Mr. Money Mustache vs. the Internet Retirement Police
“He’s not really Retired.”
“It says right in the blog that he does construction work. Also he manages his own rental houses. And has a blog. That doesn’t sound like retirement to me.”
“That Brief History of the ‘Stash stuff doesn’t add up to me. I think he’s making it all up.”
“Yes, he has a nice nest egg. But I suspect he’ll be working for a good part of the year.”
“Who the fuck“, you may ask, “are these people?”
That’s what I asked more than a year ago, when first alerted to the presence of a large number of people who I’ve never met, who were carefully and yet completely inaccurately speculating about the life and times of Mr. Money Mustache. Lucky for me, the answer came immediately, in this brilliant poem/comment that Jacob from Early Retirement Extreme posted on this blog:
In principle you can only participate in certain pre-approved retirement activities such as beach-sitting, staring out the window, and receiving visits from your grandchildren.
Traveling is also okay, as is eating “delicious food”, just make sure you don’t cook it yourself, see below. Think twice before doing anything that’s not on this list! The IRP is watching you.
The IRP does grant one exemption should you become bored with the activities above. You can work for a nonprofit organization. Make sure you’re not getting paid though even if you have to plead your case with the CEO to put in special exemptions. Accepting money obviously means you didn’t do your retirement-math and that you ran out of money a couple of years after retiring. After all, what other obvious explanation could there be? (Besides the obvious ones) If you can’t find a way to work without pay, it’s best to head back to the beach towel and sit on that.
Just to be clear: You’re most definitely NOT allowed to be a kayak-instructor in your retirement. While it may sound like a fun job that you picked yourself even if you didn’t have to, the keyword is J-O-B. You can, however, spend a Saturday morning dressed up as an elephant handing out fliers and free lemonade at the entrance. And if you really must instruct in kayaking, please avoid doing something more engaging than blogging about kayaks (and if you do blog, try not to make the blog popular… because … then the blog would be a job!).
Next, I feel like I should warn MMM readers lest they stumble into the retirement pitfall of saving money by living frugally. You can’t do that! According to the IRP saving money IS a full time job and—try to follow this—since you can’t have a job and be retired, you are not allowed to save money in retirement. You see, if you save money by doing your own cooking, you’re now WORKING as a cook, thus no longer retired.
The IRP would like you to take this to its extreme logical conclusions, e.g. you’re working as a money manager if you handle your own investments, you’re working as a gardener if you mow your own lawn, you’re working as a chauffeur if you don’t hire a driver, you’re a pro-blogger if you have a blog, and so on.
Disclaimer: All examples are taken from real world cases as presented to me by the IRP. They’re not kidding!
Jacob wrote that comment hastily in the discussion section of First Retire, Then Get Rich, but I immediately Tweeted out a link to it, sending a warning shot across the bow of the Early Retirement Police Boat. And now, at long last, we are going to sink it for good.
At issue right now, is the definition of “Retirement”.
“You’re not retired if you work on houses”. If I can somehow suppress my urge to build things and sit inside, THEN will I be retired? What about if I work only on my own house? Retired, or no?
“You’re not retired if you have a rental house”. If the tenants never call me for any reason (as has been the case for the past two years), THEN am I retired?”.. or if I sell my rental house and transfer the money to a REIT which offers equal yield, can I be retired then? What if this is less fun? What if I subsequently do a bunch of research on REIT funds and allocate my investment across several, rebalancing occasionally?
“You’re not retired if you have a blog that makes money – even if it’s about early retirement”. If I take down the remaining ads, THEN can I be retired? Or is the work involved the issue? Would I be retired if I had a robot that wrote the blog for me, but I collected the revenue?
What if I still did the writing, but I did it only while sitting on the beach while being fed intravenously. Would I be more retired than if I wrote it from my couch at home as I do now?
“It’s a shame we don’t have a better name for all this stuff we’re doing as Mustachians. Retirement doesn’t sound right. Financial independence comes closer. Can we invent a new word for it? How about Removed?”
News Flash: the perfect word has already been invented. Are you ready to hear it? Here it is:
Retired.
It’s perfect just as it is. It’s just like “Financially Independent”, but it sounds more amazing and it uses 75% fewer syllables.
“Retired” means you no longer have to work for money, and you are aware of this fact. You can then proceed to do whatever you want, as long as you do it consciously and of your own accord. If you meet this condition, and you feel retired, congratulations, you are.
Retired probably does not mean you sit at home watching TV, venturing out only for medication or a motorized-cart-aided round of golf. This is a subset of retirement, but only a very special case of it, for those with very advanced age or limited mobility.
Retired means different things to different people. But one of the rules of Mustachianism is that if someone tells you they are retired, you do not question them. You congratulate them.
Retirement may or may not include any of the following lifestyle attributes:
- the complete abandonment of alarm clocks, and a soft chuckle specially developed for anyone who tries to make you be somewhere before 9AM.
