Mr MM Explains the Why of FIRE

[aim-high]

I've read MMM. I get it but not into selling my car and riding my bike everywhere. Lol. I agree it wasn't retirement it was more about starting a blog on living below your means.

And monetizing it so that your means increase. ;-)

 

[aim-high]

Anyone know what kind of income MMM blog / forum business brings in? It must be a small fortune. I know I have a little forum I created for a large group of investors (about 250 or so). They are a fairly active bunch. Anyway, I didn't charge for it but told them I'd put up adsense to cover the cost of hosting, etc. No maintenance now on my part, but it brings in $100 to $200 a month with very little advertising and no other affiliate marketing.

With his reader base he should be bringing in $10K to 20K a month easy. Don't know how much work it is though. I know if I were to blog it would be worse than software consulting. I could crank out code far faster than I could crank out new blog content.

 

[Lucantes]

He dissed sitting on the couch and watching tv. I like sitting in my comfy chair and watching tv. I also haven't found anything I'm passionate about enough to make monetizing it worth it. I'll stick with my version of retirement which involves exercise, cooking, reading, watching tv, being a better mom.... No desire to blog, build houses, etc. for money.

+1 This is my goal, well, except the Mom part!

 

[FUEGO]

No, you have to love working for pay in early retirement too, because that is the only way a retired person can ever find sufficient "intellectual stimulation". Or so some people think, although I just don't get it myself.

Well, I do "work" a few hours per week for some very lucrative pay. The work is essentially the same thing as posting on the ER forum (which I've done for free for 10+ years) or discussing finances with a friend (also done for free for 10+ years).

It is intellectually stimulating, entertaining, and feels good to do it (like volunteering, with a fat paycheck, and not annoying like a regular 40 hr/wk job).

But I've set things up so I'm not doing more than a few hours work per week. Everything else gets turned down. Maybe that changes when the kids are all in school or they leave for college. Maybe not - there are a lot of games I want to play.

Sorry FUEGO - the retirement police object to SAHD/SAHMs calling themselves retired. So you and I don't qualify. LOL.

My wife is working on quitting. Strike that, your Honor. My wife is trying to quit. And not just to legitimize my early retired status.

 

[Lucantes]

It could be worse - - you could enjoy sitting on the couch playing video games. .

+1 My End Goal!!

 

[old woman]

I don't want to do any fund raising, work, blogging nothing. I am supposed to sell eggs but I don't. We had 20 hens laying and were overrun with eggs so I said I would sell some, I gave away 9 dozen to a niece and eat as many as I can I just don't want to sell eggs. At $3 a dozen it isn't worth my time when I could be playing farmville or something.
I think it is nice to be able to live on low income when you are young. I didn't need much after I was 40, roommate paid me almost as much as my mortgage so I could have lived on a minimum wage job, that is freeing even when working at megacorp. My last 20 years or so I knew if I lost my job it took little to no income from work to live as well as I was. Now retired living off investments will never look for a job again.

 

[ERD50]

Yeah. Not one postive comment about the article. Proud of you guys.

What an extremely odd thing to say.

Why on earth would we care if you are "proud" of us? Do you spend a lot of time worrying about whether we are "proud" of you?

Elbata - you could go first then. Well, actually second (see post #2)

Nice story on motivation,

Anyone find any irony in the negativity of complaining of no positive comments?

-ERD50

 

[karen1972]

It's amazing if you go to the forums associated with his blog, the number of under 30-somethings that are planning to RE in the US with investments <$750k. To me, that is a very long time frame and not very much money. People who would not consider at least +$1m to RE are often derided.


Not sure if there is a reality check coming their way or I am just out of touch.

It depends on what that $750k is covering. I "HAD" over a million (don't look today ..think i'm holding on but just ignoring that) but as a single person, its very different. $30k is plenty for a single person, (ACA insurance subsidy), low COLA area and with house paid off $25k is also doable (especially with taking out of after tax since capital gains isn't taxed at this level and even state taxes are minimal). A paid off house here, you could get by with $450/month for housing expenses (utilities,insurance,HOA,property tax) and the HOA covers exterior maintenance,roof,siding,driveway.. Even on $25k, I could easily get to $1000/month disposable income which is plenty to go buy stuff, eat out ( a nice dinner runs $25-30 including wine) and still go on vacation.

