Tag: FIRE

Can You Buy Back Your Time?

“I hate cleaning!”

“I wish I didn’t have to spend my precious time off mowing the lawn.” 

“I don’t have time to cook, let’s eat out again”

These are common refrains to justify spending money to outsource our daily chores in an effort to protect a few hours of down time. But can we truly buy back our time? And if so, is it worth it? If we’re pursuing financial independence (FI), what does this kind of time buy-back mean for our FI number and the time until we reach FI? I’ve asked myself this question a lot over the years. In the past, I’ve hired a twice a month housekeeper, and I’ve hired both kids and professionals at various times to mow my lawn in an effort to free myself from these routine chores. Let’s take a closer look at how much time I actually bought back.

Higher Expenses Now Will Delay Achieving Financial Independence 

This article is primarily for those who have not achieved full FI (i.e., you have the financial ability to retire early—to have complete time flexibility). If you have already achieved full FI, then only my discussion on opportunity costs and time efficiency apply.

The formula to achieve full FI is pretty straightforward—you need enough passive income from investments, real estate, or pension to cover your expenses. In simplest terms: the higher my expenses, the longer it will take me to achieve FI, especially if I plan to keep the expense of a housekeeper or lawn care after achieving FI.

Using the commonly accepted 4% rule of thumb, we need 25 times our expenses in investments to achieve FI (this is called our FI number). Roughly speaking, adding a $100 a month expense will require an additional $30K to our FI number. If I hired a housekeeper to clean my house every two weeks for $120 (inexpensive for the DC area), then I would prevent $260 average per month of after-tax money from being invested and compounding toward my FI number.

That would add $78K to my FI number! At a 100K gross salary, subtracting Federal and state income tax plus Social Security and Medicare taxes, I would need to work an additional year to save that amount of after-tax money. That will include more time spent getting ready for work and commuting that year, making my per hour wage even less.

Buying back small increments of time now will require me to pay it back later by having to work more hours. You might be thinking “But I make $48 per hour, and the lawn guy only charges me $30 an hour, so I will gain back time.” Maybe. Let’s take a closer look at what our time is actually worth.

How much is my time worth?

Before deciding if it is worth trying to buy back our time, we need to first understand how much our time is worth, so we have a number to compare with the cost of hiring someone. That will help clarify if it’s worth the extra time we would need to work to pay for hiring out our chores. It is not as simple as looking at our gross hourly wage.

If our salary is $100,000 per year (gross), then a simple division of 52 weeks in the year and 40 hours per week gets me to the figure of $48 per hour. This is a gross number and doesn’t include the reductions for income tax (federal and state) or social security and Medicare taxes.

Let’s say we are in the 22% marginal federal income tax bracket (my spouse works also). Add to that the 6.2% combined social security and Medicare tax (entrepreneurs also pay the employer amount), and 5% state income tax (this will vary by state), then our actual net pay after taxes for each hour is about $32 per hour net. That is one-third less than that $48 gross! And a whole lot closer to what the lawn guy is charging.

But wait…this doesn’t account for the other costs of work—time and transportation costs getting to work, expected donations to coworker birthdays, showers and socials, potential higher costs for work clothes and eating lunch at work, etc. Vicki Robin and Joe Dominguez provide a good method for understanding the true cost of working in their excellent book Your Money or Your Life. Often, we overestimate how much we truly earn from work and underestimate the true cost of our expenses.

The $260 monthly cleaning fee would require that I work at least an additional 8.1 hours each month to cover the cost ($260 divided by $32). Can I clean my house each month faster than 8.1 hours? Yes, I can! And by doing so, I can let that $260 per month compound in my investments and help me buy my complete time freedom much earlier. If I earned twice as much per hour or more, then it would take many fewer hours of working to cover the costs.

Many of us work a set 40-hour week without the choice to work overtime, so we couldn’t decide to work an extra 8.1 hours each month at our regular job. Instead, we would need to defer our retirement date by approximately a year (again, assuming we made $100K gross annually), or work a side-hustle. Most side-hustles earn less than our regular job, so we would actually be losing time each month trying to pay someone to do the cleaning or lawn mowing work for us—not a great bargain!

How much time does it take us to do the chore we want to outsource?

To make an accurate financial decision, we need to have a realistic estimate of the average time it takes to do the same work (e.g., the cleaning a housekeeper would do, or mowing and edging the lawn). For housecleaning, we need to dust, vacuum carpets, sweep hardwood floors, scrub two bathrooms and kitchen, and change and wash the sheets. All of which would take me three hours (your time may vary). Mowing the lawn requires gassing up the mower, pushing it around the yard, and pulling out the electric trimmer to complete the edging. All of which takes me about 45 minutes each week during the spring and fall seasons. But it isn’t as simple as comparing the cost with just the time it requires to do the chore itself. We need to include the time it takes us to manage the hired contractor.

In-house cleaning crew 🙂

How much does it really cost to hire someone?

In addition to the time needed to earn the money to pay for these added expenses, it also takes time to schedule the service, straighten the house so the cleaner can vacuum or make the beds etc., write the check (or get the cash), provide the mower, cleaning supplies, or other items, and fix/address any subpar work. All this adds up. Is it worth it?

Am I truly getting back the time it would take me to do it?

To find out how much time we are actually saving, we take the amount of time it takes us to do the chore and subtract: 

  • Any additional time we  need to work at our job to pay for it using our net pay minus any costs of working.
  • The average amount of time needed to hire and manage someone (scheduling, quality control, payment, etc.)
  • The portion of time we could use to multitask during the chore. (I listen to audio books and podcasts, so doing the dishes, cleaning the bathroom, or doing laundry doesn’t take away from my time since I’m multitasking while listening).

