It’s Impossible To Stay Retired Once You Retire Early

In the spring of 2012, I hung up my sword after working in finance since 1999. But I've discovered it's impossible to stay retired once you retire early.

There was actually a hiccup the very last day of work, a Friday. When I was e-mailing some personal files from my work account to my personal account (pictures, tax docs, etc), I inadvertently e-mailed a five year old client file that was caught by compliance. The e-mail almost derailed my retirement plans!

I was warned this was a violation of company policy. And that I would be hearing from them about any repercussions the next week. I apologized for the mistake and waited nervously about the fate of my severance check.

Trying To Retire With Some Legal Advice

To allay my worries, I actually went to a free Hastings School Of Law community service event. Law students and professors volunteer to help those with legal questions. They just so happened to host the event on what I thought was the first free weekend of the rest of my life. It was great to see the school give back to literally hundreds of people. Some of the topics were about divorce, employment, accidents, theft, trusts, and more.

My question to a professor and to a law student was pretty simple. “Can my firm take away the agreed upon severance contract due to a five year old company file that I inadvertently sent to myself?” Financial companies are notoriously strict about ex-employees transferring sensitive client documents. Employers don't want client info taken to competitors after all. I told my company that I was retiring from the finance business altogether. But, how could they know I was really telling the truth? In our business, few people voluntarily walk away from such paychecks.

After getting comforting council saying that I should be fine, I promised that day to NEVER go back to work in finance if I could still get my severance and deferred compensation.

My new manager was in from New York City that day and was already busting my balls for the incident. I went a step further and promised to never go back to working for anybody. Hundreds of thousands of dollars were at stake and I was worried.

Dodged A Bullet!

HR called me the following Tuesday and told me everything was fine in the end. They agreed the client file was irrelevant given it was five years old. In addition, they accepted my e-mail apology for the mistake.

When I got my severance check several weeks later I felt like I had sheepishly won the lottery. Instead of spending it all, I sat on it like I would any financial windfall.

By the summer of 2012, the market had taken a little dive. And I finally invested the entire amount in the stock market so as to make it disappear. I wanted to stay hungry and pretend I received nothing. 

Despite The Promise, I Couldn't Stay Retired

For almost two years, I spent several hours a day writing online, playing tennis in the early afternoon, hanging out with the people I love, and spending 12 weeks a year traveling abroad. It was wonderful seeing Stockholm, Helsinki, St. Petersburg, Mallorca, London, Paris, Amsterdam, Malta, Bruges, Zurich and more. Spending time with family for two-to-five weeks at a time in Honolulu was also wonderful. I was in the best shape of my life.

The time spent writing on Financial Samurai paid off. Traffic and revenue doubled in 2012, and then doubled again in 2013. I didn't have to live the frugal lifestyle I had anticipated with my then ~$80,000 a year passive income. Things were good because I had enough money + all the time in the world.

But towards the end of 2013, I really started getting a little bored of the lifestyle. One unemployed friend I'd hit the card rooms with midday couldn't understand my situation. He said he would never be bored if he were in my shoes. But, he's never been in my shoes, so he has no idea! My closest friends all had to work full-time jobs. And there were only a couple unemployed folks I actually wanted to hang out with who were available to go on random adventures last minute. Random adventures tend to cost money.

Ventured Into Private Fintech Consulting At Empower

Then my contact from Empower called in the fall of 2013. He asked if I was interested in taking up a social media / content manager job. I was very hesitant in the beginning.

I actually went down to interview Bill Harris, the CEO during the summer. But I never really thought much about actually going back to work at the time, even part-time. I deliberated back and forth with loved ones. Finally, we came up with an agreeable solution to work 25 hours a week, with only two days a week on average in the office.

A year of consulting passed, and I learned a ton about the startup world, financial technology companies, and digital marketing. I also crossed off two bucket list items. 1. Working at a startup and 2. pivoting into a new role outside of finance were crossed off.

What's interesting is that people in internet/tech land actually e-mail me back now, whereas in the past, the responses would be few and far between. I guess the industry is sort of a club. But, now I'm wondering, what else does the future hold?

Let me provide a candid assessment of why I couldn't stay retired and why I don't think any early retiree will ever be able to stay fully retired. Once you read the reasons, you should seriously ask yourself whether all your savings, hustle, and risk-taking is worth it. Perhaps a 40 year career is a much better way to go.

Why It's So Difficult To Stay Retired

1) You're used to years of excessive stimulation.

In order to retire early, you've got to save aggressively, take a lot of calculated risks, and probably work your ass off more than the average person. You don't have to be smarter. But, you have to be more productive than the next person with the same amount of time.

I knew from the very first month on the job after college that I couldn't work for three decades like my parents did. As a result, I saved 50%+ of my after tax income every year for 13 years, aggressively invested 70% of my money (30% was in risk-free CDs just in case I blew myself up), and developed a rental property portfolio.

When you're working 60 hours a week, spending an hour trading the markets, another hour or two reading research reports, managing properties on the weekends, and spending another 20+ hours writing online, you begin to get used to all the activity you must do. Downshifting to a 4-5 hour work day feels like you're not doing anything at all. You naturally try and fill the other 10 hours of your day with something to do.