- a general lack of awareness of what day of the week it is
- a work ethic that ebbs and flows with your natural human cycle. There may be times of extreme productivity and late nights, and other times of dormancy.
- work and areas of interest that change over the years, some of which might earn you money, and some of which might be neutral or even involve spending instead of earning money.
Or it can be completely different. The only rule is that you theoretically must have sufficient savings (or other assets) that you could live indefinitely off the passive income they provide, and these savings must give you the freedom to realize that any work you do is totally optional. You don’t actually have to live off the income, it just has to be there.
So there it is – the official definition of Retirement, of which Early Retirement is just a special case.
Why does Mr. Money Mustache get to define it? Because I have the biggest Early Retirement blog. If the Internet Retirement Police would like to supersede my definition, they will have to start their own blog, calling it something like www. mrmoneymustacheisnotreallyretired.com, build it up to be more widely read than this one, and then propose their own definition. Only at this point would the torch be passed and the definition of Retired be up for discussion.
Thousands of the Mustachians who read this blog are already Retired. Most of them still do some sort of “work”. And all of them have fists brandished in case the Internet Retirement Police dare to show their faces around the Internet again.
Further Reading: Jacob @ Early Retirement Extreme responded to this article a few days after publication.
Article: How To Start a Blog
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Mr. Money Mustache is a family man living in the United States who retired from work, relatively wealthy, at about age 30. After several years of retirement, he noticed that his still-working peers were envious of his lifestyle. They were making more money than he ever had, yet they were somehow still broke. So he decided to write this blog to educate the world on how it is done.
Even millionaires and billionaires continue to work, even many of the older ones. Not all of them, but I would say most don’t spend 365 days partying, sleeping and staring at the ceiling. People just aren’t made to do nothing. The younger you are, the more true that is.
As far as the word “retirement” goes, everyone understands the general idea: you don’t have to work for money anymore. Whether you choose to do paid work, non-profit work, volunteering, part-time, full-time, or nothing at all doesn’t really matter. Same situation, different circumstances. To each his own.
Congrats to MMM and all the others who can choose to work or not.
“As far as the word “retirement” goes, everyone understands the general idea: you don’t have to work for money anymore.”
Well, no: that is not the idea of retirement that most people have, because there at a lot of fairly hard-working people out there who don’t HAVE to work for money any more – they could just bank what they have and live a life of complete idleness. This includes people like Warren Buffet and the rest of the billionaire guys at Google, Facebook, and so on; it includes a lot of successful sports & entertainment people. Do Mick Jaeger or Bruce Springsteen really need the money they’ll earn from their next tour? Does that rookie NFL quarterback who gets a $5 million, 4 year contract really need to work a 5th season? Heck, didn’t Obama have enough to retire on without running for a second term?
No, retirement is when you stop working, either from choice, or because (as with e.g. airline pilots) age laws force you to give up a job you enjoy.
Uhh.. I hate to embarrass you in public like this JamesQF, especially since you work in the tech industry…
But it looks like you typed that whole comment into the wrong blog! This isn’t your new blog you’re writing on – it’s still mine. See the fancy Mustache coin logo at the top? That’s my logo.
In order to get any traction with your ridiculous attempts at redefining retirement, you’ll have to do it on JamesQF.com or whatever. If you need help in getting it started, see the earlier article on “how to start a blog”.
I’ll do my best help you out from my side by deleting any additional IRP-type comments that you accidentally post here, instead of there.
Sorry to be so candid, but you’re asking for it here!
;-)
Have to take issue with your examples. Buffet is just doing what he wants to do. Mick and Springsteen are just doing what they want too. In fact, Bruce spent tons of time touring with Obama for no pay as a way to bring out the vote in 2012. Nothing to do with money at all. The other examples are people who are getting glory and competition (QB) or power (POTUS). Again, nothing to do with money.
A better example would be to point out the waiter (who really wants to be a singer) who continues to wait tables. Or the telemarketer (who wants to be an actor) who keeps cold calling 40 hours a week. Or the programmer (who wants to be a rock climber) who commutes and codes everyday. These are people who are not retired.
I hear ya brudduh. I retired early the old fashioned way. Cop for 25 years. Saved all those years too and retired at 51. The pension is so generous I don’t need to touch the savings, kids are still in school. House paid off. Life is good.
I think the IRP and people in the real world harrasses all of us no matter what. People hate when I tell them I am retired. I get “what do you do all day, sit around and do nothing” , ” you should start another career, you’re so young” There are a lot of “what do” questions and “you should” suggestions from people who I don’t even know.
I think people try to justify why they do not, and cannot retire more than they are interested in what I do or should do with my time in my own retirement. I don’t believe I ever got a congratulations from anyone now that I think of it. It’s been six months and I took this time to do nothing. NOTHING! I go to the gym, take care of my kids and help out my aging mom. Late sleep and long coffee breaks fill the voids. I am so giddy every morning when I wake up, I just may spend an extra two months on this schedule.
