Sean McVay is the wunderkind head coach of the LA Rams. He got his job five years ago at the age of 30 and has since led the formerly mediocre Rams to two Super Bowls, losing the first and winning the second.
So now he's 36 and he's been a head coach for five years. But he says he's considering retirement:
The Rams were only a handful of hours removed from a Super Bowl LVI celebration that extended into Monday morning when coach Sean McVay said two words with potentially alarming implications for their future: “We’ll see.” That was McVay’s response to The Los Angeles Times when asked whether he would return to coach the Rams next season.
The obvious initial reaction to this is wtf? McVay is 36, he's been a head coach for only five years, and he's thinking of retiring? What a wuss.
And yet, I've always wondered why it is that more people in super high-paying professions don't do this. Football is a great example. If you play in the NFL for five years and make, say, $10 million or more, why not quit? You're set for life, so why take the chance of playing another decade and risking long-term injuries?
I suppose the answer is that the kind of person who makes it to the very top level of a profession is generally the kind of person who loves their work. They love football. They love being a lawyer or a surgeon. They love writing. They love making music. Etc. In fact, maybe obsessed is a better word.
Still, you'd think there would be at least a fair number of people like this who'd do what McVay is saying he might do.¹ People who make enough to satisfy their own material desires, whatever they might be, and then just quit in their 40s. But maybe there are. I wonder how we could find out?
¹Though I don't think he will.
Cut-throat business for the owners, who are all MBA CEOs who either earned billions (in various ways, with no claims of legitimacy to the methods) or prepared their entire life to inherit billions/family empires (cough Rooneys cough). Every word, gesture, etc. is examined to avoid paying out one cent more than necessary, no matter how profitable the business/team is currently operating.
It is pretty rare. A friend of mine from elementary school, a banker, retired around 2000, when he was in his early 40s, but he's definitely an exception.
While I don't know exactly how much he made, if I assume he made $10M, I know a number of people (more than five) who made between 10M and 300M, and kept working until their 60s, even though they'd made a good chunk of their fortunes by their early to mid 40s.
For a lot of business types it's not about the money, it's about ego. Money is just the way they keep score.
+1
How would you know whether or not it's rare?
10% of Americans have "officially" retired by age 50 (as tracked by various surveys of "Do you consider yourself retired")
It's difficult to disentangle that from other cases like "lazy git who figured out how to survive on unemployment" or "genuinely injured on the job and surviving on disability", but if we take it at face value, 10% is not negligible.
I think you don't see much discussion of this because
(a) society has a very definite theory of "how the average life should be lived", and the sort of person who is smart enough to be able to retire early is also smart enough to not walk into the buzz saw of public criticism by doing dumb things like constantly appearing on talk shows to discuss their early retirement.
(b) society often extends to even your friends and distant family. Why bother raising all the risks one might imagine (from resentment, to asking for your time "because you obviously have lots of free time", to asking for money "because you obviously must be rich") by flaunting that you are retired. Just leave your previous company, live your life the way you want, and when strangers (or distant family) ask, give some vague answer like "consulting".
Honestly I'm amazed that anyone is surprised by any of this. To me it seems just common sense that the early retired are also precisely the segment of society that will be most intelligent and careful about keeping their private lives private.
I don't have the full Drumology, but isn't that kinda what Kevin did, i.e. cash out of a startup, buy a Porsche, and start blogging?
Yep. Sure did.
Drum didn't retire. He worked for a couple of different publications for a two decades. Drum changed careers.
Yea & nay. He left his primary industry with a buyout & started blogging as CalPundit as a hobby. Then, in the run-up to Second Iraq, he got a cosign from Joshua Micah Marshall at the as yet not terrible TalkingPointsMemo, & that stoked professional interest at WashingtonMonthly.
Drum made his post-occupational fuckaround a job. It's really no different than what the cads at KissingSuzyKolber pulled. Except the KSK doofs would take one look at Kevin's Orange County GQP background & support for Elizabeth Warren & say, "OK Boomer". (Never mind that KSK lead doof Drew Magary is very much a Christopher Shays GQPer, & always has been.)
Why do David Koch and Warren Buffet keep chasing money, even though they have more riches than several generations of descendants could spend? Because too much is never enough.
