work as a limiting belief post FI

We all go through life accumulating experiences, and, inveterate pattern-matchers that we are, all too often we infer the general from the particular of those experiences. In the search to impose order and meaning on our world, we frequently conflate correlation with causation, and build up a mental map of the world at odds with the territory. Some of these beliefs about the world gained from experience are just plain wrong or get overtaken by events after they are formed. To take one

“You need to work”

When I left university I had no money and therefore needed to work. I hadn’t come across the option of dropping out and possum living, and it probably wouldn’t have appealed, a young buck must run with its kind 😉 Peer pressure is strong for young adults.

But in that first year I built a limiting belief, by inferring the general from the particular. I needed to work, at that time and for a significant time afterwards. But not for all time. I needed to earn enough to pay the capital cost of some of the necessities of life. I didn’t think that deeply about buying a house, though I left London because it was clear that I wouldn’t be able to buy a house there and maintain a decent lifestyle. I really should have thought more about buying a house at a market high, but that’s another story. There’s a pattern developing here, an across the board intentional living fail.

A considerable amount of luck saved me from myself – I was enterprising enough to shift myself from boring jobs until I found one that loaded the grey matter enough to be congenial, I was fortunate enough to end up in a company where I was looked after pension-wise and the pay was decent enough. And then got on with the job of spending too much but not more than I earned on consumer crap, partying, beer and travel.

And so across the intervening years, the world globalised and loads more people joined the capitalist workforce, and it started to arbitrage towards cheaper countries. I was protected from that from a long time but eventually the erosion came to my door. There’s an argument that the Millennium Bug work of the year 2000 accelerated this erosion of developed world work in the IT world. The Firm opened a BPO joint in Mahindra and a couple of the localised Big Cheeses instrumental in setting it up benefited handsomely from their shareholdings in that.

I wasn’t passionate about IT although competent, I moved into it and out of electronics engineering because that was what The Firm did. Some people did jump ship at the time, fearful that their electronics skills would atrophy. In the first glimmerings of intentional living I came to the conclusion that I worked to live not lived to work, I was in serious negative equity so I adapted and retrained. I suspected electronics design would go to cheaper countries, and it did – the tide would have gone out on me faster in electronics that it did in IT. [ref]I still indulge the passion for electronics in making instrumentation, it’s of course different from the purely analogue world I cut my teeth on as a teenager but still fascinating. But there’s no point in trying to make money from it, too niche, too much regulation and too many Chinese copycats ready to eat my lunch. OTOH I would probably still be an employable bench tech/engineer, because there is still some niche instrumentation being made in the UK. But why the hell would I want to drive to Cambridge every day?[/ref]

Limiting Beliefs

Steve Pavlina has a pretty decent summary of limiting beliefs –

Limiting beliefs can seriously hold us back in life. But most of the time such beliefs are invisible to us. They control some of our thoughts and behaviors behind the scenes, enough to curtail our results in some area of life.

His article also proposes a method of eliminating these. I don’t have his particular brand of materialist rationalism, so while I am prepared to acknowledge some limiting beliefs, I won’t fight all of them. One of mine is that something snapped in me mentally in the last few years at work, and that once something like that has broken it will never bear that load again. Since I’m rich enough not to have to challenge this by finding another job, I don’t have to go through the pain of challenging it, or indeed find out that it is in fact true. The evidence that countermands that belief is that people overcome much greater mental challenges than having a really shitty experience of working for a year.

The way this belief limits me is that I will never be able to feel safe enough to deploy any money that I earn in working again to increase my lifestyle, because I will be afraid of losing having the FU nuclear option on work. So while I might well appreciate more baubles and jaunts, no consumer shit tastes as good as financial freedom feels. And I’ve gotten used to owning my own time. So I’ll pass on the extra money and enjoy the extra time.

Over at SHMD Jim has returned to work. While that wouldn’t be right for me I tip my hat to a fellow who concluded a 0 hours week wasn’t enhancing his quality of life, and took the obvious corrective action – go get a job. I’d actually read Jim’s article before it was cited on Weekend reading and just thought good for you Jim, about time too 😉

When I read the phrases selected by Monevator from Jim’s post I thought blimey, did I read the same article? Monevator is a much more pithy and concise writer than I am, but the precise extract and reformatting together with the extra narrative in his post I think says something about both the observer and the observed:

I was struggling a bit with the retirement lifestyle, and finding the change from a full on, full time working week to a zero hour one quite difficult to handle.

I just couldn’t shake the notion that I was too “young” to put my feet up, that I should be working and that I should be out there earning money.

I might not have “needed” the latter, but it never quite felt that way.

SHMD as cited by Monevator

Jim’s evocative description of the problem shows to me an incongruity between his map of how things should be compared to the territory of how they were. He doesn’t need the money, but he needs things to be different to how they are to feel happy about it. This looks like a limiting belief to me, largely because Jim “shoulds himself” twice in one sentence. Two different takes on this issue, one from Psychology Today and the other from the A0M seem to indicate this limiting belief is from an external locus of control in the affected topic. He is measuring an internal state by a yardstick written by other people. Since humans are a social species some of this is inevitable, and there was an easy and obvious solution. Make the territory more like the map and go back to work.

Monevator admits his gut belief later on

But I believe almost everyone will benefit from having an ongoing economic relationship with society while they can – even if only for a day or two a week.

Sadly, by the time most people reach the point of having options, they seem to feel too burned out by the workplace to explore all the various other ways of making money more freely.

Protestant work ethic detector goes off. You don’t have to work to have an ongoing economic relationship with society. I allocate capital, society pays me for the pleasure of using it 😉 Heck, on the other side of the coin the consumers of Britain racking up unsustainable credit card debt have an ongoing economic relationship with society, even if they are on the dole, or reality TV show aristocrats.

Reality TV show aristocrats
Reality TV show aristocrats in an ongoing economic relationship with society

I am thinking of buying a Naim 272 to replace my 30-year old preamplifier, tuner and audio streaming box, surely I still have an ongoing economic relationship with Salisbury then? I don’t even have to worsen Britain’s consumer debt mountain because I have the money.

Now I am a case of the burned out husk Monevator refers to, although I have to say that the proposed alternative of endless hucksterism of selling your wares as a freelancer/contractor gives me even more the heebie-jeebies than the thought of going back to work for The Man. But I’ve already confessed to the potential limiting belief in my case, so far be it from me to criticise either of these two good people for tolerating theirs 😉 We can all afford to pay the cost of our limiting beliefs – I will be poorer by the opportunity cost of the money I could have earned, they will be poorer by the opportunity cost of the time spent working after financial independence. Conversely, they will be richer in money, I will be richer in Time, and each to their own. Neither course is right or wrong, it can only be right or wrong in combination with the individual’s predilections and temperaments, which may change over time.

