Transparency

I am a huge believer in blog transparency, so I’ve created this page to be super clear about all the types of things you, as the reader, have a right to know, chiefly:

  • Our financial situation and how we saved to retire early
  • How money works on this blog
  • How money works on my other projects (book, podcast, speaking, etc.)

I’ve been outspoken about the problems with blogger transparency (or lack thereof), which you can read here:

The big picture/TL;DR on all of this is:

We were able to retire early on a much faster timeline than most people can thanks to circumstances in our favor (though you don’t need to share our circumstances to retire early, your timeline might just be longer),

and

Nothing in our financial plan requires any post-retirement income from work or other projects, so anything we earn now (small as it might be) is gravy. 

Our Finances and How We Saved

We retired from our careers at the end of 2017 with enough saved to never need to work again. Which is not the same thing as saying we never will work again, because humans are wired to contribute to our communities and society. But that choice will never be driven by money, and we have the luxury of turning down or walking away from anything that’s not fun and aligned to our life purpose.

In terms of how much we saved, I don’t share our actual numbers, for reasons I wrote about in these posts (TL;DR: privacy):

But I do share a ton of charts showing our progress over time and total retirement savings in percentage terms, including this one, in which “X” is a year’s worth of spending:

Multiples-of-X

See the full set of charts representing our assets and saving progress over time in this post:

The most important thing to be completely transparent about is that we were able to save quickly for early retirement (six years from setting early retirement as a goal to leaving our careers) almost entirely because we had high incomes in our later working years. We both started our careers earning under $30,000 a year in DC, an expensive city, but we had a series of promotions and bonuses that added up over time, as I discussed in this post:

In our last several earning years, we were in the top 3% of U.S. households in terms of earnings, and it’s vastly easier to save a lot if you earn a lot. We also don’t have children and were never saddled with massive student debt that would have slowed us down. But I also had a negative net worth until my late 20s:

And neither Mark nor I grew up with significant money or have inherited money. In fact, I grew up with a single disabled parent reliant on government assistance, though thanks to that assistance, my life looked solidly middle class:

Thanks in part to that supportive upbringing, I earned a full ride to college (Mark got a half ride and had some parental help), and came out with only about $10,000 in loans for living expenses:

We also were in the fortunate position of being able to buy our house in 2011, near the bottom of the real estate market during the Great Recession, which is why we were able to pay it off in under 5 1/2 years, something that would take far longer if we were paying today’s prices:

Though we don’t require it to make our early retirement financial plan work, and we haven’t done any of it for the money, we have done some paid work and earned some money in retirement. (Keep reading for more on that.) So we aren’t yet living off of our investments, even though we’d planned to.

Money on Our Next Life

I have no problem with bloggers earning money from their blogs, especially because I know exactly how big a time commitment it is to maintain a blog. But I choose not to earn money here, even though it would be easy to do so at this point. Our Next Life, this blog, is a money-losing proposition by design. First, I don’t like mixing creativity and money, because that sucks the joy out of it, so keeping Our Next Life ad-free keeps it fun for me. Second, ads would ruin the visual experience on the site and sponsored posts would erode trust I’ve worked to build with readers. Third, bringing money into the equation makes it hard to know if you’re recommending something because you truly love it, or because you have a financial incentive to love it. Might I love services that offer an affiliate kick-back more if I was thinking about how much each click would pay me? Quite possibly. So I just avoid that question altogether by not doing any of these things. If I recommend something, it’s with no financial interest in that thing. (Exception: my book. Keep reading.)

The one thing I have done since 2018 is use Amazon affiliate links for the books I recommend, and on the links page that lists my recommended books, I include this language, which states that I use affiliate links solely to partially cover blog expenses:

*Here’s the deal with those Amazon links…

…because I feel strongly about blogger transparency.

Our Next Life is not monetized, for a whole bunch of reasons. However, there are some large costs involved with operating the blog and newsletter that make this an expensive hobby, one that’s hard to justify on a retired budget. The books I recommend include affiliate links, and the revenue from them (around $.46 per book purchased) covers a small fraction of the out-of-pocket costs of providing ad-free, unsponsored content to you at no charge. My aim with the affiliate links is — absolute best case — to break even on out-of-pocket expenses, so that providing this content isn’t a money pit for us. But here’s my commitment: In any calendar year in which affiliate income fully covers the cost of web hosting, photo editing and email list maintenance (the latter is the biggest expense by far!), I will donate all earnings above and beyond expenses to charity directly or to our donor advised fund for charitable giving, for the remainder of that year. And of course I’m thrilled if you go check these books out at the library instead!

