Early retirement is a mirage when you’re physically and mentally capable of doing more. Humans are generally not built to derive sustainable happiness from sipping mojitos on a picturesque island somewhere in the pacific. Once you’ve tasted the sweetness of a dedicated purpose, it’s near impossible to be content just sitting on the sidelines.
I’ve talked to a handful of start-uppers who build the company of their passion and then cashed in for this dream. But the pattern was pretty much universally the same: Six months of doing nothing but indulging pleasure is as long as most highly capable individuals can take.
So after a much-needed vacation, the retirement is canceled and they’re back to start a new company. (Not always with as much passion as the first time around, but that’s another story).
Jordan couldn’t stay in retirement either
The inability to enjoy the passive enjoyment of retirement life is not confined to entrepreneurs either. Look at how many times the mega stars of sports have thought mojito island was what they wanted, only to find out that they couldn’t let go of the excitement and flow of doing what they did best. Michael Jordan, Lance Armstrong, Brett Favre, the list goes on and on.
Giving the overwhelming evidence that even when you get all the money in the world, you still want to pursue your talent and passion, landing the stereotypical web-startup lottery payday doesn’t seem that appealing. If you’re good enough to build a company that can be sold of umpteen millions, you’re probably also in the category of people who can’t “retire” and be truly happy.
If you get out, then what?
Now given that, what’s the rush to get out? The big question will come knocking on your door very soon: What are you going to do then? If you cash out at 35, then what exactly are you going to spend the rest of your life on?
The difference in lifestyle between extracting a few million dollars a year from an operating business vs selling it all for a one-time payday of, say, $40 million is not as significant as it may appear. Much less significant than the difference between waking up in the morning to a passionate purpose versus yet another day of aimless pleasure.
Now it’s true that some company founders don’t really like what they do. That there’s another greater calling that they’d like to pursue but can’t until they’re free from the man and can set their own tune. Maybe they want to play jazz music all day.
I don’t think that person exists as often as the idea of the artist-beneath-the-suit would romance us to believe. And I think that plenty of people underestimate the difference between a fun hobby and a full-time pursuit, but I digress.
In short, the bliss of selling and giving up your business is overrated. It’s a long life and it’s often best spent enduring the ups and downs of pursuing something of significance. Don’t be so eager to give it up.
Andrew McKinney
on 21 Sep 09I want to hear more about this:
“So after a much-needed vacation, the retirement is canceled and they’re back to start a new company. (Not always with as much passion as the first time around, but that’s another story).”
Adam
on 21 Sep 09Once I’m bringing in a few million dollars a year I’ll give an honest response…
James Avery
on 21 Sep 09I agree completely on retirement, I know I would be miserable after a couple of months of just relaxing and doing nothing. I also know that with a good chunk of money and more time there are tons of other ideas and ventures I would love to pursue, selling your company doesn’t have to equal retirement.
Lucas Húngaro
on 21 Sep 09The goal is not retirement… is to get free from the “9 to 5” vicious cycle and to do more diverse things (investing, knowing the world and different people etc), not doing nothing all day.
Benjy
on 21 Sep 09I’d like to think that I could find pursuits in an early retirement. There are a number of things that I enjoy - cooking, travel, architecture, painting - that I could pursue but that I wouldn’t necessarily want to do as a means of supporting myself and family. Perhaps some income or a business ultimately results from some of them, but I think there’s a difference in approach when it’s a hobby that might make some money vs. a money-making endeavor.
I am curious to see how my father keep busy in retirement—he officially retires this Friday! At 60, it’s not exactly an “early retirement” but he’s certainly capable of working longer if he’d wanted to… He hasn’t had much in the way of hobbies over the years, other than travel, so I am curious to see how he spends his time. They did buy a pied-a-terre in the city a couple years ago and he completed the Chicago Architecture Foundation docent training this year.
Lubo
on 21 Sep 09@Lucas: I totally agree w/ what you said.
Scott Miller
on 21 Sep 09True dat. I lasted four years on the sidelines after selling my company. Over the four years I became mildly proficient at golf, dabbled in angel investing and taught entrepreneurship at university. All of which was fun and semi-fulfilling.
But just like eating Chinese food, you get hungry shortly thereafter for a new venture. I am five months into a new startup and liking most every minute of it. Nothing beats the opportunity for creativity and autonomy that entrepreneurship provides.
