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Do You Need to Be an Entrepreneur to Retire Early?

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Do you need to be an entrepreneur to retire early?The FIRE (financial independence, retire early) movement is getting more mainstream and there are more early retirement advocates than ever before. The funny thing is that many of us are not retired in the traditional sense. I spend 20-30 hours per week on Retire by 40 and I have some income from blogging. Most early retirement advocates are in the same boat. They are young and they aren’t ready for full retirement yet.  Many of them continue to have earned income after retiring from their career in the traditional workforce. This is inspiring to many people, but it could also be discouraging. Some readers wonder – do I need to be an entrepreneur to retire early? What if I don’t have that entrepreneurial spirit?

My take is that you need to craft your own early retirement. It won’t be the same as mine or anyone else. You don’t have to be entrepreneurial, but it helps a lot.

Entrepreneurial early retirees

The reason why you only hear/read about entrepreneurial early retirees is that they are in the public’s eye. We need publicity to advocate for this FIRE movement. This is not simply saving 10%. It’s a path less taken and we want to spread the word. I’m sure we are just a small fraction of early retirees. Most early retirees probably aren’t entrepreneurial. They are quietly enjoy their retirement without drawing attention to themselves. You won’t hear about these normal early retirees unless you live next door to them and wonder why they always seem to be home. Let’s take a quick poll here to see if I’m right.

Do you (or will you) have entrepreneurial income after retirement?

View Results

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How being an entrepreneur helps early retirement

I think being entrepreneurial is a really good way to spend your time after early retirement. It solves two of the biggest problems we have.

Money – This is a big issue with early retirement because we have such a long time in retirement. I retired when I was 38 and my retirement could last 40+ years. That’s a long time for our investments to endure. Our net worth was about 30x our annual expense when I retired, but I was still wasn’t ready to draw down yet. Fortunately, Retire by 40 was generating a little income and that enabled us to put off withdrawal. Mrs. RB40 also still works full time so that makes it really smooth so far. The longer you can put off withdrawal, the longer your portfolio has to compound. A little active income goes a long way in early retirement.

Boredom – Retirement can also be very boring to some people. Fortunately, I’m not speaking from experience here. I’ve been early retired for almost 6 years now and I haven’t been bored yet. It was a lot more boring to pretend to be busy in my old cubicle at work. However, boredom is a real problem for many retirees, early or not. Mostly because they haven’t planned for their life after retirement. Being entrepreneurial can help with this. If you’re working on something you enjoy, then you will put time into it. You won’t have a chance to get bored. Being a stay-at-home dad kept me super busy before RB40Jr started school full time. I had to squeeze in blogging time whenever I could. Often, that was late at night. Now that he’s in school, I have a lot more time to work on my blog and I can finally get more sleep. Life has been quite good recently.

Being entrepreneurial worked out really well for me, but it isn’t for everyone. Maybe you enjoy volunteering instead of hustling to make money. That’s great too. Part of why Mrs. RB40 is reluctant to retire early is because she isn’t entrepreneurial. She doesn’t know what she’s going to do without a job. From what I understand, she plans to putter around and fix all the problems in our house for a while. That might take 6 months to a year, but what will she do after that?  I’m sure that’s a conundrum for a lot of regular people too.

Let’s brainstorm and figure out some alternatives for non-entrepreneurial people. Here are my ideas.

Early retirement for non-entrepreneurial people

1. LeanFIRE

Okay, this is relatively new to me. Apparently, there is a subset of the FIRE community call the leanFIRE movement. The idea is to live on less than $40,000 per year. You’d need to accumulate less than a million dollars to fund this amount of passive income. A million bucks is still a lot of money, but it is reachable for many people.

Many in the leanFIRE community have much smaller goals. Some plan to generate passive income through rental properties which require less capital, but more leverage or borrowing. Some plan to live on much less than $40,000 per year which brings down the size of their target portfolio. This leanFIRE movement probably works best for people who never let lifestyle inflation take over. If you are a new college graduate, this would be real option for you. The leanFIRE retirement would be much harder for older people who are used to spending more money annually. It also depends on where you live. It’d be tough to leanFIRE in most of California, for example.

2. Work part time

I think working part time is a good option too. One of our readers, David Michael, works for a few months every year at the Amazon fulfillment center and takes the rest of the year off to travel and relax. This is a great way to meet new friends and augment their travel budget. They also taught English around the world when they were younger.

Another option is to work part time every week. I hear working at Trader Joe’s part time is a great side gig. Their part timers can get health insurance and other benefits. Maybe I’ll go undercover for a year and write a series on this part time gig. There is a Trader Joe’s close to our duplex. Do you think that would be interesting? I need to find out if you can work about 15 hours per week.

