What Slackers, Vacations, Storms and Mansions Have In Common
Hello Swanigans! Yes, I just made that up. If you have been sticking with me this long, you are officially a Swanigan! Thanks for stopping by, it’s greatly appreciated and I hope you enjoy today’s post. Today, I will be laying out the reasons why I work.
You may be saying to yourself right now, “I know why you work Swan, you need money…you aren’t financially independent (“FI”)! You said so yourself on Independence Day.” Well yes, you are right. There are still a number of things I need to do yet before I reach FI and am ready to retire early. For example, I need to fully fund my little ones college fund. It is about 50% funded today (I’ll save this detail for another post). And for that matter, Lucy and I aren’t done having kids and we, of course, haven’t even started funding additional kids’ 529 plans.
On top of that, I have a lifestyle to maintain and I’m not there yet. And lastly, there are a lot of things to prep for before entering the retirement stage. For example, how to tax efficiently withdraw assets to live on, do we want to fully plant roots in Charlotte or elsewhere (we came to Charlotte solely because of a job opportunity), and lastly figuring out how we want to live our “life at work”. Of course, there are other reasons too, but these are the main ones.
So, yes, I must keep working now. But what about after I reach FI? Even after I hit that magic number, I do plan on continuing to work for a few years. Why? Because of slackers, vacations, storms and mansions…let me explain further.
You Are FI, Why Don’t You Quit Now?
Slack on the Job
I have worked very hard for my Company. And actually, in just over four months from now I will have reached my 10 year anniversary. All with one Company, starting right out of college (actually the semester before I even graduated)!
As with many jobs and careers, you don’t start out with your dream position. You pay your dues, you bust your butt, you work nights and weekends, you take orders, and you march on. The way my job is beginning to evolve with recent promotions, etc, I am becoming a leader in my group. More often than not, I am the order giver rather than the order taker.
And probably most importantly, I have gotten really good at my job and know what it takes to perform and succeed at my responsibilities. Work has gotten a bit easier. While I still need to occasionally pull the all-nighter and work the weekends (including most recently the Fourth of July weekend), and upwards of 90 hours a week, on the margin it is a bit more tolerable.
So for that reason, I can slack a bit on the job without letting my responsibilities escape me. This is the time I have worked so hard the last 10 years to get to. And while I may work less (or less hard), I am getting paid more and more. This makes it even more difficult to give up and let go. Which is a perfect lead in to my next reason…
Pad My Lifestyle
Yes, each year more will pad my lifestyle in material ways. Not only is it one less year I would need to live off of my retirement accounts, but it is one more year of adding a pile of money to my accounts.
Don’t get me wrong, I would love nothing more than to spend more time with my family and have complete freedom over my daily activities, but as I get paid more and more, it almost makes it more difficult to retire because I think of ways I could pad my lifestyle by working one more year.
But by continuing to work, I can pad my lifestyle in multiple ways. First, by buying my time back, and secondly, by buying experiences. Let me explain.
How exactly can you buy your time back? Right now, there are a number of things my wife and I do that we don’t necessarily care to do. By continuing to work, we could elect to pay someone to perform these activities for us in the future.
For me, this would primarily include yard work. I love having a nice yard, but I don’t particularly care for mowing the lawn, landscaping, weeding, fertilizing, trimming, etc. The next thing I would pass off to someone else would be vacuuming, sweeping, and cleaning floors. This may sound like WW to you (woman’s work – we maintain some natural gender roles, but not all), but this squarely falls into my realm in our household.
For my wife, this list would include paying for a cleaner to do a deep clean every 3 months or so. She also isn’t a big fan of doing dishes; if she could outsource this it would relieve a big chore. And lastly, she doesn’t really like going to the grocery store. We typical grocery shop as a family and I don’t necessarily dislike grocery shopping. However, I wouldn’t mind not having to waste that time so we’d both be in favor of someone grocery shopping for us and a nutritionist or someone creating our menu/meal plan. Wouldn’t that be a convenience!
By continuing to work, we could pad our lifestyle by paying someone to take these tasks off our hands and free up hours a week.
