So what’s been going on in the world of an early retiree without travel?
July was a homebody month for us. June managed to be busy and July was the opposite. A heat wave set in along with rising Covid cases and the restrictions the governmental restrictions that come along with them. The only one that really affects us is the local beach town using the pandemic to make a public beach less accessible to nearby residents (while still allowing short term rentals). The lack of access means it’s tougher to get to my beginner surf spot. We did make the most of the month with some time at a more challenging surf spot and staying busy with the grocery hustle until things get back to normal.
July Income Report:
Instacart: $4,040. We had a great month on Instacart, one that is unlikely to be repeated. I realized early in the month we could see what the earnings potential are if we treated this like a part time job. Well, good things happened: We put in 20-25 hrs per week and grossed over four thousand dollars!
How did we do that? Earning this much came down to picking the right jobs and working during the peak opportunities. For us that was working the morning orders at our local full price grocery store in the morning, 10am Costco batches, and 2-4pm weekend orders stocking vacation beach homes. We’ve also gotten better at shopping speed and can quickly pick a good batch when it becomes available.
August will certainly be lower, Instacart instituted a “rating priority” system, which means “the highest quality orders go to the best shoppers”. This should be good for us long term, but most of the people shopping use the platform part time and the rating is based on the last 100 orders. With our amount of shopping we’ve inevitably been saddled with a couple of people disgruntled the store was out of their item and took it out on our reviews.
My guess is it’ll take a few weeks for everyone’s ratings to average out and allow us to see the better orders again. In the meantime, this is an important lesson to anyone self employed and/or in business: Do not take concentration risk! If we actually needed the money, this one change in the app would be devastating to our earnings. It’s important for everyone to have multiple income sources!
Dividends: $681. Dividend income from the taxable portfolio likely hit a low point in July with only $681. Overall our dividend income will be cut by around 25% for the full year thanks to a number of Covid related suspensions and deferrals. This year has been a perfect case study on why someone should not rely solely on dividends or dividend investing: Dividends can be cut and it often takes an investor out of the highest growth segments of the economy. Fortunately dividends are a byproduct of our investments and not the primary investment strategy, the portfolio itself continues to recover from the pain of 2020.
Bank Bonuses / Credit Card Bonuses: $300. We had a nice run on bank bonuses with another $300 hitting in March and now I’m slowing it down.. I started one account this month and haven’t seen another exciting enough to take me out of a break. August frees me up to get back in the credit card rewards game and I’m already rolling.
Blog: $0.00. The returns are nothing if not consistent from the blog. This still doesn’t stop me from seeing at least one tweet a month saying “all of these early retirement bloggers aren’t really retired, they make money from the blog!”. Well, I challenge that statement…
What’s in store for the next month and the future?
Even though there are positive signs related to COVID, the overall cases are still high and continue to limit travel. I expect August to be pretty slow outside of one trip home and continuing to enjoy time at the beach. Fishing should start picking up in September (both how well they’re biting and temperatures falling) and I’m prepared to enjoy a nice streak next to the water with a fishing pole in hand. Cooler mornings and cooler evenings are coming soon and that brings more comfortable outdoor recreation.
I also picked up and completed my first freelance gig recently, preparing a deal book for a small business exploring a sale. That was interesting and I enjoyed putting some of my old skills to use. Will I do more of that? Maybe – it had its benefits but my desire to do the business development stuff to get more jobs is minimal. Time will tell if there’s demand out there or if I want to put in the effort to generate that demand. I have noticed a difference in financial independence vs. the feeling of financial abundance that comes with additional income on top of being financially independent. Maybe this will spur along my next blog post…
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Hi,
Nice reading your update. This goes to show that it is not fearful to quit the full-time employment and enjoy the retirement lifestyle. One has the options to work if he/she wants to do so. He/she can choose the type of work of interests. It is always good to have options.
WTK
Just curious. Do you regret leaving the workforce? I’m sure the $4K you made last month is a much smaller amount than what you were making at your previous job. So, what’s the point of retiring early if you will end up going back into the workforce with a massive cut in salary plus no benefits? I’ve been playing with the idea of retiring early but am so scared of walking away from a $200K salary and going back in years later with possibly a 60-70% reduction in pay.
