Interview with Mr. Money Mustache(blog.ycombinator.com)
blog.ycombinator.com
Interview with Mr. Money Mustache
https://blog.ycombinator.com/dont-start-a-blog-start-a-cult-mr-money-mustache/
294 comments
MMM is too smug and pushy for a good portion of the general public. His writing can awfully hostile, it could be toned down a bit and his message would get further - some of his advice is very sensible.
The problem with frugal blogs (in general) is they do one or more of the following; push penny pinching 24/7, "if you aren't eating lentils everyday and living in a cardboard box you're fucking up," they are too condescending, or they are only applicable to the already rich/privileged, like Mitt Romney's "just borrow 10s of thousands of dollars from your parents to start a business, easy!," and are out of touch with they "everyday man," or fail to recognize that people are different than them.
I think I could write a blog that is more accessible, I have experience being both very high income and very low income. It's such a saturated market though I doubt I'd get any readers. Maybe I'll do it just for myself some day to formulate some of the thoughts I have on the topic.
The problem with frugal blogs (in general) is they do one or more of the following; push penny pinching 24/7, "if you aren't eating lentils everyday and living in a cardboard box you're fucking up," they are too condescending, or they are only applicable to the already rich/privileged, like Mitt Romney's "just borrow 10s of thousands of dollars from your parents to start a business, easy!," and are out of touch with they "everyday man," or fail to recognize that people are different than them.
I think I could write a blog that is more accessible, I have experience being both very high income and very low income. It's such a saturated market though I doubt I'd get any readers. Maybe I'll do it just for myself some day to formulate some of the thoughts I have on the topic.
I think MMM knows his audience, it isn't for me but I can imagine many people do get something out of it.
Really the main problem is there just isn't much to say, spend less than you earn, invest the difference, develop some self-sufficiency.
Really the main problem is there just isn't much to say, spend less than you earn, invest the difference, develop some self-sufficiency.
I didn't know what "spend less than you earn, invest the difference, develop some self-sufficiency" meant 15-20 or so years ago though, they were just words. I didn't know what a 401(k) was, I didn't know what an IRA was, I didn't know what a brokerage account was, I didn't know what a mutual fund was, I didn't know what an ETF was, I didn't know what "equity" meant, I only had a vague idea of what investments were, I didn't even know what the stock market was other than "its something to do with money."
Plus that advise isn't applicable to everyone. A college student doesn't have the same finances as a dual income couple in their 30s with two kids. Someone with a $70k income has much different prorities than someone with a $30k income. I think finances is a journey, not a destination.
I think one of the first tenets of financial freedom/independence is figuring out life priorities, not everyone is going to have the same spending because everyone really enjoys different things. Oftentimes people don't even know what they really enjoy and where their spending brings them most life satisfaction so it requires a lot of self reflection and communication/negotiation with family members and maybe questioning cultural norms and expectations. I don't think that financial independence/frugality should about hording money so much as it should be about making your money work for you in the most optimal way possible.
There's also nuances to discussions about money like how it affects interpersonal relationships (and not just romantic ones) and the psychological aspects of money and spending.
You have a good point about him "know[ing] his audience" though, so thank you for pointing that out.
Plus that advise isn't applicable to everyone. A college student doesn't have the same finances as a dual income couple in their 30s with two kids. Someone with a $70k income has much different prorities than someone with a $30k income. I think finances is a journey, not a destination.
I think one of the first tenets of financial freedom/independence is figuring out life priorities, not everyone is going to have the same spending because everyone really enjoys different things. Oftentimes people don't even know what they really enjoy and where their spending brings them most life satisfaction so it requires a lot of self reflection and communication/negotiation with family members and maybe questioning cultural norms and expectations. I don't think that financial independence/frugality should about hording money so much as it should be about making your money work for you in the most optimal way possible.
There's also nuances to discussions about money like how it affects interpersonal relationships (and not just romantic ones) and the psychological aspects of money and spending.
You have a good point about him "know[ing] his audience" though, so thank you for pointing that out.
All those things you didn't know are irrelevant if you spend more than you earn, this is the situation most people are in. It applies whether you are a student or coming to the end of your career. Most people need to absorb that simple message.
I personally enjoy his style. MMM is clearly a character that he plays and is deliberately provocative. There are other more level headed financial independence blogs out there but I don't find any of them as entertaining as MMM.
> I have experience being both very high income and very low income.
See, I could do the same thing, but the blog would really boil down to a single post - "stop fucking around and just learn web dev." I really don't see a more accessible route to go low income to high income.
See, I could do the same thing, but the blog would really boil down to a single post - "stop fucking around and just learn web dev." I really don't see a more accessible route to go low income to high income.
MMM does have this:
http://www.mrmoneymustache.com/2013/07/25/50-jobs-over-50000...
Web dev is great for a lot of people, perhaps not for everyone.
As for MMM is general, I personally love his style. I remember back in grad school, I stumbled upon his blog, I think from an HN comment. I was hooked. I read through years of blog posts in a few months. I probably factored heavily into my decision of not going for the PhD (stopped at MASc).
Although I still think he makes a lot of good points, my take on frugality and my personal finance goals are a bit more, um, nuanced these days. For anyone who'd be interested in a quick intro to his core ideas, I highly recommend this 28 min talk, it's a really fun watch:
https://vimeo.com/183016901
http://www.mrmoneymustache.com/2013/07/25/50-jobs-over-50000...
Web dev is great for a lot of people, perhaps not for everyone.
As for MMM is general, I personally love his style. I remember back in grad school, I stumbled upon his blog, I think from an HN comment. I was hooked. I read through years of blog posts in a few months. I probably factored heavily into my decision of not going for the PhD (stopped at MASc).
Although I still think he makes a lot of good points, my take on frugality and my personal finance goals are a bit more, um, nuanced these days. For anyone who'd be interested in a quick intro to his core ideas, I highly recommend this 28 min talk, it's a really fun watch:
https://vimeo.com/183016901
My comfort zone with regard to frugality is much less extreme than MMM's. Probably nearer Dave Ramsey's part of the spectrum.
I like the MMM blog because it's a good source of concepts/tips to try, but you don't have to treat it like gospel. For example, the DIY home maintenance and investing tips resonate with me, but the "rewards credit card" not so much.
I like the MMM blog because it's a good source of concepts/tips to try, but you don't have to treat it like gospel. For example, the DIY home maintenance and investing tips resonate with me, but the "rewards credit card" not so much.
Also, doesn't take into account healthcare costs and things like hurricanes and floods and disasters that afflict a lot of people.
> Also, doesn't take into account healthcare costs
See http://www.mrmoneymustache.com/2012/11/01/our-new-237-per-mo... and http://www.mrmoneymustache.com/2011/10/17/its-all-about-the-...
See http://www.mrmoneymustache.com/2012/11/01/our-new-237-per-mo... and http://www.mrmoneymustache.com/2011/10/17/its-all-about-the-...
"Third level of safety: optional part-time work."
Don't you find it hilarious that a blog on financial independence tries to talk about safety nets vs. risks and devolves to: Well, sh*t just get a job I guess, but call it optional because you are "retired"? I do.
It is how you end up with 80 year old wal-mart greeters.
Don't you find it hilarious that a blog on financial independence tries to talk about safety nets vs. risks and devolves to: Well, sh*t just get a job I guess, but call it optional because you are "retired"? I do.
It is how you end up with 80 year old wal-mart greeters.
> Don't you find it hilarious that a blog on financial independence tries to talk about safety nets vs. risks and devolves to: Well, sh*t just get a job I guess
Not at all. If you retire early, one of many backup and contingency plans, somewhere down the list, could very well be "I could always go back to work". Doesn't mean you aren't retired.
Not at all. If you retire early, one of many backup and contingency plans, somewhere down the list, could very well be "I could always go back to work". Doesn't mean you aren't retired.
It's hard to effectively criticize consumer culture without sounding hostile to consumers. It would be worse for his persuasiveness to err on the side of appeasing the dominant cultural sentiment.
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He has several rentals and lives off other families. We can't all do that. It's not a real, scalable solution. It's not genuine.
He does have rentals. But he doesn't live off that money. He's done income reports (see this one from 2016[0]) that show where the money comes from and where it goes.
[0]: http://www.mrmoneymustache.com/2017/05/19/2016-spending/
[0]: http://www.mrmoneymustache.com/2017/05/19/2016-spending/
Personally, I find rent-seeking landlords to be an unethical pursuit. I know that's not a mainstream thought, and is the underpinning of many people's income strategy ... but I can't support the idea of letting a family live in a property for decades, and then something happening, and they're on the street with nothing to show for the tens of thousands of dollars they have given in rent.
The reason to rent is for the ability to move on demand.
If a family is renting in the same place for decades, that is their problem. The moment you realize you are going to stay in one place for an extended period of time, there is no reason to continue renting. Sure, not everybody can purchase their dream home. But they can purchase something small, build equity, and upgrade in the future. The government also has programs to help first time buyers, especially those with less income.
Again, the primary reason to rent is so you can relocate. If you are not planning on relocating in the 5-10 years, you should own, or be working on owning.
Furthermore, the landlord is taking on risk (risk of the market moving against him, risk of the tenant not paying him or the place remaining unoccupied after a tenant leaves), is paying property taxes, insurance, is responsible for broken appliances, and is also often taking on a loan with higher interest rates.
Should all of this be provided for free?
If a family is renting in the same place for decades, that is their problem. The moment you realize you are going to stay in one place for an extended period of time, there is no reason to continue renting. Sure, not everybody can purchase their dream home. But they can purchase something small, build equity, and upgrade in the future. The government also has programs to help first time buyers, especially those with less income.
Again, the primary reason to rent is so you can relocate. If you are not planning on relocating in the 5-10 years, you should own, or be working on owning.
Furthermore, the landlord is taking on risk (risk of the market moving against him, risk of the tenant not paying him or the place remaining unoccupied after a tenant leaves), is paying property taxes, insurance, is responsible for broken appliances, and is also often taking on a loan with higher interest rates.
Should all of this be provided for free?
"You should own," no, everyone is different.
Many people have no interest or ability to take care of a property. I watched my grandparents' house deteriorate and literally fall apart from neglect. [I used to think the roof leaking when it rained was a totally normal thing] They had literally every appliance in the house break over the years but they didn't have the wherewithal to replace anything so they just went without. They lived in total squalor for years, it was depressing (as well as very dangerous) visiting. If code enforcement stopped by they'd be homeless.
For sure, there is many, many benefits to owning, I love being a homeowner (most of the time - though I did get a little sticker shocked at my first 4 figure repair bill), but don't believe for a second "everyone should own."
Many people have no interest or ability to take care of a property. I watched my grandparents' house deteriorate and literally fall apart from neglect. [I used to think the roof leaking when it rained was a totally normal thing] They had literally every appliance in the house break over the years but they didn't have the wherewithal to replace anything so they just went without. They lived in total squalor for years, it was depressing (as well as very dangerous) visiting. If code enforcement stopped by they'd be homeless.
For sure, there is many, many benefits to owning, I love being a homeowner (most of the time - though I did get a little sticker shocked at my first 4 figure repair bill), but don't believe for a second "everyone should own."
I don't disagree with your broader point. But I would point out that owning doesn't need to mean owning a standalone house. In addition, in general, renting starts to become problematic at some point in life where being forced to move because the landlord sold the property becomes a really unpleasant situation.
Condos are another can of worms.
I just very briefly touched on one issue with owning and why it may make sense for someone to rent for years (even if it might not be financially optimal[1]).
Books could be written about the topic.
The main takeaway is "everyone is different." And "one size does not fit all." Remember, many businesses still choose to rent over buying.
[1] plus you only truly know in hindsight what was truly financially optimal
I just very briefly touched on one issue with owning and why it may make sense for someone to rent for years (even if it might not be financially optimal[1]).
Books could be written about the topic.
The main takeaway is "everyone is different." And "one size does not fit all." Remember, many businesses still choose to rent over buying.
[1] plus you only truly know in hindsight what was truly financially optimal
>don't believe for a second "everyone should own."
You really should own if you're going to stay in the same place. If you can't take care of your place, and you rely on a landlord to do it, you're going to be in for a bad time when you have a landlord that doesn't give a shit. Which a lot of them are.
You really should own if you're going to stay in the same place. If you can't take care of your place, and you rely on a landlord to do it, you're going to be in for a bad time when you have a landlord that doesn't give a shit. Which a lot of them are.
It's common for people to get stuck below or near the poverty line. It's difficult to save for a house down payment (much less build up the credit to get a loan for the rest) when you're struggling to pay for rent, bills, and food. Ignoring this cycle is missing the reality for many, many people.
Absolutely. Some people definitely do have it a bit harder than other people. But, outside of medical/mental issues, or just a stream of bad luck, people generally make it harder on themselves due to certain choices in their life.
My parents came to America without a dollar in their pockets. My dad's income was running a convenience store which barely made enough to pay his bills. So both parents worked, effectively minimum wage jobs, and saved for years so they could build their dream home and send their children to college.
We never went out to eat, rarely went on vacation, and parents don't drink. So, they were able to fulfill their dreams.
When people say they want to own a house, but are unwilling to find a cheaper location, stop drinking, stop eating out, drive older beat-up cars, well, then they've made their choice. The system has its issues, but no one deserves anything, and the system is not the problem here.
My parents came to America without a dollar in their pockets. My dad's income was running a convenience store which barely made enough to pay his bills. So both parents worked, effectively minimum wage jobs, and saved for years so they could build their dream home and send their children to college.
We never went out to eat, rarely went on vacation, and parents don't drink. So, they were able to fulfill their dreams.
When people say they want to own a house, but are unwilling to find a cheaper location, stop drinking, stop eating out, drive older beat-up cars, well, then they've made their choice. The system has its issues, but no one deserves anything, and the system is not the problem here.
How much was land back then? Far less. He'd be in that cycle if he came over now.
You say "outside of ...", as if those things aren't common. So what, a stream of bad luck, or a sickness should relegate you to lifelong poverty?
I invite everyone on this thread to read "The Wealthy Renter" by Alex Avery. Also, no, the primary reason is not so you can relocate. Buying a home could be a very bad financial decision for most people, who don't realize it and just do it because everyone around them tells them to.
Renters are also borrowing the credit score and down payment of the landlord.
Yes, but it should be temporary (to be ethical) ... if a single entity is a long-term tenant, that should be proof that they are a responsible, and should begin to accrue equity in the asset they are paying tons of money into.
What exactly should be the relationship between the person who owns a home and the person that lives in it then? One of charity? Or do you think private home ownership is in and of itself wrong?
There is a position in between "all rental arrangements are okay" and "no rental arrangements are okay".
I think the parent and others that dislike rent-seeking would have no ethical objection if the landlord charged an amount corresponding to costs of maintaining and renting the house (taxes, upkeep, risk, management, etc). The objection is when a landlord is able to work a few hours a month managing their properties and realize a sizable income.
Rent-to-own arrangements might also be considered ethically acceptable.
I'm not trying to propose a practical policy here, just suggesting some potentially ethical arrangements.
I think the parent and others that dislike rent-seeking would have no ethical objection if the landlord charged an amount corresponding to costs of maintaining and renting the house (taxes, upkeep, risk, management, etc). The objection is when a landlord is able to work a few hours a month managing their properties and realize a sizable income.
Rent-to-own arrangements might also be considered ethically acceptable.
I'm not trying to propose a practical policy here, just suggesting some potentially ethical arrangements.
"I think the parent and others that dislike rent-seeking"
Jesus fuck I just wish people would stop throwing that word around trying to sound like economists when they obviously have no idea what it even means. Renting out real estate is not rent seeking.
Jesus fuck I just wish people would stop throwing that word around trying to sound like economists when they obviously have no idea what it even means. Renting out real estate is not rent seeking.
> Renting out real estate is not rent seeking.
