I can (theoretically) retire, so can you?! Part 2
I was saying whenever I told someone that I'm taking a career break soon, I can feel that the other party feels a little uneasy like I'm breaking some sacred social norms.
So i try to bring them onboard my train of thoughts by asking them this question. If i am 65 years old, what would you say to me? Congrats, have a happy retirement.
However, at 40 years old, you will think that it is weird for someone to "retire". My question is, what is the end game at work? When i started working, 100k was almost impossible, then 300k, then 500k then now finally to 1M. Then how about just continue to 1.5m and 2.5 and 5m?
When is it the end, when can i finally say stop,i have enough? Why dont you congratulate me for "getting out" of the rat race earlier than planned? Of coz i cant have a lavish lifestyle because it is 1M not 1B, but i never had a lavish lifestyle and its not what i sought after anyway. Ok, now I have to clarify here, I am not being booastful here that I am going to retire and all (I will still work if an attractive opportunity comes along), and the 1m portfolio and 5k dividend isn't that much compared to alot of other people, it's just that our family live a simple life. We buy what we want but we don't have a taste for expensive things or frequent trips to Europe or america. We are very happy just to be here with each other without having to sacrifice family time to entertain silly work requests.
My end game has alway been getting out of the rat race asap. However, this doesnt stop me from going back in to the rat race if a good opportunity comes along , so i have the power to choose what i want to do in my life
What is your end game at work and in life? Assuming u don't like to work( like me), will u still continue to work in order to be aligned with the social norms even though you have make do with your side or passive income? If you like working, then it's a total different ball game.
I recently realised what I'm going through now is call coast FIRE , but I think barista FIRE suits me better since I don't mind earning some bucks on the way. I'll continue on with the next post. Gotta run!
Hi there,
ReplyDeleteLet me start by congratulating you on your $1M portfolio. Not an easy feat, so give yourself a pat on the back for achieving this.
What you do with your life and wealth is yours alone to decide. What others say could be out of jealously or concern but the choice of what you do remains yours. Correct me if I am wrong, I can sense you are trying to get some affirmation whether having $4K to $5K a month of dividend is good enough to retire on. Well, I will provide you some perspectives on it, as a 61 yo.
1. Dividend income is not stable nor reliable. Our dividend income reached at all time high of $78.8K in 2019. And it tanked to $67K in 2020 during the Covid pandemic. And this is with regular cash infusion into our equities portfolio. If not, our dividend income would have been much lower.
2. FI is best time to boost savings. Reaching FI meant that your passive income covers your annual expenses. We attained FI in 2016 when our passive income reached $150K, just nice to cover our projected expenses in retirement at $150K. Our passive income comprised dividends, rental income & interests from CPF OA&SA. We continued working and saved at first 100% of our salaries, and more than 100% each year after that. This was because as earn, we saved more, invested more and grew our passive income.
3. CPF is a good safety net. Do not trivialise the humble CPF savings. The CPF savings provide us great peace of mind in market downturns and crashes. We have directed the extra savings into our CPF savings such that we can withdraw $60K of yearly interests from our OA&SA plus an a combined payout from our CPF Life of another $48K per year from 65.
4. Need to set aside warchest. This is different from the emergency fund. Having a solid warchest is a great emotions stabiliser in times of market crashes especially when retired with no more salary income. Not only it prevents you from panic selling your stocks in a crash, it provides you the ability to pick up good stocks at great discount.
5. Having something meaningful & purposeful to do. When not working, you can be directionless and lose purpose in life. Find something enjoyable, meaningful and purposeful to do.
6. Keep healthy. We can only enjoy life fully if we are healthy and financially sound. So remember to keep healthy.
All the best in your journey!
Hi there, thanks for taking time out to pen down your thoughts. It's much appreciated. All 6 points are very good advice!
DeleteThe post wasnt meant to seek affirmation for my decision to quit without a job and survive on my dividend. I am quite comfortable and confident that it can be done. I am just a little puzzled about the reaction of my peers and hope to engage with people online of similar profile to see if i am the odd one out.
Moreover , i am not really going to retire at 40 years old. I am just taking time out for the family and refocus my life and also on a look out for other interesting opportunities.
For now ,point 5 and 6 are very relevant to me. I hope to take the time out to sort out my mental/physical health ( sometimes i will think what if i suddenly just drop dead , will i be happy with what ive done in my life) and at the same time spend more quality time with my 2 young kids instead of always pushing them away due to work calls.
Thanks for sharing your wisdom on being financially independent!