Afford Anything - How to Make Work Optional, with Tanja Hester

Episode Date: February 18, 2019

#178: Tanja Hester retired at age 38. She had a negative net worth until her late 20's, thanks to a combination of student loans, buying expensive cocktails and clothes, living far beyond her means, and not paying attention to her money. If you were to have met the 27-year-old version of Tanja, you wouldn't guess that she'd be a likely candidate for retiring early. Yet a decade later, she's saved 40x of her annual cost of living. How? Tanja worked as a political consultant in Los Angeles, and during her career, ascended to important high-ranking roles. Every promotion came with more grueling hours, accompanied by a raise. Tanja maintained her same standard of living, banking every raise. This simple strategy allowed her to rapidly grow her net worth. She didn't obsess about penny-pinching. She didn't clip 50 cent coupons for shampoo and soap. Instead, she focused her efforts on getting that next promotion, that next raise, and when it arrived, she saved and invested every additional cent. Today, at age 39, Tanja has published her first book, Work Optional, about saving enough to retire and live a lifestyle in which paid work is an option rather than a necessity. She joins us on this week's podcast to talk about the lessons she outlines in Work Optional. Here are 5 takeaways from this conversation. #1: We're taught that "you are what you contribute to the economy." Most of us learn, either explicitly or implicitly, that our self-worth is directly correlated with our economic efforts. This is an idea that we need to unpack and process as we face retirement, a mini-retirement, or any career transition. #2: Research shows that we perceive all change as loss, even if the change is positive. Retirement is a loss of identity. It's one of the most stressful and anxiety-producing life events. #3: Retirement and wealth will not create happiness. Money won't magically fix your life, health, relationships, outlook, or anything else. It's a tool that can help, but it's not a silver bullet. #4: A morning routine is grounding. It's an effective way to start your day feeling centered and calm. I'd recommend this for everyone, regardless of whether you're retired or not. #5: The easiest way to save is to keep living at the same level you're currently at, while earning more. Enjoy the podcast episode! For more information, visit the show notes at https://affordanything.com/episode178  Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but not everything. Every decision that you make is a trade-off against something else. And this doesn't just apply to your money. This applies to any limited resource in your life, such as your time, your energy, your attention, your focus. If you need to manage a scarce or limited resource, you need to make some tough decisions. What's important and what's not? Because everything comes at an opportunity cost. Everything is a trade-off.

So really, you need to decide not only what is important, but also, How to actually align your daily decisions in a way that reflects that. And answering these two questions requires a lifetime of practice. That is what this podcast is here to explore. My name is Paula Pamp. I'm the host of the Afford Anything podcast. Today, Tanya Hester joins us on the show. Tanya retired at the age of 38.

Her husband, Mark, was 41. Tanya and Mark were both previous guests on this show. they were our guests on episode 111. We'll link to that in the show notes. In that previous episode, they described how they retired at the age of 38 and 41. Long story short, they spent less than they earned and invested the difference. Or it might be more accurate to say they earned more than they spent and invested the difference. We talk about that later in this interview.

Tanya recently released a book called Work Optional, which is all about how to build towards a life in which work is optional. So this book walks people through how to think about financial independence and early retirement, how to create a plan in terms of what you're retiring into, what you want your life to look like in the future. It talks, of course, about the math of it. And it talks about many of the surprises that you might discover along the way. Tanya and I have an excellent conversation about early retirement and living a life in which work is option.

Here she is, Tanya Hester. Hi, Tanya. Hey, Paula. I'm so excited to be here. I am excited that you're on the show. You're going to talk about work optional, which I think, of course, is a concept that most of the people who listen to this podcast are pretty familiar with. Yeah, I'm sure they are. We can really talk about some of the things that I tried to do in the book that are a bit different than a lot of the discussion that happens because I've been in the fire community for four years now and know that.

know that folks are very smart about a lot of the planning, but I didn't want to write a book to just kind of repeat all the same stuff that everybody knows. I wanted to bring something different to it. And you've done a great job of that. You have in your book lots of checklists and questions and exercises that allow a person to really deeply think about the type of life that they want to construct. Is this how you went about it? Or is this a lot of what you've learned in hindsight? It's a combo of both. It's definitely full of all of the lessons that Mark and I learned along the way, both in planning for early retirement and in actually being early retired. And it's a lot of the stuff that we thought about as we were going through, which I realized in writing my blog was fairly unusual. You know, I've met a ton of people at this point who will show me a vast array of spreadsheets of dazzling complexity. And then I'll say, great. And what are you going to do when you're done working and you hit this number? and I get some blank stairs sometimes, or I get sort of a vague answer of like, oh, well, you know, I'd really like to make a difference in my community.

And I say, oh, cool, what does that look like? What are you passionate about? And sometimes folks will struggle to answer. So I realized as much as it's been a really positive thing that I think in the last few years, the community has moved toward talking about something that I think you've been very instrumental in pushing the idea of don't retire from something, retire to something. I think for a lot of folks, that still feels like a pretty amorphous question. And so I wanted to actually use some of my consulting skills that I developed in my career and give people a really methodical

way to go through figuring that out in detail of not just like, what do you want to look back on in life, but where do you want to be living? Who's part of this vision? What is an issue in your community that frustrates you that you'd like to be instrumental in changing? What are some hobbies that you'd like to take up. And then questions too, like, are you someone who likes to dabble in multiple hobbies, or do you want to throw yourself deeply into one? And thinking, too, about things like sometimes when we're stressed out and working, a hobby that seems like a great release, when we no longer have that work stress, that hobby actually becomes insufferably boring. And so just asking yourself questions like that and kind of getting a fuller sense and a fuller clearer picture of what your post financial independence

life could look like, I think is so helpful both for the financial planning and for keeping your motivation up as you are saving. One thing that I like is in your book, you have all of these different categories of questions that guide a person through imagining different aspects of their life. Because when you're thinking about what your post-retirement life is going to look like with regard to legacy and purpose and how you want to be remembered after you're gone, that's very different than thinking through the mechanics of day to day, what will your morning routine look like? What will 2 o'clock in the afternoon on a Tuesday look like? Yeah, and some of that stuff that folks naturally think about is totally valid.

