Three Years of Early Retirement – Mindset Changes and Realizations

On December 14, 2018, I left my job of almost 8 years to retire early. That was three years ago this month. While a lot has happened in the world since then, our life has been surprisingly stable. I previously shared takeaways from first year of FIRE and my second years of FIRE about this. Going into 2021 suck at home and glued to the news, I wasn’t expecting it to be much different from the past two years. While that’s mostly true, it’s been interesting to see how a few mindset shifts can change everything.

When I was working, and even since I stopped, one of my favorite types of blog posts are the “what I learned by retiring early” type. The Mad Fientist has done these each of his 5 years since he retired, Retire by 40 has 9 years (!) of updates, Root of Good has updated a bunch, Our Next Life shared reflections after multiple years, A Purple Life shared her first year of early retirement, Living a FI had an epic update after a 6-year blogging hiatus and Life Outside the Maze (who retired around the same time I did) recently posted about lessons from 3 years of early retirement.

There are honestly too many other posts to count and list. Some people prefer to update monthly, others yearly. If you’ve written a blog post (or multiple) with your experience, please share it in the comments of this post for other people to read!

What I enjoy most about these posts isn’t the life updates (although those are great too). It’s how their mindset has shifted given more time to reflect. Taking a break from work is often the pause needed to shift priorities in life. It’s why many life-changing decisions happen in the years after leaving a job. This focus on personal growth to understand what’s next has always intrigued me (it helps I kind of love future planning).

With that frame of mind, here’s a look at how this past year of time away from work has shaped my own view on early retirement, financial independence and my own outlook on life.

How I Got Here

For anyone who’s been following Minafi for the last few years feel free to skip this. Here’s a quick tl;dr of where the year started.

• Retired at age 36 after a career in tech (programmer/product manager). I’m 39 now.
• Was extremely lucky, coupled with having the right skills at the right time and putting in a lot of effort.
• Had a $100k windfall when my mom passed away when I was 23, followed by selling the house I grew up in when I realized I didn’t want to be a landlord.
• Joined a startup Code School, which was acquired by larger company (Pluralsight) which eventually went public.
• Grew up in Florida, but moved to Salt Lake City, Utah about 4 years ago.
• Live in an apartment with my wife and dog.
• Living at about a 3.5% ~ 4% withdrawal rate on my very boring investments (mostly a three-fund portfolio).

For a graph of how I got here financially following FIRE path that puts it all in perspective.

How to read this:

• The Y-axis is my savings rate for each year. An 80% savings rate means I was able to save 80% of my income that year. For some years this was only possible because I had a huge windfall (noted here). For other years I tried to save what I could based on my salary.
• The X-axis is how much I had in total investments at that point in time based on my spending at that same time. For example, When I was 25, I was spending about $50,000 a year. Since my “savings multiple” was about 3.5x, that means I had about $150,000 in savings at that time.
• The X-axis can go “back” for two reasons: my spending per year goes up, or the value of my investments goes down.
• A -100% withdrawal rate would mean a 4% WR for that year from investments. Since my wife continued to work for my first year of retirement, our WR was less than 2% for my first year.

Ok, now that you know how I got here, here’s a look at what I’ve learned this last year.

#1 Retiring Early Isn’t for Everyone

Let’s start here.

This year has seen the rise in antiwork, unionization efforts and The Great Resignation. It’s obvious to anyone who’s not rich that capitalism without social programs here in the US (and anywhere, but especially here) is driving people to the point where they’re struggling to pay this months bills – never mind saving for retirement. FIRE for this group is as out of reach today as home ownership. It’s a dream like winning the lottery.

For those that do have well paying jobs, health care, stable housing and investments, you’re seeing your money grow at a rate that’s hard to fathom. The S&P 500 is up 29.71% in 2021 (!). Having a high income, having windfalls, making smart investment decisions and letting time do its thing could allow you to do what very few people in history have been able to: retire early.

But should you? Here’s my honest opinion: if work is your biggest hobby, you shouldn’t retire. You’re going to be bored. That’s why creatives thrive so much in early retirement – they finally have time to do what they’ve always wanted to!

I’ve talked to a bunch of people who say “I’ll never retire”. They tend to fall into a few different groups – all of which are completely valid opinions:

• Work is my hobby – People who genuinely enjoy their work, get value out of it, grow as humans and don’t want to stop.
• Stop working, but still be productive – People who would stop working at their job, but still do something “productive” for society. This is more semantics in my mind. It also sometimes negates creative projects, raising a family and community involvement as “not productive”.

