Sprint, walk or jog

Mr Zombie   September 14, 2015   39 Comments on Sprint, walk or jog

The method favoured by ERE, hammer those expenses down brutally and absolutely tank it towards Financial Independence.  It is possible in a scarily short time if you are committed to increasing your income and really trim back the fat on your expenses, and we are talking towards the 2% body fat range here.

Walking towards Financial Independence or plain old retirement is the approach most of the population take.  Early retirement could become an option through luck or just being good with money naturally.

If it was a nice relaxing walk it wouldn’t be so bad.  I suspect it’s not though, what with getting the biggest house possible, running a super sweet car, smashing your way through the 4 daily hazelnut flavoured grande cappuccinos and buying a new t-shirt to go out on Friday night there’s not much left for retirement savings.

It’s more likely to be jittery stressful walk, stopping in the bushes every now and then to defecate out any savings that have accumulated, all the while feeling a little paranoid, knowing that there is something in the distant future you should be saving for.  It’s whirlwind at the end, pulling together what ever resources are available and blaming everyone else for not letting you know that this day would come.

Alternatively, a plan might be in place, you are happy to work until whenever as you really do love your job, it really is a relaxing walk towards financial independence.  Especially with all the paranoid people defecating in the bushes to keep you amused.

Those of us actively saving for Financial Independence with an eye on early retirement are somewhere between a casual jog and the flat out sprint of ERE.

Some of us are cruising along at a good old pace, happy that our stoic craniums can resist the build up of too much work induced lactic acid before crossing the finishing line.  Others a little slower, perhaps away that our minds would crumple under such strain, but still steaming along faster than 99% of the populace.

Slowing the jog down – part time early freedom
One thing that I have pondered recently is a move to part time.

The first question is;

Would the drop in income be?

And immediately after that;

How long would this delay any grand ideas of Financial Independence and would the delay be worth it?

The first question can be looked at with cold numbers.  As a higher rate tax payer in the UK you are paying 40% income tax.  Any reduction in income from reducing your hours would only impact you after the effects of tax.  For example, let’s say you are earning £50k a year, lucky you.  That’s about £36,300 after tax and NI contributions.  If you were to drop your hours by 10%, so one day off every two weeks, you would see your gross salary drop to £45k.  This would leave around £33,400 after tax for you to get your grubby mitts on.  A reduction in income of 8% for a 10% reduction in your time.  A 2% premium.

How about the impact on the big idea of Financial Independence?  Well, this depends on a whole range of factors.  How much you are saving, driven by how much you spend, how much you have in savings already, assumed growth rates, blah blah blah etc blah.

As an example;

Salary: £50k
Savings rate: 60% (implied living costs of about £14,500 after tax)
Target financial independence pot: £581k as suggested by a SSWR (Super Safe Withdrawal Rate) of 2.5%
Real growth rate: 5% (then we can ignore inflation)
Starting pot: £0

Under these constant conditions it would take 17 years and 2 months to reach the targeted stash.  It would be much quicker if we trusted the 4% rule, but it’s good to be pessimistic every now and then.

If after 5 years you dropped to 9 days in every 10, a day off every fortnight, the savings rate would drop to 56.5%, assuming the purse streams couldn’t be tightened any further.  This would make the time taken to reach the targeted stash would increase to 18 years and 2 months.  An extra year to accumulate the necessary pot of investments in exchange for 1 day in every 10 days off for 13 years.

A 5.8% increase in time until the stash cracks through the mark suggested by the SSWR.  But you have spent 2% less time in the office overall, despite working for another chronological year.   Is it worth it?

We can play around with the reduction in hours and the time that part time work starts and see how much it would delay aspirations of Financial Independence.  More free time now for a delay in the ultimate free time that FI offers.

Looking at starting to go part time (part time sounds so negative, how about part time FIRE’d) at 5 years in, 10 years in and 15 years in for both 1 day off a fortnight and 1 day a week;

Delaying the onset of going part time obviously has less of an impact on the trek towards FI.  But you always get more free time back than either the increase in total chronological time or the reduction in income (both are due to the effects of tax).