I have a wood shop and metal shop waiting for me. I have many projects and enough time to pick and choose them and finish them on my own time. If any of my interests happen to generate income, so be it. I’d consider my retirement even more splendid if that happens.
By the way, congratulations on your early retirement MMM.
Steve
Las Vegas
Awesome.
PS-Congrats on your Early Retirement, truly Badass!
Congratulations from me as well.
I’m slightly surprised the IRP gives you a hard time. You currently do “nothing” except drink coffee and take care of your family. Which is actually quite important but are standard retirement activities. The other things you mentioned, the wood shop/metal shop, those too are very standard retirement activities. Lots of old guys “tinker” in their shops and wander the isles of the hardware store. It seems like most people should understand your retirement lifestyle immediately.
One thing I’ve heard is that people who retire early often die at a younger age than those who have a job their whole life. Maybe that’s a topic for another article or topic on the forum.
Whoa, easy there AEB! While I like to cultivate a leisurely vibe in my lifestyle descripiton, I’m not sure that “nothing” description is quite right! Sure, I have a coffee each day and I hang out with my son whenever he’s home. But I’m wearing work boots right now, about to walk over to the construction site where I’m building a huge master bedroom addition for/with a friend. While I only do big projects like that once or twice a year, it’s important to note that doing hard work is still compatible with being retired. That just happens to be my favorite way to socialize and get some fresh air.
MMM, I only said nothing because that’s how Steve described it himself. I think that taking care of your family is the most important thing a person can do and would definitely not refer to that myself as nothing.
No disrespect was intended.
Um, MMM not to tell you you might have spinach in your teeth but I’m pretty sure AEB wasn’t referring to you at all with his comment.
AEBinNC wrote “One thing I’ve heard is that people who retire early often die at a younger age than those who have a job their whole life. Maybe that’s a topic for another article or topic on the forum.”
From the largest study on mortality and early retirement:
“On the contrary, if we take into consideration the amount of days spent in hospital during the last 2 years prior to retirement, early retirement in fact lowers mortality risks significantly by 12% for men and by 23% for women.”
http://www.ncbi.nlm.nih.gov/pubmed/19467567
AEB, your bitterness is showing.
That’s good news to me. I’ve often heard it repeated that those who retire early don’t live as long. It wasn’t something I spent a lot of time worrying about but it was on my mind. I’m sure that people who retire but continue to workout and pursue interesting things live longer than people who retire and spend all of their time watching TV.
Or maybe people who are in poor health tend to retire early for health reasons. There may be a connection between retiring early and dying early, but I suspect the IRP has it backwards.
IRP sounds like a nursing home.
MMM, thank you for defining “retired” for the world; your definition is good enough for me. When I am not working I sure feel “retired” enough to do my own thing: run and work out, cook, drink wine, read, study, blog just a little…it’s awesome. Of course explaining this to the working dead, debt slaves, and workaholics is usually futile. Unfortunately, most people cannot even imagine what it’s like to be free enough to spend time pursuing their interests.
As of a month ago, I went from “retired” to “unretired” when I took a mid-year teaching job at a public high school. I took the job to blow out some retirement accounts before hitting another phase of my retirement. I plan on saving at least $25K from my 4.5 month work commitment, so financially it’s worth doing. However, knowing that I don’t need the job and that I will (most likely) be leaving in May makes going to work very doable. Sure, work takes a lot of my time these days, but I don’t find myself worrying about work at home. It doesn’t make sense to worry about something that will end in a few months any way. Working while retired sure has its advantages.
I think what is actually going on is once you are doing something that makes money in your “retirement”- there are a large number of people (who are probably not regular readers) who basically don’t “trust” that you don’t need the money you are earning (either 1) the actual dollars or 2) the safety factor) to be financially independent.
Something they might be comparing it to, is if they or their friends had enough money to quit (say they had a pension that covered their expenses) but engaged in “just one more year” type thinking before they quit their jobs, they would not consider it retired.
I think its hard to make people see the distinction (which depends on what you claim is going on in you head vs what they believe is going on in your head) in any one post. It is much easier for regular readers who hopefully already trust that you are speaking honestly to them.
also who died and made (IRP) the boss/Police (and are they getting paid for it).
I used to talk about saving for retirement quite a bit and my family hated it! They had the “fold up and watch cable t.v. all day” idea in their heads. My boyfriend even got mad at me for talking about it “too much”. It was, and is, a big goal of mine! And I never, ever, meant I would quit working. My retirement is just as MMM describes: doing something I love. I could never give up working/learning or even making some money. I love to make money (who doesn’t?!). At any rate, it’s nice to have a group of people who understand a goal I’ve been after for years–fuck you money. And then, I’ll do whatever the heck I please, all damned day.
I see a lot of comments on here about not being able to take the job you want until you retire. If you have minimal expenses, couldn’t you take your preferred job right now, even if it was lower pay?