So, assuming the financial calculations work and you can spend less time working at your job to hire the house cleaner or lawn care company, are you truly getting back quality time?

As I mentioned earlier, this is fundamentally a decision about extending your working time to afford these higher expenses. Will the extra 40 minutes a week “saved” mowing the lawn be spent doing something you enjoy more than the complete freedom we have after achieving financial independence and no longer need to work?

Will the cleaning or mowing service occur during your prime weekend or evening time (since that may be when the kid can mow your lawn or the cleaners can clean your house). Will you have to leave while they are working? If you remain at the house, you still have to deal with vacuum cleaner or lawn mower noise that may impact the quality of the time saved. This becomes even more difficult if you work from home and have less flexibility in scheduling these noisy chores. 

Opportunity Cost: not all time off is created equal

Consider the opportunity cost of investing the money instead, retiring earlier and having extra time that is fully usable. Getting an extra hour or two a week won’t enable more travel in your life, achieving other bucket list items, or following where your interests lead, but getting to FI earlier will.

Once I achieved FI and retired early, every possibility for my time became open to me. I was able to get rid of my possessions and travel the world full-time. I not only don’t have to mow my lawn or clean my house, but also I no longer have to schedule anyone else to do it for me, or quality check their work, or avoid the house while they are there.

An hour when I have achieved full FI (combined with the rest of my hours) is more flexible, and I argue more valuable, than a random hour dispersed throughout a work week that is difficult to capture and combine with other free time. So often that purchased time gets lost in our hectic schedule and quickly filled by our endless list of other tasks.

What about the Intangibles?

I get it that some chores are just not enjoyable, even if we also listen to a book or podcast while we do them. So, for those few chores that we truly dislike (cleaning a bathtub and shower curtain is in that category for me), then it may be worth spending some retirement capital on that chore now, even if it delays our actual FI date by a little—but we should make that choice with eyes wide open.

In contrast, many chores are satisfying. I find lawn care and gardening to be meditative and something that gives me great satisfaction when I am done. The yard always looks (and smells) nice after mowing and trimming and I feel great getting the exercise. My beer afterwards always tastes better than if I’d hired out the work.

What about the quality of work? Hiring someone does not necessarily mean that the work being done will be high quality. I have found that most kids in the neighborhood hired to mow and trim usually do an OK job, but in most cases not to the level that I would do myself (e.g., blow and/or pick-up the grass clippings from the sidewalks and driveway, avoid grass clumps, mowing on a day that the grass is dry, etc.).

Similarly, I have found house cleaners do not understand how I like to clean the kitchen. For example, I scrape the dishes and load them well-spaced in the dishwasher so they clean better and I don’t put wood items (knives and cutting boards) or Teflon cookware in the dishwasher. I was often redoing their work in the kitchen.

So Can You Buy Back Your Time?

In a nutshell, not really, unless you are a very high-income earner making multiples above the $100K salary range. For us average salary earners (US median household income is ~$81K per year), it is fundamentally a trade (possibly a loss) of our future time freedom for small bits of time now. For me, when I was still in my house, I let the housekeeper go after a couple years trial (becoming a minimalist helped reduce my cleaning!) and I chose to mow my own lawn. This approach can also be applied to other times we hire someone to do work we could do instead like cooking (Launa and I saved a fortune eating meals at home instead of eating out).

Whether the financial calculations work or don’t work for you, there may be other factors that impact your decision to hire out the work. In the end it is a personal choice—run the true numbers, analyze the quality of time “purchased,” and compare it with opportunity costs now and in the future.  

Our decision to purchase an extra year of early retirement instead of house cleaning was right for us! (Hadrian’s Gate Antalya, Turkiye)

Understanding Your Personal Inflation Rate

Thinking about inflation? Me, too. With recent increases in government tariffs on foreign goods, the specter of higher inflation has increased, and the potential impact on your expenses may be a worry. But the impacts of inflation are not always bad—or as bad as we may think. Inflation is demonized because we tend to notice higher prices for gas or groceries on a regular basis, but we tend not to notice when prices stay neutral or go down, or when our income goes up.

When it comes to personal finance, inflation is an unavoidable economic reality. Time passes, prices rise and the purchasing power of your dollar goes down, right? Well, yes and no. Truly understanding the impact of inflation on your future requires a closer look. It can be tempting to write off high inflation rates as something you can’t control, but refining your understanding of inflation in general and your personal inflation rate in particular can help you make better financial decisions.

Inflation doesn’t necessarily mean we will suffer a loss of buying power. We all have our own inflation rate. If the overall US inflation rate increases from its target of 2 percent to, say, 7 percent, your personal inflation rate could be significantly lower than the national numbers. We can influence how inflation affects us personally by how we manage our money.

Before we take a closer look—what is inflation?

More than simply an increase in prices, inflation is an overall price level increase for, generally, all goods and services in the economy. The government tracks inflation through its Consumer Price Index (CPI) which measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. On average, the Federal Reserve aims for an inflation rate of 2% per year for long-term price stability and maximum employment. Just as overly high rates of inflation can strain consumers, a too low inflation rate can cause interest rates to decline and make it more difficult to recover from an economic downturn.

Inflation can be good, bad, or neutral for your wallet.

