Working till 62 Isn’t That Bad, Right?
When I began my journey to Financial Independence in 2017 after my divorce, I learned that by being intentional and focused with my finances I may not need to work until typical retirement age. The thought of working till the age of 62, or 70, didn’t sound that bad at the time. I liked my regular W2 “day job” for the most part. I enjoyed parts of my job in which I can inspire and educate my customers. It feels good to help my customers be successful, and their employees do their best work! It can be freakin’ awesome!
I Want To Do All The Things
However, I have a lot of things that interest me. I have other endeavors that I really want to spend time doing. It would be cool to spend more time researching and writing, maybe for the blog you’re reading right now! To focus more on building and growing my real estate investment portfolio. I’d like to dedicate more time on the Nonprofit and how we can make in impact in helping those that need it. I’d like to spend more time on the new Amazon Business and grow beyond retail and online arbitrage and into wholesale, custom and private label products. I have other technology-related businesses that I’d like to pursue as well. There so many things. ALL OF THE THINGS!
Let’s be clear… While I may have resigned from my “9-5” and left W2 employment, I’ll use the term “retired” loosely here. As I just said, I have a lot of crazy things I wanna do in the coming weeks, months and years.
Getting Serious About My Finances
Getting serious about my finances meant to put things in place to help me grow my wealth in an effort to retire earlier. I had originally set my sights on leaving my W2 job at the age 55. The first thing I did was pay off my mortgage. I know, I know this is a controversial step, and some people may think this wasn’t the best move. Check out my convo with Andy Hill From Marriage Kids and Money!
I wanted to get rid of as much personal debt as I can, so I then can live on less once I am “retired”
Budget, Save and Invest
In the beginning of 2017 I had been tracking my spending, and expenses. I wanted to get clarity on where my money was going every week and every month. Once I had a better understanding how I was spending, I could stop the frivolous spending on stuff that didn’t matter. I really worked hard on being more frugal, and intentional with my spending. This, then allowed me to save and invest about 60-70% of my income. Keep in mind, I had no credit card debt, no car payment, or mortgage payment. I’m also a single guy, so my grocery and dining budgets are relatively low.
Start Real Estate Investing
Another thing I did in 2018, was purchase my first Investment Property. This was a long-term lease, rental property. This was a town home I was able to purchase for ~$135K and rent for ~$1,500 a month. This property then had positive cash flow of around $400 per month. Over the course of the next few years purchased more of these town homes in the same area.
I had continued to purchase more rental properties over the next several years. I understand my Real Estate Rental business now holds over a million dollars in debt, this does cause a little anxiety at times, I understand this is the cost of doing business. This now allows me receive enough positive cash flow to pay my bills and living expenses. With the help of a business and investing coach I began to offer Lease-To-Own program as well. This not only allows me to earn income, it helps those that may not be able to qualify for their own home, move into and purchase their own home faster.
Cost of Living
Then, I carefully tracked my expenses over a year and was very specific. I created a “Cost of Living” spreadsheet with as many categories and expenses as I could. I had a column for all my expenses including categories for Vacation & Travel, Charitable Giving, Education and Personal Development. However, I also created a column in my Cost of Living spreadsheet with the bare minimum expenses. As you recall from earlier, my minimum cost of living is pretty low because I don’t have a mortgage payment, a vehicle payment, or credit card debt.
Let’s not forget to have fun along the way. I’m still going to attend concerts and events along the way, but will be intentional on how to save for these. Milwaukee Metal Fest and Metallica to name a few! In the words of Paula Pant, “You can afford anything, but not everything.” I understand there are trade-offs. I may not dine out, and choose to cook meals at home so that I can afford a trip to a concert, for example. I continue to live a frugal lifestyle so that I can afford to do some of those things I enjoy.
Invest And Don’t Touch It
Then something crazy also happened. Because of the continued saving and investing I had been doing over the last several years, my retirement accounts had continued to grow. I could now stop the investing into these accounts, and they should, in theory, continue to compound and grow for next twelve years or so before I’d need to draw from them.
Soul Searching
I then contemplated with the idea of leaving W2 employment even earlier than the age of 55 to pursue all my other things. Perhaps by the age of 52? Could I really do that?
I had been struggling with this big decision for several months. Maybe one of the biggest decisions in my life. There were discussions with a couple of my close personal friends, as well as some wonderful people in the FIRE (Financial Independence Retire Early) community. Also, I had attended events like CampFI and the EconoMe Conference. I had long discussions on finding passions and purpose in your journey in life.
