The Meaning of Work — A Love Song

The Meaning of Work, Verse #1 — It is Through Work that We “Find Ourselves.”

The Meaning of Work
You don’t learn about yourself or about life by reading books or by sitting in your room thinking big thoughts. You learn through interaction with others and by directing yourself to the completion of difficult tasks. You learn about both yourself and about life by engaging in work.

A life without work would be like one of those movies in which people stand around talking but in which there is no action bringing their ideas to a test. Work is the thing that gives the movie of life its plot.

The Meaning of Work, Verse #2 — Work is a Prayer.

I make an effort to pray. I often forget.

You can’t forget to work, though. There’s always work to be done. So it comforts me to know that work is a form of prayer.

Prayer doesn’t require words (I do think it is a good idea to put prayer into words from time to time, however). We talk to God and adore God and seek redemption through the work we do. Sometimes those who aren’t good at articulating their thoughts give voice to beautiful prayers through the work they do.

The Meaning of Work, Verse #3 — It is Through Work that We Demonstrate Our Love for Others.

My wife is not the “mushy junk” kind (I am, not entirely, but to a point). One of the things that causes friction between us from time to time is my desire that she express her love for me with words. She would rather do it by noticing that my coffee cup is empty and by refilling it before I even discover the need. She takes my desire to hear the words as a sign that I don’t appreciate her filling my coffee cup.

I do appreciate it. I want to hear the words too. I want it all!

I’ve come over time to appreciate her point, however. Actions speak louder than words. The coffee-cup thing is real in a way in which soft words are not. Work is the hard stuff, not the puffballs.

I like using words to express love and other stuff too. I think a good case can be made, though, that it is through work that we most effectively express love. Would you rather enjoy a love expressed only through words or a love expressed only through work?

The Meaning of Work, Verse #4 — Feeling Relief from Hard Work Is One of Life’s Great Joys.

Fulfilling Work
My wife and I once ran a marathon together. My fondest memory of the experience is the feeling that I had when sitting down to dinner with her after we finished the marathon and had showers and were able to sit down and relax. That was the best prime rib I ever tasted.

Everything tastes better and sounds better and looks better and feels better at the end of a hard day’s work. What would life be like without hard work? It would be a whole bunch less exciting and a whole bunch less fun. Life without work would be an empty promise.

The Meaning of Work, Verse #5 — The Feeling that Comes with the Completion of Work Well-Performed Is One of Life’s Great Satisfactions.

Work is better than sex.

I believe that.

Sex is overrated, in my view. It has its moments. They are fleeting. Work gives a good feeling that stays around.

The good feeling that comes with good sex is more intense. That’s why so many go on and on about it. But intensity is not everything. The good feelings that comes from good work go deeper and lasts longer.

If you put a gun to my head and forced me to choose between never again experiencing good sex or never again experiencing good work, I’d leave sex behind in a New York minute. Good sex is one of those great Beatles singles with outstanding songs on both the front side and the flip. Good work is one of those great Beatles albums, like Revolver or Yesterday and Today.

The Meaning of Work, Verse #6 — Work is the Battleground on Which Most Other Big Life Questions are Decided.

Bob Dylan has a song (“Workingman’s Blues #2”) on the Modern Times album in which he discusses (or so it seems to me) his failed first marriage and the role that his desire to advance his career played in bringing about that failure:

Now they worry and they hurry and they fuss and they fret.They waste your nights and days.All of them I will forget.You I’ll remember always.

After Dylan married, he spent several years off the road and at home with his wife and with the children that quickly came along. But his call to do the work that he does better than anyone else eventually brought a return to the touring and the affairs and the drink and the drugs. He (and his wife even more so) paid a price for his work ethic.

You can say he was wrong to put his work above his family life. I won’t say different. But I would add that he would be a different person without the work ethic. It comes as a package. Dylan is a person who loves writing songs and who loved a particular woman and who in time came to find it a problem to love both the writing of the songs and the particular woman as much as he wanted to.

We all face that sort of conflict from time to time. Work is the space in our lives where things get decided. The work we do is to a large extent what we are. So we need to choose our work carefully.

The Meaning of Work, Verse #7 — Work is What Makes Money Make Sense.

Meaning of Death
I often note that “death is real.” Without death, none of the stuff discussed on the Retire Early boards would matter.

A world without death is a world without time, a world in which the concepts of “early” and “late” lack significance. In a world without death, you could fail to save for the first thousand years of your life, and it wouldn’t matter much. You would still have many hundreds of millions of years ahead of you in which to enjoy the fruits of financial freedom once you got down to business.

Death gives life its spice. Death makes life matter.

Work does that for money.

Money is the stuff we trade our time for. Another way of saying it is that money is the stuff we trade our life for (since our lives are comprised of time). The reason why money questions matter is that money questions are “how will I spend my life?” questions.

In the end, you spend your life involved in some sort of work or another. Those who are financially free may or may not work for pay. But surely they work — they direct their life energies to the completion of meaningful tasks.

So the question that we are left to decide is — What sort of work is it that we will do? How much money you save determines what sorts of options will be open to you when coming up with an answer to that one.

Money management is life management. Work matters because work is the thing we turn to to fill up the hours of our days. Work is what it is all about, in the final analysis.

The Meaning of Work, Verse #8 — Work is a Way of Measuring Progress.

Are you a success? Have you “made it?”

The best way to figure that one out is to take a look at what sort of work you are doing. If you get up in the morning, spend a bunch of time doing stuff you enjoy, and then head off to bed again, you are a success by any reasonable person’s definition of the word. If you sit around eating bonbons and watching television sitcom reruns, you are a flop even if you have $10 million in the bank. It’s possible to have $10 million in the bank and still be a loser at the game of life, is it not?

Winners do work that counts. In their own eyes. If you think that delivering the mail is important work, and you deliver mail and feel good about yourself for doing that important work well, you are a winner. If you earn a seven-figure salary and hate yourself for the waste that you have made of your life, you are a loser. No?

The Meaning of Work, Verse #9 — Work is a Sacrifice.

Do the Work You Love

All lasting happiness comes from sacrifice. Ask a parent. Ask a teenager running laps to make the team. Ask a volunteer manning a help line at three in the morning.

Work is a sacrifice. That’s why we resist it and that’s why it feels good to give in to the call to engage in it.

The Meaning of Work, Verse #10 — Work is the Great Equalizer.

John Lennon asked that we “imagine all the people sharing all the world.” My understanding is that there are a few who indeed imagined that scenario and that the idea didn’t work out so hot in the implementation stage. Too many dead bodies piled up in mounds.

Still, we long for equality. We are not created equal in terms of skills. But there is some sort of sense of justice operating deep within us that cries out for equality.

We are equal in our need to work. We all need to work. Even the rich need something to do to occupy their time. J.R. Ewing worked, right? Bill Gates works. Martha Stewart works. All of those guys and gals.

That means that they struggle with the frustrations of work. And that they experience the satisfactions of work. And that they feel a need at times to move on to new sorts of work. Work is the great equalizer. The joys and sorrows of work are something we all have in common.

I don’t know what problem kept Bill Gates from falling quickly to sleep last night. There’s a good chance that it was a problem not all that different from the one that I was thinking over when my head first hit the pillow. Gates is a whole bunch richer than me. He ain’t so rich that he doesn’t need to work, however. The fact that there are a whole bunch of human needs other than the basic one of needing to cover the electric bill is what makes it possible for someone to realistically view Gates and me as being in some important respects “equal.”

The Meaning of Work, Verse #11 — Work Shapes Our Personalities.

Alienated Workers
Those who work are often under fire. That shapes your personality.

Those who work often feel like breaking out into song. That shapes your personality.

Those who work often can’t hold back from crying. That shapes your personality.

Those who work often can’t help seeing the humor in things. That shapes your personality.

The Meaning of Work, Verse #12 — Work Makes Us Rich.

You can’t become an effective saver without earning money. You earn money by going to work. All savers start out as workers.

You can’t become an effective investor without saving. So investors too start out as workers.

Getting a job is the first step down the path to financial freedom. Work is what makes it happen.

Freedom is not an escape from work. Someone who says that he loves financial freedom but that he does not care for work is confused. Freedom is the natural consequence of work.

I’ve got a new suit and I’ve got a new wife.
I could live on rice and beans.
Some people have never worked a day in their life.
They don’t know what work even means.

— “Workingman’s Blues”, by Bob Dylan


Getting Fired — Something Dies and Something Is Born

Getting fired means that your record will never again be clean.

You got fired, you’re a loser. That’s what it means.

That’s not actually so, of course. But you’re worried that people will think that, aren’t you? For good reason.

The reality is that few employees get fired. The reality is that many employees who should get fired do not get fired. What does that say about the ones who do? The ones who get the ax must really be something else, eh?

