FatFIRE Confessions: The Dark Side of Early Retirement Nobody Talks About

In this week's episode of Moneywise, we spoke to two multi-millionaires who did the unthinkable: they actually walked away from the hustle.

Meet Ryan and Jeff (both pseudonyms btw)– entrepreneurs who cashed out in their 30s and 40s while their peers were still grinding away. One sold his software company for north of $30 million in 2021. The other built and exited multiple businesses, banking about $5 million each time. Both now face the question nobody prepares you for: what happens when you win the game early?

Like all Moneywise conversations, our guests hold nothing back. They reveal their exact net worth, portfolio strategies, and monthly spending habits (spoiler: one burns through $25-30K per month, and it's surprisingly rational when you hear why).

But the real story isn't about the money. It's about the psychological whiplash that happens when your identity suddenly evaporates.

We dive deep into the questions that haunt the financially independent: Does purpose disappear when necessity does? Is the freedom to do nothing actually a burden? And the one everyone secretly wonders – is early retirement permanent, or just an extended sabbatical before reality kicks back in?

Below you'll find my summary of the episode along with the entire transcript.

And by the way...this podcast, the concept of it came from Hampton, which is a private community for founders, CEOs, and business owners. On average, our members do about $25 million a year in revenue. These are the types of conversation that happen in Hampton, and I wanted to bring them to you. If you're a CEO, founder, or business owner, check this out. New Moneywise episodes come out weekly.

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Now, below are the notes and the full transcript.

The Numbers

Ryan's Financial Breakdown

• Exit Amount: Sold company in 2021 for "a little north of $30 million"
• Net Worth: Walked away with about $20 million in his early 30s
• Portfolio Allocation: 60% in equities (ETFs like S&P 500, Russell 2000), 40% in fixed income (muni bonds, private credit)
• Expected Returns: ~3% after tax on the fixed income portion
• Monthly Spending: $25,000-$30,000
• Housing: 40-45% of monthly spend (mortgages, taxes, utilities for two properties)
• Food: About $3,000/month (eats out about half the week)
• Travel: Budgets around $2,000/month
• Shopping/Hobbies: "A couple grand a month"
• Current Income: Part salary from helping former company + portfolio dividends

Jeff's Financial Breakdown

• Net Worth: Over $10 million in his early 40s
• Exit History: Made "about $5 million" multiple times from business exits
• Annual Spending: Approximately $250,000 ($20,833/month)
• Investments: Dividend stocks, private credit loans (generating ~10%), occasional real estate
• Investment Realization: One year discovered his investments ($700,000) made more than his business ($400,000)

The Identity Crisis After an Exit

Both Ryan and Jeff described a profound sense of loss after selling their businesses. For entrepreneurs who have built their identity around their work, the sudden absence of that daily purpose can be jarring.

Ryan explains this transition period vividly: "I think the identity problem was big for me the first year. I think I realized that was because my self-worth was based in how hard I worked on something, like how many hours I put into something, how many times I think about it... And then I didn't have that anymore, and I was searching for that next kind of grind or addiction to work on something. And that's that lost period."

Jeff similarly described the strange sensation of going from being the center of attention to suddenly having no demands on his time: "When we sold the family business. That was so weird to go from literally being the center of attention. Everybody needing you, wanting you, your phone blowing up, being all this attention on you, and then you sign it and you just walk away. It was the weirdest experience."

This identity shift isn't just internal – it affects external relationships too. Jeff noted that "While I go to a lot of events, I'm no longer like invited to those same dinners and groups that other business owners and entrepreneurs go to."

Finding New Purpose

Rather than rushing into another venture, both Ryan and Jeff have focused on finding purpose through experiences and passion projects.

Ryan has reframed his concept of "work": "I wrote this post where he's like, I feel like your job can be to make your life fucking awesome. It doesn't need to be what you thought of, what a job is. That is the job now."

He takes this seriously, creating meaningful experiences for himself and his family: "We went to Antarctica last year looking at Kenya this year. So we're able to like, create these experiences. We hosted our whole family. There was like 30 or so people... Those memories and those pictures. I look at them every time and I think, wow, it's crazy that we can create situations like this to happen."

Jeff has found meaning through passion projects: "I probably would feel lost and like a total waste of space, but because I've had that project and those hobbies and those other interests, that has really helped give me meaning and purpose."

Managing Money and Anxiety

Despite having substantial wealth, both Ryan and Jeff experience anxiety about managing their money and ensuring it lasts.

Ryan relies on financial advisors despite internet criticism: "I feel like the internet really shits on financial advisors and probably for good reason... But this referral came to me from a mentor that sold his business before... they'll explain things and they'll take the time with you and can help you through this."

Jeff described the psychological impact of market fluctuations: "When my net worth was the highest because I'm in the stock market, I think I was kind of the unhappiest... But when the market got hit pretty significantly and I had a huge downturn in my wealth. Yeah, I did feel some stress and pressure and more of a focus on how to make more money."

Another guest mentioned in the episode, Jack (who sold his company for $850 million), cautioned against overcomplicating investments: "I would have preferred to keep it much, much more concentrated. Probably most of my money in an ETF like a Vanguard ETF, like the S&P 500 or VTI... I wouldn't probably have done startup investing, for example."

