extempore recently linked to Philip Greenspun's piece on Early Retirement, which I found accurate and thought-provoking. For those who don't know, I have followed the unusual career path of starting out retired, and then getting a job, so I have a somewhat odd perspective on the matter. Some key sections, to give you the flavor of the article before you go read it all:

Ask a wage slave what he'd like to accomplish. Chances are the response will be something like "I'd start every day at the gym and work out for two hours until I was as buff as Brad Pitt. Then I'd practice the piano for three hours. I'd become fluent in Mandarin so that I could be prepared to understand the largest transformation of our time. I'd really learn how to handle a polo pony. I'd learn to fly a helicopter. I'd finish the screenplay that I've been writing and direct a production of it in HDTV."

Why hasn't he accomplished all of those things? "Because I'm chained to this desk 50 hours per week at this horrible [insurance|programming|government|administrative|whatever] job.

So he has no doubt that he would get all these things done if he didn't have to work? "Absolutely none. If I didn't have the job, I would be out there living the dream."

Suppose that the guy cashes in his investments and does retire. What do we find? He is waking up at 9:30 am, surfing the Web, sorting out the cable TV bill, watching DVDs, talking about going to the gym, eating Doritos, and maybe accomplishing one of his stated goals.

Retirement forces you to stop thinking that it is your job that holds you back. For most people the depressing truth is that they aren't that organized, disciplined, or motivated.

This is going to be a long, long entry, so if you're interested in my life story 1998-2004, follow beyond the cut...

Here is the short version of my financial/career life history: I received a substantial trust fund in 1997, enough to support a modest lifestyle on the interest. It was invested largely in technology, so as the bubble expanded so did it, going up roughly 2-3x. Then the bubble burst, and it plunged back down. As a financially-oriented guy, I tried to scale my spending with my net worth, so I had a sort of small personal version of the dot com experience, in which I spent 1998-2000 telling myself to live more extravagantly (and to some degree doing so), and then 2001-2004 telling myself to live more cheaply (and to some degree doing so).

Anyway, I graduated from college w/ a BS in Math in 1998, moved north to Palo Alto, and started a masters in CS at Stanford. Over the 6 years from 1998-2004 I dropped out of the MSCS twice, finally finished my degree, started an MBA, wrote a book on floating cities, put 1000+ hours of coding into a failed pokerbot, co-founded the ABL, and started dating Shannon. I made no attempts to get anything like a steady job or start a career, but I did have a helluva lot of fun, going to Burning Man many times, traveling around the country playing poker, many trips to LA, lots of social stuff w/ the ABL, etc.

During this period, in addition to the bubble effect, I was spending more than my interest income, and a bad loan took out a substantial chunk of capital as well. (Note to gamblers: you should never, ever back anyone at poker. This holds to several orders of approximation, the experiences of Mr. Chen notwithstanding). Playing poker didn't help much - ironically, I made by far the most money after getting a job. Before that, I treated it as entertainment, so I had poor game selection. For example, I spent a lot of my poker hours playing NL at Colma, where I made less than a quarter as much as playing SNGs online. And I'd sometimes play in games that were out of my league (where I was a losing player) - either b/c the table was tough or b/c it was a game that I was still learning. Combine those with not playing a lot of hours, and poker didn't help my finances much, until the short post-job/pre-baby period when I took it seriously as an income-generating activity.

At the same time my assets were dwindling, the prospect of being the main earner for a family substantially increased my projected expenses. Eventually, the shortfall became significant, and I decided it was time to get back in the saddle.

A little tech company called Google had just IPOed, a few of my friends worked there, and it sounded like hella fun. I looked into stat arb jobs and only found them in NYC and Chicago, so I decided to apply to Google and if it didn't work out, look harder for a hedge fund job (which 175560 was just starting, and sounded fun). I'm not sure whether I got lucky in getting an offer, on the one hand I had little experience and Google is incredibly selective, on the other hand I had some good advice on the interview process from insiders, have thrived there, and I really fit into the stereotypical googler mold of a smart, self-motivated, generalist. S felt I was a lock, but seeing how few people get offers I still feel like there must have been some luck involved.