How about buying experiences? By working another year or more, we could use that incremental income to buy a nice vacation or two. Or we could set aside a lot of that income to supplement vacations in future years.
One of our goals is to show our kids the world, not only taking vacations around the US (so many great places to explore domestically), but also abroad. By working beyond FI, we could afford more and more of these great and memorable family experiences.
Weather the Storm
One of the biggest reasons I’d advice anyone to work an extra year (or a few extra years) is the potential of retiring in the face of a recession. The timing of returns can have a major effect on the longevity of retirement assets and a major risk to the often cited 4% safe withdrawal rate.
In 2008, the S&P 500 dropped 37%. Let that sink in a minute and tell me how you would react if you retired the year before. Even if the decline wasn’t that dramatic, say your portfolio was given a haircut of 25% in year 1, would you still feel comfortable with the 4% rule?
You can answer that question however you want and whatever you feel comfortable with. But before I retire, I want to make sure I could weather a storm that immediately ensues my retirement. Or, for the sake of timing things, perhaps I retire immediately following a big drop. Assuming I’m still comfortable with the amount in my retirement accounts and having confidence that market returns will be strong in the coming years, this may be the most opportune time to retire.
The last reason I will list today, and there may be other reasons I come up with later, is the evolution of future aspirations. The first million is always the hardest to save, and it took us ten years to do so as I laid out in my Net Worth Explosion post. And as I discussed in that post, I hope the second million will take only four years (my everlasting four year goal to double our net worth) or maybe five years.
I recently posted about My Mansion Fantasy, I hope you check it out if you haven’t already. What if someday I decide I do want a million dollar home, or my wife and I downsize to say a 2,000 s.f. home, but want to load it with awesomeness, luxury, and convenience?
I’m a big fan of college athletics. While I don’t necessarily have an urge to give back to my alma mater (I think my tuition was fair compensation), I would be open to gifting to its athletic department. Perhaps I’m feeling generous one day and want to have a new building be named after me (that may be a bit too much…) or a wing of a new building (still might be a tad too much…) or even my name etched on a brick or plaque as a donor (that might be more feasible…).
Lastly, while I don’t worry about passing on an inheritance to my children, I would be in favor of passing something on. Hopefully my wife and I live to 85 or maybe longer, our children would be 55 or so at that point. Would they really need any money from us at that age? Not if we raised them appropriately. Hopefully they will be well on their way toward building a nice nest egg and maybe even considering an early retirement themselves. And if that is the case, a few bucks leftover from us won’t mean much anyway.
But with that said, I previously mentioned how hard and long it took my wife and I to build our first million. What if we wanted to help them build their first by setting aside money in a trust fund for them (something they can’t touch or get at until well into adulthood)? Not an all that bad aspiration and something we could achieve by stretching out our retirement date a bit.
These are just a few of my aspirations. We have and will continue considering these aspirations of ours. If we had endless money, we’d probably pursue them with no doubt. But maybe we work a few years past FI to fulfill some or part of the future aspirations we have or may have in retirement.
After reading this post you may be thinking I’m off the early retirement bandwagon or something isn’t quite right with me. While I can definitely dispute the first one, I’ve never been able to dispute the second one…
Quite honestly, part of the reason I wrote this post is to convince myself to keep working and keep working and keep working! I know I’m not ready to retire yet, but considering I am pre-disposed to wanting to retire early and regularly reading close to 75 personal finance / early retirement blogs in recent years, it is almost enough for anyone to say enough with it and make the leap.
So, as I said, I occasionally need a pep talk to keep working and stay motivated to work, and no doubt I will surely be referencing back to it myself when I am about to convince myself to pre-maturely make the leap to retirement. After all, that is one step that is hard to take back.
So tell me, what do you think about my motivation to keep working? Will you work one or a few more years past FI to build yourself a cushion? What drives you to keep working? Let me know in the comments below.
As always, thanks for taking a look!
The Green Swan
Work Harder, Work Smarter, Retire Earlier and Find Your Beach