What’s that burnout process all about then?

Like Monevator, the younger me didn’t understand the burnout mechanism. I saw burnout in enough other people at The Firm, but had been fortunate enough to occupy specialisms slightly removed from the ritual slaughter and yearly cull of too many project managers as the number of projects to manage dropped. I was offered enough PRINCE2 training but I’d rather drink my own urine than be a PM. I have respect for the job and the difficult balances to be made, but I don’t want to be it, and particularly for the Firm. I didn’t realise then that  the The Firm employed the same techniques as some Japanese companies on some of these guys – because there were technical reasons why compulsory redundancies were expensive for them, so they needed to mind-f*k people. They created a Redeployment Unit, which was ostensibly to re-educate some of their dead wood old fossils superfluous headcount. It had a terrible success rate – more than 50% of people eventually left on voluntary redundancy terms, because they couldn’t stand the endless Jobcentre style filling in CVs. You had to fill in so many a week, just because. It drove a fair number of people round the bend. In many cases they had been pulled from overworked teams to match headcount targets, it seemed to be a particular irony to then go for a coffee with their ex-team-mates and hear that deliverables were slipping because there weren’t enough boots on the ground. Which conveniently meant they could pull the project, outsource it to India and send the rest of the team to the RU, while marking down their performance management results. Conveniently you were barred from taking voluntary redundancy if your performance management score was needs improvement, so they saved money by sending people round the twist. Nice.

Performance management clobbered me because for the first 20 years at The Firm, appraisal was roughly about how well you did the job. I was okay with that. For an engineer their work usually speaks for itself. However, performance management was a way of introducing arbitrary extra elements, FFS like giving 5 minute seminars at all hands meetings whose tedium was increased by 5 minute presentations on random stuff to tick the box, and it was a bewildering mishmash of capricious targets. Basically you had the choice of meeting the targets or doing the job.

I pre-empted this with the last vestiges of energy I had in reserve in 2009, and fired off speculative applications because there was an opportunity to use some of my legacy electronics engineering skills for the London 2012 Olympics. I was fortunate enough to win that lottery and sweat out three years doing something interesting, time-bound and rewarding. I got a decent sendoff and the guy in charge of delivering the Olympics said I was leaving on a high, and in terms of what I did, yes. But I formed another belief about working then. Which is that working in the modern world of professional jobs is all consuming, over-controlled pissing match that hurts, and I want no more of it in my life.

It took time before freedom from became freedom to, and I realised the value of the prize I had unwittingly taken with me on the way back from the pub at that final leaving do. Eight precious years of my life that I will never live again, and in decent wealth and health, and indeed I still have a few to go before I reach 60 where I’d join the original track of my retirement from work. What’s the point of burning them up working? As Arnold Zack said to Paul Tsongas

Nobody on his deathbed ever said, “I wish I had spent more time at the office.”

Tsongas retired on (physical) medical grounds and cashed in his chips at 55.

It is the privilege of youth to think you will live for ever in perfect health – in general this squares with your experience of life so far, but as they say past performance is no guarantee of future success. I got a long way into middle age on that assumption, and I am still to be to the best of my knowledge in good physical health. But when something existential that you took for granted fails in service, then the knowledge that can happen changes you. I like to think I got some wins out of the negative experience – I deepened, and took the opportunity to jump the tracks of the assumptions I had never challenged since first starting work. I took the glittering prize of my time back with me, but I only unwrapped it and saw its gleam after the first phase of decompression had passed after two years. I had to switch off so much of myself to get through the last three years of working that I had to train myself to see beauty and appreciate music again. It is all the more amazing because I know the emptiness of the burned out years. I have more gratitude for it. It is sweeter for having known the loss, and to discover in the depths of winter, I finally learned that within me there lay an invincible summer.[ref]pinched from Albert Camus, Return to Tipasa[/ref].

I hazard that Monevator hasn’t had that experience in the work area of life and I hope he never has, and Jim took corrective action much earlier in his journey out of work, or had greater resilience. Indeed, the younger Ermine knew the feeling of Monevator’s surprise at people’s passivity in the face of an adverse work environment –

Sadly, by the time most people reach the point of having options, they seem to feel too burned out by the workplace to explore all the various other ways of making money more freely.

It’s always a puzzle, why the hell don’t people sort their shit out and improve their situation? The reason it so often happens is that while mental stress may manifest in an obvious breakdown, the seeds are sown and grow in tiny incremental stages beforehand. It is in these days, months and years beforehand that the fightback must commence.The breakdown is the result of feedback mechanisms that are trying to compensate for the stress finally being overwhelmed. While they work OK these feedback mechanisms minimise the visibility of the problem by trying to maintain the norm. So by the time people realise something is wrong they have passed the point of no return, they do not have the energy to start the fight. I was fortunate in having good people around, and doubly so in having a rare legacy skill that was needed for the last three years it took me to buy my way out. There is much more luck than judgement in that narrative. Some judgement, yes – in the switched off nature where I had lost most of the function of the emotional centre I still had the intellectual centre working at half cock. I was able to see with unclouded vision that buying into a shattered market of 2009 might be a good idea[ref]I am not a passive investor, because to build my portfolio I had an extremely short timeframe of only a few years. My contributory investing career is almost done now. To me valuation matters for new money, and 2009 was a good year to apply that. I may become more passive after I have finished contributing, though I will leave my HYP in place for the zero carrying cost and the income.[/ref], and the nonfunctioning emotional elements did not jam that with the ‘run for the hills’ response. But it’s probably the luck that won it. I learned from that experience, charging into the markets in 2011 during the Summer of Rage and again earlier this year. Last year I was into EMs, which was probably jumping the gun, though the addled brains of my fellow countrymen destroying the currency have helped buy me out of that trigger-happiness and even these dogs are starting to perform.

Work meant more for me when I was younger, it was part of how I saw myself, and it took the long process of individuation to de-identify myself against external values and own my values.  There is a lot of existential value associated with work for many people – take Ruth Graham’s rebuttal of the deathbed quote. It’s also not terribly surprising that people who suffer burnout break the link between meaning and purpose and work. After all, if I felt like Jim about work I would have to go back into the fray, risking the burnout again. It is easier to change myself than the toxic world of performance management and meaningless metrics.

