Can I get away with an improv retirement?

There's more to wealth than money. Health and happiness are important, too.
This is the place to discuss organization, self-improvement, and success strategies.

Moderator: lvergon

LMoot
Posts: 669
Joined: Fri Mar 14, 2014 4:10 am
Contact:

Can I get away with an improv retirement?

Postby LMoot » Mon Aug 21, 2017 5:51 am

*CAUTION* Massive navel-gazing ahead.

I am lazy about things that don't interest me (or which I don't understand). There are an overwhelming amount of intimidatingly smart, knowledgeable and pro-active people in the FIRE/PF community. But I don't see alot of people like me. Someone who gets tripped up, or has little interest (because they get tripped up), on numbers and graphs and projections and formulas. My eyes just....glaze over.

For the last 10 years since I graduated college, I have mainly operated on the idea that if I just focus on what I am good at (working a lot and saving alot, and finding creative solutions to earn and invest), I will be able to reach my goals (which is to be able to live the 2nd half of my life...40ish...working less and having more spending money to do things like edu-travel, home improvements, education as a means of personal growth, and other woowoo stuff like that). Learning when you don't feel like it is HARD. Sometimes though, I feel like a lot of people in this community LIKE it. Is there anyone out there who really had to force themselves to tackle the technical stuff related to PF? Did it help or was it worth it? Or is there anyone you know who just plodded along and did it their way, minimal frill, just the basics, ma'amn, and still had it pretty good?

I already know I am not one to attempt to eek out every last possible cent I can, out of my life, and I have accepted that. Sometimes though the PF community can make you feel like you are a fraud if you don't know it all, or attempt to know it all. "Oh you want to retire early but you haven't calculated how many days per year you can spend 50% above your current daily expenditure, 25 years into the future? Doesn't sound like you're very serious about retiring early." (I don't always know or care when and where an artist was born, and how many albums they released...sometimes I just like the song, ya know?).

Do I need to know exactly how much I will have when I am retired? What my tax rate is expected to be? What the cumulative dividend payouts will be? If I am already consistently trying my best, and saving as much as I can, and investing....how truly impactful will the extra knowledge be? I've learned that sometimes the path of least resistance, lets you get further. Last time I tried to "do things perfectly", I experienced paralysis. I feel like I will know when it's time for me to cut back on working, and how much to cut back. And I don't want to be so blinded by a set course, that I pass on other opportunities. But I feel that I am just as serious about it as anyone else, even if I approach it differently than the status quo.

jdmartin
Posts: 311
Joined: Thu Aug 28, 2014 10:31 am
Location: Southeast US
Contact:

Re: Can I get away with an improv retirement?

Postby jdmartin » Thu Aug 24, 2017 9:56 am

You don't really need to know a lot, honestly. It can be as simple or complex as you want it to be. If your goal is to do lots of "woo-woo" stuff, and assuming none of it comes with ancillary income, then you need to know more. If your goal is to eat 3 meals a day and not get wet when it rains, and everything else is a bonus, you don't need to know as much.

At a minimum, in the United States, I believe you should know:

1. Your approximate fixed, can't-reduce costs of living for a reasonable existence.

2. Your current inventory of non-income producing assets.

3. Your current inventory of income producing assets.

4. Unavoidable future expenses.

5. Your remaining expected life expectancy.

If you have those, you can play with the numbers any time you want to make adjustments. Example:

1. I consider having a roof, enough to eat, and basic utilities a minimum. So my fixed expenses would be mortgage/taxes/insurance, electricity/water, food bill. Easy enough to calculate.
2. Non-income assets include a car, your personal residence, no-interest cash accounts, collectibles, and so on. Note: some/all of these can be converted to income later if necessary, hence this is why you want to know what they are.
3. Rental property, dividend accounts, loans to others, your job, etc. All of these produce some weekly/monthly/quarterly/annual income.
4. Buying health insurance (if you have no job); replacing the furnace; getting a tooth pulled. Anything that you know is coming and that is going to cost you money.
5. Average life expectancy - your age = remaining years. In my case that's probably about 35 years left.

