This seems so risky to me. What do you do if a time comes when you can't find such high paying work so easily? Moreover, even if the plan works for years, how will you ever retire?
I'm all for seeking financial independence, but this seems the opposite. You're still completely dependent on work--the work is just more infrequent.
IMHO that guy IS retiring... for 6 months every year. 4HWW-style.
It makes a lot more sense if you see it like this. Plus he's enjoying his life while he is young and has enough energy to travel etc.
He's not running the risk of dying at 60 and never experiencing retirement.
These aren't necessarily two extremes - he's not implying that he's not saving for requirement and taking a vacation, just that he's taking a vacation.
He could very well still be saving considerable amounts of money for retirement.
At no point did it say you have to only earn enough to get you through to the next year. If "enough" is, say, half of your spendings in a year, then you can still pursue both goals.
Retirement, in many ways, seems like a really poor bargain. It seems better to enjoy your "freedom" when you are young and healthy. Youth is wasted on the young, wealth is wasted on the old.
Indeed, it seems I greatly under-estimated the amount of money the author is making. He indicates elsewhere that he made $140k in the first quarter of 2014 alone. Annualized, this is far, far beyond what most freelancers are going to make (and indeed far beyond what most programmers in general will make).
He also clarified that he isn't a consultant. He sells ebooks, which continue to sell even when he's not working, so he still derives an income during his off-time.
In this case, I have to say, though, that the article isn't very useful. Someone with a potential income of >$500k/year, much of which is passive, has so many more options than 99% of people. I suspect the vast majority of the commenters here didn't realize the author was making this much money and also mistook him for a freelance programmer.
I'm doing something similar. I don't have a mortgage or kids, so I don't feel it's much of a risk. If I keep up my skills, I can always go back to full time work.
In the interim, I also decided to reduce my cost of living (cooking more, cheaper apartment) so I can weather any droughts of work.
Good luck! A challenge in my neck of the woods is that once you say "no" to a client, you often lose them. It's easy to see why: they have to find someone else, and someone else has an opportunity to grow them into a house account.
If you're in a field where you have this kind of flexibility, you have my respect and envy. :)
It's hard to do in the consulting world. I've moved away from consulting, but know exactly what you mean. Another good reason you should move more towards selling products. :)
A very risky (reckless?) bet, especially with a second child on the way. Get the money while it's there and that it keeps coming. As a consultant, you have the added benefit of being the master of your schedule, which is crucially important when you're having a child, but suddenly saying "no" to all your customers for the next nine months because of some arbitrary decision? Terrible idea.
Use your status of consultant as an asset to set up your schedule so you have time for both your new child and your new work, but keep that money coming: you'll need it, especially with two children.
Nathan is no longer consulting, solely doing products. So for him there isn't a linear relation between time worked and money earned. Check his 2013 in review post: http://nathanbarry.com/2013-review/
I strongly believe Nathan will be fine - even if he doesn't work a crazy schedule :)
This is too hard. I plan on doing something similar except instead of work 4 months every year and take the rest of the year off, I plan on working about 7 more years and never working a day again.
The basic idea is that if you can save a fraction f of your income for the next n years, then you can live work free for the next n*f/(1-f) years after that.
You do this by changing your lifestyle such that f is big and you enjoy your life. Then when you stop getting paid, you can happily carry on like that. Obviously you should increase your income as well!
7 years of work at 90% savings = 63 years worth of cash.
Once you're saved a reasonable chunk of money (~$500k) it starts to look after itself (if you invest sensibly) and you can make it last indefinitely.
yea something like that. I love MMM. I'm pretty frugal but I don't save 90% though. However, I make a good bit, have already been working a few years so have a nice base. I'm targeting the $1.5 million range, then move somewhere cheaper and live like a king.
I don't have a family yet but I'm planning on doing something similar. You are allowed to retire at the age of 67 in Germany (well at least for my age group - I'm 29), so I calculated how much money I would need to live in my home town which is in Turkey. Depending on how much I can save now, I would be able to retire earlier.
However I still need to come up with a good idea on what to do there because I cannot imagine doing nothing 24/7. Usually I get bored after the first half of a two weeks vacation. As for work life balance, I count myself lucky to have 30 days of paid vacation at my current job.
I like this idea and tried something similar myself recently (though perhaps not as extreme). I, too, found myself bored (a problem magnified by the dismally cold winter and that I live by myself).
I'm far from retirement, but I do believe that every phase in life is what you make of it.
In other words, that might be the default state of retirement for some, but that doesn't mean it has to be like that. All retired people I know (including those who are widows) make sure to keep people around them and have various hobbies or found volunteer work that they are still able to do.
