How a 4-day weekend affected my views on FIRE

In the United States, we celebrate our independence day on July 4th, with parades, bands, fireworks, etc. Its typically a pretty big celebration, especially in my part of the US (I live close to Philadelphia, where the Declaration of Independence was written and signed). Most folks have off (some stores and food places stay open) and we have barbeques and family/friends get together.

This year, July 4th fell on a Thursday, so my company (and many others) also had Friday off , for a 4-day weekend! We had friends over to barbecue on Thursday the 4th, went to a movie on Friday the 5th, and worked around the house and did some house maintenance on Saturday the 5th. However, by day four (Sunday) we were starting to be at a loss for what to do. We ended up just “bumming” around the house, and then finished up with our Sunday evening “get ready for the workweek” tasks.

It was that evening that it hit me. This would be what retirement would be like if we didn’t focus on what we wanted to do once we hit FI and stepped away from regular work. I’ve written numerous times on the need to have hobbies, and to find ways to keep yourself occupied once you decide to retire. This just drove that point home!

So I thought through my hobbies and plans for retirement, and did some additional brainstorming, and here is where I am at right now, as far as plans once we retire:

  • Hobby: woodworking (may turn this into a minor $ generator)
  • Hobby: backpacking/complete the Appalachian Trail
  • Travel:  1-2 big trips a year, plus minor ones
  • Work: Temp/seasonal work, to keep my mind in use and to have some interaction
  • Volunteer: Build homes with Habitat for Humanity
  • Volunteer: Continue to work with my professional society and outdoor club
  • Volunteer: Looking for ways to take my professional and financial skills and help people with them
  • Teach: Either my hobbies or my professional skills

It could keep me busy, but I’m still concerned. It will be something that I will be keeping a close eye on in the years ahead.

So what are your plans for once you “retire?”

Mr. 39 Months

It still appears the 4% rule is valid

It still appears that the 4% rule works out, based on a recent review of Kiplingers

The article provides a lot of “qualifiers” and notes that this is a backwards looking analysis (i.e. its looking at past performance, and you can’t guarantee it will work). Still, the original 4% analysis done by William Bengen, covering a wide range of 30-year periods, including the great depression.

From Investopia: “The 4% rule was created using historical data on stock and bond returns over the 50-year period from 1926 to 1976. Before the early 1990s, experts generally considered 5% to be a safe amount for retirees to withdraw each year. Skeptical of whether this amount was sufficient, financial advisor William Bengen conducted an exhaustive study of historical returns in 1994, focusing heavily on the severe market downturns of the 1930s and early 1970s. Bengen concluded that, even during untenable markets, no historical case existed in which a four percent annual withdrawal exhausted a retirement portfolio in less than 33 years.”

My personal opinion is that the 4% rule is still valid, and you can probably go 4.5% or even 5% if you are sure to invest in equities.

What is your opinion?

Mr. 39 Months

What does your first day of retirement look like?

What does your first day of retirement look like? Your first week? Your first month?

For many folks in the FIRE community, the journey to FI is what occupies their time. Many folks dream about life once they retire, and write about it extensively. Yet the writing and thoughts don’t seem to zero in on a lot of the details that will occupy you on day 2, or a month into retirement. There is a lot of talking of sleeping in, sipping coffee/tea, taking it easy, traveling, etc. Yet what is your life really going to look like as you move into retirement for the first year? How much time have you spend answering this question?

I’m very grateful to many of the FIRE bloggers who, having spent years writing about their work heading towards FI, have continued to write about their lives post-FI. A partial list includes:

Some of the questions you need to ask yourself:

  1. When will you wake up and go to bed?
  2. What early morning rituals do you intend to engage in? Yoga/stretching, meditation, reading, writing, etc.
  3. What sort of end-of-day rituals do you intend to engage in?
  4. When will you eat? What will you eat?
  5. How will you engage with your spouse? Your family? The local community?
  6. What work/hobbies will you start doing on day 1 or 2? What later on?
  7. After you have finished with your initial “splurge” of travel (often all of year 1) what additional travel are you planning on doing? What sort of schedule per year (4X a year? 2X a year?)
  8. How will you interact with family & friends who continue to work?
  9. How will you seek out new friends and relationships?

There are obviously a host of other questions and things to consider. You should work on how you plan to live, at least for the first year. Assume you can “dial in” 50% – 75% of your initial life, but also assume that life will throw you curve balls (both in terms of issues and opportunities) that will end up taking a significant portion of your time.

You’ll often hear folks when they talk about retirement – “Don’t volunteer for too much when you first retire. You will be surprised how much of your time gets taken up.” Take some time to think about the details of your FIRE life, and you will end up having a great one.

Mr. 39 Months

When was the day you decided FI was the way?

