Neighbors Are Retiring in Their 30s. Why Can't You?

Neighbors Are Retiring in Their 30s. Why Can't You?
nytimes.com

The common thread is that just because you can buy something, or can qualify for a particular mortgage, doesn't mean you should if you're goal is to "retire" early. One of the engineers I worked at Sun with told me that once he had enough value in Sun stock he just decided it was enough. He never moved out of his "starter" house (small 3 bedroom) and always drove his budget/no-options economy car at least 100,000 miles. And his idea of a "great vacation" was camping in the Sierras. So it didn't take much for him to get there and in the middle of the dot com "boom" he sold all his stock, paid his taxes, paid off his house, and retired.

The part the article doesn't talk about enough is the whole "why do you want to be rich?" question. People look at me funny when I ask them that, but as the article mentioned you can only take so many vacations, movies, what have you. People fail at retirement all the time, feeling like their life is being wasted now that they aren't "doing" anything. In my experience, unless you've got the ability to self-motivate to do something you are really interested in that helps you grow, you may find yourself wanting to go back to work.

An interesting thing about going back to work though, if you don't need the job you can be really honest about how you see things and how much time you are willing to spend in the office. I have met a number of engineering managers who don't do well when the only tool in their toolbox is "If you don't, I'll fire you."[1]

So many people have a very very complex relationship with money. Too many use it as a "score" to reinforce their own self image. When it becomes apparent to me that someone is in that mindset, if I'm in a place to do so I ask them if someone who won the PowerBall lottery is better than they are because they would be richer. Most can see how non-nonsensical that is, but it helps to step back and remind yourself that net worth has exactly zero relationship to how good a person you are.

[1] If you're one of those managers reach out, I can coach you to becoming a better manager and charge reasonable rates to do so.

In case anyone was wondering, you cannot reduce your taxable income by paying your child to clean your house (I am a former tax lawyer). Could you pay your teenager to work for your company, and reduce the corporate income? Yes, subject to child labor laws — and you still have to pay payroll and income taxes.

Alternatively, you and your spouse can just straight up give your kid $36,000 per year as a gift (with no deduction, but also no income/payroll tax burden).

Having a 7-year-old on the payroll seems like a great way to get audited.