Josh Catone
on 21 Sep 09Mojito island sounds like a pretty boring place to retire. For me, the situation you describe, David, is more about having the freedom (of both time and money) to do whatever you want. Sitting around drinking all day, now matter how picturesque the scenery, isn’t anywhere on my list of things I’d like to do with my life.
But there are plenty of things that aren’t work that require more (leisure) time and money for me to be able to do. Things like traveling all over the world, growing a garden, having more time to cook, read, and write creatively, learn more about astronomy and astrophotography, make a documentary, mentor/invest in other startups (assuming however I made my millions qualified me to mentor startups), etc.
Some of those things I can do now, but time or monetary constraints limit how much I can really put into them. The freedom you describe is freedom to more easily pursue all sorts of things that interest me, and with less worries about stuff like making enough money to eat and pay rent. Even if whatever it was that made me my theoretical millions was something I really enjoyed doing, it doesn’t mean it’s the only thing I enjoy and I could never be happy unless I was doing the startup thing. In other words, the opposite of “aimless pleasure” isn’t work.
Mojito island sounds like a nice place to relax in between more interesting pursuits, but I wouldn’t want it to be the only place I ever saw.
Jamie Tibbetts
on 21 Sep 09I think you’re presenting a straw man argument here. I don’t think there are very many entrepreneurs who build and sell a company for a lot of money early in their life to retire to mojito island. They’re doing it for the money. Cash in, and then do it all over again. As you said, most people who are able to build million dollar companies are extremely driven and motivated people, and they will be so for the rest of their lives. They’re not looking to retire.
Jamie Tibbetts
on 21 Sep 09But as Adam said, I’ll give a more informed answer after I have my own million-dollar company. ;)
Anonymous Coward
on 21 Sep 09Cash in, and then do it all over again. As you said, most people who are able to build million dollar companies are extremely driven and motivated people, and they will be so for the rest of their lives.
The point is that lightening rarely strikes twice. And they spend the next 30-40 years trying to replicate their original accomplishment, only to fall short and regret the one that got away. This is the common pattern instead of continuing to hit the jackpot over and over.
John Topley
on 21 Sep 09Once you’ve cashed in you could always while away the years creating a new LISP variant…
Chris Carter
on 21 Sep 09You’ve taken a narrow subset of the population (start-uppers), who are by their very nature incredibly motivated and generally borderline work-a-holics (or at least find a majority of their life’s passions in the work they do), and extended it out as a generalization to all of humanity.
I know many, many people who are VERY happy not doing anything with their life but drinking by the beach, and they didn’t need to make a million dollars to do it.
The point, in regards to entrepreneurs is well taken, and I think accurate. I’ve noticed that of late 37signals has dropped some of its more “relative” language in favor of absolutes. It’s your opinion, of course, but treating advice as the definition of reality can get you in trouble (ie, your problems with security in the past).
Anonymous Coward
on 21 Sep 09Long time CEO/chairman of one of the biggest banks in Sweden retired a few years ago (although not very young at age 55) to sail around the world for three years. That’s one nice way to spend retirement.
Jay Godse
on 21 Sep 09Good point David. But I’m sticking to my original plan of retiring in 2049, and then going to a beach to sip Mojitos.
Ivan Kirigin
on 21 Sep 09I’m not sure most people want to sit on a beach all day. The life of early retirement should be experiential – meaning you have the days on the beach, but also time spent with family and friends and music and movies and new companies. The basis of this post is a bit of a false dichotomy.
If I have a certain amount of money, life will largely be the same, but I’ll take most risks.
Also, it’s a bit silly to talk about making a few million yearly or selling for many millions. People seeking either wouldn’t mind either option.
Ben Atkin
on 21 Sep 09Great article, thanks!
Reminds me of this story that I saw on Hacker News yesterday, about John Sall. He’s 60 and still working on statistical software for a company he started more than thirty years ago.
I guess this was the upcoming post that JF was referring to when he said that “fuck you money is such a myth” in the HN comments for The Next Generation Bends Over.
JF
on 21 Sep 09Ben: This was David’s post, not my post. Mine is forthcoming when I find the time.
Scott Semple
on 21 Sep 09Absolutely true.
However, it’s worth pointing out that most people, sadly, have never tasted the “sweetness of a dedicated purpose.” And that ignorance of authentic joy keeps them keeping on, pursuing shallow goals like titles and money, thinking that those things will eventually set them free from the salt mines they’ve sentenced themselves to.
