Chapter III
My story: It has never been about
retirement
For me, the pursuit of financial independence has never been about retirement. I like working and I’ve enjoyed my career. It’s been about having options. It’s been about being able to say “no.” It’s been about having F-You Money and the freedom it provides.
I started working when I was 13; even earlier if you count selling flyswatters door-to-door and collecting pop bottles from the side of the road for the deposits. For the most part, I’ve enjoyed work and I’ve always loved being paid.
From the beginning, I was a natural saver. Watching my money grow was intoxicating. I’ve never been sure how this started. It might be hardwired into my genes. It might be my mother seducing me with the image of the red convertible I’d be able to buy when I turned 16. But that was not to be.
My father’s health failed before that birthday and shortly thereafter so did his business. My savings went to pay for college and I learned it is a fiscally insecure world. Convertibles came later. To this day it stuns me to read about some middle-aged guy laid off from his job of twenty years and almost instantly broke. How does anyone let that happen? It is the result of failing to master money.
Long before I heard the term, I knew I wanted F-You Money. If memory serves, the phrase originates in James Clavell’s novel Noble House, and from the moment I read it, my goal had a tangible form and an unforgettable name.
In the novel, a young woman is on a quest to secure her own “F-You Money.” By this, she means enough money to be completely free of the demands of others and able to do exactly what she wants with her life and time. She’s after 10 million, far more than it takes to reach simple financial independence. At least for me. It helps to have a bit of the monk inside.
The other thing I quickly figured out is that financial independence is at least as much about being able to live modestly as it is about cash, as our opening parable describes.
Unlike in the novel, for me enough F-You Money isn’t necessarily enough to live on for the rest of your life. Sometimes it’s only just enough to step to the side for a while. I first had mine at age 25 when I’d managed to save the princely sum of $5,000; something achieved after working two years at $10,000 per year.
It was my first “professional” job and it had taken me two long post- college years supporting myself doing minimum wage grunt work to find it.
But I wanted to travel. I wanted to spend a few months bumming around Europe. I went to my boss and asked for four months of unpaid leave. Such a thing was unheard of in those days. He said “no.”
Back then I had no idea that working relationships were negotiable. You asked. Your employer decided and answered. Done.
I went home and spent a week or so thinking about it. In the end, as much as I liked the job and as tough as I assumed finding another would be, I resigned. I wanted to go to Europe. Then a funny thing happened. My boss said, “Don’t do anything rash. Let me talk to the owner.”
When the dust settled, we agreed on a six-week leave which I spent riding my bicycle around Ireland and Wales.
While I might not have initially realized such things could be negotiated, I learned quickly enough. I also asked for and received a month of annual vacation going forward. That got me to Greece the following year. My eyes were opened. F-You Money not only paid for the trip, it bought me room to negotiate. I’d never be a slave again.
Since then, I’ve quit jobs four more times and have been kicked to the curb once. I’ve sat on the sidelines for as little as three months and for as long as five years. I’ve done it to change careers, to focus on buying a business, to travel and—the time it wasn’t my call—with no plan at all. I did it most recently in 2011 and the intention this time is to remain retired.
But who knows? I do like getting paid.
My daughter was born during one of these, ahem, unpaid leaves. These things happen when you have time on your hands. Now an adult, she has grown up with anything from dad working 18-hour days and constantly away from home, to dad sleeping late and lounging around. But she always knew that I was doing, for the most part, exactly what I wanted to do at the time.
I like to think that these experiences taught her the value of having money and the joy of work when you aren’t effectively a slave to it.
When she was about two, her mom went back to school. This was during my business-buying phase and I had lots of free time.
While Mom was at the university in the evenings, my daughter and I spent endless hours watching The Lion King over and over. And over. I’ve probably seen that movie more times than all other movies combined. We still laugh remembering the teacup towers and Lincoln Log cabins we built.
These hours were the foundation of the relationship we’ve grown to cherish.
