It is important to realize that world views between different generations are different. This is a cause for endless confusion when discussing something like retirement or how a career would take shape.

I was born in 1975 and so I fall somewhere between Generation X and Generation Y. For example, I have a blog and I’m on facebook, but I won’t be first in line to get a cell phone permanently grafted into my skull and phrases like “were r u?!!1” raises my blood pressure. In fact I never had a cell phone. I wouldn’t know how to send an SMS without consulting the manual. The way I see the world is different from the Boomer generation and it is different from the GI Joes and the Silents.

If we start with work-life, different generations WILL see things differently. This is why you should take career advice from your parents generation with a grain of salt. It is why your values, which likely came from your grandparents generation, will not be an accurate reflection of the reality YOU live in. Because the world is ever changing. It is a dynamic system.

For Generation X there hasn’t been a single traditional career track like there was for our parents and grandparents. Most of us will not stay with one company all our life but jump around for more than a dozen different positions and maybe even hold several different careers. Sure, there has been a “career track” but not so much in the sense that working hard would automatically be promoted as the company was expanding. If we wanted a career track we need to create it ourselves without getting creamed in the process. We’ve generally found that 1) there is a huge oversupply of highly educated people meaning that we’d have 10 qualified people to fill 6 positions; and 2) company outsourcing and downsizing (I call it fun-sizing, hahaha, hmm) which turned the 6 positions in 5, then 4, then 3, … and then the company division moved to India.

How often have you gotten a rejection letter like “Thank you for applying. While you are qualified for this job, you are not the most qualified”? I bet if you kept them, you could use them as wall paper. Curses! Doesn’t that tell you something, specifically, that we have the man power to build something enormous but for some other reason we either can’t or won’t.

As a consequence. generation X career strategy has not been about working hard but about being career smart. It became less about skills and putting the company mission first and more about degrees, certificates, networking and using every edge you could find to stay alive in a system which others had constructed and which from the management’s perspective sees you as a disposable part that must be hired and fired to run as efficiently as possible. This is creates a very different perspective of the job/system compared to the perspective of the older generations who made and/or now control the system.

Keep in mind that I’m not talking specifics, I’m talking in general. I don’t care so much about the fact that your particular situation doesn’t match this pattern. You’re the exception. What matters is that the pattern holds for the majority. Consequentially, you get a generational sentiment. (You can compare this to how children are raised nowadays. When I was a kid we could run around unsupervised, scrape our knees, and blow things up with homemade bombs made out of twine as long as we were home at family dinner time. Schools didn’t have fences. Now they do. Many parents would just love to have a GPS tracking their kids whereabouts, and if a kid brings something resembling a weapon to school, you’re likely to meet with child services. Also family dinner time is practically gone. This is the kind of generational difference in sentiments I’m talking about.)

If you ask the GI Joe or the Silent generation, retirement is thought of as being put out to pasture. It is what you do when you are too physically and mentally worn out from building and managing the brave new world of tomorrow to do much of anything else than sitting in a home waiting to die. Conversely, if you ask the Boomer generation, retirement is turning into a second childhood. After having spent your 20-60s working a job implementing the ideas of your parent’s generation, now is finally the time to go and play and have fun. So you have 60 year olds buying Harleys and jumping on charter flights to bungee jump in New Zealand or playing cowboys and cowgirls on some dude ranch and so on.

I’m generation X/Y. I retired from my career at 33 and I no longer work for a living (by which I mean I don’t do any kind of activities because I need the money). My retirement is different. I do none of the things so valued by the older generations! I don’t sit at home staring at the walls and I’m not out there playing Disneyland and making up for 40 years of delayed fun. Rather than seeing retirement or more accurately my “pension” as something that lay at the end of a single track, I used the “game-like” understanding of the world which is more characteristic of my generation to make a decision to not work for a living. Everybody can make this decision. You can decide whether to sell your time for a living or you can decide to be an investor. To do the former, you learn a sellable trade and you get a job. To do the latter, you acquire assets and you use those to make money with.

So I picked the latter. That’s what I ultimately preferred. I’m a lot better at managing resources (like money) efficiently than I am at showing up day after day and doing the same work over and over. I get bored. So I did what I needed to do. I saved most of the money I earned by becoming more self-reliant and less dependent on consumerism. I started investing my savings and at 30 I had enough of it to be financially independent of work.

To put things in perspective, I demonstrated a very typical Generation X attitude to finance. Rather than thinking of it as having a pension plan, getting vested, putting in my time, and making monthly installments on my defined contribution plan, I looked at the “rules” of the game. How does the money system work? Should I work to earn and earn to consume? Or should I work to earn and earn to save and save to invest so I can stop working? The financial system is there for you to “play” much like people “play” the career-game in the work-system. Two different systems—same attitude. You could say that in Marxist terms, I chose to go with “Capital” rather than “Labor”. Of course this “I’ll pick whatever works for me and ignore the rest” jars with the older generations who say things like “You have a duty to work” and “What if everybody did what you did?”—“You must not disturb the social order,” “Stick to your class, worker”, “You were trained to fill a position as a career professional, so that is what you must do.” I say “phooey!”. That’s what you get for making a system which treats people like free agents to be hired and fired according to what’s profitable for the owners of the system. Sooner or later some of them will decide to take advantage of it and become owners themselves just like you.