I still think waking up every day without an alarm clock is like the best thing in the world. And that's something that I feel happy about and lucky for every day. So thinking in abstract terms like that isn't bad. It's just how do you kind of flesh out that vision? So it's not just not waking up with an alarm clock, but it's then, okay, how do we actually decide what Mark and I want to do today? How do we decide if we're going to hang out together, if we're going to do our own things? How do we decide whether we're going to do something that's just pure fun or if it's

something that's purposeful? And do we have kind of a rough ratio of that? Like, it's totally fine to blow a day watching television or movies, and sometimes we do that. but we don't want that to be every day. So how do we think about those questions kind of coexisting of doing the bigger picture purpose stuff while also giving ourselves room to just relax and have time that most people don't have the luxury of?

Have you found that your values priority vision has shifted since you've been in retirement? Surprisingly, no. There are a lot of things that are different about our life than we probably expected. Year one of early retirement didn't look exactly like we. had planned it, it would. It was still wonderful, but it was different. But in terms of the priorities, we had gone through the exercise that is fairly early in the book about figuring out your purpose by looking at common themes. That's an exercise I developed several years ago and shared on the blog and then just kind of expanded it in the book. But we had figured out that our real purpose,

themes are creativity, adventure, and service. And that has definitely been where we've been drawn in terms of how we spend our time. So for me, creativity and service, a lot of that is writing the book. You know, I wanted to share this information that I've learned and the research that I've done so others can benefit from it. It's also creative just kind of writing the blog, doing the visual aspects of the blog, and adventure, you know, we moved to Tahoe several years ago so that we could be outside as much as possible. Mark is skiing right now. He's skiing powder without me. But that exercise, I think, was really effective and really got us to kind of the true themes. And so I I think the effectiveness of that is sort of evident in the fact that that's really how we're living now.

Now, as background for the audience, you were 38 when you retired. Mark was 41. You are now 39. Yes. So you have been in retirement for a little over a year. You mentioned what you thought year one of early retirement would look like and what it actually has looked like were different. Can you elaborate on that? Some of the things that definitely bore out that we had hoped for were being able to travel a lot. So last year we went to Taiwan, Mexico, and France with a little side trip to Monaco. So we were able to spend a really good amount of time traveling as well as having some nice travel within the U.S. So that absolutely was what we'd hoped it would be and sort of what we really wanted to retire for. Mark definitely had the adventure side of it in terms of being able to get out on his bike,

day. He was mountain biking every day last summer. He's been skiing a ton this winter. For me, that didn't ultimately end up happening. And really for two reasons. One was the book. I ended up writing the book through a lot of the spring and summer and then editing is kind of a nonstop process. And the other part of it was that I have a genetic disability that got a bit worse in the last year. And so I was more limited by pain and some mobility stuff and not able to get outside last summer as much as I had hoped to. The good thing for me is it is always worse when it's warm and better when it's colder. So now this winter I'm feeling really great and have been skiing a little bit when I can. But the part of that that's a bummer, of course, is not being able to get out as much as I'd hoped. But on the

flip side, if I was still working and having to travel and fly every single week with all of that stuff going on, that would have been so much worse. So I'm still really grateful that I was able to retire when I did. And in terms of the tradeoffs on the book, I mean, it has always been high on my life list to write a book. And so having that opportunity was a dream come true and a total pleasure and something I would make the same trade off for over and over. And one thing that I didn't know about you until I read this is that your father also had an issue, a health issue that forced him to retire when he was in his early 40s. So he was an early retiree, but not by choice. Yeah, that's right. It actually took him a lot of years to be able to say that he was retired. And I think to admit that to himself,

He was very much brought up in the very American school of thinking that you are what you contribute to the economy. And I think it was really hard for him to accept that he wasn't working and he wanted to be working. But I also knew that that was in my future. And so I think having that example, because, you know, when it's genetic, you might get a two as someone's kid. It was such a blessing to me to know that that might be coming rather than be blindsided by it later because it helped me prepare financially and have the, motivation to do that. But it also really drilled into me how much I wanted my retirement to be on my terms and not because I was forced into retirement before I felt ready. And so it's a huge bummer for my dad. I mean, he's healthy. He's doing great. He just has some mobility limitations. But we both

agree, you know, ultimately it was it was sort of a blessing in disguise for me. What does your dad think about you choosing to retire early, even when you're healthy enough to work? Oh, he loves it. He's so proud and has been really supportive all along the way. I mean, I've always been a gold star seeker, you know, a high achiever. I think he probably when I first talked about it was surprised, but I think he saw, you know, I'm a person of many interests. I think most of us who are drawn to the concept of early retirement have a ton of interests. And you want to be able to do a lot of different things in life, not just one thing. And especially with the way that work culture is now where we're reachable all the time. We're expected to work increasingly long.

hours, the percent of salaried American workers who work over 60 hours a week is alarming and horrible. So if work is really all you're doing, that just doesn't give you space to express all the different facets of your personality. And I think he's always known that about me, that I'm someone who could do a million different things. And so once he saw that that was my motivation and, of course, knowing our health history and the fact that that could be my future, he was just nothing but supportive. What else has surprised you about the first year of early retirement. You mentioned that some of the activities that you did during that first year were not activities you expected to do, writing a book rather than going biking or skiing every day.

Have there been any other surprises, particularly with regard to where your mental space goes, where your attention and your energy goes? What's on your mind when you don't have to think about work? Yeah, it's a great question. And this is honestly something that I wish more people who have crossed over to early retirement would talk more about because I think that we all probably have a tendency to do some magical thinking. I for sure did. I tried to fight back against it. I was self-aware enough to know, okay, I'm thinking like once work is gone, my life will be perfect. I can't do that. It's still life. And in fact, that turned out to be true. That it's still life. Mark and I have always had a really strong relationship and a really good marriage, but we definitely had some rocky

patches and the first year of just trying to navigate new dynamics. It's really important to recognize that two things, one, in terms of stress, retirement, even when it's by choice, is one of the most stressful events in life. We all cope with stress differently, but when you have two partners who are both dealing with that, it's really important that you're there for each other, but you also kind of have to let yourselves each process it in your own way. I think the other side is that we know from psychological research that even when something is good, we still perceive all change as a loss on some level. And so even though we were both very happy to leave our careers behind, we had invested ourselves in them for a long time. We were really proud of what we accomplished.

