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”)?
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.
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!