AUDIO: Rob’s Financial Freedom Insight #3 — Getting Fired Hurts, and I Don’t Mean Just Financially

They used to warn us in grade school that if we looked at Suzie’s paper and got caught it would go on our permanent record. It wasn’t true. Suzy has forgotten and forgiven and the teacher has forgotten and forgiven. Losing a job is something that is not forgotten and forgiven. Future employers can ask about any job you held and how it turned out. There’s no way to make the declaration “I got fired” sound good.

Getting fired means that you need to sober up.

Dunce Getting Fired
I don’t know why you got fired. Maybe you deserved it. Maybe you didn’t. Either way you need to sober up.

Let’s say your deserved it. You did your job poorly. You need to take a look within and figure out why you did your job poorly. Getting a new job the same as the old job is only going to prolong the agony. Please take the act of getting fired seriously enough to let it prompt you into figuring out what you are doing wrong and to taking steps to change it.

Let’s say you didn’t deserve it. In that case the changes you need to make are not of the same nature. You still need to make changes, however. It could be that you got fired because your boss was a tyrant.  It could be that you got fired because your boss wanted someone else in the job. It could be that you got fired because you did your job so well that you inspired jealousy among some backbiting co-workers. Whatever happened, you need to learn from it and come back at this with a new and more sober attitude, one that will protect you from the possibility of having this sort of thing happen to you again.

Getting fired means that you need to be alone for awhile.

We all like to be social. We like to spend time with family and with friends and with neighbors and with co-workers. It’s a comfort. Humans are meant to be with humans.

Except when they aren’t.

You die alone.

If you believe in God, you need to prepare for the day when you stand before your Maker. If you don’t, you need to prepare for the day when you stand before your own judgment, the day when you look back and determine whether your life energy was directed to a good purpose or not. Being popular won’t ease the pain you will feel on that day if the verdict is that you didn’t accomplish what you set out to accomplish (or what you should have set out to accomplish).

One of the things that hurts about getting fired is that, when all of your friends are rushing off to work next Monday, no one is going to be pressing you to rush off anywhere. That’s not being freed of a burden. That’s being freed of a sense of purpose. The rebuilding of a sense of purpose is not a group activity. You need to go off by yourself a bit.

You’ll have lots of opportunities from about nine in the morning until about five in the evening of every Monday through Friday from now until a good bit of time from now. Watching television is not being alone in the way we are talking about here. Reading is not being alone in the way we are talking about here. Shopping is not being alone in the way we are talking about here.

Door Opens to Future Losing Your Job

You don’t want to get over the hurt right away. First, you want to feel the hurt. After you feel it and learn what you need to learn from it, then you can work to get to the other side of the hurt.

Getting fired means that you need to give yourself a good long talking-to.

The human need to be with others is a strong one. You are going to feel a desire to do just about anything or to say just about anything to relieve your mind of the pain of thinking of yourself as an outcast.

You could blame yourself. You could say: “I’m such a screw-up, no wonder I was fired.” You could say: “I was obviously never meant for that sort of work, who did I think I was fooling?” You could say: “I needed a little break, this is a good thing.” You could say: “I never liked that job from the start.”

Saying one of those things is fine. If it’s true. Not if it’s not.

If you were a true screw-up, you wouldn’t feel bad. If you tell me you feel bad, I question whether you are a true and complete screw-up.

If you were never meant for that sort of work, why were you there? It’s not easy to get any job. You had that one for a time. It wasn’t just you who thought you could handle it. If you really were never meant for it, at least one other messed up. It’s probably a good number of others.

You didn’t quit, you were fired. This didn’t happen because you needed a break.

I can buy it that you never loved the job from the start. I have a hard time accepting that there weren’t some good days. That’s part of the story. Don’t say you hated it all unless you really and truly hated it all.

Getting fired means that you need to talk about shameful things.

The hardest part of getting fired is not the money shortfall it creates. The hardest part is the emotional pain experienced. There’s someone out there who says you are not good enough, that you are second-rate. In most cases, it’s a bunch of someones.

Part of the job of developing a new and better Life Plan is coming to terms with this failure in the execution of the old one. You need to talk about it. It’s not going to be easy.

Look at the paragraph immediately above. It contains the word “failure.” We’re talking about you here. You are a failure.


Not in a complete sense. There are things that didn’t work. There are all sorts of possibilities, I don’t know the details. I’m worried that you will do all that you can to cover this up, not to talk about your failure. I’ve been there. I think that’s the wrong path to take.

You don’t want to be talking about The Firing all the time. You don’t want to become angry at the world and its various injustices. You don’t want to kick off your next job interview explaining how your last boss was the worst boss ever. That surely is not the way. But in order to avoid falling into the trap of obsessing about getting fired, you need to come to terms with getting fired. That means talking about it to close friends, at least a little bit, at least at first, at least on occasion.

There is shame involved. It could be that you did every single thing right. Some people are not going to believe you. Some people have reason not to believe you, they are afraid to let in that the workplace world can be so unjust a world as to permit someone who did everything right to get fired.

Sunrise Find a Job

Don’t obsess. Don’t overdo it. Don’t try to sweep it under the rug. You’re a person who got fired. You’’re a lot of other things too. If you fail ever to refer to that one thing you are you draw unwarranted attention to it, you make it special. You don’t want it to be special, You want to turn it into just one of those things that happened to you during your journey through the Valley of Tears.

Eventually, you want to be able to laugh about it. Eventually, you want to be able to say “it’s the best thing that ever happened to me” and mean it. You don’t get there by covering up. You get there by being straight about what you did wrong and by being straight about what others did wrong, and by saying what needs to be said whether it involves discussion of shameful things or not.

By talking more in the beginning, you end up talking less over time. So long as it’s the right kind of talk. Not anger talk. Not self-blame talk. Not cover-up talk. Straight talk.  All of that other stuff will be in the mix for a time. But aim for straight talk. If that means including shame in the story,  then that means including shame in the story.

Getting fired means coming up with a new Life Plan.

Losing a job is a big thing. Losing a job means coming up with a new Life Plan (most of us don’t write down our Life Plan, but we all carry around a Life Plan in our head).

This is what makes getting fired an opportunity for self-growth. I know that you’ve heard stories about people who say that getting fired was the best thing that ever happened to them. Those stories are true. They are hard to accept when you are the one who just experienced getting fired, however. You didn’t ask to get fired. It is something that was done to you against your will, like your lover cheating on you. How could this possibly turn into something good?

There’s an honesty in your lover cheating on you. It’s the most dishonest act in the world on its face. But it sends an honest message that this individual was not able or willing to communicate to you in any other way. The message is “I don’t care about you much.”

It’s not a warm message. It’s an important message for you to hear. So it is with getting fired. Getting fired sends you a message you need to hear. Hear that message clearly for the first time and all sorts of doors that have long been closed will open to you.

Maybe you really have been a bit of a screw-up. Why? Figure that out and make the necessary fix and you will pick up speed rapidly. It would have been nice to have done it the other way. The reality is that there are lots of us who do it only when we are forced to do it.

Maybe you were in some senses made for that sort of work and in other senses not made for that sort of work. Maybe the job you had was almost perfect for you, close enough to fool you into taking it and close enough to fool some employer into hiring you for it. But the fit was not perfect and the imperfections became more and more noticeable as time passed and as your desire to find a perfect fit grew stronger and stronger. Now you must take the pieces that work with you to the next place while discarding the forced fits. It’s scary because it’s important.

Maybe you really did need a bit of a break. You need to come to a clear understanding of why you needed a break. If you tell yourself that it’s just because you can’t hack it, this could doom you. Maybe you can’t hack a tyrant boss. Maybe there are some tasks that you can hack and some that you cannot, and the old job contained a few too few of the former and a few too many of the latter. Few job fits are perfect. We all make compromises. The things that you can afford to compromise on change over time. Review your decisions as to what sorts of things can be compromised. Come up with a better fit for who you are today.

Maybe you really never did like the job much from the first day. That means that your old Life Plan was a poorly constructed one. That puts you in a deeper hole because it means that your experience is in a field that is farther from the ideal one than it would have been had your old Life Plan been a good one. Still, you can make up for lost time. You are far from the only person who has spent years of his or her life pursuing a poorly constructed Life Plan. Get it right, and you can make more progress in one year than you have been able to make in five years in times passed.

Getting fired means lots of fear and lots of growth.

Getting fired means that you are going to need to ring some changes, whether you like the idea or not.

Getting fired does not always turn out to be a good thing. Not by a long shot. Getting fired can be a big setback in lots of different ways.

In all cases, however, getting fired means that you are going to be heading off on an adventure. You are going to be exploring new kinds of jobs. You are going to be meeting new people. You might be developing new skills.

