Burnout – how to deal with it

Full Time Finance and Chief Mom Officer have interesting articles out on Burnout, the idea that at certain times of your life, the issues of work, family, finances, etc. combine to push you towards the edge (and sometimes over it) – and your body and mind naturally seek ways to relieve the pressure and keep you from exploding (or dying). It is a big problem is our world, though folks have been dealing with stress and burnout for millennia. It just seems to be something new due to the fast pace of life and due to the fact that it is happening to you!

Burnout

Burnout is one of the major reasons folks get on the FIRE wagon, as they seek to escape from the stress and move towards a better life. It is only through later reading that newcomers to our community learn that the secret to success in early retirement is to be retiring “to” something, not “from” something.

Chief Mom Officer laid out her four stages of burnout:

  1. Exhaustion
  2. Shame and Doubt
  3. Cynicism or Callousness
  4. Crisis

Anyone that has been following the blog knows that I was reaching the point of burnout at the end of last year. I was well past #1 and #2, and pushing #3. My writing took a darker turn, and the issues I had with my work and my boss definitely affected my home life, my writing, and my happiness. I was seriously considering resigning from a lucrative position, in which I enjoyed the work (just not the boss).

I was fortunate to have a supportive spouse (one of the reasons why you should always have friends and family to talk to, and who see you regularly – so they can tell you if you are acting differently). Luckily, I was able to renegotiate the position, and my company put someone above me between the problem boss and me. So far, it has worked well, and I have continued to do well in the role.

Full Time Finance notes some of the causes for burnout (primarily work related causes) are:

  • Overwork
  • Poor treatment and neglect
  • Insufficient challenge (an odd one, but one he explains well)

I am sure there are others involved that folks could name.

The key is to be on the lookout, identify when you are suffering burnout, determine the cause and try to create the change needed to deal with it. It is not easy, especially in our dog-eat-dog world, but your emotional and physical health may depend on it.

Good luck out there!

Mr. 39 Months

Financial Advisor meeting #3

It is all about the assumptions….

Well, last night we had our third meeting with the financial advisor, and things did not go as well as I might have hoped. I was hoping that, after we gave him a ton of information before we even started, and answered all his outstanding questions in sessions #1 and sessions #2, that he would have some more concrete analysis for us to review last night. In the first session, he showed a sample binder from another client that had a wealth of data, spreadsheets, annual spending vs. income, etc. Several scenarios were explored. I really wanted that 3-ring binder!

Alas, it was not to be. He had two scenarios to show us on the computer in order to get our feedback, and to make any final “tweaks” to the income, spending and assumptions. In looking over his shoulder at the computer, I pointed out a few errors I thought I saw (For example, he continued charging us for company health insurance, once we retired early – as well as charging us for the new insurance we’d have to take out, etc.). Because I did not have anything in front of me, I could not really correct/alter some of the data he is going to be using.

In just the short review, it is obvious that a lot of the analysis is based on some of the assumptions he has put in (inflation rate, rate-of-return, etc.) and that will determine how well we do. What is funny is he started out saying that our original plan (work four more years, take Social Security at full retirement age of 67) fulfilled 95% of what we needed, but when we dug into the details, we were in the black all the way to age 97/99 (our plan). Therefore, his numbers were off somewhere.

When asked, he said, “you definitely can’t retire right now” which does not really match my numbers, when I add in Social Security. Still, I cannot refute him without the actual data/spreadsheets. He is saying all the things that Mrs. 39 Months wants to hear about being cautious, so I am afraid he might be poisoning the well in terms of achieving FI. We will see.

Still, we did make some good decisions based on our discussions:

  • Do the Roth conversion of $40K this year (probably the last year we’ll be able to do it until we retire)
  • Stop putting money into the deferred account at work. Go ahead and just take it as regular salary, pay the taxes now, and invest the money. If we continue to put it into deferred, we’ll have a major tax bite when I leave the company
  • Depending on the situation, consider beginning to withdraw from the deferred account, so you can draw it down instead of paying the big lump sum when you leave the company.
  • Look into benefits/risks of taking social security later than 67. Your SS benefits will increase, but you will need to draw down your investments more to live off for that 3 years. What is the right balance?

