| Real Life Strategies for Building Wealth
Life in Flip Flops is Wonderful and It Doesn’t Have to End After Two Weeks

Life in Flip Flops is Wonderful and It Doesn’t Have to End After Two Weeks

For the last two weeks or so I lived my life in flip flops (yes, the ones on the picture are my flip flops, my feet). There was a simple routine to my life: sleep until you wake up, read in bed for a bit, get up and go to the beach, sunbathe and swim, have a siesta read some more, have dinner and end the day with a cocktail.

life in flip flops

Life of indolence, you may think. You’d be correct! In fact, it was my mission on this holiday to do as little work as possible. Apart from a bit of writing for The Money Principle and recording couple of video clips I did nothing productive.

This is hard for me: I’m not sure where this comes from but I have this workaholic obsession. I suspect someone told me that I’m lazy when I was little and I took offence because since very early age it simply impossible for me to be idle.

For the last two weeks, I was; intentionally so.

And you know what?

Being indolent for two weeks was probably the best investment in myself that I could have made. I feel very zen now and what I refer to as ‘the noise in my head’ has died down. I can focus, laugh and be creative as I have not been able to do for the last year or so. It is also much easier to deal with the inevitable calamities of life.

Life has been sorting itself as well. During the last week, I learned that:

  • I have been selected to consult on a research project of high visibility (paid, of course);
  • I’ll be speaking on universal basic income at FinCon17 as part of a panel.

Boom! One academic and one blogging achievement.

Not to mention that I’ve just started a year and a half sabbatical leave from the university; on full pay and all benefits. Don’t ask me whether I’ll be going back – I have absolutely no idea at this point. What I know is that I have this unique opportunity and complete discretion over what I do for a relatively long time.

My life in flip flops may not be over just yet; this doesn’t mean that I’m going to continue my existence as an indolent, self-indulgent middle aged woman.

Since I’m amongst friends here I’d like to tell you what I have decided to do.

Here it is:

  • I will write a book setting out my theory of research spaces and research fields. For close to twenty years I’ve been building towards this moment through my research and academic writing – towards setting out a theory that can go some way towards enhancing the understanding of the links between policy and the science and innovation system. The notions I’ve been developing are already being used and it is time to consolidate these in a book.
  • I will write a personal finance book on financial health. This will be a proper book that covers all aspects of personal finance with an emphasis on the foundation, namely our mentality. There will be three e-books on separate issues of personal finance as well: one on debt (nearly finished), one on money management and one on making money and investing.
  • I will learn to do SEO like a boss. Yes, you heard me right. SEO is not the sexiest of competencies to develop but in today’s world I reckon it is the Occam’s razor. Mastering SEO will allow me to take The Money Principle to a different level by reaching, and helping, more people; have a skill that I can sell to others and improve the visibility of my academic work as well. Yeah…it is a noisy world out there and I’ll learn how to cut through the noise.

These are the three main things I intend to focus my energy on during the next year and a half. All, while still living my life in flip flops.

What do you think? Is there something you’d like me to do?

Conversations About Money With Teens or Why I Refused My Son 10 Euro

Conversations About Money With Teens or Why I Refused My Son 10 Euro

Having conversations about money with teens is not easy. In this post I share why the most important money competence you can help your teen develop is spending money, the five essential skills when spending and how I’m trying to do this with my son.

The five essential skills to master when spending money are:

  1. Make the difference between ‘wants’ and ‘needs’
  2. Taking control of your wants
  3. Prioritise spending
  4. Take the long view
  5. Spend mindfully

Having conversations about money with teens is not easy. For that matter, having any conversations with teens is like squeezing water out of stone: it’s been sometime since I’ve heard anything than grunting and mumbling.

Still, having conversations with teens about money is absolutely necessary. After all, we are not teaching them to be dependent children all their lives. Don’t know about you but I hope that one day soon my son will be an independent man; put in other words, I hope that one day soon my teen son will be an adult.

Much of the independence that signifies adulthood comes with mastering your relationship with money. (Please note that I didn’t say ‘mastering your money’. I really believe that the relationship between our finances and us is one of mutual respect and collaboration, not one of master and slave.

