“Speed has never killed anyone. Suddenly stopping, that’s what gets you.” – Jeremy Clarkson
I’ve been successfully racing around the career track for 30 plus years. I’ve written screenplays in Hollywood, have been an advertising copywriter, and have held marketing leadership roles with Silicon Valley start-ups and Fortune 500 companies. In March 2014, my 11-year career at an online broker came to an abrupt stop when my position and department were eliminated. It didn’t kill me, but it did get my attention.
This sudden stop also gave me the opportunity to assess where I was, what my wife and I wanted for our future, and how (or if) we could get there.
So what kind of shape was I in?
I was about to turn 55 and unsure about what to do next – continue on the same career trajectory, try something new, retire? All options were on the table.
My wife had retired about 3 years earlier, so for at least the short term we would have no money coming in.
I was concerned and maybe a little worried. Fortunately, my wife was there to help me out. The first thing she suggested was I take my time. We had money in the bank and my severance package would serve as a nice cushion.
So I took the time to look at my life… my career ambitions, my health, and our retirement goals. I did two key things: I scheduled a physical and sat down with my wife to review our finances.
The Physical Check Up:
The news was tough. I was out of shape, had to lose weight (even more than I thought), change my diet, and start exercising. The doctor set a weight loss target that really threw me. But he gave me a year to reach that goal. What the doctor didn’t give me was a way to reach it. I went online to find a solution that would work for me.
One mantra I especially like is, “what we measure, we can manage.” So, I selected a comprehensive food and fitness app that allowed me to measure my progress. I can set my goals (lose 2.5 pounds per week), track my exercise in calories burned, and track each element of all my meals by calorie. I was assigned a calorie goal for each day that I must keep to meet my weight goal.
I enter data and track my progress on a daily basis, but still keep an eye on the big picture. . And with big goals that seem too large the ability to break it down and focus on something as incremental as a day, or even a meal. The app is synced to my laptop, tablet and iPhone. The app is synced across all of my devices, which means it’s too convenient to ignore.
The Financial Checkup:
Wow. Eighteen years together and our financial accounts were all over the place. Multiple checking accounts, various credit cards, my 401K, my wife’s 401K, two separate brokerage accounts, a mortgage, a CD we bought when we sold some property, and oh yeah, an IRA my wife opened 30 years ago.
Some of these we could track online, others we couldn’t. Almost all were at different institutions. (We also had telephone, cell phone, Internet, and cable TV contracts that were out of control, but that is a discussion for another day.)
With so much clutter, and no single, consistent picture of our portfolio and cash flow, how could we make any projections for our future? We didn’t even know what was going on in our present.
With a full-time job, I had a paycheck deposited every two weeks, my 401K was funded at the same time (and matched by my employer), cash flow was consistent, and it was easy to not pay attention. But now, we realized we needed to see all our finances in one place so we could make intelligent decisions going forward.
Again, I went online to find a solution.
I selected Personal Capital. With Personal Capital I was able to see everything I had, all in one place – a clear picture of our net worth, including our home value. I could review cash flow, analyze investments, understand what fees we were paying and how assets were allocated. I downloaded Personal Capital to my iPhone, my tablet, and to my laptop.
The next step was painful. Not because of Personal Capital systems and ease (that was anything BUT painful), but because of the light it shined on some pretty dark corners.
I had been “managing” my 401(k) on my own… searching for wins, not checking on fees and not able to see if I had overlapping investments. I ran my 401K through the 401K and Mutual Fund Analyzers at Personal Capital.
The read out was brutal. I had what I can only describe as the most unbalanced portfolio anyone had ever seen – certainly not one appropriate for someone who planned to retire in just a few years. And based on the 401K analyzer, the fees I was paying on the mutual funds in my account would cost me more than 4 years or more of my retirement… the fees were costing me more than money, they were costing me time.
Whatever investment strategy I might have had at one time was long since abandoned… my 401K portfolio was a random series of mutual funds. I’d like to think this happens to a lot of people. We set our investments and then forget them…or we go in and tinker with them based on today’s market conditions – forgetting or never having had an investment strategy.