In some sense this might be the best of two worlds, enough money to be comfortable, but not having to wait 5, 7 or 10 years to get there. Of course that means it will take longer to earn your complete freedom. The upside is that you start doing something you love immediately, rather than a decade from now.
I think that’s going to be my strategy, take the tools from MMM and ERE to reduce my expenses. Then try to find some freelance work or rental property so I work 20-30 hours a week rather than the current 40.
Making money IS my hobby.
No need for IRP – I have my own retirement police at home. Whenever I mention early retirement, my husband’s first remark is: ” But I don’t want to be sitting around all day! I’d rather go to work and keep myself busy.” Right. And redefining this term is not easy for him or for many other people.
My husband has the same opinion of retirement, that he clearly got from his Mom. I once made the mistake of telling her that I was planning on retiring at 50, and she asked what I would do all day.
He shares the same opinion of ‘retirement’ but I’m sure he’ll be alright with it, when we can afford to travel, and his siblings are still paying mortgages.
To the people arguing about retirement, I’m confused. Educate me please.
Lets say I’m retired and I love classic cars. I even have one. It’s a basket case with good bones. I take everything apart, and put it back together. It’s fun! Now I have a flashy ride. I hear about another, even cooler basket case. I buy it. I take it apart. I put it together! It’s fun! Now, everyone in town knows about my flashy cars. Someone approaches me about buying their basket case – the coolest car ever! But I don’t have room for another car. The first one was fun, learned a lot. Now I want the much cooler one! Can I sell the first one at market rate – say $50k, or do I have to sell it for what I paid for it, plus parts – say $8k? If I “profit” $42k on a hobby (one which was never intended to be paid), am I still retired? Basically, the real question I have for you is; Does intent matter?
After consulting a professional Internet Retirement Policeman and investigating IRP code, profit from hobbies is permitted ONLY if it is unintentional and spent on vacations AND/OR ice cream and baked goods for grandchildren. The fact that you were engaging in a hobby which could reasonably be expected to generate profit is very suspicious though.
I think the answer comes from whether you’re doing the labor to pay your bills or whether you’re planning to donate the proceeds to charity (and take a healthy tax deduction).
I appreciate the advice. I’m nowhere near this situation, but if something similar comes up, I just want to sure of the rules of “retirement”. Thank you for your excellent replies
When I say that I plan on retiring by 40, I get the side eye too. It all depends on what “retire” means to you. To me it means not HAVING to work for someone else.
I don’t know why people confuse the definition of Retirement, it’s not rocket surgery…
You’re retired as soon as going to work on Monday AM is optional.
Wow, I just found out I have been retired since the age of 24 with this definition.
I’m half tempted to start a business as an instructor to teach people how to stand up and get their thumbs out from their asses.
But then I’d be accused of not being retired…
I don’t know how I stumbled across this blog but it’s the best I have read and I can’t get enough of your articles. let me “bow the fuck down” as I am 36 and sitting here in an office at work as I type this. Luckily for me, I am not in a cube so it looks like I am working even when I am clearly goofing off.
Another problem I have is I do like my job and they pay me a lot for relatively little stress, but I see extreme value in even less mandatory work because both my wife and son have been vomiting this week, this is a heavy work load for one parent to have to handle all alone. My net worth, not including my house is 580k, I suppose I should retire ASAP but we have some work to do on the expenses. In the meantime, I read this site and I drool. Thank God I work with nice people or otherwise this would be unbearable.
You can personally prescribe to whatever definition of “retired” or any other “controversial” word if you don’t agree with the alternatives. But its a mindset and a lifestyle choice. MMM doesn’t have to work. That means retired. You can do the whole 9-5 til you’re 65 routine since that is the predefined, accepted definition of the word. But who wants to work that long?? Its 2013, and we have other options, and great resources to help us.
The dictionary is no help.
Merriam-Webster defines retirement as “withdrawal from one’s position or occupation or from active working life.”
Oxford: “the action or fact of leaving one’s job and ceasing to work.”
Now define withdraw, position, occupation, active, working life, job, work, career, and employment. The dictionary definition isn’t as clear as the IRP want it to be.
Like Jacob said, if you define retirement the IRP way, as ceasing from absolutely all work of any kind, then many people who are definitely retired would not qualify, so that definition is broken.
It’s a matter of degree, and MMM is definitely retired to the degree required by the dictionary definition, having withdrawn from his career and now doing whatever he wants.
Exactly. Both MMM and I left our jobs. We Retired. We don’t do that work anymore nor will be ever do it again.
Since then, we’ve found that doing occasional work is very rewarding – in fact, it has become a mandatory part of our Retirement (as I’m sure it is for MANY retired folks). Much of this work is unpaid. Sometimes we get paid (like with this blog). What happens to that money? Does it get spent to support our lifestyle? NO. In fact, there’s too much of it and we need to figure out how to do something great with it. Something that will hopefully help a lot of people, a community, and change lives.
The really important part about Retirement is learning new things, connecting with people, etc. I spent the last 2 days learning about Thesis 2.0. Did I get paid for this? No.
