Hi there! As a new Mustachian about 5 years away from ER, I am curious if anyone out there has had an early retirement fail. And if so - why, or what lessons did you learn from it? What would you have done differently? Thanks!
In 1998 one of my ER'd relatives shorted the heck out of the NASDAQ. The margin calls shorted him right back into the workforce but he retired again in 2005.
A shipmate retired on his military pension in the early 2000s at the age of 41 and, although his finances were fine, he almost immediately crashed/burned. Within two months of starting terminal leave he found himself sitting on the couch all day watching TV, and he said even his dog was getting disgusted with him. He took a contractor job pretty close to his old military command and has been happily enjoying the structured workforce environment ever since. In his case, he didn't have a plan and wasn't capable of being responsible for his own entertainment.
One of our neighbors just retired six weeks ago. Her spouse died suddenly a little over two years ago and she's been struggling ever since. I'm not sure exactly why she retired, and that's probably because she's not sure either. She's financially independent and extremely frugal but her retirement is going very badly because she has no idea what she's going to do with herself. I think she expected her adult offspring (and grandkids) to gather around her and entertain her all day, but they have their own lives to live. Right now she's in a mode of frenzied errands and hypercleaning, but she's starting to suffer repetitive stress injuries. She's slowly starting to reach out to build her social network with family & friends, but she's also driving people nuts. This retirement is too close to call either way, but I can guarantee copious amounts of drama.
Raddr has a nine-year thread on his hypothetical Y2K ER (end of 1999) who has been blithely spending according to the 4% SWR:
http://www.raddr-pages.com/forums/viewtopic.php?f=2&t=1208&start=390#p52998Clearly a case of an inflexible robot that won't cut spending even when it's urgently necessary.
Jacob Lund Fisker kicked off a fairly impassioned debate by taking a job. Some think that he became frugally fatigued of the ERE lifestyle, others think his ERE finances were failing. He says he's just working on a fascinating problem for money that he doesn't need. I no longer have an opinion on this debate.
Dixonge and VACollector on Early-Retirement.org made a couple of pretty good runs at ER. Dixonge blew up on an options trading strategy; he and his spouse ended up converting to a minimalist lifestyle. They're getting back on track and may be back to ER by now. VACollector went big on Bank of America stock by averaging down in 2008... right up until they cut the dividend. I can't remember whether it disrupted or "merely" delayed his ER, but I think he recovered. Both of them have thoroughly discussed the lessons learned: diversification.
I've been accused of ER failure for earning money from royalties & blogging. All of that revenue has been donated to military charities, but apparently the only way to silence the last few skeptics would be to have them lead the IRS audit.
I know several people on the path to ER who have self-diagnosed their frugal fatigue and decided to enjoy life a little more by spending a little more. This may delay their ER by a few years but they're much happier with the present.
I know several entrepreneurs who have cashed out in their 20s, 30s, 40s, and 50s. No matter their age, they can't shut it off and soon start another company or begin investing in other startups. I think they're hardwired to be entrepreneurs and the money is just a scorecard.
EPIC CASE from the dot.com heyday:
http://www.retireearlyhomepage.com/rob_bennett_know.html
http://www.retireearlyhomepage.com/rob_failure.html
He singlehandedly contributed a new noun / phenomenon to the English language :
http://www.urbandictionary.com/define.php?term=hocomania&r=f
Thats funny! good read....haha
More like sad. That is guy with serious mental problems and I am willing to bet he isn't getting treatment.
I would like to see someone who tried the 4% and things didn't work out (either poor returns, unexpected expenses,...) but I am guessing not many of them every come back and talk about it. Admitting failure is real hard.
He's one of the Internet's worst trolls. I was around for his Early-Retirement.org heyday, and it was a disastrous uproar. His most recent notoriety involved lengthy discussions with Wade Pfau about market valuations & SWR, mainly via e-mail. When H0cus inevitably found fault with Wade's research and conclusions, H0cus began tweeting the contents of what Wade felt were private e-mails. I've also watched H0cus start the same "discussion" process at two conferences with two other unsuspecting bloggers. When we see it happening, the rest of us step in and direct the unsuspecting person's attention to the above links so that they can form their own conclusions.
As foobar says, I suspect that most of the ER failures are never publicized.