When I say the word “freedom,” what do you think of? Freedom of speech? Self-determination? The freedom to choose your own spouse, friends or career path? Or maybe you envision an open road. Or a favorite pastime. Or winning the lottery. Freedom is not just one thing. There are many different types, states and levels of freedom. When it comes to retirement, I think there are five key types of freedom you should strive for. Those are:
Financial Freedom. Things cost money. If you have enough money to pay for the things you want and need, you have financial freedom. You don’t need to be rich, but you need enough money to fund your ideal lifestyle. Obviously, that’s a different amount for everyone. Find out how much it is for you and get to work. Save more. Be a good steward of your resources. Stop spending on things that aren’t important to you. The more financial freedom you have, the less beholden you are to a job or lender and the more flexible you can be in your life decisions. Of course, money won’t solve all your problems, but it will usually solve your money problems (to paraphrase Naval Ravikant). It’s often the table stakes for the other freedoms we’ll discuss below.
Time Freedom. Think of life as a pie chart that is divided between time you control and time controlled by others. The goal is to gradually shrink the piece of the pie that is controlled by others. The smaller that piece becomes, the more time freedom you have. The more time freedom you have, the more retired you are. Be careful, however. The most common way to achieve the money freedom we discussed earlier is to trade your time freedom for it. That can work while you’re building your nest egg, but it’s not a good long-term trade. The goal is not to be cash rich and time poor. That’s just prison with a fancy zip code. The goal is to have financial freedom while simultaneously controlling your time.
Location Freedom. Location independence is a key theme at Intentional Retirement. Being location independent means that you’re not tied to a specific geographic location for work or other reasons. You are free to move about, explore and experience while still staying on top of work or other obligations. Pre-pandemic, this was a rarely used and somewhat radical concept. Post-pandemic, it has become almost normal. We have the tools and technology to facilitate it and fewer gatekeepers telling us no. Location freedom is important for obvious reasons. If the things you have to do are tied to a specific location, they will prevent you from doing the things you want to do that are not. A caged bird isn’t free.
Health Freedom. Think for a minute about how your health can affect your freedom. For starters, getting sick is expensive. Health issues often sabotage your financial freedom and can force you to continue working, which undermines your time freedom. Even worse, being sick or unhealthy will often get in the way of everything else you want to do. I’m sure many of your plans involve some level of activity. The worse your health is, the less you’ll be able to do. Said another way, your health can act as either captor or emancipator. Better health = More freedom.
Lifestyle freedom. Having the first four types of freedom enable you to achieve freedom number five: Lifestyle freedom. This freedom comes from deciding what you really want out of life and having the time, money, independence and health to pursue those things and make them a reality.
How are you doing so far? Any particular area that still needs work? You can do it. Just keep in mind that freedom can be tricky. When you look at the list above, it’s easy to see how acquiring one freedom can cost you another. That’s less than ideal, obviously. Figure out all five and you’ll be well on your way to a remarkable retirement (and life).
The Observer Effect is the tendency for people to change their behavior if they know they’re being watched. The interesting thing about it is that it seems to work even if you’re both the watcher and the watched. In other words, monitoring what you do seems to change what you do. Management guru Peter Drucker said it this way: “What gets measured gets managed.”
Intuitively this makes sense. If you weigh yourself regularly and track what you eat, it will likely impact what and how much you eat. And it works with more than just diet and exercise. It can have a positive impact on your finances and lifestyle as well. What do you think would happen if you started to consistently track what you spend? Or how much you save? Or your progress toward paying off your debt? Or how close you are to your retirement goals? Or how much progress you’re making on that particular hobby. Or how intentional you are with your holidays and time with family?
At Intentional Retirement, we help clients with money and meaning. The money helps them sleep at night. The meaning gives them a reason to get out of bed in the morning. Since those two things are part of our DNA, we’re always looking for ways to not just educate and inform, but to actually prompt people to make positive changes in their lives. We want you to take action. To change for the better. To become the person you want to be. To have a secure, meaningful life doing the things you want with the people you love. The Observer Effect might just help. Give it a try. Start watching yourself. Decide what you want to do or what you want to change and start tracking your progress. I think you’ll find it will help you be more disciplined, focused, consistent and…yes…intentional.
I was driving past a large cornfield the other day—I live in Nebraska after all—and had a few thoughts on sowing and reaping. We’ve all heard the phrase “You reap what you sow.” That’s true, but it doesn’t tell the whole story. Yes, if you plant corn, you’ll get corn. No surprise there. But there’s also an element of time and quantity. Time in the sense that it takes time for the seeds you plant to germinate, grow and yield their crop. Quantity in the sense that you often yield much more than you plant. With corn, for example, 10 pounds of seed typically yields 7,280 pounds (130 bushels per acre) of corn. So we reap what we sow, but it takes time and the output usually exceeds input.