It’s important to realize that human beings aren’t designed for indefinite recreation. But even more important is to discover those individual core devotions that can lead to the “sweetness of a dedicated purpose.”
PierreSmack
on 21 Sep 09The entire concept of Retirement should be retired.
Greg
on 21 Sep 09@37signals
Why do you assume that when people cash out, e.g. Mint, that the founders will do nothing?
Plentity of founders go on to do the next big thing (and/or whatever is of their interest).
I’ve actually heard very few people do nothing after a sale … for an extended period of time.
Micheal
Peter Cooper
on 21 Sep 09Giving the overwhelming evidence that even when you get all the money in the world, you still want to pursue your talent and passion, landing the stereotypical web-startup lottery payday doesn’t seem that appealing.
It depends whether you have bigger dreams beyond your current startup or not. All companies and markets are not alike. Mark Shuttleworth sold Thawte and now does Ubuntu – I bet Ubuntu is way more fun and “better” for the world even if it makes less money. Could he have thrown so much money into Ubuntu without that “lottery payday”? Ditto for the Kazaa founders who went on to create Skype. Ditto for Mark Cuban who sold Broadcast.com and bought the Dallas Jets.
As you say in the post, the “lottery payday” makes it possible to transition to other things, but you suggest that’s not appealing? It surely is if the next goal/next project is even better than your current one.
Martin
on 21 Sep 09I don’t think most people cash out because they want to retire and live on a beach, more likely it’s for one of these reasons:
a) They want a new challenge, they enjoy the process of starting and building a company to a certain level but not maintaining it. b) They want to achieve financial security and have money to use for risker ventures. c) Pressure from investors.
Bruce Hauman
on 21 Sep 09When it comes down to it. It’s all about how we relate to our lives now. The quality of our lives is determined maily by how we relate to where we actually are. If we are driven by dissatisfaction and angst then that will be our experience of life. If we are driven by curiosity and wonder then our lives will have that quality. If we are apathetic and detached from the world around us then retirement offers very little. For the most part, the content of life matters little. Retired or successful it’s how we relate to the content of the moment.
To some this may sound trite and Zen but it is also true.
indi
on 21 Sep 09If I had even barely enough money to quit my 8 to 5 job to pay the mortgage and afford health care (with pre-existing conditions) I would “retire” now and spend my time doing what I want to do. After working for large companies for 29 years, what I call retirement others would call working for themselves. I’d like to set my own hours and be able to spend more time with my wife and daughter. I don’t really want to spend all my time sitting on the beach sipping iced tea, but if I feel like doing it for a few days, why not?
Sam X
on 21 Sep 09In the past, those were able to transcend from a laborer, to a business owner, to a “man of leisure” were the ones who pushed science and the arts forward because they didn’t have to worry about making a living.
Newton could pursue physics and the calculus. Benjamin Franklin could create inventions and spend time thinking about the government. Entrepreneurs can spend time working on things that matter to them.
D Doan
on 21 Sep 09Mojito island is a metaphor. It’s that symbolic place everyone has, that moving mirage. It’s the idea that we should work first and get some remote reward later, that what we’re doing now is not as meaningful or rewarding as what we’ll reap in the future. And everyone has one: maybe it’s the weekend for you, or the holidays, or your vacation time, or your retirement (in whatever forms those take).
It’s a reminder to really evaluate how we spend our time and what we find meaningful. It’s believing that we’ll be able to profit some time later for what we invest in now. But time doesn’t work like that. We should value what we do now more than some far off future.
David mentions that life is long and that’s why we should endure in important things. But I think life is too short and we should invest in important things now because we don’t know when we’ll get another chance.
Nathan
on 21 Sep 09If I were to cash out with $40 Million at age 35, I would absolutely still be experiencing the “Sweetness of Dedicated Purpose” – That of being there every moment for my young children, to teach them, nurture them, and try to ensure that they grow and learn to be responsible and respectful adults, and to be a better husband and give my wife the time and attention that she richly deserves.
Bowman
on 21 Sep 09Man, you 37signals people are obsessed with work. All aspects of work, including analyzing it endlessly… or just ending it. The thing you missed completely, in your workaholism, is that not everybody who cashes out is going to get wasted and hire prostitutes in their free time. And you really jumped to conclusions when you insinuated that you’re either not working or starting a company. What about people that become writers, painters, or pursue other solitary and decidedly impoverished results? What creative person doesn’t want to sell their company for $40M and turn around and create what they really love (music, art, books, clothes) in their spare time and not care too much about what kind of money it makes?
