Early Retirement - 1 Year Later
Well, 1 year has passed since I pushed the biggest, scariest most exciting button I ever pressed in my life. It genuinely still feels like yesterday. Was it a good move? You bet your sweet ass it was!
On the 30th April 2020 at the ripe old age of 44, I threw caution to the wind and walked away from a 28 year career and a salary package in excess of R3,000,000 / $200,000 / £150,000 per year and growing.
At that time we needed to have R18,000,000 / $1,200,000 / £900,000 to fund our lifestyle for eternity (using the now infamous 4% rule). On that day we had exactly R13,514,216 / $900,948 / £642,860 which was just 75% of the required number.
Worth it? HELL YEAH
My life is truly transformed in some ways I hoped for and in other ways that I would have never expected. Let me try and put some logical order in explaining this:
I've always had a little bit of an entrepreneurial spirit but I never knew how easy it could be to make money, especially if you already have some. When I was on my FIRE journey and consuming all the most popular content on the subject like Choose Fi, Mister Money Mustache, Root of Good etc. I always felt that as an introvert, I would struggle to find opportunity because I'm no salesman and my idea of hell is a cold call to sell a product.
The truth is that when you have time to research and learn about things that you can truly get excited about, the opportunities present themselves thick and fast. Moreover, I found that opportunity came and found me most of the time. When your friends and ex-colleagues know you're available and looking, it's amazing how many times you get recommended for things or introduced to people who may pay your next side-hustle check.
For my main side-hustle , business consulting, I simply bought a domain name, put up a Wix website describing what I offer, got myself my own email address and setup social media accounts for the company on Twitter, Facebook, Instagram and LinkedIn, then I told anyone I knew what I was doing and then basically waited.
In the last year I would estimate I've done around 80 full days of paid work so just around a full day and a half per week (about 13 hours) on average.
In that same year, my revenue (money I've been paid) has been just over R2,800,000 / $185,500 / £140,000. Of that, my profit has been R1,250,000/ $83,000 / £62,500. That also includes a fair bit of costs for side-hustling in the development stages so my profit is quite a bit lower than what it would have been without the cost of that and all the setting up of the business (you should see my office chair, it's a thing of beauty!)
I'm now at the point where I'm starting to turn work down so my fears going in of not being able to find paid gigs was a limiting belief I had which was more about my lack of confidence than it was my ability to get paid.
FIRE Fact Number 1: Side Hustling is not difficult, you just have to put yourself out there and find something you're good at or love it so much that you're willing to put in the effort to be good at it
MR H's Top Tip for Side Hustling - Don't make being the cheapest the reason your customer buys from you, make it because you're the best or have a superior product. Your customer should choke just a little bit when you tell them your price. If you then go above and beyond to do an amazing job for them, you have justified your premium and will never have to discuss price again. Oh, and don't do work for free to "get yourself in for the bigger opportunity", that strategy fails more times than it wins.
Living to a Budget
In contrast to it being easy to make money, controlling of your spending of said cash was actually much harder than I thought. But not in the way that you'd think.
There is a temptation when you retire early to batten down the hatches and live as cheaply as you possibly can. It soon becomes an obsession and you start to take unexpected bills and spending (which are constant) badly, it actually hurts!
If you're not hitting your budget constantly on average, your budget is wrong. When we set off on this journey I was good at monitoring the budget and used oen of the many online budgeting sites that connects to your bank (my preferred is 22seven.com) and the budget was R62,000 / $4,133 / £3,100 per month. I spent close to 10 months scrutinising every penny and giving Mrs H the third degree about why she bought the expensive dog toys for Winston etc. When I eventually accepted defeat and raised the budget to R68,000 / $4,500 / £3,400, just 9% more, everything changed. I stopped sweating the small stuff, Mrs H and I stopped bickering about spending and I got hours back from over-analysing where we could save a few sheckles each month. Most interestingly, we started to come in below budget without trying and guess what? it knocked like 2 years off how long our money would last until the next side-hustle cheque and now we're back on plan now.
FIRE Fact Number 2: You can't do FIRE properly without a budget but it has to be based on fact and not what you "think" you can live on. Track your spending and set your budget on your rolling 12 month average spending. The only person your lying to is yourself if your budget is not realistic and you didn't retire to be miserable.
MR H's Top Tip for Living To a Budget - Don't sweat the small stuff. The biggest areas you can make savings is reducing your energy consumption (we installed solar), shopping around for cheaper insurance (we appointed a broker and saved 60%) and reducing your cars petrol, servicing and maintenance spend (I downsized from a 3.0 Supercharged Audi A7 to a 1.6 Mini Clubman and reduced my motoring costs by more than two thirds). You can reduce things like grocery, take out and eating out costs but this is where you can go too far and make yourself miserable. Use common sense, set yourself a reasonable budget and keep an eye on it, you'll soon learn where your wastage is.
Life & Living
By far the most important piece of the puzzle. I wake up every morning without the sound of an alarm. I lay in bed for a while and read the news on my phone. I get up and have coffee whilst I check my investments. Then If my wife is at home we have breakfast together. I head to my home office and get any side-hustling for the day out of the way. I grab lunch with my wife and then the afternoon is hobbies and personal projects which can be anything from woodworking in the garage to going and seeing a friend or going shopping for gadgets and gizmos. Winston likes to go for a drive in the car so he's usually with me. I grab in shopping for dinner whilst we're out and when I get home it's a couple of hours in the kitchen enjoying my passion for cooking. Mrs H joins me for dinner when she finishes work and we settle down on the sofa for a movie and a glass of wine or two.
