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Semi-Retirement: the under-rated key to round the world travel, starting your business, and making more money.

June 2016.

I’m sitting at my desk on the trading floor, and the sun is pouring into the room. I look at the clock: if I pick up the pace, hopefully I’ll be able to leave by 4. It’s Sunday, and I still want to make it home in time to cook dinner. But I want to grill a fresh fish, which means I need to stop at the market first, and time the train perfectly so that I don’t get stuck in the heat holding a dead, rotting fish.

-deep sigh-

This isn’t an atypical day. I work from my client site 7 days a week, on a bad week, and 6 days on a good week. On weeknights, I stay until 8 or 9, but on weekends, I try to leave “early.”

“This is what I worked so hard for. This is what I wanted.” I remind myself. I’m a management consultant and team lead on a high-visibility project at a Fortune 500 company, at a top-tier firm, and I have the distinction of overseeing the work of our many subcontractors. I get to make an impact in the anti-money laundering and anti-sex trafficking space.

I’m extremely well compensated for my time, but I don’t have the time to spend or enjoy the money at all.

Still, these hours will all but guarantee my top-rank and bonus.

I close out the tab on my browser: “Go Curry Cracker.” It’s a blog written by a man and his wife who saved 70% of their income to invest and retire in their 30’s and now they travel around the world for a living, living off of the interest.

I glance back at the clock then open my spreadsheet tracker: 10 more years and then I’m out.

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When you’re on the path to early retirement but you’re not happy in your current situation, saving $1,000,000 (or whatever your number is) feels so far away. But what if I told you that you only need a fraction of that?

What if I said that the key to living more isn’t $1,000,000 but half of that, or a quarter of that, or, if you’re young enough, 1/10 of that.

Ah, semi-retirement.

Perpetual part-time work.

How much is part-time?

10 hours.

20 hours.

30 hours.

2 days a week.

3 days a week.

4 days a week.

6, 7, 8, or 9 months a year.

The choice is yours.

But as I began the transition to early retirement, I started envisioning what my ideal life would look like, and I decided that I didn’t want to spend more than 1/10thof my time on work (work defined as “things that I do for money”), and that ten years was too long to bring that to fruition.

There are 168 hours in a week, and for years, I worked upwards of 80 hours a week (common in consulting, investment banking, and tech).

That meant that over 50% of my entire existence was on work or work activities: commuting, dry cleaning, preparing for work, thinking / planning about work. And somehow, I was supposed to fit in a healthy sleep schedule, 10,000+ steps a day, cooking 3 balanced meals a day, a social life, leisure activities, passion projects, volunteer work, and general “maintenance” like nail and hair appointments, waxing appointments, cleaning the house, running errands, grocery shopping.

Oh, and overcompensating for being at work so much by also trying to be the perfect wife: waking up before my husband to make him breakfast, cooking dinner and packing his lunch and snacks, cleaning around him while he watched TV. No wonder getting divorced felt like a massive weight off of my shoulders.

I refused to believe that I couldn’t do it all, though. If I just found the perfect productivity hack, or the right shortcut, surely, I could keep up this balancing act, right?

But I still felt time poor. I couldn’t shake the feeling that I was spending too much time at work, and not enough on the things I loved. Outsourcing help was merely a Band-Aid solution – I had to work less.

One of my favorite entrepreneurs and writers, Ramit Sethi, likes to say, “show me your calendar and I’ll show you your priorities.”

We make time for the things we value. Period. If my passion projects were critical to me, I’d have to make the time for them – without sacrificing the equally important time for sleep and health.

Enter semi-retirement.

Before, I dedicated almost half of my life to work and (all things work related) – now, I spend less than 10% of my time on work. Next year, I’m dropping this to less than 5%.

Working way less is the obvious change, but let’s dig a bit deeper:

  • Work dropped from 40% to 10% (from ~70+ hours to ~16 hours)
  • Sleep increased by 5% (by ~1 extra hour a night)
  • Errands and maintenance activities dropped from almost 10% to 1% (~16 hours to ~2 hours)
  • Social obligations remained the same.
  • Fitness and health increased by almost 5% (or 1+ hour a day)
  • Leisure and passion projects jumped from 5% to 40% (8 hours a week to 70 hours a week)

Whoa. This is a game-changer. What could you do with 70 hours a week to work on whatever you want? Sure, some of it may go to relaxing on the beach. But after a few weeks, that gets boring. What next? Would you start a business? A side hustle? Write the next great American novel? Create art? Mentor children? Volunteer in your community?