We were really happy with the way we left things. But we still lost a big part of our lives and a big part of our identities. And so something like that is bound to take its toll on your relationship and to be something that you're going to have to work through. And it's true. We had to work through it. I mean, I think ultimately we're past that. We've come out stronger, but I don't think that people assume, oh, I'm going to retire early and, like, fight with my spouse more or have some disagreements we have to work through. But I will say from other early retirees I've talked to, that is not an uncommon experience. And I think on the happiness side of it, I mean, I'll just say it right out. Like, I had to increase my antidepressant dose last year. So I have a

history of depression. That's something that is just sort of like part of my life that I think will always be part of my life. And I think it's important to acknowledge that so we can kill some of the stigma. But the reality of not being instantly happy, I think, is something that's worth people thinking about. And it's not even that I wasn't choosing to be happy or any of the stuff that sometimes people say who don't really understand depression. I mean, I think it's just it's just acknowledging that early retirement itself will not make you happy. It will not make life perfect. It won't make your relationship's perfect. You still have to work at that stuff. I love how Carl puts it, who writes the blog 1500 days, he says, when you don't have a job anymore, you suddenly have all this time

in your head. And when you're there, you can't avoid thinking about all your, he would use an expletive, but all your crap. And I think that's really true. So I still think it was all worth it. It was all on balance, a real positive. But yeah, I mean, like, we had some hard stuff last year. And I I think that that's not unusual. So I asked the question in part because when I first quit my nine to five job, now this was before I was financially independent, but when I first quit my nine to five job and I was traveling and didn't have the distraction of going into an office every day, I found, I also found myself miserably unhappy a lot of the time. And because I was free to ruminate. And oftentimes when I ruminate, the thoughts go dark. And there's no distraction to pull me out of that.

Yeah, I mean, that's valid. And I've heard similar things from others. So I don't think that that's just you or just me. You know, I think that's a lot of us. One of the things that I talk about in the book in part three and adapting to your work-optional life is figuring out if you're someone who needs structure or not, because most of us have never lived without structure. We have structure in school. We have structure even before school from our parents telling us to go to bed,

telling us it's meal time. When we work, which is the bulk of our lives, we have to show up at a certain place at a certain time. We have to do things at set times. We leave when we're allowed to. So suddenly when your time is entirely your own, that itself can be incredibly unsettling. So it's really important to observe that in yourself and see, okay, do I just not get anything done? I sit and play video games all day. Do I go to a dark place mentally because I have no distraction? Or what is your personal response to it? Some people are going to thrive without structure. But lots of us won't because we're not trained to thrive in that kind of an environment. So we talk about that a lot of how to figure that out about yourself and how to give yourself some artificial structure if you find that you do better that way.

Have you tried to give yourself artificial structure? And if so, are you able to stick with it given lack of external stimulus that forces you to do so? I do. And actually, it's part of why I have really tried hard to stick to a blogging schedule. And, you know, I don't even have ads on my side. I don't have sponsors who are saying, oh, we need you to post X number of things to get X number of impressions. I mean, it's purely self-imposed. But to me, always posting every Monday is an important part of, putting some structure into my life. Likewise with the podcast, we have a set schedule that I really try hard to stick to. In terms of other things, the way that we've kind of set up our days is Mark and I wake up in the morning, a little bit late, but we don't sleep in super late most days. We get up and then we have a leisurely breakfast and that's sort of our non-negotiable thing, unless it's a powder day, then there's an exception. Get up early. But assuming non-powder day, we have a leisurely breakfast. We try to chat. We make something from scratch. We sit and have a

have our coffee and just, you know, enjoy some time. And then we talk about what we want to do with the rest of the day. And that's been a habit that's evolved over the course of the last year plus. But I think it's been really good for grounding us. And that itself is its own structure. So we know, okay, grounded in the morning and then we can be intentional about the rest instead of just sort of like sitting on the couch and then before you know it, you've watched eight shows on Netflix and six hours have passed. It's trying to think about, okay, do we want to, do something meaningful today? Do we want to do something just silly and meaningless today? Do we want to go get outside and do something that we'll feel really good about? It's not a structure per se, but it's

attempting to at least be intentional about our time. We'll come back to this episode after this word from our sponsors. If you're a small business owner, you're juggling a lot. And while some of these things that you're juggling are great, some things like filing taxes and running payroll, meh, kind of boring. That's where Gusto comes in. Gusto makes payroll taxes and HR easy for small businesses. Gusto automatically pays and files your federal, state, and local taxes so that you don't have to worry about it. They'll automatically create 1099s for your contractors.

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And right now, for a limited time, Blinkist has a special offer just for our audience. Go to Blinkist.com slash Paula to start your free seven-day trial. That's Blinkist, spelled B-L-I-N-K-S-E. I-I-S-T. Blinkist.com slash Paula to start your free seven-day trial. Blinkist.com slash Paula, P-A-U-L-A. Have you found early retirement to be lonely, given lack of colleagues, lack of an office, even lack of, you mentioned that you were traveling a lot when you were working,

lack of taking a flight to meet somebody for a business-related purpose? I haven't found it to be lonely, but I do think some of that might be particular to my situation and our situation, which is Mark and I worked from home for the last, for me it was the last eight years of my career. For him, it was even longer. So we were already pretty isolated in a career sense and most of our interaction was over the phone or if we did travel, which I traveled much more than he did. The interaction was usually just in a business context and mainly a meeting or two and then I would fly home. So I had already adjusted to that level of social interaction. in terms of the rest of it, kind of the social piece of people being free, it really helps that we live in a resort town.

And that was actually part of why we knew Tahoe would be a good place to retire because so few people here have traditional careers that lots of people are free during the day. And in fact, we spent years being the ones who couldn't go for a hike. Someone would say, oh, hey, I'm going to go for a hike at one o'clock on a Tuesday. Can you come? And we were like, you know we can't. Thank you for asking. But, you know, it's always going to be the same answer. And so now it's great that we actually can say yes to stuff like that.

And I think that's particular to the place. So that's not necessarily going to be true everywhere. But it's an important question to ask because, yeah, if everybody you know is going to be working all day when you're free, you might find yourself isolated. And that's an important thing to think through. We are definitely working on branching out and making new friends and meeting new communities of folks who also are free when we are. And we've found that so far to be really rewarding. How is it that you've been able to meet people outside of a work context? We've done a bunch of different things.

