Money is not the problem: meet Joe

Hi RIPpers,

As you know, at Hooli we’re all multi-billionaire! Why? Came on, You know why! I’ve always been open about my salary and…

“Yeah, you earn a lot of money, but that’s probably because you’re a Director or a VP or what? The CEO??”

No, I’m actually one of the lowest leveled employees in the company. Salary-wise I guess I’m in the bottom quartile of the salary distribution among Hooli employees (in Switzerland).

“… where do I send my CV?”

Exactly. So it’s not unusual to hear stories of people reaching FI and retiring on some nest egg accumulated over the course of just few years. I’ve already told you the story of Mr. Crypt in last post, but there’s more: it’s getting common to hear things like: “XYZ quit Hooli to pursue his lifelong dream of collecting flowers” or “Goodbye buddies, I’m leaving Hooli to take a trip around the world for the next… 3 years? Is that enough?”.

Yeah, I discovered that FI, ER and other personal finance topics are definitely not a taboo at Hooli! Even more: I’ve found an internal Hooli mailing list about mustachianism with more than 1k members, sharing FI strategy, saving rates, early retirement plans, blog articles, etc etc… I’ve found that out of my small team of 5 engineers, 2 of them are on that mailing list including… wait for it… even my manager!

“RIP, where do I send my CV??”

Indeed! Listen to this one: we’ve organized a mustachian lunch in our Swiss office few weeks ago and it was a success! Meeting room fully booked and guest star my blogger friend MustachianPost! A true success! Hooli mustachians sharing ideas and dreams about investing, saving and what motivates them to reach FI! There’s been a huge demand to make it a recurring event, yay! Everybody wants to FIRE! Everybody loves freedom! Joe loves freedom too!

“RIP, please, listen to me! Where do I send my… wait… who the hell is Joe?”

I know Joe more or less since I started my Hooli adventure in 2012. He has been my manager’s manager for a while. He’s kind, he’s skilled, he’s awesome.

Several months before launching this blog, roughly 2.5 years ago, I had a chat with him about future and life goals. It was a friendly chat, not a manager-employee meeting. I trusted a lot Joe so I shared with him some pieces of the truth… you know… if you build this economic machine that generates more than you need then working is optional… Shared with him some of my thoughts about this amazing topic I discovered maybe one or two years before.

I remember his smile and his calm and relaxing voice: “RIP, I’m doing exactly that. I think I’ll work one more year so that I can pull the trigger”

Whaaaat? Seriously??

He meant it.

One year later he quit Hooli and went back to his LCOL country with his family, for good.

He’s younger than me. I think almost 5 years younger. He reached FI 2 years ago, I’m still at least 3 years away. I’m aiming to reach early retirement before age 45, he’d already be retired by a decade by then! You rock! My sincere congratulations Joe! 🙂

I was so happy for him and so thankful too. He showed me this FIRE thing is actually doable. Real people do that, not just Very Important Bloggers.

So why am I talking about Joe?

Because few days ago I had lunch with him at Hooli, here in Switzerland.

Joe is back.

When I saw the announcement mail at the beginning of February “please, say welcome back Joe at Hooli!” I was both scared and excited. Excited because he’s one of the best persons I’ve been working with, and a good friend. Having him around in the office is an amazing news! Scared because… what the fuck are you doing here? You’re supposed to be living my dream life!

I invited him for lunch and he replied “Sure, let’s have lunch together. I remember you wanted to do something similar to what I did. Let’s have a chat so you can learn from my failure”

“Ho-li-sheeeet I don’t know if I’m prepared to listen to what I’m going to hear from Joe“, that was my first thought.

In the FIRE community we’re so overwhelmed with success stories that we forget how big is the impact of survivorship bias. You don’t read many failure stories on the net. People who somehow failed are not bragging on forums and blogs.

Anyway, I met Joe and asked him to tell me his story.

He quit Hooli and went back to his home country. He didn’t fully retire, but started his own consulting company. He mainly freelanced, working whenever he wanted for whoever he wanted. He said he worked at a very slow pace (I assume somewhere between 2-3 days per week, maybe even less) and he still made a lot of money.

“If your resume says you worked for Hooli, your hourly price can be very high. People will pay you a lot!“

He worked very part time. He relaxed. He traveled a lot.

“This last year (and half) was the best year of my life!”

Holy sheet Joe, what went wrong then?

“Well, my wife didn’t like living in our country, she wanted to come back to Switzerland. She suffered the lack of energy that this thrilling environment brought to her life. Plus we have a kid that’s approaching preschool and he might have more opportunities here…”

I asked him several other questions like “why not working part time here?” or “can’t you keep your consulting gig here instead of coming back to work?”. Problem is that they got used to high standard of living and maintaining the same lifestyle is very costly here in Switzerland. My guess it’s in the range 3-4x compared to his home country. We also touched investments topic and other money related issues but that was not the point.

The point is: Early Retirement is not as easy as you might expect.

It’s easy to get caught by the FIRE wave and go blind toward FI, thinking that everything will be awesome once you reach freedom, but it’s not always the case.

FI should be just a milestone, not the final destination.

You need to work on the psychological side along with the financial one.

What did I learn talking with Joe?

Several things.

1) If you plan to change your life together with your family, invest time to make sure you’re all on the same page.

You can’t go for it hoping your family will follow.