Finding sa Job After Getting Fired

It’s scary. It’s scary in a financial sense. It’s scary in an emotional sense.

Growth almost always comes with fear. Fear often leads to growth. More than anything else, getting fired means feeling a great deal of uncertainty about a great number of things. Uncertainty is scary. Uncertainty can lead to growth.

If you don’t duck the hard questions, you will end up with a better Life Plan. That may not make up for the losses you suffer, but it will be something good. The sooner you have a Life Plan that you have confidence in, the sooner the feelings of shame and anger and self-doubt will fade, the sooner you will be able to sell yourself to employers in an effective way.

Getting fired turns you into a different person. There’s a good chance that you will always look back to the day you were fired as a turning point. You probably liked the old person. So this does not come as good news. The reality is that you don’t have any choice but to get about the business of swimming to the other side of the river. You’ve been thrown from the boat.

Look forward. Get to the business of building the new Life Plan. Get excited about it. The sooner you can get over the shock and accept the losses you have suffered, the sooner you can begin seeing what there is to enjoy in the life you will build for yourself on the other side of the river.

I was fired from a job in October 1991. That job loss put me on the path that a good number of years later led me here.

Unwritten Rules of Wage Slavery

Wage Slavery Rule #1 — Vacations Are Suspect.

We earn our vacations. Some of us, though, are made to feel that we need to ask “pretty please?” before we will be permitted to take them.

Wage Slavery

Not all employers are like that, of course. Some are generous with vacation time. I’ve heard of employers, though, who make their workers jump through hoops before they can take their vacations. It’s of course reasonable that the employer insure that vacations are scheduled so that the work that needs to be done really does get done. In some cases, taking full vacations is frowned upon. In some cases, workers worry that taking a full vacation will cause them to be viewed as not fully committed to their jobs.

It’s become more and more common for workers to be called on vacation to help out with work matters. Again, this is reasonable in some circumstances. In a properly organized office, it should be a rare event for a worker to be called while on vacation. This sort of thing happens too often today. The entire point of a vacation is for the worker to be freed of worrying about workplace matters for a time.

Wage Slavery Rule #2 — Personal Stuff is Viewed as Yucky

It’s not hard to understand why people who work together sometimes fall in love with each other, is it? We spend a lot of time at the office. We get to kid around with others, to struggle to meet tough deadlines with others, to see how others hold up under pressure. We develop feelings for these others. Sometimes, we become friends. Sometimes, we become lovers.

Employers need to discourage this sort of thing in cases in which it could cause favoritism in the handing out of assignments or in the administration of rules. Too often the way of dealing with potential problems is to forbid all romantic relationships. That goes too far, in my view. It takes away a piece of our humanity for us to need to leave the romantic part of our personality at home, especially if we are in one of those jobs that require far more than 40 hours of work effort each week.

It’s not just romantic relationships that are viewed as problematic. Those seeking to achieve success in a corporate environment need to be viewed as fitting the corporate “mold.” It might be worth it financially to do what it takes to fit the mold. But there’s a price that is paid in terms of lost opportunities to develop your personality if you play a role for eight or ten hours per day.

Wage Slavery Rule #3 — Control is Always an Issue.

Sally works for a newsletter publisher. Sam does the same sort of work on a freelance basis. Who is paid more? It’s almost certainly Sally.

Nine to Five

That shouldn’t be. There are all sorts of advantages to the employer in having work completed on a freelance basis. The biggest advantage is that he pays only for work needed and doesn’t have to pay for make-work projects assigned at times when there is not enough real work to keep a staff employee busy.

But freelancers are almost always paid less. Why? Part of it is that staff employees are more dependable. The employer knows that the staff employee is going to be there when needed and the employer knows what sort of job is going to be done by the staff employee. Those are legitimate reasons for the pay discrepancy. Part of the discrepancy, though, can be attributed to the fact that freelancers are just so darn free with their lances. Corporate employers like to be able to exercise control over their employees, and are willing to pay extra to be able to do it.

There’s nothing wrong with taking the deal. There’s nothing wrong with electing to get paid more in return for letting the employer call the tune on all sorts of matters. There’s a downside to it, however. Let the employer call the tune and you might not experience as much growth as your would if you were calling the tune. You might stagnate. It’s important to understand that giving up control over what sort of assignments you will work on (and over all sorts of other things) can hurt you down the line.

Wage Slavery Rule #4 — You Have to Buy at the Company Store.

Many companies frown on employees not using the firm’s product or the products of clients of the firm. Or apply subtle pressure on employees to support political leaders friendly with the industry, or company causes or charities. Or to go on company adventure weekends or buy the company stock and root for the home team. For the most part, this is no big deal. But the underlying thought–that when you sell your time you sell a bit of your freedom to make decisions about issues in your personal life as well — is unsettling.

I don’t expect the company I work for to share my tastes in food or music — I view the relationship as a business transaction, nothing more, nothing less. But prospective employees are well advised not to press the point over these “little things” when interviewing a new employer. Generally, pay is negotiable and not much else. So it’s almost always the employee who makes adjustments to fit the company profile, and rarely the other way around.

Many people have well-compensated and fulfilling jobs in the year 2007 in the United States. Exploitation of the type experienced in coal mines is a thing of the past for many of us, and we should be grateful for it. But the human spirit will always look for more — more significance, more accomplishment, more independence. One of the things that aspiring early retirees are seeking to obtain with the money they spend at The Freedom Store is a greater ability to call the shots about what cola they drink and what clothes they wear and what they do with their weekends.

Wage Slavery Rule #5 — Big Brother Is Watching.

Debt Is a Trap

When we have someone come in to clean our house or to repair something, I always offer them a soda or ask them if they need to make a telephone call or whatever. These people are workers, yes. They are human beings first. It’s very important that that always be kept in mind.

Most employers keep that in mind. Most of my employers were great in this regard; I have had lots of good work experiences. I have heard about things and seen things that are not so great, however. It pains me to see people tied to their cell phones. It’s not that it is a bad idea for employers to use cell phones to communicate with their employees. It’s that these things can be abused. The “checking up” can get to a point where it becomes degrading.

When I was a reporter, there were things that I had to do to get the job done well that my employer did not necessarily know about. Say that I was sent to cover a press conference. Maybe I would spend time talking to another reporter who would help me out somewhere down the line. Maybe I would spend time talking to a congressional aide even though there was no story that I was working on at the time that required such a conversation. If my editor had been using a cell phone to check up every three minutes on what I was doing, I wonder if I would have been able to make those contacts.

There are devices today that employers use to monitor their employees’ computer keystrokes. That’s sick. The employer has a right to determine whether the work assigned is being done properly. He does not have a right to be so invasive into the employee’s life that the employee feels that he is being treated like a machine rather than a person. We have privacy rights. We have personal space rights. We have breathing rights.

One problem is that the work world has become increasingly corporate over time. Sometimes it’s not the fault of the guy using the cell phone or the keystroke monitoring software. Sometimes that guy is being monitored too, and he’s just doing what he has to do to keep his job. The more corporate the world becomes, the less human it is. It’s not all bad news. We earn more today than we did when things were less corporate. But there has been a downside to the change.

Wage Slavery Rule #6 — There’s No Place Like Work.

Get Smart
We all need work to do. Work is one of the great joys of life.

We all also need a life outside of work. It’s not healthy to only work.

Many people today feel pressures to move up the corporate ladder so that they won’t become one of those people having their computer keystrokes monitored. Some feel that the way to keep moving up is to put just about all of their energies into the job. More companies encourage this sort of thing than was the case in an earlier day.

Some aspiring early retirees have come to hate work because of their feeling that their jobs do not leave them enough free time to have lives. I see that as an overreaction. I did want to escape some of the craziness of the modern-day corporate workplace. I did not want to give up the joy of work to do it, however. My view is that extremes of one kind lead to extremes of another kind, and that it is the healthy middle-ground that is the real prize.

Work is fun and fulfilling when taken in the right doses. Too much is bad and too little is bad too. I see the quest for early retirement as a quest for balance.

Why Retirements Fail

Reason #1 Why Retirements Fail — The “Die Broke!” Concept Is Dangerous

It is an author’s dream to come up with a book title that perfectly sums up a new idea that has taken hold of the public imagination. The book Die Broke! has such a title.

Die Broke

The “Die Broke!” concept is a radical one. The idea is that you should not aim to have lots of wealth to pass along to your children or to charities when you die but to use up every last bit of your accumulated wealth during your own lifetime, except perhaps for a few dollars to cover funeral expenses. I don’t like. This idea is going to cause a lot of busted retirements.

”Prudence” used to be the watchword in retirement planning. Now it’s “cleverness.” Retirees who worry about the next generation have humans who they don’t want to let down in mind when they do their planning. Retirees who don’t worry about the next generation or about passing a legacy along to a charity see the project as being a mathematical puzzle to solve — how to come up with the bucks to cover spending for x number of years in as little time as possible.

