WAIT, what? Did I get a…job?

In the sage words of Douglas Adams, one of my favorite authors: “Don’t Panic!” I have not reversed my decision to leave full time employment and my biotech career as part of my FIRE journey. In fact, what I’m writing about here is nothing of the sort. But it is true that this week I accepted a part-time role at a small business in my town. But I thought I retired early! What the heck am I doing and why? Read on to learn more!

OK what is going on here?

In short, I signed on to pour wine one day a week at a great boutique winery tasting room in my town. How did this happen? A friend from our neighborhood mentioned that she wanted us to meet this other couple in our neighborhood. She said we should stop by their tasting room downtown and say hi to the wife, who was working there – which we did. First, it was really nice to meet another neighbor! My wife Lorri, and I had a really great chat with her. Second, the wines were wonderful! We were off to a good start for sure.

Over the course of the conversation (which included talking about FIRE, yes!) we learned that our neighbor was pretty new to working at the tasting room, as it had only recently re-opened post-COVID restrictions easing in our area. I mentioned that I’d been considering picking up a shift at a tasting room, myself. Coincidentally, they were looking to hire someone one day a week. I decided to express my interest and she was pleased to hear of it! After exchanging text messages with her and another owner later that day, it was off to the races! I had my new hire training yesterday evening and this afternoon I will work my very first shift at the tasting room!

I thought the goal was to “retire” from work? What gives?

In agreeing to take on this role, I’ve thought about the “why” of this new and exciting development. I’m sure you’d like some answers as well! Yes, I can hear you already: Haven’t I been enjoying the freedom to spend my time as I see fit? Doesn’t picking up a scheduled task sound like it would be in opposition to that? Am I just trading time for (a small amount of) money – i.e. decidedly not passive income? I thought the goal was to be free from the shackles of working for someone else? All of these are excellent questions!

First, this “job” is absolutely spending my time as I see fit. Post-financial independence (FI), the requirement to work to generate income to meet expenses is gone. I don’t need to work – I want to do this. Most importantly to me, it sounds really fun and that’s why I’m doing it! I love wine, I like teaching and talking about things of interest to me, and I enjoy meeting new people. Yes, it does mean committing to a bit of a schedule, but it’s just one day a week and I’ve gathered there is a good deal of flexibility. If this doesn’t turn out to be to my liking, I don’t have to stick with it because again, there is no pressure to work. The tasting room is also just a short walk or bike ride from my house, so there is no commute. It’s also far from a high-pressure situation and nothing like a corporate job either!

It’s also not about the money. I can earn >20X per hour doing consulting vs. this gig. Sure, some extra spending money is nice, but clearly there are more efficient ways for me to earn income. In addition to the fun aspect, I’m also looking at this as a means to test out an idea. One of our long standing thoughts has been to open a small brewery and tasting room. I’ve always believed that I’d really enjoy talking with people about the beer I make, guiding them through their flight. That’s exactly what this job is only with a different beverage! So while it won’t generate a lot of cash, someone will be paying me to figure out if the beer tasting room idea has legs. Sounds pretty great to me! It’s coming across less and less like a job, isn’t it?

It is another / next phase for me – likely not the final one!

At the core, I look at this step as “the next thing I’m doing”. As readers of this blog will know, I’m always trying out new things, building skills, and exploring hobbies that may or may not turn into something more. Working at a winery tasting room is yet another part of the seemingly random walk on which I am presently endeavoring in this next phase of my life. Might I love this part-time role and desire to turn it into something bigger or longer term? Of course! But I have no way of knowing that right now nor do I care either way. I’m approaching it completely open minded. Like anything I do, I’m going to work hard, try to learn a lot, and enjoy the time I spend on it.

In the initial months after leaving my biotech career last year, I found I was fretting a bit over not knowing exactly “what I would do next”. It was a combination of pressure I felt from former colleagues as well as some I was putting on myself, to figure it all out. Talking to my wife and my Two Sides of FI partner, Eric, I thankfully realized this pretty quickly. That was an important step as I could then get back to really enjoying this freedom that I am so fortunate to have! So in keeping with that, I don’t know what if anything this will lead to and I’m totally ok with that! In the meantime, I’ll enjoy the experience and gain from it everything that I can. Did I mention the wine is really great? ?