So we agree; talking to your teen and teaching them about money is important.

Let me ask you though, what do you think is the most important competence you need to teach your teen?

Did you think that it is most important to teach them how to save money? Or you thought that it is how to make money, right?


The most important competence to help your teen develop is how to spend money.

It won’t even occur to you to teach your child how to diet, would it? You will try to teach her how to eat healthy.

It is the same with money, you know. You have to teach them how to spend properly; most else will follow from there.

‘Okay, Maria, it is all too well telling me to teach my kid how to spend money. What do I teach her though?’

Thought you’d never ask.

To help your teen develop the competence of spending money properly you need to help them master five essential skills.

#1. Know the difference between ‘wants’ and ‘needs’

A lot has been written in personal finance about knowing your needs from your wants. Mainly, this is done in the context of sticking with our needs when we want to save money.

I’ve never bought this one, you know. I think that keeping to our needs can backfire big time and that most people who fall off the ‘I’m sensible with my money’ wagon have been trying to do that for a long time. Sticking to your basic needs for a long time makes one crave something more.

We both know where cravings lead, don’t we.

This is why I’ve always believed that we have to focus on our wants.

How to know the difference between wants and needs?

This is easy. Everything that is absolutely essential to your survival is ‘needs’. On the other hand, everything that is not absolutely essential but adds colour and spice to your life is ‘wants’.

(You see that ‘needs’ and ‘wants’ can be very different for different people and at different stages of life.)

Knowing the difference takes only practice.

#2. Taking control of your wants

Left unchecked, our wants can take over our entire lives.

Hence, it is important to learn to control our wants. Most will interpret this as refusing some of out wants.

I believe that the trick is to learn how to want less.

This is a really hard one to help your teen with; there is so much temptation, so much to lust after out there.

I suppose, this can be done through example (you practice restraint) or through experience (you place your child in situations where they are happy with very little, like taking them hiking, camping etc.).

#3. Prioritise spending

Whether you are wealthy or hard up for money, you cannot have everything.

At best you can have anything.

Here the mastery is about prioritising spending. Simply put, it is up to you to decide what matters in your life and spend your money on it.

After all, money is only good when it nourishes your life.

#4. Take the long view

The thing about money is that you cannot spend it twice. This is why proper spending includes taking the long view on life.

You have to make sure that there is some money put on the side if you don’t want to miss the great opportunities that life inevitably brings.

(These opportunities don’t need to be business ones; there are opportunities to enjoy your-self.)

#5. Spend mindfully

There is nothing wrong with spending money; if you spend it mindfully that is.

Make sure that you slow down a bit when you put your hand in your pocket. Being hasty when you spend money is a bit like scoffing food: your brain is trying to deceive you that it doesn’t matter because you did it so fast.

It matter; it matters in both cases. Scoffing food matters for your waistline; spending hastily matters for your bank balance.

Where do my son and 10 euro come into all this?

I did promise to tell you about my conversations about money with my son and how I’m trying to help him develop the five skills of spending money.

Thinking about it, I decided that apart from example experience would work best.

During our holiday we set a spending allowance for our son and his friend. They were to have between them a certain sum and it was to last them for two and a half days.

When I first told my son what is happening he said:

“But mum, one ride at the beach costs…’ (insert a number of your choice).

“Exactly, son. This means that you have to decide what you do and how much of it you do.”

He went off with his friend. They went to the beach, did their own thing while I was lazing around the swimming pool, reading novels.

Two days later our son burst into our room.

“Dad, could I borrow 10 euro, please?”

You know what? John was going for the wallet.

“Nope. You have to wait till it is time for the next instalment.” – I said.

As you may well imagine, this didn’t make me popular with my son. Still, I stuck to my guns and it will eventually, I believe, pay off.

My son had the opportunity to learn through experience about controlling his wants, prioritising spending, taking the long view and spending mindfully. This, my friend, is four out of the five essential skills of proper spending. Not bad at all!

If all this learning costs me a bit of teenage angst, I’m game.


