Money Mustache Fires Back at Suze Orman ($500K to retire vs $5 Million)

[Looking4Ward]

I always find these generalized recommendations interesting. My mother retired with $230K in several checking accounts (highly risk adverse), bought a home for cash with half of that when everything was on sale in 2010, and collects approximately $19K per year in SS. Yet she still manages to save a few bucks each month.

This year I've moved to a highly regarded school district so my son can attend a great high school. I'm renting and have seen my WR double from 3.5% to almost 7%. But I consider it the price of admission for the next four years and then I will be able to cut expenses back by moving to a much lower COL area and will begin to collect SS.

Even then, my holy grail of financial calculators (FireCalc) seems to think I'll be just fine for the next 25-30 years at my current withdrawal rate so I'm not too concerned about it and like others have pointed out, if things take a turn south I will make substantial adjustments.

 

[NW-Bound]

That's a joke, son. #FoghornLeghorn

But hey, if all y'all want to just trash the folks on the MMM forums, knock yourselves right out, though there are a significant number of posters who regularly post on both. *cough, cough*

How old are you to call anybody "son"?

The "cult" is only a half-joke that he uses. The more fervent followers he gets, the more money he makes, and the higher pedestal they erect for him. What's not to like?

People have been practicing LBYM and saving for rainy days long before these gurus came along. We needed nobody like MMM and Suze to "open our eyes" to see what was the obvious.

 

[NW-Bound]

OK. Just a quick search on the Web, and what do you know! I was right!

See Youtube interview video below. I now know what MMM looks like in person. He says that he cultivated the cult on purpose. People need some authority figure to follow, to revere, to listen to. Very smart guy!

I guess he has not told people to do anything bad. It's OK with me, but I doubt he can teach me much.

 

[street]

^ WOW! All I can do is laugh at that clip. Interesting and thanks for posting that NW.

 

[daylatedollarshort]

OK. Just a quick search on the Web, and what do you know! I was right!

See Youtube interview video below. I now know what MMM looks like in person. He says that he cultivated the cult on purpose. People need some authority figure to follow, to revere, to listen to. Very smart guy!

I guess he has not told people to do anything bad. It's OK with me, but I doubt he can teach me much.

I haven't read any posts lately, but as of a few years ago, if you add back in to his budget categories he either leaves out or claims as business expenses (travel, home repairs, some entertainment, income taxes) and use average annual household expenses per person for medical and dental care expenses from the Consumer Expenditure Survey, his expenses would be a lot higher than what he posts. And that is assuming all the other expenses are accurate.

 

[Fedup]

He said he also prefers owing his house, yet I’ve seen link from his blog that was posted here recently, I don’t venture over to his site, that renting was preferable.

I think I might get whiplashed listen to these kinds of advices.

 

[RobbieB]

Yeah I guess some people need to join a cult to reinforce the need to not spend all the dough they make.

Amazing.

 

[NW-Bound]

It’s time to send a dead rat, virtual one.

No, there's no need for threat of violence, even virtual one.

MMM has not done anything to harm me.

Besides, as I checked his blog out years ago, what he said made sense anyway.

Neither MMM nor Suze say anything that really bothers me. I do not pay that much attention, and what each of them says usually has some truth and wisdom to it. I never take anything too literally.

 

[Dtail]

Yeah I guess some people need to join a cult to reinforce the need to not spend all the dough they make.

Amazing.

You have your own cult of sorts here and we are all thankful for that.

 

[Shredder]

I retired unexpectedly at age 49 in 04. I had less than 200,000. But through a meger pension, ssd, paid off house, old habits of lbym, regular investing, and some luck (its been a good maket in general) things worked out just fine.

I'm still not a jet setter, lol. But I more than tripled our nest egg, upgraded our real estate. We drive fairly new vehicles and do not feel deprived in any way. Not sure I'd live any different if I had 10 million.

Some cant take it, but people adjust. It happens every ressesion, every time a company folds. If you have good habits that may trump a fat portfolio.

 

[Katsmeow]

Interesting read. I just don’t believe in the MMM philosophy that infers you need to work or lower your standard of living after ER. Like many here, once I RE, my spending will be double what it was in pre-retirement.

And our spending is a lot less than pre-retirement. Part of that is just life changes with no longer having kids in the house. We had some high expenses for awhile with 2 kids in college but that is over now.

We used to travel more than we travel now. We used to eat out more and just spend more money.

My standard of living is lower. But it is still fine. That is, the things that are important to me really haven't changed.

I think $2 Million minimum is about right if you retire in California. My brothers and several friends live - it is way too expensive. I'm in N.C, where cost of living is much cheaper. And you can do fine with $1 Million.

I think it also depends on age. For 2 people on SS if it is a goodly amount of money I don't really think $1 million is necessary in most parts of the country. I agree younger people need more.

My mother over the last 10 years of her life (from mid 80s to mid 90s) saved $50k on an income of about $23k a year. She bought anything she wanted, but just didn't like really expensive things and was mostly a homebody once she got into her 80s.

 

[Teacher Terry]

The difference between Suze and MM is that she keeps her money and owns 3 houses. He is donating to charity the blog money.

