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The following is an interview with ESI from ESI Money, a blog about achieving financial independence through earning, saving, and investing (ESI). It’s written by an early 50’s retiree who achieved financial independence, shares what’s worked for him, and details how others can implement those successes in their lives. He is also the author of a free ebook titled Three Steps to Financial Independence and spends a lot of his time interviewing millionaires. He’s also the owner of Rockstar Finance, the leading curation site for the best personal finance articles.

1.) I frequently write about “redefining retirement“. On ESI Money you write that you retired from a corporate career at 52. But you also write about owning 14 rental real estate units. You’ve developed a successful blog, and recently acquired another online business with Rockstar Finance. It sounds like you continue to work a good bit and are continuing to earn income. How do you define retirement?

I define it as the freedom to do what you want.

Back in the day retirement was generally accepted to mean 1) you quit work and 2) you indulged in leisure activities like golf, bowling, traveling, and so forth until you eventually died.

Today I think “retirement” is getting rebranded, especially by those of us doing it earlier than the traditional age, to mean something else. Or perhaps I’m not “retired”, I’m just “financially independent.”

Whatever you call it, I don’t work for an employer and spend all my free time on what I want — some of those things being investing and running a couple websites and some of them being more leisurely like traveling, reading, and the like.

2.) How much of a role did your active investments in real estate and developing online businesses contribute to your ability to retire early vs saving and investing in stocks and bonds? Did you change your investment style after retirement?

I have a post coming up using Quicken data to determine when I became financially independent. I didn’t retire until I was 52, but I was actually financially independent a decade before that. (This assumes the value of my passive investments (index funds) at the time, using the 4% withdrawal rule, and knowing what my spending was.) This was before I invested in real estate or businesses.

Then once I bought my properties, I was at the point where I was not only financially independent but that I could quit working and live off the income from the properties alone, not needing to spend a penny of my assets/investments.

After that came the websites, which simply piled on the income.

So to answer your question, my active investments didn’t contribute at all to my ability to retire early — that was all accomplished by my passive investing. The active investments simply allowed me to go over-the-top income-wise.

I did not change my investment style after retirement other than I stopped investing in index funds. I am simply letting them ride for the rest of my life. They should be worth a tidy sum after another couple decades of growth.

3.) Describe a typical day/week/month in your retired life. How much time (on average) do you spend managing your real estate portfolio? How much time (on average) do you spend on your web based businesses?

Here’s a typical day for me:

  • I get up at 5:30 am and have a glass of water and a cup of coffee.
  • I check my websites, read a bit, promote some articles, and network.
  • I walk to the gym about 7 am (which puts me in the locker room right before the people who have to be at work at 8 am flood it) and work out for the next hour. I also hit the hot tub or sauna for 15 minutes or so and read. I then shower and walk home, which usually puts me home by about 9 am or so.
  • I eat breakfast and check email for a bit.
  • At 10 am my wife gets home from the gym and we take a 30-minute walk.
  • Once we get back home I “work” from 11 am until about 3 pm or so. This time includes everything from actually working on website stuff to updating my personal finances to reading Facebook.
  • We then generally take another walk, eat supper (usually around 4 pm or 5 pm), and watch a movie or something in the evening.

There’s a lot of flexibility built into the day so any given day can vary from this schedule quite a bit.

Common “disruptions” to this schedule include: Tuesday shows at the movie theater (Tuesdays are discount days), sightseeing and/or hiking in the area (Colorado has tons of free and fun activities if you like to be outside), and time with family and friends (when you live in Colorado, everyone wants to visit!)

I would say I spend 3-4 hours a day on website work and a couple hours a month on the real estate investments (I have a property manager and I need one — I’m in Colorado and the properties are in Michigan.)

4.) What are the biggest positives (financial, personal, social, etc) of your active portfolio of real estate and online businesses? What are the drawbacks and limitations to investing in this way as opposed to a passive stock/bond portfolio?

The biggest positives are that they churn off a lot of cash relative to the investment of time and money.

They can also be run from anywhere in the world as long as I have an internet connection. We recently spent nine days in Grand Cayman and I could have done everything I do at home business-wise from our condo if I had wanted/needed to.

The drawbacks are that active investments do require some time and are riskier, but since I enjoy the work and can manage the risk, these are negligible concerns.

Passive investments require very little time/effort/monitoring and offer growth over time, but not much income.

5.) Do you desire and are you planning for a more traditional retirement characterized by stopping paid work in the future? If so, at what age and why? If not, why not?

I don’t think I desire it — otherwise I would be doing it now. I enjoy the website tasks so they don’t seem like work. Plus there’s only so much TV you can watch.

I heard someone say once that if you’re retiring “from” something (like work), your retirement will probably not be successful. But if you’re retiring “to” something (that you enjoy), you will probably be fine.

I retired to doing things I enjoy and some of those just happen to generate income! It’s a win-win!

I’ll also note that I’m a big believer in the use-it-or-lose-it line of thinking. Being part of active businesses helps to keep me sharp and make sure my mind doesn’t turn to mush over time.

I don’t ever see myself stopping all work and just laying around the house like a big blob. Even fun activities like traveling, entertainment, and the like can only take up so much of your time before they get old.

6.) What is the best part of retiring in your early 50’s? Have there been any unanticipated downsides or challenges you’ve encountered in early retirement?

The best part is that you’re still young enough to do most of the things you want to do, which has been awesome.

There really haven’t been any downsides or challenges. It’s all been pretty good.

The worst mistake I made was not realizing I was financially independent in my early 40’s and retiring then. I wish I had. But times were different then, the FIRE movement had not come around, and anyone who retired before 65 was considered to be retiring “early.”

But I missed those 10 years of freedom and really wish I had them back.

7.) Anything else you would like to share with our readers?

My only advice is that once you reach financial independence (and have enough margins of safety that you feel you won’t have to worry about money ever again), retire right away if you want.

Sure, if you enjoy your work, it’s fine to keep at it. But if you don’t enjoy your work (which characterizes most of the population), my advice would be to move on as soon as possible and begin doing things you like/enjoy.

My Take Aways

Many of us planning early retirement enjoy and are good at earning, saving, and investing money. We also tend to be naturally frugal. This formula enables early retirement.

Still, many work longer than necessary in jobs we don’t enjoy, because we get trapped in fear and comfort. Note that ESI Money’s biggest mistake was working a decade longer than necessary.

Traditional retirement, defined as completely stopping paid work and drawing down investments, is a complete 180° from the abundance mindset and high savings rate that enables financial independence at a young age. It means we stop earning, saving, and adding to our investments, the exact things that we tend to be good at, enjoy, and which enable early retirement.

Redefining retirement to allow some paid work or alternative investments opens a multitude of possibilities. It allows you to build a lifestyle that you desire, live with abundance, and leave the rat race sooner than you may otherwise be comfortable.

Thanks to ESI Money for taking the time to answer these questions and share an example of how you can live with abundance as an early retiree, overcoming the fundamental problem with retirement planning. Learn from his successes, and his mistakes, to build your own plan to retire sooner.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at chris@caniretireyet.com.]