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!