Retirement is Worst-Case-Scenario Insurance.
I read Tim Ferris’ book The Four Hour Workweek, which turned out to be a conflicting experience. Only until the very last pages I realized why this book provoked this sentiment in me. In there he provides his perspective on the regular 9-5 work structure, and the knowledge and tools to get away from that.
The single most important tool in this process, he argues, is mobility. The ability to generate income from anywhere you want. If you are an employee this ideally means “working from home”. When you have your own business, the trick is to create a product or service that can be offered online. Finally, another fully explored option in the book is to fully automatize your company, if it’s not suitable for the internet.
Anyway, all well so far, the thing is though that mister Ferris earned 5 figures a month on the time of writing that book. Easy talking for him right?
I don’t think so. The fact that he earns a lot of money does not mean, that money is the only tool to get what you “want”. If you want to be a millionaire it’s probably not because of all the paper you can now stuff your mattress with, but the possibilities that come as a consequence.
The 80-20 Principle
It is nice therefore, that money is not the only way to get those things. When you work from 9-5, there is a high chance that what you are doing could be done in a lot less time. The 80-20 Principle, striking similarities to Matthews Law that I mentioned in another blog, was introduced by economist Vilfredo Pareto. It dictates that 80% of the output gets generated by 20% of the input.
80% of consequences result from 20% of the causes, 80% of the results from 20% of effort and time, 80% of a company’s revenue will be generated by 20% of the products and customers, and 20% of the people have 80% of the financial capacity. This list is endless and encompasses even your clothes. 80% of the time you wear 20% of what’s in your wardrobe. The division is often more extreme than it is less, 85-15 or 90-10 is not uncommon. So when we talk about your clothes for example, why would you hold on to that 80 percent? And why should you engage in that 80% of work that only generates 20% more output?
Even though, it seems counter intuitive, give it a try. Show your boss, professor, or most importantly yourself, what quality you can provide in 20% of the time. Nobody will probably notice, because the fine tuning you do for 80% of the time usually does not create anything of value.
When you redesign your life this way, you are already getting closer to living like a millionaire right? And you haven’t earned a penny more than before!
Then, for a couple of years already I have been wondering about the value of retirement.
Why the hell should I wait until I am 65 to have all the time in the world to do everything I have been wanting to do for 40 years?
Only if you believe that money is an end-goal and security isn’t a sensation but an externally acquirable object, retirement is for you.
I conceive money as a tool, and security as a sensation that doesn’t depend on money. Then how does retirement still make sense? Only if you don’t like your job. When you consider this information, and The Four Hour Workweek gives you plenty ideas and insights on how to do this, there are plenty possibilities to start doing the things you want now.
Those three months turned into 15, and I started to ask myself, “Why not take the usual 20-30 year retirement and redistribute it throughout life instead of saving all for the end?
To me, it doesn’t make sense to wait to go rock climbing when you are seventy, start learning a new language when you can only use it for 10 more years, or start hanging out with your family when you can’t lift your children up anymore. Why not start now?
What The Four Hour Workweek Did With Me
I find that the book does a great job putting these decisions in your face. However, it might just be that you are happy where you are, right?
If yes, that’s amazing. I wasn’t sure while reading. I was continuously imagining living in Thailand. I would take a sabbatical, find an opportunity to create some small revenue online, and take up mini-pensions every two years. I felt increasingly conflicted and unhappy with my current situation.
A day later I was walking back home after stopping by the supermarket. I was carrying two backpacks on my back and stomach, full of groceries, wearing my sunglasses even though sun was down. Overthinking the book, I realized: I already live this life. I don’t know if there was anybody watching me but it must have been funny to see a tall gringo, with two backpacks, and sunglasses, laughing like a maniac.
Where Tim Ferris calls it The Four Hour Workweek, I call it living an authentic life, true to your desires. In both cases the lifestyle design is the process to realize evermore of the way of life you want to live. I know that it helps immensely to expand your knowledge, see how others write the rules to their life, and understand your own reasons for working and motivations in life. After reading this book, I realized that that is what this blog is about. I am happy to have figured that out after 9 months!