Whatever you want to do and whatever you want to call it – you do you. I’m not here to police the terms you use to describe yourself.

In my case when I stopped working at my job, I immediately started working on side projects. I dove head first into Minafi and built out an Investment Bootcamp, a Fund Directory and an Investment Platforms directory. These were all fun projects that I enjoyed, but some people might actually consider this “work”. I don’t.

In 2021 I shifted gears and spent most of the year working on a new bootstrapped startup called Hardcover. It started as a joke tweet and quickly sprang up into a 7-person startup with weekly meetings, roles based on peoples strengths, equity discussions and semi-formal practices in place. I’ve had to part ways with some people who have joined – even though we’re all working for free (well, for equity only).

At what point does working on this project mean I’m no longer “retired”? Is it when I spend more than 40 hours a week on it? Is it when it makes money? Does it need to make enough money to pay my bills?

I don’t think it’s any of these. The metric I go by to determine if I’m retired is simple: who controls my time. If I control my time, I’m retired. If a company controls my time, I’m not. Easy as that.

For working on this project, I’ve set it up to be flexible. Everyone works as much as we they want to and everyone helps the end product be a little better. There are some guidelines in place – people can’t just leave and continue to own equity – but for the most part it’s flexible. My hope is to build the kind of business I’d want to be involved in while continuing to be retired.

That will mean leaving money on the table, not putting in mad hours to hit deadlines and pick up the slack at times for others. It’ll also mean others sometimes picking up my slack as well – and that’s the important part. We’re all working together.

This is still new to me, but it’s been exciting to work on! If you’d like a sneak peak while we’re building it, you can join Hardcover today with invite code “minafi”. Just keep in mind it’s still very rough, and we have a few months to go before it’s a full replacement for Goodreads.

#2 Don’t Use the 4% Rule to Decide How Much You Need

Stock markets are up in both 2020 and 2021 – despite the biggest disruption to society and industry since the Vietnam War. Just look at $VTSAX, Vanguards Total US Stock Market index fund.

It has grown 26% in the last year – and 20% annually over the last 3. With 16% growth over the last 10 years, it’s almost doubling its overall rate since inception. While a correction could happen anytime, that’s not what I’m referring to when I say “Don’t use the 4% rule”.

The 4% rule assumes you know everything about your current and future spending. That’s an impossible task. It’s not that it’s hard, it’s that it’s actually impossible.

Instead, what I recommend is calculating your financial independence with options number – your FIO number. This takes into account both what you’re spending today, as well as more potential futures. Even this isn’t a silver bullet.

One thing I realized this year is that I reallllly don’t want to go back to work. It’s to the point where I’d cut out almost any spending to avoid it and stay retired. This aversion to going back to work is one reason I’d recommend people stay in their jobs a little longer to reach a 3.5% WR, a 4% WR with your FIO number or even a bit more. Not because a 3% is “super-safe”, but because it’s hard to imagine what you’ll spend money on later and having that flexibility to spend more later is nice.

How difficult it would be for you to get a similar job when you stop working should be taken into account. If you’re going to lose your law or medical license when you stop working, then it makes sense to save up a bit more now for the future.

If you’re a person who enjoys making money online as a hobby, then you could retire with a little less (I’m looking at you Kitty). When you do you leave your job just assume it will be difficult to restart it. Maybe it won’t be and you’ll be pleasantly surprised.

#3 I Enjoy Slow Days More Than I Thought I Would

My wife left her job in January of 2020. We had big travels plans in mind. We didn’t need to plan around limited vacation time, arbitrary 2-week limits or syncing up calendars. We could just go.

Of course that didn’t actually happen. We scrapped our 3-week Taiwan and Seoul trip scheduled for April 2020 and got used to spending time in our apartment. At first I felt down about this. I finally had a chance to explore the world without time limits, but suddenly travel was off the table.

We switched from working out of coffee shops, going grocery shopping a few times a week and eating out to doing all of those things from our 2-bedroom apartment. We’re fortunate to live in Salt Lake City where there are hundreds of hiking trails within 30 minutes of us, so we were able to spend a lot of time outside. But when we were done it was just back to home.

We’ve taken a few trips since then – my favorite of which was a road trip around Utah & Arizona National Parks in December of 2020. Winter is an amazing time to go: fewer people and cooler weather.

