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00:13:41.580and he has $150,000 saved for retirement.
00:13:44.280And he meets with his advisor, has a conversation like the one we've already talked about, and without giving it much thought, agrees to 65 as his retirement age.
00:13:54.060The advisor comes back and tells him that he'll have to save $2,400 a month every month adjusted for inflation for the next 20 years in order to stop working.
00:14:23.720And then I introduce an alternate reality similar to this movie Sliding Doors from a long time ago where it was a movie with Gwyneth Paltrow where her life could go in one of two directions based on whether she caught a train or not.
00:14:36.280So I have this alternate reality take place where after that initial meeting, he comes home and he's talking more about it with his wife and his wife says, why do you want to retire at 65? You like what you do. You like the people you do it with. And even if you're not doing this, I can't imagine you sitting around not doing anything at all. He's like, you know what, you're right.
00:14:55.660So he calls the advisor back up and he says, before we meet again, can you update my plan
00:14:59.940to show me retiring at 75 instead of 65?
00:15:03.640And the amount that he has to save goes down from $2,400 a month to $110 a month.
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00:26:14.800And now back to the show. All right, so working five to 10 years after age 65,
00:26:19.620it means you have to save less for retirement now, which means in your 30s, 40s, and 50s,
00:26:25.120you can spend more of your money and time doing stuff that you enjoy with the people you love
00:26:30.080now. And as we talked about earlier, some people would just like to keep working. They wouldn't
00:26:34.480be happy not doing anything. They like working. It gives their life meaning. So stopping work at
00:26:40.38065 wouldn't be desirable for them anyway. But let's say someone is not in that camp. Their job
00:26:45.980doesn't bring them any meaning. They hate their job and they can't wait until they're 65 so they
00:26:51.420can quit their crappy job and stop working. What do you tell those people? Yeah, I changed the
00:26:57.060language in my book after the first couple of passes, I was using language like find a job you
00:27:02.160love. And I changed it to find a job you don't hate because I don't think that everyone needs
00:27:06.220to find their purpose and have that be the time that they spend with work. And so for me, I want
00:27:13.440people like if they don't like what they do, like, yeah, let's figure out a plan to not have to do
00:27:18.200that any longer than you have to. And I'm sure if somebody hates what they do, not having to do that
00:27:24.620anymore for a period of time is going to be better when you compare it to what to what you're doing
00:27:30.820now but i don't think that like not doing anything at all is going to provide lasting happiness for
00:27:35.280many people and so i think that the goal should be find a job that you don't hate find a job where
00:27:40.280maybe you like the people you like the work you don't mind it and it and it allows you to have
00:27:44.340the lifestyle to lean in more to these other things that we've been talking about all right
00:27:49.400so if you don't like your job try to find a job in which you wouldn't mind continuing to work after
00:27:53.24065. And it's probably a good idea to make that pivot long before you reach 65 since it does get
00:27:59.180harder to get hired as you get older. Another thing you do is you could pivot to something
00:28:03.180where you work fewer hours. In your later years, you don't necessarily have to work as many hours
00:28:07.280or you just want to have some income continuing to come in. Something people might think about
00:28:11.340is starting something on the side before they get older. So as they get older, they can maybe
00:28:16.500pivot into something they're more interested in and that they would like to do more of.
00:28:20.300Yeah, look, I can share my own personal experience was around 2010, 2011, I had about 350 wealth management clients and I was qualifying for these fancy trips that made me about 10 to 15 years younger than most of the other advisors who were there.
00:28:37.120And I was asking them a lot of questions and almost to a person, they all had like 2000 clients and they only enjoyed working with about 20% of them.
00:28:46.160And in our industry, especially back then, you couldn't use social media, you couldn't use word of mouth marketing very much, you couldn't get testimonials, so you just had to take whatever fell into your lap. And I recognized that there were a lot of people that I was working with that I didn't love working with for one reason or another.
00:29:03.740And so I shifted my practice. I went from 350 clients down to about 75. And then my wife and I started an organization called Cadre, which is still around today. We have a community for CEOs and entrepreneurs and find ways to bring people together.
00:29:18.600But what was fascinating about that is the ancillary benefit that really popped was by me having two things going side by side at the same time.
