Mr MM Explains the Why of FIRE

[nash031]

Pretty much confirmed that I have zero use for his blog and that I'd probably find him insufferable. To each their own; his is not mine.

[daylatedollarshort]

Quote:

Originally Posted by FUEGO Most of his travel is visiting and staying with family and friends back home in Canada, so not too surprising that it's not expensive. We managed to spend only $24k in 2015 and that included over 8 weeks of international travel with 3 kids (and no free rent by staying with family or friends!). Some mild travel hacking was involved (so gross it up to $30k if you count the cash value of that). We didn't hire any bands, but don't live like absolute paupers. There are a surprising number of very early retirees living very well on $30-40k/yr but I'm not sure they would enjoy posting at this forum very much.

Mean income in the U.S. for households 65+ (likely with many retirees or at least not working full time) is $43.6K, and that includes expenses such as state and federal income taxes, mortgage, travel, home repairs and likely higher medical costs than a younger household.

If I take out income taxes, mortgage payment (though paying off my mortgage would lower my investment income), reserves for new cars, deductible business expenses, travel, travel reward points, college costs / saving for college, and home repairs and just published a subset of my expenses for a given year online, excluded any and all reserves for future major expenses and called it my budget, my budget would look remarkably low, too.

[Markola]

I've met the real guy behind the MMM finance super hero online persona and he's a very decent guy to chat with. The persona is obnoxiously directive at times but he himself is not. These days, he's probably as focused on studying and educating about the means for fostering personal happiness, as much as frugality. Anyway, MMM has become a celebrity, with all of the associated upsides and downsides of celebrity-dom in our media-drenched society. My guess is he accepts those opportunities and limitations, unrealistic acolytes and inevitable critics and handles them all with pretty good equilibrium. He thinks and acts for himself and I think he's done the finance community, and me as a reader, a useful service with his unique ER story and sharing on his blog, no more and no less.

[FUEGO]

Quote:

Originally Posted by daylatedollarshort Mean income in the U.S. for households 65+ (likely with many retirees or at least not working full time) is $43.6K, and that includes expenses such as state and federal income taxes, mortgage, travel, home repairs and likely higher medical costs than a younger household. If I take out income taxes, mortgage payment (though paying off my mortgage would lower my investment income), reserves for new cars, deductible business expenses, travel, travel reward points, college costs / saving for college, and home repairs and just published a subset of my expenses for a given year online, excluded any and all reserves for future major expenses and called it my budget, my budget would look remarkably low, too.

Check the stats further down in your link - 65+ don't have much in the way of mortgages, paying only $1500 in mortgage interest per year. Same with taxes - $3200/yr. Subtract those from the $43600 annual median expenditure and at $39k you're still well above $24k/yr, and MMM is a household of 3 unlike the typically smaller household of 2 for age 65+.

I'd say he's still spending pretty sparsely even though I question whether there out to be some accounting for the new house costs he incurred (he says he'll end up selling it for much more than the cost of materials purchased, and he's doing the labor himself).

[haha]

I think of one likes Mr Money, he should love Bernie Madoff.

Also should appeal to anyone who enjoys fairy tales.

Those who have met him, and found him attractive, that is what people said about Bernie. A con has to be personalty attractive and seem genuine. If you are going to ask people to suspend their disbelief, you cannot afford to be obnoxious. Cons are attractive, cops and lending officers not so much.

For example, I could never make a go of any of these things.

Ha

[daylatedollarshort]

Quote:

Originally Posted by FUEGO Check the stats further down in your link - 65+ don't have much in the way of mortgages, paying only $1500 in mortgage interest per year. Same with taxes - $3200/yr. Subtract those from the $43600 annual median expenditure and at $39k you're still well above $24k/yr, and MMM is a household of 3 unlike the typically smaller household of 2 for age 65+. I'd say he's still spending pretty sparsely even though I question whether there out to be some accounting for the new house costs he incurred (he says he'll end up selling it for much more than the cost of materials purchased, and he's doing the labor himself).

The CES also shows items like $1,933 in SS / pension contributions so there is another $2K in the average budget going closer to $24K. I am not going to go through both budgets line by line but from my point of view there is not a huge difference between $43.6K and $24K, especially when one subtracts out mortgage payments, SS contributions, state income taxes, federal income taxes, car interest payments, etc.

Plus there are many items in the CES people could cut out if they had to - like not go out to eat, stop driving their cars, not take educational classes, not buy books, and sell their pets. But most 65+ households likely don't want to do that nor do they have to as they appear have enough income to cover those kind of expenses.

