Why Should You Consider An Early Retirement? A Real-Life Story

Very warm welcome to the early retirement show. The show dedicated to helping you navigate the nuances of an early retirement, a nontraditional retirement. Now, let's get right into the episode so we can learn how to retire early. Welcome back. Back to the early retirement podcast. Today's episode is a super fun one where I walk through exactly why I went into retirement planning, specifically early retirement. And what I'm going to do in today's episode is walk you through the thinking behind why I chose this and exactly a few tips that you should follow if you do want to retire early, which, as you all know, if you've been listening for a long time, that it just really means financial freedom. When are you in a position where work is now optional? Where if you enjoy going to work, great, keep doing it. 



But if you don't enjoy going to work, well, when are you in a position where you no longer have to, where you are only working not because there's a financial need, but because you enjoy it? And so that's what we're going to be walking through in today's episode. But first, all of those who have been leaving reviews, thank you so much. Please continue to do so. That is how more people find the show. I do appreciate that. If you're on Apple podcast, you can go ahead and click Five stars as well if you have been enjoying it. And then lastly, thank you to all those who have been supporting the YouTube channel. I had a video get more than 5000 views recently, which is really exciting as more people are leaving comments and retirement, and specifically early retirement, is spreading that concept. 



And that's what I want to do, because the last thing I want is for someone to be working, hating their job, sacrificing their health, and sacrificing what I think is even more important. Well, I don't know about more important than health, but more important meaning their time. What if they could do more with their family and they're just not because they don't have a plan or they're just stressed out about retirement, they don't know, hey, what are the logistics of that when it comes to filing Social Security, when it comes to actually moving over a pension, how do I do that? But then also, what is the best optimal strategy for my situation? So that is what we're going to be walking through in today's episode. And it's a fun one. 



And so I want to start with my story, and I'll even preface that by saying if there's another topic specifically with investments or what are the five main things for retire? I have topics, I have podcast episodes, I have videos on YouTube. On all of that. Today is really going to be just more about me and why I think about retirement the way I do specifically in early retirement. And if you want those topics, those episodes, those videos. Once again, you can click right below here. Meaning if you're listening to this episode on itunes or spotify, you can just go a few episodes back and you will see those if you say, hey, I really want a framework of how to build an investment portfolio. Go on YouTube, you can find those as well. Everything is in the description. 



But without further ado, why I'm a retirement planner is fairly simple. One, money was stressful growing up, but a little bit different than you may think. Meaning a lot of people say, you know, I didn't grow up with a whole ton of money, and once I got money, I realized life was a little different. And then they'll start thinking about it and they'll go, when I got the money, or was it a mindset shift? And a common example is my partner James Canal and a mentor of mine. His story really resonated with a lot of people, which is when he was explaining when he grew up, there was stress in the air. And then all of a sudden that stress went away and he couldn't figure out exactly what it was. 



And what it was is that his parents picked up a book, and that book really created financial literacy. They started to understand their money. They started to think differently about money. And so although there wasn't a huge salary increase and there wasn't a big windfall, he said the vibe was just different. And that's when things changed. And he realized, wow, I can make a big impact in people's lives by just reframing the way view money, but more importantly, reframing the way they view their life. And so I really thought that was a powerful story. Now, my story is a little different. For those who don't know, I grew up in Malibu, California. Malibu is a very affluent area. And what is interesting is I saw the stress and you would think that if people had more money, they would simply have less problems. 



You'd think that, hey, they have so much money, why even worry about this or that, is that with more money comes not just more responsibility, but more stress. Meaning, I don't want to do the wrong thing. I want to make sure I'm optimizing what I'm doing. I don't want to be screwed in taxes or I don't want to make sure my investments are out of whack. Now that's one thing. But when you have a good amount of money, people think that you will be just free from problems. And what I can tell you is that could not be further from the truth. The reason I'm a financial planner, put simply, is because I've seen what undisciplined wealth can do. I grew up around money. I've been around it. 



