It’s been almost 5 years since I quit full time employment to become a stay at home dad/blogger. There were some rough spots, but all in all the last 5 years have been awesome. In fact, this last 5 years have been the best time of my life and I could think clearly again. My stress level was lower than when I was working or when I was in school. My home life with Mrs. RB40 has been great. We’re now very comfortable with each other after 18 years of marriage. There were some frustrating moments with our rambunctious son, but it is smoother sailing now that he is in kindergarten. Early retirement has worked out very well for me.
The only similar stretch I had was when I graduated from college. The transition from having no money to having a good salary was marvelous. I could spend some money and I had a ton of fun with many new friends. Also, there wasn’t a lot of pressure at work because I was new. Being a junior engineer was great because I could focus on the technical work and ignore the BS. Unfortunately, I got promoted and the job gradually became more stressful. Anyway, I’m glad I left full time employment behind because life is so much better now.
From what I’ve read, most retirees also feel euphoric right after they retire. However, there seems to be a divergence in experience after a year or two in retirement. Some retirees settle down into the routine and enjoy retirement. But some become restless and dissatisfied. That’s not good because you can be bored and dissatisfied at work AND get paid. Retirement wouldn’t make any sense in that case. Thankfully, I’m in the enjoyable retirement camp. What’s the difference between these two groups? I’m not sure, but I’ll share my secret to a happy early retirement. If this works for me, then it should work for others, too.
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1. Comfortable finances
First the obvious one, you retirement finances should be good. I wouldn’t enjoy retirement if I had to stress out about money all the time. Well, I’m still cheap and worry about money often, but I know we can keep the lights on. I’m not going to focus on this one too much because everyone has different requirements. Here are my recommendations before you retire early.
- Your investable assets should total about 30x your annual expense. This way you can withdraw about 3.5% without having to worry much.
- Your passive income can cover your cost of living expense.
- Be open to working part time and taking on other opportunities.
- Try living on your retirement budget for at least a year before retiring.
You don’t have to meet all of these, but more is better. Also, I track my cash flow and net worth closely. If there is a problem, I’d see it coming and adjust accordingly.
I assume people who retire early are comfortable with their finances so this shouldn’t be a big problem for most of us.
2. Have one or two huge long term projects
This is the real secret. You need one or two huge projects that you can throw yourself into. When you work, you have projects to work on and deadlines to meet. Once that’s taken away, then some people can feel adrift and without purpose. Living an unstructured lifestyle is relaxing for a while, but I don’t think it’s a good fit for most people. We’re raised to be productive and not accomplishing much can cause psychological harm.
Okay, most people’s imaginary retirement looks like this.
- Wake up late
- Have a leisurely breakfast
- Take the dog for a walk or exercise
- Have a leisurely lunch
- Do some chores
- Have a leisurely dinner
- Go to bed
This is an awesome vacation schedule, but it won’t work for retirement. Retirement isn’t a vacation. This kind of schedule is great when you need to recharge, but it won’t work long term. Most of us would feel useless and unfulfilled. There is too much empty time on this retirement schedule. Also, relaxing in this case usually means watching TV. That’s not good.
What retirees need is one or two big projects they can throw their energy behind. It will fill up their schedule and help them feel relevant. This is especially true for early retirement because we are still healthy and have a lot of energy. Once we’re older, there will be more health issues and we’ll spend a ton of time dealing with doctors, dentists, and nurses.
My big projects
OK, I already told you what my big projects are – blogging and being a dad. These projects require long term commitment and a ton of time. Let’s look at them in more detail.
I’ve been blogging about personal finance since 2010 and I still enjoy it. Retire by 40 has helped me keep track of our finances and grow our net worth. It’s a big challenge because our situation keeps evolving.
- In 2010, I thought I could stop working by 2014. However, I quit my engineering career in 2012. That’s 2 years earlier than I thought.