Is Retirement Permanent?

Neither Ryan nor Jeff views their retirement as necessarily permanent – they're open to returning to work, but on their own terms.

Ryan remains open to building something new: "I couldn't imagine really managing a team right now. I'm still a little like toasty from it, but maybe. But I may do it a little differently... I think my bread and butter is software, so I probably play around with something small at some point in there."

Jeff would consider it for the right opportunity: "If I find something that really, really bothers me or that I feel that I can add an extreme amount of value where people are begging me to do this, where it makes sense to run it as a business, then I wouldn't be opposed to it."

Jeff also made an interesting point about enjoying his wealth now rather than saving it all for traditional retirement age: "There's something sad about that a little bit that I'm gonna save all this money for when I'm like 70 years old, and that's when I'm going to start to enjoy it versus now I'm like, man, I can do anything. My body works great. I have awesome friends. How would my life be if I started to spend some of that now and didn't wait until the very end to try to enjoy it?"

Other Key Quotes

"I feel like I worked hard for a long time on this and was able to exit it, but still feel like I won the lottery, and because of that, I don't want it to change. Like I do want to allow this to sustain us for a long period of time." - Ryan

"One year I'm working with the accountant and it's like made $400,000 and your stocks made like $700,000. And at that moment, it was like, wait, what? I did nothing with all of these investments. I didn't even think about them. They're just sitting there. And that made me more money than this business that I'm killing myself over." - Jeff

"At some point, they're just like, I'm just going to start another company because I don't know, I don't have anything else to do and I'm good at it, so I'm just going to start it. There's no reason they're doing this. They're just doing it because they maybe haven't sat long enough with the uncomfortable feeling of what else could there be?" - Jack

"I respect people who keep going. I want to fly on your private jet. Like, I want to have friends that have amazing houses... But for the moment, I'm not feeling a sense of guilt to enjoy this time in my life, which I recognize is a very special time in my life that I will not be able to have this time back." - Jeff

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Full Transcript

[00:00:03] Jeff: There's something sad about that. A little bit that I'm gonna save all this money for when I'm, like, 70 years old, and that's when I'm gonna start to enjoy it versus now I'm like, man, I can do anything. My body works great. I have awesome friends. How would my life be if I started to spend some of that now and didn't wait until the very end to try to enjoy it?

[00:00:26] Sam Parr: One of my favorite business people to read about is Warren Buffett. The reason I like him is he's full of wisdom, and in particular, I've always enjoyed what he had to say about patience. He's got this one quote that says, someone is sitting in the shade today because someone planted a tree a long time ago. In other words, have patience. That's something Warren Buffett preaches constantly, and frankly, I dig it. However, Warren Buffett's in his 90s. How much more patience does he need? Retire. Spend your money. Be crazy. Do what you want. At what point in your life should you stop delaying gratification and just do exactly what you want, when you want. I mean, the point of making money is to do whatever you want. And at times, if you don't want to work on this thing anymore and you have money, why not just stop, just do whatever you want. In today's episode, I want to talk about people who made a bunch of money at a young age and did the one thing that most everyone I know in that category doesn't do. They walked away. They retired early. You see, building something great is hard. It takes commitment. It takes so much time. It takes a lot of stress. And you're totally bought in and it becomes your life. And a lot of people, whether they're in that position or they're not in that position, what they say is when they get to the end and they're able to sell and cash out, they want to do one thing. They want to retire early. But I'm curious what happens to those people when they actually do that, when they stop?

[00:01:45] Ryan: My self-worth was based in how hard I worked on something. I didn't have that anymore, and I was searching for that next grind or addiction to work on something. And that's that lost period.

[00:01:59] Sam Parr: So that's Ryan, which is the name I just made up because he doesn't want to share his actual name on account of the amount of personal information he's going to share with us in this episode. Another guest in this episode, who we're going to hear from is named Jeff. He also is going to be anonymous.

[00:02:12] Jeff: My name is Jeff.

[00:02:13] Sam Parr: Has had a very similar experience to Ryan's.

[00:02:15] Jeff: That feeling of feeling like you're lost is a real feeling.

[00:02:19] Sam Parr: In this episode of Money Wise, we're going to talk about what it's like to walk away from the hustle after you've already made your money, how to find purpose after that exit. And of course, like we do on every episode, we're going to talk about how much money our guest made, how they invest their money, and how they spend it. And the most important thing is their retirement permanent.

[00:02:43] Sam Parr: I'm Sam Parr, and this is Moneywise. There's a ton of podcasts and resources out there that teach you how to make money, how to get rich. But there aren't a lot of resources out there on what to do with the money after you've made it, and how to deal with all the changes in your life. I'm the co-founder of Hampton, a private community for founders, CEOs, business owners, people who run these really large, profitable companies. On average, they do about $25 million a year in revenue. And I'm able to see all types of conversations people have behind closed doors. That's the inspiration for this podcast, money wise. We talk to high net worth people, hear about the personal finance situations and life situations that typically never happen open in public. Not only will we hear their stories, they're going to talk about the real numbers, how much money they make, how much money they spend their portfolio, all those juicy details that you usually never hear about. So both of our guests today went through a similar experience of working hard and, to be honest, getting really lucky. And they made a lot of money at a very young age. We're going to get specifics on how much they made and how they made their money in a second. So when you've earned all this money at a young age, you have a choice, a choice that people rarely ever have, which is, should I just stop working now? I think having that choice is everyone's dream. And if you talk to a lot of people, they would say, yes, you should stop working. But the thing about working, particularly if you're a really driven person, a type of person who has the ability to retire early, working brings a lot of purpose. It becomes your identity. It becomes why you wake up in the morning. Not everyone is like that, though. A lot of people, but not everyone. In the case of Ryan, it was never really about money. It was all about just making things. He just loved to tinker and see products come to life.

