How I became financially independent in 5 yrs

[Onward]

Here's a four-part article on one guy's sprint toward financial independence.

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I posit that most people can attain financial independence in less than 10 years and in less than 5 if they are truly determined. I also submit that many people are not willing to make the necessary changes.

He seems to be really frugal, so your mileage may vary. But it's an inspirational story, and he's definitely got the right attitude.

The article is a couple of years old, so I'm sorry if it's been posted here before.

http://bit.ly/75m5PE

[laurence]

Ugh, he worships at the feet of Kiyosaki (Rich Dad, Poor Dad). -2 credibility! LOL!

Extreme financial measures are like extreme dieting, IMHO. Some can do it, but for most I think it leads to a rebound. The level of enjoyment and freedom we feel being debt free (except for the mortgage), having more money come in than goes out every month, and a emergency fund that can let us live without any income for six months (before we have to tap a retirement account) is so awesome, I'm not sure the next level of independence is worth getting to that fast if it takes giving up every little pleasure!

[Onward]

A few of the bits I really liked:

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I started thinking like a wealthy person and having my money work for me while cutting down on my liabilities and avoiding having me work for money.

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What is important is money handling skills, not income.

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Today I look at myself as “Me, Inc.”

[Ducking] I even like Kyosaki. RDPD changed my thinking completely. Same as the guy in the article. I could never eat lentil soup 6 days/wk, though.

[Jay_Gatsby]

Kiyosaki found a way to make money off the ideas of others. Just like Tony Robbins and the rest of the self-help gurus past and present. If you want some good lessons in money management, try reading the autobiography of Benjamin Franklin. Fascinating that one of our founding fathers espoused such simple concepts 200+ years ago -- and yet the vast majority of Americans who can't seem to follow his example.

[fisherman]

I agree about Benjamin Franklin. A biography about him that is quite good also is by Walter Isaacson. Titan about J D Rockefeller is another good read in a similar vein.

[Tigger]

Quote:

Originally Posted by Onward Here's a four-part article on one guy's sprint toward financial independence. He seems to be really frugal, so your mileage may vary. But it's an inspirational story, and he's definitely got the right attitude. The article is a couple of years old, so I'm sorry if it's been posted here before. http://bit.ly/75m5PE

That's Jacob Lund Fisker's blog. I follow it religiously. He's in a class of his own.

Basically, he's a very frugal scientist, who saved most of his income for a small number of years and now doesn't need to work anymore.

I recommed this blog as a great source for inspiration and unusual ideas!

P.S. His "21 day makeover" series is handy for people who need to cut costs fast. You'll find it in the left margin of the webpage, below the "twitter updates".

[plex]

Read some of his blog, which is quite interesting, he followed a path that is very similar to mine (and what I plan on doing). He isn't quite FI technically though, he is FI only for his own needs (though he still did do that extremely fast, 5 years after getting his PhD with no debt). He is about a few years away from being able to cover his wife as well (who still works). I was wracking my brain for a bit on how a couple in the US could live on $7k/year until I saw that that 7K only covers his needs, which is quite possible with a paid off living space and a spouse providing healthcare (those are my biggest expenses, without them, I would be spending $5k/year).

[Onward]

Quote:

Originally Posted by Tigger That's Jacob Lund Fisker's blog. I follow it religiously.

I read every post too.

[JacqJolie]

Quote:

Originally Posted by plex Read some of his blog, which is quite interesting, he followed a path that is very similar to mine (and what I plan on doing). He isn't quite FI technically though, he is FI only for his own needs (though he still did do that extremely fast, 5 years after getting his PhD with no debt). He is about a few years away from being able to cover his wife as well (who still works). I was wracking my brain for a bit on how a couple in the US could live on $7k/year until I saw that that 7K only covers his needs, which is quite possible with a paid off living space and a spouse providing healthcare (those are my biggest expenses, without them, I would be spending $5k/year).

I read Jacob's blog regularly too. The living space isn't technically paid off, just the rv. I think they pay $400 per month for their RV pad rent, so his share is $200. His spouse doesn't pay his health care, he's self-insured at a pretty reasonable rate. Although as he says, his best insurance is that he keeps in pretty good shape.

From the time that I started from zero to enough for a frugal retirement (not close to as frugal as Jacob) or semi-frugal semi-retirement, it took me 6 years to amass enough money. So it's definitely do-able without having to go as bare bones as that.

I could spend as low as $5k with no housing costs too, but wouldn't really want to spend less than $500/month as you do. That requires a lot of lifestyle reduction measures I wouldn't be prepared to make. I'd rather work a bit.

[Nords]

He's running a three-part update on a guest blog:
Early retirement motivations

I subscribe to his blog because it's "weak dissonance". I generally agree with his concepts but the execution is, well, extreme. I can't agree with much of his thinking on the rest of society, either-- he's not familiar enough with consumers and materialism to be able to comment on them, let alone critique them. But it forces me to look at the way we're running our finances and lifestyle, too, and to re-examine my assumptions. He's helped us profit quite a bit from it in addition to avoiding expenses.

What attracts me the most is his thorough review of every assumption, the merciless implementation of every step while occasionally poking fun at himself, and the honesty/transparency of his finances. Compare that to the typical "Millionaire Mommy Next Door" ilk, and Kiyosaki doesn't even come close.

