When I was 23, I got fired from the only real job I’ve had.
Normally when you’re fired, you start looking for something else. I didn’t. I spent the next year traveling, writing, and seeing what life would be like as a digital nomad.
I was only making a couple grand a month, but I didn’t need to make much. During my job and previous projects I’d hoarded a large amount of cash which gave me the freedom to take some time to figure out what to do next. I burned through most of my savings that year, which might seem irresponsible, but was one of the smartest financial decisions I’ve made.
I hadn't followed the normal financial advice. I maxed out my IRA every year, but that was it. My job didn't have a 401k, and I didn't contribute to my SEP IRA with my side income.
I just kept it all in cash. And it turned into enough cash to spend a year learning, exploring, and figuring out what to focus on.
If I had followed the standard financial advice, most of that cash would have been locked up in retirement funds, and I would have felt much more pressure to find a new job. If I’d jumped into another job, my site wouldn’t be what it is today, and I never would have started Growth Machine.
I think I had ~$30,000 in cash. If I had put that into a retirement fund 100% in the S&P 500, it'd be worth $54,300 today 4 years later. Not bad!
But by not following that advice, that $30k turned into more than 10x that amount. Not to mention all the psychological and emotional benefits that came with it.
Retirement funds are a phenomenal tool if you have no other options available to you. But for anyone remotely entrepreneurial, or unsure about their current career, they might do more harm than good.
In this post I’m going to explore:
Read the whole post on The Almanack.