The Ten Commandments of Early Retirement

Welp…the title is self-explanatory, and for clarity’s sake I’ve organized these commandments into loose categories.

Please let me know in the comments what your own thoughts on these are, any questions you might have or clarifications I could make, etc.

Above all else:

1) Keep as mentally and physically fit as possible.

This makes everything else—everything—easier. And even if you fail to achieve financial independence and early retirement, mental and physical fitness can only serve to increase your quality and quantity of life.

The FI/ER mindset:

2) Be sure you’re not using early retirement as a kind of geographical cure.

In other words, be sure you understand that you take your personal problems with you wherever you go.

I learned that the hard way. I realized after retiring that I was using the pursuit of FI/ER as an attempt to get away from troubles that were more my own devising and perception than intrinsic to my surroundings. If I’d gotten some therapy and been more honest with my superiors, I might still be working—and enjoying—that job.

3) Those who can’t imagine what they’ll do after they retire, won’t.

Simple, really…If you don’t know where you’re going, how will you get there? And to this I’m convinced there’s a corollary: painful stimuli serve a purpose, but it’s better to move towards something positive than away from something negative.

4) Retirement <> idleness.

The most common question put to early retirees is this: “What do you do all day?” When contemplating early retirement you may be afraid you’ll be sitting around on your can all the time, bored, but after maybe a month when you’ve caught up on sleep and overcome burnout, etc., you’ll be surprised how much you’ll find to do.

Please check out this post: “The Purpose of Life,” for further thoughts on this commandment.

Money mechanics:

5) Work towards having something to sell besides your time.

I call that “Early Retirement’s Magic Bullet.” Take a look at my article of the same name for a full explanation.

This statement’s a bit like Einstein’s “E = mc2”. From this it’s possible to derive all other steps in the FI/ER process.

6) Use your creativity and energy at least as much to your own benefit as you do to your employer’s.

Remember that your job isn’t a personal relationship, but business. You may want to sell your time to your employer and your employer may want to buy it from you. Work smart and hard and well at your job, but work even smarter and and harder and better at your own life.

7) Investing: set it and forget it.

Many people micro-manage their money; I don’t, or at least not anymore.

Which is not to judge people who do. Tinkering around to optimize your financial structure can be a fun game, and I endorse any opportunity to increase your income/savings/etc. Credit card churning, for example, can be a great way to see the world on very little money, and there are a LOT of people who get off on it.

Where I’m coming from is this: set it and forget it has been very good to me, and I’m a strong believer in “dance with who brung ya.” Our financial structure has gotten so rigid that I don’t have any more room to optimize.

Although  maybe “set it and forget it” should be a long-term goal rather than a short-term tactic during the accumulation phase.

8) Not all debt is bad.

Show me a capital loan that carries a payment of two or three hundred bucks a month at an interest rate close to the rate of inflation, and I’ll likely take it because it’s essentially free money. The loan on our Prius, for instance, carries a rate of 1.9%—meaning the principal is very close to eroding during the life of the loan. True, the dollars I pay are also eroding, but across time there’s still an arbitrage of five-ish percent between the interest rate and market returns.

9) Geographical arbitrage can make many years of difference.

A personal example: a key component of our FI/ER plans was living and working in a very expensive (and consequently high-salary) northeastern city. While we were there we ran three rental properties, which when we finally ER’d we condo-ed out and sold before moving to a house in the southeastern Appalachians. The appreciation on the rental units paid in full for our new house, leaving what we otherwise would’ve been carrying as house equity free for us to invest.

Plus, there was the peace of mind that came from knowing that no matter what happened, as long as we came up with a couple of thousand bucks a year for property taxes, nobody could take our home away from us.

And finally:

10) Be very careful about sharing your plans.

In my experience if you divulge your FI/ER plans to others, you’ll find that the two most common reactions are incredulity and jealousy. The jealousy is especially toxic since people tend to keep resentment secret, especially in a work setting. Supportive reactions will be a distant third. Take that into account when you’re deciding who to tell.

And that’s it. Ten ER commandments to live by.

Again, these are crucial ideas and I’d very much appreciate it if you’d share your thoughts below.

This is simultaneously the coolest and dumbass-est thing I’ve ever seen: the Pancake Drawing Bot. I’ve not been able to find a 3D bacon printer, but I live in constant hope.





4 thoughts

  1. Great list, ERD!

    Can I call you ERD? I’d say it’s too late, but you’re the one with an Edit button and mouse in your hand (or finger on a trackpad).

    If I could add an eleventh commandment, it would be to have a contingency plan. A way to earn income if you suffer from particularly poor sequence of returns in the early years. A Plan B if you’re struggling to find purpose without paid employment. A new goal or passion project if you find you’ve got more time than you know what to do with.

    I don’t anticipate any of these problems, but I was a boy scout for at least a couple months, so I prefer to be prepared.


    1. Good suggestion. Push up on your income or down on your expenses–definitely the way to weather bad returns, and if you can do so by finding a job you love, so much the better.

  2. I like tenant 2. Don’t use early retirement as an escape plan. If you have internal problems, they will remain even when you retire. I guess that is why some people say to figure out a way to enjoy your job instead of finding a way to get out of it early.

    I like a dual contingency plan where you both find a way to get out of your job and a way to enjoy it more.

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