If you’re not entrepreneurial, then working part time seems like a good way to spend your time. Health insurance coverage would be a great benefit too. The job has to be right, though. I wouldn’t want to work too much or too hard.

3. Geoarbitrage (moving to a cheaper location)

There are many beautiful and interesting locations to live. If you are willing to consider living outside the US and Canada, a whole world of possibility opens up. You can live comfortably in Chiang Mai, Thailand for $10,000 per year. Jason Feiber’s annual dividend income is about $12,000 and he is loving life in Thailand. Frankly, I’m jealous. I’d love to live in Thailand for a year so I can reconnect with my relatives.

Chiang Mai isn’t that cheap either. There are many cheaper locations around the world. Geoarbitrage can lower your target early retirement number quite a bit if you’re willing to consider it.

Here is a good geoarbitrage post – The Cost of Living in Panama from Jim @ Route to Retire. They plan to take advantage of geoarbitrage and relocate to Panama in 2019. I’m looking forward to the stories they’ll share.

4. Early pension

The only early pension I know of is from the US military. They have the best pension plan ever. After 20 years, military retirees can receive 50% of their basic pay, full medical coverage, and a slew of benefits. The big issue here is the pay isn’t that great to begin with. The lowest rank (E1) private’s salary starts at $19,000/year. That’s not a lot of money. You’d probably need to move up the rank to survive on 50% retirement benefit. A major with 6 years of experience makes about $73,000/year. Half of that is pretty good. Check out the US Army pay chart.

This one probably isn’t for everyone either. I can’t imagine spending 20 years in the military.

5. Become van people

The #vanlife movement basically means becoming homeless and living in a van. This is beyond leanFIRE. It takes a certain mindset to go through with this. It probably works best if you’re single. I’m 100% sure Mrs. RB40 wouldn’t live in a van with me.

Of course, if you have a bigger budget, you can go with a nice RV. That sounds much better, but it still wouldn’t work for us. We’re spoiled by living in a regular home. This one probably works best if it’s temporary. You can live cheaply for a time and build your retirement fund.

vanlife

Side story – I went to New Zealand in 2006 with my parents and tried the #vanlife for 10 days. We stopped at rest areas, by the lake, next to the river, and anywhere we could find parking. It was fun, but the van was really cramp for 3 people. I was glad it was over by the end of the trip. My parents didn’t mind it. They already drove around the US for 6 months in their Chevy Astro van a few years earlier.

6. Work longer

Ugh. Here’s the one that nobody wants to hear. If you don’t want to work after early retirement, you probably need to grit your teeth and work longer. This is a common solution presented by traditional financial advisers. While I don’t like it, it is sound advice.

Other ideas?

That’s it from me. Working a bit after retiring from your career is a great thing. It helps with income and boredom. If you don’t plan to work, then you need to find something else to do with your time. Volunteering, hobbies, or working on other projects are good ways to spend some time. It isn’t good to have too much free time. You’ll be bored and early retirement won’t be a fun experience.

Do you have other ideas? What if you want to retire early, but you’re not an entrepreneur?

Starting a blog is a great way to build your brand and generate some extra income. You can see my tutorial here – How to Start A Blog and Why You Should. Check it out if you’re thinking about starting a blog. 

Photo by Christin Hume

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 78 comments… add one }
  • Jason Fieber March 1, 2018, 2:32 am

    Joe,

    Good stuff here. Very comprehensive.

    I actually think that combining as many concepts together as possible is the best way to go, if possible. No reason to limit oneself. That said, you want to make sure concepts/lifestyle choices are complementary and holistic so that each piece of the puzzle becomes worth more (and becomes more enjoyable) than it otherwise would be in isolation. And you want to make sure you remain within your circle of competence. For example, I’m combining geo arbitrage and entrepreneurship now. But you could get a part-time job here. And you could even go full-on #vanlife here in Thailand, if you wanted to!

    Appreciate the mention. My offer for lunch (at Khao Soi Mae Sai) still stands the next time you find yourself in Chiang Mai. 🙂

    Best regards!

    • retirebyforty March 1, 2018, 6:19 am

      That’s a great point. You don’t have to pick just one. If you can make a combination work, then do that.
      See you in Chiang Mai! 🙂

  • Caroline March 1, 2018, 2:38 am

    Hi Joe, I don’t think you need to be an entrepreneur to start a part time job in retirement. But if you are an entrepreneur , you could start your own part-time business in whatever you are good at , financial planning?

    • retirebyforty March 1, 2018, 6:20 am

      Financial planning and consulting is a great side gig. You help other people and make a little income. It’s win win. I might try that when I’m less busy.

  • Chris Urbaniak @ deliberatechange.ca March 1, 2018, 3:07 am

    Hi Joe – Nice summary of the major options. I personally know a couple of leanFIRE folks here who live very lean but made (and still make) a ton of $$ in real-estate investing. One of them even coined the term FIREpreneur. They were FI and quit full-time work at ages 24 and 31, btw… Absolutely incredible.