We are most familiar with the “bad” side of inflation. Prices on healthcare and education, for example, have increased faster than the median income over the last couple of decades. After the pandemic, many companies took advantage of temporary inflationary pressures such as delays in supply chains and pent-up consumer demand (coupled with increased savings) to dramatically increase prices (or reduce product sizes—referred to as “shrinkflation”), and their profits. But even when inflation is low, if we keep significant money under the mattress or in a low (below inflation) interest-bearing checking account, we will lose buying power over time.

Shrinkflation can be maddening! (Photo Credit: Retail Dogma)

If rising inflation rates have you concerned about the value of your money, considering the “good” side of inflation can help. In fact, there are some cases in which inflation can actually increase your buying power.

Owning real estate with a low fixed-rate mortgage (which many Americans took advantage of when interest rates were historically low) provides an example of the good side of inflation for our finances. My wife and I purchased a home in 2012 with a 3.25% fixed rate mortgage. While my taxes and insurance have increased since then (mostly because my home value increased) my principal and interest—the majority of the mortgage payment—stayed exactly the same. Over the past 13 years, my monthly payment increased by an average of just 1.08% per year—way below the housing inflation rate over that same period. Even with increased maintenance costs and utility price increases, my overall housing costs were well below the published inflation rate.

We can also benefit from rising house prices (aka housing inflation). We own a fraction of our  houses while we’re paying off the mortgage, but we keep all increases in home value when we sell them. For example, if I put 20% down ($100K) on a $500K home, and the home increases in value by 4% during the year, then my investment increases—not just by $4K (4% of the $100K down payment), but by $20K (4% of the full value of the house at $500K). This compounds year after year, so a 4% increase the following year would be on $520K, and so on.  

Incomes tend to rise over time, due in large part to inflation.

While my mortgage payment grew slowly, my income greatly increased from inflationary pressures. Most years as a government employee, I received a cost of living pay increase and often a merit-based pay increase and/or promotion. Similarly, my wife’s teacher salary increased significantly over the same period. My monthly military pension used to be a couple hundred dollars more than my monthly mortgage payments in 2012, but in 2025 it is a couple thousand more each month thanks to compounding cost-of-living adjustments to offset inflation. My buying power has increased because my income has increased far beyond my routine expenses for food, housing, and transportation.

But what about retirees who are on a fixed income?

Social Security and most pensions, as well as real estate and income from smart investments (e.g., low-cost broad-based index funds) are inflation adjusted, meaning their buying power remains steady despite inflation. As prices rise, so do these income sources. In 2022, Social Security was increased by 8.7%, equal to the government’s calculated inflation rate. So, while there is a slight lag, Social Security keeps pace with inflation. The same is true for most pensions. 

Similarly, if you have real estate rental income, the monthly rent is increased to keep pace with housing inflation and, since the principal and interest of the mortgage is fixed, this income can exceed your increases in rental expenses over the same period of time.

Over time, average returns on investments such as stocks and bonds tend to outpace inflation and can give us more buying power, not less. If we follow best practices for investing and take annual safe withdrawals from investments that are inflation adjusted each year, then our investment income in retirement will keep up with inflation.  

My Personal Inflation Rate—Some Examples

By understanding the components of governmental inflation rate calculations, we can identify how our personal inflation rate differs—in my case, my personal inflation rate is usually lower, while my income is usually higher.

The U.S. Bureau of Labor and Statistics (BLS) calculates the CPI annually. It determines spending categories (housing, transportation, food, etc.), weighs those categories based on what the average American spends in each, and finally identifies inflation in each category (see BLS CPI weighting chart).

In 2023, increased housing expenses across the nation represented 44.6% of that year’s inflation rate of 4.1%. Housing is usually a household’s biggest expense, but if we have a low fixed-rate mortgage, our housing costs are likely to rise slower than for people who rent. Why? Because the CPI is calculated using average rent increases for renters and “imputed rent” (an estimate of what one would pay to rent the house they own) for home owners. Imputed rent is calculated using actual rents of comparable homes in the area. So, the housing inflation rate is fundamentally based on increases in rents. 

Thanks to the fixed portion of mortgages (principal and interest), housing inflation for homeowners tends to be lower than that of renters over time. For example, my housing cost (mortgage plus maintenance) increased by 2.42% from 2021 to 2022, but average rent prices increased by about 6% nationwide in the same time period. That means that my personal inflation rate for housing was less than half of the national rate.

Each person spends differently than the “average” person. For example, if you don’t have any education expenses in the last year, then your weight would be zero in that category. But even if you do, some institutions offer tuition guarantees, which lock in your tuition costs for every year of attendance. Choosing a college or university with a tuition guarantee is one way to neutralize the impact of inflation on our education spending. Both our now grown children went to universities with tuition guarantees, eliminating the impact of ongoing inflation in the education category from our personal inflation rate.

In the healthcare category, a personal inflation rate can vary greatly from the average in the CPI. For example, my wife and I  have military and veterans’ healthcare benefits, so we spend a lot less than the average American on healthcare. Our insurance premiums are lower as are our out-of-pocket medical expenses. As a result, inflation in the healthcare category is weighted a lot lower for us (2.5%) than the 7.8% for the average American. Once again, our personal inflation rate is different from the national numbers. 

In addition, my wife and I embraced minimalism. We no longer buy as many goods such as apparel or decor as many Americans. We avoid upgrades of our cell phones and electronics, and we don’t drive cars as much. In fact, we have been car-free for the last two years as full-time nomads. (But even when we did have cars, our transportation represented 4% of our budget, not the 17.2% used by the CPI.) These minimalist choices made big differences in our personal inflation rate across many categories. 

