Meet Mr. Money Mustache

​

And by the way, welcome to the MMM "Just the Classics" boot camp series! This is email #1 of roughly 52 in the list, and they should normally show up every Monday morning, bright and early (North America time).

You can always find the original versions of any of my articles in this complete list of all posts.

​

“What do you mean you retired at 30?”

This is a blog about money. We’re going to cover a lot of ground and make plenty of amusing side trips into lifestyle and culture issues, but when it boils down to it, we are talking about money, and the freedom it can give you. Freedom from worry, and freedom from most forms of bullshit. And the best way to illustrate such freedom is to have an opinionated but wise role model guide you through your daily life from this point onwards. That role model is ME, Mr. Money Mustache.

I’m going to teach you a radical new way to think about and enjoy money that will get you off of your current debt-powered treadmill and into a lifestyle that is completely unimaginable to most people where I live, which happens to be in the United States, ground zero for self-imposed treadmills.

Once you are off the mill, you’ll feel like Neo did when he unplugged the suction cups from his pale naked body in The Matrix and looked around at the other imprisoned humans. “Holy Shit!”, you will say. “I’ve been living in this ridiculous slave world and never noticed.. and everyone else still is! WAKE UP DRONE PEOPLE!!!“.

You will suddenly be able to fly freely through the world, free from having to work for a living, able to start living life as you choose, doing exotic things like spending time raising your young children, taking a 3-week vacation each month, or just enjoying understated shows of leisure like sweeping your driveway in pajamas at 11am on a sunny Thursday morning.

Let’s talk about YOU first. If you are one of the 99% of working people I hear and read about every day, you are in a bad place right now. Young folks today seem to live somewhere on a Spectrum of Financial Idiocy.

” I am…

1. Retired, and my money situation is perfect
2. Still working, saving max in 401k, no loans on cars or credit cards, paying regular mortgage payments
3. Same asabove but add one or more car loans
4. Same as above but not quite able to max out 401k plans due to life’s little expenses
5. Same as above but have a few credit cards that I’m making payments on
6. Can’t always make all my payments, got some bad marks on my credit score.. I’d be screwed if I lose my job now
7. Everything has collapsed – losing my house and possessions, can’t find work, debt is more than I can pay off in a lifetime, why is the world so cruel to me!?

So your goal is to move up this spectrum. Everyone can do it. But most people think they can’t because they’re still stuck in the Matrix.

They blame “the economy” or other bullshit external factors, when really the only problem is they aren’t listening hard enough to Mr. Money Mustache. Become a regular reader of this blog and you’ll move up fast.

See you at #1.

Meet the Realist

This is email #2 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.​
​

Whoa, did you read the opinionated garbage in that last article?

Who is this Mr. Money Mustache? The guy thinks he’s got it all figured out. And is he trying to offer financial advice, or just financial scorn to those less fortunate than himself? Sure, maybe you can retire early if you are born to a frugal family, get a good education and never make any mistakes. But what about the rest of us? Is there any hope at all?

My name is The Realist. I’m contributing to this blog to add some perspective to the hard-edged idealism of this “Mr. Money Mustache” (who needs a fake catchy name like that anyway?).

So, life is hard in the modern world. Rapid changes in the business environment mean frequent layoffs and difficulty in holding a steady job. Health care inflation means we waste more of our small paychecks on medical costs each year. Gas prices are higher than they used to be, and so are other costs like food, child care, and education.

Yet some people manage to get by while others go bankrupt. Is it all just luck, or is there something we can do to beat the odds ourselves? As the Realist, I’ll step in to present small but powerful steps to help you get ahead. There is sometimes a fine line between financial solvency and bankruptcy.

How fine? How about $25 a month?

Here’s your lesson for the day: say you are breaking even – paying all your bills, buying $500 monthly of necessities on a credit card which gets paid off IN FULL each month with no interest, but not able to save a cent.

Then a McDonald’s opens up next to the office where you work and you start buying lunch once a week instead of brown-bagging it. All of a sudden, you can’t quite pay the credit card bill each month so a small balance starts to accrue.

• Month #1: there’s a $525 balance and you pay $500
• Month #2: you are charged interest on the unpaid $25 from the first month at 20% ($0.42) so you’re $25.42 short
• Month #3: interest on $25.42 ($0.43) plus this month’s shortfall ($25) – you are now $50.85 short
• Oops, you are just a few days late for a payment and suddenly the whole $550 balance is subject to interest ($9.16) plus a late fee ($30). Now you’re $89.16 in the hole.

Ahh, one burger a week, 89 bucks after 3 months. That’s not so bad, is it? YES IT IS.

After 10 years, you’ll have a credit card debt of about $5,000. If you couldn’t pay it off when it was $525, things are looking much tougher now.

And that is $25 per month. Imagine someone so free spending that they went to McDonald’s once per DAY?

That person would be over $50,000 in debt after ten years.

Wow, that is truly extreme. So the lessons for the day are:

• Never EVER let a credit card go even one month without paying the balance in full – because the interest rate is ridiculous, and if you ever slip up on the due date, they trick you by charging you interest on all your purchases for the whole month.
• There is a surprisingly fine line between staying afloat and sinking, even over a short period like ten years. Understand this and then all those stories about people going bankrupt start to make sense.
• But there is also a fine line between staying afloat and rising up quickly to become very wealthy.

What if the person breaking even above found a way to save $10 a day instead of spending $25 more than she made each month? The quick answer is that the same person would would have a $50,000 stack of rapidly growing money in ten years.

And that’s just ten bucks a day – we can do much better than that, with some careful, surprisingly easy, fine tuning. Read on!

Mr. Money Mustache’s Own Story

​

This is email #3 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

​

Ahh, I see that sissy the “Realist” has been posting on my blog. I hope that doesn’t happen too often. Sukka’s too soft. You’ll never get anywhere with piddly numbers like 25 bucks a month or even ten dollars a day.

And I had to laugh at that example.. would anyone really start buying lunch at a restaurant when they were already so tight on cash that they were saving NOTHING? And would they continue buying it once they saw that their credit card balance was starting to grow? What kind of idiot would do that? Why does this guy call himself the “Realist” with such an unrealistically stupid example?

What I want you to do is start thinking of REAL savings. Not putting away $5 or $150 per month, but more like FIVE THOUSAND per month. Not everyone can do that. But a middle-class American family with two teachers making $60k each per year, who are currently saving zero and struggling to get by? THEY SHOULD BE SOCKING AWAY $5000 PER MONTH. Word.

Here’s my story, so you can see how it’s done.

As a boy, I learned frugality by growing up in a family where my parents didn’t buy much stuff. Instead of having stuff given to me, I had to get a paper route, trudging 6 days every week in the bleak Ontario, Canada weather for thirty bucks.

The shittiness of this experience made me realize that I had it made when I upgraded to a better job at age fifteen: working the pumps at the corner gas station. Earning $4.15 per hour, serving four customers simultaneously because we were so busy that rarely had time to “rest” in the oil-stained, partially heated standing-room-only metal booth. Imagine then, how amazing it was the next year to earn $6.50/hour to work in a convenience store with not only windows and doors to protect you from the weather, but heat and air conditioning that allowed you to wear indoor clothing year-round? I was making $650 ever month, going to high school, and by the end of a year, I had $5,000 in the bank.

My point is that in the United States and other rich countries, you’ve got it good. Even if you work in Wal-Mart, you make more money than I did, you get to walk around in a huge fancy store, and you can save almost everything you earn if you don’t get ridiculous and waste it all. When I made $6.50 an hour, I knew it wasn’t enough to afford a car or my own apartment at age sixteen. Well, it was enough, but only if I wanted to spend everything I earned. So I kept living at Mom’s house, and was sure to make myself useful by helping take care of the place. When I started making more, I was ready to up the lifestyle a bit… but only a bit.

From here the MMM story goes on. I went to university, but picked the local one so I could continue to live in affordable manner in the spare bedrooms of family members. I worked in the summers and found affordable ways to party so I graduated with no debt. A decent professional job awaited at graduation, so I upped the ante to include my first used car and a house shared with many roommates (rent: $270/month).

After a few raises and new jobs, I moved to the USA, doubled the salary, but kept the used car and the living-with-roommates situation. Finally, a 20% downpayment had been saved for a house, so I made the jump to buy my first fixer-upper, sharing it and working on it with my future wife.

At this point, we had it made – double incomes and a low mortgage. We let the good times roll a littlebit, enjoying the same luxuries as our peers and even doing plenty of international travel. But the difference was, we were spending only about 25% of our disposable income, while they were spending 90%.

The difference? They were subjecting themselves to just a few hidden additional expenses like auto loans, higher mortgages, newer clothes and more nights out at the restaurants. This meant we were saving a good $4,000 per month, which starts compounding when you invest it. We each earned a few pay raises over the years and found that our expenses actually decreased once we had the house fully outfitted and we had satisfied the travel bug a bit. The result was that we had a net savings of $7,000/month pretty soon, and we were on a treadmill that was pushing us forwards instead of fighting one that pulled us back. Life was fun and it looked normal from the outside. The difference was that we were amassing wealth very rapidly with each passing day.

At this point, we could have bought a huge house or a small fleet of nice cars. But instead, we spent the money on the ultimate luxury – quitting our jobs. For other people, a sailboat or a starting a local charitable trust might be the luxury of choice. You get to choose your own reward. But it’s all about not getting stupid when you can’t yet afford it.

For example, when you’re making $35,000 per year, you can’t be out buying $9.00 martinis on the weekends and financing a $25,000 new car. At this level, you are still in the cooking-at-home and riding your bike club. Maybe a $3,000 used car if you can buy it in cash and if it’s really necessary to get to work.

When can you truly afford a fancy car like a BMW? Well, once you have the cash for it in the bank, your house and all other debts are fully paid off, and you are either retired or very comfortable with delaying your eventual retirement for a year or more to pay for this depreciating piece of luxury property, THEN you can roll into the dealership.

The funny part is, if you follow the ways of the Money Mustache, you’ll hit these levels sooner than you think. So you can borrow to buy the BMW today, and pay for it forever. Or you can pick it up with the spare change in your wallet in the surprisingly-near future, and be a happier person for the wait.

Getting Started #2 – The Higher Cause

​

By Mr. Money Mustache

The Realist thinks he has me pegged. He’s right about the 1999 REI Bookpacker Plus backpack, but in his calm by-the-numbers approach he is missing a lot of the reasons frugality is great.

No. Not just great: it’s the only non-ridiculous lifestyle for the thinking person. And this is because for many of us who are happily frugal by choice, there is a higher cause beyond just money.

There are many reasons why the act of going to a store and Buying Yourself A New Manufactured Product should hurt a little bit. And while we’re all still going to do it, it should be done carefully and after some thought, and after considering the alternatives.

One big reason is The Earth. Many of us feel some sort of love for our planet and a desire to preserve as much as possible of its healthy ecosystem for the rest of our fellow plants and animals to enjoy. Maybe even our children.

Well, unfortunately, buying products and preserving the Earth are at great odds with each other. You’re not helping the Earth by buying a Toyota Prius. You just caused the burning of 1500 gallons of fuel and the mining of about eleven thousand pounds of Earth herself, just to produce a car of that size.. before you even buy its first tank of gas.

Eating meat, building a new house, and lots of other fun activities are equally destructive. Assignment: Watch a few of the great documentaries like Fast Food Nation and Food Inc., and An Inconvenient Truth. Then you might build up the appropriate level of guilty awareness to take the innocence out of shopping.

But then, you get to cheer up again. Mr. Money Mustache has got the solution for you. As luck would have it, not buying things is not only the solution for saving our planet, it is also the solution to your financial problems!

“But what about being happy?”, you ask.

“I am buying these products to make me happy. Won’t my happiness level drop if I stop buying them?”

Great question! That brings us to the next Big Reason Frugality is Great: it actually makes you happier, and there’s science to back it up.

As logical people we probably agree that our main goal in life is to be happy. But what does happiness mean?

At the lowest level, it means that something in your body is releasing the right chemicals that wash through your bloodstream and make your brain interpret the situation as “good times”.

What triggers these chemicals? Usually, things that we evolved to think are good for us – eating rich foods, having various pleasant experiences with potential mates, enjoying social status among our peers, and doing satisfying tasks like nesting, building and creating things. It’s easy to understand how these things contributed to our survival in the past, so our brains evolved to reward us when we do them.