While to a certain extent real estate has been transformed into something that, in some cases, approximates a commodity, it is historically the canonical non-subsitutable monopolized good where each item lacks perfect substitutes, which is why “rent-seeking” is literally named after what landlords do. Renting out real estate is the “trope naming” instance of rent-seeking.
While to a certain extent real estate has been transformed into something that, in some cases, approximates a commodity, it is historically the canonical non-subsitutable monopolized good where each item lacks perfect substitutes, which is why “rent-seeking” is literally named after what landlords do. Renting out real estate is the “trope naming” instance of rent-seeking.
ok, then perhaps I should say, "seeking rent for long periods of time on a necessity, with no exchange of value in the long term for the person paying"
exactly this ... there needs to be a discussion about what the right balance to strike is. Rent-to-own would be a fantastic thing to be more popular (especially if you can take your equity with you when you leave ... even if only a portion of it, so that renting/risk still has rewards (yes I realize this arrangement probably isn't common (if at all), but it should be)).
I'm sure you have some properties where families can live for free, or at least only have to pay half of the rent? Or you give away interest free montages so they can buy their own place?
If not, what the fuck are you talking about then? Landlords offer a service for money. Since when is that unethical?
If not, what the fuck are you talking about then? Landlords offer a service for money. Since when is that unethical?
People price gouging during disasters is "offering a good or service for money", and it is unethical (and illegal). I propose that long-term gains from a single tenant, without an exchange of value (equity) is unethical. If you own a house, and one person/family has been living there for decades and then have to leave for some reason, they should not be leaving with a zero balance ... they've paid tens of thousands of dollars, and for a landlord to simply take it, and just rent it out to the next schmuck in a few weeks is unethical.
What you propose is not in fact unethical in any way. They offered a good or service for money without gouging and not during a disaster. you aren't getting nothing out of the deal, you got a place to live for decades out of the deal. That was in fact the deal you signed up for, and what was delivered. They offered you a house for X dollars a month, you paid X dollars a month and got to live in said house for the month. When the month is over, you either pay them again or go find a new house to live in. pretty simple really.
"I can't support the idea of letting a family buy food for decades, then something happening, and they're starving with nothing to show for the tens of thousands of dollars they have spent on food."
Housing is not a perishable resource (to an extent, yes I realize maintenance is a thing). It's not comparable
> maintenance is a thing
Yeah, I used to think "home ownership" meant I owned the home, not the other way around.
Speaking as a homeowner, with a garden, fruit trees, and formerly chickens and goats, they're very comparable.
Renting meets the daily housing need, without ownership in the assets that provide for that need in the future.
Buying food meets the daily food need, without ownership in the assets that provide for that need in the future.
Alternatively, people could buy land and equipment/building and develop skills to use/maintain them, allowing them to meet their future food/housing needs.
The key element is that people can choose how they want to spend their resources (money, time, and attention). Sometimes buying is better, sometimes renting is. And yes, people do often make decisions that turn out not to have been in their best long-term interest.
Speaking as a homeowner, with a garden, fruit trees, and formerly chickens and goats, they're very comparable.
Renting meets the daily housing need, without ownership in the assets that provide for that need in the future.
Buying food meets the daily food need, without ownership in the assets that provide for that need in the future.
Alternatively, people could buy land and equipment/building and develop skills to use/maintain them, allowing them to meet their future food/housing needs.
The key element is that people can choose how they want to spend their resources (money, time, and attention). Sometimes buying is better, sometimes renting is. And yes, people do often make decisions that turn out not to have been in their best long-term interest.
Do you spend as much on rent as you do on food? My mortgage is bigger than food and utilities combined.
I'm with you and need someone smarter to make a better argument against renting than I can formulate on my own. All
What I was taught: Renting is often times optimal, totally fine, the right choice for a lot of people!
What my experience has taught me: Renting is for suckers or the incredibly wealthy that want to be able to move to a new city on a whim. I was a sucker for many years, and paid a very rich man 100k+ for the luxury of paying down his mortage. Never again.
What I was taught: Renting is often times optimal, totally fine, the right choice for a lot of people!
What my experience has taught me: Renting is for suckers or the incredibly wealthy that want to be able to move to a new city on a whim. I was a sucker for many years, and paid a very rich man 100k+ for the luxury of paying down his mortage. Never again.
The point is, you've got to think it through and see if it's a good deal for you or not. Right now I own a house worth about 400k. If I rented and put that 400k in stocks history says I'd probably make on average almost 20k per year above inflation. Plus the landlord would pay the 4k property taxes and the new roof ill be doing next year. In my area I could easily rent a similar house for 20k per year. So in my case with the market the way it is right now I might be better off renting.
There are plenty of families who have no interest in buying even if they can afford it easily. One doesn't have to prey on the impoverished to have rental income.
It is interesting also to see financially independent people who are happy to rent, keeping their assets in more lucrative and flexible investments than the real estate they live in.
There are lots of reasons to rent. It is generally a mutually beneficial relationship, like pretty much every other business transaction.
There are lots of reasons to rent. It is generally a mutually beneficial relationship, like pretty much every other business transaction.
A lot of people don't understand the benefits or recognition of money velocity, but are also not privileged enough to care.
That's the deal. I like renting because if I want real estate exposure I could buy a diversified REIT.
I would assume that an important part of trying to retire early is to choose a career path that doesn't max out at $50k per year.
From what I've seen he suggests two things are necessary to retire early: 1. Save lots of money (which requires making money that you can save). 2. Don't spend lots of money. He seems to be pretty transparent in how he does both. If you want to save lots of money, but choose a career that leads to a $50k a year job, it is necessarily going to take you longer to retire than someone who chooses a career that leads to a $150,000 per year job. I'm not sure that makes it a pipe dream--just that if your time horizon is going to be different based on the decisions you make.
From what I've seen he suggests two things are necessary to retire early: 1. Save lots of money (which requires making money that you can save). 2. Don't spend lots of money. He seems to be pretty transparent in how he does both. If you want to save lots of money, but choose a career that leads to a $50k a year job, it is necessarily going to take you longer to retire than someone who chooses a career that leads to a $150,000 per year job. I'm not sure that makes it a pipe dream--just that if your time horizon is going to be different based on the decisions you make.
$50k earner and $150k could have the same retirement schedule if they have different lifestyles. If both can live comfortably on the same proportion of their income, then they can retire at the same time. If both had expenses that were 50% of their income, for example.
If both want to live a lifestyle where they spend $75k, then the lower earner will never retire.
If both want to live a lifestyle where they spend $75k, then the lower earner will never retire.
>good luck trying to retire as a welder or car mechanic making $50k.
Maybe you don't feel the need to retire at 30 when you are a car mechanic.
I've worked in car shops (not as a licensed mechanic) and the mechanics I worked with seemed to have a lot more fun and more free time than us office jockeys despite our 'better jobs.'
And the pay wasn't half bad either.
Maybe you don't feel the need to retire at 30 when you are a car mechanic.
I've worked in car shops (not as a licensed mechanic) and the mechanics I worked with seemed to have a lot more fun and more free time than us office jockeys despite our 'better jobs.'
And the pay wasn't half bad either.
I personally think this is the healthier way to live. I mean all power to somebody who can be in a financially beneficial position at the same time as doing what you love...
but one's place in society is not (or at least shouldn't be if the society is healthy) an isolated position. There's that old phrase "no man is an island". I understand I'm probably applying it outside of its original context, but it works just the same. Society is an interactive and interdisciplinary thing and I think we probably have need of more auto mechanics, welders, construction workers, rescue workers, firemen, pilots, etc than we do financial blog writers. Of course, I still appreciate a diversity of opinion and there's nothing stopping a financially-sound fireman write a financial-advice and good-living blog.
Ultimately the whole retiring at 30 thing just reminds me of a Trailer Park Boys beer/plotline: "Freedom 35" (its not great beer, by the way)[0]. They work so hard and so terribly to try and escape the need to do any work, and their lives are so much worse off for it. Of course, they're a poor example of the strategy to be sure. I've worked beside warehouse types who ended up working overtime for 30 years with successful investments and all with the same dream, but they still wound up working an average of 60 hours a week for 30 years...
And I really think there are more blindspots than are even mentioned here in those kinds of ideas, though I appreciate how many people have chimed in to that general aspect already.
[0] http://www.lcbo.com/lcbo/product/trailer-park-boys-freedom-3...
but one's place in society is not (or at least shouldn't be if the society is healthy) an isolated position. There's that old phrase "no man is an island". I understand I'm probably applying it outside of its original context, but it works just the same. Society is an interactive and interdisciplinary thing and I think we probably have need of more auto mechanics, welders, construction workers, rescue workers, firemen, pilots, etc than we do financial blog writers. Of course, I still appreciate a diversity of opinion and there's nothing stopping a financially-sound fireman write a financial-advice and good-living blog.
Ultimately the whole retiring at 30 thing just reminds me of a Trailer Park Boys beer/plotline: "Freedom 35" (its not great beer, by the way)[0]. They work so hard and so terribly to try and escape the need to do any work, and their lives are so much worse off for it. Of course, they're a poor example of the strategy to be sure. I've worked beside warehouse types who ended up working overtime for 30 years with successful investments and all with the same dream, but they still wound up working an average of 60 hours a week for 30 years...
And I really think there are more blindspots than are even mentioned here in those kinds of ideas, though I appreciate how many people have chimed in to that general aspect already.
[0] http://www.lcbo.com/lcbo/product/trailer-park-boys-freedom-3...
I understand what you are saying (i.e., don't assume to know what a mechanic wants) and you are right. I think his point was that most people don't actually have the freedom to make that choice (live frugally to retire early).
That's what almost every one of these success stories, blogs, etc. are. They're very heavily weighted toward survivor bias and elide much context around being born into relatively privileged circumstances.
Fuck that noise.
A lot of people are born into "privileged" circumstances in america. That is one factor. Not the only one.
To quote MMM:
"Sure, privilege does exist, and it might make it easier or harder to inherit a company or win a senate seat. But it can’t control your choice to ride a bike, buy less shit, or read library books in your spare time and I argue that frugality is the most powerful factor in earning your independence. After all, most of my equally-privileged engineering coworkers are still stuck in the office to this day." - http://www.mrmoneymustache.com/2015/04/01/impossible-dream/
A lot of people are born into "privileged" circumstances in america. That is one factor. Not the only one.
To quote MMM:
"Sure, privilege does exist, and it might make it easier or harder to inherit a company or win a senate seat. But it can’t control your choice to ride a bike, buy less shit, or read library books in your spare time and I argue that frugality is the most powerful factor in earning your independence. After all, most of my equally-privileged engineering coworkers are still stuck in the office to this day." - http://www.mrmoneymustache.com/2015/04/01/impossible-dream/
Maybe other bloggers were "privileged", but MMM grew up in a family that didn't have a ton of money, and he payed for his own college via jobs he worked as a teenager. In short, he worked his ass off.
I worked my ass off to get where I am financially. I grew up with low income, abusive, mentally ill, and alcoholic parents. I wasn't taught hardly any life skills and I had no "connections" of which to speak. I worked hard to get where I am now (I save/invest 70% of my income a year) but I don't for a second discount luck as a big part of it. Someone making similar choices as I did can surely have a different outcome.
Plus the biggest increase in my financial status came from getting married to someone who makes just as much money as I do.
Plus the biggest increase in my financial status came from getting married to someone who makes just as much money as I do.
Who you marry is hands down one of the largest factors in your overall financial success. Especially when it comes to the risk of divorce.
Absolutely. Even if we got divorced tomorrow I would be in a much, much better financial situation than if I'd stayed single. My spouse knows that from the other side of things too (was previously married to a lazy mooch for six years)
Part of that goes into the "luck" category as well.
Part of that goes into the "luck" category as well.
Sure, he and his wife clearly worked for what they have. Doesn't mean there isn't survivor bias (luck) and privilege at work. For example, anybody who can pay for their own college from jobs they worked as a teenager is privileged.
Take a look at his own story: http://www.mrmoneymustache.com/2011/04/08/mr-money-mustaches...
He doesn't say he grew up in a family without a ton of money. He grew up in a frugal family. In Canada, with a number of social support systems that simply don't exist elsewhere. He could attend a local University on his teenager job savings and had a good job waiting for him upon graduation. He and his wife found a fixer-upper they could afford to fix up. And so on. These aren't things that happen to or for most people. The suggestion that his experience generalizes is terrible.
Take a look at his own story: http://www.mrmoneymustache.com/2011/04/08/mr-money-mustaches...
He doesn't say he grew up in a family without a ton of money. He grew up in a frugal family. In Canada, with a number of social support systems that simply don't exist elsewhere. He could attend a local University on his teenager job savings and had a good job waiting for him upon graduation. He and his wife found a fixer-upper they could afford to fix up. And so on. These aren't things that happen to or for most people. The suggestion that his experience generalizes is terrible.
Do you mean to say he is privileged because of the country he grew up in? If so, I certainly agree.
That's certainly part of it, yes. He simply didn't have the adversarial childhood that lower and lower-middle income households in America have.
It's not like he started on third base to get his home run. More like he started on first or was intentionally walked.
It's not like he started on third base to get his home run. More like he started on first or was intentionally walked.
What's worse is when one of these "how I became a millionaire before 35" stories gets posted somewhere like Reddit, legitimate comments such as this one are heavily criticized as "you're just being mean(!?)" and "its because you're jealous."
I'm going to extend my comment. I've been reading James Altucher's books like "Choose Yourself" and his blog. Altucher's philosophy is somewhat similar, except he focuses on tapping into your creative mind and finding unique ways to supplement your income to the point that you're not necessarily retired, but doing what you love.
The goal then is not necessarily to retire, but to just get to a point where you are working for yourself and supplementing that with existing savings + a frugal lifestyle. That's basically what MMM/Pete is doing now with his blog. That is, I believe, how a welder/car mechanic/McDonald's employee can retire early.
The goal then is not necessarily to retire, but to just get to a point where you are working for yourself and supplementing that with existing savings + a frugal lifestyle. That's basically what MMM/Pete is doing now with his blog. That is, I believe, how a welder/car mechanic/McDonald's employee can retire early.
> tapping into your creative mind and finding unique ways to supplement your income
One of the things I do like about MMM is that there's none of this handwaviness - it's much more straightforward: get a good job and be frugal.
It's great if you can come up with a good alternative source of income, but it's not easy and not for everyone.
One of the things I do like about MMM is that there's none of this handwaviness - it's much more straightforward: get a good job and be frugal.
It's great if you can come up with a good alternative source of income, but it's not easy and not for everyone.
[deleted]
> but good luck trying to retire as a welder or car mechanic making $50k
Retiring at 30 while earning $50k would be difficult. But retiring at 40 or even 50 is still relatively easy on such a salary.
Retiring at 30 while earning $50k would be difficult. But retiring at 40 or even 50 is still relatively easy on such a salary.
Really? In the U.S.? Case study? Without kids and if you don't really spend any money on recreation or vacations (before or after retirement), maybe. Or if you somehow have a job that will give you a pension (with health insurance?) at 50, sure!
I suggest just reading MMM. It's all about savings rate. As an example, I live in Brooklyn, NY (one of the most expensive places to live in the U.S.) In 2016, I spent $32k ($24k was rent!) Assuming a $50k income, that'd be a ~36% savings rate, which requires a 23 year career.
Assume someone making $50k lives in not NYC, I imagine this scenario could be a lot better.
For a more extreme version of MMM, read http://earlyretirementextreme.com/. This guy (Jacob, who MMM mentioned in this interview) never earned much money (never over $50k prior to becoming financially independent), and retired after working 5 years. With a little creativity, most people can retire far sooner than standard retirement age.
Assume someone making $50k lives in not NYC, I imagine this scenario could be a lot better.
For a more extreme version of MMM, read http://earlyretirementextreme.com/. This guy (Jacob, who MMM mentioned in this interview) never earned much money (never over $50k prior to becoming financially independent), and retired after working 5 years. With a little creativity, most people can retire far sooner than standard retirement age.
