Lessons from Early Retirement

Our Reflections on Retiring Early

Six months ago, after many years of saving and investing, we were fortunate enough to reach our goal of financial independence where the return on our investments would be enough to cover our expenses. This put us in a position to say goodbye to our salaried jobs and high pressure lives in Singapore. We sold or donated the majority of our possessions, packed up what was left and headed off to Europe for a life of financial freedom and adventure.

Six months later is the perfect time to reflect on this huge life change. Did we do the right thing in retiring decades ahead of the usual age, with me retiring in my 40s and Gillian in her 30s? Do we have any regrets?

In fact, since our journey began, we’ve received a lot of questions about reaching financial independence and retiring early from friends and family, former colleagues, and from strangers who’ve come across our videos on YouTube. We decided to tackle the most common questions and share what we’ve learned about ourselves over the past six months of early retirement.

Loss of identity

This is one of the first questions we were always asked when we originally shared our plans to retire early: What will you do if you’re not working. Implied within this question is another about identity: Who will you be if you’re not a marketer or a healthcare professional?

This was less of a concern for Gillian because she pursued many diverse interests throughout her life and took on a number of distinct identities. In her teens, Gillian went to a school for the arts and majored in theatre. In her 20s she was an officer in the military (much to the surprise of her theatre arts schoolmates). In her 30s she worked in healthcare. She feels that while those experiences form part of who she is, they don’t define her and certainly don’t prevent her from exploring new identities.

However, for me, the potential loss of identity was a huge concern. My identity was always strongly tied to my career, which I invested many years to build including taking on two graduate degrees and putting in hundreds of hours into extracurricular professional development. That said, when we agreed on the goal of striving towards financial independence, I took a year to prepare mentally and emotionally for my new life and to reflect on who I could be outside the workplace.

In the end, despite initial concerns about giving up my professional identity, I found it to be liberating to leave my job and shed my workplace persona. It was just as liberating to me as when we downsized all our possessions so that we could be free to travel. Ultimately we’ve found that our identities don’t need to be fixed based on the careers we built but can and should continue to evolve over the course of our lives.

Becoming bored

This was the second question that we were always asked: Won’t you be bored if you’re not working at a job? What will you do all day? Amazingly, it is very easy to fill each day of the week even if you are not working.

As we headed into retirement, we knew we would need to create a level of structure and routine within our lives since we no longer had the typical Monday to Friday, 9am to 5pm workplace structure. Over the past six months, we have developed a practice of sitting down each week to plan the days ahead and make time for the things that are important to us. This includes time for exploring new destinations, time for learning new skills, going to the gym most days, time spent together and time spent apart.

Social isolation

Social isolation is another concern often facing early retirees; everyone you know is still working and you no longer have the built-in interactions of going to the office each day. This was even more challenging for us because we are traveling full time. Everyone we know is not only working, they’re also hundreds of miles away.

Fortunately, as expats we were already used to making an active effort to stay in touch with our friends and family. Now we are also building new friendships with people within the financial independence and/or travel communities.

Changing our minds

People always ask: Will we work again? Six months into retirement, we can say that we don’t plan to work in a salaried job again. That said, we’re people with a lot of energy who like to feel productive. We are already choosing to undertake passion projects and we find that very satisfying. The key is that any work we do will be based on our personal interests.

Making our money last

Now we’ve reached the topic that people are most concerned with: aren’t we worried that we will run out of money? We spent a lot of time thinking through various scenarios before landing on the amount of total wealth that we felt was enough to retire with.

Six months in, here are the things that give us confidence that our financial future is secure. First of all we have a phased approach to our retirement. We are spending less in the first few years, which should allow us to have a more comfortable lifestyle in the future and also gives us a buffer for any unexpected expenses that may come up.

We are also leveraging geoarbitrage in the early part of our retirement meaning we are spending more time in low cost countries where we can get a high quality of living for our dollar.

Additionally, we have structured our finances so that monthly expenses are paid by the returns from our fixed income investments. This means that we don’t have to sell any equities to cover everyday costs which gives us some protection from market volatility.

Finally, from our first six months of early retirement we’ve found that the monthly budgets we allocated for ourselves do, in fact, work. We have been comfortably spending the amount we targeted and we have room for flexibility as needed.

Do we have any regrets?

As we close out this post, we wanted to tackle the big question: Do we have any regrets? We both walked away from our jobs mid-career…was that a reckless decision?

For us, we had put in the hard work of saving and investing for all those years leading up to our retirement. So even though we could have continued to earn more by staying on, we valued our freedom even more and wanted to define our lives outside of the strictures of the corporate environment and the demands of an organisation.

Six months on, we feel even more confident that this is the right direction for us. Every Monday morning, we take a few minutes to be grateful that we don’t have to sit behind a desk and instead can go hiking or explore a new city. We feel like we’ve reclaimed our time and we’re free to design our own lives.