Shopping satisfies some of the later things in that list – you might get social status by having the latest trendy type of shoes, or you might trigger your nesting reward center by buying super cute shelving and accessories to organize your closet. It’s a valid form of happiness, except it comes with the cost of taking away your freedom (money), which makes you have to worry more in the future – and in most cases, the short reward causes a longer period of suffering, so you’re not coming out ahead.

So what is the alternative?

What if you were to write down the top ten activities that make you happy and are good for your long-term happiness and health, then start spending most of your time doing those things?

You would probably find that most of them are not expensive, and that they take so much time you don’t have time for the expensive ones.

For example, for me the list would have things like:

• have breakfast with my family every day
• have plenty of playing, learning and reading time with my son every day
• read 1 new book per week for myself
• have fun playing and creating music with friends at least 1 hour per week
• work out with weights at least 3 times/week and ride bikes and walk every day
• family hike or other outing 2 times per week
• try cooking a new semi-fancy recipe for the family or friends once per week

Wow, there is some wholesome but fun stuff there.. and it already adds up to more than the amount of time I have available!
​
Like most people, I still have material cravings. And my unconscious mind is automatically trying to rationalize each one even as my conscious mind resists. For example, right now I have inexplicable desires to buy

• a new computer with a gigantic top-of-the-line monitor (for creative pursuits like music-making and blogging)
• an Apple iPad (for the educational games for kids, and around-the-house convenience for us adults)
• a few new high-end tools to add to my already-complete tool set (because I’m a professional carpenter these days… I shouldn’t have to compromise by using any of remaining amateur-grade Ryobi tools even though they still work.. should I?)
• a $200 Zojirushi bread machine (to replace the rattly $10 garage one I use that still works fine)

But I just acknowledge the desires and put the research time needed for those purchases at the bottom of my to-do list. If I get everything else on the list done, I’m allowed to buy those things.

Meanwhile I can feel good about leading my existing simple life because the Earth doesn’t want me to buy extra things anyway.

See? There is a higher cause.

​

This is email #5 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

​

Getting Started #3 – Eliminate Short-Termitis, the Bankruptcy Disease

​

I just saw one of those automatically generated text ads at the top of my Gmail account. Here’s what it said:

2011 Pilot 4WD LX $319/mo

(note: this article was first published in April 2011 but you can substitute the current year whenever you read it.)

It gave me shivers to look at it, just because it is advertising a purchase that is so wrong on so many levels. We’ll get into all of those levels in future postings, but… no, fuck it, let’s talk about this particular piece of financial suicide right now.

• The model year. Why the hell would you buy a brand new car? Unless you’re a taxi company and you are going to systematically run that vehicle 60,000 miles per year until it evaporates at a million miles, you don’t need anything close to a brand new car to get around.
• Honda Pilot. A ridiculous truck from a great car company. 4500 pounds, 250 horsepower, 31 thousand dollars, all so you can carry usually-one-person on a paved road at 23 MPG.. 4 MPG worse than my work truck (a borrowed 1984 Nissan pickup) gets.
• $319/month. What!? Are we renting the truck here? We don’t buy things by thinking about how much they are “per month”.

And that brings us back to being on topic for today’s post. There are several ways to think about a purchase. We can list them here in order of increasing intelligence.

1. I just want it and I don’t know how much it costs – put it on my credit card and I’ll deal with it later.
2. $319 per month? I think I could afford that because I’m already paying $299/month on my current car and that’s only 20 bucks more.
3. $31,000 is the price of the Honda Pilot? I do have $32,000 in the bank so I guess I’ll buy it.
4. $31,000 list price, plus $2400 sales tax, $1600 registration equals about $35 grand. If I buy a 2002 Honda Odyssey for $6000, which is the same vehicle in a more practical minivan body, I save $29,000. Over a ten year period, that money will compound at 7%, saving me a total of $57 THOUSAND DOLLARS!

Wow, is a 2011 Honda Pilot really worth $57,000 more than a 2002 Honda Odyssey?

As a future young millionaire, you need to start thinking about all of your purchases as LONG-TERM events, not short-term ones. That means each decision should be carried forward in your mind for at least 10 years, rather than just until your next paycheck. Here are a few more fun examples.

• A deserving couple eating out at a restaurant twice a week, with wine, dessert, and coffee ($75), versus once a week with just a nice meal ($40): A difference of $110/week, compounded at 7% for ten years is $82,756. Would you rather have a luxuriously soft flabby physique from 1040 restaurant meals, or a leaner one and $82,756 in the bank?
• A Starbucks habit of picking up a regular coffee and biscotti on the way to work each workday. $4/day = $20/week = $15,040 in coffee over just ten years!!
• A new pair of shoes, or a few necessities from target, or a professional haircut.. once a month, for a total of $100. $17300 of handbags and closet organizers and hair clippings in ten years!

Now that you are amazed by the numbers, here is the simple formula for you to apply yourself.

• to calculate a weekly expense compounded over ten years, multiply the price by 752
• for a monthly expense, multiply by 173

.

You can fiddle around with the “future value calculator” at calculatorsoup.com for other interest rates and payment amounts.

See? Everything costs a thousand times more than the price tag you see, Now you don’t want something just because your next paycheck will cover it. You want those big sums in bold above much more, right?

Good. We have now cured your case of Short-Termitis.

​

This is email #6 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Getting Started #4 – If you Try Sometimes, you Just Might Find, you Get What You Need

By the Realist

Mr. Money Mustache has been a bit more reasonable lately, posting some numbers to back up his assertions. But I thought I should join in at this point to address something that has probably been in your mind: how much can I really give up, without going crazy?

After all, we all COULD live under a bridge and eat out of dumpsters, but no amount of money savings would make this worthwhile.

The miraculous answer to the question of how much you have to give up is: not much at all.

The reason is that you will be using your creativity to enjoy the lifestyle of your choice, at about 75% less than the standard cost. You can think of it as gaming the system. And it can be really fun once you get into it.

Let’s start by explaining why the system is so easy to game if you live in a so-called rich country like the US, Canada, Australia, or much of Europe.

Our country is home to a great surplus of wealth. It is very unevenly distributed, but there is plenty of it. We also have mind-bogglingly advanced technology and international trade which makes it so that certain goods are unbelievably cheap to buy.

You can buy enough basic food (rice, beans, oats) to power you for a day for about $1.00. You can buy enough oil to carry you and 3000 pounds of steel a distance of 40 miles, for $3.50.

But there are also goods that are incredibly overpriced. You can pay $900 for a decorative leather satchel that serves no purpose. A day’s worth of food could also cost $900 at the right (wrong) restaurants.

The whole game of our system is for the rich company owners to pay for advertisements to convince everyone else to buy their products at as high a price as possible. Ads and peer pressure make it very tempting to have the more expensive products.

Rich people and other big spenders buy these products briskly, driving up the high-priced products while simultaneously advancing industrial technology and competition which actually drives down the price of medium-range products.

But if you can peek through the ads and identify the actual needs that you want to meet, you can pick much more suitable products for yourself and save a bundle. To put a number to it, your goal should be to spend only about 25% of what the average person of your income spends in each product category.

By letting yourself spend 25%, instead of 0% like the guy living under the bridge, you can still be part of the good life, enjoying normal modern society without anyone even knowing what you are up to unless you choose to share it with them.

So to go through a few examples:

• Goal: getting around the country on four wheels: The average person spends $25k for a Honda CRV or Ford Explorer, you can spend $7k for a few-years-old Honda Fit or similar small (great!) hatchback.
• Goal: not being naked all the time: Average person spends $600/year on clothes from the mall, you can have a slightly smaller rotation of nice clothes (considerably nicer than Mr. Money Mustache’s clothes, for example) from Target or Old Navy for $150/year
• Goal: getting out for healthy bike rides: your friends may buy $2400 carbon fiber road bikes. You can still find a great bike with some old-fashioned aluminum on the frame and carbon forks for $600 on Craigslist and ride just as fast as they do.

You can figure out a trick like this for just about every category of living expenses. I challenge you to tell me one (leave comments below if you like) that can’t be improved over the standard person’s expenditures.

There are some that are easier than others of course, so I like to cut those even more than 75% to free up some money to spend on things more dear to me. For example, I spend 0% of the average on cable TV and 10% of the average American dining out budget, but more than 100% of the average on housing since I like to live in a nice place. As long as my other savings can more than make up for the house I can still meet the 75% off goal.

So you’re giving up some spending.. but you’re not giving up your needs.. or your happiness, if you do it right.

​

This is email #7 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Get Rich With… Bikes

Hey there.. welcome to the first edition of my new “Get Rich With…” series.

In these articles, we’ll analyze a bunch of ideas, both new and old, to see what kind of impact they can have on your life. (Hint: the impact will probably be a huge positive one, since these are all of my favorite moneymaking ideas).

And this edition is about the good ol’ fashioned Bicycle.

The bike will probably turn out to be the best thing ever invented for humankind. It has taken us a long time to realize this, but at last there seems to be a permanent cycling-for-transport boom that is making its way even to the US, with bike trips increasing by hundreds of percent in all major cities in recent decades.

You see, bikes were invented before they were truly needed – when the world was sparsely populated. Whencars came along, they seemed like an improvement on bikes, bringing us great speed without any effort at all.

Unfortunately, as a side effect they destroyed the whole fuckin’ world, and made most of us dangerously obese too. With a new understanding of these side effects, the bike seems like an increasingly appealing alternative.

The fundamental reason for the bike’s status as the Greatest Invention of All Time is its unique combination of simplicity, efficiency, and incredibly powerful health benefits- interestingly enough, exactly the opposite attributes of a car which is complex, inefficient, and horrible for your health due to the stress, inactivity and the cramped seated position.

With just a few moving parts, bikes are simple enough for most people to maintain entirely on their own without paying a mechanic.

And they are efficient in multiple ways: bikes weigh only 20-30 pounds but they can carry ten times their weight in rider and cargo. They convert a slow human with a walking speed of 3.5MPH into one of the fastest creatures on land, with an easy cruise of 15MPH and a top speed of over 40MPH on level ground and 50+ downhill for athletic people.

And the side effects are incredible.. vigorous biking can consume 1000 calories per hour, meaning you can burn off an entire pound of fat in one big 3 hour ride. This kind of exertion pretty much fixes up all the rest of your body for free too, clearing your arteries, polishing your kidneys and teeth, and giving you clean stylish hair and a better sense of humor, all after the first ride.

But another side effect is that bikes are good for your wealth. To start with the bare minimum: any mileage you put on your bike instead of your car saves you about 50 cents per mile in gas, depreciation, wear and maintenance. From this savings alone, doing a couple of bike errands per day (4 miles) in place of car errands will add up to $10,752 over ten years.

But the benefits are greater than that, of course.

Once you get into bicycling, it may grow on you. You may be able to go without a car, or you might find, like me, that having an expensive car is no longer useful as a status symbol to you. This would allow you to keep a less expensive car (saving another $30,000+ over ten years).

You might find that biking around becomes a source of leisure as well as transportation. This would displace other more expensive leisure activities. Driving to the stadium to watch a monster truck rally with the family ($100) could be replaced by biking along the creek path and wading around in the waterfalls ($0). Replacing even $10 per week of paid leisure with free biking would net you another $7680.

Then there are incalculable things like health and productivity. But you know what? Fuck it, let’s be bold enough to calculate them here:

By riding to work instead of driving, you are boosting your mood and your mental focus. This allows you to work smarter and longer. It also makes you better looking. These factors will allow you to earn at least an average of 5% more than your unfit counterparts would after various raises and job switches kick in. For a worker at the $50,000 annual level, this is a $2500 per year boost ($37,500 after ten years with compounding).

Then there is the reduction of doctor visits and prescription drugs which will benefit you when you are older. This is a large future sum, but let’s estimate the net present value to be about $1000 per year ($15,000 over ten). And we haven’t even gotten into the effect of greater health on your overall enjoyment of life.

Bonus: How to Make a SUPERBIKE

I’ve been a bike evangelist since childhood, but only recently did I discover the way to make your bike even MORE POWERFUL – with a BIKE TRAILER! In 2007 when my son was old enough to start riding around with me, I bought a trailer like this one* from Amazon. This revolutionized my biking life, because suddenly my wife and I could get the little lad to most of the close parts of town with no car! When you leave the kid behind, these trailers can also carry a massive $150 load of groceries, or even a bunch of stuff from Home Depot like a few cans of paint and some light fixtures. I’ve put over 1000 miles on this trailer since I bought it, meaning it has saved over $500 in car costs alone.