And I've seen the stress that it can cause, not only in terms of divorce and separation and the hardship on children, but I've seen firsthand what that does to families and quality of life. And so always I felt I've had a knack for being good with numbers and analysis, and I've realized, hey, how can I actually use that to increase lives? And what better way than to focus on people who want to retire early in the sense that it's financial freedom? Meaning there are people here in Malibu, California, where I still live today, and there are people who are so stressed. And I wouldn't say it's just completely unnecessary because of course I can't know exactly what's going on. But what I can tell you is that there are people close to me who I feel are unnecessarily stressed. 



And it's not because of intelligence. It's because they don't have a plan. They never went through a planning process to get a strategy to know where they are, how to enhance their lives. And they might have a huge team of whether it be lawyers and financial advisers and tax preparers. And there is so much unfortunate I don't even like using the word, but I think it's applicable here. There is a ton of shadiness in the industry. Are all financial advisers the same? And how do you receive fees and what is commission business? And all of these complicated terms that do not make it easy and it's not your fault? How could you possibly know every little nuance behind who should be helping you really do what you want most, which is getting the most out of your life? 



Well, you hire professionals for that in the same way that I delegate a lot of my marketing because I am not a specialist in marketing, but I want to spend my time working with clients and helping them amass their amounts of wealth so that they can have a plan. And that strategy connects to them spending more time with children or retiring early or whatever it is. My point here is that it's not easy. And so what I want this to be at a minimum is an invitation to really start thinking about what do you care about most? Okay, now you have that concept. It's, do I have the right people in my corner supporting me to help me accomplish that? For example, let's assume that you really love managing your money today. 



Now, I have no idea if you do, but let's assume that you really do enjoy managing that. Does your spouse enjoy managing that? Because if anything happens to you, I don't want your spouse to have to say, oh my gosh, I have this huge burden now. And now all of a sudden you're going to say, I wish I didn't leave that to her. If you were here. Another example is that people who really enjoy managing their money, I say, great, but is that what you want to do in retirement? Is that your ideal retirement? Meaning could you do it? Yeah, you might be able to do it, but the question is could you do it most effectively? 



And not only effectively, but is that what you want to do when you are at the pool, when you're on the golf course, when you're doing what you want to do in retirement? Are you going to be saying, I wish I was spending my time figuring out the most optimal withdrawal strategy? Are you going to be saying, I wish I took advantage of this Roth conversion? Or are you going to be saying, you know what, I want to make sure I am doing all of those things, but I personally don't want to have to do those. Now, specifically, going back to my story with early retirement is that I think when people retire, it's overwhelming. 



And I don't care if you've worked a job for 40 years and you're retiring or it's 20 years or 30 years, but what I know is that a spreadsheet from me being in this business so long is that a spreadsheet is not going to tell you exactly when to retire. It's going to tell you the numbers, but it's not going to help you understand how you can most effectively reach those goals. So I went into specifically early retirement because I want people to know as early as possible when they no longer need to work, when they are just in a position where work is now optional and they are only working because they want to do it. One of my favorite examples, and I apologize if you're a long time listener of the podcast, hearing this going, oh, I've already heard that one. 



So I hope at least if you hear this, you go, okay, that's helpful to re hear at a minimum. So what I'll say on that is that let's assume that you're age 50 and you've got a few million bucks and you go, you know what, I know that. I know that I don't love my job, but I also know that I'm not ready to retire and I don't know what to do. Well. To that person. I would say. Let's go through the planning process. Understand exactly how much you can spend because let's say you want to spend $6,000 a month. But that you did not know you actually could spend $10,000 a month and do more trips with family. Travel more. Or if you have a bad day at work. You can say. I can hang it up because you no longer need to. 



Now, that's one example. But my other example that I talk about more often is let's assume you are age 50 and you've got half a million dollars in your portfolio and you go. I want to go through my I went through a planning process. And I understand I want $750,000 so I can retire. Because that with Social Security and this pension that's going to get me to what I want to do. I say. Great. Well. We could do that and you could keep working. And let's say that it takes you five years to get 250,000 more dollars. You're very diligent. You save $50,000 a year. Maybe it's 401K. Maybe you're doing the full catch up there and some extra to a Roth IRA or whatever it is. And let's say you get $50,000. Well, you could do that. 



