At the age of 27, I proclaimed that I would retire by 34. A pretty crazy proclamation I know, but I had a plan: I would live frugally, invest, and also build up my website to be one of the top blogs in the nation, making it worth $1,000,000 or so. I would then sell the site, live off that million bucks for the next 30 years, and at that point start drawing from my retirement account.
This idea sounded pretty rock solid at the time (blogs actually do sell for millions of dollars by the way), but as many of you know, life rarely goes as planned. Since then, I went through an unexpected divorce, ended up owing thousands of dollars from the settlement, and my blog was penalized by Google soon after. Not exactly the golden road to early retirement…
At this point, my site is worth around $10,000, and I’m nowhere near that million dollar value that I was hoping for by 2019. Fortunately though, I met a beautiful woman who is ready to live life intentionally with me. After marrying just one month ago, the question now is, “What should our future look like?” Should I pursue an executive career or financial independence?
The Executive Career
I recently met with my mentor for breakfast to discuss my new job within our company. I really like the job, but I wanted to express my fear that it will limit my visibility to the executives within the company, and therefore reduce my odds of moving up the career ladder. I expected my mentor to agree and give me some advice on how to continue to stay visible to the leadership team, but his advice was far different. It went something like this:
“Derek, you do great work here, you’ve proven that time and time again, but you have a lot of distractions that I think will keep you from moving up in this company: your website, your volunteer work, your triathlon races, and soon, your wife and family. You’re juggling a lot of plates, and if you want to advance in your career your work hours will need to increase severely, and some of those other plates will just have to drop.”
It happened to him, it happens to his friends, and it’s the inevitable reality of almost every executive out there. Work hours go up, time with family is minimal, and all other interests are rarely experienced.
In an attempt to look at my career path from the outside in, I figure that my skill-set and my connections could earn me a spot as director in my late 30’s, which would yield a salary of $150k a year.
The money would be good, but this would earn me a 70+ hour workweek for the next 30 years of my life. I would likely have to sell my blog, exercise less, and my time with my family would be limited to just a few hours on the weekends. Financially speaking, life would be easy. We could afford a boat, multiple cottages, and a nice home with acreage. But when would we have the time to enjoy it? Would the high pay be worth the sacrifice of time and family?
At this moment, my wife and I own our house outright, have zero consumer debt, and have a large amount of money in the bank. If we decide to pursue financial independence instead of an executive career, then we’ll likely:
- purchase a single family home as a rental property
- live frugally to invest in another rental property next year
- improve my blog with real-life real estate investment advice
- continue to invest the profits into future real estate
After 10 years, we could easily own 12+ properties that would yield us an income of $120,000 per year. Beyond this, by keeping my website alive and writing about real-life experiences with the rentals, I project that my readers will increase noticeably and improve my yearly online earnings to roughly $20,000 per year. With an income of $140,000 each year and over a million dollars in rental property equity, I think it would be pretty safe for us to retire and pursue any interest of our choice.
The end result sounds great and all, but it will certainly require sacrifice over the next 10 years. While our friends buy new cars and fancy houses, we’ll be renovating houses and fixing leaky plumbing for our tenants. And, if we decide to ditch our jobs, our health insurance will shoot through the roof and our yearly income will be much more uncertain than if we had jobs. It would be unlikely, but what if all 12 of our rental houses were vacant and my site was earning nothing? Our income would be a flat zero dollars. That’s pretty scary!! Will the allure of financial independence be enough to take the plunge?
Executive Career or Financial Independence?
Liz and I have put ourselves in a position to pursue either an executive career or financial independence. An executive career is the logical (and often preferred) choice for many, but due to the amount of time spent at work, much of the excess money can’t even be enjoyed until much later in life. A life of financial independence requires sacrifice and often results in less money each year, but a greater amount of time can be spent on interests of your choice, rather than the interests of your employer.
Which option would you choose if you were at this crossroad? An executive career or financial independence?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.