(Note: if you don’t need to carry kids, go for an even more affordable grocery/cargo trailer, also available in the list you will find through the link above)

The final issue to address is the “But I can’t ride a bike in my city/climate/physical condition/age” excuse that 99% of people over 12 in this country seem to cough up.

The answer is, in 99% of these cases: WRONG! Amsterdam is chilly and rainy, and this is how the bike scene looks there. In Hamilton, Canada, I rode year-round to get to McMaster University, through a dense downtown area in snow up to a foot deep. It was awesome. In Asia, the streets are packed with 90-year-old-ladies zooming along on cruisers with panniers full of chickens and such. If you are too heavy to look good on a bike right now, start biking and you soon will not be. JUST GET THE BIKE and you will see.

So, if you grow a big Money Mustache today and go out and get yourself a good city commuting bike – either visit your local bike shop of if you are an online-only shopper try one of these – then here’s what you will have in ten years:

• reduced mileage: $10,752
• less expensive cars: $30,000
• cheaper leisure: $7680
• increased income: $37,500
• reduced medical: $15,000

That’s in only TEN YEARS!! A pretty good return on the investment in some thing you can find for about $300 on Walmart online, eh??

Footnotes:​
​* – Except I got my bike trailer on sale for about $80.. check your local Craigslist too

** Note – all multi-year figures are scaled to assume a 7% growth of the savings, if you had invested them instead of spending them on cars. But this effect is fairly small over 10 years. It gets bigger the longer you bike.

​

This is email #8 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Yeah, Mr. Money Mustache, Good for You, but What About Real People?

​
​

First a quick editorial update:

Mr. Money Mustache and the Realist got into an epic battle last night, similar to the one where Good Superman and Bad Superman smashed each other around in the auto wrecking yard in Superman III.

However, unlike Superman, we ended up in a death grip of mutual strangulation where our atoms both fused into one Ultimate Financial Being.

So now you may find both sensitivity and brash belligerence displayed within the same posting. Also, Mr. Money Mustache may still refer to himself in the third person, just because he finds this makes him sound more authoritative.

. . .

I’ve been getting quite a few comments already, both online and offline. This is to be expected with a controversial topic like money. A blog like this can be offensive to many people, because the subject of money gets mixed in with your feelings around happiness and life security. So to have somebody telling you how to handle your money, when they don’t even know you!? – Forget it!

But wait. First of all, Mr. Money Mustache is not judging you. He loves you and he is here to help.

And then there’s the issue of our different life situations. Perhaps you feel alienated because you read Mr. Money Mustache’s Own Story and saw that he and a very cooperative wife started saving earlier than you did.

Don’t worry! It’s not a contest of how early you started or how quickly you race your way to early retirement. It’s a contest of who can start making some changes in their life right now which bring them benefits in the surprisingly near future.

On top of that, not every person is a good candidate for the MMM way of life. If you’re already supporting a large number of children (or have other unstoppable life-and-death expenses) on a very small income, you are probably more frugal than me already and may gain very little from reading on.

But what I keep finding every time I meet new people, is that a surprisingly large number of people do have a pretty reasonable income – higher than what we currently live on – yet they all seem to be just barely keeping above the waves financially.

Others have a super-high income (which I define as as over $100k per year for a household – $50k for each person in a couple), yet STILL tend to borrow money for things like cars or even carry a credit card balance. These people are really a key part of my target audience.

These are the people who have the power to start feeling like lottery winners on the gusher of income they are currently sitting on, instead of being a slave to their current inefficient spending patterns.

It is commendable to advance yourself in a career to the point where you earn such a high income. But most people manage to build up a spending pattern that burns the money as quickly as it comes in.

If you are one of these people, you’re in the right place. Because although I also earned a good income, the big difference between you and me is that I lived like an engineer both on and off the job.

That is, being an incurable engineer, I can’t help but to calculate out every possible spending decision over a lifetime and weigh it against a dollar-value estimate of the potential hassle. So I make certain decisions differently and end up with the same desirable lifestyle – fairly big fancy house, good cars, a self-employed (and fully optional) ten hour workweek, lots of fun vacation travel per year – yet at drastically lower levels of cost and debt.

I started this blog figuring that surely some of these tricks could be boiled down into a nice periodic column. And here we are.

So to the people that are asking “What’s next?”, I can only say “Read on.”

I’ve got a big list of future articles already written and more on the go, and I am accepting comments and criticisms from anyone, and writing them up with all my might. No expense or strategy will be spared. You will surely reject some of my ideas and perhaps outdo me on others (and then I can copy you!)

But the bottom line is if YOU, middle-income-person, make some of Mr. Money Mustache’s recommended changes in your spending, you will become rich quite quickly, and you will enjoy the process immensely.

​

This is email #9 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

​News Flash: Your Debt is an Emergency!!​

I like to think of Mr. Money Mustache as an advanced personal finance blog.

We don't talk about cutting up our credit cards, or clipping coupons to save $5.00 on the newest Swiffer mop, or making a budget that forces us to save 10% of our income while we devote the rest to "guilt-free spending".

I don't talk about my own personal battle with consumer debt and how much I struggled to get out of it, because come on, I am Mr. Effing Money Mustache. I was cleaning and ironing my five dollar bills and storing them meticulously in a photo album at age ten*, obviously I was never going to go out and spend so much on my credit card that I couldn't pay it back at the end of the month!

This unique history and perspective allows me to see some things that are not immediately obvious to people who have been raised in the current consumer/debt society. And for all the Beginner Mustachians in attendance today, I would like to share one of these observations:

Your Debt is not something you "work on".

It is a HUGE, FLAMING EMERGENCY!!!

Let's illustrate what I mean with a few examples:

One time, way back when I was a university student, I lent a couple thousand dollars to a friend so he could pay his own tuition. The cash came right out of my own bank account, and since I had already paid my own tuition, I had just enough left to cover my groceries and other expenses for the school year. After the loan, that left pretty much nothing, but I assumed that my friend would have the balance paid back within just a few paychecks.

I was therefore surprised when the friend proceeded to live a normal university life of partying and eating out, even during the delayed repayment process.

Everything worked out fine in the end and the debt was repaid eventually, since this was an honorable friend. But I still learned something about society's differing opinions about debt.

On another occasion I was visiting some other friends - a married couple. The guy was showing me his new TV and video game system. As we battled on the Nintendo Wii, the wife came home from working at the part-time second job she had boldly taken to accelerate the paydown of some old personal debts.

On the way home from work, she had picked up a bottle of wine and purchased a DVD containing some episodes of a popular TV show.

This may sound like a normal Friday night to most people, but note that the purchasing of expensive beverages, DVDs, and video games was put at a higher priority than paying off the debt.

The girl thought she was taking a second job to pay down debt, but in reality her second job was going towards wine, television shows, and video games.

And finally, nowadays I receive emails from people who are working on developing their own Money Mustaches. They often detail income, spending, and debt situations. Often, there is a category for credit card debt. Yet these budget sketches also include amounts for entertainment, cable TV, and multiple cars.

The final straw was when I ventured out to poke around on some other personal finance sites last week. I found one that had a post from one of the authors, containing a table like this:

Mortgage: $75,000 @ 4.5% interest​
​Bank of America credit card: $4500 @11.9 interest​
​Wells Fargo credit card: $17500 @ 18.9% interest (<-we HATE this debt!)​
​Citibank credit card: $2900 @ 14.5% interest​
​We've really cut down on our dinners out and Brad has even started biking to work once a week to save gas in his 15MPG F-150 truck...

Do you see the glaring problems in these stories? If not, you have not yet developed the appropriate hatred for unnecessary debt. So let me spell it out for you.

The correct response to this sort of debt is,

"AAAAAUUUUUUGGGHHHH!!!!

THERE IS A CLOUD OF KILLER BEES COVERING EVERY SQUARE INCH OF MY BODY AND STINGING ME CONSTANTLY!!!!

I NEED TO STOP IT BEFORE I AM KILLED!!!"

Go back and imagine this person about one month after they got that first Bank of America credit card. They went out for dinner a few times a week and bought some shoes and a few tanks of gas in that first month, and eventually the bill came in the mail for $1125. They realized that they only had $600 in the bank, but that was OK, since the "minimum payment' was only $75.

In the absolute worst case, it is at this moment that the emergency bell should sound, for anyone in the world. The response should be:

SHIT!!!

I just totally blew it and spent more money than I earned!

I need to fix this immediately, so obviously all spending beyond food, and getting to and from work in the cheapest way possible, is now suspended.

No, I don't need a "budget" to pay back my debt, and I certainly don't need two more credit cards.

I simply need to do zero extra spending until my debt is corrected.

Logically, it follows that even if you only wake up several credit cards later and realize that you have fucked up, the emergency applies to an even greater degree.

If you borrow even one dollar for anything other than your primary house or a profitable investment, thevery next dollar you can get your hands on should go to paying that back.

You don't space it out all nice and casual with "monthly payments", and you don't get "me money", "entertainment allowance", or any other such nonsense. You don't start a family or get yourself a dog, and you don't go out for drinks and dinner with your friends.

There will be plenty of time for these things later, and they will feel much better when they are not set against the backdrop of Incorrect Debt Due to Error.

Don't worry, there is nothing wrong with making errors. They are actually good things, since they help you to learn. But you learn by fixing them, rather than letting them ride.

"Sure Mr. Money Mustache", some beginners will now say. "Of course you would say that, but I'm still less practiced than you. I still need my Starbucks Lattes and my husband likes TV sports so I can't cancel cable. Can you please stop punching me in the face and let me adjust my consumption gradually instead of suddenly?"

Wrong Attitude!

Even if you are an absolute Beginner Consumer Sucka and your goal is still to consume the maximum amount of luxury products, you are still cheating yourself out of stuff just by running a consumer debt balance.

Every dollar you pay in interest to the credit card company is stealing dollars away that you could be using for more luxury purchases for yourself.

Those dollars are gone forever, and you've permanently lowered your ability to consume luxury products, for the rest of your life. Since you need those luxury products so much, you'd better get out of debt quickly so you can afford to buy more, right?

The credit card debts above are eating up over $4000 per year of your after-tax salary just due to interest payments. That's hundreds of lattes, several pairs of shoes, thousands of miles worth of gasoline for your SUV, and even some massages at the spa and a couple of cross-country flights that you are foregoing every year.

Or, of course, once you start your Money Mustache, the interest savings could also be used to shave decades off of your mandatory working career..

And there is more good news, since this is an Advanced blog:

Your Debts Are Tiny.

I always have a little chuckle when people talk about a $10,000 debt, or even a $70,000 or $200,000 one as if it is insurmountable.

Sure, these sums of money are big when measured against the cost of groceries, and they are not sums of money to be wasted.

But this is an early retirement blog. Here we are learning how to rake together much larger sums of money to allow us to live our lives free from mandatory work. For most of us, that means somewhere between $400,000 and $1.5 million.

Beginners to Mustachianism find these sums unimaginable, but after a few years, the same people find their net worth spreadsheets increasing at over $100,000 per year due to investment returns and reduced spending.

Getting rich really is an exponential process, a concept that is hard to grasp until you realize that your money can work harder than you can. Once this higher level of financial skill is reached, you will realize that the debts of your youth were indeed small potatoes.

How do you get this elusive financial skill? If you're still in debt, you get it by getting much more bold about wiping it out. Sure, you can do it slowly, just as you can lose 100 pounds by lifting a 5-pound dumbell a few times each day while you sit on the couch and watch Oprah.

But I recommend the more efficient path: put on your walking shoes and start walking as much as you can. Eight hours a day. Go straight to the most healthy and balanced eating regime and never deviate. Stay on it and let the forward progress accelerate your progress each day. Consumer debt and excessive amounts of body fat have a lot in common.

The more vigorous method has multiple exponential benefits: every dollar of debt you pay off creates a compounding snowball of savings that continue for a lifetime. And every dollar you manage not to waste, builds your skill at saving money and learning to spend it more efficiently. These skills stick with you for life as well.

So if you still have a car loan, credit card, department store or even a student loan debt, you should destroy that as a prerequisite to beginning the more relaxed stage of saving for financial independence.

At the later stages, you can start to take it easy, but right now is the time for some hard work. Depending on your life situation, you might decide to go car-free, live with roommates, eat a vegetarian diet, take on extra jobs, delay parenthood, enjoy only local travel, and do any number of other things to get the job done. This stage will be short and effective.

Then I'll see you at the next stage, which is really where this more advanced blog begins.

​

* This is actually true

​

This is email #9-and-a-half of roughly 52 in the MMM "Just the Classics" boot camp series. Because I belatedly added this classic into the list and didn't want to renumber the rest of them :-)

You can always find the original versions of any of my posts in this complete list of all posts.