As I’m sure you’ve deduced, I’m not talking about corn. I’m talking about living a secure, purpose filled, meaningful life. You won’t get a crop that you didn’t plant. If you want security and meaning, you need to plant “seeds” that will yield those things. Seeds that yield financial independence. Seeds that yield quality relationships. Seeds that yield a healthy body and mind. Seeds that yield meaningful work. Seeds that yield unique experiences and lifelong learning. Seeds that yield satisfaction, contentment, happiness and fulfillment. And once those seeds are planted, you need to nurture them just like the farmer waters, fertilizes and weeds his crop. And then one day, you will have a bountiful harvest. Some of your crops will mature quickly. Some will take more time. Either way, don’t wait. Start planting today with tomorrow’s harvest in mind.
“It’s an ill wind that doesn’t blow some good.” – Pa Ingalls in Little House on the Prairie
COVID-19 has been a tragedy. There’s no disputing that. Thousands dead. Millions sick. Millions more jobless. It’s hard to overstate the negative impacts of the pandemic. And yet, to paraphrase Pa Ingalls, even terrible situations can produce some good. As difficult as this time has been, I can’t help but think that many of us will look back on it as one of the best things to happen to us. Not in a “I just won the lottery!” sort of way, but in a “Painful, but positive” sort of way. Keep reading to see what I mean and to see how you can make sure that this “ill wind” blows some good for your retirement.
It forces us out of routine. It’s easy to get in a rut. Easy to put life on autopilot and live the same day over and over. Even if we don’t like the rut we’re in, we’ll often stay there because it feels safe. Human nature is such that we will often choose being unhappy over being uncertain. One thing this virus has done in spades is forced us all to live life in a different way. It grabbed the steering wheel and yanked us out of the rut. That’s not necessarily a bad thing. In fact, it’s almost certainly a good thing. It gives us a fresh perspective. It helps time pass more slowly (because routine is the enemy of time). It opens us up to new experiences and new ways of thinking about things. It presents new opportunities. Yes, it brings uncertainty, but hiding in all that uncertainty is opportunity. Look for it.
It forces us to reexamine our priorities. Priorities are the things in life that are most important to us. They are the people, activities or things that we really care about and that bring us meaning. When life is going along swimmingly and we’re healthy and have plenty of time and money, we tend to get lazy. We allow things in that clutter or confuse our priorities. When life gets hard, however, and one or more of our priorities are threatened, it refocuses our mind on what’s important. Hard times force us to cut and say “no.” They force us to get back to the basics. That means a life less cluttered with filler and more focused on the things that bring you joy and meaning. That’s a good thing.
It forces us to think differently about debt. When the economy is strong and interest rates are low, it’s tempting to add debt. You almost feel foolish if you don’t. “One percent interest? Why wouldn’t I buy a $60,000 car?” But when hard times hit, servicing that debt becomes difficult if not impossible. Debt increases risk and reduces cash flow. It adds stress. It can derail your plans and dreams. It weakens your financial “immune system.” The pandemic is a good reminder to use debt sparingly.
It shows the fallacy of “appearances.” On a sunny day, a house built on the sand doesn’t look any different than a house built on rock. But when the storms come, the difference is pretty clear. It’s easy to get caught up in appearances. It’s tempting to keep up with the Jones’s. But even in the best of times, that strategy can be stressful and unfulfilling. In bad times it can be catastrophic. Machiavelli once wrote “The great majority of mankind are satisfied with appearances, as though they were realities.” Don’t be one of those people. Build a life that is happy, secure and fulfilling, not one that only looks good on Instagram.
It exposes our weaknesses. Warren Buffett once said “It’s only when the tide goes out that you learn who has been swimming naked.” There’s nothing like a combination global pandemic + financial crisis to help expose your weaknesses. Too much risk in your investments? Too much debt? No rainy day fund? Strained relationship with your spouse? Underlying health issues you’ve been ignoring? Settling for a life that isn’t what you want? If the tide went out and you find yourself a bit overexposed, maybe it’s time to go shopping for a swimsuit.
One of the most important ingredients to a successful retirement is to decide what you really want out of life and to start taking those things very seriously. COVID-19, while terrible, has likely helped you in that regard by forcing you to reexamine your habits, routines, priorities, purpose, relationships, finances, lifestyle and any number of other things. Embrace that process and you’ll likely come out the other side a stronger, more resilient, more self-aware person.
