Latest / The Curve / Should You Take a “Micro-Retirement”?

Transcript

Should You Take a “Micro-Retirement”? · The Curve

0:00
In today's episode, we're talking about something that has been asked quite a few times,
0:05
actually.
0:06
There's been a lot of people saying, I want to take a break, I want to take a sabbatical,
0:10
I want to go traveling, but I don't know how all these things are going to impact my
0:13
finances.
0:15
And this is kind of like a new craze that's come up really a hesitant, where it's not
0:20
the same, but it's kind of a similar concept.
0:22
Well, it's just, it's like the whole, like baby boomers, you have one job, you work
0:28
away up the career, and you then retire and enjoy your workingness.
0:35
Do you think that the boomers want to something in terms of like, and I, this is zoomed out
0:40
right, this isn't just for a job, but like, you're the same job your whole life.
0:45
You know consistency, you know dedication, you're committed, it's the same thing when
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it comes to data.
0:50
Did you hate your job?
0:52
No, but think about like, people are like, I started as a McDonald's, you know,
0:58
person and then worked my way up to McDonald's CEO, you know, like that's quite an incredible
1:03
story.
1:04
But like, what if you hated where you started, do you know what I mean?
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I think, I think it's more just, I just like variety.
1:12
So do I.
1:13
I'm even getting itchy now.
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And like, flower man can tell, he's like, I can feel like you, you feel stagnant and
1:20
you, you've been a London for two years, you've been at the curve for two years, you,
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you know, like, and I was like, yeah, I do.
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I get this little itch, if I'm not constantly moving forward or like changing, moving forward
1:31
and changing a different things, like move forward.
1:34
But I think this is a, this is changing up your life, right?
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It's like, but if you look at McDonald's and you start as, you know, selling fries and
1:40
then you move into CEO, that's changing.
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And it's just in the same place.
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Yes.
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But like, but some people that's like not changing, some people that might be like, you
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know, like where is I think when I did this whole discovery piece that years ago about
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what I want in my life, like variety was the big one.
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And so I think whether that's like this flat and I know you're going to leave them soon
2:01
for you.
2:02
No.
2:03
And yeah.
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I tried to imagine that relationship.
2:05
No, but like in my, in my location and my job and my, you know, friends and my experience
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like all of that.
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I actually really agree.
2:15
Yeah.
2:16
I totally agree.
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I think if you've only got four weeks holiday a year, you know, that's not really changed
2:20
your personal development or like mix it up.
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I mean, holiday's a brand of example to you.
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But I mean, if you're, I mean, if you're in a job and you've only got four weeks leave
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a year to go and experience the world, I can to, I don't know, start a side hustle or
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do something.
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It's just.
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Yeah.
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I mean, there's not a lot of room for exploration within four weeks.
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And like, if we're being totally honest, like the times that you've changed and grown
2:43
and seen the world in a totally different way, and actually we move jobs or you have six
2:50
months, moving around and you have heaps of a long time and all those things are what
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influence.
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And you make new friends and you like think of the world in different way and there's
3:00
like so many benefits you can't put a financial dollar on, you know, but I went, what I was
3:07
around about trying to say before is I think because we have so much variety and I definitely
3:12
wouldn't change it.
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I'm so grateful for that.
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And I think I'm exactly the same as you.
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I even in my day, like in the where I work, like is it a cafe, is it home, is it the
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office?
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Like I really need variety, but why are you laughing?
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I'm not.
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Oh, I thought I thought you just say it found something funny, I was like I'm pretty sure
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like me working in a cafe is not that.
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Not funny.
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No.
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But then what if I'm thinking about like out the older generation or like our parents,
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when it came to like finding a husband or a wife or whatever, like you were quite
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content with the options that you had in the sense that you would meet someone young,
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you would have a relationship, you would stick with it and you would be consistent.
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And I'm not saying that I would want that.
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Like I think that for me having variety and being able to like, I don't know, swipe
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through 500 men and decide that I find, but I think the over stimulation of variety and
4:04
choice can sometimes also have the opposite impact.
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But I think I think the older generation, yeah, there was a lot of consistency, right?
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Like you would save up, you'd buy a house and you'd live in it, you'd live in the
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same city, you'd settle down, you know, it was very traditional in the sense of like,
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yeah, you had an education and you got a job and you worked your way, you know, like very
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described, very patient, very consistent, very turtle, you know, turtle.
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Whereas we're a bit of more of an erratic here, I think, but anyway, that's probably
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what I'll teach you.