How to Make Money In The Stock Market

​

Okay, admittedly my title for this article sounds like something that you might see in your Spam folder.

But it’s also completely accurate, because I really can teach you the best way to make money from the stock market, for life, all in one short blog post.

Okay, I admit it – this is widely available information: I am going to hand out some advice that has been handed out widely before, for many years now.

But the reason I’m still writing is that ignorance still seems to be widespread. Almost nobody I meet in day-to-day life knows anything about investing, the stock market, or big publicly-traded companies in general. Their opinions on the subject range throughout boredom, fear, mistrust, and if they are lucky, curiosity. Or if they are unlucky, bold confidence in their abilities to drastically “beat the market” with their intuition.

Here are three real quotes I have heard from friends over time when discussing the stock market.

​

“Stocks are just a big roulette wheel.. You can’t go out swimming with those sharks on Wall Street – they’ll just eat you up!”

“I don’t know what my retirement money is in.. I just checked some boxes on the sheet when I started my job, but I don’t really understand it”.

“I don’t really believe in mutual funds at all – I’m dedicated enough to do my own research and I can pick winning individual stocks.. I’ve got some Apple, some Google, some Crude Oil/Gold/Pig’s Feet/whatever…..”

​

All three of these approaches are understandable, but wrong.

The sentiments are valid and I’m glad that people at least have an opinion, but each represents a lack of knowledge about the statistics that run the whole system. Knowing the nature of the market is the key to being able to invest huge sums of your money over time with the absolute confidence that you’re not doing anything stupid.

It’s worth gaining this confidence, because investing knowledgeably in stocks has always been the single best thing to do with your money in terms of getting lifetime income with absolutely no effort on your part.

To start with the basics – What is a stock?

It’s a slice of a company that you truly own. When you own a share, you have the right (but not obligation) to attend the shareholder’s meeting for that company, vote on important company decisions, and you have a right to a share of any future earnings that company makes. This share of earnings is called a Dividend.

In some companies, especially smaller or younger ones, the company elects (with the permission of its shareholders) to reinvest the dividends to help the company grow its earnings even faster. In theory, this means you will get more dividends in the future. Thus, the real value behind any share in a company is the right to get a never-ending stream of dividends from it.

For Example, the old, long-profitable company Lockheed Martin currently pays a 3.8 percent annual dividend while growing slowly, while Apple Computer, fancying itself a high growth company, pays zero percent right now and reinvests all profits for faster growth.

Why do stocks go up and down so much?

The true value of a stock is based on the amount of dividends this stock will eventually pay you, the shareholder, over time. That dividend depends entirely on how much money the company will make.

But nobody actually knows in advance how much money companies will make – they just have a big host of differing opinions. Every day, millions of investors and analysts scurry around and worry about how much money each company will make in the future.

“The Libyan People are Revolting! This will make the world have a shortage of oil, so prices will go up! Oil Companies are now worth more! Buy! Buy!”.

​

“The US economy is slowing down! This means people will drive LESS to the shopping mall and buy less gas! Oil demand will go down and oil companies will make less! Sell! Sell!

It’s a neverending din like this, for every single stock, on every single stock exchange, throughout the world.

If stocks are so crazy, how can I make money off of them?

Because in the LONG run, it turns out that all this speculation and volatility always cancels out to absolutely zero.

The value of stocks will go up as the earnings of the underlying companies goes up. A portion of the ongoing earnings will always flow to the shareholders as dividends. And all this happens because of the natural ingenuity of hardworking humans making things at a profit, and continuing to advance our knowledge and technology and make us all more productive in every field.

There may come a time when we can no longer advance, but based on the fact that we’re still driving around in gas-burning tanks and Home Depot is still doing all of its computing on green-on-black mainframe computers that kick you back to the beginning of the order if you make a typing mistake, I’d say we have at least a lifetime left to go in this department.

So, stocks go up and pay dividends over time, and they have since the beginning of modern commerce. The total return has averaged a very lumpy but fairly dependable 10 percent per year before inflation, 7 percent after inflation.

5 of the 7 percent comes in the form of rising stock prices, and the other 2 comes from dividend payments directly from the company to you. When you’re in your ‘Stashing stage, you just let these dividends automatically reinvest in more stocks which creates a nice compounding effect.

But WHICH stocks do I want to buy to make this free money?

This is the easy part. You buy ALL of them.

The best minds in finance have done countless studies on this for over 40 years. What they find is that the best way to make money in the stock market is to simply buy an “index fund”, which is a mutual fund that automatically buys appropriate ratios of every major stock in your country’s stock market, with no magic and guessing of which stocks are better than others.

The reason the index fund wins statistically is because it can be run by a simple automated set of rules – no need to pay 350 million dollar salaries to the hotshot traders running the “Aggressive Growth Fund” down the street. Because there are millions of people, both smart and dumb, squabbling over the value of each stock, the Index Fund benefits and suffers from all the individual stock performances. But overall, you get the average performance of all this squabbling.

If you descend into the pit and try some squabbling yourself, you may come out ahead or drastically behind the average, but as it turns out, you can’t predict in advance which squabblers (including yourself) will win and which will lose. All you can predict is that your average performance if you buy enough of these funds will be equal to the return of the market as a whole, minus the amount of fees your mutual fund charges.

So by picking the index fund with the lowest fees, you automatically win. Endless statistical analysis proves this again and again. If you don’t believe me, read the book “A Random Walk Down Wall Street, or look up the topic of John Bogle / Bogleheads / and the foundation of the Vanguard company itself.

But my uncle bought some stocks once and sold at a big profit! Also, if index funds really are the statistically best bet, why are there still thousands of brand-name mutual funds and hotshot traders out there?

For the same reason that Las Vegas still exists and people still drive SUVs.

Humans are irrational creatures and it is scientifically proven that we overestimate our own investment (and gambling) abilities, and no presentation of knowledge to the affected people can completely erase this. I have some perfectly intelligent friends who still believe they are “lucky” at games of chance, even though any scientist in the world can quickly run an experiment to irrefutably disprove the existence of any form of luck.

The only tool you can truly use is statistical probability, and by buying the market average and lowering your investment costs, you are improving your statistical chances.

OK, Fine. Which Index fund do I want?

There is one king index fund that makes the decision easy for you. The Vanguard Total Stock Market Index Exchange Traded Fund (VTI) tracks the entire US stock market index.

Its expense ratio is 0.04%. This means that for every $100,000 of shares you hold, they subtract $40 per year from their gains to pay for their offices and trading costs. Some funds charge 10-20 times higher fees. So if you are looking over employer-sponsored plans, try to find a total stock index fund (or at least its close cousin the S&P 500 index fund), and compare the expense ratio to 0.04%.

What is the S&P 500?

This is a collection of shares in the 500 largest companies in the US, and therefore in most of the world. They are all multinational companies, so they benefit from growth around the world. If you really want to invest without having to worry, the S&P represents good odds. If you buy the stock market index of a smaller country, like Canada, you will still have good odds, but at higher volatility. (During the dot-com boom of the nineties, a company called Nortel once represented 70% of Canada’s entire stock market value. This company is now bankrupt, so you can imagine how that felt to investors solely in the Canadian index. Now Canada is the new Saudi Arabia with oil exports, so its index is again riding high on oil company stocks. I wouldn’t bet my whole Mustache on that one commodity either).

What about International stocks?

Some people like to get fancy and buy international index funds, which can do well when the US is hurting (as it has been recently). This is fine, as long as you understand that it’s just another form of trying to outsmart the basic stock index.

When you do this, you are stating that you believe the stock markets of the other countries are more undervalued relative to future growth, than the US market is. The US is traditionally the most business-friendly country in the world, so its stock index has tended to have the highest performance, after taking into account its lower risk and volatility compared to, say, throwing all your chips onto Russia or China.

It may or may not pay off in the future – I just want to point out that most people just make this decision on a whim, something like “China is so hot right now, they’re taking over the world!” . Whereas to actually justify international investing rationally you’d have to be a very sophisticated investor and truly understand WHY you are doing it.

So there you have it – in two words: Vanguard.com, and VTI. In Canada, check out TD Waterhouse and their own series of funds, and let me know if you have any questions about what you find there – MMM has a Canadian Investments Expert Panel that can help us out.

Update: Read this great book to get a deeper understanding

A few years after writing this article, my friend JL Collins wrote a really entertaining and educational book that teaches you just how simple stock investing (and money management in general) can be. The book was so good that I accepted his request to write the foreword, and even narrate my own part for the Audible version that came later! The book has been a big seller in recent years in multiple countries and languages, and for good reason: It’s good information in an easy-to-read style.

Invest!

​

This is email #10 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Frugality as a Muscle

Oh, Mr. Money Mustache is pissed off today.

It’s because he just stumbled across a competing personal finance blog that espouses blatantly Anti-Mustachian principles! And yet it has the audacity to call itself “I Will Teach You To Be Rich!”

​Here’s the article, called The Psychology of Cutting Back on Lattes, if you want to compare it to your own value system. And now we’ll have some fun celebrating what is right about that article, and crushing what is wrong about it, in the rock-hard crevice between our biceps and forearms. Or perhaps sweeping the wrong parts off of the street and into the sewer with our stiff, bristling Money Mustaches.

First a word on the author, Ramit Sethi. I had never heard of this guy before, not being part of the regular commercial world, but it sounds like he has some MMM-type attributes himself, which I must admire. He is bossy, opinionated, and wise. He’s a self-described Best Selling Author, which is also impressive, but not something I wish upon myself, because I don’t want to take from you the very money I want you to save

But it turns out he has a different take on frugality. He is more into,

“Focus on the Big Picture! Spend your time figuring out how to earn more money! Then live a big guilt-free spendy life going to restaurants and buying things – deet-dee-deet-dee-deee, yeah! Fancy car, vroom, all right, Martinis tonight, let’s go! Hop into my jet, let’s fly first-class to London baby!!”

I must admit, he had me caught up there for a while. It did sound like a lot of fun, and it could be a worthy goal to aspire to – IF – the entire world was one big USA and money really could buy happiness and there was nobody more worthy to spend money on than myself and no shortage of natural resources for us all to burn up by increasing our lifestyles beyond the 500%-of-sustainable level that we’re currently running at.

So anyway, in the article about Not Cutting Back on Lattes, I found lines like these:

“….What is the point of saving money on obsessing about small expenses like lattes? Is it to truly save money, or is it to reduce guilt?….”

“…. these trivially expensive beverages…”

“… yo-yo of spending, cutting back, and starting to spend again…”

“…The whole point of money IS to spend it on things you love. Pleasure purchases should not be a source of shame…”

Aha.. I see what Mr. Sethi is getting at. He shares the common misconception that buying things ​makes you happier, and not buying things makes your life suck, so it’s hard to cut back on this Pleasure Purchasing.

If this were true, Mr. Money Mustache would not exist. I wouldn’t be writing every day about this absolutely golden lifestyle that will both catapult you to Ultimate Happiness and save our entire species and planet, if it weren’t actually fun!

The problem with the Big Income/Big Spender (BIBS) solution to riches is that it is a hollow victory. You are putting effort into earning ever-increasing amounts of income that could have been put into finding a meaningful life for yourself. You are buying shit that builds up in your closet (or in your arteries and your abdomen). You are channeling your precious mental energy into consumption rather than producing ideas and things of your own.

I will admit that the Big-thinking / Be-great-at-everything-you-do component of this philosophy is worthwhile and can indeed bring fulfillment. And after watching some YouTube videos of Ramit Sethi, I actually really like the guy. He is very funny and in real life seems to be quite down-to-earth. That’s probably why people are excited about his blog and the bestselling book. But a true Mustachian can go much further than that.

You see, the Anti-Frugal ranting is the error. BIBS believers imagine frugal people as tragic little beings, whining and suffering out in the street in their potato-sack clothing, as they harvest leaves and sticks from the gutters and try to pound them into pulp with rocks in order to make their own toilet paper so they can save 26 cents per week. And they extend this 26-cent mentality even into rather big expenditures, like $1000 per year on take-out coffee.

Then these believers show what happens when the typical clueless Ultraconsumer tries his hand at frugality:

“Oh! I want to cut back my budget this week, so I’m buying less lattes. But Waaah! My stomach craves a latte! Oh, this frugality stuff sucks! I’m going back to my comfortable old life!”.

And that’s the end of the Ultraconsumer’s pathetic attempt.