I can't speak for those two tycoons in particular, but there are quite a lot of people who could retire but don't because they enjoy what they do and would be extremely bored if they weren't doing it. That's not just rich people. Look at how many college professors and middle management types have good pension plans that would let them retire at 65 or earlier but just keep on going. Dr. Fauci is an example. He's 81 years old and has been working for the government for a very long time. He must have qualified for maximum pension quite a while back, but he just keeps going and going and going.
The rumor is that Head Football Coaches put in a ton of hours. McVay could retire, take a TV analyst position working a few hours a week for six months a year and could still pull seven figures. Given the incestous nature of the NFL coaching club, he could easily get rehired by one of the dumbass owners in the future. Win-Win for him.
Hiring mediocre coaching re-treads is definitely a trend in the NFL, but I 'm pretty sure McVay would be easily re-hired because he's gone to 2 Super Bowls, "incestous nature of the NFL coaching club" or not.
Bill Parcells pioneered this thirty years ago.
Is it, and are you? Let’s assume that $10 million a year is clear of taxes, and agents’ commissions and…. And, since we are in the realm of the improbable that he’s lived on “just” $2 million a year. He’s now 27, with a nest egg of $40 million. He’s likely to live another 60 years. Someone else will need to do the figuring for inflation and likely earnings on that $40 million, either with, or without the assumption this player is able to manage the money without a financial advisor. But the straight up division gives him $667 thousand a year. Seems like a lot, but not after doing $2 million a year.
And, of course, for the next sixty years there will be some fraction of Congress seeking a tax on that “excessive” wealth. Perhaps becoming large enough to successfully enact their wealth tax. Or at least an estate/death tax to preclude it from being passed on to his spouse/children without a big chunk taken out of what remains.
So no, unless he’s been living like a monk ( relatively speaking) it isn’t clear he’s set for life after five years.
I can't even figure out what someone does with a million a year, two million is completely inconceivable. I don't find it at all hard to believe that someone might not feel the need to spend that money even if they have it. My yearly spending hasn't gone up since my early thirties and we are making more than twice what we were then. I find it entirely plausible that this guy doesn't feel he needs to spend that much money. A lot of people don't want big houses and fancy cars, some of them even have money, so if this guy doesn't want those things it's very plausible that he doesn't need to spend more. Also, at fort million he could make $800,000 a year on a 2% with any excess return going to protecting his investments from inflation. He could live an infinite amount of time off that kind of investment whole still living of an annual income that puts him in the top 1% of income earners, it's an enormous amount of money.
You are not correcting for the lifestyles of the rich and famous - private schools, private resorts, multiple homes, expensive divorces, etc.
$10 million sounds like a lot, but it doesn't really mean you are "set for life" is you have any kind of high-consumption lifestyle or extended family responsibilities. Over an adult lifetime of, say, fifty years, it works out to around 200K a year, which is a good salary but won't really pay for a jet set lifestyle.
This ignores investment income. The government runs a welfare system for those who have over a certain amount of money. It's like the Romans who promoted one to the equestrian class with a variety of privileges and access to contracts if one had a certain net worth. If you have ten million today, you aren't going to spend it all at once, so you "invest" it buying privileged assets that the government guarantees will increase in value. After fifty years, that ten million will be over forty million dollars, perhaps a bit less depending on one's spending habits. I put "invest" in quotes because this kind of "investing" has nothing to do with developing productive capital.
Please tell me about these "privileged assets" that the government "guarantees will increase in value." News to me.
@rick_jones
This is bad math. If you're sitting on $40M free and clear, you should be able to get about 7-8% after taxes, or $2.8M to $3.2M per year. You can get that by putting about 40% into tax exempt bond funds paying today something like 3%, and 60% into a moderately aggressive stock fund, which pays something like 12% (10% after some capital gains distributions). The math is 0.3*.4 + .10*.6 = 7.2% but obviously you have to be able to leave the stock fund alone for 5 years at a time, if the market drops a lot.
And note that this leaves the principal *alone*. If you target taking 50% of the principal out over the next 60 years, the numbers increase, though not that much.
That is exactly the math I was asking someone to do. Thanks.
One other note--and I'm not sure how this applies to the NFL...but athletes today are expected to have their own trainers and nutritionists and gym and....plus their own security, financial advisors, charities, etc.
