In June 2012, at 34 years old and after 13 years of working in investment banking, I wanted out. So I decided to negotiate a severance, retire early, and live off passive income through my rental properties, stock dividends and e-book sales.
But just one year in, I realized that the life of travel and leisure I thought I wanted wasn’t for me. I found myself bored and felt a loss of identity. I needed an outlet and wanted to do work that I was personally invested in.
While it’s been more than 10 years since I stopped working full-time, I wouldn’t say I’m retired. Instead, I refer to myself as a “fake retiree” because I ended up taking on some side hustles to fill my time.
Here are six surprising lessons I learned after 10 years of being “fake retired”:
1. There’s no shame in being “fake retired.”
I’ve shared a lot about my early retirement journey, and one of the biggest pushbacks I get from readers goes something like: “You’re still doing some sort of work and getting money in return, so you’re not actually retired.”
That’s a fair point, which is why I think more people should embrace the term “fake retirement.” Many of us early retirees are writing blog posts, recording videos, creating e-courses, writing books or selling art. I still run my blog Financial Samurai, and I just spent two years working on my personal finance book, “Buy This, Not That.”
A lot of early retirees are working harder than ever by building their online businesses, even if it’s just a short-term passion project. The extra money they earn might not be a necessity, but it’s a nice bonus.
By proclaiming myself a “fake retiree,” I’m owning the criticism. Yes, I could sit on the beach and drink piña coladas all day if I wanted to. But I don’t. I want to work and be productive during the week, which for me is about two to three hours a day.
2. Your financial needs will evolve—and likely grow—over time.
When I retired, I was happy with my $80,000 per year in passive income. But in 2015, my wife joined me in early retirement. We calculated that we’d need to generate $160,000 in annual passive income to cover the loss of her income.
We were also planning to start a family. Our son was born in 2017, and our daughter in 2019, so our financial needs kept rising. Paying $2,200 a month in unsubsidized healthcare premiums — plus $5,000 a month for preschool — adds up.
With inflation running at 40-year highs, we must generate more income once again. That’s three major overhauls of our budget…
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