Episode 777 | Why Retiring Might Be the Worst Goal for Entrepreneurs
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Welcome back to another episode of Startups for the Rest of Us. I'm your host, Rob Walling, and in this episode, I talk with Derek Coburn, the co-author of the book, Let's Retire Retirement, How to Enjoy Life to the Fullest, Both Now and Later. And we cover a bunch of topics, one of which is why retiring might be the worst goal for entrepreneurs. I really enjoyed my conversation today with Derek, and it relates to things that I often talk about on this show, where we're not just about retirement,

building the biggest startup for all the money and sacrificing your life and your health and your relationships.

We're about building a startup that provides you freedom, purpose, and the ability to maintain healthy relationships. And that really is a big part of the focus of my conversation today with Derek. But before we dive in, I want to let you know, late September of this year, I'm going to be in Istanbul, Turkey for MicroConf Europe. We're going to have a handful of amazing talks. We're going to have amazing excursions and of course, our world-class hallway track.

Speakers so far include Michelle Hansen, the founder of Geocodeo and the author of Deploy Empathy, Mark Thomas, the founder of Positive Human, James Mooring, the founder of Astalti, and of course, yours truly. microconf.com slash Europe if you want to buy your ticket. Tickets are as inexpensive as they will ever be. If you want to get a ticket and don't want to miss the event because the event will sell out, we've sold out all the microcomps for the past couple years.

You should go to microconf.com slash Europe and pick up your ticket for our event in Istanbul. And with that, let's dive into my conversation with Derek about why retiring might be a bad goal for entrepreneurs. Derek Coburn, welcome to the show. What's up, Rob? Good to be here. It's great to have you here, man. And we're here to talk about your book, Let's Retire, Retirement, Retirement.

how to enjoy life to the fullest now and later it's a little bit off the beaten path of most of their super like tactical technical stuff i cover on this show but i want to hear from you first if someone's listening this episode and they only hear the first say three minutes what do you want them to take away from this book you've written uh sure thanks um really excited to be here with you so i've been a financial advisor for about 27 years and i'd sold my practice in 2019

I realized that the best thing that I have done collectively for the majority of my clients was help them come to the realization that they were not going to be happy sitting around doing nothing for 30 years. And if you think about it, most of your listeners, I'm sure if they've met with a financial advisor or they've plugged numbers into a calculator online, they weren't asked, do you want to retire? They were asked, what age do you want to retire? And we were all opted in whether we wanted to be or not.

Most of us probably said we weren't really sure. And someone suggested to us that we should pick 65 or 67 because that's the age that everyone else is picking. And we're going along with that with with this whole premise without really thinking much about it. And so what I want people to realize, we're seeing this through the, quote, unretirement movement right now where we have people.

Over 30% of 65-year-olds are going back to work because they don't enjoy just not doing anything, not contributing, not feeling useful, not connecting with other people. And the great thing about this is once people realize and they stop and think about it,

that they're not going to be doing nothing, that they're going to have income coming in into their 60s, 70s, maybe even longer. What that means is they now have a lot more time and a lot more money that they get to spend right now on things that are important to them

essentially because they don't have to save as much for retirement. The income coming in later is going to offset the need to invest as aggressively as maybe your financial advisor or your financial planning software is telling you. Interesting. And so, see, that's the thing is when you say folks over 65 are going back to work, I instantly think, oh, because they don't have enough money. But you're saying it's because they're so f***ing bored or

So my dad's 80 and he was an electrician his whole life and then a project manager, worked construction. When he retired, he didn't have side gig freelance. Like probably most of the listeners here being developers or entrepreneurs can figure something out, right? It's a different day and age now, right? So you can do stuff on the side. And so unretirement is a thing. I hadn't even heard of that concept.

Yeah, it is a big thing. And look, I think part of it, it just feels natural. When retirement was first established, it was in 1889 by a German chancellor named Otto von Bismarck. And he picked the age of 70 when they were putting together the first government-run social plan. He picked the age of 60 because that was the age that most Germans were dying.

