Muscle Over Motor

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(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!

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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.

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The Shockingly Simple Math Behind Early Retirement

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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,

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“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?”

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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!

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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!

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*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.

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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:

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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.

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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.

Killing your $1000 Grocery Bill

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A few years ago, I was at a party eating some amazing food at the potluck buffet. In my area, there seems to be a friendly competition among the thirtysomething outdoorsy tech worker crowd, of trying to out-chef each other. It's a contest I heartily approve of and I am happy to be both an underdog competitor and a judge.

Anyway, the topic turned to how good we have it in our lives, with such plentiful food that we can afford to spend hours combining exotic ingredients just for the sake of overfilling our bellies.

"Yeah... I know it's a bit over the top", I said, "but weprobably spend 80 bucks a week on good groceries. I think it's worth it ifyou can afford it".

"Eighty dollars a week on food for the three of you? That's IT??", said a friend, "We spend more than three times that amount!!"

"Whoa", I replied, "I guess I'm not as spendy as I thought".

Of course, the person telling me about her high food bill was more of a typical high-income spender in many ways. Her family also took out loans to buy new cars, had at least one $2500 carbon fiber road bike gleaming in the garage, and hired out the household chores to allow them to conveniently work a double-career-with-kids while still taking plenty of short vacations involving air travel. Looking back, I probably could have predicted a non-Mustachian grocery bill.

But the experience still reminded me of the amazing variety of spending levels we all have available to us here in the United States. It is simultaneously one of the cheapest industrialized countries in the world to live in, and the most expensive. It all depends on the choices you make in your shopping, because everything in the world is available right here for your buying convenience.

When you look it up, the average food cost for a family of four in the US is way up there at the level of my friends, at $944 per month. But to call it "food cost" makes it sound like it's out of your control. I would call this the average food spending. Just like the average family's transportation cost is not some fixed punishment that the cruel world imposes on them... it's a measure of the amount of driving that they have designed into their lives, multiplied by the level of inefficiency of the vehicles they have chosen for themselves.

Instead of shooting for the average, you can design your own food spending.

Let's say a family of four wants to spend only $365 per month on groceries, saving them $579 per month over that USDA average family in the link above. Investing this savings would compound into about $102,483.00 every ten years, which would obviously make a pretty big improvement in the financial health of the average young family.

To hit a monthly grocery spending target like that, you first have to understand what you are buying. There are four mouths to feed, each consuming three meals a day or 91.25 meals per month. Let's say they all need adult levels of calories, so about 2000 per day.

To meet this level of grocery spending, each meal needs average out to about $1.00 per person, and provide about 667 calories. Of course, there can be plenty of variation in the cost and calories, and you might eat 6 smaller meals and snacks instead of three big 667 calorie blasters. But these are the fundamental numbers we'd need to hit.

Can it be done? Coincidentally, this is about the level of my own grocery spending when I'm in semi-frugal mode (if you scale it down to 3 people and $273/month), and in the non-frugal mode mode we currently shop in, we spend closer to $365/month for three people, resulting in a cost per meal of $1.33. So the answer is a definite Yes.

All of us eat very well, with a fair amount of luxury spending thrown into that amount - the grocery spending includes gourmet coffee every day, a lot of organic and gluten-free specialties, food for parties, and other things that you buy when you're not worried about cashflow at all. Plus I consume far more than my share of calories due to all-bike transportation and physical labor, my son is growing about six inches a year, and Mrs. Money Mustache does crossfit workouts three times a week, increasing her food needs as well.

"But damn, a buck for a whole meal?", you might say. "That's the price of a shitty Burger King dollar menu mini burger on a soggy white bun - BEFORE TAX!"

Luckily, I don't eat at Burger King, and neither should you. But let's see how much it costs for 667 calories of some actual food staples that should be part of your diet:

Cost per 667 calorie "Meal" of common foods:​
Basmati Rice: 25 cents
California Almonds: 80 cents
Organic Extra Virgin Olive Oil: 57 cents
Spaghetti noodles: 28 cents
Black beans (uncooked): 49 cents
Natural (peanuts only) Peanut Butter: 53.36 cents
Bananas: 92 cents
Potatoes: 57 cents
Canola Oil: 14.38 cents
Cheddar cheese: $1.09
Apples: $2.79
Organic cage-free eggs: $2.85
Organic boneless skinless chicken breast: $8.00

Aha.. now things are sounding much better. Although not all of the foods above cost less than $1 per meal, they can certainly average out to less than that, depending on how you combine them. And when planning your menu to meet a certain budget, averaging out is exactly your goal. You still want to be able to eat apples, organic chicken breast, or whatever your heart desires. You just have to not eat entirely those most expensive foods.

And remember, this $1.00 target is just something I picked out of a hat for an example - you're allowed to spend whatever works for you.

Whole oils are the ultimate example. They are packed with tasty, slow-metabolizing calories, extremely good for you, and easy to mix into your diet. Using olive oil as an example, you can one third of a day worth of calories for 57 cents. Every time you dump these oils into a frying pan, or mix them into a recipe or a salad dressing, you're lowering your food cost - the oil provides calories that your body might otherwise get from cans of Coke, Filet Mignon, or Burger King dollar menu burgers.

And contrary to the 1990s low-fat-diet fad, the human body loves oil. It's yummy, clean-burning, good for a giant range of body functions, and it is satisfying to eat too. I eat a fairly high-fat/low-carb diet these days, yet I'm leaner than ever, because the oily food doesn't cause spikes of fake appetite like bread does. I've even been known to bring containers of herb-infused olive oil on road trips, supplementing every meal with this supercharger nutrient, especially when it's time for an extreme hike or a high-energy workday.

​See Article: The Amazing Waist-Slimming, Wallet-Fattening Nutrient​

Similarly, you can mix other foods from the under-$1.00 list into meals, freeing up space for expensive garnishes. Chicken and rice recipes with oils, spices, and vegetables are deliciousand can be made in many different styles (Asian, Mediterranean, Indian, Mexican) while still coming in at under $1/meal.

For snacking, I usually eat handfuls of roasted almonds and other mixed nuts, combined with fresh fruits and vegetables. The nuts provide most of the calories, while the fruits provide the various nutrients and healthy stuff.

But What about Protein?
​These days, the high-protein diet is back in style, especially among followers of the "Paleo" diet/religion. I am also a big fan of the nutrient, since it's handy as part of strength training and exercise. Unfortunately, most people equate "protein" with "meat", which is the most expensive way to get protein by any measure.

An average person might want to shoot for about 75 grams of protein per day, while an athlete might consume 150 grams. As a fairly regular weightlifter and manual-laborer, I go for the higher number myself.

When you eat beans and rice in the same meal, you're getting complete protein at virtually no cost. Nuts and especially peanut butter are also a good way to mix high calories with built-in protein. Eggs contain the highest quality complete protein of all (6 grams per egg), so I enjoy three of them every day.

Protein from high-quality meat and fish costs about 4 cents per gram, which would already put the Paleo-eating athlete over $6.00 per day just for his meat intake. Eggs come in around the same protein cost, although at lower environmental cost and with a lot of good calories and other nutrients as a side benefit. But plain old milk, or whey protein powder from Costco, Sam's Club or an online source like Swanson Vitamins provides protein at about 2.5 cents/gram - cutting the bill by 40%. So to hit my own 150 grams during a period of heavier training, I include the eggs, nuts, cheese, a lunch or dinner that includes some meat or fish, and throw in a mid-morning protein shake (banana, milk, yogurt, whey protein powder, pure cocoa and maybe some ground flax or whatever is lying around) for an extra 40 grams of protein.

The key is to look at the protein content already in your basic staples before deciding how much you need to supplement it, and then do so intelligently based on your own activity level. The average American diet is actually quite oversupplied with protein, due to the fact that most people eat meat with every meal, even while most are not competitive weight-training athletes. The opportunity for savings is enormous.

Where to Get your Food

To research this article, I biked over to the health food store in my town, a place called Natural Grocers that attempts to imitate Whole Foods. It seemed like a friendly place, where the customers are unusually slim, the bike rack sees frequent use, and everyone brings their own cloth grocery bags.

But Holy Shit, were the prices ever ridiculous there! In one quick tour of the store, I observed a package of four "Bison hotdogs" priced at $11.85, a two-pound bag of plain Tilapia filets at $25.00, and jugs of organic milk at $11.00 per gallon.

All of these prices are more than double the levels of the nearest Costco, which is one of the best places to shop for your calories and protein, unless you have even better options in your area. The prices I quoted in my $1.00 meals table above were Costco prices, and unless you already have unlimited money, you should stay miles away from Whole Foods or any of its cousins.

At a more community-oriented level, there are also good deals to be had in Mexican, Indian and Chinese grocery stores, Community-supported agriculture groups (CSAs), farmer's markets, your own vegetable garden, and other old-fashioned sources. When the parking lot is not full of hybrids, there are international phone cards on display in the window, and the cashiers also stock their own shelves and do not speak much English, you are probably onto something good.

What to Eat
​Finally, the fun part! As the wise people of India have proven beyond all other cultures*, amazing food is all about preparation and spices, rather than starting with costly ingredients. Once you know which ingredients make good staples, you can easily poke around on the Internet or in any cookbook to find an infinite number of good recipes that use them.

At the simplest "bachelor" level, you've got recipes like:

Fancy home fries:

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​Slice up about five big potatoes into thick french fry shapes, mix them around in a giant bowl along with a huge amount of canola or olive oil (maybe 1/3 cup), garlic, black pepper, cayenne pepper, paprika, and/or any spices you like (even curry!). Cook at 400F for 25 minutes on a metal tray.

Ding! You've got thousands of calories of deliciousness to use as a side dish, snack, or even combine with a salad to make a simple main meal.

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At the next level, you can move up to something I like to make regularly:

Thai Curry and Coconut Butternut Squash Soup:

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​1 large butternut squash, about 2.5 pounds​
​ 1 tbsp oil​
​ 1/2 an onion, chopped up very small​
​ 1 tbsp freshly grated ginger​
​ 4 cloves garlic​
​ 2-3 tsp Thai Red Curry paste​
​ 4 cups chicken broth​
​ 1 13-14 oz can unsweetened coconut milk​
​ 1 tsp salt​
​ 2 tbsp freshly squeezed lime juice

Fancy optional things:​
​ Some toasted coconut for garnish​
​ A few kaffir lime leaves, chopped up a bit

Cut the squash in half, take out the seeds, brush it with oil, and bake it for an hour at 400°F. Then scoop out the soft squash with a spoon when it's done.

Fry the onion, ginger and garlic in some oil for a few minutes. Add the curry paste and cook for a few more minutes. Stir in the chicken broth, coconut milk, salt, squash and shredded lime leaves. Simmer for 15 minutes. Remove from heat and stir in the lime juice.

Finally, blend up the contents of the pan in a blender or a bowl with a hand mixer. Serve in colorful bowls with the garnishes.

This soup is extremely filling due to the deliciously high fat content of coconut milk, and so good you will not believe it came from your own kitchen. It also stores well in the fridge and freezer, and can be brought to work or on road trips and reheated anywhere.

Those are just two simple recipes. The key to frugal eating is to have at least ten good things you know how to make.

There are many chefs among the readers. Maybe we will get to hear some of their best low-cost and easy-to-make creations in the comments section below?

Further Reading:​
​Grocery Shopping with your Middle Finger - an old MMM classic on this same topic, where I first started thinking about cost per calorie. But there I was dealing with food stockups and sales rather than thinking of it on a per-meal or per-month basis.

* According to the strong opinion of my own taste buds

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This is email #18 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.

My Deprived Life: Raising a Family on Under $27,000 per Year

One of the biggest objections we get from new readers around here goes something like this:

“Yeah, I guess Mr. Money Mustache has a point. Spending less than you earn really is a good idea. Too bad he’s so hardcore, though. I’m not ready to cut back my own life to the bone like he has, so I could never live on less than $40,000 per year – let alone raise a child on that budget!”

This lament comes up again and again, no matter how many times I insist that the Mustache family leads a pretty fancy lifestyle, with no cash constraints of any sort. People still don’t believe me, and they don’t have time to read the older posts which explain things step-by-step. So let’s just present a summary of what life is really like when a family of three lives on well under $30,000 per year in early retirement. This post will then become a piece of reference material, so I can link back to it whenever the topic of how deprived our life must be comes up again.

Please don’t take this as a celebration of materialism and excessive spending. My point is not to say “Yeah! Look at all the fancy things we have!”. It’s actually with a certain amount of guilt that I present this series of pictures, because I know it’s far from the minimalist ideal that many of the happiest people of the world pursue. All I can say is, “this is where we are now, it’s obviously more than enough, and over time we’re finding we want less and less, rather than more and more”.

Following the style of those Forbes Magazine top ten lists, we’ll cover each aspect of the lifestyle with a picture and description, then follow up with notes on how we try to get the most out of each area of life while minimizing the cost. After all, just as important as the amount of money you spend, is how efficiently you are able to spend it.

The House

This is our most excessive piece of lifestyle, as we live in a 2600 square foot house worth about $400,000, in a city where the average is a little over $200,000. Around here, that buys you a 4-bedroom house in great condition, in any of the nicest neighborhoods of the city. The house has four bathrooms including a master suite that is straight out of a design magazine. All of the city’s best amenities, as well as high-paying jobs and fast bus lines to other cities, are within a short walk or bike ride.

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A quick note from 2021, nine years later: WOW, things have sure changed! Due to a long housing boom that is still happening, the house we lived in back then would now be worth over $700,000, and even tiny houses in this neighborhood start in the mid-400s.

Of course, to early retirees this housing “feels” cheaper than ever because our investments have grown even faster than housing prices. It’s a lesson to invest early, and often, in assets that appreciate (both houses and stock index funds). But it’s also a lesson to shop around before settling down somewhere: there still plenty of other nice cities where houses are still cheap.