Even though I didn’t have a paycheck coming in at the time, we also decided my wife should quit her job to become a stay-at-home mom. While she liked the idea, this was a very tough call for her. Like me, she’d been working since childhood and loved it. She felt that without a job, she wouldn’t be contributing.
“We have F-You Money,” I said. “We don’t care about fancy cars or a bigger house. If you kept working what could we possibly buy with the money that would have more value than you being home with our daughter?”
Put in those terms, the choice was easy. She quit. It was far and away the best “purchase” we ever made. Of course, this also meant we had no working income. However, for the three years we both weren’t working, our net worth actually grew. It was the first time we fully realized we had moved beyond just having F-You Money. We had become financially independent.
As for me, I failed in finding a business to buy though the search morphed into consulting work and a couple of years into that a client hired me for more money than I’d been making at the job I’d left years earlier.
Such is the price of failure in the U.S.
When we moved to New Hampshire, my wife volunteered in our daughter’s grammar school library. Their hours, of course, matched perfectly. After a couple of years the school offered her a paid gig. It wasn’t the corporate job she’d been used to, but it was also stress-free and fun.
She’s never looked back.
For the most part, over the 34 years we’ve been married at least one of us has been working. That handily solved the tough problem of health insurance. During the early 1990s, when we had an overlapping employer- less few years, we bought a high deductible catastrophic health plan. It is too long ago to remember the details and they likely wouldn’t apply today anyway. But that’s what we’ll seek out if and when my wife decides to hang it up before we hit 65 and Medicare. For now, she loves working with the kids at her school and the time off it allows her for our traveling.
As I’ll detail later in the book, and as its title implies, our investments are the soul of simplicity.
You’ll also see I’m not a fan of the “multiple income stream” school of investing. Simple is, in my book (pun intended), better. So we have no cattle, gold, annuities, royalties and the like.
When I quit work in 2011 and we fully settled into our financial independence, we still had a couple of leftover investments from earlier times. These represented the last remnants of the many investing mistakes I’ve made over the years. Now in retirement, we’ve burned those up first as we needed the cash. They mostly revolved around the idea that I could pick investments that would outperform the basic stock index. It took me far too long to accept just how impossibly difficult a task that is. Three things saved us:
Our unwavering 50% savings rate.
Avoiding debt. We’ve never even had a car payment.
Finally embracing the indexing lessons Jack Bogle—the founder of The Vanguard Group and the inventor of index funds— perfected 40 years ago.
Looking back, what is striking to me is how many mistakes I’ve made along the way. Yet those three simple things got us to where we wanted to be. That should be encouraging to anyone out there who has also made poor choices along the way and who is ready to change.
When my journey began, I knew no one else following such a path. I had no idea where it would or could lead. I had no one to tell me stock picking was a sucker’s game or that swinging for the fences isn’t needed to reach financial independence. That last point alone would have saved me the $50,000 of my money Mariah International (a gold mining penny stock) burned through while failing, and failing to make me rich.
So now I’m (again) retired and it feels great. I love not having to keep regular hours. I can stay up till 4 am and sleep till noon. Or I can get up at 4:30 and watch the sun rise. I can ride my motorbike any time the weather or my pals beckon. I can hang around New Hampshire or disappear for months at a time to South America. I post on my blog when the spirit moves me and I might even get another book or two written. Or I can just sit on the porch with a cup of coffee and read the books others have written.
One of my very few regrets is that I spent far too much time worrying about how things might work out. It’s a huge waste, but it is a bit hardwired into me. Don’t do it.
The older I get the more I hold each day precious. I’ve become steadily more relentless in purging from my life things, activities and people who no longer add value while seeking out and adding those that do.
It’s a big beautiful world out there. Money is a small part of it. But F- You Money buys you the freedom, resources and time to explore it on your own terms. Retired or not. Enjoy your journey.
But first, please be sure to carefully read the important notes that follow.