My recurring costs to keep the blog running, not counting travel to FinCon or other events, currently total about $150 a month, a number that continues to increase. Over the life of the blog (founded in January 2015), I’ve made less than $1000 total.

Money on Other Projects

In addition to this blog, I wrote a book and co-host a podcast, occasionally do some public speaking, and both Mark and I have done some limited work for former clients. Unlike Our Next Life, we do make money on these things, though probably less than you think.

Work Optional — I earned a book advance for writing Work Optional, half of which I received in 2018, and the other half came in 2019. Here’s my answer on book money that I shared in my behind-the-scenes post the day the book was published:

I’m not allowed to share money stuff, but it’s safe to say that book advances are rarely a life-changing amount of money. Here’s a good article that gets into how advances work, and the sizes they tend to be. Here’s another. And in truth I haven’t calculated how many books I need to sell to earn out my advance, but I do need the book to sell if I want to write more. If I earn out the advance, any royalties will go directly to charity or our donor advised fund, so I won’t personally earn anything.

I’m not counting on royalties and would love for the book to do well enough that I earn them, so that I can donate them and increase our charitable giving. I never want promoting the book to be about money for me, for the same reasons this blog isn’t monetized. I have no issue with authors making money off of their books, and in fact think most authors are vastly undercompensated, but I don’t want the drive for more money to be my motivation to write, especially because we already have enough.

The Fairer Cents — The podcast I co-host has had sponsors from episode one, something Kara (my co-host) and I appreciate, because podcasting is even more expensive than blogging, and unlike me, Kara isn’t financially independent and needs her projects to be worthwhile financially, which I fully support. We’ve sought sponsors for that reason, but like book advances, podcast money is relatively small. In season one, our sponsorship covered expenses and that was about it. We’ve grown each season, but after expenses, my share of podcast profit comes out to a few weeks of living expenses a year.

Speaking — I do a very limited amount of paid public speaking, again for non-life-changing money, and much of the speaking I do is not only unpaid, I also pay out-of-pocket to travel. Combined, the paid and unpaid speaking net out to just slightly better than breaking even.

Financial Writing Elsewhere — I have a column on MarketWatch, which really just means that I write pieces for them when I feel inspired, which is a few times a year, and they pay me a small freelance fee for each one. It could be a nice supplement to our spending if I did it often, but I don’t. Most articles by me on the site are syndicated from the blog, meaning I wrote them for Our Next Life and they ran first here, and then MarketWatch reposted slightly edited versions. When that happens, I don’t get paid, which is standard syndication practice. You’re “paid” in links back to your site and perhaps a little extra web traffic.

Cents Positive — Beginning in 2018, I started organizing financial independence retreats for women. While women pay to attend, their payment goes entirely to cover out-of-pocket expenses of the event and speaker travel. I don’t make money off the events, again, entirely by design.

Work Work — Since retiring, I have done one very small project for a former client, and only because I like them a lot. Mark has done a handful of small projects, mostly because he had the opportunity to do work that aligned to his passions and purpose, not because of the money. His work, though short-term and limited in nature, paid for nearly all of our expenses in year 1 of our early retirement, though far less in year 2, covering at most half of our expenses.

Right now, we earn some money from the things above (though don’t expect them all to continue into year 3 and beyond), we earn dividends on our taxable (phase 1) investments, we earn interest on our cash holdings, and we come out about even on our single rental property (that will go cash flow positive in about 10 years when we pay off that mortgage, which is by design). After taxes, all of those sources earned us enough to cover our year 1 expenses with enough leftover to max out both of our IRAs ($11,000 total). We don’t expect to fund IRAs in year 2 because we’ll earn less since Mark is working much less (that’s the whole goal!). We’re not yet selling shares of our taxable investments, but expect to do that in year 3.

Any Other Questions?

Have any questions on transparency that aren’t answered here? Ask them in the comments, and I’ll answer publicly so anyone interested can see.

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10 replies »

  1. Tanja, thanks for the post and for your commitment to transparency and even calling people out when you see misleading claims.

    I assume that when you set up your savings goals before retiring that they were based on a safe withdrawal rate. When you achieved your initial retirement savings goal, you made an even more aggressive savings goal before finally leaving work. You talk above about phase 2 savings and getting to 22.5X expenses.

    Do you mind sharing the savings to annual expenses multiple you achieved at the point you retired?

