Eight Lessons After Eight Weeks Of Early Retirement

Eight weeks of retirement already! Actually, a little bit more by the time this goes online, but it was exactly eight weeks when I started writing this. Early retirement is a lot more than number crunching and safe withdrawal simulations, so today it’s time to reflect on the first two months of Early Retirement. Everybody’s experience will be different and here’s what have I learned, what surprised me and what didn’t surprise me…

1: No regrets!

I can’t remember a single day I woke up and thought “Oh, boy, I wish I could go back to work again today!” And I’m not even talking tongue-in-cheek here; we shouldn’t be surprised if folks who hated their job never look back but I actually thoroughly enjoyed my former job, my duties there and the people I worked with. Of course, in early October when we’ll be back in San Francisco Bay Area I will definitely swing by the office and say “Hello” to my former colleagues and bosses. But I’ll look forward to the Asia-Pacific part of our World Tour way too much to stay there longer than needed and if they offered me my old job back I’d politely decline! 🙂

Of course, doubters could say that I was just plain lucky: the stock market is doing well so far, so it’s easy to have no regrets. That’s true, to a degree because I know about the challenges of withdrawing money in retirement, the pitfalls of the 4% Rule and the dreaded Sequence of Return Risk. But working in finance, especially asset management, there is one issue to consider, which brings me to the next point…

2: The only thing more stressful than managing your own money? Managing other people’s money!

When people point out that it must be stressful to live off our money with a lot of exposure to stock market volatility I readily concede that. But I used to work in Asset Management. And my experience there: it’s been even more stressful to manage other people’s money and go through a market downturn. In this industry you’re just one market downturn, one bad year, maybe even one bad quarter away of getting kicked to the curb. Sure, the market will always recover, but that recovery is of no use if your client “fires” you at the stock market bottom and hires the competition to ride the market back up to the next peak.

So, I am actually less stressed out about market volatility now. Investing our own money has the advantage that if things don’t go so well in our portfolio I “only” have to report that to my wife. And she has more patience with me and my investing skills than the average client in the asset management business. So, when the next downturn hits I will have the confidence that we have enough wiggle room for a comfortable retirement. And my wife will stick with me going through it! It can’t be more stressful than working in finance in 2008/9!

3: I feel the same as before

“Do you feel happier now?” is one of the common questions people would ask. I should be so much happier now, shouldn’t I? Maybe as happy as the other Big Ern (Bill Murray in “King Pin”)?

ERN-gif01
Big Ern one minute after handing in his badge and office keys? Uhm, no not really! My hair is better, too!

My last day at the office was June 1 and, shockingly, I didn’t feel all that different on June 2. Is that normal? Did I do something wrong? Does it mean that early retirement doesn’t really make you happier? Of course, early retirement makes you happier! A lot! But the increase in happiness was already “priced in” gradually instead of jumping from 0 to 100 on June 2.

Happiness Chart
Early Retirement Happiness had been “priced in” way before my retirement date!

A nice analogy from finance (of course!) would be that in light of the corporate tax cuts going in effect on January 1, 2018, prices didn’t jump on January 2 (the first trading day) but the projected corporate earnings boost was already priced in way before the tax law changed. For the same reason, my happiness didn’t move much on June 2!

4: One gets used to discomfort really quickly!

We’ve been living out of suitcases for a while now! Not just since retirement in early June but since Early March when we moved out of our condo in San Francisco. Since then we’ve stored most of our belongings in a self-storage unit in the Bay Area while we stayed in a string of temporary housing arrangements; Airbnb, cruise ships, friends, relatives, vacation condos, etc., with a few suitcases and backpacks. If we really splurge we’d have a place where our daughter has a separate bedroom but for the most part she sleeps in the same room with us, sometimes even in the same bed. I would have never thought we’d so easily give up our nice large 2-bedroom condo in San Francisco; 1,150 square feet, which is yuuuge for SF standards!