It can work. It also can fail. People who see retirement planning as being primarily the solving of a mathematical puzzle (it is of course indeed partly that) are more likely to make mistakes than are those who see it as a means of seeing that they live on (either through their children or through their favorite causes) after they take their leave of the Valley of Tears.

When your retirement plan includes something for the next generation, a near miss means that the next generation gets a little less than you anticipated. When your retirement plan aims at preparing you to die broke, a near miss means that you go hungry in your later years.

Maybe the kids will take you in.

Reason #2 Why Retirements Fail — Bad Calculators

There are articles at the “Risk Evaluator” section of the site explaining why most media accounts of how much you can safely withdraw from your stock portfolio in retirement are wildly off the mark. I won’t repeat what is said in those articles here other than to caution you not to trust any retirement study or calculator related to stock investing that does not clearly show the effect of changes in valuations on long-term returns.

Knowing what I now know about the conventional methodology safe-withdrawal-rate studies and calculators, I am wary of all retirement studies and calculators. There’s never just one cockroach, you know?

It’s not that mistakes were made; I see that as not being at all a biggie — it’s just one of those things. What alarms me is the lack of reaction in the conventional media to our findings that the Old School studies are analytically invalid. There seems to be a widespread feeling that it would be rude to ask the authors of the Old School studies and calculators to make the necessary corrections. Doing something about the severe life setbacks that will likely be suffered by the users of the discredited studies and calculators doesn’t seem to be a high-priority action item for too many.

What does that say about the integrity of the personal finance advice biz? Not something at all encouraging, in my assessment. I can’t speak about other sorts of retirement studies and calculators. It is only the safe-withdrawal-rate studies and calculators that I have studied in depth. Knowing what I know from that experience, I would be cautious about putting much confidence in the guidance provided by any retirement study or calculator. Even if there are terrible problems with the tool you are using, and even if those problems are well known in the industry, there’s a good chance that no one will have bothered to do anything to bring the problems to your attention or to have the problem corrected.

Wy Retirements Fail

You need to use calculators when planning a retirement. The project lends itself to use of them because it requires planning for an unknown future. The trick is to make sure that you understand the methodology being used and that you think through carefully on your own whether that methodology makes sense for use in serving the purposes to which it is being put.

It is my belief that analytically invalid retirement calculators are going to cause millions of failed retirements in days to come. My personal take is that this is a bad thing.

Reason #3 Why Retirements Fail — Fear of Planning

People hate to plan. This comes up as a problem in every area of financial planning. People would save more if they prepared budgets. People would have more confidence in their investment strategies if they wrote them down. People would plan more effectively for retirement if they didn’t rush through the planning in hopes of moving on to activities they view with more favor, such as getting their teeth drilled.

I hope that we will be able to do some things to tackle this problem here in the Financial Freedom Community in days to come. Financial planning does not need to be a painful experience. We need to find ways to make it fun. I think that the key lies in getting people to think of financial planning as Life Planning. People enjoy talking about themselves and about their hopes for the future. We need to develop tools to make people see that financial planning is nothing more than drawing up a map for the journey from Point A to Point B.

Well-planned retirements don’t often fail. It makes sense to devote a good bit of energy to planning your retirement. The time you spend doing this minimizes the worry you will feel over the efficacy of your retirement plan for many years to come. It is time well spent.

Reason #4 Why Retirements Fail — Bad Timing

There are two comments in the article entitled “Community Comments on Using Stock Data to Diminish Retirement Risks” (see the “Risk Evaluator” tab at the left of this page) that made a big impression on me. Mikey says: “Some safe-withrawal-rate discussions are being held by people who are already in the belly of the whale but just don’t know it yet.” BenSolar says: “I posted a poll over at the Motley Fool board that was designed to gauge how many people started retirement during the record valuations of the 2000 bubble…. A surprisingly high percentage of respondents retired during that time.”

Some people are just unlucky. There has never been a worse time in the history of the United States to begin a retirement than January 2000. Stock valuations were so absurdly high that many aspiring retirees were able to fool themselves into thinking that they were financially ready to retire at a time when a clear-headed assessment of the realities showed that they were not. And stocks had been doing so well for so long that it is hard not to feel a good bit of sympathy for the retirees who were taken in by the stocks-for-the-long-run mumbo jumbo of the day.

Busted Retirements
We should do what we can to warn those whose retirements are on shaky footing. We have had limited success so far. It’s possible that we may see a greater openness to hearing a realistic message after the next big drop in stock prices and that there still will be time at that point for some of those whose retirements are in danger to take effective steps to move to higher ground. Let’s all hope that the human suffering that follows from today’s widespread indifference to the plight of the bubble retirees brings about an awakening to the importance of realistic retirement planning.

Reason #5 Why Retirements Fail — People Kid Themselves

The story that you hear a lot today from Baby Boomers who have not saved enough to finance a secure retirement is that they will work past age 65. I have no objection to the concept. People are healthier today and there is no good reason why people who enjoy work should not remain engaged in it well past age 65. I worry, though, that in many cases this solution to the retirement planning problem is being put forward as just another rationalization for not getting serious about saving.

People kid themselves about this stuff. You might intuitively think that it would be hard to do because retirement is about getting the numbers to work and numbers are cold and hard and objective things — how can you kid yourself about whether the numbers work out or not? It can be done. I’ve seen it done thousands of times. It can be done.

I’ve come over time to the counter-intuitive belief that it’s easier for a human to kid himself about a numbers-related topic than it is for him to kid himself about a non-numbers-related topic. The hard part of kidding yourself is convincing yourself of something that is not so. Numbers make the convincing part of the self-deception project an easy task because they are objective and thus convincing. The deception part is achieved through use of the phony ways in which the numbers are put together as support for claims that possess surface plausibility but that are in an ultimate sense illegitimate. Humans possess an amazing capacity to lie to themselves about what the numbers say. Numbers are used far more often to persuade people of things that are not so than they are used to persuade people of things that are so.

The moral here is to spend less time worrying about getting the numbers to work out right and more time being sure that you are shooting straight with yourself as to what the numbers need to show and whether or not they truly show it. You’re always going to get some things wrong; that’s all part of the wonderful game. You can always fix holes in your plan as they become apparent to you. It’s critical, though, that you engage in the retirement planning process with a clear-headed desire to learn the realities of what it is going to take to construct a safe retirement plan. Lose the capacity for straight-dealing with yourself, and there’s no telling how dark a road you are going to end up on.

Reason #6 Why Retirements Fail — The Cliff Model Adds Risk

Will Your Money Last As Long as You Do?

The Cliff Model of retirement does not make a whole big bunch of sense. Retirements following the Cliff Model are those in which the worker switches from being a full-time employee on the night of the last day of his 64th year to earning not a penny ever again beginning on the morning of his 65th birthday. This is an artificial way to set things up. And it is an unnecessarily risky way to set things up.

The risky time for a retirement is the first 10 years. The problem is that, if you suffer big losses in your stock portfolio during those years, you lose out not only on the dollar amount of the losses but on the many years of compounding returns that would have been generated by the dollars lost in those early years. Also, the compensating factor when stocks go down hard is that this puts them at low valuations, from which long-term returns are likely to be juicy indeed; retirees who need to make withdrawals from their diminished portfolios to cover living costs experience only the down side of price drops and not the compensating factor that lessens the overall risk of stock investing for most others. If price drops come after 10 years of at least modestly appealing returns, the likelihood of needing to sell large amounts of stock to cover living expenses is greatly reduced. If you have put together a good plan, and you get through the first 10 years without a big price drop, you are not necessarily home-free but you are a long ways along the road to getting there.

So why not set up your retirement plan to protect yourself from experiencing big drops in accumulated wealth during the first 10 years of retirement? Moving to a lower stock allocation might help (that’s more likely to be so if you retire at a time of high stock valuations). Taking a part-time job for the first 10 years of retirement certainly would help. Another way to limit your vulnerability to suffering too big a hit in the early years of retirement is to follow a Plan B budget during those years, holding off on expensive travel until you have seen by the investing results that you have obtained in the early years of your retirement that you are going to make it to 10 years without your plan suffering any major hits. For example, if you were far ahead of your anticipated wealth level at the end of Year Five, it would probably be safe to move to your more free-spending Plan A budget.

Reason #7 Why Retirements Fail — People Live Longer.

When we live longer and are healthier for a bigger percentage of the retirement years, retirement costs more. This is another argument for working in retirement and for beginning to plan for retirement at an earlier age.

Reason #8 Why Retirements Fail — The Common Feeling That There Is Safety in Numbers.