While the examples from my life may not be practical for every financial situation or lifestyle, they illustrate how accounting for inflation is more than just budgeting extra for groceries each year. When we focus on what we value most and let the rest go, we also have a hedge against many of inflation’s “bad” effects. By living an unconventional life and controlling expenses, often buying less expensive alternatives, we have gained a lot of control over our personal inflation rate. 

Perhaps best of all, we don’t have to panic when we hear the latest scary national inflation rate in the news, because we’ve thought through our personal inflation rate, and we know the difference.   

Inflation is a fact of life, but it doesn’t have to derail your financial journey. In some cases, it could even be a help.

Post cover photo by Markus Winkler on Unsplash

Six Myths of Financial Independence and Early Retirement

Since my early retirement in 2020, I have noticed several misunderstandings about pursuing financial independence (FI) and retiring early that are frequently perpetuated by FI content creators and their guests. Here are six common myths regarding pursuing full FI and early retirement. While some of these might be true for some individuals or in very specific cases, they become myths when touted as general truths. It is time to debunk several:

1. I have to keep working because I couldn’t just sit on the beach (or couch) all day.

This work or do-nothing binary has got to go! It is frequently used to justify continuing to work when someone is fully financially independent and doesn’t need the money. The truth is––a life without paid work can be equally, if not more, fulfilling. I’m a proud early retiree and I rarely spend time on the beach sipping fruity drinks or sitting on my couch eating Cheetos. My life is well-balanced with full-time travel, quality time with friends and family, getting plenty of sleep and taking care of my health, hiking, reading, and learning––all with white space to breathe and just be. It has led to a life of contentment I never had when working 40-50 hours per week, to include when I worked my dream job. There are thousands of interesting hobbies to pursue that make for a happy and contented life. By not working, my time is mine to control and I love it! 

2. I don’t want to pursue full financial independence with the ability to retire early, as I don’t want to live a life of deprivation or unhappiness to get there.

Frugality is the superpower of FI. Cutting back on spending does not mean that we have to live a life of deprivation or unhappiness––just the opposite. You don’t have to eat only beans and rice, sleep on a friend’s couch, or some other extreme deprivation. My favorite cutbacks enable me to save money while still enjoying the same or close-to-the-same goods or services. These are the “invisible” cutbacks––those that are not noticeable or barely noticeable with a little intentionality (Brad Barret, host of the ChooseFI podcast, frequently echoes this sentiment). I have found that happiness is usually found in time spent with family and friends, time in nature, and learning––most of which can be done without spending a lot of money. As modern-day philosopher Naval Ravikant explains, “Money doesn’t buy happiness – it buys freedom.”

3. Renting is financially better than buying.

For a short term, this is generally true, but for a long-term (~7+ years) buying a comparable home on a fixed rate mortgage and renting it to yourself is usually the better financial decision. This is primarily due to the power of inflation. Over time rents increase at a far higher rate than home mortgage payments and maintenance costs combined. In addition, the owner gets to keep all of the home’s valuation growth despite only owning a fraction of the home. You can find a detailed financial analysis with spreadsheets in this rent vs buy post. When making a rent vs buy decision, run the numbers over at least 10 years. Financial advisors rarely advise investing in the stock market for less than a 10-year horizon. Likewise, we should not invest in buying a house unless we achieve a better result than if we rented. If you can’t do that, rent.

4. You must know what you will do with a specific plan for retirement before you retire or you’ll find yourself with nothing going on and you’ll get depressed. 

Spending time before retirement when I was physically and mentally exhausted working long-hours at my job and fitting in my every-day life chores around that, was not the right time to try out new hobbies or make new retirement friends. Forcing a new hobby into my already busy life, particularly one that would benefit from daytime hours and my full energy, would have added to my burnout and risk me resenting the new endeavor that I might otherwise enjoy. It is completely OK to not know what you want to do in retirement. Leaving work frees up an enormous amount of time and mental energy to explore and try out new things and meet new people. When I retired, I went to graduate school to study history for a year, then I pursued personal financial consulting, then I worked my dream job but quit after a year to travel full time (and this will eventually change again). I learned an enormous amount about myself after retirement because I had the time and resources to do so. I became a minimalist that changed who I am, started writing, and improved my Spanish. The key is that we don’t have to have it all figured out in advance. Protect what little white space you have in your life when you are working and know that retirement will provide ample time to decide what to do next.

5. Pursuing full FI and early retirement is a race.

It’s not, but I’m surprised at how often I hear it implied. Reaching FI actually takes time and is achieved at your own pace. Even with an impressive 44% savings rate it should take about 20 years. My wife and I, due mostly to poor investing, took 30 years after college to reach FI and we retired 15 years early. If you take longer or shorter it is OK. It is your journey based on your life. It is not a race with anyone as achieving FI is often dependent on how much you make in your chosen field of work and your life’s particular situation. While some may be happy spending their free time working side-hustles to earn more money, I didn’t, and you don’t have to either. Follow your own path. It took 19 years before my salary broke 6 figures and my wife’s salary as a public school teacher never did, but we are both separately fully FI. It just took frugality, investing, and time.

6. The “middle” is boring.

I have heard people who are on the path to financial independence extoll that the middle is boring. Meaning that after they have worked out a solid savings rate, optimized their spending, and automated their finances, that life becomes boring while they are waiting to reach early retirement which, as previously mentioned, takes many years. What? Boring? The middle IS life! This is the time to make and cash in on memory dividends. This was the time I enjoyed weekly family game nights, pancakes on Sunday mornings, frequent local camping trips, time reading books aloud together as a family, and taking memorable inexpensive vacations using home exchanges and travel points. This was the time I achieved a sense of accomplishment in my professional life. This was the time I coached my daughter’s soccer team for 13 years. This was the time I went for evening walks with my wife along the trails in our neighborhood. Sure, the time freedom I have in retirement is AMAZING, but I wouldn’t trade away any of the “middle.” Working doesn’t make the middle boring. Boredom is a mindset you don’t have to have. Minimalism can help.