It wasn't lowered until 65, until about 30 years later. FDR, when he was setting up Social Security in 1935, thought that sounded like a good number. At that time, life expectancy was about 71, 72. So it was never meant to be this thing where we just sat around and did nothing for 30 plus years. And I have a little bit I cover in the book about the difference between pursuing happiness and pursuing meaning. And essentially, when somebody is only focused on their own happiness,

They're only focused on, you know, being comfortable, sitting on a beach somewhere, having, you know, a fruity drink. It's producing a reaction in their body that is the same reaction that's produced when someone's dealing with chronic adversity, when someone's dealing with the loss of a loved one, when someone's dealing with the loss of a job versus the people that were in a separate group during this research initiative who were pursuing meaning, something bigger than themselves, contribution to the world at large.

Those people were not producing that. Those people had lower inflammation. Their immunity was better. And yeah, so that's why you hear a lot of stories. I'm sure everyone has a couple that they've heard of where you're retired, somebody retired, they stopped working, they died or they got a disease like within two or three years because they just shut down and stopped having a bigger reason for doing this whole thing.

Yeah, and that's a big part of it, right? Almost probably anyone who's listening to this podcast reads a ton of books, often on Audible, frankly. I have 914 books in my Audible account, which is either a badge of shame or a badge of honor. I don't know, man, but we're not going to stop working. I just don't – I talked to Sherry about this within the last year of like –

someone said, when are you going to stop doing the podcast? Right. We're 15 years in 777 episodes. And it's like, I don't know, never. Like I just, I've never thought about not doing it. Obviously there's going to come a point where I, where I don't want to anymore or something like that, or I just get too old. But I do think there's a whole mindset shift that has to happen around this. And in, in today's show, we're going to talk about, you have a bunch of myths. You have

The Fallacy of Assumptions. You have something called $50,000 Moments. I want to cover all those as we roll through. But I want to start by saying if folks are interested, if you're already intrigued and you want to pick up the book, it's on Amazon right now. It's called Let's Retire Retirement. And you have a Kindle, a paperback, and an Audible version. Or they can go if they want to find out more buy directly from you, DerekCoburn.com.

So let's dig in to this tale of two Tonys. I love this. For my left-brain folks in the audience, we're going to talk some numbers here. As a financial advisor, financial planner, that's something I really appreciated about this book is, you know, you can read books about the high-level philosophy of this kind of stuff, but like you get down to the brass tacks because, you know, you've been doing this for decades. So let's talk through the Tonys.

All right, so I introduce a character named Tony in my book. He's 45 years old. He makes $150,000 per year, and he has $150,000 saved up in retirement accounts.

Tony meets with his financial advisor and just like what I went through, you know, a second ago, decides he's going to retire at 65 without giving it a whole lot of thought. And his financial advisor tells him in order for that to happen, he needs to save about $2,400 per month. You spread that over the course of a year and that works out to be about 20% of what he's making, which is a non-starter for most people. I mean, that means you're basically living off of

the same amount that you're saving. So Tony, like a lot of individuals that gets this information, starts freaking out. He's behind. How am I going to catch up? I'm going to work longer. I'm going to not go to the gym. I'm not going to see my kids as much. I'm not going to take care of myself. And just kind of gives himself over to playing this game and getting to a place where he'll have enough to stop.

And I have his wife remind him in the book that he likes his work. Are you sure you're going to want to stop when you're 65 years old? I can't imagine you sitting around and doing nothing. So Tony reaches back out to his advisor and he says, hey, can you change my plan and update it to show me working until I'm 75 instead of 65?

And the numbers are staggering. So I'm about to give a lot of your listeners immediate access to a ton of extra time and money that they previously did not think they had. The number goes from $2,400 a month down to $110 per month. The amount that he needs to save in order to quote unquote retire goes down by 96%.

And even if Tony were to say, I'll work until I'm 70 instead of 75, the number goes down to $600 per month, which is a 75% reduction. Look, I'm not saying that anyone needs to work as hard as they're working now or do the same thing that they're doing right now.