Looking at it from where I am sat;

– 1 day off a fortnight looks like a pretty good deal, even from only 5 years in.

– switching to 1 day off a week early on, around 5 years in, has quite a big penalty.  But becomes more attractive later on.  Perhaps the transition to FI should be eased into, like easing into a hot bath you need to do it slowly lest you burn your dangly pieces.

It obviously different for everyone (their perceptions of going part time, not getting into a hot bath) but it has some clear positivies and negatives.

More free time.  The main advantage, but it is an absolute beauty.  A free day to cycle, surf, catch up on various shitty tasks that you resent doing at the weekend, play computer games in your pants, read, write, go to cafes or do whatever suits your needs on that day.

A drop in income being potentially the hardest to stomach.  It’s hard to put a value on your free time, but I suspect that it increases as you get older so making this less attractive early on.

Got to accept that you will be making it far harder to get promoted.  Your colleagues that are grinding their faces off at the grindstone are going to get promoted ahead of you in all likelihood, unless you really can cast spells at work.

Might not even be possible, working in finance you are needed at certain times, certain working days of the month.  You would need a pretty flexible employer to make it work.

Incidentally, my manager works 4 days a week and kids are all at school next year.  He’s not going back full time as enjoys the free time too much, despite admitting promotions are probably out of reach due to this.  Can’t be all bad.

An FI test run
In my crusty eyes there is another option; a sabbatical.  It would be tempting to travel round the world on your sabbatical and come back with a shocking tattoo on your arse, a tale you’ll tell no one about involving a rowing boat in South America and a few maxed out credit cards.  No doubt fun, but it kind of hampers any idea of Financial Independence.

But taking it as a chance to recharge the batteries, test run your withdrawal strategies and generally see what it’s like to live off your investments for a few months might be a good idea.

Take it too early, you risk burning through whatever small savings you have and missing out on the years of later growth.  Take it too late, and what’s the point?

So, what impact would a 6 month sabbatical have on things?

Perhaps surprisingly not that much impact.  As before, it would take 17 years and 2 months to reach £581k with no rest.  Or with a 6 month sabbatical, taken 10 years in, it would take 17 years 8 months, an extra 6 months to build up the required savings for a 6 month sabbatical, seems fair.

I have run it with a 6 month sabbatical taken 2, 4, 6, 8, 10, 12, 14 and 16 years in;

No surprises there really, the earlier you take a sabbatical the bigger the delay it causes.

Taking it early (somewhere up to 6 years after starting) causes a delay of longer than the sabbatical itself.  And conversely taking it later (after around 12 years) causes a delay less than the sabbatical.

That’s because at some point the growth of our fund starts to overtake the size of the withdrawal.  In our example of earnings of £50k and a 60% savings rate, it assumes around £14.5k spending (after tax) or about £1.2k a month, it happens 10 years and 6 months in in this example.  This is a function of our savings rate, the withdrawal rate and the assumed 5% growth rate, i.e. it is based on some pretty sketchy constant assumptions and can’t be relied upon in reality.

Still… as an estimate of when it might be a good time to have a practice run at the whole FI thing, it looks like a good proxy to me.  Take it after your portfolio starts to churn out more than you spend, so it isn’t expected to shrink while conducting your experiment.  

Looking at the growth of the fund for each scenario shows how similar they all are;

I admit its not the greatest graph ever produced, but it shows something.  It shows how similar all of these scenarios are.

Keeping things simple, ignoring volatility and sequence of returns risk, it shows that it’s easy to get wrapped up in the pursuit of FI.  Once in the groove and with your eyes firmly fixated on the finish line it’s easy to forget that a rest might not be a bad idea.  It ultimately shows that a break isn’t going to destroy everything, it will slow you down slightly, but it doesn’t have to completely derail you.

Personally I wouldn’t want to take it too early.  Getting into the habit of saving much more than you earn, embracing the slightly tougher approach to life that frugality entails, ignoring what the majority are up to and telling unconscious consumerism to fuck off can take a while.  A break too early on could render it near impossible to get back into things after tasting the the good life…and ultimately causes more delay to your quest than you get in return.

