Author Topic: Forgoing Early Retirement for a Part Time Job  (Read 2751 times)

dangbe

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Forgoing Early Retirement for a Part Time Job
« on: August 16, 2016, 08:10:36 PM »
I feel that there are two options for increasing freedom in my life. 
  • Grind out money at an office over the next 8 years and retire early
  • Give up the full time job and work 20 hrs a week and live off of that

I need help weighing the pros and cons of each of these options. 

My Situation
I am an early 30s engineer and I have saved up ~100k
I have a 70% savings rate and spend about 20-24k a year including rent (10k/yr)
I also have a spouse who makes near what I do and is willing to support me indefinitely (I don't want this to happen)

So at this point I am trying to decide whether I want to continue working full time and getting to a nest egg of around 600k
- or -
I could stop working full time right now and switch to 20 hours a week. 

I would most likely have to change jobs and start my own business consulting (I've done this before) and if I can lock down gigs for 20hrs a week I will be making about 65-75% of what I currently make as a full time employee. 

At this rate I could live off of only 20 weeks of work a year, but if I go this route I will most likely work all year round so I can continue saving.  The issue is that it is much tougher to find companies that are looking for part time consultants.  I do have quite a good network in my industry and will be able to use that to establish work for a while.  My big worry with this part time approach is that it may take 15+ years to reach that 600k goal and will I be able to find part time gigs for 15+ years or will I start being seen as unqualified because I haven't worked a full time job in a long time?  Note that if I go this part time route, retiring early will not be as important to me and if I can't do it until I'm 60 then that may be fine.

I realize this is a bit different as this isn't entirely about retiring early but increasing the amount of freedom I have in my life.  I see part time work as being able to reach that freedom much sooner while still making enough to save 30-50% of my income.

What do you think?  Is part time work a viable alternative to FIRE?

oldtoyota

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #1 on: August 16, 2016, 08:22:11 PM »
... or will I start being seen as unqualified because I haven't worked a full time job in a long time?  Note that if I go this part time route, retiring early will not be as important to me and if I can't do it until I'm 60 then that may be fine.

...What do you think?  Is part time work a viable alternative to FIRE?

You have a great savings rate and a supportive partner, so that is great. As you can imagine, no one can answer this but you.

I will say this. I gave up FT work to be a consultant. I made more in seven months--working fewer hours per week--that I did in one year at my previous job.

What I notice is that it seems you are still considering yourself an employee in the entrepreneurial scenario.

You ask if you will be seen as unqualified because you have not worked FT. If you are a business, why would clients care if you worked 20 or 40 hours a week for other clients? You won't be giving them your resume. I have not used a resume in over a year to get any of my clients...

I don't even use hours when I bid on projects. I have a monthly rate and they can pay that or not. I also create project rates. It gets clients away from focusing on hours. If I need to do more, I do more. If I don't, I don't. I would rather focus on the value I'm bringing to client as opposed to the hours it took me to do it (which encourages clients to view you as an expense rather than see the value you bring to the bottom line, etc).

I recommend taking business workshops or hanging out with entrepreneurs so you can start getting out of the "employee" mindset and into the entrepreneurial mindset. =-)


JLee

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #2 on: August 16, 2016, 08:56:55 PM »
If you can reliably make 75% of your current salary while working 20 hours a week, and you're saving 70% of your current salary, that sounds like a pretty good deal to me.   However...

MMM's math shows that, starting from zero, a 70% savings rate will make you FI in 8.5 years. You have $100k already -- if you're truly saving 70% of your salary and only need $600k to be FI, rough math says you're 16% of the way there with roughly 7 years to go.

If you cut your salary by 25% and your saving rate goes down to ~50%, you'll be adding roughly ten years to your working career...unless, of course, you continue to increase your income / decrease your expenses over time.

If you can get 75% of your income with 50% of the time invested, I would probably be aiming for 150% of the income at your current time commitment so you can be done earlier. That's me, though. : )

dangbe

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #3 on: August 17, 2016, 07:12:11 PM »

What I notice is that it seems you are still considering yourself an employee in the entrepreneurial scenario.

You ask if you will be seen as unqualified because you have not worked FT. If you are a business, why would clients care if you worked 20 or 40 hours a week for other clients? You won't be giving them your resume. I have not used a resume in over a year to get any of my clients...

I don't even use hours when I bid on projects. I have a monthly rate and they can pay that or not. I also create project rates. It gets clients away from focusing on hours. If I need to do more, I do more. If I don't, I don't. I would rather focus on the value I'm bringing to client as opposed to the hours it took me to do it (which encourages clients to view you as an expense rather than see the value you bring to the bottom line, etc).

I recommend taking business workshops or hanging out with entrepreneurs so you can start getting out of the "employee" mindset and into the entrepreneurial mindset. =-)

Insightful and good advice.  I think you've really illustrated that my mentality about this is all wrong.  It's not so much going part time as it is becoming my own business and dictating how I do work from there.  I will take your advice and try and figure out how I should be approaching clients and ridding myself of this employee mindset.  Thank you!

forummm

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #4 on: August 18, 2016, 10:16:26 AM »
I don't think this is a decision you have to make now. You can also keep going with your current situation for awhile longer to pad your stash some more. So maybe you decide to go PT in 4 years with 10 years of PT after that (or however the math works out). There's no urgency in the decision. You can consider your options over time.

TheAnonOne

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #5 on: August 18, 2016, 10:31:49 AM »
Alternate solution, find extra time and over-time. IE: work 60h weeks as a consultant. Retire in 3-5 years.

ooeei

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #6 on: August 18, 2016, 11:29:45 AM »
If you have a 70% savings rate and spend $20k a year, you should be saving a LOT of money.  How do you only have $100k saved?

HipGnosis

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #7 on: August 18, 2016, 12:21:16 PM »
But don't forget about the benefits of FT work - mostly health insurance(s).
ACA health insurance cost is based on your salary - of LAST (tax) year.  Your first year is going to be expensive.

jim555

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Re: Forgoing Early Retirement for a Part Time Job
« Reply #8 on: August 18, 2016, 12:33:20 PM »
PT work usually never pays as well as FT.  I would be in the camp of suck it up in FT and get out earlier rather than dragging it out in PT.