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We'll probably get to 65 and be like, ah, absolutely, it's a lot of stuff.
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It's like sticking to something as well, sticking to something and I mean, what does that
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stand at something like you have to do something 10,000 hours to be an expert at it?
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And you know, most of us probably get to 5000 and get bored and move on.
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And so it just sort of, it depends.
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And even we were just talking to one of our business advisors and he was kind of saying
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the same thing.
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He was like, when it comes to business direction, like you have to be so strict because there's
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so many options and there's so many different ways that you could take something like as
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an example, if you were, I don't know, like his business is medical research and he was
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like, you know, we are looking at ovarian testing.
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If we all of a sudden decided there was an opportunity and breast cancer and we did
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a massive side pivot, it's like it can be detrimental to be constantly looking for better
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options.
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Yes.
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And that's actually the best thing you can do is like, try and stick to the same thing.
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Which is so one thing.
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Which is kind of the opposite of what we're about to talk about.
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Yes, yeah, exactly.
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I'm trying to figure out 10,000 hours if you worked a typical day of eight hours a day is
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like five years.
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But that would be doing the same thing every day.
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Say that again, sorry.
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So 10,000 hours.
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So to come a master or an expert or something, it's 10,000 hours.
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If that's a typical day, so say like an eight hour day, five days a week, that's doing
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the same thing for five years.
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Which doesn't seem that much, but it's more the same thing of like, if you're learning tennis,
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it's 10,000 hours a day, five days a week, for five years.
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Maybe I'll just take a five years to medical and become serene Williams.
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Do you think tennis is your one?
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I think so.
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I mean, people who have played tennis with me might say different, but you're quite good
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at tennis.
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I just really enjoy it.
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I think you're quite a cute tennis player.
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You've got good tennis outfits.
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Thanks.
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That's, you know, that's totally what it's about.
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It's looking good.
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But yeah, that's quite good to know.
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What's five years?
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I reckon you've left your tennis crest like you're honesty.
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I know.
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Like get a bad back.
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I used to look at like, jock of it.
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Jock of it.
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And like, I always thought they were quite, they were old, but they just look old.
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Like, do you think?
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And then it saw their ages and I'm like, well, I don't know, younger than me.
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But do you know they just look like old men or are they doing their 10,000 hours early?
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Yeah.
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And all these young people coming through a year, they're in their 10,000 hours.
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I reckon tennis players are all just generally really hard.
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Yeah.
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Like all so good looking.
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Yeah.
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I did the coin toss.
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But that's right at the effectively, the New Zealand Open, it's like our tennis, it's
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like our US Open a few months ago.
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And I was doing a presentation to a corporate there.
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And then they were like, do you want to do the coin toss for the, for the final?
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And I was like, oh, it would be on it.
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And then I did it anyway, it's a digital coin.
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There's not even, you don't even feel, I know, I know, I was like, I don't, I feel like
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it.
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And they're like, no, it's about a new person that's big on the big screen.
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Oh, it's such a shame.
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Anyway, I, there was these two young 18-year-olds that thought was hard.
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And I was like, Stanley, I was like, you guys have so much muscle.
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Anyway, and I felt like that little kid, but like, you know, kind of like the Ronald McDonald
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kids or like the, the kids that like, this is wheeled up and they want to make a wish.
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Yeah.
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And no, I was a 35-year-old woman who, yeah, they normally have done it for people.
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But now, now I look at the coin toss, people are like, oh, they are like children who's
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like, this is their biggest dream.
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And like, I'm just like, oh, well, and I really stuffed it up.
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Like, we're supposed to have a photo, but I walked off and they're like, come back and
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then I, yeah, it was just, and then I stood there too long and it was the end of the
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year.
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No, that's in front of that many people.
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No.
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Not really.
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God, it's a lot of people.
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Oh, yeah.
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I kind of found it funny.
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Anyway.
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Wow.
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We have tangents.
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Oh, yeah.
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Off top of it.
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I think it was our longest tangent.
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Anyway, we want to talk about, it's called micro retirement.
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And it's when you take a work sabbatical essentially and you have a little mini retirement
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break within your career or your life.
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So it's not like working and surviving until you're 65 and then saving up your money
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and then living off it when you're 65.
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It's going, you know what?
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I want to take a two year break, a five year break just to focus on me and have my
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retirement early, have a little mini retirement, chip into that 15, 20 years of retirement,
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but now it's quite fun.
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Yeah.
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But I just point out what I would say about this.
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I know you're about to go to the bud.