Aiming for something like this well after the halfway point might not be a bad idea.  A taster of what’s to come.  Something to aim for that’s closer that the finish line and could provide some motivation to keep the fire stoked.

A counter culture within a counter culture
Taking a break isn’t generally done within the small community of the population seeking FI.  It does seem like a single mindedness begins to take hold once we start on the yellow brick road towards Financial Independence.

But this relentless staunch approach might not work for everyone, you have to be focused, stoic and motivated for a long time.  And this is partly the point, gaining true Financial Independence isn’t supposed to be easy, otherwise everyone would be at it.  The difficulty and the size of the task is a large part of the appeal.  There’s not that many blogs of people that have made the journey intact, and that’s why they make such interesting reading.  There’s a lot of people trying though.  Burn out looks like a very real danger and I want to keep my odds of making it as high as possible.

Time for a poor anecdote.  Settle in while Grandpa Z gets into a ‘monologue-ial’ stride.  Last year I put in nearly 5,000 miles on my bike, it was a glorious year.  Through the winter I spent more time in the gym lifting weights in an attempt to get stronger legs and back, and then started building up bike endurance through horrible static bike intervals in the gym or on the turbo.  Thing is, I injured my back in January by pushing some squats too far.  I never properly rested it, because I didn’t want to lost the gains I made through the hard winter training.  When you are enthralled in training it can be hard to see the bigger long term picture.  And I’m still paying for it now.  There’s a reason that every 4th week in a tough exercise program is a rest week, our bodies need rest.  And that’s as much to avoid physical injury as it is to avoid burning out.

I’m only just over a year into saving hard for FI, am I backing out already?  Not a chance.  But I like to keep my options open.  6 months off in 5 years time might be just what I need to stay motivated.  Working part time for the last few years, easing into things might be right for me.  Got to find what works for you, not what has already worked for others.

Spend Less, Save More & Escape the Horde


39 thoughts on “Sprint, walk or jog

  1. weenie

    Interesting graphs and scenarios there, Mr Z.

    I agree – just as people get burnt out and worn out by their jobs, I'm sure there will be people who will feel the same in their pursuit of FI. Keeping up with the Frugal Joneses can be tough!

    I quite like the idea of a 4 day week but am nowhere near ready financially.

    I think I've mentioned before that I could lead a more frugal life but it wouldn't be a life that I would enjoy.

    Am just in the middle of drafting a post where I will go off my frugal rails for a bit…

  2. ermine

    As a counterpoise, you are looking at this with young eyes, you are in control of the variables, you assume that companies let you take these sabbaticals at regular intervals.

    No plan survives contact with the enemy. Let me offer you the story of an ermine – reaches 49, expect to work another 11 years to NRA, everything going okay.

    Then bang – three engines out of four flame out and the remaining one runs rough. Your 50s are a hazardous time in terms of physical health and mental health in stressful workplaces – I can say that because I saw a lot of people go down, and indeed physical health did for more people – you know that when you stand behind the fresh pile of earth where an erstwhile colleague was. But of course, it wasn't going to happen to me. Until it did. After the financial crash The Firm was desperate for people to go part time and offered incentives. I never entertained the idea – even after I had been off sick, because once you go down you stay down. Once I had formulated the plan to clear out after three years I stuck to it – because any time out stretches out the end point. I made it past the finish line, but only just, and with luck and the wind behind me. Each year I would have pulled short by going part-time would have been 5 years working minimum wage for Tesco to backfill.

    Look around your office. Find the oldest 5% of the cohort and take their average age. I would be surprised if in finance that is more than my 49 when I first looked for clearance to land ASAP. And use that information well 😉

    You are part of the PF community because you make more money than the average Brit (roughly £26k). That often comes at a price; it wears the system. Send not to know for whom the bell tolls – it tolls for thee.

    > Keeping things simple, ignoring volatility and sequence of returns risk

    Given what you do, show us the Monte Carlo bit. And factor in that you can afford sabbaticals early in your working life, and very late (it's called early retirement). Taking time out in your 30's and 40s is lethal, because you gain most career progression in your late 20s-30s and in your 40s you start taking an increasing risk of being priced out for a younger model.