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How we get it for less: We bought this house for $350,000 about six years ago. At the time, it was underpriced by almost $50,000 due to a motivated seller and a lack of market research on the part of the agent. We toured the house on the first day it went to market, and had the offer in on the same day. Since then, I’ve spent almost a thousand hours of my own time renovating the house to add upgrades like wood floors instead of carpet, ornate tiles instead of plastic shower pans, and other details that make me happy. It all came at minimal cost due to the fact that carpentry is my idea of a good time – it feels like play rather than work to me. This also means home maintenance and repair costs virtually nothing – I can often find the materials through Craigslist and the labor is free.

The house is also strategically located: property taxes are only $2400 per year. Good solar design and insulation in a sunny but moderate climate keeps our combined heating and cooling bills under $450 per year. Understanding our electric use and low local electric rates means electricity bills are under $25 per month. Is housing much more expensive where you live? I had the same problem – I had to move here deliberately to find the right combination of good and affordable.

The Toys:

We have all the stuff we need. Too much stuff. Five working computer systems sharing a high-speed wireless network system stocked with movies and music. A video projector in the basement with an 11-foot screen for movie nights. A stereo system that can reproduce the richest and most detailed music you’ve ever heard, and five other systems which also play music. A complete Ludwig 1994 maple drum kit. Two guitars. Microphones and mixers. A frickin’ five-foot-long Didgeridoo bought directly from its Aboriginal maker in Australia, who also taught me how to play it. A set of carpentry tools complete enough to build an entire house from scratch. An enviable set of educational toys for the little boy. Six bicycles*. A Sevylor inflatable kayak. Great camping gear. Workout gear. Snowboarding gear. Too much!

How We Get it for Less:

At 37 years of age, I’m getting old. I’ve been earning adult wages (and/or investment income) for about 17 years now, and every year I have been tempted or tricked into acquiring more of the luxury items listed above. I bought most of the things used from Craigslist, inherited them for free from friends or family or rental house tenants who abandoned them, or traded for them through barter arrangements. For the rest, I did agonizing comparison shopping, considering each purchase for months before making it. Everything is of fairly high quality, which means it tends to never break, which means it ends up accumulating over the years as you get older. I’m not proud of having so much stuff. But I’m mentioning it just to show that we do not lead a life of deprivation.

The Place in the World

The Money Mustache Family lives, in my own humble opinion, in one of the nicest places on Earth. The Boulder County area of Colorado sits on the edge of the Rocky Mountains, where constantly sunny weather lights up the sparkling glacier-fed streams. You can ride your bike out of your driveway and soon be in a canyon where 2,000-foot cliffs tower on each side of you, a river rushes along at their base, and rock climbers look like tiny ants strung up in the sky above. Bike just a little further and you can set up a tent in an area of wilderness that shows absolutely no sign of human influence as far as the eye can see. Yet you’re surrounded by cities and small towns which connect you by trade to the richest economy in the world with minimal taxation and regulation. And yet, it costs almost nothing to live here relative to the wages available, since food and housing are so cheap and land is plentiful. As with many places in the United States, this place is Pure Freedom, expressed as a series of geographical features.

How We Get it for Less:

We settled down not in the city of Boulder itself, (where a house like mine goes for over $1 million), but just 12 miles down the road in Longmont. It is drastically less hip and fashionable, and the richer Boulderites mock it endlessly, imagining it as a dim expanse of mullets and meth labs. But they’re dead wrong: living here for six years I mostly see towering trees, clear streams, natural people and happy families. And even a little bit of hipness creeping in, if the growing number of cruiser bikes, Subarus, beards, and packed microbreweries can be considered a measure of such things.

The Vacations:

As your life changes, your travel preferences will probably change as well. As twentysomethings, my wife and I saw a bit of the world including Australia, New Zealand, Italy, Hawaii, Mexico, and of course Canada and a great amount of the US. Now that we’re parents to a six-year-old, we keep things a bit more tame by staying mostly within North America. But that doesn’t mean sitting at home at all times. Even at this age, our son has been to four countries and about 20 US states. We spend about 3 months traveling each year and plan to do more as he gets older.

How We Get it for Less:

Mrs. Money Mustache is a travel planning enthusiast. Travel is one of her interests, which is why we do so much of it. She combs the Internet and gets ridiculous deals on flights and hotels. We use high-reward credit cards to get free flights and cash back. We sometimes travel by road in a fuel-efficient small car, bring our own food, and camp out in Nature for some of our US-based vacations. We aren’t impressed by valet parking or $20 drinks and $100 steaks, but we ARE impressed by 14,000 foot peaks, coral reefs, wilderness preserves and untouched beaches.

The Cars:

I write about bikes pretty often, so I must be one of those wacky car-free people right? Wrong again! I actually love cars and am a closet gearhead. Throwing aside practicality, I would own an all-electric Tesla Roadster (one of the fastest cars in the world) plus a BMW 335d diesel wagon for family runabouts and a custom-built Mercedes Sprinter cargo van converted into an RV for extended travel.

How We Get Them For Less:

But instead, I have forced myself to acknowledge that expensive cars are a big drain on the wallet and don’t actually deliver lasting happiness, so I focus on practicality rather than the latest luxury. We have a 2005 Scion xA (“Xena”) for most of our rare driving, and I also have a 1999 Honda Odyssey minivan (“La Mujer Azul”) for hauling the tools and lumber for my part-time construction business. The Scion can carry us all in great comfort at over 40MPG. The van occasionally gets to come out on camping trips, which makes her happy as well.

Both vehicles were bought used, and yet are in nearly-new condition and have never broken down or demanded much beyond oil changes and wipers. Part of this is the fact that combined, we drive less than 7,000 miles a year and it’s mostly for long highway roadtrips. Despite a combined current value of less than $12,000, they are far more than we could possibly justify needing.

The Food:

Oh, the luxury of good food. We don’t need it to be happy (I could live just fine on beans, rice, fruits and vegetables), but somehow we manage to buy fancy food every week and go to great lengths to prepare it in entertaining ways. We invite people over for parties and feed our expensive food to them frequently as well. Most of our food is organic these days, and gluten-free due to my wife’s dietary needs. All of these things cost more. I enjoy and appreciate them, but they are far beyond being basic needs, which is why I’m acknowledging them here. Dig in!

So What’s Missing?

Many people who are new to this blog add up their own budget, and find it’s a lot bigger than that of the Mustache family. So what are we doing so differently that allows this seemingly-normal lifestyle to occur at such a low cost?

Most notable is the virtual absence of a “miscellaneous” category. We have a lot of stuff, but it was bought only once, and most of it long ago. I often go for months with no need to visit any store beyond the grocer, and the hardware store for construction supplies. We don’t buy high-heeled shoes or massages, and probably eat out at a restaurant once a month on average.

Then there’s the absence of driving. We drive only when it’s time to go to another city, which is only once every week or two. No trips to the store, no commuting to work back in the working days, no driving just for fun. That shit is what BIKES are for. This paragraph alone can cut some people’s expenses in half.

Then there’s the child-raising. Having only one kid is obviously less expensive than having more (child-related stuff has averaged $300 per month for us for the 6.5 years of his life so far). But there’s great variability in how much you choose to spend on being a parent, and spending more doesn’t make you a better parent. I like to call it Avoiding Ivy League Preschool Syndrome.

Finally is the absence of interest payments. I’ve never been in debt, with the exception of one year of car-related foolishness when I was young and a few years of paying off a mortgage. A lifestyle like the one in this article could easily cost $60,000 or more per year if you jumped into it by borrowing for everything. But by owning the stuff you use, life becomes much cheaper.

Of course, owning things is not exactly free either: besides the annual spending, there’s real money tied up in this house and stuff. If we sold it all and moved to a rental house and rented the cars, bikes, and furniture too, living costs would rise. But in the end, it’s just one of the two parts of the savings required to pay for a lifestyle:

• the stuff you own outright (the things in this article cost somewhere in the mid-$400,000s, mostly in the house)
• the income-producing assets you own (stocks, bonds, real estate, businesses, etc.), which pay for your annual outflows. To provide $27,000/year in income using the 4% rule, you need an additional $675,000. (Since I have a rental house as part of my income that provides at a much higher than 4% rate, I could get by with even less than this).

In other words, a lifestyle like this can be sustained indefinitely on around $1M in savings, with no need for any additional income. A million dollars – remember that number? That’s the amount that used to be big, but that everyone says is far to little to retire on these days. My whole point here is that it’s still way more than enough.

The Future:

Life is full of change, and I’m looking forward to lots of it myself. We’re still only beginners in this life of not working for a living (although still working plenty for other reasons). And there’s still lots of baggage left over from the days of being more consumption-oriented.

In the long run, I’d like to live a simpler life in a smaller house with less stuff. As our boy gets older, we want to involve him in more work and adventure, so he doesn’t grow up knowing only this life of easy material abundance. So while the doubters will continue to accuse the Mustache family of living an overly frugal lifestyle, you’re only going to see it get simpler from here. Even as income and happiness is rising over time, excessive spending and materialism can drop away as you figure out what’s really important in life.

* after hearing that part of the article, my son informed me that I should count his new bike in the total and be sure to include it in the picture. So make that seven bicycles

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This is email #19 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.

Safety is an Expensive Illusion

Man, I sure lead a risky life these days. I’ve learned that I am on the bleeding edge of so many wild frontiers, it is a wonder that I’m still alive. When you add in the fact that I’m also in great health, happy and content with life, and I even still have all of my fingers and toes, I am expecting a call from the Guinness Book of World Records any day now.

Let’s review a few of the risks people have told me I’m running:

• When I write about my strategy of driving only small, fuel-efficient cars, people chime in about how dangerous it is to drive anything except large trucks like the Chevrolet Tahoe.
• When I write about how we should all ride bikes, people whine about the danger of getting hit by cars while cycling.
• When I describe my love of carpentry and the power tools which make it possible, I get tales of severed fingers and punctured eyeballs.
• When I suggest that it’s more cost-effective to use only high-deductible health and home insurance, people talk about the risk of chronic diseases lurking just around the corner and the litigious people with slippery shoes who might fall on my sidewalk.
• When I write about how I never keep more than a few thousand dollars in uninvested cash around (instead of the $30,000 “emergency fund” that beginner financial advisers suggest), people gasp and talk about the dangers of holding only volatile investments.
• I’ve been riding dirt bikes and motorcycles for 22 years now.. long enough to receive dozens of lessons about how dangerous those Death Machines are.
• I’ve even received earnest lectures about the dangers of microwave ovens, cell phones, wi-fi routers, fiat currency, nonstick pans, and the radioactive fallout from Japanese nuclear reactors. All of which I have taken no precaution against.

So I’ve come to realize that I really am living on the edge by modern standards.

How could this be? Why does our society have this obsession with safety and danger anyway? Have they picked it up from watching TV during these past fifteen years since I tuned out of the medium?

Modern media seems to have figured out that Fear Sells*. If it’s possible to portray something as Scary, those sumbitches will find a way to do it. They’ve noticed two things:

• Fear will keep you glued to the TV set
• Fear will fool you into making purchases “to protect yourself”

I see all of this as breaking down to two possibilities: Either I really am a radical risk-taker and these detractors of mine are much more sensible than I am. Or maybe, just maybe Mr. Money Mustache has actually thought about all this shit and still come to the conclusion that life is safe enough.

As it turns out, I like doing the math on things like this. I can’t keep myself from making estimates of the Expected Value of almost every life action you can put a number on. These calculations happen whether I want them to or not, so I might as well make the best of it.

Let’s use the often-repeated Small Car Argument as an example.

I love small cars – the smaller the better. Better handling, easier parking, less wasted materials, and much better fuel efficiency. But some people think small cars are unsafe. They like to repeat scary statements like, “In a crash, the big vehicle wins. End of story”.

But let’s look into that a bit further. The US government agency called the NHTSA compiles statistics of every major crash that happens in this country, and they’ve been doing it for decades. This has helped car manufacturers improve their designs to the point that fatalities (per mile driven) have dropped by 85% since the 1950s. What’s the rate today? About one fatality per hundred million vehicle miles driven.

Next we can compare the fatality rates by vehicle type:
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The measurement is a little different, since this chart compares fatalities per 100,000 vehicles instead of per mile. But we can still reasonably estimate that my subcompact car is about 16.85/12.34 = 37% more dangerous than a full-size SUV. (also note that midsize cars are safer than SUVs of any type, further proving that the S is for Sucka).

In an average year, I might drive 7,000 miles. So I’ve got a 7000/100,000,000 chance of killing myself by driving in any given year. In other words, there’s a 99.993% chance of surviving.

I’ve got at best 60 driving years left in my life, so over a lifetime my chance of survival is (99.993^60), or 99.58%. In other words, driving causes an expected 0.42% reduction in my lifespan. 0.42% of 60 years is about 4 months.

If I increase my chance of dying by 37%, I subtract another 1.5 months from my expected lifetime.

Is driving a Chevrolet Tahoe instead of my 2005 Scion xA for 60 years worth that extra 1.5 months of life I’m expected to gain from it? Let’s put that another way.

Driving 7,000 miles a year for 60 years adds up to 420,000 miles. According to the EPA website, the 2005 Tahoe gets 14MPG combined, using 30,000 gallons of gas costing $120,000 at today’s prices.

The Scion, burning at the EPA estimate of 30MPG combined (even though I average about 42 in mine), will use up $56,000 of gas. The fuel savings is $64,000. The savings over a lifetime of buying and maintaining smaller vehicles is even larger, but for this argument, fuel savings alone is enough to make the point.

How long do you have to work to save $64,000 after taxes, commuting, and other work-related expenses? I’m guessing it is at least 6 months, and more likely two years or more.

