In Social Media, we are told regularly – that there are some things that could significantly improve our lives. Whether it is a particular kind of investment, a diet, a novel mind-set, or the latest money-saving technique, there’s no shortage of ideas on how to get ahead.
Many of these theories sound good, but do not appear in real life. Some things are terribly overrated. Early Retirement is sold really hard! What do they have to gain by YOU retiring early?
No boss, no clients, no deadlines, no more business travel – wow! At least for Indian men the whole ‘early retirement’ sounds almost sinister! In the last 8-10 years of their lives, they did not develop any hobbies, did not know any household work, and suddenly they seem to have lost their sense of purpose! While some people can enter early retirement without skipping a beat, many individuals who decide to retire early from the workforce soon realise that working is about far more than money. The real successful people don’t retire –they realise that working is not just about money. It is a social place too – the people with whom you want to eat, party, go on vacations, etc.
Ernie Zelinski talks about the importance of work in How to Retire Happy, Wild, and Free:
“Regardless of how talented you are and how successful you are in the workplace, there is some danger that you will not be as happy and satisfied as you hope to be in retirement…What may be missing is a sense of purpose and some meaning to your life.”
First question to ask is “why retire” – finding the purpose of life especially during retirement and knowing what will be the time-table for the rest of your life, you should re-think. Playing golf, listening to music, going to the gym –which look like luxuries when you are working are just not enough to be fully engaged.
All of us need good returns for our portfolio –but the retired persons are likely to be paranoid about the sequence of return risk. If you get bad returns in the first few years, your capital could get wiped out –and force you to enter the job market AGAIN! Some of you may be in a position to tap a second career, I would call it a PULL retirement. A push to retirement (saying I don’t like my job) is tough to handle, be careful.
One more problem is our unwillingness to accept that we can’t predict what will happen in the future. One illness, death, divorce, -any one event can upset the whole thing and we should be careful about it. Sure being in a job is not an insurance against things going wrong. A simple medical cover by an employer may become a huge relief if a liver needs surgical attention!
F.I.R.E – Financial Independence and Early Retirement – I love the fact that F.I. comes first. Once you are Financially Independent, decide on what to do. Retirement is just one of the options. I.C.E is also an option – ‘I will continue Earning’. Just remember that.
PV Subramanyam
Writes at www.subramoney.com and has authored the best seller ‘Retire Rich - Invest C40 a day’