Jim doesn’t have that link broken. There are hardly that many terrible consequences of working when you don’t need to. But it isn’t totally cost-free. Those are years you won’t get to live again. Work is a way for finding challenge and interest. But it’s not the only way.

How to go nuclear on your career

This is a bigger change that gradually inching down, or switching to a different type of work. If you have any lingering doubts, then don’t do it. Go for the slowly reducing your hours if you can, or alternative employment. After all, that’s the point of being financially independent. You can choose not to work, but you don’t have to. If you are reducing your hours, things are simpler, you probably want to stay in the same location.

But if you are aiming to finish work, or do something else, then you have more options. Moving is one of them – of course if you have a partner/children and particularly if they are not retiring at the same time then this is out, unless moving closer to their work. For many people FI roughly coincides with their children coming of age, which I hear is also a big life change for the parents. It’s a good time to re-evaluate what you want out of life.

Anybody living in London should seriously consider their options on reaching FI. It’s a young person’s city and no place for old men IMO – and you may as well leverage the closeness to massive pool of employment premium on the value of your house or reduce the rent you’re paying. It’s an opportunity to reduce costs, unless you value the lifestyle more than the cost.

For many people work is a huge part of the amount of day-to-day intellectual stimulation they get, they are too busy in their non-work time making all the trappings of a middle class life happen and wrangling kids. Pull the plug on work in that sort of lifestream and there’s going to be a great big instant hole.

If you are going to quit then you have to step up to the bigger change. You have greater opportunities too, simply because you now have all your time to allocate to living your unique life. In no particular order I toss these out as things worth considering, they work for me. I’m not saying they have to work for you

Look to your social circle post-retirement

Early retirees, very early retirees, men, those who move on retirement all have a particular issue with this and ideally want to start addressing it before they leave work. To stereotype shockingly in the interests of brevity

Early retirees (30s-40s) and men often have a lot of their social circle connected with work. Retire early and half your social circle is still working and will be for the next 20 years. You want to at least think about backfilling this, and you’re probably going to have to make most of the effort.

Those who move on retirement may face having to start anew in a different place. If you have an idea of where you are moving to, there’s a case to be made for cultivating social connections there ahead of time.

Retiring is also an opportunity to leave behind people who have become toxic in some way, it’s not all bad 😉

Toss your TV.

Slightly tongue in cheek, but it is a particular form of a general principle. Create, learn and be intellectually active rather than a passive consumer. TV is great escapism to switch off from work. You don’t need that any more. And too much of TV is vapid attention-grabbing pabulum whose main purpose is to be a carrier wave to ram consumerist messages into your head.

Learn something new every day

You probably had to do this at work. If you are retired, then you have the freedom to cover new ground. Learn about new things just because. It doesn’t have to be useful. I am thinking of making a bull-roarer today. It is the diversity of what you learn that makes you a more rounded person, and exposes you to more viewpoints. Read at least two papers from the opposite sides of the political spectrum. Try and open your mind to points of view that you don’t agree with. Are they at least internally consistent? Are your views? Are your views perhaps wrong?

Read books as well as the Web

The Web is a fantastic resource for learning something new every day. But it is shallow, it is bad for your attention span, it is often unreferenced and unauthoritative, and there is always the vile commercial imperative in a lot of writing, which favours the attention-grabbing and the short form. I found too much web reading damaged my ability to take in information from books, I had to slightly relearn that

When I say books, I mean books that have at least some print format that is not self-published. If a publisher had to take a risk on the book it is more likely to have merit. The massive swathes of ebooks written by money-grabbing incompetents are a way of trying to ‘monetise content’ and from my experience that content isn’t worth my time. There isn’t a book in everybody, leastways not a book worth anybody’s time. I wish there were a way of screening out the output of ebook content mills on Amazon. Using your public library to borrow real books is one way round that.

Walk/bike everywhere

I’m a walking guy on this front, but that’s because Ipswich is a relatively compact market town. most places I want to go are within two miles. Over distances like that walking wins over cycling by not having to park your legs outside your destination and worrying some scrote is going to pinch them. I’m of the opinion no retiree needs to use a gym[ref]If you get an endorphin rush, have masochistic tendencies or simply like the stale smell of sweat and pheromones, then damn well go for it – there’s nothing wrong with gyms if you can afford the money. I just don’t think they are essential.[/ref]. The trouble with walking when you are working it it wipes out a huge amount of your small amount of free time, after all if I want to walk somewhere two miles away and come back it’s going to wipe out an hour and a bit of my day. That’s tough if I only have four hours free time. But it’s no beef for a retiree. It’s good for you, and thinking while walking is somehow a different and more lateral experience too.

Obviously there’s space for the car as well, if you are going to haul stuff. But don’t go nuts on it. I walk a mile and a bit to recycle glass, carrying it in a rucksack. You can easily carry 10kg in a backpack, more in panniers on a bike.

Create experiences, don’t buy them

Climb hills, learn about Nature, invent, carve, repair, originate before consumption. Many ‘attractions’ are simply commercial enterprises designed to separate parents from their money because they don’t have enough energy or imagination to distract/entertain their kids themselves. I personally avoid places like this like the plague. But there are similar joints for adults, and, I am sad to say, particularly targeted at men who have a weakness for extreme this and that. There are general trends to commercialise, professionalise and monetise recreation. What did kids do before Go Ape? They climbed the trees and built their own tree-houses from scrap wood. BTDT

Do hedonism, but vary it. Prize diversity and  quality over quantity

There’s nothing wrong with going to a decent restaurant every so often, but it should cost you more than £100 for two (Londoners probably need to think £300). Do better, but less often. There are vast swathes of middling and low end joints which aren’t worth your custom, go big or go home, but go infrequently. And spin it out with other sorts of hedonism.

Travel alone sometimes

You see far more of a place when you travel alone. Conversely the experience of travelling with your partner is a more congenial experience and gives you shared stories. Make space for both.

Be insanely curious

Poke about in the cornucopia of variety that is our world. Take things to bits, turn them over and wonder why. Lift stones and see what’s underneath[ref]Old World only – don’t do this in Australia, where if it moves it wants to kill you[/ref]. Play

Do one thing at a time, and do it well

There’s a trend towards multitasking – looking at your phone while listening to an audiobook etc. Humans haven’t suddenly become great multitaskers over the last 20 years. If it’s worth doing it’s worth doing well.