Could work well for a small percentage of people.
What if after you say "no", the client never emails /calls you back? How many clients can one afford to lose? Not everyone has that luxury.
Make your money while you can and then retire or slow down is better IMO.
I wonder how large must be one's coffers to allow for this kind of slowdown. Apparently not large enough to completely eliminate the need to work, though.
During the 2008-2009 crisis, I read that even the super-rich had concerns about their future. The human mind is amazing with so many what-ifs. "Enough," for me would mean at least $4-$5 Million and then living in many different and cheaper countries (or US states) to save money if the stock market is doing badly.
Great story, but as someone who freelances, I have one rule: never say no to (good) work.
When you're freelancing, there will be natural droughts. And when they happen, I do fun stuff without feeling guilty (travel, personal projects, nothing). So take advantage of the droughts, but don't plan them.
Not everybody has droughts; if you're doing longer term work it's fairly easy to book yourself (virtually) solid for the whole year.
I've been doing what tptacek calls 'staff augmentation' (i.e. drop me in any project that's in trouble and I'll make sure it goes faster/makes it deadline) and in 5 years I've never had more than a six week drought and even that was only because I didn't start looking until two weeks into that drought.
Would you mind sharing some details about how you do this (make the project go faster)? Is what you bring to the table more of an organizational/process improvement or technical expertise?
Good question. I should write an ebook on that once ;) It's a lot of little things though. A few major ones that come to mind:
Learn to scan entire code bases (+docs/wikis) to get a solid high-level overview of the entire system and fairly in-depth view of the parts under active development in at most a few days. Basically cram like you would for a last minute university exam.
Blend in fully with current culture and process. If you choose not to, make sure you know the costs of change and do so only if you can decisively implement the change and have it deliver a net positive effect during your stay (hardest skill of all.)
Quickly establish trust in your technical competence without being perceived as showing off. Usually jumping in to help fix bugs, giving colleagues 'aha-moments' and identifying (elusively obvious) fundamentals work well for me.
Grab every opportunity you can to figure out what someone does and show them you're a good guy/girl, whether at lunch, in the elevator or even just in the hallway I call it 'collecting pointers into the organization.'
TL;DR Work your ass off at the start to consciously do in a few weeks what normally happens by osmosis in a couple of months.
I'm between contracts at the moment, but I've planned it in.
I can't just work n months of the year and keep happy clients, but I've done 30 months straight for one client. That means I can comfortably take 6 months out now, over the summer months when the weather's better and the days are longer. We can book a family holiday; my wife needs to give 8 weeks notice before taking leave. I'm moving house and will be able to spend time doing the property up.
Personally, having the time out not at my choosing would be quite stressful and wouldn't allow me to plan house moves, holidays, etc. around it. I guess YMMV.
Given Nathan's business model I don't see how this is a risky move for him to make. He sells products and will likely continue to earn money on those even without investing additional hours of work during the year.
It would really only be a big risk if he was to stop putting in hours AND take his products off the market for the rest of the year.
I agree this would be a very scary proposition as a freelancer with a direct correlation between hours worked and revenue.
Not sure how retirement or emergency preparedness or kids educations plays into this scenario. Certainly seems very risky vs some alternatives which still let you live your life
The ability to do this is definitely a major luxury. Just imagine explaining this situation to someone who had to work all year round. You'd probably come off a little arrogant. Even among those with well-paying jobs, most of them probably work for companies which would never let them do that.
Power to you if you have the kind of job and income where this is possible, but maybe avoid bringing it up too much in casual conversation.
That's interesting, I'm curious, where are you from? I'm always interested in learning about cultural differences.
Oh, and...
> Even among those with well-paying jobs, most of them probably work for companies which would never let them do that.
That doesn't mean it's impossible :) If you have a well-paying job, that probably means you can later find a good job at another company too (otherwise why would they pay you so much?)
I'm surprised at how many people claim this is risky. Granted it is. But isn't this entire community about embracing risk and pursuing happiness/reaching our business goals?
Avoiding burnout is a very real thing to keep in mind, and I often fear many in this community are at risk of burning out hard.
I suppose a valid one if you are considering the "work until 65 and then stop" approach to life. Sounds really shitty to me. There is a concept of "micro-retirements" that I find incredibly appealing. Much like Nathan describes here. Putting in the work, and enjoying the dividends.
I'm 40, have 4 children, and frankly want to enjoy my life now (and when I'm 70), but the options at traditional retirement age seem so droll to me. I don't want to sit around, play golf, fish, or whatever.
My situation is similar to Nathan's, and my goal is not to be rich. My humble bootstrapped products make me enough money to live modestly and enjoy life now.