There are many paths to reach financial independence and early retirement. Your path is your own, but it doesn’t have to be a race, it doesn’t have to be boring, and it doesn’t have to be a life of deprivation and unhappiness. Quite the contrary––it can be great! Life in early retirement is amazing, so unless working is truly what you value most, I recommend actually retiring when you get there. So many possibilities await you. 

Why You Should Quit Your Dream Job

I frequently hear on Financial Independence and Retire Early (FIRE) podcasts and read in FIRE blogs that the RE (Retire Early) part of the FIRE acronym should be dropped. They can’t imagine not working, they say, and besides, they enjoy working.

I know what they mean. I had my dream job, and I worked it even after I achieved full financial independence with the ability to retire early (aka FIRE).  I had quit my career of 29 years in retail and hospitality management, and then I found the perfect job that I loved doing—educating military service members on personal finance. Despite my dream job having everything I wanted, I quit it just one year later. 

And, if you’ve reached full financial independence, I think you should quit your dream job, too.

What? Quit you say? Then it couldn’t have been your actual dream job, right? Wrong.

This was my dream job! It had it all: an important mission educating military service members on personal finance, a kind and supportive boss, great co-workers, practically unlimited resources, lots of autonomy, great pay and benefits, no supervisor responsibilities, and the ability to telework as much or as little as I wanted.

Logo for the office of my dream job (I linked it to the FINRED website)

It was the perfect job for me! So why did I quit? 

In a nutshell, we have finite lives. As much as I valued this job, it wasn’t the number one thing I wanted to do AND it was physically and mentally keeping me from doing the things that I valued more.

My top five things I wanted to do were: travel, improve my health (stretch, walk, and hike more in particular), spend more quality time with friends and family, follow my curiosity (to include learning a language), and read more books. It turned out that the sixth thing I wanted to do was help people improve their personal finances—my dream job.

What We Tell Ourselves About How It Is Going To Be

When I applied for the job, I made a bargain with myself that I would only work the required 40 hours a week. I committed to not work any extra hours or sit endlessly at a desk—a way of life that had plagued me throughout my working life.

I promised myself that I would use my free time to do those top five things I wanted to do. Since I had limited time off (4 weeks per year), I planned to jet-set off with my wife on the weekends to visit family and see new places.

To work on my health, I bought a new standing desk, new ergonomic chair, headset, and a variety of other office items to make my home office as comfortable as possible (I had a dedicated room upstairs with two nice windows). After work, I planned to walk every day and do my daily stretching and body-weight exercises. Also I would read more, study my Spanish, and spend more time with family and friends. It was going to be great! 

Since I didn’t need the money (I was fully FIRE), I committed to spending the extra $125K+ a year after taxes on travel and things that would make life easier, such as housekeeping, lawn care, and eating out, so I could maximize my time off.

So how did I do that year in my dream job, achieving the things that I wanted most in life? The reality was a lot different than what I planned.

Even My Dream Job Didn’t Fit Neatly into Working Hours 

I often worked extra hours despite my promise not to. At first, my justification to myself was that I needed to get up to speed on the new job. But after a couple of months, that justification morphed into a desire to accomplish a lot (and I did!). 

I’ve known for some that when I make a commitment to others, I place that higher than commitments I make to myself. This year of work after I reached FIRE reaffirmed that understanding. Work severely limited my ability to engage in my higher priorities. I didn’t need more money—I needed time. 

Traveling to Asia and having the time to visit the minor temple sights in Cambodia wouldn’t happen if I was working full time

Lots of Travel, But Little Decompression

I took many weekend trips that year. We often left on Friday nights and returned Sunday evenings (or Monday evening if it was a holiday). The fun weekend destinations included New Orleans (once with my wife and once for an NFL game with a friend), Phoenix (to see relatives), Miami (Formula One Grand Prix with a friend), Puerto Rico (for my birthday), rural Virginia (for CampFI Mid-Atlantic), Charleston (for our anniversary), and Thomas, West Virginia (for great bluegrass music).

I also took longer trips: 4 days in Minneapolis for a family reunion, 8 days in Newfoundland with my son, 10 days hiking Hadrian’s Wall in England, and about 10 days hosting our two adult kids over Christmas, though I worked several of those days.

While all of this travel may sound great, I found it to be tiring. There was no downtime between work and travel. On those weekends when I wasn’t traveling, I was researching and booking my airline, hotel, transportation, and excursions. Travel planning takes time.

Because I only had a couple days at each location, I found myself scurrying around when I got there, trying to maximize the visit (the way most Americans go on vacation). I was also traveling when everyone else did (weekends and holidays) and fighting crowds and paying a lot more as a result.

My time off was limited by my work, and although I had a generous 4 weeks of paid time off each year plus every federal holiday, it wasn’t nearly enough. My higher priority to travel and follow my curiosity was being hampered by my dream job.

Did My Health Improve?

No. My sleep was hit or miss as it was often interrupted when I had an important upcoming meeting or project due—I couldn’t turn my mind off easily. Having a job that I cared a lot about was difficult to turn off when I closed my laptop.

Even with the new high-end standing desk, I sat for most of the day. I did get out for a walk most evenings before dinner, but I had difficulty fitting in my stretching and body-weight exercises as work started early. I was no longer biking with my friends on the weekends—it just didn’t fit.  