  3. Steve R

    Fascinating post; I hadn't sat down and done these calculations myself as I'm a) lazy and b) didn't want to tempt myself. I'm a few years out from FI but it's getting close and I'm feeling the temptation to take some kind of break – it's been my habit to take a few months off every few years for a bit now – but at the same time I just kind of want to get the damn compulsory work phase over and done with. 🙂 On my normal break schedule I'd take one more break before I hit FI, but – while it sucks a bit – I am telling myself it's better to postpone that break until after FI. I don't think I could really enjoy a few months off knowing I'd have to go back to work for the final stretch.

    There is an element of fear here, it just feels (correctly or otherwise) as though well-paying jobs are harder to come by (some of Ermine's thoughts on the increasing unpleasantness of modern work ring true for me here) and so I kind of feel I ought to make hay while the sun shines rather than take a break and struggle to find something when I come back.

    I've no personal experience, but one of the classic gotchas with part-time work is that you end up doing just as much work, maybe over just as many hours, but spread over (say) four days instead of five. Even if that's the case, it might be worth it – perhaps three day weekends with no free time during the week are "worth more" to some people than the normal 2 day weekend with some free time in the week – but probably worth being cautious.

    On a similar note, switching to a four day week but postponing FI is in some ways a good trade off, as you say, because of the tax benefits. Then again, you can't take a round the world trip in three-day chunks, so you have to weigh up the value of differently-sized lumps of free time.

  4. EarlyRetirementGuy

    Some excellent calculations and a really thought provoking post. I purposely delayed taking a gap year (which turned into a gap year x 1.5) until after I had finished university because I knew I couldn't stomach having to go back to lessons and exams after having such a long time out. I do wonder if those taking an early sabbatical might suffer the same and struggle to get back into the stride of the 9-5 on their return?

  5. Anonymous

    Contracting rather than permanent jobs helps a lot here. I worked for 2 days in total in 2008 (finishing off a stint in Colorado, tax free, spending 6 months on holiday in South America), and started work on the first contract of my career at Christmas, and worked 252 days in 2009, taking not a single day's leave. The following 3.5 years, pumping pension money into a depressed market, have brought forward FIRE by decade.

    Contracting is all about exploiting existing skills, not garnering promotion, people expect you to clock watch, you can negotiate shorter weeks to match the workload, and using an umbrella company you can control your investments much better, with the marvel of salary sacrifice.

    Yes, its more uncertain, but it builds up the confidence you need to finally give up work. One downside is that its tempting to never take leave, as the direct cost is obvious, but that's a danger for any frugal, accumulating, strategy, you just don't accept you've got enough, and keep piling up the cash forever. John B

  6. Anonymous

    I took my first sabbatical after my 10 year stint in the civil service ended when they relocated 200 miles away. I broke all ties, selling the house and going round the world for a year. Yes, coming back I found it hard to find enjoyable jobs (and still struggle, I just don't like jobs, hence FIRE), but the last 15 years have been much more varied, and I can place each year better than I could for the amorphous long stint. I also made more money working, and had much more time off, than I'd ever had plodding along in the old job. Its not been good for a career, but who needs a career if you can escape it by 50? John B

  7. M from There's Value

    I think the concept of having a sabbatical here has gotten far removed from the way most sabbaticals actually happen i.e. in academia when a professor/lecturer takes 6-12 months 'off'. They're not really off at all, as they usually come back with new ideas, the beginnings of a new book, or some new kind of research that is useful.

    If you used a sabbatical in like manner, it'd possibly be a really positive thing – you could spend time learning something useful for your career as well as not having to grind your face off like everyone else.


  8. Getting Fired

    Great post Mr Z. I worked out a similar plan in my head, but rather than construct time off, I made it my business to allow myself the ability to work remotely for sometime (its especially hard to remove yourself from the business when you own it). But next May will tell and the cost to doing so puts an extra 2 weeks approx onto my fire date.

    Yet I get to spend an entire month eating paella and practicing spanish in the sun. Worth it? I'll tell you in June.