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However, if you think about travel, because like, let's be honest, that's what everyone
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loves, isn't it?
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Saying the world, seeing new cultures, doing that now versus in 30 years, I will be way
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more on form and able to really make the most of it, I think, more than when, you know,
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it's a different type of travel.
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Yeah.
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But it's not necessarily a travel either.
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Like it could be, I'm going to take two years off and focus on family or we're going
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to, you know, like it's kind of, I don't want to be earning, I want to be focusing on
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my family because these two years are important.
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Or like, even in the sexuality or somewhat, you know, like just, or young kids, anything,
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but, or, yeah, maybe you just want to, maybe you want to go and learn tennis two years
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and you just want to learn and do your hobbies.
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Yeah, I see so many memes and it's like, I've got a head free will and it's like people
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making pasta with like blue dye and making it look all disgusting and that, you know,
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just, just the idea of like going rogue, doing something that is like really not normal.
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Like you're not going to go and make spaghetti bolognese and have blue pasta and then red
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toppings just because you decided you want to make dinner look like a clown.
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Do you know what I mean?
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But like, but why not?
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Actually, you could.
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Yeah.
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You could take two years off and go and play tennis.
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Yeah, yeah.
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If you wanted to.
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It's not a judgment, right?
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It's like, oh, oh, okay.
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No, I just don't even think people think about it.
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No, but I mean, it's just like, yeah, I think people don't think about it because it's
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not the norm, but it's becoming the norm.
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And that's what this is about.
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And I think why it's getting so much hype right now is like, it's a number of reasons,
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like the biggest one is burnout.
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And I think that has been instilled from our previous generations of like the hustle,
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just working to the nth degree.
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If you work harder, you'll make more money like all of that, that mentality are.
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And also wanting to live up to expectations as well has meant we can't.
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We can do it all.
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We just can't do it all at the same time.
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And I think you're so right, but I do think there's a real epidemic on burnout.
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And it's like, it's almost normal to be burnt out now.
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Yeah.
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You know, five years ago, maybe longer than that was sort of this big question about what
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even is burnout.
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And I was having a conversation with one of our friends, actually, Emma, who was on our
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podcast a couple of years ago.
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Yeah.
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She has an amazing rank called six talks.
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But anyway, we were talking about, she was like, I'm so sick of hearing about people
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say burnout.
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I'm so sick of the word, I think it's total bullshit.
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I think we're like actual burnout is like, like, and people might be listening to this
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who actually have got diagnosed with burnout.
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And it's like, you can't, you can't function for like six months, you know, like saying
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like, I'm burnt out, I'm burnt out.
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Like people that have actually been through, I think I've got PTSD from that.
12:02
Yeah.
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It's like, you don't have PTSD.
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Did you go fight in a war?
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Yeah.
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Yeah.
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It's overused.
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But I think the reasoning behind it and how it's become normalized, there's still a
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function of people overworking, you know, like I think the fact that it's become, you know,
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call it what you want.
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Like it's overworking, essentially.
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And trying to do it.
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It's being too stressed.
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It's chronic stress.
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It's chronic stress trying to do too much, you know, bite off more than you can chew, but
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it'd be there for everyone trying to do everything.
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I heard this the other day.
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I was listening.
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I want to play to an episode on burnout.
12:34
Yeah.
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One of the things that I thought was just like a quick tip, which I'm just going to add
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in here is like actually scheduling in, relaxing time and like protecting that in the same
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way you would protect your meeting time or your workload or things that's in your calendar
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that you wouldn't move because it's work, guarding that with the same respect.
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And you know, it might just be two hours on a Wednesday from seven to nine, you always
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just like, you have a dinner by yourself and you read a book or like, and I know that
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that's really privileged.
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There's a lot of people that aren't able to do that, but I love the concept of card out
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time for yourself and like book it in your calendar.
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Yeah.
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Just as nothing time.
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I had two weekends of that and then I'm like nervous for this weekend because I haven't
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done anything for the last two weeks in terms of like socializing or like, you know,
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nothing.
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You do nothing.
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Nothing.
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That's so impressive.
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No, but I'm like skewed for this weekend.
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Like because you're like a built-up.
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So actually anxious.
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No, like I've pent up like.
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Oh, she's never blah, blah.
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So maybe just like don't do extremes.
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What do you have just put it in, like little nuggets, don't do like a big download of
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you time because then the flip side is download of social time anyway.
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So yeah.
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But I think now that I know that you're pre-empting, I mean, just like the twinkle in your eye.