But curbing expenses is possible! Lifestyle inflation can be reversed without too much pain and it’s easier to declutter our life and especially the spending in one sweeping move, like ripping off a band-aid! Of course, eventually, once we’re done with our travel adventure, we’ll likely scale up our consumption again: We’ll buy a house, own a car and – gasp!!! – might even switch on the cable/satellite TV again. But it’s good to know that trimming consumption can be done without too much pain if that ever becomes necessary in the future, i.e., if the market doesn’t cooperate, think Sequence Risk.

5: I have less time for blogging now!

I retired on Friday, June 1 and then have 40+ extra hours for blogging starting the next week. Great, I can go to two blog posts a week now, right? Wrong! Maybe this would have worked out differently if we had stayed in the same location post-retirement. Because I got a new “job” now: traveling. And – at least for me – this new job is less conducive to blogging than the day job I held until June. I would occasionally have some downtime at the office and work on my blog – don’t tell my former employer!!! But that’s not so easy when you’re out and about with a backpack and a four-year-old in tow. I hope readers forgive me when I slow down a little while on the road!

Talking about traveling as a job, that brings me to the next lesson…

6: I still need a weekend!

There must be something about this biblical convention to have seven days in a week! Not three days per week, not 30 days but 7 days. I mean, after five days at the office everybody needs a weekend but who knew that the same is true when you’re on a permanent vacation? After about 5 to 6 days of sightseeing, walking, visiting castles, museums, etc. I actually need 1 to 2 days of vacation from our vacation! I realized that perma-traveling is a job and you can’t do a job seven days a week! Luckily, we didn’t try to pack too much program into our World Tour. For example, we skipped Southern Europe entirely this year and plan that for next year. Instead, we slow-travel through a smaller geographic area – France, Germany, Switzerland, Austria, Slovakia, Czech Republic (and now back to Germany again) so far – and factor in enough slack days for the occasional lazy “weekend” when we “only” go for a walk, to a park or to a playground or just watch some TV. Go to a playground while on vacation? That was completely unthinkable pre-retirement when we tried to max out every single precious vacation day.

7: I have yet to meet a naysayer!

As I have mentioned before, the reception so far has been extremely positive. Everyone we talked to, whether relatives or friends or strangers on the train seems to be very supportive of our decision to pull the plug. What was the most negative response so far?

“I’d get bored retiring so young!”

In its literal interpretation, that’s actually not even much of a criticism unless he meant to say “You’ll get bored retiring so young.” So, considering that I’m certainly not bored it probably just means that different people have different preferences. It’s also much easier to not be bored as a retired finance professional; I’m still practicing finance after all by managing our own portfolio and by blogging about (personal) finance.

8: You can’t get homesick if you don’t have a home!

Before I retired we’d rarely travel for much more than a week. Occasionally, we’d do 10 to 14-day trips but at the end of the trip, I’d always have the feeling of “I’m ready to head home now!” Isn’t that crazy? Even though going home meant going back to work! Sounds like homesickness to me. So, planning a seven-month trip around the world this concern was on my mind! But I’m glad that traveling hasn’t gotten old yet and I hope it stays that way until December! One reason must be that we don’t even have a home to go back to (yet). Our belongings are nicely stored/stacked in a self-storage room. That doesn’t feel too homely – even though it’s climate controlled while we are sweating here in Europe without AC! So, above all, packing up our stuff back in the U.S. was a nice “hack” to save money but also keeps us motivated to stay on track with our travel plans without feeling homesick!

So much for the 8-week early retirement progress report! I hope you enjoyed today’s post! Please share your thoughts and comments below!

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77 thoughts on “Eight Lessons After Eight Weeks Of Early Retirement

  1. Good to hear life is treating you well, Karsten! I went through the same feelings/discoveries soon after quitting work. Not really interested in returning to work at all. And when traveling, I often have less free time than I dd when I was as working full time (because you can always pack an hour or two of screwing around in an efficient 8 hr work day!).