But what I don't want you to do is to be sacrificing your health in order to do that. Meaning, could you find a job that pays you less money? Yes, you heard that right. Pays you less money, but you enjoy it more. Therefore you can work longer. Not only have more dollars, but those years of health. I mean, what's that worth to me? That's worth everything. And so ultimately, I want to go through a planning process with everyone so that they know when they can officially retire in the sense of financial freedom, so they can start thinking, oh my gosh, I never thought about switching jobs to one that pays less and then working more. 



Okay, I see the math works out there, but I also see how if I could get a few hours back every week, oh my gosh, what could that do to my relationships? What could that do to my time? What could that do to really what I care about most? And that's why I keep going back to that what I care about most. Because what I care about most personally is not money. I care about time. And when I work with people, I want to help them optimize their time. And my ultimate goal, which I will tell clients, which I know is going to sound odd, is not to get them 1020, 30, 40, 50 billion trillion dollars. That is not my goal. 



My goal is to help you understand when you are in a position where financial freedom exists and you can accomplish your goals. If you determine that you want to take extravagant trips, great, what do we need to do so you can do that? If you say and you're listening to this, hey, Ari, that's not me at all. I just want to rent an RV. I want to be traveling locally. I want to be able to fly, to see my children wherever they are. Great. That's a different goal. That means that there needs to be a different plan. And I want you to know when you can do that. So specifically, I'm young. I will be the first to tell my clients I'm young because I don't want to be here just for you. I want to be here for you. 



I want to be here for your kids. I want to be here really giving guidance and really your partner as you transition into retirement. I want to be the person that is helping you navigate through what I feel is one of the most, not just stressful, but honorable things in your life, where I have the opportunity to really help you navigate what's so stressful, which is, how do I retire the nuanced decisions. And then if you're retiring early, okay, where's healthcare going to come from? Okay, re. I see that I'm going to have to go and look at some different policies. How does that connect to Social Security? Should I even plan on Social Security? What about my investments? What about my tax strategy? Where's income going to come from? Am I going to get that biweekly? 



How does my pension you can see, I can go on and on. And ultimately, early retirement to me is freedom. Freedom to pursue what you care most about. And so I'm going to leave you with these four tips so that you understand. What can you start thinking about if you want to retire early? That was a little bit about my story and specifically, why early retirement? Now, here are the four tips so that if you're thinking about this, you're going, what can I take away from this? Because I always want to have some action step. I am what's called action bias, meaning when I finish any meeting, here's the summary. What are the action steps we're taking? Let's not just talk about it. Let's actually do it. So step number one, are you ready to retire both financially and emotionally? 



I want you to close your eyes. I know that might sound weird, so you don't really have to close your eyes, but I would invite you to if you want to close your eyes, imagine you're retired today. What does life look like? I mean, really think about it. It's 09:00 A.m.. It's 09:30 A.m. Now. It's in the afternoon. What are you doing? What is filling up this time? Is it volunteering? Is it traveling? Really think about what do you want to do in retirement? So that's number one. Number two, what will retirement cost? How much do you want to spend in retirement? Now, I want you to think about it and really dream. We go through a planning process and what we call the discovery meeting, where we want to discover, what do you care most about? 



And one of those things is, what do you want to do in retirement? So dream for a bit and really think and dream hard and go, you know, what if I did have X amount of money that would allow me to do what I want to do? Some people come to us and they say, I want to be able to spend 4000 $5,000 a month. I go, that's awesome, but do you want to travel on top of that? They go, yeah, maybe it's another 500 or 1000 a month. I go, what would it be in a dream world? And they'll say, Well, I'd love to have ten, $20,000 a year. And I would say, well, if you want $20,000 a year, let's look at what that looks like, because at the very least, it'll show you can you do that? 