    • Hi PMM — Thanks for your nice note. :-) I’m not totally sure I understand your question. Are you essentially asking what percent of our income we were spending vs. saving/investing? Or something else? I’m happy to answer if I understand. :-)

      • I am imagining that you set your original retirement savings goal with a 4% safe withdrawal rate. Just a guess. Once you hit your original goal, you decided to keep working, because you wanted to be really sure your SWR was low enough to survive a bad sequence of returns period and other risks. Eventually you balanced all of your anxieties about running out of money with a portfolio big enough that you were mentally and emotionally comfortable enough to retire on.

        My question is, what was the safe withdrawal rate you finally achieved that made you stop worrying that your money might run out and hand in your notice?

        From the picture your writing has formed in my mind, I may be in the same place emotionally that you were in maybe two or three years ago. I have reached FI, but I still worry about living on the 4% rule for 50 years or so. My life could be supported on about 3% withdrawal rate (depending on health care and other difficult-to-calculate factors). I’m just interested to know what withdrawal percentage other real people actually decided was low enough.

        • Thank you for clarifying! I understand now. :-) The truth is that we built our own mathematical models from the outset, so never had a specific withdrawal rate in mind until much later. And we always had an end date in mind for when we’d quit our jobs, so we didn’t work longer than we planned, we just happened to hit our financial goal early and were able to pad things a bit. In Work Optional, which has a ton of math on this exact question, I definitely recommend going with a lower SWR than 4%, how low having to do with how old you are when you retire. But honestly, the best thing for my peace of mind has been not withdrawing from our accounts in the first two years. I think if you aim for 4% but then do enough part-time work in the first few years to not touch your investments for a while, that gives you massive insulation against sequence risk just as a lower withdrawal rate would — perhaps even more effectively. Once we begin withdrawing, it will be at quite a low rate, under 3%, but I don’t think you have to be as conservative in your numbers as we are to have a rock solid plan. :-)

  2. Thanks for the write up.

    In my view, it is not so much whether one is working or how much money someone is making through that work after retirement. Everyone is entitled to make their own choices if they want to work and get some income, of course. But having said that, not having to withdraw retirement savings during the initial retirement years is a big deal. Most of the people trying to retire early based on FIRE will not have that luxury. I am afraid that many readers may not fully appreciate this and could be easily misled into thinking that 25x is enough, based on the all the FIRE blog content. But many readers will not understand that an overwhelming majority of FIRE bloggers have some side income — enough to not having to tap into retirement savings for an extended period of time. Although you say that it was not your goal to avoid tapping into investments for living expenses (and I believe you), the peace of mind and security that comes with not spending retirement investments for the first 2, 3 or 5 years is both intangible and priceless.

    Hence it can be quite misleading. This critique is not directed specifically at you but rather a good number of other bloggers who don’t quite reveal all there is to know, yet they make good money from
    their blog writings preaching about early retirement and not having to work a single day after early retirement.

    • I agree with you 100% on all points, Kumar. That’s why in my book, Work Optional, I recommend a much higher number than 25X as a savings target for full early retirement and offer a more detailed breakdown on semi-retirement math for those planning to continue earning, and why I dedicate an entire chapter to beefing up your plan to guard against sequence risk and other hazards. I also wrote this post last year about side hustling to minimize withdrawals early in early retirement (https://ournextlife.com/2018/03/19/side-hustle-year/), and of course it’s why I wrote this transparency page. Readers deserve to understand all of these factors in considering how much of my story and advice applies to them! Earning enough in years 1 and 2 of early retirement not to need to withdrawal funds could very well make the entire difference in whether our money lasts, and that’s no small thing — not to mention that I sleep a whole lot better at night!

  3. I’ll admit I paid very little attention to blog transparency in the past. I almost didn’t read this because I was thinking “if she makes money from her blog, power to her.” But I like how you write, so I did click on the link and I’m so glad I did! Not only did I find this very interesting and sooooooo nicely structured (I’m a total sucker for structure) but I also now understand exactly what you meant by blog transparency. I appreciate the honestly, thank you!

  4. Thank you for posting this. I have touched upon how I want to do this, and have had smaller conversations about it with my wife. We talk about 4% or 25x spending, and I am starting to develop some code to chart out these scenarios; I write code for a living. Still, I am not sure I have thought it through all the way. Blogging for me is all about that. I need to think this stuff though, and focus our plans. I never really did that holistically or steadily until I decided to start blogging. If nothing else, this hobby of spending time each month thinking about this is forcing me to do that, and to be honest with myself. So, thank you again for posting this, as it will help my wife and I plan our retirement.

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