Myra – Its a great question. Rarely do I regret leaving the workforce. Part of coming to terms with financial independence and leaving my work *was* knowing that I was giving up pay at my old level. I had maxed out in my old role around $300,000, give or take 15% either way depending on how the stock price moved on RSUs and annual incentives came in.
I had to know that leaving that job meant if I ever re-entered the workforce, I’d be looking at 50% of the compensation. That falls under “it is what it is” in my side of finance.and $150k/year is still a ridiculous amount of money if I’m not trying to meet a net worth goal.
I believe you trade time for money and money for time in life….but you also trade control at these higher level jobs. I’ve found I value control the most and have a lifestyle that only requires $50,000 – $70,000/year for the two of us to live on. I’ve had some opportunities to go back to work full time or part time and it made me reflect and realize I value control of my time more than any amount of money, I wouldn’t go back to work full time at the stress level I had before for $500,000 or even $1,000,000/year. I was only put on this earth once and have a finite amount of time. Eventually the additional money has diminishing returns. I live where I want and do what I want….
Regarding Instacart or even my old part-time gig I was doing for a former client: I have found that giving something 10, 15, or 20 hours a week at my control is worth the extra money, even if it is at a greatly reduced rate. I enjoy the feeling of being productive, contributing, and getting money and satisfaction as a reward…but I do it all within the scope of controlling my time. Instacart is low paying but the longest commitment I’ve ever had is 3 consecutive hours (Got paid $220 to stock a beach house!), that’s very different than the control a boss had over me with annual bonuses, continued employment, and making it to the next stock vesting date.
Given what we’ve saved and the lifestyle we’ve designed, I’ve found the additional money and enjoyment from work diminishes much past 15 hours a week and $2,000/mo in income. Kind of crazy considering that’s less than 10% of my old pay.
All of your thoughts are normal and plenty of people go through it, best of luck on your journey.
That’s what scares me about early retirement. So many unknowns for such a long period of time. If we retire now, we’re looking at 40+ years of retirement and so many things can change during that long span of time. My mom retired at age 45 and keeps telling me that we shouldn’t retire. What she thought was sufficient wealth at 45 has pretty much disappeared over the last 30 years. She had a stroke, then my dad got cancer, and then multiple businesses she had faltered. Now, she’s practically broke. My husband wants an iron-clad plan for retirement where nothing can backfire. But, there’s just no 100% guarantees with anything. We have 2 kids, 1 in college and 1 in high school. The rational side of me wants to wait until both are done with college before pulling the trigger. We have investments of $5M plus a $1M paid-off home and a combined income of $700K. So, walking away from that is really tough.
There are a lot of unknowns period. I think often of the shop owner in Oakland who suffered a heart attack and died at 62, a week into her retirement.
Myra,
Interesting situation. I tend to agree with everything Robert says and my analysis is the same. That said, most of us in this position in life are here b/c we are very financially conservative, so making the leap to retirement is hard and scary.
Just as he has shifted the focus away from work as a way to make the maximal amount of money possible to taking on new and interesting challenges, my wife and I have done the same and it is freeing. After 2 years of working on a book and blog (on top of 5 years working on my original blog with 0 income), I’m finally seeing “passive” income come in. My wife has been able to negotiate everything she wants from her employer (part-time, WFH, medical insurance) and make enough to support all of our living expenses. Like Robert, I’ve had multiple other interesting ways to make money come up (paid guide with adaptive ski program, getting a job at our favorite restaurant where I’d love to learn how to cook) but other than my writing, I’ve passed to this point b/c I can just volunteer and maintain more of my freedom.
Another thing we’ve found is that people who put themselves in this situation are really good at making and/or saving money, so even if your “retire” you don’t have to follow the narrative of retirement means stopping all work/income and spending down your assets.