00:29:27.320It allowed me to really have the courage and the ability to stick to my guns in terms of who do I want to work with and who do I want to support.
00:29:35.160And Adam Grant in his book Originals, I think, talked a little bit about looking at entrepreneurs and people that were starting businesses.
00:29:42.800and the success rate that they had with their new business
00:29:46.500based on whether they had some steady stream of income
00:29:49.820coming in from another source at the time.
00:30:33.440And maybe you keep both going at the same time,
00:30:35.280but maybe it provides an on-ramp for you
00:30:37.520to leave the job that you don't love right now
00:30:39.260and start leaning into something that you enjoy much more.
00:30:41.580What about someone who's got a job that involves a physical capacity that degrades with age and necessitates an early retirement? I'm thinking maybe you're in a physically demanding job like you're an HVAC installer or even surgeons. It requires a lot of fine motor skills or whatever. And maybe as you get into your 70s and 80s, that sort of degrades. What do they do? They've trained their whole life to do this thing and they can no longer do it. What about them?
00:31:11.580Yeah, you know, I think that there's other opportunities like in their fields. You know, I think you see a lot of doctors, a lot of surgeons who take jobs as professors at universities or they sit on boards and contribute their knowledge that way. You've got auto mechanics that end up in more of a managerial type role. So hopefully there's going to be some opportunities for them to pivot doing something else.
00:31:36.000Yeah. Maybe you got to think like an athlete, right? Like a football player, you know,
00:31:39.640they have to retire in their thirties and then they end up doing something that's related to
00:31:43.620the field. Like they become a coach or something like that, or an agent, you know, my dad,
00:31:48.720he was a federal game warden for the fish and wildlife service for his entire career.
00:31:52.420They had mandatory retirement. I think it was like a 55 sometime in the fifties. It's a demanding,
00:31:57.440physically demanding job, but he kept working even though he didn't have to, he had a pretty
00:32:01.480good pension with his job, but he got a contract job with the EPA checking oil rig compliance
00:32:09.360regulation stuff. And he's been doing that. He just turned 79. He's still doing that. And I don't
00:32:15.960think he like loves it, but he doesn't hate it. It's just something to do. And he really enjoys
00:32:21.060working. And I think it's an example of doing something related to what you were doing, but
00:32:25.860in a different capacity. No, that's a great example. All right. So if we're shifting from
00:32:29.540a hard stop retirement to a continuous income or phased model where maybe we make less and less as
00:32:35.980we get closer to 75, how should our investment strategy change? What does the portfolio look
00:32:41.800like when you aren't planning to completely drain it starting at age 65? Well, one of the nice
00:32:47.120advantages of working longer is that you can allow your money to potentially have more exposure to
00:32:53.360risk for a longer period of time. So somebody that is planning to retire at 65 is going to want to
00:32:58.800shift, in my opinion, more of their money to some conservative investments that's not going to be
00:33:03.520subject to a potential stock market decline of 20%. And if you're still working and thereby you're
00:33:10.040using your income primarily to live on and not drawing down from your investments, you can leave
00:33:15.120your money invested a little bit more aggressively for a little bit longer. That would be one thing.
00:33:21.100I think another thing is just the idea of getting more and more people comfortable spending their
00:33:26.460money earlier, you mentioned you're a great saver. And I will tell you that most of my clients now
00:33:31.620are in their 60s and 70s. And they all have probably, you know, eight, eight figures plus
00:33:36.500of net worth. And the recurring theme in all of these conversations with my clients is just begging
00:33:42.920them to spend more of their money. Because the problem is, if you've been a great saver your
00:33:47.620entire life, and you played that game really well, it's incredibly difficult to just flip the switch
00:33:53.420and all of a sudden, like lean into spending your money more. And if I have different groups of
00:33:58.860clients, let's say in one bucket, I have clients that have enough money, they're probably never
00:34:04.020going to run out of it. And they're still earning an income, even if it's like $50,000 a year,
00:34:08.720or $100,000 a year, those clients spend their money in much more of a carefree way than the
00:34:16.540ones who are completely out the ones who are no longer doing anything at all, have a really
00:34:21.240difficult time transitioning from this. My portfolio has gone up only for the past 40 years,
00:34:27.680and now I'm taking money out of it. And psychologically, it's been interesting to
00:34:32.440see how many people have such a difficult time overcoming this. Yeah, I can see that happening.
