Vicki Robin, one of the authors of the truly great personal finance book Your Money or Your Life, wrote an article for Marketwatch entitled . The article discusses the decision of financial guru Suze Orman to return to work after retiring three years ago, digging into her reasons for doing so and coming up with some interesting conclusions about retirement and financial independence.
Let’s dig into some key quotes from the article to break it down bit by bit and then I’ll summarize my thoughts on the article.
Suze Orman did a smackdown of the FIRE (Financial Independence/Retire Early) movement on Paula Pant’s podcast. She said she “hates it, hates it, hates it.” […]
She said to Paula: “I’m telling you, I just did it for three years on my private island. I retired at 65. I shut down the Suze Orman show. I sold five homes. I got rid of five cars. I stopped going on QVC. I stopped writing for Oprah’s magazine. I stopped giving talks. I stopped doing everything, and I had a great time for three years. I learned how to fish. I learned how to win tournaments. I learned how to be the captain on my boat. and all of a sudden it was like, “Oh, there’s still stuff for me to do.” Now. I was in a field that everybody welcomed me back, when I came back. They were excited to see me in the halls of NBC and MSNBC, and everywhere that I went this past week.”
This is an important anecdote. Suze doesn’t like early retirement, but from reading that story, it certainly sounds like retirement didn’t mesh with her. She seemed to be much more fulfilled by going back to her previous work, with the relationships and the challenges of her career, than what she was doing in her retired life.
Let’s be clear: “retirement” doesn’t have to mean filling your life with pure leisure. In fact, I believe that for most people, having a “retirement” that’s nothing but leisure is a mistake. People generally thrive when they feel as though they have a purpose and while leisure is a wonderful thing, it often doesn’t scratch that “purpose” itch. A life of continuous leisure can eventually feel purposeless.
Robin touches on this in the next paragraph:
I think there is retiring forward and retiring backward. Suze did what many early retirees do. She left her day job. She got rid of excess not needed in a post-job life. For most, it’s getting rid of the car to impress clients or five suits for a weekly rotation at the office. For Suze, it was five cars and five homes.
Indeed, the simple life is one of the lures of early retirement. This can mean time in nature, reading, meditation and family life. For many who achieve financial independence (FI), compensatory spending — the shopping you do to reward yourself for a tough week at work — disappears. For Suze it was quitting the QVC habit.
FIers might travel to exotic places. For some it’s backpacking. For Suze it was living on her private island.
And people tend to learn new skills. For most it’s a language or an instrument or home cooking. For Suze it was fishing and tournaments and being a captain of a boat.
And then, a couple of years in more or less, the identity confrontation lands with a thud. Who am I now that I am not my job? How do I explain myself to others? How can I gain the respect and voice I had with my old job? I was somebody. Now I’m nobody.
Almost all of us want to feel as though our life has some sort of purpose. We are fulfilled by having something meaningful to do that gives us a sense of having a place in the world. Many people find it in their careers, but some find it elsewhere.
Often, it is that very step of walking away from a career that can take away that sense of purpose. Sure, a person might have a long list of leisure projects that they want to take on, but those leisure tasks often lose that sense of driving purpose that led them through their careers and through the other major accomplishments of their life.
Retirement, whether early or not, is a mistake if you’re not using it to fulfill some kind of purpose. It’s probably going to be a different purpose than the one you found in your career.
Robin touches on this later in the article:
Retiring forward is using this crisis of identity to grow spiritually or take on some of the bigger issues in the world through volunteering, study, serving on boards, entrepreneurship, training or social innovations. Or they attend to the relationships they neglected as they hurried to their million or two.
Not everyone does this. Many retire backward, returning to their old professions after they’ve filled up on travel or hobbies, perhaps on their own terms, because that’s where they felt competent, needed and, truth be told, important. Many do a bit of both and feel their way along to who they will be and how they might spend their time in this new world of freedom, choices and sovereignty.