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I know.
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Do you think about your big weekend?
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I just want to on Friday because I'm like, no, not going to go out Friday.
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Like just, but then if I do three weekends and I'll hold or I know you don't want to
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go like caged monkey and I don't want to go and then holiday the next weekend.
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Oh, no.
14:00
No, no, no.
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I'll go out this weekend.
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Guys, you'll see me out.
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But maybe you just need to sit yourself and like, can I'm going to be home by one or whatever?
14:08
Yeah, yeah, yeah.
14:09
Yeah.
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Anyway, the other reason is that I try to pretend she's not a party or anyway, and we move
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on.
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Sorry.
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I had a friend who's just had a baby and like, obviously sleeper sites and she bumped
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into another friend who she used to party with quite a lot.
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And this friend was like, oh, well, at least you'll be used to the late nights.
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And I was like, that is great advice.
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We, you know, I'm prepared for the sleepers nights.
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I'm prepared for like the same way I took three.
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It's going to be great.
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It's going to be fun.
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Anyway, the other reason we've got burnout is real.
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We've got that flexibility and kind of we kind of spoke to this just before, but like
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people want, you know, remote work they want to work in cafes, they want to work in
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different countries.
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They want, you know, a portfolio of careers, you know, it's they want to be their own
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boss and like have different clients or, you know, dictate how they're going to work
15:04
not work for someone else.
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Like all of that is feeding into this mini retirement craze.
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Also that we're seeing at least linear life right now.
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And I think again, that's what our parents probably instilled in us was like marriage,
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babies.
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You know, like all of that.
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And it's like, no, no, people are having very quote unquote unlinear time lives right
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now.
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Focusing on business rather than family fucking, you know, like it is very mixed in terms
15:34
of it's not as traditional as it was.
15:37
Yeah.
15:38
It's kind of, I guess what I'm saying.
15:39
Yeah.
15:40
I feel like I like that it's starting to be more definitely outside of New Zealand.
15:45
I would send the UK anything goes and New York anything goes, you know, you see people
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who are when I was in New York, I remember seeing 40 year olds acting like 15 year olds
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and 21 year olds acting like 40, you know, it's really varied and it's the same in
16:00
London.
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I think big metropolitan cities is quite as it encourages people to think differently.
16:07
There's a lot more diversity of and I'm a lot more accepted, right?
16:10
Yeah.
16:11
Yeah.
16:12
Whereas in small towns often, and I'm not saying New Zealand's a small town, but like
16:15
in small towns, generally those people love the idea of the life that's sort of prescribed
16:21
all the timeline that is traditional.
16:23
Yes.
16:24
I remember I'm moving here at 35 and you're like, oh, so young, you know, it's like, that's
16:31
amazing that you have that mentality and not like, oh, I'm 35 and I'm moving to London.
16:36
Yeah.
16:37
Actually, we spoke about this the other day.
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There's such a huge way that our friends, our age, who have moved to London and I think
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if this was 10 years ago, there's no way you get 35 year olds moving to London.
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I think it's a function of the New Zealand economy as well.
16:51
Also probably COVID.
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Yeah.
16:53
Yeah.
16:54
And the last one, which is the big one, is that there's been a shift in like what people
16:58
value?
16:59
Do you know what I mean?
17:00
It's not like titles and salaries.
17:03
It's like very much health and well-being, you know, you've only got one body, like all
17:07
of that, like very conscious about mental health and just like, I think there is just like
17:14
living intentionally, having that freedom, all of that has meant taking a works radical,
17:22
having little macro retirement, but there is a financial implication to all this.
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Where?
17:29
I didn't think I'd be going there.
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And if you are going to do it or you're thinking about doing it, you want to do it, like you
17:36
need to have a plan, just like with anything in life, it costs money to take a break,
17:41
right?
17:42
You know, it costs money to live in this world, and if you don't, if you want to take
17:45
time off from earning an income, you're still going to have expenses that you need to figure
17:51
out how to pay for this.
17:52
I cannot imagine what it would feel like to be living my life and not, and not worrying.
17:59
No, no, no.
18:00
I like, I can't imagine the anxiety of spending with, you know, knowing full well that two
18:07
years, three years, five years, there's no money coming in.
18:11
Even people that say that so much, even people that say they're traveling for two years.
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I need someone when I was in Turkey who was like, oh yeah, I've been traveling for two
18:20
years.
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I was like, sorry.
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How are you affording life?
18:24
Yeah.
