The Motley Fool: The Fribble, Fools Don't Retire: They Become Independently Wealthy, by Terry Yoder

Friday, May 22, 1998

Fools Don't Retire: They Become Independently Wealthy
By Terry Yoder ([email protected])

When I retire I'm not going to list my occupation as "retired" on any forms that I fill out. I'm going to write "Independently Wealthy" or maybe "Self Employed." These descriptions sound better to me and they'll probably be more accurate.

You see, I have a Foolish concept of retirement. It's different from the classic concept where retirement is some momentous day when one quits working and starts living off of pensions, social security and other supplemental income.

I think of retirement as the day I become Independently Wealthy, independent of an employer and wealthy from my investments. I think it can happen before age 65, too. Sure, when I am older I may receive supplemental pension and Social Security (uh huh), and I don't rule out the possibility that I may work part time, either because the pay is lucrative or the assignment is downright fun! But I base my retirement planning solely on my investments and I consider the rest gravy.

Furthermore, after I retire I will remain self employed -- managing my portfolio of investments. I'm already managing my portfolio and I can't imagine stopping. In fact, it is precisely because I took control of my 401(k) portfolio several years ago that I expect to be independently wealthy sooner rather than later.

I like to tell people I "retired" from my first job, even though I was under 40 and I took another full-time job in the same field. But when I changed jobs I did two very Foolish things that significantly affected my retirement goals. First, I traded income for quality of life. That's right! I took a "regional adjustment" in order to live in a much better environment. A Wise person would never willingly take a pay cut! But isn't that what happens when you retire anyway?

Secondly, I took control of my investments. I rolled my 401(k) into an IRA and began selecting my own stocks. I joined an investment club, I learned about Internet trading, I discovered the Motley Fools. Pay cut be damned, I took a wealth increase! Moreover, I got an education and learned a way of life that I will always keep.

I'm planning my next retirement. My occupation may still be "Engineer," but some day, sooner rather than later, I'm going to retire for good and list my occupation as "Independently Wealthy" or "Self Employed."