Leave the smartphone at home

This is a personal bugbear of mine. I decommissioned my smartphone when I realised it was simply pissing me off for no good reason, and swapped it for a dual-SIM plastic Nokia 150. Why? Dual SIM gives a better chance of getting a signal in the countryside if they are on different PAYG bearer networks, plus I can route outgoing calls and SMS via the cheapest option. I couldn’t stand the touch keyboard, and prefer predictive text SMS. The RF performance of a basic phone is so much better than a smartphone, people can actually hear me and I get to hear them (if they aren’t using a smartphone outside an urban area). Every photograph I’ve taken with a mobile phone is a little bit shit and makes me wish I hadn’t taken it or had used a real camera. I don’t regularly do Facebook, twitter and all that cobblers. A smartphone is a really crappy satnav, because again the RF performance of the GPS is poor in urban areas, which is of course where you really need detailed navigation and good responsiveness. They are great in the open, on motorways and A roads, the sort of places where it’s easy to navigate using map and road signs 😉 I bought a Garmin satnav after realising that I was going to more places I hadn’t been before even in Suffolk and was spending too much time and fuel overshooting, then turning round to back up. It performs properly in urban areas, uses DAB to update traffic reports rather than spying on me by using the mobile network. A smartphone does a load of things, all of them poorly, and I got sick of that in the end.

Reduce unnecessary interruption in your life

Most of these come from electronic devices and social media. You can probably still swim with the hive-mind by connecting every three hours and then disconnecting, and the old saw about connecting to email once or twice a day is also worth noting. Even if you are a social media maven, well, connect every hour or half-hour if you must, and then give your full attention to whatever you are doing. If you can’t be bothered to give it your attention, then perhaps just cut it out of your life altogether. You don’t have this choice at work, because obviously you are being paid to do what others want.

Pursue novelty. For its own damn sake

But try to avoid paying for it 😉 In general any new experience or thing should challenge you, teach you something  or make you grow some tiny bit. Too many manufactured experiences are designed to get you to buy something or take part in the sequel, hence try to avoid paying for it. I admit that three years of frugality mean I take this a little bit too far. I should become more prepared to pay for and honour quality and distinctiveness.

Choose diversity in what you do

You may think you want to lie on the beach or play computer games all the time. Too much of any one thing isn’t good for you. Mix it up. You have the opportunity now your time is your own. Seize it. If you’re sitting in the same place for as long as you were at work you’re probably doing something wrong even if it is on the beach or at a computer game.

Does retiring early kill you faster?

Towards the end of his piece Monevator opined,

Incidentally, I also think retiring early is bad for your health.

This is a hard subject to get any accurate research on. For starters, people who retired early in the 1970s and 1980s tended to be be educated white collar workers, which is a shocking sample bias. These guys are going to be richer than the general population, and, surprise surprise, richer people live longer anyway. Pretty much everyone reading this will probably have a longer life expectancy than average all other things being equal, let’s face it the poor don’t read about personal finance and early retirement because it’s not relevant to their lives. There are just too many confounding factors and statistical wrinkles to establish facts with a decent confidence interval. We diverge more and more from each other as we get older – at graduation you had more in common with your peers than you’ll have with them at the reunion year when you all start drawing your State pension. There are more subtle forms of sample bias. Some people retire early for health reasons, arguably I am one of them, although for mental rather than physical health. If you retire early for physical health reasons then you’re loading the dice towards shortened longevity, I don’t know what the stats on that are like for mental health. For physical health reasons it’s probably still the right thing to do – for you, and for the same reason as retiring early was the right thing for Paul Tsongas. You gotta play the hand you are dealt.

There’s an ESRC report that concluded[ref]I had the devil’s own job trying to locate this. It is called “Health And Well-Being In Old Age: It’s Still Money That Counts” by the ESRC in 2009 The press can get it from Science Daily[/ref]

“Early retirement is generally good for people’s health and wellbeing unless it has been forced on them,” the study said.

“Those forced into early retirement generally have poorer mental health than those who take routine retirement, who in turn have poorer mental health than those who have taken voluntary early retirement.”

A moot point for me then. Arguably it was forced upon me, although I did not retire using any formal ill-health procedure, and indeed took an active part in the decision to retire early but using voluntary early retirement mechanisms. In that case Monevator’s prognosis is right and  I will die younger than my parents. OTOH I can hardly say the ESRC’s narrative on mental health squares with my experience of life post retirement 😉

There’s sport for both of us in Sing Lee’s interesting piece using the pension funds from several big American white-collar employers’ pension funds. I confess that I agree with Lee in that technical creativity is probably at it’s peak in the 10 years around 30. Although he took a lot of shit for it Mark Zuckerberg was probably right that young people are just smarter. If people stopped berating him for his political incorrectness and listened to what he said, he proffers a mechanism which makes a lot of sense to me

“Young people just have simpler lives. We may not own a car. We may not have family.” In the absence of those distractions, he says, you can focus on big ideologies. He added, “I only own a mattress.” Later: “Simplicity in life allows you to focus on what’s important.”

Looking at the other end of the working life arc Sing Lee’s 2002 talk of over-funding of pension funds sounds delightfully naive now – he didn’t realise that the developed world was going ex-growth after the dotcom bust. However, when he charted the years of retirement versus age at retirement, I think his narrative is pretty much along with the narrative what I did, although I didn’t have the strategic vision and just ended in a tactical firefight.

The pace of innovations and technology advances is getting faster and faster and is forcing everybody to compete fiercely at the Internet speed on the information super-highways[ref]how delightfully anachronistic, I haven’t heard reference to Al Gore’s information super-highway for years, it’s so AOL Connie[/ref]. The highly productive and highly efficient workplace in USA is a pressure-cooker and a high-speed battleground for highly creative and dynamic young people to compete and to flourish.

However, when you get older, you should plan your career path and financial matter so that you can retire comfortably at the age of 55 or earlier to enjoy your long, happy and leisure retirement life into your golden age of 80s and beyond. In retirement, you can still enjoy some fun work of great interest to you and of great values to the society and the community, but at a part-time leisure pace on your own term.

On the other hand, if you are not able to get out of the pressure-cooker or the high-speed battleground at the age of 55 and “have” to keep on working very hard until the age of 65 or older before your retirement, then you probably will die within 18 months of retirement. By working very hard in the pressure cooker for 10 more years beyond the age of 55, you give up at least 20 years of your life span on average[ref]Sing Lee does stand somewhat charged with inferring the general from the particular. For starters his stats about longevity are typically from people who retired 30 years ago, so the pressure cooker pace of change wasn’t so bad. Some of the jobs will have been more physically wearing 30 years ago which may have taken a physical toll. There’s no good answer to the delay in longevity statistics, we will find out what early retirement really does for my age cohort in a few decades.[/ref]

But anecdotally I see where Monevator’s coming from. I’ve seen people retire and then pretty much switch off. My Dad did this. He retired, at 65, from his job as a fitter, and while he didn’t zone out totally he watched far too many crappy TV game shows. On the upside he was also stuck to Teletext and share prices[ref]this was pre-internet[/ref], he read company accounts and went to AGMs, as well as gardening and the occasional travel. In support of Monevator’s angle, as a non-early retiree, he got to 86 before leaving this mortal coil, which is still 16 years of extra time over his allotted three-score-years and ten.

