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How to retire early — 35 years early
Old 12-29-2014, 05:34 AM   #1
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How to retire early — 35 years early

How to retire early — 35 years early

Nothing new here but, nonetheless, a nice Interview.

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The idea that retirement — even early retirement — is within anyone’s grasp is a big part of the appeal of a popular personal-finance blog called “Mr. Money Mustache,” written by a 39-year-old man named Pete, who lives with his wife and 8-year-old son in Longmont, Colo. (The blog recently had 417,000 monthly unique visitors, and has had a total of 4 million unique visitors since it launched in April 2011.)
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Old 12-29-2014, 06:46 AM   #2
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Thank you. That was a nice interview.
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Old 12-29-2014, 08:00 AM   #3
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Thanks for posting this. I have read the interview before, as it says it was originally posted in Jan 2014, but I am a fan of MMM. I love reading the comments, some of which are new. Some of the comments are so hostile!

"It's impossible to live on $25k a year !"

"It's easy for him, he makes tons of money on his blog!"

"He's not really retired. He writes a blog and works on houses!!!"

And my favorite: "How can he afford healthcare?!"

If people would just read his blog for 5 minutes it would all become clear but they don't seem to want to understand it.



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Old 12-29-2014, 10:12 AM   #4
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I have followed his blog a bit.

You can live on $25K a year, but I am guessing that MMM spends a bit more than that now. Even some quotes from the posted article, "I enjoy nice coffee at breakfast and wine many nights at dinner, and the food we eat is very high-end these days. And we live in a pretty fancy house full of nice stuff and take a lot of trips."

But the main moral to the story is LBYM, do as much as you can rather than pay someone to do it for you, and find cheaper ways to do what you are already doing. Lots of DIY stuff.

The problem I would see to his approach, by 'retiring' so young, is that he really would be in a bad time if his expenses went up considerably. High inflation might do it. Property taxes going up 20% a year for a few years (like mine...), stock market crash and dividend cuts, etc.

He really doesn't have too much 'insurance' for bad times, or to take into account when he is not able to do the things he does.

Here in the USA, no one will ever be without food, shelter and healthcare, if you have enough ambition to look for the resources that provide them. What you may lose is choice.
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Old 12-29-2014, 10:33 AM   #5
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I have followed his blog a bit.

You can live on $25K a year, but I am guessing that MMM spends a bit more than that now. Even some quotes from the posted article, "I enjoy nice coffee at breakfast and wine many nights at dinner, and the food we eat is very high-end these days. And we live in a pretty fancy house full of nice stuff and take a lot of trips."

.....

The problem I would see to his approach, by 'retiring' so young, is that he really would be in a bad time if his expenses went up considerably. High inflation might do it. Property taxes going up 20% a year for a few years (like mine...), stock market crash and dividend cuts, etc.

He really doesn't have too much 'insurance' for bad times, or to take into account when he is not able to do the things he does.

.....
Last year, they spent $25,142 (excluding construction costs for renovating new house, which he ended up more than netting out on selling the old house) Exposed! The MMM Family’s 2013 Spending!

Also, they do have some shock absorbers built in to their original 4% SWR, due to rental properties (inflation), and keeping skills up that would allow more serious money making if needed. (Plus, as you note, the blog income is likely well beyond anything he planned on)

Like you, I've enjoyed his blog--even though he would definitely deride the lifestyle that DW and I currently have, much less our retirement goals. :-)
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Old 12-29-2014, 10:40 AM   #6
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I like the general idea, but on this particular blog I don't see the numbers actually adding up to support the house and lifestyle described in the blog. The Biogleheads, Reddit users and even some of the site's own forums members have had threads on many of the inconsistencies.
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Old 12-29-2014, 10:45 AM   #7
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That could well be true. Given the lack of applicability to me, I've never looked closely at the numbers. Rather, I've enjoyed the general, aggressive, LBYM approach.
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Old 12-29-2014, 10:48 AM   #8
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MMM would have a lot of credibility if he had actually stuck to his own plan. He didn't. I believe because more is better, and as he aged he realized it. He thought he was a minimalist, but he was wrong.

He's in what I personally refer to as "Stage 1" retirement. "I have the money to stay alive and sheltered, but I still have skills and health, so let's keep making money as long as it's not aggravating".
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Old 12-29-2014, 11:55 AM   #9
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Doesn't he live in a rental house for free in exchange for "maintenance of the building"? I recall reading somewhere that he received some overly generous situations that I found rediculous.
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Old 12-29-2014, 12:34 PM   #10
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Here is one of the forum posts that outlines some of the fuzzy math on the ongoing budget:

should some of MMMs business expenses be counted in his yearly spending report?

Here is another one from Reddit on the fuzzy net worth math:

http://www.reddit.com/r/personalfina...nders_welcome/
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Old 12-29-2014, 02:33 PM   #11
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I think it's great that people put the time and work into putting information, as well as their own stories, opinions and perspectives on blogs and websites, so that we regular folk have all kinds of reading material to browse and peruse at our leisure. For this reason, I don't like to be too critical, but there is one aspect to MMM's blog that I found a bit off-putting when trying to "get into it", and that was his attitude. Some might call it irreverence, but I find him a bit cocky. To a lesser extent, I had a similar reaction to Jacob's blog.

Andy Baird's writing style on his Travels With Andy site is much closer to the kind of narrative I enjoy reading. I much prefer material presented in a humble and personable style. It makes it easier for me to digest, rather than having to spend time and effort trying get past the attitude, before reaching the content.
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Old 12-29-2014, 03:30 PM   #12
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Cocky and opinionated - not at all like modest humble me! Who managed an all time personal best low of 12k one year in the La swamp.