Working, making, building, and creating are actually a part of my lifestyle. Retirement in the long-term sense has 0 appeal to me, though when I'm 70 I might feel differently ;)
I've always been under the impression that retirement isn't just meant as a reward to those who've worked hard, but as protection to those whose age are likely to start negatively impacting their work.
For me the overarching reminder is that of contentment. It's easy to talk yourself into an endless pursuit of more. There are bad reasons to turn down more work, but taking time for your family and hobbies seems like a good trade off.
Nathan's wife is the one whose opinion about this matters. If they are both on board with his choices, they are going to be fine.
But more generally, I always think of a statement I heard somewhere, to the effect that "You're not going to be lying on your deathbed wishing that you had spent more time at work."
Yes, it is a luxury that we can even consider taking lots of time off. You could argue that it is foolish to take it — and you could argue that it's foolish not to take it. As a freelancer who happened to have an insane amount of work just as my second child was born (two years ago May 10th), I know it was not the best time for our family — in fact one of the hardest. In our case it was the right thing (adoption is expensive) and we got through it. But on balance, healthy babies are not all that expensive, especially your second one, and especially if the mother can nurse. You might as well spend that time together, because, unlike work, your time is not a renewable resource.
I'd really like to see the follow-up to this in about 6 months. As somebody lucky enough to have lived the "enough" lifestyle, my main feedback is this: It seems a lot more amazing to other people than it actually is.
Now as somebody with children, you certainly can spend time with them, but I think generally if you aren't finding new challenges in life, it is just going to be boring. I think that is why already rich people still keep working... it isn't about the money, it is about the challenges.
So I wish you good luck, but don't feel like you are "throwing in the towel" by continuing to pick up new projects. If you enjoy your job you don't necessarily have to work for the money, you can just work for the work.
You're definitely right. It took me 48 hours of trying to stop working (or at least slow down) to show me I had to find something else to do. Now I'm just trying to find a balance between general life stuff and (more slowly) working on my business.
Children are great, but by the time they are interesting enough to spend all day with, they're old enough to start attending education. Of course, people can use the time to homeschool if they like - probably a good choice for many - but the real rewards for spending time with kids (for a working dad) is probably increasing from ~1 hr at night before bed to ~3 hrs including morning, something during the day and the nighttime routine. After that the marginal returns do decrease. Playing endless toddler games does tire compared to learning a new skill.
I am often amazed by how much freedom a lot of people here have. I'm a graduate student in physics after betraying my first love in programming because I thought I would end up in a 9 to 5 dead end hacking job, I never heard of this whole "freelance" and start-up scene, otherwise, I would have done that.
I'm happy for you and you should feel very blessed to have the options you have. That just isn't an option for so many of us.
I'd have a lot more marketable skills if I wasn't forced to do the same old thing day in and day out for my boss all year. I had a 1 month sabbatical last year and I learned a ton.
Well, first off, if you have digital products like ebooks, it's not as if people will just stop buying them. He may not write more books but I imagine Nathan will still make a decent amount of monthly revenue with little intervention.
But selling actual software requires a lot more maintenance than ebooks.
Also, some people (myself included) are a lot more susceptible to parkinson's law with regards to money. I don't have an "enough money" number. I'm not greedy but if I can maximize my income while working a healthy amount, I'm going to do it. (All my kids are in school anyway). If I want to take extended time off and embark on adventures with my family, I'm going to do it.
Wow, thanks for sharing my post. I'm honored. I wrote this quickly and didn't expect it to go anywhere (I didn't even send it to my email subscribers), because it was more personal to me. Glad you all are enjoying it as well.
I should answer a few things:
1. This is possible because I sell products. I don't do consulting and haven't for over a year. My products will continue to sell even when I'm not working like crazy to create new ones.
2. I live in Boise, Idaho which is not very expensive. I could live quite comfortably on $80,000 per year. In Q1 2014 I made $140,000, so I'm not exactly hurting for money. If I hadn't purchased a house last week, my bank account would have plenty in it. This is not a risky financial move.
3. The consulting example was just a story I heard from a friend. That's not me, I don't do consulting. Being able to do something like this is another reason I like selling products even better.
4. This would not be possible without the great team I have in place to run ConvertKit. While it still takes my time (and I really enjoy it) they handle all the support and serious issues.
Anyway, hope that clears a few things up. Thanks again for all the kind words and attention.
I think what made this story all the more interesting to me is that you are doing this even though (and also because) you have a family. These kind of stories usually lend themselves to those that are less restricted as far as commitment goes.
For yourself, was it a question of weighing up between there more for your family against providing more financially for them in the future, or are you that comfortable that it isn't really something that weighs into it all that much.