[00:04:23] Ryan: I was just always building little apps, doing a lot of freelance design, any type of website that someone needed. I was like, I could build it. I was just poking around, and that's when I built a lot of different apps that solved my needs. So we were selling clothing and, you know, we needed inventory app. So I built one. A friend needed a texting marketing app. There was no klaviyo and stuff, then built something simple.

[00:04:48] Sam Parr: That love eventually snowballed into a business which itself just kept snowballing.

[00:04:53] Ryan: Like I had almost no expectations. I wanted the next customer and I loved seeing the stripe email. Like you remember when stripe first started, it was like, congratulations, you received, uh, whatever, like $19 or something like that. That was so good. That felt good. And it felt good to just keep building. But I never thought about exiting, selling, hiring, doing all that stuff.

[00:05:17] Sam Parr: Jeff, on the other hand, he inherited his entrepreneurial mindset.

[00:05:21] Jeff: My dad and I, when I was in middle school, sold blue blocker sunglasses at like county fairs for cash, and we would go to like, the most redneck like motorcycle festivals or whatever. That was father son bonding. Like we're selling sunglasses.

[00:05:44] Sam Parr: Now, just to kind of define terms here and give context on what I meant when I said retiring. Jeff is in his early 40s. Ryan is in his 30s, which means retiring when most of your peers aren't and they're in the prime of their career. That's a whole other topic that we need to discuss later in this episode. But for now, I want to talk about Ryan's journey. He had a full time job and was building his company on the side for a couple of years.

[00:06:05] Ryan: The company was doing about 300 K in revenue, and I was still scared to go full time on it though, because it was like, wait a second, there's no W2, you know, paycheck coming every two weeks. There's no lunch that was served. They paid for a cell phone and I have to do that. And insurance. How do I do that? So it was more the mental space of going full time when it was not. I should have done it sooner. It was stupid not to.

[00:06:29] Sam Parr: But what was the profit on 300 grand in revenue?

[00:06:32] Ryan: Dude, like almost all of it. It was me coding it. It was me doing the support. It was me doing the sales. I started to hire a contractor to help me do a little bit of the coding, because I wanted to move a little faster.

[00:06:42] Sam Parr: And yet you were still nervous about leaving a W2?

[00:06:46] Ryan: Yeah, because I think because we're trained, you know, I was raised to like, that's exactly what you do. That's what you're supposed to live is to go through and you work for someone else.

[00:06:55] Sam Parr: At the time, how much was your burn? Your monthly, your personal expenses?

[00:06:59] Ryan: I remember rent was about a thousand a month. We went out a lot. Maybe that was another 1000, 2000 a month, probably 3000 a month.

[00:07:08] Sam Parr: That's it. So only $3,000 a month. You have saved up a nice chunk of change. Yeah. Your business is doing hundreds of thousands in cash flow.

[00:07:16] Ryan: You know what? It's funny. And a lot of the team, when they joined, I remember some team members are like, man, I could see like where this is going. I've kind of I've been through something similar and we didn't even have an equity package for the longest time, and it was just cash. And again, we were following the base camp like, you know, if there's a sale, you split whatever percentage of the sale. The only reason why I started to think about that was because I was getting tired.

[00:07:42] Sam Parr: So you sold in 21. When were you like, all right, I'm going to take a I'm gonna actually consider a sale. Seriously?

[00:07:48] Ryan: Three months prior. Four months prior.

[00:07:51] Speaker6: No shit.

[00:07:52] Ryan: Yeah. That's right. I didn't know about the SBS. Like all the stuff that I feel like is trendy and everything now. I didn't set that up. Now, fortunately, that time was really frothy. Like, things are very good in tech and they still have, you know, they're still pretty good. But it was a unique time.

[00:08:07] Sam Parr: What did you sell for.

[00:08:08] Ryan: A little north of 30.

[00:08:09] Sam Parr: What did you walk away with at the end of that?

[00:08:11] Ryan: Uh, about 20.

[00:08:13] Sam Parr: And so that's how he made his next big move exiting. That was in 2021. For a couple of years, Ryan continued to work for the company, but in a different capacity, which basically just means when you're running a company and you're the CEO of your own company and you sell it, you have to work a lot less. It was only recently that he decided to completely restructure his involvement with the company and mostly retired, meaning he mostly did nothing. Yes, Ryan still has some small involvement with the company he built, but it's not a full time job and it can be a real emotional thing to let go completely. Jeff's story, it's a little bit different. It doesn't involve a big exit. We'll explain in a couple minutes. At this point, Ryan's in his early 30s and has made around $20 million, a life changing amount of money. But the biggest impact wasn't hitting that dollar mark.