    One other option to consider is serial retirement, or taking regular lengthy sabbaticals. The downside is of course having to go back to work full or full-ish time after being off for so long. Also, you have to keep your skills up if you were going to go back into the job market, which presents the advantage of a sabbatical from a current employer.

    For example, many public service jobs in Canada like teachers and college profs have the option of reducing their pay each year and then continuing to be paid during a year off. If I were in those careers, I’d be all over that!

    • retirebyforty March 1, 2018, 9:16 am

      Real estate is one proven way to build wealth. It’s probably the easiest way to build cash flow. I wish I started much earlier with real estate.
      Serial retirement sounds like a good option if it’s adaptable to your career. I couldn’t do that with my engineering career. My knowledge is outdated now. There are many motivated young engineers and they cost a lot less to hire.

  • FIRECracker March 1, 2018, 3:19 am

    Awesome breakdown of all the way you can become FI if you’re not entrepreneurial! I love working on passion projects but wouldn’t consider myself entrepreneurial either (I’m too lazy and too stupid). One thing that’s worked out really well to my advantage is geo-arbitrage! We get to spent time in warmer places (like Spain, SE Asia, Portugal, Mexico) that we lOVE and still make money after retirement because it’s so inexpensive compared to back home.Win win!

    • retirebyforty March 1, 2018, 9:18 am

      Working on passion project is a great way to spend your time after retirement. Blogging is good for me right now, but I’m sure it’ll change. I’d love to spend more time creating artworks and photographs. Probably can’t make much money with those fun activities. Geoarbitrage is very cool. We’ll do more of that once RB40Jr is out of the house. 🙂

  • DocG March 1, 2018, 3:32 am

    Hey Joe, great post! I think most of us FIRE people are highly motivated. Take away our 40hr/wk W2 employment and it leaves a vacuum. People like us fill that vacuum with entrepreneurship. It’s who we are.

    • Mr. Tako March 1, 2018, 8:35 am

      Too true DocG! We FIREd with more than enough money (NOT LeanFIRE), yet we still continue to be productive people.

      I have absolutely no need to work or hold a part time job — yet I still started a blog and Mrs. Tako still works because she enjoys it.

      I also got to increase the amount of time I spend on hobbies. It’s a pretty good life.

    • retirebyforty March 1, 2018, 9:19 am

      The poll result is very surprising to me. The entrepreneurs are way ahead. I think you’re right about FIRE people being highly motivated. We can motivate ourselves internally. That’s a good trait for entrepreneurs.

  • Mr. Freaky Frugal March 1, 2018, 3:42 am

    Nicely done, Joe!

    The original LeanFIRE (new term for me as well) people that I know of are Mr. Money Mustache and especially Jacob at Early Retirement Extreme. They both inspired me to retire early even though I’m not as Lean as they are.

    I agree with DocG above – FIRE people are highly motivated and will usually find something useful to fill their time. It may be a small business, job, volunteer stuff, sports/exercise, hobbies, travel, or just experimenting with lots of different things.

    • retirebyforty March 1, 2018, 9:21 am

      Jacob was my inspiration as well. I cut down our annual expense quite a bit after I discovered Early Retirement Extreme.
      Our expense is higher now, but it’s pretty stable. Everyone has to figure out their own level.

  • MUSTARD SEED MONEY March 1, 2018, 3:43 am

    I think the really nice thing about the FIRE movement is it allows people to throttle back to pursue their passions. Whether that’s sitting on the beach or pivoting to a career that it more rewarding. FIRE opens up options 🙂

  • Ms. Frugal Asian Finance March 1, 2018, 3:54 am

    I think being a successful entrepreneur does help with FIRE. However, starting and running our own business can involve lots of risks and can even delay FIRE. But we should all try out our ideas and passion projects without taking on huge risks. No pain no gain!

    Mr. FAF, my MIL, our baby, and I tried taking a nap and resting in our Toyota Corolla, and it was really cramped. I think it might be more suitable for a couple with no kids. Having an active toddler in the car while everyone is exhausted is not ideal. @[email protected]

    • retirebyforty March 1, 2018, 9:22 am

      You’re right. Starting a business is a risky venture. That’s why I like blogging. You don’t have to invest a lot of money. It takes a ton of time, though.

  • Mrs. Groovy March 1, 2018, 4:17 am

    We’re a combination of LeanFire, early pension, and geoarbitrage. Our expenses are under $40K and the pension only covers half, but our investments and savings make the difference. Geoarbitrage allowed us to concentrate on dumping our very average salaries (we never earned more than $130K combined) into 401Ks, Roths, and taxable accounts.

