I comb the blogosphere every week to come up with interesting links for this weekly column. I continue to be fascinated by bloggers who document “early retirement extreme,” (ERE) often in their 30s and 40s. It is important however to recognize that for many people, this does not mean completely leaving paid work behind. It simply means that they have accumulated a financial cushion which gives them the freedom to work less or do something different.
For example, last month Tim Stobbs wrote I Don’t Have Enough Money, But I Retired at 40 Anyway. He says, “What I’m doing really isn’t a full on ‘I never plan to work again retirement’ but rather an ‘I plan on doing some fun work during a semi-retirement.’ And that little shift of wording regarding what I planned to do made a huge difference between being able to leave now and being able to leave two to five more years in the future.” Stobbs is going to take a stab at writing fiction first for some income and if that doesn’t work out he will consider other options.
Firecracker and Wanderer are married computer engineers who retired in their early 30s. They blog on Millenial Revolution. The built a seven-figure portfolio and live off the passive income which allows them to travel the world and work on projects they are passionate about. They offer a free 53-part series of investment workshops on their blog and they have been widely quoted in the media. But they also write children’s books, develop apps for non-profits and teach children how to code.
In a recent blog, Firecracker interviewed Derek Foster: Canada’s Other Youngest Retiree. Foster, who is well-known to savewithspp.com readers retired at age 34 and he and his wife had eight children since then. He supports his family primarily with dividends generated by his stock portfolio. However, the self-identified “Idiot Millionaire” wrote six investor books and offers portfolio picks for a fee on stopworking.ca. He also accepts paid speaking engagements.
Some people who retire extremely early go back to work a few years into their retirement and take on short-term consulting assignments for a limited period. For example, Retired Syd who packed it in at age 44 in 2007 took on an assignment for several years and returned to full-time retirement in August 2012.
Can or should you aim for ERE? It really depends on your personality and your priorities. I freely confess that I’m very far from a minimalist and I was never prepared to forgo a really significant component of current consumption to fund a frugal very extended retirement.
As Ben Carlson writes in Some Thoughts on the Extreme Early Retirement Movement, “I have a ton of respect for these people. There are so many people out there today who have a hard time saving any money at all. The fact that these people are willing and able to save enough money to become financially independent so early in their years requires a combination of discipline, hard work and planning that is rare these days.”
But like me, Carlson doesn’t see the ERE lifestyle working for him. He says,” To me, financial independence means not having to stress about money all the time; it means having enough money saved so a one-off expenditure won’t be a huge issue; it means having enough money to pamper myself every once and a while without feeling guilty; it means living life in a way that is rich to me personally.”
What does financial independence mean to you? Are you contemplating extreme early retirement?
|Written by Sheryl Smolkin|
|Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.|