[00:09:02] Ryan: I think the hitting the number part wasn't as impactful. More so was that I felt I had bent reality a bit for me and my family. I feel like we accomplished something that changed our trajectory in a way we're able to have like a bigger house or a lot more freedom, or, you know, more trips or these luxurious experiences that we really couldn't do before because of all of this other, you know, stuff that led up to it.

[00:09:30] Sam Parr: The sudden new reality has everything to do with why Ryan stepped away from the grind.

[00:09:35] Ryan: I feel like I worked hard for a long time on this and was able to exit it, but still feel like I won the lottery, and because of that, I don't want it to change. Like I do want to allow this to sustain us for a long period of time? So I don't want to screw it up. It's like I'm like, trying to kindle a little flame. Like blow on it a little bit and like, you know, keep it alive for as long as I possibly can.

[00:10:02] Sam Parr: Now, about Jeff. I told you his story is quite a bit different. It wasn't just one big sale that made him rich and gave him financial freedom. It was more like a frog in boiling water. I freaking hate that metaphor, but that's the best I could think of for now. It just means that he started and sold a few businesses that gave him enough financial freedom to step away.

[00:10:21] Jeff: There's been like a couple times in my life where I've made about $5 million and have been very lucky with those.

[00:10:28] Sam Parr: It was just a few years into his most recent business, though, where he finally had a life changing epiphany.

[00:10:34] Jeff: I was busting my butt for.

[00:10:36] Speaker7: The Globex Corporation.

[00:10:37] Jeff: Like killing myself. Like so frustrated with the team and the staff and drama. And one year I'm working with the accountant and it's like.

[00:10:47] Speaker8: Oh, nuclear power plant.

[00:10:49] Jeff: Made $400,000 and your stocks made like $700,000. And at that moment, it was like, wait, what? I did nothing with all of these investments. I didn't even think about them. They're just sitting there. And that made me more money than this business that I'm killing myself over. And so that was like a wake up call for me. That started the beginning of me thinking like, oh, wow. Like there's other ways to make money once you have money.

[00:11:25] Sam Parr: The thing about selling your business, and this is something that I personally have experienced, is you get this huge amount of euphoria right away. It feels like, yes, I have finally done this. I achieved what I was trying to achieve, which was to make a life changing amount of money and I can relax. I've got this huge burden off of me. But then, and I think everyone goes through this. I've seen this in Hampton, I've seen everyone have the same conversation, which is like, what's next? What should I be doing now? I'm unhappy. How do I spend my time? And it's this classic phrase that people tell you, but it's unfortunately one of those things that you kind of have to experience to understand it, which is the journey is worth more than the destination. But because it's hard work and it takes up so much time in the thick of it, it's actually hard to think that you might actually miss this. And even if you don't think that at the time, I think a lot of people, not everyone, but a lot of people, they actually do. They miss it. They miss the grind. This is something that Jeff had already been familiar with.

[00:12:21] Jeff: When we sold the family business. That was so weird to go from literally being the center of attention. Everybody needing you, wanting you, your phone blowing up, being all this attention on you, and then you sign it and you just walk away. It was the weirdest experience.

[00:12:39] Sam Parr: Ryan described that feeling as going through a loss, almost like he was grieving.

[00:12:43] Ryan: I think the identity problem was big for me the first year. I think I realized that was because my self-worth was based in how hard I worked on something, like how many hours I put into something, how many times I think about it, how many podcasts I listen to, and Jason Lemkin blog posts I read and like newsletters I could like, it was all based on all of this, like hustle. And then I didn't have that, like almost it takes maybe 6 or 8 months or whatever to really transition and get new leadership and all that stuff. Then after that, I didn't have that anymore, and I was searching for that next kind of grind or addiction to work on something. And that's that lost period.

[00:13:30] Sam Parr: Now here's the deal. These are first world problems. But you know what? First world problems are still problems. That emotional loss was significant, but it's $20 million enough to fill that void. The simple answer no money can't replace the passion or drive or purpose you get from building a career or building a company. It's not just a loss of direction or a loss of purpose or importance, which is huge. Humans need that. We need to feel needed, but it's also a loss of community. By the way, I've experienced this as well. I sold one business, I had enough, and I started a new one because I didn't want to feel alone, I needed community. Here's what Jeff had to say.

[00:14:06] Jeff: While I go to a lot of events, I'm no longer like invited to those same dinners and groups that other business owners and entrepreneurs go to.

[00:14:19] Sam Parr: Both of these things are largely part of your external world, and the loss is difficult. But it can be overcome with time. But there is something a bit deeper that you lose as well. So when you build a business that you eventually sell for tens of millions of dollars, typically the type of person who's able to pull that off, they're incredibly dedicated, they're ambitious, they have an action oriented personality to be able to pull that off. And it sounds weird, but that intense drive. If you sell your company and you have enough money, or you make enough money that you don't actually have to work again, it sort of feels like that drive is going to go away. And it feels weird. You're like, look, I used to work my butt off because I loved it and I was ambitious. And then once you get a little soft and on a big fat cushion, it feels like, oh my God, I'm way less intense. I'm not nearly as driven, I'm not nearly as hungry. And it feels really strange. It almost feels scary. In fact, I've got a friend named Jack. He recently retired from a big exit. He started a company in his early 20s, and by the time he was like 29, he sold it for $850 million. For years, he struggled mentally, and I think he's still going through it a bit. And for him, accepting the loss of his drive is something he had to get comfortable with.

