Life is interesting. And that’s a good thing. How boring would it be if every day on this planet was the same?
For about a decade now, we’ve made some choices that have swung our days into some crazy adventures. There’s no doubt this took us out of the realm of monotony.
Between retiring at the age of 43 at the end of 2018 and then moving to Panama for a few years starting in 2019, we got a lot of raised eyebrows. Surprisingly, going against the grain on these things was a little uncomfortable when talking to others. Most folks don’t want you to do things they aren’t – maybe it’s a lack of understanding, true concern about the unknown, a little bit of envy… or even some of all of these.
Regardless, we did it anyway and these moves have proven to be so eye-opening to us as to what the world truly has to offer. Fighting complacency has led us to do other cool and unusual things like starring in an episode of House Hunters International and traveling the country in an RV for 8 months. I’ve also hiked up an active volcano and recently, I got to be an extra in a big-time upcoming movie.
I could continue, but the point is that choosing to do something different has rewarded us in so many ways.
And now I’m possibly at a new crossroads in life and I’m exploring some new ideas. One of those is tossing around the idea of a part-time job.
WHAT???!! A part-time job after retiring early?! That’s not allowed!
The good news is that it is allowed… if I even decide to do it. I’m torn a little and sometimes I do things slightly differently than many other bloggers. A lot of times, I write about something before it happens rather than after the fact. I like to write things out to help me get my thoughts out there. Plus, in many cases, readers offer great suggestions that help me think about options I hadn’t considered or even known about.
So, let’s talk about why I’m contemplating a part-time job after almost 6 years of early retirement.
Why did I retire in the first place?
I was a Studio Art major for the first couple of years of college, believe it or not. But I soon became disenchanted with the idea of doing this for a living. I ended up taking an “Intro to Computers” class back in the Windows 3.1 and Windows NT days and loved it. I changed my major to Computer Information Services and decided that was the route for me.
In 1999, I put on a suit and went door-to-door handing out my resume in a couple of industrial parkways. I was lucky enough to get a couple of interviews and ended up landing a job at a small IT support company as a part-time junior engineer until I graduated. I then became a full-time Systems Engineer with the company for a handful of years until I was promoted to the manager of the engineering department.
That’s the position I stayed in for many years. If you haven’t been in middle management before, it’s generally not a fun job and is a good place to find a fair amount of stress. I was good at what I did, but I started to lose interest in it after a few years.
Then in 2010, my daughter, Faith, was born. I took a week off work for her birth and to be with her and my wife, Lisa. Faith was (and still is) amazing and everything was great… but then I had to go back to work. That stung. I was already unhappy at work and now I had to go there and miss time being around my daughter as she grew up.
I didn’t like it at all. But such is life, right?
So I went about my day-to-day routine for a few years until that day I randomly stumbled onto Joe Udo’s Retire by 40 blog probably around 2014. That became an eye-opener for me into the world of financial independence and early retirement. Everything changed for me at the moment.
Fast forward to December 31, 2018… my last day of work. My daughter was now 8 but that meant I could now spend so much more time with my family as Faith was growing up.
And that’s what we’ve done. We’ve done so many awesome things we never could have done while I was working. Between living in Panama for a few years (which was incredible for all of us), traveling on vacations several times a year, and then taking an RV across the U.S. for 8 months, we’ve spent a lot of time together having fun.
Early retirement has been 100% worth it.
Why consider working now?
So if early retirement has been so great for the last 5+ years, why go back to work?
First off, remember that this is all just something I’m tossing around – it may or may not happen.
The biggest factor though is that Faith is now 14 years old. She started high school this month (homeschooling). She’s a teenager and spending almost all her time with her parents is slowly fading away. She now spends much of her time hanging out with or texting her friends. She volunteers and rides horses at an equestrian center as well (with her friends).
That’s a good thing, of course. That’s also why we’re planning to stay put for a few years. It’s now her time to continue to grow and manifest friendships that maybe she’ll even have for life.
That’s always been inevitable and I’m content with that. Early retirement allowed us to spend as much time as we wanted together as a family. And that’s not to say that she’s done with good old mom and dad, but things are changing and will continue to over the next few years.
