The Dark Side of Early Retirement

[@scottw5315]

I remember being at work, I was active duty military, on a staff tour, meaning desk job. I recall looking out the window wondering when I would have time to do the things I wanted to do. Suddenly, after twenty years I was retired. I had built a fairly thriving real estate business on the side so I didn't need a job. I was forty two. So, I went to Europe for months. Traveled the US extensively. Got divorced. Almost lost everything in 2008. Did everything from handyman to AC tech, to broker, to sales agent. Started a new management company that was mostly a failure. Some really hard knocks for a decade. I've been mostly retired since my business turned around in 2016 at age 54. First, there are real pitfalls retiring early. Pitfalls like divorce, alcoholism and more. It's real easy when you don't have to work to start cocktails at four. A few years later they might start at one. So, there's that. Also, leave recreating for recreation. You can't make your life golfing, or skiing or whatever you did for fun during your working years. Two weeks at a world class ski resort will likely get boring. So, retiring early can leave you with lots of time on your hands. How are you going to productively use that time. This is something you should consider. So, I travel a lot and do those things I never had time for when in my working years. Also, I still have that real estate business so it keeps me engaged without too many headaches. There is no heaven on earth. At least make sure there is no hell.

[@stefanwagner6236]

Your comment was more interesting than the ten minute video

[@laurennorfleet4303]

Thank you for your experience and insights

[@serialmigrant]

Graduated at 21, realized I could have a 50 yr career ik engineering. Decided early on I would take the slow way, taking sabbaticals along the way. I implemented the FIRE stratégies, not to retire at 35, but to simultaneously save for sabbaticals and traditional retirement at the same time. NO regrets here

[@mikeg9b]

I saved 30% to 50% of my pay when I was working because, for me, working was a state of constant suffering and I wanted my suffering to stop. That's it. I don't have enough money to live anything other than a frugal life, but at least I'm not suffering anymore. Fortunately, I have cheap hobbies.

[@edp2506]

great plan and i hear you. for me, it's mostly that am so introvert and judgemental as well and can't stand butt kissers and feel for those who work so hard and not attain a raise.

[@hagakuru]

I appreciate how you can concisely explain your topics.

[@sct4040]

The spending instead of saving is hard to do.

[@hogroamer260]

I was too old to take advantage of the "fire" movement. Now I'm on the "fier" movement - Financial Independence Eat Rice.

[@ordinaryhuman5645]

I should eat more rice. Bread has not been agreeing with my digestive system recently.

[@donaldcedar7574]

I know this stuff deep down and it is what ultimately keeps me up at night.

[@Lawandasu]

Perfectly said, James!

[@Uplate992]

The wisdom in this video! The only thing missing is a mic drop at the end.

[@KH-dg8or]

Money is good, but to love money is evil.

[@lilsaint91]

What do you think is the best age to retire and why?

[@ordinaryhuman5645]

Financial Samurai had a pretty reasonable take on that, worth pulling up his blog post on the ideal retirement age. Early 40s. Long enough to work and accumulate more than enough without feeling like you didn't work hard/long enough, but not so long that you're losing healthy and active years. Retire sooner and you'll miss out on the biggest paydays that you had been building towards earlier in your career. Retire later and you're sacrificing the last of your healthiest years and time with kids before they become adults. By then, you've also likely sorted out some big life variables (children, spouse) so you should have more confidence in stepping away from work. Personally, I'm shifting into it slowly starting at age 35. I peaked a bit early in my career because I didn't want to go down the management track, and I'm opting out of the spouse/kids stuff for the foreseeable future, so I don't need to pad the accounts with extra work for that.

[@marconi3142]

Excellent advice!

[@RootFP]

Glad it was helpful!

[@SalFarruggia]

who is this nerd? Work as hard as you possibly can.

[@DanRichter]

Just turned 29. I'm about halfway to FIRE. To me, FIRE isn't about literally retiring, enjoying margaritas on the beach every day. It's about having the power to say "no" when your boss suddenly demands you to do something you don't want to do.