    Also love this comment: “After about 5 to 6 days of sightseeing, walking, visiting castles, museums, etc. I actually need 1 to 2 days of vacation from our vacation!”. For our 8-9 week summer trips, I always intentionally plan “do nothing” days in our schedule. The kids love those because they get to , well, you know, “do nothing”! So a typical week of traveling is: 1 day travel between cities, 4 days sightseeing/activities, 2 days “do nothing”. Doing nothing could also include walking around your immediate neighborhood, getting a bite to eat, relaxing in a quiet park, watching a little street music, etc. Just no castle tours, day trips out of town, or 4 hours of slogging through *another* museum or palace.

    Liked by 1 person

    • Thanks, Justin! Exactly our thinking! Get the weekly discount from Airbnb, but that doesn’t mean we have to squeeze out the max. On the travel day between two places we also mostly take it easy. Grocery shopping and maybe a walk at the new location.
      Hope all is well with you! 🙂

      Liked by 1 person

    • So true. It wasn’t until we took two weeks of vacation instead of one that we were able to slow down on a trip somewhere. Two weeks in Paris sure beats one. We actually spent time just sitting idle in the many parks, people watching, while enjoying our take-away baguette sandwich.

      Congrats on your early retirement, Big ERN! We’ll have to trade notes on Switzerland some day. One of my favorite places to visit, thus far in our travels.

      Liked by 2 people

  2. Great insights! Since I left my job last year we’ve done a bit more travel, but are restrained over the next year till our younger one goes to college.

    While I’d never dream of calling the slack days a weekend, you definitely have the right idea of taking it slow when you travel. I don’t think of travel as a vacation at all – it’s just living temporarily in some other place where we sometimes find things to do during the day, and sometimes we don’t!

    Can’t wait to here more about your travels…

    Liked by 1 person

  3. Congrats on the first 2 months of your new life. My situation is strikingly similar to yours – in terms of age, nest egg, career path, young child, and enjoyment of my job / friends at work. I’m at “FI”, or at least according to the FI community’s conventional definition/ your SWR rates (albeit I tend to be more conservative than most over the uncertainty regarding HC costs), but am completely torn over the RE decision part. I’m really looking forward to reading more about how you feel in 6-months; how your philosophy on life evolves (or if it ends up being fairly consistent); and what your game plan will be for the next 5 years. Best of luck to you Big ERN family.

    Liked by 1 person

    • Thanks! I understand why people hesitate. For some of us it’s an irreversible decision to go from FI to FIRE. You’ll find the right time!
      FWIW, I found that HC costs that are far in the future, say, due to uncertainty over old-age HC expenses wouldn’t impact the SWR too much. Near-term expenses do, of course!

      Like

    • Hi TZQ, If you don’t mind sharing, how do you calculate your healthcare costs? Based on estimates from others we also tend to be fairly conservative.

      I calculated around 10K per year on average per person between late 30s and 64 and unknown but hopefully no more once medicare starts. The calculation used the second lowest cost silver plan in our area (from the KFF subsidy calculators 2018 numbers) and assumed health insurance would rise 2% faster than inflation, plus an average of $1400 per year in out of pocket costs.

      Although retirement income will be low enough to qualify for subsidies, we assume they will be eliminated with an asset test or some other means before they become meaningful. 2% is also incredibly low based on what has happenned in the last 4 years of the health insurances market places, but I am hoping the big change/uncertainty are over.

      Also congrats BIG ERN, I am glad everything is going to plan and better so far. It is amazing and well deserved that you get to spend this year traveling before your daughter starts full time school.

      Liked by 1 person

  4. Thanks for sharing.
    Interesting insights.
    People ask me to manage their money. This is a good reminder of why I don’t.
    Also, when I went to part-time work I noticed I have less time for blogging. Glad I’m not alone in that.