And as that happens, guess what that means – I’m going to start to have a little more time on my hands.
As far as money goes, we’re in good shape. We use the free Empower Dashboard to track our net worth and investments and we’ve been fortunate enough that our net worth has grown from $1.1 million at retirement to around $1.8 million now – even while paying for all our expenses.
PS I update our net worth every month on the Net Worth page of this site if you’re interested.
That said, a little extra money never hurts, right? I’m not interested in returning to a full-time career, but having a little extra splurge money for vacations is always good!
And finally, the readership here has slowly been going down. I don’t think it’s the content itself because I hear the same thing from a lot of bloggers all over, but it seems that blogging might be a dying medium. It’s funny because subscribers here continue to grow but page views have declined. It seems that there are still some dedicated readers out there!
On that note, you can get on my mailing list here and I’ll send you a bunch of useful spreadsheet tools as a welcome gift that I hope you’ll find useful…
I don’t plan to abandon writing for the blog anytime soon. However, it’s still something that I stay conscious of because if people aren’t reading, then it takes a little bit of the joy away from the idea of writing so much. So there could come a time when I write less often. Who knows, but I guess time will tell.
But with the thought of slowly having more time on my hands and blog readership declining, it might be time to weigh some new options. The opportunity to make a little extra money while working a part-time job doing something different seems a little more enticing.
What kind of part-time job am I looking to do?
Financial independence brings about an interesting twist on working… you don’t need to do it. Because of that, if you choose to work, you can focus solely on what you find enjoyable.
So that makes things a little interesting for me and why I’m still tossing this idea around. It’s not about the money – but being paid for my time and work is certainly satisfying. Here are a few of the bullet points I’ve been thinking about…
It needs to be a part-time job and flexible
As I mentioned, I’m not interested in a full-time job anymore. I have too many other things in life I enjoy doing with my time and others I want to get into. So it would need to be a part-time job. That’s easy enough. When I was younger, I enjoyed my days at Walmart and could go back or maybe work at Costco or something along those lines.
The problem with most retail though is that they generally need you most on evenings, weekends, and holidays. That’s not so fun.
And that leads to the next problem… we like to travel… a lot. Having a part-time job and then constantly requesting off time for vacation doesn’t usually go over very well with employers.
I want something that has the flexibility to choose when I work and when I don’t.
I guess the part-time job will be self-employment
Ok, so if I want the pinnacle of flexibility, self-employment becomes the obvious choice. If I want to work maybe 8-12 hours a week, this is definitely the way to go.
I enjoy helping and teaching others
I’ve written and published two technology books over the years. In both cases, I knew it wasn’t a big money-making play. The biggest reason I did it was so I could pass on my knowledge and help others learn more about the subject.
I enjoy helping others, but I prefer teaching a man to fish rather than just doing the work for them. I want others to be more comfortable with the subject in the future.
Focus on my strong suits
Obviously, I could start a part-time job working for myself doing anything, but I’d rather focus on areas that I’m already good at and enjoy. Here are a just few that come to mind:
- Technology – I still like keeping up and learning about new technology. I’ve been messing with this stuff for decades and enjoy the way it all works and what it’s capable of doing. I’m extremely good with hardware, software, and services and making it all work the way it should (if it can!). My time as a Systems Engineer and the training I constantly did was a big help as well.
- Personal Finance – I’ve learned a lot in the subject area and it’s the reason why I was able to go from being $30k in credit card debt in 1999 ($55k in today’s dollars) to financially independent and an early retiree. I might not be 100% versed in every aspect of personal finance (is anyone?), but I have a firm handle on quite a bit of it. From debt reduction to saving to investing to tax strategies, I get better with this stuff every day.
- Travel – I’ve been a regular traveler since my early twenties. I’m good at finding the deals, and we enjoy the different destinations. When friends and family are looking to travel, I almost always have some tips or tricks to suggest to help make the trip or the planning a better experience. Throw in the world of credit card rewards hacking and I’m loving it even more now!
- Organization / Systems – When it comes to organization and creating systems, I’m the guy. To me, it’s all about optimizing and figuring out a way to methodically do something. That goes for physical things and now a lot more with the digital world. I’ve got a system for everything!