Fears of a Failing Retirement

The biggest reason why many do not plan for retirement is that they see others not planning for retirement. The scare stories that are used to persuade people to plan frequently backfire. Stories that intimidate people often cause them to feel even a greater reluctance to face up to the realities and put together a plan.

The core theme of this site is that we need to see saving as a positive goal, not as something we do to prevent the nightmare of a destitute old age. We need to begin selling a positive vision of retirement. One way to do that is to customize the retirement vision. People need to begin thinking of their retirement as their retirement and their retirement only.

There is no safety in numbers. We each need to take care of the one retirement we care about more than any other. The first step to getting there is to begin thinking of retirement as something we can structure to best suit our own personalities. We don’t all work at the same jobs, we don’t all go to the same places on vacation, and we don’t all drive the same types of cars. We need to begin thinking of “retirement” as a more flexible concept than we have come to think of it during the “an-age-65-retirement-fits all” era of retirement planning.

Secrets of Retiring Early

My Secrets of Retiring Early report, published in the summer of 2000, explains why today’s middle-class worker has opportunities to win financial freedom early in life that were not possessed by any earlier generation. The report was the #1 best-selling report in the history of

Secrets of Retiring Early

Set forth below are brief descriptions of each of the 10 secrets explored in depth in the report.

The first of the ten secrets described in the Secrets of Retiring Early report is The Productivity Secret.

The Productivity Secret is that most workers earn enough money to retire early. It was the rapid increase in the productivity of each worker’s labor early in the 20th Century that established retire-at-65 as the norm. The productivity increases have continued at a steady pace ever since.

Some years productivity increases one percent, some years two percent, some years more. Over time, all those percents add up, and you have an economy where each worker–just by virtue of doing his or her job–has earned the right to retirement 20 percent, 25 percent or 30 percent sooner than did those who came before.

The second of the ten secrets described in the Secrets of Retiring Early report is The Spending Secret.

The Spending Secret is that unclaimed money will be diverted to purposes other than the pursuit of financial freedom.

Were there no place else for all the extra money earned by virtue of The Productivity Secret to go, we might be forced into awareness of our happy new circumstances. The money would pile up, and people would start quitting their jobs without having planned to in advance.

As it is, though, the same economic change that created Retire Early possibilities created alternate uses for our new wealth as well.The sellers of goods and services have become systematic in their exploitation of the possibilities opened up by the flood of productivity dollars. New needs demanding immediate attention are discovered each day, advertisers are hired to pitch newly created solutions, and more Productivity Dollars escape from the middle-class worker’s pocket.

The third of the ten secrets described in the Secrets of Retiring Early report is The Opportunity Secret.

The Opportunity Secret is that the New Economy rewards Retire Early planning.

How Early Retirees Pull It Off

The positive side of our brave new economy is that it promises many new opportunities. But the old model of personal finance does not do much to prepare workers to take advantage of them. To do so, workers need to have more put aside than the minimalist requirements of the 10-percent savings rule-of-thumb. They need to position themselves as if they were small businesses ready to jump into new markets when enticing prospects arise.

The fourth of the ten secrets described in the Secrets of Retiring Early report is The Goals Secret.

The Goals Secret is that a customized vision shortens the process by which financial freedom is achieved.

The Retire Early Idea is as elastic a concept as you need it to be to help you realize a life-altering goal. If you plan to leave the work force altogether in 15 years, you might establish a five-year goal to move to a different, less stressful, type of full-time work. You might anticipate switching to a part-time schedule five years farther along. The idea is to fashion a series of success points keeping you strongly motivated at each step of the process.

The fifth of the ten secrets described in the Secrets of Retiring Early report is The Planning Secret.

The Planning Secret is that Retire Early calculations give you X-Ray money vision.

What does it mean to save $10,000? For most of us, it’s an abstraction. It’s a good thing, of course. But who knows whether $10,000 is going to make much difference in a retirement that is decades and hundreds of thousands of dollars away? Retire Early calculations put the matter in a new perspective. Assuming a 4 percent real rate of return, putting aside $10,000 means having the capital to produce $400 every year of the remainder of your life without working. If your budget shows that you spend about $33 a month on books, periodicals and music, you can now forget about ever needing to work to pay for those items again. You’ve created a personal endowment-fund for them.

The sixth of the ten secrets described in the Secrets of Retiring Early report is The Motivation Secret.

The Motivation Secret is that a personal goal fuels ideas to overcome obstacles.

How often have you heard workers justify their spending as the purchase of little luxuries needed to get through a boring work day? A better reward than expensive coffee for the worker bored with her job would be to think of the day when she will be able to turn on the creative juices; or to spend some time just thinking about the big questions in life; or to take a chance on starting at ground level again in a new field of endeavor. When the goal of your finance plan is one you supplied yourself, there’s not much point to rebellion. To undermine your Retire Early plan is to undermine your own dream.

The seventh of the ten secrets described in the Secrets of Retiring Early report is The Saving Secret.

Early Retirement

The Saving Secret is that freedom saving is different from other forms of saving.

Saving devoted to getting out is a new kind of saving, freedom saving. It is saving that goes beyond what is needed to pay for identifiable and required expenses (the costs of a conventional retirement). It’s as if you were setting something aside not to replace a machine that wears out (your body) but to buy a new machine to do the same job (your capital). Once the new machine takes over the task of financing your life’s activities, the old one–replaced while still in working order–is free to go where it chooses and do what it wants.

The eighth of the ten secrets described in the Secrets of Retiring Early report is The Earning Secret.

The Earning Secret is that telescoping the capital accumulation process leverages gains.

By the time that most workers reach their target retirement age, they have discovered how they should have been going about saving for retirement all along. The trick is to accumulate lots of capital fast, and let it do the work, not you. The sad thing is, at the point most workers see how leverage works, it’s too late to change strategies. All the years of allowing increased productivity to be diverted to other purposes are in the past. Those dollars have gone to work for someone else.

The ninth of the ten secrets described in the Secrets of Retiring Early report is The Freedom Secret.

The Freedom Secret is that it’s easier than you think to acquire freedom from wage slavery.

Get Rich Fast

If you have never calculated how much you need to live on, your guess as to what it takes to retire early is probably off the mark. It’s hard for our minds–conditioned as they are by retire-at-65 thinking–to grasp how much each dollar of additional spending costs us in terms of realizing an independence-oriented goal. You need to play with possibilities until the point hits home. Then you’ll be sufficiently encouraged to take up the issue of where to make adjustments to spending.

The tenth of the ten secrets described in the Secrets of Retiring Early report is The Purpose Secret.

The Purpose Secret is that there’s meaning in work outside of paid employment.

Some early retirees are driven to the goal out of a need to accomplish things that cannot be done in corporate or government bureaucracies. This group is not looking for a break, but for a greater challenge. The question is not how to avoid boredom, but how to fit all the critical tasks into the day now that one finally has a chance to act on long-suppressed dreams.


Pursuing a New Kind of Retirement Purpose

What’s your retirement purpose? if you are like a lot of other workers, you have come to have doubts about the old idea of retirement as a time to leave the world of work entirely behind and instead see your retirement purpose as becoming free at last to do the work you truly love. Retirement Purpose Here is a link to a Washington Post Outlook piece examining how and why the conventional view of “retirement” as a time of rest was marketed to middle-class America and how and why a new vision of retirement as a second active stage of life (with more freedom) is gaining ground today.  I found it fascinating to learn that the English word “retirement” is derived from a French word meaning “to go off into seclusion.” I believe that a big problem with the conventional retirement purpose is that the goal being sought is something that not too many of us look forward to all that much. How hard can anyone be expected to work to attain the ability to “go off into seclusion?”

Who Wants to Head “Off Into Seclusion?”

Most of us want to engage in some form of useful activity for as many years as we possibly can. We have good reasons for not wanting to be dependent on a paycheck. For a good number of us, the work that most excites us is work that is likely to pay little or perhaps nothing. But we do want to do things with our lives before time passes us by. So a retirement purpose that provides for a time when we will be heading “off into seclusion” rarely provides the motivation needed for a successful saving effort. Financial freedom is something everyone wants. So the focus of our saving efforts should be the exciting things we can do with our lives by attaining financial freedom. Not just in our 60s, 70s, and 80s. We should be saving for the exciting things that financial freedom lets us do with our lives in our 30s, 40s, and 50s too. Why should those age 65 and over be having all the fun? As the new idea of retirement purpose described in the article linked above gains ground, retirement will no longer be resserved for those age 65 and over. The new retirement purpose is a retirement purpose desired by just about everyone. I stand second to no one in my love for financial freedom. But this “to go off into seclusion” business is strictly for the birds, so far as I’m concerned. I want to live! Define “retirement purpose” in such a way that it permits a whole bunch more living after you get there, and I will seek to retire as early in life as possible. Use that old fogey definition in which retirement is about getting ready to die, and I can probably find better things to do with my time and efforts and money than to seek retirement either early or late.

