Hello everyone!\u00a0 We’re back with our next installment of the FIRE Community Guest Interview Series!<\/p>\n
For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones,\u00a0please reach out to us!<\/a>\u00a0You can\u00a0check out the previous FIRE Community Guest Interviews here<\/a>.<\/p>\n Today, we have the pleasure of having a former CEO\u00a0turned early retiree on to share their journey to FI. What I love most about this interview is that it showcases that even though you may make a high income, there’s more to early retirement than just bringing in a big paycheck.\u00a0 The mental piece to it all is so important and understanding the mindset required is half the battle.\u00a0 It’s always nice to have fellow early retirees on to share their insight as to how they got to where they are today. I love seeing the words “flexible” and “flexibility” throughout the interview as that really is the key to a successful early retirement.<\/p>\n I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Accidentally Retired, please check out their website Accidentally Retired<\/a>, reach out via their\u00a0contact form<\/a>, or leave a\u00a0comment below!<\/p>\n Without further ado, take it away AR!<\/p>\n 1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?<\/b><\/p>\n I am an entrepreneur and former CEO, who has been <\/span>Accidentally Retired<\/span><\/a> for a year and a half now.\u00a0<\/span><\/p>\n The long and short of it was that after running my company for 10 years and working for a public company for 5 of those years, I was ready for a new challenge in life. And even more, I felt like I wasn\u2019t really living the life I <\/span>really <\/span><\/i>wanted.<\/span><\/p>\n I have always wanted to retire early. In fact, it was something that I was thinking about even in my adolescence. Why work when you can play right?\u00a0<\/span><\/p>\n So I decided early on that the path to early retirement was going to be via entrepreneurship. I knew that if I could build a big enough business, I would likely make enough money to call it quits whenever I wanted.\u00a0<\/span><\/p>\n So the idea of early retirement had always been with me, but it took me a long time to put two and two together to really figure out the nuts and bolts of how it all worked. I had just figured, if you make enough money you\u2019re set.\u00a0<\/span><\/p>\n But I was wrong. After we sold our business, <\/span>we still weren\u2019t set<\/span><\/i>. I had to put my head down and continue to work to grow the business from within a large public company. And it was probably a few years after that when I really started to take things more seriously and follow more personal finance blogs.\u00a0<\/span><\/p>\n 2. When in your journey did you realize financial independence was actually possible?\u00a0 Was that the original goal at the beginning?<\/b><\/p>\n While retiring early was always my big goal, I didn\u2019t have a real concrete plan for it.\u00a0<\/span><\/p>\n It wasn\u2019t until I was a CEO, that I was starting to seriously think about my exit plan. I wanted to make sure the business was in good shape and in good hands before I left.\u00a0<\/span><\/p>\n But on the flipside of that, I started to read personal finance blogs, and then eventually I began to run retirement scenarios on a self-made spreadsheet.\u00a0<\/span><\/p>\n It became clear that even after selling my company and working as a CEO, I would need a few more years for early retirement to become doable.\u00a0<\/span><\/p>\n But then fate stepped in.<\/span><\/i> Our brand was divested from the public company we were working for to a private startup. Contract negotiations weren\u2019t going well and I just had this gut feeling that it was time to leave. So I negotiated my exit, and decided to take a mini-retirement to figure out what to do next.<\/span><\/p>\n 3. To help put things into context, if you are comfortable sharing some numbers, what was your savings rate, FIRE number, net worth, salary, how many hours a week did you work, etc?\u00a0 How long have you been working towards financial independence and where are you today?<\/b> How were you able to become a CEO at such a young age?\u00a0\u00a0<\/b><\/p>\n My wife and I have decided not to share our personal financial information online, but I have shared our <\/span>early retirement withdrawal strategy<\/span><\/a>.\u00a0<\/span><\/p>\n As discussed above, I didn\u2019t make as much money as you would think from the sale of my business. I was a minority partner and we had likely sold about 5 years too soon.\u00a0<\/span><\/p>\n Yet even despite that potential error, I made the most of what we did make, saving every bonus, distribution, escrow payment, as well as maxing my 401(k).\u00a0<\/span><\/p>\n Our combined savings rate was roughly about 15% for the first 5 years after college working in more entry level positions, but then as I started to make more money in the later years, it ballooned up to 55%.