I think we are getting a benefit out of this, and I am glad we are doing it. I hope that I am passing good info along to folks. If you can think of something, you would like me to explore with him, please comment.

I will let folks know after we have our fourth meeting (early November) how that is going. In the meantime, I hope all your plans work out.

Mr. 39 Months.

Walking through Antique Stores

             

One of the more interesting idea in the US is the idea of going “antiquing.” This is where you go visit certain parts of the country near you that have an abundance of antique shops, and see if there is something you might like to buy from someone else’s leftover “stuff.”

I had the opportunity to be a “roady” again for Mrs. 39 Months at a dulcimer festival near Asheville NC. Asheville and the surrounding area is a wonderful, mountainous region, plenty of outdoor activities, fall colors, and a general “funky” attitude (lots of coffee shops, music venues, art exhibits, etc.). It is one of the areas that we are considering retiring too, especially since a lot of my family is just over the mountains in TN (2-hour drive away).

Asheville also has a large amount of antique shops/stores – big warehouses of space with little 10’x10’ and 20’x20’ sections walled off, where dealers have put out large collections of old items, mostly bought at estate sales and moving sales. You would think that the advent of eBay and other on-line purchasing systems might have put a crunch into this, but it does not appear to have.

It is always fascinating to walk around in these and see items that you may have purchased in the past (especially toys) that now are listed as “antiques.” It is fun to remember playing with the toys as a kid, reading some of the books/magazines you had, or remembering some of the other items that were part of your life that you happen to come across there.

It also brings out a bit of sadness/awareness when you see a family’s prized possessions now laid out, and fetching pennies on the dollar for what they paid for. As I walked around, I saw lots of furniture, many collectables, and many items that you know someone spent a lifetime collecting and enjoying. Now it is sitting in an old tobacco warehouse waiting for someone to show interest. It made me realize again that the accumulation of “stuff” does not necessarily make you happy, and probably is going to go fill up a landfill or sit in a warehouse.

For me, I was looking for old woodworking tools to purchase cheap, fix up, and then re-use. I figured at least that would do honor to some long-lost woodworker who used the items. Trying to keep the old crafts alive.

Mr. 39 Months.

Financial Advisor meeting #2

As you remember, I wrote how Mrs. 39 Months does not trust my numbers, and wanted us to meet with a professional financial advisor to bounce my numbers off of and to go through various scenarios. She is very conservative and concerned that we will run out of money. Longevity runs in her family (her aunt lived to 102, and the rest of the women on her side lived into their 80s and 90s). Therefore, I understand her concern – all my planning assumes she lives to 99 (and I live to 97).  

Some folks have asked about the fee we are paying for the advice. He is a fee-only planner, though he does manage some folk’s investments for a 1% per year fee. The fee he is charging us, for a New Jersey suburb of Philadelphia, is a flat $2,900. When we first engaged him, the financial advisor stated that it would be for four (4) meetings. The agenda appears to be something like:

  • Meeting 1: Share with advisor our info (typically in hard copy form, though I gave him ours electronically)
  • Meeting 2: Clarification of numbers, budget, situation, etc. Opportunity for the advisor to ask questions and get answers prior to doing the work, and to share some of his planning assumptions with us
  • Meeting 3: Sharing of the plan and some base scenarios that we have asked for him to run. After review, give him ideas for other scenarios to run
  • Meeting 4: Final meeting to run through any alternate scenarios, finalize the plan, determine next steps

He has also said we could come back “every so often” to update it, since it is already in his system. I am assuming there is a small fee for his work, but not sure.

I was hopeful that, since we gave him all our data electronically in advance, we might have jumped past meeting #2 and gone straight to #3. I wanted to get ahold of the three-ring binder with the big plan and analysis in it! I wanted to look at his planning and compare it to mine (and potentially share it with everyone here). No such luck.

