4 min read
There seems to be an unspoken rule in the F.I.R.E. (Financial Independence / Retire Early) community that once you quit your day job you’re not allowed to work anymore because that would mean you’re not truly financially independent or “retired”.
I’m not sure how this idea came to be, but I think it misses the entire point of F.I.R.E.
The whole reason people try to retire early or achieve financial independence is so they can live their best life possible without being weighed down by their finances. Whether or not this includes work of some kind shouldn’t make a difference.
Our Hatred for “Work”
In most cases, people either hate their day job or they feel ambivalent towards it, which is why the idea of “quitting your job and never working again” is so popular. The word “work” itself has a negative connotation. It makes us think of pointless meetings, long commutes, dumb corporate rules, boring projects, etc.
This is why the idea of financial independence is so popular and why so many people feel they need enough money saved up to never work again.
But I think these negative feelings towards work have made us forget that not all work is miserable. In fact, doing work we find meaningful can be one of the greatest joys in life. Doing the right work can make us smarter, tougher, and better. Getting really good at certain work can allow us to contribute something valuable to the world, which is also one of the best feelings we can experience as humans.
I believe there is a way to live your best life possible while incorporating work into your life. I’d like to throw some numbers out there to make you ponder the concept of working even part-time…
Working One Day a Week Can Be Worth $100,000
In college I used to work at a math tutoring center where tutors got paid $12 per hour. One of my coworkers was a guy in his 40’s who only worked on Saturday mornings. He told me he did it just because he loved math and helping students.
Each Saturday we would work a six-hour shift, which meant we earned about $60 after-tax. This guy worked every Saturday which meant he earned an extra $3,120 ($60 * 52 weeks) in income each year.
To put that in perspective, that’s the same as earning dividends from a $104,000 dividend stock portfolio with a 3% dividend yield. By working one day a week at a job he loved, he had the same spending power as a $100k portfolio.
Hypothetically, if he worked twice a week he could earn an extra $120 each week, which would be an extra $6,240 each year. That would be the same as receiving a 3% dividend yield from a $207,000 stock portfolio. It would take most people a decade to build up that type of portfolio.
There’s obviously some benefits to having the stock portfolio. The dividends would likely grow over time and it requires no active work. If this guy ever wanted to quit his weekend job, he’d earn $0. The portfolio, on the other hand, would just keep paying him his dividends each year.
It’s a game of trade-offs. The portfolio offers passive income but it could take years to build. The tutoring gig is easy and fun, but it only pays cash if you show up to do the work.
Get Paid for Work You Love
This example is just the tip of the iceberg. There are plenty of part-time, weekend, and freelance jobs that pay far more than $12 per hour.
When I tutor students in statistics I charge $50 per hour.
My dad dresses up as Santa each year and does local Christmas events each December to earn an extra $3k and he loves it.
My sister recently started dog-sitting through Rover and earns an extra $100-$200 each weekend and she also loves it.
There’s all types of side-hustle gigs out there that pay quite well.
In a recent interview I did with Financial Panther, I asked him how he finds time in the day for all his side hustles. His answer was genuis: he simply looks for ways to get paid doing things he’s already doing. He already spends time cleaning his house, so it made sense for him to rent out his spare bedroom on Airbnb. He loves animals so he gets paid to watch dogs at his own house.
What if we translate this idea to post-retirement: Do stuff you love, but get paid for it? That way it doesn’t even feel like work.
Do you love animals? Dog sit once a week. Twice a week. However much you want.
Do you know a foreign language? Tutor students at a local high school once a week after school. Tutor people via Skype on the weekends.
Do you know a lot about computers? Do some freelance consulting for companies three months out of the year.
Do you love gardening? Grow and sell your own vegetables at a local farmer’s market in the summer.
Incorporating some type of work into your life can dramatically alter your financial plans for the future. Instead of enduring another decade of cubicle hell to reach financial independence, maybe stick it out for another two years, save a stack of cash, and do part-time work you love to cover your expenses.
By giving yourself the option of working even a little bit after “retirement” you can potentially quit your day job far sooner than you thought. Instead of spending three years saving an extra $100k you could just work once a week at a job you love.
The end goal of F.I.R.E. is to live a good life, not to avoid working entirely. If you are aiming for complete financial independence and never want to think about money again, by all means go for it. But just know there are other options.
Part-time, freelance, weekend, and seasonal work doing something you love could be the ticket to a happier retirement and a much closer F.I. date.
Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.
Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.
His favorite investment platform is M1 Finance, a site that allows him to build a custom portfolio of stocks for free, has no trading or maintenance fees, and even allows him to set up automated target-allocated investments.
His favorite way to save money each month on his recurring bills is by using Trim, a free financial app that negotiates lower cable, internet, and phone bills with any provider on your behalf.
His favorite micro-investing app is Acorns, a free financial app that takes just 5 minutes to set up and allows you to invest your spare change in a diversified portfolio.
His favorite place to find new personal finance articles to read is Collecting Wisdom, a site that collects the best personal finance articles floating around the web on a daily basis.
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