Each athlete is at the center of their own business. If they hire 5 people, that runs into ca. $500K in costs (salary, benefits, taxes, etc.) for a modest salary. In reality, it could easily eat up to half their take home pay.
Here's the thing, most athletes are lucky to last 5 years in the pros--and then their money making years are over in that line of work. (commentator and coaching positions are more rare than playing slots).
40 million in an index fund (someone should have told Donald) will make, on average, about 4 million per year. That's not living like a monk. And it's nowhere near what anyone in Congress describes as excessive wealth . The current estate tax exempts the first 12 million entirely from taxes and the rest would probably be taxed at about 20 percent.
But as others have pointed out elsewhere this isn't really about money. The Catch 22 here is that the people who would be content to retire and live off their millions and raise goats in the the country are not the people who make millions.
Most people who make a lot of money are very driven/ competitive people. They like money plenty but money is also the way they keep score.
If you could get a mere 2.5% a year return on your $40 million, that's a million dollars a year without dipping into the capital at all. It shouldn't be too hard to live on that, and with reasonably careful management you should be able to get a high enough nominal rate of return to allow you to spend that million a year and still increase the capital in step with inflation, so that your spendable income also keeps up with inflation.
"Retirement" is the wrong word to use for McVay. Retirement suggests he'll never work again. That's not what is going to happen. If he leaves coaching, he's leaving coaching, but he'll continue to work ... in a television booth calling games, or in a studio doing the pre-game and post-game shows. And he'll continue making millions of dollars.
Bill Cowher was the previous generation's wunderkind coach. He got his job as head coach of the Steelers at the age of 35 and left at the age of 49. Did he retire? No ... he's continued to do sports TV ever since.
I don't get it either. I tend to think of potential pay increases vs. workload in terms of how much earlier this will let me retire. If someone would pay me a million per year I would be out the door and on the beach within five years. Of course this probably has something to do with why I am not anywhere near a career path that would pay me a million a year.
It all depends on what he did with his money
If he invested in the S&P his first year's salary would be up by about 98% wouldn't it?
Then there's bonuses playoff additional pay etc
Of course he could also be like Dan Marino and lose everything and then resort to doing cheesy infomercials.
This whole story is a nothing burger. He is successful in his profession. Good for him
The answer to Kevin’s question is in the film Key Largo. Rocco wants more:
https://youtu.be/ITs-YX1yQ7o
I get not retiring. Lots of people are bored out of their minds a year or two into retirement. Heck, my extended family spends a week on the beach every summer (except the last two, for the obvious reason). My kids are always sorry when it is time to go home. So am I, but I also know that if we spent two weeks, by the end of the second week I would be totally ready to go home and back to work. A true life of leisure is not for everybody. There are alternatives to working a full time job, of course, but you need some reason to get out of bed in the morning. If you can find this reason in a hobby, that is great! But this doesn't cut it for everyone.
That being said, there also are the rich guys who are assholes about it, merrily screwing over anyone in their path to make yet more money. Those guys simply are sociopaths.
In the specific case of professional athletes, they tend not to have money management among their skill set. Many don't even have the middle class cultural background of living within adequate but not extravagant means. My research area is early baseball. The popular image in the 1880s of the professional ballplayer was a guy from a working class background with poor money management, no other marketable skills, and often a substance abuse problem. There were any number of guys who met that description to a tee. They were the ones the club had to send train fare in the spring so they could report, pretty much regardless of their salary. But then you also had guys living modestly and investing in real estate. The modern athlete with $10 million in earnings might go either way: retire and live a modest but comfortable life, or be penniless within a couple of years.
I think about this all the time.
1) Many do, but the threshold for financial independence selects these people out before they achieve very high profiles. People who are strongly motivated to retire will usually do so when they have less than $10M in assets. A successful 45 year old assistant coach in the NFL would probably have $6M saved before he got his first high profile job.
2) Lots of NFL players take early exits. Robert Smith, Barry Sanders and Herman Moore all quit close to their primes. If you follow college football closely, tons of average players who made it to the NFL quit rather than keep plugging away. "I made $4,000,000. I could keep doing this but I'm 27 and my family is set and I don't want to get hurt." Those folks would stay in the league if they were making Franchise Player money, but the equation is different for a comfortable striver.