Conversations about money with teens are absolute necessity but not much fun. Part of the problem is that we as parents try to teach our teens the wrong thing about personal finance, namely, how to save money.

I am teaching my son how to spend money properly and believe that this is the cornerstone of a healthy relationship with money.

Do you talk about money with your teens? What are the money management skills you teach your children?

Conversations About Money: Being Wealthy is Not About Money

Conversations About Money: Being Wealthy is Not About Money

“Are we going to be poor, mum?” – my teenage son asked.

I was driving us to the gym and we were talking about changing our phones. Naturally, he wants a top-notch iPhone; I understand that. I worship in the temple of ‘Apple’ too.

What was my son about?

I had just mentioned that when our phone contracts are up for renewal we’d need to be careful to keep the cost down – particularly if I decide to take voluntary severance.

It was obvious that the thought of having to be careful with money upset my son. He flipped to the conclusion that we are getting poor and somehow this didn’t sit well with him (I don’t understand this one either but probably this is for another conversation).

I didn’t know what to say. Conversations about money are never easy and it doesn’t matter how open you are generally about it. Having conversations about money when your financial situation is about to become much less certain is…well, difficult.

I said nothing; which I find is the best thing to do when you don’t know what to say.

Then I started running and my mind drifted back to my son and his understanding of wealth and poverty; or the lack of it. On the way back home, we had our chat about money.

I told my son that we won’t be poor and that we’ll need to be careful. This didn’t seem to lift his fear.

This is when I realised that my son is fearful of being poor because he has very little understanding of what being wealthy is about.

The first of our conversations about money, about wealth, boils down to the following:

Being wealthy is not about money!

Are you surprised? Do you think this sounds wrong?

Most people I meet think like my son.

When they think about wealth they think about hefty bank accounts, mansions, soaking the summer sun on a yacht and gold plated door handles. Some, more sophisticated, acquaintances of mine would go as far as including unique experiences and limitless opportunities and choice in the description of wealth.

These are the signs of wealth but not what makes you wealthy.

Which brings us to the fact that being wealthy is not about money.

It is about what makes you wealthy and this is a combination of your ability to create wealth, to keep it, to expand it and to appreciate and share it.

So, I’m not giving you some new age drivel about how money doesn’t matter; how all that matters is love and your soul (for what it is worth, I believe that all these matter for a happy and fulfilled life).

What I’m saying is that becoming, and being, wealthy is not about money; it is about the conditions you’ve created in your life to make it, keep it, expand it and spend it appropriately.

Here is some of what you need to be wealthy.

#1. Understanding of the link between money and value

To be wealthy you need to understand the link between money and value.

Sustainable wealth is a measure of the value you contribute to others and to the society at large.

For instance, your pay is a measure of the value your employer believes you contribute to their business. Hence, if you want a pay rise, you need to make sure that you contribute a lot, that you contribute what your employer values and that your employer knows of your contribution. Simples.

This link between money and value works similarly when you freelance and start your own business.

(You can make money that is not linked to contributing value but, I’d venture, this is not sustainable. When money and value are not in accord, you are likely involved in a form of gambling and even if you are very good at it things can go wrong.)

#2. Understanding money and how it works

To be truly wealthy, you need to understand money and how it works.

I doubt very much that I’ll manage to help with this one here: many volumes and digital space is devoted to this.

What I can do, however, is to tell you that money is to the economy what your blood stream is to your body – it makes all else thrive but to do that it must circulate.

As part of this large body of the economy you make money, use it to nourish your life and store some resources.

Where this gets more complicated is the detail. For example:

Equally important is to comprehend some of the simple rules of money like ‘you cannot spend it twice’.

Understanding money and how it works can take a long time. Have you thought of playing some of the great money games to help you along? (I can tell you that playing CashFlow with John and our son made me think and research quite a few things.)

#3. Making choices

Being wealthy is to a very large degree about the choices you make in life – every choice comes with its costs and opportunities.

What did you choose to do for living? How much you choose to read (and what do you read)?

Did you go to university? Did you borrow all you can?

I can go on but you probably get my meaning already. Your choices matter so you ought to choose wisely. And remember that you can change the direction of your life.