We've been in a global pandemic since I began retirement so that is a pretty standard weekday. Weekends are inevitably meeting up with friends and doing things together as a couple. Walks with Winston and chilling out with Mrs H as she recovers from a week at work.
Life is great, I literally have nothing to complain about and it is a stark contrast to the stressed executive working 14 hours a day burning the candle at both ends and self-medicating with booze and painkillers to keep going at an unsustainable pace to make sure the company's shareholders get a return oh their investment.
FIRE Fact Number 2: Not having to worry about money or having to "provide" at a young age is quite simply one of the best feelings in the world. You simply don't realise the amount of stress you live under day to day when you're following a conventional lifestyle until it's gone. It's not about being wealthy or having lots of "stuff" it's about being truly free of being beholden to anyone or anything, your time is truly your own.
MR H's Top Tip for FIRE Life & Living - Do what you want to do, even if that's nothing. After years of being judged by productivity and delivery it's very difficult to be selfish without feeling guilty. There is a temptation to feel like you're wasting your life by relaxing or doing something with no tangible outcome like reading a book or talking a walk with no destination. You need to re-engineer your thinking that those things are the most productive because they're things that you actually want to do. Chasing the next promotion or staying at the office until after your boss leaves is non-productive because when do you get to enjoy the output of doing that? When you're too old. Don't be the richest man in the graveyard. Maybe read a book instead!
Summarising My First Year Of Retirement
This post could go on way past the point that anyone would read it. I have so many good things to say about my decision to jump off the hamster wheel but the best parts are hard to describe. I see things differently now.
I observe and listen to my friends of whom most are still working and some I'm sure still think I'm just a bit lazy and I'm technically unemployed rather than retired! But I see them passionately talk about everything that's wrong with the company they work for and how it wasn't for them the place would be even deeper in the dwang than it already is. I can no longer identify with that despite the fact just a year ago I was having the same conversations. It simply doesn't matter any more. It's just not important enough for me to get excited about.
Despite that, I have truly grown to understand how important having true friends is, what the difference between friends and sycophantic associates is and how appallingly bad I have been as a friend in the past. I see now how much more effort I need to put in to be as good a friend as some of my friends are to me. I'm lucky enough to have some great friends and they clearly like something about me too but I can see how great friendships need to be cared for, constantly contributed to, nurtured and maintained. That has been an absolute revelation to me and I'm just a better friend now than I ever was and it's because the people who were only around because of what I could do for them are gone, and that works both ways if I'm honest with myself. What's left is real friendships.
Finally, and most importantly, my relationship with Mrs H. Things have never been so good. Anyone who knows us well knows we've had a tempestuous relationship over the last 15 or so years and as we've worked together in the same company for at least 10 of those it's surprising we eventually made it to actually getting married in late 2019. That is another change that FIRE has benefited me. I'm much more self aware and realise that I contribute much more than I thought to the harmony of our relationship and I'm slowly becoming more sensitive and emotionally intelligent when it comes to "us". It feels like we're really best friends as well as husband and wife these days, which I guess is how it should be. We are just in the final hours of a 12 day government quarantine in London and it has not gone unremarked how well we have got on despite being less than 3 metres away from each other for the last 12 days with not one argument (other than our usual and fairly constant playful jibing at each other). I put a lot of that down to FIRE and the fact we don't work together any more. I can listen without caring to how her day has gone and I don't feel the need to solve the problem. Because of that I'm not focussed on the problem, I'm focused on how she is doing and how she is feeling, that's quite a change.
So in order to bring this to a close and truly summarise. I'm sure you've realised by now thy I don't regret pushing that button and that it's going pretty well. Hopefully I've been able to communicate that the change I'm most proud of is not that of not going to work and being able to do what I want, its of the change I've seen in me as a human being. I'm just a better man than I was and whilst it's probably only the end of the beginning of that, it's on that basis I would will anyone to put in the hard miles to pursue a FIRE lifestyle.
We sacrificed a lot in the years leading up to my retirement both financially and physically and in aspects I'm still paying that back but it was worth every saved cent and every extra hour in the office. I think of that now as my difficult "Middle Life" in that before that, there is the first 16 years of your life as a child which is great fun. Then there is the difficult "Middle Life" which for me was from 16 to 44. Also enjoyable but it's the bit that the work goes in and the primary objective is to get to the end of the level as soon as possible! Next is arguably the best bit from 44 to 70 when we have the part where it's all about living, adventures and experiences. Enjoying the hard work we put in in the last stage and choking the life out of life. Then we have the twilight years to look forward to from 70 - 100 where we get to relax in comfort and enjoy a slightly more subdued pace of life together with all we have learned and experienced on the journey this far.
Then who knows what after that.
Hopefully this has been insightful and provides motivation to my readers who are still in the tough but exciting run up to the pressing of the freedom button. Keep going, it's definitely worth it.
If anyone has anything they'd like to know that I haven't covered about the journey to, or beyond, FIRE, please don't be shy and ask your question in the comments. There are a number of readers on this blog who are post-fire and would be more than willing to wade in with insight and answers to the myriad of questions that occur when you're working towards FIRE. As a community we simply love to share an opinion!
Until next time, keep living