By leaving my full time Operations Management job this year at the age of 43, I am leaving a lot of money on the table. If I worked this job to the traditional age of retirement I would have earned another $232,000 in KiwiSaver assuming 5% investment returns and 2.5% annual salary increases. I would have saved another $290,000 by keeping a company car full time. If I invested those savings then that would be another $255,000. And last but not least, there is the non paid salary. $2 million over the next 22 years. And if I invested that $2 million instead that is another $1.5 million thank you very much.
A grand total of $4.25 million left on the table.
When you phrase it like that it makes me sound a bit crazy. I do often find myself talking to myself.
Of course this assumes life going as planned. There is no guarantee of income increasing each year until my mid 60’s. Nor is there a guarantee of me keeping a company car or working until the age of 65. However, it isn’t entirely out of the question to expect a minimum of inflation linked pay increases for a valued employee. I didn’t include any bonus payments and used a modest 2.5% inflation rate.
“You are leaving in excess of $4 million on the table just so you can work less hours at age 43”?
I must admit, it is hard to give that up.
But with every decision you have to consider the downsides and the alternatives.
The downside is that by working an extra 22 years that is a heck of a lot of extra time stuck in traffic, getting ready for work, working, and decompressing from work.
The alternatives I would miss out on are plentiful. By giving up 22 years of work and $4 million I am also gaining around 43,560 hours of free time. That is 4,840 work days.
If I think about what I would like when I am 80, more money or more time, the answer is always going to be more time.
As long as we have enough to sustain our lifestyles and leave a little something for the kids, that is enough for us. Everything extra is really a luxury and not something I would agree to giving up all my time for.
This is just a thought exercise. I do realise it is not lost money because I never earned it, despite the clickbaity title 😊. But for me, and hopefully some readers, it serves as a reminder that once you reach a certain age, time is far more valuable than any amount of money.
Of course some work can still provide plenty of benefits like providing mental challenge, socializing, and a sense of accomplishment. And that is why I am still working. And to meet expenses of course. However, I am just working a lot less and am choosing work that pays much less but brings in far greater satisfaction and a greater work/life balance.
That is the benefit of saving hard up front and knowing what your ‘enough’ point is.
I now get to hang out with the family every day. Cruise to the beach when I feel like it. Improve on my shooting percentage at the basketball hoop at home. Play regular tennis. Volunteer my time. Be active in our kids schooling. Not get to ask anyone for permission for time off. Not sell out on how I run my financial advice business and remain independent. Support my wife in her work.
I do feel privileged to be in the position I am in. There was of course a lot of planning and hard work, but also an equal dose of good luck and support from family.
It still takes incredible courage (I think) to leave so much money on the table, but I would make the same decision every time. Otherwise I am leaving close to 50,000 hours on the table, and I am incredibly excited for what the next 22 years (and beyond) will bring. I wouldn’t be able to say the same if I stayed on the work till I drop path.
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