I enjoy learning
I consider ongoing education to be one of life’s most exciting facets. Between non-fiction books, blogs, podcasts, online courses, educational apps or videos, etc., I appreciate how easy it is to continue learning in today’s world. I mention this because there could be learning, training, or exams/certifications I’ll need to do. I’m ok with this and would probably enjoy it if it’s in a subject I’m interested in.
Are there any part-time jobs that come to mind?
I struggled with this a lot and I still am. Hopefully, you might have some thoughts to add.
One part-time job I started to consider recently is becoming a financial coach. It involves a subject matter I know well, I could make my own hours, take on as few or many customers as I want, help others work toward a better financial future, and I could make some decent money. What’s not to like?
I did some preliminary digging into it though and I wasn’t blown away with the details. For instance, here’s what ChatGPT told me about what a financial coach does:
A financial coach helps individuals and families improve their financial well-being by providing guidance, education, and support. Unlike financial advisors who may focus on investment strategies or retirement planning, financial coaches primarily work on day-to-day financial management and behavioral aspects of money.
Hmm, this sounds like what I don’t want to focus on. I’d prefer to focus on the holistic picture, including investment strategies and retirement planning. And the other thing a financial coach can’t do is give investment advice. I’m not sure how a financial coach could completely shy away from this area, but them’s the rules!
Technically, you aren’t required to be certified as a financial coach. I’d do training for it though regardless and would likely go after the Accredited Financial Counselor (AFC) certification. Just because you’re knowledgeable in an area doesn’t mean there’s not more to learn to better assist others.
But then I went down the hole of what the requirements are to become a Certified Financial Planner (CFP)…. they get to do everything! Yeah, that might have been a mistake. Here’s ChatGPT again with some thoughts…
Summary of Time Commitment
Education: 12 to 18 months part-time Exam Preparation: 6 to 12 months part-time Experience: 2 to 3 years full-timeSummary of Costs
Education Program: $3,000 to $7,000 Exam Fee: $725 to $925 Certification Fees: $455 annually Continuing Education: $300 to $1,000 every two yearsTotal Estimated Costs
Upfront: Approximately $4,180 to $7,925 (including education and exam fees) Ongoing: Approximately $455 to $955 per year for certification fees and continuing education
Yowsers! Maybe that’s totally but that’s a heckuva investment nonetheless. The part-time job I had in mind wasn’t going to involve that big of a commitment.
So I stepped back for a little bit and sighed. Then I thought, “Wait a minute, why do I need to conform to some supposed predefined job description? This is going to be my business so it doesn’t need to be a cookie-cutter role. I can define this however I want.” I mean, just because a financial coach might normally focus on the behavioral day-to-day stuff like budgeting, why can’t my business focus more on what I want, including a holistic approach?
I would still need to be careful not to recommend specific investments since that would be a violation of the Securities and Exchange Commission (SEC) as an unlicensed investment advisor. But I don’t think that would be a big issue as discussing general ideas like investing in low-cost broad-based index funds can be acceptable. The key is to explicitly disclose that you’re not providing specific investment recommendations but rather offering general educational information.
Or maybe I could be some sort of FIRE consultant or something along those lines.
There are several different ideas to dig into and it’s actually kind of fun to think about. The bonus would be that any training I do decide to dive into could reveal ideas or strategies for our own finances, too. That could actually help offset some of the start-up costs.
Could the income be problematic in early retirement?
Absolutely.
Any money we make from a part-time job needs to be taken into consideration with the Roth IRA conversion ladder we’ve been doing. When we do a conversion each year, we’ve been aiming to stay within the 12% tax bracket when possible.
But if we also have additional income from a job, that cuts into how much we can convert while staying in the lower bracket. And if we don’t convert enough in a given year to cover our annual expenses 5 years out, that poses a problem. If we stop bringing in extra income, we won’t have enough money to live off of in the year we pull out the money from that rung of the ladder 5 years later.
We could convert more, but that also means paying more in taxes as we move into the 22% tax bracket – not the end of the world, but not necessary for us either. It could also affect the ACA healthcare subsidies we’ve been lucky enough to get.
