"At the same time, there is a depressing message for the rest of us: Maybe the fact that you would even consider retiring to a life of luxury at a young age is a sign you aren’t going to succeed at a high enough level to make that an option."
Now wait a second... didn't the author just finish talking about diminishing utility? This sounds like the mindset of someone who really doesn't understand just how little it takes to work and/or retire comfortably. The vast majority of people don't need to travel the world in a private jet to enjoy retiring luxuriously in their 50's (or in most cases even earlier).
Most 'professionals' quickly reach the point where money is really more about status than anything else. Sure, there are a few toy's, but the gap between a 25k car and a 250k car is not actually that big for most day to day driving. Often a 50$ watch is more useful than a 50,000$ watch.
Rent a 35' boat for a weekend and it's a fun experience, own a 35' boat and it's a long term hassle.
Not that status is useless. Being able to afford a high status area has plenty of knock on benefits. But, where the benefits of a middle class vs poor are might be huge past that there are significant diminishing returns.
So, IMO it's really a question of how much you care about status vs. any thing else. 50 year old with 90 million in the bank are a dime a dozen in some circles, where a CFO at Google get's a long list of people paid to do what they say.
"Most 'professionals' quickly reach the point where money is really more about status than anything else."
This sounds like something a young person would say. It's certainly not what most successful "professionals" would say. Most professionals feel like they're on a work treadmill same as everyone else, except they're doing it to support a more expensive house, more expensive cars, more expensive clothes, more expensive food, more expensive education for their kids, more expensive frills than people who make less money.
The consumer society we live in encourages/creates spending patterns that almost unavoidably rise right along with our salaries. These patterns of high spending then feel like they're "necessary" and they raise the bar for what feels like a safe retirement nest egg. It is possible to avoid this consumer-society treadmill, but it's not easy -- it requires swimming against the stream -- and a relatively small percentage of people do it. Avoiding it is basically what the Mr. Money Mustache website (referred to in other posts in this thread) is about, and it's interesting to note that the people who seem to gravitate to that plan often retire with a fraction of what "professionals" would consider a safe retirement nest egg.
> * Most professionals feel like they're on a work treadmill same as everyone else, except they're doing it to support a more expensive house, more expensive cars, more expensive clothes, more expensive food, more expensive education for their kids, more expensive frills than people who make less money.*
I'm confused as to why you think this is not about status.
Not OP, but I can tell you what I've been experiencing. It's not about status, I don't care about impressing anyone else.
After leaving at&t to work in trendy-SF-startup tech scene, my salary sky-rocketed. So I get married and have 2 kids. You'd think I'd just be relaxed and happy right? I was; and I am still really, but that relaxing time gave me more time to read stuff like HN, etc.
--- I read a ton about poor public education in USA... and now I need a private school. Or, I need to move into a neighborhood with million dollar houses to gain access to their super-amazing public schools.
--- I read about horrible quality of food and watch "Food, Inc.". Now I've restricted my whole family's diet to USDA Organic, non-GMO from WholeFoods and my monthly grocery bills easily exceed $1,000.
--- Today I'm still driving my first car, Honda Civic LX 2002. It's great right? For me yes, all I do is drive 20mins to BART station and back. But I have a wife & 2 kids; time for a family vehicle. I could just get something cheap & used, right? Then the thought of my wife being stuck in a broken-down vehicle somewhere with our 2 kids hits me and I'm like... "Nah, I better make sure I get a nice, new & reliable, many airbags vehicle with GPS and everything to keep my family safe" It's kinda FUD really, but when it's my own family and I have the money, YOLO.
--- Clothes? Today I have a standing desk, but I use to sit a bunch. I started noticing that cheap jeans do feel less comfortable. Before I know it, all my jeans are near $200 from GUESS. They don't look fancy, you can't tell they're from GUESS. But they feel great.
I didn't do any of this to impress anyone. I just want the best for my family. And I've learned that the definition of "best" keeps moving higher and higher the more I read about stuff & experience things.
Agreed. There's also a huge red flag in the mindset that I saw as I was reading that lifestyle choice. We're all going to die some day, which throws another huge strike against pursuing the best above enjoying life. Add in the pipe dream of living forever that is being sold these days (just as it has been many times before), and it only makes "living well" seem more and more difficult. Assuming we can even somehow define living well...
tldr: Find what makes you feel content. Be willing to stop doing other things.
