From Denny C.: I just read Mark’s letter about income level and happiness in the February 26 Daily.

I have to agree with what he said. But, the income levels for my life are a bit different… I live in the Midwest, where cost of living is considerably less than the Northeast.

The part that I struggle with is now that I have reached the level of “total income” (including my investment income) and savings where I can do whatever I want.

There are no longer any additional rewards to growing my total income. It seems that the only way to gain a more rewarding life experience is to disconnect with active earning… thus freeing up the time to do things I want to do.

However, your advice is to never retire and keep earning. I am not sure I agree with that approach.

Reeves’ Comment: Congratulations on reaching this level, Denny. It sounds like you have a great retirement ahead.

I think the key point here is redefining what “work” means for you in retirement. As Mark says in his essay, “How the Big White Lie of Investing Almost Cost Me My Retirement”…

 

I am not saying that you should give up on the idea of retirement. I’m saying that you should think of retirement differently. It is a wonderful time of your life when you change the ratio of work and pleasure.

Instead of spending 80% of your days working for money and 20% having fun, you spend 20% of your time working and 80% having fun.

That doesn’t seem so bad, does it?

And if you are smart about what kind of work you do, you can actually have fun working!

Paint a new mental picture of what retirement can be: a life free from financial worry that includes lots of travel, fun, and leisure—funded in part by active income from doing some sort of meaningful work.

There are many ways for a retired person to earn a part-time, active income. You could do some consulting, start your own Web business, or earn money doing any sort of purposeful work.

You’ll find one great example of this “work-fun inversion” in our next letter…

From Allen C.: How do I maintain an “active income” in retirement?

I initially took a course to become a tax preparation professional. After doing this for two years during the tax season, I concluded the hourly wages were not commensurate with the effort required.

Now I work part time for my son-in-law’s small business doing financial and administrative services for him at a decent salary. I work around 10-15 hours per week. The rest of my time is my own to pursue whatever I want. It’s a great setup.

Reeves’ Comment: Outstanding, Allen. Well done. Thanks for sharing.

From Dr. Jack E.: I think living rich may have as much to do with state of mind as it does with material resources…

For instance, I have a 28-year-old car that I’ve kept running and looking almost like new. That car cost only $8,000 new, and I wouldn’t trade it for a brand-new Maserati!

I live in a 140-square-foot house and have an outdoor kitchen, bathroom, and tropical shower… and like it more than the beautiful 2,400-square-foot house I once owned.

I generate more than enough income per year to meet and exceed my expenses. Yet by government standards, I am living below the poverty level.

I am 65 years old, haven’t taken so much as an aspirin since I was 38, and can do everything now that I’ve always been able to do.

I am most grateful for all that I have, including my Palm Beach Infinity membership.

I think a big part of happiness in life is to keep our wants and desires in check; otherwise, no matter how blessed you are, it will never be enough.

It took six months to put it all together… and my main builder and I weren’t particularly in a hurry. Total cost was $20,000 if you include my labor at $1,000 per month. That price includes furniture.

It was a labor of love, and I love living here! So, I’ve achieved the “American Dream” for $20,000.

Reeves’ Comment: Wow. Congratulations, Jack. Thank you for sharing your success story with the Palm Beach community.

What’s your secret for earning active retirement income while still enjoying a great life? Please share your own helpful insights with the Palm Beach community, right here.