As an early retiree who blogs about early retirement, you’ll eventually find yourself in a situation like this: Your story gets picked up by national media (like MarketWatch). People read it, hop over to your site, find out that you’ve monetized your blog or are making money on the side, then feel duped. There is a disconnect between early retirement and earning money while you’re retired.
In the early retirement community, most of us work on side hustles and other projects that keep us busy and productive. Sometimes, we make money with these projects and most of us don’t give a second thought to earning money after we’ve retired. It feels natural to us to spend time doing things that interest us, even if we’re getting paid.
But here’s the rub: most people assume that after we retire, we’re done earning money. We might volunteer, but that’s about it. No monetized blog. No side hustles. No additional earned income from anything.
Early retirement means something very different to most people. They think of sipping margaritas on the beach, not sitting in front of a computer writing articles for pay, or side consulting work, or podcasting, or any of the wide variety of things that keep early retirees busy.
This disconnect is powerful and real. And trust me, I totally get it.
How do we deal with this mixture of quitting the rat race early and earning money in a way that’s honest and real, but yet tells the whole story about early retirement? In other words, are we truly retired if we actively pursue income-generating side hustles?
The key is to understand that early retirement and being productive isn’t an either/or.
Early retirement is not a traditional retirement
As most of us in the financial independence and early retirement community know (for which we have a very clever acronym: F.I.R.E), our lives don’t simply stop once we reach retirement (in many cases, it’s quite the opposite). Most of us don’t sit and stare out the window. Many of us keep doing things that we enjoy, even if those things generate positive cash flow.
I am talking about active earned income.
Passive income through investments or real estate is one thing. But actively making money? That isn’t retirement. If we are retired, there’s no more income generation. We aren’t writing blogs, or consulting, or pursuing one of our side hustles that generate cash flow, right?
The truth is that the earlier a person retires, the more likely he or she is to pursue interests and side hustles that produce income. We can’t just sit there for 30, 40 or 50 years doing nothing. Eventually, opportunities will present themselves that produce cash. It is going to happen.
Note that early retirees probably won’t need the income – if they do, that’s tough to justify as “retirement”. If an early retiree needs to work to fund their lifestyle, that is not retirement. Unless something goes wrong, this type of scenario is the exception, not the rule.
Side Hustles give early retirees a purpose
One of the major sticking points in the early retirement community revolves around purpose. It’s critical that younger retirees have hobbies and things to do in retirement. Things that they enjoy spending time on. Smart early retirees retire “TO” something, not simply from their previous careers. We often call these post-retirement pursuits “side hustles”.
Retirement without purpose is a recipe for failure.
A purpose is what gets us out of bed in the morning. It makes us feel like productive and contributing members of society. Having a purpose is critical to a successful early retirement.
Sometimes, that purpose can generate cash flow. Blogs are a primary example. The personal finance blogosphere is flooded with blogs written by those who have retired at extremely young ages. I retired at 35. Others, like Justin from Root of Good, retired at 33.
Retirees in their 30s, 40s, and 50s feel a sense of purpose with all sorts of hobbies, like blogging or real estate, podcasting, public speaking, and traveling. Side hustles, like wood-working or web design, coaching, tutoring, photography, baking, and babysitting is just a small sampling of ways that early retirees stay busy during the day and feel productive and accomplished.
If we pursued these side hustles for free, surely, nobody would argue that we’re working. But, some of these side hustles do generate income (though a lot of them don’t start that way), and that’s okay. A little extra cash flow never hurt anyone.
Here’s the thing: The presence of income doesn’t suddenly make us “unretired”.
After all, it is tough to argue that someone who quit after a 20-year career in corporate law isn’t truly retired because they get paid to tutor law students. Or an accountant who bakes cookies for tips. Or a computer programmer who does occasional web design work on the side. Or a program analyst who now runs a podcast.
Side hustles give early retirees purpose, not jobs.
The true definition of early retirement
We aren’t just “retired early” and sitting on the beach, are we? I’m certainly not. Most of us are still active. In fact, I’m busier than I was before calling it quits because I’m now doing things that I actually enjoy. Every day.
I’m also earning cash flow through my side hustles and by monetizing a blog. I’m proud of what my blog has become. But, I can also stop any time I want. I have the freedom to design a schedule that works best for me, or to do something else at a moment’s notice, or to throw everything away and start again. Retirement provides this type of flexibility.
And to me, that’s what retirement is all about.
Retirement isn’t just about income. I believe that retirement is about the freedom to choose exactly what we do with our time, even if that includes side hustles, blogging or anything else. We are no longer forced to work full-time jobs to generate a large income to fund our lifestyles (not to mention save for retirement!). That phase of our life has passed.
Now, we’re on to the next.
I completely understand how someone might feel bamboozled by stories of early retirement after discovering that retirees can still earn money. Most of us do. The mere presence of income does not mean we’re working traditional jobs again.
Instead, our side hustles – even those that generate cash flow, provide us with the purpose, direction, and challenges that we need to make sure we feel active, productive and accomplished as we grow older.