The-negatives-of-early-retirement-life-nobody-likes-talking-about
00:00:00.000 | Hello, it's Sam from Financial Samurai and in this episode we're going to talk about
00:00:03.920 | the negatives of early retirement life that nobody enjoys talking about.
00:00:09.960 | Now it's been over six years now since I left my day job in 2012 and I must say that for
00:00:16.600 | the most part it's been pretty good, but I've also discovered plenty of negatives since
00:00:22.040 | the time I left.
00:00:23.480 | I know why we revert back to our baseline state of happiness no matter how much freedom
00:00:28.720 | and how much money you have.
00:00:30.940 | So let's go through five of the negatives of retiring early now that I'm a grizzled
00:00:35.320 | veteran.
00:00:36.560 | So the first negative is you will suffer an identity crisis for an unknown period of time.
00:00:43.380 | When you've spent at least a decade working in a profession, you'll find it incredibly
00:00:47.620 | jolting to no longer be identified as the person who is a marketing expert, an investment
00:00:52.760 | professional or the management consultant who can figure out how to optimize a business.
00:00:58.360 | It's only after you leave where you truly realize how wound up you were in your profession.
00:01:04.920 | It's always the case where you never really fully appreciate what you have until it's
00:01:09.080 | gone.
00:01:10.080 | Your identity crisis may last as short as let's say two or three months or it may last
00:01:15.400 | for years.
00:01:16.520 | It all depends on how wrapped up you were in your job, how much you cared about that
00:01:20.840 | job, how long you spent getting educated after high school to get that job and whether you
00:01:27.080 | have a clear plan post-retirement.
00:01:30.560 | So for example, doctors who spend what, years and years, four years at least after college
00:01:36.840 | and then three years of residency to become full-fledged doctors are the people who suffer
00:01:41.240 | the most after leaving their occupations with regards to having an identity crisis.
00:01:46.480 | Conversely, high school graduates who somehow strike it rich with a product or an invention
00:01:51.280 | or who simply just make a good amount of living and save and save and just decide, "You
00:01:55.160 | know what, I'm not going to do this anymore," seem to adjust much easier in post-retirement
00:01:59.040 | life based on the people I've talked to over the years.
00:02:02.720 | Job titles can be incredibly addictive.
00:02:05.960 | Why else do people get so depressed when they're passed over from promotion?
00:02:10.360 | Why else do people try so hard to get promoted sooner and faster than everybody else?
00:02:15.560 | Do not underestimate the importance of being a manager, a director, a vice president or
00:02:20.480 | even a C-level executive.
00:02:22.480 | It really does mean a lot to your identity.
00:02:26.280 | After all, the most common question most people ask when they first meet each other is, "What
00:02:30.440 | do you do for a living?"
00:02:31.440 | And if you tell them you don't do anything for a living, well, then you might just feel
00:02:35.000 | like a sheepish loser.
00:02:37.280 | And you'll want to try to explain yourself, but by then, your three-second first impression
00:02:42.520 | will no longer hold the person's attention and they'll probably just move on.
00:02:47.560 | So in my case, after working in the Asian equities business for 13 years, it felt hollow
00:02:52.720 | to no longer have my executive director title or be identified with my investment firm.
00:02:58.600 | After all, I was there for 11 years.
00:03:01.320 | I felt sad that I could no longer go to Asia for conferences or with clients.
00:03:06.660 | For so long, I would take a business class trip to Hong Kong or India or China or Taiwan
00:03:12.720 | that it was part of my quarterly routine.
00:03:15.200 | I felt special every time I was allowed to board first.
00:03:18.280 | You know, business class, board three, four, economy class.
00:03:21.880 | Because generally, I'm just flying economy like I am now.
00:03:25.360 | And I felt important when clients would entrust me to show them around in a foreign land.
00:03:29.820 | So for the first year after leaving my job, I wondered how the business was going to do
00:03:33.880 | without me.
00:03:35.200 | Could they really survive without my relationships and expertise?
00:03:39.920 | After all, my partner and I built the business to the foundation it is when I left.
00:03:45.280 | So surely they needed my relationships and my skills.