So the ‘safe’ SUV driver is working an extra two years, in order to extend his life by 1.5 months. That is not my idea of a good life strategy.

And that’s before even takinginto account the happiness gained by driving a sweet little well-engineered Japanese car instead of a gigantic piece of shit that can barely navigate a parking lot!

Ok, that example ran a little long, but it sets us up nicely to handle the rest of the list in a flash.

As it turns out, riding a bike extends your lifespan (due to health increases) by between 20 and 100 times more than it subtracts due to statistical risk of crashes. Ride a bike, and you can expect to live a lot longer, it’s as simple as that. Add in the cost savings from cycling, and the decision becomes even more obvious.

Investing your money in productive assets like stocks provides much greater returns than keeping it “safe” in guaranteed accounts which don’t even keep up with inflation.

Over-insuring yourself for any risk (including medical bills) provides a guaranteed stop on possible annual losses, in exchange for a statistically guaranteed larger lifetime loss in wealth. I can do the math almost as well as the actuaries at the insurance company can, and because of that, I carry insurance only against the most catastrophic cases (which don’t include minor things like totaling a car or under $10,000 of damage to my house).

Carpentry and power tools provide guaranteed returns in exchange for an acceptably small amount of risk, so I take the risk and continue to profit.

The microwave and the cell phone present no statistically significant risk to human health. Even if there was a risk, it would very likely be lower than the utility that these devices provide to my life, so I’d still use them.

Do you see the pattern now?

The risk-fearing Complainypants types always focus on the negative consequences of any possible activity.

What they’re missing is the risk of not engaging in that activity. That risk is just as real, and it’s usually larger. But it’s a more hidden and less scary risk, so they take it, and over time they lose.

Statistically, there only two risks in modern life that are significant enough to get me a little scared:

1. The risk of wasting my life by not living it to its fullest
2. The risk of ruining my own health at an early age, possibly limiting my ability to accomplish #1

For most US residents, both of these carry a probability that is astronomically higher than everything else described in this article combined. Upwards of 50%.

It’s so huge, that almost no other risks matter by comparison. So we can happily ignore everything else and focus on just those two things.

My goal for the Mustachians is to constantly whittle both of those numbers down toward zero. Interestingly enough, the best way to accomplish it is often to fuck the conventional notions of “Safety” and start putting some good old-fashioned Risk back into your life.

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Update: One year later, I dug into the bicycling statistics a bit more and wrote another article on scaredypants disease. Biking turned out to be a little bit more dangerous than I had estimated, but it still easily wins as the safest form of transportation, because it extends your life by much more than it subtracts. Many complaints poured in over the minute details, but none were able to overcome the logic that is similar to this article: NOT cycling (or walking extensively every day) is a guaranteed loss. Sitting on your ass at a desk isextremely hazardous to your health. Cycling is a huge gain, with a small and easily mitigated accident loss that you subtract from that gain.

*Fear Sells: That is surely why the Bullshit TV News focuses on scary and irrational short-term issues. But you know what? I’m finding that Optimism Sells as well, and it sells to a much nicer audience. To some, this is just a natural way of viewing the world, but it seems we’re an under-served audience. Optimism is also why I sought out that guest article from Jim Collins– he’s one of the few other people out there correctly reminding us that Everything is gonna be All Right.

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This is email #20 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.

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One dark February night in 1992, the skinny teenaged version of Mr. Money Mustache was sitting alone on the recliner in his parents’ living room, staring out the window in a severely depressed funk. I had just been dumped by my first girlfriend. Lacking any past experience, I felt it was the end of the world. There was nothing to do besides shed tears of teenage angst to a soundtrack of groaning Pearl Jam songs.

I needed something to take my mind off of this incredible loss, so I started combing the bookshelf for something to read. Deep in a remote recess of the shelf, behind the dry Art History books and bizarre volumes of Jungian psychology, a much smaller and more approachable book materialized.

The title was, “The Magic of Thinking BIG, by David J. Schwartz, Ph.D”

Looking back decades later, I now feel certain that this book must have been ‘Stashed there by a future me, just as Biff traveled back in time to give a sports almanac to the teenaged version of himself in Back to the Future II, to ensure a drastically more successful life for himself. Because this tiny and simplistic and charmingly outdated book from the 1950s completely changed my life. And now, Junior Mustaches, I get to share it with you.

You see, with the unexpected growth of this blog’s readership, I’ve had to deal with quite a few naysayers staining the Internet with their Anti-Mustachian complaints about pretty much every idea I’ve ever shared.

“You’re not really retired!”

“Oh, you must be lying about this or that, because things like that aren’t possible in the USA”

“Oh, good luck having your kids go to college because it’s almost IMPOSSIBLE to get a degree without incurring a lifetime of debt.. and then the degree will already be obsolete and then it will have been a waste anyway!”

Things don’t work like that here in Mr. Money Mustache territory. Here in this special place, we shun the Pessimists and learn mostly from the Optimists. And for me, my entire adult life’s history of shockingly self-fulfilling optimism goes back to that initial late night spent reading Dr. Schwartz’s little book.

The book starts off with an intriguing premise:

“…The more I observed, the more people I talked with, the deeper I dug, the clearer was the answer. Case history after case history proved that the size of bank accounts, the size of happiness accounts, the size of one’s general satisfaction account is the product of the size of one’s thinking.

There is magic in thinking big…. but much of the thinking around us is little, not big. All around you is an environment that is trying to tug you, trying to pull you down Second Class Street.

Meanwhile, First Class Avenue, USA is a short and uncrowded street. There are countless vacancies there waiting for people like you who dare to think big.”

As you read through, these quaint yet curiously memorable phrases continue in abundance. You’ll find yourself repeating Dr. Schwartz’s classic 1950s one-liners to your unsuccessful friends, only half in jest, as you try to explain your own phenomenal success after the pairing of David J. Schwartz, and his contemporary counterpart Mr. Money Mustache.

In the early chapters, your mind is described as a Thought Factory which employs two Foremen: Mr. Triumph and Mr. Defeat.

If you put Mr. Defeat in charge, he will very patiently have your factory workers present reasons you cannot achieve what you would like to achieve. You’re too old, or busy, or too overweight, or not qualified for the job.

If Mr. Triumph takes the floor, he switches the thought production completely. Now, every goal you set starts with the immediate assumption that it IS possible. Mr. Triumph already knows he will win, his job is simply to lay out the steps required to get to that goal, and to keep you excited about cranking through these steps.

Next is the chapter about Excusitis, the Failure Disease. The good Doctor describes a series of real-world people he has worked with, some who suffer from this disease, who immediately start listing excuses in the face of any challenge.

“I’m fat because I have a slow metabolism.”

“I can’t ride a bike to work because I’m too busy.”

Then he contrasts these folks to a series of Big Thinkers, who never make excuses and accept challenges with curious enthusiasm. As it turns out, the big thinkers are always the successful ones with plenty of money and happy, balanced lives, and the Excusitis sufferers are always burdened with big and compounding problems.

Amazing, isn’t it, that these examples were all of people in the 1950s, and yet the same characteristics also seem to correlate almost perfectly with successful and unsuccessful people today?

You will find the contrast in your own friends amazing, as you are encouraged to use your real life as a laboratory, doing little thought and observation experiments on yourself and studying the behavior of actual people you know - both the role models, and the anti-role-models. The observations of the book are all spot-on when applied to real people, even from our current vantage point sixty years in the future.

As the book goes on, it gets into deeply practical strategies to be an actual big thinker yourself. Things like monopolizing the listening, rather than the speaking, in every conversation. And when meeting with a more senior executive in your own company, realizing that you are not a subordinate and a boss, but two equally important people sitting down together to solve an important problem. Curing Fear with Action. Absolutely golden stuff, every page of it.

When I re-read this book in modern times (which I still do about once a year), I realize that Mr. Money Mustache has in fact become very similar to David J. Schwartz. We both start each of our golden lessons with an amusing and/or illuminating anecdote. We both write in short and punchy sentences. And we both believe that the modern world is an absolutely excellent place, a dense and flowery jungle completely packed with Mangoes of Opportunity that spray their juices in our faces every time we take another muscular step through the foliage.

But we’re not just living in denial. This confident optimism actually opens up gigantic doors for us and creates unimaginable opportunities.

The reason of course is not actual magic, but the effect your optimism has on the people around you. People want to hire you, or to help you, or to work for you, because big thinkers are very rare and it’s exciting to be around one. And the most powerful key to a happy (and rich) life is to have an easy time bonding with and working with other people.

With this confidence, you don’t have to worry about a recession, or a depression, or using gold coins as currency in a post-apocalyptic shanty town, because you’ll always be able to work with other people, build a productive community, and have a life packed with ample fun and opportunity. As a side effect, you will just happen to accumulate much more money.

Here on this particular blog, we’re applying Big Thinking to become rich enough to retire drastically sooner than regular people. Even better, you will also be applying these new skills to do better in all other areas of your life as well.

So if YOU are not already a big thinker, it’s time to start your training by adding this book to your personal library. And as the word continues to spread, we can all look forward to seeing less whining and more BIG Thinking out there on the Internet and in the real world.

This is email #21 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.

To Achieve Greatness, You Must First Acknowledge that You Suck

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I've got some terrible news for the most dedicated Mr. Money Mustache fans, those strange but generous people who post positive comments here and there around the Internet or in the comment sections of this website, sometimes idolizing the bossy older brother of the FIRE movement.

I, Mr. Money Mustache, am not actually a particularly amazing man. In fact, I suck at many or even most things. Even in the area of early retirement, my primary superpower is simply my ability to not buy things. Furthermore, even if there are certain things I do fairly well, there are thousands or millions of people around the world who do them much better.

Yet I'm not disappointed by all of these glum-sounding shortcomings. In fact, I'm downright excited about them. The fact that I'm still performing poorly relative to my potential as a human is actually one of my greatest motivators. And if you choose to allow it, it can be one of yours as well.

Let's dig in and figure out why:

In our culture these days, there is an interesting type of cancer which affects a certain chunk of the population. The modern word for these people is "Haters", and they're the folks whose comments you see dominating any online news article about anyone who has done something interesting.

A parent who found a new way to raise their kids, a formerly-overweight person who found a way to slim down to athletic proportions, or a person who dared to spend less than they earned and suggest it was a worthwhile thing for others to try. According to the haters, there's always something seriously wrong with the person in the story... and yet miraculously there's never anything wrong with the haters themselves.

So we read the success stories, and then we read the criticisms, and we are confused. Should we be inspired, or pissed off? Are the haters the wise, sober realists they portray themselves to be, or are they just assholes?

Thankfully, there's an easy way to sort out the confusion: Ask yourself: Which group of people is the one getting the good results?

I have seen this pattern repeated with the many people I've met throughout my own life as well. As with any large sampling of people, there were some success stories and others with pretty serious problems or destructive habits.

But oddly enough, the people in the most trouble tend to be those who claim to have run their own lives nearly perfectly. They always have the very best excuses as to why things are not going their way.

"Man, I've really messed up my back, because I had to work so hard at the office and never got a chance to exercise. And now that my back is messed up, it's even harder to exercise, which is causing me to gain weight really quickly. That messes up my back even further, and ... "

"These credit card companies are really ruining my credit. It all happened because my damned employer laid me off right in the middle of a recession. After that, I just went deeper into debt and nothing has gone my way."

I've had conversations like this while the victims and I were in a seated position, consuming pizza and beer followed by sugary desserts. And yet the problems were still pinned on the oppressive workplace and the bad luck of 'old age' dishing out the lower back injury.

I'd like to suggest a different approach.

I'm not asking the haters and victimsto jump up and instantly transform into muscular self-help gurus, ready to start writing books and set out on the public speaking circuit. I'm not even asking them to put down the pizza and start combing Craigslist for a good set of barbells.

All I request, for now, is that they start acknowledging that they, just like me, currently suck.

"You know what? I've managed to mess up my back, because I played the mental self-denial game and let myself get weak and out of shape. I spent my days slouching in a chair at work, and I wasted my precious free time watching TV and drinking beer.

I know that in order to maintain an injury-free back I should be doing at least an hour of walking each day, plus some stretching, and a full suite of weight exercises like squats, clean-and-press, and pull-ups as part of workouts spaced throughout the week.

I also know that if I consume pizza, beer, and cookies, I'm going to gain fat very quickly no matter how much I exercise. But I pretended I was still fifteen years old and that my body would forgive me for treating it like crap."

There. That was a mouthful, and it makes you sound like a loser. But all of a sudden, you're no longer a victim. Suddenly, you've framed the problem entirely in terms of things you can control yourself, and thus you can finally make some progress towards solving your problem.

As it turns out, this mental reset is essential to achieving greatness, or even making much progress, in any area of life.

Applying it to myself, I can see quite plainly that I still don't look anything like Vin Diesel, I haven't contributed nearly as much to reducing poverty in Africa as Bill and Melinda Gates, and I haven't even written as many articles here on Mr. Money Mustache as I would have liked.

But these sad shortcomings are not because of genetic deficiency, or lack of being in the right place at the right time, or being too busy with the demands of parenting.

While these factors could become the seeds of some pretty good excuses, the excuses won't help me get ahead. So for all practical purposes, my shortcomings are simply because I have sucked so far, and it's quite obvious that I can do better in all areas.

The challenge then becomes the much more approachable (and even fun) task of figuring out how to do better. It's a matter of figuring out how to increase your self-control and trick yourself into acquiring better habits - slowly but surely. It's a matter of learning just a little bit each day, noting your mistakes and building on your successes.

Without the fake excuse that the outside world is making you a victim, you're finally free to move up in the world.

Next time you're talking with friends about your various successes and failures in life, try an experiment. See if you can detect any symptoms of Excusitis, the Failure Disease in the conversation - both from their side of it and from yours. If you have friends who have achieved varying levels of success, see if the level of the disease varies.