It’s gonna be fun!

image credit: Photo by Kelsey Knight on Unsplash

Invest early and often to ensure your financial goals are met!

Last week we posted “Don’t Make These Financial Mistakes on the Path to FIRE!“, our longest Two Sides of FI video to date. We had so much to say on the topic that even with splitting our edited footage into two parts (part 2 is now live as well!), it was still long. Why? It’s simple: none of us come into this world as personal finance wizards. We stumble through life making financial mistakes in assorted ways. Most of us make lots of them! That definitely turned out to be the case for us, and we enjoyed discussing our many misses along the way. I encourage you to check out the video!

The episode originally had much less of a clickbait-style title. But when we saw the early traffic wasn’t at our usual level, we amped up our marketing! As I suspect we all know well, humans are rather emotional creatures. Many people worry a lot about money, often for very good reasons. But even the more fortunate among us are no less emotional about cash. So our sensationalist headline did result in an uptick in views! Thinking about our conversation in this episode prompted me to write about a common issue that we discussed: wishing we’d saved more, earlier. Read on and avoid our mistakes…

Most of us get a slow start when it comes to saving and investing

Few of us had the knowledge and/or initiative to become big savers growing up – even if we had jobs throughout our teens, as Eric and I both did. As soon as we start earning money, we generally spend it. Sure, plenty of us start savings accounts – we did too. But humans aren’t born with a desire to save and invest. Generally, someone has to introduce us to the concept and convince us of its merit. Unless you’re from a wealthy family, that often doesn’t occur until your first “real job” after high school or college – and only if you’re fortunate enough to work somewhere with a retirement savings plan like a 401(k) or a 403(b).

Even if we do take advantage of those workplace plans, many of us fail to realize the merits of participating fully. How many among us have contributed to a retirement savings plan but didn’t save enough to achieve the full employer match? That’s equivalent to saying “no thanks!” to free money. Yes, I know it can be hard in those early years. As I whined about often early in my career, I was the lowest paid of all my college friends in my first job out of school. It can feel like a real struggle to meet all your obligations and save enough. But even if not right out of the gate, as soon as you can, it’s important to kick up the savings. It will yield huge leverage over time as I’ll share below. Not doing that soon enough is a common financial mistake – one often not realized for many years. A sobering fact: according to Vanguard, in 2020 the median 401(k) balance at age 65 was only $65K. That means half have saved less than that.

The best time to start is yesterday and the second best time is today

So you got a slow start – or haven’t invested at all. Is it too late now? As some will know, one of my favorite podcasts is The Money Guy Show. I’ve been listening to it (now I watch on YouTube) for 8 or 9 years. The title of this section is something I’ve heard hosts Bo and Brian say many times over the years. Sure, it’s best to start saving early (and often), but is it ever too late? Technically, no – but playing catch up becomes harder and harder over time. One of my favorites of the great free resources they have on their website is the Wealth Multiplier. It describes how much money you need to save and invest monthly to reach $1M by age 65. How big of a difference can a few years of savings make? Check out this snippet from their chart:

My favorite take-home from this picture is one they point out often: you have an 88X multiplier on your savings when you start at age 20. In other words, every dollar you invest at 20 can yield $88 by age 65. By comparison, at age 25 that multiplier is down to 44X, at 35 it is less than 13X, and just over 7X by age 40. Download the full table and you’ll see that it only gets worse from there. Translating that into monthly savings, you’ll agree there’s a huge difference between saving $95 vs. $780 each month comparing ages 20 and 40. Wow, right? Particularly for those who don’t love math, I think this image best shows the power of compound interest over time as compared to a graph.

Putting it in context

Eric and I both saved early on and took part in 401(k) plans and other savings vehicles over time. But neither of us would say we took full advantage of those plans in our earliest work years when the multiplier was huge. As we discussed, we did have some financial missteps, challenges, and setbacks along the way – I got divorced, we had student loans, my expenses went up due to relocation, we started families, etc. But even so, in hindsight we know we could have saved more, sooner. We didn’t prioritize saving as early as we could have. Neither of us fully investigated the investment options available to us in those early years. We are both fortunate to have gotten much smarter about things eventually, and benefitted from our career successes which enabled financial catch up. But things could have gone very differently if we hadn’t.