And you might be surprised or you might say, Got it. I understand. My limit is fourteen zero a month. That way, I can still do XYZ. So that's number two is understand. What do you want to be able to spend and what are your expenses going into retirement? Number three is where will income come from? Is it coming from a pension? Is it Social Security? Is it investments? Is it a combination? Because my common example that I always like to use is, let's assume you want $100,000. Well, does that all need to come from your investment portfolio? Do you need a million dollars to retire? No, you just need to replace that $100,000 of income, and you need to replace it when adjusting for inflation and after taxes. So if you need $100,000, is 60 coming from your investments? 



Is 20 coming from a pension? Maybe another 20 from Social Security so that you can meet that full $100,000. That's what you need to think through, is where's income going to come from in retirement. And number four is a long one, which I just call the everything else strategy. Now, I know that doesn't sound helpful, but here's what I'm thinking about is life expectancy. Is there a long history of health? Because if so, great. Let's make sure we're planning for that. If there's not, well, let's also look at this a little differently. For example, let's assume you have a life expectancy of 80. Sorry, I'm not killing you off at 80. I'm just using this as an example. Let's assume your expectancy is 80 because of whatever health considerations there are. 



Well, if that's the case, can we spend more and do more while we're here? Can we give more? Can we get the most out of those dollars? Well, we don't want to play till age 90. If it's very reasonable that age 80, we might pass away. Can we do more while we're here? Now, you might say, Ari, I think I'm going to pass away at age 80 just based off of everything, but I don't want to plan on that. They'll say, Great, let's plan on 90, but ultimately we can plan on whatever we want. But the concept here is that based off of your life expectancy, it's going to change your plan. Another example of this is inheritance. Some people say, Ari, I don't want to factor inheritance into my financial plan. And I say, Great, let's not put it in the initial case. 



What we create is what's called a what if scenario. What if $500,000 comes? What if a million dollars comes? How does that change the plan? And as you can imagine, it tends to have a fairly large impact. If it's a large number now, you never want to factor it into the plan, is what people say. However, I disagree. If you know a certain amount of funds is likely going to come in the next few years. Well, let's look at that, because the reality is if we just ignore it's going to feel good in the short term because we're not thinking about a very sad thing, which is that a potential parent or loved 1 may pass. But I look at something a little differently, which is of course, that's sad. 



But what's also sad is that you are working a job that you hate, potentially unnecessarily, because you know these funds are coming well all of a sudden. Does that change how much you should be working, where you should be working, where you should be spending your time? So that's what I'm thinking about with inheritance, just a few other small ones, asset allocation, tax strategy, how should you really be implementing your retirement approach? So, a little more nuanced when it comes to that stuff. But I wanted to just give you a high level of why I like early retirement, why I chose this field, what about it is appealing to me, and then also give you some things to think about in terms of what can you actually take away from this episode? 



So I know you can always look at other episodes for that information, but I wanted to put it in here. I know it's been a little bit of a longer episode, so was the last episode. Let me know. Submit a question on my website earlier chimneypodcast.com. Tell me, is that helpful? Do you like these longer episodes? Do you like the shorter episodes? So I know it's a little different with every podcast, but when you submit a question and give me feedback or you go to my YouTube channel and give me feedback there, it is so helpful you could not even know. So thank you so much for all of those who continue to rate the podcast and subscribe. I'm forever grateful for the ability to help you all. So thank you so much and I will see you all next week. 



Thank you for listening to another episode of the Early Retirement show. If you have a question that you want answered in a future episode, you can always go to my website earlyretirementpodcast.com, that's earlyretirementpodcast.com. And you can go ahead and submit a question that I'll look to answer in a future episode. Thank you all for listening. Please do rate it, review it, and share it with someone who you think would benefit from this information. If there's anyone out there that you know, I certainly appreciate it and I will see you all each week. Hey guys, it's me again. Please be smart about this. Nothing in this podcast should be construed as financial, tax, or legal advice. Consult with your tax prepare or financial advisor before taking any action. This podcast is for information purposes only.