"I'm confused as to why you think this is not about status."
You can say it's about status if you want; it has some truth as an objective, detached description of what's happening. For purposes of our discussion in this thread, though, I would say it's neither very interesting nor accurate. And more importantly, it's not helpful. People's _subjective_ motivation for purchasing things rarely has anything to do with status. If you think you're going to be able to avoid the same money issues by virtue of being less status conscious than every one else, you're probably wrong.
The helpful thing to recognize is that our consumerist-society is driven by ads and social cues that create what we perceive as _needs_. This combines with the simple and hard-to-combat psychological fact that we tend to spend more money if we have more money. So as their income rises people tend to find more "needs" and spend more and more.
Just saying that people fall into this trap because they're status conscious, and that you'll avoid it because you don't care about status at all, is not going to help you. The psychological effects that you'll need to battle in our consumerist-society are more subtle and difficult to shake than that. Go read some of the stuff at that Money Mustache site; that may help you realize that that the issues people deal with in trying to spend less are not about status. For a start, try this one, http://www.mrmoneymustache.com/2013/08/29/luxury-is-just-ano...
"Often a 50$ watch is more useful than a 50,000$ watch."
Another factor that comes into play is your mental balance. A man with a $50k watch is a lot more worried about what his wrist bumps into than a man with a $50 one.
The cost of a car is only weakly related to how well it suits you. I find my $12k car much more pleasant than many much more expensive cars I've tried (I admit I haven't tried anything in the $250k range).
I'm much more comfortable in my used Subaru. My fear of buying a new car comes from knowing that I don't want to spill coffee in it (and I definitely would).
"the gap between a 25k car and a 250k car is not actually that big for most day to day driving"
Look, I generally support your point, but even the gap between a 25k and a 75k one is big. Having a 100k, 1 million or 10 million are vastly different.
Really? I don't think anyone's saying there aren't major physical differences in the actual car at those price levels, but the core utility is pretty much the same for all practical purposes.
After a certain point, practicality takes a back seat and other concerns become primary.
I love my Mazda 3. It does everything I want it to do. Looks great, drives fast, has a loud stereo. But I will eventually replace it with a soundproof car. Why? Because I plan to move in town, and my car has already become the one place I can go to listen to music loud on demand without having to resort to earphones. Once I move in town, I won't be able to just hop in my vehicle and crank it up. I have to get out of the parking deck, get out onto the highway if I don't want to be a douche about it. It's not a refuge anymore.
I can't not move in-town, and I can't not have my refuge, I rely on it. Without it my stress level goes up, and when you have a lot of money, the best use of it is to reduce stress. A soundproof car is not a 'need at all costs' sort of luxury that a private plane becomes for high-profile CEOs that have a serious need to not deal with commercial air travel, I can get by without it for awhile, but at some point the advantages will outweigh the tradeoffs and I'll spend a gross amount of money and dump a perfectly good automobile for one that solves a very specific need.
Well I guess the crux is the difference between what one considers 'major differences'. It's true that a 25k and a 75k car will bring one or multiple persons from point A to point B. A $500 clunker will do that, too. 25k will get you (sticking to new cars for the sake of the discussion, but the same dynamics hold for used) a Camaro, a Dodge Grand Caravan or a Ford Escape. 75k gets you a BMW X5 or a Porche Cayenne Hybrid. The room in those cars, the level of comfort, the quality of the drive is of a different level than in the first 3. Is it 'worth' it? Of course that depends on your frame of reference. For somebody with a commute of an hour, or somebody who regularly goes out to ski or on longer road trips to visit family, it's a real difference.
Back when I was a student, or even when I just had my first job, I looked at cars in that price range and thought that people would have to be nuts to spend that much on a car. Now that I'm in my mid 30's with a family, the BMW X3 I drive doesn't seem like such an extravagance it once did. If I had 2 million I too would semi-retire, but the X5 or Cayenne would be out of my price range - the yield on 2 million doesn't make it fiscally responsive to buy a car of that price range. But somebody who retires with 10 million could. And they could dine in much nicer restaurants much more often (for those into that), and do a bunch of other things that would be a real difference from those with 2 million.