Let me digress and explain what I mean by financial independence. It means having enough investments to support your lifestyle 100%. If you are financially independent, you do not need a job, you do not need “passive” income (like from a blog), you do not need any handouts, you do not need a spouse to support you, you do not rely on the government. In practical terms you have a broker account and every month dividends from various companies are deposited into that account and you use it just like bank account. It’s like having someone working for you. And in reality this is just what it is. People working for companies which are owned by shareholders which in turn get paid some of the generated profit. Alternatively, you could own real estate and having a management company run your properties. If you want to get really exotic, you could even own a bunch of patents and copyrights and live off the royalties.

It’s very much like having a business. An investment business. You’re a private money manager. The main difference is that you answer to no-one but yourself. Thus you do not having to spend hours “managing” your investments which is another way of saying writing accountability reports to your employer/shareholders and scrambling for new clients. If you only answer to yourself, investing requires very little actual activity. What it mostly requires is “patience and understanding”, in short “wisdom”.

(As a side-note, it is interesting how little “wisdom” is appreciated these days.)

It takes some time getting used to “making money without working”. The hardest part is probably the fact that money comes from patience rather than effort. When you have been conditioned to work for a living, you’re continuously looking to “work” as the answer to your problems. How do I get more income? More work! How do I get a promotion? More work! With investments it gets weird. How do I get more investment income? Well, you wait for a good buying opportunity.


How do I do that?

That, my friend, is one of the things you have to find out. And you better get good at it too if you want to be a good investor.

Think of it as deer hunting with a rifle or a bow. The best way is to get a deer is to set up from a good position, be very still, and then wait for the deer to come along. You won’t get very good results if you think work-effort will be rewarded and proceed to trample through the forest in search of deer.

(Returning to the comments on wisdom. Who would you rather bring along as a hunting buddy? Someone with years of actual hunting experience or someone young and full of energy? Conversely, who would you rather bring to dig a trench? Did I make my point well?)

It is yet to be determined what “retirement” will mean for Generation X and Y. Some people are deadset on trying to prove that “I’m not retired” because I make money from my blog (which incidentally is mostly on autopilot—I write very few new posts) and from sales of my book (which also does not require any effort as it is already written).

I retired from my one career in physics. Depending on how you count, it lasted almost two decades if you include my all encompassing interest in physics which started at age 16 when I started reading all the college level text books I could get my hands on to the end of it at age 33 when I was publishing papers and giving talks and seminars at (inter)national labs and big universities (you can look this up on the internet). In reality I only made money for nine years, four of which were in grad school. I worked for about three years after becoming financially independent until I finally grew uninspired (relative to my other pursuits) and decided to leave room for someone else. I’d rather like to think that if you’re no longer inspired by your work, you have a duty to leave your job and make room for someone who is rather than hang around just to collect paychecks. Well, actually, you can do what you want. I’m not the one to tell you what your duty is.

You could call me retired… or you could call me a private money manager. Whatever. It’s 11:40 am on a Friday as I write this. When I’m done, I’ll go out and water my container-garden and then I’ll walk the dog.

I would only say “I’m retired from physics (my career)”. I don’t do any physics any more. I don’t think about it anymore, like ever.

Who knows, I might even get a job someday. I can’t really tell you what I’ll be doing 15 years or even 5 years from now. I won’t promise you that I’ll never earn money from a job ever again. It might be interesting to get a job. I wouldn’t be the first one to become financially independent and stop working only to go back to work a decade later; not because I needed to but because it would be fun.

The important point is not whether I work or not, but that I don’t have to. In particular I’m not nearly as tied down to space (“I must stay in this region to get interviews or make money”) and time (“I can not afford/are not allowed more than 2-3 weeks of freedom every year”) as people are when they work for a living and need to consider how their job-behavior might influence their resumes. I can go wherever and whenever if I want to. This creates a tremendous amount of freedom. Of course, the flip-side is that one has to figure out what to do with this freedom. Most people aren’t used to being free and so wouldn’t know what to do if they didn’t have someone telling them. This takes some time figuring out. Everybody has to figure out what _they_ want to do. This can be extremely challenging if you have spent a lifetime doing what someone else wanted you to do.

Going from “working” to “retired” definitely requires a change of mindset. This can be difficult and some can’t handle it.

I’m not so sure that the term “retired” iswill be so fitting anymore. Many in my generation expect to get nothing from the social security we’re paying into. We fully expect the boomers to leave just about nada for us. Many people in generation X effectively save nothing. That is, they save money in a 401k alright, but then they get laid off and proceed to raid the 401k while scrambling for a new job.

I think going forward, we will no longer be dividing people into “the young ones who work” and “the old ones who are retired”. We will be dividing people into “those who are financially independent and who choose whether to work” and “those who are not financially independent and who must work”.

These two classes will exist regardless of age and occupation.

I suspect retirement as a concept will be dead in a generation or so.

Originally posted 2011-06-01 08:12:24.