[00:15:28] Speaker9: When I was younger, I think I had in America, they more say it as like chip on your shoulder that I had something to prove. Then, after having a big exit, I didn't have that same drive to prove something anymore. But if I had not had a good exit, or by my perception to be good, then I think that I would still have that motivation that like, oh, now people are still doubting me, so I still got to prove stuff. So that would have been what would be driving me.

[00:15:57] Sam Parr: Jack says that there's pros and cons to not having that drive anymore.

[00:16:00] Speaker9: When I was doing it then I was sacrificing my living conditions to live in their health that I was eating crap. I was not working out. Didn't really prioritize friendships much. Did not do any dating or anything. So making a lot of sacrifices. But yeah, it was really fulfilling to go all in on one thing. I think it served. I appreciate that at that time in my life. Now I'm thankful probably not to have that anymore. But yeah, sometimes I do miss that. It's energizing to be so driven. But now, yeah, maybe a different stage in my life. And I am also feeling more comfortable with myself and the things that I'm working on now. I can maybe get fulfillment from in different ways than, oh, I need to prove the world wrong.

[00:16:54] Sam Parr: Now, even if you've come to terms with this internally, there's still a bunch of external pressure. Or at least I think there appears to be. And this pressure, it kind of reminds me of what happens with a lot of athletes. They win a big championship, and they're at the post game, press conference or the post-fight press conference, and oftentimes the press, their very first question is what's next? And that happens with entrepreneurs. They run their company for a decade. They sell it. And within a week or two weeks, people always ask, well, what's next?

[00:17:23] Jeff: And they're asking that because they care about you and they believe in you. And as an entrepreneur, it can be a little unsettling. Like there's like, you're only needed or wanted.

[00:17:36] Sam Parr: It's pressure.

[00:17:37] Jeff: Yeah, yeah, yeah. That there's like a little bit of pressure or a lot of pressure on what that is.

[00:17:43] Sam Parr: The thing is, is that that external pressure, I think it could be a bit of an illusion. And I try to default to they're just asking to be nice or they're just trying to make conversation. And this is something that I learned from Jack.

[00:17:56] Speaker9: You don't necessarily need to feel that as a pressure, whether it takes you one week to find what things you would like to go into next or 5 or 10 years. I don't think that life is not always like a scoreboard, that you're getting scored with your efficiency to arrive at the next step.

[00:18:17] Sam Parr: And giving into that pressure, like giving into a lot of external stuff. Frankly, it leads down a path of unfulfillment because you're not really doing it for yourself. You're doing it for others.

[00:18:27] Speaker9: At some point, they're just like, I'm just going to start another company because I don't know, I don't have anything else to do and I'm good at it, so I'm just going to start it. There's no reason they're doing this. They're just doing it because they maybe haven't sat long enough with the uncomfortable feeling of what else could there be?

[00:18:45] Sam Parr: I'm going to briefly touch on something we talked about in our very first episode with my buddy Anker. Anker has sold his company in his early 30s for something like $200 million, and if you go to that first episode, he breaks down his whole portfolio expenses. It's pretty great. And what I learned in that episode is that having money doesn't immediately make your life better. It's a tool, and it's a great tool, and you can use it to make your life better, but you could also use it to make your life worse. And so if you're going to retire early, your life needs a little bit of reshaping. Suddenly, having financial and more important time freedom is great, but your next step is figuring out how can you enrich your life so you can enjoy that retirement. Ryan has been very happy since he decided to step away, but that's because he put effort into making it work.

[00:19:26] Ryan: I wrote this post where he's like, I feel like your job can be to make your life fucking awesome. It doesn't need to be what you thought of, what a job is. That is the job now.

[00:19:36] Sam Parr: And he takes his new work really seriously.

[00:19:38] Ryan: You know, we went to Antarctica last year looking at Kenya this year. So we're able to like, create these experiences. We hosted our whole family. There was like 30 or so people. We had people set up tables and brought in food and like had all these activities rented out a pickleball court. We took everybody for surf lessons. Those memories and those pictures. I look at them every time and I think, wow, it's crazy that we can create situations like this to happen. And it's not stressful. We're not overthinking it, but it it's really special.

[00:20:11] Sam Parr: But those aren't all the things that Ryan is doing. He also started his own blog. It's called After the Exit, and it shares his experiences of starting and selling the company and what he does after the sale. I recommend you guys check it out. It's awesome. And Jeff's situation is similar. He's out there enjoying his time and doing what he loves. In fact, when my producer called him for this pre-interview, he was in line at a taco truck at an amusement park, and this was at like 11 a.m. on a Tuesday, but Jeff spends the bulk of his time on passion projects, which I can't break down exactly in this podcast because it will give it away. But like his other companies, his passion projects have also been very successful and it's been a key aspect to his happiness.

