Gave my notice today!

[Prime Number]

I gave 6-8 weeks notice today (still TBD - I want 6, they want 8 ).

Scared, excited, sad, happy -- all at the same time!

Through a combination of saving and recent inheritance, my partner and I (both 47 - no kids) have a little bit over $5 million in net worth.

I have been in high-stress, director-level position for the past few years and have always been a very driven and dedicated employee. But, the last few years have taken their toll and I am tired of the rat race - at the very least, I want an extended break. The inheritance was a surprise; I was not expecting to have this amazing opportunity to retire so early.

The biggest concern for me right now - What will I do with all this free time?? Has anyone else faced this challenge? How did you ease into retirement and make it a happy and healthy transition for you? If you didn't really know what you wanted to do before retirement, how did you figure it out?

[chris2008]

Take it easy.
Beware of Financial Advisors who want to shave your nest egg. Do not make hasty decisions but learn about wealth management.
Beware of conflicting expectations with your partner. Talk how you both want your life to become.
I like the book 'how to retire happy, wild and free' by Ernie Zelinsky. The exercise of the get-a-life-tree is a good one to do alone and with your partner.
Enjoy!

[jwkde]

Congrats on your decision - ENJOY

[travelover]

Quote:

Originally Posted by Prime Number ........... The biggest concern for me right now - What will I do with all this free time?? Has anyone else faced this challenge? How did you ease into retirement and make it a happy and healthy transition for you? If you didn't really know what you wanted to do before retirement, how did you figure it out?

My advice is to relax and let it evolve. From kindergarten on, our lives are so scheduled and our "progress" so measured, it requires a whole new mindset to become happily retired, IMHO.

Remember, too, that financially independent (FI) does not necessarily mean retired early (RE). You may find satisfaction in the non-profit world either as a volunteer or in a paid position, or maybe you'd like to catch up on travel or pursuing a sport or hobby. Try out different things and see what actually makes you happy as opposed to what should make you happy. In fact, banish the word should from your vocabulary.

[Dash man]

Quote:

Originally Posted by Prime Number I gave 6-8 weeks notice today (still TBD - I want 6, they want 8 ). Scared, excited, sad, happy -- all at the same time! Through a combination of saving and recent inheritance, my partner and I (both 47 - no kids) have a little bit over $5 million in net worth. I have been in high-stress, director-level position for the past few years and have always been a very driven and dedicated employee. But, the last few years have taken their toll and I am tired of the rat race - at the very least, I want an extended break. The inheritance was a surprise; I was not expecting to have this amazing opportunity to retire so early. The biggest concern for me right now - What will I do with all this free time?? Has anyone else faced this challenge? How did you ease into retirement and make it a happy and healthy transition for you? If you didn't really know what you wanted to do before retirement, how did you figure it out?

I've lost. 40 pounds in three years (tomorrow) since I retired. Losing that stress does wonders. My blood pressure has dropped significantly and my doctor has reduced my medication. However, I'm trying to lose more weight and eat a more heart healthy diet and exercise more since I recently had a cardiac calcium scan that didn't look so great.
I've found little projects to keep me busy, done some traveling, closing on a Florida beach condo tomorrow, and some just plain relaxing. I also manage our finances that DW ignores except for her work related accounts. Once she's done in November I hope we can both be involved in the big financial picture more. She was slightly shocked at how well we've done not even considering her work related accounts when we did our taxes this week, even though we owe.

When you walk out of that office for the last time you won't want to look back. Make sure you're health is in order, manage your finances wisely ($5M can go fast if spending is not controlled). Enjoy life! Time goes amazingly fast when you're retired!


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[Prime Number]

Chris2008, jwkde, travelover, Dash man -
Thank you all so much for your support! I love all of your advice.

I will definitely check out the Zelinski book, and I definitely want to focus on my health and getting back into shape.
The volunteering/non-profit route also sounds like a great idea.
I've been tracking our spending for ~3 years in Mint, and am slowly working on getting the finances shored up - I will definitely heed the warning about advisors!

I think the point about a scheduled and progress-oriented life is SO true - I hadn't thought about it that way before. I think it'll take some time and effort to get out of that mindset.

And yes!! I will definitely banish the word "should". Great suggestion!

