The Doors of Bliss
It’s that time of year again. Summer officially starts today.
In agricultural terms, I guess we call this the growing season, with harvest coming in the fall. But that’s not quite true, is it? I am no green thumb, but I have had some small gardens in the past, and you start harvesting vegetables in the summer.
So let’s call it a growing and harvesting period.
Which is really very similar to early retirement—or at least the kind of FIRE experience I have had and would promote: financial freedom to go do what you love.
Yesterday, I listened to a recorded office-hours call from Financial Mentor (Todd Tresidder) that he sends to people who have taken his Wealth Plan course. The topic was safe withdrawal rates after no longer working for a paycheck.
People really worry about this, and I get it. I have worried about it in the past and continue to pay close attention to my spending as a percentage of my portfolio.
It can lead to a term called One More Year Syndrome.
You think to yourself, “What’s one more year?” if by working in your current job you can harvest some more gains and grow your portfolio.
Unfortunately, this keeps people stuck.
They stay five more years instead of one.
I think I did this myself.
In early 2015, I had reached my original target for a portfolio I could live off without a paycheck. But my target kept growing.
$745,000
$900,000
$1,200,000
Etc.
Why?
Because of my actual spending. I was living large, even as a somewhat frugal minimalist.
Because of learning about the safe withdrawal rate idea. Oh, 8% or even 7% is too much to withdraw?
And because stopping in 2015 would have forced me to move to a lower-cost area. That seemed like a parachute I wanted to hold off deploying until it was really needed.
As a result, I didn’t actually leave my long-term career until almost the start of 2020.
Let’s see… that’s about five years or more, right?
Yes.
This morning, I watched a pretty good YouTube video called The Psychology of People Who Retire Early by The Wealth Advisor, a Canadian financial planner who works with lots of retirees.
He says he sits across from many 55-year-olds who have the exact same net worth, identical spending, identical tax situations, similar health, relationships, and other factors. Yet one of them will pull the lever to retire early, while the other gets stuck in One More Year Syndrome.
It comes down to psychology, in his opinion.
This is one of the Amplifiers of Yeah we’ve been discussing here: Psychological Freedom.
He’s found five common reasons why the people who do retire early make the leap:
They defined “enough” much earlier than age 55.
They built a separate identity from their work that they wanted to step into.
They were able to accept social friction (“You’re too young to retire.”)
They had contingency plans for market conditions they trusted.
They gave themselves permission to spend, rather than only accumulate.
These all resonated with me.
For example, I first learned of the concept of enough from Your Money or Your Life in the mid-2000s and started applying it, trying to define it.
As it turned out, luck was on my side, too.
I got divorced (not the lucky part) and found myself over $1,000,000 in debt as a result.
The Great Recession caused the company I had worked for for six years to go under in 2008, and I lost a significant amount of my RSU stock options—about $650,000 (also not the lucky part).
So where was the luck?
Well, three things happened.
First, the devastating financial impacts of the divorce and the Great Recession woke me up.
My level of commitment toward reaching FIRE went from a C grade to an A+.
I got serious. Very serious.
Second, I found a job with a company that had great values. A company that cared about its customers, but maybe its employees even more.
That company almost went under in 2011–2012.
But it didn’t.
It thrived.
And again, I felt so strongly that I was working for one of the best companies out there that I was committed to staying until the end.
I was prepared to go down with the ship, if so be it.
Third, I got a boss who didn’t respect—or really care for—me toward the end of my time there.
Also not the lucky part.
But she cared enough to give me an out.
She pulled me out of my position at a time when I was loving what I was doing at a level I had only experienced a few times in my long career. She placed me into a position that was going to last a couple of years to help with a merger and then go away.
At that point, I could either try to find another role in the company or exit with accelerated vesting.
Guess which I chose?
In hindsight, though, there was a fourth lucky thing going on here.
Joseph Campbell is famous for his advice to “follow your bliss.”
And that was what achieving FIRE meant to me.
The other part of his advice related to following your bliss is often not discussed.
He said that when you do so, doors will open that you never even imagined existed.
That’s what happened to me.
That is what can happen for you.
Following your bliss is good advice.
Being fully committed to the journey—with your full integrity—is the key.