> In 2016, I spent $32k ($24k was rent!) Assuming a $50k income, that'd be a ~36% savings rate, which requires a 23 year career.
Assuming a $50k income post-tax
Assuming a $50k income post-tax
Knocking off 18k for 401k and 5.5k for a Traditional IRA dramatically reduces the tax liability. I recognize 50k-32k = 18k (so the full 23.5k can't be executed in this case), but it makes a significant difference regardless.
And there are methods to pull this money out well before the standard ages without penalty, such as Substantially Equal Periodic Payments (SEPP).
And there are methods to pull this money out well before the standard ages without penalty, such as Substantially Equal Periodic Payments (SEPP).
You are forgetting taxes (FICA, state and federal income taxes, etc), which would eat up a significant portion of those savings.
That's an exaggeration, even for frugal people. Retiring at 50 means ~30 years of working life finished and ~30 years of retirement remaining. At $50k per year * 30, that's $1.5m. Spread out over 60 years that's $25k per year before tax. I wouldn't say it's "relatively easy" to save for retirement, pay for healthcare, live somewhere safe, have children, etc. on that, even with investment returns over that time frame.
You're ignoring investment income. I suggest reading MMM. It's a trove of great information.
I second this. He has a ton of blog posts though, so it can be like drinking from a firehose. Start with this one: The Shockingly Simple Math Behind Early Retirement - http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
Assuming you decide to not to have kids ;)
And assuming there are no bad events in your life which drain your savings, like health issues
Best thing you can do to protect yourself from bad events like health issues is to have a cushion of cash! The strategy is the same: spend less, so you can save more money.
You can't protect yourself from bad events like health issues with a cushion of cash. I mean not unless you have hundreds of thousands of dollars in the bank. My son was diagnosed with Type 1 Diabetes at 19 months old (4+ years ago) and with what we spend on hospital, health insurance, supplies, etc we could buy a new Toyota Camry every single year. Let that sink in for a minute. I have been a contractor for quite a while so we've been able to weather it, but if I was making a 'normal' salary (I'm in the Southeast US) we'd be drowning in credit card bills to pay for our son's care.
That depends greatly on where you are living and on whether or not you have kids or student debt. In plenty of places a 40 or 50K salary would be burned up every month even if you never did anything crazy.
This is more important than a lot of people realize. "Just move somewhere cheaper!" is the battle cry which ignores "It's cheaper because there's no real jobs there."
Few industries are as flexible about working from home as the software development industry.
Few industries are as flexible about working from home as the software development industry.
To apply MMM's ideas, on a 50K salary assuming monthly expenses of 1,250 (that's the hard part), if you put away 50% every year you can retire on a 375K nest egg (4% safe annual draw) after 15 years, or age 37. Roughly.
Assuming you only live to be 80, you'll have to stretch out that $375k nest egg for a whopping 43 years of inflation, rising healthcare costs, and unpredictable market conditions. And God forbid you reach 80, run out of money, and then... keep living, old and frail and weak with no job prospects. FIRECalc suggests a probability of about 20% of running out of money by age 80 with a 4% annual withdrawal rate (adjusted for inflation).
Plans like this just seem downright dangerous to me.
Plans like this just seem downright dangerous to me.
On a longer timeframe you'll need to have a lower withdrawal rate, but not a huge amount more. The 4% withdrawal rate is based on the Trinity Study [1] which was looking at 30 year time periods. (edit: added the link)
Per cFIREsim, with "success" defined as having more than 0 dollars at the end of the time period
375k -> 84.62% success 425k -> 96.15% success 450k -> 99.04% success
Additionally, the median portfolio value at the end went from 650k to 1.1M to 1.4M.
375k is definitely cutting things close. But at the same time...
* you're always going to have unpredictable market conditions
* you're likely to get at least some level of social security (which is unaccounted for in the above numbers)
* pulling back the expenses even a couple percent in the particularly bad years has a huge effect on success. This is admittedly difficult at 15k/year expenses, but padding the 375k by 5-10% would do a lot to mitigate that risk as well.
* If things start going downhill in terms of market returns, you retired young enough that you can reasonably go back to work for a short period of time. Even working at McDonald's at 7.25/hour would be approximately sufficient to cover the annual expenses.
[1] https://en.wikipedia.org/wiki/Trinity_study
Per cFIREsim, with "success" defined as having more than 0 dollars at the end of the time period
375k -> 84.62% success 425k -> 96.15% success 450k -> 99.04% success
Additionally, the median portfolio value at the end went from 650k to 1.1M to 1.4M.
375k is definitely cutting things close. But at the same time...
* you're always going to have unpredictable market conditions
* you're likely to get at least some level of social security (which is unaccounted for in the above numbers)
* pulling back the expenses even a couple percent in the particularly bad years has a huge effect on success. This is admittedly difficult at 15k/year expenses, but padding the 375k by 5-10% would do a lot to mitigate that risk as well.
* If things start going downhill in terms of market returns, you retired young enough that you can reasonably go back to work for a short period of time. Even working at McDonald's at 7.25/hour would be approximately sufficient to cover the annual expenses.
[1] https://en.wikipedia.org/wiki/Trinity_study
To add on to this, I found the recent reddit AMA with Bill Bengen (first author on that Trinity paper) highly interesting:
https://www.reddit.com/r/financialindependence/comments/6vaz...
https://www.reddit.com/r/financialindependence/comments/6vaz...
Or god forbid, you work a little bit to supplement your nest egg during those 43 years.
Sure, but that changes the topic a fair bit. Part of the allure of MMM is telling people they can retire at age 30 to 40 with a relatively small amount of money if only they can keep their expenses under control and live frugally.
The reality is that as you get deeper into that 43 year period without pursuing your career, your marketable skills will diminish as well. Many careers don't "scale down" either. A person who was once making $50k may not be able to make $25k with half the hours. The choice in many careers is 100% or 0%. Programming is in many cases a wonderful exception, so that might be biasing folks here.
You may very well end up just getting a part-time retail or fast food job. In any area of the country where this plan is viable, the minimum wage is going to be quite low, possibly as low as $7.25/hour. You're going to find yourself working quite a few hours just for a "little bit" of supplemental income. Indeed, if you needed to cover all your expenses (but nothing more), that'd be a full-time year-round job at the minimum wage (and in fact you might have to work overtime).
The reality is that as you get deeper into that 43 year period without pursuing your career, your marketable skills will diminish as well. Many careers don't "scale down" either. A person who was once making $50k may not be able to make $25k with half the hours. The choice in many careers is 100% or 0%. Programming is in many cases a wonderful exception, so that might be biasing folks here.
You may very well end up just getting a part-time retail or fast food job. In any area of the country where this plan is viable, the minimum wage is going to be quite low, possibly as low as $7.25/hour. You're going to find yourself working quite a few hours just for a "little bit" of supplemental income. Indeed, if you needed to cover all your expenses (but nothing more), that'd be a full-time year-round job at the minimum wage (and in fact you might have to work overtime).
Well, you said this was a dangerous plan. The biggest danger is that you have to go back to work.
If you continually only withdraw 4% of your nest egg (reducing your absolute withdrawal during market drops), then make up the difference if you need to in order to cover current expenses, then you'd be just fine.
If you continually only withdraw 4% of your nest egg (reducing your absolute withdrawal during market drops), then make up the difference if you need to in order to cover current expenses, then you'd be just fine.
[deleted]
Most people do not have a lot of good opportunities to supplement income in retirement. Yes, there's part-time retail--especially around the holidays--and, these days, there are the various gig economy jobs. I'm not sure that any of those are things I'd voluntarily do absent a pressing need for some additional money.
>>Plans like this just seem downright dangerous to me.
Retirement doesn't mean one sleeps 15 hours a day. It generally means one doesn't care much about the day to day financial demands of life and does what he/she always wanted to do.
If you give these $50K/yr people $400K at the age of 37, these people will very likely go on to a lot of other important things which can help them make more money.
Retirement doesn't mean one sleeps 15 hours a day. It generally means one doesn't care much about the day to day financial demands of life and does what he/she always wanted to do.
If you give these $50K/yr people $400K at the age of 37, these people will very likely go on to a lot of other important things which can help them make more money.
when you retire @ 37, you can start to do yoga/tai chi religiously, 1-2 hrs a day, so when your 80 years old your not old/frail. And IF you are tired of material existence, you have the means to end your life internally by simply controlling your energy, sending it up your spine into your brain ;)
> when you retire @ 37, you can start to do yoga/tai chi religiously, 1-2 hrs a day, so when your 80 years old your not old/frail.
Ever heard of diseases (not to mention just plain old aging)? Tai chi/joga is not a ticket to immortality.
Ever heard of diseases (not to mention just plain old aging)? Tai chi/joga is not a ticket to immortality.
I'm guessing that part was as serious as this part:
>you have the means to end your life internally by simply controlling your energy, sending it up your spine into your brain
>you have the means to end your life internally by simply controlling your energy, sending it up your spine into your brain
It's just a strangely worded way of saying it. You can practice these forms without needing to retire and/or you can continue to practice them for however long you want whenever you retire. And it might not be a matter of starting, if you've already started before you retire.
Many people (myself included) practice yoga and other internal martial arts for at least 1-2 hours a day while also having a full-time job and family.
Many people (myself included) practice yoga and other internal martial arts for at least 1-2 hours a day while also having a full-time job and family.
Where are you LIVING on that kind of money? Even in a small town you're looking at probably at least $750/month for a place that's not a roach motel.
Estimate is off. $500 if the town is small enough. Additionally, typically lower-income people aren't trying to pay the whole of it (family lives with them and contribute).
May or may not be relevant in the context of this discussion.
FWIW you can buy a lot more than you'd expect for a small amount in very rural areas. Homes and acreage for well under $100k, which gives you a pretty small mortgage. Much, much smaller than $750.
May or may not be relevant in the context of this discussion.
FWIW you can buy a lot more than you'd expect for a small amount in very rural areas. Homes and acreage for well under $100k, which gives you a pretty small mortgage. Much, much smaller than $750.
I paid $220/mo for a room in Tucson during 2012-2013. Nice and big one-bedroom houses are close to the university are like 400-500 nowadays. Obviously having kids changes things.
In a perfect universe. But along the way unintended expenses happen, hospital bills, car accident, getting sued, or just drifting away from your original goals. Bottom line though is just keep saving, and don't worry so much about a hard date.
[deleted]
The difficulty with the bike thing, is that the closer you are to cities the more housing costs.
The housing expense often costs more than owning a cheap car.
The housing expense often costs more than owning a cheap car.
He touches on that in this post (with numbers): https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/
Those numbers dont really work in the uk.
So what numbers do work in the UK? I'm from The Netherlands, and I also find that these numbers don't work for me. However, I have a spreadsheet with my own numbers and it shows I can retire about ten years earlier than the rest. And that's nothing to sneeze at.
I've found myself saying that phrase in response to a lot of MMM's posts.
Anywhere in the UK, or just in the largest few cities?
No worries, those numbers don't really work in the US either.
He owns and rents several properties. Rentier activity like this pushes up housing costs.
Try to quantify each commute kilometer, for example, each km costs 1,000 GBP in lost time, car expense, and psychological damage. Plug that into an equation then ask yourself if it is worth it to live closer to work or not.
His blog also nets him hundreds of thousands of dollars a year. I'm sure that helps him feel smug and safe in early retirement.
https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...
https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...
>>good luck trying to retire as a welder or car mechanic making $50k
I know a few people here in India who as cooks and welders have retired early. You have to ruthlessly put your interests on the top. Things like frugality etc, are qualifying conditions. But the necessary conditions are keeping an endless watch on your income, learning new skills and to a degree being able to move on from your jobs to ones that pay well.
That also involves doing things like getting into renting, and squatting useful real estate by buying way in advance and having others pay for your investments later.
In short you need to consider your financial interests as the only things that matter, and do what it takes. More often than not, it will usually create a situation where you trample on others along the way.
I know a few people here in India who as cooks and welders have retired early. You have to ruthlessly put your interests on the top. Things like frugality etc, are qualifying conditions. But the necessary conditions are keeping an endless watch on your income, learning new skills and to a degree being able to move on from your jobs to ones that pay well.
That also involves doing things like getting into renting, and squatting useful real estate by buying way in advance and having others pay for your investments later.
In short you need to consider your financial interests as the only things that matter, and do what it takes. More often than not, it will usually create a situation where you trample on others along the way.
Why are those criticisms?
The top 5% of households earn over $200,000. That is a large and wealthy audience, that is equally as interested in retiring early as people making 50k. In the United States alone, the top 5% of earners is a large audience, and again, the wealthy audience that any blog, or cult, or merchant is looking for.
The people making 50k have to figure out the irrelevance to their situation on their own.
The people making 150k don't, as they are a hop away from being in the top 5%, and a hop away from learning what is needed to cement their financial independence.
The top 5% of households earn over $200,000. That is a large and wealthy audience, that is equally as interested in retiring early as people making 50k. In the United States alone, the top 5% of earners is a large audience, and again, the wealthy audience that any blog, or cult, or merchant is looking for.
The people making 50k have to figure out the irrelevance to their situation on their own.
The people making 150k don't, as they are a hop away from being in the top 5%, and a hop away from learning what is needed to cement their financial independence.
What avenue is there to retire at 30 if you make 200k by 25? I must be missing something massive.
I'm not a subscriber to this strategy, but the theory goes that if you save, in that scenario, 80% of your take home pay (annually saving ~$100k, spending ~$20k), you'll have, say, ~$500k invested in 5 years and can safely withdraw 4%/$20k per year indefinitely. Then you can quit your 200k job, 'retire', and enjoy the same lifestyle as you lived while employed.
Personally I agree with the message about the power of saving to offer financial stability and independence, but I prefer saving reasonably while also trying to find ways to do work that I enjoy instead of saving super aggressively in search of an early retirement from a job I hate.
Personally I agree with the message about the power of saving to offer financial stability and independence, but I prefer saving reasonably while also trying to find ways to do work that I enjoy instead of saving super aggressively in search of an early retirement from a job I hate.
I agree with your approach and that is what I have implemented so far as well. As much as I would love to have the 40-60 hours a week I work back to myself, it is just much too difficult for me to live off of only 20k or less per year. I am not interested in living like that anymore, I'm too familiar with it.
20k/year is tough to measure up to. From the Reddit community around financial independence, "build the life you want then save for it". [1] You might look at your expenses and decide "_____ really doesn't provide me much happiness. Maybe I should reduce or eliminate it".
If most people would look at their spending and eliminate the 5% that brings them the least happiness, they would be in substantially better positions financially in the long run. Many people spend 100% of their paychecks and have little to nothing to show for it.
[1] https://www.reddit.com/r/financialindependence/comments/58j8...
If most people would look at their spending and eliminate the 5% that brings them the least happiness, they would be in substantially better positions financially in the long run. Many people spend 100% of their paychecks and have little to nothing to show for it.
[1] https://www.reddit.com/r/financialindependence/comments/58j8...
GP's example of 5 years is a very short timeframe, however. A big part of achieving financial independence is compound interest returns on investments in low-fee index funds.
Try a quick spreadsheet for yourself. You can assume 5-6 % real returns. Play around with savings rates, GP suggested over 80%, which is more agressive than I've ever heard. Try 60%, which would leave you with 60k disposable, and you'll see things go up very fast in the 10-15 year range.
In fact, MMM shows that it actually all reduces to a really simple calculation, and with that 60 % savings rate, you're 12.5 years away from retirement (if you start at 0 net worth).
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
Try a quick spreadsheet for yourself. You can assume 5-6 % real returns. Play around with savings rates, GP suggested over 80%, which is more agressive than I've ever heard. Try 60%, which would leave you with 60k disposable, and you'll see things go up very fast in the 10-15 year range.
In fact, MMM shows that it actually all reduces to a really simple calculation, and with that 60 % savings rate, you're 12.5 years away from retirement (if you start at 0 net worth).