    I can see doing some type of work if it’s fun. In the national parks we’ve run into folks who work in the gifts shops, etc. in exchange for their RV hookups and a little pocket money. They commit to a few weeks or months at a time and then move on to the next one.

    • retirebyforty March 1, 2018, 9:23 am

      Do both of you have pension? I know Mr. Groovy works for the city. What about you?
      These sounds like great plans. Can you give us a bit more detail? If you have a post about it, I’ll link to it.
      Being a park host sounds like fun to me too. I doubt Mrs. RB40 would like it. She likes the comfort of home. I’ll check. 🙂

      • Mrs. Groovy March 2, 2018, 6:57 am

        I don’t have a pension yet — I’ll have one for about $200 a month from AFTRA (one of the acting unions; it combined with Screen Actors Guild but the pension funds are separate) when I’m 65. Mr. Groovy took his mini-pension at age 55.

        Not sure if this post explains it best so feel free to remove.
        http://freedomisgroovy.com/groovy-drawdown-strategy/
        At the time Mr. Groovy wrote it, healthcare was an unknown but we’re currently paying $123/month for Obamacare. It was $115 last year.

        One thing I’d like to point out is that we began tracking expenses three years before retiring and we didn’t reduce them since retiring. We have plenty of room to cut if necessary but we’re comfortable at spending under $40K.

  • Lily | The Frugal Gene March 1, 2018, 4:56 am

    Thorough topic coverage!

    I’m not sure how to vote in that poll haha. Jared is not entrepreneurial. He thinks it’s dumb. We fought over this before.

    But I love the idea of being an entrepreneur. I have crazy schemes All. The. Time. And he’s pulling me aside constantly to inject logic (which is great because he’s often right and I’m always wrong somehow.)

    Jared post FIRE is to raise kids and do nothing. Maybe play video games. I’m just a housewife with some side hustles so entrepreneur-y things is what I want when he retire in 10 years. We’ll essentially switch roles I think haha.

    • retirebyforty March 1, 2018, 9:39 am

      That’s kind of like us. Mrs. RB40 is not entrepreneurial at all. I’m sure she’ll find something to do after retirement. She’s a busybody, just not in a making money kind of way. 🙂
      I hope Jared can find something else to do. Doing nothing isn’t good.

  • Dave @ Married with Money March 1, 2018, 4:56 am

    You don’t need to be an entrepreneur, but it definitely helps. Even having some side income (as in, you don’t make it your full time thing) can go a long way if you just bank all that side income during your working years.

    I’m shooting for essentially a part-time gig in retirement, once our house is paid off. Here’s my plan as of right now:

    30: Regular work, side hustles as time permits, etc. This is where I’m at right now. I enjoy my work, and while I’d like to have a bit more freedom, it’s not negatively impacting my life and I’m happy where I’m at.
    35: More hustle, baby! Saving everything my side hustles bring in, if applicable. Continue to work for the next 15 years…
    50: House paid off by 50 at the absolute latest. Wife quits work if she wants, I scale down to part-time consulting honestly still making great money. I figure at that point I’ll likely be bringing in ~$100/hour or slightly more, and would love a 20 hour a week, 6 month commitment each year. That’s $52k and would be nearly enough to support us (once you figure taxes in the mix). At this point, though, I might put on the afterburners and just keep maxing out retirement accounts and taxable accounts for a few more years.
    55+: Consider full retirement from ‘work’ and just do the side hustle/my own thing. No longer work for the man.

    I’m not a crazy “I need to retire at 40” type of guy (bahahaha no offense Joe!!!!), and our lifestyle doesn’t currently support that anyway. Our lifestyle DOES support this plan, even with $0 coming in from side hustles or anything else.

    It’s a bit nuts to me that we can make this happen. We earn good money, but last year neither of us cracked six figures. My wife earns considerably less than I do, but we save EVERYTHING she makes, and that’s a huge difference not only in the nest egg we can grow, but also in the amount that we NEED that nest egg to be to support our same lifestyle.

    I think a lot more people could retire early if they actually put in the effort…

    • retirebyforty March 1, 2018, 1:54 pm

      Your plan sounds very busy. 🙂 It’s good, though. You won’t get bored. 50 is still young. Good luck!
      I hear you about retire by 40. It was a little crazy, but I seem to be pulling it off.

  • Tom @ Dividends Diversify March 1, 2018, 4:57 am

    I’m not entrepreneurial having slaved at other peoples companies for 27 years before retiring early at 48 years old. I can’t think of any other options. You covered them well. I’m a proponent of working part time regardless. You have to do something so why not make some extra money? Our economy has such a large component of “gig” and “contract work”, tapping into it is kind of like being an entrepreneur as a contract worker. Tom

    • retirebyforty March 1, 2018, 1:56 pm

      The gig economy grew so much. We didn’t have anything like this when I was young. On one hand, it’s good because it give people more option. It must be tough to be young, though. It’s probably much harder to build wealth in the gig economy. I could be wrong about this.