Now, what I am saying is that if we find work that we don't hate, if we find work that we enjoy doing, we can do it on our terms the way we want to do it. I think we're going to be able to do it for a longer time. And having that money coming in later allows the money that we do save to compound longer, to grow longer, to work longer. And it takes a lot of pressure off of us in the here and now in terms of what we need to do financially.

Yeah, and something I talk about a lot on this podcast is about through entrepreneurship, wanting to find three things, freedom, purpose, and healthy relationships, right? So there was a time in my life, it was back when my second son was born. And I found freedom, I was working a 10 hour work week, literally, I had a bunch of products, it was the four hour work week, but I was working 10 hours, it was amazing. I was free, I hung out with the kid all the time, it was great. I was so bored. Yeah.

After 10 months, I was so bored because I had, I didn't have the second thing, right? I had the freedom, but I didn't have the purpose. And then relationships are, you know, a separate topic. But that's what we're saying here, right? Is if at 65, you just stop, you have freedom now. Hey, look at all this time I have. And you lose that purpose, right? So even keeping something going part time, as you said, you don't have to necessarily work as hard, but

But the bit of purpose that brings you and the bit of income is shown in this two Tonys example, right? Yeah.

Yep. Look, we've all seen all these articles about how we should have saved more when we were 22 years old and we feel like idiots for not doing it to take advantage of compounding interest. But no one really talks about how you can accomplish the same thing and have it be even more beneficial because it's such a larger pool of money by just extending the time that you have it invested before you start taking it out. And that's what I'm trying to bring to people's attention with this example. Right. And I think if we think back to

maybe my dad is an electrician or someone who worked in a factory their whole life, they probably didn't love their job. And so they're counting the days until they cannot do that job, right? And there was not remote work. There was no work from home. There was no freelancing. The times have changed. And that's really, you know, what this book is about. I want to bounce to this concept you have called $50,000 moments and the time machine effect. You want to talk us through? It's a concept you go through in the book.

Yeah, so look, I have two boys. They're 15 and 12 now. And when they were about 10 and 7, we had a nighttime routine, my wife and I, where we would take turns laying in bed with each of them for about 10 minutes while they fell asleep. And I noticed myself starting to not appreciate this time that I had with my oldest especially because I knew he was getting close to the point where he probably wasn't going to want to do this with his dad and his mom for too much time.

However, I was sitting there a lot of nights thinking to myself, gosh, hurry up and fall asleep so that I can go have a glass of wine and watch a show or finish some work or do whatever. And I knew I should be valuing these moments more, and I tried to force myself to do it, and that didn't work necessarily well.

all that well either. So what I did is I just had this thought one day. I said, what if there was a company that created a time machine? I'm 65 years old and they tell me I can go back in time for one night to have one of these nighttime routines with my kid. What would I pay for that? To be honest, I'd pay a lot of money, but I called it a $50,000 check. I know

personally that I would write a $50,000 check to go back in time when my kid is 12 or 10 and have one more nighttime snuggle with him. And so I said, look, I got to start treating a lot of these moments like the $50,000 moments that they are. And I think there's a lot of parents, especially that, um,

are taking these moments for granted and our kids are going to be with us for a short period of time. They're going to be gone and we're going to miss them. We're going to miss these experiences. And knowing that I'm going to be working a lot longer, knowing that I'm going to be working a lot more once my youngest is out of the house in five and a half years is really like it sponsors

It's me showing up more for them right now. It sponsors all of the time and attention that I'm able to give them because I don't have plans to stop anytime soon. And I'll be happily will turn it up a notch or two once they leave.

Yeah, see, and that's interesting to hear you talk about it in your own life. Did the concept for the book come out of your own thinking of like, you want yourself want to do this? Like, are you planning to keep working to 65, 70, 75 and doing this stuff? You know, you can tell folks like you run cadre, right, which is a community in DC and an event. Like, you know, what is this stuff that you could see yourself working on for the next 20 or 30 years? Yeah.