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
That's pretty much most of us. I couldn't imagine sitting around at 30 with nothing to do.
Depends on what you mean by "retire." Having complete financial independence is unlikely.
However a person with no debts or children can live a nice middle-class life as a single person or partner/spouse even in the Bay Area and still save $50k/year or more. With conservative investments that $250k in savings over five years can easily be used to have a few thousand a month in income. It won't replace a $200k per year salary, but it'd be enough to live very frugally in an inexpensive place. It's much riskier than having a salary, health insurance, etc. and I wouldn't advise it.
However a person with no debts or children can live a nice middle-class life as a single person or partner/spouse even in the Bay Area and still save $50k/year or more. With conservative investments that $250k in savings over five years can easily be used to have a few thousand a month in income. It won't replace a $200k per year salary, but it'd be enough to live very frugally in an inexpensive place. It's much riskier than having a salary, health insurance, etc. and I wouldn't advise it.
I see, I hadn't considered the "lean fi/re" approach. I guess by that definition you can retire much much earlier than you would think normally. I can't imagine living off of only 20-25k per year during my retirment.
If I live on $30k/yr (I lived comfortably on a less for years--Austin, not SF) and pay 30% in taxes (again, Texas is an exception this way), that's $550k after five years without interest. If you can then earn 5%/yr on that $550, that gives you $27.5k/yr to live on--and you've already been making it on $30k/yr...
Basically, learn to be comfortable on a reasonably low income. In the interview, he talks about biking as an example.
I've always been confused by single people struggling on much more than I lived comfortably on, and I recently realized part of it is that the average cost of car ownership in the US is something like $8k/yr[0]. (My first two years in Austin, I was in Americorps, so that would have been over 70% of my income.) That's just one example of a major expense we just treat as a necessity.
Maybe you don't want to live without a car. Maybe you want to go out to eat twice a week. Maybe you want a bigger apartment. Those are all fine--but those are also all choices that will raise your cost of living, which will likely push out your retirement age.
Personally, I don't mind working past age 30, but if you want to retire early, it will probably require arranging your life to live without things that might seem like necessities right now.
Again, totally your choice, and it might not be for you, but let me anecdotally provide that it's very possible to live a great life without a car, an expensive phone and phone plan, etc.
I'd recommend breaking down all your spending and looking at what you want to live without and what you don't. With things you can easily turn on/off (Netflix is easy to cancel for a few months, or biking to work for a couple weeks if you have a bike--car ownership or apartment size/location, not so much), experiment on living without and see how you feel. You might miss it and you might not.
Don't rely on my experiences, but don't rely on your guesses on how much you like the status quo either. (I guess that also means I should try renting a car and driving to work for a few weeks to see if I like it better than biking.)
[0] https://www.nerdwallet.com/blog/loans/total-cost-owning-car/
Basically, learn to be comfortable on a reasonably low income. In the interview, he talks about biking as an example.
I've always been confused by single people struggling on much more than I lived comfortably on, and I recently realized part of it is that the average cost of car ownership in the US is something like $8k/yr[0]. (My first two years in Austin, I was in Americorps, so that would have been over 70% of my income.) That's just one example of a major expense we just treat as a necessity.
Maybe you don't want to live without a car. Maybe you want to go out to eat twice a week. Maybe you want a bigger apartment. Those are all fine--but those are also all choices that will raise your cost of living, which will likely push out your retirement age.
Personally, I don't mind working past age 30, but if you want to retire early, it will probably require arranging your life to live without things that might seem like necessities right now.
Again, totally your choice, and it might not be for you, but let me anecdotally provide that it's very possible to live a great life without a car, an expensive phone and phone plan, etc.
I'd recommend breaking down all your spending and looking at what you want to live without and what you don't. With things you can easily turn on/off (Netflix is easy to cancel for a few months, or biking to work for a couple weeks if you have a bike--car ownership or apartment size/location, not so much), experiment on living without and see how you feel. You might miss it and you might not.
Don't rely on my experiences, but don't rely on your guesses on how much you like the status quo either. (I guess that also means I should try renting a car and driving to work for a few weeks to see if I like it better than biking.)
[0] https://www.nerdwallet.com/blog/loans/total-cost-owning-car/
Yeah, I live in Houston and can totally see what you mean. I think I could reasonably get down to 30k and be pretty comfortable. I let lifestyle inflation hit me harder than it should have and that's what I'm dealing with now. I make better decisions than most, but not optimal decisions. (eg. I bought a car for 14k on an almost 0% interest loan, but the optimal choice is to not buy a car at all. The average choice is probably buy a more expensive car with a bigger interest rate loan) As I get older I realize the compounding sub-optimal choices really make a huge difference. I'm going to take your advice and really break down what my goal is and what my spending habits must be in order to hit that goal. It's definitely closer to FI at 40 than RE at 30, but at this point I'm not even sure I'll hit that.
> average cost of car ownership in the US is something like $8k/yr
The number you've quoted is about new cars. For used cars it could be 10 times less.
The number you've quoted is about new cars. For used cars it could be 10 times less.
It definitely can be a lot less, but national average for insurance alone is $815[0]. Obviously a lot of people have costs below average, but a car is going to be a major expense. If you can do it (legally) for under $1000/yr, you're probably driving very little, taking some risks (in having minimal insurance) and doing a lot more maintenance/repairs yourself than most people know how to.
Under $8000 is easy, seeing as $8000 is average. Under $1000, I'm not so sure about. Maintenance/repairs on a new car averages > $1000/yr[1]--I'd assume used cars to be at least as high. Insurance average cost is similar. Fuel is going to be several hundred unless you have a very efficient car you drive very little.
I think people just look at their monthly car payment and ignore most other costs associated with car ownership. There are a lot of not-so-little costs. There are also lots of not-so-little benefits, but you need to weigh both, not just the latter.
[0] https://www.thesimpledollar.com/how-much-does-car-insurance-... [1] http://newsroom.aaa.com/auto/your-driving-costs/
Under $8000 is easy, seeing as $8000 is average. Under $1000, I'm not so sure about. Maintenance/repairs on a new car averages > $1000/yr[1]--I'd assume used cars to be at least as high. Insurance average cost is similar. Fuel is going to be several hundred unless you have a very efficient car you drive very little.
I think people just look at their monthly car payment and ignore most other costs associated with car ownership. There are a lot of not-so-little costs. There are also lots of not-so-little benefits, but you need to weigh both, not just the latter.
[0] https://www.thesimpledollar.com/how-much-does-car-insurance-... [1] http://newsroom.aaa.com/auto/your-driving-costs/
I was just pointing out that the reference used by GP is specifically about new cars.
Also, your second reference is also about new cars. I cannot believe anyone spending ~$1000/year on a maintenance of a 'new' car. First three years while it is still covered by warranty you will need an oil/filter change once a year and no new tires. $50/year at the official dealer was the maintenance cost of the last four new cars I owned.
Also, your second reference is also about new cars. I cannot believe anyone spending ~$1000/year on a maintenance of a 'new' car. First three years while it is still covered by warranty you will need an oil/filter change once a year and no new tires. $50/year at the official dealer was the maintenance cost of the last four new cars I owned.
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He has good ideas but I agree with your arguments.
Also, is he retired? How much time does the blog consume? How much income does it generate?
Also, is he retired? How much time does the blog consume? How much income does it generate?
You can read his blog yourself, but the basic idea is that he chooses to run the blog, he's not forced to for financial reasons.
He has enough income from invested savings that he is not required to have more income to maintain his lifestyle.
He has enough income from invested savings that he is not required to have more income to maintain his lifestyle.
He had the money to retire before the blog got big, but yes he and his wife still work, but only when they want to.
Sadly, these days good luck trying to retire EVER making $50K.
its about living within your means... you can't afford new cards, $1000 cell phones, AND retire on 50k, but you can pare that back... Life is about choices.
[deleted]
Something that seems to be lost in this thread, which looks to be mostly a debate about whether or not early retirement is feasible for normal people:
For normal people, MMM strategy is about making uncomfortable decisions (plain, reliable used cars, no fine dining, no fancy houses, no downtown-big-city living locations) to avoid the most uncomfortable thing of all: work.
If you would rather have a job your whole life so you never have to eat a bean or drive a 20 year old car, you're not the target audience. People who are driven to early retirement & financial independence are people who DESPISE jobs and are willing to spend their whole life at a much smaller income bracket in exchange for not having one.
They don't want your new devices, cable tv, leased cars, and downtown apartments. They agree those things are nice, but not nice enough to take on an extra 40,000 hours of "servitude" with an employer.
The strategy is simple: if you can live on 20% of your income, and save the rest, then in a few years, you will have the ability to reproduce that same income indefinitely. The amount of the income doesn't matter, and that is being lost here for some reason. If you can't do 20%, you can do 30% and a few extra years. Or whatever.
The MMM strategy is about ditching the job, and balancing the trade-offs to something you can stomach. If you can't stomach it, fine, but that doesn't mean it's not a viable strategy.
For normal people, MMM strategy is about making uncomfortable decisions (plain, reliable used cars, no fine dining, no fancy houses, no downtown-big-city living locations) to avoid the most uncomfortable thing of all: work.
If you would rather have a job your whole life so you never have to eat a bean or drive a 20 year old car, you're not the target audience. People who are driven to early retirement & financial independence are people who DESPISE jobs and are willing to spend their whole life at a much smaller income bracket in exchange for not having one.
They don't want your new devices, cable tv, leased cars, and downtown apartments. They agree those things are nice, but not nice enough to take on an extra 40,000 hours of "servitude" with an employer.
The strategy is simple: if you can live on 20% of your income, and save the rest, then in a few years, you will have the ability to reproduce that same income indefinitely. The amount of the income doesn't matter, and that is being lost here for some reason. If you can't do 20%, you can do 30% and a few extra years. Or whatever.
The MMM strategy is about ditching the job, and balancing the trade-offs to something you can stomach. If you can't stomach it, fine, but that doesn't mean it's not a viable strategy.
> People who are driven to early retirement & financial independence are people who DESPISE jobs and are willing to spend their whole life at a much smaller income bracket in exchange for not having one.
I was surprised by the negativity in this thread until I read this sentence. Most readers here though have the option of either finding a less terrible job or starting our own companies. When neither of those are an option eating beans sounds pretty good.
I was surprised by the negativity in this thread until I read this sentence. Most readers here though have the option of either finding a less terrible job or starting our own companies. When neither of those are an option eating beans sounds pretty good.
Just because you want to work forever doesn’t mean you will have the opportunity to. There are plenty of 50 year olds who unexpectedly find themselves out of work and unhireable.
[deleted]
The MMM way is more about locking in your luck than anything else. Be frugal, when lady luck smiles and you have a lot of income make sure you do not waste the proceeds and avoid living above your means at all costs. Having skills is a plus and in his particular case it helps if you are good at building a personal brand so you can ride the self help bandwagon.
Very useful information compared to most other self help institutions though, far more actionable but a bit preachy and unaware of how complex other peoples lives are but such over simplification can help to make a point.
Also, he seems to pretend as if he is the first person ever to live like this but there are many others that simply never thought of themselves as special in any way. See also: the millionaire next door.
Very useful information compared to most other self help institutions though, far more actionable but a bit preachy and unaware of how complex other peoples lives are but such over simplification can help to make a point.
Also, he seems to pretend as if he is the first person ever to live like this but there are many others that simply never thought of themselves as special in any way. See also: the millionaire next door.
> Also, he seems to pretend as if he is the first person ever to live like this but there are many others that simply never thought of themselves as special in any way. See also: the millionaire next door.
He believes the world would be a better place if most people lived a bit more like him (independence, hard work, frugality, etc). I don't see anything wrong with blogging about it. Also, he certainly doesn't claim he's the first person to live like this, and regularly cites influences, including an entire post dedicated to Millionaire Next Door: http://www.mrmoneymustache.com/2011/05/14/weekend-edition-bo...
And the book he credits with changing his life: http://www.mrmoneymustache.com/2011/05/28/weekend-edition-th...
He believes the world would be a better place if most people lived a bit more like him (independence, hard work, frugality, etc). I don't see anything wrong with blogging about it. Also, he certainly doesn't claim he's the first person to live like this, and regularly cites influences, including an entire post dedicated to Millionaire Next Door: http://www.mrmoneymustache.com/2011/05/14/weekend-edition-bo...
And the book he credits with changing his life: http://www.mrmoneymustache.com/2011/05/28/weekend-edition-th...
I find his schtick over the top. On the other hand, some people really do need to learn that they'd have an easier time saving money if they didn't lease a BMW, go out eating and drinking every other night, and vacation at expensive resorts.
He has a pretty healthy attitude to debt and in plenty of countries that are less consumption oriented he would be pretty normal. I know lots of mustachians here in Europe who most likely have never ever heard of him.
Actually, that's a good point - I've known quite a few people who lived carefully off of investments/property. Fairly common in some (usually rather posh) circles in the UK.
When I sold ww.com the first thing I did was pay taxes (rather a lot), the second to dump the remainder into property to rent out. It doesn't bring a whole lot but far more than the bank or even index funds would bring, and that's at friendly rates rather than market rates.
Similar story probably - money from a minor exit into property which did very well, although that was accidental. We just bought places we really wanted to live and they turned out to be very good investments - certainly much better than our pension funds.
In fairness the bulk of The Millionaire Next Door subjects owned their own business and could often pull in salaries of $500K+ per year.
Yes, owning your own business can be a good way to end up 'middle class' or 'comfortably poor'. But it works and that's good enough for me, and I never paid myself $500K per year either. And still had my first property paid off 20 years ahead of schedule.
Things that helped:
- ability to save
- driving cheap cars (my current daily driver is 20 years old)
- very little debt (usually only to finance the next property)
- buying quality stuff and what I need
- living in a country where healthcare can't bankrupt you
- with free education (though that is changing now)
- making reasonably good money because of my chosen profession
None of the above would matter much if I would work as a store clerk or something like that, that's a much harder situation to get out of.
Things that helped:
- ability to save
- driving cheap cars (my current daily driver is 20 years old)
- very little debt (usually only to finance the next property)
- buying quality stuff and what I need
- living in a country where healthcare can't bankrupt you
- with free education (though that is changing now)
- making reasonably good money because of my chosen profession
None of the above would matter much if I would work as a store clerk or something like that, that's a much harder situation to get out of.
Being frugal is the biggest baloney to wealth. People like you and I obsess over it because $COST_OF_LIVING is the one variable of the Income Wealth Equation we can control.
You want to become wealthy? Affect millions.
You want to become wealthy? Affect millions.
Well, change frugal to 'don't be wasteful' then if that makes more sense to you. A friend of mine has four holidays per year, lives in an 800K euro house, has a whole pile of other interesting expenses and wonders out loud to me why he has no money left over. And that's with both him and his wife pulling in six figure salaries...
Sounds like your friend sacrificed the future for the today. But far, far too many of us are guilty of sacrificing today for a tomorrow 40 years from now.
Get rich slow when you're 70, or get rich fast by working your ass off and being accountable for your wealth.
Get rich slow when you're 70, or get rich fast by working your ass off and being accountable for your wealth.
It's a two step process.
1) Make lots of money
2) Don't spend it all
You need to succeed at both steps to be wealthy. However doing well at either step will still improve your circumstances.
1) Make lots of money
2) Don't spend it all
You need to succeed at both steps to be wealthy. However doing well at either step will still improve your circumstances.
Yes! You need an incredible flow of income to become wealthy (selling your company, book you wrote becomes a hit, etc). You cannot accomplish step 1 through a job.
Rich people telling you to invest in mutual funds and treasuries to become wealthy are frauds. That's what you do to MAINTAIN wealth, not to generate wealth.
Rich people telling you to invest in mutual funds and treasuries to become wealthy are frauds. That's what you do to MAINTAIN wealth, not to generate wealth.
> You cannot accomplish step 1 through a job.