So the more I think about it, the more it seems to make sense not to put any extra income from a part-time job directly in our pocket where it becomes taxable. Instead, I could open up a Solo 401(k) or a SEP and just move all the money into it. That would defer the tax and not count the money as income. I would still be paying tax on it later through conversions or distributions, but that’s not a horrible problem to have either.
And that’s what happens when you get into my mind – we toss everything out there to see what’s floating around on a subject. Now, just to reiterate, I’m not saying that this is something I’m going to do right away or even at all. This is just an idea I’m tossing around.
But since I’ve thrown this all out there, what are your thoughts?
Thanks for reading!!
— Jim
Hi Jim,
we seem to always have similar thoughts:)… I guess going through the Early Retirement phases is similar for many people.
I actually decided to try myself at being a Health Coach and Financial Wellness Coach earlier this year (olafmoves.com) I’m still trying to build a client base at this point .To combine the two topics seems weird to many people but I think health and financial well-being are very interconnected especially if you don’t like your job.
All the best, Olaf
I think the combination makes a lot of sense, Olaf – money tends to be at the root of a lot of stress for people. I’ll be checking out your site to learn a little bit! 🙂
“It seems that there are still some dedicated readers out there!”
No worries, Jim. I’ll ALWAYS be a dedicated reader…even if you go back to work! 🙂 On a serious note, I did consider pursuing the CFP, but the requirement to work in the industry for a few years before getting the certification turned me off (I was considering it as a “hobby job” in retirement). I did consider coaching, and think it’d be a great fit for you. You can design your program around your strengths, and there’s a lot of need out there for advice. 100% flexible, and it would be a lot of fun. I decided against it, simply because I felt the use of my time in 1-on-1 coaching was less efficient than using the same amount of time to write articles that could reach thousands of readers for the same effort.
Keep us posted…I’ll be reading!
It’s crazy how involved the CFP is, right?! You know I value your opinions, Fritz, so I appreciate the acknowledgement that coaching would be a good fit. And yeah, I get why you didn’t do it – you guys are already involved in so much. Plus, what would I do if I didn’t get to read your new posts each time they come out? 🙂
Yeah a long time ago I considered the CFP through the U of Georgia but decided against it for the reasons Fritz mentioned and the fact that you would be “selling”. I wanted to give advise, not sell stuff.
Anyway, I did stumble upon a consulting gig. Only about 5 hours a month but it is fun money. Stay flexible. Get something for the winter to keep busy and get you through the snow and SAD that goes with it.
Funny, I hired a few different CFPs to go over my plans before I retired just because of how important it was. All were fiduciaries and none of them tried to sell me. They were all tremendously helpful, too. I think the fiduciary part is key, but dang, that’s a hearty investment to go down that path!
5 hours of month of consulting… I like that! Like you said, it provides some fun money and gives you a little something to do. If I do go down this path, I’ll start slow and keep things flexible. The nice thing is that since it’s not about the money, I can take on as few or as many clients as I want (providing folks want to work with me! 🙂 ).
Ugh, the winter… not looking forward to this. But I do have a plan for SAD that I’ll be writing about soon with a part-time gig like this being a piece of the solution.
The U of GA idea was over 5 years ago, before I retired. Not sure the fiduciary rules were in place then. The discussion with one of their advisors and “selling” turned me off. Things might be different now but there is no way I’m spending a bunch of money on certifications/education at this point in life. If you can do it on the side without it, that would be much better.
Yeah, that would be a huge turn-off for me as well and I’m with you on investing so much time/money into something I’d only possibly want to do as a part-time job. So I guess we’ll see what happens! 🙂
Jim, if you decide to stop blogging, I will just randomly email you to get your thoughts on things that are probably going through your head as well. You have always manged to write about topics almost at the same time I think about them. Lately as I gear up to taking a sabbatical maybe early retirement I already thinking of what I would like to do parttime. As you know we have daughters similar in age and yes at some point they want to be off doing their thing more and more so that creates some space. I joke about a lot of parttime opportunities. My wife shoots many of them down. I’ve looked into tag team truck driving, trader joes (the staff always seem happy), we love coffee opening a small drive-thru coffee/pastry spot. I really like the idea of personal finance coach, I know you recommended a couple before and they arent taking on more clients, clearly there is space in this area. I personally would pay for someone like you to mentor me in the actual drawdown phase of early retirement (hint hint)
Love to hear that you continue to enjoy the blog, Nadeem – very much appreciated!