  • Marc @ The Optimal Choice March 1, 2018, 4:58 am

    Working during retirement is definitely the plan for me. While I like the idea of being an entrepreneur, I worry about my lack of experience. Definitely don’t want to dip into our savings to make up for poor business decisions. So we’ll probably play it safe and pick up fun, low stress part time jobs.
    I used to work at a Science Museum and help fix and update old exhibits with new tech. There was an older man who worked there part time and I always envied his schedule. After we hit FI, I think I’ll try to work part time there like he did. At least until I get bored :).

    • retirebyforty March 1, 2018, 1:57 pm

      I wouldn’t want to invest too much after retirement either. That’s why blogging is good. Low overhead.
      The museum job sounds like a good part time job.

  • Joe March 1, 2018, 5:05 am

    Nice article. Unless you are entrepreneurial and extremely flexible, you’d better have a big stash.

    Name one FIRE blogger who 1) is retired 2) does not have a working spouse and 3) does not make good income (over $30k per year) from their business. I can’t think of any. Then add kids into the mix. GoCurryCracker probably fit all those criteria before building up his blog income to over $40k per year, but his lifestyle is inflating now based on that income.

    There are a few who do make good business income, but probably don’t need the income based on their lifestyle (Root of Good, MMM). However, they have the huge safety net of having that income in case of a major downturn in the stock market. This mental safety net is not to be underestimated, it makes for a much more pleasant retirement frame of mind.

    I FIRE’d before the FIRE movement 11 years ago, and lived through the financial crisis. I am not entrepreneurial, I have a child, and my spouse doesn’t work. My mindset was fine during the financial crisis, but I didn’t have a family then, and I have an 8 figure net worth. I imagine having only $1 – $3 million as an early retiree would be pretty nerve-wracking during a major downturn (30+% market correction) unless you are entrepreneurial or have a working spouse.

    • retirebyforty March 1, 2018, 2:03 pm

      Justin from Root of Good. I think his blog/consulting income is a bit under $30,000. They have 3 kids too. That’s pretty good.
      You’re right about the downturn. It’d be tough to lose 50% with $1-$3 million. I wouldn’t want to draw down until the stock market recovers.
      It’d be very difficult to get a part time job during a recession too. I’m sure our blog income will drop like a rock. Companies won’t spend as much on advertising. I hope the next crisis comes before Mrs. RB40 retires.
      Thanks for your input.

  • FullTimeFinance March 1, 2018, 5:28 am

    I’ll probably be entrepreneur in retirement, but it’ll be more about my sanity then the money at that point. Otherwise I’d just work longer as I’m in the I still enjoy work camp.

  • [email protected] March 1, 2018, 5:46 am

    The question in the title here makes my head spin. Of course you don’t need to be entrepreneurial to retire early. You just need to save enough money and live below your means.

    The question I have is: If you retire from a career to be an entrepreneur, are you retired or did you just switch careers? How do you define retire?

  • Angela @ Tread Lightly Retire Early March 1, 2018, 5:51 am

    My husband’s godfather retired early 6 years ago and hasn’t worked a day since. He keeps saying he’s thinking about working part time, but he’s just been too darn busy for work 😉

    • retirebyforty March 1, 2018, 2:04 pm

      That’s great too. I hope we get there at some point, but I’m too young now. Maybe in a few years.

  • fin$avvy panda @ finsavvypanda.com March 1, 2018, 5:53 am

    Hi Joe!

    Great post topic!

    You are right that you don’t need to be business in order to “retire” early. Man, I get so confused with the two terms nowadays — early retire vs financial freedom.

    Anyway, I think the geo arbitrage is great idea especially for those who enjoy travelling to the lower cost of living areas. I would totally do it but only for a certain period of time because I don’t think I’ll be able to NOT live in the city. Especially when all my friends and family are here.

    Essentially, I’d love to become financially free and have more time with learning about blog, dealing with my tenants, and I actually want to try out air bnb. That all seems fun! Well, I’m pretty far away from becoming financially free, but working to get there — haha, like literally!

    Overall, this was a great post to lay out options for people who aren’t aware of “FIRE.”

    PS. my first time hearing of “leanFIRE.” I don’t think I’ll be able to survive on this one, but it would actually work for those who live in cheaper cities or willing to reallocate there permanently. A lot of great options as long as the person is willing and want to!

    • retirebyforty March 1, 2018, 2:06 pm

      I want to try out Airbnb too. That sounds like a good money maker. Also sounds like a lot of work. 🙂
      Geoarbitrage sounds great. I would love to do it for a while. Once RB40Jr goes off to college, I’d like to live oversea about half time. That should be a lot of fun.