Because MMM talks so much about working hard and enjoying work in this blog, it might be misrepresenting what is really happening around here on most days. Things are very relaxing, sometimes too much so that we need some added stimulation. Between the hours of 10 and 2, we might do the occasional work, but being parents is the main thing we do. We always eat breakfast together and have lunch together everyday. We go on walks during the day. Sometimes we even go out to lunch. I go to crossfit during the day 3 times a week, we volunteer at school regularly, I sit at my computer and learn a new skill occasionally. We take care of household things, do groceries, make dinner, etc. MMM is currently helping a friend on a construction project during the days. He loves it.
We never ever work unless we really want to. The work is usually never long (maybe 1-2 hours and for MMM that is usually writing a blog article). We absolutely do NOT have careers of any kind.
We go on long vacations, spend time with family, go on hikes and bike rides, etc. We sit around and read. It’s all the same as what a “real” retired person would do.
We have ONE rental house. We haven’t dealt with anything related to that house for probably at least a year. Money comes in from that, but we don’t do anything. It’s just like an investment.
Being creative, having goals and ambitions, being excited about entrepreneurial activities, etc. does NOT stop the minute you are retired. In fact, those things GROW. They grow a lot. They grow so much that you can’t wait to do things and become better, to live your life in your own way. You can’t stop that from happening, especially if you’re Retiring Early. There’s still so much life left and so much to do.
It’s pretty Awesome. But there’s no doubt that it’s still Retired.
I’m actually amazed that regular MMM readers are commenting here and saying otherwise. It’s pretty ridiculous. Who wants to sit around and do nothing in Retirement? Only the people who work too long and don’t realize that there’s more to life… by the time they retire, they don’t know what to do with themselves anymore. When you Retire early, you have plenty of time (and energy) left to figure that out.
I am also surprised that others are arguing that you aren’t retired. I mean, if only one of you was retired and the other working, you’d probably be considered a “SAHP”.
You can work and be retired. If you aren’t beholden to anyone. And it’s fun to “work” and learn new things too.
I am not retired, but I think about it from time to time (we could both be retired now if we left coastal southern CA for a cheaper place to live. For now, I’d rather live here.)
My stepdad is retired. He couldn’t WAIT to retire. What does he do now? Well, he’s got acres of land to maintain, a house and a cabin to work on. He collects cans. There is no real recycling in his rural area, so he has a “route” that includes friends and relatives and a couple of golf courses where he sets out recycling bins. He keeps them in the barn, sorts them, crushes them, and takes them to the city to recycle (and pockets the money). Yes, he makes money, but it is fun for him and he’s only 65.
I guess he’s allowed to be “retired” at that age.
My FIL is retired (he was a lawyer). He loves to spend money on gadgets and is always complaining about not having enough money (cheating on your wife and ending a marriage after 43 years will do that). Yet he refuses to work! He has several lawyer friends who offer to throw a little business his way. A few cases a year would go a long way (he’s a personal lawyer, wills, etc.) Absolutely refuses.
This entire comment made me smile. You rock Mrs. MM!
Mrs. MMM – I actually find your comment more inspiring than the post and the post was pretty good. Maybe you should post more often.
Awww… thanks guys! :)
I have been thinking about writing a “what do we do all day” post, but I pretty much laid it all out (but in a totally unedited and messy format) in this comment. Ha!
I may still be slightly traumatized from the last time I posted (just kidding, sorta), so I’m sticking to more factual posts for now — like “how to start a blog”, which was mostly my content, as well as the $10 iPhone one.
I might cook something up in the future just for you though. ;)
Please do. The Mustachian lifestyle for a married couple is a very powerful way of life. My wife and I are both still within the first year of reaping the benefits and looking at early retirement.
As such, I (and my wife) always love to hear what MMM’s Tag Team partner has to say. So by all means, please share your thoughts when you feel compelled. We enjoy it.
Between the hours of 10 and 2, we might do the occasional work, but being parents is the main thing we do. We always eat breakfast together and have lunch together everyday. We go on walks during the day. Sometimes we even go out to lunch. I go to crossfit during the day 3 times a week, we volunteer at school regularly, I sit at my computer and learn a new skill occasionally. We take care of household things, do groceries, make dinner, etc. MMM is currently helping a friend on a construction project during the days. He loves it.
—
I have to say, your lifestyle must make it particularly easy to have a rewarding personal relationship with your significant other. For some people, finding enough time to grow a relationship can be a real challenge and this should really be expounded more as yet another benefit to the ERE lifestyle. Self-inflicted stress from trying to “keep up with the Joneses” and always earn earn earn (because people spend-spend-spend) can easily destroy relationships.