Which brings me to the second point - what's the difference between having 1 million or 10? Well quite a lot. 1 million will let you 'retire' if you're content with a lower-middle class lifestyle and do some paid work you enjoy every now and then. 10 million lets you retire comfortably and lets you go on holidays abroad a few weeks or months a year. It still 'only' (yes yes, first world problems) affords you a house in a nice but not upper class neighborhood, and you won't be jetsetting first class around the world with it. Is that 'necessary'? Of course not, billions of people would literally give their right leg for just a fraction of these amounts. Yet most people in my (Western European, mid career professionals) social circles don't consider it 'wealthy' or would be content with such a lifestyle for the rest of their lives, without any prospect of advancement.
Maybe there is a similar case for the difference between 10 and 100 mil, or 100 and a billion, I don't know - I don't have that much money, most likely never will, and I don't hang around with anyone like that either. But I can imagine that the people with the 50 feet boats in the marina (the 100 million crowd) have a different lifestyle from those with boats that can go from Miami to Monaco (the 1 billion crowd).
I don’t agree that you need to stick with new cars for apples to apples comparison; it’s just a question of value for money.
I agree there is a large bump from a 500$ Junker that's likely to break down and say a 25k used 2013 Acura TL with 15k miles. However, the gap from a 25k 3 year old used car in great condition and a 35k new car of the same model is not that great. And the gap between a 35k car and a 70k or 250k car is again there but not that huge. The 25k is long past the point of not breaking down on the side of the road; it's got heated power seats, heated power side mirrors, auto dimming rear view mirror etc.
Don't get me wrong the next bump is real and say automated cruse control is useful. But, it's less useful than you might think and you can expect that to be part of the basic 25k package before too long.
As to retirement I am saying early retirement on ~5 million where driving a 25k car is a completly reasonable choice is where dimmining returns start to hit hard.
The "fraction" refers to expense rate versus savings rate. If your "absolute amount" is low enough relative to your income, your savings rate is high so you can retire earlier.
But that's the point. This process is "faster" on a higher salary if and only if your final target income isn't also higher. For many people this will not be the case, e.g. the person with a 100k/yr salary has a higher retirement cost of living targeted than the person with 50k/yr salary does.
Of course, if you are happy living a 50k/yr lifestyle and retirement but happen to make 100k/yr, yes, you should be able to retire much faster.
The MMM lifestyle is something like 25-30k to live.
If you make 50k.. you can save at most 20-25k, taking (10-15 years to retire, would need to do math).
if you make 200k, you can save 150-175k, reaching retirement in 2-3 years.
The "higher income -> higher lifestyle" is a myth MMM tries hard to dispel. You don't NEED newer cars because you make more money. You don't NEED a bigger house. Sure you can choose those things...
It has a huge impact if you are willing to approach it that way, but my point is that I don't believe many/most people in that 100k+ earning range actually are willing to retire to a 20/25k range, at all.
Which leads you back to scaling everything up to the number you are willing to you are comfortable with.
Yes he did, this is a very poorly written article. I know lots of people who have retired "early" because they came into enough money[1] that they didn't need to work for their lifestyle any more. As the mmm[2] web site is pretty good at pointing out, you don't need a whole lot to live pretty comfortably, especially if you're not going to work every day so you can live where property values are low.
There are people who feel financially insecure even with tens of millions in their accounts, and then there is a friend of mine who walked away with $1.2M after selling his house during the dot com run-up and moved to Boise, IA. He's been there ever since and really loves it.
In my experience the people who "can never get enough" are the unusual cases, not the folks who just happen to like what they are doing and it pays well, but people who focus all of their energy on increasing that number at the bottom of their portfolio account.
There are a whole lot of people who are "retiring" than you read about in the funny papers. They don't call it retiring of course, because retiring carries a stigma of sitting on a porch sipping mint julips and telling stories about the 'good old days', but they feel bad about calling it 'full time vacation mode' which is really what it is.
[1] Generally technology people of course, and generally through stock they owned in a company they worked at as an employee.