Fortunately amateur hour came to an end.
Which Way To Go?
As I started to get the rest of my life in order, I had to think about what was next in my career – and how we were going to finance it. If I was going to work, I really wanted it to be a job where I could continue to be creative, but with more flexibility in terms of time commitment. I knew we didn’t need as much income as before, but I wasn’t sure what that meant.
- I considered retirement. We could pay off our mortgage (so we would have no large financial commitments) and still maintain a decent lifestyle. We would have to carefully manage our assets. It might mean reducing some principal – finding a balance between short-term needs vs. dividend income over time. We would have to be careful about expenses like travel, entertainment, and dining out.
- I could go back to work fulltime. I leveraged my network and interviewed with companies about similar positions to the one I had just left or even higher up in their organizations. Financially, these jobs would be great. Egotistically, I would have loved to have a high-paying, high title job. I could continue to fund my retirement accounts at the highest rates and get all the benefits of working full time – health coverage, bonuses, paid time off. But each time I interviewed I felt like I had lost another piece of my soul – I felt like I was getting back on the same fast track I had just gotten off.
- I could become a marketing consultant. But what did that mean? And who would hire me? The benefits would be freedom to pick and choose my assignments. The downside would be that there could be long periods of time without any work. Benefits – like health insurance, retirement programs – would be solely my obligation. But I wouldn’t have to worry about the commute!
In the end, the decision was easy.
A friend from a previous job asked me if I could help out on some marketing assignments. I became a consultant, and I couldn’t be happier.
My income may be lower than when I was working fulltime for the online broker (it could also be larger, as I am able to add clients), but not by much. I work from home, so my expenses are relatively low. I set my own hours and work on every project I get (hahaha, I don’t know many consultants starting out who picks and chooses assignments), and have the freedom to pay attention to things other than work.
A Change In Attitude
With this change in career trajectory, my wife and I have also changed our investing outlook and strategy. Before this, we were looking at growth with a high-risk tolerance – after all, the cash was flowing in, and retirement was a distance away.
Now we won’t have the opportunity to contribute as much to retirement plans (and it won’t be matched).
I’ve taken greater control of my 401K by rolling it over – a simple process. I’m moved away from mutual funds and their higher fees, and am now invested in a more balanced portfolio of individual stocks and ETFs.
While we couldn’t continue to be super-aggressive in investing, in some ways we are more aggressive about our portfolio now because we understand how it defines our retirement. Based on getting a complete picture of where we stand, I know now that I could be completely retired in 7 years or sooner.
After years in the professional world, I’m competitive, and my instinct is to BEAT the market. It’s something I have to remember when I look at my Personal Capital dashboard. Our risk profile has changed. Our goal is to grow and, more importantly, to maintain the bulk of our portfolio… wild swings in the shorter period before our retirement could be tough to make up.
So it has been about nine months since my old career – my old life in fact – ended and the new one began. I continue to measure and manage both my finances and my fitness.
On the fitness side, I have lost all the weight the doctor recommended. I did this within six months, half the time suggested, and have kept it off. At Thanksgiving I ran our local “Turkey Trot” 5-miler in an hour… the first time I have run more than a mile in 40 years. I continue to track my calories and almost daily workouts on the app I downloaded in March. I’ve never been in better shape.
I think the same can be said financially. When the Personal Capital Forecast tool was launched, I used it to check our progress against our retirement goals. We are tracking in the right direction – but I check in almost daily. I like to run different scenarios based on retirement date and the amount we might have saved at that date.
I use Personal Capital to track the spending in our checking and savings accounts, credit cards, our mortgage balance and investments daily. Because I can see what I have and what I am spending I am making better financial decisions. Regularly scheduled bills and expenses no longer surprise me.
What we measure, we can manage. But it might be the things we can’t measure — like feeling healthy and financially confident– that are the most important things. For me, an abrupt stop allowed me to begin. But you don’t need to stop everything to reset… just download and link using the free Personal Capital software so that you can begin today.
Photo credit: Eric Vondy Flickr Creative Commons