My entire life going back as far as I can remember I’ve wanted to own a record store. No I don’t look or act anything like Leo (played by Tommy Chong) from That 70’s Show. I just simply love music and I can’t play a note. As a child in the 1980’s I remember the feeling of walking into that world of music and I wanted to live there. Sadly by the time that I was part of the working class those stores were pretty much gone. Not completely gone of course but the industry was well on it’s way to putting music into files instead of shiny black discs. As the resurgence of vinyl continues to grow my dream has become more a part of my daily life. To this day I frequent various shops throughout the year and even stopped at the one in Myrtle Beach (Kilgore Trouts) while on vacation this summer. Each of these stops make me yearn for the day when I retire from corporate America and can spend my days in the store.
Then while listening to a podcast on my daily commute this morning I came across an idea. That idea turned into an epiphany. The podcast mentioned that some people decide to retire early aka FIRE (Financially Independent Retire Early) and others decide to transition slowly. Their logic was that if you work even a few hours a week then you don’t need as large of a nest egg.
So follow this logic: Let’s say that you need to earn $40,000 a year in retirement. The 25x rule says that you need a nest egg of 1 Million dollars in order to live off of 4% of it. If you instead decide to work part time for say $10 an hour and 20 hours per week you can quit sooner. With that 20 hours per week you are earning $10,400 of new income annually and then only need $29,600 from your investments. $29,600 x 25 = $740,000 effectively reducing your required nest egg by $260k (26%) or several years of working at the job you want to leave.
That’s when the epiphany hit me. Why do I have to own the record store? Why take on all of that responsibility, taxes, etc? I could simply work at one doing what I love and get out of corporate America much sooner. Maybe I’ll buy the store when that owner retires and maybe I’ll learn that working in one isn’t as heavenly as I dream. Either way, I can make it happen much sooner. My two other passions are photography and helping animals so maybe I can take pictures of records or shelter animals. Or maybe volunteer at a shelter and start a small photography business. All of these things I simply don’t have time for while working at my current job. The great thing is that I can do those 3 things in almost any town so I can move to a better climate or closer to family.
Can you think of a way to shortcut your path to FIRE? I’d love to hear from you.