Strive to Wake Up and Do Nothing (with Your Finances)

“If you really have done a great job as a leader, you should wake up in the morning and have nothing to do.”

– Steve Case, Co-founder of AOL, Chairman and CEO, Revolution

© Tommyschultz | Dreamstime Stock Photos & Stock Free Images

© Tommyschultz | Dreamstime Stock Photos & Stock Free Images

This quote changed the way I think about my IT consulting career. Soon after I read it, a coworker complained to me that his manager was dumping menial work on his underlings; to the point it appeared he was taking on very few tasks. Previously, I would have sided with my coworker thinking this manager was not pulling his weight, but now I realize this guy is working on becoming a good manager. While his team is writing his status reports, the manager is likely devising his next steps up the corporate ladder.

The goal of actually having nothing to do as a manager or leader is impossible to achieve. But STRIVE for this goal, and it will drastically change the way you approach your career. Mr. Case also states that putting in place a team of the right people is an important step toward achieving your goal. By streamlining workflow and empowering capable and trustworthy people, a manager can inch closer to quiet mornings with an empty email inbox.

Click here to see a video interview with Steve Case about management. 

Apply This to Your Life
You may not be a manager at your job, but you are the CEO of your household and your finances. So how can you take this management philosophy and apply it to your life?

Can you reduce, streamline, delegate, simplify and automate your life on the way to financial independence – getting your finances in order to the point where you have little to do except enjoy life in retirement? That would be true independence.

The whole idea behind passive income is to make money with little effort, and ultimately not need a ‘real’ job to pay the bills.  The hard work is done up front, whether it be buying a real estate property, a dividend stock, or some other form of investment income. Some maintenance work must be done in the future, such as managing the rental property (or communicating with a property manager and making decisions), or keeping up on stock and investment performance. Passive income is the vehicle you need to achieve financial independence.  But once you’re there, it’s time to slow down and enjoy yourself. Having too many things that need to be done all the time defeats the purpose of striving for free time in the first place.

Those seeking financial independence want more free time to pursue passions that can’t be pursued while working a 40-hour per week job. Pursuits can include new business ventures, traveling, an athletic goal, spending more time with family, picking up a hobby, or just simply reading for pleasure. The last thing you want in early retirement is unwanted administrative tasks that take up your time.

What are Some Things You Can Do to Reach This Goal?

  • If you have income streams that come from real estate that you manage, it would be best to eventually hire a property manager to run it for you. Otherwise you’d be better off selling it because rental properties will take up your time. Rental property problems can interfere with your life; like when my wife was due to have a baby and the condo association called me in for a hearing about my tenants putting their garbage out on the wrong night. 

  • If your passive income streams come from stocks, well then you better buy good companies with long histories of paying and increasing dividends; companies with wide economic moats, strong balance sheets, and excellent management. Too much work?  Income stock ETFs like the SDY, VIG, and NOBL may fit the bill instead, spreading out your risk and decreasing the need to keep an eye on things all the time. Or buy bonds.  Or if you really want to get passive, hire an investment adviser who handles your investments for you, but expect to pay hefty fees for this service. Although it may be worth it if you really want to get laissez-faire with your investments.
  • Use one financial institution to manage all of your investments. I’m guilty here. I have a taxable online brokerage account, a DRIP account with Computershare, a 401k account through work, and a retirement account with a different broker. I need to do better at this today, but I’ll certainly straighten it out by the time I stop working. Nowadays you can use a tool like Personal Capital to track everything on one screen, but you still need to log into all of your accounts to take action.
  • If you invest in peer-to-peer (P2P) lending, the industry is moving in the direction of automation. Lending Club Prime allows you to choose your investment criteria and the service will place orders for you when inventory becomes available. Prosper has similar functionality too.  Set up your P2P accounts right and you’ll receive and reinvest the income without thinking about it too much.
  • Eliminate your bills. Don’t have bills, don’t have bills to pay. Pay off your debts and work toward paying off your mortgage. Cancel unneeded insurance policies, cable TV, magazine subscriptions, jelly of the month club… whatever it is you don’t want or need, eliminate it and you won’t have a financial action to take. My wife had a Banana Republic credit card for years and liked it because they sent her coupons. Since she no longer needs work clothes, she doesn’t shop there as frequently. When she did use it, it was another bill to pay. This month we finally closed it.
  • Embrace the ACH (Automated Clearing House) and set up online bill pay. Most young people are already doing this. But you can get extreme and not sign up for anything that can’t be automated. Use one bank to pay all of your bills, or better yet, use the same financial institution where your investments reside. Never write another check.

