It's always interesting listening to skeptics of early retirement. In my offline life I often avoid talking early retirement because it freaks people out and induces that eye-rolling look.
It seems impossible to your average, not-very-Moose-like individual who bury themselves into a monster mortgage, car payments, property taxes, hockey fees, and a job to "earn" a 2 week vacation once a year.
People are even more skeptical about the idea of living from a passive income. It's like they know the Amway flogger will fail, or that it's not "real" retirement if you spend your day running around selling flavoured water and dish soap. That's just a new job. But no job at all? It's just not possible in today's economic environment.
The more astute observer will ask two main questions:
- What would you do all day? and
- How will you handle a market downturn?
Let's tackle the first one...
What Do Early Retirees Do?
This question is loaded with heaps of social guilt and pressure. In our society our minds have been twisted since birth that we owe it to everyone to perform labour for others. Idle hands are the devil's playground our forefathers have said.
You must work now, study for work purposes only, work some more, take a short vacation here and there, work overtime, and after forty or more years of sweat and toil, the government will finally allow you to exist a few years in retirement with a social hand out. Most likely because you're too old to be a good worker.
Even our tax system is structured to suffocate labourers. People with jobs get taxed at rates ranging from 20% to 60% or more. Someone living from investments, or a business owner, often pays half the tax or less. Yet it is still conventional wisdom to find a good, stable job.
On every popular TV show the characters work all the time and identify themselves with their jobs: the always-shouting lawyers on Suits, sexy doctors and interns on Grey's Anatomy, scientists on The Big Bang Theory, cops on True Detective, actors on Entourage, and the list goes on. It's work-centric entertainment.
Society has ingrained in us that we deserve to work all the time, the harder we work the better person we are. And we are not just Daren; we are Daren the *insert a certain government job*.
It's almost always the first thing we do when we meet someone; work dominates our conversations and our thoughts. Ask them what they do. Everyone knows what's meant by that question.
What if you answer that question with a word? Nothing.
Well that's impossible. Then you are judged as a nobody. You must be lazy, or one of those leaches the Conservatives whine about and Liberals fawn over, pity, and pamper.
How can you do nothing all day? You will certainly become an alcoholic, drug user, or perverted necro-manga porn addict with all that free time.
Truth is that no one naturally does nothing, our brains are not wired to do nothing.
If you doubt me, try sitting down on a chair, set a 10 minute timer on your phone, and think about nothing. You will quickly find it's impossible to do nothing. Even for just 10 minutes. You will think about worries, you will think about the things you could or should otherwise be doing in that 10 minutes, you will worry more about those thoughts, you will think about the time, you will think about what you are going to do when 10 minutes is up, you will think about how many minutes are left, etc.
Our brains are designed to be naturally creative, active, and thoughtful; they're not designed to spend 8 or 10 hours a day slogging through an uninspiring job.
That's why I—and probably you—have never been at a job for more than a few years before a form of boredom sets in. You still do the work, you're still productive, but your brain is running in a type of "standby mode" most of the time. Natural inspiration is lacking.
There's a better answer to the question: only what I want to do.
Wouldn't life be genuine and deeply fulfilling if you only did the things you truly wanted to do? If you want to build a house, you build a house. If you want to take some university classes for the sole purpose of learning something new, you take those classes. Let's say you want to learn a new language, you just go to a language school. If you want to write a book, you sit down and write.
Today, if you love poetry for example, you have little chance of devoting yourself to that passion. At a young age, mom and your school guidance counselor remind you that poets don't make money. So you reluctantly go to college for a career degree, find a job, and live miserably as an inspiring poet. Poetry feels so far away, you almost begin to resent it. If someone else is a successful poet, you might even jealously scorn them only because you can't do the same. Or you might envy them and become more depressed.
You could substitute poetry for just about any passion. Did you ever notice that all the fun things in life, the things we actually want to do, the things our brains naturally aspire to, all apparently make no money? They are all "unacceptable" labour choices; they're relegated to mere hobbies.
If you're an early retiree, you could be an author, a poet, a musician, a tinkerer, a creator, a traveler, a learner, a giver, an adventurer, a builder, an artist, an athlete, a chef, a truly great parent, a mentor, or anything else you want to be or do.
Being an early retiree is like winning the lottery. You don't have to do anything you don't want to do because of financial obligations. You are free to do the things you naturally aspire to do. I'm betting that's not working a job forty hours a week.
Early retirement is the opportunity for true, individual freedom.
Part 2 talks about market downturns...
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