#4. Sound money habits

Being wealthy is very much about your habits.

If you’d like to learn more about that you can check out Rich Habits by Thomas Corley. (You don’t have to agree with everything in it; just read it and think about it.)

#5. Resilience

Being wealthy is also about resilience.

As I tried to tell my son on numerous occasions, this is about what you do when sh*t happens to you.

Because, as we all know, dreadful things happen and often you have little or no control over whether they happen or not.

Being resilient means that you keep going – you adapt, you fight and you find a way. One thing you don’t do is admit defeat.

#6. Flexibility

Being wealthy is also about how flexible you are prepared to be in your life.

What are you going to do when there are setbacks in your wealth building plan? Like you are made redundant?

I believe that being flexible is key to sailing through financial adversity. If our monthly income declines, I’m more than prepared to reduce our monthly spending; and reduce it very seriously.

Because, through challenging my comfort zone, I know that I don’t need much to live on. I can take life as it comes.

#7. Hunger

No, I don’t mean this literally. Still, being wealthy is about being hungry – for life, for experiences, for glory even.

Indifferent people don’t make a difference in this word, they don’t ‘make a dent in the universe’. Hungry people do.


Conversations about money can be difficult. How do you explain to your teen son that wealth is not about money?

I chose to tell my son that being wealthy is not about how much you have, it is about how well equipped you are to have what you want.

“Are we going to be poor, mum?” – my teenage son asked.

No, son; we are not going to be poor. You can still forget about this shiny, new iPhone – this is what being flexible is about.

photo credit: Theo Crazzolara Chocolate coins via photopin (license)

7 Ways to Transform Job Redundancy into the Most Exciting Opportunity of Your Life

7 Ways to Transform Job Redundancy into the Most Exciting Opportunity of Your Life

In this post I discuss seven ways that will get you away from viewing a job redundancy as the end of your dreams and see it as the opportunity of a lifetime. Faced with job redundancy we feel fearful and stressed; this is only to be expected. Heck, I want to crawl in bed just now and not get out of it for a very long time. What I feel at the moment, however, matters little; what I do next is important. In this post, I’ll share with you what I do/have done to transform job redundancy into the most exciting opportunity of my settled, cushy, middle class life.

In brief, the seven ways to make a glorious opportunity out of the threat of job redundancy are:
#1. Focus on gain not on the loss
#2. Love your work not your job
#3. Work out what your strengths are
#4. Map opportunities ‘out there’
#5. Do your sums
#6. Take it one step at the time
#7. Believe in yourself because you are more resourceful than you think

Imagine how one morning you get up, have breakfast, read the news and complete your ablutions. You sing in the shower because life is looking good: you know what you want, you have a plan how to get it and you enjoy the way getting there. You get in your car (hop on your bike or the bus) and arrive at the office. All kinds of opportunities are open to you and underneath all these is the unshakable belief that you’ll continue this sequence of events and you’ll be coming to the office, contributing to the organisation and it is your choice how long this goes on for. It is about feeling secure and in control, you know. Then you open your e-mail and you can’t believe your eyes – what you see is a message announcing a round of job redundancies.

This is almost exactly what happened to me, and to all academics employed by my university, last Wednesday.

So, my friends, I’m sitting here writing this post and my job is at risk of redundancy. And it is not only my university: the whole higher education sector in the UK is in profound crisis. Three other universities are undergoing job redundancies and many others are considering their options.

Do you want to know what I felt when I first read the job redundancy message?

I felt wronged, angry, fearful, full of righteous indignation and silly fight, I felt defeated. In this order! Than I reminded myself to breathe and started thinking about how to make the best of a very bad situation.

Somewhere on the way between fear and acceptance I realised that this job redundancy, assuming that I manage to get it under the conditions I’ve worked out, may be the best opportunity to do something sensible with the rest of my settled life.

Here are the seven ways I used to transform the threat of job redundancy into a most exciting opportunity for happiness and fulfilling existence.