I know I for one, would enjoy reading an article on this site about that side of things, hint hint :)
“In a world where no one is compelled to work more than four hours a day, …Young writers will not be obliged to draw attention to themselves by sensational pot-boilers, with a view to acquiring the economic independence needed for monumental works, for which, when the time at last comes, they will have lost the taste and the capacity. . . Since men will not be tired in their spare time, they will not demand only such amusements as are passive and vapid. At least 1 percent will probably devote the time not spent in professional work to pursuits of some public importance, and, since they will not depend upon these pursuits for their livelihood, their originality will be unhampered, and there will be no need to conform to the standards set by elderly pundits.”
-Bertrand Russel, In Praise of Idleness
This reminded me of your classic “complainypants” post. I liked that one, and the word itself, I just figured out a way to link to it in my last post.
Mmmm…
wonder how I can use this one….
think that domain is still available?
In this article (which is excellent, by the way) you state that the only rule for being early retired is to have passive income that matches or exceeds expenses. I’d like to submit that even your ONE RULE can usually be THROWN OUT.
For example, my own passive income only meets about 25% of my expenses on average and I take on various casual projects at my leisure for on average an hour a day to make up the rest. You do something similar with your construction business.
As you’ve said in a previous post, you have earned more money per year retired than you’ve spent. I’d like to submit that this is true for a significant percentage of early retirees! So why do you need 100% or greater in passive income to retire? Why not just have enough saved up and retire on that without a defined plan?
I know a couple of guys at work that are at the cut off point- they could tell the boss to suck it, walk away, and never worry about a paycheck again. They stay because they like keeping mentally active, and they enjoy the friendships.They’re very happy, relaxed, with absolutely no distress at all over any the little problems or office politics that have the rest of us freaking out. If that’s not retirement, it’s sure as hell close enough for me!
MMM,
Great stuff. Brandish that fist!
The idea of retirement as slothing around on a beach or couch somewhere for the rest of your life because you are somehow precluded from ever earning money ever again is completely ludicrous.
So if you retire early and want to help others and write a book on how you did it, you are no longer retired? You’re an author now? What if you give the book away for free? Now you’re not earning any money from it…so you must still be retired, right??
This is so closed minded. Really quite unbelievable.
Glad you posted this. This is something that really bothers me. If you earn money, even if it’s a hobby that you’d otherwise partake in for free, you’re no longer retired. It’s like the word retirement is completely focused on economic activity for these people, instead of the freedom and actions that are available with retirement.
To me retirement means being free. Free to do whatever the hell you want, for money or not.
Best wishes!
I think the definition of retired is so screwed up. We think of our old grandparents sitting around a dying a slow death. But come who world wake up, there are many forms of retirement. There is the world view of work a job, invest your paycheck in your employers 401k plan, then eventually you might have enough to stop working full time when or more likely than not your employer will fire you early because you are to old and slow and your employer wants to get out of paying you a pension.
People need to wake up and start living more like a mustachian, then they realize that life does not cost as much as corporate america would like you to believe and that you can only retire when you are half dead already, there are other options and ways to enjoy life.
“The only rule is that you theoretically must have sufficient savings (or other assets) that you could live indefinitely off the passive income they provide, and these savings must give you the freedom to realize that any work you do is totally optional. You don’t actually have to live off the income, it just has to be there.”
People can define words however they want, but all a definition does is let you put different labels on things. I suggest that what’s more important is how you live your life — your values and if you live by them — independent of what definition your life fits or not.
I think the key value in that definition is freedom. I would add a feeling of security too, though the definition doesn’t mention it.
You can get freedom and security through other means than passive income. Personally, I’ve chosen to have enough savings to last me way more than enough time to get a job if I have to and then to live my life how I want in that time.
You could say I don’t have the security of someone who could live off their assets, but many people who could live off their assets in 1929 found they no longer could in 1930. Or who worked in Enron months before its collapse, at the time considered a paragon of success, compared with after its collapse. Or before a war began compared to after.
In other words, whatever your assets and passive income, you still have risk. Anyone who thinks they have none is only fooling themselves. The question is how much.
I bet I could produce statistics everyone here would agree with that I have as much security, based on my skills and experience, as they do with their assets and passive income. So I’m not “retired,” but I bet my life espouses everyone’s values as much as anyone.
I know people who have virtually no assets, yet travel the world. Whole cultures don’t even have concepts of assets and income, yet people in them live lifestyles we might envy.
Consider an immigrant who works night and day to give their grandchildren opportunities they never had. They may never be “retired,” but they may feel more pride and happiness in their achievements than many readers of this blog.
Again, I’m not arguing with the definition. I don’t care what word someone else describes my life with and I suggest you don’t either. I just suggest you focus most on your values and the emotions you live by, which that definition puts second.
If you love your life and wouldn’t change a thing about it or a decision that led to it, who cares about passive income? If you don’t, I suggest no amount of passive income or savings will fill that gap.
About a month ago I read an excellent article which relates to this one: http://www.bankers-anonymous.com/blog/what-is-wealthy/ . One quote that stuck out to me was the following, “If you have enough assets plus passive income to cover your personal lifestyle expenses for the rest of your life, and that money allows you to work at something you love – without concern for the amount of compensation – then you are wealthy”. Based on this definition, it’s safe to say that MMM has not only retired, but is wealthy too. To that I say congrats to you and others who have reached this mark!
