Maximizing Retirement Time: Being Flexible in Both Work Income and Spending

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When it comes to Financial Independence Retire Early (FIRE), many people get turned off because they define retirement as “never, ever working again for money”. Financial independence fits better with my goal of spending the most of your limited time on Earth aligned with your values.

If the idea is to maximize your independent time, then you have to accept that luck matters. This chart from Michael Kitces explores equally likely scenarios from someone spending down a $1,000,000 portfolio of 60% stocks and 40% bonds.

Equally likely:

  • Ending up broke or feel alarmingly like you are headed towards broke.
  • Ending up with many, many times more money than you started with.

Is retiring as soon as you reach the 4% rule too risky because you might run out of money? Or is working longer for 3% too risky because you might have wasted years of your life working when you didn’t need to?

Let’s look again at some charts from Engaging Data. Here are sample results for the early retirement scenario at 4% withdrawal rate at age 40 ($40k from a $1m 65/35/5 portfolio, retirement horizon 50 years, female longevity table).

  • Red – Alive, but ran out of money.
  • Light green – Alive, with less money than you started with.
  • Green – Alive, with between 100% and 200% of what you started with.
  • Dark green – Alive, with over 200% of what you started with.
  • Grey – Dead.

Here is retired at 40 with a lower 3% withdrawal rate ($30k from a $1m 65/35/5 portfolio, retirement horizon 50 years, female longevity table):

Notice at even with the riskier 4% withdrawal rate, you have roughly a 60% chance that your portfolio never goes below the starting balance for as long as you are alive. That means you just spend your 4% every year and it just replenishes itself over and over. Sure, the 3% chart looks safer as there is no red “failure” area. But is that chance of failure worth working maybe another 10 years to go from 25x expenses (4%) to 33x expenses (3%)?

If your portfolio value drops early in retirement, flexible withdrawals are one important tool to improve your portfolio survival odds. However, what about flexible income as well?

What if you retired earlier so that if things go well, you get more retirement years, but if things go bad, then you fall back on some part-time back-up work? Your main risk is of poor returns in the first 10 years of retirement or so. You would accept the chance that you might have to do a little work again to prop your portfolio up during that time. A good part-time job would have the following characteristics:

  • Scales up and down easily. Ideally, you could spend 10 hours a week, 20 hours a week, or 40 hours a week on it as necessary. This could mean hourly shift work or flexible self-employment.
  • Higher-paid skilled work that is at least partially satisfying. Unskilled work will be the easiest to obtain, but the pay will be low. Uber/Lyft driver, food delivery, home health aide, retail, warehouse, etc. You want something where your special skills are compensated accordingly.
  • Minimal maintenance. For some jobs, if you aren’t constantly putting in hours, you’ll become obsolete and won’t be able to start back up again. There may be professional licenses to maintain, etc.

Here’s a brief list of ideas:

  • Healthcare. Many positions in the healthcare field can be part-time and hourly, from doctor to nurses to technician positions.
  • Elder care. This may be related to healthcare, but the overall aging population is another trend to consider.
  • Accounting. An accountant or someone with similar skills can usually find work during tax season, assisting other accountants.
  • Tech. There is often consulting or project work available, if you keep your s and skills up-to-date.
  • Passion work. Turn your hobbies into work. You could be a travel guide, taking people on hikes, tours, kayaking, etc. Carpentry projects could turn into an Etsy store. If you like to fix things, become the neighborhood handyperson.
  • Real estate. I tend to break up residential real estate investing into two parts – the actual ownership and the property management. Property management is basically a part-time job which you can do yourself, and the effective wage can be quite high if you are skilled at managing tenants. (The catch is that you can also lose money if you are unskilled at it.)
  • Teaching and kid-related. People are having fewer kids, but spending more on each one. Sleep training consultant. Potty training consultant. Academic tutoring at any age. Sports coaching at any age. Chess coaching. Language coaching. Musical coaching. These all command premium hourly rates.