Speaking of parenting, I can't wait to see until his hypotheses are put to the test of raising a family...

[JacqJolie]

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Originally Posted by Nords Speaking of parenting, I can't wait to see until his hypotheses are put to the test of raising a family...

Oh, no kids for Jacob and DW are in the future plans. Or so he says, maybe she'll change his / her mind.

I made a mistake on my earlier post, his RV pad rent is $475/month (his portion being $237.50 of course).

[Letj]

Quote:

Originally Posted by Tigger That's Jacob Lund Fisker's blog. I follow it religiously. He's in a class of his own. Basically, he's a very frugal scientist, who saved most of his income for a small number of years and now doesn't need to work anymore. I recommed this blog as a great source for inspiration and unusual ideas! P.S. His "21 day makeover" series is handy for people who need to cut costs fast. You'll find it in the left margin of the webpage, below the "twitter updates".

I follow his blog religiously. It's a great blog.

[Letj]

Quote:

Originally Posted by plex Read some of his blog, which is quite interesting, he followed a path that is very similar to mine (and what I plan on doing). He isn't quite FI technically though, he is FI only for his own needs (though he still did do that extremely fast, 5 years after getting his PhD with no debt). He is about a few years away from being able to cover his wife as well (who still works). I was wracking my brain for a bit on how a couple in the US could live on $7k/year until I saw that that 7K only covers his needs, which is quite possible with a paid off living space and a spouse providing healthcare (those are my biggest expenses, without them, I would be spending $5k/year).

I cannot imagine living on $5K/year even without children and a paid off house. $5K sounds like what you one would need to cover the grocery bill.

[unclemick]

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Originally Posted by Letj I follow his blog religiously. It's a great blog.

Harumph! Rookies. When I run across a blog where they shut off the electricity and get down to something like a fish camp(bought with petty cash and pay something like 150 dollars A YEAR ground lease then I'll listen.

There is frugal and then there is getting serious about it.

Of course if she merntions her cast iron frying pan and mumbles that you have to sleep sometime - throttling back a tad and taking more time to get to ER is sometimes a wiser course.

heh heh heh -

[deserat]

I read his blog, too - he's got good ideas, although some of his comments trike me as odd and a bit ignorant....the fact that he lives in the Bay area on that amount of money a year is pretty amazing. I read where he subsisted as a grad student/physicist on lentil soup and tuna sandwiches...that would get old fast!

However, he does analyze what he does and obviously knows his math. As for Kiyosaki, I didn't pick that up in his blog----

[leftbucket]

Jacob's quality blogging. Highly motivating!
He's let a couple of us forum folks put up guest posts on
his blog, too.

(I know of scrabbler and myself, maybe others also)

-LB ("firefighter" on ERE, [Jacob's blog])

[plex]

Basically, I make all my non-health care insurance and rent payments through my credit card. Last month it was $170.69, the month before $255.75, the month before $174.35...etc. It is usually in that range with one month where I have some decent sized car/entertainment expense come along and it hits $600-$700 for that month. I get ~2% cash back through my card though .

Not counting health care and rent, utilities and food are my largest expenses. Food/household good costs I keep around $100/month. Utilities are about $70/month for my half. They would honestly be significantly lower though, as a whole, if I didn't have a roommate, he needs cable/half the heat/internet, I just need internet/half the heat, so my costs would be nearly cut in half if I was on my own for that part. Entertainment is mostly free for me (Internet/downloaded movies/free games), except when I buy a computer upgrade or a new computer every 5 years. I walk everywhere except to get groceries, unlike the blogger mentioned, I really dislike carrying 50 lbs of groceries long distances, I have been using a car that had 115K miles on it when I got it for 7 years now, and it has 145k on it now (My plan for retirement is to eventually get a lightly used car, and keep it for 25 years, the car will actually stop depreciating well before I am done with it). Taxes, well, I essentially don't pay taxes. I buy so few items that sales tax barely applies, I expect to pay property tax in retirement, but I do not do so now (and get a tax credit for renting from the state), and I had $1600 more in income tax credits, than I was actually taxed (so I netted $1.6K), I do not count taxes as a reduction in expenses though, it is more like tax-free income.

That all said, this is a student's budget, essentially. Granted, I have done it for 8 years, and can probably do something close to it while working full time...BUT, there are certain things in life I am interested in having in retirement, like not having a roommate ($$), and having a wife someday ($$$$$ unless I am really lucky). Having no roommate will result in being able to get a smaller house/lower utilities, but you still come out ahead pretty easily when you have a roommate. I doubt my spending habits will change after 10+ years of already living very frugally, but these sorts of lifestyle changes will be expensive, and it is factored into how long I expect to work. Planning on miracles happening, like finding a similarly frugal wife, is not realistic.

[Lusitan]

Thanks for the link, looks interesting.

[Bimmerbill]

Heck, my kids daycare was $5K and out of pocked co-pays for doc visits, dentsts and eye glasses was $2.5K for me.

[ESRwannabe]

Interesting blog. I am reading it now and he is way more hardcore LBYM than I am willing to go. I enjoy variety in my diet, as my belly can attest.