I won’t go into all the details here, but there are many other aspects to consider on this topic, some of which we touched upon in the episode. There are a variety of different tools available for investing depending on the country in which you live; each of which has their tax benefits and other aspects to consider. In the US, these include Roth IRAs and Health Savings Accounts (HSA), just to name two. Particularly if you are early in your career or maybe even still in college, I encourage you to investigate these options. Roth IRAs in particular are a very powerful tool and are available to you as soon as you have earned income. Wisely, Eric has already gotten his working age kids into Roth plans!

But isn’t it difficult? I don’t know where to start!

Above all, don’t panic! This does not have to be complicated! If you have a workplace savings plan and are wondering how to get started, look into target-date mutual funds. These are simple and effective plans that run on autopilot. They have very low fees and auto-balance your portfolio between stocks and bonds relative to your age and time to retirement. And if a plan isn’t offered through work? Have a look at some of the Books listed on our Two Sides of FI website. In particular, I’d recommend The Simple Path to Wealth by JL Collins. This fast and easily digestible read is chock-full of investment guidance that you will understand immediately and can readily apply. It’s very popular for a good reason.

Now get out there and save! I wish you all the best in your financial journeys!

image credit: Photo by Tech Daily on Unsplash

Let’s turn your passion into a business and generate some passive income!

Today I’ve elected to write about a favorite topic area of mine. Have you ever wished you were the one in complete control of your work schedule; selecting the hours and days you wish to get the job done, and from where you do it – perhaps on a tropical island or at your ski lodge? Sounds too good to be true, right? But many are doing it, and so can you.

Do you have any interest in generating extra income outside of your primary employment? Perhaps you have dreamed of how you might launch a small business from a hobby you truly enjoy, and grow it until you can quit your other job to run your own personal business empire? Are you already retired and are excited by the idea of creating a small business you can run part time? If any of that sounds good please read on!

Generating passive income and growing “side hustles” into small or even huge businesses are common paths to achieve financial independence. Search YouTube and you’ll see exactly how true that statement is. If you have even the slightest of entrepreneurial streaks in you, this could be the accelerator you have been seeking! I don’t claim mastery of this area but I’ve studied it extensively. I am also fortunate to have learned a lot from several sources, including my Two Sides of FI creative partner, Eric. I have no step-by-step plan for world domination to give to you. Rather, my goal is to share a few resources and thoughts with you in the hopes they might inform and inspire you to do a bit of research, start brainstorming, and eventually launch your own next big thing!

Who wouldn’t want a four-hour workweek?

Sure, some among us truly love their jobs and wouldn’t trade them for the world. That’s really great! But I suspect even those lucky ones wouldn’t mind having greater control of their schedules, over the priorities that frame their days, and be able to take time off whenever they want. These are indeed some of the benefits of what I’m going to describe here. If you’ve never heard of Tim Ferris, let me enlighten you. He’s an entrepreneur, best-selling author, blogger, podcaster (the first to have a show exceed 200 million downloads), and to many, a sherpa who guided them to the lifestyle they always wanted. Enter, “The Four Hour Workweek”.

This is a remarkable book (Kindle and Audible versions also available) despite its seemingly fantastic title. On the surface, it fanciful indeed, but the concepts contained to help one realize that vision are rather straightforward and easily understood, yet very effective. I am among several people I know who cite this book as wildly influential – if not transformational towards how they think about work.

In short, this book and it’s D-E-A-L method guides the reader towards a variety of practices to modify your existing work to place it much more directly under your control, or even better, to create your own thing. Importantly in both cases, the methods aim to reduce the active time you spend performing “work” – trading your time for money, gaining leverage and efficiency via a variety of different means. The most effective of these aim to help you generate passive income – among the most powerful levers available to transform your ideas about the relationship between work and money. There is something in this book for everyone, irrespective of your age, field of work, or intended retirement age.