Well, as the linked article and the various blog posts show, that isn't exactly true, especially not for people in IT.
In IT you can accomplish step 1 through a job.
Well, as the linked article and the various blog posts show, that isn't exactly true, especially not for people in IT.
In IT you can accomplish step 1 through a job.
You cannot scale yourself. You cannot demand a 200% raise from your boss. You can control your $COST_OF_LIVING, you can job hop to increase your income, but it is bounded. Just as a doctor can increase his number of patients but cannot work more than 60 hours a week.
Something I’m curious about regarding Mr. Money Mustache - is he actually retired, in the sense that he doesn’t do anything to bring in income (except through passive index investing)?
It seems like he has a brand that is pretty lucrative, so it’s unclear to me if he:
1. has enough money to be functionally retired at his current lifestyle, but chooses to continue his brand anyway,
2. has enough money to be functionally retired, but not at his current lifestyle, and so chooses to continue his brand,
3. cannot functionally retire and simply “transitioned” from professional software development to professional blogging.
I follow the logic of his blog series (reduce spending dramatically, increase savings dramatically, invest optimally), but I can’t tell how much of it contributes to his current lifestyle.
It seems like he has a brand that is pretty lucrative, so it’s unclear to me if he:
1. has enough money to be functionally retired at his current lifestyle, but chooses to continue his brand anyway,
2. has enough money to be functionally retired, but not at his current lifestyle, and so chooses to continue his brand,
3. cannot functionally retire and simply “transitioned” from professional software development to professional blogging.
I follow the logic of his blog series (reduce spending dramatically, increase savings dramatically, invest optimally), but I can’t tell how much of it contributes to his current lifestyle.
One of the things that made me stop reading him was when it became clear his "I'm totally retired and you can be too!" thing was BS. At the time he had like 3 part-time jobs (the blog, landlord, handyman, IIRC), with his savings being large enough that he could make a stupid "hey, you should stop paying so much for health insurance you idiots! Turns our if you have a lot of money in the bank and the skills to land a job with family coverage in a matter of months if you need to, you only need catastrophic coverage! I don't know why people say buying your own health insurance is expensive, it's not!" post, but not enough to totally retire on it (he seemed to be letting his investments grow by spending mostly his part-time job money, at the time, rather than investment returns)
Exactly. Seems totally stupid. Like why is it better to have 3 jobs ( blog, handyman, landlord ) than one normal job ? to me retired is a person who specifically lives strictly off the money they have. I mean sure, if you prefer to work as a handyman or run a successful blog, by all means do that, but calling yourself retired seems inaccurate. I am retired but I have 3 jobs. ooook.
Ha. The MMM community calls people espousing this sort of view "the retirement police". I have no idea what this complaint intends to accomplish beyond adherence to some kind of radical linguistic prescriptivism.
http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-...
http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-...
You can't claim to be financially independent and come back two years later with this gem:
"The secret is that my wife is no longer really retired, and in fact she started a business that is now big enough to FUND OUR ENTIRE FAMILY'S LIFESTYLE."
http://www.mrmoneymustache.com/2017/03/06/etsy-shop/
If not outright dishonest, it certainly gives the off appearance that you can't put any weight in the numbers he is throwing out.
I guess I'm one of those "retirement police" who hates seeing a huckster give bad advice while eschewing talking about the real increase in realized risk you take by retiring early and not considering it in your plan. As one of the previous comments stated: your budget is not static, investment returns are not guaranteed, life events and medical situations change drastically.
So when I see, "I made it so can you", I want to respond, "Come back to me when you are 90 and on your death bed and talk with me again." I've seen the cancer treatment bills and what they do to someone with 10x your "financial independent" worth.
"The secret is that my wife is no longer really retired, and in fact she started a business that is now big enough to FUND OUR ENTIRE FAMILY'S LIFESTYLE."
http://www.mrmoneymustache.com/2017/03/06/etsy-shop/
If not outright dishonest, it certainly gives the off appearance that you can't put any weight in the numbers he is throwing out.
I guess I'm one of those "retirement police" who hates seeing a huckster give bad advice while eschewing talking about the real increase in realized risk you take by retiring early and not considering it in your plan. As one of the previous comments stated: your budget is not static, investment returns are not guaranteed, life events and medical situations change drastically.
So when I see, "I made it so can you", I want to respond, "Come back to me when you are 90 and on your death bed and talk with me again." I've seen the cancer treatment bills and what they do to someone with 10x your "financial independent" worth.
I think his definition of "retired" is pretty simple:
his family could cover all of their living expenses from investment income alone.
When you think about it, this is pretty much what we mean by "normal" retirement as well. If a 70 year old retiree does some maintenance on his rental property we don't accuse him of lying about being retired.
Your point about medical bills doesn't really hold water. I'm sure plenty of unlucky people who retired at a more conventional age end up having to come out of retirement because of an unforeseen tragedy.
Unless you want to change the definition of "retired" to: "having sufficient investment income to cover any possible expense that you or your family could possibly incur from now until your death, without ever doing a single hour of paid work"
I don't agree with MMM all the time but accusing him of not being retired does seem like a pointless exercise in semantics.
his family could cover all of their living expenses from investment income alone.
When you think about it, this is pretty much what we mean by "normal" retirement as well. If a 70 year old retiree does some maintenance on his rental property we don't accuse him of lying about being retired.
Your point about medical bills doesn't really hold water. I'm sure plenty of unlucky people who retired at a more conventional age end up having to come out of retirement because of an unforeseen tragedy.
Unless you want to change the definition of "retired" to: "having sufficient investment income to cover any possible expense that you or your family could possibly incur from now until your death, without ever doing a single hour of paid work"
I don't agree with MMM all the time but accusing him of not being retired does seem like a pointless exercise in semantics.
if you are doing 3 different jobs ( 4 counting the etsy shop ), you are working at 3 jobs. That's not retirement. Sure, he claims his investment income covers his expenses, I get that. But, no matter how you look at it, he is working. He is not retired. If a 70 year old is spending time doing maintenance on rental properties, that 70 year old is working part time
[deleted]
MMM gave a talk last year[0] where one of his key points was "Work is better when you don't need the money."
That's what he's doing when he says he is "retired" and yet works odd jobs to make money, or his wife sells things on Etsy for fun. I do think there's something behind the idea that it's more fun to do money-generating activities when you don't need the money they generate.
Also, his talk is pretty funny (and a good intro to his way of thinking for those who haven't read any of his stuff). Worth a watch.
[0]: https://vimeo.com/183016901
That's what he's doing when he says he is "retired" and yet works odd jobs to make money, or his wife sells things on Etsy for fun. I do think there's something behind the idea that it's more fun to do money-generating activities when you don't need the money they generate.
Also, his talk is pretty funny (and a good intro to his way of thinking for those who haven't read any of his stuff). Worth a watch.
[0]: https://vimeo.com/183016901
ok. but if you don't need the money, why not do a million other activities that don't bring in money?
Why does it matter whether doing what you want to do brings in money?
it doesn't but then there is no advantage to whatever MMM is doing, vs just having a well paid regular job that you like.
to me the point of retirement is to be able to wake up at 9 and go for a walk or travel or reading a book. Not going to 3 different part time jobs.
to me the point of retirement is to be able to wake up at 9 and go for a walk or travel or reading a book. Not going to 3 different part time jobs.
Of course there is a difference. MMM doesn't have to do what he's doing in order to pay for a place to live and food to eat. He doesn't have to stress out about losing his income stream. He basically has hobbies for which he gets paid.
In your retirement, you'd choose to walk and travel and read books. Those are good hobbies! What if eventually you want to get into something like woodworking (a very popular hobby)? What if - gasp - you sell some of your woodworking creations for money? Does that invalidate your retirement?
In your retirement, you'd choose to walk and travel and read books. Those are good hobbies! What if eventually you want to get into something like woodworking (a very popular hobby)? What if - gasp - you sell some of your woodworking creations for money? Does that invalidate your retirement?
If you sell those wooodworking creations for money and you keep the money - yes, absolutely. Why don't you give those woodworking creations away for free if you don't need the money? or why don't you donate the money you earn from them to charity - if you don't do those things, you admit you need that money for something that you can't afford otherwise. In that case, why not just work a job? I mean if you love woodworking and do it for money, you just have a job that you love, which is fantastic. but it's a job.
In the woodworking example, you may only have room for so many chairs around the house. And, if you don't really need the money, you make what you want when you feel like it. That's a lot different from the typical job.
Needing money isn't binary in any case. I may or may not need more money. But maybe I'll be glad I had it some day. Of, perhaps unlike MMM, maybe I'll buy something or take a trip someplace with the extra money that I wouldn't have otherwise done.
Needing money isn't binary in any case. I may or may not need more money. But maybe I'll be glad I had it some day. Of, perhaps unlike MMM, maybe I'll buy something or take a trip someplace with the extra money that I wouldn't have otherwise done.
Of course you can do that too. Leisure is awesome. I think I'd do a lot of that myself.
I don't think I'd give up programming though. I really enjoy it. Maybe after tinkering on a bunch of my own projects that nobody ever sees, I would get bored of that (pretty sure I would anyway). I'd probably get an itch to do something that other people can use too. And then it's likely there'd be money involved.
But also, "going to 3 different part time jobs" isn't really a good way to look at it. If someone asks you "hey, do you want to help me build a deck?" , there's a world of difference between saying yes because you need the money vs. saying yes because you enjoy the work and want something to do.
I would not underestimate being in the position to walk away. Even if you never act on it, that feeling of control is worth something. (see also: "fuck you money").
I don't think I'd give up programming though. I really enjoy it. Maybe after tinkering on a bunch of my own projects that nobody ever sees, I would get bored of that (pretty sure I would anyway). I'd probably get an itch to do something that other people can use too. And then it's likely there'd be money involved.
But also, "going to 3 different part time jobs" isn't really a good way to look at it. If someone asks you "hey, do you want to help me build a deck?" , there's a world of difference between saying yes because you need the money vs. saying yes because you enjoy the work and want something to do.
I would not underestimate being in the position to walk away. Even if you never act on it, that feeling of control is worth something. (see also: "fuck you money").
It's not dishonest, you're missing the point of that sentence.
The Etsy shop could fund the family's lifestyle. The family is already funded by investment returns. They could shut the shop down and continue living just as they do. MMM is just using "fund our family's lifestyle" to give an idea of how much the shop is pulling in (about $30k/year).
The Etsy shop could fund the family's lifestyle. The family is already funded by investment returns. They could shut the shop down and continue living just as they do. MMM is just using "fund our family's lifestyle" to give an idea of how much the shop is pulling in (about $30k/year).
All of these concerns are real. You'll be reassured to learn that health costs are probably the fourth-most discussed topic in the MMM community, after safe withdrawal rates, asset allocation, and game plans during the next big market crash.
MMM's blog posts are very basic - you won't safely retire early if all you do is read them. Fortunately, people are responsible and put slightly more effort into planning their entire lives than uncritically following some blog post on the internet. For example, many people are planning on using a 3.25% withdrawal rate rather than 4%, and have much more in bonds than the 100%-equities-or-bust message on the blog.
MMM's blog posts are very basic - you won't safely retire early if all you do is read them. Fortunately, people are responsible and put slightly more effort into planning their entire lives than uncritically following some blog post on the internet. For example, many people are planning on using a 3.25% withdrawal rate rather than 4%, and have much more in bonds than the 100%-equities-or-bust message on the blog.
One of the key insights about his situation, I think, is that you can live on his under-30K budget and not feel super poor, if you don't have regular 9-5 job with a fixed location, if you don't need to worry much about good schools (can homeschool—these two things combine to mean you can choose inexpensive housing with fewer other trade-offs, which makes it easier to have a paid-off house), and if you already have a lot of money and in-demand skills so you can reasonably have much lower insurance spending generally, and especially health insurance. The overwhelming bulk of his budget savings comes from already having lots of money and from having plenty of time to DIY stuff others might pay for. The rest is useful but relatively marginal.
His blog's good for reinforcing that you can spend less money when you already have money, so it's heartening in that it tells you your target income for retirement can be much lower than the income you need pre-retirement. It's not especially helpful for getting there.
His blog's good for reinforcing that you can spend less money when you already have money, so it's heartening in that it tells you your target income for retirement can be much lower than the income you need pre-retirement. It's not especially helpful for getting there.
And that's another thing that I don't particularly like about MMM: the incessant shouting down and name calling of anything and anybody that dares to question him and his statements.
His community takes the cue and runs with, too. Any hint of, "wait... this post is useful for saving only if I already have a ton of money and/or already don't have a job and therefore have little to no time pressure in my life. Rich people pay less for stuff, retired people have lots of free time, that's well known and not insightful. Some of the cutting-spending stuff here is good, but this particular thing is incredibly unhelpful." is dealt with harshly, no matter how justified.
ahelwer(1)
He had more than enough money in the bank to do nothing given his expenditures. Turns out he likes making money on his own time.
Here's a New Yorker article about him: https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...
I believe he has some rental income from properties he owns and he claims to only spend $25K or so per year, so the answer is probably closest to 1. His brand/blog does seem to be quite lucrative though. At this point, it would probably make more sense to limit the effort rather than shut anything down.
I believe he has some rental income from properties he owns and he claims to only spend $25K or so per year, so the answer is probably closest to 1. His brand/blog does seem to be quite lucrative though. At this point, it would probably make more sense to limit the effort rather than shut anything down.
There should probably be another word for it? I'm financially secure and will be for the rest of my life. But, I still generate an income, mostly by ownership but I still do physical labor. I do quite a bit of my own labor, as well. I can easily pay someone to do it for me, but I like it.
I just helped harvest the blueberries. Next, I'll be filling my own freezers during hunting season and I'll be guiding others to help fill their freezers. I harvest and process the animals on the neighboring farm, more so if I'm to be purchasing the results. I cut down trees for my own firewood, but I've helped the crew that harvests for commercial reasons. I own a share in a few franchises, and it is not unknown for me to come help on snowy days or even just to help clean up at close. I not only plow my own snow, but I plow it for other people, I'll even shovel for them.
Some of this makes me money, some of it costs me money.
I'm not sure retired is the right word? I don't have to do it, but I like keeping busy. Surely, there could be a better word than 'retired?'
I just helped harvest the blueberries. Next, I'll be filling my own freezers during hunting season and I'll be guiding others to help fill their freezers. I harvest and process the animals on the neighboring farm, more so if I'm to be purchasing the results. I cut down trees for my own firewood, but I've helped the crew that harvests for commercial reasons. I own a share in a few franchises, and it is not unknown for me to come help on snowy days or even just to help clean up at close. I not only plow my own snow, but I plow it for other people, I'll even shovel for them.
Some of this makes me money, some of it costs me money.
I'm not sure retired is the right word? I don't have to do it, but I like keeping busy. Surely, there could be a better word than 'retired?'
I don't know. "Financially independent" strikes me more along the lines of being able to walk out the door tomorrow and only doing a job because I want to. Not because I need the money.
I think "retired" is OK. A lot (most?) retired people who are healthy do something whether it's just some DIY around the house or volunteering. Of course, these days there are opportunities to pick up some dollars through various gig economy things though I would definitely have to need the money.
The lines are more blurred than they used to be though. I've known quite a few consultants who basically wound things down over time--not actively pursuing work as much but happy to spend some time and cash some checks with existing clients.
I think "retired" is OK. A lot (most?) retired people who are healthy do something whether it's just some DIY around the house or volunteering. Of course, these days there are opportunities to pick up some dollars through various gig economy things though I would definitely have to need the money.
The lines are more blurred than they used to be though. I've known quite a few consultants who basically wound things down over time--not actively pursuing work as much but happy to spend some time and cash some checks with existing clients.
Yeah, right after I sold, I tried the not being busy thing. It was less than ideal and it only took a few years before I was bored beyond belief. I did the volunteering thing but that was, for many reasons, less than ideal. So, now I keep myself occupied in unofficial capacities, both at home and in my small community.
