A FIRE Icon Goes Back to Work

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In this post, I react to the news that the Financial Samurai (Sam Dogen) is returning to the workforce after a decade of early retirement.

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While on my way to Ohio for another week of locum tenens work, I read with interest that Sam Dogen is headed back to work.  Better known as “the Financial Samurai,” Dogen made waves as one of the most prominent voices of the FIRE movement to actually retire early.  

As an investment banker, Dogen was able to build a $3 million net worth by the age of 34.  He retired from the corporate world and spent the last 10 years “fake retired” as a popular blogger.  

But things change and as he discussed recently, he’s decided to go back to work.  

Did he run out of money?  Is FIRE really just a pipe dream?  Let’s take a look. 

Families are expensive

Three million dollars of stocks and rental property can bankroll a comfortable life for one or two people. But Dogen found that the math starts breaking down with kids in the picture.  

As I found when I analyzed my family’s spending a few years ago, about 15% of our monthly costs were directly related to childcare or education for our kids. Now a few years later, with our kids both in private school, I’m fairly certain that number is even higher.

When it comes to the Financial Samurai, he reports that he had a net worth of around $3 million when he retired. Assuming that this was all comprised of the type of assets that generate a return, this equates to $120k/year of spendable cash via the 4% rule. 

One hundred twenty thousand dollars is a lot of money.  The average salary in the US in 2022 was around $60k, after all.  But as I found in my own life, kids, private school, and home choices can swiftly eat up even six figure incomes.  

Read more:  The Darwinian Doctor’s 13 Monthly Expenditures (with real numbers)

Multiple streams of income

Luckily, Dogen also supplements his investment income via his excellent blog.  He’s also an author and released a book called “Buy This, Not That,” last year.  It’s sitting on my pile of books to read, but it gets excellent reviews on Amazon and is a Wall Street Journal best seller.

Through his investment income and blog, he generates about $250,000 a year.  This can cover all his family’s living expenses, though he admits that it’s a tight squeeze in the high cost environment of San Francisco.  

Despite this income, Dogen is planning to go back to work because of one thing:  college tuition.  He estimates that it’ll cost up to $1.5 million to send both of his kids to college.  His kids are only 3 and 6 years old currently, but clearly he’s planning ahead.  

Ever the analyst, Dogen has calculated that with an expense like this looming in the future, the math just doesn’t add up anymore.  

Going back to work is not failure

The only thing our society loves more than a success story is when our heroes stumble.  I think there’s going to be a lot of people out there reading this news with some measure of schadenfreude, enjoying what they think is a fall from grace.

I don’t see it that way at all.

Dogen achieved something of which most of our country will only dream.  He spent a decade retired and financially independent.  He did this in the prime of his life, unlike most Americans that retire at 65 years old riddled by chronic health conditions.  I’ve got some strong feelings about this, as you can see below:

@thedarwiniandoctor

Work 9-5 until retirement then die? No thanks… #financialfreedom #medtok #finance #investing

♬ original sound – Jake

When it comes to his family, Dogen was present for the younger years of his kids’ lives in a way that is also rare.  It’s something that I’ve also hoped for and am now enjoying in my new hybrid doctor/investor life. 

Read more: Why I’m home for breakfast these days | Letters to my sons

Although he’s headed back to the workforce, Dogen gets the opportunity to be choosy about how he will earn money.  By most measures, he is already independently wealthy.  Rather than taking the first available job, he can choose to do something that he will enjoy.  

From the article, it sounds like he’s hoping for a job that somehow involves video production or sports.  

Respect

I have a lot of respect for people who walk the walk, and Dogen has done that.  He joins others like Mr. Money Mustache and Mr. 1500 Days who have actually retired decades earlier than most.

Dogen’s blog now serves as a roadmap for a lot of people who are also aspiring for early retirement.  His financial analysis of his own post-retirement life is already an invaluable record.  

But now that he’s going back to work, I find his story even more relatable.  Before my move to Memphis, our expenses were strikingly similar.  By my calculations in 2019, my family would need about $6.35 million to achieve financial independence. I calculated that inflation would push this number to over $10 million by 2034, when I originally planned to be financially independent.  

Those numbers were what I originally set as my goal to achieve financial independence.

Read more:  My 15 year plan to financial independence, moFIRE style

But a lot has changed since then.  

Life is about change

Since my original 15 year plan to financial independence, here’s a short summary of my family’s major life changes:

• I lost the private vs. public school debate
• We became real estate investors
• I quit my full time urologic surgery job
• We moved from Los Angeles to Memphis

These four changes have caused seismic shifts in our financial picture.  Some of the changes have accelerated our path to financial freedom, while others have slowed us down.  

Our move to Memphis, for example, cost us about $450,000 in opportunity cost and real costs.  I’m going to break that number down in a future blog post, but I think it’s fairly accurate. 

But things change.  As Dogen says, “The future won’t go according to plan. Stay flexible.”

He’s staying flexible by going back to work.  But he’s making the decision from a position of financial strength, after a decade of learning, living, and reflection.  

Should we all be so lucky.

– The Darwinian Doctor

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