Well, yeah. It was hard for that person because their Frugality muscles were so weak and flabby and hidden beneath folds of Consumer Flab that they could not even flex properly. Just as I would be whining and falling down in the desert sand if I packed up tomorrow and decided to run the Death Valley Ultramarathon (a 135 mile running race done in temperatures up to 130 degrees Fahrenheit).

But what does Frugality feel like to someone who has developed their muscles? It feels absolutely amazing. It is Badassity itself, which means it is Happiness itself.

For example – today I got up, cooked breakfast at home, then with no shitty office job to attend to, was able to immediately hop on one of my bikes and head out for some errands under a bright sunny sky.

I visited my rental house to sign a lease with a new tenant, then biked to the bank machine to deposit some checks, then to the grocery store to buy some fruits and vegetables. It was a fantastic errand, since I took the scenic creekside route and ended up traveling almost 20 miles in a loop of half of the city to visit all of these places. And I did it at the highest possible speed, carving corners, jumping curbs, wind roaring in the ears, burning almost 1000 calories in the process.

Afterwards was lunch with my family, and then I took some time to do this week’s load of laundry, which I enjoyed hanging up to dry as part of my personal anti-electric-clothes dryer vendetta. In the afternoon I played with my son in the living room, had some nice conversations with my wife, finished a woodworking project in my garage, then cooked a delicious dinner and later found myself typing this MMM article.

If you look it over, this was a perfectly frugal day – I didn’t drive a car, I didn’t buy anything other than carefully-chosen food from a grocery store.. no lattes, no martinis and steaks, no golf clubs or BMWs. I used very little energy and threw out no trash.

And there was no deprivation at all – I did not suffer or whine, or deny myself any form of pleasure. In fact, it was an absolutely stellar day. And I ended up healthier and richer at the end of it than when I woke up this morning. Sometimes I can hardly sleep at night, because my days are so fun and energizing. I have to get back out of bed and read and write some more stuff, just to process all the joy.

And as it turns out, almost every day is like this. There really is no suffering here, in this highly frugal life. Just a lot of rewarding work and effort and accomplishment. I’m not a Death Valley Ultramarathon Frugalist like Jacob from Early Retirement Extreme, but I still run a good race compared to my fellow countrymen, because my Frugality muscles are healthy and well-developed.

So how can we get the latte-swilling car-financing whining flab-bombs described on Sethi’s website to start developing their own muscles? Your guess is as good as mine. Part of my attempt – this MMM blog – is to show people that there is a desirable end goal – early full or semi-retirement in full material comfort.

After capturing their imagination, we throw them into the Triple M Gym and lock the door. The workouts are a neverending stream of amusing reminders that you can’t get here by buying your way in. Because it is far more efficient to save your way in instead – cut your big expenses like car costs first (as our competitor also advises), but then continue the accelerating trend as your muscles develop, until you find one day you are saving 75-90% of your take-home pay.

This Acceleration phase is what makes the difference between “early” retirement at age 60, vs. true Early Retirement only 10 years or so from when you do your first lift. Age 30 if you start at 20. You get happier even as you get better at the methods, and richer. Rinse, Repeat, Retire Early.

I’ve discovered from the comments that many of us already are fairly muscular in this department. But it is still fun to work out together, and to welcome any new folks just coming in on their first guest pass.

​

This is email #11 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

A Millionaire is Made Ten Bucks At A Time

​

I was at a party recently and a lifelong friend walked up to start a conversation. Although we had never talked about money before, it turned out he had secretly been reading this blog, and now he had a few questions for me.

"I understand now that even a family can retire on well under a million dollars*, but that is still a lot of money. Yet your blog talks mostly about small things like saving $70 a month on electricity or gasoline or coffee.

Aren't these two different universes of savings that don't even relate?"

-

My friend had a good question, of course. It is this perception of "small" versus "large" amounts of money that is the downfall of most of us.

It drives many to fantasize about lottery winnings, since that's the only way to become a millionaire if your job title doesn't include CEO, NFL or Notorious B.I.G., right?

And meanwhile, we buy $9.75 bottles of Kirin at the sushi restaurant and $12.00 movie tickets to see the newest Pixar movie with the kids in the movie theatre and pour $70.00 of gasoline into the family SUV so we can burn it up every couple of weeks running around town for relatively short trips. And we don't become millionaires very quickly at all.

The solution to this is a change of mindset: It's time to start getting excited about ten bucks again.

When I was eleven years old, I had to cut my parents' enormous and hilly half acre lawn by pushing a fume-spewing 21-inch Lawn Boy for two hours. For this afternoon of sweaty torture, I would earn five bucks.

Then I would excitedly wait a week so the grass would grow and I could repeat this process to earn another five bucks. At this point, I would have ten bucks.

Sure, that was a long time ago. But even today, ten dollars will still buy about 9 pounds of delicious, kickass, nutritious, muscle-fueling rolled oats - still a solid staple food for many healthy millionaires, despite the fact that we can easily afford fancier food. Or two gallons of organic milk. Or enough gasoline to drive over 200 miles in a good car. WEEKS worth of regular driving if you don't have a ridiculous commute. Or enough natural gas to provide hot water for showers and dishwashing for a family for several weeks.

Ten Bucks is a lot of money. So you need to respect it.

Ten dollar bills are not just food stamps or amusement park coupons that you fork over by the dozen to get restaurant meals, smokes, strippers, drinks, tourist attraction admission, and assorted domestic services. Each Ten is a critical brick in the Early Retirement castle you are building.

So how can we get from ten dollar bills to six-figure sums required for early retirement? Think of it this way:

If you could somehow save $796 per week, and each week invest it to get a rather typical 7% compounded investment return after inflation, after just ten years, you'll have about $600,000 sitting in your account. And to be more accurate, this money won't be just sitting around - it will be 600,000 little employees working for you tirelessly in the background, producing thousands of dollars per month of passive income.

As you can see in the footnote section below, that is more than enough to start a nice Early Retirement, especially if your house is paid off. Maybe more than twice as much as you need, but since we do conservative calculations here at MMM, let's roll with that number.

"But how the hell can anybody save almost $800 per week!?"

Suppose you've got two income earners working together. Now each one has to save only $398 a week.

There are 112 waking hours in each week. So to go from "broke" to "rich enough to retire early" in just ten years, each person has to make 40 successful ten dollar decisions each week.

Some of these decisions can be made automatically - like owning a less expensive car and driving it less ($100 per week per person), using less electricity and other utilities ($25), eating most office meals without going out to lunch ($50), not having cable TV and in general spending less time in retail establishments ($25). Now the remaining number is only $200 a week.

Most zero-savings people blow dramatically more than $200 a week just on random purchases. Spas, yoga, fingernail treatments, bottles of wine, sixpacks of beer, shoes, electronic gadgets, ice cream cones, movie tickets, plastic crappy toys for toddler birthday parties, books from Amazon.com instead of your local library, lawn-care services... whatever.

Those, combined with the automatic savings above, are the ten-dollar decisions that make the difference between the typical broke and indebted person, and the Mustachian Early Retiree.

If you start Respecting your Tens at age 20, you'll be Retired by 30**.

Now, before the whiners start chiming in and saying it is no fun to spend zero money, you must realize that there is plenty of wiggle room for luxuries in my numbers.

Each person is saving $400 per week or about $20k per year on top of their house payments. Yet many of us have a take-home pay of over $30,000 per year. Sometimes way over that amount.

There is plenty of money to go around in this situation, and I'm even giving you a single family home to live in and a relatively quick 10-year sprint to retirement! If you have any issues with my numbers, make your own adjustments and the results will still be amazing.

But even with all this room for indulgence, it is important to keep your priorities in order, otherwise you are combining Luxury with Fantasy.

For example, it is absolutely ridiculous to buy even your first bottle of wine or restaurant meal if you do not yet have a good bicycle and a bike trailer. It is insane to buy a luxury car if your house isn't even paid off yet. If you still have student loans, get them paid off BEFORE you splurge on that iPhone or overseas vacation.

You can still have these frivolous and fancypants things, some of which I admit to owning myself. But you need to have a rational definition of "Can I afford it?"

Part of the Ten Dollar Philosophy is that you must pay for the current luxuries in your life before you start adding additional luxuries. (Can you tell I love that word)?

I'd also suggest that since luxury spending is primarily for pleasure, you could try doing much of your purchasing for other people. Perhaps counterintuitively, it is proven that most of us get more pleasure buying a necessity that really helps someone else - for example, a bike for a family member who can't afford one - compared to yet another luxury for ourselves - a $100 hairstyle or an upgraded china set for our yacht's main dining room.

So there you have it - the way to become a Retired Millionaire using just those useless paper scraps in your wallet - by changing the way you think about them.

* A family of four in the US can live comfortably on about 24k per year plus having a paid-off house. With an nice conservative 4% annual withdrawal/return rate on your investments, you need $600k invested to generate this cashflow, inflation-adjusted, forever, plus your $200k house. $800k total. Or, if you want to get off your butt and work very occasionally to earn $12k per year, you can slice the $600k number down to $300k! Or you can save the $600k AND work, and keep saving more and more over the years - ending up a multimillionaire all while doing very little paid work.

** Holy shit, that's quite a neat little verse I came up with there! Believe it or not, it happened completely by accident.

​

This is email #12 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

It's All About The Safety Margin

​

Being the bossiest personal finance role model on the Internet, Mr. Money Mustache naturally receives quite a few challenges on the accuracy of his math and assumptions.

It is with a palpable sense of glee that some people dig into my calculations, find something they disagree with, and then jump up and down and throw it in my face like a monkey flinging its feces at an opponent.

​

“GOTCHA MMM!

​

You just told me that your property taxes are only $2400 but mine are twelve grand! And, your assumptions about future stock market returns are different than what I just saw in this random article on Buzzfeed.

So therefore, everything you write about is bullshit and all the principles of Mustachianism are therefore invalid!”

​

And I will admit that I do make mistakes sometimes, both plain old typos, and even overly simplified assumptions. This is because it is not easy to model something as complicated as a Human Life into a series of income and spending equations – especially when the income portion is derived from investments, which in turn further depend on the activities of other unpredictable humans.

But yet I am incredibly confident in the future – my family and I will lead a happy life, and we will almost certainly have a growing surplus of money for the rest of our lives. We started the clock on retirement about six years ago, and despite a negative stock market performance, and even some expensive business and legal problems a few years ago, we have still done just fine and are ending up further ahead each year.

What is causing all of this good fortune? Baby Angels? Envy-inspiring Luck? Smugness?

Nope, it’s actually just another example of math and statistics playing out behind the scenes, in the form of something I would like to re-introduce to you as the Safety Margin.

Back in Engineering school, they used to teach us that every piece of real-world information comes along with an unspoken “Error Range”. By testing a sample of soil upon which you want to build a bridge, you might find that the soil can support a load of about 2000 pounds per square foot. But because you don’t know what is hiding deeper inside the Earth, the real value could range between 1000 and 3000 PSF (based on what the other bridge builders before you have measured and recorded around the world). So you design your bridge strong enough to survive even on 1000 PSF soil.

You will be using concrete that can withstand 5000 pounds of pressure per square inch. But because there could be an error at the cement factory, the real range is between 4000 and 6000 PSI. So you design the bridge even stronger, to survive even if it was made of 4000PSI concrete on 1000PSF soil.

If you continue the chain of calculations, you end up with a longer and longer list of error ranges, and you can adjust your design to accommodate all of them. If you use the most pessimistic number for all possible decisions, you’ll end up with a bridge that is incredibly strong. But it will also be incredibly expensive, because you’ve over-engineered it.As a house builder, I would often joke about the over-cautious nature of structural engineers for my houses – they would design everything ten times stronger than any house I had ever seen, and then just for extra insurance, add a footnote at the bottom specifying

*the structure shall also be built upon a titanium column that extend to the center of the Earth

So yeah, that is over-engineering, and I hope we can all agree that at a certain point, there is such a thing as being too careful, because caution is expensive.

On the other hand, if you design the bridge to withstand exactly the expected amount of stress and not an ounce more, it will collapse as soon as something unexpected happens to it. This is under-engineering, and it is easy to see why it is dangerous.

Somewhere in between is a happy medium where your bridge is statistically very safe, yet not nearly as expensive as a worst-of-all-cases design.

In my old field of Software Engineering, the same principles applied when estimating how long it would take to develop a big product which took the cooperation of many people to build. Each stage of the project might be estimated to take five days, but in reality it could take between 2-10 days depending on unforeseen hardships in working with the new technology.