I like FINANCIALLY FREE. You’re not “retired” from all forms of work, but you are retired from the “rat race”, because you can go whatever pace you want (or just sit and watch the others run by, and not give a shit).
This is way too much text for something that demands a simple and easy to understand response (we don’t want to confuse the IRP right?)
http://www.youtube.com/watch?v=6wS5xOZ7Rq8
Done
Interesting discussion. I was semi retired doing consulting, and then offered full time employment on a fascinating project. I took it for the opportunity, but that comes with full immersion back into the workforce, 60 hour work weeks, etc. My time and schedule are no longer my own. However, on a macro level, it is a totally different experience.
I no longer make decisions influenced by the fear of losing my job or not being promoted. On more than one occasion I have (privately) voiced my differing opinion to the company president. I would have thought long and hard about that before. Now, I will tell him what he needs to hear, and if he decides he wants to fire me for it, it will be his loss. Surprisingly, it resulted in him promoting me.
On a micro level, that does not mean that there are not times I have to work weekends (which I hate) or work late into the night so the team can meet deadlines. But I always know that overall I am doing this by choice for the opportunity to work on this project, and that choice comes with some compromises, as well as a nice little cushion in the retirement calcs.
Yes, I agree totally with your definition of retired. I know several people who fit your definition– business owners that are retired and still own the business but don’t really do anything day to day and receive enough income to pay all the bills and more. Also, they may happen to do something else that happens to pay them something. Isn’t that retired? Heck yes! Who said retired meant pathetic.
I’m now lowering my lifestyle to the point that I’m going to be retired very soon too! (I was going broke and being whiny on a very significant passive income. All because I had to have….a 300HP luxury car, private clubs, food out all the time, expensive clothes, “the best” for my kids, etc. I’ve just been released from the Matrix. Thank you!).
If you think you are retired, then you are! It is a state of mind really and not a state of your daily schedule. :) We all have our own definition od retirement. I don’t really get it when people try to impose their definitions on other people. WTF really?
Well, I don’t care what anyone else calls this way of life. For me, it has simply been an awakening. A couple weeks ago, I stumbled onto this blog from a link on Ericas blog, Northwest Edible Life. I am eternally grateful that I did. I’m a 38-year old single mother of 4 and I’ve lived my entire adult life in debt, always going from paycheck to paycheck, often unsuccessfully. I’ve been unhappy, obviously, and stressed sometimes to my breaking point, but truly had no idea there was any other way to live. I guess that makes me naive or stupid to many people, but there it is.
I have spent so long just believing that this was the way life is, has to be, and I should just suck it up and get on with it, do the best I can. I was not a complainypants, I had just accepted that the debt-laden, depressing life I had is the only kind available tor lower to middle-class Americans. I felt lucky that I wasn’t born in the slums of , like I was “supposed” to and tried to put on happy face and make do. It always felt like something was wrong though, something missing.
Then I found this blog. I’ve read every single post here and most of the comments. You people are brilliant and inspiring. I know it sounds exceedingly corny, but this blog, this community has literally changed my life, and by extension, the lives of my children, for the better. Something WAS wrong with our life; something WAS missing. I don’t HAVE to live the way I was shown. Spending money I don’t have for things my kids don’t really need doesn’t make me a good mom. And, refusing to spend money on things that don’t enrich our family life doesn’t make me a BAD mom. (Eureka!) There are choices and I’m allowed to make them. I will not retire in 5 years; I have too much consumer skin to shed (read: debt to repay) for that. But, I can and will pay off my debts, live more consciously, and invest our money in our family, rather than the latest shiny thing. In 10 years or less, I should be free.
Long post, sorry. Point is: I don’t understand the hang up on what word is used. Retirement’s fine by me. So is any other word anyone wants to use, as long as you keep posting and showing people like me how to learn to really live.
Well written comment! I think you expressed what a lot of readers feel. :)
This nearly made me cry. :) Welcome to your future. It’s awesome.
Well-said, Jenstill, and thanks for sharing.
Team Mustache (MMM, Mrs.MM *AND* all the great commenters) has changed my family’s life in macro and micro ways FOR GOOD.
My Optimism Gun is locked and loaded!!!!
Wonderful! This is the type of change of thinking that I imagine drives MMM to write this blog. Hurrah!
The more passive returns i make from my investments because i saved over 60% of every paycheck starting a few years ago, the more secluded i feel on sharing this information because consumers and normal workers don’t want to hear about finances, frugality, or the many many options of investments besides a 0.01% savings account.
It seems like the longer they have been an over consumer, the harder it is to open their mentality for even a conversation. I am glad on got on board the ERE Mustachian bandwagon as early as i did, just the only place i can even talk about it is on these blogs and relative forums/ blogs. Heaven forbid if you got to a consumer’s website’s forums and start talking about FI there!