- In 2012, we thought Mrs. RB40 would continue to work until she’s in her 50s. Now, she’s trying to retire before 2020.
- Our investments are constantly changing. I’ve tried P2P lending. That worked well, but now I’m moving to RealtyShares, real estate crowdfunding. We had a rental home and a 4-plex. We sold those and now we own a rental duplex and a condo that are located very close by.
Things just keep changing and I like sharing our financial journey with our readers. Your feedback is really great and it helps me figure things out. Also, I like being an advocate for early retirement. Early retirement is working for me and I’m sure it could work for many other people, too. I’ve really enjoyed blogging these past 7 years and I can’t recommend it enough. Here is my tutorial on how to start blogging.
Working on the blog takes quite a bit of time and that’s not a bad thing in retirement. I schedule 2-3 hours in the morning and 2 hours at night for “work.” This really fills up my schedule and I feel relatively productive even if sometimes “work” is mostly browsing the internet.
Of course, having some income from blogging helps a ton. It’d be much tougher to put in 20-30 hours per week if Retire by 40 doesn’t make any money. All in all, blogging has been a great project for me and I plan to keep going for many more years.
*See my guide – How to Start a Blog and Why You Should. Starting a blog changed my life. It provides some income after retirement and it’s a great way to build a community. Those are the two biggest problems after retirement. It’s a great way to use some of your free time.
Being a dad
Being a dad is a humongous project. RB40Jr was 18 months old when I retired from full time employment to be a stay at home dad. Actually, that was perfect timing because he was great from 18 months until 2. After that, the back talk started and it was tough to be patient with him all the time. He has a ton of energy/curiosity and that tends to cause problems for the grownups.
It’s much better now, though. He’s 6 years old and he goes to kindergarten from 8 am until 2:30 pm. Yes! This is a game changer and life has been so much easier for me since the school year started.
Anyway, the point is that it’s a long term commitment. Our kid will need less and less attention from now on, but we still have 12 more years left on the clock. Being a parent takes up a ton of time, but it’s very enjoyable, too.
Line up some projects
So those are my 2 big projects that will keep me very busy for a long time. I’m sure once RB40Jr leaves for college, I’ll have some other big project lined up.
If you plan to retire early, I suggest you have one or two time consuming projects lined up, too. Here are some examples.
- Write a book
- Become a world class photographer, painter, musician, or other kind of artist
- End hunger in your city
- Travel long term
- Take care of your kids and/or parents
- Build a dream home (an affordable one, of course)
- Earn a Ph.D.
- Improve your local school system
- Save the whales
- What else?
3. Dream of better days
Keeping busy with a few worthwhile projects is good because you avoid having too much idle time. However, I recently realize there was another essential ingredient for my fantastic early retirement. Happiness is a journey, not a destination. Life is great now, but I still dream of better days ahead. This gives me something to look forward to and work on getting there.
Experts say the pleasure of getting what you want is often fleeting and that’s true for early retirement as well. Not having to go to work is really nice and life is perfect for a while, but it will become normal at some point. This is a real problem for early retirees. We have 40-50 year in retirement and staying static for that long won’t work out. It will get boring at some point. No matter how perfect your life is, you need to dream of something better.
For me, I have a lot of dreams left to accomplish.
- We need to figure out how to get Mrs. RB40 to retire early.
- I want to take a year off to travel around the world before RB40Jr is buried in schoolwork.
- I’d like to move to a better location. Portland is nice, but we want nicer weather.
- Retiring overseas for a while would be a great experience.
- A family compound in Hawaii. Not sure if the RB40 Villa is realistic, but I can dream.
Life is a journey, not a destination, so we need to keep dreaming. Happiness comes from making progress on your dreams. So don’t ever think your life is perfect because it won’t stay that way forever. You have to dream of a better future.
So those are my tips for happiness in early or any kind of retirement. What do you think? I’d love to hear from some retirees. What’s your secret to a happy retirement?
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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