    Liked by 2 people

  5. As someone about to embark on a taster of early retirement through an extended (and unpaid) leave of absence, it’s great to read about your experiences.

    In terms of managing your investments, I am curious to know whether you have changed your strategy to account for SRR now that you are in decumulation?

    Thanks for continuing to blog – I always find them to be an insightful read.

    Like

    • Thanks! Best of luck with your own mini-retirement.
      I have clearly changed my ways! Instead of 100% equities, we now have a sizable cushion sitting in (tax-free) muni bond funds to help with the SRR for the first few years or early retirement!
      Cheers!

      Like

  6. Thanks for sharing how things are going. I too pulled the plug at the beginning of August and found that I also feel about the same as before. I like your premise that the happiness was already “priced in”. It’ll be interesting to see how things may evolve over time. For me, I’m not doing anything as exciting as travelling at the moment. Rather, I’m working on a few hobbies and projects that I’ve wanted to do for a while, but never had the time when working full time.

    Liked by 1 person

  7. I’m really excited to see where you landed your personal accounts based on all your blog posts (regarding your asset allocation, withdrawal rates and style etc…)

    Liked by 1 person

    • I haven’t done a Net Worth update in a while. Skipped the 6/30 update! Still almost the same as before, but I did shift some money into Muni bonds (small % of net worth) for peace of mind during the first few years in retirement! Will write an update later this year!

      Like

  8. I’m curious about how you feel after 8 months as you may be still in the honeymoon period. When we’re retired, I’m considering keeping a “home base” even though it will cost some $$. Will couch surfing, hotels and Airbnb will get old after a while and having a “place of your own” give you some santurary before the next adventure?

    Safe travels!

    Liked by 1 person

    • Good point! My daughter already asks when we’ll have our own house! But if we keep doing the Airbnb – much more of a homely feel than a hotel room – I’m sure we can do this all the way to December. And then REALLY look forward to having our own home again! 🙂

      Like

  9. My brother in law was a captain of industry with 40,000 employees reporting through him. I remember him telling me to never retire, I’d get so bored. Because he was and is bored. He actually bought a whole factory just to have something to manage in his spare time after he retired. I retired early three years ago and haven’t missed work at all. I still consult a day a week, some weeks none at all, with my former employer and many other companies but it is just for fun. We travel more than we used to but living out of a suitcase for more than a week isn’t fun for us. That’s the beauty of not working full time, you can design your life your way because you have control of your schedule. Some may choose to work a little, some a lot and some not at all, but it is a free choice and you aren’t married to it. Great post, it is fun following your journey as we chart our own course through the rest of our lives!

    Liked by 1 person

  10. It’s great to hear how much you are enjoying your travels and early retirement. I suspect your graph should have a little more slope since June. Now that we have been retired for several years, what we find is that the actual weekend days are good days for down time and hanging out near home, as everyone else is out and about and things are generally crowded. The best day for outings is Wednesday.

    Also, as a new hobby blogger, I find that I only have time for maybe one post a month. We are too busy enjoying all the various hobbies and travels!

    Liked by 1 person

  11. Totally agree on the value of downtime while traveling. On our jaunts in Europe my wife and I always notice the “big bus” tourists dutifully marching along to see the Three Cs: Cathedrals, Castles, and Collections (museums). Most don’t seem to be having much fun and spend a lot of time taking selfies and pictures, probably so they can remember what they saw and did when back home because I’m guessing it all seems a blur at the time.

    On our trips we spend most of our time at a “base camp”, a vacation rental in an area where we want to explore that is our “home away from home” and allows for day trips to sights, a starting or ending point for long walks, and just a place to relax and enjoy the local ambiance.

    Liked by 1 person

  12. do you know what – I have just stumbled across this blog and I am very impressed with it and even more so since you have a wife and amazing daughter!
    You are doing something similar to what we plan to do – and I’m going to keep an eye out for new posts about what you are up to and what’s happening.