If you get a chance, try expressing your hardships in a way that acknowledges the fact that you do, in fact, suck.

You'll probably find that your partner starts to disarm and acknowledge that there is just a small chance that they may suck as well.

And from that baseline of humble and modest suckiness, together you can start to build some real Greatness at last.

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This is email #22 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.

Frugal vs. Cheap

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In the great transition from Clueless Consumer to Badass Mustachian, a person must first overcome a significant obstacle: the perception that Frugal, Cheap, Tightwad and various other words all mean the same thing, and that they are all nasty conditions that we should try to avoid.

So I've been meaning to lay down the law on this issue for some time. If you've read "Frugality is the New Fanciness", you know that being frugal just means displaying some skill and good judgement in the way you spend your money - and thus it is a mark of status far greater than conspicuous consumption. Only about 1/300th of the US population has read that particular article so far, but once they do, our country's desire to show off by making unnecessary purchases will be cured. No problem.

But that still leaves the issue of cheapness to be dealt with. What about Ebenezer Scrooge? What about the new reality TV series that a reader forwarded to me called "Extreme Cheapskates"?

Since you're probably too busy to watch the actual video, I'll give you the executive summary: In the linked episode, an unfortunate-looking man with really bad hair is profiled in his various money-saving adventures around town: scraping food off of the plates of other restaurant diners, asking for extra ketchup packets so he can refill his ketchup containers at home, and washing and reusing paper napkins, which he leaves hanging all over his kitchen.

Peppered throughout the show are voice-overs like "Roy estimates that over the last ten years, he has saved nearly $2000 by reusing paper towels"*.

Now, I'm not one of the standard douchebag consumers who derides any attempt to save money as pathetic. I've read plenty of misguided shit that internet commenters have made about my own lifestyle, and it is clear that the complainers do not get it. So I suspect that Roy is actually having a pretty good time with his little tricks, and whether his math is right or not, he's doing pretty well overall.

But I would also guess that anyone who follows his lead might suffer severe social stigma for being "cheap", and for many of us that is not an acceptable outcome.

Being cheap works perfectly well for many people. If you're older, safely protected from the dating world from within the confines of a long-term relationship, and employed in a field where the cheapness doesn't hold you back, you're set. As your age and wealth grows, you may naturally give less of a shit about any irrational preferences of younger society.

But I've made the entire journey from teenager to greybeard with a strong appreciation for the value of money, but an even stronger desire to be part of society, to have friends, girlfriends, fancy jobs, and some social status. For better or for worse, I like being part of a social scene, and while I have no problem with doing things my own way, I try not to let my quirky preferences get in the way of these lifestyle goals.

Imagine a high-school or university student who is in a rich city and looking for love. In this situation, squeezing out ketchup packets, wearing stained green 1980s sweatpants from a thrift shop, or refusing to go out on the town with friends can seriously cramp your chances of success.

Or perhaps you're a young professional worker in the financial industry. If your boss and coworkers wear crisply ironed blue shirts and suit jackets around the 54th floor office, while you insist on freebie conference t-shirts and Wal-mart jeans, your cheapness is not helping you get ahead.

Even in married life, canvassing the tables of the other restaurant diners to ask if you can take home their leftovers while your wife covers her eyes in shame, is an exercise in penny-wise and pound-foolish behavior.

But yet, there are other ways where frugality (rather than cheapness) is a win/win situation: the student who walks to campus instead of driving, or the finance professional who foregoes an expensive wine-collecting hobby, or the married Mustachian who lifts weights in his basement instead of joining the $200 per month health club downtown can save money with frugality without suffering any downside.

What makes the difference between frugal and cheap? Mr. Money Mustache has some guidelines to help you walk the fine line.

It's (almost) all in your Mind:

Many of the worst spending addicts are buying things because of purely imaginary fantasies about the social status they will get. A specific brand of $400 purse or a Mercedes GL550. At this level, they are well beyond the lower threshold of what is required to fit in socially, and may even be popping out of the other end of normalcy, where people will wonder why the hell they buy such expensive stuff. I know several CEOs of multimillion dollar companies who are perfectly content to be seen in a Honda CR-V, and plenty of fashionable Los-Angelesy people who do not follow fashion brands at all. The key is that these people still understand social norms, but they are confident about not needing to stand out at the high end of them. And that confidence earns them far more respect than expensive products could ever attract.

Frugal does not mean Owning Mostly Crap:

A cheap person may live for decades with the sorriest old fridge he could find on Craigslist. A frugal person might have a relatively new and even rather luxurious fridge, and yet spend less money owning and operating it. Similarly, the frugal person might own a more expensive bike or pair of shoes. The key to this counter-intuitive trick is to factor in things like energy consumption, longevity, time saved by owning a more effective product, and even life satisfaction derived from having a few very good things that you use every day. Frugal people still get to own and enjoy top-quality assets, tools, and investments.

Don't spend excessively on yourself, but don't be afraid to spend on others:

When you're on a first date or out with friends, it may be perfectly appropriate to pick up the tab, spontaneously buy pitchers of beer, and otherwise burn off a week's worth of grocery money in four hours. And do it without worrying a bit, because you know you can afford it in the long run. If you do it right, you're buying experiences you'll remember for a lifetime and building friendships of similar longevity.

The key is in what you do between these lifetime experiences. If you attempt to re-create them in the same way every weekend, you're just building your career as an alcoholic. If you also pamper yourself with iPads, massages, and salon haircuts on the off days, you're just creating a person who needs Pampers. So you can selectively spend to capture those fleeting Good Times... but live more like a spartan warrior when nobody's around.

Make fun of Yourself, but don't EmbarrassOthers:

On a typical day, I can be seen biking around town in a paint-splattered lumberjack shirt, patched jeans, and work boots, pulling a bike trailer full of groceries and/or power tools.To me, it feels more showy than a Mercedes, because I'm out riding in the sun while everyone else works. But the Mercedes drivers passing me may think I'm an unemployed hooligan. Occasionally, I'll show up at the school to meet my son in this condition, and I find the other parents are dressed in their office worker or doctor or teacher clothing. Nobody seems to care at all, and I get a huge running hug from the boy when I arrive.

On the other hand, if I had a teenage daughter giving the valedictorian speech at the high school, I might not show up in my painting clothes. And at a restaurant, I never ask strangers for their leftovers, no matter how yummy they might look. It's because these actions would embarrass others, and so my frugality would be inflicting pain on others even if I enjoyed it myself. It would become cheapness.

Use Social Responsibility as a Guide:

If you forego German SUV ownership, you're not hurting society. In fact, you're probably helping by eliminating a bunch of mining and fossil-fuel burning. On the other hand, if you dump your trash in the forest to avoid paying the city's garbage fees, or haggle endlessly with the manager at the big-box store to get things for free, you're not helping anyone but yourself. Canceling TV service and taking up the more productive hobby of reading library books is Frugal. Saving the same amount of money by voting down property tax funding for your local school system is Cheap.

Physical fitness is a nice Substitute for style:

As a close companion to the first point about mental conditioning, comes the issue of your physical form. If you're already so confident about yourself that you don't care what the outside world thinks, good for you - you can skip this step. But for the rest of us who could benefit from a reassuring ally in life, solid physical fitness is a nice one.

Although it is a form of discrimination, fit people are considered more attractive in our culture, and attractive people get hugely unfair benefits in all areas of life. Dating, business hiring and promotion, and even presidential elections are strongly influenced not just by how competent people are, but also on the purely physical impression they make. You can totally game this system just by giving yourself a generally athletic form. The boost in self-confidence combined with the actual change in how other people view you can create a virtuous circle. You will earn more money, even as you can confidently get away with more Frugal tricks without taking shit from your friends and coworkers. And all this shallow appearance stuff is of course just the icing on the cake of living a longer and more energetic life in general!

Artsy-ness Makes Cheap Stuff Cool:

My mom is an artist and my younger brother is an indie rock musician. They're creative and eccentric and great, but they don't make a lot of money with that talent. So both of them have scraped by for many years on incomes that most people would consider inadequate. But when you visit them, there is not a sense of cheap deprivation in their homes... instead there is just really interesting coolness. Bizarre found objects get adopted and shaped into stylish pieces of artwork, unsightly nooks in an old brick wall get painted and become chic shelves you wish you had at home, and scribbly drawings and tour posters somehow work just right for the audience. I've seen my brother, wearing old thrift store discards and 1980s pinstriped suit pants, rock a packed venue of hipsters until tears streamed from their eyes. The lesson is that artistic expression is an excellent substitute for using money to be appreciated.

Choose Wise Friends, not Vacuous Consumer Drones:

Although these tips are designed to keep you on the good side of society as a whole, you can also fine-tune the crowd with whom you choose to hang. There are still some circles of people caught up hopelessly in consumer lifestyles - those who jet out for trips to the shopping mall between episodes of reality TV shows. But luckily, there are plenty of people who are not like this, and they want to be your friends too. The battle to maintain a better lifestyle will be much easier if you pick the right crowd.

So let's draw a line between frugal and cheap. You can be as badass as you want about frugality, and yet you can still shed society's scornful comments about what it means to be cheap, all while being confident that you are doing the Right Thing.

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*which sounds like bad math to me. Would you really spend almost $200/year on paper towels? I probably spend less than $10.00, and that includes a few bucks for washing and replacing luxurious dish towels and cloth napkins as needed.

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This is email #23 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.

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A Peak Life is Lived Off-Peak

One of the key Principles of Mustachianism is that any and all lineups, queues, and other sardine-like collections of humans must be viewed with the squinty eyes of skepticism.

Paradoxically enough, I have found that if so many people simultaneously decide to do something that they are forced to stand or drive in a queue to do it, there’s a good chance it is something that is not worth doing.

How can I dismiss the desires of the millions of line-waiting humans as just wasteful folly? It is because in our natural state, we are supposed to be a diverse and individualistic species. At any given moment, you might choose to be walking in the woods while I’m at home cooking some dinner. Later, we might get together with some of our other friends for a party on my back patio, but we would not expect everyone else in town to suddenly mob into the yard as we did that. If we turned around and saw a lineup of people stretching around the block, we’d know something fishy was afoot.

So the sort of mass behavior that causes lineups tends to occur only in special situations:

• When there is some central authority planning or advertising it
• When herd mentality has taken over, turning People into Sheeple

Marketing causes crowds of people to want each new Apple phone on its release day, so those suckers end up in the silly all-night lineups you hear about every year. Black Friday sales are a similar phenomenon. The 9-5 workday, (combined with poor choices of home and work locations) causes hordes of people to want to drive cars just before nine and just after five every weekday. And thus, these people end up in lines as well.

Herd mentality also makes certain people love certain bands and sports teams, for no better reason than the fact that they are already popular with other people. And thus they line up to get tickets and parking spaces at the crowded stadiums.

Knowing all this, it should not surprise you to learn that as a general policy, Mr. Money Mustache Does Not Do Lineups.

If I’m planning a car trip through a big city, I’ll plan around the rush hour traffic jams, no matter what. Back where I grew up, some of the biggest traffic jams on Earth would form on a daily basis across the megacity of Toronto. To traverse that expanse, you need to plow through over 60 miles of the sixteen-lane-wide highway 401, a road so busy that the daily traffic jam lasts about 18 hours. The only sane conditions are found between 10:00PM and 4:00AM – and so that is when I make my stealthy crossing.

In Colorado, the ski resorts have become so popular that a spectacular lineup forms around each lift chair. A 500-person mob of people waiting and shuffling instead of skiing and snowboarding, is your reward for trying to visit one of these places on the weekend. On top of that, the traffic jam that forms on Interstate 70 on weekend afternoons can turn a one-hour descent back down from the mountains into a six-hour ordeal. But if you stop by on a Tuesday, both conditions are cured.

As a lifelong music-lover, I love to go out and see live music as well. But this doesn’t mean staying up all night to buy tickets for a sold-out arena to hear the world’s biggest pop stars repeat their radio hits. The best music experience for me is seeing insanely talented young musicians play the music they just invented, in a small venue, where you can shake their hands, say thanks, and buy a T-shirt and an old-school CD from them directly after the show.

And during my recent stay in downtown Las Vegas, I found people queuing up for everything, with no apparent benefit to themselves. There are lines to get drinks at the bars. Lines to check into the hotels. Lines of cars everywhere. Lines waiting for the elevators that extend almost to the doorway to the empty staircases.

It’s all a bunch of nonsense. As explained in last summer’s post about reaching the top 5%, most people spend most of their time doing what everyone else does, without giving it much thought. And thus, it is usually very profitable to avoid doing what everyone else is doing.

On the trip, we did a little experiment: Mrs. MM and I wanted to get away for a few minutes. So we decided to go down to the hotel lobby and get some fancy coffees at the Starbucks, which we would sit peacefully together to enjoy. Already I can see your eyebrows raising, but try to stay calm and remember this is just an experiment.

When we got to the coffee stand, I was dismayed to see that everyone else had had the same idea. There was a line of at least 10 people snaking out from the cash register, including two formidably proportioned gentlemen sitting on electric scooters and towing life support equipment. My first instinct was to chuckle out a few new curses towards the overcrowded venue and keep walking. But we persisted.

After sufficient waiting, we finally earned the privilege of forking over $8.11 for two grande lattes. This is roughly the same amount I normally pay for two pounds of organic fair-trade espresso beans at Costco, which makes over 100 cups of fancy coffee at the MMM Homebrew Cafe, but again, we wanted to see what everyone else likes to do. The cafe tables were all full and people were awkwardly leaning on the noisy slot machines or enduring the Beyonce-blaring lobby nearby in order to drink their coffee.