Andre at thisinspiresme
on 21 Sep 09I think we’re discussing an attitude that is a symptom of something deeper. Currently, it is not really legal to not make money. So, the majority of people work out of necessity, and do jobs they wouldn’t choose otherwise.
Being able to stop working as an obligation and start working as an authentic contribution, passion and creation is an important and very, very satisfying lifestyle change.
Nathan Fitzsimmons
on 21 Sep 09Hear, hear! I’m with the other @Nathan on this one. I’m working from home, but still don’t have the time I’d like to have with my kids. On the other hand, I wouldn’t ever be able to give up my work completely.
Captain Mojito
on 21 Sep 09Oh how I love thee Mojito Island… Dreamy shores seduce my thoughts, as I long to taste the fruits of hard labor. Like a distant mirage, forever perfect in its unattainability. I love you not as a destination, but as the shining star which guides my never-ending journey…
Helgi Þór
on 21 Sep 09Unrelated to this post, but…
I’m trying to find an earlier post, which I think was written by Jason Fried. The topic was about the parts of your business/customer needs that don’t change (like quality of service, security, speed etc.) and the importance of working on those things as opposed to getting sidetracked in things that are fashionable at the moment. I think it referred to Jeff Bezos.
I can’t find it now though, help anyone?
Deep in the Game
on 21 Sep 09It’s a game. As long as you’re working for someone else, you’re still in the game. The goal of the game isn’t just to ‘win’, it’s to get out of the game. People who get their first job should be told that; ‘You’re in the game now. You’re on the income/expenditure treadmill. Now, your goal is to get out of the game.’ For most people, it takes until they’re 65 to get out.
Getting out of the game is that magical point where YOU choose what you work on. It’s not ‘sitting on a beach, earning 20 percent’.
My wife has commented that I’ll likely be programming until my deathbed, retirement or no. Some of those projects will interest others and/or make money, some won’t, but they’ll be my projects.
Sure, I do that right now when I have time, but when I’m working for someone else, I have to make the choice between spending ‘home time’ programming on a project I find fun, or spending it with my wife and son. Wife and son wins nearly every time, if my home time is limited.
So yes, as someone else said, this post is purely strawman. It’s a false dichotomy. People who are interested in starting their own companies aren’t going to go off to a beach if they make it big. But they may still want to get out of the game.
$2M (after taxes) is how much it’ll cost me to get out of the game. Interest on that would let me be free to pursue my own projects (even ones that might make more money!) for the likely rest of my life. Everybody should figure out how much that number is for them, and then figure out how they can turn their passions into that number.
37signals is a great example of a company where a bunch of people are (hopefully) pursuing their passions together. But I’ll bet sometimes it still rankles to have to design another form, or another landing page, instead of working on a personal project, or something else cool that’s caught your attention.
Rahul
on 21 Sep 09I think that building a sustainable business over time is much more appealing than the large acquisition. The advantage of being an entrepreneur is your flexibility in what you do and how you spend your time. It allows you to complete certain life long goals or experiences that you’ve always wanted to do. It allows you to pick up foreign languages, travel the world or whatever your heart desires. It gives you the freedom of mobility and the nature of online business means you can work from anywhere which is a luxury I don’t think most of us take advantage of enough.
You can’t vacation forever if you’re a passionate entrepreneur but you can take what Tim Ferriss refers to as Mini-Retirements for 6 months – 1 year which I think it more exciting. Why buy into the deferred life model? The biggest issue I see is that we invest so much of ourselves into building businesses and becoming immersed in this world that we never think about what we want to accomplish outside of the office.
Chris Hajer
on 21 Sep 09John Topley – nice Paul Graham reference ;-)
Chuck Blakeman
on 22 Sep 09Couldn’t agree more – retirement is a bankrupt Industrial Age idea that wasn’t a good idea then either.
See my very short and supporting blog on this from early July – it’s also a chapter in my new book “Making Money is Killing Your Business.”
http://blog.teamnimbuswest.com/2009/07/retirement-is-a-bankrupt-industrial-age-idea/
Best, Chuck
GeeIWonder
on 22 Sep 09Couldn’t agree more – retirement is a bankrupt Industrial Age idea that wasn’t a good idea then either.
Really?
I’ve seen no convincing evidence of this: Humans are generally not built to derive sustainable happiness from sipping mojitos on a picturesque island somewhere in the pacific.