00:34:37.560Because you spend your entire adult life saving. And now it's like, okay, now you got to spend it.
00:34:41.900You're like, wait a minute. That's not right. So that can be tough. But by having that job in your
00:34:47.80070s, you know, 70, 70, 75. Yeah. Like you said, it released some of that psychological pressure
00:34:54.120to not spend. She's like, well, you know, I still have money coming in. My retirement's
00:34:58.920going to be okay. I can spend and I'll be okay. Yeah. Okay. So the argument you're making is that
00:35:03.580people could stress out less and enjoy their lives and their younger years more if they plan
00:35:07.780to work past 65. And this is something that's very doable now because, you know, most jobs
00:35:11.580aren't physically demanding and people are living a lot longer. I mean, even if you stop working at
00:35:16.30075, you could still have 20 years, two decades of not working at all. I think there are some
00:35:21.320people out there who truly don't want to work any longer than they have to. And there's some
00:35:24.480careers where it makes a lot of sense to maximize your earnings in your younger years, where maybe
00:35:29.780it's a physical job and you don't see yourself pivoting to something else later. Or maybe you
00:35:34.840want to devote yourself to volunteer work after 65. But for a lot of people, this is a path that
00:35:39.140could allow them to make more of their lives now. And as part of that, you're a huge advocate
00:35:44.140for continuing to invest in yourself as you age?
00:35:57.720we do it at the expense of going to the gym.
00:36:00.180We do it at the expense of the quality of our sleep,
00:36:02.540hanging out with friends, having a good time.
00:36:05.480And I think that our society really over-indexes
00:36:08.580for the long-term benefits of doing these things
00:36:11.520that are healthy for us and good for us
00:36:13.540and undersells the short term benefits. So like, yes, you should get a good night's sleep tonight
00:36:18.240because you might feel better 20 years from now. But in my experience, you should really get a
00:36:23.220good night's sleep tonight because of how you're going to feel 20 hours from now. And I think that
00:36:27.280the idea that I'm trying to promote here is that I think that if you're currently working, let's
00:36:33.280say nine hours a day, and you feel like you don't have time to go to the gym, you don't have time to
00:36:38.220see your best friend, you don't have time to take your wife out on a date, that by actually making
00:36:42.700time to do those things, you're going to be filling up your cup. You're going to be giving
00:36:47.780yourself more energy. You're going to be giving yourself more clarity. And even though you might
00:36:52.180be now working eight hours a day instead of nine hours a day, in my experience, you can be a lot
00:36:57.200more productive with those hours because you're better rested. You don't have the brain fog and
00:37:02.400you're showing up with more vigor than you were before. For someone listening right now who's
00:37:07.320exhausted by the grind, but feels trapped by this traditional retirement timeline. What is the very
00:37:13.120first step they can take today to start applying your framework? So look, I think, I think I'm
00:37:17.840selling, I'm not really selling anything, but I think I'm selling a lot of the same things that
00:37:21.040other people are selling. Like lean into these relationships that are important to you, take
00:37:25.100better care of yourself, have more fun, but I'm hopefully solving the elephant in the room for a
00:37:31.200lot of these people, which is like, how can I afford to do this? So I have a calculator on my
00:37:36.280website, which you can link up, hopefully, DerekCoburn.com forward slash never retire,
00:37:40.820where people can enter in like their income and the assets that they have, and they can experiment
00:37:45.680with, well, what happens if I work two more years or what happens if I work four more years
00:37:50.160and be able to really embody the financial impact of flexibility that will come from agreeing to
00:37:56.640say, I'm going to do this for a little bit longer. Like I gave the tale to Tony's example before,
00:38:01.640But even like working just one extra year, somebody were to say, I'll go till 66 instead of 65, typically correlates with about a 15 to 20% reduction in the amount of money that they have to save on an annual basis. So really think about, you know, how committed are you to your plan? How much of your plan right now is on autopilot? Did you pick 65 because that's really the age that you know you want to stop working? Or did you pick 65 because that's typically what everyone else says to do?
00:38:31.200Well, Derek, this has been a great conversation.