18:25
But I also think plan, a plan, but also when you're traveling or if you're doing, I think
18:31
traveling is different because you can travel quite cheap.
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If you want to, you don't need to be in an Airbnb, however, if you were staying in your
18:38
city, paying your mortgage or your rent, and you had all of the same expenses, like,
18:43
go on, let me.
18:44
Yeah, it's like little things having a plan of like, yes, if you do have a house and you
18:47
are going to go traveling for two years, making sure you've rented out that there's people
18:51
to cover it, that it covers their expenses, that if they move out, you've got an emergency
18:55
fund to cover the mortgage.
18:56
And you're like, all of that stuff, like you have to think about, but let's look at an
19:01
example, because I think you might be surprised at like which one is better.
19:06
Taking your micro retirement break or actually just working until your retire.
19:11
See, my gut feeling before we've looked at any numbers would be, it's a no brainer
19:16
that you're going to be so much worse off if you take a break, but maybe I'm wrong.
19:21
Yeah, maybe.
19:25
I've spoken about this before, but I'm going to speak about it again because I think
19:28
it's a really, really important thing for all of us to think about.
19:32
And that is our confidence and how we show up in the world.
19:35
And it's been something that I've been trying to look at, things like setting boundaries
19:40
with myself and with other people, being able to take risks, trying new things, like
19:45
there's so many things that have impacted my confidence in a really positive way.
19:50
There's also been a lot that has done that in a super negative way.
19:53
When I was home in New Zealand, I was driving this car as in the one that I'm sitting
19:57
in right now recording this.
19:59
It's really impacted my confidence in such a positive way.
20:02
And it's just been one of those things where I'm like, oh wow, you know, it's okay sometimes
20:06
to admit that there's some stuff that's external that makes you feel good.
20:11
And so Lexus are empowering this podcast.
20:14
And we're so, so grateful for them and also just to be able to be in this car.
20:19
It's been absolutely amazing.
20:21
But basically we've created a co-branded resource that is a chance for you to learn exactly
20:28
how you can work towards a big ticket item.
20:32
Like buying a Lexus.
20:34
So if you would like to find out how you can work towards buying a Lexus or a big ticket
20:39
item, there's just like a link in the podcast show notes.
20:42
It's free.
20:43
It's a really cool resource.
20:45
And one day, you know, you and I, we might both be lucky enough to be parked up in our
20:49
beautiful Lexus car.
20:51
But thank you so much, Lexus, for empowering this podcast and for honestly giving me the
20:56
chance to realise how much I would love to one day invest in a beautiful car like this.
21:06
So let's say with 30, you and me, do you want to take the break or do you want me to?
21:13
Um, I'll take the break.
21:15
I think you'd be a break-taker.
21:17
I'm not sure.
21:18
I'm not sure.
21:20
I actually don't think I would.
21:22
I think you would be more likely to take a break.
21:24
I think you do some rogue stuff, like, piss your eyebrow or like, you're, like, almost
21:30
like the most consistent, measured plan person ever, but then you have these bizarre blow.
21:36
It's almost like you're, I'm not going to party, not going to party, have a blow up.
21:39
I'm not releasing energy in other ways.
21:41
Yes, yeah.
21:42
So point here is, I think I'd be too scared to take a break.
21:45
I think my identity's so wrapped up in work and I love it so much that I can't imagine
21:49
it.
21:50
Whereas I can imagine you calling me being like, I'm moving to Mexico and I'm learning
21:53
to manage.
21:55
That would probably be my break to be fair.
21:57
I'm like, I get it.
21:58
Yeah, I get it.
21:59
Okay, let's do your taking the break.
22:02
What would your break be?
22:03
Mine would be like, I'm taking a break just to read books or something.
22:06
Yeah.
22:07
Like, God, you're a geek.
22:08
I know.
22:09
So true.
22:10
Okay, you're taking a two-year break, get through 24 books that you've been wanting to
22:15
read.
22:16
Oh.
22:17
Yeah.
22:18
It would be amazing.
22:19
Oh my God.
22:20
You're smarter and calm and knowledgeable.
22:23
I mean, good luck affording that.
22:26
Let's just reject these numbers to read it out.
22:29
Yes.
22:30
Okay.
22:31
So you're working straight through and I'm taking a sabbatical at 35 years old.
22:37
Okay.
22:38
So we're both starting at 30 just for like ease of sake.
22:40
Right.
22:41
So we're going 30 years off.
22:42
And you're planning in five years to be doing this.
22:44
Yes.
22:45
We're doing this.