A New Way to Work

New Retirement Ideas Here’s a quote from the article that I especially liked: “This new generation of aging boomers seems poised to swap that old dream of the freedom from work for a new one built around the freedom to work — in new ways, on new terms, to new ends.” That makes sense. That’s a retirement purpose for those too young at heart to accept the idea of going “off into seclusion” any time real soon.

Ten Fears of Those Who Retire Early

Here’s a list of ten of the biggest fears of those who aspire to retire early (as expressed in discussions held at the Financial Freedom Discussion-Board Community), accompanied by my comments on whether these fears are justified or not.

Retire Early Fear One is of seeing large increases in the cost of health insurance or health care.

Retire Early Fears This is a legitimate fear. It’s not only that health care costs are rising so fast. What makes this problem so serious is that health-care costs are to a large extent unavoidable. I can do without vacations in a pinch. I can do without a new car in a pinch. I can’t do without an operation on my knee if it is producing throbbing pain.

This is not an issue that affects only those planning to retire early, of course. All workers are at risk of suffering the effects of rising health-care costs. Those planning to retire early may in some cases end up better off than those who are not because they are more likely to engage in serious analysis of how the problem affects them personally as part of the effort to craft their particular Retire Early plan.

Retire Early Fear Two is of seeing cutbacks in Social Security benefits or increases in taxes enacted.

What out lawmakers are going to do in years to come is a big unknown. Changes in the law affect all workers, but those planning early retirements worry more because they are not still in the workforce (at least not to the same extent as those not early retired) and therefore do not have available to them as many options for coping with legal changes.

Some aspiring early retirees deal with this fear by not counting on receiving any Social Security benefits. Do that, and you can view anything you get from Social Security as a nice extra. An alternate and more moderate approach would be to count Social Security income in your plan, but not to the extent that you would if you expected benefits to remain at their current levels.

Retire Early Fear Three is of finding that, once a resignation is handed in, it will not be possible to return to the workplace earning the same salary.

You don’t lose your work skills when you hand in a resignation. In theory, you should be able to return to the workplace at the same pay level if at some later date you changed your mind. The practical reality is that this is generally not possible. Jump off the step on the Ladder of Success you now stand on, and you will probably be pushed down to a lower step in the event that you someday elect to return to the climb.

My way of dealing with this one was to “retire” only from corporate employment, but to continue working full-time doing work I truly love. I can’t today return to my former pay level. But I continue to develop my work skills and to make new contacts. So I enjoy better prospects than many retirees who stopped working altogether of returning to a reasonably appealing step on the ladder if I suffer reversals.

Retire Early Fear Four is of incurring financial responsibilities for children that one did not at an earlier time anticipate in one’s financial planning.

How Much Does It Cost to Have a Child? My wife Boo and I had our first child nine months before I handed in my resignation from corporate employment. We had our second child 20 months after I handed in the resignation. Hey! You’re not supposed to be having children after you retire, are you? Oh, well.

If you retire very young, there’s a chance that you are going to have children after you retire. Even if you go for a retirement beginning only a bit earlier than the conventional age-65 retirement, there’s a good chance that your planning effort will begin at a time when there is still a possibility of having children. So this is a matter that a good percentage of those planning early retirements need to look at.

I’ve seen articles that look at the question of how much it costs to raise children. It’s a good idea to take the financial costs of having children into consideration in putting together your plan. My personal view, however, is that the financial considerations should not be primary. The purpose of money is to enhance life, so financial goals are secondary to life goals. A decision to have children is so core a life goal that it cannot be analyzed properly by looking only at numbers.

If my obligation to support my children causes me to need to return to corporate employment, so be it. I’d rather go back to cooking chicken at a fast-food place than miss out on the life enhancement that I have gained by taking on the responsibility for raising my two boys.

I have hopes that the two boys will end up being a financial plus. My concern that I do right by them pushes me to work harder at writing books and marketing books and building web sites and all that sort of thing. The added motivation to earn money that comes from having children translates into added wealth over the long term. according to this sunny way of looking at things. We’ll see.

Retire Early Fear Five is of needing to pay for college for one’s grown children.

This one hits me where I live. Some point out that there’s no obligation to pay for the expenses of college for one’s grown children. I think that’s so. I still intend to do it if there is any reasonable way to pull it off, however. My parents paid for my college. It would not seem right to me for me not to make a serious effort to do the same for the next generation of Bennetts.

I put the boys’ college fund at risk by quitting the higher-paying corporate job. My hope is that I will make up for that by providing them the excitement about work that will come from watching a dad that truly loves his job go about his daily activities.

Retire Early Fear Six is of learning somewhere down the road that one needs to provide financially for one’s parents.

Nightmares About Running Out of Money When several generations lived in the same place, this issue was not so complicated. We gained in recent decades the freedom to seek opportunities elsewhere, which is in many ways a good thing. One big downside, however, is that the aged are sometimes left without the resources they need. When you are not even seeing your parents daily, you sometimes do not even know what they need until there is a crisis that brings the matter to your attention.

This is an issue that affects early retirees and regular retirees alike. It gets discussed among aspiring early retirees because aspiring early retirees are engaged in a more intense effort at planning their financial futures. That’s a good thing.

I don’t think that concern over the need to provide financially for one’s parents is generally a good reason to reject the Retire Early concept out of hand. There is often a financial loss associated with leaving a corporate job. Our parents will in some circumstances suffer some downside as a result of our decisions to leave corporate jobs. The other side of the story, however, is that the more intense planning that follows from a decision to retire early may lead to a result in which one’s parents are better cared for than would otherwise be the case.

Retire Early Fear Seven is of experiencing boredom.

This is not a problem for me. It is a problem for many others. Please don’t think of retirement planning as strictly a financial exercise. The idea is to plan for a new way of living. You need to give a good bit of thought to what you will be doing in retirement before handing in a resignation.

If you don’t have a clear idea of how you will fill your days in retirement, you are not prepared to hand in a resignation. That’s my take.

Retire Early Fear Eight is of finding oneself feeling constrained in having to stick to a budget for many years or of discovering that the need to pay careful attention to finances after retiring rules out engaging in travel later in life.

At age 40, it might sound appealing not to have to go to the corporate job any longer. At age 60, the idea of having enough money to spend years seeing the world might be the more attractive option. My view is that the concept of “retirement” needs to be redefined. We need a more flexible definition in which we “retire” from some aspects of our work lives (those we don’t enjoy) and not others (those we do).

Is Early Retirement a Mistake?

I don’t have money in my budget for lots of travel. But I haven’t given up on the dream that I will be able to enjoy lots of travel. It depends on how well my writing business goes. I retired from corporate employment and all that goes with it, but I continue to work and to earn an income. That means that I did not need to make final decisions as to whether my wife and I will be able to see the world when we are old or not.

Retire Early Fear Nine is of experiencing friction with one’s spouse because of differing views on whether early retirement provides a sufficient sense of life purpose.

Whatever form of retirement you seek, you are planning a big change in how you live. You must spend lots of time talking through the implications with your spouse. My wife and I took weekly two-hour walks doing this for years before I felt confident enough of her buy-in to hand in a resignation.

There were a lot of payoffs that followed. I not only gained my wife’s buy-in for my retirement plan. I came to appreciate her more and she came to appreciate me more. We know each other better as a result of those many two-hour walks. Those many two-hour walks offered us a fantastic value proposition.

Retire Early Fear Ten is of suffering the loss of social interactions that previously took place at one’s place of work.

Retirement Is the Beginning of a New Stage of Life

It’s a good idea to seek a gentle transition from the corporate life to the post-corporate life. We can’t help but rely on the workplace for many of our social interactions, given the amount of time we spend at our places of work. If you are going to give up going to the place of work, you need new means of attaining the level of social interaction that is best for you.

It can almost always be done. Perhaps you will join an internet discussion-board community. Perhaps you will get involved with a charity. Perhaps you will join a running club. Perhaps you will get to know your neighbors better. The key is to spend some time thinking this aspect of the Retire Early project through. The money issues are important issues. They are not the only issues.

The best way to ease your Retire Early fears is to check them all out to the best of your ability. Don’t hand in a resignation without first being sure that you have thought through every possible downside of a decision to retire early.


How to Escape the Rat Race

Even those who don’t make the big bucks can escape the rat race years early if they put their minds to it. So says “Ariechert,” one of my favorite posters in the Financial Freedom Community.

How to Escape the Rat Race I don’t agree with all of the advice that Ariechert puts forward. But I do recommend that you take a look at his posts. What makes his stuff special is that he speaks from the heart. Ariechert can often convey in a small number of words ideas and emotions that it takes a good number of other posters (like me, for example!) pages of text to get across.