\u00a0<\/span><\/p>\n I\u2019ve always believed in having a strong work\/life balance. That is why I typically never worked more than 40 hours a week, even as part of a small 3-person team, all the way up until my CEO days.\u00a0<\/span><\/p>\n My path to becoming a CEO was pretty straightforward. By starting my own businesses and then joining two co-founders as a third partner, it made it a pretty easy path to becoming CEO. I am sure there are many other ways to do it, but starting a business is the easiest way to become CEO.\u00a0<\/span><\/p>\n Don\u2019t get me wrong, there is a big difference between being a CEO of a small business making $100K a year to a $15M company, but the path is simple. Grow with your company, and build your leadership skill set as your company grows.\u00a0<\/span><\/p>\n Honestly, the title is just that – a title. People respect those who lead, empower others, and who can get things done. Ultimately, that is what I tried to do whether I had the title or not.\u00a0<\/span><\/p>\n 4. As someone who reached financial independence (at an early age to boot!), how has life changed since you stopped working?\u00a0 What does a typical day\/week look like for you? How long has it been and are you bored yet?<\/b><\/p>\n Initially, I started off by taking a mini-retirement. I wanted to take six months off to travel, golf, and spend time with my wife and kids.\u00a0<\/span><\/p>\n It was during that time that I started to really dig into personal finance even further. I read <\/span>The Little Book of Common Sense Investing<\/span><\/i> by John Bogle, and I realized that I was closer to my early retirement than I had thought. I just had to get a little creative.\u00a0<\/span><\/p>\n In some ways life hasn\u2019t changed much at all. I think this is likely due to having two small kids. You still have to be a parent and my life still revolves around my kids and their schedules.\u00a0<\/span><\/p>\n We typically drop them off at school, then we workout either by going on a long walk or doing some sort of YouTube workout. Then I either run errands or sit down at the computer and write on AR or manage the other website I invested in.<\/span><\/p>\n I\u2019ll be honest though, these days, I have ended up back to working quite a bit for an average of 3-4 hours per weekday between AR and my other website.<\/span><\/p>\n But the great part is that I can take vacation whenever I want, I can stop working whenever I want, I can support my wife if she is having a bad day, etc.\u00a0<\/span><\/p>\n In other words, I have flexibility that I did not have while working full-time.<\/b><\/p>\n My wife and I pick up the kids from school together and I\u2019ll typically take them on a bike ride or to the park or something like that.\u00a0<\/span><\/p>\n That is a typical day, and in general, I really can\u2019t get enough of it.\u00a0<\/span><\/p>\n 5. Do you feel deprived?\u00a0 Do you feel like you are sacrificing and missing out on life?\u00a0 How would you say your mindset has shifted throughout your FI journey?<\/b><\/p>\n No. I can\u2019t claim to feel deprived in any way. I reached FI through entrepreneurship and doing things that I was passionate about. Now, I get to focus on family and continuing to explore my passions.\u00a0<\/span><\/p>\n But there definitely has been a mind shift. I\u2019ve taken my finances a lot more seriously. While I previously had an investment advisor, I now manage my own portfolio.\u00a0<\/span><\/p>\n Previously, I thought that investing in the stock market was too complicated for the average joe, even a CEO. Boy was I wrong!\u00a0<\/span><\/p>\n Once you educate yourself on a few things, and create a plan, investing in Index Funds really couldn\u2019t be easier.\u00a0<\/span><\/p>\n 6. Do you use a budget?\u00a0 Do you track your expenses? Do you track your net worth? If so, how often do you update these?<\/b><\/p>\n We\u2019ve never really had a budget. My wife and I always stuck to the philosophy of making sure to save as much as we could for the future. No matter what we focused on just saving for the sake of saving.<\/span><\/p>\n In the early years that was 15% when we were both out of college and not making too much. But as our income grew quite significantly, we still made sure to spend wisely. I maxed out my 401(k), and we lived off only whatever was left over, with bonuses and other distributions all flowing into investments.\u00a0<\/span><\/p>\n Now, in early retirement, we have more of a budget, but we still aren’t sticklers for it. We save money where we can and we spend where we have to. It helps that we\u2019ve sort of always lived this way.\u00a0<\/span><\/p>\n All of this gets monitored monthly in Personal Capital, and tracked in <\/span>my net worth tracker spreadsheet<\/span><\/a>.<\/span><\/p>\n 7. What are some of the more unique\/uncommon ways you\u2019ve cut down costs?<\/b>\u00a0<\/span><\/p>\n I wouldn\u2019t say any of this is unique, but here is how I cut costs:<\/span><\/p>\n If there is something that I can do, and I have the time, I do it.\u00a0<\/span><\/p>\n My wife and I also both sell used items that we don’t want\/need anymore on ebay, Amazon and Poshmark.