Thank you all

[athena53]

Congratulations! My main advice would be not to lock yourself into anything right away. I did take a Geology at the local community college right away and just loved that (and got an A!), but that was something I could have quit easily if I didn't want to continue. When it comes to nonprofit work, think about what you really enjoy doing and make sure you're not stuck with work that doesn't fit your skills and interests (in my case, calling people up and asking for money). I found that I really enjoy being on the Board of our HOA because they're good people (even though we have a few dysfunctional neighbors) and my skills and experience really add to what we're trying to accomplish.


Are you interested in travel? We have a whole Board devoted to that!

[DrRoy]

I have OMY but I have given a good bit of thought to the same question. I am hoping to turn part of my hobby into a service that will fill my time and even raise some income. Just getting it going will keep me busy for a while. This will not work for everyone but beyond hobbies there is also volunteering, part time work, etc. You could consider looking for a future use of your time as your new job.

[Racer X]

Congratulations!

I'm probably within a month of giving my notice. In the spirit of our election cycle, I sat down last week and made a 100 day plan. I started writing down all of the projects I would do within the first 100 days of being retired. Those little repair items both small and large around the house, reorganizing long cluttered areas of the house, paint this, trim that, etc. etc. Some were 5 minute tasks (fix screen door), some were much larger (remodel bathroom). Then I wrote down all of the things that I would be doing on a regular basis. Laundry, groceries, lawn care, car maintenance, paying bills, house work, etc. Next I wrote down all of the events I knew were coming up in the next few months. Parties, trips, visits, events, etc. Lastly I wrote down a few broader goals for retirement. Go to the gym regularly, read more, visit elderly relatives more, participate in some favorite hobbies more frequently, etc.

By the time I got all of that down I had a list of close to 100 items that will probably take me the better part of two years to address. Suddenly I had no concerns about what I would do when I retired, and rather became concerned with how quickly I could retire.

[Earl E Retyre]

Quote:

Originally Posted by chris2008 Take it easy. Beware of Financial Advisors who want to shave your nest egg. Do not make hasty decisions but learn about wealth management. Beware of conflicting expectations with your partner. Talk how you both want your life to become. I like the book 'how to retire happy, wild and free' by Ernie Zelinsky. The exercise of the get-a-life-tree is a good one to do alone and with your partner. Enjoy!

+1 on all these suggestions ... the get-a-life-tree is an excellent exercise that will help you brainstorm all the things you can be doing with your life now that you have freedom to do what you want with relatively few restrictions.

I would not limit your ideas at all and would continually update the tree as you learn what you like to do and as you change your opinions on what defines fun. Be it exercise/health, travel internationally or locally, volunteering/helping people, learning to play an instrument or a new language, cooking, gardening, blogging, writing a book, the ideas are endless. Even working part time (volunteering or paid) can be fun. And doing nothing is OK too.

The beauty is that you are in control of how busy you want to be and what you do with your time. Congratulations and enjoy.

[eta2020]

Quote:

Originally Posted by Prime Number I have been in high-stress, director-level position for the past few years and have always been a very driven and dedicated employee. But, the last few years have taken their toll and I am tired of the rat race - at the very least, I want an extended break.

It is funny the higher I am the more fun (less stress) I have in work and more difficult it would be for me to leave.

That is through eyes of Software Engineer in same pay grade as Director of Engineering.

[Nodak]

Quote:

Originally Posted by travelover My advice is to relax and let it evolve. From kindergarten on, our lives are so scheduled and our "progress" so measured, it requires a whole new mindset to become happily retired, IMHO. Remember, too, that financially independent (FI) does not necessarily mean retired early (RE). You may find satisfaction in the non-profit world either as a volunteer or in a paid position, or maybe you'd like to catch up on travel or pursuing a sport or hobby. Try out different things and see what actually makes you happy as opposed to what should make you happy. In fact, banish the word should from your vocabulary.

+1

[Prime Number]

athena53 - That is good advice! I could definitely see myself getting locked into something early on because I want to ensure I find something to do! And I definitely agree with you on the calling people and asking for money -- not my thing either!!

DrRoy - That sounds awesome! I don't currently have any hobbies that I think I could turn into something profitable, but I will keep that in mind moving forward.

RacerX - I love that idea - I'm a big fan of lists! Another person on another forum said they planned out their next day the night before, so they wouldn't get sucked into playing around and surfing on the computer all day. I think that would be something that would work for me as well.

Earl E Retyre - Great points! I think I'm going to have to remind myself of this every day. Definitely something to be conscious about!!

eta2020 - funny, I AM (well, WAS pretty soon!) a Director of Engineering. For me, being an individual contributor was way less stress. But every situation is so different - I'm glad you enjoy it!