I am a conservative person at heart, and I know that I would worry about my family’s finances if my portfolio dropped significantly from my retirement date. Therefore, I am both using a conservative withdrawal method and maintaining a semi-retired work schedule for the time being. I don’t have the luxury of a full traditional retirement, but I like the balance so far.

Bottom line. Living off of an investment portfolio of stocks and bonds depends a lot on luck. One way to deal with this is to be flexible with your withdrawals. Good luck means spending more, bad luck means spending less. This flexibility may allow you to retire earlier with a smaller portfolio balance. However, you could also plan for a little work income to offset early bad luck with portfolio returns. If you instead have early good luck with market returns, then you’ve just won many more years of free time.

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Boeing Engineer: From Dream Job to Nightmare

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The most depressing thing I read today was Former Boeing Engineers Say Relentless Cost-Cutting Sacrificed Safety at Bloomberg Businessweek.

If you want to know why I am not part of the “I love what I do and I’m going to plan to work forever” crowd, this article pretty much sums it up. As someone who has an engineering background and has actually done work inside some of their facilities years ago (but never worked for Boeing), I also felt Boeing had the reputation of hiring the best aerospace engineers and thus made awesome airplanes. As a kid, that was a dream job. C’mon, you get to make airplanes!!!

Yet somehow a company renowned for its meticulous engineering installed software that drove the aircraft into the ground while the pilots searched desperately for answers.

Why? The answers to all your questions is money. At Boeing, the bean counters won and the engineers lost. It wasn’t overnight, but it like many things it seems gradually and then all at once. Even though the FAA basically let Boeing police itself, the FAA has still had to forcefully ground two of Boeing’s planes in the last 6 years. The last time a plane was grounded before that was 1979. The worst part is that they still don’t seem to understand their mistakes.

The relentless message: Shareholders would henceforth come first at Boeing. The important thing was not to get “overly focused on the box,” Hopkins said in a 2000 interview with Bloomberg. “The box”—the plane itself—“is obviously important, but customers are assuming the box is of great quality.” This was heresy to engineers, to whom the box was everything.

I can’t imagine how disheartening this would be to a Boeing engineer or factory worker. Their obsession is why the airline industry has become so commonplace and successful. We trust that we will land safely. They built up a great reputation. Now it appears that Boeing executives started trading that assumption of quality (reputation) in exchange for short-term profits (while firing many of the engineers). The product that they helped create had defects that killed people. Worker morale must be at an all-time low.

This is why building up a certain level of financial independence is important. Sure, your job right now is great. The pay is great. You’re building something cool. You like your boss. There is no end in sight, so why not buy the huge house, luxury car, and new boat? If you have the dream job and your specialized skills are highly valued, enjoy it but remember that if done properly you only need to get rich once! A dream job can turn into a nightmare. Read this article and watch out for those bean counters. I’m so thankful that I never have to answer to one again.

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The Most Common Sacrifices Investors Make to Reach Their Financial Goals

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According to a Wells Fargo/Gallup survey of U.S. investors, 78% say they are at least fairly disciplined in reaching their financial goals. About 50% of investors say they will have to sacrifice a “fair amount” or “a lot” to reach their financial goals, while the other half only expects to sacrifice “only a little” or “nothing”. Investors are defined as adults with $10,000 or more invested in stocks, bonds or mutual funds, either within or outside of a retirement savings account.

In what areas do they expect to sacrifice? Here is a chart showing the most popular ways in which the polled investors say they have and/or expect to sacrifice to reach their personal financial goals:

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Big List of Free Consumer Data Reports (2/2): See Your Confidential Rental History, Insurance, Retail, & Employment Data

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magLinks checked and new agencies added for 2019. Here is the second part of my big list of free consumer reports from over 50 different reporting agencies. The first part included your credit, banking, and subprime lending-related information. This part includes your housing, insurance, and employment history. Request a free copy every 12 months of what these databases have stored about you and are telling prospective landlords, insurers, or employers.

Again, you may not need to check all of these, and many may not even have a file on you anyway. But for example if you are a renter then you’d want to make sure your rental history is clean and correct, because if I was a landlord I’d avoid anyone with previous blemishes on their record.