I won't comment any more as I think the subject has been covered well by the math brains at Bogleheads and Reddit folks and I don't have more to add than the inconsistencies pointed out in those forums.

[Focus]

Quote:

Originally Posted by FUEGO Most of his travel is visiting and staying with family and friends back home in Canada, so not too surprising that it's not expensive.

If I were his relative or friend and knew he made $400,000 a year, I'd tell him to stay in a hotel!

Quote:

Originally Posted by audreyh1 Does the New Yorker typically write really long articles?

Yes. It's known for them.

[brucethebroker]

Personally, I enjoy reading MMM. I think to really understand him, and his blog, you need to go back and read all of his blogs over the years. I find a large difference between what he suggests and what his readers run with (reading their comments). Many readers seem to be following him because he offers hope, unlike much of the media which seems to slam younger people (lazy, whining, stupid, etc.). I see much of his following as similar to the "tiny house" movement (will they abandon the tiny house when married, with kids? Perhaps). The kids seem frustrated with status quo, and are reaching out.
I follow many early retirement blogs looking for nuggets. MMM really promotes driving as few vehicles as possible, as small sized as possible, as little as possible. That made me rethink my own usage. DW and I downsized, and moved to a more walk/biking friendly neighborhood, and sold off one of our two cars. We get more exercise and save about $400 a month (depreciation, repairs, insurance). MMM may drive even less than I do, but he is about 25 years younger-so I get it. And that is OK.
I believe, after reading his early stuff, that he only wanted to share is "Aha! moment" with others in the beginning. Because he has a rabid following, and is now making money off his website doesn't bother me-more power to him. I continue to read and still get a good idea from MMM from time to time.

[dixonge]

In the end, it's all self-reported, both income and expenses. Maybe he really spends $60K/year. Maybe he never really retired. It couldn't necessarily be proven otherwise. So there's a certain amount of trust in guru-type sites, justified or not.

[pb4uski]

Quote:

Originally Posted by nash031 Pretty much confirmed that I have zero use for his blog and that I'd probably find him insufferable. To each their own; his is not mine.

+1 too extreme for me.... life is for living, not for scrimping.

[photoguy]

I met the guy once when we were in Boulder and he seemed nice enough but I don't really know much about him or the blog (don't read it). But the whole risk calculation of ER changes dramatically when you have fall back options for healthcare (i.e. Canada) and continuing income. Also I imagine staying the course through a brutal bear market will be a very different experience if you still have non-portfolio income.

[Chris7]

Quote:

Originally Posted by haha I think of one likes Mr Money, he should love Bernie Madoff. Also should appeal to anyone who enjoys fairy tales. Those who have met him, and found him attractive, that is what people said about Bernie. A con has to be personalty attractive and seem genuine. If you are going to ask people to suspend their disbelief, you cannot afford to be obnoxious. Cons are attractive, cops and lending officers not so much. For example, I could never make a go of any of these things. Ha

I have heard him mentioned on another blog. Read the New Yorker article and read his follow-up comment. As far as I know he is paid through clicks and affiliate sales on his blog. He doesn't personally charge anybody anything, so not sure how he is conning anyone.

I have not ventured over to his site. Others have mentioned a propensity for foul language of which I'm not a fan so I'm not one of his rabid fans seeking to defend. :O)

[nash031]

Quote:

Originally Posted by ChrisCD I have heard him mentioned on another blog. Read the New Yorker article and read his follow-up comment. As far as I know he is paid through clicks and affiliate sales on his blog. He doesn't personally charge anybody anything, so not sure how he is conning anyone.

Purporting to live one way, on a certain budget, when in reality you're writing off travel as a business expense while claiming to be retired even though you do part time work and run a blog that requires at least part time effort which you've since monetized via advertising and pulls down $400,000. It's not a con, per se, but it's become disingenuous. Kudos to him for brilliant execution of the plan!

Anyway, he strikes me as an environmental activist spreading his message via a popular blog on a totally different, loosely related subject. Just not my cup of tea.

[daylatedollarshort]

Quite a few differences in key metrics between the blog, the Reddit deconstruction post replies and the New Yorker article.

[shortstop14]

I've read his blog a bit, but haven't gotten into (or cared about) the details of his particular situation. But I do think his message that thoughtless consumption (that is, spending without a real return in quality of life, just because everyone else is) can keep people from retiring is a good one. Maybe a slightly more extreme form of LBYM.

[ExFlyBoy5]

A couple points. He mentioned his original intent was to get rich people to stop trashing the planet. I think this still his goal.

Second, he made a recommendation for a Chase credit card when he wrote a review. The link to apply (on his frugal website) earned him $100 PER CLICK!!! Seriously? This alone really knocks him down a few notches on my opinion on the guy. He makes a ton of money off a system he despises.