22:46
I'm going to take a reading break.
22:47
I'm going to take a reading break of a year.
22:50
Okay.
22:51
Yeah.
22:52
Yeah.
22:53
Okay, cool.
22:54
So would you be reading nine to five?
22:55
Like, how would you make sure that you were actually not just like, do you, you know, reading
22:59
a book, you're like, take five of them a whole day and never open one of them?
23:02
I know.
23:03
You would have to be quite structured.
23:04
I don't know.
23:05
I've got a week per book.
23:06
Yeah.
23:07
Yeah.
23:08
I'd probably get quite a bit of mech.
23:09
You know.
23:10
I'd get like a spin.
23:13
Oh, yeah.
23:14
You'd get like a...
23:15
For anyone that's not watching, she means kind of like almost like a head brace.
23:18
Like when you're having like your braces when you're going to a night guard or something,
23:21
she's mentioning those ones that like, you can lie down and bed and they connect to
23:25
your side, you're like, bed so table and they like, it's like a kindle and a book holder.
23:29
And so you can just lie and bed under the covers and rest.
23:31
But how does it work if it's a normal book?
23:33
So you...
23:34
Yeah.
23:35
You still turn and...
23:36
But if it's a kindle, you can click it or your phone like, yeah, I bought one for Valentines.
23:41
Yeah.
23:42
Didn't he hate it?
23:44
That is really bad from you.
23:46
Happy Valentine's on like our first Valentine's.
23:48
Now you can sit there and lie and bed and not talk to me.
23:51
Yeah.
23:52
It's not the most sexy.
23:53
Did he get mad at you for that?
23:54
He just was like, gosh, you're weird.
23:56
I wanted it.
23:57
I wanted it.
23:58
So I got it.
23:59
Practical.
24:02
Anyway.
24:03
We are both earning 60,000 pounds a year.
24:05
Shit, yeah.
24:06
I love that for us.
24:07
Yeah.
24:08
We both invest 500 pounds a month.
24:10
Wow.
24:11
Yeah.
24:12
Impressive.
24:13
So we're going to be using...
24:14
And this is growing at 10% return per year, which is what stock market...
24:18
The US stock market has done over the last 30 years on average.
24:21
So you've invested that 500 pounds per month for 35 years.
24:27
So from 30 to 65.
24:29
So you've done that.
24:30
Oh, sorry.
24:31
Got you.
24:32
Right.
24:33
So we're looking at me from 30 working all the way through.
24:34
Yeah.
24:35
And I'm not increasing my 500 new pounds investment.
24:37
It's just the same.
24:38
Just for ladies.
24:39
Yeah.
24:40
Yeah.
24:41
You never take a break.
24:42
Bloody hell.
24:43
Yeah.
24:44
Okay.
24:45
So if we did took your calculations off, so you're saying that it probably take you 7 years
24:49
of not investing.
24:50
No, you're the one that's taking the break.
24:53
Sorry.
24:54
Seven years of not investing and putting that money aside so I can spend it for my holiday.
24:58
Yeah.
24:59
Quite a good holiday.
25:00
Plus not investing for the time that I'm on the break.
25:04
So.
25:05
Yeah.
25:06
Because basically if you have to get to, let's say, instead of that 500 a month going
25:11
into investments, it's going into a pot of savings for when I take my break.
25:15
Yeah.
25:16
Yeah.
25:17
So that break of not investing, which includes my year sabbatical, just eight years all
25:22
up, basically.
25:23
That's roughly 40,000.
25:24
You're not contributing to your investments for 35 years.
25:29
As in, that's compounded over 35 pounds is that that missed opportunity years compounded
25:34
because that money's not in there compounding for 35 years, 1.4 million, I know.
25:42
And I guess this is just reiterating, it's not just not investing for a year, it's technically
25:46
not investing for like eight years, right?
25:48
And eight years of investment invested for 30 years, that's the compound interest.
25:52
That's how 40,000 makes its way up to 1.4.
25:55
But in a simple way, if it was literally just not investing for a year, that's still
26:01
costing you 200,000 just by not contributing 500 a month per year.
26:06
So that is motivating.
26:08
So if you can live off 500 a month on your sabbatical and just not invest that money,
26:15
but spend that money, it's going to cost you 200,000 by the time you get your time.
26:23
So the question is, is that 200,000 worth it to you from a health and well-being,
26:34
taking that time off?
26:35
It's not 200,000.
26:36
I reckon we have to be like, it's the cost.