I've greatly enjoyed my job for the 2 years I've been there, having lots of fun and benefiting financially from Wall Street's consistent underpredictions of our profit growth (or their current overprediction, depending on how you look at it). Really, I'm insanely spoiled - when I finally deigned to dirty my hands at working, I picked a company which gave me a great offer, whose stock price has almost tripled since I joined, which has incredibly generous benefits and refresher grants, and which recently instituted a program that amounts to handing gobs of money to its current employees. It currently looks like I will earn as much money as I inherited in roughly 3-5 years of total work, depending on stock performance and whether you count the portion of my income which the government steals.

Which is just ridiculous. Again, hard to pin down the line between luck and talent - on the one hand, the company's performance has been insane, and clearly I am lucky to be there. On the other hand, it is very hard to get in, it was the only company I applied at, and my backup plan (stat arb) was a job at which a friend my age (175560) is making even more than I am. So clearly I have some ability to pick 'em as well.

Looking back on my "early retirement", it was quite a mixed bag. As Greenspun describes, I did a lot of sleeping late, reading books, and goofing off. On the other hand, when I list my accomplishments, I really didn't do too badly. In 6 years I finished a masters and a half, wrote a book, and wrote a substantial amount of code (abandoned pokerbot, a few months of consulting work, a book draft commenting system), even though I bet I spent at least 80% of my time goofing off. I think I'm just extraordinarily productive when focused (it's like that at work too - my output per unit time seems to be well above average even there). So on the one hand, I totally agree with Philip that you spend most of your time goofing off. On the other hand, I think I did amazingly well for my circumstances.

I feel like it will be a lot better next retirement, because I'll appreciate it more. Even the goofing off will be more fun, b/c I will have earned it. I'm not going to say that it's better to work than to be a trust fund kid in general, but my experience does suggest these two things:

a) it's better to work at a job you love than to be a trust fund kid
b) if you can make enough to retire in a small number of years b/c of luck or talent, that is also better than inheriting wealth, even if you don't love your job. It's just a lot more fun spending money you've earned - and you do it more wisely too. Inherited wealth is hard to hold onto - like Rodney Dangerfield, "It just don't get no respect."

Another part of Philip's description I can identify with is:

Suppose that you say, for example, that you can't make firm travel plans because your little airplane doesn't have a turbine engine and deicing equipment and therefore you're very dependent on the weather. Folks will ask "Why don't you get a Gulfstream and blast through the clouds at 4,000 feet-per-minute with the same engines that power a Boeing 737?" It becomes a little awkward to admit that you're approximately $50 million short of the $50 million required to join Jack Welch in the flight levels (of course Mr. Welch, despite being retired, doesn't pay for his use of a GE business jet, the fuel, or the pilots; the public shareholders of GE do).

An answer that brings the conversation back down to earth is to remind your interlocutor of all the older folks he or she might know who are retired. They aren't rich, are they? They have enough money, one hopes, to live in a comfortable house and do the things that they most enjoy, not enough money to gratify every conceivable material desire.

I definitely found that many people thought that just b/c I had enough to live on w/o working, I could afford to fund their crazy business ideas or whatever.

Philip also has a section summarizing the happiness research, which emphasizes that the connections between wealth and happiness are often tenuous. People often have a hard time believing it - what do you mean rich people are unhappy? because that's what they aspire to so they assume it will be great when they get there. But the biggest factors in my life happiness, in order, are: a) being biologically wired to be happy, b) having a family, c) loving my job. The only contribution of wealth is in reducing the downside of (b) by being able to afford nannies, which I also expect to be the main contribution over the next decade. Increased wealth does not lead to increased happiness, but better sleep does, and nannies are how to transform wealth into sleep. (If this seems paradoxical, it is because there are few such clean conduits for converting money into happiness).

Anyway, this has gotten long even for a life story, and I am really itching to go to work, so farewell!