It’s nice when money isn’t the driving force as to what you could do as a side gig. Even though you joke about some of these, it can’t hurt to try different things. If you like it, you stick with it. If you don’t you move on – no harm, no foul. If we didn’t travel so often, I would absolutely try out some different part-time jobs – great opportunity to learn new things and meet new people.
And, yeah, if I do go down this path, hopefully I’ll be able to help folks like yourself looking for guidance on different pieces of their financial journey. 🙂
I follow another website called Stockcharts.com. They have a panel of “experts” that write articles and produce videos related to stock market investing. Not all of the experts have professional credentials, and I don’t believe that it is a legal requirement to be credentialed when providing financial advice, if you use adequate disclaimers and don’t purposefully mislead anyone. I could see you teaming up with a website like that one, and doing a once-a-month newsletter and maybe an occasional YouTube video on the subject of your choice, possibly related to financial education or a Clark Howard type of presentation. For me, I could care less about the university degree or the professional credential. I think all of that has been abused and way oversold. When approaching investments, I look for a trustworthy person that has a demonstrated history of producing positive results.
I’ll check out StockCharts.com – thanks for that, David. It’s funny you mention Clark Howard – not sure if you know, but I’m a huge fan of his and what he does to help others. That’s something I would love to do. At the same time, that’s a lot of work until it’s built up (and maybe even once it is). If I wanted to do something like that, I would either be spending more time than I wanted editing and marketing or hiring someone to handle that for me. As a part-time gig, it might not be worth it.
I agree that degrees and credentials get oversold to us. I do appreciate the value of education but knowing that someone’s accomplished what I’m trying to do can be just as valuable or even more so in a lot of cases. The old joke about brokers being broker than you is funny but carries a lot of truth.
I feel like we have so many parallels. Retiring at 43 (only we did it in 2016). I found your blog just as we were leaving Panama and you were just settling there. Then I (gasp) took a job. It wasn’t part time, but it was only seven months. We were staying put in the USA for an extended time while COVID settled down. It was a great experience because it was something I really wanted to do and be a part of. Maybe your job will find you as well. The best part is, if you don’t like it, you can walk away.
It sounds like I just need to ask you what I can expect around the corner, Bonnie – you can tell the future for me! 🙂 100% agree with what you’re saying. I like the idea of trying different things and seeing what works and what doesn’t. When it’s not about the money, it can make the decision process a lot better.
Hope you guys are doing well!!
lol, If I could I would!
Have you thought about consulting or gig work? Then you can make short-term commitments. Maybe you end up working 40 hrs a week – but for only a couple weeks or months. Then you can have a few months off.
Those are some good ideas, too, Bonnie. It’ll be interesting to see what sort of fun I can get myself into if I go down this path! 🙂
You may have already considered this or perhaps you are already doing so, but volunteering could be another option. Volunteers control their schedule which allows for travel. Other benefits include meeting new people, gaining a sense of purpose, and helping those in need.
That’s a great point, Paul and one that’s been on my list for a while. You’re right that it’s got some great rewards. Funny enough, one thing I considered recently was combining this with some of my personal finance knowledge to volunteer for the Consumer Action Center for Clark Howard. I don’t know enough about how that would work but it was something I thought of recently while listening to his show.
Keep in mind that you cannot contribute 100% of your earnings to a self-employed retirement plan.
Great reminder, Eric! I’ll definitely dig into the specifics more before I’d jump into it. Just toying around real quick with some of the AIs, I asked Perplexity what the maximum amount of income the business could bring in that would allow me to contribute everything between a Solo 401(k) and a tradtional IRA would be as a 50-year old (I’ll be 50 next year)? Here’s what a piece of that response:
I’ll have to verify everything there, but that’s more than I’d anticipate bringing in, so that might be a better option than a SEP where I’d be more a lot more limited. And if I’d start making more than that, I guess that’s a good problem to have to figure out! 🙂
Thanks so much for bringing this up!