At last, we decided to end the experiment, satisfied that the behavior of the masses was not for us. We found a quiet-looking staircase and walked up three flights to an abandoned conference center area. There was nothing to buy up here, and no automatic conveyances to carry your body here, and thus it was completely empty. We sat down on a comfortable little couch and drank our incredibly pricey coffees with no sounds beyond those of our own conversing voices. It was blissful.

Other parts of the vacation reinforced this pattern: In Moab, Utah, we usually stay in one of the little campgrounds in the canyon along the Colorado river. This year, I was surprised to find them all full, and we had to give up our first two nights of camping and stay at a hotel instead.

The hotel manager informed me that we picked one of the peak times to be in Moab – an event called “Jeep Week”. In this tragic comedy of an event, people from all over the country tow their ridiculous motorized La-Z-Boys with knobby tires from the comfort of their enormous 20,000 pound motorized RV homes. Once in Moab, they detach the smaller recliners and sit in them, pressing pedals and burning gas to bump around on the red rocks for a while. All apparently oblivious to the Muscle over Motor principle, which explains that greater fun could be had by simply riding a 25-pound mountain bike on the same trail.

To get back to the point, by unwittingly arriving at this peak time, the MMM family ruined its own fun and missed out on two nights of camping, because the campgrounds were full.

Although we tried our best to obey the Off-Peak principle, we also made another major stumble: touring the Hoover Dam. To understand the error, check out this quote directly from the visitor’s brochure:

“Although several modern dams are higher, wider, and produce more electricity, the Hoover Dam remains the most popular for visitors, hosting millions of visitors every year”.

Translation: “We have no idea why so many people are lining up to tour this old thing, but shit, we’ll keep taking the money if you keep giving it to us”.

The pamphlet went on to explain that the popularity is continually reinforced by major movies that feature action at the Hoover Dam as part of their plots (Superman 1 being my favorite).

Sure enough, we took the tour, and it was over an hour of lineups and crowding just to see a turbine room briefly and hear a guide squawk out a few memorized facts. There was even a lineup to get into the parking garage.

Meanwhile, a much better experience can be had with no waiting: park in one of the free pullouts on the Arizona side of the dam. Hike down the hill and walk over the entire length of the dam to explore the stunning scene with your own eyes. Then hike back up and climb another 200 feet, to the astounding new Colorado River Bridge (built between 2005 and 2010), where you are so high that the dam looks like a little toy in the canyon far below you.

You can use this general principle to end up with a better life in all areas. If you find any part of your life subject to overcrowding, consider whether there is another way it can be handled. Crowded roads are eliminated by biking, replanning, or even moving. Crowds at Disneyland and National Parks are avoided by visiting areas where there is no RV parking or gift shops. Crowding at venues is eliminated by being a producer of entertainment, food, sports, or music, rather than just a consumer of it. Lineups at shopping malls are easily avoided by not going to shopping malls.

The off-peak life works perfectly for working people, since it frees up some of your limited time and money. And it takes on a new dimension once you gain the flexibility to escape the 9-5 work schedule. Suddenly you can do everything when everyone else is at work, from renting vacation homes down to visiting the grocery store. This saves you even more, and frees your mind from some of the overhead of dealing with constant crowding.

So from now on, if you ever find yourself amid a crowd of running sheep, just turn around and run the other way.

It can take a bit of dodging at first, but it’s worth it for the much better view.

​

This is email #24 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.

​

Fear is Just a Chemical

Image: This is Pure Fear. Not quite as scary as you imagined, is it?

I had a pretty scary dream the other night.

My son and I were sitting on the floor in our basement, building a fort out of interlocking foam squares. Except in this dream version of our basement, I had built the house just a little bit out into the ocean, and the foundation out of sheets of thick glass so you could see the whales and fish swimming around you whenever you were down there.

Except there had been a flaw in the design and at this moment we heard a deep, sickening Cracking Glass sound, followed by the immediate rush of thousands of tonnes of water rushing in to the basement and filling it up. I looked into my son’s frightened eyes as he looked into mine, and grabbed him to get ready to swim. But eventhen I knew there was a good chance we were about to drown together.

Thankfully I woke up right at that moment. My heart was pounding and I was still as scared as hell.

My foot was poking out of the bottom of the blanket. “Danger! Anything out there could bite your foot off!” I pulled it in for safety.

My upper body was still out of the blankets. “Danger! That part of you is exposed to predators as well! Make no sudden moves, and slowly cover yourself up.”

By this point, I had been awake for a few seconds and was starting to come to my senses.

“Ok, idiot. Relax. You just had a dream. Look! You’re safe in bed and more importantly little MM is still sleeping like an angel in his own bed down the hall.” I felt a rush of joy realizing that everything was still fine.

But my heart was still going hard, and I suddenly found myself worrying about the strangest things.

“It’s raining outside. Is the roof going to leak? Did I leave anything outside? Is the rental house OK? Did I forget to do anything important that is now overdue? Am I really prepared for that Ecuador trip in a few weeks?”

As the minutes passed and I thought about what was going on, I realized something profound and useful: that fear and worry are really just chemical responses. Here I was, intellectually aware that everything was just fine, prosperous and safe. But at the same time, my emotions were screaming out in fear and worry as I laid in bed for those first few minutes.

If you have ever done any casual reading on health and wellness, you probably already know this – for various reasons, your body will sometimes decide to squeeze the ol’ Cortisol and Adrenaline bottles into the blood stream. It’s the Fight or Flight stuff that happens to all of us animals. But only by feeling it on such a visceral level and watching myself turn into a cowering crazy man under the blankets, did I realize how powerful it is, and how much it affects us in even in daily life.

The revelation was even more apparent as the hormones cleaned themselves up from my bloodstream and I was able to smile again and fall back asleep. And the next time I woke up, I had the opposite feeling about life in general.

The sun was peeking through the shutters, birds were singing in the trees around my bedroom window, and it was start of another grand day with no alarm clock or mandatory work.

“Wow, beautiful morning out there. I am sure glad we got that rain last night, the gardens will love it. And look at this fine house, is it really mine? What!? I just realized I also have a rental house that is happily taking care of itself. And I sure am looking foward to that Ecuador trip.. what a blast. What an amazing life!”

My whole perspective of the exact same set of life details had completely changed within the span of a few hours, from standard happiness, to extreme worry, and back to gratitude. Just because of the secretion of a microscopic quantity of some damned hormones I didn’t even ask for in the first place.

There’s a lot to be gained in life by thinking about this, and reminding yourself at every moment possible.

Are you scared to apply for a new job, switch careers, or search for a new house in a better location? That’s not because it’s a truly scary thing to do. It’s because there is a drop of liquid about as big as a flea that has been squirted in to your blood stream and is making you just slightly scared. And it’s not helping you.

About 100 people wrote me comments and emails asking me hysterically why I was seen on Yahoo wearing a fishing hat instead of a crash helmet when biking around my quiet neighborhood. The reason is because those little fear chemical bottles don’t squirt for me when I ride a bike. Because, like most things in life, it’s not worth being afraid of.

I have recently heard from people who are afraid to invest their cash or use it to pay off a mortgage, afraid to take it out of the “safety” of a guaranteed-loss-after-inflation 1% savings account. Other people are afraid to quit or even scale down their jobs, despite having several times the savings needed to live forever off of the passive returns. Afraid to try new things, afraid to make the stretch to invite a new friend over for dinner, afraid of the imaginary doom and gloom that will be brought down upon us by this government or the next one.

Your assignment, then, is to notice and remind yourself that all fear, unless it involves rapidly moving weapons, teeth, or claws, is actually bullshit. All fear can be cured. You can attack it with the mind, by imagining those little squirty bottles located right above the kidneys, laughing at them, and shutting them off.

And you can attack it with the body, by just doing what you’re afraid of. And suddenly, it won’t be scary, and you’ll laugh at your wimpy past self. Because oddly enough, Action Cures Fear.

It’s one of the most useful things you can learn as early as possible in life, and I wish this had been drilled into me as a young child. It’s more important than arithmetic or chemistry class or calculus. So that’s your assignment for this weekend – cure one of your own fears, and come back on Monday a bit richer.

-----

Update: in the comments section below, it looks like we have spawned yet another bike helmet safety debate. While this in itself is a little off-topic, I am always was especially intrigued by the inevitable comments that come in with graphic descriptions of head injuries. “In the newspaper, they said there was blood all over the pavement!”, “my aunt works in the ER..” and other such entertainment.

This is the perfect illustration of fear as it should NOT be applied to decision making. Scary stories are of no use to you – only scientific studies of large groups have any hope of helping you decide what activities are actually dangerous. And thus, I tend to delete irrelevant scary stories from this comments section, just as I avoid them in real life, because they are not helping. My apologies and remember that your own blog awaits as a place for all the scariest stories you can muster!

This is email #25 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.

Luxury is Just Another Weakness

I’ll be the first to admit it: Mr. Money Mustache is known to indulge in a few luxuries.

Hell, I’m doing it right now, with my fingers tapping comfortably on a brushed aluminum keyboard while the letters instantly pop up on the 3840×2160 pixel screen of this feathery “ultrabook” laptop. I’m on front porch, looking over the hundreds of beautiful plants in the front garden, my belly is comfortably full from a breakfast of espresso with frothed organic milk, almonds, mangoes and avocados. Aren’t I Mr. Fancypants?

No, actually I am not. This stuff isn’t anything to brag about. Although I am enjoying it at the moment, it is actually an indulgence of a weakness, and I had better watch myself, lest I start to depend on this sort of pampering all the time.

When you really look at this fancy picture, I’m sitting around on my ass, consuming stuff. This seated position is bad for my bones and organs. My muscles are atrophying away as the body takes the hint that they are no longer needed. The typing is straining my wrists and nibbling away at the joints, trying to lay the foundation of Carpal Tunnel Syndrome. The laptop is wearing out and depreciating and the luxury home is tying up close to half a million dollars of precious capital.

In fact, the most rewarding part of this exercise is the fact that I am working to create something – this article for you, for which most of the surrounding luxury is not even necessary.

If I were to get used to all of this, to feel like it were my inalienable right to have it, and become unhappy if I could not have it, I would be pretty much screwed. Because at that point, I would have designed a lifestyle so narrow and delicate, that it could easily be toppled by something as trivial as an economic recession.

And yet people do this all the time. Most people, even. When you borrow money to buy a consumable product, you are instantly teetering atop the ultimate house of cards. You are getting yourself used to the rare luxury of your new toy, even while you are speeding up the treadmill you have to run upon even to get close enough to use it. This is why I laugh and cry with frustration at the absolute insanity of borrowing money for a car, and the fact that ninety percent of Americans do it.

But it’s not just borrowers that are the fools here. Even those of us with a comfortable ‘stash who can fork over a few thousand dollar bills for the odd treat here and there would be wise to watch ourselves. And yet, here is Mr. Money Mustache talking about his own luxuries. What gives?

In fact, the relatively material-rich lifestyle of the MMM family is one of the primary reasons this blog doesn’t scare everyone off. People say, “Oh yeah, they have a kid, cars, and a nice house – seems like a reasonable lifestyle, I guess we can dip our toes in as well.” For a blog that preaches living a larger life with a smaller footprint, the contradictions are rife.

Fortunately, there is a way to reconcile the ideal and the reality. You can dabble in luxury, without becoming a whining slave to it, just by understanding the concept that luxury is a drug.

Most of us have tried drugs in one form or another, right? Coffee gives you a little boost. Alcohol makes you a bit more silly and friendly. Ibuprofen lowers your swelling and fever and can really cut down the misery of a cold or flu. Marijuana is amazing for bringing out creative ideas and highlighting the texture and humor in life, and the list goes on. But the key to all drugs is that they come with a balance of positive and negative effects. So only a fool would overdose on any of them in a breathless pursuit of their positives, while ignoring the well-documented negatives.

Luxury behaves in exactly the same way. I remember taking a big hit of it on a business trip a while back. I stepped off the plane in an exotic destination and smelled the warm air off the sea as I watched the palm trees and flowers blowing in the wind. A black Lincoln was waiting right at the curb to pick me up. I threw my backpack into the back seat and climbed in, noting the contrast between my sandals and shorts and the black leather seats of this business-oriented car. The driver zoomed me through the city to the luxury hotel while I casually flicked through emails on my phone and watched the skyscrapers roll past.

“I am Mr. Bigshot”, I thought to myself. “I sit in bigass cars, with muscular V-8 engines which waste huge amounts of gas while people drive me around. I sit upon polished strips of sliced-up cows, dyed and stitched together by workers who earn far less than me. When I get to the expensive hotel, I will be presented with an internationally-sourced meal prepared by chefs, and a large private suite, while others bow down and wait and pay me for the priceless solutions I deliver from my powerful mind. THIS is the treatment I deserve! Why have I been taking the bus and riding my bike and setting up tents all these years?”

A scientist could probably measure exactly the rush I was receiving from this drug. All the chemicals that come from the feeling of being powerful, pampered, and getting used to it.

It was fun, but it was an experience to be tucked away and cherished and laughed at, just like being drunk off your gourd in the company of friends or high on any other substance. Because even that one executive pampering was enough to start me idly pondering the option of luxury airport transit on my future trips. Tentatively sorting the list of hotels from “high to low” instead of “low to high”. Chuckling at the dowdy furnishings of the Best Western or cowering away from the heat of a Houston day in August.

And while constant pampering of this level would soon make me flabby and dependent, there are ready examples of even more pampered people further along the scale. Some kings and queens of the past grew so dependent and accustomed to their ornate surroundings that they would imprison or execute any servant that failed to deliver their luxuries exactly as ordered. Some movie stars today add special clauses to their contracts, specifying that they only be sheltered in the top grade of limousine and hotel, and the demand is backedup by threat of whining and legal action. My experience with the Lincoln Town Car and the Marriott would be deemed an upsetting step downwards. “Lincoln! Don’t you know those are made by Ford? .. And the Marriott is a place for middle managers and tourists.. not A-list movie stars such as myself!”