 

[cyber888]

Great feat to triple it. Congrats

I retired unexpectedly at age 49 in 04. I had less than 200,000. But through a meger pension, ssd, paid off house, old habits of lbym, regular investing, and some luck (its been a good maket in general) things worked out just fine.

I'm still not a jet setter, lol. But I more than tripled our nest egg, upgraded our real estate. We drive fairly new vehicles and do not feel deprived in any way. Not sure I'd live any different if I had 10 million.

Some cant take it, but people adjust. It happens every ressesion, every time a company folds. If you have good habits that may trump a fat portfolio.

 

[treeofpain]

All of the cult talk is more marketing than anything else IMO.


MMM is a combination of strategies discussed regularly here. I don't think he would claim to be "retired," which is the focus of this site. It seems to be more about reducing your costs to have more control of your life.

 

[davebarnes]

Kool Aid comes to mind ...

Why?
It was a Flavor Aid at Jonestown.

 

[davebarnes]

LOL! I can't remember for sure but if I remember right one was "what was the first word on the first MMM forum board". Any way is was something like thaT

Is anti spammer thing.
Bogleheads has it also.

 

[ESRwannabe]

In theory yes, but I doubt if anybody here is brave enough to retire on that amount. That’s like $28k per year for ER.

Just depends on where you live. I'm in the South and my monthly take home expenses are usually around $2,700 a month. Rent is $1,090 and my car lease is $265.

I could buy a descent house for $100k and buy the car. That would reduce expenses to $1,345 a month, but then I should probably add in an estimate for silver healthcare plan, say $200, and house expenses of say $250 a month. So that gets me up to $1,795, or $21,540.

Retiring off $28k would work for me.

 

[Omega]

The only way to retire with 500k is if you have subsidized health insurance.

This!!!

 

[Omega]

There is a lot of good advice on there. Some people take things to the extreme of course. I think MM was as surprised as anyone how much money the blog has made. The 300k he made he donated to charity. I admire that. Basically what he is teaching is how people used to live before easy credit came along. There are some really high earners on there so they can save boatloads of money in a short amount of time. I consider myself retired yet work part time at stuff I love doing and wouldn’t be as happy if I wasn’t doing it and I am much older than him. Choosing to work at something you love is much different than having to work.

The hard part for me is finding what I love.

 

[ncbill]

I retired unexpectedly at age 49 in 04. I had less than 200,000. But through a meger pension, ssd, paid off house, old habits of lbym, regular investing, and some luck (its been a good maket in general) things worked out just fine.

I'm still not a jet setter, lol. But I more than tripled our nest egg, upgraded our real estate. We drive fairly new vehicles and do not feel deprived in any way. Not sure I'd live any different if I had 10 million.

Some cant take it, but people adjust. It happens every ressesion, every time a company folds. If you have good habits that may trump a fat portfolio.

Close relative retired from their blue-collar job in their early 50s in the early 90s with a lot less...probably around $50,000.

But, they were in good shape since they had a union-managed COLA pension, nearly free retiree healthcare (converted to a Medigap policy when they became eligible for Medicare) and a paid-off home.

Medicare (and the above supplement) has covered serious health conditions, including a kidney transplant, for very little out-of-pocket expense.

The VA pays for the most expensive post-transplant drug (~5 years active)

 

[haha]

Mr MM is a sales psychology genius. Super great interview above!

Ha

 

[RetireBy90]

Great response to Suzie Orman

Interesting post about the Suzie claim you need $10M to retire.

Found it at https://www.marketwatch.com/story/s...k-2018-10-23?siteid=yhoof2&yptr=yahoo&ref=yfp

Pundit or blogger Chad Carson posted a response on his coachcarson.com site, which is new to me. Good analysis of the FIRE situation without degrading anyone. My take away from his response is that once you have a good plan in place to FIRE, you go through a period of couple years of getting used to not having a job and paycheck, and need to learn some new passion or feed a passion you have neglected. He points out that some find a passion and a new purpose, what he calls "retire forward" and some don't and fall back to the job defines who I am that he calls "retire backwards". Interesting read for me as I'm a vetran of being retired with 2 months under my belt already.

 

[Rianne]

Interesting post about the Suzie claim you need $10M to retire.

Found it at https://www.marketwatch.com/story/s...k-2018-10-23?siteid=yhoof2&yptr=yahoo&ref=yfp

Pundit or blogger Chad Carson posted a response on his coachcarson.com site, which is new to me. Good analysis of the FIRE situation without degrading anyone. My take away from his response is that once you have a good plan in place to FIRE, you go through a period of couple years of getting used to not having a job and paycheck, and need to learn some new passion or feed a passion you have neglected. He points out that some find a passion and a new purpose, what he calls "retire forward" and some don't and fall back to the job defines who I am that he calls "retire backwards". Interesting read for me as I'm a vetran of being retired with 2 months under my belt already.

I think he's a salesman with deep thoughts.

 

[Teacher Terry]

I fell into a new career which was teaching college online. Had never taught before and it’s been great fun. It’s just one class.

 

[RetireBy90]

I think he's a salesman with deep thoughts.

How does the saying go ? even a broken watch is right 2 times a day ?

Maybe this was one of his 2 times