I'm not sure how people do it. They retire and seem to do a whole lot of nothing. They may travel a little, maybe putter in the garden, but they mostly seem to watch television and hang out with other old people.
I retired fairly young. That may account for some of the difference. I try to have hobbies that keep me both physically and mentally occupied. Being unoccupied doesn't work well for me.
I'm not sure how people do it. They retire and seem to do a whole lot of nothing. They may travel a little, maybe putter in the garden, but they mostly seem to watch television and hang out with other old people.
I retired fairly young. That may account for some of the difference. I try to have hobbies that keep me both physically and mentally occupied. Being unoccupied doesn't work well for me.
Financially independent is the phrase I'd use.
Enough money so you don't 'have' to work to survive
That works. Anything I make, at least for money, gets donated or given away, pretty much. Some of the things I do result in my being given things like lasagna and fresh baked bread as payment. I eat that. I'd be crazy not to.
He 'retired' (as in, didn't have a job but spend most of his time DIY'ing so he didn't need money - not quite my definition of 'retire' but let's not beat that dead horse any more) years before the blog, but now brings in 6 figures (maybe more by now) from ads & other website income. It's a bit a 'in a gold rush, those selling shovels do best' thing.
I don't think you know what retired actual means here. It doesn't mean never working again, it more refers to being financially independent.
If he wanted to stop all those projects and never do anything again, he could. But that would probably be boring, so he pursues things that interest him, some of which net him income.
He's gone over his family's spending before, if you want to read more - http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-fa...
If he wanted to stop all those projects and never do anything again, he could. But that would probably be boring, so he pursues things that interest him, some of which net him income.
He's gone over his family's spending before, if you want to read more - http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-fa...
Yes. Also, I would add that MMM and his wife certainly did retire -- in the sense of quitting their conventional jobs and intending to live off the income, having no need to work. It just happened that in retirement they found themselves wanting to do some things, and those things have produced an income of their own. I'm pretty sure, the moment MMM isn't having fun with what he's currently doing, he'll stop and do something else, which choice will not be driven by how much income it produces. How is that not retirement? (The idea that in retirement you sit around all day and do essentially nothing is, I suppose, true for some people, but surely not a healthy or happy way of living your life.)
Beautiful. Since we get to make up our own definition of what retired means, I guess I am also retired.
re·tired rəˈtī(ə)rd/Submit adjective 1. having left one's job and ceased to work.
re·tired rəˈtī(ə)rd/Submit adjective 1. having left one's job and ceased to work.
You can substitute "financially independent" if it makes you feel better. Many people continue doing things that generate income even though they don't need the money. It's worth noting the difference between someone working because it's what they enjoy doing vs. someone who is compelled to work by financial necessity.
if they have enough money that they don't actually need to work and yet do work that generates income why don't they take that income and fully donate it to charity? if MMM doesn't do that, it means he needs that income - not different from just having a job
That's a ridiculous standard. How much money do you make? Do you live on the bare minimum necessary for survival and donate the rest? If you do, then kudos. If you're like most other people, you probably indulge in a luxury once in a while that you wouldn't otherwise buy if you couldn't afford it. That's not unreasonable. If your income unexpectedly declined, I'm sure there's a number of expenses that aren't strictly necessary and could be given up without too much worry.
FWIW, MMM did blog about giving away $100,000 of his blog windfall last year (https://www.mrmoneymustache.com/2016/10/26/notes-on-giving-a...) and plans to give away more.
FWIW, MMM did blog about giving away $100,000 of his blog windfall last year (https://www.mrmoneymustache.com/2016/10/26/notes-on-giving-a...) and plans to give away more.
that's not really the point. I have expenses that aren't strictly necessary that I could give up - but those are things I like. So, the question is, why should you claim to be retired and then work part time to afford extra things you like, vs just have a job and afford those things.
Well rather than attempting sarcasm, why don't you tell us what you think retired means? Presumably you're banned from ever doing any task that might even possibly net you any money?
if you are doing tasks that net you money, you are working, you are not retired. Right?
definition of retired:
Dictionary
retired re·tired rəˈtī(ə)rd/Submit adjective 1. having left one's job and ceased to work. "a retired teacher" synonyms: former, ex-, past, in retirement, superannuated More 2. archaic (of a place) quiet and secluded; not seen or frequented by many people. "this retired corner of the world"
definition of retired:
Dictionary
retired re·tired rəˈtī(ə)rd/Submit adjective 1. having left one's job and ceased to work. "a retired teacher" synonyms: former, ex-, past, in retirement, superannuated More 2. archaic (of a place) quiet and secluded; not seen or frequented by many people. "this retired corner of the world"
If you play poker for fun and win some money while you're at it, are you working?
What about slots?
What about buying antiques, and you wind up with something worth a bunch of money?
I think calling it work requires the intent of earning money. And I agree that MMM is no longer retired.
What about slots?
What about buying antiques, and you wind up with something worth a bunch of money?
I think calling it work requires the intent of earning money. And I agree that MMM is no longer retired.
Look, claiming you are retired while regularly doing 3 jobs for money is disingenuous in my opinion.
BINGO! And he bends the truth with his budget, go look at http://www.mrmoneymustache.com/2017/05/19/2016-spending/
Claims they live off of 'About $22,000' after saying that his 30k$ home addition does not count in his budget because it's not a necessary expense... "Finish materials for my house and the homes of some friends/family. Does not include the $30k detached Studio I built."
That's extremely deceptive.
Claims they live off of 'About $22,000' after saying that his 30k$ home addition does not count in his budget because it's not a necessary expense... "Finish materials for my house and the homes of some friends/family. Does not include the $30k detached Studio I built."
That's extremely deceptive.
I think a better term for what he preaches is financial independence.
It depends on how you define retired. Most people define being retired as living a life without obligations required to bring home the bacon and by that definition MMM is now retired (at his expense levels), but when he made the claim at first I felt he was overselling it. But the blog ads bring in much more than he is spending + passive investments ditto so if he would stop working / bringing in other money besides those streams he would be able to do this forever.
>when he made the claim at first I felt he was overselling it.
In what way? His passive investments were bringing in far more than his spending, so in what sense was he "overselling" it?
In what way? His passive investments were bringing in far more than his spending, so in what sense was he "overselling" it?
He had to go on the 'carpentour' to not eat into his savings.
Retirement means not having to work, period.
Retirement means not having to work, period.
Where did you get that from? There wasn't any market crash when he stopped working, therefore his passive income would have been far in excess of his spending.
Where did you hear he had to work?
Where did you hear he had to work?
He has said that he has enough money as is, but continues to do what he does because it's more interesting than sitting on his thumbs all day.
Being retired or financially independent is really about being able to do what you like when you want to and not having to worry about money. Choosing not to work at all simply to conform to what other people's expectations about what you're "allowed" to do if you call yourself retired is kind of silly.
http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-...
Being retired or financially independent is really about being able to do what you like when you want to and not having to worry about money. Choosing not to work at all simply to conform to what other people's expectations about what you're "allowed" to do if you call yourself retired is kind of silly.
http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-...
He's functionally retired. He was living off income from his investments before he started the blog.
The blog happened to take off and bring a windfall of money that allowed him to make some purchases he might not have otherwise made, but he posts his budget every year and it's pretty clear he could easily live off only his investment income, and does for the most part. He also gave a six-figure amount away to charity last year.
The blog happened to take off and bring a windfall of money that allowed him to make some purchases he might not have otherwise made, but he posts his budget every year and it's pretty clear he could easily live off only his investment income, and does for the most part. He also gave a six-figure amount away to charity last year.
I think the answer is 1 - http://www.mrmoneymustache.com/2017/05/19/2016-spending/
That said, some of the blog money is going into non-index investments like mmm hq - http://www.mrmoneymustache.com/2017/08/02/introducing-the-mm...
That said, some of the blog money is going into non-index investments like mmm hq - http://www.mrmoneymustache.com/2017/08/02/introducing-the-mm...
The answers to your question is here:
http://www.mrmoneymustache.com/2017/05/19/2016-spending/
tl;dr - He is still very frugal, unless you count his business expenses. He definitely works on his business and brings in income, but he gives much of it away.
http://www.mrmoneymustache.com/2017/05/19/2016-spending/
tl;dr - He is still very frugal, unless you count his business expenses. He definitely works on his business and brings in income, but he gives much of it away.
He's not frugal, he is very creative with his accounting. In the post you linked he deducts his medical expenses and food expenses.
Also if you look at the post you linked "Does not include the $30k detached Studio I built." 30k$ is more than a LOT of people gross annually in the U.S. and he claims it doesn't count as an expense which conveniently keeps his budget 30k$ smaller than it in fact was.
According to the U.S Census Bureau "The per capita income for the overall population in 2008 was $26,964; for non-Hispanic Whites, it was $31,313; for Blacks, it was $18,406; for Asians, it was $30,292; and for Hispanics, it was $15,674." which are all less than his 30k$ "hey guys it doesn't count I added a whole new room to my house" creative budget.
Also if you look at the post you linked "Does not include the $30k detached Studio I built." 30k$ is more than a LOT of people gross annually in the U.S. and he claims it doesn't count as an expense which conveniently keeps his budget 30k$ smaller than it in fact was.
According to the U.S Census Bureau "The per capita income for the overall population in 2008 was $26,964; for non-Hispanic Whites, it was $31,313; for Blacks, it was $18,406; for Asians, it was $30,292; and for Hispanics, it was $15,674." which are all less than his 30k$ "hey guys it doesn't count I added a whole new room to my house" creative budget.
My take was that he followed his own advice and did successfully "retire" without any of the blogging or brand income. Then his blog took off, and he started pulling a lot more money and getting quite famous.
He definitely has enough money to retire forever, but chooses to keep running the blog and doing interviews because he enjoys it, and it's something to do.
He definitely has enough money to retire forever, but chooses to keep running the blog and doing interviews because he enjoys it, and it's something to do.
(1). He was functionally retired before his brand started bringing in $400k/year.
All I know is he makes good money off the blog, and his affiliate link disclosures (e.g. Betterment) are often poor (e.g. at the end of an article, which doesn't conform to federal guidelines). It also, of course, calls his judgment into question, though naturally he swears up and down he loves the companies that sponsor him.
According to this New Yorker article, the blog makes hundreds of thousands a year. So now his 'early retirement' is starting to look like 'smart career change for getting much richer.'
https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...
According to this New Yorker article, the blog makes hundreds of thousands a year. So now his 'early retirement' is starting to look like 'smart career change for getting much richer.'
https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...
I read that his blog fetches half-a-million a year in revenue and he's barely monetized it. He brags about turning down offers from large institutions for various reasons. I'm sure these offers were quite lucrative.
I suspect the unrealized worth of his brand is in the $50-100mm range. He has a huge cult following (his words) among some of the highest earning members of society.
I suspect the unrealized worth of his brand is in the $50-100mm range. He has a huge cult following (his words) among some of the highest earning members of society.
Allow me to just throw out that I love the transcript. I know it is a lot of work, but I wish more podcasters would publish them.
I watch/listen to very few podcasts; don't drive regularly, which is where I would normally consume them, and otherwise tend to skip them because so many are a tedious waste of time. Plus, I just prefer text to video.
So, thank you!
I watch/listen to very few podcasts; don't drive regularly, which is where I would normally consume them, and otherwise tend to skip them because so many are a tedious waste of time. Plus, I just prefer text to video.
So, thank you!
Glad you like it! Always helpful to know what's worth the effort :)
Can you help me find the RSS feed? I'm trying to subscribe in a popular iOS podcast player (Overcast) and struggling to find the feed.
Never mind found at: backtracks.fm/ycombinator/ycombinator/feed
Never mind found at: backtracks.fm/ycombinator/ycombinator/feed
They're really not a huge amount of work if you pay a nominal amount to have it done for you. After I edit a podcast, I get mine transcribed by CastingWords, clean it up minimally, and paste it into the blog post I do for the podcast with show notes, etc.) e.g. http://bitmason.blogspot.com/2017/07/red-hat-mark-wagner-on-...
If I want to do a longer blog post based on the interview, it's also nice to just have the transcript to excerpt from.
If I want to do a longer blog post based on the interview, it's also nice to just have the transcript to excerpt from.
The easiest way to retire early is to enlist in the military, at least in the US, anyway. After 20 years of service, you are set for life with life-long retirement pension and healthcare. Of course, there's a high risk, since there's always wars and deployments, etc and many don't make it past 10 years, after they get fed up with being in the military.
When I was in the army, I saw a lot of people in their early 40's who retired after their service, and many spent their time either working in another job, because of boredom of retirement, or activities like traveling. These were those who enlisted right after high school, with nothing but a HS degree, but they were doing much better off than my friends who had college and MBA.
When I was in the army, I saw a lot of people in their early 40's who retired after their service, and many spent their time either working in another job, because of boredom of retirement, or activities like traveling. These were those who enlisted right after high school, with nothing but a HS degree, but they were doing much better off than my friends who had college and MBA.
Military pensions continue to be the top reason why most young people across the world are attracted to join the forces.
But there is a catch though. You really have to serve the minimum time. And like you said most get either fed up, or they are discharged early. The other part is in many parts of the world, there is relative peace, so its a safe bet. Plus most of the times apart from the training days, they actually see good physical exercise everyday to its like a win-win job.
In India armed forces have asked for a kind of roll over pensions, where every year your pensions are revised and you are paid as much as the highest paid servicemen retiring in the rank you retired from. Of course there is a lot of opposition from the civilian side for something like this.
Given the relative peace in the Indian subcontinent, in most cases its possible for many people to make it through without much risk, and if you join early, you can come out by 40, with a neat yearly increasing pension for the rest of your life.
They also have short service commission jobs in the Indian army, which don't carry these benefits. And they often go unfilled for the obvious reasons.
But there is a catch though. You really have to serve the minimum time. And like you said most get either fed up, or they are discharged early. The other part is in many parts of the world, there is relative peace, so its a safe bet. Plus most of the times apart from the training days, they actually see good physical exercise everyday to its like a win-win job.
In India armed forces have asked for a kind of roll over pensions, where every year your pensions are revised and you are paid as much as the highest paid servicemen retiring in the rank you retired from. Of course there is a lot of opposition from the civilian side for something like this.
Given the relative peace in the Indian subcontinent, in most cases its possible for many people to make it through without much risk, and if you join early, you can come out by 40, with a neat yearly increasing pension for the rest of your life.
They also have short service commission jobs in the Indian army, which don't carry these benefits. And they often go unfilled for the obvious reasons.
It's also a great way to go to med school.
It's also a great way to end up with nagging injuries for the rest of your life, PTSD and or certain death.
The biggest question I face regarding early retirement in the USA is how to handle health care expenses, because the situation is so messed up. There is huge uncertainty around the future of healthcare, especially regarding coverage and quality.
So far, all the early retired people I have seen have either a working spouse or have retired abroad. It would be great to know if people here, especially those who retired early, have solved the problem of healthcare coverage.
So far, all the early retired people I have seen have either a working spouse or have retired abroad. It would be great to know if people here, especially those who retired early, have solved the problem of healthcare coverage.
At least with the Affordable Care Act (which survived yet another repeal-and-replace attempt this week), it's possible to buy insurance on the open market with a pre-existing condition (which I assume that almost everyone older than their 20s or 30s has at least one). So for now health insurance is an expense you can plausibly budget for and not something that's completely unattainable at any price.
Given the political uncertainty around ACA until now, I would say its a rational decision to not rely on it. Sure, it survived this round of repeal efforts, but I am not sure if it is going to survive next 10 years. There is a very good chance that it will be replaced, and only a moderate chance that replacement will be better than what we have today.
From my own experience, most people have not. I work in aerospace and there are a large number of employees with 30+ years tenure who are of retirement age who need to stick around because of the quality and cost of the health insurance coverage. Engineers with good salaries who have saved much more than the average Joe, much more than most "financially independent" bloggers.