What are some practical ways to apply all this? I’ll put a few ideas below along with links to articles and resources at Intentional Retirement.
Quick thought for today.
If you want to live an intentional life, you should focus primarily on
the present. Let me explain. We all spend part of our days—either mentally
or physically—in the past, present or future.
You’re sitting there right now in the present, but maybe you’re thinking
about something you did this past weekend or dreaming about something you hope
to be doing 5 years from now. Past, present
and future. We all spend our time
inhabiting each of those spaces.
Unfortunately, most of us mess up the proportions. We spend too
much time and energy on the past and the future and not enough on the
present. We look back and worry about the
things we did or didn’t do. We look
forward and dream about the things we hope to eventually do. That only leaves a small amount of our time
where we’re honest to goodness living in and making the most out of the
I’m not saying that you should ignore the past and the
future, but the present should be your priority. Anything else means you’re focusing on things
you can’t change (the past) or things that might not happen (the future). Here are a few suggestions on how to get the
How to use your past:
Don’t obsess over it. Don’t
waste your time thinking about regrets or wishing you had done or said things
differently. Don’t cling to
bitterness. Don’t hold grudges. Instead,
think fondly of the good times and be grateful for the wisdom earned and lessons
learned from the challenging times. Use
it as a foundation to build on. Remember
the people, places and things that made you who you are.
How to prepare for your future: Don’t push everything to the future. Don’t treat it as some magical time where you’ll finally start living. Delayed gratification is great if it’s allowing you to work toward something, but it becomes a problem if it becomes an excuse for life avoidance. Use the runway between the present and the future for planning and preparation. Use it to set the proper direction for your life and to get any necessary prerequisites out of the way. Use it to set goals, dream, plan, save and even to experiment. All of those things will help you hit the ground running and make the most out of your future years.
How to live in the present: Don’t get bogged down in the routine of
life. Don’t focus all your time on the
maintenance of living. Don’t live a life
that is frantic and unintentional. Be
present in your days, with your friends and during experiences like vacations
rather than worrying about how to make it look a certain way on social
media. Decide what you really want out
of life and start doing that. Today. Even if you have to start small, start. Have intentional action in your relationships,
activities, health, hobbies, pursuits and every other area of your life. Be proactive.
Learn. Do. Go. Experiment. Take risks.
In other words, live.
A good balance of past/present/future is something like
10/60/30. If yours looks more like
30/20/50, you’re not really living life.
You’re worrying about the life you’ve already lived and dreaming about a
life you hope to someday live.
At Intentional Retirement, we believe that retirement is an
intentional way of living that prioritizes freedom, fulfillment, purpose and
relationships. It starts today and is an
incremental process of aligning your lifestyle and actions with your highest
priorities. To do that, you need to
focus on the present. Stop fretting over
what is past or dreaming about what is to come.
Today is a new day. Start doing.
Happy New Year! Just a quick thought today on doing (i.e. taking more at bats). One of the biggest retirement mistakes I see people make has nothing to do with money. It’s that they constantly defer their dreams. They just don’t do stuff. Everything is “someday” this and “someday” that. And I totally get it. It’s hard to decide what you really want out of life. It feels risky to put yourself out there to try stuff. But you absolutely have to do it.
The best advice I can give you for 2020 and beyond is to start
taking some at bats. Right now. Even if you’re not retired. Especially if you’re not retired. The worst that can happen is that things
don’t work out, you get rolled a little bit, so you dust yourself off and try
something different. Ironically, that’s
also one of the best things that can happen.
Because that failure is feedback.
It turns out we’re pretty terrible at knowing what’s going to make us
happy. The more stuff you try, even if
you don’t end up liking it, the better idea you’ll have of what’s important to
you, who’s important to you, what you like, what you dislike, what makes you
happy and what you’re passionate about.
All of those things help you understand yourself and they make
you more self-aware so you can design a life that takes you where you want to
go. Finding out that you actually hate
to travel or you stink at gardening or golf is awesome. That means you won’t waste any time or money
on those things during the prime of your retirement. Instead you can triple down on the things
that you do care about.
So start taking some at bats today. Get out there and try stuff. Take a trip.
Pick up a new hobby. Learn
something new. Meet new people. Challenge yourself. Get outside your comfort zone. Sure, you might strike out a few times. But you’ll get better. You’ll figure out what you really want out of
life and you’ll be doing something about it.
And that’s what living an intentional retirement and an intentional life
is all about.