September, 2020

Life and relationships can get a bit more complicated concerning money.

In November 2017 Rups gave us $120,000, specifically intended to go towards college savings for the girls. While the gift was generous, it was also the result of other factors.

After Birgit had been diagnosed with cancer and gone through all the treatments, at some point Christoph made a comment to Inga and Rups that amounted to this: If Birgit does pass away due to cancer at least he will be taken care of via Birgit’s inheritance.

This inappropriate comment, needless to say, alarmed Inga and Rups. While they absolutely intended to pass all their assets on to Andrea and Birgit, they had no intention of Christoph receiving any money in the event that Birgit did pass away. Thus began a process of managing their money (the inheritance) differently, the details of which I don’t know. But the decision to contribute $120,000 towards the girls education was part of their readjusted planning.

I broke up the money into the girls 529 Education accounts: $50,000 for Annika, and $35,000 each to Niki and Britta.

Fast forward to October 2019, when I arrived in Munich for the start of another year in Austria (the girls had already been in Salzburg for nearly 3 months). On the drive from Munich to Salzburg I shared with Andrea that I had been thinking more about retirement; I didn’t have a date in mind, but I was in the long process of doing the financial planning and contemplating what retirement might look and feel like (a sanity check so to speak). One aspect I mentioned to Andrea was that the girls education was already accounted for, with their 529 plans sufficiently funded which was certainly due in part to Rups and Inga’s contribution.

Andrea, who was silent throughout the entire conversation, insulted my integrity with the assertion that I was acting just like Christoph, essentially taking money from Rups and Inga. Her assertion was that I was only able to consider retirement due to their $120,000 contribution.

Now, without going into details, a 56 year old with kids still at home and potentially 40 (an optimistic guess) years of living left to do needs A LOT more money to retire than just $120,000, and while that contribution was helpful it didn’t factor at all into my decision making concerning retirement.

Thus I made a snap decision that before I were to retire I’d re-pay Rups and Inga the $120,000, with an explanation why (the explanation being that my integrity and character was worth more than $120,000). Andrea’s comment killed our conversation, and the drive continued in silence.

Jump ahead to September 2020, when I have decided to retire and I do have $120,000 set aside to re-pay Rups and Inga. To be clear, this wouldn’t affect the girls college finances; their 529 wouldn’t be touched, I’d repay them with money directly from me.

Consider for a moment the delicacy of the situation:

– While Rups and Inga were motivated to contribute financially to the girls education because of their complete love and adoration for the girls, there was a strategic aspect as well (namely, ensuring that Christoph doesn’t see any of their money should Birgit pass away).

– Rups and Inga have no idea of the October 2019 conversation between Andrea and I

– My returning their money, without including them in the conversation, can be taken as an insult (and rightly so)

Thus I wasn’t sure how to approach this. One thought was to wait until summer 2021, and talk with them about it in person. While I wasn’t willing to reconsider my plan (again, my integrity and character was worth more than $120,000), I could at least explain the situation in person before actually returning the money.

However, when the girls returned to the US in September 2020 Andrea changed my plans to some degree. I don’t know all the details, but this is what Andrea said: Rups is anxious about money (although Rups is always anxious about money). There are some improvements (the roof and bathroom were two examples) to their house in Roxheim that he didn’t have the money for. To be clear they do have enough money to live on via their monthly retirement/pension, it was additional funds for home improvement that they lacked. Andrea asked that I wire $50,000 (taken from the $120,000 contributed by Rups and Inga back in 2017) to Andrea’s bank account in Salzburg, for the purpose of alleviating her Dad’s anxiety and allowing them to make those home improvements.

A few things to note, keeping in mind that I don’t trust Andrea at all:

– She insisted I wire the money to her account in Salzburg, and not to Rups and Inga

– Even though Rups had given Andrea 400,000 Euro back in 2013 as a deposit for the house in Elsbethen (the total cost was about 500,000 Euro I believe), Andrea decided that if Rups needed money it was better to repay them from their contribution for the girls education instead of Andrea repaying them in part for the money they gave her for the house.

– It’s not clear to me that Andrea has any renters in the house; meaning she has monthly mortgage payments (for the balance of the loan) and other bills (like utility) that she is responsible for. Thus I wonder if Andrea is intentionally not renting the house so that it will be available each summer for their return to Salzburg. This is all speculation on my part; Andrea doesn’t share any details of what’s going on, and certainly won’t share any specifics as to her plans or intentions.

It’s unfair of me to speculate in a way that’s not complimentary of Andrea, but such speculation is informed by my history, experiences, and understanding of Andrea’s moral compass.

So my plan now, subject to change: I’ll wire $50,000 to Andrea’s bank now. Next summer I’ll have that conversation with Rups and Inga, and I’ll reference the $50,000 already repaid. While I hope it’s not true, I will not be surprised if they know nothing about the $50,000, and that some of that has been spent by Andrea.

In June 2019 an old friend Bryan Deaver, who started working at Cisco at the same time I did, visited Tahoe with his family. Bryan was in the middle of a 1 year sabbatical, and when I asked him about returning to Cisco he mentioned that he might simply retire. I’ve known Bryan for 27 years, he’s always been very low key, but his answer stunned me. My first thought was “Wow, can I do that too?”.

Thus began a year long thought exercise about retirement.