True, I think in 10 years we will have single payer or at least buy into medicaid as a start.
I know the vast majority of you are 6-figure types and MMM is still making 6 figures annually from his blog and his wife's 'hobby' business and that he never actually has to touch his retirement investments and can in fact add more money to them annually than most people in the U.S. actually gross.
According to the U.S Census Bureau "The per capita income for the overall population in 2008 was $26,964; for non-Hispanic Whites, it was $31,313; for Blacks, it was $18,406; for Asians, it was $30,292; and for Hispanics, it was $15,674."
It's taken me 11 years to get to 32k, I got super lucky early this summer and got hired for some remote work, full time on top of my current job, for a tech company thanks to someone at YC helping me out. A day after I started I was told I was inelligible for employment because several years ago I had to file bankruptcy.
So while you all sit nice and well with your 6-figure incomes, talking about how horrible your lives are when you earn more in a year than I do in 3-5 years BEFORE your bonuses and 401k match and all the benefits you get that real businesses don't offer their employees... just know a lot of us are busting our asses just to feed ourselves.
According to the U.S Census Bureau "The per capita income for the overall population in 2008 was $26,964; for non-Hispanic Whites, it was $31,313; for Blacks, it was $18,406; for Asians, it was $30,292; and for Hispanics, it was $15,674."
It's taken me 11 years to get to 32k, I got super lucky early this summer and got hired for some remote work, full time on top of my current job, for a tech company thanks to someone at YC helping me out. A day after I started I was told I was inelligible for employment because several years ago I had to file bankruptcy.
So while you all sit nice and well with your 6-figure incomes, talking about how horrible your lives are when you earn more in a year than I do in 3-5 years BEFORE your bonuses and 401k match and all the benefits you get that real businesses don't offer their employees... just know a lot of us are busting our asses just to feed ourselves.
Hey! Thanks to many of you for suggesting Pete as a guest on the podcast.
Let me know if you have ideas for other folks. You can comment here or email me - [email protected]
Let me know if you have ideas for other folks. You can comment here or email me - [email protected]
Ben Thompson of Stratechery (https://www.stratechery.com) - in addition to just talking about tech, would be good to hear about how he's grown his blog into such a great business.
:thumbsup:
Is there a way to see all the guests you've had on the podcast -- just a simple list without having to scroll through all the pages?
Hm. The iTunes feed might be easiest - https://itunes.apple.com/us/podcast/y-combinator/id123690742...
This is such a weird content piece from YC. Is this supposed to help us understand brand marketing? If so, I want to hear from people who have piloted the brands of massively successful startups, not a guy who says he's head of a cult.
Though I don't agree with or support self-help / Tim Ferris types personally, I'm open to the idea that this guy has some key insight into branding for startups, but this content doesn't really have any of that.
I appreciate a hustler as much as anyone, but this guy doesn't stand out from your generic Tim Ferris / Gary Vee snake oil lifestyle sellers.
Though I don't agree with or support self-help / Tim Ferris types personally, I'm open to the idea that this guy has some key insight into branding for startups, but this content doesn't really have any of that.
I appreciate a hustler as much as anyone, but this guy doesn't stand out from your generic Tim Ferris / Gary Vee snake oil lifestyle sellers.
'Life is a balancing act.'
I do also use to read his blog but I don't follow 'frugalism' as a cult. I cherrypick what I consider that adds significant value to my life. The same with other "isms" like Agnosticism, Centrism, Minimalism and Intellectualism..
I do also use to read his blog but I don't follow 'frugalism' as a cult. I cherrypick what I consider that adds significant value to my life. The same with other "isms" like Agnosticism, Centrism, Minimalism and Intellectualism..
How much money do you have to have in index funds to live comfortably off dividends? Isn't it an astronomical amount? I have ~$100K in index funds and i'm making about $100 (if even that)/month right now which just gets reinvested. You'd have to have at least half a mil to get any kind of serious money out of this.
You can safely draw down 4% per year according to fairly conservative calculations of MMM.
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need...
It sounds like you're making 1.2% in dividends, but you can (by this calculation) also sell 2.8% of your investments whilst keeping your total pot above inflation.
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need...
It sounds like you're making 1.2% in dividends, but you can (by this calculation) also sell 2.8% of your investments whilst keeping your total pot above inflation.
It depends on the withdrawal rate. See https://en.wikipedia.org/wiki/Trinity_study. Accordingly, you can withdraw more that the 100$ dividends you are getting without reducing the inflation adjusted value of your funds.
The general rule that people use is the 4% rule. If you take your comfortable living amount and divide by 0.04, you will get a rough estimate on how much you will need to retire. This is based off of market returns, primarily invested in index funds. If 40k / year was comfortable, then the target would be 1,000,000.
Are you paying a lot in fees? I would have expected a better return than that.
Very possible since this is a managed account. I am terrified of doing anything in the stock market, unfortunately.
[deleted]
[deleted]
You also should "count" capital gains as well as dividends since dividends offset capital gains.
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=I...
Yields 2.99% - 0.15% for expenses. So you'd need roughly 34 times spending to get by on dividends alone.
Yields 2.99% - 0.15% for expenses. So you'd need roughly 34 times spending to get by on dividends alone.
SEC yield already includes expenses, so it's just 2.99%. (The actual dividend yield is 3.08%. I don't know where the other .06% comes from, but IANAA).
Only to say that there is "nothing new under the sun", Mr. Money Mustache's basic message is (was) essentially "common sense", some time ago I cited an old Italian proverb in a similar enough topic:
https://news.ycombinator.com/item?id=14593794
https://news.ycombinator.com/item?id=14594858
He only uses his own experience to show how it can come out in practice (and of course it needs to be scaled - down or up - depending on personal income, financial situation, family size, etc. and of course expectations).
Results will of course be different, but the basic principle remains valid.
https://news.ycombinator.com/item?id=14593794
https://news.ycombinator.com/item?id=14594858
He only uses his own experience to show how it can come out in practice (and of course it needs to be scaled - down or up - depending on personal income, financial situation, family size, etc. and of course expectations).
Results will of course be different, but the basic principle remains valid.
Mr. Money Mustache started me down the path of exploring my own personal philosophy. I now worship MMM as a diety (MMM !== Pete Adeney in my religion). Thanks for the teachings Pete.
Robert - what would you recommend as a getting started guide to MMM?
And how would you describe your personal philosophy?
And how would you describe your personal philosophy?
Not Robert, but I would start here.
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
Start reading more from there and remember it's your expenses more than your income that matter most. Also remember he turned the dial quite far.
And this page is also quite good. You don't have to go as extreme as MMM, and doing so would burn out a lot of people.
https://www.reddit.com/r/financialindependence/comments/58j8...
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
Start reading more from there and remember it's your expenses more than your income that matter most. Also remember he turned the dial quite far.
And this page is also quite good. You don't have to go as extreme as MMM, and doing so would burn out a lot of people.
https://www.reddit.com/r/financialindependence/comments/58j8...
Seconding this. That MMM article is what got me started into reading more of that blog.
I would recommend reading through the entire blog archive, all together it's about the same length as a book. You can skip over articles on things that aren't interesting to you, for example I don't care about real estate.
My personal philosophy is a combination of all the different sources I have been exposed too. My main influences would be the mustachian thought sphere (MMM, The Magic of Thinking Big, Stoicism), secular western buddhism (Buddhism Plain and Simple, In the realm of hungry ghosts, The magic of tidying up) Game theory probabilistic thinking (Poker background).
When I first started reading MMM I was already a very tribal person. The us vs them mentality really appealed to me because I was used to strongly identifying with minority tribes (atheist, vegan). After I started studying buddhism I've been able to let go of some of the tribalism of mustachianism , but the frugality and the powerful self belief have remained. This is an example of my personal philosophy forking from a monolithic belief system.
I also have a couple dieties I worship. MMM is the god of frugality and not being a wimp. RNGesus is the god of accepting random bad stuff. I'll spin up/down dieties to put on my altar depending on my current priorities/ needs.
I know recommending you a bunch of books isn't really a proper response, but a proper definition would be the length of a book and I haven't written that yet.
What I would recommend to everyone is to study different belief systems and roll your own religion. Our brain is designed to consume faith-y belief systems. It's arrogant to believe those mechanisms in your brain won't latch on to something. It should be something your consciously decide on and design.
My personal philosophy is a combination of all the different sources I have been exposed too. My main influences would be the mustachian thought sphere (MMM, The Magic of Thinking Big, Stoicism), secular western buddhism (Buddhism Plain and Simple, In the realm of hungry ghosts, The magic of tidying up) Game theory probabilistic thinking (Poker background).
When I first started reading MMM I was already a very tribal person. The us vs them mentality really appealed to me because I was used to strongly identifying with minority tribes (atheist, vegan). After I started studying buddhism I've been able to let go of some of the tribalism of mustachianism , but the frugality and the powerful self belief have remained. This is an example of my personal philosophy forking from a monolithic belief system.
I also have a couple dieties I worship. MMM is the god of frugality and not being a wimp. RNGesus is the god of accepting random bad stuff. I'll spin up/down dieties to put on my altar depending on my current priorities/ needs.
I know recommending you a bunch of books isn't really a proper response, but a proper definition would be the length of a book and I haven't written that yet.
What I would recommend to everyone is to study different belief systems and roll your own religion. Our brain is designed to consume faith-y belief systems. It's arrogant to believe those mechanisms in your brain won't latch on to something. It should be something your consciously decide on and design.
How do you go from atheist to creating your own deities that you add and remove at will?
I am 25 so I grew up online during the golden age of internet atheism. r/atheism was still a default sub, 'The God Delusion' was released in 2006 when I was 14. What I came to realize is that I was essentially worshipping my logical analytical mind and believing that if I had a enough processing power I could think my way to any solution. Eventually what I came to realize is that the logical conscious mind we are always aware of isn't necessarily making the decisions, nor does it ever have a complete picture of reality. Once I believed that my logical mind was n't capable of truly capturing reality I felt comfortable training myself to believe in things that weren't "true" since nothing as perceived as the conscious mind is really "true".
And there you are lighting incense to an action figure with a mustache on it to help contemplate doing your own bike repairs (: .
And there you are lighting incense to an action figure with a mustache on it to help contemplate doing your own bike repairs (: .
> creating your own deities that you add and remove at will?
This is likely a miscommunication. Deity is a bad word, but I have a feeling the parent poster was just using it for emphasis.
The parent poster may just mean they respect and believe in the ideas collected together by a specific symbol. As soon as that symbol diverges its ideas from the parent, or the parent diverges is value function away from those ideas, then the parent poster no longer holds that symbol "in regard" (i.e. a deity).
I don't know about the parent, but to give you my perspective: I consider myself a poly-ideologist. It comes across very similar to what the parent poster describes.
I try and give all ideas merit, regardless of my prior thoughts. I usually give the most respect to ideas which are in my best interest (i.e. follow my value function). Sometimes this is hard because it goes counter to other ideas, and I have to internally find an equilibrium.
For example, how do I reconcile that I want to be financially independent, to do so, maybe I need to rent-seek, but also I believe all humans should be considered equal and treated with respect? By some definition of rent-seeking I am not respecting the people paying me money. As such, clearly it isn't binary I need to find an equilibrium and as time flows that equilibrium may change. To give fake but concrete numbers for the sake of explanation, lets say: I have a 65% belief that all humans should be respected and considered equal, however, 35% belief that I am not considered equal with all humans, I am superior. At every instant in time, I flip flop. I flip flop so fast between both that it is indistinguishable from believing both even tho they are contrary. Knowing this side of my human nature, it helps me reconcile how much I am willing to exploit other humans in order to become financially independent. (For the record its a hard thing to type out, because of social stigmas against recognizing certain ideas. rent-seeking/not treating people equally are some of the slightly more appropriate of all possible inappropriate ideas.)
Another example, if you asked me do I believe in god or am I an atheist? Those aren't binary questions for me, I'd give you a percentage. Today, I'm 20% sure god exists, 20% an atheist, 60% sure that it doesn't matter to me today. On a different day, say I was in the hospital, I may find myself giving more merit to believing in god, and that ratio might skew 80% believing in god, but still 20% sure that its total bullshit. Or I say a child with cancer and on that day I'd be pretty sure god doesn't exist.
I don't know.. I'm just kinda weird. Perhaps its not possible for me to explain myself yet.
P.S. All percentages in this post are not accurate. I have no way to measure how much I believe a particular idea.
This is likely a miscommunication. Deity is a bad word, but I have a feeling the parent poster was just using it for emphasis.
The parent poster may just mean they respect and believe in the ideas collected together by a specific symbol. As soon as that symbol diverges its ideas from the parent, or the parent diverges is value function away from those ideas, then the parent poster no longer holds that symbol "in regard" (i.e. a deity).
I don't know about the parent, but to give you my perspective: I consider myself a poly-ideologist. It comes across very similar to what the parent poster describes.
I try and give all ideas merit, regardless of my prior thoughts. I usually give the most respect to ideas which are in my best interest (i.e. follow my value function). Sometimes this is hard because it goes counter to other ideas, and I have to internally find an equilibrium.
For example, how do I reconcile that I want to be financially independent, to do so, maybe I need to rent-seek, but also I believe all humans should be considered equal and treated with respect? By some definition of rent-seeking I am not respecting the people paying me money. As such, clearly it isn't binary I need to find an equilibrium and as time flows that equilibrium may change. To give fake but concrete numbers for the sake of explanation, lets say: I have a 65% belief that all humans should be respected and considered equal, however, 35% belief that I am not considered equal with all humans, I am superior. At every instant in time, I flip flop. I flip flop so fast between both that it is indistinguishable from believing both even tho they are contrary. Knowing this side of my human nature, it helps me reconcile how much I am willing to exploit other humans in order to become financially independent. (For the record its a hard thing to type out, because of social stigmas against recognizing certain ideas. rent-seeking/not treating people equally are some of the slightly more appropriate of all possible inappropriate ideas.)
Another example, if you asked me do I believe in god or am I an atheist? Those aren't binary questions for me, I'd give you a percentage. Today, I'm 20% sure god exists, 20% an atheist, 60% sure that it doesn't matter to me today. On a different day, say I was in the hospital, I may find myself giving more merit to believing in god, and that ratio might skew 80% believing in god, but still 20% sure that its total bullshit. Or I say a child with cancer and on that day I'd be pretty sure god doesn't exist.
I don't know.. I'm just kinda weird. Perhaps its not possible for me to explain myself yet.
P.S. All percentages in this post are not accurate. I have no way to measure how much I believe a particular idea.
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I find it interesting that both he and his wife were high income earner earners. That makes it easier to save appropriately and get to financial freedom sooner. I think he even notes this in some of his blog posts that the opportunity to become financially free is limited. A lot of people don't have a 3 month or 6 month reserve which I think is the first goal. Get there first.
He and his wife are STILL high income earners. From his affiliate links, sponsored posts and going on and on about his wife's etsy business I guarantee you they are still making six figures without ever having to touch their retirement investments. Call him out on that and guess what, he will NOT approve the comment on his posts.
man, what a weird pov. Start at the beginning - "nobody should do the 40 mile pleasanton to sf commute". I guess he means pleasanton to mv, because if you were to go to sf you'd just take the bart door to door. So do you know how many engineers drive from pleasanton, or in general east bay, to mv ? I'd wager its upwards of 100k, considering the backed up traffic on 680 between 8 am to noon. now are all of these engineers fools ? the majority of them have a nice tech gig in mv at the biggest tech firms - the sexiest startups and boring profitable enterprises, a solid 150k+ paycheck, stocks, 401k etc and are paying off their mortgage in the east bay on a large 3k sq ft house in an incredible school district. the tech companies themselves encourage this behavior by plying free wifi-buses on 680 so you've done your git commits en route. so which part of this is objectionable and why ? even if facebook builds a company town in san mateo or wherever, engineers are ultimately humans who have reasonable human desires to buy a house & get hitched & start a family & send the kids to school, so all of that isn't going to happen within the confines of a company town designed for the 20 year old median programmer crowd. in all likelihood, this 40 mile commute, whether to east bay or south bay or wherever will be the norm, because the alternative is what ? all of us moving to colorado and riding our bicycles to work?! i mean i envy your frugal no-waste healthy bicycle lifestyle, but i just don't see all these engineers with giant beer bellies either. they do the 40 mile commute because there really isn't much of a choice, and most companies do offer some form of on-site fitness regimen, so the majority does keep in shape. financially the outcome is positive as well - appreciating equity in a spacious sunny california home, 7 figure retirement accounts, kids in good schools. if the only downside is a 40 mile commute, i'll take that any day of the week.
