Sam Dogen is the creator of Financial Samurai, an American personal finance blog, on which he was chronicling his life as an early retiree… until he decided to go back to work. Before he launched his blog in 2009, Sam worked in finance for over a decade. Sam started the blog to “help make sense of the financial crisis.” He lost more than 35 percent of his net worth within 6 months despite “doing everything right.”
The 2008-2009 financial crisis gave him a reality check. Sam lost the zeal to climb the corporate ladder and make lots of money. At the tender age of 34, he took a leap of faith and retired early. He believed his working days were well behind him. To fund his retirement savings account, he created multiple streams of income.
By the time Sam quit his job, he had accumulated a net worth of around 3.7 million CAD that generated approximately 98,234 CAD in investment income per year. Sam no longer had to deal with 60-hour workweeks, long commutes or office politics. He got to focus on his long-time dream – to travel the world and run his blog. At the time, Sam and his wife did not have any kids.
FIRE : Expectations vs Reality
A couple of years later, Sam came to the realization that he wasn’t really prepared for early retirement. Due to a slumping economy, his kid’s education and an ever-rising cost of living, Sam admits that he’s planning to get back to full-time employment.
It’s not just Sam. Once they get a taste of what retirement feels like, most early retirees return to the workforce. But when it comes to FIRE (Financial Independence, Retire Early) movement followers, the notion of circling back to their old jobs is frowned upon. It’s more awkward for Sam as he already has a huge following on his blog that offers advice to create a nest egg to avoid such pitfalls.
Despite earning approximately 307,116 CAD (!!!) annually in passive income streams, Sam estimates he needs 114,231 CAD more every year to live comfortably in one the most expensive city in the United States: San Francisco. When things in his life started changing, Sam’s plan evolved. He did not stick to his early retirement wholeheartedly.
Early Retirement: So What Changed?
Having a kid has been Sam’s biggest change to his financial standing. Sam and his wife did not budget having kids when he retired. But he was blessed with a son whom he promised to be present in his life.
The son has already started school and Sam’s concerns have shifted to financing for his education. Odds are they will be forced to enroll him into a private school if he fails to secure admission in a public school nearby. For its public schools, San Francisco utilizes a lottery system.
Sam says he won’t be able to afford paying 42,990 CAD every year for grade school tuition. Add the potential cost of having another kid (potential move to a bigger house, higher health premiums, more daycare), and things start getting messy.
According to Sam, his concern is justified as he is planning for the future of his family instead of plainly ignoring it. Some FIRE movement loyalists may argue that Sam should instead cut expenses or find a cheaper strategy. But Sam disagrees and sees no point in wanting to live like a pauper just to retire early.
Finding a job is the best option in his view. Having worked with top financial firms where he earned a base salary of 307,055 CAD, Sam was used to fat paycheques. If he cannot land well-paying freelancing gigs or better monetize his blog, he’ll be looking to make a comeback to the finance world.
Isn’t It Logical to Move to a Cheaper Area?
The first question that pops up in most people’s minds is, “Why can’t he relocate to a low-cost area?” Well, it is not like Sam has not thought of it. According to him, moving to the South or Midwest where life is cheaper concerns him as he would have to move somewhere less racially diverse.
Since he grew up in Virginia, Sam is not comfortable relocating his family to some unknown city where his son would feel “more of a minority.” Since Sam has family in Hawaii, he plans to relocate there eventually. With a welcoming community, lifetime friends and connections, Sam is not yet set to give it all up.
Early Retirement: Wrapping Up
Fear of what expenses await him is what fuels Sam’s focus on heading back to work. Up until his early 30s, Sam’s mindset was to do everything faster – graduate, get a good job, get rich and graduate.
At 42, he now realizes how ridiculously young he was when he retired. He was just entering his peak earning years. According to him, he has done everything he wanted to do. He also misses parts of the office, like the feeling of accomplishing projects as a team, something you can’t get in retirement.
Sam does not want to view returning to employment as a failure but rather an evolution based on his personal and financial needs.
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About The Author: Arthur Dubois
Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since his arrival in Canada, he’s built his credit score from nothing.
Arthur invests in the stock market but doesn’t pay any fees because he uses National Bank Direct Brokerage online broker and Wealthsimple’s robo-advisor. He pays for his subscriptions online with his KOHO prepaid card, and uses his Tangerine credit card for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.
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