  9. London Rob

    A great and thought provoking post. Personally, I can't go part time – one it just wouldnt work for my job, and second I am not sure I can afford it 🙂
    I've done the calculations and I know I have another 15+ years before I can FIRE, but that assumes that we stay in London, not sell up, move out and utilise the equity we have built up, in which case it could be a lot less!
    There is an interesting comparison to a friend of mine. He finishes his contract and gets a bonus. He takes a few months off with that bonus money. Sure, its a nice couple of months off, but means he has nothing financially to show for it. I put my bonus into my ISA… my next bonus will be a mix of ISA and mortgage overpayments.

    Don't take the time off, just think how much more time off you will get in the end!

  10. Craig from York

    Great post, and something I have been considering myself for some time.

    I think there are an additional two (albeit closely related/intertwined) concepts that also need to be considered, which are much more difficult to model in a spreadsheet, but arguably far more important to our overall utility. This is the idea of relativity (not Einstein's version!) and diminishing returns.

    Diminishing returns: the more of something you have, the less marginal value it has. This is one of my favourite rules, because it seems to apply to absolutely everything. Whether it's comparing the first refreshing sip of a cold bottle of coke with the seemingly sickly sugary last sip, or the first 10 minutes of a massage with the last 10 minutes :). This is why an individual's happiness is often maximised by leading a more balanced life.

    It works in both ways. Increasing both income and time off decreases the marginal value of both. The first £1000 of your pay is far more valuable than the second £1000 and so on. This works with leisure time as well. Remember as a kid, in the 6 weeks summer school holiday, the first few days/weeks were just absolute heaven. By the end of the 6 weeks you were ready to go back to school. The first week of that holiday will have provided significantly more marginal utility than the last week.

    So considering the more of something we have, the less valuable it is, I think it makes a lot more sense to trim the cream off your income, to give yourself some extra freedom. You're sacrificing the sickly sugary sip of coke for a refreshing sip instead. This is why I think a systematic reduction in your working week will be more valuable than a sabbatical (where you receive your free time as a 'lump sum', the tail end of which will diminish in value).

    Relativity: we can only really evaluate things on a relative scale. We judge everything according to some anchor point. Grab a bottle of beer out the fridge and it will feel really cold in your hands, but put your hands in a bucket of ice for 20 minutes, and the beer will feel warm instead. This applies to more conceptual ideas as well. When you were younger, the years seemed to last much longer. This is because going from age 10 to 11 is living another additional 10% of your life.

    If you work a 5/2 week, your anchor point is 2 days off. With this in mind, consider that moving to a 4 day work week will increase your weekly days off by 50% vs your anchor point, but only cost you around 8% of your net income. That is an absolutely massive gain. You have 50% more days off to do whatever you want!

    The economic argument becomes even more favourable when the additional days off only cut into your higher rate tax margins.

  11. Craig from York

    To continue above (you have a max character count, and I can certaintly waffle on!) …

    I'm young and I don't pretend to understand the motives and incentives of those older than me in completely different industries. However in the FI world, I increasingly see the idea of 'enduring' a job that you hate, working every minute of the day, and sacrificing happiness and opportunity now for the promised land of FI someday. I believe happiness should be optimised and smoothed out as best as possible over your entire life. The idea of living a binary two segment life of torture and paradise like Andy Dufresne from the Shawshank Redemption just doesn't appeal. How are you supposed to plant the seeds of a fulfilling life in retirement if you have limited hobbies, interests, pursuits or passions due to having insufficient free time over your working life to develop these things? I notice people around me who work 24/7 because they started doing that, and seemingly can’t return to any other arrangement. They feel guilty for not working, and they have nothing else to fill their time with because work is all they feel comfortable with. Going from that extreme to 24/7 freedom must be quite jarring!

    There's something else which I feel doesn't get much exposition in the modelling of future financial outcomes: mortality rates! Who knows what the future holds. I'm 26 and judging by the UK national life tables there's around a 4% chance I wont even reach 50, and an almost 10% chance I wont reach 60. Perhaps we should start weighting these future outcomes by our average probability to be alive before judging them against our current opportunities!

    This is mostly me just thinking out loud, I hope nothing comes across as offensive or judgemental!