#1. Focus on what you’ll gain through job redundancy not on what you’d lose

When I first heard the news about the job redundancy my mind jump-started an inventory of all that I’m going to lose. You know, these are all random thoughts about loss of status (oh, I’m not going to be Professor Nedeva any longer), identity (I’m not going to be an academic and a respected researcher any longer) and income (there won’t be a large(ish) amount of money hitting my bank account every month) shooting through your mind.

Reminding myself that ‘if I’m not enough without it, I’m not enough with it’ helped a bit; a tiny bit.

Then I decided to change my focus and think about the things I’ll gain if I engineer my job redundancy.

  • I saw myself in complete control of what I do with my time.
  • I imagined myself writing books that people what to read not research papers my university wants me to publish.
  • I reminded myself of all the wacky and wonderful projects I’ve thought about and never tackled.

And, you know what, I felt my fear of job redundancy recede and a youthful excitement take its place. I can hardly wait to begin the rest of my life!

#2. Do you love your job or you love what you do?

We often mistakenly believe that we love our jobs when in fact we love what we do. These are two very different things. You may love selling flowers and dislike your job in a particular flower shop, right?

When it comes to being a university professor, the difference is even more pronounced.

I love what I do. There are few things that give me more pleasure than holding a class of undergrads transfixed and seeing the spark of curiosity and passion for learning in their eyes. Every cell in my middle aged body starts humming with pleasure and excitement when I do my research (all stages).

For several years I have been less certain that I like the conditions under which my university expects me to do what I love doing. I’d go as far as saying that I would have checked at least four of the five signs that you should leave your job.

Realising that I love what I do but have grown to dislike my job makes the experience of loss because of job redundancy much less strong. Also, I started thinking about different ways to continue to do what I love doing while forgoing my job.

#3. Do you know what you are really good at?

This is a hard one because people tend to either overstate or understate their competencies. (Some people can get this one completely off kilter but this is not usually the case.)

I tend to underplay my competencies. Hence, it was very helpful to do an ‘inventory of competencies’. I just wrote everything I can do (this should be done without much thinking and strain). When you do this, please don’t concern yourselves if you find that you’ve put on the list things like ‘I can wipe a baby’s bottom’ or ‘I’m very good in the sack’.

Because the next step of this exercise is to get back to your list and match each competence with a way to mobilise it for income generation. You can choose not to take some obvious possibilities forward.

This exercise made me feel good. Unexpectedly I saw that my competencies as a successful scholar are almost exact match for the competencies one needs to succeed in the network economy. A possibility to make income from writing also transpired. Not that hopeless after all!

(I did find this very hard and would appreciate some help from you guys at some point. I’d like to ask you about how you see what I’m good at (have to find a form to do that.)

#4. Brainstorm some opportunities that you can see ‘out there’

This one is deceptively simple. To do it properly, however, you’ll need to achieve a good grasp of the developments in the economy, your industry and have an overview of future trends. Apart from that, you’ll need to move continuously – and for some time – between the opportunities to make income and contribute value that are ‘out there’ and the competencies you have.

You may need change your skills set. You may need to gain different social capital (start hanging with new people, make contacts with people in other industries etc.).

Sounds complicated but it isn’t. All this takes is intelligence, determination and persistence.

#5. Do your sums

Loss of income is probably the aspect of job redundancy that scares people most.

There are few things that deal away with fear more effectively than firm grasp of the fact. Here is where maths and numbers come into the picture.

To cope with the fear of loss of income you have to move away from the emotion and make it into a problem. Sit down and go through your monthly spending. I did this using The Money Principle Monthly Budget Planner. Check your income streams, savings and investments. How much is in your emergency fund? Work out how much you’ll get as severance payment? Check what will be the effects of job redundancy on your pension?

I’ve done most of these and I’ll be talking to a pension consultant over the next week. And you know what?

Numbers don’t lie and I feel so much better for the level of certainty they bring to my otherwise shaky existence. I know exactly how much income I have to make (as a minimum). It is not too bad, really.

#6. Take it one step at a time

The threat of job redundancy can leave you completely paralysed if you get ahead of yourself. Your best chance for getting it right, and approaching it with something at least approximating a dignified rationality, is to work out a sequence of actions and focus points and follow this strictly.

