When I started the blog, I debated what might be a good name for the blog. One name that was considered was “Extreme Early Retirement” but I found that name had already been “deprecated.” Extreme Early Retirement was free though and ERE was also a better acronym than EER.
A little over three years after starting the blog, it turned out that the R part of the name had some annoying side effects.
I found that the crux of the matter was that people had different preconceptions about what retirement meant. Traditionally, retirement meant the part of life that followed a lifetime of work. Retirement was for those workers who were physically and sometimes mentally exhausted and unable to continue working. The way industry was set up meant that they could be replaced by a younger, functional version of themselves, like a part of a machine.
As a more robust financial system replaced the family’s dependence on having children, some people who had accumulated enough capital were able to retire a few years earlier than usual. One could stop working even if one was able to continue working. This was the first paradigm shift.
Traditionally, the family had one income, which meant there was enough savings to support the family.
Recently, the idea of retirement has begun to change.
First, as households became poorer in real terms, single-income households became dual-income households. This now means that one person can retire while the other continues to work. This is the second paradigm shift. Here one person can retire several or even many years before the other.
Some people have also been able to push their retirement age, the age at which they stop working for money, down. This is called extreme early retirement. It’s a bit different from using your money until your pension comes due. It’s more like a lifetime of cash flows from investments that don’t depreciate.
This is what I’m talking about in this blog. This is the third paradigm shift. We’ve moved far away from the original definition of retirement: from someone who was too exhausted to work to someone who had enough money to not need to work.
This is why extreme early retirement is a bad name.
Maybe extreme financial independence would be a better name?
Well, the problem here is that financial independence has also come to mean many different things. For me, it means having enough savings to cover (fund) all my needs throughout my life. However, for some, it simply means not having any debt; for others, it means having enough income to buy almost everything they want.
These definitions are far from what I mean.
Another suggestion is “independent wealth.” This is a fairly accurate suggestion, but many people confuse “wealth” (having money) with “richness” (spending money).
So, I’m stuck with extreme early retirement. Just make sure you don’t stick to your own interpretation of what that’s supposed to mean, right?
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Originally published on 2010-12-12 20:48:47.
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