The most pointy-haired managers would create what they liked to call “aggressive” schedules that would assume each stage would get done in 3 days (a brilliant idea often accompanied by the suggestion that we all put in some nice unpaid overtime to accomplish this). Sometimes work would fly along without any problems even on the shortened schedule. But then the inevitable unforeseen hardships would occur, and there would be no slack in the schedule to allow the designers to catch up. This would in turn cause delays and stress, which in turn would compound, causing people to get flustered and create low-quality work that took months to clean up… (or sometimes which never got cleaned up and would eventually destroy the company in the form of buggy products.).

Wiser managers with knowledge of the Safety Margin principle would schedule 5-8 days for each component. On average, some would go more quickly. But then the engineers would also have time to solve the problems in the more difficult parts. In the end, everything would be completed just a little bit ahead of schedule, most of the time, leaving everyone feeling good about their jobs and creating a higher quality product as well. Once I learned this trick, I started running my own group’s projects this way, much to the amazement and scorn of the pointyhairs.

But the safety margin isn’t just for engineers. I had a friend once who was late for almost 100% of his appointments. It was because he planned them like this:

“OK.. I need to meet with MMM at noon. But I also want to meet my friend in Boulder for coffee that morning. So, a 15 minute drive, an hour for my coffee date, plus 15 minutes to drive back home for our second meeting. So I’ll leave my house at 10:30am”.

All of these times might be accurate in ideal conditions. But with no safety margin, they don’t leave time for a traffic jam, or a conversation running longer than expected, or a freight train crossing the road, or getting an emergency phone call from your Mom just after your coffee date.

On the opposite end of the spectrum, I’m a compulsively cautious planner, because it is never okay for me to be even one minute late when another person is waiting for me.

So I might allow 20 minutes to get to the coffee shop, 90 minutes for the meeting, 20 minutes to get back, and then a further 15 minute safety margin just in case anything else goes wrong and also in case the other person shows up early for the appointment. Thus I’d be out the door by about 9:30. My own slogan for timeliness is “If I’m not at least 5 minutes early, I’m late”. By never packing too much into my day, I was always able to commit full effort to the things I did schedule.

Now we can finally bring it all back to financial planning. When a young lad graduates from college and gets a new job and an apartment or house-with-roommates, he is implicitly choosing a safety margin. If his job pays $2000 per month, and his food and rent is $800 per month, the margin is fairly reasonable.

If he signs up for a car loan at $300/month, the margin shrinks considerably. As more services and especially loans are added, the margin can approach zero or even become negative. And even with a small positive margin, the slightest change in life situation – like a medical bill, a job loss, or a partner or spouse losing their job, can tip the whole balancing act quickly into the shitter.

Modern life also creates the the issue of a time safety margin. When people design a long double-income commute into their lives, add kids, and schedule an Olympic Roster of events for everyone involved, they have eliminated their time safety margin.

With no slack in their schedule, theyfeel overwhelmed when the prospect of change is suggested to them, and many of them complained violently on Hacker News and Metafilter when an MMM article pointing out the fact that most long car commutes are in fact self-imposed and ridiculous went somewhat viral on the Internet last week.

Because of all this, I would suggest that modern life works best if you design in at least a 50% safety margin. In other words, find a way to live on no more than 50% of your take-home pay, and keep plenty of your non-work time open for freestyle learning and new experiences.

If this means living with parents, family, or in a nice house with roommates initially, so be it. On average, the 50% that you save will build up rapidly and start providing an income stream of its own, and also on average, the take-home pay of many recent graduates will tend to rise over time. So a lifestyle of increasing luxury is still available as time goes on. But the safety margin will always be there for you, preventing financial disasters as well as giving you a vastly wider range of choices in your life.

I think I may have been born with too much of a love of the safety margin. As a kid, I was afraid to try new things until I was sure I could master them on the first day of trying. As a teenager, when I played real-time strategy video games I would always amass a ridiculously overpowering army before swooping in to destroy the opponent – I was too cautious to risk an earlier attack. And as a planner for early retirement, I built up a ‘Stash of savings that was big enough to live on, as well as several backup systems that could also provide a living if anything went wrong with the primary system.

So let’s review what I view as my own financial safety margin. Doubters and Anti-Mustachian complainypantses should pay close attention, because it is this network of flexible parts that allows me to safely brush off minor details like “what if your health insurance premiums rise?”, or “how will you pay for your kid’s university education?”

All told, the safety margin represents a 500-1000% flexibility in the income to expenses ratio that can be adjusted to meet any situation. And in all reasonably probable cases, Mr. Money Mustache will both retain and further entrench the status his doubters on the other discussion boards so happily like to question.

First level of safety: a primary income. Right now, this is a rental house that provides an income of $24,000 after expenses – just a bit more than our family’s spending last year. If the rental house happens to go up in value faster than general inflation by the time we sell it (aka, a housing market recovery), this would be an unbudgeted additional safety margin.

Second level of safety: a backup income. We also have some index funds in taxable accounts that provide capital appreciation (admittedly negligible in recent years), and a strong level of dividends that are just building up for eventual future use.

Third level of safety: optional part-time work. Levels #1 and #2 are paying the bills and continuing to build a larger safety margin, but Mr. and Mrs. Money Mustache also have some free time during school days, and we love to accomplish things during that time. We happen to get paid for some of these things – financial and real estate work on her side, construction and internet-related things on my side. This income gets saved as well.

Fourth level of safety: 401(k) plans. We stashed away quite a few years worth of maximum-level 401k savings back in our working days, and they will collect dividends and appreciate until we can crack into them at age 59.5. Assuming a reasonable level of stock appreciation over the coming decades, these funds alone will be enough to live off from that age forwards – despite the fact that we aren’t even planning to spend the Level 1, 2, or 3 money before then!

Fifth level of safety: Social Security! This is an unpredictable benefit due to the political questions surrounding the program, but it will very likely still provide a substantial portion of our living expenses, since even $600 per month in today’s dollars is a substantial portion. All of the first four levels of safety don’t even assume any support from Social Security.

Sixth level of safety: lifestyle flexibility. The MMM family currently spends about $24,000 per year, but there is plenty of room for improvement if money ever became tight. All of the safety systems above have been built assuming a level of spending even higher than our current $24,000 rate. We could easily move to a much smaller house, take fewer month-long trips, go car-free, stop buying organic food, and more. And, I also assumed that our child-related expenses will never go away, which in fact they probably will in less than 20 years as Junior ‘Stash grows up to forge his own way in the world.

Seventh level of safety: Work Flexibility. I could start building more stuff for people, and earn three times our living expenses from that alone. Or I could go back into software and earn even easier money. Mrs. M. could probably out-earn me by using her golden reputation among the people she used to work with to get a new job. Or she could just start rustling up real estate work. I have a huge fancy finished basement suite in my house that we could rent out for about $8000 per year with only minor modifications. I could buy a multi-unit apartment building for thousands per month in cashflow. I could start peddling “Mustachian Wear” clothing and e-books on this website. Or we could start some sort of entirely new business!

It all seems a bit excessive when you type it out in a big list like that. And indeed, it could be said that Mr. Money Mustache is actually a bit of an overcautious wimp when it comes to financial planning, not the reckless chronic optimist that many people accuse me of being.

But I just wanted to share the thinking process that goes into retiring confidently. By building a large safety margin into everything you do, you open up a whole new world of options for yourself, and the resulting reduction in stress and increase in happiness tends to feed back into more energy, trying more new things, and opening up even more options.

And since in real life, it is very unlikely for every single thing to go wrong in a well-protected system, you will tend to have ever-increasing safety margins throughout your life. Six years into retirement, I already see this happening at an increasing rate.

So what is the lesson? Save your current income, even as you build complementary skills like frugality, adaptability, and the ability to earn money in more than one way. Then you’ll be ready to retire much earlier, because the sum of your safety margins will be enough to make you feel comfortable taking the leap. And most importantly, stop worrying!

​

This is email #13 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Muscle Over Motor

​

(This post was originally published in December 2011)

It's definitely late fall here in Colorado, and the trees have dumped most of their leaves onto the ground.

In my neighborhood, this invariably triggers a flurry of lawn contractor activity. A pickup truck pulling a long trailer full of equipment pulls up, a fleet of young guys gets out and each picks up a leafblower, then for the next hour they blow leaves and gasoline fumes back and forth at each other while the surrounding square mile of city becomes a toxic and ear-splitting war zone. Eventually they manage to get a portion of the leaves into plastic bags in their trailer and they motor off.

Just a few days ago, we had an early snowstorm here, which dropped a quick few inches of luxurious fluffy powder onto the newly blown lawns. I was enjoying a casual bike ride through the stuff on my way to the grocery store when I glanced over and noticed a shockingly irrational specter: One of my neighbors was clearing the light powder from his short sidewalk with a SNOWBLOWER!

Like 99% of the snowfalls in this region, this was a quantity of snow that could have been easily swept aside with a shovel, or a broom, or even a tiny little bird feather... but this able-bodied gentleman was out there doing his duty with a gas-powered appliance. The stench leaking from the crude 2-stroke engine left a stain in the air that could be smelled from 500 feet away.

Earlier in the week, when the temperature was in the 60s, other neighbors were using gas-powered lawnmowers to slowly mow their lawns while simultaneously sucking up and chopping the autumn leaves into the lawnmower's bag, which they then threw out with their weekly trash.

All of these events led my brilliant engineer's brain to come up with a few new Inventions:

Imagine a leafblower so advanced that it harnesses the power of your abdomen and biceps, while sucking away your stored fat reserves. Yet it operates nearly silently and costs under 15 bucks. With just a simple wooden handle and a few ounces of sturdy bent plastic or metal prongs, it could be lightweight and quite wide, and be able to clear thousands of square feet of densely-packed leaves per hour, leaving you feeling refreshed and healthier and more connected with Nature every time you use it.

Imagine a snowblower so supreme that it works a complementary set of muscles to the leafblower above: your shoulders and your lower back, as well as the hamstrings and portions of the gluteus. It also operates with silky silence, and it ALSO gets 100% of its power from the ultimate renewable resource - your beer belly.

You would assume this futuristic device would cost hundreds of thousands of dollars, right? Wrong! This too is under fifteen bucks.

My next invention is an advanced motorcycle that weighs less than thirty pounds and costs less than three hundred dollars. Yet it has a range of over a hundred miles per day, and you never have to find a power outlet to plug it in, because its power source is - you guessed it - the cellulite stored in your ass which gets converted into muscles in your legs and calves as a side effect of the transportation!

I know I am blowing your mind with these inventions, but I actually have working prototypes right in my garden shed and garage.

I also have a lawnmower with a spinning reel of sharp metal blades that gets its power from me pushing on the handle, and even a boat (which I am demonstrating for you in the picture below), that is 11 feet long, and able to navigate everything from tranquil lakes to roaring ocean surf waves to car-sized river rapids.. but which deflates to fit in a bike trailer, weighs less than 25 pounds, costs less than $100, and is also powered entirely by muscles.

So How Do I Use This To Get Richer?

I think you might be noticing a pattern here. And the pattern is of course Muscle over Motor.

It's more than just an article. It's a Founding Principle of Mustachianism, because when you embrace it, it adds great fun to your life even while it simultaneously strips away the fat from your physique and your budget. It's one of the most powerful little three-word sentences you can embrace.

Because of the power of Muscle over Motor, you should be deeply suspicious of anything with a motor. A motor represents a shortcut to getting something done. That sounds good on the surface, but you must consider what you are shortcutting.

A motorboat will get you across the lake quickly, but wait a minute, you like being on the lake - so why not use your muscles to actually earn your trip across it? It takes longer - that is a good thing. You will enjoy the beers on the deck afterwards much more when you really deserve them.

A Hummer will get you up the logging road and across the rocky meadows. But dude, you're sitting in a glorified Lazy-Boy recliner and pushing on a pedal. What kind of wussy way of climbing a mountain is that? Leave the motor vehicles where the pavement ends and put on your hiking boots like a Real Man or Woman (or a pair of old flip-flops if you want to be even more badass like some of my old-school Colorado friends).

If you want more speed than walking and the ability to cross dozens of miles of terrain per day (as well as catching much more air on the descents), try a mountain bike instead of an SUV.

A Harley - of course with its quiet stock mufflers replaced with illegal straight pipes - will get you through some beautiful rocky canyon roads and allow you to ruin the outdoor dining of thousands of people in the hopping downtown Chicago restaurant districts. But a nice lightweight road bike will get you up the same roads and let you hear the birds at the same time, and your resulting muscular physique and healthy glow will get a lot more positive attention in downtown Chicago than the overpriced motorcycle and standard-issue black leather "Independent-minded Renegade Harley® Rider" Halloween costume ever will.