A huge reminder to the story about the Mexican Fisherman and the Capitalist, the Mexican Fisherman lived a lifestyle of a Retiree his whole life, as the Capitalist worked to death for a similar lifestyle in the end of his life.
Google Mexican fisherman and the Capitalist
When i was watching Star Trek: TNG, i was questioning the entire time if the officers aboard are retired or not, sense they have all they need and currency doesn’t exist anymore. Sometimes they seemed like volunteers just doing their Duty, but other times they were ordered to die for the “Federation”, like it was dying for Humanitiy’s sake.
Then again if i were retired extremely young, i would volunteer and be loyal to a Starship Captain to get the chance to explore the mysteries of deep space, as an engineer and a friend, without the need for profits.
I agree that “retired” or “financially independent” are perfectly acceptable words for mustachians to use.
However, that language isn’t very useful, in the sense that the mustachian doesn’t really fit the terms as they are generally understood. Thus, the mustachian who uses them faces making long explanations and/or long arguments with the IRP. Which is borne out by the preceding long series of comments.
The best descriptor I’ve found to date is “self-directed,” which incorporates the idea of being able to pick and choose the activities you engage in. “Self-employed” also isn’t bad, although it might be taken to imply that working for money is an essential element of one’s life. “FU money” also might work, although it might be taken to imply only that you are financially able to weather periods of unemployment after telling your (previous) employer “Hey bud, I’ve got FU money, so FU!!”
I am bored with being retired. I am fit, healthy and have a lot of experience – all going to waste. There, I”ve said it.
I am looking for a partner in a working guest farm that I want to buy in South africa (just outside of Cape Town in the Overburg area).
Anybody out there interested in a working retirement as a partner in a busy essential oil/ wheat farm/ guest house/conferencing/wedding and game farming business?
Call me +27 82 922 9893 or e-mail: anemari2602@gmail.com
Retirement sucks
I use various words to describe what we do, depending on the audience. Today we met a man in his 60′s, consciously counting pennies and living in lower cost Mexico because its the only way he can afford to not work. He also just went through a divorce and was feeling down, and coughed constantly through our conversation. I didn’t tell him I was retired, because I didn’t think he could handle it
We also met a girl in her 20′s who was a free spirit, working the occasional seasonal job to fund her adventures, because that’s what she loves. When she asked how we can afford to travel for so long, it was from genuine interest and curiosity, so I told her I was retired. She said, “That is awesome!” with a huge smile on her face
While visiting my grandparents before starting our travels, I also said I was retired. My grandfather, probably a card carrying member of the IRP, looked confused and said, “But not with full pay!? You are too young to be retired.” My grandma just looked at him sideways, and said, “Suck it grandpaw.” Go grandma! :-D
Just like not dropping F-bombs in church or in court, I tailor my language based on the situation. Channeling grandma is a lot more fun though. Suck it IRP!
Completely agree – there’s a lot of confusion around what exactly does “retirement” really mean – I have been confused about it myself. It’s easy to see where the confusion comes in. For example, I have written computer games for fun. If I do that in retirement that’s OK, but what about if I charge for the games and make money – am I still retired? Not according to the Internet Retirement Police! I am slowly building a picture of what my “retired” (that word again) life will look like – probably a couple of years away from it now – just waiting on daughter to finish University then I’m done. Thanks for this great article!
The IRP definition of retirement is nonsense. According to their standards, my parents are not retired even though they’re about to turn 80 and live in a retirement community. That is because they mainly cook all their delicious meals, don’t sit around staring at their navels all day, help care for grandchildren, and my father works part-time because he wants to. Actually my folks say that you would be surprised how many of their neighbors work at least part-time.
I attended a retirement seminar last year in which several speakers recommended that retirees have plans for how they’re going to use their time for at least 20 hours every week. Apparently this has been proven to benefit both physical and emotional well-being. It also leads to a longer and more fulfilling life.
I like your definition of retirement.
I’m single and looking to turn the corner toward my own early retirement at 45, though I’m still deciding whether best to sell my house with a mortgage on it or to rent out a room.
I’m also concerned that I might fall into a rut. Maintaining a positive attitude and challenging myself to be as active and social as I have been is important to me.
Anywho, thanks in advance for several articles that are getting me thinking outside the societal box!
River in PA
Boeing used to do seminars for their employees who were about to retire, hopefully they still do. Being a big company that had been around quite a while (and being full of engineers) they had built up a lot of data on their retirees in the pension plan and the most important fact they shared in the seminars was this:
If you sit on the porch after you retire you’ll be dead in a year.
The biggest lesson Boeing had to teach their retirees was that the IRP approved retirement would kill them in a year! This is a lesson the clearly applies to everyone including mustachian retirees and soon toos.
Bottom line, the IRP definition will kill you early if you try to live it and there is statistical evidence from IRP sources to prove it. Clearly they need a better definition and I heartily recommend the MMM version.