Ariechert’s Tip #1 on How to Escape the Rat Race — Don’t let the fact that you don’t earn a big income stop you from pursuing the goal.

The basic facts of Ariechert’s life circumstances and the impetus of his decision to retire early are set forth in this post on how to escape the rat race.

He never earned more than $28,000. He worked “spraying dog manure down a drain” as part of an effort to find a cancer cure.

He notes in this post that “I have never had a job where I got one iota of recognition. It was always the people above me taking credit for the work I did.”

It is a little hard to believe that that is entirely so. My guess is that it is a bit of an exaggeration. Still, I do think that this comment highlights one of the reasons why many workers today are seeking an escape from the rat race. People have a deep need to obtain more than money from the work they do.

Ariechert’s Tip #2 on How to Escape the Rat Race — Use your bad work experiences as motivation to save, not as an excuse to spend.

Ariechert is not a complainer. I noted above how he feels that he has never received recognition for the work he had done. The most important lesson that his story teaches, in my view, is that he did not permit his feelings about not receiving enough recognition embitter him. Most of his posts convey an easygoing, lighthearted attitude towards life.

Take a look at this post, in which he argues that “If you are responsible for just yourself, you can easily get by on retiring on less than $500,000.”

Or this one, in which he says that “”I live in a house with ten acres of land valued at $79,000, drive a 10-year old Toyota, all of my bills together come out to $900.00/month, and I feel like I have a pretty good life.”

Escape Wage Slavery

Ariechert comes across as grateful for the good things he has in life. He did not permit his negative experiences to crush his spirit. He used them to motivate him to do the things he needed to do to get to a better place.

Ariechert’s Tip #3 on How to Escape the Rat Race — Don’t be afraid to be different.

Ariechert lives on a smaller income than many middle-class workers would be comfortable living on. He retired while his wife remains in the workforce. He relies on his wife’s company-provided health insurance.

He chose a path that wouldn’t work for many others. The reality, though, is that we all have some things in common with others and some things about us that are unique. I think it is a mistake to ignore the conventional wisdom just for the sake of being a rebel. There’s usually a good reason why certain viewpoints become widely accepted enough to become conventional wisdom. When those reasons don’t apply, however, it can make sense to take the path less traveled.

One of the benefits of tapping into the wisdom of our community is that we have all sorts of people sharing their financial freedom dreams on our discussion boards. If you cannot relate to Ariechert at all, you might be able to relate to someone else who posts at the same board. You need to expose yourself to a diverse group of takes on all the various financial freedom topics to form a well-informed take of your own on how You, Inc., should proceed with its financial freedom quest.

The bottom line is that you are given only so many years to live your life before it is taken from you. Ariechert notes in this post that his father died shortly after turning sixty-five. Seeing that happen is one of the things that put the idea of seeking an early escape from the rat race into Ariechert’s head.

Ariechert’s Tip #4 on How to Escape the Rat Race — Understand that all life decisions have financial consequences.

It is important to marry someone who is not heavy into consumerism, according to Ariechert.

In this post, he notes that divorce can be the cause of a big financial setback.

Ariechert argues that he would not have been able to retire early if he had had children. I don’t advise anyone to give up having children for the possible financial benefits. In my view, the satisfaction that comes from raising children can provide that sense of recognition for a job well done that Ariechert failed to obtain in his work life.

Ariechert also argues against starting your own business. Again, I believe that having your own business can provide both financial benefits and a sense of deep satisfaction. But, again, the benefit of tapping into the wisdom of the Financial Freedom Community is that doing so permits you to hear a variety of viewpoints on these sorts of questions.

Ariechert’s Tip #5 on How to Escape the Rat Race — Don’t Hang Out at the Shopping Mall.

You Can't Con an Honest Man Ariechert argues that things you buy often just become a drag over time. In contrast, money you invest provides you the freedom to do the things you most want to do with your life.

I personally like to be able to enjoy a lot more of the benefits that can be obtained by purchasing goods and services than I could if I entirely took my leave of the workplace with only the amount of assets Ariechert had when he retired from his job “spraying dog manure down a drain.” But I very much think he is onto something important with this one.

Those with big incomes can get permanently caught up in the rat race. And those with moderate incomes can escape the rat race at remarkably early ages. The key is developing an understanding that, while spending is often fun, saving is often more fun.


The Normal Retirement Age It Is a Changin’

Trend #1 Causing the Normal Retirement Age to Change — The Realities that Made Age 65 the Norm are Fading from Memory

The Normal Retirement Age Is a Changin'

Age 65 was established as the normal retirement age as a result of the Social Security legislation of the 1930s. The idea was to get old workers out of the workforce, open up room for the hiring of younger workers, and thereby get the economy on its feet again.

The economic realities have changed over the past 70 years. The factors that made identifying age 65 as the normal retirement age make sense no longer apply. It’s just a matter of time before new norms are established.

Trend #2 Causing the Normal Retirement Age to Change — Employers Are Getting Out of the Retirement Security Business

Our employers did not finance our retirements with company pensions because they liked our smiles. They did it because they needed to entice workers from farms into factories and from factories into offices. They don’t need to do that anymore.

For a time it was shocking for an employer to announce that it was going to stop funding its employees’ retirements. More and more employers have gone down this path in recent years, making it easier for even more to follow suit. It’s unlikely that employers will want to reassume this financial burden. Company-paid pensions are on the way out.

Trend #3 Causing the Normal Retirement Age to Change — Workers Are Not Saving Enough to Be Able to Retire at Age 65

Most workers have not saved enough to be able to retire by age 65. New products and services are made available to us all the time and many of these products and services offer strong value propositions. Given the weaknesses of the conventional money management model, workers naturally are enticed to spend most of their incomes. The end result is that many will not be able to retire at age 65.

Trend #4 Causing the Normal Retirement Age to Change — Most Workers Overestimate Their Net Worth

Most of today’s workers are heavily invested in heavily overvalued stocks. That means that most of today’s workers are overestimating their net worth. Even many of those who believe today that they will be able to retire at age 65 will find that they are no longer able to once stock prices drop dramatically.

Trend #5 Causing the Normal Retirement Age to Change — Multiple-Employer Careers Are Becoming Common

The Path to a Safe RetirementIt used to be common for employees to remain at a single employer for an entire career. This is less and less the case. This makes planning more difficult and more fluid.

Changing employers can cause big income increases or big income drops. Some workers will be left better able to retire early. Others will be less able to retire at the normal retirement age.

Trend #6 Causing the Normal Retirement Age to Change — Fulfillment Counts for More to Today’s Workers

Workers who lived through the Depression cared most about income, benefits and job security. Today’s worker seeks personal fulfillment in his or her job. Many of today’s workers have small families or have no children or are unmarried. Such workers put more focus on obtaining fulfillment at their work. Such workers are less inclined to be willing to give up the spiritual rewards of work at age 65.

Trend #7 Causing the Normal Retirement Age to Change — Workers are Living Longer

Age 65 was established as the normal retirement age at a time when those who had reached age 65 were old. Many of today’s 65-year-olds have a good number of energetic years ahead of them. They are not inclined to accept without question the normal retirement age.

Trend #8 Causing the Normal Retirement Age to Change — Work Today is More Fun

We all complain from time to time about the work we do. Truth be told, however, many of us derive a secret pleasure from our jobs. Few of us are coal miners anymore. Work today is more enjoyable than was work in the days when age 65 was established as the retirement norm.

Many of us are disinclined to give up our share of the fun. We want to move to less stressful jobs. We want to move to jobs that leave us with more free time. We want to move to jobs that we find more meaningful. We don’t want to leave the workforce altogether just because we happen to turn 65.

Trend #9 Causing the Normal Retirement Age to Change — Workplace Rules are Becoming More Fluid

Can I Retire?

Computers permit much work to be done offsite. Employers are better able to check on whether work is being done properly by employees not coming in to the office or not even living in the same state. Workers who are older than 65 are open to all sorts of arrangements that those in need of larger incomes to finance mortgage payments and college tuition payments are not willing to consider. Employers and older workers possess both the motivation and the means to construct creative arrangements for the older workers to continue working in some capacity beyond the normal retirement age.

Trend #10 Causing the Normal Retirement Age to Change — Workers Earn More

Most of us earn more than did our parents or grandparents. While many workers will elect to work past age 65, others will elect to retire earlier than the normal retirement age. Both changes erode belief in the idea that there is signifiance to the act of turning 65. In a culture in which we are offered 12 different ways to drink our cola and 36 different toppings for our pizza, the one-size-fits-all retirement no longer seems to make much sense.