Rental History

Realpage Consumer Report. Provides tenant screening through their LeasingDesk product, including “the industry’s largest rental payment history database.”

  • RealPage.com report request page
  • 866-934-1124

CoreLogic SafeRent. SafeRent provides both tenant and employment screening data, including information regarding landlord tenant and criminal public court records. One free report every 12 months.

  • CoreLogic.com report request form
  • 888-333-2413

Experian RentBureau Rental History Report. “Every 24 hours, Experian RentBureau receives updated rental payment history data from property owners/managers, electronic rent payment services and collection companies and makes that information available immediately to the multifamily industry through our resident screening partners.”

  • Experian.com/RentBureau report request page (see bottom right; PDF form)
  • 877-704-4519

First Advantage Resident History Report. Tenant and employment background checks. One free report every 12 months.

  • FAdv.com report request page
  • 800-845-6004

Contemporary Information Corp. CIC provides background checks on prospective tenants and/or employees and contractors for landlords and management companies. Keep records of any rental evictions.

  • CICReports.com report request page
  • 800-288-4757

Tenant Data. Provides tenant history reports, including any reported damages, unpaid balances, evictions, lease violations, noise complaints, or unauthorized pets.

  • TenantData.com Tenant History report request page
  • 800-228-1837

Screening Reports, Inc. A national provider of background screening service to the multi-family housing industry.

  • Screeningreports.com page (see bottom)
  • 866-389-4042

TransUnion Rental Screening Solutions SmartMove provides tenant credit, eviction, and background checks.

  • MySmartMove.com FAQ page
  • SmartMove will disclose the contents of a criminal and/or credit report retained by SmartMove to an individual who requests a copy of their report. To verify your identity and obtain a copy of your report(s) or dispute any information within that report, please customer service at 866-775-0961.

LeasingDesk (Real Page, Inc.) Tenant screening.

  • Realpage.com report request page
  • 866-934-1124

Auto and Property Insurance

C.L.U.E. Personal Property Report. A division of LexisNexis, CLUE stands for Comprehensive Loss Underwriting Exchange, which collects information that is used to calculate your insurance premiums. This report provides a seven year history of losses associated with an individual and his/her personal property. Includes date of loss, loss type, and amount paid along with general information such as policy number, claim number and insurance company name. This also means you can find out about previous claims on the house you are currently renting or recently bought, even if they weren’t made by you.

  • LexisNexis.com CLUE report request page
  • 866-312-8076

C.L.U.E. Auto Report. This report provides a seven year history of automobile insurance losses associated with an individual. Includes date of loss, loss type, and amount paid along with general information such as policy number, claim number and insurance company name.

  • LexisNexis.com CLUE report request page
  • 866-312-8076

A-PLUS Loss History Reports, subsidiary of Verisk. ISO stands for Insurance Services Office, A-PLUS stands for Automated Property Loss Underwriting System. Auto and property loss claim history.

  • Verisk.com report request page
  • 800-627-3487

Insurance Information Exchange (IIX), subsidiary of Verisk. Provide reports including your motor vehicle records and driver history, including any traffic violations or related criminal history. May require proof of adverse action to obtain free report.

  • IIX / Verisk.com report request page
  • 866-560-7015

Utilities

National Consumer Telecom and Utilities Exchange. NCTUE tracks when people don’t pay their phone, cable, or utility bills. One free report every 12 months.

  • NCTUE.com report request page
  • 866-349-5185

Retail

The Retail Equation. Tracks product return and exchange abuse at retail merchants.

Gaming

VIP Preferred. Tracks consumer data regarding check-cashing at casinos.

  • VIPPreferred.com request page
  • 800-638-4600 x140

Medical History

MIB (previously known as Medical Information Bureau). Run by 470 insurance companies with a “primary mission of detecting and deterring fraud that may occur in the course of obtaining life, health, disability income, critical illness, and long-term care insurance.” They record information of “underwriting significance” like medical conditions or hazardous activities. If you have not applied for individually underwritten life, health, or disability income insurance during the preceding seven year period, then you probably don’t have a record.