[00:20:50] Jeff: I probably would feel lost and like a total waste of space, but because I've had that project and those hobbies and those other interests, that has really helped give me meaning and purpose.

[00:21:04] Sam Parr: It's awesome that both Ryan and Jeff have found purpose from stepping all the way, but the sad truth is that that may not come as quickly or easily to most people. My friend Jack struggled with this a ton after his exit and after years of working on his mental health, I think that he's now finally starting to understand how he can bring purpose and motivation back into his life.

[00:21:23] Speaker9: When I sat with it, I felt I'm not motivated to make more money. I kind of feel like, okay, now I have enough money. Instead, I think I'll be motivated or I would like to work on projects where I can have more impact. For me, that looked like starting some different charitable projects, and now I'm working on a project where it's prioritizing mental health for other people.

[00:21:55] Sam Parr: All right. So one of the biggest fears, it's a fear we talk about in this podcast all the time. So if you listen to all of them, you're gonna be sick of hearing this. But a big fear of people who start and eventually sell a company is running out of money and not just running out of money for some reason. Managing your money, even if you don't have to, even if you can just set it in the index and just let it ride. Managing the money for some reason starts to become a full time job. And Ryan, he's a big proponent of financial advisors.

[00:22:22] Ryan: I feel like the internet like really shits on financial advisors and probably for good reason. Like, I bet 80% are just kind of scummy, or they're bad at communicating or they're more self motivated and granted, this firm I work with is not a fiduciary, so you could argue that the same is true there. But this referral came to me from a mentor that that sold his business before, and that he works with them. And he basically was just like, look, they all are going to do something similar, but which is the firm that you can really talk to, and they'll explain things and they'll take the time with you and can help you through this. And that's why I went with this. Whereas I did compare the fixed rate folks and the other folks and all the different banks and yeah, I mean, sometimes I don't know. Did you go into the rooms, like physically with them or did you just do all zooms if you talk to any of them?

[00:23:10] Sam Parr: So what I tell people is after a sale, like if you want just do like treasury or bonds for basically a whole year and just get used to things because everyone's going to sell you stuff. I was lucky, like you or I had a friend who had been there before, and he made all the mistakes, and he just introduced me to all the people that he trusted. And so that helped me. And so I went with that person eventually, and my portfolio is very easy. And so I didn't meet with many people because I had a relationship with one person leading up to it. And this person knew that I wanted boring. I don't want anything sexy. I go, if I can get a 7% return for the rest of my life every year, I would be incredibly happy.

[00:23:51] Ryan: Did you feel like you wanted income right away.

[00:23:54] Sam Parr: After six months? Yeah, and it's a very overwhelming feeling because you could tell me how you felt. I felt like it was a burden for a little bit. It was like, oh my gosh, I can't lose this.

[00:24:05] Ryan: Yeah, yeah. The psychological application of it is a little bit tricky. And that's where the advisors personally helped me a bit to like calm me down or, you know, think about things a little more rationally.

[00:24:14] Sam Parr: So what's your where's your income source now.

[00:24:17] Ryan: So part of it is still helping out with the company. So there's a salary there. And then the rest of it is just the portfolio spinning off dividends. It's kind of split into a fixed income portion and an equity portion. So the fixed income portion also generates a tax advantaged bucket of cash every month too.

[00:24:35] Sam Parr: So then what do you what's your portfolio like now? Tell me how is it invested?

[00:24:39] Ryan: 60% is in equities and 40% I left with a financial advisor who does fixed income. Like a lot of, like private credit type stuff, uh, muni bonds. He's got some other, like, kind of private related stuff there. And then the equity side is all ETFs. So pretty simple Russell 2000 S&P 500. Some developed international and a little bit of like developed dividend growth type companies.

[00:25:07] Sam Parr: In the 40%. What do you expect the returns on that to be.

[00:25:10] Ryan: You know what's interesting is I actually look at that more on an after tax basis. But that's around kind of mid 3% after tax.

[00:25:18] Sam Parr: So 3% of 20 million is 600,000, which is what is that 50,000 a month. Is that how you're budgeting it.

[00:25:25] Ryan: Yeah I want it to be a portion of whatever the 3% was. Right. Because there's a lot of articles out there now that the 3% rule apply. Because of inflation or like, how does this exactly work? And I'm like, I'm not going to get into the weeds on this. I don't I can't figure this exactly out. So if I have that cushion of whatever the 3% is. So yeah, yeah, let's say the 50 K a month and then my spend is like 25 to 30. Awesome, I feel good.

[00:25:52] Sam Parr: What do you spend it on?

[00:25:54] Ryan: We have two places. So I'd say 4,045% is just for like mortgage tax. Call it like utility type housing buckets and then we eat out probably half the week. So maybe that's 3KA month. I bucket travel 2KA month or something. Some shopping a couple grand a month gifts. I'm really getting into some hobbies, so that is a surprising spend.

