What is mini retirement
What is mini retirement?
Mini retirement is different than financial independence retire early.
Tim Ferriss is the first person to make mini retirement popular.
However, it hasn’t taken off since then. Instead what has gained in popularity is the FIRE movement.
Why is FIRE more popular. FIRE is more popular because it’s easier to sell products and courses to people in the FIRE movement. FIRE people are also more fantasy oriented. It often takes a long time to get financially independent to be able to retire for the rest of your life.
People that sell things to the FIRE crowd know this. Another reason FIRE is so popular is because it such an insane idea for our culture. How can someone just stop consuming products like the typical american and stop working for the rest of their life? It gets so many people mad because the typical american lives paycheck to paycheck and looks forward to retiring in their 60’s, later or not at all.
How dare someone retire before then and enjoy their lives. It also stirs a lot of emotions in people that can’t save money. Many people don’t believe they can save money, so when they see others saving tons of money, they get upset because retirement seems further away for them.
Why I like Mini-Retirement
Why am I interested in mini retirement v FIRE. I’m interested in mini retirement compared to FIRE because you can mini retire before you can FIRE. Most people who want to retire early aren’t going to be able to until their late 30’s or early 40’s.
If they retire earlier than their 40’s, they typically don’t spend very much money at all. They live in minimalist homes and don’t have many expenses.
You can mini retire in your twenties or early thirties without jeopardizing your “future.” Mini retirements are typically longer than a year but not for the rest of your life. You still need to save for mini retirements. I also like mini retirements because you can use them to refresh or build side hustles. Mini-retirements are also not sabbaticals. You actually quit your job and do your own thing.
I also see mini-retirements as a test FIRE. You can use your mini-retirement to build up side hustles, and then turn your mini-retirement into a full-time retirement.
I believe that everyone should aim for FIRE or a mini-retirement. Typical retirements are trash. You are taking a huge gamble when you save up all your money to “enjoy” it after you are 60. Most of that money will likely go to healthcare or your children when you die early.
Aiming for early retirement also allows you to get into a saving mindset. It actually forces you to save and invest aggressively. Saving and investing aggressively is a common trait of the extremely wealthy. Just read the book The Millionaire Next Door.
You don’t have to travel
Don’t get me wrong; traveling the world is awesome. However, you don’t have to do it. You can just enjoy your life where you are and build up side hustles or chill. There is nothing wrong with chilling. This will allow you to spend less and grow your investments. It’s easy to blow more money travelling the world. You should also make sure that travelling is your idea. Many of these blogs and websites tell you to retire and travel the world. They are selling you an idea because they can sell you travel plans and courses with that. Many people also choose to travel because it’s an escape. They can escape the life don’t want to live by crossing the border. Sometimes it’s better to use your retirement time wisely and connect with yourself. Establish healthy routines you weren’t able to when you were working.
The road less traveled with no map
If you are going to take a mini-retirement or retire early, you have to understand it is a road less traveled. Additionally, you should travel it on your terms. There is no map for this type of path in life. There’s no federally mandated age for early retirement. That’s probably why it is so scary. You have to come up with the plan and terms on your own.
None of these questions have right answers. It’s up to you based on how you want to enjoy your early retirement.
Don’t follow what some wanderlust weirdo tells you to do. Don’t fall for the fear tactics of financial experts either. Do what you feel is right based on your plan and budget. If you are going to go back to work, make sure to allow at least 6 months to find a job. That means you’ll need savings for you retirement plus an additional 6 months of savings for job-hunting. You could also get a low level part-time job to help you during the job hunt period.
Fear Tactics
Yahoo finance and other personal finance blogs love writing about what could go wrong on a mini-retirement or an early retirement, but who cares. They say you will lose all your friends from work.
You will lack motivation. You will get anxiety from running out of money. You will actually run out of money.
The funny thing is most of these people have never had depressing corporate jobs. They don’t understand the toll that having several bad jobs takes on a person.
There are no guarantees at work either.
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You could get fired.
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Your pay could get decreased.
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Your company might go out of business.
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You could have a terrible boss.
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You could develop several bad habits that result from having a terrible job (eating too much, drinking too much, low physical activity, bad posture, etc.)
Every path in life has its ups and downs. Retirement will come with its own negatives, but it will also come with many positives. There is a reason people need breaks from work. Grinding around the clock isn’t healthy. Your bank account might be healthy but your physical health and relationships are probably sick.
How much should you save for mini retirement?
How much you save for mini retirement depends on how you live your mini-retirement.
You need to figure out how many years you want to be retired for.
You then need to calculate your expenses. Make sure to factor in the following:
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Housing expenses
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Vehicle expenses
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Medical expenses
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utilities like internet, heating, electricity
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Food expenses
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clothing expenses
You need to save up enough to cover those expenses for the number of years you’d like to be retired for.
Alternatively, you can assess how much you have saved in retirement, and then figure out how long that will last you.
If your savings won’t last long, then maybe you can cut expenses. You can cut housing by moving to a lower rent apartment or house. You can also try van-life or living in a tiny home.
You should also get rid of cable tv if you have it. You can also cut your streaming services to save money.
What should you do with your mini-retirement?
I personally think that you should spend your mini-retirement wisely. You shouldn’t just use it travelling and spending all your money.
You should use the time to build up side hustles to further your retirement. Building up side hustles can also help you build your financial independence.
What side hustles can you build? You can:
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Write an ebook,
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Build a website
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start a youtube channel
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stream on twitch
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build an online course in something that you are skilled in
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sell products on amazon, etsy or ebay
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build a shopify store
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build an app
If you don’t want to work on your income, then just enjoy your time off. Relax or travel. Do what you can afford.
You can use the time to pursue other careers or interview for other jobs.
Maybe you could use it to get a degree in another field that you are more interested in.
You could learn to code or develop other skills that are relevant in the future.
You can also use the time to learn more about investing to try to earn some extra income off your savings.
