Work After Trying Early Retirement? Could I do it? What would it take for me to go back to work?: This question comes from Income Surfer
I’ve fielded some form of this question from former coworkers and clients as well and think about it from time to time. Would I “go back to work”? If so, why and what scenario?”
I actually went to Alan Donegan’s PopUp Business School for two weeks in February trying to figure out the answer to this question. I loved the game of business and assembling the puzzle that was a financial deal, but I disliked a lot of things about my chosen career.
The Career Choice/Preface:
I was listening to ChooseFI’s episode about the mid-life crisis and the career discussion came up for both Brad and Jonathan. Brad lamented about quickly getting out of public accounting, deciding the carrot of a high income in eight to ten years wasn’t worth the grind to get there or the grind afterwards. Jonathan lamented about his pharmacy school cost and declared at this point he wouldn’t go back to his old employer even if they offered him triple the amount of money he used to make. (He said something similar when speaking at PopUp). In both of their scenarios, the chosen career developed a very specific skill set where time can be exchanged at a high price.
My career choice followed a similar trajectory. I developed a specialized skill in commercial/corporate banking which generated a lot of money for my employer, especially after I was eight years in. In exchange for those eight years of grinding and skill building, I could earn a six figure salary. After twelve years, that skill was worth even more when I added in leading a team of people. The challenge with my chosen profession is that specific skill doesn’t translate well over into other businesses, at least at any compensation level remotely similar to what I previously made. Any “return to work” then falls into two categories: Going back into my prior industry or exchanging my time for a much lower amount of money. Alan commented to me that ex-bankers usually overvalue their skill set. I agree with that assessment
Here are the considerations I have when I think about going back to work?.
Consideration One: Who could I work for?
I had the pleasure of being exposed to a lot of different businesses and I put leadership into three categories:
Entrepreneurs, Operators, and Managers:
#1: The Entrepreneur: The entrepreneur has his/her own money on the line. They are directly impacted by the choices they make and act accordingly. If a business generates five million in profit for a year, that profit (or the majority of that profit) belongs to the owner of that business. It is the ultimate learning experience on how to compete in a market, operate a business, and lead people.
#2: The Operator: An operator is a leader of a business that earns a salary but also experienced a significant upside for success. I put many technology companies/founders in this category as well as properly done compensation plans. A leader of a tech company may own 10-20% of the company, but they are compensated well by the people who provide funding in exchange for the operator performing. I had the pleasure of working for one corporate leader who viewed himself as an operator. He had a career trajectory where he knew if he operated the divisions well, his payoff was a c-suite position with a multiple seven figure annual salary. He acted accordingly and ran a great business.
#3: The Manager: Unfortunately most corporate and governmental bosses are managers. Maintaining their existing salary and lifestyle is their most important goal – basically self-preservation Sometimes the company is set up in a way where salary/lifestyle maintenance requires the manager to run an effective business. Sometimes it isn’t. My old industry had compensation structures and a culture that attracted managers. If my division went from earning $4mil in net profit to $7mil in net profit for the year, I *might* make 2% of those profits in incremental bonus. That is money, but it’s nothing compared to the percentage of profits an entrepreneur or operator would earn for the same performance. This culture attracts mediocre people and creates politics and friction at the office. I would have to endure phone calls with five to six people on them for a decision that only really required two people. The other people were there because they wanted to justify their employment.
I have zero tolerance for managers at this point in my life, yet my skill set is designed to work in an industry devoid of operators and entrepreneurs.
Consideration Two: Control Of My Time:
It’s almost tough to describe what it is like to have total control of my time. It is almost indescribable to old me. From ages five to thirty six, I always had a cloud over me of people telling me where I had to be and when I had to be there. School had a schedule. If you don’t go to school, someone would pay a visit to my parents house (not that I knew anything about that…). College had a schedule. Sure it had a little more flexibility, but choices had consequences. Don’t go to class, don’t graduate. I had two weeks off between graduating and starting my professional job. Weekdays were now full of obligations minus the two weeks of vacation I started with. Even when I was on vacation, I had someone else dictating when I had to come back. Everything required permission. Want to keep the job and the paycheck coming in? Control, control, and control.
Another early retiree described it best as if you receive a low electrical shock every morning. Its uncomfortable, you don’t like it, but after a decade you don’t *really* notice it anymore. Until the shock is gone. It may take three, six, or twelve months to realize what it’s like not to be shocked anymore. Some people who have experienced this long enough actually crave the structure of ceding control of their time. I am not one of those people. I’ve taken some phone calls on interesting opportunities, but ceding control of my time has been a hard stop for me.
Consideration Three: The Incremental Value Of Money
The approach to and subsequent achievement of financial independence reduces the incremental value of additional funds. When we were broke, the value of each additional dollar earned was tremendous. It funded this month’s expenses, it paid down our debt, and it could be invested for the future. Now our basic expenses are funded for decades, there is no debt to be paid down, and the thought of more money to be invested only provides a little incremental enjoyment.