  • MIB.com report request page (see bottom)
  • 866-692-6901

Milliman IntelliScript. Tracks your prescription drug purchase history. “Milliman IntelliScript will have prescription information about you only if you authorized the release of your medical records to an insurance company and that company requested that we gather a report on you.”

  • RXHistories.com report request page (see bottom)
  • 877-211-4816

Employment History

The following companies all offer background screening services for employers. Most will not have any information about you unless you authorized a potential employer to run a background check on you (probably during the application process). Some will not provide you information unless there was adverse action. Otherwise, you can get one free copy every 12 months.

The Work Number (division of Equifax). They also keep historical income records.

  • TheWorkNumber.com report request page
  • 866-604-6570

Accurate Background, Inc.

  • AccurateBackground.com (scroll down to “How do I request a copy of my background check?”
  • 800-216-8024

American Databank, LLC.

  • AmericanDatabank.com report request page
  • 800-200-0853

Backgroundchecks.com.

  • Backgroundchecks.com report request page
  • 866-265-6602

Checkr

  • Checkr applicant portal (access report here).
  • 844-524-3275

First Advantage Background Check. Tenant and employment background checks. One free report every 12 months.

  • FAdv.com report request page
  • 800-845-6004

General Information Services.

  • GenInfo.com report request page
  • 866-265-4917

HireRight

  • HireRight.com report request page
  • 800-381-0645

Info Cubic.

  • InfoCubic.com report request page (PDF form)
  • 877-360-4636

IntelliCorp

  • IntelliCorp.com report request page
  • 866-202-1436

OPENonline

  • OPENonline.com report request page
  • 888-381-5656

Pre-employ

  • Pre-employ.com report request page
  • 800-300-1821 (ext 199)

Professional Screening & Information, Inc.

  • PSIBackgroundCheck.com report request page
  • 877-235-7574

Sterling Talent Solutions (acquired EmployeeScreenIQ)

  • SterlinkBackCheck.com report request page
  • 888-889-5248

PeopleFacts

  • PeopleFacts.com report request page
  • 800-600-8999

Reminder: Also see Part 1: Big List of Free Consumer Reports with Your Credit, Banking, and Payday Lending Data.

Sources: ConsumerFinance.gov, FTC.gov, Wikipedia

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Financial Freedom Is About Resilience to Outside Shocks

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I found myself thinking a lot today about General Motors announcing layoffs for over 14,000 employees – 6,000 hourly and 8,000 salaried workers. This affected the factory workers making the cars, engineers designing the cars, managers, and executives. I know one of those workers.

When you talk about the pursuit of financial freedom, often you may have a vision of sunny beaches and European cruises. Younger folks may be thinking instead about a cross-country RV trip with the entire family or spending a year hiking across Southeast Asia.

But instead of being aspirational, I have to admit that my pursuit started with a basis in fear. I am afraid of being broke, bankrupt, or having to beg someone else for help. I hate, hate, hate not being control. Most households do not have the ability to withstand a few months of unemployment without major disruption. I can’t stand that feeling of vulnerability.

Financial freedom is not a black and white thing. It is a gradual process of increasing your resilience to things outside your control.

  • Once you save up $500, you can withstand a car breakdown or a broken appliance. You don’t pay for your rent in weekly increments. You can pay for minor things without starting a cycle of debt that eventually spins out of control.
  • Once you have a couple of months of expenses saved up, you can withstand a decent-sized medical bill or a series of bad luck that would otherwise send you into high-interest debt.
  • Once you have a year of expenses saved up, you can withstand a layoff and short-term unemployment. You have the ability to move to a better geographic location to pursue better opportunities. You have options. You are not stuck.
  • Once you have a few years of expenses saved up, you can withstand a layoff and longer-term unemployment. You can train yourself for something different, something better, something more aligned with your values. With or without a primary job, you can take some risks, perhaps start a new business venture.
  • Once you have more than 10 years of expenses saved up, honestly, you have more money saved up than most people ever will at any age. If you reach this point, you probably have a system in place where it is likely just a matter of time until your investments grow that amount ever higher.