Hiked 10,000 foot peak in Vietnam. Not working enables lots of hiking, walking and biking in my days.

Did I Find More Quality Time With My Family and Friends?

No. While I did make some trips to visit family, they were limited by my time off (which was split between seeing new places and seeing family) and similar to my sightseeing, it was harried and less quality. I was seeing my family and friends about the same as I did before I reached FIRE—not enough. 

What About My Priorities of More Reading and Learning a Language?

Because I was so engrossed in the important work of my job, I was mentally exhausted at the end of most days. My best creativity and concentration were focused on better reaching military service members with quality personal financial information. After work I didn’t have the mental energy to read the books I wanted to, or focus on improving my Spanish—I found I needed to spend much of my free time mentally decompressing from work.

Relaxing and reading on my porch in Luang Prabang, Laos.

Since Quitting My Dream Job

After quitting my dream job, my wife and I fully embraced minimalism and it changed who I am. We sold or gave away 98% of our belongings, turned our house into a long-term rental, and became full-time nomadic travelers with a backpack and a carry-on each. That change has been deeply valuable to us, and it took time—time I simply didn’t have when I was working my dream job. 

But here is where I really saw the effects of quitting. This comparison chart shows my time (counted in quality days) spent with friends, family and traveling during my year of working my dream job vs. my first year after quitting my dream job.

FriendsFamilyTravelTotal
Year During Dream Job13452381
Year After Dream Job43130178351
Quality Days Spent on Three of my Top Five Priorities.
Note: some days overlapped with family or friends on vacation, so I chose what the primary purpose was for each day listed to avoid double counting. It doesn’t add up to 365 because there were about 14 quiet days that didn’t neatly fall into any category, so I left them out of this tally.

By letting go of my sixth priority (my dream job) I have been able to fully achieve my top five.

  • I traveled more than in my previous 13 years combined.
  • I read more books than any year, to include college.
  • I spent more time on my health than I had in decades.
  • I spent 3.5 months practicing my Spanish to include in-person classes and daily app learning (my Spanish had been neglected for years prior).
  • I spent 3x more quality time with family and many friends.

I have found contentment in my daily life and I couldn’t be happier. 

Is It Time to Quit Your Dream Job?

Even if you have your dream job, that isn’t necessarily reason enough to keep working after achieving FIRE. I recommend that after some soul searching you ask yourself: “Is this job truly my top priority in my life and with my time?” If it isn’t, then ask yourself “Does this job hamper my higher priorities in any way?”  

If your answer is yes, and your dream job prevents you from fully doing any of your higher priorities, it is time to quit. 

Real Estate is Passive or I Make $2,800 Per Hour

What? $2,800 per hour? This must be a crazy MLM scheme or some sort of bait and switch scam, right? 

Not at all. On average I work one hour a month managing my two real estate properties. Each month I clear an average of $2,816 (including my principal and net of expenses and taxes). So my hourly rate is $2800! 

But “passive”? That is impossible, you might say. Yes, really. As I show below, the average percentage of my time (.006%) that I spend each year managing my two rental properties rounds to zero! It essentially takes me the same amount of time as investing in stocks.

For 19 years I have owned one or two rental houses at a time (I have two right now). I like to say I am a lazy landlord, but actually I’m an efficient landlord.

I bought and lived in all of my rental houses before I rented them out. I have calculated that buying is often a better investment than renting (comparable houses), but ONLY if you are willing to keep the house for 7-10+ years, much like long-term stock investing. Since keeping these houses instead of selling was the better long-term investment, I now rent them to other people instead of renting them to myself.

So How Much Time Does It Take To Manage a Rental Property?

Let’s put this in perspective: In the 13 years (156 months) of self-managing my current property in Ohio, I had 87 maintenance and repair expenses. In other words, on average I had a 20-minute issue to resolve every 1.8 months.

Of course, I can’t ignore the upfront and more time-consuming effort to get a lease, advertise, screen tenants, and then handover the property (~10 hours) and the infrequent work of replacing my tenants (6 hours) or renewing the lease (2 hours)–a great house rents quickly. There is also the rental-property related work on my taxes that takes about an hour each year, and maintenance inspections of the properties that take about two hours per property each year. (My trusted handyman actually inspects for me in OH, so now I only visit that property once every 2-3 years). 

On average over the last 13 years, I have spent about 35 minutes a month managing my OH property (not even a full hour!) and I clear over $1000 per month. That’s $12,000 a year for 7 hours of work – a pretty good wage. I make even more on my VA property ($1800 per month) and I average even less time per month managing it (25 minutes). I think you get the point–it doesn’t take that much time to manage a property if you have good systems in place.

Most months, nothing happens except the rent arrives by direct deposit. 

Setting Up Good Systems Saves Me A Lot of Time

  • Number one is finding good renters. I don’t skimp on tenant screening. I always call work and housing references, and I complete credit checks unless they are active duty military, and even then I still collect all the info needed for a credit check.

Great renters are looking for a quality home for their family. They tend to care about their belongings, their credit score, the appearance of the yard, and they will care more about my house. Many of my renters do simple maintenance and repairs themselves, or they are willing to pay for improvements they want. One renter (with the help of her handy dad) offered to install new composite decking if I paid for the materials. The house now has a huge, great-looking deck for 10% of the cost I would have had to pay a company to install it. 