The only major dream/goal that we have where money would provide incremental value is moving to Hawaii. The majority of funds are in retirement accounts and we don’t quite have the financial capacity to buy the kind of house/location we would be looking for. We aren’t sure if we want to pull the lever and move out there and rent without a pathway to be where we want to be. (There’s also family that might hold us back). Financially it would require either more after-tax savings or some type of employment to qualify for a mortgage. That’s why I call this a dream/goal: I’ve always believed dreams are something we have, while goals are something we work towards. I’m not yet ready to declare it a goal and become hyper focused on achieving that goal. This also eliminates a large portion of work opportunities because it generates this requirement: The work must be remote.
Consideration Four: Enjoyment
What did I enjoy about my former work life? I loved helping companies and investors raise money. Putting a deal together was like assembling a puzzle…and I happened to be really good at assembling that puzzle. I enjoyed leading people and coaching…and to some extent even the challenge of the sales pursuit. It seemed that part of my job was only ten to twenty hours a week while the other twenty hours was dealing with other non-productive work created by managers or friction in the process. Is there a way I can just do the 10-15 hours of what I enjoy without the bureaucracy and politics? I haven’t seen it yet.
Many of the opportunities have been operator style positions which I know I would enjoy, but does this enjoyment offset what would require a complete commitment since people would be trusting me with their capital and business? That conflicts with my second consideration, control of my time. I’m not willing to cede control of my time and it wouldn’t be right for me to accept a position knowing I’m not providing a complete commitment to the work.
So where does this leave my thoughts about W.A.T.E.R?
I’m still not employed. I’ve enjoyed doing a little gig economy work, but the rate of pay I’m exchanging my time for is far less than I made when exchanging a professional skill. Do I sign up for Upwork and start putting myself out there on LinkedIn to take client side assignments (similar to my former side hustle)? I’m not sure about the market for that service in the short term due to COVID and I question how hard I want to hustle on business development. The end always justified the means when it came to business development in my old job, but when the money only provides an incremental value to me, am I willing to pay the price to get it?
Could you work after early retirement? What would be your requirements? Please leave a comment below and let me know what you think.
Credit to The Frugal Engineers for introducing me to the acronym of WATER
* While writing this over the course of two days, I had my first nightmare about my old job. Botching a presentation, the stress involved in the sale. It’s probably a sign I shouldn’t go into my old industry again!
7 Replies to “Do I Want Or Need W.A.T.E.R?”
Duuuude. I lived and worked in Hawaii for ~5 years. Tech sales over there is different than it is here in CA. First, the technology is about 10 years behind the US mainland (in a good way). Second, sales is made by building long term relationships and based on trustworthiness over there. A-hole managers and bosses rarely thrive in Hawaii because being a shark is frowned upon. You might really like your old career, just in a different state. (expect a 50% pay reduction from mainland wages :))
As for the mortgage problem… Seller financing or hard money lending might be an option if you don’t qualify for a mortgage right now. If/when you buy in Hawaii – beware of Leasehold properties!
Good luck! See you over there in a few years (my wife and I are planning our moving back too)
I left a mid six figure executive position five years ago to retire early. I did immediately set up some side gigs, mainly consulting in some technical and regulatory areas. Over those five years I’ve made six figures annually usually only working one day a week, sometimes two, sometimes none. I’ve set some of them up on retainer and some by the hour but I charge what my salary used to be on an hourly basis, $250 an hour or more. The retainer work is year round but I have a lot of time flexibility and it isn’t difficult work. The more technical consulting come in the form of projects or lawsuits and they are intense but usually only last a week or so. I don’t need the money but its kind of fun to remain an “expert” and to have a visible profile in the business world. Yet I still have most of my days just to do whatever I want. I’ve turned down several full time jobs, even though I’ve never looked for a job, one was even seven figures a year, more than I ever made. Seems like the less you need a job the easier it is to find one. Seems like with your experience you could do short term consulting projects like I do? And the thing about those short gigs for big companies, they could care less what you charge, it is small money to them.
I’m impressed! That would be interesting to me, but I’m still exploring what can provide a decent hourly rate with my somewhat specialized skill set.
It is always good to have side gigs with the control of the time. This is akin to being an self-employed.
It’s a tricky transition going from full-time work to the ability to do whatever you want with your time.
Nearly one year in, I’ve discovered that I’m content not going back to my old job in the operating room, but I do have an innate propensity to remain productive or busy in some way. The blog gives me that outlet.
In this last year, I’ve had so many dreams where I was back in the hospital. Most weren’t exactly what I’d call nightmares, but they’re rarely pleasant experiences, either. I’m guessing that won’t change anytime soon. I think I had stress dreams about high school wrestling for a good 20 years afterwards.
i appreciated the small commentary on the difference between a dream and a goal. call it a dream and remove the pressure of making it happen until you’re ready, then its a goal
I feel like if I were to WATER, it’d be strictly in the entrepreneurial column where it wouldn’t be services-related work. For example, I’d write software to sell to the masses, or sell items online, as opposed to having a list of demanding clients to deal with or doing things in the gig economy.
That’s just my personal preference because I always want my work to:
1. Have some potential to have a very high leverage on my time, and
2. Something where I don’t really have to talk to any clients that much (i.e. I’m OK with sending an email for a customer wanting a refund on an item, but don’t want to have a 2 hour conversation with a marketing client). This is just personal preference because my enjoyment for the work generally comes from solving hard problems as opposed to conversing with people.