3) Many jobs get easier when it's big time. Having to fly to Houston and stay in a Hilton Garden Inn next to a strip mall for nine weeks for a trial is worth it to earn your associate lawyer's salary. But if you're a named partner at a law firm, it may be mostly just taking phone calls at home, making some decisions and going to nice dinners with executives from client corporations. A lot of these jobs require experience and authority can be done in the time one would devote to a hobby.
4) Goals change. Personally, I have twice passed the amount of money I said I would retire on once I had it. It no longer feels like enough because of life style creep. This happens at all levels. People with $50M now realize they need $80M if they want to have foundation *and* a yacht.
5) It's not always about the money. Sometimes the status that comes from a high profile job can't be bought. Getting recognized places, being in-demand, being on TV is addictive. The things that make people happy are 1) Relationships 2) Progress toward goals 3) Status. Money might help with some of those, but perhaps less than actually doing a job.
I will never think about it, lol. I will never be able to retire.
Well look at Notch. He has nothing to do since selling out to MS except indulge himself in fascist internet wankery.
There's are a bunch of subreddits focused on this. There's r/FIRE and then there's r/FatFIRE for the 5 million+ club.
Stafford will be in final year of contract next season. 2022 Rams season is technically already over the cap, so, if they want to sign Stafford to a long-term contract, they'll have to pony up even more money. They're going to have to cut down their talent level significantly and try to replace with draft. Problem is, they don't have a pick until the 3rd round in the upcoming draft.
So yeah, I can see why McVay would consider retirement. 2021 season was *the* year they got all the stars to align with money and talent and they succeeded. Next season is going to be a lot more difficult to get through.
He wasnt asked if he was retiring, he was asked if he would return to coach the Rams.
As opposed to, say, doubling his salary and coaching the Lions or the Giants.
The last time early retirement like this was in the news was back in the mid-1990s when the market soared. A lot of people retired in their early forties. I know I and my significant other did. The market and the economy decoupled in the 1980s, and with so much money floating around thanks to tax cuts and flat line wages thanks to union busting, living comfortably on one's investments became a no brainer. The clinch was that market crash around 1987 followed by a rapid market recovery. Pundits noted at the time that there was nothing to invest in so people would buy stocks. Stock picking was dead. Investing was all about following the massive wave of wealth, not productive investment opportunities.
In the early 1990s, the news was full of layoffs, mass firings, job displacement, falling wages and soaring markets. Interest rates were low, but one didn't need a weatherman to tell which way the wind was blowing. All you needed was a pile of money, an index fund and no need to amp up your already comfortable lifestyle. That pile didn't even need to be a full million back then, the Reagan administration had made the necessary changes to the economy. As long as you were willing to follow, rather than beat, the market, your investments were in better shape than Social Security. There was talk of privatizing that if you remember.
That decoupling and that concentrated mass of money made market recoveries quick despite recession after recession. If you were minimum wage or at the median, it sucked. You'd finally get a little wage and hour traction, and then there would be a recession and you'd be back to square zero. If you had saved enough, you were on easy street. The Fed would prime the pump and the market would recover just fine. If you didn't sell in a panic, you'd be back in shape much more quickly than the grocery stocker hoping to get back up to 34 hours a week.
It used to be that if you were higher wage, you weren't in that trap, but the line keeps moving up. Now, even workers making millions a year are just peons, and their bosses let them know it. The game is so horribly and obviously rigged that anyone who can tries to get out of it. That includes peons like school bus drivers and Superbowl winning NFL coaches. There are many outs. Opiates are one. Early retirement is another.
I believe the average NFL player doesn't quite make it through five full seasons. It's a brutal game. If you're in a position where retirement is voluntary (ie, you're still able to command $10 million/year) the temptation to play another season must be strong indeed, because you're injecting $5-$6 million+ into your portfolio. Again, with every season. An addition two or three seasons could easily translate into an addition $20 million on your net worth by the time you do retire. That would make a non-trivial difference, to put it mildly, as you move forward in life. But yes, it's a gamble, given the potential for brain injury.
Ah Kevin, why is greed not #1 in your top 10 for staying on? It's a well known fact that once money rolls in, it's difficult to want to stop it. Greed. The rich always want more, and more, and more!
I've run the numbers and have, probably, enough to retire. A few more years working will make it a certainty, I'll hit 62, get SS, and it's easy at that point. Recent stock markets and a few gun shots in the Ukraine not withstanding.