I am more like Mr. Money Mustache. When I was 47 my wife and I sold a nice house just north of the Del Mar Race Track, and moved into a tiny but really nice house in Sedona Arizona. Major downsizing.
As it turned out, I got bored in retirement and in the last 15 years I have written a bunch of books, consulted for some great companies like Google, but the difference is that I have had a lot of freedom now, and probably averaged less than 10 hours per week, not including writing, in the last 15 years.
I have to admit to a lot of curiousity about how Google's CFO will do after a few years of leasure - I hope he enjoys his travels!
Just out of curiosity, how has your income from these more, I assume, passion-based writing projects and consulting jobs compared to the income from your original profession that allowed you to initially retire in the first place?
I made much more money when working for large companies, on site or as an employee. I don't charge much when working remotely unless a customer wants me to be always available during working hours in which case I charge onsite rates. Working onsite at Google in 2013 paid well but cost of living in Silicon Valley is very expensive. Where I live in Arizona, life is much less expensive than in California. BTW, I just came back from a 2 1/2 hour hike in the local mountains with five friends. Having this freedom is worth so much more to me than extra income.
"""The real question is not why these four men are all retiring"""
I disagree. NFL players on average retire for very different reasons than Google execs. It may not be the case for the recent retirees but even if you are fully healthy it's really risky to keep playing in the NFL (concussions alone, check health premiums of NFL players etc.). Many players should probably retire earlier. It's a lot better to enjoy less money than to have more money and Alzheimers or the like at age 50.
+it's more likely that NFL players that retire early kind of have a good feeling for how many more high level seasons they could have played. At least I'd think it's easier to judge the capabilities of your body than the capabilities of your mind. (QB's are the exception, I guess Locker could have stayed around as a journeyman for a couple of years and made relatively safe money holding a clipboard). I don't have any evidence but I also suspect some of the surprise early retirements may be ralted to PED use and/or uncertainty if that can be kept up "undetected". At least it's reasonable to think this is the case for a higher %age than in other fields.
tl;dr: apples, oranges. NFL retirement is extremly different from most other forms of retirement. The high level abstraction of "retired but didn't have to" is at least somewhat questionable.
I remember when Tiki Barber, a running back, retired early. He was on a talk show and when they asked him why he retired, he said that being a running back in the NFL was like running full-speed into a brick wall over and over again.
Wow, Shocking news!! People want to enjoy the money they have earned ...
I have a company and have rich friends, this is completely normal, people do what they always wanted to do when they get money. It is called "financial independence".
I read and write on HN(for other people a waste of time) because I like it, and because I can. I travel just because I can. I work on projects that probably will not make money(and end making the most money of all because nobody risks doing it) just because I can.
What is really a Paradox is that when you start doing what you really want to do,instead of what others tells you to do, you could start making more money than ever.
You are not a slave of money. It is a common belief of people living in NY. People earning a million dollars a year but spending half of that in a condo.
Personally, I am trying to work as hard as I can so I can start a company. Even if I had $5 million I would probably keep pushing myself to ensure I had what I felt I needed to achieve my goals.
Money lets you purchase other peoples time, it's boosts your productivity, and if you can hire someone to build you something you can do ever greater things.
Although this is just my motivation, I am sure most of the highly productive or motivated people feel the same way. They want to do something great, and they know they have to work to get there.
This has always been my understanding of the obscenely rich. At some point, it can't be about material goods, and even status seems like a thin draw. It's got to be about power. Not necessarily as in a corrupt, evil way, but just the ability to impact the world on a national or global scale. The difference between a millionaire and a billionaire isn't how many private islands they can buy, it's how many people can be paid to further their goals, whatever those goals may be. Usually, this comes in the form of companies and/or politics. More money and more companies lets you change the world. And really, what person hasn't at some point had the thought, "Man, if I ruled the world, I would fix XYZ" You may not be able to rule the world, but with enough success and money, you can probably fix a few XYZs.
Well there's work and then there's "work," and I think this is the big part of what the article misses.
Put it this way - if someone asked me if I wanted to be making $250K/yr at CorpTech or $250K/yr hitting baseballs, the choice is pretty clear (at least for me, you may hate baseball). When a job is fun or emotionally rewarding, it changes the way you perceive "work."
