We can all think of a number big enough that would make you comfortable retiring, or at least quitting your current job, right here and now. It’s probably a pretty big number. A Lotto like number. A number where there is no doubt you would be just fine, as well as your kids, loved ones, dog/cat, etc. Ramit Sethi (@ramit) asked on Twitter what that looks like:
How would you know when you’ve made “enough” money? What does that look like? I’m curious to hear your thoughts.
— Ramit Sethi (@ramit) March 18, 2019
The problem is that vast majority of us don’t have that luxury. It wasn’t until the 20th century that retirement became even an option for people in the developed world. That number is simply unreachable under most conditions. Most of us don’t have $500,000 to get our kids into USC. The number that is feasible for us is smaller, and is going to involve trade-offs.
In a recent podcast, JC Parets of All Star Charts was discussing the idea of ‘work-life balance’ with Phil Pearlman. Pearlman was emphatic when stating there was no such thing. Paraphrasing Pearlman:
“There is no such thing as work-life balance. All we can do is make decisions about how we spend our time.”
For some that’s working 14 hours a day. For others that is living in their parents’ basement smoking weed and playing Fortnite: trade-offs, decisions, choices.
I thought that was interesting idea beyond work-life balance. For example, the so-called FIRE movement has been much in the news online and in the blogosphere. The idea being that if you work hard while you are young, save copious amounts of that income, invest it and live frugally you can become financially independent and retire early. Through Pearlman’s lens this is just a specific set of trade-offs. You don’t have to agree with them.
As a way of shorthand, people sometimes talk about their Number. That is the amount of money they would need to have saved to quit the rat race. Khe Hy at Rad Reads took a look at the whole idea of “The Number” from the perspective of someone who had made pretty significant life transition. What he now recognizes how difficult it is to nail down a single number. There are simply too many variables involved to make a single point estimate realistic.
Part of this is because we are all on different paths in live, making very different decisions. The one thing he wants people to keep in mind is that the pursuit of some all-encompassing retirement war chest is a mirage. Hy writes:
The pursuit of The Number is a complete distraction. In fact, it’s worse. It’s sending you on a wild goose hunt in the wrong direction…think of yourself as a DJ with all sorts of knobs to adjust the energy and intensity while blending tracks into one beautiful experience. The knobs are your work, your investments, your spending and how you allocate your time. There’s no end to career. Nor is there a start to retirement – just tiny tweaks along the way that respond to the energy of the crowd.
Instead of a Number, what most of us want is optionality. The ability to live, work and travel as we best see fit. Whether this fits inside the box of a traditional career or whether it looks like something altogether different, it really doesn’t matter. As long as it reflects the unique and genuine choices you want to make in your own life. For the vast majority of us, this will require some trade-offs. We can’t have it all, but we can try to have those things that matter the most to us and the people we love.