  • Getting great renters requires a great house. I buy houses in desirable school districts and neighborhoods, which I know first hand because I first lived in them myself (my system works for a small number of rentals). I have bought in military communities, and I usually rent to senior-grade military families.
  • I make sure my lease agreement is comprehensive. Setting standards and expectations up front is key to avoiding problems later. My first lease was OK, but every renewal since I have strengthened it with lessons I have learned myself or learned from smart friends with more experience.
  • Set expectations with renters up front on maintenance and communication. I walk through with my new tenants how maintenance and repairs will work. For true emergencies (e.g., no heat in the winter or a water break), I empower them to call for repairs directly with the appropriate company if they can’t reach me quickly and it can’t wait. When they do reach me with a problem, I either have my handyman look at it (with a quick email or text), or I have the renter call a company of my choice (or theirs if I don’t have one lined up already).  I have the bill come directly to me. This saves everyone time as the repairman has to schedule with the renters anyway, and the renters are very happy to be in charge of scheduling.
  • A reliable handyman is recommended but not required. I have a great handyman for my OH property but I have yet to find one for my VA property. While addressing maintenance issues takes the same amount of my time, having a reliable handyman saved me money and improved my confidence in getting quality work. 
  • Take advantage of the quality and often free resources online to make renting a property easier. Online sites like Zillow (no endorsement intended) work great for advertising, tenant applications, and background checks. I invested about 3 hours, one time, to modify a premade lease for each state I rent in to make sure I comply with state landlord-tenant laws. I set up my property management tracking spreadsheet, where I keep a simple on-going record of income and expenses, in about 30 minutes. 

If I only focused on the initial one-time effort needed in the first few weeks of renting out my house, then it may feel like a lot. But over a 19-year time frame, each month it is hardly any time at all.

Skip The Property Manager – It Doesn’t Take That Much Time

Since I have two properties and live far from either of them, I must have a property manager, right? Nope! I learned the hard way that a property manager doesn’t really save you any time. 

If the water heater broke, the tenants contacted my property manager who would then call me about it. Then the manager called a repair person and scheduled the repair with the tenants. Then I was sent the paperwork each month that I needed to file away for taxes with the amount subtracted from my rent (or I was billed if the repair was major). 

Now that I’m my own property manager, the renters text me if the water heater breaks. I ask them to call a repair company and schedule the repair at their convenience and have the company bill me. It’s the same amount of effort on my part and more convenient for the renter to schedule their own repair, but without having a middleman or becoming the middleman between the renter and the repair company.

With a 5-minute call from the tenant (or usually a text with a picture), and a 5-minute call to the company to pay (usually an online payment), the work is done and the problem is solved. I then open up my property management spreadsheet and record the expense (another 5 minutes). So after 15 minutes of work, the problem is solved. 

On more complex issues like working with a neighbor to take down a shared tree, I had to write a good 10 texts back and forth to coordinate the work. It took me a whole hour total to get that job done – whew! 

As my good friend and real estate expert Keith Nugent shared with me at a CampFI, you need to be your own property manager until you understand every aspect of it and then only consider hiring one once you own five or more doors. My experience confirms this. Since I’m not planning to expand my properties past two, I’m never planning to hire a property manager. 

Don’t Confuse Stress With Work

It can be a stressfulI conversation to demand overdue rent or pursue eviction action, but these actions do not take up much actual time. The one time in 19 years I needed to pursue eviction it was definitely stressful, but it did not take much time to resolve. I called a lawyer (it took maybe an hour) who sent the eviction proceedings letter to the tenant. The tenant then left. 

The reason I hear that people feel renting properties is too much work often goes something like this:  “I don’t want to deal with calls at 3:00 am for an overflowing toilet.” I feel that is a worn out trope. For one, an overflowing toilet is almost always the renters’ fault for clogging it, so they would pay the bill for any repair or damage and clean up. My excellent renters have never called me for such things. 

My tenants did call once at 11:00 pm about the heat not working in the winter, and I empowered them to call a repairman directly and that I would cover any extra fee for an emergency response (I don’t skimp on safety). Then I went to bed and slept well. Being called after 10:00 pm has happened maybe 4 times in 19 years and it took me 5 minutes to resolve each one.

I try not to confuse stress with time. Over the years, tenant issues are infrequent and rarely take much time. Even getting quotes for a new roof or windows only took a couple hours. I am responsive and get the problem fixed. 

Is Stock Investing Truly Passive, but Real Estate is Not?

I often hear in FIRE podcasts and read in blogs that stock investing is truly passive – the old “set it and forget it.” While I am a “passive” index fund investor, I have found I actually need to spend some time managing my investments. 

I rebalance every quarter so my funds stay within the percentages of my investment strategy. I spent time calculating my traditional IRA to Roth IRA conversions (I have some after-tax basis). It takes many hours to rollover my wife’s and my 403b, 457b, 401k, 401a accounts to our IRAs. I keep an eye on the stock market and buy when it drops 10% or more (push more bonds into stocks) and then I rebalance when the market recovers. I spend about an hour each year on my taxes related to my stock investments.

I spend nearly as much time on my stock investments as I do my real estate management and both pay me a handsome wage per hour! So technically neither is 100% passive, and neither has to be a lot of effort.

Basic real estate investing in a few houses can be fundamentally as passive as stock investing. If I ever did get too many rentals where I noticed and cared about the higher workload, then I’d switch to a good property manager and drop my level of effort back down. 

Real estate investing, as with stock investing, benefits from up-front research. Setting up a good system will minimize your long-term efforts, diversify your portfolio, and save you money over renting if you decide that the renter of your house is you. 

So is Real Estate Passive Income? In My Book – YES!