 

[timemoveson]

another opinion

While I'm demographically much more similar to this forum, White Coat Investor or BH, I've read every post on MMM and read his forums as well.

After reading every post and considering the forum content presented several times a week, I've concluded for myself that he has formed a consistent, well-defined and described ethos he is trying to follow.

You can take it or leave obviously. A lot of people seem to like it. It offers real guidance to people in a lot of areas that overlap with this, BH and other advice repositories on FIRE topics. Most people reject it as "impossible". Clearly, his forum readership and level of support would argue that is not entirely true.

I take elements of it and leave others. It is not all things to all people. I'm rich and got that way playing great "offence" and adequate "defence". He espouses a way that eliminates the requirement to play great offence only and you can easier on our planet at the same time. I wish I had read it or similar 25 years ago as the journey might have been different.

 

[Big_Hitter]

Elbata - you could go first then. Well, actually second (see post #2)

Anyone find any irony in the negativity of complaining of no positive comments?

-ERD50

"crickets"

it seems to me that if everyone followed the MM philosophy the US economy would eventually collapse


it's also possible I'm missing something. of course I was raised by my parents to be more financially successful than they, not less

 

[Major Tom]

The one glaring inaccuracy in that article is the title, "I retired at 30". As DrRoy, REW, and a few others have pointed out, he didn't retire - he switched careers. This is really my main issue with MMM - he portrays himself as retired when he so obviously isn't. In that sense, it turns his blog, in my mind, into a sophisticated form of click-bait. There's definitely much good information on his site, and he's obviously an intelligent guy with writing skills, but I find his brand of overly-confident cockiness off-putting.

I'm just not fond of the use of hyperbole and misrepresentation to generate internet traffic. It doesn't speak much to his personal integrity, IMO.

 

[steelyman]

Click-bait? Oh, my! I thought that never happens!

 

[highlow65]

Wow, thank you MMM, I just realized that I have been retired for some 35 years now. I retired early at 32, not 66 like I had previously and erroneously thought. Because 1980 was the last year I received a W-2, and it was for only 20% of the year. The rest of the time I spent doing things that I liked doing, and had been doing anyway for free before then. But people did start giving me money for doing that stuff. I thought I had started a microprocessor consulting business, but now I realized that really I was retired!!!
I got paid for things (I was about to say worked) I did from my home office, so I could still be around my kids when they were young, and take off when I wanted. Gee.
I should have started a blog about it too, but they hadn't been invented yet.

call it what you want it seems like you have enjoyed a pretty awesome life

 

[Major Tom]

Click-bait? Oh, my! I thought that never happens!

I would be terrible at online promoting. Instead of writing, "What you see at 3:47 will astonish you and completely turn your life around", I'd probably write something like, "This video is quite amusing. I think you'll get a chuckle out of it."

 

[daylatedollarshort]

MMM also leaves out many of his expenses in his budget such as taxes and "business" expenses, like home improvements and travel. And his budget is really a list of expenses for the year, a true budget would allow for at least some high medical expense years, car replacements, saving for college and a new roof. Add those in and his budget is not really much different than many middle class households. Plus as others have mentioned he obviously works - he is just self employed and not salaried.

 

[CaliforniaMan]

The one glaring inaccuracy in that article is the title, "I retired at 30". As DrRoy, REW, and a few others have pointed out, he didn't retire - he switched careers. This is really my main issue with MMM - he portrays himself as retired when he so obviously isn't. In that sense, it turns his blog, in my mind, into a sophisticated form of click-bait. There's definitely much good information on his site, and he's obviously an intelligent guy with writing skills, but I find his brand of overly-confident cockiness off-putting.

