There is a point in most careers, where a certain feeling emerges. A feeling of where to? from here.
You have spent a decade or two, 10 or 20 years, trying to learn your craft and be useful to corporations and institutions you have served. You did not rock the boat too much, and focused on continuous personal improvement. And then as it happens, there was an epiphany based on a key question: Where do I go from here?
The work which had always beckoned you, no longer appears tantalizing. The growth trajectory you had envisioned did not quite materialize. The specific industry might have matured, or stagnated. Here you are at your desk, highly capable at your craft, now middle aged. You almost do not want to think what the next 20 years could look like. A certain corporate malice has set in.
You almost do not want to think what the next 20 years look like. A certain corporate malice has set in.
It is not that you do not like your work. You may still like the work that you opted for 15 some years ago. It is just that the sheen has come off the corporate slogans, endless status reporting, pointless meetings, performance review bureaucracy and resource justification exercises. Yes, it all sounded ok at the start, even helpful at times. But now, with half or more of life gone, one yearns for a creative outlet. Something that can show your unique texture and view on the world. Corporations are just not cut out for that.
The big problem of course is finances. For our first career, we had our childhood homes, parents paying rent, and society subsidizing student loans and similar things, for us to become productive members of it. But for this leg, the re-invention, the building of a new identity, we do not have the preparation time available to us unless we can create it ourselves. We can retire from active work for a while, a mini-retirement if you want to call it. But the purpose of this mini-retirement break is to go and pursue a more meaningful, a more aligned life.
And to go on that mini-retirement, a re-invention break, you need time, and financial resources to weather that time, while continuing to provide for yourself and dependents. In general, this period of life comes with dependencies. Spouse, kids, aging parents, people who you are committed to providing for. Which brings us to the question of how much do you need for these provisions, while you re-invent yourself towards your creative, aligned outlet. We will need a formula for that.
So what exactly is the amount needed for you to take the plunge, and never look back at your corporate overlords? It is hard to make up a formula that would work for everyone. So we need a few assumptions.
That gives us our cushioning formula.
Rounding it off, we can say a sum of 250,000 dollars, allows you to educate yourself, experiment around with a few things, all the while living the average life of a first world citizen.
Is this a lot of money? Yes, it absolutely is. But, it is far, far less, than the 1 million or 2 million you would have to strive for, for a perpetual retirement. All the while grinding away at the job that you have lost all passion for. This amount, the freedom amount if you want to call it, is a fraction of that sum.
But what this allows you to do is, quit the corporate, and forge a path for yourself. A path unique to your identity. A path sustainable for a very long term. The beauty of this path is, that once you have forged this path, and found something that you find joy in doing, you may never have to retire in the traditional sense, ever again.
The idea of accumulating a retirement fund then goes out the window. You may still choose to have a saving fund, but the idea of a traditional retirement, at the traditional age of 65, has simply gone out the window for you. This fund, of 240,000 dollars, is all you ever needed. It transformed the problem, from accumulating and then retiring, to pausing and re-inventing for life.
Your own amount may be slightly different. You might need 6 thousand dollars for your monthly expenses. You might have a year off in which you wanted to take care of your aging parents. You may have a year of high expenditure before things settle down. But you can always calculate your own amount.
We call it a license-to-create fund. A fund that allows you to morph into someone who would never need a traditional retire-at-65 path. Someone who can retire to a life of perpetual contribution because they re-invented themselves to align with the most compelling value they offer to the world.
There are some immediate questions that might arise in the mind. What is it with 24? Why did you suppose this time? What if it takes me longer? That is a fair question. And to put it down again, 24 months, that is 2 years, is the time that is stipulated for you to take your creative endeavor, enterprise, or solo business, to a state where it can begin supplementing your income. But supplementing is the key word here. For instance, if you were earning 6 thousand dollars from your day job, about a 100K+ annual salary, you do not have to replace the entire salary at the end of those 24 months. And this is the key. You only have to replace it partially.
Basically not stop the drain, but put a big band aid on the leaking pipe. If you can manage to bring that loss from 6K to 4K, by earning 2000 dollars a month, you have substantially enhanced the effective life of your portfolio. What I deem unlikely is, that you have spent 2 years trying to monetize your skillset accumulated over 20 years of professional work, and you are unable to figure out a way. This is just very, very unlikely.
Do I still suggest to scale the formula for your own living situation? Yes and no. If you are in a situation, where there is an element of externality that is just beyond your reach, like a sick parent or a close relative, or a younger brother you are supporting, it is very hard to scale back on the expenses. However if the expenses are meant all for the immediate family, it still makes sense to consider slashing them to the required number of under 5K a month. There is an adventure to going out, and building something of yourself. And what is an adventure, if you cannot take the family along. Everyone can go for a ride: scale back on the lifestyle for a bit, to reap the dividends of a focused effort in building something worthwhile.
For some people, this can be automatic. A layoff from the primary job, shuttering of a certain industry or a business model, job displacements spurred by AI, may make this life style de-inflation pill, automatically palatable. For others, they may have to work a bit on steering the ship around in a slightly different direction. But it is a work worth indulging in, as it can make the money go further, and allow the focus on the venture to deepen.
So go ahead. Imagine what you can build, and then take the leave to build it.