\u00a0<\/span><\/p>\n Lastly, we like to prepay on anything that gives you a discount, so things like online storage, car insurance, security, anything that offers a 10% discount or more, we just prepay it to save the money.<\/span><\/p>\n 8. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?\u00a0 Has your investment strategy changed over the years?<\/b><\/p>\n My investment strategy has certainly changed over the years.\u00a0<\/span><\/p>\n At first, it was to rely entirely on the advice of my financial advisor. But after my mini-retirement that all changed.\u00a0<\/span><\/p>\n So now, I\u2019ve spent the last two years converting all of our investments from expensive mutual funds and a portfolio of 80+ individual stocks, to a three-fund portfolio. I really want to keep it simple and not overly complicate things.\u00a0<\/span><\/p>\n In my mind, there is no reason to gamble on individual stocks when you\u2019ll beat the market and the average investor with Index Funds.<\/span><\/p>\n My one unique investment strategy has been to go out and acquire a small web business. After running various calculations and looking at real-estate versus websites, I came to the conclusion that <\/span>websites were a better investment than real estate<\/span><\/a> for me. So I spent much of 2021 looking for a website and I eventually purchased one in October 2021.<\/span><\/p>\n Of course owning a website is not very passive, and so I\u2019ve been working a few days a week on the project to get it to where I want to be revenue wise. Once there, I\u2019ll shift to outsourcing a majority of the work and operating it a bit more passively.\u00a0\u00a0\u00a0<\/span><\/p>\n 9.<\/strong> <\/span>Did you take advantage of tax advantaged accounts offered to you? Can you please share your withdrawal strategy in your post-FI world?<\/b><\/p>\n Yes! Thankfully one of my business partners was pretty chatty and he was talking about maxing his 401(k) pretty early on after we sold our business. So I did the same, and after 5 years of maxing, <\/span>I should be on track to have about $1.4M<\/span><\/a> in that account by the time that I can withdraw.\u00a0<\/span><\/p>\n The reason why I purchased a website rather than real estate, was entirely to help fortify my withdrawal strategy. We largely lived off cash reserves for the first 1.5 years of retirement, but I didn\u2019t feel like that was sustainable or safe to do.\u00a0<\/span><\/p>\n So we purchased the website with the hopes of bringing in more steady cash flow to offset sequence of return risk and allow us to build up our investment portfolio without needing to draw down on it.\u00a0<\/span><\/p>\n 10. Speaking of withdrawals, what is the withdrawal rate you use when you withdraw from your portfolio?\u00a0 Are you a fan of the \u201c4% rule\u201d or something else?\u00a0 Why?<\/b><\/p>\n I love the simplicity of the 4% rule, but let\u2019s face it\u2026<\/span>it doesn\u2019t work on a long-term horizon<\/span><\/i>. I love the work that Karsten at Early Retirement Now has done to help early retirees manage sequence of return risk.\u00a0<\/span><\/p>\n So my strategy is to stick to a maximum of 3.25% withdrawal rate now (hopefully less as the web business generates income), and we\u2019ll also be using an equity glidepath to further mitigate risk and allow for higher withdrawal rates in the future if all goes well.\u00a0<\/span><\/p>\n But most of all, we simply want to remain flexible. If I have to go back to work and get a full-time job, I will do it. If we needed to more aggressively cut back on our expenses for some reason, we could do that as well.<\/span><\/p>\n 11. How do you handle health insurance now that you are no longer working?\u00a0\u00a0<\/b><\/p>\n For the first 18 months, we stayed on my former company\u2019s healthcare plan using COBRA. We could have even stayed on it for another year thanks to New York state law, but we decided that we\u2019d rather take the risk and switch to a marketplace plan.<\/span><\/p>\n So we are now on a High-Deductible Silver Plan with an HSA. As soon as we started the plan, I immediately maxed out our HSA for the year. In an ideal world, we\u2019ll continue to do that for as long as possible and pay any healthcare costs out of pocket and use the HSA as an investment\/tax savings vehicle.\u00a0<\/span><\/p>\n 12. If you could go back in time and change things, what would you have done differently?<\/b><\/p>\n Honestly, I am not sure. First, it would have been nice to hold onto our first primary home and have rented it out. This would have gotten us started with a little bit of cash flow, but perhaps added stress and headache as things were starting to wear down and need constant repairs.\u00a0<\/span><\/p>\n Secondly, I regret not maxing out my wife\u2019s 401(k) more than we did. At the time, we were young and worried about not having a big enough emergency fund. But in retrospect, we could have really supercharged things for her had we been more aggressive.