitably eat them!
No more beer o’clock
Before kids I would often go out for drinks or dinner with friends and colleagues.
After kids my social life scaled back considerably.
I developed a bad habit of having a beer or a glass of wine when I got home from work each day. It was a quick way to unwind, mentally change gears from “work mode” (frustration, stress, spending half the day surrounded by idiots who suffer from backpfeifengesicht) to “home mode” where I needed the patience to enjoy reading bedtime stories and listen when my kids downloaded about their day.
backpfeifengesicht: German for ‘a face in need of a fist‘ or ‘a face that is begging for a slap‘
Retirement meant there was no more “after work”, and tomorrow wasn’t a work day either.
If the sun was shining outside, and I didn’t have anything immediately demanding my attention, why not sit outside with a good book and a nice glass of wine? So what if it is only 11am on a Tuesday morning?!
That impulse took me by surprise. I can see how some people end up having beer with their cornflakes.
I can see how some people end up having beer with their cornflakes.
You won’t get fit or lose weight
As with stress, retirement doesn’t magically provide you with the additional motivation.
If you couldn’t summon up the motivation to go for a run, or eat a salad instead of a plate of hot chips, before retirement then chances are pretty good you won’t do it after retirement either.
There is a big difference between excuses and reasons.
There is a big difference between excuses and reasons.
You may get bored, depressed and lonely
A big part of our identity is what we do for a living. “Bob the builder” and “Dora the explorer” are great examples of this.
When you retire you lose that part of your identity. If you no longer have that professional qualifer, then who are you?
The daily grind of work imposed a structure, and forced interaction with a social group. For many people this acts as a crutch, particularly if they don’t have lots of friends or neighbours living nearby.
Retirement removes that crutch, which makes it easy to go for days at a time without talking to anyone outside your immediate family unless you make the conscious effort to seek out social interaction. One for the introverts to be mindful of.
This conscious effort is also required to replace work with other fulfilling pursuits. Without it you could easily find yourself sat on the couch, still in your pyjamas, wasting days at a time watching unemployment television.
You will become your family’s shock absorber
Whether justified or not, the value of a retiree’s time does not compare to that of a salary earner.
They have a finite amount of annual leave. Bosses to appease. Stakeholders to manage. Staff to supervise, and so on.
You have nothing but time.
Time to wait around for tradesmen who never turn up.
Time to receive deliveries.
Time to pick up whatever shopping items the rest of the family desperately needs, but failed to procure themselves.
You will get curious… and then grumpy
Now that you don’t have to subject yourself to the daily grind, you have the luxury of taking deep dives into subject areas that catch your interest.
You have the time to read the study behind all those newspaper headlines.
You can invest the time to validate the conclusions an “expert” has reached.
You quickly become disheartened by how inaccurate just about everything the media reports actually is.
The “letters to the editor” section of the newspaper is full of commentary by people just like you!
Retirement won’t fix you
Retirement can’t make you happy, content or fulfilled.
Retirement can free up your time however, so that you have the opportunity figure out what will.
But only if you choose to take it.
There are very few things you want to do in retirement, that you couldn’t already be doing in some form today.