Look, I just, I love contributing. I know that I have a lot of skills. I know that I have the ability to add value to people in a variety of ways. I want to keep learning. I want to keep leaning into all the different things that I'm doing. So I don't know that I can sit here and say specifically, this is what I will be doing. Maybe I'll have eight books by then. Maybe I'll have...

no additional books. Maybe I'll do coaching. Maybe I'll be speaking. Maybe I'll do something entirely different. I mean, if someone wants to create the granddad Olympics at some point, I will happily enter into that competition. But yeah, to your point, man, look, I started writing this book in 2017 and I was going to write it as a way to attract more clients for my practice. And clients for my practice were minimum investable assets of, you know, a couple million bucks.

I sold the business, COVID happened, and I just got really immersed in the lives of my kids. I spent an extraordinary amount of time with my kids, my wife, my friends, having incredible experiences compared to most people. And the idea for the book just sat there because I was living what I'm preaching. I was living what I'm trying to get

a lot of other people to do. And it wasn't until a couple of years ago, I said, you know, I want to finish the book, but since I sold the practice and I'm not really looking for new clients now, I can write a book that will hopefully benefit a much larger group of people than maybe who the initial intended audience was going to be.

TinySeed is the world-class SaaS accelerator that I run with my co-founder Einar and our amazing team. And we are raising Fund 3 to continue doing more of what's working. We've recently invested in our 204th

B2B SaaS company. And although we've only been doing this for a handful of years, the early signs are really good. We're able to help these companies grow. These companies become extremely valuable because B2B SaaS doing seven or eight figures of ARR is extremely valuable.

And I am wildly optimistic about the future of TinySeed. And we'd love to have you be part of it if you are an accredited investor or the equivalent of that in your country. You can invest if you're a US citizen or if you live in, I think, most countries in the world. And recently, we've actually carved out a few spots for smaller investors that weren't able to hit the minimum investment that we previously had. So if you're interested in indexing

across hundreds of ambitious early stage B2B SaaS companies. Head to tinyseed.com slash invest to see our full investment thesis. And if you fill out that form, Aynar Volset will reach out to you. Or obviously you can ping Aynar directly on XTwitter or via email. That's tinyseed.com slash invest. And in the book, you get in towards the end of the book, you get into really specific like three buckets, pre-tax,

tax-free, cap gains, required minimum distributions, like a lot of the nuts and bolts that you bring to this as a financial planner. And I don't want to dive too deep into that today just because it gets technical. And folks, if they want to understand that part, I think they should get the book and read those chapters. The next thing I want to talk about is I love this concept of investing in you. Like if you are going to work longer, you don't have to work so hard. You don't have to save so much. You don't have to push it off so far.

you can have more fun. You can exercise more, sleep more, your relationships can be stronger. Like talk me through that part, whether you have examples of folks you know, or even in your own life,

life, you know, having seen the transformation? Yeah. So I think that when it comes to things like sleep and health and working out that our society overemphasizes the benefits that will occur 20 years from now and underemphasizes the benefits that will occur 20 hours from now. So for example, like, yeah, if you sleep well, you're going to live longer. If you exercise, you're going to live longer. But the main reason to sleep well is

in my opinion, is because tomorrow morning, when you wake up and feel amazing, you're going to make better choices at nine o'clock. And those better choices at nine o'clock are going to lead to better choices at 11 o'clock. And it'll be easier to work. It'll be easier to make time for friends and connection and

dating your wife more and all of these things. And so the investing in you chapter is essentially me saying, hopefully I've convinced you and shown you that you're likely to work longer than what you previously thought. And the immediate benefit or result of that is you now have more money and more time that you can spend on other things. And I think that as entrepreneurs, as business owners, a lot of us feel like we don't have the time to spend on some of these things that are good for us while we're building the business, while we're growing the business.