  12. Anonymous

    Similar experience – took a year out at 40 to travel. Landed first job I applied for on return- at best ever salary, although previous weren't great mind. In IT as well, and it's also probably been my favorite one. My 'career' hasn't been affected, in fact it's probably improved because of it.
    If you are good at what you do, you'll get a job and if you feel a potential employer would look down on a break – you probably don't want to be working for them in the first place.
    Good to read this this post as I additionally plan to go .8/.9 this year – the lazy workshy fop that I obviously am. Life, can be unexpected and cruel – so seize any opportunity to improve the quality of it.
    Maybe one of people's reasons for FIRE is just that they need a break, be it a sabbatical or simply more time to do their own thing. Time away/less hours may change your perceptions ?

  13. Anonymous

    I'd replied earlier (2nd response to ERG above) but your post Craig, says it far more eloquently.

    The day off, doubling your anchor point has really hit home as well.

    Excellent post.

  14. Steve R

    Some great comments and I was also pleased to see Ermine take off from this article to write a post expanding on his comment above.

    I've been thinking about this far too much at work today. 🙂 It occurs to me that these same calculations, on a smaller scale, presumably apply to taking normal levels (20-30 days a year) of holiday while working. If your employer lets you buy or sell a few days' extra holiday a year you have a decision to make, trading off time for money.

    Taking extra days off (shall I call them micro-sabbaticals? :-)) doesn't push FI out by much – I would assume the same tax advantages as in your examples mean that one extra day off pushes FI out by less than a day – so an extra five days a year adds about three months onto a 20 year working life. These extra days off also probably don't harm your promotion prospects or significantly increase the risk of things going badly wrong before you make it over the finish line, unlike going truly part time or taking a long break.

    Craig's posts make me think the optimal use of holiday – especially extra holiday – is to use it in little one or two day bursts (probably on a Monday or Friday) so you get the maximum marginal utility for each extra day. But maybe having a week off is also good, as you can perhaps manage to forget about work more completely. Using five extra days' holiday to boost a two week holiday up to three weeks probably gives relatively little marginal utility, unless you have something special in mind which you can't do in two weeks but can in three.

    Having said all that, I think I'm still going to continue to take less holiday than I could to earn faster while I can, but as and when the grind starts to get to me, I think this kind of analysis will make me less reluctant to "give in" and take a bit of time off.

  15. Cerridwen

    I went down to a 4 day week about 18 months ago and it's great 🙂 My organisation was (and still is) shrinking so they were very open to offers from any one who wanted to reduce hours. I do find I have to work "smarter" to get through the work though, as it hasn't shrunk any. Perhaps a few corners are cut that wouldn't have been so in the past but that kind of thing is part of the landscape in public services anyway these days – we just can't do as good a job as we once did.

    In my case I'm only aiming to be a very "late" early retired person (at 58 hopefully) so the drop in money hasn't really affected my plans. I would struggle to go earlier more from the fact that I wouldn't have built up enough DB pension than I couldn't afford to fund another year.

    I agree with the point made that the quality of how we spend our time at every stage in life is just as important. Personally I would rather work longer at something I enjoy and that I feel is a worthwhile pursuit in itself, than shorter at something I hated even if that meant I would be "free" sooner. Job satisfaction can enrich a life just as much as a job dissatisfaction can degrade it.

  16. ermine

    > However in the FI world, I increasingly see the idea of 'enduring' a job that you hate, working every minute of the day, and sacrificing happiness and opportunity now for the promised land of FI someday.

    A great and thoughtful reply – with regards to this specific point I would venture the answer to this is sample bias. The people who can most consider FI tend to earn more than average, and the particular fields (IT and finance) tend to be stressful, highly competitive, poorly managed dog-eat-dog workplaces. Wouldn't you want to get out of that sort of joint ASAP 😉

  17. Anonymous

    BIG upvote on this whole article — this is exactly why I'm on 'self-funded sabbatical' right now, by coincidence six months overall with about nine years left until projected FI date.

    I've heard more ad-hoc variants of this called by several names, such as 'pretirement' and 'mini-retirement'. These breaks often get considered as 'early enjoyment of the fruits of your labor so far'.