Finance as a Hobby
People like me, and probably a lot of you, think finance is fun. When I implement automation for my bills and simplify my finances, it opens up more opportunities to analyze investments, make crazy spreadsheets, and track my money… hobbies I enjoy. Writing for this blog is another hobby I enjoy. Every time I automate a financial aspect of my life, or eliminate an action I need to take, it gives me more time to do fun stuff. As an example, I used to pay my car insurance 4 times a year. But recently I switched to the one payment a year plan. Paying once a year instead of quarterly saves me three checks I don’t have to write and account for… yes I still write checks for that one. Maybe I need to find an insurance company that does bill pay with my bank. If I take a lot more steps like this, more free time will open up.

Final Thoughts
When I’m retired and traveling in some remote part of the world, I’ll always have some financial responsibilities that need to be taken care of.  Concerns like filing taxes, following investments, and home bills and maintenance while I’m gone will need to be handled by myself or someone I pay. Technologies like the smart phone will allow me to handle my finances on the fly, further permitting extended traveling and fun activities. But even though I’ll always have some financial tasks, I can still STRIVE to get my financial life to the point that I have little or nothing to do with my finances each morning.  Just as the quote by Mr. Case has influenced my career, it’s a reminder of the need to simplify my financial life so I have more time for things I enjoy. 

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32 Responses to Strive to Wake Up and Do Nothing (with Your Finances)

  1. FI Fighter February 6, 2014 at 9:58 am #

    Great post! I’m with you on the traveling part and wanting to automate, delegate, and just spending very little time on finances/investments.

    With rentals, I already have PM’s in place and couldn’t imagine not using them, even after I reach FI. The ones I manage myself now, I would delegate over to a PM. The point of FI is to have free time, after all.

    Work hard, pay your dues early in life so that you can wake up someday and not have to do anything. I love it!

    • retirebeforedad February 6, 2014 at 10:54 am #

      FIF,
      I’m not usually inspired by quotes, but this one hit the spot. The smart phone is revolutionary for travel. I used to spend a lot of time in internet cafes on PC back when I traveled. Now with wifi and a phone is like being home. I’m managing my one property now because its close and easy. But in retirement, I think I’ll either sell or give to a manager to take care of. Depends on the numbers at the time.
      -RBD

  2. writing2reality February 6, 2014 at 10:09 am #

    Mr. Case’s point about the ability to delegate is tremendously important. Where I work, there is a Director who is terrible at letting go of the details. What ends up happening is micromanagement and frustrated folks from extra oversight. It is tough to watch for sure.

    As with yourself, a lot of my investment tracking, analyzing, spreadsheet building, etc. is driven from my personal enjoyment and can be considered a hobby. I know I will not want to be as involved for the rest of my life, so putting the pieces in place to allow me to step back will be important down the road. Of course, this is easier said than done while in the accumulations phase of life.

    • retirebeforedad February 6, 2014 at 10:56 am #

      I put that part about finance as a hobby because I do enjoy sitting down and working on it. What I don’t like is getting bills in the mail, and having to log into too many sites to get things done. Simplifying is a priority this year, but I’m finding it hard. So I think its a long-term thing. I need to be hesitant to opening up new accounts.
      -RBD

  3. JC @ Passive-Income-Pursuit February 6, 2014 at 1:39 pm #

    Very true, why spend all that time maximizing your financial efficiency to reach FI just to then spend all of that free time managing your finances. I’m a big fan of automation and like most things, the bulk of the work is done before you make the move. Rental property? Find a good area and good property and get a PM. Investments? Identify the truly great companies and then invest all the money that you can into them. Personally I wouldn’t go the FA route but it is an option for those that don’t want to think about it at all.

    • retirebeforedad February 6, 2014 at 1:53 pm #

      I probably won’t go the FA route ever either. My Dad in fact has a guy and only made 8% last year in his IRA. That was a huge disappointment obviously. Although he is in his 60’s and holds some fixed income to protect against downside.
      -RBD

  4. Adam February 7, 2014 at 8:33 am #

    Watch the SIPC limits if you centralize to a single brokerage, depending on the level of risk you are comfortable with.

  5. SavvyJames February 8, 2014 at 8:36 am #

    Over the years I have definitely simplified my investment portfolio and therefore, reduced the amount of time spent managing disparate accounts. Early on, between different DRIP accounts, separate brokerage and IRA account, etc. I spent a significant amount of time each month keeping it all straight. Now however, there is simply my TSP account, various accounts (IRA, brokerage, and cash management) with one financial services company and a rental property. Right now, I am probably close as I can get to being on auto-pilot without utilizing a financial advisor, something that is not an option for me as I am allergic to fees.

    • retirebeforedad February 8, 2014 at 4:09 pm #

      James,
      I’m working on simplifying, but it is tough. Its a goal over time. I am also allergic to fees and I don’t see myself ever going with an adviser. But you never know.
      -RBD

  6. Kay February 8, 2014 at 4:26 pm #

    I also enjoy managing my finances and creating spreadsheets, etc. I would love to retire early so that my “job” is just to manage my finances and different income streams. Now that is a job I could handle gladly! I’ve worked hard at streamlining accounts and our finances overall. It seems to me that it is a continual process – meaning that it is always evolving in some form for the better. Even compared to a year ago I write fewer checks now than I did – hardly ever write them now. Can you pay your car insurance by credit card? We do that as it adds points to our rewards card.