In Robin’s terminology, “retiring forward” means finding a new purpose in something new once you’re retired and have walked away from your old career. “Retiring backward” means that you retire without that purpose, indulge in leisure, and wind up longing for the purpose you walked away from or, worse, simply feel lost in retirement. Many often try to return to the career they retired from.
Money alone is not an answer to this conundrum. You can have a giant wad of cash in retirement but it doesn’t matter how much cash you have if you don’t have a purpose in living.
Robin goes on (and I’m going to bold a key sentence):
From Suze’s account, it sounds like she retired backward into her old role. OK. But what did she learn in those hiatus years that she can share with her audience? It seems from other comments she learned that even $10 million in a retirement account is not enough. That stuff happens and money is the answer. I hope for all our sakes that she learned more than that and will share it.
The question for early retirees is: “To what am I dedicating my freedom?” It’s really not about how many millions you have — Suze’s assertion. Nor how much play you can do before you get bored and go back to your old job.
To what am I dedicating my freedom? That is an amazing question, and it’s one that really underlies the financial decisions Sarah and I are making.
I do not want to walk away from the work I’m doing now – writing for disclaimer-statement.info and other such tasks – to simply engage in leisure. I am very sure I would get tired of that rather quickly (though I’d certainly have fun for a while) and eventually I’d want to go back to it or to something similar.
Rather, if I had absolute financial freedom, I’d move onto another purpose in life. I have a few ideas of what that would be and at least two things that I would strongly try to see how well they clicked with me (namely, managing a local charity and writing novels). I’d want to approach those things with goals, with responsibility, and with seriousness and routine, and I would hope that they fill my life with the purpose I feel in writing for disclaimer-statement.info. I’m fairly confident that at least one of those two things would click and, if the first one I tried didn’t, I’d try the other and I have a few other ideas beyond that.
Robin writes on:
In “Your Money or Your Life,” we promised FI as a reward for systematically examining your relationship with money. I think this is what most people attracted to FIRE really want. Independence of thought. Of how they use their time. Of options. Of choices. Of dedicating their attention to something less soul-searing than cubicle life or the endless boring meetings of middle management. Retirement and freedom are two different animals. Doing “nothing” and doing your passion full-time are not even the same species.
Right now, I feel as though those two things I mentioned above – writing a number of novels and being involved in a local charity – are unfulfilled purposes in my life. They are things that I feel drawn to do, yet I know that I cannot take them on in the current situation in my life. I need a state of financial independence so I can take on those challenges without the need of working to earn an income.
The key thing is that I have a purpose in life. I have a reason to get out of bed in the morning. I have a few strong purposes right now, but if those purposes fade or end, I don’t want to use the time I have in an aimless fashion. I have other things I want to do with my life, things to approach with seriousness and commitment and purpose.
Robin ties it up well:
People don’t have to follow my path of service, spirituality and social innovation. There are so many ways to use your time for happiness, meaning, purpose and contribution. At the end of the day, we all want to have a well-lived life. Five houses and five cars and a private island — without a higher purpose — mean nothing.
This article left me thinking quite a bit over the last few days and it brought me to a few conclusions worth sharing.
It’s Hard to Get Excited About a Retirement Without Purpose
If you view retirement as nothing more than leisure time and eventually a health decline, it’s often pretty hard to get excited about it. The reason is obvious: there’s no real purpose underneath it, not like the purpose many people feel in their life right now.
Right now, I have a lot of purpose in my life. I’m a parent raising kids. I’m a writer with a pretty big audience that I feel as though I reach in meaningful ways that help their lives. I’m involved with some local charitable work, though not as deeply as I’d like. I’m a husband who works to keep a strong marriage.
If those purposes fade or go away, my life will feel less purposeful unless I replace them with something. From this vantage point, a retirement with nothing but leisure in it sounds pretty … empty to me. It would be fun for a while as I unwind from the worries of my current life, but over time that would fade and I’d just be left with a purposeless life.
I can see that. I think most people see that, too. They don’t desire a life without purpose and that’s what they see when they think about retirement. They see a life with purpose now and a life without purpose then and they can’t justify saving for that purposeless life. It feels empty… and, honestly, it is empty.