Well, Jim, you should really explore or investigate further is you really must get all that education to help/coach others on the financial topics. Like someone else mentioned, you just have to do all the proper disclaimers and stuff. I’ve seen some PF bloggers having a button on their blogs regarding consulting them about FI or FIRE topics with prices and I’m sure they didn’t have any certifications. So, I bet consulting involved sharing in depth personal experience and knowledge of how they did their own FIRE stuff and provide advice, but they just had to be careful of how presented suggestions of which mutual funds to buy. Look, some bloggers even wrote books about FIRE without fear of telling what funds/stocks they put money in, so it must be possible. So, it could work for your part-time gig. As long as you are not managing their portfolios and making trades on their behalf, you should be fine (disclaimer: of course, I don’t know 100% either).
Thanks, Sandy – I’m with you on this. I’ll obviously dig more into it before jumping into anything but as long as I’m disclaiming everything and being careful about what I do say or put on paper, I don’t think there’d be a problem. As far as the education goes, I’m not even too concerned about the cert itself (which I believe is not a requirement). Obviously, having it might be good for marketing, but I do like the idea of learning as much as I can regardless. You don’t know what you don’t know and the more I’d learn, the better the recommendations would be that I could make. Plus, it would be a icing on the cake to learn that I could do something differently on my end to better our own finances and save/make more money.
I’m still just on the surface with this – I’m sure I’ll find out more if I head down the rabbit hole! 🙂
Hey Jim,
This sounds like a great idea. I don’t know how much education you have, but have you thought about teaching at the collegiate level? Or substitute teaching for business classes in your area? If you did a couple of classes you could make anywhere from 10-20k a year or more.
Just a thought.
Hi Jason! The only thing that makes the teaching not so enticing for me is the set schedule. That would be difficult with all the traveling we do. But the substituting would be a different ball game since there’s a lot more flexibility there. Something I’ll have to consider!
Two other job ideas:
1) You might think about working as a financial coach for an organization (e.g. bank or nonprofit). You often can do it online, but if you live near a large community you would be surprised how many people need your work.
2) You might consider working with youth. For example, there are a number of organizations that are looking for people to work with high school seniors and guiding them on college choices, finance, etc. It might be something to look at.
These are cool ideas. I like the idea of working for an organization so I don’t need to deal with all the extra stuff, but then that takes away from a lot of the flexibility that I’m after. I’ll dig into these more though and see if there’s something that does have that breathing room though. For some reason, employers seem to frown on an employee who wants to be on vacation more than thy want to work! 😉
Hi Jim,
You mention above being adept at technology, software etc but I was curious if you are still using a chromebook as your main laptop/computer? As I thought that’s what you used to use but was curious if you’ve switched to either Windows or Mac or if you are still very satisfied with chromebooks? I’m partially asking as I am no longer working and though I used windows my entire career I am considering a chromebook for my personal needs now as I definitely need to upgrade my tech and I do like the simplicity of chrome os plus the great built in security. Thanks.
I’m typing on my Chromebook as we speak, Lou! 🙂
I recommend Chromebooks to almost everyone for home use – unless they have a specific requirement to use Windows/Mac like some specific software that they need to use. My family all uses Chromebooks for everything. I do still have a Windows computer that I use for all our digital media for Plex, but that’s not something most folks will need. Unless you plan to do some heavy graphic design or video editing (both of which can be done on some of the beefier Chromebooks anyway), the simplicity of a Chromebook is wonderful. It just works and you don’t need to deal with all the headaches you’re probably used to now. Try to live in your browser right now for everything you plan to do. If that works, then a Chromebook will be right up your alley.
Is there a Trader Joe’s nearby? If I need/want to go back to work, I would consider Trader Joe’s part-time. TJ’s loves part time workers. I was talking to a cashier at TJ’s recently and she told me that she was visiting family in the area. She lives in Florida and was in California for six weeks. She said TJ’s allows workers to work in a different town while on “vacation”, so they don’t use up all their vacation time. That seems to be a pretty good deal to visit other places while still working a little.