I bring this up in response to your comment because owning and running your own company is an emotionally gratifying experience. Granted, there are moments that tear your heart out, moments that leave you awake at night, but if you're wired for this kind stimulus, you enjoy it. It stops being about (just) the money.
> if someone asked me if I wanted to be making $250K/yr at CorpTech or $250K/yr hitting baseballs, the choice is pretty clear (at least for me, you may hate baseball)
Well, of course. But that doesn't make the choice unclear ;)
"Presumably America’s companies are better run when the most talented executives put in a 50-year career than if they put in only 20 or 30."
Are we talking about the executives most talented at increasing shareholder profits, or executives most talented at improving people's lives? To put it another way, there's a lot of good reasons we put term limits on politicians, why are business executives different?
I am not sure if you are kidding, but the serious answer is that politicians who can stay in power without limits (witness Putin now) tend to rearrange the political process of their country with sole purpose of never leaving their post. Then they lose all accountability and do as they please without worry of being voted out.
Companies, on the other hand, exist in the ecosystem of the market (so a single CEO can not rearrange the playing field). If the company is doing poorly, its shares will drop and forces will gather to remove the CEO (note how Balmer or recent CSFB CEO were removed).
Jason Worilds is retiring so he can devote more time to his religion, the Jehova's Witnesses.
I don't necessarily disagree with the author, but another reasonable explanation is that successful people like their jobs, and in the absence of larger pursuits, like religion, they see no reason to move on. Retirement in and of itself isn't the "prize" for every single person.
I actually wonder how common it is to retire early? First of all what is "early"? If it is before 65 then a good number of people do.
Getting to the spirit of the article though, a good chunk of the people that I know who don't "have to work" anymore, don't, or do so infrequently. I think it is rare indeed for someone to become a billionaire or hundred-millionaire without the manic drive that this article speaks of, but I do know plenty of millionaires who either don't work or take it very easy.
It actually would make sense that a lot of millionaires wouldn't work anymore. Presumably they make most of their money in a one-time deal (i.e. their company gets sold), if they were a solid software engineer, etc at said company it might not seem worth it to go back and work another company doing CRUD. Maybe the right opportunity comes along, maybe it doesn't, but why pressure yourself if you don't "have to work".
It's strange to see the author come to this conclusion (fierce drive is necessary for high income, and as a result prevents early retirement) without trying it out on anyone. Why not just ask executives who are still at Google why they do it, and mention what the most common responses were?
I dont understand all this "retirement" anxiety. Anyone with half a brain can find a job/lifestyle they'd love doing forever and save enough money not to have to worry about it. Why fritter away you life on activities you hate?
This is not true in my experience. There are a lot of people who want to do a job that doesn't pay well (like teaching elementary school) or there aren't any jobs in their area other than physical labor (much of the midwest US outside of the cities).
Saying "anyone with half a brain can find a job they love" is really dismissing quite a lot of people that are not in the same privileged situation as you.
The spelling of 'NFL' vs. 'N.F.L.' isn't up to the individual NYT writer. Whatever his preference, his editor will make sure it complies with the New York Times Manual of Style and Usage, which in its 2015 edition still calls for 'N.F.L.'
Money isn't about money. It's about status and power for many people.
That's different from being ambitious in general. I probably wouldn't stop working if I made $20 million, but I'd work differently. I'd take more risks, play less politics, and be able to focus more due to fearlessness. I, however, don't view work for work's sake as being valuable. When I'm 55, I might decide that it's time to do more traveling and less working.
There are, however, a lot of people who see money as "life's scorecard" and that leads them astray, because ultimately optimizing for that one factor is (beyond a certain point) astronomically stupid. If you enjoy your work, keep at it. But a lot of these people don't. When you look at why they keep going, though, it turns out that they're not really into the work or the money themselves but the status that come with them. A surprising percentage of people don't really care what it is they do, so long as they can use a private jet to do it.
Now wait a second... didn't the author just finish talking about diminishing utility? This sounds like the mindset of someone who really doesn't understand just how little it takes to work and/or retire comfortably. The vast majority of people don't need to travel the world in a private jet to enjoy retiring luxuriously in their 50's (or in most cases even earlier).