Hopefully by now you all know the importance of having diversified investments and not putting all your hopes on one asset, one company or one industry.

But rarely do we think about ourselves being diversified. A diversified identity is what will help with your career, as well as your transition to retirement.

By diversified identity I mean someone with a wide range of interests, skills, experience and knowledge.

don’t place all your eggs in one basket

All too often we hear of the big wig CEO or person who was so dedicated to their job that when they retire they lose their identity. They don’t know who they are without their job. That is a lot of faith you put in your employer. If things go badly and your life is your job, you are left with not a lot.

I have recently started the process of slowing down at work. In the past I have been extremely dedicated to work to help set the family up, but it has been at the expense of more family time and time spent pursuing my other interests. Almost to the point where I’m not entirely sure what my interests are anymore. That is what long hours at work does to you. It gives you a new identity. One that is not very well rounded. Not at all diversified.

Now, with two young kids and a body that isn’t getting younger, I am wanting to dedicate far more time to family, interests and helping people with their finances.

Of course there are going to be seasons in your life where you have more time available for work, but there will also be seasons where you want more time for other things such as family, travel, and interests. The closer to financial independence you get, the less dependent you are on work and the more you can achieve that balance.

Many in the FIRE community tend to overcommit to work for too long and then realise they didn’t need to work so hard for so long. They overcommit to too much work before retirement and then under commit to not enough work or not enough challenge after retirement. They lack that challenge.

Some work, paid or not, is a great thing. The key really is not to spend too long in any one box. Whether that is work, no work, travel. Too much of anything (even no work) can get boring and unsustainable pretty quick. And it is extremely risky!

If you rely on work for identity you will be unpleasantly surprised with retirement and unequipped to handle it.

Embrace a wide range of things that make you who you are. Place your eggs in a wide range of baskets. Then when one of the baskets no longer works for you, you have plenty of other baskets you can tap into to fulfil your life.

The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here