Retiring early does hit people who get a lot of meaning and self-esteem from work. It’s not inconceivable that if they lose meaning from life they may live shorter lives, and certainly have a lower quality of life. The obvious answer is ‘don’t retire early’.


Why your spending may not be lower in retirement in future

My experience of spending post work was of a massive fall, but two commenters (Jane, Monkeynut) on the post describing that make me wonder if that may not hold so much for future retirees. So in the interest of balance I thought I might as well take the other side, though I’d not speaking from personal experience.

For what it’s worth my biggest spending was on mortgage payments which then switched to pension contributions and simultaneous ISA investing in the last three years. I am not able to think up anything I’d want to spend that much on – Stuff, Experiences, whatever. I’m in agreement with Jane that spending on myself has gone up as a proportion, though not absolutely, because working made me spend quite a bit just to dull the pain. But as a proportion, sure it’s increased.

Taking my ex-colleagues as a benchmark, two things clearly stick out as different about my lifestyle choices. One is that I am child-free, and the other is that housing is a much lower part of my net-worth than for most of them[ref]at work people with children tended to discharge their mortgages in their late fifties, unless they’d upsized in the 2000s, in which case it was interest-only all the way, with an expectation of house price appreciation and probably downsizing to solve the missing equity problem[/ref]. The reason for the lower percentage of net worth is I had a very bad experience of the housing market early on in my career, and never saw it as a financial investment that could only go up as everybody else seems to do. I have only as much house as I need, which is a three-bed semi for the two of us. The reason most of my colleagues had the dominant stake of their net worth in housing was because they have a lot more house than I do in general. It isn’t because not having children has made me particularly rich compared to them, though there’s an argument to be made that if you have kids you probably do need more house 😉

Having more house than you need is a hit on your net worth if you live in it, because you take on more massive debt on something that provides you with a consumer good – living space, as well as accumulating an asset. Over the course of a 25-year mortgage you pay about  twice nominal for the house, maybe 1.5 times  real terms[ref]I used MSE’s mortgage calculator assuming repayment, 7%, which was probably an average over my mortgage-paying time, in real terms probably about 4% over inflation[/ref]. You have to heat, furnish, maintain and service that space, and the more there is of it the higher your running costs will be. You do, of course, build up equity is a larger asset – when they have paid off their mortgages my ex-colleagues will have houses that are worth a lot more than mine. After which, by the looks of some who have got there, they will rattle around in them and keep spare rooms for the kids to visit, though those kids will not visit as often as they’d like. So they keep a lot of their net worth tied up in bricks and mortar, which doesn’t pay any financial return. Note this is totally different in the case of the buy to let owner – they may also have a lot of their net worth tied up in housing, but the return arrives in the form of the rent cheque every month.

Because I have the excess net-worth in financial investments I have less room to swing my cat in. Compensating me for this is the income from shares. The general return from the relative asset classes seems to be similar over the long run, accepting that the capital value of shares is hellaciously more volatile than that of houses. This is the evil twin brother of the higher liquidity, I guess.

I’m not telling people how to live their lives, each to their own. However, I do observe that there’s often a lot of emotional capital invested in a family home. In my own case, it was probably not a rational decision to pay down the mortgage in a time of low interest rates when I was planning to retire early. I mainly wanted rid of other people being able to tell me what to do by controlling money – I’d had enough of that at work and wanted shot of the threat at home from the mortgage company. It would have been much more sensible to keep the mortgage and use the cash to invest and bridge the gap rather than save the cash upfront and pay off them mortgage. But in the end, if you don’t want other people to be able to control you through money, then don’t borrow money from them and don’t depend upon them for an income. Paying the mortgage off was a dumb thing to do, financially, but sometimes claiming financial freedom isn’t financially clever. But it sure does feel good.

It’s usually a very bad thing to have a lot of emotional capital invested in something where you have a lot of financial capital too. You tend to end up with sub-optimal results, it’s hard enough getting a handle on personal finance as it is without adding a great layer of confounding emotional values.

The increasing opportunity cost of having children

Having children is something that the vast majority of people want to do, and while it leads to all kind of of rewards I don’t think that anybody claims improved personal finances is one of them. It’s frowned upon to send them out to work in the fields or down t’pit to do their bit for the family finances these days 😉 Something that strikes me comparing people having children now compared to the impact it had on my parents’ generation is that the opportunity cost of having children has dramatically increased. This is probably as a result of modern households being predicated on having both partners working. The baseline cost of living has shifted upwards, particularly in the area of housing, which has increased relative to individual incomes over the last 30 years.

That means the opportunity cost of one partner stopping work while the children are young has a lot more effect on the household finances, because housing costs remain at a level assuming two people earning. That’s a hit early on in one’s working life, because biology means that having children in the second half of your working life isn’t that easy. Inadvertently we have designed an economic system that disadvantages one of the most common things people want to do in life more than for the previous generation.

In return our households have twice as much coming in, so we have a more Stuff and experiences, as well as a larger proportion of our net-worth tied up in houses. An awful lot of people lay the increasing cost of housing at the door of immigration, but it started a long time ago, well before New Labour. I was twit enough to buy a house at over four times (single) income multiple, though I didn’t have to borrow that much from the mortgage company because I had a deposit. And an interest-free loan from a credit card 😉 I was already suffering competition from those dual-income households in the late 1980s, a decade before Things Could Only Get Better.

the 50% university target delaying financial independence

go on. Take a guess when the switch to criterion referencing happened

Something else that has changed is that children don’t become financially independent of their parents when they come of age these days,  and this is often to do with the cost of university, though the dearth of jobs for young people right now doesn’t help either. When I went to university the deal was simple. You had a very high chance of failing the exams that were necessary for university admission[ref]I flunked the general knowledge entrance exams for Oxbridge most comprehensively – some of the questions on Classical philosophy I didn’t even understand, never mind have any intelligent answer to. I scored a Gamma, which is Oxbridge speak for ‘thanks for signing your name, but we had expected better’ on general knowledge, though I survived the subject-related papers with an alpha and beta. The competition clearly had a much better general knowledge than I did[/ref], because your marks were allocated as a percentage of the performance of everyone who took the exams at A level. This is called norm referencing and strikes me as the obvious way to do exams, it tells you how good you are relative to others of your age. This is what universities and employers wanted exams to do for them.