For me, the first question is do I want to apply for voluntary redundancy? (This hide several questions such as do I want to stay in academe, do I believe that I’ll make it outside etc.). What is important is that this decision is still under my control.

Next, if I were to decide not to apply for voluntary severance, would be to wait for compulsory redundancy. This is stressful but…

Main thing is not to allow yourself to worry what may or may not happen when you leave your job. Remember that most people when faced with adversity behave like Israel: they hustle according to their need. In other words, it seems to me that expanding energy worrying about what you’d do ‘after’ is a wasteful strategy: you’ll be all right at the end.

#7. Remind yourself that ‘it will be all right at the end’

Life has an uncanny way of sorting itself out. Please remind yourself that:

“It will be all right at the end and if it is not all right, it is simply not the end.”

Bonus…The Eminem Approach to Job Redundancy

To apply the Eminem approach to job redundancy you have to believe that

Success is your only motherf*cking option; failure’s not!

This is all.


Your Game Plan to Financial Independence

Your Game Plan to Financial Independence

Editor’s note: This is a guest post from Pauline of InvestmentZen.com. The point Pauline makes here is simple: to achieve financial independence you need to master three things: spending less, earning more and investing wisely the rest.

Financial independence is the stage of your financial journey where your passive income from investments covers all your living expenses. That means you never have to work another day in your life if you don’t want to. Pretty sweet, right? But that sweet reward comes after a few years of saving and dedication that not everyone is able to accomplish.

Know where you stand

When you embark on a journey towards financial independence and early retirement, you need to review your entire finances to know where you stand.

  • If you have high interest debt, paying it off is your number one priority. Try to get a 0% balance transfer or at least refinance for a cheaper rate, so it doesn’t take forever.
  • Then look for a refinance of your student loans and mortgage, that can also save you thousands
  • Send every extra cent you have to pay off your debt.

Once your high interest debt is wiped off, time to plan for financial independence.

Your financial independence number

How much do you need to live comfortably for the rest of your life? Right now, there are expenses that are related to work, like buying suits, commuting or having lunch with your colleagues, that will be eliminated once you are financially independent. If your income is lower once you stop working, you might also be paying less taxes. And if you are living off your nest egg, you will not be making retirement contributions anymore.

On the other hand, as you get older, you might need a bigger house for your growing family, money to send your kids to college, and medical care in old age. The last thing you want is having to go back to work at age 65 because you didn’t plan properly!

So, determine your financial independence annual budget, and multiply that by 25. Using a safe withdrawal rate of 4%, your nest egg should outlive you if you have 25 years of expenses saved.

Get started

Financial independence is achieved by a combination of

  • Spending less
  • Earning more
  • Investing and compounding

Spending less

Spending less is easy when you know the reward that is expecting you: independence from a cubicle and freedom to do what you please with your days, decades before your peers. But if it becomes a frustration, you might give up and go back to your old spending ways. Try to determine what is really important to you, so that doesn’t happen. If you want to buy something, wonder how long you would have to pay for it, and whether it is worth delaying financial independence by that much.

Earning more

Earning more is the real key to financial independence. While you can certainly cut your expenses here and there, you still need to eat and put a roof over your head. You can’t achieve a 100% saving rate. In order to become financially independent earlier, you need to make more.

You can start by asking for a raise at your current job, if you haven’t had one in a while. A one time $10,000 raise means $200,000 more over the next 20 years! If you were already able to live off your current salary, invest 100% of your raise for a year or two. Living on last year’s salary is a great way to boost your saving rate. If your boss won’t give you a raise, look for a better paying job elsewhere. Or a job that pays the same but would give you more free time, less commuting expenses, etc. Try to find an hour or two in the evening to work on a side project. It could be something that pays you right now, like teaching a yoga class or dog walking, or a side business you enjoy, so it doesn’t feel like work and might provide an additional source of income in retirement.