GM says they are trying to save money while times are good. Individual workers may need to have the same idea. From the Reuters article Money disasters can derail retirement:

Contrary to popular retirement saving strategies that are based on the assumption that procrastination is the root of the problem, the Rand researchers think there should be more focus on the probability of money disasters, which are much more common than most people assume. That scare would get people to focus on saving more during good times.

Many of my friends are that mix of skilled and lucky that the last time they involuntarily ended their job, they quickly found another job that paid even more. Maybe you’re one of those people too. But in the next big recession, which may or may not arrive soon, things might not be so easy.

Karyn Golden’s income was approaching $200,000 as she lived a carefree single existence at the peak of her career in Chicago, 20 years ago. She brokered real estate deals, served on boards and lunched with political leaders. She never imagined she would be where she is now – 70 and down to her last $200 in savings.

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Will We Ever Talk Openly About Income and Money?

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I started sharing my net worth anonymously because it was so hard talk about it publicly. Even today, my site logo is a voice bubble with money inside. Fast forward nearly 15 years later, and it is still unlikely that you know your coworkers’ salaries, let alone their net worth!

Do you know what the average tech worker in Silicon Valley makes? You might be surprised to know that with 5-9 years of experience, the average total compensation is nearly $300,000 per year. I know this from Jackie Luo’s Medium article I Know the Salaries of Thousands of Tech Employees. Luo herself is a software engineer at Square with 3 years of experience, and her base salary is $130,000 with a total annual compensation of about $230,000 (depends on stock price). She asked for anonymous data and compiled the following chart:

Her data reveals that stock grants are a huge part of total compensation (and one that is negotiable). As such, she encourages people to talk about their compensation and create a new culture of openness will help make things more fair. I admit I’m skeptical about that part. You’re fighting against a lot of deeply-ingrained discomfort. Is there any culture on Earth that talks about their wealth (and thus wealth inequality) openly?

I think that the best you can hope for is a trusted, popular website that becomes a huge database of anonymous submissions. I’m not sure any site has reached that level, but the cited ones trying include Glassdoor, Comparably, and Levels. While poking around, I even found a site that compares PhD stipends.

As an aside, this chart also explains why a disproportionate amount of early retirees are tech workers. If you’ve got people making $170,000 right out of college, I don’t care if you do live in the Bay Area, that is still a lot of income. If you have even a small degree of self-awareness, you know that many people live on far less, and that you could too. If you’re a tech couple pulling in $300,000+ a year, financial freedom within 15 years is on the menu. Whether you pick that option or not, that’s up to you.

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Good Luck or Bad Luck? Maybe, It’s Hard To Tell

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Reading children’s books to my kids has become a regular source of new wisdom. I guess that’s not surprising, if the goal is to teach kids about life. Here’s one that came across recently and keeps popping back in my head.

I first read it in the children’s book Zen Shorts by Jon J. Muth (Caldecott Honor book). There are many variations of it online, and it may be credited as a Chinese, Buddhist, Taoist, or Zen parable. Here’s a brief version from Daily Zen:

There is a Taoist story of an old farmer who had worked his crops for many years. One day his horse ran away. Upon hearing the news, his neighbors came to visit. “Such bad luck,” they said sympathetically. “Maybe,” the farmer replied.

The next morning the horse returned, bringing with it three other wild horses. “How wonderful,” the neighbors exclaimed. “Maybe,” replied the old man.

The following day, his son tried to ride one of the untamed horses, was thrown, and broke his leg. The neighbors again came to offer their sympathy on his misfortune. “Maybe,” answered the farmer.

The day after, military officials came to the village to draft young men into the army. Seeing that the son’s leg was broken, they passed him by. The neighbors congratulated the farmer on how well things had turned out. “Maybe,” said the farmer.

I enjoy the sound of Alan Watts’ voice, so I am also embedding this YouTube version:

I still have a hard time applying this parable in real-time, but it does help me after some time passes. This parable is also tricky because you have to remember both when life puts up a roadblock and when you receive an unexpected windfall.

