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Get a job???? Isn’t this a site focusing on financial independence and the option to retire early?
Easy, tiger – no need to come out fighting right off the rip. Don’t get out your pitchforks to tell me that we didn’t retire with enough money. This is more of a hypothetical than anything.
I’m confident that we have enough money to last us the rest of our lives. Our net worth has actually grown dramatically since I retired at the end of 2018 – even while living off our portfolio.
Additionally, the bucket strategy we use keeps us from needing to sell in down markets. And our spending has stayed in line with our budget, even while frequently traveling and vacationing.
So I feel really good about where we’re at financially.
However, as with most things in life, resting on your laurels has the potential to cause you to get bit in the butt. It’s always a good idea to proactively pause and reflect on the direction you’re going and consider the what-ifs.
Times are good in the employment world with jobs being easier to come by. Employers are practically begging to get workers so the pay can be really good. When you see headlines like “Target raising wages up to $24 an hour”, it’s smart to take a moment to pause and reflect.
Would it be worth it to get a job?
Even a small part-time job could bring in some nice supplemental income. I’m sure we could find a way to have a little more fun with even more spending money or sock it away to build up a bigger security blanket.
The reality is that you don’t want to be forced to get a job at a later stage in life when it’s easier to get one now if needed. So should I get a job as a hedge for tomorrow?
That’s what we’re going to look at today…
Could our expenses go up to be more than we can afford with our portfolio?
The four biggest questions on expenses that currently come to mind are:
- Will our costs be higher in the U.S. than they have been in Boquete, Panama over the past few years?
- Will the expenses from raising our daughter increase over the next few years?
- What if we want to upgrade our lifestyle more down the line?
- Will the cost of a dramatic rise in inflation devalue our money?
Panama to the U.S.
We’re anticipating that once we move back to the U.S. from Panama in April, our spending will actually be very similar or just slightly more than it is now. Surprised by that?
I’m not going to dig into that too much in this post, but here are a few of the biggest reasons for that:
- Instead of aiming to lower our cost of living while living in Boquete, we pushed up our quality of life and lived it up a little more.
- Because of how the system works, our healthcare costs will be only slightly higher than they are now thanks to subsidies we’ll be able to take advantage of through the ACA marketplace.
- Some expenses, such as groceries, can indeed be done cheaper overall in the States. It’s tough to beat the price of the fresh fruits and vegetables here. And grocery prices in general in Boquete tend to be slightly cheaper overall than many grocery stores in the U.S. However, our grocery bills are dramatically more than they would be when leveraging low-priced stores like Aldi in the U.S.
- We’re going back to northeastern Ohio where the costs are already pretty modest anyway.
Assuming we go back to living our modest lifestyles in Ohio, our costs shouldn’t go up very much. We’ve also discussed the possibility of living in a lower-priced apartment just to give ourselves even more breathing room for more travel.
The one cost that will likely add a little weight to our first year will be furniture. Remember, we sold almost everything we owned when we moved to Panama. We’ve already decided that we’ll be buying mostly used furniture, but we’ll still need some regardless.
They grow up so fast!
Our daughter will be just shy of 12 years old once we’re back in Ohio.
Everyone always talks about how expensive kids are to raise but we really haven’t seen that. Sure, there’s some additional cost, but I haven’t noticed anything crazy.
But, we’re also not done raising her either. We still have to endure the teenage years, which should be fun. I would guess our grocery bills will go up as well as some costs for extracurricular school activities (once she goes back), a used car, and more.
We continue to save some money for her college education in a 529 plan, but she’ll be taking out loans for some of her education. She already understands this and plans to aim for scholarships or start with a community college. It’s nice having a kid who you’ve been teaching personal finance religiously to over the years – she gets it. I wish I did when I was her age!
Living it up!
We already do quite a bit of traveling. But what if we want to start doing bigger or more expensive trips? Would I need to get a job to be able to support that?
Perhaps we decide that we want to move back into a house that’s way too big for us again in the suburbs. It’s definitely not on our radar right now, but that could change.
Or we might decide to be snowbirds. It was easy to live in Panama since we were solely living in Panama. That meant one rent payment. As snowbirds, we’d either have to do shorter leases in Ohio (which I’m sure would be more expensive per month) or suck it up and be making two rent payments – one in Ohio along with another wherever we’re escaping to.
I remember when bread cost a nickel!
Yeah, inflation sucks for savers. If you’re not careful, it can erode your stash… what a thief!
A little inflation is good. It’s good for the economy and we even account for that in our drawdown plan.
But runaway inflation ain’t so good and could really be detrimental to our long-term plans.
Is that what we’re starting to see happen right now? I couldn’t tell you. The best I can recommend is being aware of it and jumping on opportunities to help mitigate it along the way. A good example was buying into Series I Savings Bonds for as close to a risk-free investment as possible with an extremely good return.
None of these are sure things. They’re just some random what-ifs. Nevertheless, it’s always important to be aware of these possibilities so they can be planned for if needed.
Does that mean I need to get a job?
Could our future returns be less than the past?