So, with all of this talk about how much time it takes to manage rental properties, it can’t be considered passive, right? Let’s run some numbers…

There are 2080 hours in a work year (40 hours per week x 52). I work an average of 12 hours per year on my rental properties, which is .006% of traditional work time. Even if I doubled it with 2 additional properties or quadrupled the time spent, it would still round to zero! 

So, either real estate is passive income or I earn over $2800 an hour! Either way, it is worth the effort. 

P.S. For further information on how being a landlord does not have to consume a lot of time, and how to set up good systems to become a “Lazy Landlord,” check out James Lowery’s presentation at the 2023 ECONOME conference.

The Pursuit of Contentment

“I want to be happy” was how I replied when asked as a youth what I wanted to be in life. Likely inspired by our country’s Declaration of Independence, I bought into the enticing desire of achieving full happiness. It doesn’t work that way.

In the pursuit of a life of bliss, I read several books and listened to numerous podcasts on happiness. I was struck by the happiness science finding that 50% of a person’s happiness is based on genes, 10% individual circumstance (environment mostly out of our control), which leaves just 40% under our control. More than half of a person’s happiness (or lack thereof) is out of one’s control. 

This finding is eye-opening on why happiness is so elusive for so many people. If I was born with a 5% genetic predilection to happiness, and I somehow maxed out my environmental circumstances AND all happiness related measures under my control, I could achieve a maximum of a 55% state of happiness. 

That is a failing grade, and I doubt I could consistently maintain a 100% achievement of the areas in my personal control, especially when my genetic disposition was fighting against me. 

I’m More of a Piglet Than a Pooh Bear.  

I have found that my normal state is not one of default happiness. Do I think I am an Eeyore with a 5% genetic happiness disposition? No. But I also don’t think I’m a Pooh Bear with a 45%+ genetic good humor and gentle kindness. 

Unlike Pooh, happiness doesn’t come naturally to me. I am more like a Piglet. I naturally worry. I look for security and close friendships.  Sure, I’ll be brave at times with my friends, but my default is not the blissful happiness of Pooh. 

Happiness carries too much weight. 

Happy moment sitting on a dune in the Sahara

I have learned that I don’t need to achieve the joy of happiness in all the day-to-day things I do or own. My wardrobe, meal, or wherever I’m staying the night isn’t responsible for my happiness, it just needs to fulfill its job. A car doesn’t need to spark joy, just get me where I need to go safely.

Happiness has a short shelf life and it is fundamentally based on comparison—with others and with personal expectations. 

I think about the sheer joy my 14 year-old daughter expressed on her first business class flight experience. Through a series of crazy events, she unexpectedly was upgraded to business class flying home from Barcelona. She didn’t know until she was on the plane. She reveled over each item in the bag of sundries provided and in her ability to order all the pineapple juice she wanted. She was so grateful for the experience. 

But conversely, I have seen people who travel business class frequently who complain about some aspect of the service and take the experience for granted. They have lost that first-time joy because business class has become routine.

The latter is an example of hedonic adaptation where humans will reset expectations as new experiences become expected. As we quickly adapt to life’s changes (e.g., new exciting car quickly becomes our regular car), we are continually chasing the next level item (oooh, look at that better and more expensive car!!!).

As a corollary, getting rid of unhappiness does not necessarily bring happiness. Happiness researchers share that negative emotions such as sadness and fear are necessary for survival, and that suffering is part of the human condition. Achieving 100% happiness would require humans to ignore these other important emotions and states of being. It is just not humanly possible to be fully happy all of the time, and yet we humans continue our endless pursuit of this holy grail.

The more I pursued happiness, the more elusive it became—always just around the corner, but never with me for long.

Instead, I pursue contentment.

Pursuing contentment addresses the hedonic adaptation treadmill problem that the pursuit of happiness tends to create. I have determined what is enough in my life—enough money, enough stuff, enough commitments.

Minimalism was a big help in this. In embracing minimalism, I lessened the emotions and value I placed on items I owned. The things I own, such as a car, watch, clothes, boat, home, etc., are no longer symbols of myself, any of my achievements, or my love of other people. It changed who I am. I don’t need to dress nice for other people. I don’t need new things to impress others.

I also fluctuate my life’s experiences to help me maintain an appreciation for the lucky life that I live. In the past year as a full-time nomad, I have slept on an inflatable camping mattress, two bunk beds, a rock-hard bed that made my hips ache, and several gigantic and comfortable king beds, and many beds in between (62 in all).

The variation keeps my perspective in check. If the bed does its job, then I am content with that. I don’t need an incredible bed every night to appreciate my daily life. The same applies to my food, clothes, transportation, and excursions.  

Instead of asking myself “Am I happy?” I ask myself “Do I have what I need?”  The bar for responses to the latter question is much lower, and I achieve contentment at a far higher rate than happiness. Attaining 100% contentment feels achievable in a way attaining 100% happiness never has.

Of course, I still feel many moments of happiness as I sit on a dune in the Sahara desert in Morocco or hike along a Roman road to the Bachkovo Monastery in Bulgaria, but these highs are no longer my measure for daily success.  I instead measure my daily success by my level of contentment—having enough to meet my needs and pausing to notice that. 

Recently, I had a nice take-out meal from Seven Eleven in Japan and I enjoyed it in a park with my wife. Nothing fancy. We had lots of ants join us. There were lots of weeds around. My seat on the concrete step was hard. The sky was beautiful. The mountains in the distance were nice. The buildings around us were interesting. 

Was I happy? Maybe. Was I content? Fully.

Content moment having a picnic in a park

[This post was republished on the minimalism and simple living blog No Sidebar.]

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