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The Greatest Fear of Newt Scamander

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Harry Potter fans will remember boggarts, shape-shifters that take on the form of the viewer’s greatest fear. This will be different for everyone – perhaps snakes or public speaking. If you’re reading this site, you might relate to Newt Scamander’s greatest fear as revealed in the latest trailer from the movie Fantastic Beasts: The Crimes of Grindelwald.

Now, there’s nothing universally wrong with working in an office. Some people work well in an office environment, while others can’t stand it. I don’t have hard statistics on this, but my hunch is that those that really hate the office environment are more likely to seek early financial independence. You have to motivated to think outside the figurative box (to get out of the literal cubicle).

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Why ‘Find Your Passion’ Can Be Bad Advice

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The power of mindset was popularized by psychology professor Carol Dweck in her book Mindset: The New Psychology of Success and others including the bestseller Grit: The Power of Passion and Perseverance. The fixed mindset believes that success is based on innate abilities like talent and intelligence. The growth mindset believes that success is based on effort, good teaching, and persistence. Importantly, a person with a growth mindset believes that they have more control over their own fate.

In an article in The Atlantic, Olga Khazan explores why “find your passion” is bad advice for similar reasons. O’Keefe, Dweck and Walton have a new paper in the journal Psychological Science about the ““fixed theory of interests” versus the “growth theory of interests”.

Are passions really “found”, as if they are a hidden gem in a pile of rocks? The fixed theory assumes that passions are pre-formed. The growth theory suggest that you must gradually develop a small interest into a burning passion through time and effort. This path won’t always come quickly or easily. I liked this quote:

“If passions are things found fully formed, and your job is to look around the world for your passion—it’s a crazy thought,” Walton told me. “It doesn’t reflect the way I or my students experience school, where you go to a class and have a lecture or a conversation, and you think, That’s interesting. It’s through a process of investment and development that you develop an abiding passion in a field.”

One danger of the fixed theory is that you’ll pick something up and if it doesn’t “click” right away, you’ll just give up on it and move on to the next thing. You might miss out on a lot of potential passions because you didn’t dig deeper. Alternatively, once a person with a fixed mindset believes that they have discovered their “true passion”, they are likely to stop developing your other interests.

How do you know when to give up and when to keep trying? This is always the difficult part with no simple answer. I still prefer this simple diagram as a general guidance mechanism:

caddell620

  • It’s easier to fail and still try again if you are really interested in something.
  • It’s easier (or faster) to get better at something if you are naturally talented at it.
  • You are more motivated to fail and still try again if you get paid a lot of money to do it.

I often feel like people believe that passions aren’t allowed to also pay well. In fact, financial rewards should be another incentive to help you develop an interest into a passion. You’re trying to find something that you don’t mind working at day after day.

If you asked me as a teenager, I would have told you that I wanted to be a professor or a scientist in a lab coat. I had little interest in money, and I had a mental image of becoming the stereotypical “absent-minded” professor. It may sound weird, but engineering ended up being the “easy” career path for me. Personal finance started out only as a small side interest, but eventually it developed into a passion where now reading investing books is my idea of a nice afternoon. Sometimes I wish I had pursued finance or computer science earlier.

Bottom line. Finding your passion is rarely something that just “clicks”. It takes time and effort to develop an interest into a passion, and the fact that it is practical should be seen as a positive, not a negative. Sometimes your side interest can turn into a successful career/business, and sometimes it ends up better left as a side interest. Keep developing your interests, but watch your downside risk.

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Why Pursue Financial Freedom: Fulfilling Retirement Activity vs. Ideal Job

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retirehappy

How to Retire Happy, Wild, and Free by Ernie Zelinski continues to offer smart observations on retirement. For example, when people are working, their idea of leisure is often passive: watching TV, listening to music, shopping, or eating at restaurants. However, in retirement, they need to replace all the intangibles besides money that working provided.