When you wriggle yourself into the narrow nook of luxury, your perspective on the world, and your ability to survive and thrive in it, also constricts dramatically. Like any drug, it can be fun to indulge in occasionally. But to seek to constantly maximize luxury in all areas of your life to the limits of what you can afford? Pure insanity. Just as it would be insane for me to say, “Since I can afford it, I need to start taking drugs for as many of my waking hours as possible. Alternating shots of espresso and fine scotch all day, with hits from the bong every hour on the hour!”

Even more insane is for people with financial problems to seek out luxury and even buy it on credit – exactly like a man with a damaged liver reaching for the bottle of vodka while the surgeons are trying to perform a transplant.

So by all means, if you’re not tough enough to abstain totally, go ahead and dabble in luxury just as you might have some fun with the other bits of naughtiness. Think of it as part of an exploration of the full human experience: many luxury products are, after all, the culmination of the art and science and effort of your fellow humans. But approach it from a position of strength, rather than the whining dependence that most of your fellow rich people develop.

Luxury is best appreciated as a strong and interesting contrast to, rather than the fabric of, your daily life.

​
​This is email #26 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 Principle of Constant Optimization

A few years ago, I was helping a friend with some kitchen renovations. He’s a smart guy with a good career, and he likes to work hard on the weekends. He had done most of the carpentry himself, completely transforming a very small house to make it work better for his growing family and greatly improving the home’s value as well. But as we talked about life over the background task of installing backsplash tiles, he mentioned that he wished they could afford to build an addition someday to get a third bedroom, or possibly move to a bigger place.

This was interesting to me, since I know this couple well, and they are pulling in two very solid salaries while living in a modest house that cost under $200,000 back when they bought it. With similar incomes, Mrs. MM and I lived in and renovated a larger house, and still had enough left over to accumulate a retirement-sized investment pool over nine years – about the same length of time we’ve been friends with these people.

Using my secret identity as Mr. Money Mustache, I naturally began to look for clues as to how this might have happened. I noticed a Honda CR-V and a (financed) Honda Pilot in the driveway. Those are great vehicles if you run a rafting company and need to pull people and trailers up the forest access roads to get to the best rapids, but they are not suitable for commuting to work, and yet that was their primary purpose. Their jobs were in two different cities, and neither of them has ever worked in the city we live in – despite the fact that both job types are available here as well. The recycling bin was piled high with fast food containers, which my friend picks up when returning from late shifts at work, and empty Gatorade bottles. The modern wall-mounted TV displayed the razor-sharp images and broad channel selection that are telltale signs of a premium cable subscriber.

So while I had solved the mystery of where their money was going (to the endless stream of seemingly tiny budgetary leaks that are part of a middle class life), I still hadn’t figured out why these otherwise-intelligent people were continuing to burn money even while they obviously had higher prioritiesin their lives than Gatorade. I asked a few more questions:

“Say, that Honda Pilot is a pretty posh machine – what made you decide on that one?”

“Well, we’ve always liked Hondas, and when we had the second baby we just figured we’d like a bit more space”.

“That’s cool. Hey, you often mentioned you don’t like your morning commute – have you ever considered looking into getting a similar position here in Longmont?”

“Yeah, I’ve thought of that, and it would be great. It’s just that, you know, I’m in a groove and I like my coworkers at the company in Boulder. I just haven’t really looked around at the opportunities here. Plus it’s only really a 25 minute drive if you hit it at the right time.”

This conversation went on for a few more cycles, and it became evident that the main reason for most of these ‘stash-draining behaviors was not conscious choices that my friends made in search of a better life, but just things that had been locked in at one stage or another earlier in their lives, which never ended up being changed. They were a form of habits.

As I mentally put myself into their shoes, driving to and from work and buying Gatorade for myself, I started feeling uncomfortable. I felt the inefficiency and the daily drain, but I was not able to fix it. And this brought me to a realization of something I have always done, that is not widely practiced. But it is so important, I think it could be considered one of the Principles of Mustachianism:

Practice Constant Optimization

in all areas of your life.

When I was younger, I was faced with the typical young person’s perpetual shortage of cash. I had wants and needs, but with zero net worth and minimal income I obviously could not meet them all. The solution for me was to try to meet them, in order of priority, at minimal expense.

But the thing is, your wants and needs change over time, along with the rest of your life situation your income level, and the world around you. Your original way of meeting needs will soon become inefficient, and if you stick with it after it is obsolete, you are wasting your own time and money.

For example, way back when I graduated and got my first engineering job, I needed a place to live. Knowing that driving cars costs money and time, I naturally wanted a place close to work. But I also wanted to share a house with three friends, so we could pool our rent money to afford a really nice house even while paying less than we would each pay for separate small apartments.

On paper, this was the perfect arrangement because all three of us worked at the same high tech company. We were excited about the synergies of sharing friends and career advancement and carpools to work.

The problem was that certain members of the group were party boys who wanted to live within stumbling distance of downtown. I preferred to live near work (which was 20 miles West of downtown), figuring you go to work far more often than you go to the pubs. So we all talked it out and shopped for rental houses, settling for a place roughly halfway between downtown and our workplace.

It was reasonable, as I could bike occasionally and carpool the rest of the time. But the next year when the lease expired, the party boys had matured slightly and were willing to live closer to work. So I took the initiative and found us a nicer house with a shorter commute. Optimization had been performed and we collectively started saving thousands of dollars per year in commuting costs. One year later, we moved even closer. And so on.

As the years have gone on, I have always felt the nag of any monthly expenses, seeking to reduce or eliminate them. Borrowing money for anything other than a house was obviously out, since that would trigger a monthly interest expense – an easy thing to optimize away. But much more than that came under the microscope and continued on to the chopping block. I compared insurance rates at every policy renewal date. Looked for new ways to eat that would result in better nutrition and lower cost. Ditched my sports car as soon I realized I no longer used it regularly, with my fancy motorcycle following the same path. Both were fun to own at the time, but when the desire for them faded, they were optimized away.

Even now, I still enjoy keeping a creative eye out for ways to streamline my life. Do I still need my Google Fi mobile phone plan with its generous free international data roaming, or can I switch to a cheaper plan now that I travel less? I definitely love my current house so I’m keeping it for now, but would I sell it and shrink my footprint a little bit once little MM is all grown up? And do I really need two motor vehicles in the driveway when I typically drive less than once a week?

When you practice constant optimization, nothing should be considered sacred, and all of your old assumptions should be challenged on a regular basis. Are there other people out there doing things in a smarter way than you are? Great! You can easily follow their lead. Have your needs or tastes changed as you got older, or new innovations come up since you last bought something? Ideal – another chance to optimize.

Constant optimization may sound tiring when you list two decades of steps out like I did above, but in reality it is incredibly simple and easy. You just have to keep your mind open, asking yourself occasionally, “Is there anything I could change for the better?”

Often, the answer is no, and you can go on in the old pattern. But sometimes your open mind will find things to improve, and you will be far richer for it.

Getting started with a new habit like this can be as simple as saying, “I like to experience new things.” Then back it up by doing it.

Take a different route to work as often as you can, until you’ve tried and compared them all. Subscribe to automated updates on the housing and job markets in your areas, just so you always have a mental map of what is out there. Make a list of your ten biggest monthly expenses and tape it to your fridge, just so you know they are all there, constantly using up your money, so they had darned well be worth the resources they are consuming. If they are worth the expense, continue to enjoy them. If they are not, optimize them away. Look at your daily routine from an outsider’s perspective, and figure out if you are really getting the most value from each one of your hours.

An unexpected benefit of all this self-imposed change is that it helps protect you from forming bad habits, which are hard to change once you get them. In fact, change itself becomes the habit, which is a good one to carry with you through your life. The willingness to experience change brings opportunity, wealth, learning, and happiness for those of us who are bold enough to embrace it.

This is email #27 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 Low Information Diet

The big news today is that the politicians of the United States just bumbled themselves into a Government Shutdown.

Last night, a military friend sent a message mentioning the impending doom to me, which is the first I had heard of the situation. Unfortunately that triggered a late night of frustrated, sweaty reading on my part as I spent the evening catching up on the history of this predicament, cursing the bullshit and the rhetoric of the responsible members of congress, and generally being pissed off about things.

But after an uneasy sleep and a slightly groggy morning, I opened my shutters and found a clear blue sky with bright yellow sun, singing birds, and my lovely family running up to me requesting hugs and breakfast. And thus, my plans for today do not include reading any more of the news.

If you’re surprised to hear that I knew nothing of the looming shutdown, and that I don’t read (or watch) the news at all, then you will get a lot from this article. Because I’m going to suggest that unless you work directly in the news media industry yourself, you too should be paying absolutely no attention to the daily news.

This is an unusual stance in this country, where the 24-hour news cycle has become common and 100 million office workers flop down in front of the television nightly to catch up on the day’s events. Political dramas, stock market fluctuations, meticulous recaps of all the major sports, local tragedies, weather, and of course an update on what is new in bikinis and celebrity gossip.

​
​“As a citizen, it’s my duty to stay informed”,

one news watcher might say, while another quips,

“I gotta keep with up with my Packers, they got a real chance this year!”

“The markets are on a rollercoaster this year”,

Joe Trader might add,

“I need to be on the watch so I know when to sell!”​
​

–

“It is all Bullshit”, is what Mr. Money Mustache says, “You need to get the News out of your life, right away, and for life.”

The reasons for this are plentiful, from the inherently sucky nature of news programming itself, to the spectacular life benefits of adopting a Low Information Diet in general. But let’s start with the news.

News programs are, with the exception of a few non-profit or publicly funded ones, commercial enterprises designed to turn and maximize profit. Many of them are owned by larger shareholder-owned corporations, most notably Rupert Murdoch’s News corp which runs Fox, but let’s not forget MSNBC and even the Jeff Bezos-owned Washington Post.

The profit comes from advertising, and advertising revenue is maximized by pulling in the largest possible audience, holding their attention for the longest possible time, and putting them into the mental state most conducive to purchasing the products of the advertisers (which turns out to be helplessness and vulnerability).

This is why the typical evening news program always follows the same arc:

• It begins with a sensationalist take on a topic of at least plausible national interest (terrorism, political conflict or economic problems are favorites here)
• Then takes a detour into truly horrific and depressing irrelevant tragedies (“Chinese boy’s eyes gouged out with spoon and left in field by unknown woman” is one that unfortunately crossed my screen when doing research for this article)
• Finally, ends on an uplifting note with something like a defiant entrepreneur or a caring soup kitchen. An emotional roller-coaster ride every day of the week.

Now comes the interesting part.

The “largest possible audience” is by definition biased towards the people who watch television the most. These are the struggling masses, the people with debt problems, the folks likely to bring a 3-year-old SUV down to the GMC dealer and trade it in for an even newer loan document.

They are not comprised of 65% engineers, technology and finance workers, doctors, lawyers, and teachers like the readers of this blog. While news programming is an awful diet for their brains, it’s even worse for yours.

The news also completely fucks up the layperson’s perception of risk. The very fact that bad events are rare these days, makes them newsworthy.

A bicyclist hit by a car. A school shooting or an abduction. A terrorist attack. These things are so uncommon, it is best to ignore the possibility of them when planning your own life. But with a sample size of over 300 million people in the US and 7 billion worldwide, unusual tragedies happen daily, and they end up on the news nightly.

Because of this phenomenon, I got almost 50 concerned emails about the recent Colorado floods.

“Is your family OK out there in Longmont? We are terrified for you!”

I was touched by the thought, but also tempted to write back,

“Are YOU OK? You seem to have been watching the news, which is much more dangerous than living in Colorado during this 500-year flood!”

The news focused on the damage: ripped out roads and flooded suburbs. The numbers tell a different story: less than 1% of homes damaged or destroyed, and a death toll of 8. About the same number of people die in the state’s car crashes every week, and staggering property damage is caused in the state’s almost-2000 car crashes per week.

If the news were delivered on a basis of logic rather than sensationalism, it would proclaim

“250 more car crashes today! Families mourn injuries and death, and yet pointless commuting and Car-Clown driving remains unchecked!”

While we can do nothing to prevent the freak rainstorms that cause floods*, we can certainly reduce the unnecessary driving that kills and impoverishes us all. And thus, wouldn’t reducing driving be a much more practical focus, if the news were really a program designed to help society?

All of which brings us nicely to the real point of this article: it’s not just the news that is the enemy.

It’s all forms of irrelevant information**.

As an unusually intelligent person on a quest to create the best life for yourself and your fellow humans, you have a big task ahead of you, and you’ll need all your brainpower to do it. And yet your intelligence, your time, and your attention span are all finite. So why would you ever squander it on anything that doesn’t help you advance your goals? You need to be ruthless in your quest for a cleaner and more powerful mind, and the better you do at this, the more you will prosper. Let’s look at a few examples from everyday life:

Meetings at Work:

Back in my corporate days, I used to sit in meeting rooms with up to 15 other people, with a conference telephone on the table squawking out the chatter of an additional 15 people who had dialed in from the San Jose office. Pointy-haired managers would quiz people on the minutiae of their individual status reports while the rest of us tried to hide the fact that we were falling asleep. Every mind in the meeting was becoming less focused, less productive, and less happy, due to the flood of completely irrelevant information. Meetings should be as short, focused, and small as possible. It is far better for a knowledge worker to miss some “key” information, than to end up flooded with too much.

Micromanagement:

One of the less competent managers at work used to try to read every single software and hardware design specification produced by the entire 50-person department. “As a manager, I need to stay on top of the design details”, he told me. But he had it all backwards: because of this habit, he slowed down every meeting by second-guessing every design decision of every software engineer – most of whom were much more skilled than he. Let the smart people work at their own higher level while you focus on giving them what they need to do their jobs.