2) You constantly want to learn new things.

After my 10th year in the equities business, I knew 85% of what there was to know. It was the same old stuff over and over again given the markets are cyclical and there aren't a plethora of new companies going public every year that matter. I've discovered that work stops becoming fun for me after there's not much left to learn.

After you learn most of what you need to know, work becomes repetitious to the point where you can't really take it anymore. One of the strangest, and perhaps worst feelings is the depressing feeling of having to work for money, not out of love for what you are doing.

After two years of growth on Financial Samurai, I proved to myself there is a correlation with hard work and progress in the online world. A book on achieving freedom was written. And the site was picked up by several large media organizations, and you, the community blossomed. I'm challenging myself with creating monologue podcasts now, but I'm not sure if that's going to be my thing. I'll give 12 episodes a go, and then decide from there.

Desire To Learn More About Digital Marketing

I wanted to learn about digital marketing and how startup culture differed from traditional corporate culture. On the one end, there's Financial Samurai, a completely homegrown site that spends hardly anything getting recognized. On the other end, there are plenty of companies who've raised millions of dollars who are using such financing to increase brand awareness through advertising spend. 

My experience at a Silicon Valley company is not very different from my experience at my old firm in finance because I was the boss of my own business in a satellite office. I only realized how much freedom I truly had at my old job of 11 years after I started consulting.3) There's a desire for order and direction.

When you have nobody to report to, you start taking your freedom for granted after a while. Sleeping loses its allure when you can sleep in every single day. Freedom doesn't feel as free when nobody is checking up on you. Days start blurring together when there are no concrete daily objectives.

My simple objective is to always be happy. Financial Samurai is actually secretly a blog about achieving happiness. But being happy is a little too amorphous. So I challenged myself to make X amount of revenue in three years online. That was a good goal that kept me focused, but I blew past the revenue goal after the second year.

So I sought to join an organization that had their own objectives I believed in. I didn't mind getting told what to do because being told what to do provides structure. Besides, I knew I always had the option to quit if I didn't like the structure, which is one of the most amazing feelings ever.

4) You love the security money provides.

Early retirees likely watch their money much more carefully than the average person. It's not uncommon for an early retiree to check his or her bank account multiple times a day. It's a no brainer for early retirees to leverage as many free tools as they can to help track their net worth, reduce expenses, and manage their cash flow. Early retirees love money because they recognize money buys freedom.

To go from a nice steady paycheck every two weeks for 13 years to nothing was a shock to my system for the first couple of months. But I got used to the lack of cash flow after the third month. It's true that we easily adapt to our money circumstances, so don't worry if you feel that you won't have enough to live a comfortable retirement.

Despite the growth of my online revenue and passive income streams, I still felt I lacked another financial buffer to feel absolutely secure. One change in a Google algorithm and there could be a 75% hit to my online revenue for years. I realized I love receiving a steady paycheck in the mail every single month, even if it is never spent.

5) You start really harnessing the power of money to do what you want.

Every single early retiree I've talked to has wondered what it would be like if they had a different career. Several I know have gone back to school to get a degree in something they once loved, but found impractical to learn from a money making/survival standpoint. Many pursue far less lucrative careers, but potentially more rewarding careers that offer more excitement. For fun, ask yourself what you'd do if you were a billionaire.

I've had a tough time getting out of the mindset that whatever I do should have the highest ROI possible for my time and effort. It was a big step for me to take the consulting job because the pay is much less than what I used to make, which is why it is really important for me to constantly be learning something new on the job. The moment I feel like I've stopped learning is the moment when I will start considering doing something else.

Early Retirement Becomes A Challenging Game

If you manage to retire early, like sub 40 early, I bet you a steak dinner at the finest steak house in the world that you won't be able to stay retired for more than three years. I made a Herculean effort to not get back into the workforce after almost two years, but like a velvety chocolate cake sitting in front of me, I couldn't resist stuffing my face with glee!

I think trying to retire early and live without a paycheck for an extended period of time is like trying to hit a million net worth; they are temporary challenges that once met, are shelved away to make room for the next challenge. Progress is my one word definition of happiness.

If you can have progress in your career, finances, family, spirituality, and your love life, no matter where you start, you will always be happy.

The Challenge To Earn More Continues

Now that it's 2023 and we have two young kids, I've also come to realize there is greater pressure to provide for your family than ever before. When there is a helpless little one to also support, the natural instinct is to try and earn and save more money to support a family.

That said, I've been fortunate enough to build enough passive income before he was born so I'm not stressing too much. All I wish I could buy with my money is energy now. Who knew taking care of a baby/toddler 24/7 was this tiring!

Related Post: The Dark Side To Early Retirement

Wealth Building Recommendation

In order to optimize your finances, you've first got to track your finances. I recommend signing up for Empower's free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator.

Those who are on top of their finances build much greater wealth longer term than those who don't. I've used Empower since 2012. It's the best free financial app out there to manage your money.

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