That’s an interesting idea that I haven’t heard of before. Now if only they’d put those up near some of the cruise ports so I could swing in there for a few hours of work before heading to the next port! 😉
No, that could be a great option for snowbirds, too.
Hey Jim,
I decided to go with a seasonal part time job (park ranger) working for my city and it’s been great. On the non-financial side, it provides purpose, a new social network with people of all ages, physical workout, and opportunity to help keep the city parks nice. The cool part of the job being seasonal is there is nothing awkward about quitting each season when it’s time to start traveling. On the financial side, you can still fill in a few more years of $5-$7K in income for your social security benefit calculation and finally it reduces pressure on your safe withdraw rate. Please keep us updated on your techniques to finding great part-time jobs.
That’s a really cool idea… I might need to dig into that one a little more!
Repackage some of your blog articles and try to sell them as a freelance writer. Many of the topics you have written about would be interesting to a larger audience. IMHO the article on the composting toilet might have a limited audience.
Haha, who doesn’t love a good post on a composting toilet?! 🙂
I think working part-time is a great idea. It gets you out of the house and brings in a little income. Recently, I’ve been getting into pottery. I wouldn’t mind working at the community center or a studio so I can use their equipment. That would be a lot of fun.
Good luck finding something interesting. Financial coaching sounds like something you’d be good at and enjoy.
Thanks for the mention!
Thanks, Joe – that’s really cool that you found something you’ve been enjoying. I say why not do the pottery somewhere if you’ve got the time and enjoy it? Seems like a no-brainer… any pay would be icing on the cake, right?
Hi Jim,
So, I have been self-employed for 12+ years or so, 16+ if you count my rental properties as self-employment, and I have a few random golden nuggets for you.
1.) Addressing making too much money now and messing up your Roth conversion ladders or ACA. You could do some self-employment and then HIRE your daughter as a W-2 (not 1099) employee. This would also give her a taste of work and maybe teach her self-employment skills. This would essentially transfer income from you to her (she has to work…so it’s not REALLY a “transfer,” so to speak). She will likely earn only enough to be in the lowest tax brackets for federal AND state. ALSO, there is a big bonus….because she is a W-2 working for a family-owned operation, she wont have to pay payroll taxes AND you also get a break on payroll taxes. Then you could heavily encourage her to max her Roth (assuming she made enough to do so). She has to be a W-2 employee and you have to run a payroll for her. I do this with my kids, and my account runs one payroll at the end of each year (December). You HAVE to run the payroll before year-end; you can’t do it the following year as long as it is done before April 15th. Also…the minor/your kid has to be W-2, NOT 1099.
Imagine your daughter earned $8000 in 2024, pays 0 federal income tax, pays 0 payroll tax, I am unsure your state brackets, AND then slams 7k into a Roth, which grows tax-free. In 30 years, shed would have 46k tax free (assuming 6.5% inflation-adjusted CAGR return). Also, you can earn 8k and not pay taxes on it because your hired your daughter, and that was a business expense. If you did this for 4 years (when she is 14, 15, 16, 17,,,at 18, she has to pay the payroll taxes, but you could keep going), she would have 141k at age 40 or 246k at age 50, 462k at 60, 634k at age 65. Assuming she lives to 95, and went from 6.5% returns to 4.5% in retirement, at 65 she could pull 39k tax free for 30 years. Add some amount of social security to that and she could be Coast-Fi at 17 lol. I am sure you wouldn’t encourage her to retire that late, but it is a cool concept. Also, a nice Roth at that young of an age is a GREAT “backdoor emergency fund” …. I am coining that term here and now lol. She could use it for college penalty-free, use 10k for a first home penalty-free, withdraw if she became disabled penalty-free, have medical expenses over 7.5% of AGI, use money for qualified disaster relief, up to $5k for childbirth or adoption, or pay medical insurance premiums if she became unemployed. She would still need an emergency fund as an adult, but this provides some additional options and support. As a parent, I want my kids to use their Roth’s to retire earlier and reduce financial stress, but I also get a little relief knowing they have something to tap into when they are young if their back was against a wall. Its a much better option if they exhausted their emergency fund and were considering something crazy like a personal loan or running up a credit card.
