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Thursday 5 May 2016

What is Early Retirement Anyways?

How to retire young

As the sun of your working career
sets, retirement looms ever nearer...
Okay, so as you know this blog is about living the Stealthy Way in order to spend less, save more and with the ultimate goal of retiring early - in my case at the age of 45 instead of 65. But the question is, what is retirement, and what is early retirement?

So Wikipedia defines retirement as "...the point where a person stops employment completely." But for me, there is more to it than this.

Officially, retirement is simply the act of stopping work. And for most people they imagine their retirement to be something like the picture at the top of this post (took this one at sunset on an Island just off the coast of Krabi, Thailand while on Honeymoon with Mrs Stealthy Wealth1. But I digress.....)

However for me, retirement is not just about stopping work, it is about not being dependent on a job for an income. It is about living the same life you have always lived, but without having to spend 40 hours a week (or more) selling your time to your employer. It is about waking up each morning and doing something that you want to do, not that you have to do. And it's about still earning enough money to cover your expenses, except you do not need to do anything to earn it.

Now the sad reality is that most people who have retired, are not actually retired by my definition, because they are not earning enough to cover their expenses. A lot of these people have to downgrade and make sacrifices, and they cannot continue living the same life they had pre-retirement. For these people, if given the choice, they would continue working for even longer in order to save more and lead a better quality life after retirement. For these people (and for the large majority of South Africans) retirement is an event, that happens at 60, or 65 or whatever the maximum retirement age is, and it happens whether they are ready for it or not.

Most retirees have worked a career of 40-45 years, day in and day out, blood, sweat, tears, stress and time. They have sacrificed and given up countless social events, put families at a lower priority and sacrificed so much, and for what? Just so that they can stop working and make more sacrifices to make ends meet.

Ok wow, that was morbid!

But the good news is that it doesn't have to be that way. And this is where early retirement comes in. Now if you mention early retirement, most people conjure up some images of cocktails on a beach (cue some more Thailand pictures).

Retire in Thailand
Thailand - maybe not a bad place to retire...
To most people, early retirement means having a shit load of money. They have these ideas of extremely wealthy people with money to burn and the faster they spend it, the more keeps rolling in. And the reality is that there are a lucky few who will end up like that (if your surname is Gupta, your odds are pretty good...) - but not me, and probably not you, considering you are reading this blog, no offence :-P

But the above scenario is actually very far for from what I envision. For me, early retirement is simply about generating enough wealth so that my living expenses (which I will reduce as far as possible) are covered by investment income, allowing me to choose to give up my job. It is about a choice - I have enough income that I do not need a job any more, and I can stop working.
Early retirement is not about having bucket loads of money, it is about having enough money.
Early Retirement is about knowing that my expenses will be taken care of and I can simply carry on living as I have always been, except now I get to choose what I want to do each day. It is all about choice, including choosing where we want to live post retirement - and that could very well be Thailand :) Although, the cocktails will be home made - Don't get me started on restaurant drinks prices! (Remember we are reducing our living expenses)

And that is the biggest difference between retirement and early retirement - choice!

For an average person, retirement is about being forced to stop working because they are too old (despite the fact that they may not have enough). But Stealthy people are not average people. Come on, we can do better than that! Aim for more!

Early retirement is about choosing to stop work. Its about taking control of your life and doing what you want to do!

For average people, retirement is an event, for Stealthy people retirement is a choice - and I choose early retirement!2

Till next time, Stay Stealthy!
 - ~ - ~

1 I will admit, our Thailand honeymoon was in my pre-Stealth days - days when we bought a lot of crap, owned two cars, and were pretty much living month to month.

2 Right, now that we all agree that early retirement is the way to go, we still don't know how to get there. Well having an end goal is a good start, and don't worry, in future posts I will discuss "The Stealthy Wealth Plan for Early Retirement"