Absolutely. In fact, the projected market returns over the next decade don’t look as great according to many of the folks who study this stuff…
Three primary factors are behind the forecast for reduced returns: low interest rates, low economic growth, and equity valuations.— Schwab’s 2022 Long-Term Capital Market Expectations
These are a dime a dozen and you can find plenty of others pointing in the other direction. The point though isn’t to pick who you believe – these are all just predictions. Many are educated forecasts but it’s important to remember that they’re still guesses regardless.
Instead, you should hope for the best and plan for the worst. I sure would love it if that long bull run we had until recently would get back to doing its thing until the day I die. But alas, I’m not going to count on that.
Basing your entire early retirement on the 4% rule isn’t the best idea either. It’s a fantastic tool just to give you some context on how much money you want to save up in your portfolio. However, it’s all based on historical data – no one knows what the future holds.
You can then go on and analyze what the right safe withdrawal rate is until you’re blue in the face. I leave that to the smarter folks like “Big Ern” at Early Retirement Now. He does a fantastic job of deep-diving into the analytics of things. If you want to jump into the rabbit hole, check out his Safe Withdrawal Rate Series.
But is he right? Hard to tell until you’re on your deathbed.
What else could the old “get a job” help with?
Energy now versus later
If you need to get a job at some point, it’s better to do it while younger. Your body and mind are more up for the task and you’ll probably be able to command a higher pay while in your prime. I think it’s a safe bet to think that I have more energy and drive now than I will later in life.
The value of money over time
Probably the biggest benefit if I were to get a job is that we’re already financially independent so even a small salary can reduce what we need to take out of our portfolio. And with that, our money can remain invested and continue to grow. The effect of compound interest on money left alone to grow is much more valuable than money earned later in life.
Effectively, we could lower our withdrawal rate, which is always a good thing.
Social Security benefits
Social Security is also something to consider. I’ve already put in enough time to qualify for Social Security benefits later, but could I get that number to be higher by working more now?
I could… but if I were to get a job working something like 15-20 hours per week, it ain’t gonna matter. I earned some pretty good money in my career so I would need to go out and find a high-paying full-time salary somewhere. More than likely, that would mean going back to a career and I have no interest in that.
A “top-off” job could be easy and fun
I spent a handful of years working at Walmart in the mid-’90s. I actually had a blast working there. Granted, I was around 20 years old at the time, but it was still a low-stress job and an opportunity to work with some fun people.
I even had the chance to be a part of a Walmart commercial over 25 years ago…
But I’m sure times have changed. Who knows if it would still be an easy way to have some fun and earn a few bucks along the way?
So, should I go out and get a job?
Here’s the thing – to go out and get a job might seem like a no-brainer. Times are good, so why not? Work until you die and you’re all-but-guaranteed to have more “security” in your life.
But there are a few important pieces to this that need to be considered:
The potential issues are all just what-ifs.
I can’t tell you if none, some, or all of these are going to come true. No matter what you do, there will always be what-ifs in life. If you live life always afraid of what might happen, you’re not living life.
I belong to a great mentoring community called Millionaire Money Mentors. It’s a great place to share and learn from others. In a recent thread, Doug “Nords” Nordman from The Military Guide responded to others with something that resonated with me…
[H]ow much more life energy do you want to trade for external cash flow (and its emotional security) that may not be financially necessary?— Doug “Nords” Nordman – Millionaire Money Mentors
In other words, there are always things you can go out and do to bring in more money. The question is, “Is it necessary?” And maybe it is, maybe it isn’t. That’s going to be personal to each of us and something we all need to decide for ourselves.
I’m comfortable with our finances and our lives. I don’t want to get a job doing something I don’t enjoy just to prepare for something that might not happen. With that said, I’m fine with making money doing something I enjoy…
Going out and getting a job isn’t the only option.
We do plan to keep seeing a little income floating in to ease any potential burden. But this is on our terms more than anything.
Lisa plans to go back to work part-time once we move back and get settled in. It’s not going to be a high-paying position, but that’s not what she’s after. She just wants something to fill her day a little more, so the money is secondary… and that’s awesome.
No matter, every little bit counts and each dollar earned is less that we have to touch in our portfolio.
For me, I still enjoy writing and managing this blog. I generally write one post a week and it’s fun for me. Any more than that and it would start to take away from time with family. That I wouldn’t enjoy.
Right now, I earn a little money from it (it’s taken years though to make this happen!). Year-to-date, I’ve been fortunate to make a little more than $2,300. Considering last year I earned just under $5k total, this is a good start to the year.
Again, it’s not about bringing in the big bucks though; it’s about having the choice to do what you want. Any money made is just icing on the cake and simply helps pad our buffer of security.
With Faith growing up, our free time will continue to grow and I can put more focus on building the blog up some more, which should likely produce more income. But the goal is to only do that if I decide that I want to spend more time on it… time will tell!
It’s always fun to put my thoughts out there. As I write out things like this, it helps to put things in perspective.
I don’t need to get a job when we move back to the States… and I probably won’t. If something fun crosses my sights though, who knows? The reality is that life’s too short to pick up a crappy job if I don’t need to. But having some fun and making a little money along the way never hurts either!
Plan well, take action, and live your best life!
Thanks for reading!!