This might be my good resolution for 2016: crystallize my Early Retirement plans, and make stuff finally happen.
I just turned 34 this month. My long term plans are to become financially independent and retire before 40. This year has been quite painful from a work perspective and it’s become clear to me that I can’t take it much more longer, definitely not for an additional 6 years.
So I’ll have to make things happen sooner than later. The good news is, assuming an aggressive savings rate, a reasonably good market in 2016 (that is, not like January so far…), and my side gig doing as well as in 2015, by the end of 2016 we could reach what I like to call my first Financial independence threshold (FFIT): My investment income (assuming a 4% withdrawal rate) added to my side gig will be enough to match our financial needs.
There are some significant drawbacks in pulling the plug so early: the main one will be that my side gig would become my main income source. This could transform a great hobby into a source of stress, and things could easily go south. The other issue is that it means I’d be relying on my side gig providing income indefinitely. I can see myself working on it for the next 5 years or so, but I know I won’t be doing it forever, so I’ll need to find other solutions for income in the future.
I can see two scenarios playing in 2016, given my current state of mind:
If the market gets a bad year, and we barely hit the FFIT goal or simply miss it (6% return or less on my stock investments in 2016), I’ll probably try to relocate to Japan within my company. The pros are that my company would pay for the relocation, I would still be in “accumulation mode” for a few more years (ensuring a better guarantee of Financial Independence down the road), and I felt that working in Japan was not as stressful as working in the US (but my memories are tricking me here. I started this blog from Japan, after all, so the situation was not unicorns and rainbows there either). The cons is that I would still be working, and there probably will be some clause about how I cannot quit the company within 2 years if I don’t want to have to pay back the relocation costs.
If the market gets a good year (10% or more return on my stock in 2016), and we completely hit the FFIT goal enough that we can also pay for a relocation to Japan on our own dime, then I might quit my job and we’d move to Japan. The cons, as I mentioned above, is that we’re not really financially independent yet and I would be heavily relying on my side gig being successful for many years. This means increased risks to have to go back to the corporate life ultimately.
Wait, 6% vs 10%? Not such a huge difference here. Really, I might be running a case of the “OLY” (one less year syndrome), the opposite of the typical “OMY” (One more year) that most financially independent people run into: people reach Financial Independence, but still work “one more year” to improve their chances. The issue with the “OMY” syndrome is that people get stuck in a loop and work “one more year” every year.
In both cases, you can see that my goal is to go back to Japan by early 2017. I like the US and I might change my mind, but I miss my friends and family-in-law in Japan. Having no grandparents here in the US for the kids is much more painful than I imagined. My wife and I need some time for ourselves and we can’t seem to be able to get that without the grandparents around. And at this point there’s nobody here that we would fully trust with our kids (babysitter or friend). I used to have no problems with that, but I guess the Japanese culture has progressively tainted me: if somebody babysits our kids, it has to be family.
There are other plans we are still considering: moving to Europe instead of Japan, staying a few more years in the US (a possibility if I can get a green card, at which point I would not feel “chained” to my company anymore), but those are lower on the possibility scale for now.
Why pull the trigger so early?
Those of you who have been following the blog for a while now might remember that my initial goal was to stay in the US for at least 2 years, but targeting maybe 5 or 6 years. By moving back to Japan in early 2017, we’ll just hit the 2 years mark, not really an over-achievement on that goal here.
There are a few things motivating me to move back to Japan as early as 2017. First is that my life here in the US is not as fun as I thought it would be, mostly because I don’t enjoy the job*, and because grandparents are not around as I mentioned above. But more importantly, our son starts elementary school in 2017, and we’ll want some kind of stability from that point. If we choose to stay in the US in 2017, it will be much more difficult to move back to Japan for the next few years after that.
The main problem with leaving the US so soon is that one of our main goals (getting our kids to become “almost native” English speakers) will not happen. But at this point I am not willing to sacrifice my own happiness just so that they can learn English.
The good news is that with my shifting Financial Independence target, I feel much more confident today than I was a year ago, about my possibility to retire way earlier than 40. I’ll shamelessly claim that I retired at 35, if the only “job” I have to do from 2017 is to maintain and grow my side gig 🙂
* I could change jobs. Hopefully people reading this blog and other Early Retirement blogs know that the problem is not with the job itself, but with the concept of a 9 to 5 in the first place. Switching jobs/company will most likely not work for me at this point.