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The 4 Hour Work Week - Retirement

June 25th, 2007 by Kenric

I’ve been reading and listen to the book, The 4 Hour Work Week for the past week ever since Jon mentioned the book on his blog, Art of Money.  Today, on my drive back from California to Phoenix, I listened to the book for a second time.

This book is a odd book.  It starts out talking about the “New Rich” and working a few hours a week and it’s benefits.  Then it goes into making money online with Google Adwords.  Finally is switches to how to slowly change your job from working in the office to working from home 5 days a week.

There were a few things that stuck in my head going through it a second time. 

“People don’t want to be millionaires — they want to experience what they believe only millions can buy.”

I already knew this before reading the book.  But it’s nice to have someone else say it and confirm your suspicions. Remember my post about non-financial goals?  Isn’t this the same thing?  Nobody is trying to make money because they want to stare at bundles of cash.  They want to spend that cash.

This book is basically saying that you should figure out why you want to retire first.  I’m paraphrasing below;

“Retirement is Worst-Case Scenario Insurance…

Retirement as a goal or final redemption is flawed for at least three solid reasons:

1) It is predicated on the assumption that you dislike what you are doing during the most physically capable years of your life.  This is a nonstarter–nothing can justify that sacrifice.

2) Most people will never be able to retire and maitain even a hotdogs-for-dinner standard of living…  The math doesn’t work…

3) If the math does work, it means that you are one ambitious hardworking machine.  If that’s the case, guess what? One week into retirement, you’ll be so damn bored… You’ll probably opt to look for a new job or start another company.  Kinda defeats the purpose of waiting, doesn’t it?”

Point #1, I totally understand what he’s saying.  After spending a week in California just mountain biking all day everyday with my friend, I always wish that we could just do that anyday, whenever we want.  If riding down a mountain on a bike were our jobs, we would never want to retire.  Isn’t that the kind of life that would be totally fulfilling.  Doing what you love everyday and getting paid?  No thought about ever retiring?

I don’t 100% agree with point #2, but I understand what he’s saying.  The mainstream financial planners keep telling us that when we retire, we’ll spend less money.  However, the number one thing that people want to do when they retire is travel.  Travel isn’t cheap.  Can you do everything you want on 70% of your salary when you retire?  I hope so.

To me, point #3 is the answer to why are rich guys still working question?  Why does Bill Gates still go to work?  It’s easy.  People who are rich and wealthy generally are driven to do things.  They work hard.  They work long.  They make money.  These people don’t ever really retire.  To them, retiring is changing your focus from one job to another.

So as I was driving home today I was tring to answer the question posed in the book.  What if you had $10,000,000 in the bank today at this very moment.  What would you do?  Now besides all the spending spree and investing answers…  really… what would you do?

Think about it.  Your answer may suprise you.

Here are some of the answers that popped into my head (they were all biking related cause I’ve been eat, sleep and thinking that all week):

• * Start a clothing company making dry-fit type of shirts for biking (like Under Armor)
• * Design a better helmet camcorder cause all the ones on the market suck
• * Try to design a better bike pedal (Like Egg Beaters)

So there are my answers.  But now look at them again.  Do I really have to wait until I have $10,000,000 to implement any of them?  Why can’t I start them tomorrow?  There is no reason I can’t.

How come I need a cushion of $10M to do this?  Because I don’t have to worry about them failing?  Is it because I don’t have to get a bank loan?  Is it because with $10M, the above would really be a hobby rather than a true business venture? Why?

What would you do if you had $10,000,000 in the bank at this very moment and all your doodads wants and investment goals were fulfilled?

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