Passive income: make it once, benefit “forever”

The concept of passive income is simple on the surface: earn money without doing active work – or at least, not continuously doing active work as in a standard job. One easily relatable example of passive income comes from owning rental property. You buy a house, someone else rents it, and you get that monthly rent as income. Anyone who has been a landlord knows that it’s not entirely passive, even if you pay an agency to handle the day to day work. But you get the idea. You buy the house once, and it generates income as long as you have it. Once the mortgage is paid off, that rent is all profit minus the cost of upkeep for which you are responsible as the owner. However, in the internet age, there are myriad options to generate passive income without owning a bit of real estate!

Today, digital assets are a very common and powerful way to generate passive income. We touched on this in several episodes of my YouTube channel, including this one. Click that link to check it out, and hear the many ways in which Eric generates passive income. He’s a sole practitioner architect. But as he states on the show, his aim since realized, was to get to the point where >80% of his income came from passive sources. He has written several books, created internet-based courses, sells plans and software add-ons, has affiliate programs, and also runs a very popular YouTube channel. But isn’t there work required to write a book or develop a course? You bet! But you do that work once, and then make the material available for purchase. People purchase it and you earn income. You put in the work to film and edit a YouTube video, and earn ad revenue when people view it. You create the asset and it generates recurring revenue. If you choose wisely, your content might even age well and need minimal upkeep over time. Sounds great to me!

I’m not an architect and neither are most of you. But each of us certainly has expertise in one or more areas, gained over our lives and the course of our careers. Surely, there are ways to monetize that knowledge and experience – many of those means are largely passive in nature. How might you approach this given your own interests? Yes, I can hear some of your thoughts already: Not everyone wants to write a book, develop a course, or launch a YouTube channel. Of course those are only a few of the ideas you can undertake. The Four-Hour Work Week describes other paths well worth considering. But perhaps you’re still not sure where to start, or want something a bit more actively managed? There are some great resources out there for more information and inspiration!

“Tune in. Take Action. Make Money.”

Those few simple and well-chosen words are the defining tagline for “The Side Hustle Show”, a key resource site and incredibly popular podcast hosted by Nick Loper. I’ve learned tons from him and the many fascinating guests he has on the show. I highly recommend it – and I get no benefit from you checking it out.

Side hustles at their simplest can take the form of part-time gig work (things like driving for a rideshare app or Instacart shopper) that you never intend to grow to something bigger. You’re just supplementing your main income source(s) with some other work. But there are countless ideas out there for much more passive means to generate income as well.

My wife has generated a fun, small passive income stream from one of the ideas she learned from the show (Episode 339: Low content publishing). She designs and sells a variety of journals, yearly planners, password logbooks, etc. via Amazon KDP print-on-demand. With this approach, there is no inventory, order management, or customer service – Amazon does all that! Most importantly, there is effectively zero cash outlay required for this business. She uses free web-based software to do layout and design (something she enjoys even without any paycheck!), and uploads the PDFs to Amazon, who lists them on the site. People find her books via search, they order them, and she earns royalties on each copy sold. This is just one idea where with just a little effort and creativity, you can have a nice side business – or perhaps something much larger!

But side hustles don’t have to be passive if that’s not of interest. On the podcast I shared above, you’ll find countless examples of people who took a hobby or a passion (baking cookies is one that comes to mind) and grew it to a six-figure income personal business! Side hustles are great because they are a safe means to test the waters. Sure, there is effort involved in exploring an idea and testing it out. “Hustle” is in the title after all! But doing something as a side hustle means that you’ve got the security of your primary income while you investigate your new idea(s). I’m certain each of us has something they love doing and have wondered whether it could be a business. The answer is probably yes! And if you don’t have that “magic idea” just yet – check out the podcast and website I listed above and learn from the examples of others.

As stated, my intention was not that this post handed you a blueprint for your next business. Of course I have no idea what your interests are and what would fit you best! But this article will have been a success for me if it merely inspired you to check out one or more of the sources I mentioned, gets you thinking about ideas for your side hustle and/or future business. It’s so easy for any of us to get wrapped up in our daily grind at work, home, or otherwise. You’re all busy people! But I’d challenge you to give this some thought. Who knows what exciting development might come from it? I wish you all great success!

image credit: Photo by Kyle Glenn on Unsplash