So I go to several different meetup groups. We have a group here in Tahoe that's focused on entrepreneurship, which I don't consider myself an entrepreneur, but I still find it sort of a like-minded audience. I've gone to some of those. I have a podcast group down in Reno that I love who've become some friends. A lot of it is what I call asking people on a friend date, like if we're out backcountry skiing and we meet some people who are out likewise on a weekday. We go like, oh, that's promising.

And we'll say, instead of just like, oh, hey, have a good day. We'll say like, oh, hey, can we trade emails and let's go get a coffee or something? That's been really fruitful. I think it's important, too, not to limit yourself by age. So a lot of the folks who we've met in the outdoorsy kind of activities are significantly older than us. But it's Tahoe. And so, you know, 75-year-olds are like racing you up the hill and run faster than all of us. So they're super athletic, but that is going to be who you have a lot in common with as an early retiree is traditional retirees.

So I think just like taking that agist blends off it and sort of seeing everyone as friend material is really helpful. How has the financial picture been similar to or different than what you expected it to be? We have not had any financial difficulties or even what I might call anxiety, even now with the markets being really volatile. It's something that we're not really thinking about in large part because we built a very conservative financial plan. So often people will talk about saving 25 times your annual expenses, often short-handed as 25x. We actually saved closer to 40x. A lot of that is in what we call our phase two retirement fund, our 401Ks and IRAs, which will fund our later years. And we hope at that point that we'll be able to raise our standard of living significantly at

which point it will no longer be so many multiples of X because X will get bigger. But a big part of that was just how long this time horizon is for us and how many unknown unknowns are out there. In addition to my health challenges, Mark has an autoimmune disease. I mean, right now insurance companies are prohibited by law from discriminating against you for preexisting conditions, but that could change. Health care is a really political topic. It's just rarely settled permanently. And so we wanted to have an extra cushion to allow for more medical expenses. So I will say, yeah, our plan is definitely on the more conservative end. It doesn't feel that way to us. It feels to us like the right plan. But my advice in the book and just sort of in life generally is you should not be modeling

anything about your plan on what an expert has done or what some person on the internet who writes a blog has done, including me. The goal is to create a plan that feels right to you. And so I suspect most people don't need 40x to feel comfortable and to sleep at night. And that's fine. What's important is not how much I saved, but how much you need to feel really solid. But I do think just generally I'd urge folks, make sure you have some contingencies in there. I talk in the book a lot about the types of contingencies you want to think about making sure, for example, that you can afford permanent housing when you're in your later years, especially if you do something like live in an RV or live in a tiny house now. that might be super exciting, but it's not necessarily going to work forever if you have some health

challenges later on, both for just your own convenience and in terms of what Medicare will cover in the way of nursing home care versus in-home care. But other than having a few contingencies, then it's really just about building a plan that feels right to you, choosing a safe withdrawal rate that feels adequately safe to you once you understand all the risks involved. It's just sort of taking all that info in and then on some level just feeling it out. You know, there is a big role for your gut in this. So I have to ask, you say 40x, which is an impressive number. You mentioned in the book, and this is also something that I didn't know about you, that you had a negative net worth until your late 20s. Oh, yeah. Oh, yeah. I was a big financial mistake maker. Wow. So that turnaround,

because as I mentioned, you retired at 38, but 10 years before that, you had a negative net worth. that's the most incredible financial turnaround I've probably ever heard of. Yeah, I think it was 10 years before retirement. I had just broken even, basically. I had definitely made some dumb choices early in my career. I for sure tried to keep up with the Joneses. If older friends were going out for Happy Hour, I went to Happy Hour, whether I could afford it or not. I definitely bought clothes and shoes that I felt like I needed to project a certain image at work.

You know, they always say dress for the job you want, not the job you have. tried to do that. And I didn't think enough about what it all cost and how much money I had. I didn't take my student loan debt seriously, which thankfully it was very small. I had a really nice scholarship for college, but I still came out with a little debt. And I financed a car at 100%. And that's a bad idea. But on the flip side, I still drive that car 15 years later. So it was ultimately, I think, a pretty good investment. But certainly there were advantages at that. you know, the point at which I had just broken even net worth-wise was also when Mark and I both kind of hit the management level in our careers and started to earn more. We also don't have kids,

which for sure helps in terms of being able to save. And this is an important focus in the book, but it's also really been the thing that worked for us is oftentimes people will talk about achieving financial independence or achieving big savings goals by being really frugal, thinking about what you can cut. We really never did that. So often folks will ask me like, oh, what was the biggest thing you sacrificed? And it's like, you know, nothing really feels that way. We did for sure cut back on restaurant spending. There were a few things where we trimmed back. But by and large, what we really tried to do is just keep our standard of living level. So we were climbing in salary pretty quickly at that point. And we saw all of our friends and

colleagues start to spend more. They were trading up for new cars every couple years. They were moving up to bigger, better houses. They were buying, you know, stuff that we didn't feel the need to by and we said, that's cool, good for you, but we're not going to do that. We're going to keep living at the level that we're comfortable at. So for about the last 10 years of our career, we lived at the same spending level and just didn't add stuff. And we did, you know, we did deflate our lifestyle a little bit here and there, but we did that more gradually in a way that never felt like a sacrifice. And then we focused on growing our income. We leaned in hard to our careers. We worked really, really hard. We really invested in them. We did all we could to earn as much as possible. So all

of that turnaround was really about growing our earnings and banking every single raise and not thinking, oh, we're earning more now so we can spend more now. That was where we drew the line. And for us, that was so much more effective than trying to say, like, okay, we're going to go from spending $600 a month on groceries to spending $200 a month or things like that that I think can mentally be very hard for people who aren't naturally inclined to be frugal. This is why I love you. Seriously, because that is such an important message. and I don't think it gets told enough.