    Would love to see you work this up more, with an aside on the Horde's pace — which of course being slower than the Walk would be the Shamble. 😀

  18. OnSabbatical

    Second upvote here too from a further 'self funded sabbatical' taker. I very much like the Andy Dufresne analogy, Craig, couldn't have put it better myself. I just now tried to explain the same sort of thing over on SLIS but didn't get my point over half as well. Sabbaticals can't be seen as purely an FI-delaying barrier – they can be restorative, inspirational, motivational, experimental etc.

    I have a banner on my spreadsheet to keep me in check – "this plan is there to support your life, your life is not to support this plan".

  19. M from There's Value

    Totally agree with above and with Craig. Working shitty hours in an environment that you hate, just to get to FI a few years quicker is not cool. I do think the move from that to FI would be very jarring indeed. Just look at 'normal' people who retire to nothing at 65 – so many of them waste away because they never had much free time to develop hobbies and interests during their working life. I find that utterly sad.

    Luckily in my own family, my dad had a long list of things (large projects) he wanted to get round to after retirement and he is super busy, in a good way, with all sorts of hobbies and activities

  20. Mr Zombie

    I was out of the office for most of last week, but on Friday I did have a look around… you are pretty much spot on. Very few people in the office were 50+, something I hadn't noticed before. Either they are pushed out by younger versions and are manning B&Q or it's a field of early retirees. Somehow the first seems more likely…


  21. Mr Zombie


    Thanks for all the thoughtful comments 🙂

    I was away this week on a big training exercise so haven't had much time to respond, but really happy it grabbed the imagination and sparked some debate.

    I should say that my plan is head down for now and see where it takes me.

    But the idea has been rammed to the front of my cranium recently as my brother is off on a 6 month sabbatical and the conversation with my manager around working part time were interesting. I hadn't really considered it before in anything but a negative light…perceptions are changing, but it is generally viewed as giving up in the world of finance…


  22. Mr Zombie

    RIT, that is my plan for the next 7 or so years (hammer it out towards 40). And by then, like you say, it might be so close that a break isn't needed. Perhaps a disclaimer is needed 🙂


  23. Mr Zombie

    Hi John,

    Contracting is tempting, and certainly fruitful in my occupation. The risks are very real though, and I want a few more years of building up reserves before considering it more seriously.

    I don't think I ever see contractors taking any leave 😀 – too expensive.

    Thanks for the comment


  24. Mr Zombie

    A two part comment, deserves a two part reply.

    Completely agree around the utility of income, it certainly decreases as you earn more. I hadn't thought about it in a similar way for time off. A 50% increase in time off is huge.

    On the other side, you are definitely sacrificing chances of further promotion, no matter what the equality committees and working groups would like us to believe! It would have to be timed correctly 🙂

  25. Mr Zombie

    Enduring something you hate is a surefire way to early burnout. I do enjoy my career for the most part (too much regulation and constant performance reviews withstanding) but I'm not kidding myself that this will last forever.

    But that seems to be how most people approach work! "Hmmm, I'm enjoying work now, so I assume I'll be the same in 20 years time. Best take out the biggest mortgage I can and get a sweet expensive motor".

    FI is as much an insurance policy as it is an over-arching goal for me. Who knows, I might have enough to retire but find myself loving work…or in 5 years time hating it (in which case the fund can also be used to support a new career or a move somewhere else).

    Going at it hammer and tong for a few years and saving like a maniac, for me, looks to have mostly positive benefits.

    True re: mortality rates. I guess those looking at FI naturally assume the other way, what happens if I live longer that mortality rates suggest (not even considering increasing longevity trends). Some people view it as "what a waste to perish with unspent assets" but I think the other side is worse, to live into poverty as you burn through all your assets!

    Thanks for the comment Craig, not offensive or judgmental at all 🙂


  26. Mr Zombie

    Hi Steve, interesting…

    I had thought about using holiday to maximise the number of 3 day weekends before, it does seem like an efficient use.

    We are forced to take a two week long break in finance every year, to make sure we aren't pilfering money from the company and covering it up!

    I do buy extra time off, rather than sell holiday… but that does have tax benefits 🙂


  27. Mr Zombie

    Hi LR,

    At the moment, I am ready and willing to keep the hatches down and crack on towards FI.

