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Considering Cash Flow in Retirement

There are so many ways to build a successful retirement from our medical profession. Regardless of our choice of flavor, cash flow in retirement is perhaps the most important aspect to consider.

V. 1

The first version of retirement I ever contemplated was an age problem. As in, once I reach the appropriate age I would figure out retirement.

V. 2

Version 2 was solving a financial problem. As in, how much money did I need to squirrel away in order to enjoy a safe retirement?

V. 3

Later, when I burnt out of medicine, I started looking at retirement as a way to escape my career. If I could retire early then I could escape the suffering sooner.

V. 4

My current version of retirement is all about creating cash flow from work I enjoy doing. As in, perpetual income.

Cash Flow in Retirement

I probably spent too much time thinking about a passive way of generating cash flow in retirement. I had a bad taste from practicing medicine full-time and assumed that I would only want to generate income which required minimal effort.

But then I started building my own businesses and making money from non-clinical activities. This was quite satisfying.

Because I want to be productive, I’m able to go back to thinking about a sustainable model of cash flow in retirement; not just from passive income sources but also from trading my time for income.

Stay tuned for V. 5, I’m sure that’s only a few years out.

Solving the Cash Flow Problem

Retirement is synonymous with a lack of earned income. But that needn’t be the case. Nothing with having some earned income in retirement – from trading my free time doing what I enjoy, in return for some bling.

No matter how rich you are, there is a need for income in retirement to pay for bills and emergencies and entertainment.

The more money you have the easier it is to generate cash flow in retirement. With millions of dollars saved up and invested I can have more than enough money coming in from bonds and CD’s and some passive index funds.

But, as I’ve mentioned many times, I have no desire to work full-time for the next 25 years in order to have enough money for retirement. I want to “hack” it or fast track it, if possible.

#1. Quality of Life

My definition of comfort isn’t a big house, fancy dining, or business class seats. Gimme freedom and gimme good friends and family…. and a couple of espressos.

#2. Debt

Many retirees end up retired with debt. Not just mortgages but business debt or as a cosigner for family members.

#3. Entertainment

I have somehow managed to reprogram my entertainment barometer to be content with good coffee and a bouldering session at the gym. Everything else is icing on top and shouldn’t cost me more money.

#4. Emergencies

Emergencies will happen. From cancer to family needing money to major home repairs. Having the cash on hand to cover such spending gives me a massive sense of security.

#5. Basic Overhead

Since late 2012 I have been obsessed with bringing down my basic overhead. I wanted my burn-rate to be as low as possible. Less overhead means less need for cash flow in retirement.

#6. Productivity

Finally, who doesn’t want to be productive in retirement!? Why not turn my interests into income generators?

A Working Retirement

If my work in retirement generates an income then I will have solved my cash flow problem. So what is the kind of work that I can do in retirement which keeps me engaged, is relatively easy to do, and covers my overhead?

That’s what I have been figuring out over the past few years. And it seems that I get closer to it every year.

I love writing.
I enjoy teaching.
I like helping people.
I enjoy creating media.
And I enjoy sales process.

These skills and interests are more than adequate for a working retirement.

Income and Expenses

Many physicians argue whether they earn enough. Primary Care doctors wonder if they should be earning more. Interventional Radiologists have turf wars with Cardiologists over cath procedures. And PA’s and NP’s wonder why their income isn’t as high as the MD or DO whose work they are doing.

These are valid and worth discussing in online forums, I suppose. But the fact is that we all earn more than enough money to not only retire early but to pay off all of our insane education debt and still enjoy the shit out of our lifestyles.

There is no such thing as earning enough money. No billionaire is trying to earn less money. Most people wish they had more, whether out of greed or out of fear or for philanthropic reasons.

It is perfectly fine to want something else, but the question is whether it’s worth it to actually put in the effort to obtain that little bit of extra.

Spending less is far more effective, far more sustainable, far better for society and the environment. It’s definitely easier than trying to earn more money.

With more money you have more problems to solve. With less spending you have fewer things to worry about.

It’s like when you decide to stop buying clothes which need dry cleaning. Done. It’s a liberating feeling and you accomplished so much with a single decision.

Cutting Spending

For the sake of this website and because of my own natural curiosity, I always try to push the limit on how little I can spend.

  • A house which requires very little maintenance
  • No transportation expenses
  • Cheap but healthy food
  • Preventative healthcare spending
  • Cheap entertainment
  • Traveling locally

I got rid of my car in 2014 and I don’t miss it.

For 6 months I didn’t have a cell phone in Portland and my social life was solid as ever.

For 2 years I got all of my books and movies from the library in San Diego.

In 2015 I paid off all of my debt and didn’t feel the need to take on more.

I pared my wardrobe down to a few items and still enjoyed dressing nicely.

From 2012 until 2019 I purchased 1 cell phone, 2 bluetooth headphones, and 1 laptop.

Despite all of this, I am still a big spender. There is plenty of room to shave my spending down further without sacrificing my quality of life. It’s just that I have other priorities now and I no longer have a financial goal to meet – I fortunately met my financial independence goal in 2016.

Spending is Passive

Spending is a passive process; you see something you like and you swipe your card.

Avoiding spending is a very active process which requires planning and internal conversations.

The problem with spending is the same as eating a shitty diet. It’s easier, it feels great, but you’ll suffer the consequences in the long-run.

You can be frugal without being cheap. You can spend less without suffering. And you have my permission to tell others to fuck off if they wanna give you shit for not spending money.

Creating Social Space

The final thing I’ll say about spending and generating cash flow in retirement is that it helps create social space.

If I spend less and I figure out ways of doing productive things I enjoy then I’ll likely have more income than I need. I’ll also have more free time than I need.

I don’t need to squander any of that. I can use these extra resources to help out friends, family, neighbors, and expand from there.

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