There are two levers that you can pull and the earning lever for many people, particularly educated professionals, which is the predominant majority of this podcast audience, I know from surveys that we've taken of this audience, the earning lever is an incredibly powerful one. Yeah, and I have a chart in the book that demonstrates really the power of that,

of just keeping your spending level and focusing on growing your earnings. It's so much more powerful than trying to, clip coupons and save 50 cents on your can of soup. I mean, that's fine if you like that. But I do just think, and this is really the focus of the book in a big way and why I put non-penny pinching in the title, look at the areas where you can get the biggest impact. And that's really expanding your income, containing your housing costs, and containing your transportation costs. If you can do those three things, you're like 90% of the way there to being

on the path to financial independence. I mean, it's three things. It's really not that hard. I still think the life stuff, envisioning the life that you want to live and making the transition, those are really important to put a lot of thought into. But on the financial side, it truly can be very simple. For people who are listening to this who are at this moment thinking, okay, I would like to earn more. Should I focus on getting a raise or should I focus on developing a side hustle or developing some type of entrepreneurial effort? Which of the two would you recommend? Or more importantly, what decision-making?

or thinking framework would you recommend to help a person figure out how to figure it out? Yeah, I think it helps a lot to look at your own situation and look at your earnings potential in the job that you're already in or the career path that you're already in. Some career paths have good, good opportunity for earning more. If you're in something tech, something medical, those are two big ones. But even in consulting, which Mark and I both did, you're able to. to earn pretty good increases year over year if you stick with it for a while. So just being honest about your situation. If you're a teacher and you know that you're looking at tiny, tiny increases

over time, I think a side hustle is probably your best bet. But if you have a lot of earnings potential in the job you already have, sticking around and just pushing for more could be your best bet. So I think part of it is starting there. The side hustle question is a really good one. And I side hustled for 10 years. I taught yoga and spinning way too. often, to be honest, six to eight classes a week. I lost a lot of sleep doing that, but it did help me save faster and pay off some of my debt when I was in that stage of life. But there came a time when it was holding me back in my main career and I had to let the side hustle go because it's a side hustle where you have set classes at set times. You have to be there and I was having

to sub them out more and more to travel for work. I was having to say no to work things because I didn't want to sub out all my classes. And it was just, it got to be very messy and I realized that, you know what, this is money that I'm giving up. But by giving up this money, I think I'm going to earn more in my job. And it was absolutely true. As soon as I gave up the side hustle later that year, I got a really good promotion and definitely was on a higher earnings path. So side hustles are great. And in my case, also teaching yoga made me really good at public speaking and thinking on my feet, which are skills that I love having. So there can be also those intangible benefits. But yeah, at a certain point, they might very well hold you back. So I think it's looking at kind of

all those questions. The entrepreneur, entrepreneurship question is one I can't answer because I personally do not have that in me to take the leap and believe that the net will appear. But I think that's a question that you should be asking yourself too of are you comfortable with taking on the risk? Are you okay if you do something and you don't earn a paycheck for many, many months? If that's something that doesn't scare the crap out of you like it does for me, then that might be a good thing to explore too. But it's very much about where are you now? What's your current potential? Retraining for another career might also be a good option. Lots of good options out there, but you should kind of listen to your gut and your heart on what feels right to you.

With your side hustle of teaching yoga and spin class, did that double as a form of exercise for you as well? Or were you unable to exercise while you were teaching because of the demands of teaching the class? Spinning definitely was exercise. I probably worked harder than anybody in the room, and that was amazing to get paid to workout. Yoga, no. Yoga, you know, you're walking around and checking folks out and helping them. it was better than sitting on the couch, but it was not real exercise. But it still got me to the gym or to the yoga studio where then I could often do other things while I was there. So it was a great thing. Being accountable and having to go to the gym because you're getting paid to do so is a pretty good gig.

One of the things that you mentioned within your book was that when you were working that side hustle in addition to having your regular job, you were often waking up at 5 in the morning and you felt sleep deprived. Did that sleep deprivation, obviously it's going to have impacts on your health, but did you feel it impact your productivity? The truth is that I didn't feel it impact my productivity, but it's impossible that it didn't. It absolutely must have. I'm sure you've seen some of the research on sleep deprivation that if you sleep deprive someone for one night and have them take a test, they have lower cognition the next day, but they also believe they do. And if you keep sleep depriving them by like, I'm going to mess this up, but by the third. or fourth day, their cognition has continued to decline, but they feel as though they have bounced back and they have adjusted to the sleep deprivation. So I think we are very bad judges of our own

cognition and our own productivity. I don't know how it possibly could have not affected me, but I was also in my 20s still for most of that. And, you know, you feel pretty invincible then. So it felt like a good trade-off for all those years. What do you think are some of the biggest mistakes that people make when they begin along the fire path? I completely understand why it happens, but I think that the biggest mistake that a lot of folks make is focusing on the numbers and focusing on the spreadsheet, focus on optimizing rather than thinking about life first. And if you realize that you can retire early because you run the numbers, I get why that feels exciting. And it feels so good to put money away and watch it grow and to see your numbers get bigger and bigger each month or

each year. I mean, that is an amazing feeling and one that I don't want to steal from anybody. But that is not even half of the equation. You know, the reason that we're all doing this and aiming for this is to live the lives that we dream of. So you don't want to neglect that part. You don't want to fail to do the dreaming or to kind of skip thinking about how you're going to fill your time, how you're going to derive purpose. I think likewise, related to the numbers is I've seen so many people, and Brandon the mad scientist, I know has talked about this with you, that he got so focused on saving that he made himself really miserable and really harmed his marriage because he put saving and watching the numbers get bigger above other

life goals. So I think making sure that you're living a life that you still enjoy and that still feels worthwhile while you're in the accumulation phase is super important. And it's something that's easy to forget about. So that's my reminder is keep enjoying your life. life, make sure you're not giving up, spending on all the things that you love, and plan for your whole life, not just your financial life. I remember that comment from Brandon the Mad Scientist very well. And for the listeners who have not listened to that interview, this remark that he made was, in hindsight, he regrets saving money as much as he did. And that's not the type of comment that you expect people to make. You know, you don't expect people to say like, gee, I regret

saving so much. But there is a tipping point after which you do. 100% and I think my equivalent of that and Mark would agree is our second to last and our third to last years of work. We took almost no vacation. We didn't, you know, we both had great vacation time. We were each getting like four weeks a year from work and we didn't use it all. And I think even the second to last year, we used barely any of it because we were so focused on trying to maximize our earnings and do as much work as we could so that we'd get bigger bonuses and get promotions and all that stuff. And we made ourselves miserable in the process. And so our last year of work, we used every bit of vacation we had and really tried to pace ourselves a bit better. And it was honestly so much healthier.