[00:26:25] Sam Parr: Now I want to backtrack a little bit and I want to focus for a second on something Ryan mentioned right there, the stock market. I hate to admit it, because I try to just set it and forget it. It is anxiety inducing, and it's particularly anxiety inducing when you're trying to live off that lump sum of money. My advice to Ryan and everyone else 80% index funds, 20% bonds. Easy as cream cheese. You can do the math on figuring out how much money you need, which is for a lot of people, roughly 3% a year of your total sum. That's usually enough that you don't ever run out. And if you've done that math, you got to just have faith that you're not going to run out, because that just typically is not the case. In fact, Jeff has also had some stock market induced anxiety.

[00:27:07] Jeff: In those moments when my net worth was the highest because I'm in the stock market, I think I was kind of the unhappiest or not unhappiest, but you're just refreshing and like you're checking in and you're looking at the stock. But when the market got hit pretty significantly and I had a huge downturn in my wealth. Yeah, I did feel some stress and pressure and more of a focus on how to make more money to at least even out my burn.

[00:27:38] Sam Parr: Were you able to do that, or do you still just live off like some type of draw or dividend from your principal?

[00:27:45] Jeff: Now I have a little bit of investments that spit off a little bit of cash. Imagine that I have some dividend stocks or private credit loans that generate 10% a year, or occasional real estate investments that will pay out. And because my burn is, let's say, a quarter million a year, it's fairly manageable.

[00:28:10] Sam Parr: Look, there's a ton of pressure to keep your money, and there's a ton of anxiety that comes with it. In fact, I think that the negative feelings that you have when you lose something, when you lose money in particular, it actually hurts more than how good it feels to earn it in the first place. And place. And because of that, you feel a lot of stress and a lot of anxiety. Let's take a lesson from Jack. He made a ton of money, and yet he still had a ton of financial stress, which in hindsight was completely avoidable.

[00:28:42] Speaker9: Being amongst peers who maybe have had an exit and stuff, the discussion kind of felt pressure because everybody's talking like, oh, I'm getting like 20% IRR on my money or whatever. And then so you're. I kind of felt that I should be feeling the same, I guess, because I was getting these inputs that other people considered like, oh, how much money am I making a year? Even though I actually didn't really need to make more money, I guess I thought like, oh, if I'm not making those, then I guess I'm doing bad or I'm running out of money or something and having that as a data point, I just invested in much, too much different stuff and it's causing an extreme amount of anxiety to administer those when it's doing tax returns. If I if I move house and I need to update the address, that's anxiety of my own making. With hindsight, I would have preferred to keep it much, much more concentrated. Probably most of my money in an ETF like a Vanguard ETF, like the S&P 500 or VTi, which is a bit similar but broader, maybe a little bit in a real estate fund. I wouldn't probably have done startup investing, for example.

[00:29:58] Sam Parr: Money should make your life easier, not more complicated. If you're ready to step away and retire, go as simply as possible. Let your money work for you, and do not get caught up in what everyone else is doing. Plus, you have to remind yourself no one knows what they're doing anyway. There's a reason why virtually no hedge funds can outperform the market over a few decades. And here's the other thing. When you retire young, you got to remember you're young. Retirement does not have to be a lifelong commitment. Thinking it has to be permanent. That's just putting unnecessary pressure on yourself. Retirement is supposed to be freedom, which means you can go back to not being free if you want. You can go back to working. In fact, Ryan told us that he is thinking about going back. Although going back and returning to work, it might look a little bit different than how he used to do it.

[00:30:44] Ryan: I couldn't imagine really managing a team right now. I'm still a little like toasty from it, but maybe. But I may do it a little differently. And maybe that's the Twittersphere of like, cash flowing businesses and and service based businesses and this type of stuff. But I think my bread and butter is software, so I probably play around with something small at some point in there.

[00:31:05] Sam Parr: Same with Jeff. He's not ruling out the possibility.

[00:31:07] Jeff: If I find something that really, really bothers me or that I feel that I can add an extreme amount of value where people are begging me to do this, where it makes sense to run it as a business, then I. Yeah, I wouldn't be opposed to it.

[00:31:25] Sam Parr: Do you think that the majority of people, though, aren't like you, and they just get back into something in hopes that they experience that rush again? Or do you think that people are more like you, where they are methodical and are willing to wait or never do it again?

[00:31:40] Jeff: I respect people who who keep going. I want to fly on your private jet. Like, I want to have friends that have amazing houses and maybe that need once I get a family or kids will come back. But for the moment, I'm not being not feeling a sense of guilt to enjoy this time in my life, which I recognize is a very special time in my life that I will not be able to have this time back. And I'm trying to live in that moment and appreciate that for what it is.

[00:32:16] Sam Parr: Do you think that your life is the way it is? Mostly because you are wealthy and single versus wealthy and with a family. And will that change?

[00:32:25] Jeff: 100%. I think that the freedom and flexibility that I have and that I value so highly right now, it is largely indicative of the fact that I know that that will go away once I have a family and a relationship.

[00:32:38] Sam Parr: So does it feel like you're trying to rush to get it all in or something before? Like you're trying to, like, blow your load so you're completely empty by the time you get married.

[00:32:46] Jeff: I think maybe there was a little bit of that some time ago. I don't feel that now, but maybe trying to travel the world. I remember that there would be certain days where I would look at the calendar and I'd be like, wow, I could go to Tokyo today. In fact, I did that one weekend. It was like a Tuesday. And like on Thursday, I was like flying to Tokyo or even a few weeks ago, I was like, I want to go to Mexico tomorrow. Do you want to go? And so me and a friend like just went to Mexico City the next day, but I don't feel like I'm trying to get it in. If anything, having a team and working on my projects may be distracting me from the larger goal.