Great article though, it's always good to see people going against the norm in search of a more rounded life.
90 comments
[ 4.1 ms ] story [ 196 ms ] threadThanks for sharing.
I'm all for seeking financial independence, but this seems the opposite. You're still completely dependent on work--the work is just more infrequent.
He's not running the risk of dying at 60 and never experiencing retirement.
To be clear, I'm very much in favour of the approach that Nathan proposes. I just don't think it could replace retirement.
He could very well still be saving considerable amounts of money for retirement.
Retirement, in many ways, seems like a really poor bargain. It seems better to enjoy your "freedom" when you are young and healthy. Youth is wasted on the young, wealth is wasted on the old.
That means you'll be paying quite a bit less taxes.
He also clarified that he isn't a consultant. He sells ebooks, which continue to sell even when he's not working, so he still derives an income during his off-time.
In this case, I have to say, though, that the article isn't very useful. Someone with a potential income of >$500k/year, much of which is passive, has so many more options than 99% of people. I suspect the vast majority of the commenters here didn't realize the author was making this much money and also mistook him for a freelance programmer.
In the interim, I also decided to reduce my cost of living (cooking more, cheaper apartment) so I can weather any droughts of work.
If you're in a field where you have this kind of flexibility, you have my respect and envy. :)
You're hooked and you can't get off :) .
And yes, he definitely advocates productization strategies.
He ends up his spiel by saying "say no to drugs!" :P
Many, many of our fellow consultancies here have a plan of "consult now, while we build a product" and I'm wondering how prevalent that is.
37signals --- err, Basecamp --- is another example of a company built on the "consulting->product" strategy.
I don't remember you talking much about your product efforts (as opposed to the consultancy). I'd love to hear more about it if you can share.
Use your status of consultant as an asset to set up your schedule so you have time for both your new child and your new work, but keep that money coming: you'll need it, especially with two children.
I strongly believe Nathan will be fine - even if he doesn't work a crazy schedule :)
http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-...
The basic idea is that if you can save a fraction f of your income for the next n years, then you can live work free for the next n*f/(1-f) years after that.
You do this by changing your lifestyle such that f is big and you enjoy your life. Then when you stop getting paid, you can happily carry on like that. Obviously you should increase your income as well!
7 years of work at 90% savings = 63 years worth of cash.
Once you're saved a reasonable chunk of money (~$500k) it starts to look after itself (if you invest sensibly) and you can make it last indefinitely.
Is that what retirement is like?
In other words, that might be the default state of retirement for some, but that doesn't mean it has to be like that. All retired people I know (including those who are widows) make sure to keep people around them and have various hobbies or found volunteer work that they are still able to do.
Make your money while you can and then retire or slow down is better IMO.
I wonder how large must be one's coffers to allow for this kind of slowdown. Apparently not large enough to completely eliminate the need to work, though.
During the 2008-2009 crisis, I read that even the super-rich had concerns about their future. The human mind is amazing with so many what-ifs. "Enough," for me would mean at least $4-$5 Million and then living in many different and cheaper countries (or US states) to save money if the stock market is doing badly.
When you're freelancing, there will be natural droughts. And when they happen, I do fun stuff without feeling guilty (travel, personal projects, nothing). So take advantage of the droughts, but don't plan them.
I've been doing what tptacek calls 'staff augmentation' (i.e. drop me in any project that's in trouble and I'll make sure it goes faster/makes it deadline) and in 5 years I've never had more than a six week drought and even that was only because I didn't start looking until two weeks into that drought.
Learn to scan entire code bases (+docs/wikis) to get a solid high-level overview of the entire system and fairly in-depth view of the parts under active development in at most a few days. Basically cram like you would for a last minute university exam.
Blend in fully with current culture and process. If you choose not to, make sure you know the costs of change and do so only if you can decisively implement the change and have it deliver a net positive effect during your stay (hardest skill of all.)
Quickly establish trust in your technical competence without being perceived as showing off. Usually jumping in to help fix bugs, giving colleagues 'aha-moments' and identifying (elusively obvious) fundamentals work well for me.
Grab every opportunity you can to figure out what someone does and show them you're a good guy/girl, whether at lunch, in the elevator or even just in the hallway I call it 'collecting pointers into the organization.'
TL;DR Work your ass off at the start to consciously do in a few weeks what normally happens by osmosis in a couple of months.
I can't just work n months of the year and keep happy clients, but I've done 30 months straight for one client. That means I can comfortably take 6 months out now, over the summer months when the weather's better and the days are longer. We can book a family holiday; my wife needs to give 8 weeks notice before taking leave. I'm moving house and will be able to spend time doing the property up.