Our planner had been dealing with some family issues (he’s the only child and his mother had to go to hospital for extended stay and many tests) so he was not able to really do the analysis. He still had a few questions and thoughts he wanted to share with us as well. So, no binder, not deep analysis. Still, some of the planning points that he shared/we worked out:

  • Inflation assumption: 3.25% – a little higher than the past 10+ years, but historically accurate in our lifetimes
  • Inflation for medical: 6% – very accurate historically, and something I didn’t consider in my initial planning
  • No inheritance planned – my mother is well off after a life of frugal living and excellent planning. However, we assume we won’t get anything (again, staying conservative with Mrs. 39 Months)
  • Changed the life assumptions from 90 years old to 99 and 97 (see above)
  • Discussed scenarios to look at, including immediate retirement, retire on my schedule of July 2020, and retire when I hit 60 and Mrs. 39 Months hits 62.

There were a few other clarifying questions and for the most part, we are making very conservative estimates and plans. While I am a little more willing to plan “to the edge” of retirement, I do not think we will go that route.

One of the biggest benefits to this is that it has gotten Mrs. 39 Months to open up with her thoughts about retirement, budgets, lifestyle and plans. Despite my prodding over the last several years, she really has not opened up too much about it – until we started to have these meetings. Now we have created a budget, discussed travel and lifestyle, and started working some of the details out. Mrs. 39 Months commented to me after the second meeting that it was a strange thought that, even in our conservative planning, retirement was just 4 years away.

The fact that this is enabling us to discuss it this way is worth the $2,900 fee alone, even if we did not get any analysis.

I will let folks know after we have our third meeting (late October) how that is going. In the meantime, I hope all your plans work out.

Advisor Meeting #1

Mr. 39 Months.

What Does Your “Year 2” Look Like?

For most folks in the FIRE community, part of what motivates us is the free time we hope to have once we hit our “number.” Time to pursue other goals, hobbies, time with family & friends, etc. We look at the future and imagine all sorts of things we would be doing once the need for money is taken care of. Often this involves extensive travel (both in the home country and throughout the world). It can be very exciting.

Most folks have a long list of what they intend to do in their first year – but what are your plans for year 2? Once you have checked off all the immediate ideas and needs, and you are starting towards the long, daily “grind” of being financially independent, what is your life going to look like. It is this part of planning that many FIRE folks fall a little short of – yet it is here where we will be spending the vast majority of our time. How do we plan for year 2?

What are you passionate about?

One way is to ask yourself what are you really passionate about? What gets you out of bed in the morning, gets your blood flowing when you get the chance to do it. It may be volunteer work, working on your house or garden, a specific hobby, or spending time with your family. Take  the time to sit down and ponder/meditate on what you are passionate about and use that as a basis to plan your year 2 activities.

Not a race, not one answer

One of the mistakes folks make when they think about this is to believe that it is a one-time decision, and once they start down the road towards activities for year 2+, they will be stuck in it. Nothing is further from the truth. Almost everyone will have changing interests/passions over the next 10, 20, 30 years – as their life experiences change them. Look at what you want to do now, but don’t beat yourself up that you might change your mind. In the engineering world, its called “paralysis by analysis” where you keep analyzing without actually acting. Feel free to make a decision with the full knowledge that it isn’t going to commit you for the rest of your life.

Learn to enjoy the present

Typically, year 1 of FIRE is a frantic time, running around and doing all the things you’ve always wanted to do. Year 2 and beyond is much more about relaxing and enjoying the present in a more unstructured manner. Make sure that while planning year 2, that you don’t “over-plan” year 2. Leave yourself plenty of time to relax and just “enjoy the present.”

In the end, the primary benefit of hitting FIRE is you are given the “Gift of Time.” You should make some serious considerations of how you intend to use that time, once the initial “bloom” of retiring early is done. While you don’t need to being too crazy about analyzing it, take the opportunity to look into it.