It takes a little work to get that info, but it's not really that time consuming. If you figure out that your bare minimum existence (see #1) is $2,000 per month, and your income-producing assets (#3) are $2,000 per month, that means that your non-income producing assets (#2)have to cover everything in #4 and #5, as well as make up any loss of anything in #3 - your job, for example (if you retire early). If #2 = $1,000,000, and #4 = $10,000, then you (in theory) have $990,000 for "woo-woo" stuff and covering #3 shortfalls (say the cost of food, #1, goes up, or you decide you can't live without a monthly mani/pedi).

Or, let's say #1 = $2,000 and #3 = $4,000, and your job = $1,000 of that. You might be ready to retire completely! But what if #2 = $1,000 (you own nothing but a junky car) and #4 = $100,000 - you have to buy annual health insurance for 10 years, or you are going on a yearlong overseas sabbatical complete with donations - then you might not want to jettison that job too quickly.

Really, that's all there is to it. #2 & #3 covers #1 & #4. Your reasonable existence, #1, might include a lot of "woo-woo" stuff, and you need to have some idea of what those costs are. That's the only way you'll know if you can divest of some assets to pay for those costs, or if your income-producing assets will cover those costs. And of course you need to know how long those assets have to last. If you want to die leaving a substantial chunk of money behind, you need to have more assets than liabilities, and your liabilities are anything you want/have to spend money on.
"Money is better than poverty, for financial reasons" - Woody Allen

LMoot
Posts: 669
Joined: Fri Mar 14, 2014 4:10 am
Contact:

Re: Can I get away with an improv retirement?

Postby LMoot » Fri Aug 25, 2017 4:49 am

Thank you for that list/breakdown jdmartin! That definitely helps with prioritizing. I am still weary/anxious about calculating how much I will have in the future. I don't know why. I guess maybe on some level it's scary to think that all I am doing now (which feels like an impossible amount...I've been working an average of 75 hours/wk for this month so far), won't be enough.

I admit I am being lazy and purposefully ignorant. In my mind I figure...well I can't tell the future so what is the point of the calculations? I am better to focus that energy on doing the best I can today, and it will work out, or I will adjust. I think...well what if my calculations show I am not doing enough...what would change? What could I do better? It reminds me of a conversation I had with my former supervisor, (who sadly passed away this year in his 30s due to hypertension, and likely work related stress). He would always give little bonus quizzes at the end of our one on ones each month. I always failed those quizzes when they were related to service level requirements. One day he asked me, "How come you never know the service level requirements? Most people know them by heart. I replied "I don't know them, because I don't care. It doesn't affect how hard I work, because I'm always trying to do my best." He thought about it for a moment then said " Yeah, come to think of it, those who know them the best are the ones skimming the edge ". He hired me as his team lead months later...and I was probably the only lead in history there, who never knew the service level requirements.

I like your different retirement scenarios you presented. I think my retirement ethos is, in order of necessity/desire:

1) Basics must be met: medical, shelter, food
2) happiness and mental health: social and intellectual health (clubs), ability to travel to visit family and friends, or host family and friends
3) Entertainment/ hobbies: travel, annex/college classes
4) philanthropy: run parrot rescue, give/leave money for family (I don't plan on having kids of my own)

I feel like I am flexible enough to scale back on 3 & 4 and still be happy in retirement. Or find cheaper alternatives. Just coming up with what I would need in retirement is hard enough, letting alone figuring out how to get there. I don't know how much I'll need. No clue. I can thrive in such a wide range of income that I wouldn't even know where to start.

BTW, totally not expecting anyone to answer this or tell me what to do haha, just thinking out loud. Besides, it's like talking to myself around here these days....which I also do a lot on my own :)

jdmartin
Posts: 311
Joined: Thu Aug 28, 2014 10:31 am
Location: Southeast US
Contact:

Re: Can I get away with an improv retirement?

Postby jdmartin » Fri Aug 25, 2017 7:17 am

In my opinion, if you can find something you like doing so much you would do it for free, that also happens to provide some income, and you can live within those boundaries, you've got it made :) Even in a rich country like the USA with a relatively weak safety net (as compared to other wealthy, industrialized nations), it's rare for someone to willingly starve to death in the street without any clothes. Most of those that do have drug or mental health issues. So if you can be happy just being, and don't have anyone else to provide for, you really don't need much.
"Money is better than poverty, for financial reasons" - Woody Allen


Return to “Personal Development”

Who is online

Users browsing this forum: No registered users