Again, thanks to everyone for all the feedback and advice. It makes me feel much less scared about the future to read these comments and know you all are going/have gone through some of the same things!!

[petershk]

Don't know the specific situation but I'm 40 with 2 kids and have a similar amount... a mix of saving and lucky stock options.

That said the option part accelerated my FI plans by many years and that created a strong desire to RE (haven't yet). I've spent the last couple of years trying to get everything in order... financial and non financial.

5m is a lot but can go really fast. There's vast industries that exist to take it all away quickly and somewhat silently . Depending on what % came from where you might have some similar experiences.

I've avoided the traps for now and feel much more at ease after a couple years. This forum is a GReAT source of calm and information.

Grats!

Sent from my HTC One_M8 using Early Retirement Forum mobile app

[Teacher Terry]

The first 6 months we rehabbed a house and moved. Shortly after we did some volunteering, etc but got bored. Then we did p.t. consulting in our fields and I teach an online college class and for us that has been the perfect mix. WE also take friends that are sick or disabled to appointments, etc. We also travel more then we did before. If you look you will find the perfect cobo.

[Prime Number]

petershk - Very good point. This is definitely something I worry about. Are there specific threads or articles that you suggest I read?

Teacher Terry - That sounds great. I don't know if I'd want to do PT consulting, but I think teaching a college class could be fun!

I just picked up the Ernie Zaleski book at the library. I'm going to spend some time with it later this week.

Please feel free to send me more advice/suggestions/your experiences - it helps calm my nerves to hear other people are doing it successfully

[Prime Number]

Thank you all so much for your advice and kind words.

I just finished reading the book by Ernie Zalinski, "How To Retire Happy, Wild and Free". I would have never picked up a book like that on my own, thinking it would be a bit corny. But, I found it tremendously valuable, with concrete examples and ideas. I've started up on the exercises and am feeling a lot less anxiety about the future already. So, thank you very much, chris2008, for the recommendation! I would definitely recommend the book to others as well.

People (such as petershk) mentioned pitfalls/traps when it comes to money management. I would love to hear people's advice in this area.

Thanks again, all!

[petershk]

Quote:

Originally Posted by Prime Number Thank you all so much for your advice and kind words. I just finished reading the book by Ernie Zalinski, "How To Retire Happy, Wild and Free". I would have never picked up a book like that on my own, thinking it would be a bit corny. But, I found it tremendously valuable, with concrete examples and ideas. I've started up on the exercises and am feeling a lot less anxiety about the future already. So, thank you very much, chris2008, for the recommendation! I would definitely recommend the book to others as well. People (such as petershk) mentioned pitfalls/traps when it comes to money management. I would love to hear people's advice in this area. Thanks again, all!

There's a number of books that are recommended frequently and are also really solid.

For advice I think the more specific your question, the better the results.

The hardest thing for me was getting away from the desire to have a "right answer." Much more important, IMO, than the "right answer" is being able to sleep at night. Some people can push everything into the stock market and sleep like babies. Other people have a 20/80 stock/bond split and sleep like babies. Finding a strategy that safely covers your cost of living while allowing you to sleep is the key.

WARNING: Long winded, general and personal thoughts below .

1) A quote that helps me with my own decisions here is "don't risk something you need to get something you don't need."
So in simple terms if my family's costs are 80k/year and I have 5 million$, that is a 1.6% inflation adjusted return. I could probably buy 30 year government bonds, TIPS or a CD Ladder... even at today's terrible interest rate and never think about money again. Putting that 5 million into Uncle Fred's 3D printing startup is probably a bad idea, even if it's a sure thing with 100x returns in 2 years.

Those are, of course, extremes... but that thinking lead me to my current investment strategy which is moderately conservative and mostly passive - not passive enough (see emotional problems below). Over time I have moved away from "optimized return" to "optimized sleep at night and don't look at it."


2) no one cares about your money more than you.
The tri-force of Taxes, Transaction costs and investment returns (including inflation) are important to intimately understand.

I had to learn this the painful way as well, though, thankfully when I had WAY less money to lose. The good news is, it's not really that complicated and it doesn't actually take that much time unless you want to make it complicated and spend lots of time doing it . Any expert who says it's too complication and difficult for you, but is happy to take 1.5% of your money to do it for you; should be run away from IMO .

