Life After FIRE – One Year Review – Part III

I was considering stopping my one year review with the last post but then it occurred to me that I didn’t really get into something I feel is VERY important for retirees in general: self motivation.

The problem is summed up like this: your workplace typically provided you with lots of external motivation to do things.  If you don’t do your work: then you get called out on it and potentially put on a ‘plan’ to improve or face being fired from your job.  If you don’t complete something on time, you typically have to provide a reason why, a revised due date and again might lose your job if you keep doing it.  And due to this highly developed structure you typically don’t need to provide much self motivation to do your work.

But now imagine you don’t have that workplace any more and in fact there is no one checking in on your progress or lack there of on anything.  So if you don’t do anything on a project and just play video games all week and at the end of it you might feel guilty but there often is no initial consequence for not working on the project.  All your external motivation is gone in retirement for the most part and suddenly you have to use all internal motivation on everything which isn’t a muscle that you have developed all that much prior to leaving your workplace.

So this can be a very significant problem for any retiree and after a time it is easy to fall into a series of bad habits and then feel mildly depressed about the entire retirement lifestyle.  While I personally didn’t get that bad about things I did underestimate how significant this can be during my first year off.

You see I’ve always been one of those people that thought they had a decent amount of self motivation.  I didn’t typically need reminders at work about much of anything and I was proactive on keeping people informed on changes of status of projects I was working on.  But I did forget for a while the often quoted cautionary tale for engineers: what happens when you give an engineer an unlimited project budget and no deadline? They never finish the project because they keep improving it.

Thus I fell into a trap of endless research on my next book and kept delaying starting on writing it.  It was only over the summer when I finally told myself this was getting nuts did I start with writing out a table of contents and then start writing every weekday to actually get some progress done.  And so far that has helped, I can have weeks where I fall off the wagon a bit and not get as much done as I should but overall I’m much further ahead then I had been for the last four months or so.

So this is your cautionary tale for any retiree: do not underestimate how important self motivation is for getting anything done.  Feel free to use any and all tricks you need to keep it going: offer yourself rewards for getting things done, tell others about your deadlines so they can help remind you to keep working, sign up for specific training or appointments in the future to help drive you to get something done.  What ever you need, feel free to use it.

In the end, if you want to get anything big done you are going to need to figure out how to manage your own internal motivation.  And this is key because one of the major components of long term happiness is working towards a project you find meaningful.  You need to accomplish something that you care about and it doesn’t matter what that project is (running a race, being a better parent, helping out in your community) you need self motivation to get there.

This concludes this series of posts on my one year of FIRE.  Of course, please  continue ask any questions you have in the comments.

Life After FIRE – One Year Review – Part II

Well welcome to part II of my series on my one year of early retirement.  Today, we get into some of the nuts of bolts of how this entire idea of early retirement works: let’s talk about the money.

So in the interest of a proper review let’s look at where I was at during the end of Sept 2017.

  • Investments: $595,030
  • Net Worth:$990,030
  • Spending Previous 12 months (less renovations):$35,305

Meanwhile, my end of August 2018 numbers were:

  • Investments: $619,850 (increase of 4.2%)
  • Net Worth:$1,014,850 (increase of 2.5%)
  • Spending Previous 12 months :$35,814 (increase of 1.4%)

Of course keep in mind I was officially on vacation for my first six weeks of early retirement and getting paid and still saving so the comparison to exactly one year ago is a bit off.  But overall the investments and net worth went up even with the choppy stock market of the last  12 months.  Of course I was sort of hoping to see my spending go down a bit not up during the first year but such is life.

A good part of our family’s income for the year was my wife’s daycare business which she has chosen to keep doing for a few more years (roughly $8000 for the year).  Then the rest came from cash we had pre-saved for the year and dividend income (roughly $10,000).

Now according to my last net worth update I’ve exceeded my goal for the year as our money in from investment gains and income was 108% of our spending. This was even with our spending being a bit higher than predicted and our investment returns did lower than expected. Of course this is somewhat of an illusion because in fact it is only because without my tax refund of just under $4000 this won’t have occurred, with out that I would have been under my target. And of course going forward that large of a tax refund isn’t like to happen again as it was somewhat a left over from my previous job. So am I screwed going forward? Not really.

Why? Well there are two items that come into play. First the low investment returns, had those been closer to my expected long term average of 4.5% we would have still covered our spending without the tax refund. I purposely left some slack in the numbers to cover this very scenario. The second reason I’m not really screw going forward is I’m expecting some additional income in the future.

The two main increasing sources of income will be when I actually like publish a book or two (or take on some other ‘fun’ work which pays) and our Child Tax Benefit is set to swell dramatically in 2019 (estimates have it increasing from around $340/month to closer to $1000/month).  Also we have stopped adding money to our kids’ RESP account as of this summer so know we can actually use our current Child Tax Benefit for our kids day to day expenses.  We stopped adding money to the RESP because we broke our $80,000 target (the actual account balance is closer to $80,500 if you want to know).  Of course a concern would be changing of the Federal government in the 2019 election, which even if they did roll things back to the old program amount we would still get around $730/month.

So going forward we should definitely have more income coming in even if our spending stays at the current level.  Later this year I’ll take some cash from my RRSP account to fill up our high interest savings account which we use to help ‘pay’ ourselves an income twice a month.  I use automatic transfers twice a month to simulate a paycheque.