In our first 2 years of “early retirement” we spent about 1% of our assets in year one when moving cross country and refurnishing our home, saved about $15k in year two despite doing a home renovation, and in year 3 with minimal travel (due to COVID) or housing (b/c hopefully we’re good for a while) expenses we’re on pace to max out my wife’s 401(k) and our HSA, reinvest taxable dividends to max out 2 Roth accounts, and reinvest all other dividends while drastically upping our charitable giving and buying some expensive toys to get outside and play even more. And we’re doing this all with much lower assets than you.
I’ve recently written about how tax friendly early retirement is. It is also a way to pad future SS benefits if you haven’t already maxed them out.
I doubt any of this is really news to you as you are obviously good with building wealth, but ultimately a successful retirement requires a mental shift and a different skill set. It is difficult for many of us to be able to shift from accumulation to decumulation, or even just down shift to semi-retirement.
All of this to say you are not alone. Best wishes to you and here is a link that you may find interesting. https://www.caniretireyet.com/retirement-mindset-shift-saving-spending/
Cheers!
Chris
Chris, thank you for such an in-depth response to my post. You’re right, it’s a total mind-shift and one that may take time to accomplish. My husband and I have been planning for this early retirement goal for a couple of years now. I really don’t know what will finally push us to the edge to do it. Hoping for some clarity once this covid crisis passes. He and I are working from home 100% right now and have been enjoying that tremendously. So, why walk away from a $700K income when we currently have all the time flexibility we’ve been craving for. Maybe once everything settles back to how it was before covid and we will need to physically go back into the office, I will hate the commute and office politics so much and will want to quit. For now, I’m playing it by ear and see where the next few months will lead us…
“ make enough to support all of our living expenses.”
Just to clarify, your wife works while you are retired?
Doesn’t seem like retired. As a woman, we just call this being a stay at home mom/parent.
Just wanted to clarify this and ask what’s wrong with saying you’re a stay at home dad?
I call it wiFI- Wife = Financial Independence!
RE: Maya’s dilemma-
I guess the hardest part about life is there is not 100% ironclad plan. We could get hurt or sick tomorrow, get laid off from our high paying job, loose a loved one, or face a national pandemic that upends all of our expectations of how to run a business, travel, and re-evaluate what is most important in our lives.
Deciding to retire and “walk away” from a combined 700k annual income sounds scary but it’s not an all or nothing game. You could chose to have one person quick work, or possibly one or both try working part time if that’s an option. You don’t have to start spending your savings if you work just enough to generate what you need for expenses (ala Coast FI) and continue to let your investments grow.
There is always the possibility that something drastic could happen and maybe you do decide that you need to go back to work in the future. If it’s for a lower salary it may sound like a bad deal but if you don’t need all of your original salary to support yourself, what’s the issue? Maybe your new job is fewer hours or lower responsibility. Maybe it’s the kind of job you do during work hours and walk away from (mentally) when you’re off. Maybe you only have to work part of the year and then still have 6 months of complete control over your time with your family.
I’m guessing that the world of high paying salaries is seductive and the accompanying expensive lifestyle feels necessary. I don’t make lots of money and never would if I stay in my city in this industry and it’s ok by me because it’s enough.
Ultimately though, you have to figure out why you want to retire. Maybe you don’t want to quit your job, maybe you want to keep working – that’s ok. Maybe you have enough assets and maybe you don’t. $5M plus a paid off 1M house sounds like A. LOT. to me but I also don’t have a household income in excess of $500k so I don’t know how much of that income is spent annually. We all have different numbers but doing the math to figure out where’re you’re at personally will give you a better picture of how secure your retirement plans are. And have a plan B (if this happens what will we do/change) and a plan C (if we need extra income what will that look like, how much do we actually need).
Hi there, I’m new here. To clarify, Did you retire early to then just be a grocery delivery person? I’m not sure if what you did is considered retiring early or financial independence at all.
It seems like all you did was trade one job for a much lesser job with no benefits and worse pay. What am I missing here? Or before you retired, did you have some type of goal of always being a grocery delivery person. If so, that’s great. Nothing wrong with that.
It just feels like this whole early retirement thing has become so far-fetched. Thanks for clarifying.