Two of my favorite resources:

INVESTING: Stock Series
TAXES: Archives

My own quick "rule" here is that I take 4% of my total assets as the amount of income it generates (so for 5M that's 200k/year) and then I decide how much of that I would be willing to pay to just manage it.

Most financial advisers take about 1% of total assets, which is around 50k/year. 50k compared to 5M seems small. 50k compared to 200k seems huge. So I look at the 200k number, not the 5M number; and in my mind paying 25% of your income to have someone manage your money is bananas.

I wouldn't pay someone at work 25% of my income to manage my household finances either... so why should I pay that when the source of my income is investments vs working?

10% seems much more reasonable; but I still begrudge that amount. I include in that number: accountants, lawyers, insurance professionals, ETF fees, trading fees, etc. So a .15% ETF would cost $7500, leaving another 12,500 for all the other stuff. If an ETF charges 1.5%, I probably can't buy it because transaction costs are too high. That removes a lot of investment options from the available universe.

Getting that number lower is one of the best long term investment decisions I can make and it's important to focus on that number as much or more than on how much "return" my investments get. Very few investors have a long term track record that beats the market by 1% and if they do, I suspect they don't need to manage your 5 million .

Reducing costs is a 100% risk free return... tax optimization is similar... investment returns are the least predictable and hardest to control so spend time accordingly .

Mad Fientist has some amazing articles in ridiculous detail if you like that sort of thing.


3) Emotions/human behavior are the enemy
Again, learned this the hard way. There's a huge difference between how I think I'll feel/act in extreme situations (2001/2008 market) and how I REALLY act. This varies from person to person and you need to be able to honestly evaluate yourself. If you don't know assume you suck at it because most people do and the costs for thinking you are great and sucking are far higher than the costs of thinking you suck but in reality you are great (see #1).

Knowing this helps me resist doing emotional things in extreme situations (timing the market, reacting to MSN news, buying Tesla stock after model 3 announcement). Some people are not like this. They somehow can behave rationally and confidently even when the emotional roller coaster is swinging wildly. I THOUGHT I was like that... years of evidence says I'm not... and because of #1, I just try to separate out money management from emotions altogether.

My own strategy here is to constantly reduce the number of decisions I make. Although I'm not 100% there myself, I'm pretty sure that I will get the best long term return with the highest number of good night sleeps if I can reduce the number of investment decisions I make to as close to 0 as possible. but I also have to keep transaction costs low so I can't just pay someone 1%-1.5% to do it. That leads me straight to passive ETF/Mutual Fund index investing which I pretty much think is the no brainer, default people should take until they have spent lots of time and deliberation going in another direction.


4) Flexibility of spending is as important as amount of spending
Since the future is always uncertain and uncontrollable I think flexibility is super important. So when you extend that to money: relying on investment income (unstable return) to pay for your life (stable costs) can stress the hell out of you. From what I can tell EVERYONE on this forum has, at some point, thought about "what happens when the apocalypse comes along and wipes me out!?"

I suggest going back and reading the 2008-2009 forum threads... they are very educational and some of the members here were absolutely amazing during that time.

We live in Southern California in one of the most expensive housing markets in the country. If our income from assets took a really bad beating, we could pretty easily reduce our cost of living by 30% just by moving to, say, Austin or North Carolina... both places we think are beautiful and WAY cheaper. My DW is a nurse who keeps her skills and qualifications up in the case that she has to (or wants to) go back to work. For me it's tougher as the industry I am in has much more of a 1 way door (Computer Software).

I have committed to an exercise routine that has dropped my cholesterol level into a range that is better than it's ever been and my BMI is lower than it was when I was in college... reducing medical risks.

We've also kept our spending roughly the same for the past 4 years despite significant increases in assets. That was surprisingly hard for me to do, but now it's kind of a habit.

so those things are all about cost of living flexibility. If we want to we can take a 10k trip to hawaii BECAUSE we have the flexibility. Of course you have to actually DO those things to know if you really are flexible. I haven't ever sold the house and moved to Austin, so that's a bit on blind faith...I try to reduce those.


5) No matter how much you have, someone else has more.
Don't compete.
I also maintain a certain amount of secrecy from friends and family. We deliberately avoid "showing off" financially which prevents people from constantly asking as well as keeping our costs down. I'm kind of uncomfortable with attention so this is actually pretty easy.