But I also feel like, you know, the best thing that we can do for our business, for the value of our business, for the value that we are bringing to the table for our clients and our customers is to show up as the most optimized version of ourselves as possible. And so, you know, I think that the best place for any of us to turn to for advice is this best possible version of us, the well-rested version, the

the clear-minded version, the energetic version. And even though it feels like maybe we're taking away from the business, I'm betting on myself, I'm betting on most people I know to show up working less hours in their business, but they're well-rested, they're feeling good in their body, they're feeling good in their mind, they're calm in their central nervous system. I'm betting on the

results they are able to generate more than the results of somebody who is actually in the business for an extra hour or two, but is stressed out, is anxious, is worn down, is sluggish, is not feeling very good. Yeah, that makes a lot of sense. There's a term you use that caught my eye. It's called

The concept of a fun recession. Well, you can define it for folks. And then I think I'm curious to hear, like, why do you think that adults do have such a hard time prioritizing all the things we're talking about, the fun and the rest?

I say that I think we're in a fun recession. I think that the majority of adults are not coming close at all to having the appropriate amount of fun that they should be having on a regular basis. I mean, when my kids wake up every day, like they're thinking about how much fun can I have today? Like, who can I have fun with? What can we do that's going to be enjoyable?

And I think I've done an informal survey for the past five, seven years with soccer parents and people that I know. And I asked, like, when was the last time you had a good time? Most people pause for 10 seconds. They have to think about it. And the most common response is something along the lines of, you

You know, a month and a half ago, we went out to dinner with this other couple and we had a bottle of wine and we talked about our kids. And it's like, look, would the version of us that we would look back to as the version that was having a lot of fun, that was having a good time, would they be impressed with the type of fun we're having right now, with the amount of fun that we're having right now? And so I think...

look, I just think if we're here, we're gonna be working hard, we're doing the work, we're spending time at work, all these things are good, but we shouldn't be enjoying ourselves a little bit too. And there are a lot of data points that I talk about in the book about how it increases productivity, how it increases just how you feel in your body, how it reduces inflammation and keeps you healthier. But I think ultimately we should be looking for reasons to have a good time just for the sake of wanting to have a good time. Yeah, and in the book, you give options of,

What you can do, let's say you do hit 60 or 65 and you're kind of like, look, I've been a software engineer my whole life. I don't necessarily want to keep grinding doing a 40-hour work week, you know, working salaried.

You have options like you can transition to a new career, maybe something that makes less money, but you enjoy more, right? Since you don't need to make as much money. Build a side business, which obviously a lot of folks listening to this podcast are doing. You can transition to consulting or coaching, which gives you a lot more flexibility. You can slow down, you can pivot, you can take a mini retirement or a sabbatical. Do you have any examples of folks you've known who've taken one of these tacks and has really, I think, been able to step away from

You know, I imagine if someone worked 20 years, 30 years as a W-2 employee, they might think, when I'm 65, I don't want to do that anymore, but I'm too scared to kind of do something else, right? How can they get over maybe that resistance in their own mind of, well, what else will I do to fill the time and make money?

I'll share a quick story that I mentioned in the book that came from a book called Originals by Adam Grant. And he references a study that was done that looks at entrepreneurs that start companies while they either have an existing stream of income coming in

That's one group. The other group went all in and just started a company sort of like with no backstop whatsoever. Even though entrepreneurs sort of had the reputation of being great risk takers, the best entrepreneurs, according to this study and a lot of this research, are

are shown to be the ones that are very good risk mitigators because it was the companies that were most likely to succeed were the ones that were run by individuals who had a steady stream of income coming in from someplace else. The story that he tells in the book is he was approached by the founders of Warby Parker to invest in their company. And he says, the worst financial decision I ever made was not doing this. And the reason I didn't do it is because these guys all had other jobs while they were building Warby Parker. And I'm like, I'm not going to give

these guys money if they're not going to be all in and all focused on it. So I bring this up to say that I think having two things going side by side at the same time offers some nice ancillary benefits. First and foremost, the ability to be really particular about who you work with. So if you have your job now and you're working the 40 hours a week and you think there's something else that might be of interest to you,

Start it. Maybe do like a couple hours a week. Try to find one or two clients. If it doesn't work out, you can pivot. You can do something else. But if it does work out, I think that that income coming in from the other job will prevent you from selling your soul. It'll prevent you from feeling like you need to work with people that you don't want to work with in order to pay your bills.