Personally, having the time out not at my choosing would be quite stressful and wouldn't allow me to plan house moves, holidays, etc. around it. I guess YMMV.
We used to have droughts as well.
Hence are launching this service to keep a track of good leads for freelancers round the year: http://topleads.co
One question - what do you do when you have many good leads, but have time to work on only one?
One important thing: the "enough" amount must also contain your yearly portion of retirement savings.
It would really only be a big risk if he was to stop putting in hours AND take his products off the market for the rest of the year.
I agree this would be a very scary proposition as a freelancer with a direct correlation between hours worked and revenue.
Power to you if you have the kind of job and income where this is possible, but maybe avoid bringing it up too much in casual conversation.
Oh, and...
> Even among those with well-paying jobs, most of them probably work for companies which would never let them do that.
That doesn't mean it's impossible :) If you have a well-paying job, that probably means you can later find a good job at another company too (otherwise why would they pay you so much?)
Avoiding burnout is a very real thing to keep in mind, and I often fear many in this community are at risk of burning out hard.
I suppose a valid one if you are considering the "work until 65 and then stop" approach to life. Sounds really shitty to me. There is a concept of "micro-retirements" that I find incredibly appealing. Much like Nathan describes here. Putting in the work, and enjoying the dividends.
I'm 40, have 4 children, and frankly want to enjoy my life now (and when I'm 70), but the options at traditional retirement age seem so droll to me. I don't want to sit around, play golf, fish, or whatever.
My situation is similar to Nathan's, and my goal is not to be rich. My humble bootstrapped products make me enough money to live modestly and enjoy life now.
Working, making, building, and creating are actually a part of my lifestyle. Retirement in the long-term sense has 0 appeal to me, though when I'm 70 I might feel differently ;)
But more generally, I always think of a statement I heard somewhere, to the effect that "You're not going to be lying on your deathbed wishing that you had spent more time at work."
Yes, it is a luxury that we can even consider taking lots of time off. You could argue that it is foolish to take it — and you could argue that it's foolish not to take it. As a freelancer who happened to have an insane amount of work just as my second child was born (two years ago May 10th), I know it was not the best time for our family — in fact one of the hardest. In our case it was the right thing (adoption is expensive) and we got through it. But on balance, healthy babies are not all that expensive, especially your second one, and especially if the mother can nurse. You might as well spend that time together, because, unlike work, your time is not a renewable resource.
So, congratulations and best wishes to the OP.
Now as somebody with children, you certainly can spend time with them, but I think generally if you aren't finding new challenges in life, it is just going to be boring. I think that is why already rich people still keep working... it isn't about the money, it is about the challenges.
So I wish you good luck, but don't feel like you are "throwing in the towel" by continuing to pick up new projects. If you enjoy your job you don't necessarily have to work for the money, you can just work for the work.
I'm happy for you and you should feel very blessed to have the options you have. That just isn't an option for so many of us.
Thanks for the implicit encouragement.
So skills-wise it is not a problem if you keep tinkering and learning new stuff, although not if you just take a 6 month holiday.
You might have a harder time explaining the gap in your CV/Resume, especially to more blinkered enterprise companies but that is another issue.
But selling actual software requires a lot more maintenance than ebooks.
Also, some people (myself included) are a lot more susceptible to parkinson's law with regards to money. I don't have an "enough money" number. I'm not greedy but if I can maximize my income while working a healthy amount, I'm going to do it. (All my kids are in school anyway). If I want to take extended time off and embark on adventures with my family, I'm going to do it.
I should answer a few things:
1. This is possible because I sell products. I don't do consulting and haven't for over a year. My products will continue to sell even when I'm not working like crazy to create new ones.
2. I live in Boise, Idaho which is not very expensive. I could live quite comfortably on $80,000 per year. In Q1 2014 I made $140,000, so I'm not exactly hurting for money. If I hadn't purchased a house last week, my bank account would have plenty in it. This is not a risky financial move.
3. The consulting example was just a story I heard from a friend. That's not me, I don't do consulting. Being able to do something like this is another reason I like selling products even better.
4. This would not be possible without the great team I have in place to run ConvertKit. While it still takes my time (and I really enjoy it) they handle all the support and serious issues.
Anyway, hope that clears a few things up. Thanks again for all the kind words and attention.
-Nathan
For yourself, was it a question of weighing up between there more for your family against providing more financially for them in the future, or are you that comfortable that it isn't really something that weighs into it all that much.
Great article though, it's always good to see people going against the norm in search of a more rounded life.
I'd say it's actually because of these 'commitments' that you've finally got something worth staying home for.