There was a Simpsons episode where Homer makes the final payment on his house. Completely out of debt, he quits his job in spectacular fashion (literally burning a bridge in the process) and begins working at his dream job - a pin monkey at the bowling alley.
I’m in a similar position: I have more than enough money to pay off my mortgage and have some left over. And I have an enjoyable side job that could probably pay my bills sans mortgage.
Do I dare? Is this a really bad idea? I’m 37, so I hopefully have quite a while to live. But goddam, it’s tempting to step off the wheel.
But do you have enough to cover future problems? Is the side job rewarding enough to get you out of bed in the morning? What if your tastes change for the more expensive? The thought of getting out early is a seductive one, but full of pitfalls. Sock away the loot for 10 more years, then re-assess your position.
I think you’d be better off with Homer’s other plan: eating so much that he goes on disability because of his obesity.
What happens if you get sick? Would you still have health insurance? What if a tornado sends your house to the land of Oz? What if any of a countless number of disasters befall you? What would you do then?
My sister retired (financial controller of an automobile body manufacturer) at 43 to teach piano. It was the best thing she ever did, for now she is happy.
I doubt if I will ever retire, for I like what I am doing (lawyer).
What about after you quit working altogether? Do you have enough in investments and such to carry you? Or would you plan to work this other job until you die?
I briefly dated a retiree—retired at 40 and was a handsome and healthy 53. His hobby was taking care of himself and spending as little money as possible. I’m no gold-digger but he didn’t want to drive his car or accommodate my work schedule if it in any way meant a deviation form his routine. I unfortunately met him on his monthly trip to Costco and didn’t realize he wouldn’t willingly leave his paid-for house until the following month. No movies, no Starbucks, no concerts in the park if you had to drive there. Not my idea of a happy retirement but that’s just me. He’d tell the same stories repeatedly and I saw him as much older than he was.
i would suggest, if it is available, for you to take a leave from your main employ for a year. maintain your side business, but otherwise relax, travel, whatever you have in mind. as the leave is nearing an end, re-assess you situation; are you still financially set? are you still comfortable with the amount of free time you have? do you need to go back work, or maybe just find someplace to volunteer to keep you busy?
perhaps the time away from working will free you to pursue your wildest dreams. or maybe it will make you realize you need a routine, regardless of your financial situation, that keeps you getting up at the same time every day.
I think you certainly are in a position for some kind of big transition. Maybe try a career change or to be your own boss, but I would still want to keep some money coming in and to try to stay challenged.
If I had enough money to pay off my mortgage, I’d do it immediately. That frees up so much of your finances, and gives you a substantial chunk of equity in case something goes wrong.
I’d do that first, then take time to consider my other options.
Yeah, I agree with paying off the mortgage. I know some advise against it, but worst case scenario happens to you, you still have a house if you have paid it off.
The problem for most people in retiring isn’t the normal bills - its health insurance. Any sort of health insurance, even just major medical, is expensive - and gets more expensive as you age.
I’m in a similar situation, thoughtwise, and a similar age. My situation is a bit different. We are in the process of selling our house. Our plan is to use the equity to pay for something outright. If all goes according to The Plan, I will not have to work. Currently, I am the primary caregiver, moneymaker, cook, housekeeper and blowjobber, and frankly, I need a bit of a break. The idea of being able to “step off” for a bit is extraordinarily tempting. I’m not sure if it is a mid-life crisis or an end-to-the-crisis-crisis, but I do feel a break would help me approach the second half of my life with a healthier outlook and hopefully a fuller quality of life.
I’ve spent a lot of time thinking about what I want the remainder of my life to be like. Many folks make decisions when they are young about who they want to be and what they want to accomplish. As we age and experience life, those things can change. It is very difficult to truly analyze what is really important to you when you are running like hell on the treadmill of life.
I’ve worked all the numbers over and over again. We have a 10 page written Plan about the different aspects of our life, financial, emotional and physical and what we’d like to accomplish. It is The Plan. It may sound anal but I had a very wise man once tell me “Make every step you take be one step closer to your goal.”
It isn’t just the math. It is your life. And baby, believe me, I believe in equity.
My uncle (late 50’s) lost his job due to layoffs a few years back and decided he didn’t want to rejoin the rat race. So now he makes stuff and sells it at craft shows. It’s a great life, except for the minor detail that he doesn’t really earn enough from his sales to cover both life expenses (mortgage, health) and work expenses (travel to craft sales, supplies for making more stuff). But he’s happy.
Phil Greenspun wrote an interesting series of articles on this subject, after he retired at 37 due to founding a company that was sold during the dot-com boom:
I “retired” when I quit my full-time job in 2003, at age 58. I have a part-time job, two private pensions, and Social Security. It’s enough to live on without pinching pennies, but you can bet I’m changing the oil in my car every 3K. A car payment would hurt.
But it’s great, doing what I want, not having to deal with a boss or co-workers, not having to get out of bed at 6 a.m. in the winter and travel an icy road to work. If I want to read all day or watch my Wire DVDs, I can do that.