26:39
That's the opportunity cost.
26:40
Yeah, but it's technically over a million, it's only a million and a half, like I think
26:44
we have to be realistic.
26:45
Like in today's world, it's hard enough for someone to find money to invest.
26:50
It's hard enough to do that, to be able to forfeit your money to invest.
26:56
You also have to save towards affording an entire year of not having a salary.
27:00
So it's pretty unrealistic, I would say, for someone to be able to save 500 pounds, which
27:07
is 1,000 New Zealand, and then put aside 500 pounds, 1,000 New Zealand for saving.
27:15
You are absolutely effing yourself over.
27:20
So I guess the kind of takeaway from this is like, it's not just, and it's with anything
27:25
right, it's if you're taking time out to look after family and you're not earning an income.
27:31
It's like whatever the reason is, yes, we talk about traveling or reading books, but
27:34
like, it's not just the 6,000 pounds that you're not contributing to your investments.
27:42
It's that compounded over how many, however many more years you have until you retire.
27:47
And that's 35 years is a long time for you, for that money to compound, and therefore
27:55
for it to natively impact you.
27:58
So it's like just being aware, it's like when we used to talk about, oh, you know, saying,
28:02
okay, I'll just go to this dinner at this restaurant, it's not just 100 pounds for dinner,
28:06
it's 1,000 pounds for dinner, because if you've taken that 100 and invested it, it would
28:11
be way more.
28:12
So it's just thinking of the opportunity cost of what you're doing.
28:15
And like, let's not use numbers for this because I feel like it might be confusing.
28:19
But if you take a break early in your career set, 25 versus 60 or 50, is the idea that
28:27
the dollar amount, like the lady you do it the less, because you, because when you start
28:32
and get the whole point of investing young, is that like the compound interest you get
28:35
on, say, 6,000 pounds is enormous in 35 years, right?
28:40
So the dollar amount when you're later in life, if you take 6,000 and you don't invest
28:44
for a year, that amount is not going to be, you're not going to be making, isn't like,
28:50
do you know what I mean?
28:51
Like if you're 25 and you invest 6,000, by the time you're 65, that compound interest
28:55
on 6,000's huge, there's so many factors, right?
28:58
Because it's like, what is your income?
28:59
It's probably a lot less when you're younger.
29:02
You probably have less investments to lean on in terms of paying for your true,
29:07
when you're older, you might not need to have the salary got more passive income,
29:11
more passive income, more expenses as well.
29:15
You've probably got kids that you need to pay for as well, so.
29:18
Yeah, so there's lots of, there's lots of factors, but the point here is, it won't derail
29:23
your future, but it's just a lot of money.
29:26
It's a lot of money, but it's like, it's what, what is the price that you're willing
29:32
to pay for that one year sabbatical essentially?
29:36
It's actually a really good way to look at it.
29:38
Like, if someone said to you, you get a whole year of reading books, but you're not going
29:44
to have 1.4 million, is that year worth 1.4 million to?
29:48
No, no.
29:49
The books can wait.
29:50
The books can wait until it's been absolutely wait, but maybe if it was 100 grand, is it
29:55
worth it?
29:56
Maybe you're getting close.
29:57
Do you know what I mean?
29:58
It's like, it's not what we call like, would you do this for a million dollars?
30:02
Like you're rather, would you rather do this or would you do this for a million?
30:04
I'm like, what about 100?
30:06
You know, like it's like, gosh, so hypothetical, but yeah.
30:09
But I do like the idea of understanding how much that year or five years is costing
30:13
you, like the actual tangible amount.
30:16
And this is a really good example of like, when parents take time out of work, look after
30:22
children.
30:23
Oh my God, you're so right.
30:24
It's exactly the same.
30:25
They're not contributing to their pension or their Kiwis over superannuation.
30:29
That's probably 500 pounds a month ish for some people.
30:33
Like that compounded over, if you're taking a year maternity leave, you know, like that's
30:38
how you got to think about it.
30:39
The gender pay gap alarm.
30:40
Yeah.
30:41
So like have conversations with the partner, have conversations with your employer, like
30:45
make sure that you're not as impacted as we have just gone.
30:50
Because I guess in a parental situation, if one person's working in one person's not,
30:55
this is what we've spoken about.
30:57
Heaps is if they're still contributing to their 20 year holiday fund, they should be
31:02
splitting it.
31:03
And then because they're benefiting from you not working, essentially no brainer for
31:07
me now.
31:08
But when we first started talking about it, I kind of was like, I don't get it.