In my work life, I have to attend major team meetings 2-3 times a year. This are typically 2 day events where we  go over our key objectives for the year, and look at our existing staffing (their professional goals, current level of work, and potential for growth/promotion). It’s actually a very good experience, and I have to give my boss credit for caring to develop and promote those under him. In addition, the key objectives for each team member are not job-based, but are additional goals to help “drive” the team forward and change the organization for the better.

Unfortunately for me, I am looking to reduce my responsibilities and/or early retire in less than 21 months. So when we discuss my own professional development, and potential promotions/opportunities to improve the organization, I have to hedge my conversations and downplay future contributions. Part of my FI plan includes some bonuses that would be due to me, especially in March 2019. While it wouldn’t be a back breaker to not receive the full bonus, I do believe if my contributions were good in 2018, I deserve to get the bonus.

I’ve talked before about the feeling that in some cases technology has passed me by. This was also evident in the meeting, as I was surrounded by many folks somewhat younger than me, with more technical prowess, and burning to move up the career ladder. I did not have that “burning desire” and questioned whether learning new technology and new skills (some of which I questioned if they were truly valuable) was really something I wanted to do.

It was during this event that it hit me again why I wanted to achieve FI. I wanted the freedom to be able to choose how I contribute to the organization, not to be forced into a career path or job that was ill suited for my skills or interests. Since I am pretty much there (yep, I still have “1 more year syndrome”) I have decided that in April of next year – right after bonus – I am going to approach my boss with the request to downshift pay & responsibility.

We will see how that goes over. I think I have a pretty good skill that is in short supply in my organization, so I might be able to step back from a management role and continue to be paid. I guess we will see in 6 months.

Wish me luck, just like I wish all of you luck on your journey to FI!

 

Mr. 39 Months

Good post on lessons for your first year of FI – from the Mad Fientist

While listening to his podcast, I found the link to this article and thought it was very good. In it, he discusses some of the trials, successes and surprises from his first year of FIRE.

Valuable Lessons from My First Year of Freedom

I think I’m going to create a new category just for lessons from the first years of FI. Its a topic I’m very interested in, as I close in on my number.

 

Mr. 39 Monts

What do you do when your reason for living has gone away?

The comments below reflect the thoughts and idea of myself, a 54-year old man, raised in that time period. Some people may question the assumptions or thoughts here, but they are mine, and I believe they reflect a certain percentage of the men my age in the FI community. Since the purpose of this blog is for me to discuss my thoughts on FI, and its impact on my life, I do not have any problem with voicing my opinions and thoughts on the matter.

As someone born at the tail end of the boomers/beginning of Gen X (1964) my general thoughts on men is that we are the providers in a relationship (I know, everyone has different opinions here – I’m talking in generalities here, so sue me). Men have the ability to generate excess resources beyond their needs. Anyone who has ever been to a bachelor’s home knows that they don’t need much to live. I once heard a female comedian call men “bears with furniture.”

A typical bachelor pad will have some basic furniture, maybe a card table instead of a dining table, and a functional bed. Not much on decorations, curtains, exotic cooking gear, etc. They will probably have a great TV/entertainment set up. Their clothes requirements will be simple and not excessive. After that though, they don’t need much. Yet they have the ability to generate large incomes and throw off excess money.

This is why the basic family unit worked so well. Raising kids takes an awful lot of time and resources, so by having two people working on it, the man can generate the excess resources necessary for the family to get what they need. In return, the man gets a feeling of accomplishment on his work, and the belief that he is contributing to the success of his family.

So where am I going here?

As you close in on FI, and you reach the point where you have sufficient resources to maintain your lifestyle, the primary reason for many men’s existence suddenly is threatened. If they have reached the point where the family has what it needs in perpetuity, then why is he needed? One of a man’s primary roles in the family is gone. What do you do?

I think this is a major reason why we see so many men dying shortly after their retirement. Their major role in life is gone, and they struggle to find something new. They’ve been working at this since they are 18, and for some, that is 45-50 years of life’s work that is suddenly gone. All they’ve known in their adult life……

I’m struggling with that right now. I’ve got 24-1/2 months left to go, and while I have some short-term goals (travel, writing, etc.) I am not sure what I want to do once I hit FI. I know I want to take some time off (sabbatical?) but then what?

An interesting book that I have just started reading is Find your Why, by Simon Sinek. The idea is to search for the core idea of “why” you do stuff, “why” your exist, “why” you act the way you do and what that gives you. Knowing your “WHY” gives you a filter to make choices, both at work and home, that leads you to finding greater fulfillment. The book is interesting (as is the TED talk) and I’m hoping the exercises it has will lead me to further revelations.

Other blog postings related:

I hope this helps

 

Mr. 39 Months