Failing exams upsets people, and to avoid that we introduced criterion referencing – marking the exams against some supposedly absolute reference, and also raised the target for the number of children going to university. This all sounded very progressive and egalitarian, and of course an advanced knowledge economy needed more knowledge workers and fewer carpenters, machine operators and brickies.

Everybody believed Tony Blair’s story that more university – “education, education, education” was A Good Thing in itself, and yelled down the cynical who asked the obvious questions about grade inflation and cheapening the brand. I was therefore surprised to read in Ha-Joon Chang’s ’23 things they don’t tell you about Capitalism’ that the correlation between education and economic performance is very weak. One of his examples struck me as particularly remarkable.

That well-known backward and developing country otherwise known as Switzerland had a university enrolment rate of 16% in 1996 – only a shade over the 11% enrolment that Britain had when I started university nearly two decades before. And yet Switzerland is highly industrialised, though they do their best to make out that all they do is make cuckoo clocks, fabulous skiing, and, ahem, occasionally allow dodgy geezers to deposit money in their banks without asking too many questions about the provenance of the filthy lucre…

I must admit I thought “you’re having me on, Ha-Joon” when he said Switzerland is industrialised. I was thinking as a tourist, all cuckoo clocks, cheese, cowbells and mountains. And yet, to be honest, when you go there and you see all the stupendous rock-boring to straighten out the motorways you have to acknowledge these are not people who are afraid of big engineering works, and looking around I saw that indeed Swiss engineering had penetrated Ermine Towers; I didn’t need to step outside my door to find several examples of fine Swiss engineering, even though I have no desire to own a Rolex. The Swiss aren’t generally known for industrial output because they concentrate on business-to-business according to Ha-Joon Chang.

Switzerland - clever marketing makes you think it's more about this
Switzerland – clever marketing makes you think it’s more about this
than about this - Swiss quality: over twenty years old and still going strong
than about this – Swiss quality: over twenty years old and still going strong


You don't have to be a connoisseur of jigsaw baldes to see the Swiss quality even in the basic range compared to Wilko no-name
You don’t have to be a connoisseur of jigsaw blades to see the Swiss quality even in the basic range compared to Wilko no-name

Now there are others who declare the modern UK university experience an increasingly unaffordable luxury, but Ha-Joon Chang, bless his South Korean and Cambridge lack of egalitarian political correctness, delivers himself of the true purpose of university:

the main explanation for the Swiss Paradox should be found, once again, in the low productivity content of education. However, in the case of higher education, the non-productivity component is not so much about [… (Ed: I paraphrase: all the self-actualisation and citizen-building benefits of education …] as is the case of primary and secondary education. It is about what economists call the ‘sorting’ function.

Higher education, of course, imparts certain productivity-related knowledge to its recipients, but another important function of it is to establish each individual’s ranking in the hierarchy of employability.[ref]23 things they don’t tell you about capitalism, Ha-Joon Chang, Penguin, 2010, “Thing 17, pp 186/7[/ref]

In other words, university is there to help employers tell the bright bulbs from the dim ones. You can do that cheaply, using norm-referenced examination results to screen. Or you can do that expensively and poorly, by telling everyone they are special and should go to ‘uni’ and let the employers sort it out some other way. Because university adds little value to productivity[ref]I studied Physics at university, and in working as an electronics engineer some of the maths, in particular Laplace and Fourier transforms were used at work. I’ve used more of my Physics knowledge since retiring, in developing and using environmental sensors. I’m with HJC on the low productivity value of education. It still amazes me, talking to people in their undergrad studies, how they both take it so seriously and often assume they will use it at work[/ref], you unfortunately can’t sponsor it as a widespread experience as a government because the taxpayers will revolt, so if people want so much of the university experience they end up paying shedloads of money and incurring debt at the beginning of their working lives.

Parents, why on earth did you not have the guts to accept that some of your kids won’t be brilliant, and damned your children to this world of hurt by demanding politicians facilitate a 50% university enrolment? Why have we collectively as a society done this to our young people because we didn’t have the courage to tell them that people are of differing abilities? And use our extra wealth to create a vocational system that tried to address these differences?

I went on a satellite master antenna  TV(SMATV) training course once, and wiped the floor with everyone on the written part of the training course, enough to win a prize of a installer’s meter worth about £1000 (Thank you Sky – I still occasionally use it!). It was unjust, because you don’t need theoretical and design understanding to install a SMATV system, but the marks were measurable and what the prize was determined on. Everybody else in the room, who was either working for an installation company or apprenticed to one, could rig a satellite dish better and faster than me. Faster as in less than half the time. There were people on the course who couldn’t add 3, 5 or nine to a channel number – I helped a couple of guys by showing them how to use squared paper to do that, but they’d have your dish up and running and be onto the next job in half the time at less than half the cost. I would have been the slowest installer on the block. Even in many technical jobs competent workmanship often trumps theoretical smarts.[ref]I went on this course to learn the issues and practice of SMATV installation because I was designing systems to work with these systems, so I was never going to be an installer. Had I worked as such I’d hope I would have got a bit faster. I did well in the theory part because I knew it from designing some of these bits of gear and some large systems[/ref]

Now if university didn’t come with a mahoosive price tag these days then it wouldn’t be such a bad thing. Our society has no coming-of-age rite of passage and it’s poorer for it. ‘uni’ provides some sort of safe environment for people to indulge in some of the boundary testing inherent in becoming a young adult. Not sure the rite of passage is worth the £40-50,000 price ticket, though. Even a Gap Yah seems like better value, and takes you out of the workforce for only one year rather than three[ref]doing a Gap Yah and going to university seems a rum do. It was extremely rare when I started at university, because people couldn’t afford it. That it’s common enough to satirize now despite those high fees shows just how much richer Britain has become in the intervening three and some decades.[/ref]

