Today I wanted to share a more personal perspective on finances, and why I’m (almost) retired at 40 years old. I could very easily be employed full-time as I am still active in my industry and am a recognized name in my industry. I could also be retired if I wanted and not have to watch my budget or cut my lifestyle to do so. In today’s article I will go over a few things in my life that have set me up for this, why I still work even if I don’t have to, and what my future plans are.
The Set Up
So, what got me to this place? A lot of credit has to go to my parents who made sure I did my homework, stayed out of trouble, and ate my vegetables. They both wanted for me what I want for my kids, to give them a platform to shine… to give direction but not directives. They gave me freedom to do what I wanted.
So, with that freedom I went to college, where I worked part time, chose to major in one of the physical sciences, and finished my BS in three and a half years. Which I then followed with a MS, PhD, and after a decade in the workforce an MBA (which was really done for fun). When it comes to picking a major, my advice is to try and find a combination of practicality and enjoyment. I always enjoyed science and math, so majoring in a science or engineering made sense. It turns out that I made a great choice, although that was far from certain at the time.
After finishing a doctorate I was faced with the choice of modest-paying academic jobs or a high-paying industry job. I chose to go into industry, and it was at a time when that industry was booming. It was fun, exciting, and financially rewarding. It took me from the USA to South America to Africa to the Middle East to Europe and then back home. The whole time, but especially while living abroad, I was able to save more than 50% of my post-tax income. Wait, what?
That’s right, I was able to save 50% of my post-tax income. How did I manage that? Well, that was also part of my upbringing. I am notoriously cheap. Cheap enough that my parents, who are also cheap, tease me about it. So, what do I mean by cheap? Basically, I feel guilty spending money on things that I consider frivolous or wasteful. Here are some examples:
- I prefer to go to the cheap movie theatre that is $6 instead of the one that is $12… I can enjoy the film just as much without reclining, stadium seating
- When I go out to eat I normally have water with my meal, and I’ll rarely go for starters and deserts, but for special occasions I’ll bend on that
- I do most of my clothes shopping at Old Navy for casual wear, trying to buy all I’ll need for the year during a big sale. For my suit-and-tie job I focused on buying mid-level quality. No $300 dress shirts for me, but I’m also not going to go bottom of the line and risk looking shabby.
- I eat breakfast at home, I generally take my lunch, and I try not to eat out more than once per week. This saves money, but also allows me to better control what I eat.
However, I don’t deny myself things that I need or that I really want. Computer dies? Check if a repair makes sense, then buy a new one if it doesn’t. I enjoy hiking and biking, so if I need a new backpack or want a new set of tires for my bike, I just buy them. Friend wants to meet up for a beer on the weekend? Sure thing.
Also, in being cheap I am constantly on the prowl for better deals and places to make improvement. Internet company threatening to raise rates? Time to call them up and tell them I get a discount or I’m leaving. Credit card’s cash back program starts to fall short? Time to look at new options. I notice that I’m using too much gas for my heating? Time to play around with the thermostat to see if I can run a more efficient timer.
I view being cheap and saving money as a badge of honor.
Why I Still Work
Why work if I don’t have to? Because I can be very selective about the work I do and the clients I take, which means I only work the jobs that are both fun and enjoyable. Also, the industry I am in gives me a rush, especially when I am doing work on mergers and acquisitions for clients… there’s nothing better than seeing a deal come through. This, combined with the fact that I am considered to be one of the best in my industry, leads to work that I find very personally gratifying. Finally, many of the people I work with are friends, so it is always nice to team up with them for jobs.
I also “work” on a number of personal side projects that are related to my profession and, which if successful, will be quite valuable. Sure, they don’t provide a steady stream of income right now, but they are projects that will have impact in the long run. Note, that most of these are software projects, which means that I can work on them for (almost) free.
Finally, although I hate to admit it, work is a part of my personal identity. When you’re out being social and someone asks what you do, telling them your profession is a natural response… and regardless of how long I might take away from work at a time, I’m still going to be a scientist at heart. And in going to the gym 5 days a week I realize that I can’t do that all day, and doing some work/side projects is a good use of time.
Also, work does allow me to offset my cheap tendencies. When the wife says she wants to take a trip to some exotic destination complete with childcare, day trips, and blue and orange-colored cocktails instead of thinking about costs I can just say to myself, “Cool. No problem. Let’s do it.” And then I’ll work for a few days when we get back to cover it.
I’m not sure what the future necessarily holds with respect to work. I am fairly confident that at least one of my side projects has the potential to become a sizable business, and if so, I will run that until it becomes more mature. I have also been presented with many opportunities to run divisions in large companies, which I think would be both financially rewarding and intellectually stimulating. That is definitely something I am considering. I am also very entrepreneurial, and there is a good chance that I will expand on this and turn one of my side projects into a full-time business.
However, I do know that regardless I’ll keep having fun and will do so knowing that I am in good financial shape.
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