Since I’ve made this drastic lifestyle overhaul, I’ve come to a few big realizations:

Work and work-related activities (including errands) take up way more time than I thought.We tend to think we’re “only” working 40 or 50 hours a week, but once I factored in not only time spent working, but time spent commuting, getting ready for work, ensuring clothes / materials are prepped, answering emails off-hours, mentally preparing materials, maintaining a sharp wardrobe and keeping it dry-cleaned / tailored / spot-cleaned, packing lunch, and meal-prepping breakfast, etc. I realized that work was truly most of my life. Once I dropped it substantially, I got time back in areas that I hadn’t even thought about.

Working less allowed me to reprioritize sleep and optimal health: ensuring that I’m sleeping long enough and measuring and improving the quality, spending more time getting exercise and because I’m not rushing from Point A to Point B, when it comes to meals, I pick the healthy choice instead of the fast choice. Further more, I want to bring my sharpest mind to the table so I make sure that I nourish my body.

Having the Choice to Work > Not Working. We’re even seeing retired people of the traditional age of 65+ returning to work part-time not because of financial need, but because of the enjoyment of meaningful and purposeful work. My initial assumption was that my happiness boost would come from the absence of work, but that’s not true. Having most of my life dedicated to leisure or activities that I choose has had the biggest impact on my happiness. Now, I can always choose to return to full-time work and simply invest my entire salary, but that’s my choice. Autonomy is the most important factor - not working vs. not working. I'll also mention that my leisure activities would be considered work to some people (but not to me because I do them 100% for enjoyment, not income). I don’t spend it on the couch, watching Netflix for 8 hours. I’m writing, designing, creating art, and mastering skills and interests that excite me.

Now, how can someone actually start a semi-retired lifestyle?

The Main Four Approaches:

Save and invest a lump sum. Work only to cover living expenses (not living + savings). Allow lump sum to grow untouched until age 65.

Example: Jessica works a side-job in addition to her full-time job as soon as she graduates, and save 50k by age 25 and invests it into index funds. She doesn’t touch, or add it to it, because she drops her full-time job and only keeps her part-time job to cover her living expenses. It will grow it to $3 million by the time she’s 65.

Drop expenses so that they can be covered with part-time work. Work part-time indefinitely and use the rest of your time however you want.

Example: Gary wants to spend more time improving his surf skills and cooking so he moves to Phuket, Thailand, where he can live comfortably for $1,500 a month. He works remotely doing freelance software development, and he spends about 10 hours a week on projects. The rest of the time is his to surf, take cooking classes on Thai cuisine and explore the country.

Save and invest a lump sum large enough that 4% covers your living expenses. Live off of the 4% and work only enough to cover your entertainment and excess spending.

Example: Danielle invested over 50% of her income from the time that she graduated at 22 until she was 30. She was able to amass about 500k, which generates $20,000 a year, enough to cover her baseline living expenses. She works part-time on one of her passions, art, to earn enough to cover her fun money.

Scale income so that part-time work covers living, savings and excess spending.

Example: Michelle scaled her income to hundreds of dollars an hour so that a mere 5-10 hours of work a week could cover everything she needed. She also used geo-arbitrage to travel more while stretching her money further in order to maximize savings.

Example: Rachel worked at a top-tier management consulting firm for several years. After deciding to pursue graduate school for her own personal development, the firm allowed her to use their family-friendly flex policy to work 60% of the time for prorated pay. Since consulting at top firms typically starts at an upwards of 80k straight out of undergrad, and she’s been mindful about not inflating her lifestyle with every raise and bonus, she doesn’t miss the extra money and enjoys the time back for her personal interests.

Example: Charles obtained a foreign teaching job in Asia that only required 8 hours of work per work, 9 months a year. The job paid full salary and paid his living and pension expenses. Combined with the low cost of food and entertainment where he lives, he is able to save over 70% of his income.

If you’re new around here, this may sound unrealistic, but all of these case studies are based on real-life people, including myself.

Semi-retirement may not be the right choice for you, but if you’re burnt out at work, and want to scale back, whether it be for family obligations, personal interests or leisure, consider testing the waters.

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