[@khoasterful]

I've retired early, going past a year now... I liked the way you explain things in this video. Along the same lines, here are my perspectives to provide additional clarity. - Once you hit your [FI] numbers, one can "retire". Retire does not mean stop working, but now you can do what you enjoy. The goal is no longer working for the money, but have money work for you. - Instead of "retiring to", I "re-purposed" myself on doing what I like to do. Part of that re-purpose is re-train oneself from a super saver to a spender. - Have an annual budget. If you come close at the end of the year to your budget, don't worry about detailing little things. If you constantly worry about small items, you'll miss the bigger picture of life enjoyment. - Money is essentially a tool. Don't be a slave to a tool, but use it as a tool. Happy FI everyone!

[@dlg5485]

This risk of feeling "empty" when you reach a goal isn't unique to FIRE. It's quite literally can happen with any goal in life. The solution is the same regardless of the goal which is to maintain mindfulness about what you're doing and why. Call it a 'life plan' or whatever you wish, but it's an all-encompassing document that you revisit on a regular basis and constantly adjust based on changing priorities and values. Again, this risk isn't unique to those pursuing FIRE. The difference if that FIRE-ers simply haven't had as much time as a traditional retirees to ponder and refine their life/retirement plan. Ongoing mindfulness and self-reflection helps you to mentally prepare for any stage of life.

[@fialee8ca132]

Spending $20 (or $200) for breakfast isn't going to make you any happier either. It's just a waste of money unless it's a special occasion or a special dish that creates a lasting memory. Let's look at your life vs time... if you make $25 hr, is a $20 breakfast worth 1+hours of your life? Most people don't have $4m in net worth.0

[@alexa9771]

"Most people don't have $4m in net worth" these words are much more valuable than the whole bs video

[@davidfolts5893]

Money is a tool; we are the tool users. A lot in life has nothing to do with tool usage.Thanks for another great video, James!

[@lmalit]

😊😊😊😊😊😊😊

[@anthonypaton8029]

Holy cow, this is on point- especially at 2:20. You train yourself to live below your means and start to enjoy the penny pinching life. It becomes a permanent part of your DNA to sweat the idea of spending the extra $0.75 for a cheeseburger vs hamburger. Then, when you FIRE- you have the pile of cash and you're supposed to instantly give up the way you've been living for decades?

[@ordinaryhuman5645]

If it's in your DNA, you're going to have to learn to deal with it eventually regardless of whether FIRE is a priority. For some of us, there was no training required. FIRE via sound investing was just the most sensible way to deal with the inevitable surplus of cash our lifestyle would generate. The book "Die with Zero" was a good read to help think about it differently. I'm borderline FIRE (FI part seems fine, though I'm still working part time) and I'm starting to loosen up with the spending a bit. The biggest thing that has helped so far is realizing that my odds of dying with a pile of unused money is greater than my odds of dying broke... so I should be working harder to figure out how to work through that pile of money. But silly things like $15 fast food combo meals will not be a part of that (which is what I experienced when grabbing fast food for the first time in years for a request from a family member).

[@OnCashFlow]

3:49 The idea of having a life plan is so important, and one that I did not have when I became FI. I have gotten a lot better, and I have learned to enjoy spending a lot more compared to when I was in my accumulation phase. However, I'm still very frugal and minimalist, so I still do dislike wasting money unnecessarily. However, now I have a large (for me) entertainment and travel budget that is mine to spend and not worry about.

[@Andrew-zh6jl]

I really like and appreciate the holistic approach you, and your firm, take to retirement planning. Retirement entails more than just having enough money. Thank you.

[@J-2024-v8i]

Great video James! My only suggestion would have been to not title it in relation to the FIRE movement, as this advice relates to everyone. I am recently retired and indeed it is difficult to become a spender after so many years of being a saver. The concept of charting your goals first and then translate them into the money needed as a tool is indeed the way it should be, rather than aiming for a number to later see how to use it, as “later” never truly comes!

[@okrajoe]

All things in moderation.

[@jameswitte5676]

Including moderation……Oscar Wilde

[@bigprice7085]

Now with the recent economy, To get Financial FREEDOM you have to be making money while you're asleep.

[@pensacola321]

Twenty dollars for breakfast? 😵‍💫😵‍💫🤑 Seriously, excellent content, James.