Inspiration and Enlightenment
I had also read this book titled, “From Strength to Strength” by Arthur C. Brooks. It focuses on finding success, happiness and deep purpose in the second half of life. I will tell you this book changed my life. This caused me to thinking about how to continue to create and find purpose in other endeavors outside of my current career. How to begin to develop an identity outside of what I did for work. I began to think about all the things that get me amped up, and excited about. What are things I could do or how could I make a difference in the world. This took me back to the non-profit organization I started earlier, and how it could help so many people. I like ideating, creating, and starting businesses or trying side hustles. I like to do this and have the curiosity to see what works and what doesn’t. Let’s do this!
Plan of Attack
Finally, after many sleepless nights, and conversations, I decided to take the leap, and decided to “retire” from my W2, nine-to-five job, and focus on other things. I began to plan and prepare. I began to look at a calendar and key dates and timelines over then next year. Then, down to the next 6 months, then 3 months. Some things for me to consider were:
- When are my Restricted Stock Units (RSUs) Vested? RSUs are a type of compensation given to employees by their company as part of their overall compensation. RSUs represent a certain number of shares of company stock at a future date. Having these shares vest is the process by which an employee gains ownership of the RSUs over time. Like mine, it was a common four-year vesting schedule. I’d get 25% of the RSUs after one year, and then an additional 25% each year after that until I’ve received them all. Once the RSUs vest, I’d officially become the owner of the stock, and can choose to sell it or hold onto it. I needed to review the calendar and see when the vesting dates were for RSUs that have been granted to me over the past several years.
- What would my ESPP (Employee Stock Purchase Plan) purchase period was, and when the Stock Purchase would happen. An ESPP is a benefit offered by some companies to their employees. you can choose to contribute a percentage of your paycheck to the ESPP. This money is set aside and used to buy company stock. The money you’ve set aside accumulates, and at the end of what is called a purchase period is used to purchase shares of company stock at a discount, in my case it was 15% off the market price. Once the stock is purchased, I can do with it what I want, either hold it or sell. Looking at the calendar, I wanted to review the calendar to see when a stock purchase was to take place.
- Enrollment into Health Insurance. Knowing that my existing health Insurance coverage continues to the end of the calendar month in which you are separated of employment, I wanted to ensure my last day was towards the beginning of the month. Then I enrolled in our Healthcare Marketplace. In my case, I used MNSure to enroll in the program. After filling out many questions, and why I’m enrolling (ie: because I no longer will have an employer sponsored plan) I provided what my estimated income would be for the year. Based on my estimated income, I qualified for a tax credit per month for my selected plan. Once you receive, and provide proof of separation of employment to MNSure, I’m able to select a plan. There are many to choose from in which I balance, monthly premium, deductible, and annual maximum out of pocket costs along with what clinics or doctors are in the plan. In my case, I can still see the same doctor I’ve been seeing for over 20 years! You can also choose higher deductible plans that allow you to continue to contribute to an HSA (Health Savings Plan) which many use as another long-term investment vehicle.
- When to take vacation or sick time? I then looked at my existing sick time and vacation I’ve accumulated. I wanted to be strategic and ensure I could use these prior to separation of employment. I planned days, and time to use these over the coming weeks and months. So many people never use their accrued sick time. It’s sad actually. I had maxed out my sick time and wasn’t accruing anymore. Upon discussing with the Human Resources department they reminded me that I should be using these as to then accrue more! It’s a benefit they reminded me. Use them for Mental Health Days, use them for Doc Appointments and so on. So I did. I didn’t deplete my total but was able to use some for going to the eye doctor and the dentist. Normally I’d be squeezing these in between my meetings throughout my work day. Now, I’d take sick time! I also used accumulated vacation time throughout the months leading up to departure. Any vacation time I had not used was added to the last paycheck following my separation.
- Provide notice, and timeline to my leader. Now that I had a schedule in place, and a date that made sense for my last day of employment, I scheduled time with my boss. I provided four weeks notice, and continued to work on a transition plan with my team, my customers and my boss. After all, I continue to want my customers to be successful, and have little disruption as possible.
That is How it is Done
This is how I “retired” by 50. It was a series of events, a cumulation of thoughts, conversations and inspiration from others. I’m excited to explore what’s to come! I appreciate you following along in this journey. Horns up, my friends! \m/ \m/
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