    But…perhaps in 7 or so years time, who knows… might be a nice option!


  28. ermine

    > Very few people in the office were 50+, something I hadn't noticed before.

    You know the date of your likely early retirement now 🙂 A perfectly reasonable alternative strategy would be to switch to a different career between 40 and 50 – one that pays better than B&Q but less than you'd expect to get where you are. Of course the devil is in the detail there.

    What's also missing from that chart, BTW, is the forward projection across 40-50 years of retirement – the small difference in high-water mark will compound, and compounding is not your friend here.

  29. Living cheap in London

    I'm probably a sprint-walker then…. 😉 working a 3 day week only since shortly after my 36th birthday. In November this will be 5 years.

    I'd been working very intensely before that, as had Mrs LCIL – she dropped to a 4 day week the year after. By this point we had overpaid a chunk of our mortgage & what is left is fully offset so it's essentially paid off. We're lucky in that our combined earnings are still more than comfortable….& my wife's lifetime salary pension will always keep us above water…. & that is my reason for posting… whatever you do it needs to work for you all…. in my world that includes 2 kids. Getting to spend a lot of time with my children whilst they are young is worth any delay in retirement age.

  30. thefirestarter.co.uk

    Way late to the party here but hopefully can bring some small insights not already mentioned:

    1. I had an admittedly rather short sabbatical in 2008 (Right over the GFC in fact, see what happens when I left you lot in charge!? 🙂 ) of 4.5 months. My employers kindly agreed to keep the position open afterwards. In nearly 12 years at the company I know of only 1 other person who even asked for a sabbatical (he was allowed it as well). So it is fair to say most people don't even think of this sort of thing, or don't save up enough to be able to do it!?
    Anyway, it was a blast, we travelled across USA and South America. I didn't know anything about FI back then but even if I did I wouldn't have changed it. I think it probably did hit my career progression and it was very hard getting back into office life when I came back, but it was worth it. It sounds cheesy but you have to follow your heart and at that time my heart was saying I needed to travel before I settled down properly. Now I am settled and look back thinking, yep, I did that at the right time. Middle life is for raising kids and then once they get a bit older you can travel a bit more again. Which brings me onto…
    2. Part time work. I've also just gone part time by cutting my hours by 33%. I think my income dropped by only 29% or something like that due to the HR tax situation you mention. For me this seems to work out really well. I had not really considered the marginal utility of time off before but I think Craig has totally nailed it. It's great having some time off but then eventually it is nice to go back to work again. You just don't get that feeling after 2 days off at the weekend! This will also work out nicely when we have a kid (next March) because I will actually get to see the little bugger grow up a lot more than the average worker drone. The key things to achieve all of this is you need to keep your spending in check, as most of us in this community are already doing, and the second thing is having an industry and employer amenable to these sort of working hours.

    I fully subscribe to the philosophy that this is not a dress rehearsal so am not into working every hour under the sun for 8 or so years. That is a bloody long time and you could be run over by a bus tomorrow! Rather take a more balanced life and take the slow jog to full FI.

    Good luck if you decide to try your hand at either. Now or 5/10 years into the future!

    Cheers Mr Z for a great article and everyone for the subsequent comments, a great read.

  31. Anonymous

    I have experienced all sides of this debate.

    I have had three sabbaticals in my life. A year after school traveling around Central and South America. A year traveling around Australia in my early 30s and six months road tripping around North America during the GFC when I lost my job twice. Apart from the obvious enjoyment of being free to travel the big benefit looking back is that I remember those years. The years I have spent working I don't really remember as there was nothing memorable about those times. The flip side is that I have not had a career just a series of jobs.

    I have also worked unusual roster patterns and job shared. 7 days on/3 off/7 on/4off, 8 on/6 off and now 14 on/7 off. Also job share: 7 days on/7 off/7 on/35 off. The less time I have to spend at work the happier I am. I feel like I am actually being myself as opposed to some kind of brain dead drone. However working too little time means money worries so it is a balance.

  32. Pingback: An Arbitrage Machine – The Finance Zombie

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