  • Frieda March 1, 2018, 6:10 am

    So glad you posted this. My husband and I aren’t super-entrepreneurial, to be honest. And we live in a HCOL area where LeanFIRE would be tough. We’re leaning toward real-estate investing as our route to early retirement.

    And I have to add, working at Trader Joe’s is my husband’s dream retirement job. The dad of my daughter’s classmate works at our local store, and he seems pretty darn happy. A lot of the workers have been there for years.

    • retirebyforty March 1, 2018, 2:08 pm

      Real estate is a great way to generate passive income. It can be a lot of work, though.
      Trader Joe’s sounds good to me too. I’ll do a little more research.

  • Steve @ familyonfire.org March 1, 2018, 6:59 am

    I’m not intending to be entrepreneurial, but might fall into it. I’m only spending a couple of hours a week on the blog but if it takes off then I might spend more. I board game as a hobby, so i might try and invent a board game. Mainly for fun, but after that who knows. Other hobbies might lead to paying gigs, but it’s not a priority.

    • retirebyforty March 1, 2018, 2:10 pm

      Inventing a new board game sounds really cool. You’d have to be very good at it, though. There are so many out there already.

  • Financial Samurai March 1, 2018, 7:07 am

    Counteracting boredom and seeing what you can do is the most fun for being an entrepreneur. Since everything is gravy once you retire, you might as well Have fun and challenge yourself right?

    If one can make more income from entrepreneurial activities then their passive income, and that would be a whole Lotta fun. No need for lean fire but blockbuster fire!

    Sam

    • retirebyforty March 1, 2018, 2:11 pm

      LeanFire doesn’t sound like much fun to me anymore. It sounds okay when I was hating my job. I’m glad I figured out how to make some money after retirement.

  • Jillian March 1, 2018, 7:07 am

    I think there is a middle ground with hobbies and passions that also produce income. Like ski instructors and a friend who makes jewelry and sells it at a dozen craft fairs in the summer. Taking something you love, doing just the right amount and earning some money. Even an extra 10k in income a year makes a big difference. Or another option is volenteering where there are other benefits. A hospital here allows volenteers to have a free $100+ a month gym membership. Or overseas you might get free housing. Or at a CSA you might get weekly free produce. There are lots of ways to reduce cost and earn income when you have the free time.

    • retirebyforty March 1, 2018, 2:12 pm

      You’re right. I think $10k/year makes a big difference too. It takes over $300,000 to generate that amount in passive income.
      Thanks for the ideas!

  • FJ March 1, 2018, 7:27 am

    Hey RB40,

    Good post. I have a ‘FIRE’ in my mind, but I am not an entrepreneur. I still in 9 to 5 cubicle life, but my approach is somewhat similar to Jason Fiber (DM). I am aiming to reach my financial independent with dividend income from my investment assets.

    Yes, we don’t need to be an entrepreneur to be retire early (my opinion).

    Best Regards,

    • retirebyforty March 2, 2018, 11:57 am

      That’s a good approach, but you’ll need to save a ton. Unless your cost of living is very low. Dividend income takes a long time to build up.

  • Helen March 1, 2018, 7:36 am

    Very good summary, Joe. I’m not an entrepreneur type. Life has been very good after retirement. It’s quiet, peaceful, content, healthy, and exciting sometimes.

    • retirebyforty March 2, 2018, 11:58 am

      I like your approach too. It really depends on your personality. It’s hard for me to slow down that much for long. Someday…

  • freebird March 1, 2018, 8:09 am

    No I’m definitely not the entrepreneur type, I don’t want to ever have to deal with customers I don’t know well nor do I want to manage others. But somehow I associate entrepreneurship with working rather than retiring, after all “being your own boss” means you’re both supervisor and employee, right?

    The issue of too much free time is why I targeted fatFIRE, the idea being that living expenses during retirement would be double or triple what they were when working. Filling 40 hours a week for many years doesn’t sound cheap.

    From your list I wouldn’t do #1 because a health issue could create serious financial problems. I don’t like #2 and #5 because I don’t enjoy driving, so Uber/Lyft, delivering pizzas, or Camperforce are non-starters for me.

    My brother tried #3, he gave it nearly a decade before he got tired of the inconveniences and returned. His explained what started out as an adventure when he was young eventually became intolerable hassles as he grew older, so he left. His advice– don’t just focus on the cost side, think about the intangibles you’d be giving up for the long term.

    As for #4 I don’t know anyone who’s getting a pension at all, much less one that starts after just 20 years. My guess is that most of these people take on second careers that are connected to their previous jobs.

