There’s a poll at the end of this post, so please vote! With all the buzz going around in the personal finance sphere about who’s retired, early retired, or not retired at all, I thought I’d introduce the candidates and let you decide. You can also check out PK’s post on Don’t Quit Your Day Job or Darwin’s Money to get an idea of what’s at stake. Are you considered retired if you live on $10K a year and need to work to afford any luxuries, healthcare, or clothing?
To me, being retired is different from being financially independent. If you’re retired, you’re not working much, maybe playing golf and living off a pension check. If you’re financially independent, you don’t need to work because your passive income covers your bills, but you can still choose to do things you enjoy. Some people hate working for a boss, and being financially independent means no more bosses. You work if and when you want to. The common thread seems to be freelancing, contracting, or working for yourself, with no one else telling you what to do. Because your bills are already covered, you can take risks with fun projects that you enjoy and often end up making money from them because you’re good at it.
ARE YOU RETIRED IF YOU HAVE A BLOG?
There’s a debate over whether people who run blogs are truly retired. I think it’s similar to writing your memoirs as a hobby when you’re really retired. If you run a blog as a hobby and it makes some money, great—you’re still retired. But if you spend 20 extra hours a week optimizing SEO and maximizing ad revenue to pay your bills, that’s work. It’s funny how some bloggers say they’ve moved to self-employment, while others claim they’re retired, even though both put in the same time and effort.
SO WITHOUT FURTHER ADO, WHO DO YOU THINK IS RETIRED?
Jacob from Early Retirement Extreme: He retired at 33 with a monthly allowance of $700. He eats lentils every day, takes cold showers, lived in a trailer to save on rent, and recently took a job to afford an apartment. He doesn’t blog much anymore.
Mr. Money Mustache: He can live on $25K a year from his investments but often takes on construction jobs because he enjoys them. He says he’s retired because he doesn’t need those jobs to live.
Joe from Retire by 40: It seems he needs extra income from his website and his wife’s salary to make his budget work. He couldn’t stop working online right now but does what he loves.
Sam from Financial Samurai: He manages several websites and aims to make $200K a year from them or might go back to a job. He works 20 hours a week on his sites, even though he has the highest net worth among our early retiree panel. He doesn’t want to touch his savings and lives exclusively off his online income. He even missed a tennis tournament because of business commitments and doesn’t like to take more than 20 days off at a time.
Me: I don’t usually call myself retired, just retired from the corporate world. I could live off my investments without working another day but need something to occupy my time. I’m developing a guest house, working on a 90-acre piece of land, and running a blog—all fun projects that make or will make money someday. I enjoy diving and often think about ways to monetize it by taking others along so I can dive for free. I don’t dream of making millions but do aim to offset my living costs through these ventures. I travel for extended periods—spent two months in Morocco in 2010, six months in Mexico and the US in 2011, and six months in Europe in 2012—and even managed to offset some travel costs by writing travel articles.
Grandpa and Grandma: At 85, they work over 20 hours a week as an accountant and event planner for various charities. They do it for free but with the dedication of paid workers. The charities wouldn’t function without them, and even though they’re getting tired, they feel they must continue helping. They live off Grandpa’s government pension from his time as an army general during wartime, which is quite comfortable.
Let’s vote! I’m new to this poll thing and not sure if the results will show immediately, so I’ll publish them in a Friday recap next week.
PS: This isn’t meant as an attack on how these people market themselves or their lifestyles, just a fun way to see what the general consensus is.