So I think I can relate to that. We still spent money on some things we enjoyed, which was unlike Brandon, but we didn't take the time for self-care and stepping away from work in sort of the same mindset that he had, the same goal of like, let's try to get there as fast as we can. I think if we did it again, we'd go slower. And that's exactly what he said, too. He said, if I could do it again, I would have gone more slowly. What's funny about the vacation example that you just gave is that the path towards getting to a point in life in which you are essentially on permanent vacation where you can travel as much as you want, the path towards that for you involved not taking vacation. That's some irony, isn't it?

But the lesson is it didn't have to. No, it didn't have to at all. It was the choice we made. We knew that we could be on a very fast track to early retirement. And we just kind of decided we were going to try to sprint to the finish. But yeah, in hindsight, I think we would have a different race strategy. I've asked you about one of the biggest mistakes that people make when they start along the fire path. Conversely, what are some of the things that you see people doing right, right from the beginning?

Oh, gosh. I feel so envious. of people who are young discovering the movement who are maxing out their 401k in their 20s, something I definitely didn't do. I think folks are making some really good financial decisions at an early age in ways that I just really, really admire. And I think just insisting on being financially literate period is a really good thing. But millennials in particular, of which I am not one, I am a few years out in young Gen X,

But I think millennials really do have a spirit of I can sort of do anything. I can figure this out myself. I can take it on. I think doing DIY investing, not being afraid of index fund investing or just opening your own brokerage account, that's something I love seeing and I feel really inspired by versus folks who are my age and older who tend to think like, okay, well, I need to check with a financial planner first, which there's nothing wrong with having a planner check your plan. I think that that's a great thing just to get a second opinion, have a set of professional eyes on it. But it doesn't mean they have to manage all your money for you. So I think kind of the willingness to dive in and get your hands dirty and really figure out the plan, I love that. Whenever someone shares their spreadsheet with me or their plan with me and you see their eyes light up, I just, I get so fired up in that moment. We'll come back to this episode in just a minute. But first, do you remember when you started your small business or started freelancing

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Going back to our conversation about things that you have sacrificed or things that you've cut that in hindsight you wouldn't have. The example was that you and Mark cut vacations for a few years, and in hindsight you wouldn't have done that. Brandon the Madfcientist cut craft beer and kept his house extremely cold. And in hindsight, he wouldn't have done that. one thing that strikes me when I hear those examples is that type of hindsight is not a one-and-done deal. It seems as though any of us might be sacrificing certain things now that five years down the road we'll look back on and regret. How do you check in with yourself in the present moment about something like that? I think it's hard to do, but I think it's important to do.

And I think you're right. Everyone is going to get to their financial independence goal. having screwed some things up in the process, having some things they'd do differently if they could. And that's natural. I think it's important in checking in with yourself not to beat yourself of about that stuff, but just to learn from it and move forward. You know, when we were a year out from retirement, I was definitely very close to saying, I can't make it one more year. I need to quit now. I don't care that we're not at our number. It was sort of looking at that and then being able to say, okay, why do I feel that way? I've always really liked what I do. I like the people I work with. What is it

about right now that's making this tough? Part of it, I will say, was the fact that we had just gotten through the 2016 election that Mark and I both worked on. And that was ugly on both sides and just horrible for everyone. So it helped that going into 2017. My last year, I knew it was an off year in terms of election cycles. But we really then kind of checked in and said, okay, why is that? What did we do differently last year that made it so hard. And we realized like, oh, we didn't take any time off. We didn't kind of give ourselves time to heal from the stress of working or to just process it all better. And so that's why we resolved in our last year to use that vacation time. And we did a few other things too. Like we instituted what we call a work complaint ban. We said we were no longer

allowed to complain about work. We could talk about particulars. Like if something crazy had happened, we could share that with each other, but we couldn't complain about the fact that we had to work or the fact that someone expected us to do our jobs or wanted something from us or just like normal workplace drama, all of that was off limits. And I cannot say how much that helped, how much that made us view work much more positively. So I think it's just about that. It's saying like, okay, here's how I'm feeling now. What could it be that's causing that? What have I changed that may have triggered that and does that tell me I should go back? Have I cut my spending too far to a point where I'm unhappy or I'm, I feel like,

I'm missing out on things I want to be doing. Am I not caring for myself enough on the journey? I think those are just important questions to be asking at all times. And to be perfectly honest, those are questions we try to keep asking ourselves now. Like, okay, looking back at year one of retirement, what did we do well? What do we want to change? And we have several things that we are trying to change in year two, particularly just trying to schedule less, having more open stretches on the calendar. So I think of that is really an ongoing lifelong process. And it's something that you just build up as a skill with practice. Tell me about some other changes that you want to make in year two. You mentioned scheduling less. What are some things that you schedule these days now that you're

retired? Obviously with the book coming out, there have been some interviews that I'm doing with that. So this is the grand exception to the rule. But we're trying to book fewer trips. So even though we love travel, last year, we really were gone a lot. We were gone almost a third of the year. That meant we missed a lot of stuff at home. We weren't here for the lovely fall season when we could have been out hiking and biking, which we don't regret that. We were in France and it was amazing, but we want to give ourselves more time at home this year and just less travel generally, but also kind of fewer things that we're saying yes to. So we said yes to a lot of volunteer things last year. We're going to say less to slightly fewer just so that we aren't feeling

stressed about that. We've realized that we have such tendencies learned from work of feeling like we're carrying around this big to-do list all the time and we're just trying to shrink that list so that we don't feel this sort of artificial work stress even though we're not working. And this is such a silly one, but it's really meaningful to me. I got to the point we both did in our careers where we had to be entirely online. Like our calendars were fully online because of course you need other people to be able to see your availability to book meetings. And likewise, is, you know, everything is through email and cloud-based documents. We said that this year we're going to go back to paper.