Finally, investing is the secret that will take your financial independence plan to the next level. It will take much, much longer to save 25 years of expenses if you are getting 1% interest from your saving account, compared to getting 8% from the markets. 8% is a realistic rate of return over a long period of time (30+ years) for index funds like the S&P500. Open a brokerage account and start sending every amount you can spare, taking first advantage of tax free accounts and your company match for an extra boost. No need to be an expert in investing or spend hours researching a company, just select a few low fee index funds and keep going. Ignore the market crashes, the craze about this or that stock, do your boring little thing and watch your nest egg grow. Invest only money you can afford to leave untouched until financial independence. Reinvest the dividends and watch compound interest work its magic.

You can also look for other types of investments, like real estate, but remember that managing a rental property is not exactly what you call passive income, so take that into account when you picture your retirement. Will you be active, and willing to do that? Will you even be around, or traveling the world? Will a manager still make the investment worth your while?

Financial independence does not happen overnight. But following these steps, even on an average salary, you can get there in just a few years. If you save 50% of your income, which is easy with a partner since many households make it work on one income, financial independence is just 17 years away.

What is your game plan?

photo credit: Lapse of the Shutter Tree Avenue via photopin (license)

This is How You Know Without Doubt That You Are Ready to Retire: introducing F*ck That Index

This is How You Know Without Doubt That You Are Ready to Retire: introducing F*ck That Index

Over the last several months my mind has been drifting towards thinking about whether I’m ready to retire.

Okay. Not really pondering whether I’m ready to retire; more like trying to decide when I’m going to be ready.

For me the matter of retirement – be it early or not – is not mixed with longing for twisty, ribbed stockings, bubbly cardigans and watching daytime TV. I can’t stand daytime TV.

For me, the matter of retirement is tangled with the lust for independence, the desire to create without restrictions and contribute to people’s lives with no limitations. While I’m employed this is not possible.

‘Oh, but you are a university professor.’ – I hear you say. ‘If you are not able to create and contribute value to people’s life, who can.’

You’d be surprised. In the past, I have made some positive contributions through my research; like contributing to a very substantial increase of the science budget in the UK in mid-1990s. I have touched the destinies of generations of Doctoral, Masters and undergraduate students…reputedly. Still the changes in Higher Education and the universities over the last decade or so, have been consistently robbing my life of meaning.

I want the meaning back.  After all, we are all mortal and we are not born to make money, spend money and die with regrets.

So I’ve been trying to decide whether I’m ready to retire – and when I’ll be ready if I’m not there yet – and have had a big problem.

This problem is called ‘enough money to last me for life’. I am not looking to stop being employed so that I could put my feet up and do b*gger all, that’s true. Still, leaving the security of a full professorship and having to make a living is scary. I’d like to know that I have enough at a very basic level so I don’t need to obsess and panic about earning.

So, I played around a bit with our retirement calculator. It is fun but…I had to make too many assumptions that are highly problematic. Like my annual spending in ten years’ time.

While looking for something else, I came across an easy formula that helps you decide whether you are ready to retire; it was introduced by Quora reader Doug Massey and is known as F*ck That Index (or FTI).

Are you ready to retire: what is FTI?

FTI, or your readiness to retire, is calculated using the following:


Your Age * Your Net worth/Annual spending


The index should be greater than 1,000 for you to be ready to retire.

I love this one! I love it not only because it is the kind of thing that tells you ‘yes’ or ‘no’ but also because it allows you to play with the conditions for readiness. For instance, you may be closer if you reduce your annual spending; or you need to wait several more years.

Where do I stand in all this retirement lark?

Remember when I was telling you how important it is to know your net worth and that you should follow it religiously. Hope you did! I do know my net worth exactly and update it every month so calculating my FTI is easy.


…my index is 1,705.

(Had to correct this one up after carefully calculating my net worth. What am I waiting for, I wonder.)

Which is over 1,000 anyway and this means that I can jack my job tomorrow is I want to. And this makes me feel all warm and glowing inside. This is without changing our current level of spending at all.

(Just for the record, John’s FTI is well over 1,000 as well. I haven’t factored keeping a teenage son through university but this may be why I have to make a lot of money some other way.)

What is your FTI value? Are you ready to retire?