00:03:49.520 | But after months went by with no email or no phone call from my old employer saying,
00:03:53.520 | "Hey, we want you back," I had to come to terms that I was no longer important to them.
00:03:58.520 | I wanted to believe that my position meant something to the firm and to the people that
00:04:02.200 | I serviced.
00:04:03.200 | But at the end of the day, the person I trained to replace me as part of my severance agreement
00:04:07.760 | was good enough.
00:04:09.120 | And because he was good enough, I concluded that I was no longer any good.
00:04:13.680 | So this ego hit took me a full year to get over where I was finally like, "You know what?
00:04:18.920 | I'm going to leave this world behind because I've got a new world with me with Financial
00:04:22.840 | Samurai."
00:04:23.840 | Two, you will be stuck in your head.
00:04:26.960 | There is this disease called locked-in syndrome.
00:04:30.680 | It's where the patient is aware but cannot move or communicate verbally due to complete
00:04:36.260 | paralysis of nearly all voluntary muscles in the body except for vertical eye movements
00:04:41.360 | and blinking.
00:04:43.120 | So that is kind of like my worst nightmare.
00:04:45.920 | And when you retire early, you're stuck in your head because when you suddenly have an
00:04:49.560 | extra 10 to 14 hours a day of free time, it's very difficult to optimize your time wisely.
00:04:56.080 | Just like how bedrooms and kitchens and living rooms naturally get messier and messier and
00:05:00.080 | messier, your mind naturally gets lazier and lazier the more time you have to do anything.
00:05:05.000 | So your productivity will suffer.
00:05:07.680 | You will no longer feel motivated to achieve great wins.
00:05:10.960 | And as a result, you might slowly start to get depressed.
00:05:14.760 | Only after some really deep soul searching and some "What the hell am I doing with my
00:05:18.940 | life?"
00:05:19.940 | questioning will you begin to organize your time better and become more productive.
00:05:24.100 | Your mind really can be dangerous because it can always second-guess your actions.
00:05:28.720 | You're going to ask yourself, "Did I retire too soon?
00:05:32.160 | What if I run out of money?
00:05:33.640 | What if people think I'm a loser?
00:05:35.080 | What if I can't get back into the workforce if things go wrong?"
00:05:38.640 | When you have a lot of time to think, your doubts go on and on.
00:05:42.720 | Therefore, retiring early may render you inoperable for an unknown period of time.
00:05:48.480 | So what happened to me?
00:05:49.700 | Because I left work at the age of 34, I was worried for the first two years whether or
00:05:53.840 | not I had made the right choice.
00:05:55.400 | Originally, my plan was to work until age 40.
00:05:58.640 | But then I was like, "Well, I found Financial Samurai and I negotiated my severance, so why
00:06:03.360 | not?"
00:06:04.360 | But still, I had my doubts.
00:06:06.040 | No rational person leaves a well-paying job to be unemployed in their mid-30s.
00:06:10.880 | Because once you're in your late 30s, that's when the money really starts getting good.
00:06:15.200 | And by the time you reach your 40s, you should be at your maximum earnings power.
00:06:19.180 | During my first year of early retirement, to the outside world, I proudly proclaimed
00:06:23.600 | I was retired from a career in finance.
00:06:26.000 | But on the inside, I was second-guessing my decision to leave.
00:06:29.600 | Because of my uncertainty, I decided to do some part-time consulting with some financial
00:06:34.560 | technology startups for about 20 hours a week.
00:06:37.360 | It was a great way to distract my mind from all my fears, earn some side income, and re-plug
00:06:42.800 | myself into society.
00:06:45.060 | I also dived deep into my writing on Financial Samurai, writing three posts a week.
00:06:50.220 | Writing has always been my most cathartic way to deal with any uncertainty or problems
00:06:54.620 | I might have.
00:06:56.000 | I wasn't afraid to tackle any topics that concerned me.
00:06:59.000 | For example, recently I talked about earning $300,000 a year in order to live a middle-class
00:07:04.280 | lifestyle in San Francisco.