I'm just not fond of the use of hyperbole and misrepresentation to generate internet traffic. It doesn't speak much to his personal integrity, IMO.

+1
This is my problem with his site also. I find it just too disingenuous, seems to me to be mostly marketing flash. If one has a point, make it, there is no need to use hyperbole and misrepresentation. But then again I am just a crotchety old ex engineer.

 

[Bigdawg]

Well, I do "work" a few hours per week for some very lucrative pay. The work is essentially the same thing as posting on the ER forum (which I've done for free for 10+ years) or discussing finances with a friend (also done for free for 10+ years).

It is intellectually stimulating, entertaining, and feels good to do it (like volunteering, with a fat paycheck, and not annoying like a regular 40 hr/wk job).

But I've set things up so I'm not doing more than a few hours work per week. Everything else gets turned down. Maybe that changes when the kids are all in school or they leave for college. Maybe not - there are a lot of games I want to play.



My wife is working on quitting. Strike that, your Honor. My wife is trying to quit. And not just to legitimize my early retired status.

You are upfront about your situation and freely admit that you do some work. I don't feel pressure when I read your blog. I feel "I'm not worthy" when I read MMM.

 

[karen1972]

I find his type of retirement to be a common theme. My facebook feed is full of MLM folks talking about not have a JOB..and then trying to sell me their stuff or sign up. To me its a misuse of retirement when they really mean financially independent (ie. I don't absolutely need the paycheck, but I'll take it if its offered and I like the assignment). However, I won't diss him because many I know that are retired still own rental properties which managing, maintaining them to me can easily become a job. We never counted my friends dad as retired because every day he got up, did the rounds and collected his quarters from the laundry mats he owned, called maintenance. Sure he spent most of his time golfing, but he still ended up doing errands to keep his laundry mats going which otherwise he wouldn't have received weekly income.

 

[FUEGO]

You are upfront about your situation and freely admit that you do some work. I don't feel pressure when I read your blog. I feel "I'm not worthy" when I read MMM.

Well, I clearly need to ramp up the pressure then!

I actually enjoy reading most of MMM's articles. Some are over the top but most are entertaining (even if I don't agree with them).

I get it - he's a type A person and really enjoys the go go go life. Some folks are like that and most of them don't ever want to quit work ("I'd get bored. What would I do all day?").

I don't know how MMM decides on what paid tasks he takes on. For me, I ask myself "Do I enjoy doing this? Will it allow me plenty of leisure time and the flexibility to do whatever I want whenever I want? Is the compensation worth my time to deal with the finances/business side of the transaction?" As long as the answer to all questions are yes, then I will do things in exchange for money.

I imagine MMM applies a similar heuristic when deciding on what projects he tackles and what work he turns down. His definition of "leisure" is probably very different than mine because his apparently includes manual labor (carpentry). Although I don't mind the occasional DIY task either, so I get it (difference of magnitude but the same thing). Hanging out with friends, drinking beer and making stuff.

 

[lhamo]

I read that article and wondered about the construction company, boutique carpentry and other ventures that have come and gone. The only one that still survives at the time of the article is the "boutique carpenter operation"(can anyone tell me what that is). Those of you that are familiar with this man, were these bankruptcies? I'm trying to understand putting up the money to start a construction company and then realize it was too much for him. Does he have that much money from his 10 years of working (is that how long he worked at a full time job?) to keep starting ventures that come and go. It sounds like a lot of wasted money on business ventures. It says he retired in 2005 so it doesn't sound like these ventures/businesses were long term.


Quote from article "So in my own case I started just with the goal of being a parent, but then ended up starting a house-building company to pursue my lifelong love of building things. Then I learned that the daily stress and schedule of big, multi-person projects was still too much for me at the time, so it evolved into a boutique carpentry operation that still does local projects to this day. Other ventures have come and gone, but none of them were done because we needed the money. That is my definition of a modern retirement: the activities you pursue once you are done searching for money."