And so it's a silly thing, but I bought myself a paper planner for the first time in probably 10 years. And I've been using that. I got rid of my to-do list apps. I'm not using Evernote or To-doist or Asana or any of those anymore. I keep all that stuff on paper. And it is amazing how much more calm I feel and how much more on top of things I feel. Because when stuff is all digital, you first, you have.

haven't committed it to your brain the same way that you would when you take the time to write it down. But it's also easy to worry that you're missing something or that something hasn't popped up yet, but it's going to come surprise you. When everything's on paper and you can easily see your whole week and you can flip to the next week and you can see your whole to-do list, I feel much more on top of my life. Silly thing, but that has been probably the biggest and best change so far in terms of the impact it's having. Wow. I like that tip. Yeah. I mean, I'm still very much on. line. I'm on Twitter like every five seconds. So this is not me like being some amazing digital minimalist or anything, but just with stuff like to-do lists, calendars, writing, moving

offline has been a real positive. For people who are listening to this who may have an interest in personal finance, but they're not sure if fire is something that they want to pursue. How do you know if it's right for you? Oh, gosh, what a good question. And that is one that I try to address a lot in the book because the reality is that full early retirement is not right for everyone. Not everyone is going to thrive without a job. For people who say, oh my gosh, I don't know what I would do with myself without a job. My advice to you is keep working, although please do make sure that you save up a good cushion in case your work stops loving you back because we live in an economy in which a lot of industries are becoming defunct or moving overseas or being taken over by AI. So we all do

need to look out for ourselves and build good safety nets. But I think there's sort of the mental component. And then there's just the financial reality. I mean, if you earn minimum wage in the USA today, you cannot afford rent on an apartment in virtually any U.S. city. So I'm not going to tell someone in that situation that you just aren't trying hard enough to be frugal. I think that it's recognizing your own reality. No, I do think lots of folks could probably retrain for a different career path and increase their earnings potential, not everyone. But it still remains true. But it still remains It's true that full early retirement is not something that is accessible to all people. So there, I think looking at what are your other options?

What could you do that might make you feel like you're still getting to live the life of your dreams, even if it's in smaller doses? Maybe that's semi-retirement in which you work part-time or work seasonally or can change to a career path that feels like it aligns better to your values. Maybe it's taking a career intermission, taking a year off once or every five or ten years, so that you can go and, do some of the things you dream of doing, or even if it's just to be able to take care of a loved one. It doesn't always have to be some big fantastical adventure. But being able to take care of a loved one and take time off from work for that might be a real gift that you can give yourself. So I do think it's important to recognize that it's not all or nothing. Early retirement is a spectrum and there might be a place on that spectrum that's right for you. And even if you decide that there isn't

to place for you on that spectrum, the book will still give you a lot of tools to think through your best life and to put some habits into place financially and some systems into place financially that set you up for a really secure traditional retirement and also just give you flexibility so that if down the road your thoughts change and you realize, oh, now I do want early retirement, you're not starting from scratch. Thank you, Tanya. What are some of the key takeaways from this conversation? Here are five.

Number one, we are often taught from a very young age that you are what you contribute to the economy. We are taught that our value as human beings are self-worth is what we do economically. He was very much brought up in the very American School of Thinking that you are what you contribute to the economy. Now, I hope it goes without saying that this is a false idea. We all have intrinsic worth that is absent of our economic contributions. And we all make contributions to society that are not necessarily economic. Unfortunately, though, this notion is still something that many of us have deeply internalized. And what that means is that when we are no longer working, either by choice or due to disability,

that can cause a bit of a personal crisis, terms of how we regard our self-worth. And so this notion that you are what you contribute to the economy, this is an idea that we need to unpack and process as we face retirement or the prospect of a mini retirement or a sabbatical or any career transition. So that's key takeaway number one. And I thought that was a insightful remark that Tanya made about her father. Key takeaway Number two, we perceive all change as loss. Any change, even if it is a positive one, still in some ways, is a loss. We are losing our old identity. We're losing our old lifestyle. We're losing our old routines and habits and norms in order to transition to the next phase. That can be extremely stressful, even if the change is positive. We know from psychological research that even when something, is good, we still perceive all change as a loss on some level. And so even though we were both very happy to leave our careers behind, we had invested ourselves in them for a long time. We were

really proud of what we accomplished. We were really happy with the way we left things. But we still lost a big part of our lives and a big part of our identities. And so the second takeaway is not to glorify retirement as this point at which things will become better. It might not. Certain aspects of your life may improve. You may not need to wake up to an alarm clock or have a bumper-to-bumper commute. You may no longer need to drink stale office coffee under fluorescent lighting. But you will still face a loss of identity. And there will be a gap, a bit of a hole to fill.

And it's up to you to figure out how to fill that hole. A lot of people, when we talk about thinking about what comes next, When we talk about thinking about what comes after you leave the nine to five day job, people often think about activities. So they'll talk about volunteering or they'll talk about starting a new business or some sort of activity that might fill that time. But the thing is selecting activities is necessary but not sufficient because the whole that you're trying to fill is not simply the activities that you're missing. You're not simply trying to fill the hours on a calendar. you're also in a very core way reshaping and reforming your identity. Who are you when you are no longer insert job title here?

So that's key takeaway number two. Change is hard. And retirement is one of the hardest changes. It's a loss of identity. And by the way, I'm not just talking about retirement. I'm talking about any type of major career change, including if you quit your job and then become self-employed full-time or become a full-time freelancer. That change is extremely difficult because as Tanya and I talked about, you move from a

structured environment to an unstructured environment. All of a sudden, you're in your pajamas at three in the afternoon on a Wednesday. The hours that you spend in front of a laptop are completely at your discretion. And so even if that's not the mountain biking ski and golfing retirement, it's still a huge change, not just in lifestyle, but in identity as well. When people ask you what you do, you can no longer decisively state a job title for which somebody gives you a W-2. You're figuring it out as you go. So that's key takeaway number two. Key takeaway number three, retirement, financial independence, wealth, money, none of these things will magically bring you happiness. On the happiness side of it, I mean, I'll just say it right out. Like I had to increase my

antidepressant dose last year. So I have a history of depression that's something that is just sort of like part of my life that I think will always be part of my life. And I think it's important to acknowledge that so we can kill some of the stigma. But the reality of not being instantly happy, I think is something that's worth people thinking about. And it's not even that I wasn't choosing to be happy or any of the stuff that sometimes people say who don't really understand depression. I mean, I think it's just acknowledging that early retirement itself will not make you happy. It will not make life perfect. It won't make your relationships perfect.