Even going back as a young boy I’ve always been careful with my spending, and committed to saving money (even if there was no goal in mind, no desired purchase to aim for) as well as investing money. I’ve made mistakes with investing, and learned along the way, and together my predilection towards saving money, my lesson’s learned over the years about investing, and my luck in having worked for Cisco for 27.5 years, in addition to having started with them 7 years before the dot-com stock crash (meaning for 7 years I was vesting in Cisco stock that was doubling every year) has served me well.

Contemplating retirement really consists of two exercises: doing the financial math, and pondering the emotional, mental, and psychological ramifications of not working (meaning, your purpose in life and your identity not being grounded in your work, your profession, your employer).

The financial math in the 2nd half of 2019 suggested I was really close to being able to retire and not have to adapt my (and my families) life style – meaning I could continue to spend money as I have been. Of course with Annika out of the house in 1 year (sigh), and Niki and Britta out in 6 (double sigh), considering that I have money saved for their college funds that means the money I spend each year will drop a little each year, then a lot in about 6 years.

Still, “really close” doesn’t equal “no problem”. I was enjoying my work, really liked my manager Ed Swenson (who I’ve worked with since Day 1 at Cisco), and was looking ahead to 1 year in Salzburg (9 months really for me, Oct 2019-Jun 2020) so I didn’t think too much more about the financial aspects.

However, 2020, the year of COVID-19 and economic hardships for millions of people, was a boon for me. This sounds like I’m brilliant but it was mostly just luck that I’ve done very well this year financially; my entire net worth has increased by close to 25% due to the stock market (I was out at the right time, got back in at the right time, bought some great stocks along the way, etc).

And so it was that by summer of 2020 my financial calculations now said “no problem”. This awareness of financial freedom going forward allowed me to spend more time contemplating the second exercise (pondering the emotional, mental, and psychological ramifications of not working). And for me this was, after 23 years of living in Tahoe, surrounded my role models demonstrating how to emphasize living over working, an easy task. The chance of using my time to spend with Niki & Britta (Annika was mostly done spending time with me, especially once she could drive) before they turned 16…skiing more, riding more, hiking more, doing more, possibly getting more involved with community events…the future of a retirement looked bright.

But again, I still really enjoyed my job. And then things happened, quickly.

On Wednesday August 12th I had lunch with Rick at Squaw; Rick and I have talked about retirement for a few years now (mostly me encouraging him to retire, as he’s almost 20 years older than I). We talked of it again, and I told him “I’m ready to retire, I just need Cisco to show me the door since I still enjoy my job too much to leave on my own”.

On Thursday August 13th Cisco had their end of fiscal year conference call with Wall Street (I never listen to these), where they announced they intended to cut costs by $1B (or about 6%) over the next year.

On Friday August 14th at the bi-weekly Cisco wide conference calls (they used to be monthly, but starting with COVID-19 they were held much more often) where Cisco announced the details:

1. An early retirement option, for those eligible
2. A reduction in your work week (and pay) of 20% for 1 year (so, working 4 days per week)
3. A layoff

I was not concerned with being layed off, so my priorities were #1, then #2. Anything to have more free time.

On Tuesday August 18th at 10:00am (exactly) I was notified that I was eligible for the early retirement package. Cisco was offering me 15 months of pay, 9 months of health insurance coverage, and expedited stock options. I was thrilled and ready to accept immediately.

Still, I had 10 days before I had to officially accept. I spoke with my manager, looked at my numbers again, and thought things through once more. At no time was there any indication that I should pause, wait, be cautious, or work longer. So on Wednesday Sept 2 I accepted the package, and my last day working for Cisco will be Oct 5, after 27.5 of working for Cisco.

A short Cisco recap:

I was hired in March 1993, working in Mountain View. I had been out of work for 6 months, the first 3 of which were traveling through Australia and New Zealand. By March 1993 I was broke, living with Grandpa in Martinez, and ready to work.

Immediately my time at Cisco was intoxicating. The work was challenging and fun, the people were super smart and competent, the environment was productive and I was not being micro-managed. I was working in the Technical Support Center (TAC), dealing with customer’s directly to resolve their Cisco (hardware of software or configuration) issues. After 1 year in Mountain View, where I had no life and was working too much but also enjoying every minute of it, Cisco moved to their new Headquarters in San Jose. By 1996 after a number of pay raises I was promoted to the escalation team, dealing with high visibility customer problems, working closely with software development, and training young engineers. I traveled to Brussel’s a few times, Australia, Raleigh, Mexico, and numerous customer sites to support customer’s and Cisco engineers.

In 1996, in order to spend more time with Andrea in Germany, I asked for a 3 month sabbatical and Cisco allowed it without hesitation.

In 1997, at the eve of getting married, I asked to work full-time remotely from Tahoe. No one worked remotely, so it was a big ask but my Cisco managers allowed it without hesitation.

In 2003 after Annika was born I took 3 months off to spend time with Annika, and Cisco allowed it without hesitation.

In 2007, just before Niki & Britta were born, I was nervous about having the time to help with them so I asked to leave the TAC (after 14 years) and move to the Certifications group, which was lower stress and easy work. Cisco allowed it without hesitation.

In 2017, after too much time with the Certifications group (the manager was nice but incompetent, the work minimal, I wasn’t dealing directly with customer’s and it wasn’t that technical and the projects would take months and months to complete) I moved back to the Services group, back working for my old friend Ed (I had worked under him once before at TAC). The job was fantastic, Ed’s super smart and great to work for, so it’s been so much fun.

In all, it’s been a wonderful journey; a great company to work for; and an exciting time to be working in the high tech arena. But I’m ready to slow down, to live life, to be more present to my kids and my friends.

This retirement thing has gotten me so excited…