10 ms·

I've been reading his blog for a few years, and he does some have some insightful advice on shedding unnecessary expenses and living on a frugal spending diet.

by joeax 9y ago

I've been reading his blog for a few years, and he does some have some insightful advice on shedding unnecessary expenses and living on a frugal spending diet. I've been able to get down to one car that is almost paid off, and double my savings and investment portfolio. My favorite article from him is living close enough to work to bike (although working from home is most ideal). 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.

jrochkind1 9y ago
Sadly, these days good luck trying to retire EVER making $50K.
- abfan1127 9y ago
  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 9y ago
    [deleted]
the_gastropod 9y ago
> 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.
- jrochkind1 9y ago
  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!
  - the_gastropod 9y ago
    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/ 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.
    - cheetos 9y ago
      > 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
      - froindt 9y ago
        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).
    - davis_m 9y ago
      You are forgetting taxes (FICA, state and federal income taxes, etc), which would eat up a significant portion of those savings.
sidlls 9y ago
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.
- markdog12 9y ago
  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.
  - sidlls 9y ago
    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-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.
    - markdog12 9y ago
      Do you mean to say he is privileged because of the country he grew up in? If so, I certainly agree.
      - sidlls 9y ago
        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.
UK-AL 9y ago
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.
- astura 9y ago
  He touches on that in this post (with numbers): https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/
  - branchless 9y ago
    He owns and rents several properties. Rentier activity like this pushes up housing costs.
  - UK-AL 9y ago
    Those numbers dont really work in the uk.
    - maxsilver 9y ago
      No worries, those numbers don't really work in the US either.
    - J-dawg 9y ago
      I've found myself saying that phrase in response to a lot of MMM's posts.
    - gnopgnip 9y ago
      Anywhere in the UK, or just in the largest few cities?
    - cerberusss 9y ago
      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.
astura 9y ago
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.
- hoosieree 9y ago
  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.
- branchless 9y ago
  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.
  - CodeCube 9y ago
    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.
hammock 9y ago
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.
- joeax 9y ago
  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.
- nilkn 9y ago
  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.
  - yessql 9y ago
    Or god forbid, you work a little bit to supplement your nest egg during those 43 years.
    - nilkn 9y ago
      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).
joeax 9y ago
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.
- deleted 9y ago
  [deleted]
- davidw 9y ago
  > 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.
gerbilly 9y ago
>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.
- sephlietz 9y ago
  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).
- 52-6F-62 9y ago
  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-35-lager/497701#.WcvaVBNSyjI http://www.lcbo.com/lcbo/product/trailer-park-boys-freedom-3...
stefantheard 9y ago
What avenue is there to retire at 30 if you make 200k by 25? I must be missing something massive.
- sidlls 9y ago
  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.
  - stefantheard 9y ago
    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.
- macNchz 9y ago
  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.
  - stefantheard 9y ago
    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.
troupe 9y ago
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.
- AjithAntony 9y ago
  $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.
jk2323 9y ago
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?
- mod 9y ago
  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.
- Jemmeh 9y ago
  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.
ringaroundthetx 9y ago
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.
deleted 9y ago
[deleted]
misnamed 9y ago
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-mustache-the-frugal-guru https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...
kamaal 9y ago
>>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.

by joeax 9y ago

jrochkind1 9y ago

Sadly, these days good luck trying to retire EVER making $50K.

abfan1127 9y ago
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 9y ago
  [deleted]

the_gastropod 9y ago

> 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.

jrochkind1 9y ago
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!
- the_gastropod 9y ago
  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/ 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.
  - cheetos 9y ago
    > 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
    - froindt 9y ago
      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).
  - davis_m 9y ago
    You are forgetting taxes (FICA, state and federal income taxes, etc), which would eat up a significant portion of those savings.

sidlls 9y ago

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.

markdog12 9y ago
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.
- sidlls 9y ago
  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-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.
  - markdog12 9y ago
    Do you mean to say he is privileged because of the country he grew up in? If so, I certainly agree.
    - sidlls 9y ago
      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.

UK-AL 9y ago

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.

astura 9y ago
He touches on that in this post (with numbers): https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/
- branchless 9y ago
  He owns and rents several properties. Rentier activity like this pushes up housing costs.
- UK-AL 9y ago
  Those numbers dont really work in the uk.
  - maxsilver 9y ago
    No worries, those numbers don't really work in the US either.
  - J-dawg 9y ago
    I've found myself saying that phrase in response to a lot of MMM's posts.
  - gnopgnip 9y ago
    Anywhere in the UK, or just in the largest few cities?
  - cerberusss 9y ago
    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.

astura 9y ago

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.

hoosieree 9y ago
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.
branchless 9y ago
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.
- CodeCube 9y ago
  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.

hammock 9y ago

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.

joeax 9y ago
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.
nilkn 9y ago
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.
- yessql 9y ago
  Or god forbid, you work a little bit to supplement your nest egg during those 43 years.
  - nilkn 9y ago
    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).

joeax 9y ago

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.

deleted 9y ago
[deleted]
davidw 9y ago
> 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.

gerbilly 9y ago

>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.

sephlietz 9y ago
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).
52-6F-62 9y ago
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-35-lager/497701#.WcvaVBNSyjI http://www.lcbo.com/lcbo/product/trailer-park-boys-freedom-3...

stefantheard 9y ago

What avenue is there to retire at 30 if you make 200k by 25? I must be missing something massive.

sidlls 9y ago
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.
- stefantheard 9y ago
  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.
macNchz 9y ago
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.
- stefantheard 9y ago
  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.

troupe 9y ago

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.

AjithAntony 9y ago
$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.

jk2323 9y ago

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?

mod 9y ago
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.
Jemmeh 9y ago
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.

ringaroundthetx 9y ago

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.

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misnamed 9y ago

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-mustache-the-frugal-guru https://www.newyorker.com/magazine/2016/02/29/mr-money-musta...

kamaal 9y ago

>>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.