He has roughly outlined how they accumulated their nestegg (aka the "stache") here: A Brief History of the ‘Stash: How we Saved from Zero to Retirement in Nine Years

He also provided the details on his business partnership that went bad here -- lost quite a bit of money on that, but eventually bounced back: Mr. Money Mustache’s Big Mistake

More recently, they bought a fixer upper in their neighborhood that was slightly smaller/older than their previous house, renovated it, and sold the original house for a significant profit:

We Sold the House! Here’s How I’m Investing the $400,000.

Although I personally wish he had chosen to classify himself as "financially independent" rather than "retired," given the blog and his other ventures, I think it is pretty clear from reading his blog (which is very much written in a "persona" voice that is not necessarily a direct reflection of Pete himself) that he basically does whatever the f*** he wants with his time and energy. The blog is probably a huge cash cow for him at this point -- more power to him. Unlike others, he hasn't sold out. He even kicked off lucrative sponsors when they wanted to control him.

For those who have been put off by the forums, you may find a more welcoming tone in the "journals" section -- much more variety in outlook/approach there. There are also some really useful tools in various places on the site (e.g. poster MDM has developed a great "case study" template that has a very nice sheet in it where you can project your SS earnings given different scenarios).

 

[Katsmeow]

I read the article and liked it. I think that issue of whether or not he is "retired" is a distraction from the points he is making. I liked this quote in particular:

financial independence isn't so much about freedom from work. It is more about freedom to do your best work, without money getting in the way.

And I think that is really the key to a lot of what he is says. I note by the way that the description of him at the bottom described him as retiring "from the field" of software engineering, which I think he certainly did.

I used to read his blog a great deal (and his forums a fair amount). I quit reading it mostly because (1) I got busy writing my own blog and (2) he annoyed me. He didn't annoy me because he called himself retired (I don't care how he describes himself) or because he earns money or even that he doesn't spend a lot of money or includes living expenses as part of blog expenses and so on. What annoyed me was how he made fun of choices other people made when he spends a lot of money on things that he values. For example, he made fun of people eating restaurant meals basically taking the view it was ridiculous to do that. Yet, he spends way more money on travel than I do and he thinks that is totally fine. It annoyed me that he totally discounted people's enjoyment in things he doesn't like, without realizing that maybe some people think some of his preferences are a waste of money.

But, anyway, I actually kinda understand his view on retirement and working. I know that some feel that as soon as you do anything other than passive investment that brings in any money during retirement then you are working. But, put in one Adsense ad on your blog and then it is a job. I don't actually see it that way.

To me, there is a big difference between someone working for money who needs that money and someone who earns income from something that they do for pleasure but they don't really need the money.

I don't make any money from my blog but I am not sure that putting some ads on it would mean that was my job. I have toyed with the idea of being a Weight Watchers leader which I would do simply out of desiring to help others. Yes, it pays money (not much). The money would be immaterial to me, but I wouldn't turn it down.

I also have a master's degree and license in a field that is not the one I worked in for 30+ years. This other field is one that is not well paying at all. I never actually got a job in that field because I could make so much more money in the field I did work in. But, there are times, when I have thought about getting a part-time job in that field. To me, it would be just for the fun of it. Yes, I would get a paycheck. But, frankly, it would pay me less than SS benefits would pay me. The money wouldn't be my motivation for doing it. It is just that I could never afford to do it before and now I can. It isn't the money I would want, but just the opportunity to do the tasks that come with that job. (I am not likely to actually do it because I don't want the other stuff that comes with a job ...I think I would like the work but hate the job).

To me, there is a big difference between doing work that you are doing because it is fun for you, but they happen to pay you for it, and you don't need the money and doing work that you need to do in order to make ends meet or work that you do because you are primarily motivated by the money.

 

[JP.mpls]

Bigdawg,
I like the LBYM and low consumerism message on the MMM website, but I get a similar feeling from the site. If you are not 100% on board, you are not one of us. I guess that follows his "tough" stance on those who don't live by his every word.