Mr. 39 months

Friends

Came home the other day from work, and Mrs. 39 Months met me with the news. “John is in the hospital.”

John is one of our close friends in the area, and someone I have known for almost 30 years. We are the same age, and have many of the same interests, though lately his crafts and interests have tended to mirror more of what Mrs. 39 Months enjoys making.

John has been married for 20+ years, and while it has its difficulties, you can tell he loves his wife. Unfortunately, her health has deteriorated over the last five years to the point that she can barely walk for any length of time. This precludes a lot of activities and forces John to do a lot more work around the house, just to take care of her. She is under a doctor’s care for her ailments, and she does work to get better, but it is a struggle. John is a “giver” and while he complains about it at time, I think he enjoys the role of “white knight.”

Recently John’s allergies kicked up and got rather bad. He ended up overextending himself, and in the end, had to go to the hospital because he had come down with a severe case of bronchitis. This left him so weak he could barely move, and at the same time, he was not around to take care of his wife (her daughter assisted a bit).

We took the opportunity to go visit him for a couple of hours last night. He was still weak, and was probably going to be in the hospital for at least 2-3 more days. He knew he needed to rest, but worried that when he went home, he would end up exhausting himself with taking care of his wife. All we could do was volunteer to help, and let him know we were there for him.

It is interesting, as you get older. You realize that friends and family are the most important thing in your life. With FI, you can try to find more time for them, especially if they need it.

Mr. 39 months

Social Security Fixes in the United States

A lot of ink has been spilled over the last 10 years on the state of the United States’ social security program. For those outside the US, this is the base retirement investment program, which takes 6.2% of someone’s salary, and another 6.2% of the salary from the employer, and uses this tax to pay for current retirees. Most folks think they are paying into an “account” for themselves, but it is actually sort of a giant Ponzi scheme, where current tax money is used to pay off outstanding bills. For folks in the FI community, Social Security is a part of the program, but probably not a major part.

Like so many Ponzi schemes, it is predicated on getting more and more people/taxpayers to pay into it in order to keep it rolling. Unfortunately, the folks in the US have not been having 3+ kids to help defer this, and the bill for the “Baby Boomers” is coming due. The taxes taken in are now not enough to pay current beneficiaries, and so the system is spending up the excess it has built up over the past decades. Depending on which accounting system you use, the year it goes “belly up” is around 2032. Unless something is done, benefits will be cut to 75%, which could be very serious for the ones who most depend on social security.

This happened previously, and the two sides of the political aisle got together in the 1980s and came up with a series of items (extend retirement age, tax benefits, etc.) to fix it, at least for the next several decades. Well, we are fast approaching the time when we need to do something similar, but both sides of the US political aisle seem to not want to even discuss it. Probably because it has been called the “third rail” (i.e. the electrical rail for trains) for politics – to touch it means death.

Which is sad, because the closer we get to the magical date, the more severe the changes that will need to be made in order to keep it solvent.  I recently read a report from the Society of Actuaries (an accounting field that specializes in longevity, insurance, etc.) on potential fixes, and what percentage they could go to in fixing the problem.

  1. Raise the retirement age to 70. Life expectancy is longer, but it could be hard on people with physically demanding jobs or who are disabled. +68% of fix
  2. Reduce the cost-of-living-allowance (COLA) by a certain percentage. A congressional commission felt the consumer price index (CPI) was overstated by 1.1%, meaning the COLA was too high. However, these would be cumulative, so as retirees get older, they fall further behind in purchasing power. +37% fix
  3. Reduce benefits by 5% for future retirees: Puts everyone in the same boat, but would hit low income the hardest. +26%
  4. Increase the number of years used to calculate average wage from 35 to 40 years. This would encourage people to work longer, but would hurt folks who work less than 40 years, especially mothers. +24%
  5. Affluence test: Reduce benefits for those whose total retirement income exceeds $50k/year. This preserves the benefits for most, but discourages savings and encourages people to hide assets. It also changes Social Security from a universal, “all in this together” program, to one of need. Would hurt support for program. +75%
  6. Raise payroll taxes from 12.4% to 13.4%. Would not hurt because real wages are going up, but we may also have to increase Medicare payroll tax (it is in even worse shape) so total taxation would be burdensome. +53%
  7. Increase wages to social security tax: Currently capped at , this would make Social Security a worse deal for higher incomes, further eroding universal support
  8. Invest 40% of Social Security Trust Fund in private investments. Could boost returns with less risk to individuals, but this would be 5% of private market. Stock voting and selection could be politicized. +48%