    This leaves #6 which I think you’re selling short because if you have reached financial independence, you gain more control over at least some of your working conditions because you’re not dependent on the paycheck. My own wish list boiled down to location, schedule, and work content, and I was fine to give up on raises and promotions in exchange. Management can be very supportive of this kind of arrangement when they understand that you’re not gunning for their job.

    • retirebyforty March 2, 2018, 12:05 pm

      Mrs. RB40 likes fatFire too. It sounds like an easier retirement. 🙂
      Geoarbitrage doesn’t have to be permanent. We’ll probably do something like that too. A decade is a good amount of time to explore the world.
      #6 works is the default option for a lot of people. IMO, it’s the safest option. However, it isn’t the right one for me.

  • Millionaire Doc March 1, 2018, 10:37 am

    I didn’t get the entrepreneurial bug until relatively recently. I’ve always been a go to work, make a steady paycheck kind of guy. Most docs are. I think I will always do some kind of work and have a bunch of side gigs just to keep my life interesting. Good post.

    • retirebyforty March 2, 2018, 12:07 pm

      I’ve always wanted to be an entrepreneur, but circumstance didn’t work out until I was older. Going to work and making a steady paycheck is a good fit for a lot of people.

  • Jim @ Route To Retire March 1, 2018, 11:34 am

    Haha, love the van pic!

    First off, thanks for the mention, Joe! Very much appreciated!

    Like you mentioned, we’re using geoarbitrage to get done with this working stuff much sooner than later. However, besides our current W2 incomes, I have three small side businesses going (including Route to Retire) as well.

    It’s definitely possible to do a little of both sides of the equation on this one. And if it keeps you from having to go with option 6 of working longer, I’ll take that any day! 😉

    — Jim

    • retirebyforty March 2, 2018, 12:03 pm

      That was a fun trip, but that little van was too cramp for 3 adults. It would be a fun trip with RB40Jr. We camped out everywhere. Next to a lake, river, and on quite spots along the roads. Had to find coin showers to clean up every few days, though.

      I’d take side businesses over option 6 any day. It suits me much better.

  • The Green Swan March 1, 2018, 11:57 am

    I’m more in the “fatFIRE” camp. With a 40-50 year (hopefully) retirement horizon, I think it is crazy to retire without a good “cushion”. Longevity risk is real. My plan is to work longer (ughh…five years left) to ensure that I don’t have to work after retirement, although I wouldn’t be surprised if a hobby or two that I may pursue bring in some cash.

  • Accidental FIRE March 1, 2018, 3:44 pm

    I reached financial independence without being an entrepreneur, and now that I’m working part time I’m using those hours I have back to start my entrepreneurial journey. So far, results are mixed

    • retirebyforty March 2, 2018, 12:08 pm

      I bet it’s fun so far, though. Working on projects is a great way to spend some time.

  • Martin Stone March 1, 2018, 5:14 pm

    Well thought out article Joe.

    Now into my 4th year of ‘early’ retirement, I tried multiple job fillers before weaning myself away from full time work. I tried working in a supermarket, UBER, demonstrating food for Boars Head and then consulting back in the tech field. I now feel fully retired and keep super busy with house maintenance, volunteering with the San Diego Police Department, homebrewing, gardening and all the small stuff that I couldn’t do before.

    Once you retire on your terms, life is definitely good.

    • retirebyforty March 2, 2018, 12:11 pm

      Thanks for sharing! That’s very cool. I’d like to try some of those jobs some day. Being a brand ambassador sounds like fun for a while. It has to be fun so it doesn’t feel like work.

  • Blake Smith March 1, 2018, 9:53 pm

    Great stuff Joe! Wouldn’t we all love to retire early. Hope we can all make it to our goal.

  • Mr. MFC | Morning Fresh Cent March 1, 2018, 11:11 pm

    Oddly enough when I was young, I wanted to work for an employer and in the corporate world. Then now as I traverse the corporate world, all I want to be is my own boss. Just too much politics. Fear and the pursuit of perfection holds me back from trying many things but just recently I made a commitment and recently launched a blog. Let’s see where this takes me. ?

    Keep posting as I really enjoy reading your articles. It keeps me motivated and print forward even when I am scared of failure and making rookie mistakes.

    • retirebyforty March 2, 2018, 12:12 pm

      The corporate BS is one big reason why I had to get out. It’s too much. Good luck with your blog!

  • David @iretiredyoung March 2, 2018, 1:09 am

    I feel that Financial Independence, early retirement and being entrepreneurial are all different things. For me, the key is getting to FI, because from that point you have choices. You can decide to retire early, continue working for someone else, be entrepreneurial and start your own business, volunteer, fill your time with interests and hobbies etc.

    If you’re entrepreneurial, then this adds to your options. I do wonder if one leaves a job, but then starts a full (or almost full) time business, is that really retirement? But at the end of the day, it doesn’t matter, as long as we’re happy.