    • retirebeforedad February 9, 2014 at 11:22 pm #

      I should look into paying my insurance another way. I may be able to do it with CC. I set it up quarterly so that I didn’t have one big payment. But my priorities have changed and I just want less financial actions. I could also see myself happily managing my finances in retirement. It is a fun hobby (for some of us!).
      -RBD

  7. Cashville Skyline February 15, 2014 at 1:48 pm #

    This is a super inspiring post! You are completely right about “passive” income. I catch myself spending too much time on my budget some mornings. This takes away from other things like writing for my blog, reading, etc. I’ve put a good personal finance system in place, but I need to let it do the job without constant supervision.

    • retirebeforedad February 15, 2014 at 1:52 pm #

      Thanks Cashville. Some of us love finance, but plenty of things are more fun. I need to work on getting all my finances into better shape for retirement. I still have some time though. Glad you stopped by.
      -RBD

  8. Integrator February 15, 2014 at 3:26 pm #

    I’m taking the advice to hire a property manager for our soon to be rental also. I need to do a better job on the automation front with the various accounts. Too many disparate things that we need to consolidate is causing some headaches.

    Btw – On the quote, just personally, I’d detest working for someone who wanted to delegate every meanial thing. Fortunately I don’t have a boss like that, nor a role like that. If I did, that would probably drive me even harder to achieve early FI, which I suppose isn’t a bad thing :)

    • retirebeforedad February 15, 2014 at 3:30 pm #

      Integrator,
      Ha ha, yeah I would detest that too. The key according to Case is to be ‘that guy’ who delegates everything. Do that and move up the ladder. Changes the way I look at things with my career. Doesn’t change the fact that I want to achieve financial independence.
      -RBD

  9. save. spend. splurge. February 16, 2014 at 4:35 pm #

    I don’t do automated bill pay because I have run into 3 problems in the past of companies overcharging me. It becomes a headache to ask for your money back if you automatically pay, let alone all the bounced insufficient funds fees that appear if you keep your bank account in the low digits.

    • retirebeforedad February 16, 2014 at 7:59 pm #

      SSS,
      I definitely keep a tight watch on my automated bills because I don’t entirely trust the system. That’s why the best option is to eliminate bills where possible. Automate where prudent, keep a close watch on things if needed. I’ll never get to complete hands off bill paying, but its something to strive for.
      -RBD

  10. J. Money February 20, 2014 at 12:39 pm #

    Very true, brotha! This is indeed a great goal to shoot for – even though it sounds a lot easier than it is :) But if you REALLY remember to focus on this with anything in life going forward, I bet we get there a lot faster… And currently I SUCK at this – so it’s a warm reminder.

    • retirebeforedad February 20, 2014 at 12:48 pm #

      Ha Ha, I could be better at it too. Working on it though. That quote got me thinking for sure. Case is a local guy, maybe he can make the next HH!
      -RBD

  11. Justin @ Root of Good February 23, 2014 at 1:34 pm #

    I’m all about being lazy with finances and doing as little as possible. Since retiring I think I have rebalanced twice. And once was to deploy my pension rollover.

    Not touching the investments takes the emotional aspect out of investments and makes it less likely I’ll do something stupid in the heat of the moment.

  12. Big Guy Money February 25, 2014 at 10:48 am #

    “When I implement automation for my bills and simplify my finances, it opens up more opportunities to analyze investments, make crazy spreadsheets, and track my money… hobbies I enjoy.”

    Ha! This particular quote struck a chord for me. I’m with you – building crazy spreadsheets to track our money is a hobby that I really enjoy! Funny thing is there are very few people in real life that don’t think I’m off my rocker when I start talking about it.

    • retirebeforedad February 25, 2014 at 10:53 am #

      BGM… in the financial blogging world you’ll find a lot of company!
      -RBD

  13. Free to Pursue February 26, 2014 at 11:45 am #

    Thank you for the kick in the rear. I just did a tally and 16 accounts for checking/savings/pension/tax-sheltered accounts between my husband and I is INSANE!!! I am vowing to get it down to 6 by year’s end.

  14. DividendDreamer September 15, 2014 at 10:58 am #

    Very interesting post, especially the part about the property manager. I like the idea, but I just cannot let go. I just have the need to be involved for some reason and I personally do not trust that the job will be done to my expectations. I guess I feel that I would do a better job because the property is mine and I have a vested interest in keeping it in perfect condition.

    Now, as far as all the other points you made, I am with you all the way.

    Keep cranking,

    Robert

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