Profile in Retirement: How to Become Financially Independent and Retire Early
Robert Powell, CFP®
“Luck is when opportunity meets preparation.” - Seneca
Jason Hull, a certified financial planner, and his wife retired early when he was 46 and she was 45. While he did sell a software company he founded, it was not, Hull asserts, any more of a financial boon than he would have made had he stayed in a corporate job. Instead, getting to early retirement was more of a function of focus, intention, and planning, as well as a little bit of luck.
“We didn’t have any brilliant investment insights," he said. "We didn’t hit Google, Apple, and Microsoft at their IPOs. Instead, we invested in index funds, and we started investing in residential real estate to build our nest egg. It’s nothing special, and we never had to significantly sacrifice our lifestyle, as the picture album of our travels can verify."
For the Hulls, getting to FIRE (financial independence, retire early) was a function of doing some things right, and avoiding some big mistakes.
What does Jason think that they did right?
· They were in agreement on their goals and that they wanted to retire once they were able to afford a certain lifestyle.
· They never took any real moonshots with their investments. Jason’s entrepreneurship was moonshot enough, while his wife kept a solid, steady job until they retired.
· They worked backwards. They identified the lifestyle that they wanted to have in retirement and how much that would cost. They also accounted for unexpected expenses that could derail their retirement (one of the criticisms Hull has of the LEANFIRE movement), and adjusted their safe withdrawal rate to account for their FIRE status.
· They never jumped on the hedonic treadmill. They’re both proud drivers of “granny cars,” old Toyota Avalons, for example.
What are the mistakes that Jason thinks others may make on their FIRE journey?
· Cutting it too close. Not only does someone who is retiring early have to rely on their nest egg longer as a bridge to their retirement accounts and what is probably a less than average Social Security check, but they also have longer to self-fund any unexpected shocks that come.
· FIRE to run away from work rather than retiring to something. If there’s no positive goal for retiring, then it will be much harder to find a lifestyle that aligns with their values.
· Sacrificing their current lives so much that they’re miserable and unhappy. Living a life of stress and unhappiness builds up a lot of negativity that will take a long time to work out from under post-retirement. Instead, live the lifestyle you want to live and that makes you happy now. You are never guaranteed a tomorrow, so enjoy today.
Jason and his wife have taken on a new passion project in retirement. You can check out their latest venture at https://www.bemaskuline.com.
Listen to this podcast with Jason Hull, CFP.