    • retirebyforty March 2, 2018, 12:13 pm

      They are all different, but somewhat related. Getting to FI is a good milestone, but my life didn’t change until I retired early from my career. Everyone has to find their own path. Good luck!

  • Lady Dividend March 2, 2018, 5:02 am

    Hmmmmm…. maybe someone could also reach FIRE earlier by house hacking. This is where you use rental income for some or a portion of your housing costs. Good examples of this are a duplex or living with roommates. I have had success with lowering my housing costs through house hacking. Right now I’m on the lookout for my next place which could allow some house hacking.

    • retirebyforty March 2, 2018, 12:14 pm

      This is a great option. My friend did this when he was young and learned a lot. I wish I did the same when I was 22.

  • RBD March 2, 2018, 5:17 am

    I’m in the boat (or van) of using multiple strategies to attain the retirement you desire. Many income streams, including entrepreneurial ones, protect against job loss, economic problems, and helps you become wealthier when times are good. Find what works for each individual. While I admire people in the leanFIRE movement, that’s not the kind of life I want to pursue and it’s increasingly difficult with more kids. But as demonstrated by many already, it is possible to FIRE with a normal 40-hr per week job.
    -RBD

  • Kris March 2, 2018, 2:47 pm

    The cool part of the achieving FIRE is it lets people pursue their passion and it could be an entrepreneurship or working part time giving out samples at Costco, all that matters is that your enjoying it and not slaving to 9-5 job you are not fond about.

  • snowcanyon March 2, 2018, 11:55 pm

    I can’t say any of these options excites me. Oh well. Good to know what the options are!

  • Rich March 3, 2018, 12:14 am

    If you live in a bigger city, participating in focus groups could be another source of income. You can make between 100-500 for an hour or 2 of commitment.

    • retirebyforty March 3, 2018, 9:21 pm

      I’m signed up, but it hasn’t been working out. I mostly got rejected. You need to be the right segment they’re looking for.

  • Rodney Allen Hampton March 3, 2018, 6:01 am

    Geoarbitrage sounds great but I doubt my wife would move outside the US.

    • retirebyforty March 3, 2018, 9:20 pm

      My wife would be okay part time, but not full time and not permanently. This one is much easier for single people.

  • Tabitha March 4, 2018, 4:49 am

    The Trader Joe’s experiment sounds interesting. I’d love to read about it!

  • Martin @ DiscussPF March 4, 2018, 1:04 pm

    Good points. I think it is more likely to see the entrepreneurial guys because they are in the public eye, but there will be people out there who have invested in the right places, etc and so can afford to retire early and live on dividends and savings they have built up over the years. I think our jobs as owners of personal finance bloggers is to try and find these people and share their stories to add to the diversity of the advice and stories we tell.

  • Stock Street March 4, 2018, 9:03 pm

    Great article! I feel like one does not need to be entrepreneurial to be in the FIRE camp. But I also feel like being an entrepreneur doing some side gigs or creates a blog is different than someone who allocates a large portion of capital in a business. Creating a blog can have extremely low startup costs, but if I purchased a laundromat for supplementary income, that is going to be a whole different ballgame. Love the article!

  • Mr. Groovy March 5, 2018, 6:27 pm

    Hey, Joe. Late to the game here, so I won’t make an exhaustive comment. I’ll just say that I’ve been looking at a lot of YouTube clips about Chiang Mai apartments lately. Here’s one, for instance, that rents for $250/month. Amazing. Thailand is definitely on our bucket list. Mrs. Groovy and I can’t wait to get there. Great post, my friend. Cheers.

  • Kailash March 8, 2018, 9:33 am

    My own thoughts on the FIRE movement mirrors your own. I don’t have much lifestyle inflation, though I can’t be sitting at home all the time. I’m not really a FIRE proponent any more. Definitely save more than you earn, 10-20% sure, but don’t let that limit your life now because in the end you still want to fulfill your non-retirement goals and dreams and what better time to do that than now?

    Once you hit that mark (1mil or whatever your number is), are you just magically going to change? Why don’t you think about what you want to do now and change slowly to design the life the way you want instead of following someone’s arbitrary goal of FIRE? Make your own goals.

  • blueox22 March 10, 2018, 9:03 am

    I came across this site while doing some research on passive income and dividends. Funny how it one thing leads to another and I must say I am retired by 44. With 3 girls, 9, 5, 8months…my hands are full…i don’t know where to start but in nutshell my wife and I are franchisees and pretty much own our own business. We are heading towards FI but find it difficult when uncle sam is taxing everything down to the floor we walk on…lol…Being a stay at home dad is really busy when your days are broken down to 3 hour increments. This issue I have is trying to find that “side hustle” to keep me sane. Any recommendations?

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