00:07:05.880 | And the reason why I did that was I wanted to look at the numbers to see how much you
00:07:10.160 | would need to live a comfortable lifestyle in San Francisco if you had to pay for private
00:07:14.880 | school tuition.
00:07:16.560 | Now the reason why is because there's a lottery system in San Francisco where there's no guarantee
00:07:21.640 | that my son could get into a public school in my neighborhood.
00:07:25.360 | And if that's the case, then I guess I have to pay for private school or I've got to move
00:07:28.840 | away.
00:07:29.840 | And so $300,000 is more than my current passive income, and that provides some stress, but
00:07:35.280 | at least that gives me a goal to try to make more money by the time he goes to kindergarten.
00:07:39.760 | Alright three, people will treat you a little weirdly.
00:07:44.000 | Like you're a misfit or a miscreant.
00:07:46.840 | You know, whether it's because retiring early is unconventional or because people are secretly
00:07:50.960 | jealous you aren't grinding away at a day job, people won't give you the same amount
00:07:54.840 | of respect as working class citizens.
00:07:57.680 | After all, if they can't describe what you do for a living, then they can't pigeonhole
00:08:01.560 | you into an archetype that is comfortable for them.
00:08:05.280 | Having a job means you are a productive member of society.
00:08:08.600 | If you retire at a young age, people will assume you are simply slacking off and not
00:08:12.920 | paying your fair share of taxes.
00:08:15.520 | They'll sometimes look at you as a leech they want to just flick off.
00:08:19.280 | Further, if you're an outcast, then you won't be invited to parties or events that other
00:08:23.840 | working people always get to attend.
00:08:26.760 | You're simply not top of mind to them.
00:08:29.680 | So if you're an extrovert, early retirement will be more difficult than if you're an introvert.
00:08:35.320 | So regards to what happened to me, after the first year of early retirement, I no longer
00:08:39.960 | told anybody I retired early.
00:08:41.880 | Instead, I told them, you know, I was a writer or a tennis teacher or a fintech consultant
00:08:47.280 | or simply in between jobs.
00:08:49.720 | Prior to that, I think a lot of people just assumed I was a trust fund baby who did not
00:08:53.560 | have to work and that's the last thing this middle class guy who attended public school
00:08:59.000 | wants to be known as.
00:09:01.080 | My favorite time of the year was during the winter holidays.
00:09:04.120 | I loved going to all the holiday parties and getting tipsy with fellow revelers.
00:09:08.840 | Now I get invited to zero holiday parties because I don't work for anyone, nor do I
00:09:14.040 | get invited to client holiday parties either, even though I have several partners who are
00:09:18.600 | based in San Francisco Bay Area where Financial Samurai does really good business with them.
00:09:24.080 | So it may sound silly or a little petty, but having a drink with good people with shared
00:09:27.920 | interests really means a lot to me because I am pretty extroverted.
00:09:32.160 | I would say like an eight out of 10.
00:09:34.160 | And the thing is, since I've left, I've continued to pay tens of thousands, maybe hundreds of
00:09:40.100 | thousands in taxes since because my online business has continued to grow and I sold
00:09:44.840 | my rental house, sold some investments.
00:09:48.040 | So you know, I'm still paying my taxes, folks.
00:09:50.360 | I'm not leeching off society.
00:09:51.880 | I think I'm actually continuing to contribute to the redistribution of wealth in America.
00:09:58.080 | Four, you'll be disappointed that you aren't much happier.
00:10:02.500 | So many people think that once they achieve financial freedom or leave a job they dislike,
00:10:07.120 | they'll suddenly be permanently happier.
00:10:09.760 | The truth of the matter is your elevated happiness will only last at most three to six months.
00:10:15.600 | Three to six months, folks.
00:10:16.840 | It's a good time, but it's not a permanent increase.
00:10:20.640 | Eventually you'll revert to your natural state of being.
00:10:23.520 | And if you don't believe me, just look back to your high school or college years when
00:10:27.120 | you didn't have any money at all.
00:10:29.040 | I'd venture to guess you were just as happy as you are now, if not happier when you were
00:10:32.920 | a broke college student.