Love the interview and his blog. I spent 4 years (1970's) in Littleton CO so under 25k at todays prices is being frugal in my book.

heh heh heh - go Mr. Money Mustache.

P.S. H--l yes today I spent more than that - Duh? Whadda think being frugal all those years(21 in my case) does to a retirement portfolio?
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Old 12-29-2014, 04:54 PM   #13
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Reminds me of some acquaintances.

They brag about spending a month in Kauai but then you slowly find out they slept on the beach or in their car and pretty much ate at McDonalds (or scrounged from a food pantry) the whole time.

Sounds nice on the surface, but...
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Old 12-29-2014, 05:23 PM   #14
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He sold the spec home that became the rental property after the market tanked a few months ago when the market came back. He also sold the house he was living in when he completed the remodel of the one he bought. I don't think he owns any income property at this point.


The blog is grossing several hundred thousand a year according to other PF blog owners. I believe one thought he could be grossing around $1M. It produces a lot of referral income for credit cards and other products. Not sure what he got out of the trips to Ecuador to be a presenter at the conferences there.


I give the guy a lot of credit for common sense analysis and presentation of his ideas. However, he does come across as arrogant and selfish at times. He is sensitive to noise and calls Animal Control when the dogs in the neighborhood bark. There is an anti-barking ordinance in Longmont, and he takes full advantage. At the same time, he runs his carpentry equipment, which is being used for business purposes, in his back yard. That might be even louder and more offensive to a lot of people. If I lived next door, I might be putting in a call to Code Enforcement about that.


I think the message is very helpful to those under 30 that did not get much of a financial education at home or in school. His discussions about the real costs of owning and operating new cars and living far away from work and other activities shows how detrimental to wealth building the new car cycle is for people that never would have thought about it. What he and a lot of other folks that participate in the forums have achieved is eye opening to that group.
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Old 01-03-2015, 11:47 AM   #15
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Someone PM'd me to expand on my "Stage 1" retirement post above, wanting to hear my personal definition of stages. So here it goes.... never really formalized these thoughts before now.

And maybe I shouldn't call them stages, but these are for me mile markers that my savings has reached a level of utility I am looking for. Each of these levels, for me, present a tangible change to what I think about each day when I wake up, and therefore my happiness.

Stage 1 - "I have the money to stay alive and sheltered, - Not set for life mind you, just have that minimum egg that will keep me off the streets and eating ramen noodle if life throws me a curve that I can't recover from. (For me, just got to Stage 1, 1/2 million bucks @ age 36, massive relief to make it)

Stage 2 - This is a tricky one - depends on your age versus your egg and has big assumptions. Stage two is your egg is big enough to "coast" to a comfortable retirement egg size by NOT adding (significant) amounts to savings each year. You can actually spend what you make instead of saving it now, or choose to earn less money pursuing whatever you want. Of course you have to choose your own return, inflation, and target egg assumptions. For me, I kinda feel like I am there now because I expect my egg to double roughly every 10 years, so at 56 I expect to be around 2 million.

Stage 3 - Your egg hits your personal SWR multiple of expenses ( I target 3.5%) for a comfortable life. (now you are probably stressed, because you achieved your goal, and don't want to pull the trigger)

Stage 4 - Optional - You keep earning because you want a MORE than you need in retirement for whatever reason, trading this time now for the probability of more money in retirement or a lower SWR (OMY). In actuality you are stuck in stage 3 loop and changing your lifetime goals for fear, greed, etc.

Stage 5 - Having enough money is not a concern beyond an annual budgeting exercise. Nirvana, The promise land, Valhalla, Elysium Fields, over-sixty swinger's clubs. Whatever you want it to be.
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Old 01-03-2015, 05:55 PM   #16
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MMM's older material has some good case studies and a lot of common sense advice that some people need to hear. I agree his newer stuff is not as good, but he is doing pretty well for himself.

dallas27- I like your stages, well done.
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Old 01-03-2015, 06:01 PM   #17
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His blog has good advice but I do not believe he lives on 25k. There is no way he could do all the travel, home remodeling,etc. He may consider the traveling as part of his business expenses. There has been a lot of arguing about this on the forum.
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Old 01-03-2015, 06:59 PM   #18
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His blog has good advice but I do not believe he lives on 25k. There is no way he could do all the travel, home remodeling,etc. He may consider the traveling as part of his business expenses. There has been a lot of arguing about this on the forum.
Housing is the biggest expense for most people, so in reality I would think the most cost savings would be living in a modest condo or apartment if one really wanted to have a family and live well on $25k. Riding a bike to the grocery store is not where the big dollar savings would come in for us if we wanted to live on less - it would be downsizing the house.
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Old 01-03-2015, 07:14 PM   #19
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Housing is the biggest expense for most people, so in reality I would think the most cost savings would be living in a modest condo or apartment if one really wanted to have a family and live well on $25k. Riding a bike to the grocery store is not where the big dollar savings would come in for us if we wanted to live on less - it would be downsizing the house.
The thing is, the largest portion of Americans live in big cities or their suburbs. Where you are is more expensive than Seattle, but even here if you want to be able to do without a car, you will pay >$2k/mo for a two bedroom apartment and a pretty crappy one at that. And whatever some blogger might say, check Runzheimer to find out what it costs to own and operate a car in the real world. If you own a car, bicycling to the supermarket is just a staged stunt. No effect on anything, except it becomes easier to become a traffic fatality.

Ha
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Old 01-03-2015, 07:26 PM   #20
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I actually have never read one word of MMM's blog but I am active in the forum there for years. I don't really care about one particular person's financial life but I do like to read discussions between people about financial topics.

I have a direct shortcut link to the forum so never see what is posted on the blog itself. I think MMM is married, that is about all I know.
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