A big theme here over the last ten years has been building as much flexibility into your financial life as possible. Part of that discussion has to do with the risk that life circumstances force your hand one way or another in terms of some large expense or forced change of lifestyle that must be absorbed.

Another part of this discussion has to do with simply wanting to make a change in lifestyle and being able to do it financially.

Recently I had conversations with two friends both involved with firefighting about retirement. They are both a little older than me; one is 50 and the other 51. The first friend, let’s call him Winthorpe, is a professional firefighter has achieved a high rank in his department and so probably makes a good living. He’s always dabbled in side business but never mentioned any sort of meaningful success. He wants to retire but is unsure whether he can pull it together financially (he would get a pension but is worried about whether it will be sufficient with the implication being he has not accumulated much in the way of retirement savings but I am not certain).

The other friend, let’s call him Billy Ray, is 51 and is a volunteer with our department who just started with us a couple of years ago. He is very eager to retire (counting down in months) and has found an intersection between his career and firefighting that he wants to do but will pay him significantly less money but he is lining up his ducks to do this very soon.

For purposes of this blog post let’s assume that Winthorpe is right in thinking he doesn’t have enough to retire and the Billy Ray is right in that the greatly reduced income will be sufficient when considered in with what he has accumulated.

The obvious point is that Bill Ray has more options because he has accumulated more in savings and again that is a crucial point but a deeper point is that both of these dudes are about 50 and emotionally they have decided they want to move on to new things which ties in with another idea from past posts which is that you don’t know what the future you is going to want to do.

Not everyone can save more to have Billy Ray’s financial flexibility but the sooner one can be self-aware of the possibility that they might want to make a change the better their chance for doing what needs to be done to get there.

Without knowing any of Billy Ray’s particulars, let’s say he needs his portfolio to generate $3000/month in today’s dollars (assuming the 4% rule) when he is 65 and his portfolio can generate that $3000 now in today’s dollars then he probably doesn’t need save so aggressively going forward which creates the flexibility to do this new, lower paying gig.

Of course living below ones means increases the odds that a scenario like Billy Ray’s can succeed. This is simple math, a $3000 lifestyle on a $10,000 income increases the chances for success. This is one reason why I am so intrigued with the Tiny House ‘Movement’ (although I think movement is a terrible word to describe it). As a reminder, this is about living in a very small ‘house’ that is very inexpensive.

Again, not right for too many people but can be the solution for some. This link is about a married couple who sought out tiny living when they lost their house and business during the financial crisis. They’re trying to sell you something (a five day seminar on tiny living) but that isn’t so bad in that if you read the article it is clear (to me anyway) that they really enjoy every aspect of the concept and now are trying to figure out how to monetize their enjoyment. Not everything can be monetized so who knows whether they can succeed with that part of their experience but it is a logical tie in to what we’ve been discussing here over the years.