We, the RIPs, might be in this very situation. Mrs. RIP doesn’t fully get this FIRE thing. She understands the basic mechanics of it, but she still thinks it’s a fairy tale, not something that will one day happen for real. In order to prevent failures we should (and will) start talking more about our future life.

We might also experiment our future life a bit before going all in: taking a mini retirement when our daughter will be 1yo (summer 2019). We’re actually discussing this these days, something like a 6 months break from regular life to travel a bit and taste what life could be.

2) Even if you and your partner think you’re on the same page, take into account that things will change and neither of you knows right now in which direction.

Plan for the unplannable.

Yes, it’s a contradiction I know.

At least try to be resilient. Be sure you have a lot of bullets in your gun. If you’re not complaining right now that you have too little free time and too many passions and projects you’re not devoting enough time to, then you’re in a bad spot and your ER might fail.

3) Once you get used to a certain lifestyle, downsizing is very very hard.

I don’t mean objects or stuff. You can always declutter and be happier. I’m talking about objective standard of living. Joe mentioned that his wife was scared when buying groceries in their country. After years of living in Switzerland you become spoiled. Physical safety, efficient public transport, amazing health care, lack of diseases, clean environment… here you can trust almost everything and everyone. You don’t want to move back to a place where traffic jams are the normality, shops are dirty and mosquitoes are everywhere. Not to mention political instability and crime rate.

Life here is expensive, but once you get used to this standard of living you don’t know how you were able to survive elsewhere.

I don’t know if there’s a word for this phenomenon. I wouldn’t call it hedonistic adaptation since we give a negative connotation to that.

The point is: do your best to resist the urge and the social pressure to adapt to a comfortable life. Do what Seneca did: sleep on the floor once per week! Rehearse poverty from time to time. Experiment zero spending weeks. Do what Pablo Picasso wanted to do: to live as a poor man with lots of money!

4) Corollary: retiring in a different country is hard.

Quitting the rat race is emotionally difficult, we all know that. You will feel guilty, you’ll lack your job title and its prestige, you’ll be scared that you could be seen as lazy, selfish and useless. It’s a big change and everybody says it’s not as easy as it seems.

Now try to add to this that you’re going to relocate to a different country. Boooom! Even if the destination country is your home country, don’t forget you’ve settled in your current country. You have new friends, you have your routines and you adapted to the culture, the food and even the weather of your current country – I don’t know how I was able to survive 40 degrees summers back in Italy!

Teleporting your family to your home country and quitting the rat race at the same time might feel like a complete loss of orientation in life. Let’s call it reverse homesickness!

This makes me feel like it would be nearly impossible to consider places other then Italy or Switzerland as geographic arbitrage for our FIRE life.

Unless we’re going to build a FIRE community, of course!

5) Kids make you redefine your priorities.

I could be wandering around forever, with a backpack and a couchsurfing account. I could convince my wife, eventually. But what about kids? Who am I to define what’s best for them?

Joe told me “either we move back within 2 years, before our kid goes to school, or we stay here forever“. You’re not only driven by what’s best for you, you’re also – mainly – driven by what’s best for them.

I’m going to become a father in few months. Luckily (hopefully) we will reach FI before she’ll go to mandatory school so we have time to ponder the choice, but her presence will impact our decision anyway.

6) Joe was happy living his ER life.

Finally a glimmer of hope!

My main fear when I think about ER is “what if I discover I miss my previous life for some reason?“. That’s my nightmare. I know it’s very unlikely, but I can’t stop thinking what a big failure would it be if I myself would start regretting my decision to live my life in a brave but extravagant way.

“This last year was the best year of my life!”

Joe’s words are full of hope. Life after ER is likely to be awesome, and opportunities to make some extra income (in case you’re scared you’ll run out of money) will come to knock to your door.

Bottom line

FIRE doesn’t equate to happiness. FIRE can be dark and full of terrors! I recently read an amazing article about the dark sides of FIRE, I strongly recommend you to go read it.

The more I move toward the light the more I question myself: is this the right goal? Am I doing it right? What else could I do? Am I prepared to afterFI life? Is my family prepared? Is ER the solution? What alternatives are there?

There are alternatives:

• Just keep working until traditional retirement age. Still save some reasonable portion of your income, but enjoy luxury a bit. Aim to FI, in a longer time frame, but not to ER. FI is always good. In the end it may not depend on you (you might get fired). Not for me, I guess.
• Switch to working part time, forever. 80% or, better, 50-60%. Still aim to spend less than you earn and eventually reach FI at one point. This may be a valid option for us.
• Work in bursts and take mini retirements, forever. Like work for 6 months and then take 6 months breaks each year. Harder to do while working for a regular company, perfect for your consulting gig. Still aim to spend less than you earn, on a yearly basis. This is something I actually like, but better to reach FI first.
• Coast to FI with current Nest Egg and in the meantime do some fun-but-low-paying job. This is the famous BaristaFI model. This might have worked if I were single and free, not with a family.

These models allow you to not revolutionize your current life and avoid the shock associated with a life changing sudden early retirement. These models may work if you, in the meantime, have built a life you don’t want to escape from, if you’re working a job you don’t hate and if you’re not sure you’d be enjoying an overwhelming amount of free time.

Do not worry friends, I’m still aiming for the full-optional-no-bullshit Early Retirement 😉

I wish you the best, Joe!