You’ve heard of trial by fire. It was the fate of many an accused witch in Salem, Massachusetts in the late 17th century, and the meaning has morphed to indicate any sort of stress test.
It’s jumping head-first into the deep end of the pool. You sink or swim. Hopefully, there’s a lifeguard on duty to throw you a buoy.
We talk about FIRE more than water here, but we’re not discussing a flame that burns. It’s Financial Independence. Retire Early. Is FIRE right for you? How will you know?
Personally, I wasn’t 100% sure that I’d be able to leave a great doctor job when I had at least a couple of good decades left in me. I opted to try it out first. Letting go of the demands of gainful employment isn’t exactly a trial by fire.
It’s FIRE by trial.
My FIRE by Trial
I haven’t seen an operating room since 2019, but I discovered the concept of financial independence and the fact that I had it nearly five years earlier.
My initial FIRE trials were purely theoretical and existed only on a spreadsheet. I mapped out what our net worth might be based on working another X number of years while getting a range of realistic returns on our investment portfolio.
What I learned from those exercises was that working as little as one more year would add a comfortable cushion to our savings. The further out I pushed the potential FIRE date, the more our portfolio’s balance was dependent upon investment returns rather than new additions from continued work.
With a new schedule that gave me three or more weeks off at a time, I started doing the things I was hoping to do when completely retired from medicine. We spent three weeks in Mexico. We took another long family trip to Hawaii.
Our trial trips showed me that our family could thrive and enjoy more adventure if I wasn’t beholden to a job and a schedule. Our finances were in great shape as the market was kind to us in those few years since I had discovered the FIRE movement. I became a retired anesthesiologist in August of 2019.
I renewed my state medical license a couple more times, but I slowly let other certifications lapse, like BLS, PALS, and ACLS. I could always get them again if the need were to arise. As time went on, the likelihood of that need arising became smaller and smaller in my mind.
My license to practice medicine officially expired at the end of November in 2021, although I was granted a 9-month grace period in which to reconsider. I now feel comfortable saying that my career in medicine is officially over, some seven and a half years after I first figured out that we were truly financially independent.
It helps that I have this blog that gives me income and something to do, but even without it, I would have entered retirement with an incredibly safe withdrawal rate of 2% or less.
The Facebook Group Posts
I’ve started a few Facebook communities for fans of the blog. Not infrequently, we get anonymous posts that read something like this:
“I’m relatively young, have millions of dollars, plus or minus real estate or another side gig that nets six figures annually. We spend some comfortable six-figure amount annually, and if we retired now, we’d be living on less than 3% of our portfolio, not counting the ancillary income and pension we’ll be collecting.
Can we afford to retire?”
Some see these posts as “humble brags” but they’re understandably made anonymously, so I don’t think that’s it.
Others state that the person asking the question must be bad at math, because these people can obviously afford to retire using even the most conservative assumptions. I don’t think they got to $8 Million by their 50th birthday by being bad at math.
What are they seeking, then? Just trying to rub their wealth or good fortune in our faces?
I believe they’re looking for two things. The first is reassurance. Perhaps for their own benefit or for that of a doubting partner.
More than reassurance, I believe most are looking for permission. It seems counterintuitive to ease your foot off the gas pedal when you’re clearly an excellent race car driver. They want someone to validate their inkling that maybe life could be better if their career was not a primary priority.
“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” -Nassim Nicholas Taleb
The above quote was attached to one of the posts like the one I outlined above. We become accustomed to the steady stream of income that comes with a good job, and it’s painfully difficult to imagine letting that go.
Fortunately, as my FIRE by trial example shows, you don’t have to jump directly into the deep end of the FIRE pool. Perhaps you could test the waters in the zero-entry kiddie pool first.
Practice Makes Perfect
Abrupt life transitions can be stressful. I do hear about failed retirees on a regular basis. They usually have a few things in common.
One, their identity was interwoven with their profession. Leaving the job meant losing a part of who they were.
Two, they hadn’t developed many outside interests. Due to time constraints and competing demands, they weren’t quite sure what to do with themselves when freeing up 40 to 60 or more hours a week.
Finally, partially due to reasons one and two, they didn’t have a non-financial retirement plan. It’s best to retire to something (or retire on something) and that’s where practicing retirement can play a key role.
How can you see if the water’s warm without quitting full stop?
Take a Sabbatical
Taking an extended break is easier in some professions than others, and you might assume it’s not possible in yours. Remember this, though. If you don’t ask, you don’t get.
To get a true feel for what retirement might be like, I think that a sabbatical of at least three to six months would be needed. One to two years would be even better, and you could probably cut your sabbatical short if things weren’t working out for whatever reason.
Let’s say you request a sabbatical and the response is a stern No. If your job skills are in demand, you can take a sabbatical of any length you wish. You just might have to work for someone else (or yourself) when you return.
Locum tenens work can be a great way to bridge that gap for a physician, and your employer may be able to utilize locums doctors in your absence if you do take a sabbatical.
You can even do locums work internationally, which is something I once strongly considered. A dramatic change of scenery could be nearly as powerful as a true sabbatical.
One final note on sabbaticals: if you take a one-year sabbatical, do it from one summer to the next. The taxes work out in your favor, you’ll have the ability to max out retirement accounts both calendar years, and if you’ve got kids and plans to travel while on sabbatical, they’d only miss one academic school year.
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Part-Time Work and Coast FIRE
Another way to test the retirement waters is by simply working less.
At the risk of sounding redundant, I’ll mention that where there’s a will, there’s usually a way, even if part-time work does not seem feasible in the job you currently have.
I hear from some physicians that working just a half-day less per week can be great for their mental health, not to mention their ability to get to the post office, bank, and dentist.
Coast FIRE is the concept where you cut back on work to the point where your salary is sufficient to support your annual spending. Assuming you’ve already amassed a decent portfolio of at least half of your FIRE number, you should reach FI in due time based on investment returns alone.
While part-time work doesn’t give you complete freedom from paid work in the way that a sabbatical can, it does allow you to experience more days and weeks where your time is your own. What would you do with an extra 9 hours a day?
Interested in reading more about part-time work as a physician? I”ve got you covered.
What’s the Worst that Could Happen?
Change is hard. Maintaining the status quo is the default option, and we’re often reluctant to fight inertia to introduce a significant life change.
If you think you’ve got the FI piece figured out, why not see what RE might be like?
Luckily, there’s no one-way check valve between the working world and the retirement realm. It doesn’t work like the tubing I used to hook up to a bag of saline.
At best, it’s a semi-permeable and incomplete membrane, much like that which sometimes exists in the epidural space and causes labor epidurals to work better on one side of the body than the other.
You see, your work may never leave you, even after you’ve left it, and there are ways to sample the retired life without committing to it.
Financial independence gives you leverage. Use it to your advantage, and plan your FIRE by trial. Honestly, what’s the worst that could happen?
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If you’d like to join me in the many healthy discussions we’re having about these topics, we now have three groups:
Physicians on FIRE for MD, DO, and foreign equivalents.
Dentists on FIRE for DDS, DMD.
fatFIRE for anyone, including dentists and physicians but encompassing all professions, with an interest in higher-budget FIRE.