How to Finance a Mini Retirement

Author's tips on taking a long break from work


Recently, a friend told me her goal for the year was to quit her job: take some time off, travel, visit family, and think about what she'd like to do next. (She's been at her current job for seven years now.) Maybe she should consider a mini retirement. According to Tim Ferriss, author of The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, and blogger, a mini retirement is similar to a sabbatical or a vacation, except that it lasts one to six months and involves immersion into a nontouristy, new way of life.

Blogger Get Rich Slowly recently interviewed Ferriss about the logistics of the mini retirement—specifically, how to approach it financially. Here are a few highlights:

  • People confuse investing with viewing retirement as the end-all, be-all objective, where you redeem all the things you've postponed for 40 or 50 years. Those are two separate questions: investment being the vehicle, retirement being the objective.
    • There are a few assumptions I operate on. The first is that long life is not guaranteed. If we define risk as the potential for an irreversible negative outcome, there's more risk in postponing the things that you would most like to do for 30 or 40 years versus taking a perhaps sub-optimal, less-compounded return on investment because you allocate some of that to these mini-retirements.
      • Assumption two is that your ability to generate revenue and to accomplish business objectives is directly dependent on optimal physical and mental recovery. I would argue that when people add hours and only have [two-week] vacations, they'll benefit from taking a mini-retirement and actually return to work with more perspective, greater endurance, and the ability ultimately to produce more money, so that offsets the amount of money spent on that mini-retirement.
        • I was initially paying for the apartment and then I realized it made no sense, gave it up, and ended up putting my belongings into storage. I went from $1,500 a month to $150 or $200 a month. That's what I did. There are other cases where people who go on mini-retirements will do a house swap. Why not find a wealthy family in, let's say, Panama who will let you use their house in exchange for them using your house for a four-week period?
          • Most people believe you either have to have a low-stress, low-reward job and life — you're a home-based dog-sitter with very few responsibilities, a lot of time and no income, but very little stress — or you can be an investment banker, make $500,000 to a $1,000,000 a year, and work 80 to 100 hours a week. You don't necessarily have to choose between those two. You can get the best from both. You can mix-and-match.