[@glenvisitacion5932]

One of the best videos I’ve seen. I am very busy hustling, saving as much money as I can. And when I have expenses out of my budget, I got affected. I don’t want to spend money which is not on my budget! This video made me reslized the real reason why I want to retire early. Thank you

[@cdd4530]

Hi James, great video as always. Thanks for sharing your knowledge with the masses. Has helped me with my retirement planning immensely.

[@NipItInTheBud100]

Damn….James got a couple tickets to the gun show!

[@jtjacobs6003]

Nah. I can tell you, I'm not empty as I approach my goal and my bank account isn't empty either. FIRE is worth it.

[@alansach8437]

The biggest mistake is mistaking unemployment with retirement.

[@Pieter2360]

Very true!

[@toddlevin]

The joke to FIRE is it assumes 1.) Spend some time getting some sort of education; 2.) Work and save; 3.) Retire early. But - I wanted to move directly from step #1 to step #3 and skip step #2 altogether. This meant that whatever I chose for 'work' had to be something I enjoyed so much, that I didn't consider it 'work' as it is defined here. I'm 62, and by other people's metric have 'worked' every day, but by my own metric I've done exactly what I've wanted to do every day, when I wanted to do it, how I wanted to do it, with the people I wanted to do it with (all while saving for the future). So in my own mind, I went to school, and then retired the day I left university at 30 years old, and I've been retired for 32 years since. Work, such as other seem to define it here, has never been a part of my life at all.

[@beatricerights]

What do you do?

[@DavidDLee]

I don't think there's much difference between FIRE and retiring at 65 and finding out you lost your meaning in life. At the same time, for many but not everyone, going to work everyday is a huge chore and annoyance that is not part of your life's plan.

[@fabianstoll]

You can't buy friends. Do we really need the expensive golf club membership? The problem I see with your approach is, that you think more money spent gives you more happiness. Furthermore, with savings and a surplus, the financial life gets easier as we have space for unexpected events. We can still spend money for things we really need, but in a considered way.

[@MrGoodaches]

Some good ideas endure. Your “interactive example” transported me back to late 1980s and the corporate mandated Franklin Planner seminar I attended. It’s the eternal premise, create a budget (time or money) to prioritize whatever you believe will enable your goals.

[@markt4605]

Excellent points! I am not a Fire participant however even those who retire at 62 need to chart out these numbers. (59 myself and am shooting to retire comfortably at 62.)

[@HonestOne]

OMG I love him. Knowing what enough is everything.

[@DanKohan]

I agree that it's important to balance saving money for the future with enjoying life today. It's easy to get too focused on numbers and forget what really makes us happy. I've seen people I know go through the same thing, and it shows that being happy doesn't come from having a certain amount of money. Thanks for sharing this important idea, James.

[@ArthurDentZaphodBeeb]

I just roll my eyes at the extreme FIRE groupies. Just so tiresome.

[@ordinaryhuman5645]

Working for four decades seems like it'd be even more tiresome though.

[@KH-dg8or]

I wish Dave Ramsey can LEARN this from you. He thinks that he knows everything just because he has money and successful.

[@bradk7653]

I am not saying Dave R is perfect, but he has helped millions of people get out of debt, and in most instances this is the first step to financial independence.

[@teatree6228]

1-2 million at retirement is not enough for retirement

[@youngtimer964]

Easily enough for many, including myself.

[@sermanojedagil2729]

In Manhattan

[@Sc9cvsd]

Anyone who says FIRE is drastically cutting expenses to retire early is wrong and delusional. You can't retire early on an average (say $50k salary) even if you save 80-90% which is nearly impossible anyway. The only way to fire is to have a massive salary then invest a large portion of it

[@fabianstoll]

Why not? Assuming you only spend 10k a year you would have 1897594.22 after 20 years (8% return). For the next 60 years you could take out 12,246.15 a month. In reality, less, because the stock market is volatile. As you only need 10k to sustain your lifestyle, the money is a lot more than needed.

[@autobotdiva9268]

keep working then

[@bradk7653]

Not true, it is all based on what your expenses are and what they will be when you retire. If you are earning 50k but living on 30k that provides the ability to invest 20k per year. Doing this for 20 years will result in nearly 1 million dollars. If in your retirement you expect your spending to remain approximately the same (adjusted for inflation) you will be able to pull a comparable amount from your investments without draining your investment, and when you turn 67 Social Security will cover approximately half of your living expenses.