Email:

As I write this, there are no email programs in sight. My phone’s mail application (and indeed every app on the phone) is permanently set to “no notifications”. Every email is a potential wormhole of distraction and mental fatigue. This is fun if you have nothing to do, but disastrous for people like you who are working on improving your life. So keep your email sessions defined, short, and focused, then completely close that Gmail tab (and erase the bookmark) so that logging in is a deliberate affair.

Facebook:

Oh man.. don’t even get me started on Facebook. It’s like the news, but at a local level focused on the latest parenting problems, bowel movements, consumer indulgences, and forwarding of pointless memes and Youtube videos. From this point forward you may sign in to Facebook at most once per week. Make a grand appearance, read the updates from your best friends, drop a few compliments and jokes, then get the hell back out. Delete the app from your smartphone, change your password to a 12-digit alphanumeric string you have to look up on paper, and then log out from the web browser. Ahhhh.

I often tell people that the biggest benefit to early retirement has been “getting my own mind back”. Without the demands of 8 hours of software design every day, I’ve been amazed at the fun things I have had the energy to learn in these past 8 years.

But a job really only takes about 50% of your mind. The other half is generally burned by email, television, Facebook, Reddit, video games, researching potential products and other unnecessary things. If you can eliminate these, you’re halfwayto retirement already.

With this 50% downpayment on the most powerful asset of a free mind, you can then start getting other things done. You’ll be able to better organize your time, get a better job, learn skills, learn about happiness itself, get in shape, be less exhausted, and much more.

And so begins your real life – which will proceed nicely whether the government is currently shut down or not. Congratulations!

Addendum:

Wow, this post is much more controversial than I expected and I’m taking some heat in the comments. I think most of the complaints come from the mistaken impression that I am promoting ignorance rather than efficiency.

Following the daily news with the death tolls and pointless squabbles is very different from seeking to understand human society and world politics in general. And when you skip the sugar and carbs of the daily stuff, you free your mind up to accomplish much more than you otherwise would.

As just one example, this blog has reached over four million people and 40 million page views, promoting the idea of lower consumption for the rich world. And I still cast my votes in every election and send the odd letter to a senator. Is this a higher or lower impact than me spending that time being “well-informed” watching or reading the daily news?

Regardless of your goals, you will notice exactly the same effect: If you don’t think you can be a better citizen without daily or even weekly news, just do yourself a favor and try it for one week.

Also, the title for this post was respectfully imitated copied from a chapter in Tim Ferriss’ useful book The Four Hour Workweek.

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Update: several years after this post was written, I had the pleasure of being a guest on The Tim Ferriss Podcast, completing this funny online circle. Then, I even got to contribute my own mini-chapter to his subsequent book, Tribe of Mentors. Thanks Tim!
You can find the podcast episode here: https://tim.blog/2017/02/13/mr-money-mustache/​

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* Although if you really think about it, reducing driving actually could reduce the incidence of floods, due to the effect of driving on climate change, and the effect of a warmer planet on the amount of atmospheric moisture and thus the intensity of storms.

** I should mention that while the news is a useless way to learn about the world, learning about the world itself is very useful. But this is best done by reading books – and maybe the odd scientific blog or journal or other periodical. I do still read most of the Economist every week or two, for example. The facts about the world don’t change on a daily basis, so by focusing on these slower and more well-researched sources of information, you filter out the noise and end up with the stuff that’s really worth learning.

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This is email #28 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.

​How Big is your Circle of Control?​

That recent article on the Low Information Diet (which I probably should have called the Low Irrelevant Information Diet) stirred up quite a debate.

While some readers offered their double high-fives of agreement, others came out with pitchforks and torches, scolding both Mr. Money Mustache and any who dared to agree with him for “Celebrating Ignorance”.

This response threw me off-balance, since the whole purpose of this blog, and most of my life in general these days, is supposed to be the opposite: Decreasing Ignorance, in the form of trying to educate the rich world about the consequences of our current lifestyle and its effect on the rest of the planet, and show an alternative way of living that leads to better results.

I can blame some of the misunderstanding on my own lack of skill – I try to write these things to be as clear as possible, and the success is measured by the percentage of people who write angry responses based on missing a key concept. And sure, we could dismiss a few other people as hopeless complainers who will whine about anything – there’s no changing their minds without a good set of boxing gloves.

But among the intelligent dissenters, the biggest part of the chasm of misunderstanding seems to be coming from a hole in their grasp of the ideas of the Circle of Concern, versus the Circle of Control.

These terms come from Stephen Covey’s ridiculously powerful classic called The Seven Habits of Highly Effective People. It’s a book so old, so wise, and so essential that you are probably living a pointless life if you have not yet internalized its concepts.

I first read this thing about 20 years ago, and I’ve reviewed it about ten times since then*. The concepts are so religiously ingrained in my mind at this point, and have proven to be accurate through so many real-life tests, that I tend to go into a mouth-frothing rant if I see someone not following them. Whether it happens in my comments section or at the table in my back yard surrounded by beers and fellow liberal-minded hippie do-gooders earnestly repeating conspiracy theories, the offense is equally severe.

“What nonsense is this Infidel spouting before me?

This foolish assertion directly violates the First of the Seven Habits!!“

So here it is in a nutshell:

You will have a much better life, if you focus your mental and physical energy ONLY on the things you can personally influence.

Everything else is a distraction that pulls you away from running your life properly.

But quite counter-intuitively, this smaller focus does not shrink your influence and your ability to do good. It causes these things to increase.

Covey calls the range of everything you spend time thinking about your Circle of Concern. Similarly, everything you can actually influence is called your Circle of Control. For most people, the two circles look like this:

Yikes, look at that. The Circles of the typical News Watcher. Many worries are buzzing around in his mind, and yet they are things he cannot control. Whenever you read complaints on a blog or a news article, they are usually targeted at these red boxes.

Even a beginner can take control over many things, which are highlighted in green boxes in the middle. But any time and effort spent on the red boxes subtracts directly from time you can invest into the green ones.

If you live your life in this manner as most people do, you become a reactive person. Life throws stuff at you, and you must react to it. Crappy weather shows up, and you react with a bad mood. A traffic jam snarls up your commuting, and you react by honking the horn and complaining to coworkers when you finally arrive. A health condition develops and you react by typing Mr. Money Mustache angry messages about his health insurance calculations.

Although this is the default human condition, there is another way to live.

It is to shrink your circle of concern (ignoring the daily news and concentrating on deeper sources of information), while using the newly liberated brainpower to work only on items within your circle of control. This is called taking a Proactive stance.

To accomplish this, it helps to start from the beginning and work outwards. And the very beginning is your goal in life.

For me, this exercise might look like this:

Goal:

• To lead the happiest life possible.

How to Reach Goal:

• Live a long and healthy life.
• Have plenty of close and happy relationships with fellow humans.
• Make a difference whenever possible by helping others.

With these directives, it becomes much easier to decide what to include in your Circle of Concern. You simply identify each concern in your life, analyze it and decide if it is something you can affect, then either ditch it or get to work on it. For example:

Concern: The weather sucks today. I wish it was sunny and warm so I could get out and ride my bike.
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Analysis:

• How does this relate to my goal? It is part of Directive #1: Health. Riding a bike is a key to this.
• So I am correct to seek out a way to bike today? Yes.
• Is the local weather in my control? No.
• Does complaining about the weather increase my control of the situation? No.
• So willI choose to waste anyone’s time by issuing complaints? No.
• Is it possible to still ride a bicycle when it is 34F with a light mist falling? Yes.
• What is required to do this? Get out a hat, gloves, and a waterproof coat.
• So will I go to the closet and get out the hat, gloves and coat? Yes.

In other cases, the revelations can be deeper:

Concern: I try to keep up with the daily happenings around the world, and what I hear worries me quite a bit.

Analysis:

• Why do I feel that watching the news helps me to be a better human? Because I want to stay informed about world events.
• How does this help me with my goal of helping people? By allowing me to understand their suffering, like what’s going on in Syria.
• Does understanding the details of each instance of human suffering help me alleviate it? Well, no.
• Has war and suffering been a permanent fixture of human civilization since before we had swords? Umm.. I guess so.
• Would you rather save 10,000 people by focusing on the details of one war, or save one billion people by reducing on the causes of war and other suffering? Shit, what kind of question is that?
• What has been the cause of war in general? I guess it would be inequality, poverty and the struggle to survive, oppression, insatiable desire for power, religious conflicts, and a few other things.
• Do these general causes of war change with the daily news? No.
• How can you have the largest effect on the number of people who suffer due to war?
  ​Hmm.. I guess I might work on poverty since greater wealth and productivity has caused a pretty dramatic reduction in violence between the wealthy nations. After all, Germany hasn’t sent out any fleets ofattacking submarines in an awfully long time!

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But what will I do, if I’m not busy being concerned with things outside of my control?

Now here’s the reason this counterintuitive mind trick works: By deliberately limiting the irrelevant things you do and think about, you automatically become much, much better at the relevant things on which you spend your time.

The increases in your health, wealth, focus, network of friends, and knowledge of relevant things from reading library books and talking with other Highly Effective People will have the following effect on your circle of control:

Wow, look at that. The circle of control has really grown! And when reviewing this new more advanced circle, we see that all sorts of fancy new options have been added in blue.

This person, while carefully avoiding the distractions of any of the irrelevant items in red, has gained influence over many more things. And thus things you could once only worry about, are now things you can control. Which is probably what you wanted in the first place.

Therefore, today’s assignment is as follows: over the coming fifty years, monitor both your worries and your words. If you catch yourself leaking out more than a tiny percentage of your personal power on things you cannot personally control, repair that leak.

Then find a way to channelthat awesomeness to somewhere it will make a difference instead. Watch the results, and write back to me only when you have realized how well it works.

*I have an audiobook version of the book in MP3 format, and at least once a year it comes up on random play on the digital memory card labeled “Cross Country Roadtrips” that I pop into the car stereo at the start of long voyages.

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This is email #29 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: The Position of Strength​

Mrs. MM destroys a portion of the house in a 2013 work session.

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A note from 2022. Hey everyone, I hope you are enjoying this boot camp series as much as I have been enjoying digging up these articles and dusting them off a little. Just for context, we are still working our way through in chronological order - and the following article was first published on November 11, 2013. While many details of life (and house prices) have changed since then, it's amazing how the core principles of living well just stay the same, from one decade/generation/lifetime to the next. Please read on!

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A few weeks ago, the MMM family lost about $12,000.

While this might sound like quite a bummer, the event wasn’t upsetting in the least. In fact, the days between that fateful event and today have been some of the most joyful and free days of our lives so far.

As you know, Mrs. Money Mustache keeps an old real estate license handy in her toolbelt. While she maintains the appropriate retired woman’s approach to the field, turning down business except in the case of helping the occasional friend who is buying or selling a house in our immediate neighborhood, she still finds herself helping out with a deal or two every year.

For the last few months, she has been touring houses with some friends who are currently renting a place nearby. They were shopping on the nicer side of our local neighborhood, which implies a 3-4 bedroom house in good condition at a price of around $400,000.

They shopped and shopped. Some places were perfect, but sold too quickly at a price just out of reach. Others were shabby and overpriced. There were various squawking battles from the colorful real estate agents and sellers involved in the process. Going through the all-too-familiar complications inspired my own article on how to buy a house.

At the end of it all, our friends decided to simply buy the nearly-new house they had been renting right in the same neighborhood for the past year. Their landlord had bought it just before the housing crash, and was happy to unload it now that our prices have recovered.

But the landlord proposed it as a private deal: cash would flow from buyer to seller, with no real estate agents on either side. With Realtors normally tacking a 6% commission onto every deal, this simpler arrangement would create a huge win/win situation for our friends and the homeowner.

The only problem was that Mrs. MM would no longer be eligible to receive her 2.8% paycheck, which is how a buyer’s agent normally earns a living. With a purchase price around $400k, this implies a loss of almost $12,000 in income. This fact was not lost on our friends.

“How should we handle this?”, they asked. “We don’t want you to get shafted after doing all this work – should we raise the selling price so you can get your commission? Should we renegotiate the deal harder so the landlord will pay you out of her cut?”

​

“Bah… don’t worry about it!”, said my wife. “We’re just happy that you found a place you like, and that you are getting such a great deal on it. Enjoy your new freedom from the grind of shopping and moving, and congratulations!”

.

That night she told me of her decision, and we both toasted some heartily filled wine glasses and had a laugh over the whole situation. We were glad our friends had finally found a house. We both knew that they would benefit from the lower purchase price much more than we would benefit from an extra twelve grand of before-tax income. There would surely be other deals and other windfalls in the future. And more importantly, we value the friendship and were very thankful that the sticky issue of money did not have to get in the middle of it. Friendships, businesses, and even families have been broken apart over much smaller sums.

I share this story because it is a particularly sweet illustration of the Position of Strength. It is an example of why financial independence, freedom from an addiction to ever-increasing luxury, and when you really think about it, all forms of strength are such incredibly useful things to build into your own life.

Looking back at my list of all the articles, I am starting to realize that this isn’t a personal finance blog or even a lifestyle design blog. It’s a neverending sermon on the joy of strength. Strength, also known affectionately as Badassity, is at the root of most of the joy in a human life. And weakness, which also manifests itself as Complainypants and Wussypants diseases, is what makes you unhappy. The solution to leading a great life is therefore so simple, it is almost insane that our entire society is geared to run directly against it.

