Yesterday, my dad drove up to his office with his briefcase in hand, went in through the back door, met with clients as usual, and when the day was done, he walked away forever. He hadn’t planned to retire for another 5 years, but someone offered to buy his small business earlier this year, so he did some calculations. He realized that if he carried the loan on the business and charged a low interest rate, the person buying the business would be happy with the low rate, and my dad could use the loan payments to retire five years earlier than planned. I’ve known about this for nearly six months and have had several thoughts since hearing the news. Here are a few of those thoughts:
Retirement is a Big Deal
While my dad figured out all the legal stuff around selling the business, no one was allowed to know about the possible deal. Once everything was official and all the documents had been signed, he told his staff. Then he sent a letter out to all of his clients introducing the person taking over and telling them he would be retiring at the end of the year. This letter went out in mid-November. I was super excited for him. I called my mom the day after the letters went out to ask what people had said. She told me that no one had called. “Retirement isn’t a big deal, Maggie. You’re the one making it a big deal.” WHAT?! It’s a HUGE deal. My dad’s been doing the same thing for over 30 years. He built his small business up enough to be able to sell it and retire 5 years earlier than planned! And now, he’s done. When I talked to my dad later that week, he said: “We’ve gotten a lot of appointments before the end of the year because people want to get in before the change happens. Other than that, people don’t say a whole lot about it. People my age think it’s great. They wish they could do it, too.” Whether you think it’s a big deal or not, I think it’s a huge deal and I’m proud of my dad. He deserves to celebrate. You better believe we will be celebrating when we hit our goals!
Creativity Leads to Opportunity
My dad had a very specific monetary goal he wanted to hit before retiring. Initially, working five more years and then selling the business would have worked out to that number. However, when he got an offer on the business, he didn’t dismiss it immediately, he started getting creative. Floating the loan for the business himself is somewhat unconventional, but it provided him five more years of retirement while still hitting those specific goals he had set.
Money Grows Money
My dad making money as a lender is a perfect example of how the rich get richer. Society is not fair. But if you are as lucky as we are, you can use interest in your favor. You hear the power of compound interest a lot. But the power is real. Money turns into more money. There’s an episode of 30 Rock where Liz Lemon sees her future as a destitute hippie and tells Jack: “I can’t end up like that. I have got to make money and save it. And I have to do that thing that rich people do where they turn money into *more* money. Can you teach me how to do that?” His answer is: “With my eyes closed.” Because the answer is simple. Save money and then invest that money. If you choose to invest it in the market, great. Or you could do something creative like invest it in your business, and then make interest on the sale. Either way, saved money grows more money when invested smartly.
Financial Independence means FREEDOM
What does my dad plan to do on a daily basis now that he’s retired? He doesn’t entirely know (and to be honest, my mom is a bit nervous). But he does have a long trip to Europe planned next year and as a big retirement celebration, he decided to fly his two kids and their families to HAWAII for Christmas this year (for which we are both super excited and grateful!). And he has a big list of all the things he’s been meaning to “get around to” doing and he’s excited to get to do them. Every day means he gets to make all of his own choices about how to spend his time. It will be glorious. And I can’t wait to follow in his footsteps to freedom (skipping the whole working 30+ years thing)!
Congrats Dad! I’m proud of you!