‘Ignore your passion': 5 counterintuitive retirement tips from early retirees
Read this with caution because everything you thought you knew about saving for retirement might be about to get turned on its head.
You've heard the mantras, right? Follow your passion, max out your savings, invest, and you’ll be set to retire in the lap of luxury.
But what if I told you that's not the whole story? In fact, what if I told you some people have successfully retired by doing exactly the opposite?
Stick with me here because we're about to explore some retirement advice that's as counterintuitive as it gets—and yet has worked for quite a few people.
Intrigued? You should be.
Ignore your passion
Have you heard of Steve Adcock, who retired at age 35?
Well, it wasn't about following his passion. Instead, he focused on building a career in a field that pays well—even if it wasn't something he was particularly passionate about.
Although Steve’s passion was photography, he chose to work in software engineering—which paid off very fast. Two years in, he was already making six figures.
Steve's decision to focus on his strengths over his passions was a calculated one. He knew his chances of combining a hobby with a high-paying, marketable career were slim to none.
As he put it, “Our passions, which tend to be more on the creative side, can't always pay the bills—our strengths do.”
In fact, 75% of artists in the U.S. make $10,000 or less per year from their art, and close to half earn no more than $5,000 annually, according to an Artfinder study.
Nearly half the artists surveyed said their artistic practice accounted for less than 25% of their total income. Female artists were even worse off—with 83.6% earning less than $10,000 from their art.
Pursuing a passion might be emotionally rewarding, but it often fails to provide financial stability. And that insecurity could ultimately undermine the passion itself.
Besides, who says you can't work on what you love doing outside of work? Being able to retire early will mean more time to pursue your passion.
Moving on to the next eyebrow-raiser. "Save Less." Really?
I don’t mean you should loot your Amazon wish list. But there are two things to consider before raising your saving rate so you can retire earlier.
First, saving too much can actually harm your current quality of life. The trick is finding a balance between living comfortably now and saving for the future.
You don't want to end up a millionaire who never enjoyed a wonderful vacation or even fantastic meal out, right?
Second, people need less money for their retirement than they think. According to the Financial Planning Association, retirees tend to spend much less than expected, and some even see their financial assets grow over time.
There are even some people who happily embrace frugality as a lifestyle.
Meet the Frugalwoods: Liz and Nate, the couple behind the popular blog "Frugalwoods." They retired in their early thirties to a homestead in the woods of Vermont.
They didn't have a million dollar nest egg when they decided to retire. Instead, they embraced a concept they call "luxurious frugality."
They focus on finding joy and fulfillment in what they already have rather than continually seeking to buy more. They cut costs in major areas and are careful to invest in high-quality items that last longer.
They still splurge on things that genuinely bring them joy and enhance their life, like quality food and travel.
This approach is also a great example of the Pareto Principle, often referred to as the 80/20 rule. The idea is that 80% of results often come from 20% of causes.
When applied to personal finance, it means focusing on a few high-impact areas—like housing and transportation—that eat up the majority of most people's budgets.
In the case of the Frugalwoods, their choice to move from the city to a rural setting significantly reduced their housing costs.
And their commitment to frugal, eco-friendly transportation—primarily walking and biking—tackled the other big-ticket item, transportation, which resulted in significant savings.
But their approach was not all about sacrifice. They didn't hesitate to spend on things that brought them genuine joy, like quality food and meaningful travel. They were frugal, not cheap.
This is the essence of the Frugalwoods' approach and the Pareto Principle: optimizing the major elements to make a significant overall difference, instead of obsessing over every minor detail.
The result? They managed to secure their future without compromising their present happiness.
Risk more while you’re young
Retirement advice usually preaches playing it safe with investments.
But being too conservative—especially while you’re young—will mean missing out on the “compounding effect” of your portfolio and can lead to a much smaller nest egg.
For example, $10,000 in the S&P 500—which has averaged a 10% annualized return over the past 100 years—would grow to $174,490 over a period of 30 years. The same money kept in a CD would earn just $24,000 and barely break even on inflation.
The magic words here are calculated long-term investing.
Higher-risk investments generate higher returns, but they are more volatile—especially in the short run. As we’ve all experienced recently, the stock market can be a bit of a rollercoaster ride.
The good news is: if you are young, you’ve got plenty of time ahead of you to ride out the downs while taking advantage of higher long-term returns. Remember, a few mere percentage points in return today could translate to six or even seven figures 30 years from now.
Did you ever ask yourself if you actually want to retire? Well, you should.
Meet Chris Reining, who achieved financial independence at age 35 and retired early at age 37. He had a nest egg of over $1 million and could live comfortably without working.
But after a while, he realized he missed certain aspects of work, like solving complex problems and having social interactions.
So, he went back to work, but this time on his own terms. He became a writer, sharing his knowledge about personal finance and investing. He didn't need to work for money anymore; he found work that he enjoyed and found fulfilling.
Reining's story is a great example of how retirement doesn't have to mean stopping work entirely. For many, it can be a chance to do work they love without the pressure of having to earn a living. That’s where passion can come in.
Besides, if you don’t actually plan to retire, you don’t have to set aside as much.
Finally, and this might be the most important point: ignore everyone.
Retirement isn't a one-size-fits-all game. The best strategy for you is as unique as you are. It's about trying different approaches, learning from experiences—both successes and failures—and ultimately finding your own way.
Remember, you're playing the long game here.
It's okay to stumble, to change paths, to do things differently. As long as you keep going, keep trying, keep learning, you're on the right track. The road to retirement isn't always straightforward. But then again, the most exciting journeys rarely are.
So, go ahead, challenge the norms. Who knows? You might just end up rewriting the retirement rulebook.