The passing of the normal retirement age is a frightening specter to many. For good reason. Most of us have devoted little time to planning our careers or our financial affairs. Still, the news is not all bad. Those who do plan have before them more opportunities than were available to workers of any earlier time. Today you can choose your retirement age just as you can choose your pizza toppings or your cola.

Retirement — Have It Your Way!

Money and Personality — Is There a Retire Early “Type”?

An article at the web site explores the connection between money and personality. John Greaney answers “yes” to the question posed in the article title — “Is There a Retire Early Personality Type?” I say “yes and no.”

Observation #1 on money and personality — The REHP survey is an unscientific survey.

Money and Personality The survey taken by Greaney is obviously not scientific research. The survey sample is small. And the sample is extremely biased. Participation was limited to people who used the internet, people who discovered the Motley Fool site, and people who visited the Retire Early Home Page discussion board at that site. Another factor is that only people who elected to participate in a survey taken over the internet were included.

A survey conducted in a scientific manner might generate very different results.

Observation #2 on money and personality — There are reasons for believing that the survey results are at least somewhat accurate all the same.

In recent years, I have participated on a number of discussion boards at which early retirement is a frequent topic of conversation. It is my impression that the ISTJ, INTJ, and INTP personality types (the personality types that Greaney identified as most drawn to early retirement) are over-represented at just about all of these boards.

The Greaney survey is not scientific research, but it does appear to me to point to something real — it really does appear to be the case that someone with the one of the three identified personality types is more likely to be drawn to seeking financial freedom early in life than someone with one of the other 13 personality types used in the Myers-Briggs personality assessment tool.

Observation #3 on money and personality — Money behavior is often counter-intuitive.

Greaney says in an October 2000 follow-up article on the same survey that: “There seems to be ample evidence that education and ‘brains’ don’t necessarily correlate with the ability to manage one’s finances. (I know several MBAs that graduated from business school with me 20 years ago that are no closer to retirement today than the day they entered college.) Personality and ‘temperament’ may explain the differences in outcomes that fly in the face of what we would expect with a degree from an elite university and high SAT scores.”

This statement points to something important, in my view. Greaney is quite right that, when we look about us to see where people stand in their efforts to accumulate wealth over the course of their lives, the results we see are not at all what we would intuitively expect. I know people with modest incomes who are doing quite well. And I know people with six-figure incomes who are less than one paycheck away from being candidates for admission to the poorhouse.

These realities are not at all in accord with what the conventional money management advice tells us is important. The usual advice is numbers-oriented. We are told to develop skills that enable us to earn bigger salaries, to save a higher percentage of our incomes, to invest in ways that yield a higher return, and so on. All of that advice is fine in its place, but much of it misses the critical starting point in the money management project — development of the proper attitude to the task.

Are INTJs Have the Retire Early Personality?

Motivation is everything, in my experience. Those who are motivated to save do so. Those who are not do not. The connection between income earned and amount saved is far weaker than what we would intuitively expect it to be. Those with big incomes do save more than those with small incomes. In extreme cases, they almost cannot help doing so. In general, though, bringing home more dollar bills is not the route to accumulating more dollar bills in one’s investment accounts.

Observation #4 on money and personality — There is a connection between one’s personality type and one’s ability to develop the level of motivation needed to save effectively.

Different sorts of people are drawn to doing different sorts of things. That’s so obvious a truth that I worry that I am insulting you by having those words appear on your computer screen.

But here’s the thing.

As obviously true as the statement above is, most conventional money advisors pay little heed to it.

Do most money advisors say that those with Personality Type X should invest mostly in stocks while those with Personality Type Y should invest mostly in real estate? They do not. Do most money advisors say that those with Personality Type X should aim to save X percent of their income while those with Personality Type Y should aim to save Y percent of their income? They do not.

It is not how much you earn that determines how rich you become over time. It is what you do with what you earn. It is behavior that matters.

Personality drives behavior. Most money advice doesn’t pay much attention to this personality jizz-jazz. Perhaps not so coincidentally, most money advice doesn’t produce much in the way of results in the real world.

Greaney has put his finger on something terribly important with his publication of the Retire Early Personality Survey, in my estimation. He is very much not offering the advice you would expect to hear from a conventional money advisor. Ask a conventional advisor how to retire early, and she will tell you to try to get a job where you earn more and then to try to save a high percentage of what you earn. Greaney is suggesting something very different.

The Confident Investor I don’t think that Greaney would reject the conventional advice. He is certainly not saying that it is a bad idea to earn a big income or to save a big percentage of your income. He is suggesting, though, that these are not the most important factors in determining who is going to be successful in seeking early retirement and who is not. He is saying that what matters most is the attitude you apply to money questions.

I think that Greaney is right about that.

Observation #5 on money and personality — The three personality types identified in the Greaney study as likely to seek early retirement probably do possess a natural edge.

The personality types identified in the Greaney study as being likely to pursue early retirement are generally personality types that enjoy planning. A willingness to plan is critical to the success of a quest to win financial freedom early in life.

Forget the fact that the Greaney study is not scientific research. It confirms what Financial Freedom Community members have seen by taking note of the personality types who participate most frequently on our discussion boards. More importantly than that, the study’s findings make sense.

So Greaney came to a proper understanding of the connection between money management success and personality type, right?

No, I don’t think that’s right.

I think that Greaney put his finger on something important. I also think he jumped too quickly to inappropriate conclusions.

Observation #6 on money and personality — INFJs are capable of developing the love of planning needed to win financial freedom early in life.

I am an “INFJ.” INFJs are not particularly good at planning. Ask my wife. She loves me, but she is an honest person. Ask her about my planning skills and she will tell you some good stories.

So my Retire Early hopes are doomed, right?

No, I don’t think that’s right.

I am living proof that INFJs can become planning machines in the right circumstances.

INFJs do not naturally enjoy planning in the way that INTJs do. INFJs are naturally drawn to other pursuits. It does not follow that INFJs cannot plan. INFJs just need to find a reason to plan that makes sense to someone of their personality type. Once they do that, they can begin planning every bit as effectively (or perhaps more so!) as their INTJ counterparts.

A Positive Attitude Will Get You Everywhere

INFJs are driven to understand what goes on in the world. They are “seers” — they see connections between seemingly unrelated things that other personality types often fail to grasp. You turn an INFJ on to financial planning by showing him how financial planning can help him make progress on life goals that he previously did not see as money-related goals.

I have never in my life felt driven to accumulate lots of green pieces of paper. The idea bores me. Until I reached age 35, I was not a good candidate for early retirement. I earned a good income, but I saved nothing.

I was driven to advance in my writing career. Communication with other humans is what turns me on. The day that a switch was flipped in my money management life is the day that I discovered that saving effectively would permit me to take my writing career to new and more exciting places.

From that day forward, I was a planner. Not in general. In the area of money management. I plan what I do with my money today not because I am naturally drawn to planning. I plan what I do with my money because I care deeply about communicating with other humans, and I now know that planning what I do with my money permits me to communicate with other humans in more effective ways.

The Greaney survey does not show that INFJs are particularly suited to early retirement. That’s not because INFJs do not possess what it takes to pull off a successful quest for early financial freedom. It’s because most INFJs just flat-out do not care about money stuff all that much.

Most INFJs do not seek early retirement. So they do not participate in surveys held on Retire Early discussion boards. But show an INFJ how financial freedom can be put to use achieving goals he or she does care about and — watch out, world! INFJs can be extremely determined in their efforts in pursuit of goals they come to care about.

Observation #7 on money and personality — Financial freedom is a sufficiently flexible goal that it can be structured to possess appeal to all personality types.

I don’t know of any reason why what worked for me cannot work for all of the other personality types too.

I don’t believe that any one personality type has a permanent edge in the quest for financial freedom. Personality types that naturally enjoy planning possess an initial edge. But those with other personality types just need to find something in the financial freedom quest that speaks to them to get the bug.

The Mastermind Investor

Once they get the bug, those with non-planner personalities become effective planners. And that’s not all they then have going for them. Those with non-planner personalities bring things to the financial freedom quest that those with planning-oriented personalities do not. Those who are not naturally strong at planning are naturally strong at other things that help them win financial freedom early in life so long as they also engage in planning.

Observation #8 on money and personality — We need more aspiring early retirees with non-planning personalities participating on our discussion boards if our movement is to achieve its full potential.

We need ISTJs, INTJs, and INTPs at our discussion boards. We need the other 13 personality types too. It is only by listening to what all of the various personality types bring to the table that we can continue to advance in our understanding of what it takes to win financial freedom early in life.

When the conversations at our boards get stale (and I see staleness at a number of Financial Freedom Community boards today), the answer is to open the floor to new types of discussions. I look forward to hearing more from the other 13 personality types in days to come.

Watch out, all of you ISTJs, INTJs, and INTPs. You started out with a natural edge. But the rest of us are quickly gaining on you!