Rehearsals for Retirement
If you like folksingers from the 1960s, you’re probably familiar with Phil Ochs, who sang “I ain’t marching anymore” and many more catchy protest songs. He came to a sad end (self-inflicted) and one of his last albums was entitled Rehearsals for Retirement. (Yes, I still have the original vinyl and the song title is actually one of the chapter titles in Findependence Day).
That title also serves as today’s blog title and happens to be a key strategy for those who are pursuing financial independence. I’m taking this week off from my day job at MoneySense but it’s more or less a “Staycation”: a working vacation spent at home. Other terms for this are “Veranda Beach” or (in Quebec), “Balconville.”
In the book, I write that the day after Findependence may well be the same as the days and weeks before: you continue to practice whatever craft or profession that got you to Findependence. You’re not “retired,” you’re still productive and you still wish to be engaged in the world, connecting with the workplace, colleagues, friends and family — either virtually or physically.
Definition of Findependence
Let’s step back a second and review the definition of financial independence (findependence for short). I wrote about this on my Financial Independence blog last week at MoneySense.ca, which you can find here. Based on how I interpret the Wikipedia definition of financial independence, it is a prerequisite for retirement: that is, you can’t have retirement without findependence, but on the flip side, you CAN have findependence without retirement. Findependence is also the precursor to such variations on retirement as phased retirement, semi-retirement and today’s theme of “rehearsals for retirement.” A one-year “sabattical” is one long such rehearsal but as I write below, even a one-week paid vacation from your day job can be a rehearsal if it’s a working staycation.
Varieties of Staycations
There are I suppose two or three types of staycations: one is where you really take a vacation from work of any kind; another is where you continue to work, but on your own projects rather than an employer’s. Your time being your own, you can also do a hybrid of these, which is the route I’m going this week: doing various errands and chores one normally might tackle on weekends, but also engaging in social media, writing and other work-like tasks.
As I experience this, I’m reflecting that a working staycation is very much like Och’s Rehearsals for Retirement. I have several friends who are both findependent and fully retired, in that they no longer perusue economic (money-making) activities. But of course, they end up as busy as anyone else: household chores, shopping and maintenance don’t go away even if full-time employment ceases to be. You may pursue various artistic or entrepreneurial activities that may or may not lead to economic reward down the road.
If you still have a day job but have reached the point where you have several weeks of paid vacation each year, you may find a working staycation an excellent trial run for retirement. When I wrote the first edition of Findependence Day in the summer of 2008, I began the writing during my paid vacation weeks from my newspaper staff columnist job. Since I had been a freelance writer for several years in the 1980s, I was familiar with the rhythmn of writing at home. At some point I can see finishing my journalism career in the same way, supplementing the various “Findependence” sources of multiple income with the odd freelance assignment, book royalties and the like.
As I write the first draft of the blog entry you’re now reading, I’m doing so on a MacBook Air in my back yard. The sun is shining, a waterfall is splashing into our fish pond, cardinals and blue jays are pecking away at a bird feeder and life is good. I’ll go back into the house to polish this and format it for the web but this is an example of the kind of life I describe as “findependence.”
If you’re contemplating such a step but unsure about whether you’re suited for it, I recommend trying a week or two of a working Staycation during paid leave from your current day job.
Not yet retirement, but perhaps a rehearsal for it!
Note to US book reviewers & financial bloggers
One of the activities in which I’m engaged this week is promotion of the US edition of Findependence Day. Any journalist in the mainstream media can request a review copy by emailing firstname.lastname@example.org. If you’re a financial blogger or a financial planner with a newsletter or good social media followings, I’d be glad to mail you an access card in order to download the e-book edition in most major formats. I’ll also email you a Word file of the end-of-chapter summaries, such as the one below. You can reach me at email@example.com.
Chapter 3 summary
Finally, as promised, here’s the next installment of the end-of-chapter summaries of the main lessons learned in the book:
Chapter 3: Poor Boy Blues
You can’t save by spending; Be an Owner, Not a Loaner
• Frugality needs to be a lifetime habit, ranging from brown-bagging work lunches to taking public transit half the time.
• Don’t just focus on cutting expenses through small sacrifices; find ways to increase your income.
• Beware financial industry gimmicks like “spend ‘n save” cards.
• Department store credit cards charge the highest rates of interest.
• The secret of building wealth is to be a business owner.
• Be an owner, not a loaner means investing in stocks rather than bonds; or better yet, starting your own business.
• While the biggest fortunes come from starting a business, most of us are better off diversifying our equity exposure through index funds or Exchange-Traded Funds (ETFs).