The Early Retirement Fallacy

You are going to work. When you are young. When you are old. There is no doubt about it. You are going to create some service or product and exchange that for some other service or product. You may take payment in the form of money which is an intermediary. But this relentless drive to produce will continue no matter what you do. Not because you are wired that way. Not because of money insecurity. You will work because you have to. The early retirement fallacy is that when we reach some level of financial independence that we can become slugs and lie on the couch all day.

The truth is more ominous or uplifting depending on how you look at it. We are not trading retirement for leisure. We are trading work in the form of W2 income in exchange for work in the form of self-maintenance.

Exchange Rate

So let’s take a look at what people exchange for so called early retirement. In an effort to cut costs and afford the absence of W2 income what types of things do people do?

Home school their kids
Monetize a side hustle
DIY and frugality
Travel hack
Landlording

The common thread here is that under my understanding, all this counts as work. If you home school your kids, you are producing a good or service in the form of the curriculum and then expending energy to bequeath it to your children. Would it be any different if you created this curriculum for a company that then sold it to parents?

The early retirement fallacy is that you can escape doing work. You can’t.

W2 Independence

Rightly, you may correct me and say that there is no early retirement fallacy. Retirement is more properly defined as W2 independence. Once you have saved up enough outside of the W2 workplace and have created your perpetual money machine, you are free.

Or at least kind of. You still have to manage the countless things I consider work. You have to do the dishes, and make dinner. You have to pedal your bike to ride over to the pharmacy to pick up your hemorrhoidal cream (maybe you want to drive.)

In fact, some of those activities of early retirement may be tiresome enough that you might even take on a W2 wage to not have to suffer through them. I would rather skip that painful bike ride mentioned above and go to work placing stethoscopes on chests for a few hours. This would more than pay to hire someone to make a trip to the pharmacy to pick the cream up for me. Or maybe I could have Amazon Prime deliver it to me the same day. Did I mention that Amazon Prime Cost money?

Money

Money is an intermediary. A form of potential energy. By providing goods and services in the form of work we can build up enough to leave the W2 workplace altogether. Then we can deploy that money to buy other goods and services that we need. We still will have to provide ourselves goods and services. Unless our wealth is limitless, we still need to do the dishes, and wash the floor, and make spread sheets to organize travel hacking, etc, etc.

But then let me ask you a provocative question. What if you found a passion in life such that it sustained your soul to provide goods and services? Maybe being a pet detective is your meaning in life. Would you bother retiring early? Would you need to accumulate accounts full of money if you continuously created marketable goods and services just by living your best life?

Conclusions

The early retirement fallacy is that we ever really retire. Whether W2 dependent or not, you are going to work. Don’t let the tail wag the dog. Stop worrying about some definition and spend your time considering which types of goods and services you want to spend your time providing. For some, that will be a job that they remain tethered to as long as possible. For others, it will be self and family care and they will build up as much money intermediary as possible.

The choice is yours.