Going to university is bad for your wealth – parents and children alike

As well as setting up a society which makes one of the most basic and common lifestyle goals  – having kids – more difficult, we’ve produced a university system that places a big financial millstone round the neck of the children just as they leave home, where earlier generations would have become financially independent. That gives a double whammy – many parents look at the situation and understandably don’t want their kids to start off with the equivalent of a small mortgage before they’re earned any money. If you look at the lifecycle of humans, if you have children in your mid-to-late-twenties you will eat this hit twenty years later, in your mid to late fifties. In previous generations this is where the children would have left home and become financially independent, meaning the parents could now accumulate wealth a lot quicker, clearing their mortgage and getting set for retirement. The children now have two calls on their finances – the costs of university and the cost of getting a deposit together for the house they can’t afford to buy unless they have two incomes. Parents who do want ot help their children out at this stage may want to familiarise themselves with Martin Lewis’ guide to student loans. If you have £x to help your child, it’s probably worth a lot more to them as a deposit for a house than as an upfront student fees payment. It’s at least worth convincing yourself that’s not the case before ignoring it 😉

 Previous generations needed less income after retirement

Let’s take a look at a bit of history. A final salary pension scheme targeted  between 50% and 2/3 of the worker’s final salary; these were considered the gold-plated heyday of British pension provision. Blue collar ones seemed to accrue at 1/80th of final salary per year worked, a typical working life was 16-65 but sometimes the years up to 21 weren’t pensionable. Later white-collar ones accrued at 1/60th of final salary, graduates started at 21 and would work until 60. Both of these rough out about 60% of final salary. However, the experience of a professional career had more similarities then than the variety or career experiences now, and some of the assumptions were:

  1. mortgage was paid off
  2. the worker was 65 or older – people had children earlier in life so it was more likely that
  3. kids had left home and were financially independent

I fit the assumption that the mortgage is paid off and there are no child-related costs, so maybe this is why I share these earlier generations’ spending models.

These assumptions are less likely to hold with people coming up to retirement in future. In particular the interest-only mortgage nixes assumption 1, so perhaps people will have to shift their retirement dates to keep a constant spending rate.

When I analysed my own spending for why it fell, one of the biggest reductions in spending was the drop in pension contributions after retiring, it was larger than I had been spending on the mortgage before it. I gained a double win with the fact I stopped spending  more money than I should have done trying to compensate for a worsening experience of work. In particular holidays were too fast and furious, and expensive. The first time I had an inkling I was not living my values with respect to work came in 2005 on a whistle-stop trip of Western Scotland – I had been searching for ptarmigan at the Applecross pass, which is a remarkable drive in it’s own right and not one you’ll ever forget.

In the evening I watched a fabulous sunset over the bay and heard a cuckoo in the distance. Somewhere over dinner in the bar I realised that I was running away from something, snatching glimpses of this natural beauty in what seemed a never ending greyness of work. This sort of thing shouldn’t happen – you shouldn’t find yourself in such a beautiful, quiet and isolated part of the world with clean air filling your lungs and experience a down. I did not listen up to the signal, but drowned it in whatever fine ale they had.

Your spending patterns may be more sensible than mine were, and less susceptible to reducing. If you carry a mortgage into retirement then your spending may not fall that much, unless you are investing the money you release by not paying it off. If you’re the Bank of Mum and Dad, then clearly your spending may in fact increase… If you have more house than you need then some of your costs won’t fall, and indeed if you need to heat it in the winter they may increase. There are all sorts of reasons why your spending may not fall.

If you want to retire early, however, reducing your spending punches way above its weight. Earning more doesn’t help nearly as much; reducing discretionary spending lets you save more while working and makes it last longer when you aren’t working. I’ve also banged the drum at length about the value of time – we don’t have an endless string of days on earth.

However, I’ll leave the last word to Jane – and Monkeynut

I suppose I’m just wanting to suggest that whilst frugality has it’s place and usefulness, it’s important to have an idea of what gives your life meaning (and that’s different for all of us) and that doesn’t always mean we’ll potentially spend less in retirement.


Overall, my strong advice would be to work all this out to your own preference before you ‘go’. You CAN go and then live within what your spreadsheet tells you, or (as I prefer) get your spreadsheet to inform you how much you NEED, and fix your retirement date to match.

I couldn’t agree more – it is more important to live intentionally and in accordance with your values than to live frugally 😉

Five tips to Save Money and Retire Early

I will be retiring about eight years early, or, as far as the Government’s expectations are concerned, 14 years ahead of time. Here are five tips on how to get there.

From age 25 I managed to do 1 and 2 of these, and as I came within five years of retirement I did the whole lot.

  1. spend less than you earn
  2. never pay interest to borrow money for consumables, only productive or cost-reducing assets
  3. save six month’s running costs as an emergency fund
  4. pay off your mortgage before you reach retirement age, preferable five years before so you can use pension tax breaks to the full
  5. minimize fixed recurring costs such as mobile subscriptions, Sky TV, gym and magazine subscriptions. Of those you keep, make sure you get utility from them.

I’ve had good luck in some areas, such as being employed 95% of my working life, and unemployed only 1.6% of it (the rest was when I did an MSc with a grant), and having a final salary pension in a company with a normal retirement age of 60. I’ve had rotten luck in other areas – buying my first house in the Lawson boom and writing off half of it to negative equity.  I trashed over £10k chasing momentum in the dot-com bust. But these were mistakes I could afford to make. You can be too fearful of making mistakes – and then you will never take opportunities. Getting the balance right is the key…

I am not a City banker, my job probably classes as middle management if equated to the rest of The Firm. Earning a little bit  more than the UK average isn’t the secret to early retirement. There are plenty of people who earn a lot more than I do but can’t make ends meet.  The secret to early retirement is pretty much in these five tips on how to stay on top of your finances over a working life-time. These are strategic and high-level rather than immediately actionable. Indeed, if you want to use them it helps to start at half my age 🙂

They worked for me, and I’m toying with the idea of going along to the Write on Finance Blog Up in Leeds. I will have finished work by then, and DW has identified a Turkish Baths at Harrogate which is 12 miles away. She has a weakness for that sort of thing. And I’ll take the opportunity to say hello to these old friends, the Devil’s Arrows, as mediaeval Christians titled the three prehistoric standing stones by the side of the Great North Road.

Devil's Arrows, Boroughbridge

I like that. There is something special about a construction that has been standing sentinel for four thousand years.

This is an entry in the competition to win a 2 night hotel stay during the Write on Finance Blog Up Leeds which runs 22-23 September 2012; gold sponsor is MoneySupermarket

Wake Up Call – Is Fear Standing In My Way

There’s a guy in the office whose worked for The Firm for 39 years, he’s been with it man and boy. Let’s call him X, he’s 59 now, working as a project manager, on a project which is basically doomed. The suppliers were screwed down so much on price that they lied about the functionality of the products, and as a result it has no chance of being launched on time. They’ll be lucky if it does anything at all even when it is launched.