00:10:35.140 | So that happiness barometer doesn't fluctuate too much.
00:10:39.400 | Having the freedom to do what you want is priceless, but you will eventually take your
00:10:43.040 | freedom for granted like the air that you breathe every single day.
00:10:49.040 | And during the times that you do feel kind of angry or annoyed or unhappy, you're going
00:10:54.440 | to feel like what's wrong with you since you have all this financial freedom and time?
00:10:59.240 | Just think about the citizens in the happiest countries in the world like Norway or Sweden.
00:11:04.840 | They're always in the top five.
00:11:06.880 | But imagine if you're not a happy person there.
00:11:10.080 | Gosh, you'd probably feel like a loser.
00:11:12.560 | So what's going on with me?
00:11:14.000 | I thought I'd be much happier not having to report to a micromanager boss I did not respect.
00:11:19.120 | I really didn't respect him.
00:11:20.720 | He was kind of overweight.
00:11:22.740 | He wasn't that smart.
00:11:24.720 | And he just wasn't really charismatic at all.
00:11:28.640 | But my happiness after I left my job was fleeting and only lasted about a week before I was
00:11:33.560 | back to my regular self.
00:11:34.880 | One week, folks.
00:11:36.640 | Instead of my happiness was weighed down by months of uncertainty on whether I'd made
00:11:40.300 | the right move to leave my job.
00:11:42.800 | So although corporate politics no longer pissed me off, other things end up filling the void.
00:11:47.680 | For example, drivers who decide to double park on a busy street in rush hour traffic
00:11:52.520 | really pissed me off.
00:11:54.680 | Dog owners who decide to let their dogs poop in front of my house and not pick up after
00:11:59.120 | them really pissed me off.
00:12:01.320 | So in the past, I could only allocate a small amount of annoyance to such incidences.
00:12:07.020 | But now, my annoyance bucket has more capacity, so it just gets filled up by other things.
00:12:13.400 | Instead of being at a permanently happier level, I'm simply no longer as annoyed or
00:12:17.800 | angry at things as frequently.
00:12:20.200 | Further, the volatility around my steady state of happiness is lower.
00:12:24.560 | So I guess in a sense, I'm more mellow.
00:12:26.840 | Alright, fifth and finally about the negatives of early retirement.
00:12:30.960 | You constantly wonder whether this is all there is to life.
00:12:35.040 | Most of us spend 13 years going to grade school so we can spend 4 years in college in order
00:12:39.540 | to get a decent job.
00:12:41.700 | Then we spend decades trying to earn and save money in order to provide for our family and
00:12:45.940 | then one day retire by 65.
00:12:48.500 | With good luck, we'll live another 20+ years maybe and enjoy all the fruits of our labor.
00:12:54.300 | So when you retire at a much earlier age, you're constantly left wondering what's
00:12:58.820 | next.
00:12:59.820 | You are mentally twiddling your thumbs waiting for the next big thing while your close friends
00:13:03.540 | are all at work working at their purpose or so it seems.
00:13:08.080 | Early retirement can get extremely mundane and boring because you have nobody to spend
00:13:12.180 | it with because they're all working.
00:13:15.240 | So it can get really boring and as a result, you're repeatedly forced to will yourself
00:13:19.420 | into action.
00:13:20.620 | So this constant self-starting attitude can be very tiring to the point where you just
00:13:25.680 | want to rejoin the workforce and be told what to do.
00:13:28.620 | So what's going on with me?
00:13:30.020 | Well, I totally thought to myself, "What's next?
00:13:33.220 | What's next?
00:13:34.220 | What's next?" for the first couple of years and I probably drove my wife nuts during the
00:13:38.140 | first 2 years of early retirement as well because I constantly told her I was bored.
00:13:42.660 | Only boring people get bored, right?
00:13:44.780 | Well, I think that's wrong because everybody gets bored at some point and when you're working,
00:13:49.380 | you don't have time to get bored because you're working.
00:13:52.020 | There's only so much tennis, golf, and softball I can play before my knees break and my shoulder
00:13:56.640 | gets strained and my lower back just can't move anymore.
