One of my favorite things about blogging is the connections we’ve made with our readers – whether in person as we travel (over a dozen meet-ups last year!) or over the internet.
This e-mail from a reader caught my attention last week:
I hope you and Daniel are doing well and enjoying semi-retirement! I’m hoping you could share some advice that you’d give to your 23 year old self.
I got my bachelors last year in Marketing and have worked for a cool, highly successful company in a southern U.S. city since, salary about $40k pretax. But here’s the thing, Matt, you’ve ruined me.
Since I discovered semi-retirement was possible at a young age, I’ve become obsessed with the concept. I’m a rock climber, mountain biker, etc., so the thought of being able to pursue those hobbies full time while my body is at peak health is incredibly enticing.
I’m not sick of working, as a concept, though I am so sick of marketing. I am more like you than the rest of the FI community in that I have no problem working again someday; in fact I know I want to. If I could find a way to semi-retire for a few years, I could use that time to pursue my age-restricted hobbies and develop skills for re-entering the workforce.
So, what would you tell yourself at 23 to make early retirement planning less painful, more productive/efficient, or what have you? And any advice for my specific situation?
My response quickly turned into a multi-page letter, and I decided to post it here.
Here are five pieces of financial advice I’d share with myself at age 23.
1. Prioritize people.
The very first thing that comes to mind when I think about that period of my life is the people I shared it with. Your early 20s are the time to strengthen and solidify your best friendships. Daniel and I saw a ton of good friends on our recent road trips around the U.S., and most of them are people we got to know well at that time in our lives.
People start getting boring when they turn 30! Relationships, careers, and kids start taking precedence. Say yes to every opportunity to build relationships now, and they’ll stay with you for life. Yes, these opportunities sometimes come with a financial cost – like a weekend trip or a night out with friends. Sometimes, though, they might actually save you money – like living with friends instead of renting your own apartment.
Same thing goes for family. I’m pretty close with my parents, and I notice their age now more than ever. Never put money or work ahead of the people in your life.
2. Make your work life the best it can be today.
My strongest reaction to your e-mail was your point about being sick of your field. Marketing was my college major, so I can relate. I’ll always remember the moment I decided against it as a career path. My professor was describing how he spent years of his career as the brand manager for the “Helper” franchise – as in Chicken, Tuna, and Hamburger Helper. Everywhere he traveled, he would duck into grocery stores to check on the shelf placement and display of the products. One of his biggest projects was consumer-testing and piloting a new product, Lobster Helper, which ultimately flopped. “Oh, fuck,” I remember thinking to myself in class, “There is no way I can waste my life doing that.”
Anyway, enough about the Betty Crocker line of packaged foods. Here’s my point: Work occupies more of our time than anything else in our lives. If your day-to-day work life isn’t happy, make changes immediately.
You live in the land of opportunity, have a college degree, and are capable of writing a coherent e-mail. I guarantee there’s work out there that you’d love, and it probably pays at least $40k a year. I’m not delusional enough to think that you’ll find a job that’s great every single day, but don’t get stuck in a rut. Work that you enjoy might make the difference between a relaxed path to early retirement and a really unhappy one, even if the timeline is longer. You can’t live for the future alone.
3. Figure out how long you’re willing to wait.
I’m kind of a wishy-washy blogger, Buster. I write shit like “Don’t wait,” but then I also say that you can’t “just go” without planning and preparing. Ultimately, you’ll have to figure out the timing that will work for you.
You might decide that rock climbing and mountain biking are essential to your life right now, and you’ll do anything to make it work — even if that means taking odd jobs, living in a van, and eating rice and beans for every meal.
Alternatively, you might be willing to wait a decade or more to pursue those things full-time. You wouldn’t get to enjoy your youth in quite the same way, but there are advantages to this path. Our friends over at Our Next Life, for example, are retiring in their late thirties with enough financial security to never work again. You might value the peace of mind that comes with that approach. Spending years focused on your career also lets you build skills and experience in a way that’s hard to replicate with shorter career stints.
The answer for me was somewhere in between. I managed to reach FI in my twenties, but I was due for a major career change or time away from work regardless of whether I’d hit my “number.” Taking time off had been part of my plans since my first day in an office.
Another thing I’d remind myself at age 23: 30 years old is not old. (Sounds like something a 30-year-old would say, huh?) Neither is 40. I don’t feel much different from how I did at 23. I still plan to pursue a lot of physical hobbies in the coming decades. If anything, I might be getting more out of this semi-retirement experience now. I’ve had more time to figure out what I value, and having years of career-oriented life for comparison makes every day without a job just a little bit sweeter.
4. Income matters.
If you’re serious about early retirement and you’re already living economically, growing your income will have by far the biggest effect on your savings. Our Next Life, Think Save Retire, Go Curry Cracker… many of my favorite FIRE bloggers who called it quits in their thirties had six-figure incomes. It’s possible to retire making less, but it’s harder.
You said you’re earning $40k now. If you’re serious about enabling early retirement or semi-retirement in the next decade, do you have a reasonably clear path to making $60k? $100k? If not, I’d consider looking for work with higher earning potential, so long as it’s also compatible with my points above.
Start turning your skills into side income, too. If you want to take time off before you reach financial independence, being able to generate self-employment income could be extremely helpful. Even just $10k a year could probably cover most of your living expenses while camping and climbing, for example.
5. Relax. You don’t need to know the master plan yet.
At 23, I knew that I wanted to take time off from work at some point in my twenties or early thirties. Did I have any notion that I’d be here in Thailand this month? Of course not. Your life circumstances will change over the coming years in ways that are impossible to predict.
As Steve Jobs put it in his 2005 Stanford commencement address, “You can’t connect the dots looking forward; you can only connect them looking backward.” Looking backward, I see that the most valuable thing I did was laying the groundwork for financial independence: working hard, saving money, and optimizing my spending. At 23, building your savings and being committed to taking time off in the future can be your entire plan.
So don’t stress about whether you’re 2% or 12% of the way to your “number,” and don’t feel like you need a concrete goal or deadline. The more skills you build, the more you save, and the more flexible your spending, the better equipped you’ll be to take the leap into something new like semi-retirement when the time feels right.
Readers, anything you would add or change? What would you tell a recent college grad interested in financial independence? I’d love to hear your perspectives in the comments.