If you need to carry a few bags of cement over to a neighbor's house, try a wheelbarrow or a dolly instead of a pickup truck. If you need to get up to a different level of a building, give me a break, you don't need an elevator or escalator... find the stairs! You work on the 63rd floor? I envy you!

In the gym, the machines with fancy paint jobs and HD displays are to be mocked, because there is already a much more effective yet simpler tool that helps you exercise, namely the chunks of metal with handles on them in the free weights section.. or better yet, in your own garage or basement or living room or friend's house.

Even if you're missing some of your younger physical abilities or you are in a wheelchair, you can still use what you've still got to kick as much ass as possible!

The thing about this philosophy is that it keeps you very busy, which means it keeps you out of financial trouble as well.

If you are following Muscle over Motor, your leisure time is packed with active high-effort outdoor activities which you love. And because of this, you don't even have time to take up expensive hobbies like waterskiing behind a powerboat, or jacking up your Jeep so it has higher ground clearance so you can drive it around the trails at Moab, or riding ATVs around to shoot at animals. Sure, these can be fun activities as well, but we all have a finite amount of time and money.

So which activities do we choose: the expensive ones where you sit on your butt and twist a throttle? Or the low-cost ones that also make us healthy and develop our physical skills?

This isn't a perfect rule, because there are exceptions. Motors are still useful when we're trying to get some serious work done. I'm not suggesting that the world's excavator operators climb down out of their cabins and pick up garden shovels, or that carpenters sell their table saws and start cutting 16-foot trim boards with a handsaw. Taxi drivers may or may not want to switch to rickshaws, and accountantsshould definitely not give up their computers.

But when applied to most of your life, this whole idea of powering your own damned recreational activities (including lawn care) is a great one. It's another form of Insourcing, but it applies to everyone, not just homeowners with chores. If you find yourself tempted to use a motor when a muscle will do just as well, you should imagine me hovering behind you and reminding you of the slogan every time you reach for a gas-powered lifestyle accessory.

So MUSCLE ON!

​

This is email #14 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

​

The Shockingly Simple Math Behind Early Retirement

​

This is the blog post that shows you how to be wealthy enough to retire in ten years.

Here at Mr. Money Mustache, we talk about all sorts of fancy stuff like investment fundamentals, lifestyle changes that save money, entrepreneurial ideas that help you make money, and philosophy that allows you to make these changes a positive thing instead of a sacrifice.

In addition, the Internet presents us with retirement calculators, competing opinions from a million financial advisors and financial doomsayers, unpredictable inflation, and a wide distribution of income and spending patterns between readers.

I reviewed my own path to age-30 retirement in “A brief History of the ‘Stash“, then I did a hypothetical calculation using two average teacher salaries to show how long it would take them to retire in “The Race to Retirement – Revisited“.

Because of this torrent of information, people tend to become overwhelmed and say things like,

​

“Yeah, good for you Mr. Money Mustache, but how can I possibly know when I’ll have enough to retire myself, with a completely different lifestyle?”

​

Well, I have a surprise for you. It turns out that when it boils right down to it, your time to reach retirement depends on only one factor:

Your savings rate, as a percentage of your take-home pay

If you want to break it down just a bit further, your savings rate is determined entirely by these two things:

How much you take home each year

How much you can live on

While the numbers themselves are quite intuitive and easy to figure out, the relationship between these two numbers is a bit surprising.

If you are spending 100% (or more) of your income, you will never be prepared to retire, unless someone else is doing the saving for you (wealthy parents, social security, pension fund, etc.). So your work career will be Infinite.

If you are spending 0% of your income (you live for free somehow), and can maintain this after retirement, you can retire right now. So your working career can be Zero.

In between, there are some very interesting considerations. As soon as you start saving and investing your money, it starts earning money all by itself. Then the earnings on those earnings start earning their own money. It can quickly become a runaway exponential snowball of income.

As soon as this income is enough to pay for your living expenses, while leaving enough of the gains invested each year to keep up with inflation, you are ready to retire.

If you drew this “savings rate” story into a graph, it would not be a straight line, it would be nice curved exponential graph, like this:

Working years vs. Savings Rate (screenshot from networthify.com)

If you save a reasonable percentage of your take-home pay, like 50%, and live on the remaining 50%, you’ll be Ready to Rock (aka “financially independent”) in a reasonable number of years – about 16 according to this chart and a more detailed spreadsheet* I just made for myself to re-create the equation that generated the graph.

So let’s take the graph above and make it even simpler. I’ll make some conservative assumptions for you, and you can just focus on saving the biggest percentage of your take-home pay that you can. The table below will tell you a nice ballpark figure of how many years it will take you to become financially independent.

Assumptions:

• You can earn 5% investment returns after inflation during your saving years
• You’ll live off of the “4% safe withdrawal rate” after retirement, with some flexibility in your spending during recessions.
• You want your ‘Stash to last forever, you’ll only be touching the gains, since this income may be sustaining you for seventy years or so. Just think of this assumption as a nice generous Safety Margin.

Here’s how many years you will have to work for a range of possible savings rates, starting from a net worth of zero:

It’s quite amazing, especially at the less Mustachian end of the spectrum. A middle-class family with a 50k take-home pay who saves 10% of their income ($5k) is actually better than average these days. But unfortunately, “better than average” is still pretty bad, since they are on track for having to work for 51 years.

But simply cutting cable TV and a few lattes would instantly boost their savings to 15%, allowing them to retire 8 years earlier!! Are cable TV and Starbucks worth having two income earners each work an extra eight years for???

The most important thing to note is that cutting your spending rate is much more powerful than increasing your income. The reason is that every permanent drop in your spending has a double effect:

• it increases the amount of money you have left over to save each month
• and it permanently decreases the amount you’ll need every month for the rest of your life

So your lifetime passive income goes up due to having a larger investment nest egg, and it more easily meets your needs, because you’ve developed more skill at living efficiently and thus you need less.

If want to retire within 10 years, the formula is right there in front of you – simply live on 35% of your take-home pay**, which is approximately what I did without even realizing it during my own younger years. The only reason Mustachians will remain a rare breed, is because this article will never appear in USA Today. (Or if it does, people will be too busy complaining about how it can’t be done, rather than figuring out how to do it)

So keep reading, since this blog is all about making financial independence happen!

---

This is email #15 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Get Rich With: Good Old-Fashioned Hard Work

In a recent article, I shared my enthusiasm for some of the confidence and hacking-the-system approaches covered in the Tim Ferriss book. In the reader comments that followed, there was lots of agreement but also some Tim-bashing, suggesting that he advocates taking unethical shortcuts and shunning real work.

While it's easy to misunderstand what Tim was getting at (he's actually a ridiculously hard worker and I later got to know him a bit better through an appearance on his podcast), these readers still had a good point. And this has reminded me to write this article, on a topic I have long wanted to cover: Working Really Hard.

Sometimes on this blog, you'll hear me celebrating the idea of leisure. In the very first post, I talked about hanging out at home on a sunny Thursday morning while everyone else is at work, sweeping a few leaves off of the driveway in my pajamas. Other times I'll talk about kicking back with a deluxe home-brewed beer or catching giant fish and snowboarding in exotic locations.

It would be easy for an impressionable youth to see these decadent displays and latch onto them as the end goal.

"How can I take a shortcut to get what Mr. Money Mustache has?", they would say. "I want that end result, and I'm willing to do any sneaky hacks I need to, to get it."

So today I'm going to shatter the illusion I have built up about my easy life. But don't worry, it's not a bad thing. It's actually a piece of even better news:

You too can have the lifestyle of your dreams. And to get it, you will need to do an absolute shitload of insanely intense, ball-busting work. And here's the best part: the insane work will bring you just as much happiness as the leisure time!

So you get to achieve whatever you want, and you get to work really hard for it. Isn't that great news?

Despite the fact that I sometimes talk about not working, I have actually grown to really love hard work. But it was only in the last few years that I realized this.

Ever since I hit first grade and was fortunate enough to be placed in the top reading group, I have been hooked into hard work. Not realizing there was any other option in school than to get all "A"s on the report card, I naturally did whatever amount of stupid busywork and coloring, repetitive addition and subtraction, and putting up with irrational rules, to get the perfect grades. Growing up through high school, I attended all the classes and did the necessary ass-busting to get the grades that would grant me university admission and eventually graduation. At the time, I thought I was enduring a wasteful hardship, but really there was something else going on in the background.

On the side of all this school work, I signed myself up for a second line of work in the pursuit of cash. With frugal parents that didn't believe in giving their kids a free ride, I was forced to work for any money I wanted for myself. Starting at age 10, I cut the grass and washed cars. At age 12, I started working on their old Victorian house, stripping old paint from the massive front porch* and doing other projects which culminated into building my own bedroom in the attic at age fifteen.

Eventually, I advanced to a cushy minimum-wage job at the busiest gas station in town, pumping about 4,000 gallons of gas into rusty old Chevrolet Caprices every day, then moved up to a less chaotic gas station, then a hardware store, then a convenience store. Then engineering jobs between school terms (even over the Christmas holidays once), then full-time engineering work including many weekends and evenings, then even the construction and blog-typing work I'm doing to this day.

There have been many times during this history of work, where I have thought that I had it pretty hard. When I had to spend entire days on the university campus in the dead of a freezing winter, trudging through the snow with inadequate food and non-waterproof boots from the 8:30AM calculus class, to the 9:30AM chemistry class, on and on right through to the 8:00PM physics mid-term exam, all while being surrounded by a class of Engineering students with far too many nerdy and quiet dudes who never made jokes, and far too few beautiful girls, that was pretty tough.

Whenever I'm upside down with my head and one scratched and filthy arm stuffed into a floor cavity, holding a grinder which is spinning an abrasive blade cutting off old nails and plaster so I can remove a wall or a ceiling, and the whole scene is a dark din of Vietnam-style dust, sparks, and shouted expletives, I sometimes think that work can get a little unpleasant as well.

But as I've gotten older and made the connection between the hard work, and the results, and the constant learning and deep base of happiness it seems to provide in ever-increasing quantities, I have come to realize something I wish I could go back and tell myself at age fifteen:

Every single second of hard work you perform in your life, will come back and benefit you many times over for the rest of your life - in often unexpected ways.

In other words, no hard work is ever wasted. It sounds ridiculous, but I find it to be ridiculous how often thisproves to be true.

One time I hit a serious roadblock when building my first house. Because of the architect missing some obscure rules about fire codes and roof venting, my house was not going to pass the "framing" stage of the building inspection. There was a workaround, which involved paying an extra $5000 to have an insulation company install a special kind of spray-in insulation. My business partner Dean wanted to take the shortcut and just hire the company. The other option was for me personally to spend the entire weekend meticulously cutting and gluing up strips of rigid foam-board insulation to every square inch of a high vaulted ceiling.

"Fuck the $5000 expense", I said, "that's not in the budget. We can crank out the fix this weekend, and only spend $300 in foam board instead of five grand for the spray".

Dean opted out of this task, since he always liked to take weekends off to relax. But luckily I had another hardworking friend who helped me out and we got the work done, saving over $4000 even after paying ourselves well for our labor.

The work sucked at the time. It was dark and cold working in that house shell in late November, I missed my wife and newborn baby, and I got coated in filthy powder from the insulation. I questioned my own wisdom for taking on the extra task. It was only money after all.

But it wasn't only money. Over the subsequent years, the information I was forced to learn about roof venting, foam board insulation, fire codes, building inspections, and a dozen other things from doing that work, have enabled me to solve countless other problems in home construction and energy-efficient design. Solving these other problems has brought in even more knowledge, and opened up a whole new section in my mental toolbox that I get to use for figuring things out in many areas of life.

And the shared experience of completing the shitty work together helped to build a longer-term friendship with Mike, the rockstar friend who helped me with the work. This guy is still out there succeeding, and probably even reading this alongside you since he is a practicing Mustachian. And when I look around at other friends who survived the Great Recession while keeping their businesses alive and their base of friends intact, it is always the ones who were willing to sacrifice a weekend to, figuratively speaking, glue up their own damned foamboard to solve life's little emergencies. Meanwhile, Dean ended up crashing himself into bankruptcy, mostly because of his aversion to hard work.