Most of the last year hasn’t been nearly as glamourous. My days now typically look something like this:

• Wake up between 8am and 10am without an alarm.
• Have coffee and breakfast in bed while checking my phone or reading.
• Take my dog on a long walk (my wife and I switch off).
• Do some programming or play a game (I can’t neglect my Stardew Valley Farm).
• Have lunch.
• Do some tidying up around the apartment.
• Go for a run 3x times a week. Usually a 5k with some uphill that’s equivalent to a 120 story building.
• Do some programming or play a game (I can’t neglect my Stardew Valley Farm).
• Make dinner or order delivery with enough leftovers for a few days.
• Take my dog on another long walk (my wife and I switch off).
• Cuddle up and watch a movie in bed.
• Scroll through some social media.
• Maybe make a cocktail, enjoy a beer and relax.

That’s a typical day. That’s assuming no errands, no social commitments, no emergencies, and no holiday preparation. It’s not all hiking around Salt Lake, hanging out with friends, or travel. Most of life is just this – staying at home and enjoying life.

And that’s what I’ve come to enjoy. The above day isn’t going to get a lot of likes on social media, but it’s been amazing. It’s a slower pace of life, with time to create, time to maintain, time to deepen relationships and time to build new ones.

Now I look forward to these days! I can hardly believe the schedule I used to follow:

• [6am-7am]: Wake up at 6am and write on Minafi for an hour.
• [7am-7:30am]: Walk our dog (we trade off).
• [8am-9am]: Take public transit to work 8am-9am.
• [9am-4:30pm]: Work.
• [4:30pm-5pm]: Public transit to the gym.
• [5pm-6pm]: CrossFit
• [6pm-8pm]: Travel, walk our dog, shower, make and eat dinner.
• [8pm-11pm]: A combination of relaxation, errands, new projects and everything else.

Looking at that now it’s insane. I have more free time before lunch than during the entire day!

It can be a little scary not knowing what you’ll spend all of your time doing, but give it a try. Maybe you’ll find new things you enjoy. Or maybe the slower pace will give you a chance to see things you missed.

#4 I Spend Even Less Time Optimizing My Investments

While working I tried to tweak my investments a lot more. A three-fund portfolio has made up 80%+ of my portfolio since I began investing. Earlier on I experimented more with that last 20%. I invested in some individual stocks, “tilted” my portfolio by including small cap or other mutual funds, and looked for ways to get that extra 1% a year.

While this was a great learning experience, I had one big takeaway: I was doing a lot of work for very little gain. Sometimes this would result in a larger than expected return due to speculative investments, but usually it wouldn’t impact the bottom line too much.

Basic diversification goes a long ways:

Since then I’ve returned to a basic 3-fund portfolio plus a little bit in REIT funds, some dividends from bonds and a slow transition from VTSAX to ESG funds by changing where dividends are reinvested. Now my focus is more on keeping it simple, holding long term and spending the least amount of time making changes.

#5 My Political and Social Views Have Polarized

I suspect this one is less about early retirement and more a reaction to events of the last few years. In just the past few years my views have migrated:

Liberal -> Democratic Socialist/Progressive – Think Finland, Swedan, Denmark. These countries are still capitalist, but try to level the playing field to make the game of life less dependent on who you’re born to. Caps on raising rent, providing basic necessities, protecting people from corporations, negotiating drug prices, providing infrastructure, making voting easy and so much more. I wouldn’t be surprised if at some point we move to one such country.

Bitcoin is neat -> Bitcoin is evil – I bought some bitcoin when it was around $1. I sold it as a few bucks. I’m not bitter about it though. 😅 I still think the blockchain is great, but the implementation of it for Bitcoin taking up as much power as Switzerland to provide only a tiny bit of the transaction volume that Visa offers is crazy to me. This at a time when global warming could reshape the world feels like having a bonfire on a sinking ship. I think there are great parts to the blockchain, web 3 and decentralized computing. Between high energy use, rampant speculation and hype a lot of it just sucks.

Landlording is a way to retire early -> landlording prevents upper mobility in renters – Ok, not all landlords are bad. I mean the concept of landlording as whole is generally bad for society the way it’s implemented here in the US. I’m not against renting – I’m a renter myself. I love not needing to worry about every little thing. What I’m referring to isn’t that. It’s the price of housing being so high that people need to rent. Between NIMBY communities, single-family home districting, foreign investors and the rise of Airbnb, the amount of housing just isn’t keeping up. Now I think both of these are true (way to retire early AND generally bad for society). I support candidates that help lower the prices of housing in any way.

