I have eventually produced a plan which would have seemed so foreign to me even five years ago, and yet now I cannot imagine it being any other way. In an earlier post, I urged readers to keep an open mind. Indeed, on one large personal finance blog, when the author merely announced he would be paying down his mortgage early, a number of readers commented that they "felt betrayed" and "wanted to throw up." Since paying down one's mortgage early is a fairly minor point, I can only imagine the fury of such individuals upon hearing my plans in the next paragraph. Fortunately, my readers only number in the low hundreds and comments have been turned off long ago.
So the way things will unfold is as follows: I am going to continue working (for now), but we are now going to "spend" nearly all of the money that we have previously been saving each year. More specifically:
The New Plan
- Continue working until 55 or until triggers are reached
- No more saving money, except to get employer matching
- Spend all dividends and previous savings
- New spending will all be on new creative projects
- There will be no net increases to existing spending items
- Some money may be spent on tools and other "enablers" to save time
- Don't touch the principal; it will continue to grow
- There will still be some savings (matching)
- The longer I work, the fewer years of drawdown and private health insurance
- Because of sequence risk and health insurance risk, I'm just not comfortable with a traditional retirement in my late 40's. And I'm not likely to be comfortable with that approach until I'm near 65, which is too late to accomplish what I want to do.
- On the other hand, every model I've ever looked at says I could already completely stop saving money and still be fine at retirement, as long as I don't start drawing down assets now. Continuing to work means I can avoid drawing down existing assets.
- Continuing to work, but (mostly) ceasing to save is actually now the low-risk option for maximizing wealth/happiness in my life, and this meshes nicely with the seed money that will be necessary for other ventures.
- Other family members have been taken into account. There is ample savings for college tuition, life and disability insurance are adequate, and there are multiple buffers and safety nets in place. No one is going to wind up in poverty even in adverse circumstances.
- Lastly, don't assume all money will be spent on myself. It is anticipated that a good chunk will be spent on partnering with other people to accomplish certain things.
So where will the money go? Well, that's a topic for another post. And while I'm not going to elaborate in great detail, I'm not going to be completely vague. In a future post, I will attempt to wrap things up here and give you a brief roadmap of where I'm heading. For now, all I have to say is that I'm very excited about 2016. Thanks for reading.