So let us browse through a few of life’s most powerful sources of strength to soak up its amazing connection just about everything:

• Money is the most acknowledged source of strength in modern society, for it gives you the power to get other people to serve you, and to do so with a smile.
• An Abundance of Money is even more powerful, because you no longer find yourself feeling the need to act like a weenie in the pursuit of more of it. With this Abundance power, you can properly align your earning and your spending with your values, rather than just seeking out the cheapest option or trying to squeeze more money out of your customers, employees, or fellow citizens.
• The Desire for Ever-Increasing Material Luxury is therefore a serious weakness. In the playground of life, there is a giant teeter totter. Mr. Abundance sits at one end of it, with his casually ripped physique, faded skateboarding shirt and scruffy facial hair. Mr. Luxury sits directly opposite him, clean-shaven in a 3-piece suit with those shiny pointy-toed business shoes and a rounded little beer belly tucked in behind a tight belt. You can never satisfy Luxury – there is always another level of fanciness to attain, and thus he can never have quite enough money.
• Giving is a form of strength. When you say, “I have more than I need, and thus my desire to take should fade away as my desire to help out grows”.
• Taking is therefore a form of weakness. On the playground, Luxury maintains just a little more desire to take, which competes with his desire to give. Meanwhile, Mr. Abundance is always working on needing less. The “taking” weakness continues to shrink, allowing him to invest more in his “giving” strength.
• Health is a form of strength. With health comes a clearer mind, more energy, a greater range of options and comfort zones, and a longer time alive to enjoy the offerings and mysteries of this planet. Life can dish you a blow, and you can get up and get back to work.
• Physical Strength is the part of health that is mostly ignored in the United States, yet it is the most useful and efficient component. Sure, aerobics and bicycling can keep the worst effects of early decay at bay, but lifting heavy old-fashioned barbells and dumbells is a much faster and more thorough way to keep all of your systems in working order and create a foundation for the rest of your life’s strength.
• Skills are a form of strength. Each thing you learn to do improves your quality of life in astonishing ways, because it makes you stronger. If you are good at your job, you have the ability to earn lots money. But if this is your only skill, you need to outsource your food preparation, transportation, relationships, entertainment, and the repair and maintenance of everything you own including your own body. If your money supply fails or your hired specialists don’t do their jobs perfectly, your life falters. By insourcing all the basics required for happiness, you build a self-reinforcing resilient mesh of power that makes you happier, wealthier, and more interesting as well.

By now you are probably pretty excited about the Position of Strength, and you are ready to step into it. But there one point that underpins everything above, and it is the one our marketing engine works so hard to hide from you.

• Voluntary Discomfort is the secret cornerstone of strength. We build our whole lives around increasing comfort and avoiding discomfort, and yet by doing so we are drinking a can of Weakness Tonic with every morning’s breakfast.

Discomfort is generally regarded as a bad thing. If you’re a mother of five in a developing country and you run out of food, or your children are injured or killed by disease or war, saying it absolutely sucks would be a great understatement. This is involuntary discomfort at its worst, and the resulting unhappiness makes perfect sense.

But when you, as a privileged rich-world resident walk into hardship and discomfort willingly, the feeling is completely different.

My favorite part of every weekday is cycling with my son to school. The morning temperature at this time of year is right around the freezing mark, and I make a point of wearing just a bit less warm clothing than I need for complete comfort.

“Don’t you need a bigger coat?”, my wife asks. “It’s freezing out there!”

But the feeling of cold wind on my skin is exactly what I need to feel alive in the morning. Pushing the frontier of comfort is a simple way of building strength, preparation for the coming winter, and by extension, happiness.

After all, my son and I could just as easily drive the car that 0.77 mile distance to the school, thereby avoiding all discomfort completely. Heck, I could start driving for all my errands around town just like a Car Clown. I could avoid the burning sensation of trying to lift the barbells in my garage and be more comfortable too. Sitting in my office typing thisblog article is much more comfortable than lying in the crawlspace under my new house welding up the new structural supports, and it pays much better too. Perhaps I should also outsource the hard physical activity to a specialist. A 2014 Mercedes would be more comfortable than my 2005 Scion, a $2000 bike would out-cozy my $300 one, and in the summer my house would be more comfortable at 75 degrees than the 86 level where I currently consider turning on the air conditioning. It would be more comfortable to have a housekeeper and a chef, a private driver and a gardener, and these days we could even afford to add these comforts to our lives without the discomfort of having to work.

And yet we continue to not purchase any of them, and to do quite a bit of unnecessary work. Why? Have we developed some sort of insanity?

The answer is exactly the opposite: If you go back and look through those points which define the Position of Strength, you see that every bit of the conventional and comfortable path undermines that position.

Our entire culture teaches us to seek out all possible comforts, and to be unhappy when we don’t have them. And thus, it dooms us to a life of permanent involuntary discomfort, and therefore permanent weakness.

Living a life of weakness is not fun

Living a lifestyle of strength is extremely fun.

The only insanity is the fact that almost nobody chooses this option.

This is email #30 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.

​Predictably Irrational​

Author Dan Ariely

As an Economic Unit in a Capitalist Economy, you probably spend most of your time scurrying about Maximizing your Utility. Right?

You buy things which give you pleasure, or sell them when the cash you’d receive is greater than the pleasure of keeping them. You choose the job that offers the best tradeoff between things like pay, stress, and time consumed, in an industry you chose based on the same criteria.

Even your leisure time is rationally allocated, optimized to get the most happiness from a finite amount of time, with cost factored in and weighed against the amount of extra work required to pay for leisure spending.

Although you’re probably having a good laugh at my deliberately optimistic oversimplification, this is the basis of free-market capitalism itself, and to a certain extent it works. In fact, most of the good aspects of our great leaps forward since the industrial revolution are byproducts of this free enterprise and trade. Neat inventions in food production, medicine, clothing, and everything else that brings us long lives and comfort, are side effects of the incredible ingenuity unleashed by setting smart and hard-working people free to run.

If that were the whole story, we could just shut down the government and sign an Ayn Rand novel into law and be done with it. But anyone with a deeper understanding of the market system is probably waiting to point out the other side of it:

Most of the bad aspects of modern society are brought about by the failure of humans to properly maximize their utility.

In other words, we make some incredibly stupid decisions. And the byproduct is pain, untimely death, and inefficiency.

The standard opinion on this inefficiency is that it’s just a few bad apples in an otherwise good system. Most of us do well at running our lives, don’t we? We know what we want, and our system is good at delivering it to us. But I’d say there is more to the story.

Most Americans, for example, are deep in unnecessary debt, overweight and poorly nourished, inactive and stressed out, and self-sentenced to a mandatory career of unsatisfying work just to stay afloat. We constantly buy things we can’t afford and don’t need, and the majority of the trading we do does not increase our net happiness.

We’re so easily manipulated that advertisers and politicians can pull our emotional strings with ridiculous ease just by replaying the same transparent ruses day after day, decade after decade.

• “This $60,000 truck will bring you power and freedom to escape to the Hills of Freedom while towing your bigass boat.”
  ​
• “This $60,000 SUV will keep your children save while adding a nice veneer of prestige and quality to your suburban life”
  ​
• “Vote for my political party, and I’ll protect you from the other side who wants to drive this country into the shitter, attack your most core values, and take away all your prosperity for themselves.”

And all of this is done with virtually no awareness of how we are affecting our own ecosystem – the tiny veneer of air and plants that is the only thing between us and the lifeless vacuum of space. In fact, it would be difficult to imagine a less efficient way to maximize “Utility” than what the modern consumer does.

Given all this freedom, why do we screw things up so royally? Is there a way to maintain the power of the market while getting around the general idiocy of our own species?

Fortunately, the answer is built right into you, in the form of the genetic program you received at birth. The reason we suck at running our own lives is that we are evolved and programmed for a completely different set of surroundings. But this handicap can be overcome: by learning about our own weaknesses, we can compensate for them and lead much more productive, powerful and happy lives.

This is where the title of this article comes in. I recently read the book Predictably Irrational by Dan Ariely at the recommendation of some readers. It’s not often that I find a book that crystallizes so many interesting concepts in one swipe, but this book does it. Everything the author proposes just makes so much sense. But as an MIT behavioral economist with mutiple books and over 75 published papers on his resume, these are not just the blowhard opinions of a financial blogger – the man actually does his own research and has an uncanny way of sharing it with the world with perfect accessibility.

There were a few key lessons that stuck with me after finishing this book. They are useful not just as curiosities of human nature, but as practical tools for overriding our innate ridiculousness and learning to live life more sensibly. When applied to personal finance, this equates to easily amassing way more money than everyone else.

And then of course, using that wealth in a more rational way in order to have a much more fun and generous life.

Relativity

Humans make decisions in relative terms, rather than absolute ones. Given a restaurant menu with varying prices, people tend to avoid the most expensive item, but are very comfortable choosing the second one on the list. Restaurants have learned this, so they will often insert a “decoy” expensive dish (which may cost no more to prepare than the others), which allows them to raise the price of everything else, making all alternatives look like comparative bargains. The same thing happens when shopping for clothes, cars, or television sets.

Rationally, we should be comparing list prices to all other ways of meeting the same needs, and to our own income. But our genetic wiring wants us to make quick decisions and move on, and in prehistoric times, comparing in relative terms was the way to get this done.

But this built-in flaw has implications on much bigger things than restaurant choices. We design our entire lifestyles by looking around us to see what everyone else is doing. Most of us position ourselves in the middle of theherd, and start feeling deprived if we sense we are near the bottom. The problem arises when the herd is comprised mostly of sheep, responding blindly to their own irrational instincts. So as a society we have a tendency to automatically run ourselves straight off of the nearest cliff.

Market Norms vs. Social Norms

Most of us know that it is socially inappropriate to ask our friends to cough up money when we invite them over for dinner, or to offer money to a romantic partner in exchange for sex. But if you take those exact two human needs and reframe them differently: it is normal to pay for a meal at a restaurant and the world’s oldest profession continues to thrive.

This is the core of the distinction between “market” and “social” norms. As it turns out, humans obey different rules when operating in a business environment, than they do when they perceive they are among friends and family.

We are more generous when we are reading from the Social Norms playbook, and we enjoy our lives more when doing it. This is why countries and cultures with stronger family and friendship bonds tend to be happier than the cold and impersonal market-driven ones – even if their incomes are lower.

You can use this to your advantage. By bringing more social exchanges into your life, you can live more happily and build a safety net that protects you from the sharpest edges of the market system. I saw a nice example of this about a year ago, when a close friend stopped by and saved my house from flooding as part of a routine visit to water the plants. Invite your neighbors over for dinner, share children back and forth for babysitting, and loan out your tools, lawnmower, and weekend labor as much as you can.

And if you run a company, bring some social norms into the way you treat customers and employees. Instead of dinging people with every conceivable fee or squeezing employees with the lowest legal level of vacation allowance, expand your trust and generosity towards them. Watch as their dedication to you grows and provides benefits much greater than the costs.

Loss Aversion and Overvaluing What We Have

When I wrote the opening story about ‘losing’ $12,000 in an earlier article about Strength, I took some heat in the comments about it:

“You did’t lose the twelve grand, Mustache, you just didn’t get the money in the first place! Totally different.”

But that choice of words was deliberate. I work hard to remind myself that although it feels different to have a brand-new $12,000 car roll off a cliff because I forgot to set the parking brake, or have an expected $12,000 deal fail to materialize after doing all the work, the financial effect is exactly the same, and thus I should not worry about either of them.

In everyday life, loss aversion messes with us more than we realize. We hesitate to sell things we are no longer using, because we become attached to them.

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“I can’t sell my pickup truck for $12,000 – I paid $30,000 for it just a few years ago!”

“I don’t want to invest in stocks, because there might be a big crash which causes me to “lose” money. I prefer to keep the money in savings where it is guaranteed not to fluctuate.”

“I am afraid to seek out a new job or find myself a new home closer to work, because I might lose some of the comforts that I have grown accustomed to in the current situation”

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The way to get around thisis to recognize your own irrational loss aversion, and work to compensate for it.

For example, I keep a Craigslist app on my phone and fairly ruthlessly fire out ads to sell unused things when I stumble across them in the storage area of our house. I try to replace emotion with the more rational friend of statistics when deciding whether I should invest money, buy a more full-coverage type of insurance, or take any other form of risk. And in our upcoming move where we are “losing” over 1000 square feet of living space, I remind myself that there is no fundamental rule of humanity that dictates three people will be any more happy with 2600 square feet of interior space than they will be with 1532 square feet. I program myself to feel the “ChaChing!” instinct, which creates immediate gratification in the event of good monetary decisions, to compensate for my natural tendency to want shiny things NOW instead of investing for later.

Marketing and How it Plays Your Ass Like a Puppet

The thing about all of these cognitive biases is that even if you don’t round them up and get control of them, somebody else will. For over a century, the field of Psychology has been unearthing these things and studying them rigorously, discovering the joys and hilarious downfalls of the human animal. And for almost as long, marketers have been picking up the research and honing it for their own advantage. I recently read a quote from the head of one of the country’s largest ad agencies, which went something like this,

“It is generally understood in our industry that we aren’t fulfilling wants and needs – we are creating them. A new product first needs to create a market for itself, before it can be sold into it.”

Isn’t that revealing? I still admire many of the funny and creative people of the advertising industry and my own Dad worked most of his career in it, running his own one-man agency for much of my childhood. In fact, some of the lessons of that industry have surely soaked into my own approach, and you could view thisblog as an ongoing Anti-Advertisement which aims to apply some of those principles in reverse.

But by golly, if you are going to be out there trying to kick ass in life and as an Economic Unit, you’d better go to battle with proper armor. And that means understanding your evolutionary weaknesses so you can avoid their tendency to turn you into a Consumer Sucka. We are all idiots at heart, but the more successful among us learn to compensate for our idiocy.

So I’d like to give my thanks to Dan Ariely for writing this book and his amazing contributions to society so far – I’m off to read the rest of what he has written.

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This is email #31 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.