Mmm, I’m a bit unsure on how to best describe something that tends to be so far reaching, but I will make the attempt. New Escapologist (NE) magazine, which by the way also has a blog, is best described by its introduction:
New Escapologist is a magazine for white-collar functionaries with escape on the brain.
Drawing from philosophy, literature and original humour; we discuss practical escape routes from the present-day predicaments of demeaning work, status anxiety and urban lethargy.
Each issue is a compendium of funny and practical essays on the subject of escape. We promote freedom, anarchy and the absurd.
So while the Canadian Dream blog tends to fall into the financial independence and early retirement bend, NE takes it a step further of getting out as soon as possible. How? Well in issue #3 which deals with the practical issues it suggests the following format as an option.
- Cut Expenses – Any going for FI would have already done this, but its good to start with stop buying crap that doesn’t make you happy and doesn’t serve a purpose.
- Save Like Mad – The more you save the sooner you can get out.
- Beef Up Your Skill Set – Use work as a training ground to learn as much as possible on different skills sets.
- After Developing a Escape Fund, Quit – Yes, rather than going for full FI, get a beefy escape fund and get out now.
- Enjoy your Escape – Consider it a sabbatical or long vacation rest and recharge from the horrors of work with up to half your escape fund.
- Seed Money – Use the remainder of your escape fund to start your own cottage industry or small business. The idea is to have a business the covers your basic expenses leaving you time to actual enjoy living your life.
Overall I rather like the concept as it mirrors somewhat my current plan to some degree, but it just gets you out the door sooner. It’s more of FI by starting your own business route, but that isn’t the only way ‘out’ and points out what others have done to escape the odd world of work in a cube. I should note that they just released the entire back catalog as a PDF, so I got all six issues for $40 and highly enjoyed reading them.
Since the issues also look at the somewhat absurd things it is a fun read which I often felt was very well written. Some examples include essays on the absurd things they teach us in school in the theory of getting a better job (which of course doesn’t get used at all), on the practical side a report card on someone’s escape just one year into their plan, and even a essay on the digital bohemian.
If you have any doubts on if you would enjoy it or not I would suggest reading the blog as you can get a good feel for the publication by the posts. I personally enjoyed the entire back catalog and read all six issues in just a few days, but do keep in mind the publication isn’t serious all the time. You have to laugh sometimes just to get through the day.
I’ve occasionally come across people that refer to financial independence (FI) as ‘fuck you‘ (FU) money. While if you hate your boss that might sound appealing, in my case I won’t bother…I like my boss. Yet that did get me thinking, what are the benefits of going for financial independence before you ever get there. In my short journey, this is what I’ve learned.
- Open Your Month Money – Imagine for a moment that you had a 7 year worth of income emergency fund, do you think you would speak up more at work? Well hell yes, that is exactly what happens with me. I’m still respectful of others, but I always speak my mind now. Why? What’s the worst thing that can happen? I get fired and I’ve got seven years of cash before I need to have another job. The reduces my stress about speaking up hugely.
- I Can Walk Away Money – In negotiations the one party that can walk away from the deal holds most of the cards. Which is why I was always schooled to never fall in love with a particular house, I can walk away from the deal. Now could you do that with a job offer? If you have lots of bills to pay, likely not. Yet if you are on your way to FI, then you can start playing a little more aggressive negotiations. Ask for a raise before you start? Sure. An extra week of vacation? Why not. What can they do? Say no. Then you can decide if you still want that job with out the extras.
- Can Earn Less Money – Could you handle a 20% pay cut if you were told you would lose your job otherwise? How about 50%? I could handle either if I wanted to, since my expenses are much lower than my income. In fact, for three different jobs now I’ve chosen to earn less money than I could make. Why? In some cases, what I wanted out of the job wasn’t money related. One job I picked because of the geographic location (I wanted to move closer to my extended family), another I wanted the free time to pursue a personal interest and the last one I picked because I really wanted to work for a particular person.
- Stress Free Money – People are somewhat surprised when I tell them I never worry about money, but it is true. I like to talk about money, think about where to invest it, run projections on when I will be FI, but I never worry about it. How? My bills will be paid regardless of if I get up and go to work this morning because of my savings. If I get hit by a bus, my family will be fine (financially speaking) without me. I know exactly where my mortgage payment could come from if my paycheck was late a week. Do you?
- Take the Extra Risk Money – Starting a small business can be a gut twisting exercise because of the risks involved. In most cases the worries tend to focus around getting the startup cash and being able to afford to put in some time to get the business off the ground while you don’t take any profit. With a large pile of savings, neither issue is a problem anymore. You can take a unpaid leave from your work if you need to, you can finance the business startup costs if you want. In summary, you can take more risk in other areas of your life since you have a financial buffer.
So what you have you learned on the your trip to FI? Does FI = FU for you?
Well in case you weren’t on the early bird list, the CPFC12 conference (Sept 21 to 23, 2012) for personal finance bloggers opened up registration recently. They blew threw the early bird tickets at a brisk clip and as of the last time I looked there are only 7 regular tickets left. I was one of the lucky ones to get an early bird ticket at half off. So I’m off to Toronto this fall to talk with a great group of people about blogging and money.
Yet what really struck me as odd was this post over at Blonde on a Budget where she talks about saving up for the conference. Why? Because literally the thought that went through my head when I was reading the post was “But why would you do that? Can’t your business cover the expense?” At which point I realized just how far my blog has gone from hobby to business.
While these aren’t any final figures, so far my rough pre-tax calculations were my business in 2011 I had total sales of approximately $7200 last year with a profit of about $4200. Yet that included all revenue from this blog, freelance writing and book sales (so yes, obviously I’m not getting rich writing). Yet what struck me as surreal about those numbers was that fact that was my third job and I wasn’t putting in that much time into the business compared to my day job or school board trustee job.
Of course this got me thinking that if I can pull off that amount as my third job, just imagine what I could do with a little bit more time to work on things. So my initial idea of pulling down $5000/year in semi-retirement situation seems damn reasonable all of a sudden. Or alternatively if I add up 4% of my current investment net worth (to simulate a sustainable withdrawal rate), my wife’s business profit and my business profit we end up with a figure of approximately $20,000/year. That is within striking distance of our post-mortgage expenses of $24,000/year.
While I don’t want to semi-retire with that little saved, it does provide a nice sleep at night factor to realize that once the mortgage is paid off later this year that I could lose both other jobs and still be fine looking for a new day job for years. I suppose that is the point of either having your own business and/or planning for early retirement. You become independent of having a day job at all.
So do you have a small business? If so, how much time do you put into it and how do you do for sales? If not, would you consider one in your retirement years?