For me, it's a matter of being certain that I can sustain things over the next 30 to 40 years with a margin of safety.
I think that's kind of the problem, there's always some lagging doubt that it isn't quite enough. Just one more year to be sure, and in my case, I'm already estimating that I'll live to be a 100 for my calculations. On the other hand, I have a 91 year old father whose blood work is better than mine.
I do mostly like my job, ironically in government, so I'm not in a hurry to leave.
As an NFL player, I'd be out the moment I was set. The sport just tears you apart. It's not worth the risk.
Sure, some people achieve monumental success young and then just retire.
Steve Wozniak.
I've known a number of other techies who've made their pile and quit, also. There may be two reasons for this that distinguish them from other types of successful figures: 1) They're not in it for the money. Enough for a comfortable life is enough, there's no need to go on proving it; besides, true success in tech is often gargantuan. 2) Unlike in other fields where you just have to go on being as good, in tech the frontier is rapidly advancing, and you have to keep learning more and being better to keep up. Chances of burning out and then falling on your face are high; better to get out of the race.
Dick Vermeil quit young. He had led UCLA to the Rose Bowl where he upset Ohio State, and then took the Eagles to the Super Bowl. And he quit. Became a broadcaster on ABC for over a decade. Had a lot of fun calling games. And then... he got the bug.
Took a job with the St. Louis Rams, a last place team. People laughed at him. And he took them to the Super Bowl and won it, the Rams' only Super Bowl win until last Sunday.
And he was inducted into the Hall of Fame last week.
You never lose the bug.
San Francisco 49ers linebacker Chris Borland retired 7 years ago at age 24. I don't think he quit all work, he did leave football as a very successful player over concerns about his health. He didn't want to sacrifice his body.
I'm the opposite. I just recently retired at age 70. I love what I do and will continue doing this (at a much lower pace) in retirement. I am a physicist working in the area of energy dispersive x-ray spectroscopy. We probe samples with electron beams to determine elemental composition down to the sub-micron level. It is boatloads of fun. I stayed in because I liked it. I didn't need the money. Our investments were paying much more than my salary.
I used to love going to conferences and presenting posters about my work and meeting colleagues and hearing about what everyone was up to. Now our conferences are virtual. I hope in a year or to we can go back to in-person meetings.
I have similar thoughts about Mark Zuckerberg. I wonder if he regrets not stepping down, say, 6 or 7 years ago. He'd still be one of the richest people on the planet; he'd have unlimited scope to engage in challenging, interesting and fun projects or work; and he'd even be able to spin his departure from FB ("The culture was really becoming too toxic and right wing for my tastes") in self-serving manner, after the fact, so as not to be one of the most hated people in America in 2022.
Now if he were to leave Meta it would quite rightly appear that he's doing so because he's run into a lot of failure of late, and has guided his creation very poorly indeed in recent times. And it would take years to rehabilitate his public image, if that's even possible. Zuckerberg is the Napoleon Bonaparte of American entrepreneurship.
A lot of people can't figure out what to do with themselves once they retire, which is odd, because there is so much work that volunteers can do that is really meaningful, but not going to be paid.
I know a retired scientist who spends 4 days a week volunteering in an elementary school. He runs book clubs and extra math groups. He has a ton of fun, and the kids absolutely love it. A retired writing instructor helps kids learn to write. Another retired person I knew years ago basically ran the phone banks for a public broadcasting station during pledge drives. Three times a year she'd work long hours making sure her favorite station stayed solvent. Someone I know who teaches in elementary school basically had a classroom "grandma" who showed up nearly every day and made sure all sorts of things got done - from photocopying to helping kids.
None of this is glamorous, but it can be very rewarding. Plus, there is no boss giving you a hard time, no annual review, and anything that is too awful, you can just not do.
I'm not retired, but if I had the money, I absolutely would. In fact, I'm writing this from my 20-hour-per-week volunteer gig, just before I head to my real (part-time) job.
There's plenty of unpaid work that I'd rather be doing, and that is more socially beneficial, than my real job.
My former roommate did. Then his wife told him he had to start working again and get out of the house.
BTW, if I could retire I would. Being an academic has been the polar opposite of what I thought it would be.