And that brings me to my next point: Shortcutters like my old business partner were often excited by the idea of making money without doing work. I have always been more interested in the idea of doing work, and making money from it if possible. He always talked about how our business profit sharing should not be based on how many hours we contributed. I felt that it should be, since with hard work comes accomplishment. It led me to create this Mustachian Maxim:

In the long run, in the Game of Life, we all get Paid by the Hour.

There are a few lucky exceptions, like the kid who gets a trust fund or inherits his family's business, the early employees in a company that eventually goes public, or the guy who gets famous for doing something stupid on YouTube. But when you're starting from scratch, you need to think of every hour of work you do as planting a seed that will bloom at some unpredictable time in your future life. Sometimes it looks like successful people never do any work. Most of the time, it is because they have respected hard work all of their lives.

Tim Ferriss often praises the idea of minimal working hours. But if you look at how he arrived at the Four Hour Workweek, it was through years of extremely hard work, research and testing, and 80-hour workweeks. During those 80 hour weeks, he thought he was just wasting his time and answering customer and supplier emails and phone calls. But really in the background he was learning very quickly about how businesses and people work, and being forced to devise a system to take himself out of the loop. Without the 80 hour workweeks, he never would have been pushed to innovate, and we never would have heard of him.

Bringing all this back to the Mustachian way of life, this is why I am always advising you to work hard in your day job, but then also come home and take care of your own kids, clean your own house, cut your own grass, and spend the remaining time reading books or websites - to research things that are of interest to you. With no passive television watching allowed.

By doing all of these things, you're actually working and learning all the time, without realizing it. Your mind is making unexpected connections between things you did during the day, things your kids said, things you read at night, and they are forming into new ways to make yourself happy, or to start your own business and earn more money, or to save money on some aspect of living, or get life in general figured out.

Hard work can be painful, but it should always be viewed as a good kind of pain, just as you celebrate a good burn in your biceps and forearms when doing a record-breaking set of concentration curls. When you find really enjoyable work, you can get many of the same benefits without as much pain. But both kinds are to be welcomed. It is the source of growth in your life.

So get back to work!

---

*which, looking back, I now realize was surely lead-based paint. Nowadays we don't let our kids play with that stuff and we make painters wear plastic space suitsand ventilators just to handle it. Ahh the naive ways of the 1980s.

---

This is email #16 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

Frugality: the New Fanciness

This is my fancy, homemade “construction radio”. Booming bass, workplace toughness, extra plugs, 25 foot cord. Made almost entirely of stuff I got for free. Bonus: people tend to get a good laugh out of it.

I grew up in a pretty low-key family, financially speaking. We always had plenty of money for groceries and my parents never went into debt, but if you were one of the Joneses* living down the street from us, you’d be hard-pressed to notice any flashy spending.

This upbringing occurred in a pretty small town (we only got our second stoplight around the time I reached high school), and there wasn’t a lot of wealth to be flaunted around there. The closest thing to riches was a very attractive girl in my class named Kim who got to drive her parents’ brand new 1992 Mercury Cougar from the nicely-outfitted family farm to the high school every day.

This town was located in another country called “Canada”, and we were known at the time for being less wealthy and flashy than our neighbours to the South. Hearty lumberjacks with big beards and plaid shirts were part of our iconography, even if my own area was a bit more clean-shaven.

And finally, all of this happened in the 1980s and 1990s, at a time when all of us had simpler and less flashy lives. The very first cell phones – the ones that were tethered with a coiled cord to a base unit as big as a car battery – were only things to ogle curiously and were priced at $1999 on the last page of the Radio Shack catalog.

Even in university I was barely awareof wealth. We Engineers are notorious for our lack of cash-flaunting (and status-detecting) skills, so I thought of all of us as equals. There were a few rare kids that had expensive mountain bikes or laptop computers at the time, but for the most part, we all paid our own tuition with money from crappy jobs working at Subway or Costco if you were lucky, and lived in cheap basement apartments.

So for most of my early life, I wasn’t even aware that money was something that could be flaunted to others. I thought it was a tool for buying your groceries, or if your parents really did well, a back yard swimming pool.

I think I experienced my first flaunting experience just after I had graduated and started working full-time in the software field. Some friends and I went on a summer trip to “Sherkston Beach”, a low-budget Canadian version of what they call “Spring Break” here in the US.

Beers in hand, we walked along the shore to join the party. I noticed that a long line of very clean and shiny cars had been parked along the beach, and each was playing some sort of boo-tss-boo-tsss dancy music from an upgraded stereo system. The owners of the cars, invariably tanned and bare chested dudes with expensive sunglasses, frosted hair tips and their little muscles carefully flexed, were busily walking around their cars, tending to this or that, setting up beer coolers or polishing volleyballs or otherwise keeping themselves busy.

“What is going on here?”, I wondered at first. “Why are their cars so clean? Why are they so well-groomed on a camping trip?.

“Oh… I think I get it … they are attempting to show off their wealth for the benefit of all the fine ladies around here.”

The whole scene seemed a bit amusing and evolution-driven, like the complex bird mating dances in Madagascar that David Attenborough likes to teach you about:

​

At the time, I was finally working an “adult” software engineering job so I was probably making more money than any of the dancing bird boys. I even had a nicer car, since I had not yet learned of the folly of this type of purchase. I remember my car, dusty and parked over next to my tent, getting a bit of positive attention from men and women alike… and I admit it felt pretty nice at the time.

When I got older and moved to the USA, however, everything stepped up a few notches. I saw parking lots just casually filled with cars fancier than anything I had seen in my entire childhood. I learned about neighborhoods where people engage in passionate gossip about each other’s wealth, and even enforce gardening and house painting standards upon each other to “preserve the property values.”

I heard about “Golf Club Memberships”, a bizarre concept where you pay thousands of dollars in advance, for the privilege of paying hundreds of additional dollars each time you play golf at certain courses.

And I learned that people consider it prestigious to spend money on these expensive things, even while they consider it a hardship to lead a life that does not include the expensive things.

When newcomers stumble across the Mr. Money Mustache blog, they are immediately excited by the idea of early retirement and a lifetime of freedom. But then they are immediately dismayed when they realize that to earn this freedom, they will need to spend much less money than they earn, for several years.

“Dammit!”, they say. “I want the reward, but I really don’t want that hardship and struggle that it takes to get there. I will be viewed as a lesser person among my peers if I dare to embrace such frugality!”

Well guess what? You can now drop your fears of looking like a loser, because things have changed. If you haven’t heard the word, here it is:

Frugality is the New Fanciness.

Let me explain, for those still not convinced.

In the olden days, times were much tougher. Most of us struggled to keep food on the table and to keep the water from leaking through our roofs. The economic system was simple, based on slips of paper in bank vaults and file folders, and gold coins. The credit system was in its infancy so the average Joe couldn’t just go out and borrow money to buy whatever he wanted.

In these conditions, it took real skill to get ahead. A man had to really master the system to pull himself up out of material scarcity. This meant studying financial concepts, understanding the emotions of fellow humans in order to rise into a position of leadership, and even conquering his own fear and lethargy to avoid the temptation to sit at home and do nothing all day.

Only after mastering these tasks, could someone start a successful business or earn a promotion to the top of an existing one, and only at that point would he have enough cash to buy a flashy house, or expensive artwork, or jewelry, or whatever else the status symbols of the day were.

So when the successful olden-days businessman walked down the street with these trappings of success, it could reasonably be deduced that he was actually somewhat badass.

Of course, if he later passed on his wealth to children who would then flaunt the wealth without having earned it, the next generation could grow up with the option of fake flaunting. But for a moment, let’s suppose that at least sometimes, the wealth being flaunted in the streets in early 20th century America was self-made.

Because of this, showing your wealth was a sign of status, as it was proof that you had taken a more difficult path and succeeded.

Now let’s fast forward to the present day. Everything is fucking amazing – we all have touchscreen computers in our pockets that can listen to our voices and speak back, while accessing the sum total of humanity’s knowledge instantaneously through invisible radio waves. We have cars that can shoot us across the country in climate-controlled comfort, yet they’re cheap enough for teenagers to buy them on minimum wage.

And most significantly, credit is so widely available that anyone with a heartbeat can sign up for tens of thousands of dollars in debt. You can buy anything you want, even if you have no money at all. People buy houses with an 80% mortgage, and then get a second mortgage for the other 20%, and cars are bought with zero dollars down aswell. And almost every single person does this.

In this environment, the easy path is to do what everyone else is doing. You see an ad for the iPad, or the Ford Expedition Extradouche Signature Edition, and you are excited by the power and the sleekness. You’ve got no money, but thanks to the advertising and peer pressure you’ve got plenty of desire. So you swipe a card or sign some paperwork, and now you too have the fancy stuff.

These days, it’s totally normal for even the most indebted people to go out to enjoy acres of Sushi and lakes of Sake on Friday nights, laughing and having a grand old time without the smallest thought about the deepening grave of debt they are digging. It doesn’t even strike them as a problem that they don’t own their own houses and even their cars are borrowed.

“This is socialization, it’s important!”, they rationalize. “And besides, sushi is extremely yummy!”

You too want to participate. You drive yourself to the restaurant in your own borrowed car and live “the good life”.

It can be pleasant to indulge in these things, and it sure is easy. But there’s another path available: the more difficult yet far better one.

Certain rare people live in the same society, and work the same jobs as the folks described above. But they’re a little bit better at math, and they can think a little bit further into the future. They see that money is useful for spending, but even more useful as a tool for earning more money.

So they train themselves to master finance, and hard work, and self discipline. And they figure out how to have just as much fun as the big spenders, while being sure to do it in a way that allows them to save at least 50-75% of their income. It has already been proven that these people can meet or exceed the happiness levels of the more spendy group. The only difference is that they are able to spend less.

To top it all off, research comes in that the spenders are in fact consuming too much of the world’s resources. Oil reserves, Ice caps, and Ecosystems are taking a huge hit. The spenders refuse to believe this, latching on to any information that justifies the continuance of their lifestyles. The companies that provide their consumables are only too happy to furnish this information. Only those with the ability to understand scientific research are able to see through the haze.

In this situation, which group is more badass, more skilled, and thus more worthy of social status? The spenders, or the savers?

See? Frugality is, quite obviously, the new Fanciness.

The only reason to maintain a non-frugal lifestyle in the face of all this evidence, is if you’re too stubborn and stupid to accept it. Will you continue to fight against frugality, to show the world how stubborn and stupid you are? Or will you wise the hell right up right now and start showing your better side?

The only thing that has been missing for the rich world’s Fancy Frugal people, has been a support community. When you’re living a life that is so different from your neighbors, it can be hard to remain confident that you’re doing the right thing, no matter how right it seems in your own heart.

But now the times are ‘a’ changin’. The Mustachian Nation has been born. Look around at the comments on these articles and in the Forum. These are real people, tens of thousands of them, who have collected here on a less-than-one-year-old website that does no advertising or promotion. These people were already out there, and they are growing in number every day as more people see the light.

A great thing about frugality is that it still allows you to show off in a hilarious and social way. In the olden days, the executives at the golf resort felt camaraderie as they showed off their Rolexes and BMWs and thousand-dollar titanium drivers. It wasn’t the actual nature of these products that made the situation fun, it was the fact that they felt close to each other as they joked about their latest purchases.

When Mustachians gather, they show off the way they have modified their 30-year-old work trucks to work harder than brand new ones while burning less fuel. They bring their home-made radios to the campsite and share tales and tips of how it was made using entirely leftover materials. They discuss strategies on how to feed a family with peak nutrition and deliciousness, for less than $1 per person per meal.

And unlike those who compete to consume more, these people actually have something to be proud of – they are blazing the necessary path towards a sustainable life for everyone. Eventually, all humans will have to learn to live on what the planet can regenerate each year. When you use more than that, you’re stealing resources from your own kids, and from the rest of the people you share the globe with. You don’t have to feel guilty about this.. you just have to feel good when you stop doing it.

This appreciation for our badassity is still rare, but it’s growing. If you adopt a frugal lifestyle, you may occasionally have to endure some misguided shit from clueless consumers around you. I took lots of it from the MSN readers back in January, although nobody has hassled me in real life so far. But you will also find you start getting some envying looks and respect from other people for your frugality skills. Eventually, just like the BMW-financing 21-year-old gets respect at Spring Break today, you will in due time become a hero in your own community for doing what’s right.

But ironically, the same skills that will get you there, mean that you won’t give a shit what they are thinking.

Onwards, my Fancy Frugal Friends!

*we really did live two doors down from the Jones family. But they didn’t buy much of anything either.

---

This is email #17 of roughly 52 in the MMM "Just the Classics" boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.