[00:33:24] Sam Parr: Of what?

[00:33:25] Jeff: Of just thinking about what's next. So like, I've actually been thinking about trying to spend down my money and not being afraid to say, hey, what would my life be like if I wanted to spend $1 million this year and not be afraid to? Right now we have this idea that we have to die with more than we have now. That like this, money is not meant to be spent. And there's something sad about that a little bit that I'm gonna save all this money for when I'm like 70 years old, and that's when I'm going to start to enjoy it versus now I'm like, man, I can do anything. My body works great. I have awesome friends. How would my life be if I started to spend some of that now and didn't wait until the very end to try to enjoy it?

[00:34:11] Sam Parr: How do you balance that? And potentially the fact that you'll never start something again? And the fear of running out?

[00:34:17] Jeff: I've never thought that I would spend it all the way down. I think I would always have a, let's say, $10 million buffer as a backstop, because I have more than $10 million. That hasn't occurred to me. That's not a fear that I have.

[00:34:31] Sam Parr: So then you're comfortable spending it all that exercise of like, what if I spent it? You're comfortable with that?

[00:34:36] Jeff: I'm comfortable to start thinking about it. It is. You know, I'm flying to New York in a few days. I'm still flying, coach. I'm not, like, burning it on business because I'm like, yeah, what's the difference between this? Is that worth $700?

[00:34:56] Sam Parr: Now, the last thing I think that's important to consider, if you are like Ryan and Jeff and you are thinking about retiring early, is that the early part of retiring early is kind of unique. Most, if not all, of your friends who are around the same age, they are not going to be in similar stages of life as you. If that is the case, according to Jeff, it's just a matter of location and you may want to consider relocating.

[00:35:19] Jeff: I remember when I left New York City and I was looking at some different towns to live in, and one day I was in Dallas. I just really wanted to, like, go out and like, be with a friend and throw a Frisbee. And I called all the people I knew in Dallas and nobody could go hang out. And it was a really sad moment for me where I knew then I was like, this is not the town for me. I think there are only a few places that one can exist with such freedom, and not get a little sad where you can live in a town or an environment with people that have schedule flexibility. That's where I live now. I think New York City and other major metropolis areas are great for that.

[00:36:08] Sam Parr: All right. We've covered a lot in this episode and it's a huge topic. There is a bunch of little small subjects that we could probably go deeper on in later episodes within this episode, and I think we might do it. If you want them. And remember, that's a big if because, well, I'll tell you at the end of this episode why I said because. But let's wrap up here with a little bit of advice from Ryan for anyone interested in selling and walking away, or those who just have.

[00:36:31] Ryan: I would absolutely think about what your life you'd like it to be after. So that is figured out, and then you spend less time figuring it out later. So it's hard to imagine. But imagine your calendar was basically had one call on it. What are you spending the rest of the day doing? Are you going to the gym in the morning or are you playing tennis? Like, what are you doing? Optimize for tax as much as you can based on your timeline. There's still an element of luck with selling the business and what the time is of the market and how things are valued, so definitely optimize for tax there. I would consider a little bit of the investment side of what do you think that you would start to allocate into later. So then you have a little bit of a like a little foundation versus oh shit, now what do I do? Right. You like put it in the treasuries and then you have to figure out what is all the rest of this stuff mean.

[00:37:23] Speaker5: I swear you're the gold. I've been running for it. Like I woke up in one the top, bro.

[00:37:31] Sam Parr: Now, the reason why I said that we may not go further on all the topics within this episode, but we might is because these episodes are a lot of work, and I'm only going to keep making them. If you, my dear listener, wants more. And so if you want more, you can find me at Twitter, The Sam Parr, or go to the podcast app that you're on and leave a review. Let me know. You can let me know if you want more episodes. And if you do, what do you want the episodes to cover? And of course, if you hate this, you hate money wise. You hate me. I want to hear from you to let me know what you think. We'll either stop or we'll keep going. It all depends on your feedback, and I'm going to remind you guys that if you are a business owner, if you're a CEO, if you're a startup founder, and you love these types of conversations, if you love the types of conversations that deal with when it's the right time to fire people and how to do that when it's the right time to celebrate, how to spend your money, all these conversations that you have when you're running your business, that you can't have with anyone else, or that you can't Google the answers to these certain questions you guys have to check out.

[00:38:25] Sam Parr: Hampton. It's join Hamptons.com. We've got thousands of members who fit this criteria, and it's awesome to see all these conversations. My partner Joe and I review 100 of the people who apply were the ones who actually approve or deny people, depending on if they're a good fit. So we want this community to be just beautifully done. It's the best way to describe it and intimate. So check it out, join Hamptons.com. And last but not least, I say this podcast is a lot of work. But guess what? It's not a lot of work for me because I hired Lower Street. You guys can check them out. Lower Street they made making this podcast way easier. Way easier. All right, I'll see you next episode. And please let me know what you think in the comment sections of the podcast app and leave us a review. See ya.