While there does not seem to be one single answer, the best way to do this is with a series of 3-5 of these, and this will get us over the 2032 “hump.” All we have to do is have the political will to do it.

That is the problem.

Sorry to be a bit of a bummer, but we all need to be planning on our financial future, and for those in the US, this is an important part of it.

Mr. 39 months

The Journey/Struggle is half the fun….

The other day I was going into a local BJ’s store (a mass marketing store that is membership only – you can buy items in bulk for significant savings). It turned out it was time to “re-up” our membership, so I had to take out my membership card to get a number in order to do it. In looking at it, I was struck by the picture on the back. There, grinning back at my was my early 30’s self, with a big shock of dark hair, and not too many lines on his face.

I thought about my life at that time (recently left the military, just starting out in logistics job, a home and mortgage that was almost 4x my take home pay, etc.) There were going to be a lot of struggles ahead, a lot of stress and tension, and a lot of decisions that, for good or ill, were going to shape my life. How interesting to look at that face, and know now, what I didn’t know then. How much better would I have done if I had adopted some of those lessons (especially FIRE lessons) back in the early 1990s.

Recently I’ve learned that one of my nieces is in a lot of debt. I have thought about assisting (with the approval of her Mom, beforehand) but I’m holding back. Part of it is the knowledge that if we just give funds, she’ll wind up in the same spot. Part of it is the notes above – the journey /struggle in life is part of the purpose. There are lessons to be learned, experiences to be had, and things to do that, if someone steps in, you might not gain. These may end up biting you on the butt later on.

One of the benefits of the FIRE community is the sharing that folks do, the lessons they’ve learned that they want others to benefit from. I do a lot of reading, both online and through books, just to try to gain the lessons from others. Still, in the grand scheme of things, I don’t think I would trade any of the lesson’s I’ve learned in – they have made me who I am. If I had to tell my younger self anything, it would be that “It’s all going to work out OK, in the end.”

I hope its working out well for all of you

Mr. 39 Months

Jefferson’s Ten rules

Thomas Jefferson, one of the founding fathers of the US and the writer of the Declaration of Independence, lived a long and fruitful life. He was the first Secretary of State for the US, and the 3rd President of the US. Both he and his peer (and President #2) John Adams dies on the same day, July 4th, 1826 – 50 years after the publication of the Declaration of Independence. Exactly 50 years after!

Jefferson was known for giving advice to his family, friends, and associates. In 1825, one year before his death, he wrote down his “Ten Rules” and abbreviation of his “Canons for the Conduct of Life.” They have gone down through the years and been reprinted numerous times. I happened across them while on vacation last week, at one of the historical sites we visited, and thought I’d reprint them. Many of them would make their way into an instruction book for FI.

  • Never put off till tomorrow what you can do to-day.
  • Never trouble another for what you can do yourself.
  • Never spend your money before you have it.
  • Never buy what you do not want, because it is cheap; it will be dear to you.
  • Pride costs us more than hunger, thirst and cold.
  • We never repent of having eaten too little.
  • Nothing is troublesome that we do willingly.
  • How much pain have cost us the evils which have never happened!
  • Take things always by their smooth handle.
  • When angry, count ten, before you speak; if very angry, an hundred.

So what words of Wisdom do you live by?

Mr. 39 Months