You still have to work at that stuff. An improvement in your net worth will not magically fix your life, your health, including your emotional health, your relationships, your outlook, or anything else. And you know what? I actually made a comment about this on Twitter about a week or two ago. And I got this huge backlash from people who said, oh, Paula, don't be nice. naive. Having a low income is stressful, having a low net worth is stressful, debt is stressful. So getting rid of that will, will eradicate your stress. It will make you happier. Financial difficulties equal stress and anxiety. Therefore, no financial difficulties equal no stress and anxiety. That was the logic that they were using and it's pretty easy to see how that logic is flawed. Because stress and anxiety are not only produced. by financial difficulties. They're also produced by many other factors. So improving your financial life will take care of one of many variables that affect stress and anxiety, but it won't

solve all of those other variables. If you have relationship problems or health problems, sure, you can spend money trying to fix it, but problems are problems whether you're rich or poor. and money alone is not going to solve everything. It can be a tool that helps, but it will not in and of itself be the silver bullet. So that's key takeaway number three. Key takeaway number four. A morning routine is grounding. The way that we've kind of set up our days is Mark and I wake up in the morning a little bit late,

but we don't sleep in super late most days. We get up and then we have a leisurely breakfast, And that's sort of our non-negotiable thing. Unless it's a powder day, then there's an exception. Get up early. But assuming non-powder day, we have a leisurely breakfast. We try to chat. We make something from scratch.

We sit and have our coffee and just, you know, enjoy some time. I love Tanya's description of her morning routine. I never used to think of myself as a morning person. I always thought of myself as a night owl. But mornings have now become my favorite part of the day. and my morning routine is a big part of what grounds me. It sets the tone for the day. And what's great about a routine is that it doesn't have to be elaborate or fancy.

Mine involves I open the curtains, I make the bed, I feed the cats, I brush my teeth, I drink a full pint glass of water, I weigh myself, I make a cup of coffee, and I drink it while writing in pen with pen and paper in a journal. And at the moment, that's it. That's the whole routine. In the future, I'd like to add a bit of meditation to it, maybe a bit of duolingo or tiny cards practicing a foreign language. In the past, I've had a little bit of just a tiny amount of exercise built in,

but that went away. In the past, for a while, I was holding plank every morning. So morning routines change all the time. And they don't necessarily have to be complicated, and they don't have to be some one hour-long exercise and read and write and and and and they don't have to be an endless series of ands. You're not competing for a valedictorian of the morning routine. But if there's something that you do every single morning, I'd recommend this for everyone, regardless of whether you're retired or not, it's an excellent way to center yourself. Finally, key takeaway number five.

The easiest way to save is to keep living at the same level that you're currently living at while earning more. For about the last 10 years of our career, we lived at the same spending level and just didn't add stuff. And we did deflate our lifestyle a little bit here and there, but we did that more gradually in a way that never felt like a sacrifice. And then we focused on growing our income. We leaned in hard to our careers. We worked really, really hard. We really invested in them. We did all we could to earn as much as possible.

So all of that turnaround was really about growing our earnings. Of course, if there are obvious strains in your expenses, you know the obvious holes that you can plug. That's the low-hanging fruit of cutting your expenses. But once you've done those things, once you've plugged the big obvious holes, you've picked the low-hanging fruit, then as Tanya said, and as I agree, it doesn't make sense to over-optimized. that's an inefficient use of time and energy. It is more efficient to maintain your current standard of living and focus your time and energy on earning more.

Now, in Tanya and Mark's case, both of them were fortunate enough to have jobs at which they had the opportunity for promotions and raises. If you are in the same situation and you have that opportunity, focusing there can be an excellent use of your time. If, however, you are not in that situation, You're in a job where realistically you're not going to get a good promotion. You're not going to get a good raise. Let's say hypothetically you're a newspaper reporter.

Hashtag, ask me how I know. And you're at a small paper, and it's the type of career where even the managing editor of the paper is making $60,000 a year. And that's the highest paid person at the company. Well, in that situation, it makes a lot more sense to focus on entrepreneurship and side hustling, building your own business, freelancing. So regardless of whether you earn more through entrepreneurship or whether you earn more through focusing at work, through doubling down at work and going for promotions and raises, regardless of which of those two strategies you choose, the common thread between the two is that both of those approaches focus on earning more. And that's where your power is. So as Tanya and Mark did, if you live at the same standard, a reasonable standard without any huge. huge spending wastes, and you then start earning more.

But as you earn more, you continue living at your same current standard. That's how, as Tanya has just described, that's how you go from having a negative net worth to being an early retiree with 40x your annual income in the span of only 10 years. That's a remarkable turnaround. And she did it through the incredible power of boosting her income. So those are five takeaways from this conversation with Tanya Hester. If you enjoyed today's show, please think about somebody who you know who's interested in the fire movement, early retirement, and send them a link to this episode. You can get a link to the episode and the show notes at Afford Anything.com slash episode 178.

But share this episode with somebody who you know who's interested in early retirement, because I think that this does a lot to showcase the nuances of early. retirement. A lot of people who don't really understand it think that, all right, you retire at 40 and then you just drink beer on the beach all day. There's actually a lot more to it than that. And what happens after retirement is not always pretty. And what I liked about today's episode is that we talked about that. We went there. Please also hit the subscribe button in whatever podcast playing app you're using. That way you won't miss any of our upcoming episodes. and also leave us a review in the app that you're using to listen to this podcast. By the way, I wanted to make an announcement about the way that we number our episodes.

Thanks to the suggestion of a listener, we have switched to putting the episode number in the episode description. So as you are on your app and you're looking through all of the episodes, the very first thing that's written in every episode description is the episode number. So we'd had some complaints from previous listeners who said, hey, you know, you often reference episodes by number, but I don't see those numbers in the titles on the app. Thanks to the suggestion of a listener, we've now put those numbers in the description. So episodes based on their number should be easier to find. I just wanted to let you know that we've made that update. Thank you so much for tuning in.

My name is Paula Pant. You can find me on Instagram at Paula P-A-U-L-A-P-A-N-T. This is the Afford Anything podcast. Don't forget to subscribe. And I'll catch you next week. Thank you.