31:11
And if you don't understand it, you wouldn't get it.
31:14
And then you wouldn't ask for it.
31:15
You wouldn't know.
31:16
And then you wouldn't be, wouldn't realize you're being negatively, financially impacted.
31:20
And yeah.
31:21
So education and knowledge is power.
31:25
So we're the all of us.
31:26
Yes.
31:27
Would you?
31:28
Yeah.
31:29
I was about to say would you?
31:30
We were talking about the idea of a five year.
31:32
I mean, good Lord.
31:33
Do you imagine how expensive that would be?
31:34
Like no one can afford that.
31:35
Yeah.
31:36
I would say it would be niche, niche, what's the word?
31:38
Negligible.
31:39
Negligible.
31:40
Negligible.
31:41
Negligible.
31:42
Do that.
31:43
Yeah.
31:44
Actually, not that we're financial advisors.
31:45
But I would say that's an absolute no.
31:46
Yeah.
31:47
No, I wouldn't.
31:48
But a year.
31:49
Even six months is not enough.
31:50
I'll just wait till I'm 65.
31:51
And I probably can't even see the words on the page.
31:54
And I'd, you know, have to listen to all your book on super loud.
31:57
Yeah.
31:58
Yeah.
31:59
Yeah.
32:00
Cool.
32:01
Depression for weeks of annual leave.
32:03
Yeah.
32:04
That's why.
32:05
But also, I think it's like thinking outside the box, right?
32:09
It's like you could make money in other ways.
32:10
So let's say, for example, you did take a year off and you weren't getting a salary.
32:15
But could you reduce your costs enormously so that all you were missing out on was the
32:21
money you're not investing for a year, which is 6,000.
32:24
And technically, as you say, live on 500 pounds, like, is there a way where you could
32:28
downsize and like really reduce the amount, all the financial impact that it's having?
32:32
Yeah.
32:33
You could.
32:34
Like the different ways of doing it.
32:35
If you could live off that 500 pounds a month, that would be way less impactful.
32:37
So yeah, you could do that.
32:38
I don't know if I feel like, I feel, I think I feel a bit like, saddened.
32:42
Yeah.
32:43
But also, I also said, I was blatantly not going to be the person that takes a whole year
32:47
off.
32:48
So maybe not.
32:49
Maybe not.
32:50
Yeah.
32:51
I think the idea of compounding interest, we haven't really spoken about that in ages
32:55
on the podcast because it was so like beginner, welcome to investing, understand it.
33:00
But I think now is a really good time to bring it up again.
33:04
And this whole thing is essentially just highlighting how amazing having money invested
33:10
from a young age is and like young inverted commas.
33:14
Like, I don't, I don't mean five.
33:16
I mean, obviously amazing.
33:17
It's just like the earlier you can, the better.
33:20
Even if it's, you know, don't wait a year and then start investing or don't wait,
33:24
be like, I'm going to start when I'm 30 or start when I'm 40, like, start.
33:29
But also, don't stop because the, the stopping is what I think really marks people are.
33:35
Get on the investing gravy train because I've been putting heaps of money into my,
33:39
well, not heaps.
33:40
Well, I've been putting money into my emergency fund the last few months and I'm like,
33:44
stop it.
33:45
You've got enough.
33:46
You're fine.
33:47
You don't get greedy with the need and like put your money in the stock market.
33:51
Sophie.
33:52
Yeah.
33:53
You know, like, how many root canals you're going to have to pay for?
33:57
Not enough to need $8,000 New Zealand dollars.
34:00
Because then you'll put the other way and be like, I've got so much money in there.
34:02
It's not really an emergency, but I can spend it.
34:04
Yeah, yeah, true.
34:05
Yeah.
34:06
I have noticed myself doing that lately.
34:08
Speaking of money, I really need a coffee.
34:09
Yeah, cool.
34:10
Okay, wrap it up.
34:11
Bye.
34:12
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34:16
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34:18
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34:19
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34:22
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34:23
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34:26
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34:29
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34:33
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34:34
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34:39
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34:41
And it only takes one second and it would really make our week a month, though, yeah.
34:45
Yeah, yeah.
34:46
So, please do it.
34:47
Okay.
34:48
Love you.
34:49
Bye.
34:50
Okay, quickly, the curve was created to empower and educate you about investing, but we are
34:53
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34:55
Our platform exists for educational purposes only and it doesn't provide personalized investing
34:59
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35:04
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35:05
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35:09
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35:13
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35:15
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35:16
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35:17
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