If you have been around the early retirement blogger community for a while you will notice we have a high number of members who were engineers. I initially thought that was a interesting fact as I drank the kool-aid of thinking anyone could retire early. Then after reading this article in the Atlantic, my realization that I was never middle class it hit me all over again. I have always been really am well off and honestly I like to think it is my own merit and skill but I should really should mention I was born with a significant leg up on everyone else. Yet the real truth of the matter is it extends farther than just me. The entire concept of early retirement in your thirties or forties is really a niche carve out mainly of the subset of the professional class (like engineers, lawyers and other high paying career tracks) who crave freedom more than anything else.
After all we personal finance bloggers continuously preach that it is all a matter of saving a high percentage of your take home pay and just about anyone can do it. If you can save half that is great, but if you can push it even higher to saving 66% of your take home pay then your working career gets even shorter and starts to approach a mere 10 year career.
See by telling the story in terms of percentage we mask the little details like it a hell of a lot easier to save 50% of your tax home pay when you are making a combined household income greater than $100,000 per year (and in a lot of cases per person). When in fact, the median family in Canada is only $70,330 per year (2015). Now toss in the average house cost in Canada is $495,000 and suddenly saving 50% of the median income at that level gets a LOT harder when you could be spending around 40% of your income on just the mortgage payment.
I used to think I was somewhat noble for doing early retirement after all I was giving up the option to be really rich if I kept working…of course I conveniently ignored the fact I was already rich compared to most people just not multiple millions in the bank rich.
My kids for example are already better off than I was. I was the last of four kids so my parents decided to cut off my university funding after my first two years and co-signed a line of credit instead (not that I’m blaming my parents at all for that decision there were a lot of factors that lead to that decision). But it did result in me owing $25,000 when I left university. My kids haven’t got to high school and they already have over $40,000 each saved for their post secondary education. Not to mention the fact they now have two parents who work in the house and are available to help them with homework, attend school functions and otherwise support them in just about everything.
While I can’t predict if my own kids will ever go after FIRE themselves the reality is they would end up with a huge leg up over my own attempt as they will likely graduate post secondary education with zero debt. Thus further enabling my kids to retire even earlier than I did if they also go after a professional or other high paying career.
So the question becomes is FIRE really possible for everyone? While in a pure theory sort of way, the answer is yes. The reality is much different. The difficulty of early retirement keeps getting higher the less income you make and the scale isn’t just linear. For a family earning less than medium income the odds start to become vanishingly small. You basically need to live in a low cost of living region with a higher than average local income to make it work. So in the end I have to conclude FIRE is basically an elitist concept that is mainly limited to high income people and those that succeed at it will always be a minority as compared to the general population.
Do you think FIRE is elitist? Why or why not?
So I was thinking back about my old engineer career the other day. I didn’t mind what I did for a living but it was time to move on to try other things. But as I looked back on my career and I came up with some lessons that hopefully can help someone else in their career.
In no particular order:
- Asking for forgiveness is easier than asking permission, but it only really works on the minor things. So try to be reasonable.
- Don’t be afraid to use your sick time. I used to come in sick for the early part of my career and all I did was get no work done and then infect everyone else.
- Do good work, complete your work on time and be nice to work with. Honestly if you can do that you are further ahead of most people.
- Own your successes and your mistakes. It doesn’t get easier to admit when you screw up so get used to doing it earlier in your career. And come with a plan on how to fix your mistakes.
- Good enough works sometimes. For everyday items do good enough and save your energy for the key items your senior management really care about.
- Never depend on a raise or bonus. It should accelerate your plans, not be your plan.
- The best way to a higher salary is usually a new job. I got more raises moving jobs that I ever did just staying put.
- Always leave slack when estimating the amount of time you need to complete your work. More often than not you will need it and if you don’t you just finished your work earlier.
- Know what you want or need in a job and try to maximize those and minimize what you hate doing. For example, I hated repetitive work but loved getting new projects.
- People won’t recall your work, but they will remember how you made them feel. So be nice as a default.
- When in doubt: speak up. Ask the obvious or hard questions since most people have trouble doing that. Senior leadership doesn’t know everything, contrary to popular belief, so ask.
- Time off is more rare than a raise, so when in doubt take the time off over money.
- If you can’t get all your work done in a day, it isn’t your fault. It is often a resource problem, so doing overtime consistently will not fix it. So avoid doing overtime on a consistent basis, but it is okay for that last push to finish a project.
- Take every dime of money you can for matched savings programs. It will add up over the years.
- Social interactions make the world spin in business. So dear engineers get used to doing some small talk before diving into the agenda of your meeting. I know it feels odd but when you really need someones help they are WAY more willing to give it if they like you.
So what lessons did you learn from your career? Please add to the list with a comment below.
I think perhaps people assume that when you give notice at work that it should be some sort of big deal. There should be shock, drama and all sorts of interesting things. In my case, it was mainly boring, except for one thing. Why was it boring? Because everyone involved in this decision knew it was coming.
It all started way back almost a year ago when I mentioned my plan to leave work would likely occur in the next year during my performance review (please recall I do blog publicly about my plans so work has been aware of them in some form for the last five years or so). My boss and I were discussing how much notice he would like and we agreed to a figure of at least three months.
Then earlier this year during the work planning cycle I mentioned that I was concerned about taking on a project that I wouldn’t see the end of. So I provided an updated on my plan and said that I would likely provide official notice after my summer vacation (I figure no one should make that sort of big decision without first being calm and relaxed – you know that feeling you have after not being at work for like two weeks). And on top of that, I have even been dropping comments into conversations with co-workers that I would likely be leaving work this calendar year.
So like I said everyone involved knew this was coming, hell, I even had an appointment for 8am on the day I got back to work from my summer vacation to officially provide my retirement notice. The meeting was only ten minutes long. I handed over my letter of official notice (that I wrote six months earlier) and had printed off over a month ago (it was sitting at the bottom of a file at my desk just waiting for me to sign it). So the conversation was short and I explained that my last day was Oct 27, 2017, but I was going to be on vacation prior to that so my last day in the office is Sept 15, 2017. I then entered this information into our online system (which by the way I actually submitted my retirement notice, I didn’t just resign) and with a click of a button my days as an employee were numbered (because it says right on the form you can’t delay or revoke your retirement after you submit it).
Therefore on the process side things went very smooth so far and no drama or surprises. Yet what I wasn’t fully prepared for was the emotions that ran through me on this day. I woke up sort of nervous. You know like when you have a important meeting or presentation to do. I got to work and I got a little light headed and clamming skin right before the meeting (again nervous…after all I was ending my career here). Then afterwards things got worse, I didn’t calm down or get better. In fact, I was a ball of conflicting emotions. I had feeling of being excited, fear, worry, anxiety and a good dose of thinking “what the hell am I doing?” all at the same time. It was like my entire body was vibrating on a slightly different frequency than normal. Then the nausea hit in the early afternoon and I went home sick for the rest of the day. I hoped it was food poisoning but in fact it may have just been emotional overload.
So despite having read a library of material on retirement I still wasn’t prepared for the emotional impact that hit me. You can think you are ready, but nothing will prepare you for actually ending your career and jumping into your new life. I wonder what other surprises await me in the days ahead.