Republicans have different opinions -> republicans are traitors – There are some republicans who I’d still count under the “have different opinions” group, but they’re few and far between. When most of the US house votes not to certify an election on a lie, or when not single senator and 210 out of 220 house representatives vote can’t vote for voting rights, it’s clear: these people are only there to stay in power and not to help people. There are democrats in the same camp who I also don’t support. But when 98% of one party is against free and fair elections that’s a big problem. I’ve had many conversations with republicans in the last year, including a bunch while volunteering before the last election. Some are up for having in depth discussions about our differences. Too many others have clearly declared they don’t care about other people (masks, vaccines, taking away rights, gerrymandering, etc) and I’m not going to waste my time on them other than opposition at every turn. (side note: I don’t need to hear comments from “good” republicans unless you’re contacting your representatives and holding them accountable).

Billionaires must have done something right -> billionaires shouldn’t exist – There are many reasons why the US doesn’t have social programs of other countries. We don’t have universal healthcare, maternity/paternity, free college, a minimum wage that’s kept pace with inflation (did you know the minimum wage would be $28 today if it had?). Billionaires aren’t the only players fault for this, but they’ve certainly drained resources that could have gone to people that actually need it.

While I’m generally not optimistic about the US taking steps towards a more fair and just society, the thought of not pursuing it – and just giving up – is far more depressing. As with all things, none of these are black and white. There’s always a case – theoretically or practically – that disproves the statements above.

#6 Have a Project to Devote Your Time

I mentioned this in Retiring Early Isn’t for Everyone. If I don’t have a project that can fill all of my available time then I go a little crazy.

This doesn’t need to be a long-term project like Minafi or Hardcover. It could be planning a trip, organizing a game night, or researching gear for hike. During 2021 one of my projects was to run a marathon – which I did in July after hundreds of hours of training.

I love pointing to goal and figuring out how to get there. Many goals I give up on before I make it, but that doesn’t discount the effort put in. Although I might not ever become fluent in Japanese, spending a bunch of time learning kanji is something that I enjoyed a lot over the past 2 years.

This isn’t a recommendation for everyone, but if you’re the kind of person who always needs to be working towards something (like me), then spend time deciding and planning out what your next project will be.

#7 Relationships Need Energy

For a lot of my life I’ve spent a lot of time on personal development. Journaling, self reflection, and planning have always been one way I’ve organized my thoughts. This results in lots of lists: goals, local bucket lists, my beliefs, and pretty much every post here that’s not all about investing.

This year marked a shift in that – from doing this entirely by myself to doing joint exercises with my wife. This started from a couples retreat my friend Gregg organized. We spent two days going through John Gottman’s “Art and Science of Love Workshop” with an instructor. Considering that we’ve never done any couples therapy (and I’ve only done ~80 hours of therapy my own), most of this was all new.

We left this retreat with a bunch of things to try to deepen our relationship. The organized list side of me loved having concrete ways of handling complex situations. Two of these stuck with me and have helped communication between us a bunch:

Have a weekly “State of the Union” conversation with each other. This is a repeating chat to check in with each other. The format is simple:

• Each person shares 5 things they appreciate about the other.
• Each person talks about what’s going right in the relationship.
• Talk through or process a regrettable incident using one of the conflict resolution frameworks.
• Share how your partner can love you more in the next week.

Short and sweet. Processing a regrettable incident can take a while, but we’ve always felt so much better after those discussions.

The other framework that stuck with me is the “after the argument” discussion. The idea is for both people to share how they were feeling in the moment with a play by play of the argument. After each person shares, their partner repeats back what they heard. Next is a chance for discussion of what parts of the argument triggered memories of the past, taking ownership and discussing preventative planning.

Marilyn and I have been fortunate so far in our almost 16-year relationship. We don’t want to take that for granted by assuming everything will always be great.

Year 4?

The next year of early retirement looks a lot like the previous two. We renewed our apartment lease for another year, meaning we’ll be sticking around in SLC until at least January 2023. Thanks to COVID, our international travel plans are on hold still. If restrictions and cases decrease enough we might end up planning something (maybe for my 40th birthday – we’ll see).

We do have some things planned for 2022. We’re volunteering at the Sundance Film Festival, going to Disneyland, spending some time in Seattle with friends and possible getting a cabin together somewhere off the grid for a week away. It’s been a lot less stressful to plan events away from society that aren’t dependent on COVID fluctuations or shifting travel restrictions.

While I don’t plan to go back to “work” in the next year, I’ll keep spending time writing here on Minafi from time to time, building up Hardcover and spending time with friends and family. I’m sure I’ll do another recap next year too. 😉