“I’ve seen old people pocketing the free crackers.”
That’s what my husband said when I pointed out how screwed up it is that, as a society, we put so much more effort into retirement planning than planning all-the-life-that-comes-before-retirement. And he is right, of course. We should do some worrying about old age. We should be sensible. We should plan ahead and make sure we have a safety net.
But I think I’m right too. (Of course! 😉 ) We are told that our generation will have to work into our seventies. Yet, our life expectancy sits at 85ish. I’m not a math genius, but that adds up to working our asses off for roughly half a century, so we can set aside money to be secure for the ONE golden decade at the end:
25 years of schooling + 50 years of working + 10 years of retirement = 85 years of life
Now, I realize that some people actually like their jobs. (If you are one of those, quit reading this article and go enjoy your life! You have made it!) But many of us only barely tolerate the career path we are on. Maybe it’s not meaningful. Maybe it’s too confining. Maybe it’s boring. Maybe it doesn’t utilize our talents. Maybe it’s too stressful and draining. Whatever the reasons, the idea of doing it for 50 years straight brings a little throw-up in our mouths and we dream of escaping the 9 to 5 drudgery. We spend 50 years dreaming of the last 10 when the doors of the career cage are finally swung open and we can fly free.
One obvious solution to this dilemma is to seek and find a traditional career that is more suitable to you. But another is to escape the traditional career system altogether. If you happen to be looking for such an escape (or if you are just curious), I’ll introduce you to three brave groups of people who are saying “thanks, but no thanks” to the career cage.
Free-ranging is becoming your own boss. But not in the traditional sense of becoming a business owner and being just as tied up as if you were employed by someone else. Free-ranging is saying good-bye to alarm clocks, commutes, and cubicles. It’s saying good-bye to counting the minutes until it’s 5pm and counting the days until you are 65 (or 70 or 75 or whatever the Big Brother says the magic age is for you). Free-ranging is about figuring out what you love to do and then figuring out how to make money from doing what you love.
These are your freelance service providers (designers, therapists, consultants), virtual product creators (bloggers, e-book authors), and makers (artists, crafters, carpenters, bakers). What makes a free-range business different from other businesses is that you remain FREE. Free to work when, where, how, and with whom you wish. For your profit and nobody else’s.
The best introduction to this style of making a living is Marianne Cantwell’s Be a Free Range Human: Escape the 9-5, Create a Life You Love and Still Pay the Bills.* This book offers numerous encouraging real-life examples and practical tips for how to get started on a free-range career with little to no capital investment. And the real vanilla-cream-cheese icing on the cake is that Cantwell talks you out of all the excuses that are running through your head and keeping you from actually doing it.
Another worthy read in this category is Barbara Winter’s Making a Living Without a Job: Winning Ways for Creating Work That You Love. My favorite take-away from this book is the concept of Multiple Profit Centers. Most of us have been taught to think in terms of a single source of income – you have one career with one salary. But Winter’s advice is to create several income streams. First of all, this creates security similar to diversifying your investment portfolio. Second, it allows you to pursue various interests, which is great for those of us who get bored doing just one thing. And third, Winter points out that it’s easier to make $1,000 a month from 10 little businesses than it is to make $10,000 a month from one big business.
Back To The Basics
Free-rangers break out of the career cage by finding an alternative, more pleasant way to make money. Others break out by figuring out how to reduce their spending, so they can get away with making a whole lot less money. If we are completely honest with ourselves, most of what we consider “basic necessities” these days, people were managing to do without just a few short decades ago. The idea here is that if you cut your spending to what is actually necessary, you will need to work a lot less.
In Un-Jobbing: The Adult Liberation Handbook, Michael Fogler writes in favor of choosing free time over a large paycheck. Working on drastically bringing down his expenses has allowed him to only do occasional part-time work for casual income.
Many people find that when they drop out of the full-time career system, they have time to DIY and produce some of their own food to bring the expenses down further. Some adherents of the modern-day homesteading and permaculture movements even get close to complete self-sufficiency. Check out The Weekend Homesteader: A Twelve-Month Guide to Self-Sufficiency by Anna Hess and Mini Farming: Self-Sufficiency on 1/4 Acre by Brett Markham.
A third option is to accummulate so much money that you can live off the interest. Unrealistic and unattainable? Not so, according to Vicki Robin and Joe Dominguez, authors of Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence. Their 9-step program is largely based on awareness of “life energy”:
- Become aware of what your current job is actually costing you in terms of time and money and calculate your real hourly wage. Take into account all job-related costs (commuting, clothes, meals, and everything you hire someone else to do because your job takes up your time). Take into account all the time you spend preparing for the job, getting to the job, getting back from the job, and recovering from the job at the end of the day. Your real hourly wage is what you are exchanging your life energy for.
- Become aware of where your money is going, by closely tracking all your spending and how much life energy you are using to cover your current expenses.
This awareness will naturally result in lower expenses and higher savings. You will figure out how much monthly income you actually need (likely less than what you are spending now) and how large your savings would need to be in order to produce enough interest income to cover those expenses. When your savings reach the point of covering your expenses, you are financially independent.
Here are some rough estimates for how much investment capital is needed for certain levels of monthly income.
- $300,000 capital – $1,000 monthly income
- $600,000 capital – $2,000 monthly income
- $900,000 capital – $3,000 monthly income
- $1,200,000 capital – $4,000 monthly income
- $1,500,000 capital – $5,000 monthly income
(These are very rough estimates using the 4-percent rule of thumb, which is far from perfect, so please don’t sue me if this doesn’t work out for you. 😉 )
Now, most people are not going to save hundreds of thousands overnight, so this route would take a while to implement. But, following the principles outlined in Your Money or Your Life, many people are able to achieve financial independence (=retire) much earlier than they would by just relying on typical retirement savings or government programs.
What do you think? Appealing? Crazy? I would love to hear about your thoughts in the comments. 🙂
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