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Opinion

My Retirement Plan Sucks

For a person that writes on money, and who doesn’t really have “regular” income, I’m a strange guy. I talk about how you should save for retirement. I build large excel sheets, that when you click a button, tell you exactly how much you need to save so you retire. I tell people to save today so that they have a friend in the money tomorrow.

And yet, I don’t have such a retirement plan for myself. I’m a strange guy.

Oh, I do have a savings plan for my son. And about 12 months of expenses in an emergency fund. But I haven’t quite saved for retirement. I’m banking on a lot of luck.

As a startup founder, I can’t expect a fixed salary every month. It will come, but I’ve grown to accept that it will be much lesser than whatever I could get at a regular job. I have a lot of fun, but the financial payback is not expected to be a larger paycheck; it’s supposed to be one large cheque.

I’m betting my future on the hope that I’ll make a ridiculously large sum of money when I sell my company. Or that my business will get so rich it’ll pay me way beyond anything I could get in a job. In my own way, I’m focussing on capital appreciation of my investment (of time and opportunity cost and money) rather than income.

There is no diversification. I’m betting on me and my luck. In a job, you can switch employers, without much of a thought. To me, that’s like switching out of me, a failure of sorts. I’m not afraid of failure – after three startups you don’t give a damn what other people think – but I’m going to give everything my best shot before I give up, for sure. But it is true that I have a very concentrated portfolio – it’s just what I do and how lucky I am, now even necessarily in that order.

The one big difference is that I get to build an asset. At a job, you hardly ever own a piece of what you do, though stock options do provide some upside. At a startup, you build an asset for yourself. Sometimes it’s junk. And some other times it’s so valuable people will pay a lot of money for it. And you get to shape that asset, so unlike buying a company’s share and hoping they’ll make more profits, with your own company you can convert that hope into effort and reality.

What I’m really doing is betting that if I keep at it, something big will happen. It has, in the past, and I’m grateful that gave me the money to be able to do this and not have to really worry about the rent. But to truly be able to retire, I have a long way to go financially.

So my retirement plan is a pot of gold at the end of a rainbow. In a world increasingly populated by gadgets that I want NOW, time I need to take off today, that plan sucks. Until one day, when it doesn’t.

(Yes, you should try it. No, it’s not glamorous. Yes, it’s so much fun. No, I’m not smoking.)