And I think there's just a lot of ways that we can all explore. We can look into taking online courses. We can look into reading about other interests that we may have. You have a really smart and intelligent audience. And I would say, even though now the norm is people to just kind of stick with what they do, we're going to be up to 45% of the workers in this country are going to be freelancers by the year 2027.

And I think that even a lot of people that are listening to this that are the type of person that you just described, they're going to be in a position where if they're good at what they do, companies will be happy to have them. If you say, look, I can only do 10 hours a week. I only want to work on Mondays, Tuesdays, and Wednesdays. I want to take summers off. Like, if you're good at what you do, you're going to have the opportunity to call the shots and set things up in a way that's really favorable for you.

Yeah, and I like having that anyways. I mean, boy, when I was in my early to mid-20s, even when I had a day job, I was often doing freelancing on the side, both to make extra money because we were kick-starting a life, but also I was always a little mistrusted in the W-2. Too many of my friends got laid off, you know? And so having extra legs under the stool I think are super interesting. And that's something I want listeners to take away, right, is this podcast and a lot of the stuff I do focuses on launching projects.

products, software products, SaaS products, companies. But I just recorded a YouTube video the other day where I talk about, look, the fastest way to make money is not with SaaS, that s**t.

It takes forever to build a long time to launch. It's very complicated. It's actually to do some freelance work, to do some consulting, to take your expertise and it's dollars for hours. And so it's not something I ever wanted to do for decades, but it really isn't that hard as long as, you know, if you have some expertise, especially like I say in our, my audience who probably has marketing or design or, or, uh, you know, some type of software development expertise. Yeah.

So if someone's listening to this and in your head, they're like, I want to take one action. Like I want to do one thing after hearing our conversation today. What do you think they should do? You know, I think they should pause and they should think about how much thought they gave to setting up a retirement plan if they have one. Because I do think that a lot of people just go along with this concept on autopilot because everyone else is doing it.

And when you do a retirement plan, if you sit down with an advisor or you do it online, you have to make a lot of assumptions. You have to assume what inflation is going to be for the next 20 years. You have to assume what rate of return you're going to get in the stock market every single year for the next 20 years, what you're going to earn after that. You have to assume what tax rates are going to be. Oh, by the way, you're going to have to correctly guess what age you are going to die and your spouse, if applicable.

if your parents are going to have any issues where they're going to need support financially or your children. We're picking all of these numbers like they're easy to pick. And look, we're all going to be really wrong about all of this. That's the one thing I can safely bet on is that whatever we're assuming is

we're going to want in 20 years and what needs to happen in order to get there. It's not going to be the way that we think it's going to be. Yet so many people are living their lives based on the confidence that all of these things are going to happen. Look, you might save and you might have this great plan that's based on you being in a 30% tax bracket when you stop working at the age of 65. And if that's the year that someone gets elected and decides to bump your tax rate up to 55%, then your entire financial plan is

It's just going down the tubes at that point. So really just be mindful of it. The reason why the unretirement movement is as big as it is, is because people were promised to feel a certain way once they got to retirement. They were promised a certain outcome, the arrival fallacy, if you will. They were promised something. If they did things a certain way, they would feel a certain way. And they're not feeling that way.

way. And I'm trying to get the attention of people in their 30s, 40s and 50s and help them realize that they're probably not going to be happy with this idea of sitting around doing nothing for 30 years. And I want them to think about how they can live their lives differently, knowing that that's probably not going to be an outcome that they want.

Derek Coburn, thanks for joining me on the show, man. Your book is Let's Retire Retirement, and it is out today as of this episode going live on Amazon, Kindle, paperback, and Audible. Thanks so much for joining me. Thanks so much, Rob. Appreciate you.

Thanks again to Derek for joining me on the show. Again, you can buy the book on Amazon or at DerekCoburn.com. And thanks to you for listening this week and every week. This is Rob Walling signing off from episode 777.