An example: MMM decided it was reasonable behavior to knock on the windows of people sitting in idling vehicles, because he didn't approve of their vehicle choice, and he didn't think they should be polluting and wasting more energy than he would. He is going from someone recommending alternative values and lifestyles, to someone who believes he is on the side of all things good, and he is doing a good deed enforcing his beliefs onto others. It almost has the feel of a crazy cult.


Take care,


JP

 

[Calico]

......An example: MMM decided it was reasonable behavior to knock on the windows of people sitting in idling vehicles, because he didn't approve of their vehicle choice, and he didn't think they should be polluting and wasting more energy than he would. He is going from someone recommending alternative values and lifestyles, to someone who believes he is on the side of all things good, and he is doing a good deed enforcing his beliefs onto others. It almost has the feel of a crazy cult.

Take care,

JP

Wow, he really is living in an alternate universe. One of these days he's going to knock on the wrong window, and it won't end well for him.

 

[daylatedollarshort]

I don't think there are really enough details on the blog on the key metrics to tell if they were realistically FI after working 9 years - what were investable assets (without home equity) AA, expected rate of return, planning age, realistic budget until end of plan (allowances for items like braces, increasing health care costs with age, sports injuries, replacement cars, new roof, LTC, serious illness / car accidents, etc.). We go out to eat, see movies and plays, and drive to the grocery store but with or without these expenses, either way these aren't the items that are going to make or break our ER budget. The biggies are / were things like health insurance, college, travel, housing, income taxes / RMDs, home repairs, and LTC and many of these are not covered in his expense lists.

 

[cyber888]

Where's your blog? I'm interested.

I read the article and liked it. I think that issue of whether or not he is "retired" is a distraction from the points he is making. I liked this quote in particular:



And I think that is really the key to a lot of what he is says. I note by the way that the description of him at the bottom described him as retiring "from the field" of software engineering, which I think he certainly did.

I used to read his blog a great deal (and his forums a fair amount). I quit reading it mostly because (1) I got busy writing my own blog and (2) he annoyed me. He didn't annoy me because he called himself retired (I don't care how he describes himself) or because he earns money or even that he doesn't spend a lot of money or includes living expenses as part of blog expenses and so on. What annoyed me was how he made fun of choices other people made when he spends a lot of money on things that he values. For example, he made fun of people eating restaurant meals basically taking the view it was ridiculous to do that. Yet, he spends way more money on travel than I do and he thinks that is totally fine. It annoyed me that he totally discounted people's enjoyment in things he doesn't like, without realizing that maybe some people think some of his preferences are a waste of money.

But, anyway, I actually kinda understand his view on retirement and working. I know that some feel that as soon as you do anything other than passive investment that brings in any money during retirement then you are working. But, put in one Adsense ad on your blog and then it is a job. I don't actually see it that way.

To me, there is a big difference between someone working for money who needs that money and someone who earns income from something that they do for pleasure but they don't really need the money.

I don't make any money from my blog but I am not sure that putting some ads on it would mean that was my job. I have toyed with the idea of being a Weight Watchers leader which I would do simply out of desiring to help others. Yes, it pays money (not much). The money would be immaterial to me, but I wouldn't turn it down.

I also have a master's degree and license in a field that is not the one I worked in for 30+ years. This other field is one that is not well paying at all. I never actually got a job in that field because I could make so much more money in the field I did work in. But, there are times, when I have thought about getting a part-time job in that field. To me, it would be just for the fun of it. Yes, I would get a paycheck. But, frankly, it would pay me less than SS benefits would pay me. The money wouldn't be my motivation for doing it. It is just that I could never afford to do it before and now I can. It isn't the money I would want, but just the opportunity to do the tasks that come with that job. (I am not likely to actually do it because I don't want the other stuff that comes with a job ...I think I would like the work but hate the job).

To me, there is a big difference between doing work that you are doing because it is fun for you, but they happen to pay you for it, and you don't need the money and doing work that you need to do in order to make ends meet or work that you do because you are primarily motivated by the money.