Sent via mobile device. Please excuse any grammatical errors.

[Markola]

My Goodness, some of the judgments above. Several could be summarized as "I have never read MMM but I am certain I would not like him based on what I've heard. Nonetheless, he is clearly a scam artist and another Bernie Madoff". Several folks above sound envious, to be honest. MMM is just one person who FIRED like everyone else here supposedly aspires to and wrote about it online. Because he hit a nerve, people started throwing money at him to speak and write more. He's not an advisor or money manager but, apparently, earning money in retirement is fraudulent. Yeesh, remind me not to ever write a blog.

[LitGal]

Quote:

Originally Posted by scrabbler1 One condition for me to ER was that I would have no change to my everyday life. That is, I would not have to make any changes to my already low spending habits after ERing. If I wanted to go out and be a little spendy once in a while, I would not have to worry about if I had the money to pay for it or worry about how it would fit into my budget. My monthly budget already includes a surplus which I can use to pay for something I need or just want. For example, my old, ancient TV was dying so I finally bought myself an HD TV. It cost me about $150, a decent price (its a 28" without any extra frills), so I bought it and it is wonderful and gives me more incentive to sit on my couch (or chair) and watch TV all day or close to it. When I ERed, I had no desire at all to have to work to earn any money. As my signature line suggests, I want my money working for me, not vice versa. My career "change" went from working for a paycheck, even a part-time one, to working not at all. My main reason for ERing was to eliminate the long, tiring, and sometimes sickening commute I had for most of the 23 years I worked. When I watch the local news on my (new) TV, I like to watch the traffic and transit reports to remind me of what I am missing (and to watch the cute girl giving us those reports LOL). This falls under a bigger category of ERing to simply eliminate all the things I disliked about working. Getting rid of negatives for me is just as good as adding positives such as being able to take an afternoon nap every day. My being single (but with a ladyfriend) and childfree combined with being FIREd is a superb way of having total personal and economic freedom, freedom to do what I want whenever I want. I realized this some more in the last week when, a few days after I bought that new TV, my dad (85 and retired for 21 years) and I just took off to visit my brother who lives 200 miles away. We had planned to go there 2 weeks ago but a snowstorm prevented us from making the drive. With good weather in the weekend forecast, we just decided last Wednesday to leave Friday and return Sunday. As I mentioned to him and my brother, we retirees can simply get up and go when we like.

+1 DH and I had similar motivations for achieving ER. Such basic, simple conditions can have a huge impact on quality of life: lack of commute, self-determined schedules/activities/obligations, absence of general stress and work-related hassles.

Just sleeping in, enjoying coffee with the newspaper (for as many hours as we choose)..........joys like these are the fruits of pure freedom....despite the nagging reminder which especially affected us: our days are numbered. We have no idea how long we will get to enjoy retirement. Because of DH's disability and short-term prognosis, we were able to make the most of about two years of retirement (before his year of eventual decline).

Some of my happiest memories of our ER were the simplest of life's pleasures. It would have been even better if we could have started at age 45!

Thanks for your post, Scrabbler. I wish I could have said it as well myself.

[LitGal]

Quote:

Originally Posted by karen1972 I assume his income from his blog comes from things like his "referral" fees for credit cards, his "referral' fees for things like MrRebates and then some advertising... ie he has figured out a lot of referral programs that pay him substantial kick back and if you have enough followers signing up it can be a great gig. I always take everyones budget with a grain of salt. Its very hard to tell what people are leaving out..ie are they still using miles they earned years ago for all their travel, using HSA money and not counting it, etc... do you live near family and they help you out significantly. Like my sister who is like oh my food bill is only X, but I know she eats and mom and dads at least 3-4 times a week with her 5 kids... yeh I can imagine your food bill being lower than expecting.. guessing mom and dads is rather huge though.

At the end of discussion about Thoreau at Walden Pond, it's fun to toss the students a little factoid to enjoy on their way out the door: Thoreau built his cabin on free land provided by Emerson, and he walked to the Emersons' house every night for dinner.

He lived on more than the beans he grew.

[daylatedollarshort]

Quote:

Originally Posted by LitGal At the end of discussion about Thoreau at Walden Pond, it's fun to toss the students a little factoid to enjoy on their way out the door: Thoreau built his cabin on free land provided by Emerson, and he walked to the Emersons' house every night for dinner. He lived on more than the beans he grew.

I never knew that and haven't read the book, but I did know he only lived there a couple of years, so I'm guessing it wasn't his perfect forever home.