Which obviously is an exaggeration but may in fact be exactly what we are build to do. Saving and planning for rainy days or dry days or future needs has often been discussed as one of the DEFINING human traits when compared to our cousins. It builds resilience into the system and allows for many of the things and professions and pursuits we associate with civilization. Without even just food and water stores, you have none of these things. Many instance of ‘Collapse’ are simply cases where I can imagine this exact argument was made.
I think there’s a real lack of ‘start putting it in the bank’ attitude in personal and public management of money, of water, of climate, of energy and of many other things that we are only beginning to appreciate.
Espen Antonsen
on 22 Sep 09After leaving my previous start-up I went traveling for ten months. I can definitively agree with the statement “Six months of doing nothing but indulging pleasure is as long as most highly capable individuals can take”.
First six months were fantastic; met some great people and visited amazing places like Himalaya in Nepal, Varanasi in India, went snowboarding in Iran (btw; to you americans: Iran is a stable country and Iranians were the most hospitable people I met on my journey), Damascus in Syria. But as soon as I finished that six-month period I became bored and felt the urge to use my brain again and now I am back with a new startup.
mike in africa
on 22 Sep 09I think many people would agree that the ultimate contentment is from within; being able to find peace within oneself. It’s the human desire of “wanting more” that keeps people from stopping. They think that’s the only way they’ll be satisfied.
Peter Harkins
on 22 Sep 09Not everything worth doing is profitable.
Geoff
on 22 Sep 09Highly recommend the book “Born to Run” about humans long distance running ability. An interesting factoid from the book: Humans develop the stamina to run 100 miles around the age of 18, they peak in their mid-30s, and then their pace begins to decline. But their decline is slow—in their early 60s, they are still faster than they were when they were 18. We are designed to go for a long long time, and sitting around doing nothing is against our nature.
Carlos Cardona
on 22 Sep 09Wonderful article. Thanks for the level headed insight.
Andrew
on 22 Sep 09if i ever retire early, the first thing i’ll do is follow my real passion which is wildlife conservation. interspersing that with the odd mojito on a beach, there’s no way i’ll be bored :)
Don Schenck
on 22 Sep 09Surfing. Kayaking. Golfing. Surfing. Karate. Surfing. Cooking. Gardening. Travel. Bicycling. Snorkeling. Surfing. Writing. Reading. Hiking. Surfing. Slot cars (seriously). Model building. Surfing.
I like to think I could keep busy…
Robert
on 22 Sep 09I don’t know. This kinda struck me as a “last word” after the Mint.com “sellout” article. The very vast majority of commenters there seemed to be along the lines of “yeah, why shouldn’t they be able to choose to sell for a vast sum of money and do as they wish” (with very few people implying a “Mojito Island”), and almost immediately you follow up with a “Yeah, well, the real brains and creatives, they’d never be satisfied with that!”. Not that you aren’t entitled to a rebuttal, this seems a direct response to the (perception, at least) reaction you got to the mint.com post.
Jim Hutchinson
on 22 Sep 09A favorite quote from Charles Kingsley I have pinned up above my desk.
“We act as though comfort and luxury were the chief requirements in life, when all that we need to make us really happy is something to be enthusiastic about.”
Enthusiasm is central.
Kevin Holesh
on 23 Sep 09Instead of saving up your retirement for the end of your career, why not spread it out throughout your life?
Work on a start up for a few years. If you love it, great. If you don’t, take 6 months off and travel the world. Then get back in the game.
I can only imagine how passionate and motivated I would be after a 6 month break spent relaxing (read: constantly thinking of business ideas).
Cormac
on 23 Sep 09No, we’re actually designed to spend 40+ hours a week staring at a screen
Roy Quader
on 24 Sep 09It seems to me that once you have more than enough money to quit your day job you are ‘retired’. You don’t have the same obligations as others when you can leave at any time or go start a new project on your own. It sounds like a different world to me, doing work for the enjoyment of it instead of survival.
Coward
on 25 Sep 09David has toyed with the idea of early retirement, and came to the conclusion that it would be a bad idea.
Coward
on 25 Sep 09Let’s not forget this quote: “Variety is the spice of life!”
Tiago Matos
on 27 Sep 09We can assume this post answers why 37signals does not intended, in a forthcoming future, to but a ‘Mojito Island’ for themselves?
This discussion is closed.