    You started blogging in March 2016 so so about 2 years 3 months before FIRE.
    We are looking at a FIRE in between 9 months and 4 years (originally when I was 40 but that might be brought forward depending on a few things). So I have a roadmap to follow!

    Thanks.

    Liked by 2 people

  13. Big ERN! Great to hear from you, my June FIRE brother! Not sure how I missed this when it first came out, other than to add to your “not enough time to blog” (ditto!!) the reality that there’s also a lot less time to READ blogs. Since I agreed with every feeling in your post, I suspect you’ll relate to the reading “problem”. No obligations, write when you can, but don’t worry about it when you can’t.

    Liked by 1 person

  14. Perhaps the best criticism of early retirement is that it its selfish. Typically when you have a 9 to 5, you perform a useful service to others – the company, the government,whoever your client is. However, if you save enough to take the rest of your life off to go fishing, then you’re basically all about yourself.

    So, basically early retirement seems okay with me, as long as you find a way to serve a cause greater than just your own individual needs. Ultimately that’s probably better for you and society.

    Liked by 1 person

    • I don’t feel guilty about not working anymore. I still provide ustility to society by making available capital. Over time, machines will replace ore and more labor, creating labor over-supply and capital shortages. I’m exactly on the right side of both imbalances, thereby doing society a huge favor. No need to feel guilty! 🙂
      But I’ll also do some volunteering, of course!

      Like

    • How many jobs out there truly serve some greater good in any tangible way? I’m talking beyond the “people need batteries, people need hamburgers, ” type of service. Real humanitarian type stuff. Not many is my thought.
      Doing good in the world and having a full time job don’t really have a lot to do with each other in my humble opinion

      Liked by 1 person

  15. Have binged on many of your blogs the past few days – thank you! The depth and breadth of thought in what I’ve read as well as the ties to existing studies are superb. May your journey be kismet for the gift in what you’ve blogged!
    I’m considering a similar road and your efforts give me all the more courage and conviction to do it.
    Thank you!

    Liked by 1 person

  16. I’ve traveled a few times to Europe for work and had a vacation afterwards; it was without a doubt a blast! As the three or four week mark started to close in, there was such a desire to stop doing touristy stuff, be around the familiar routines and life I was used to, and as I finally boarded the plan home, my eyes could barely stay open.

    I learned so many things, saw so many places, and it was wonderful to finally get back home!

    SN – I do miss the espresso 😀

    Liked by 1 person

    • Thanks! Very nice way to put it. I like the diversity of Europe. So far it hasn’t gotten boring and we are already on the last few days here before the ship takes us back. I will miss the German bread and sausages and the Czech and Belgian beers!

      Like

  17. Congratulations on retiring early. Definitely gives me extra motivation for when I pull the trigger. Glad to see that pretty much everything listed is positive. I definitely want to travel more as well and pretty much do a food tour of the world (I’m a big foodie). Well my launch date is still a bit away (I’m 47 and shooting for 53) but still think I will be young enough to enjoy it.

    Liked by 1 person

  18. Sounds like you are doing great. I am leaving my job in 2 months but will start a new one 2 monthsater in Tennessee. We are going to Need Zealand for 2 weeks but 7 months sounds awesome. You didn’t say how your 4 year old is doing with it all. I imagine they arenpayxhed dad and Mom are always available.

    Liked by 1 person

    • Good point! She’s doing well and enjoying the impressions from around the world. But she does ask occasionally when we’re going to have our won house again. I suspect after 7 months she’ll be ready to settle down!
      Best of luck with your travel! Sounds like fun! We will spend only a few days in NZ in late November, early December. Mostly to get a taste before we head back again later!

      Like

    • I can imagine that others hand in their resignation, leave and are significantly happier upon leaving! I guess the warning “individual results may vary” applies here. I was speaking from my own personal experience where I handed in my resignation in February but was enticed to stay along until June. It was one long victory lap for me! 🙂

      Like

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