His point of view is that those perks don't justify the commute. I'm personally inclined to agree with him having tried both.
There's a fair amount of research suggesting short commutes are good for mental health and the effects of regular walking/running/cycling are well known.
There's a fair amount of research suggesting short commutes are good for mental health and the effects of regular walking/running/cycling are well known.
I read a couple of his blog posts, and his "your doing it wrong because you don't value what I value" attitude is a huge turn-off. He probably has some great gems of wisdom but they're lost in the moralizing about why I shouldn't have a car and why I'm inferior because I didn't get a windfall and pay off my mortgage. I do that specific "mega commute" he mentions (I'm in Livermore so it's even farther), and trust me, I don't live out here because I like to commute over 100 miles each day!
For a guy who claims to be retired he sure seems to work a lot.
Feeds into the universal basic income philosophy: if you don't have to work to survive, you might still work on things you care about.
Do you think he is doing this for free? I don't.
No, neither of us thinks that.
I think you wanted to point out an inconsistency between the dictionary definition of retirement and the fact that this person is still receiving income in exchange for work. You made your point. Let's move past that.
Not having to work to survive (e.g., this guy, retirement, UBI, lottery, vow of asceticism, whatever) gives you more options. Some people go on permanent vacation. Some people keep chugging away at their jobs because they still enjoy them. Some people change to jobs that they previously weren't willing to stake their survival on, and those new jobs might or might not pay money. I don't know this MMM guy, but it seems like he's in that last group. Doesn't sound so strange to me.
I'd be pretty disappointed if retiring meant you were prohibited from doing things that others happened to be willing to pay for.
I think you wanted to point out an inconsistency between the dictionary definition of retirement and the fact that this person is still receiving income in exchange for work. You made your point. Let's move past that.
Not having to work to survive (e.g., this guy, retirement, UBI, lottery, vow of asceticism, whatever) gives you more options. Some people go on permanent vacation. Some people keep chugging away at their jobs because they still enjoy them. Some people change to jobs that they previously weren't willing to stake their survival on, and those new jobs might or might not pay money. I don't know this MMM guy, but it seems like he's in that last group. Doesn't sound so strange to me.
I'd be pretty disappointed if retiring meant you were prohibited from doing things that others happened to be willing to pay for.
How disappointing to see this flagged.
Does anybody know whether the transcripts are done manually or automatically? Seems to be a lot of work if it’s done manually.
https://backtracks.fm does it for us and they also host the podcast. I think they do a bit of both but don't know for sure.
Does anyone else think it's a bit funny to see an MMM interview on YC? Through their investments, YC seems quite pro-consumerism. Consumerism is the antithesis of being mustachian. It's always kind of bothered me that HN (and YC) seems to encourage conspicuous consumption.
Where do HN and YC encourage conspicuous consumption? Does ramen profitable somehow equate conspicuous consumption?
A significant number of YC's alumnus look like Juiceros to me. Building products nobody needs because they think there's enough stupid people to create a market. Slap together some glossy marketing materials, and now you've got a premium product ready to change the world.
Frankly, most people don't need to be constantly buying new things. They should be buying less, fixing what they've got, saving more, going outside and getting exercise.
Frankly, most people don't need to be constantly buying new things. They should be buying less, fixing what they've got, saving more, going outside and getting exercise.
YC alumnus != YC. Huge difference there.
Agreed on the 'changing the world' bs, though there are some that genuinely seem to have that goal (Watsi, for instance).
And yes, people usually do not need all that they are buying but then again, it keeps the economy going, I'm having a hard time imagining a world where everybody behaves like MMM does, it would not scale.
Agreed on the 'changing the world' bs, though there are some that genuinely seem to have that goal (Watsi, for instance).
And yes, people usually do not need all that they are buying but then again, it keeps the economy going, I'm having a hard time imagining a world where everybody behaves like MMM does, it would not scale.
Also, startups are kind of the antithesis of early retirement.
The few people I know that actually managed to get into early retirement (below 35) were the ones that founded very successful start-ups.
Sure, I should have been more specific. Non-founder startup employment is the antithesis of early retirement.
https://danluu.com/startup-tradeoffs/
And in spite of your personal anecdote, after 13-14 years (35-22) at a BigCo it is certainly possible for anyone who could have founded a successful startup to gross enough money to retire.
https://danluu.com/startup-tradeoffs/
And in spite of your personal anecdote, after 13-14 years (35-22) at a BigCo it is certainly possible for anyone who could have founded a successful startup to gross enough money to retire.
Yeah, I think on the surface it could seem contradictory. MMM does advocate frugality but he also advocates spending money on things that increase happiness and don't hurt the environment. I'd say many (though obviously not all) YC companies actually do check that box.
Technically, YC is selling consumerism if they invest in startups that encourage conspicuous consumption.
If you're selling consumerism and buying mustachianism, it means you think the former is overpriced.
If you're selling consumerism and buying mustachianism, it means you think the former is overpriced.
+5 Insightful.
I don't see that much of consumerism advocacy here. Quite the contrary - being frugal to extend runway, achieving ramen profitability etc.
Also with rampant ageism in tech you do need to retire before 40 /s
Also with rampant ageism in tech you do need to retire before 40 /s
A good example of what I'm talking about can be found in the thread here about Citibikes in NYC: https://news.ycombinator.com/item?id=15338098
A lot of people seem to have an incredible resistance to the idea of riding a bike in NYC based on pure nonsense. Biking is safe, fast, and cheap. We don't need self-driving cars, we need investment in walking, biking, and public transit infrastructure.
A lot of people seem to have an incredible resistance to the idea of riding a bike in NYC based on pure nonsense. Biking is safe, fast, and cheap. We don't need self-driving cars, we need investment in walking, biking, and public transit infrastructure.
Oh god. I'm horrified by this.
> People think of a cult as a bad thing [...] really, it’s just a social organization structure which is a basic built-in thing to human beings
This is the naturalistic fallacy, or the is-ought fallacy. Other basic built-in things to human beings include ignorance, rage, greed, abuse, exploitation, and violence.
A core part of civilization is deciding which of our basic built-in things are valuable, amplifying the useful bits, and circumscribing the ones that aren't. Treating something as good because it's natural is a giant error. A very convenient one for him here.
> People think of a cult as a bad thing [...] really, it’s just a social organization structure which is a basic built-in thing to human beings
This is the naturalistic fallacy, or the is-ought fallacy. Other basic built-in things to human beings include ignorance, rage, greed, abuse, exploitation, and violence.
A core part of civilization is deciding which of our basic built-in things are valuable, amplifying the useful bits, and circumscribing the ones that aren't. Treating something as good because it's natural is a giant error. A very convenient one for him here.
Don't read too much into it.
He's only using "cult" as a provocative term to describe a tribe of fans who passionately like a particular brand. Nobody's going to be committing human sacrifices or burning heretics on behalf of Mr Money Mustache any time soon.
He's only using "cult" as a provocative term to describe a tribe of fans who passionately like a particular brand. Nobody's going to be committing human sacrifices or burning heretics on behalf of Mr Money Mustache any time soon.
> Don't read too much into it.
It's hard not to especially when comes to people in power and leadership.
It's hard not to especially when comes to people in power and leadership.
In all fairness, I do think it's a bit more than that although I think it's mostly harmless if not positive in this particular case. A fair number of people do feel the need to jump into systems/philosophies/brands with both feet whether it's MMM or GTD. Personally, I am more the pick and choose useful ideas from here and there sort, but if committing wholeheartedly is what someone has to do develop better spending habits I have trouble finding a lot of fault with that.
It's also important to figure out which of our built-in behaviors are ineradicable, so that we can develop systems that help route around our worst impulses. Much of conventional society and its norms was geared toward this and it's something we do a really poor job of understanding as we tear those walls down.
If cult behavior is built-in, then directing that energy into reverence for Mr. Money Mustache seems like a positive to me.
If cult behavior is built-in, then directing that energy into reverence for Mr. Money Mustache seems like a positive to me.
I've been re-evaluating the reflexive "cults are bad" instinct that Americans like myself seem to have.
Your implication is that 'cult' and 'ignorance, rage, greed...' are the same levels of undesirable. And like this guy said, when we think of cults we think of Kool-Aid and Waco.
But "cult" is a little word that covers a lot of territory:
- a system of religious veneration and devotion directed toward a particular figure or object
- a relatively small group of people having religious beliefs or practices regarded by others as strange or sinister
- a misplaced or excessive admiration for a particular person or thing
- a person or thing that is popular or fashionable, especially among a particular section of society
(Oxford)
The first one would be analogous to calling Christianity the Cult of Jesus, as a statement of fact. Neutral connotation, I think.
The second would include something along the lines of Jonestown, but really is just any cohesive group that believes something differently than you do. Really, that definition is so flexible and relativistic that it can be tagged to anything you disagree with. And it's possible that those beliefs and practices are edifying in nature, but you just get called a cult because your friends all do it together with you and everyone else just thinks it's weird.
The third would be something like Bieber fever or Beatlemania. Negative connotation.
The fourth would be something like iPhone/Android people, or a cult film. Neutral-ish connotation.
No definition truly captures what we think of as a cult: The charismatic leader that probably wants to have sex with all of his adherents, the coercion and conformity, the inability to leave.
I don't really know how he's using the word so I don't have a strong opinion about what kind of cult he's formed, but I wouldn't write him off instantly because he used the word.
At least I don't think so; I'm trying this argument out in public for the first time right now.
Your implication is that 'cult' and 'ignorance, rage, greed...' are the same levels of undesirable. And like this guy said, when we think of cults we think of Kool-Aid and Waco.
But "cult" is a little word that covers a lot of territory:
- a system of religious veneration and devotion directed toward a particular figure or object
- a relatively small group of people having religious beliefs or practices regarded by others as strange or sinister
- a misplaced or excessive admiration for a particular person or thing
- a person or thing that is popular or fashionable, especially among a particular section of society
(Oxford)
The first one would be analogous to calling Christianity the Cult of Jesus, as a statement of fact. Neutral connotation, I think.
The second would include something along the lines of Jonestown, but really is just any cohesive group that believes something differently than you do. Really, that definition is so flexible and relativistic that it can be tagged to anything you disagree with. And it's possible that those beliefs and practices are edifying in nature, but you just get called a cult because your friends all do it together with you and everyone else just thinks it's weird.
The third would be something like Bieber fever or Beatlemania. Negative connotation.
The fourth would be something like iPhone/Android people, or a cult film. Neutral-ish connotation.
No definition truly captures what we think of as a cult: The charismatic leader that probably wants to have sex with all of his adherents, the coercion and conformity, the inability to leave.
I don't really know how he's using the word so I don't have a strong opinion about what kind of cult he's formed, but I wouldn't write him off instantly because he used the word.
At least I don't think so; I'm trying this argument out in public for the first time right now.
Well on the whole people who sell sensible advice for free in the personal fincance sphere, though living off their blog income, are probably not the bad guys. Although you might have to exercise some independent thought to figure out what sensible advice means for you.
I'm going to use your comment to go on a bit of a rant. What is the purpose of your comment? Like, really. What are you trying to attain by stating what you did?
Your comment is pedantic and completely irrelevant to the topic at hand. Derisive thing to say, perhaps, but this is classic HN. Miss the big picture for a useless little nugget that is of zero consequence.
For the current case, for example, a certain amount of a lot of those supposed "vices" that you listed are healthy. Greed and jealousy make you strive, ignorance give you peace of mind, rage is cathartic. So, OK, I'm guessing we both agree that there should be limits on such things. Scientology, bad. Cult involving biking to work, good.
"A very convenient one for him here". Huh?
Your comment just seems to be a portal into a conversation involving endless squabling about a topic that has nothing to do with MMM.
Your comment is pedantic and completely irrelevant to the topic at hand. Derisive thing to say, perhaps, but this is classic HN. Miss the big picture for a useless little nugget that is of zero consequence.
For the current case, for example, a certain amount of a lot of those supposed "vices" that you listed are healthy. Greed and jealousy make you strive, ignorance give you peace of mind, rage is cathartic. So, OK, I'm guessing we both agree that there should be limits on such things. Scientology, bad. Cult involving biking to work, good.
"A very convenient one for him here". Huh?
Your comment just seems to be a portal into a conversation involving endless squabling about a topic that has nothing to do with MMM.
I am mainly trying to point out a common and dangerous philosophical error.
Arguing for creating a cult because it is beneficial on its own is reasonable (although I'd argue it's wrongheaded). Arguing for it on the basis of it being natural is wrong. All sorts of terrible things have been justified this way. Slavery, for example: https://en.wikipedia.org/wiki/Cornerstone_Speech
And when you say "vices" I'm not sure who you're quoting, but it's not me. Those are just natural features of the human organism. My point is exactly that they're not intrinsically good or bad. It's in how we structure our society to use them.
Arguing for creating a cult because it is beneficial on its own is reasonable (although I'd argue it's wrongheaded). Arguing for it on the basis of it being natural is wrong. All sorts of terrible things have been justified this way. Slavery, for example: https://en.wikipedia.org/wiki/Cornerstone_Speech
And when you say "vices" I'm not sure who you're quoting, but it's not me. Those are just natural features of the human organism. My point is exactly that they're not intrinsically good or bad. It's in how we structure our society to use them.
> Cult involving biking to work, good.
Just to be clear, in case you;re confused. Biking to work doesn't involve you being forced to cut off ties and communication with family and friends who don't bike. Neither does it require you to hand over a large proportion of your income to a church.
Just to be clear, in case you;re confused. Biking to work doesn't involve you being forced to cut off ties and communication with family and friends who don't bike. Neither does it require you to hand over a large proportion of your income to a church.
tl;dr privileged white guy tells you you can retire at 30 if you have access to >300k a year for 10 years and ride a bike
retired at 30
and probably making millions a year, because "he retired". Now that's retirement.
A++++ on marketing.
and probably making millions a year, because "he retired". Now that's retirement.
A++++ on marketing.
Rich guy tells poor guys, "to get rich, trick poor guys to listen to you".
He's not wrong but you're all fools for caring about what he has to say.
He's not wrong but you're all fools for caring about what he has to say.
He told me to save some money and invest it. I gave him nothing and have more money in the bank. How does this make me foolish?
His message is basically summarized as "Spend less than you earn, and invest it in index funds."
He's not wrong, but I submit that the people implementing that advice aren't fools, either.
He's not wrong, but I submit that the people implementing that advice aren't fools, either.
I'm referring to his comment about starting a cult. He is right of course that finding gullible people to follow you is easy. Just say some obvious things like "don't spend all your money, save and invest!" and the sheep will flock. Maybe you gave him no money, but you spent your time and attention.
However, his blog comes with a bit of smug (calling himself a "cult", or "Good news, there's a recession coming"). His faithful mantra of "retiring at 30" is a pipe dream unless: (1) you have a big income i.e. $200k per year by the time you are 25, (2) have a software engineer wife that makes as much as you and have no kids, or (3) inherited a large sum to begin with. All of his case studies are about him and his wife who were pulling $100k before they "retired", or the lawyer who was pulling in $160k a year at 26. Kudos to them, but good luck trying to retire as a welder or car mechanic making $50k.