I did start contributing to a 403(b) at a very young age, but I did so because of advice from mentors, not because it seemed exciting or purposeful to me. It turned out to be a great move, but at the time, it wasn’t meaningful at all and I probably would not have done so without guidance. (Now, of course, I’m so glad I saved back then.)
Now? I’m thrilled to save because I see purpose in the next stage of my life, when I have enough money in investments and in Social Security to effectively replace my income. I have things I’m drawn to do at that point, things that just aren’t feasible for me right now.
Finding a Purpose Can Be Extremely Helpful as a Motivator for Financial Recovery and Financial Independence
I’d go so far as to argue that one of the key reasons that people get into financial trouble is that they don’t see any affirming purpose in financial success. They don’t see how it leads to anything in life that has a worthwhile purpose, or at least not anything that compares to the purpose they find in their daily lives right now, so there’s little compulsion to save or to financially improve themselves outside of a general sense of that’s what a person is “supposed” to do and an understanding that they may have to someday deal with physical and/or mental decline. Those aren’t exactly exciting reasons.
Often, financial turnarounds are borne out of discovering some sort of life purpose. For me, it was having a child. For others, it comes from finding a soul mate or from discovering what they want to do with their lives or something they deeply hope to do with their lives when things come together. For still others, it comes from discovering a cause that speaks to their heart in a deep way.
The discovery of that purpose often awakens a strong desire to shape one’s life in a way that allows for the fulfillment of that purpose. For many, that comes with a strong push for financial responsibility, as financial stability is often a big part of living out this newly discovered purpose.
Find Your Purpose
I’m not suggesting that a person should get married or have a child in order to try to discover a purpose that will guide them to financial success or motivation to save for retirement or early retirement or some degree of financial independence. Rather, I recommend spending time trying to discover that kind of driving purpose.
You may find that it already exists to an extent in your professional life, in which case you may want to think ahead about what your ideal professional situation would be and what you could do now to get yourself financially prepared for it. For example, perhaps you’re a teacher and your dream is to teach at-risk students but you make substantially more teaching at a cushy school. If you were to, say, get your financial house well in order over the next several years, you could have a cushion in place that would make it financially feasible to make that kind of switch.
You may find that it exists in another profession or in a charitable cause, in which case you may need to have substantial savings in place to make that switch. Set this as a central life ambition.
Whatever that future purpose might be, consider that you want to put yourself in a position where you have the financial foundation under you to take on that passion without sacrificing your life and that you have the time to adequately tackle it. How do you get from there to here?
That sense of purpose can often be enough to drive people to make better financial decisions for themselves and their future. It certainly has for me. For me, it started with a new purpose – being a good parent – and, over the years, grew with the realization of other things I wanted to achieve in life. That provides a lot of drive to keep on a strong financial path.
So, how do you find your purpose?
My recommendation is this: try new things, lots of them. Give some serious time and thought to everything you’ve ever been interested in or wanted to achieve in your life and dabble in them with seriousness. Volunteer for a charity and take on some real responsibility. Take some classes in an area of interest, or at least read some challenging books in that area. Work on a skill with intensity and regularity. Connect with people as you’re doing this.
What you’ll find is that many of those things are fun and make for good leisure activities for you, but one or two will just click in a deep and purposeful way. You find yourself easily flipping into a flow state while doing them and you genuinely feel good about the results that you’re producing or what you’re learning and will be able to apply soon.
The things that stick around in my life are ones where I lose all track of time doing them because I’m so engaged mentally and physically in that thing. I tend to believe that such a state is the optimum human experience and is a sign that you’re either acting out your purpose in life or very close to it. They make your heart sing out in a way that little else does. I tend to find that such states produce amazing results, too.
Find those things. It will take time, but when you do, you’ll know it. It might be working for a cause. It might be a particular kind of work. It might be something else entirely. When you find it, recognize that if you make smart financial moves, you can do this on your own terms for as much of your life as you wish, and it can become an incredible financial motivator.