Hello, it's Sam from Financial Samurai and in this episode I want to talk about the importance of working smarter, not harder, for financial independence. So one of the guest posts that I had recently published was called "My Secret to Retiring Early with Only 4 Million Net Worth and 2 Kids." So there are two trigger words here, "secret" and the word "only." And this has been complained about in the comments section multiple times.

And I wanted to address this because yes, the word "secret" is a trigger word and "only" obviously is going to piss a lot of people off who don't have $4 million. But this is one man's perspective on how he was able to retire at 41 with about $4 million in net worth, a wife and two kids ages 5 and 8.

And if you read the post, you'll discover that his "secret" was being able to marry well and to work with a partner who had the same ideals as him in terms of saving and investing and planning for the future. And she is going to continue to work, she's going to make at least $350,000 if not more once she becomes a partner at a law firm.

And he is going to take a step back and spend more time with his children and relax. Now if you were to look at Juna, the guest poster, his financial situation, he was able to amass a net worth of $2.5 million. So can you retire early off $2.5 million at age 41?

I would say you definitely can. They are technically not married. So he amassed $2.5 million, she has amassed $1.5 million which equals $4 million. But she's also two years younger than he is. And sooner or later, she's going to build an even greater net worth. So one of the main complaints is, why is Juna considered early retired when women who take off work to raise kids are considered stay at home mothers?

That's a great point and that's a point that I've been bringing up in the past as well. Why are there some men in the personal finance sphere who just say they are early retirees when their wives continue to work, bring home the bacon, provide health care insurance, and that's security?

Well, the reason why a lot of men say they are early retired is due to ego. Men have fragile egos. You can't tell, we all want to be puff puff the providers and we want to say we left on our terms and we are retired and we don't have to do anything.

When in reality, taking care of kids is much harder than any day job that I've ever had and I worked in banking. We're talking for at least my family crying every day. You got to reason, you have to have patience, you have to have just so much concentration when taking care of young children because one look away could mean a disaster.

So ego is the main reason why a lot of men say they are early retired even though they are full time stay at home fathers. Now let's turn the situation around. Why can't women say they are early retirees as well? I say women absolutely can if they want to.

It's equality. Women can say they gave up their careers to be full time mothers and that's a great and important career. If you're a child, you obviously want to have more time with your parents than less. And so if someone can give up their career, especially if it's at the pinnacle of their career, Juna became a partner and he was a partner for three years until he said, "You know what?

I've seen the pinnacle. I know what it's like to be a partner. I'm going to leave now and not have regrets because more money is not going to make me happier and more money is not going to make our family happier." So I was pleased that some commenters were able to recognize how difficult it was to walk away from a lucrative career and a prestigious career.

You know, three years in as partner, maybe in 10 years, Juna will be making over a million dollars a year. And Juna had the courage and the foresight to plan ahead to walk away for the betterment of his family. And I think that should be respected. Everybody's got a different situation, but I think that's a very respectable move.

We have been talking for a long time on Financial Samurai about how to balance the income, the net worth and happiness. At the end of the day, we want to be happy and we want to use money to make us happy and live the experiences that we want. So for Juna and his family, he thought $4 million combined, good enough.

You know, I believe thanks to inflation, $3 plus million is the new millionaire threshold for living like a millionaire from 30 years ago. And in probably 10 years, $5 million is probably going to be the new $1 million. It's just what inflation does. It makes the cost of living more and more expensive.

And we all know this in the year 2022 with the print at over 8.5%. Don't forget those I-bonds going to pay over 9%. That's something to check just FYI. But a $4 million net worth is broken down into about $1.2 million for the primary residence and $2.8 million in investable assets.

Those investable assets, according to the Post, generates about $60,000 to occasionally up to $120,000. And they have a lifestyle that requires $160,000 a year for their ideal lifestyle. So $160,000 a year means you got to make about $200,000 a year gross. Therefore, only one of them can retire early.

And the fact of the matter is his wife doesn't want to retire early because she wants to see what it's like to become a partner as well. And then maybe after two, three years, she might think, "Oh, I know what being a partner is like, making more money is like, the prestige is like the status." And maybe she'll join Juna in early retirement.

But she's not going to quit before she gets to that pinnacle. Otherwise, she's going to have that regret. So in my circumstance, I tried to become a managing director. But after one year, I decided, "I tried. I'm out of here." At least I tried. But if I didn't even try, if I wasn't even up for promotion to managing director after three years of director, then I would always be wondering, "Okay, what if I did try and I could have got to MD and then my life would have been better?" I don't think it would have been.

I would have had more stress and more responsibility, albeit having a bigger bonus at the end of the year. But at least I tried. And I think this is what everybody has to contend with. If you don't try to get to the top of your career or whatever it is you're doing, will you regret it?

And for me, the answer was yes, I would regret it. For Juna, the answer is no because he achieved it. And for his wife, it probably is yes, she'll regret it if she left early. And besides, they've got two young kids and they're just staggering their early retirement. Now I want to focus on the word secret, his secret to retiring early.

A lot of us were focused on saving, investing, making right choices, and then going from there. We have like this heroistic individualism. I don't know what you say, what it's called, but we just focus on ourselves. In America, it's like independence, individualism. But what I think this message is saying, this post is saying, is the secret is to actually find someone who shares your same ideals.

Life is so much easier when you have someone who believes in what you believe and has the same goals. So maybe instead of spending so much time reading and listening about personal finance, how to invest, how to get richer, asset allocation, and so forth, we should spend more time developing relationships, really key relationships, obviously, with our significant other, but also with those in our network, building a strong network that can pull us ahead when we fall or when we want more opportunity.

One commenter said, "The secret in this case wasn't some money investment management insight that I think a lot of us hoped for. The secret was partnering with a rich person who was cool with you working but making no income." Now, if you read the post, you will have learned that Juna and his wife met in law school when they were both broke and in debt.

So back then, they didn't know what their future held. Maybe they could have dropped law altogether like many, many lawyers do after 5, 10 years. Maybe they could have just changed professions and become social workers. You just don't know. But you got to make an investment. And the good thing about relationships is that you can nurture your relationship to improve it.

You can whisper sweet nothings during pillow talk or you can encourage them to do better or you can pick them up when they're down. You can do a lot of things to improve a relationship. Whereas if you're a passive investor in a stock, you're just going to hope that management has their head on straight and they do the right thing.

I have a feeling a lot of us, if we use percentages, are around, let's say, 80% focused on how to optimize our finances and maybe 20% on how to improve our relationships with our significant others and other people in our network. I think that percentage change or difference is too much.

I think we should probably move in more towards 50/50 or 60% money, 40% relationships. And if you don't have someone, if you're single, you should probably spend more than 50% of your time trying to find someone to partner with. Because again, partnering with someone who you love just makes life so much better and so much easier.

And just think about the simple situation of, let's say, splitting rent costs. There's a $1,500 one bedroom or two bedroom. It's $1,500 if it's just you, but it's $750 if you split it equally and you like to share that space with someone. It's just that much easier. So in conclusion, please try to nurture your relationships, your existing relationships, and your future relationships.

I think they'll do a lot to help you build wealth and happiness over time. Thanks so much everyone for listening. If you liked this episode, I'd love a positive review and share it around.