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.
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.
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.
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.
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.
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.
$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.
>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.'
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.
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.
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.
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.
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!
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.
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.
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.
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.
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.
>>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.
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.
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.
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.
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.)
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.
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.
> 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.
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.
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.
> 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...
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.
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.
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.
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...
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.
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.
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?'
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.
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.)
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.
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.
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.
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.
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.
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.'
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 $100 (if even that)/month right now which just gets reinvested. You'd have to have at least half a mil to get any kind of serious money out of this.
It sounds like you're making 1.2% in dividends, but you can (by this calculation) also sell 2.8% of your investments
whilst keeping your total pot above inflation.
It depends on the withdrawal rate. See https://en.wikipedia.org/wiki/Trinity_study. Accordingly, you can withdraw more that the 100$ 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.
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:
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.
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.
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.
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!
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.
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.
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.
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.
> 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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.
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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.
Also, doesn't take into account healthcare costs and things like hurricanes and floods and disasters that afflict a lot of people.
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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.
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.
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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.
$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.
>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.
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...
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/
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.
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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.
> 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.
> 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.
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!
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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.
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Assuming you decide to not to have kids ;)
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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.
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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.
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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.
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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.
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.
He touches on that in this post (with numbers): https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/
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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...
>>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.
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.
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.
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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.
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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/
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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?
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 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.
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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.
> 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.
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.
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.
> 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...
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.
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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.
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.
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...
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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.
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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.
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.
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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.
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?'
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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...
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.
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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?
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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-...
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.
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...
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.
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.
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.
(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...
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.
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!
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
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.
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.
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.
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.
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.
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 - craig@ycombinator.com
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.
'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..
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 $100 (if even that)/month right now which just gets reinvested. You'd have to have at least half a mil to get any kind of serious money out of this.
You can safely draw down 4% per year according to fairly conservative calculations of MMM.
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need...
It sounds like you're making 1.2% in dividends, but you can (by this calculation) also sell 2.8% of your investments whilst keeping your total pot above inflation.
It depends on the withdrawal rate. See https://en.wikipedia.org/wiki/Trinity_study. Accordingly, you can withdraw more that the 100$ 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.
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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.
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=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?
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...
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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.
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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.
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.
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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.
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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.
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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.
+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
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.
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.
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.
> Don't read too much into it.
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.
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.
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.
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.
> 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.
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.
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 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.
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.