Although our house is "expensive" by national standards, it's "cheap" relative to assets/income from a peer perspective. This means I don't see Ferraris driving down the road, I don't have neighbors that compare Rolex watches and talk about flying 1st class to 1 month exclusive Hawaiian resorts - north of us in Hollywood and West of us in Brentwood, that happens all the time. I'm surrounded by mostly middle class people who drive older cars and take a reasonably priced vacation once a year or so. They deal with credit card debt, job loss, tuition costs, etc. So in comparison I feel like I have it made and don't need anything to be happy. If I moved into a "richer" neighborhood I am pretty sure I'd feel the urge to upgrade every part of my life but would somehow not be any happier... in fact the additional cost would create financial stress so I'd actually be LESS happy. No thanks.

6) Kids do what you do, not what you say.
Finally, because we have kids, the last thing I want is to raise a bunch of self-absorbed, spoiled, entitled brats. If I shower myself with expensive gifts and show off to everyone that we have a bunch of money.. or compete with people who have way more... I'm pretty much teaching them to be entitled, materialistic and bratty. So in order to teach them how to be what I consider to be a decent human being, I have to avoid these behaviors.

The money is there because of a combination of work, discipline and luck. It's purpose is so that we can enjoy our lives reasonably and give back in ways that we think make sense. The biggest luxury IMO is time. I heard they aren't making any more of it . If my kids grow up thinking that I'm a lazy, entitled, materialistic jerk then I have failed as a father and a human being. That's a really good check on behavior.



Anyway... random stuff there but hopefully some of it is moderately helpful.

People on this forum have many centuries of combined wisdom and are generous in time and spirit. They so much more than I do, it's pretty humbling. I have never had a question that wasn't answered with thought and candor and have always found it to be valuable and helpful.

so fire away

[Prime Number]

Petershk - I wrote a really long and appreciative response to you, thanking you for all your thoughts and advice, but, apparently I took too long and the token expired and ate my response!

The short version:
You have a really great perspective and insights into yourself (emotional responses, being able to sleep at night, being a good example for the kids) - how long have you been retired? What's been the hardest for you to deal with and why? You mentioned you do computer software, which I do as well. For me, that is one of the hardest things to give up, knowing it would be close to impossible to get hired again, if I'm gone for too long.

I really like your thoughts around being able to sleep at night. For example, lately I've been agonizing over whether to pay off the house or not, running through numbers and various philosophies on various websites. But I think I would just feel a lot better, knowing I don't have to make that monthly payment.

It's funny - I have always thought about investing as maximizing returns (while minimizing costs) so I hadn't ever thought about investing the way you put it: "don't risk something you need to get something you don't need." This makes complete and total sense and I'm kicking myself that I haven't thought of it this way before. I also like

I am in the process of dumping my current financial advisor. I had shopped around last year for a new one, but the fees were just too much to swallow, as you pointed out. Since I have a technical background, I thought, I should just learn to do this myself. But, however much I would like to believe that I make logical decisions, I am pretty sure I don't. I like the fact you try to save you from yourself by minimizing your decisions; I have read about passive ETF/mutual funds and will look into these some more.

In the past few years, I've had pretty demanding jobs and have gotten into the very bad habit of just throwing money at problems, giving the excuse: "I've got more money than time." I've committed to driving our expenses down this year by 20% - I think it's doable. What are some of the things you've done to keep costs down?

I learned the "don't compete/compare" lesson a while back. My partner has a private pilot's license and joined a flying club. We thought it would be fun to hang out with people with similar interests. While we met some really great people, there were a large number of folks who really flaunted their money and were constantly comparing and looking down on others had less. I would often come home from these events anxious and on-edge. And we've personally never really cared to have super-fancy clothes, cars, etc.

I will check out the forums/posts you mentioned - thank you for those! I am particularly interested in understanding how to manage taxes and costs better since the advisor I mentioned previously has me in these managed funds with quarterly fees AND constant buying/selling, which drives up my taxable income like crazy. I am looking at Vanguard, but am also open to suggestions.

Thanks again for taking the time to write such a thoughtful response. I appreciate your honesty and sharing your experiences

p.s. - I used to live in Austin - it's a great city, although it's getting very expensive there now, too! But, no state capital gains tax, unlike California!

[Options]

Quote:

Originally Posted by Prime Number ... The biggest concern for me right now - What will I do with all this free time?? Has anyone else faced this challenge? How did you ease into retirement and make it a happy and healthy transition for you? If you didn't really know what you wanted to do before retirement, how did you figure it out?

My response from another thread recommending some excellent books dealing with this issue:

http://www.early-retirement.org/foru...ml#post1716921