00:14:00.920 | And there are only so many churches to visit in Europe before they all start looking the
00:14:04.660 | same.
00:14:06.140 | She used to have vacations from me, my wife did, because I was always away traveling for
00:14:10.620 | work once a month.
00:14:12.140 | Now she sees me in the morning, in the afternoon, in the evening because she too doesn't work
00:14:17.340 | because she's a stay-at-home mom which is a full-time job.
00:14:20.940 | And so hey, it's great that we have 3 bedrooms.
00:14:23.580 | Otherwise, I'm pretty sure we'd both have gone crazy from seeing each other so often.
00:14:28.860 | It was only after our son was born in early 2017 that I felt a renewed sense of purpose.
00:14:35.060 | Before my boy, I felt my purpose was to help educate as many readers as possible about
00:14:39.380 | personal finance in order to one day be free as well.
00:14:43.900 | After my boy, my purpose has expanded to keeping Financial Samurai long enough to teach him
00:14:49.060 | about operating an online business out of fear he may have a tough time getting ahead.
00:14:54.500 | And I fear this because he's a minority, he's mixed, he might have some issues with his
00:15:00.140 | vision, who knows?
00:15:02.660 | And you know, kids are cruel and life is really, really competitive due to the globalization
00:15:06.900 | of the world.
00:15:08.100 | So with Financial Samurai, I can show him the ropes, I can talk to him about how to
00:15:12.960 | speak more eloquently perhaps with enough practice on my part, how to write good copy,
00:15:19.100 | how to be convincing in your prose, and how to, I don't know, build a brand and drive
00:15:25.740 | traffic to your site.
00:15:27.020 | I think these are all good skills that everybody should have and now I just have to think,
00:15:32.300 | "Well, I got to make it last for at least 10 years or 15 years until he tells me, 'Dad,
00:15:37.420 | I don't want to learn any of this.
00:15:38.940 | I want to be a guitar player,'" which would be pretty cool.
00:15:41.900 | Hopefully he's pretty good at it.
00:15:43.500 | In addition, I now need to live long enough until he finds someone who loves him as much
00:15:47.860 | as I love my wife.
00:15:49.360 | I don't think I'd be able to die in peace if there was nobody to replace his mom or
00:15:53.460 | me.
00:15:54.460 | I would really, really hope that he finds someone, hey, maybe it's a high school sweetheart.
00:15:59.740 | Then I'd only have to wait, hmm, maybe 13 to 17 more years until he finds someone, settles
00:16:07.500 | down and lives happily ever after.
00:16:09.580 | That would be awesome.
00:16:10.780 | So as a result of needing to live longer and living for him, I'm exercising more, I'm
00:16:16.820 | watching what I eat more carefully, and I'm meditating longer to keep my mind fresh.
00:16:24.020 | So in conclusion, there's no doubt in my mind that early retirement is a worthwhile goal
00:16:27.980 | to pursue.
00:16:29.340 | I strongly suggest you guys start building passive income sooner rather than later.
00:16:35.540 | Having the freedom to do what you want cannot be overstated.
00:16:39.860 | Just know that your mind will play games with your spirit during the first years after leaving
00:16:45.260 | work.
00:16:46.260 | And some of you, frankly, won't be able to take the early retirement lifestyle and will
00:16:50.900 | end up going back to work.
00:16:52.820 | Just know that with enough conditioning, you will eventually embrace your freedom.
00:16:58.220 | Nobody I know who retired from corporate life early has stayed retired.
00:17:03.300 | They've found their purpose, whether it's a different type of occupation, whether it's
00:17:07.140 | volunteering, whether it's doing something entrepreneurial, and in my case, writing and
00:17:12.420 | doing something entrepreneurial.
00:17:14.740 | Once you find that purpose, you will take steps.
00:17:17.140 | You'll take steps to ensure you remain free forever.
00:17:20.280 | So good luck everyone on your financial independence journey.
00:17:23.180 | I promise you, I promise you, you will not regret sacrificing things today for the freedom,
00:17:29.380 | the freedom you will enjoy tomorrow.