So short term, I really don’t expect any problems for the next year or two.  But with the long term we do have a potential issue that if our investments continue to perform below our planned long term average for the next five years my wife’s full retirement might get delayed.  Yet even if that did occur we do have options like me doing some part time work to help boost savings and/or downsizing the house or any of my other back up plans.

The point is we will deal with that if it occurs in the future.  Life never goes according the plan.  You just adjust as you go which is honestly how we go to this point in our lives.  We adjust as things happened.

Any questions on the money side of things?  Or any other questions you would like to know about? If so, please ask in the comments.

Life After FIRE – One Year Review – Part I

Okay, let’s get the big thing out of the way. I’m so in love with my early retirement I can’t even see going back to full time work. I just enjoy this new lifestyle too much.  I will stand by my previous thought I won’t mind part time hours up to half time or so.  Just so far nothing as worked out along those lines.

So what are the positives of this new lifestyle?  Well it’s a long list but I enjoy the following the most:

  • That I no longer wake up to an alarm like 99% of the time (I did use it a few times to get up early for something and I didn’t want to oversleep).
  • I get to do things when I want to do them.  So if I’m tired I do less and when I’m in a grove I get more done.  This is so different from my old day job and I seriously enjoy this more than I thought.  The ability to adjust my day based  on how I’m doing is literally priceless to me.
  • I almost never feel stressed out anymore.  I, of course, still feel some stress but it really isn’t even in the ballpark of my life (which wasn’t really that stressful to begin with).  I honestly feel like hippie some days as I look at other stressed out people and resist the urge to tell them to just chill out a bit
  • I get to follow my curiosity where ever it goes.  So if I develop an interest in a new book series I can borrow them all from the library and read them.  Or research an term I found in a book or even watch YouTube videos to learn a new hobby.

Yet I should caution that not everything is positive.  I still have a problem in early retirement: I still have too much to do. What the @$%#? Yes, I know. You may hate me for a moment. The issue remains the same as before I retired. I have a lot of interests and things I want to try which is more than the time I have available. The side effect of this is that I’ve never been bored remotely even once during the last year. Yet I feel much better now as I don’t feel I’m squeezing in life at the seams but rather living it to its potential each day.

Part of that come from the fact I can now do things at my own pace as I mentioned above. I feel like for the first time that I’m not really ignoring parts of my life. I get to them all eventually it often take me weeks to cycle through all my interests. Part of it is that I choose to leave time for those quiet moments in life. If I’m out for a walk and something catches my eye I can stop and have a look. Or I can make sure to spend some time each day reading and not feel guilty over it.

Yet one lesson I have learned in the last year is how easily it is for time to go by without you realizing it. In the beginning I gave myself permission to do not much, yet over time I wanted to accomplish something. I wanted to create and work towards something big. Of course, what that is can be anything and it various from person to person but we all need ‘work‘ on something we find meaningful. I think this is so overlooked by many retirees regardless of age. You don’t stop wanting to achieve things because you left work. That desire is still there and needs to be fed with something. Of course what you find meaningful is highly subjective. I’m fairly sure some people would consider me making little trees for my kid’s D&D game a massive waste of time but I like the challenge of learning new skills, being a bit artistic and having a tangible product of the end of my time.  It means something to me and that is all that matters.

With that in mind perhaps my only regret in the last year was how little time I focused on my writing. I enjoy writing but I was still wasn’t doing it every day for most of the last year. I didn’t find a good rhythm for doing it until summer where I made it more of a habit and started writing my next non-fiction book which is the sequel to Free at 45 (I’m got a first draft of five chapters so far).

Which brings me to my next point. I’ve added some extra structure to my days during the summer. Not a lot more but just a bit more. Why? I found I was avoiding things too much which didn’t really need to be delayed like writing my latest book. So now I give myself permission to be lazier on the weekends and then write out a to do list for each week. I also include certain habits that I want to do in that list.  So going for a run three times a week is on it and writing at least a page per day on my book on average and drafting at least one blog post a week.  You might wonder why a ‘to do’ list.   Well I always liked using them at work previously and they do help me to make sure I don’t forget to do something.  But really the structure can be just about anything you want to help you get things accomplished.

Perhaps one item that seems a little silly but never the less I’m proud of my ability to bask in those little quiet moments in life a bit more. I can pause on a walk and just marvel at the light coming through the trees and not feel guilty for taking time. Life really does now move at a slower more sane pace for me and I don’t ever want to give that up now.

I also don’t regret leaving when I did. I could have saved more money prior to leaving and have additional savings to pay for some things that have come up over the last year but I really don’t regret it. Why? I don’t mind limits from the money. It keeps me in check for determining my priorities and not buying too much stuff that I won’t get around to using. Having too much cash I think would make me more prone to impulse buying or getting too much of a backlog of things to do. Which I know I can happen to me..see exhibit A: my video game collection is a bit too big and I have almost 100 games on my GOG.com account and I’ve barely finished like 11 of them. So to deal with that I’ve just banned myself from buying new games for this year. Or exhibit B: my Netflix to watch list still hasn’t gone down that much either in the last year.

Tomorrow I’ll look at the money side of the early retirement in a bit more detail. In the mean time, did you have any particular questions about my first year of early retirement?  Please ask away in the comments.

A blog about early retirement and happiness