The Academy of Leisure Sciences has 8 criteria for finding a good leisure activity in retirement:

  1. You have a genuine interest in it.
  2. It is challenging.
  3. There is some sense of accomplishment associated with completing only a portion of it.
  4. It has many aspects to it so that it doesn’t become boring.
  5. It helps you develop some skill.
  6. You can get so immersed in it that you lose the sense of time.
  7. It provides you with a sense of self-development.
  8. It doesn’t cost too much.

Did you know even know the Academy of Leisure Sciences existed? Another new tidbit from this book.

My observation is that these are also same characteristics of a good job. Think of your own job and read it again:

  1. You have a genuine interest in it.
  2. It is challenging.
  3. There is some sense of accomplishment associated with completing only a portion of it.
  4. It has many aspects to it so that it doesn’t become boring.
  5. It helps you develop some skill.
  6. You can get so immersed in it that you lose the sense of time.
  7. It provides you with a sense of self-development.
  8. It pays enough to support your lifestyle.

Of course, this brings you to why saving up money to reach financial freedom is a worthy pursuit. The list of things that satisfies the top 8 leisure criteria should be pretty long. It might take a few tries to find something that fits, but you could play any sport, learn to cook, speak a new language, and so on.

However, adding the criteria that it has to pay you makes the list much shorter, perhaps non-existent. Compare picking up cycling for personal enjoyment vs. getting paid as a professional cyclist. Learning how to smoke some decent backyard BBQ vs. getting paid as a professional caterer. Start to speak a new language vs. becoming an (adequately-paid) French teacher. I’m sure some lucky people out there really do have a perfect job where they are getting paid for something that they would “do for free”. However, most of us don’t, so that’s where financial freedom comes in to remove that money requirement.

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Ikigai – Finding Your “Reason For Being”

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ikigai

I stumbled across the concept of ikigai in Japanese culture – loosely translated as “reason for being” – in this Medium post. The Venn diagram above appears to be taken from this Toronto Star article (which is based on another work, and so on…). The graphic suggests that we asks ourselves these questions to find our ikigai:

  • What do you love?
  • What are you good at?
  • What does the world need from you?
  • What can you get paid for?

In other words, Ikagai is not just your passion or something that makes you happy. I searched for deeper explanations and found this BBC article with the most satisfying one:

Ikigai is what allows you to look forward to the future even if you’re miserable right now.

I was reminded of this previously-mentioned Venn diagram by Bud Caddell regarding finding the right job:

caddell620

In essence, the question “What does the world need from you?” is collapsed into “What can you get paid for?” above. If you’re looking for the ideal job, then I suppose that is a good shortcut.

However, not everyone’s reason for waking up every morning involves money. The BBC article cites a 2010 survey of 2,000 Japanese men and women where just 31% of participants cited work as their ikigai. That means for 69% of Japanese people, their ikigai is something else. Family, friends, community, a hobby, a volunteer position.

Food for thought.

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Keep Moving In The Right General Direction

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compass200Here is some career advice by longtime Silicon Valley executive Ben Fathi in his post What I Learned from Working for Both Bill Gates and Steve Jobs. An excerpt (bold added):

What I can tell you as a piece of career advice is to only work on things you are passionate about. As long as you’re learning, keep at it. There is so much to learn and this industry moves so quickly that you will fall behind if you stop learning even for an instant.

As long as you’re moving in the right general direction, I used to tell people, it’s all good. Don’t try to plan out your entire road trip from New York to LA before you start out. (If I’d done that, I would have lived an entirely different life — never having even signed up for that first computer science class.) Instead, on your way to LA, just make sure you’re driving in a generally westerly direction, then keep going. And keep learning along the way, course correcting as necessary. You’ll eventually end up in the right place; and you’ll have a lot of fun along the way. I know I did.

You could make parallels between career and financial advice. Keep yourself moving in the right direction. As long as you’re learning, your career will progress. As long as you keep saving and investing in quality productive assets, your portfolio will grow over time. If you find something you don’t mind working feverishly on for 60-80 hours a week (ideally when you are young and don’t have a family to ignore), go for it. Add in some luck, and both your career and finances will be zooming along. If you aren’t zooming right now, don’t worry. Just keep moving forward in the right general direction.

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