\u00a0<\/span><\/p>\n My advice to anyone in their 20s. Max out your 401(k). You can always back off it later and pivot to a taxable brokerage, but with built in tax savings and company match it is a really easy way to supercharge your wealth if you start early and allow decades for compounding to do it\u2019s thing.\u00a0<\/span><\/p>\n 13. Has discovering financial independence changed how you view life overall?<\/b>\u00a0<\/span><\/p>\n FI has brought me back to a more conscious state of living. I always wanted to FIRE, but didn\u2019t plan it out well. By the end of my CEO days, I was just biding time, but not really sure for what. Now, I have time to be more introspective. I read more, I think about my life more, I am less reactive, and more in charge of my life.\u00a0<\/span><\/p>\n 14. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know that you\u2019ve reached financial independence?\u00a0 If so, how did you bring it up and what were their reactions?\u00a0 If not, why not?\u00a0 Why do you struggle with this conversation and why do you feel that money is such a taboo topic?<\/b>\u00a0\u00a0<\/span><\/p>\n Haha no. I think my friends and family have a general idea that we are doing well and I possibly don\u2019t NEED to work, but we try to downplay it for various reasons. This was also part of the strategy for investing in a web business. We can talk about that with friends and family, and use it as a bit of a shield.<\/span><\/p>\n The main reason we aren\u2019t open is because we are fans of <\/span>The Millionaire Next Door<\/span><\/i> mentality. We\u2019d rather not flaunt where we are at, and it\u2019s not that I feel finances are too taboo, but I do think that other people\u2019s feelings and attitudes towards us will change. So on one hand I don\u2019t want to be shady about things, but on the other, I have seen some legitimate changes in attitudes from people once they know the behind the scenes.<\/span><\/p>\n 15. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?<\/b>\u00a0<\/span><\/p>\n Create a better plan than I did. I believe that had I planned better, I could have reached FI sooner. I put all of my eggs in the entrepreneurship\/startup basket. While it did work out, it was risky.\u00a0<\/span><\/p>\n Start investing early in your 20s. Make a plan. Write it down. Stick to it.\u00a0<\/span><\/p>\n But also, don\u2019t get too stuck in the weeds. You have to live your life too. So find the right balance between saving for later and living in the now.\u00a0<\/span><\/p>\n 16. What does the word \u2018success\u2019 mean to you?<\/b><\/p>\n I believe that success is simply the ability to be consistent over a long period of time.\u00a0<\/span><\/p>\n Whatever it is that you are doing, the path to success is pretty simple. Just keep going. Keep doing great work in your niche, in your industry, year after year.\u00a0<\/span><\/p>\n It took 10 years for my former business to really become successful on paper (even after we sold it). Success takes more time than you think. But anyone can achieve it.\u00a0<\/span><\/p>\n And another thing – my success does not limit your success. It never has and it never will.<\/span><\/p>\n We can all be successful.\u00a0<\/span><\/p>\n Let’s lift each other up, instead of tearing each other down.<\/span><\/p>\n 17. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?<\/b><\/p>\n I try to recommend as many <\/span>blogs<\/span><\/a> and <\/span>books<\/span><\/a> as possible over at AR. I also try to review many that I read, though admittedly I am backlogged!\u00a0<\/span><\/p>\n If you are reading this you\u2019ve probably read may of the finance books, so I\u2019ll recommend a few non-financial:<\/span><\/p>\n 18. How can people get in contact with you?<\/strong><\/p>\n You can head over to my blog, Accidentally Retired and <\/span>fill out my contact form<\/span><\/a>.\u00a0<\/span><\/p>\n You can also <\/span>hop onto Twitter<\/span><\/a> where I hang out from time to time.\u00a0<\/span><\/p>\n Lastly, if you want to <\/span>subscribe to my email newsletter<\/span><\/a>, you\u2019ll get my content delivered to you typically twice a week.\u00a0<\/span><\/p>\n Cheers!<\/span><\/p>\n Thank you again Accidentally Retired so much for being a part of our FIRE Community Guest Interview Series, we really do appreciate it! In our next FIRE Community interview, we\u2019re staying in the States to hear from a mom who had to rebuild from nothing and was able to reach financial independence in a short timeframe.<\/p>\n Note that this upcoming interview is the last one in our queue so if you would like to share your story please let us know otherwise we will be taking a break from this series for a bit.<\/p>\n Did you enjoy this interview? Any thoughts or additional questions for Accidentally Retired? Please let us know in the comments below!<\/p>\n<\/div>\n Thanks for tuning in and check back next month for the next interview.<\/span><\/p>\n We love highlighting other members of the FI community. Please\u00a0<\/span>
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