X highlighted this, and as a result he’s been shifted to the bench. Don’t be the bringer of bad news, people don’t like it. Last week he wasn’t at work, and we found out why this week. He came in looking a shadow of his former self, apparently having suffered a TIA. Wikipedia doesn’t pull any punches – under treatment there is the stark phrase

TIA can be considered as the last warning.

Last year X discovered he had late diabetes, and generally the toll of working is showing on him. We’ve been getting onto him about it’s time he listened to his doctor and indeed his body, and simply pulled his ticket and left. He’s entitled to within a whisker of full pension, so money isn’t an issue.

The tragedy is, that his whole world-view is associated with going to work. He has interests outside, but he has no vision, no mental model of what his life would mean if he didn’t go to work.

He is holding, ready for the final approach, but has no map, no concept of where he is going to land. And so he fears leaving work, though he doesn’t need the money.

I thought of X as I read McKenna’s book. He needs to take a look at where he is, where he is going, and why the hell he is still working when warning sings are flashing Wrong Way, No Entry, Do Not Carry On. He doesn’t need the money, but something that beggars belief is that he is hung up on it. Yes, his pension is about half his salary. But he’s got no mortgage, he isn’t raising kids, what’s he need all that for. One thing is sure. He’s not taking it with him if the warning signals continue to get louder and one day they stop all of a sudden.

I thought of another guy who I used to work with, in his 50s. He hadn’t progressed as far as he would like, and could be bitter about it. He lived to go hiking with his wife, and was saving massively in AVCs and the like so he could leave early. He was physically very fit – you don’t get to do all that hiking without developing muscles like steel.

He never got there – in his mid 50s the clockwork stopped, and he died of a heart attack.

I would say mental health at The Firm is below average, partly because as an engineering facility it is male-dominated, and partly because its age profile is skewed towards the middle-aged. It can’t hold young-uns because it doesn’t attract many of them in the first place, and it is deskilling so they see a lack of future potential. This isn’t a great problem for HR, as it probably needs to thin out the ranks a little bit more.

Dmitry Orlov - Reinventing Collapse

Looking at it I would say that as people get over 50 they become vulnerable to the stress manifesting as physical ailments. Dmitry Orlov, in his book about the collapse of the Soviet Union said that the 45-60 age group was particularly sensitive to the stress of the loss of meaning and what they had worked for. They would look at what they expected and what they now had, and the fire within their minds would surrender and they’d top themselves.

That’s not unknown at work, though it’s always hushed up – I only heard about it through a guy that worked for me that was in the volunteer first aid service. I’ve never looked at a particular cracked paving slab in the same way after hearing how it got that way.

I thought of X when I read Early Retirement – Is Fear Standing In Your Way. Everything about him is trying to flag him down, his body is telling him that he is running out of road. And yet like a rabbit in headlights, because he cannot see a meaningful life without work, he is frozen in fear despite all the warning lights flashing red. What part of

TIA can be considered as the last warning.

does he not understand…

So often we stay with the tried and tested, either because we lack inspiration to do otherwise, or we fear the unknown. It is sometimes good to be reminded that it doesn’t have to be this way, and the inspirational RetiredSyd did that for me today, introducing me to Early Retirement – Is Fear Standing In Your Way and to Early Retirement Extreme’s The Voluntarily Dispossessed. A reminder of what is wrong about the status quo is neatly summarised in Never Forget.

Sometimes it’s good to come up for air.

How I plan to retire early

Firstly, retirement means an end to steady paid employment to me. It doesn’t necessary mean an end to earning money. Early retirees need to make this call. If retirement means your pension arrangements will be your only means of support you will need a much larger pension pot.

It’s wage slavery I want shot of. I also want my time back; my current job is reasonably well paid so if I’m going to be working for the Man I may as well stay put. But I am looking at retiring about 10 years early relative to the normal retirement age for my job.

The keys to successful early retirement are

  • clear debts
  • reduce outgoings
  • save more
  • develop alternative income streams

I owe nobody  – Debt Free and Mortgage-Free

I didn’t achieve this by winning the lottery. It’s taken me two thirds of my working life and it was done the boring way; I spent less than I earned and I paid my mortgage in 18 years, by overpaying for a few years. There are no short cuts; I had fewer holidays than most and stayed closer to home – while colleagues were jetting off to Egypt or Australia I stayed in the UK or Europe with the odd foray to the States.

Unlike many personal finance bloggers who became inspired to master their finances after building up frightful debts, I never ran up traumatic debt and juggled credit cards. I credit my parents for that, they’d even put sixpences into a tin towards the bill when they used the phone when I was a kid.

Clearing mortgage debt is liberating – it means I can focus my efforts on saving over 70% of my take-home pay. By saving half of it in my company pension additional voluntary contributions (AVCs) I keep Gordon Brown’s grubby mitts off it.

Reduce outgoings

I live on considerably less than the take-home of someone on Britain’s minimum wage last year (full-time UK NMW is about 12k gross or 10k net). That’s not as hard as it sounds for me since I have no mortgage or rent outgoings. It does mean no foreign holidays and low-cost staycations, which is hard when working the 9-5 life. It was particularly hard last year, what with some of the nutty practices at work after some dreadful business results meant HR are trying to stress people to leave by abusing the performance management process to avoid paying redundancy money.

There’s no way round it, not getting a decent break is the grimmest part of living frugally but working in a stressful environment. It brings it home just how much holidays were as much a respite from work as a positive acquisition of new experiences. However, I figure a year or two of that is worth it to win a permanent holiday for the rest of my life!

Reducing my outgoings also gives me a dry run on what it would be like on a lower income – the fact that I can do it gives me good confidence in my retirement calulations. I’d recommend it to anybody thinking of retiring early – live on what you plan to retire on and save the rest. That way you test the theory while you can still back off and work for a bit longer if you got the estimates wrong.

Save hard

If you can save 50% of your take-home then for every year you work you can take a year off. It’s obvious when you think about it, the half you don’t use this year pays for your next year.  I thank Jacob from Early Retirement Extreme for bringing it to my attention in his blog post.

Find alternative income streams

I have to admit that I am not really doing that well at this. Most of these need creativity, such as writing, recording, photography, and this is at a low ebb while living frugally while tolerating a poor work environment. I’ve got some ideas and am improving my writing.

And of course I am investing, both in shares ISAs and in pension AVCs, and my ISA and company sharesave holdings are paying dividend incomes. But the stock of capital is pretty low so that is not a large alternative income. And realistically, these alternative income streams are dwarfed by my employment income. At times I am in danger of getting sucked into the one more year before comfort trap that ERE highlights.