Retiring Early Is the Worst Financial Dream
I joined and immediately left the FIRE movement (Financial Independence, Retire Early)
What if I could stop working tomorrow?
Everyone has asked themselves this question at some point.
I have done the calculations myself of how much I would need to retire in a few years.
I wanted to retire at 31, but the closer I get to financial independence the less I want to quit my corporate job.
But is retiring early the goal you should strive so hard for?
“We should appreciate what we are doing. There is no preparation for something else.” — Shunryu Suzuki
Early retirement is not impossible, but it is expensive
Retire at 31 or how much earlier?
The very thought is a provocation.
Retire at an age when some college students only start working after a long study?
I know a couple who retired after only 8 years of working. During this time they earned a lot, saved a lot (60 percent!), and invested (at the right time) in stocks and real estate.
They accumulated about $100,000 per year in wealth and retired with over $900,000.
Since then they live on $25,000 a year. Most of the money comes from rental income.
Early retirement is not impossible, but it is very expensive.
Fun costs between $600,000 and $1.6 million if you want to retire at 40 and live on $20,000 a year for the rest of your life.
Happy without a corporate job?
But what makes early retirement seem attractive in the first place?
Is it the feeling of never having to work again for someone else?
If you hate the idea of working until the end of your life, it’s not the savings rate that’s the problem. It’s your job.
If you are happy with your job, why is early retirement desirable?
Why say goodbye to colleagues, clients, or employees?
If you are dissatisfied with your corporate job, the question arises as to what is the best exit strategy.
Those who dream of early retirement should first consider their employment situation and only then their investments.
Retire as soon as possible or work endlessly?
If early retirement is not necessarily desirable, should you never stop working?
I see more and more people who think this way and continue working for years after retirement.
Not because they need to, but because they want to.
Of course, this is not the case in all professions.
The “smart workers” have a clear advantage here. Because at least physical strength decreases with age.
This is exactly why you should definitely build wealth, even if you are not working for retirement.
After a certain age, the decision for or against retirement from working life should no longer depend on money.
But does it really have to work? Isn’t it enough if we keep ourselves busy? After retirement, we would have plenty of time to do it when we are retired.
Work and employment are not the same things
“Work always works for others, otherwise it is employment.” — Reinhard K. Sprenger
Work is when we create value for other people. This does not apply to employment.
We can get involved in literature, music, cars, or anything else for pure self-interest. But isn’t it more satisfying when we enrich other people’s lives with our knowledge and skills?
So, if we work anyway?
To retire early or to be financially free?
To become financially independent well before age 60, savings rates of 40% of net income or more are required.
But very few earn enough money at a young age to afford these savings rates. Even if they want to.
Instead of creating unnecessary stress with the obsession with early retirement, it is better to look for a job that is fun, live frugally, and invest your savings wisely.
Relying on the state, the capital, financial, and stock markets and their holdings are and always will be a risk anyway. Because there will be little protection against pension cuts, stock market crashes, or losses in value in the future.
The ability to earn money through work is something that no one can easily take away from us.
Health and labor power are by far the most valuable assets we have.
We must take good care of them.