2) Self-employment is GREAT for certain expenses. You can buy your family ACA plan through your business, and boom…that’s one BIG write-off. You can now make 10-20k more and show no more additional income OR pay any additional tax. You can only write off premiums, so it may even make sure to buy a higher-tier plan with a lower deductible at some point. Plus, you could have an HSA. In retirement, you can expense your medigap premiums. Then there is your home office deduction, office equipment expenses, home internet and cell phone, mileage write-offs, work-related travel (write off the driving/flights and parlay a personal trip immediately after the work portion) and so on.
3) You could also consider buying a rental unit. Hours can be flexible (as long as you have a back up manager when you travel to handle emergency repairs). Lots of write-offs. It could also be a low-cost “home base” for someone who may still travel 6+ months a year. The tenants could help look after your unit/the home when your on the road. I am in Buffalo NY, and we have a ton of 2-4 units all over and I understand most of Ohio has pretty similar 2-4 unit homes. We are strongly considering this when the first of our two kids moves out…and we are even considering buying one now and renting both units to move into the lower unit years in the future. Super frugal me is even trying to recruit my wife to let me Air BnB our unit when we are on trips (that may be a losing battle, though lol).
4.) I am a digital marketing consultant and plan on starting a finance blog this year for kicks and giggles. I have 100% thought about monetizing it with low-cost courses and one-on-one coaching vs. just ads. Considering you have a site and likely an email list, you are one step closer than I am. Plus, you could always use your clients and topics to write about; just change the names and numbers a bit.
5.) Lastly, maybe consider taking jobs that reduce other expenses instead of pure compensation. For example, working part-time at an airline front desk for airfare discounts or flying free, or at a hotel chain for hotel discounts. This may be a stretch but worth looking into, especially as airfair and hotels have gotten much pricier in the last few years. This may become a better option when you become empty nesters in the future as well.
If you ever want to learn more about leveraging write-offs for self-employment or rental units, shoot me an email. Would love to video chat about it.
Wow, that’s a lot of info to digest, Will – you do need to start a blog! I need to think more about point 1 – that’s great if I actually have work that I can offload onto her.
2) I actually never thought about writing off the ACA premiums. Can I do that now for Route to Retire? I’ll need to dig into that one, too.
3) Rental property – been there, done that, got the t-shirt. I’m glad I did that in the past with both a single family and a duplex but I’m also glad to be out of that game. The benefits are great but it’s not my jam.
4) Yes, you should make that happen!
5) Now that’s a cool idea I never though of before. But again, this means I lose some flexibility in being able to travel whenever we want. Pros and cons, right>
Thanks for all the info, Will – looks like I’ve got a lot of thinking to do!
So, in regards to writing off ACA against your blog….you can, but I would talk to an accountant. The reason I bring this up is that I do not know what you pay for ACA premiums or what your blogs annual income is.
If you start showing a loss every single year, does that throw up a red flag and ask to get audited? If you still come out showing any level of profit after the ACA write off, I would 100%. I am not an accountant through, so I would consult with one you trust.
Of course – an interesting idea to consider regardless. Thanks, Will!
I thought blogging was already your small-business / part-time gig? No?
Interesting point about Solo-401k. Is that where you put blog income as of now? How much are you generating from the blog (if you don’t mind my asking)? Do you have a sole proprietorship for the blog?
Hi Mike – yes, the blogging is a part-time gig, but it’s starting to lose some of the excitement as folks reading blogs has started to wane (for a lot of us in the community). I’m also coming up on doing this for 10 years and I’m thinking it might be time to try something different. I’d still keep the blog around and write posts but probably less often.
I don’t make a lot on the blog regardless – it’s just been something that I enjoy doing. I’ll likely bring in a little over $5k this year, so it’s obviously not about the money. Route to Retire in in an LLC. Some of the earnings goes into a Roth IRA and some of it I’ll pull as owner proceeds just for a little more play money on a vacation or whatever.