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.

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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.

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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.

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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.

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​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!”​
​

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“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.
​​
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!

​
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.

​

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.

​It’s Not a Contest​

A few weeks ago, I was in downtown Denver at the conference center, as one of the parent volunteers my boy’s the elementary school Robotics Club. We were there to watch an international competition, where kids from around the world had brought along robots they had built to be squared off against each other in various events.

After an exciting drive down to the big city, we stepped off the school bus and made our way though the various bridges and corridors of the gleaming glass facility. When we arrived outside the designated ballroom, we were greeted by one of the teachers from our school district. He addressed our group of about forty kids:

“OKAY GUYS! Before we go in, I wanted to remind you of one thing. There are two types of people in the world today: those who create technology, and those who consume it. Only one of those groups gets to cash the check, the other has to write it. Apple Computer didn’t get to be the richest company in the world by buying a bunch of phones – they had to do the hard work to develop those phones.

So when you go into this room, I want you to look at the teams and where they are from. You’ll notice most of them are from Asia. Because over there, they take this stuff – science, technology, engineering, and math – much more seriously than we do. The kids your age are already starting calculus, and they program their own robots and do events like this every weekend. They are way ahead of us, and in a global world, it’s blah blah blah…”

At this point I tuned out, because I could see where the guy was going. And while his pep talk was meant to be inspirational and he had some valid points, I also think he was missing the bigger picture.

However, I was happy to add this experience to my collection of stories about a common theme these days: the concept of artificially imposed competitive worry.

These scary little talks pop up in all areas of life, and with them we are creating a dog-eat-dog world in the middle of a very comfortable and well-appointed dog food factory.

You’ll see this phenomenon in varying degrees in the school system: At one end of it, my own family has become curious about the hippy free-for-all concept of Unschooling, while traditional schooling methods are more rigorous. And the trend seems to intensify in the Northeastern United States, where many of the wealthier residents are afflicted with Ivy League Preschool Syndrome). Further East, some of the Indian and Asian cultures value education highly, but often under a very strict regime of long hours, reduced leisure, rote memorization and a focus on competition.

Unfortunately this phenomenon does not end on graduation day. The nature of large-scale capitalism is competition and survival of the fittest, which I believe can be a good thing overall. But when you apply constant competition on the level of individual humans in a win-lose battle, the results are not nearly as good.

Most of us seem to come pre-packaged with a desire for more. If something is good, more of it must be better. A 4-cylinder car provides amazing transportation options, so people naturally try to get more of that amazement by buying 8-cylinder trucks. A few hundred square feet of interior space is a very useful form of shelter, so given the resources some of us will amass tens of thousands of these square feet.

But the phenomenon of more extends even further than material conveniences. It leaks right into the way we live our lives and perceive our value as human beings.

If you enjoy your job, you may find yourself advancing relentlessly until you become the CEO. If you own a business, you might find yourself growing it just because the customers and the money are there and you don’t want to waste the opportunity. If you like jogging, you might start escalating the hobby into being a competitive athlete, and end up spending every weekend training and traveling and getting tendon surgeries without even stopping to ponder if even more running is what was missing from your life.

But what if higher status and accomplishment and higher income were not the things you really needed to achieve a happier life? You would end up trading precious time and life for something that really delivers no value to you, because you had enough in the first place.

Some people call this tendency mindless accumulation. This bad habit is built right into us, as you may have seen in the recent psychological study described in the New York Times. In that rather amazing experiment, researchers found that people were willing to endure annoying noises for far too long, just to accumulate chunks of chocolate that they knew they would never be able to enjoy. This tendency was more prevalent among high-achieving and high earning people like you.

You might think that a fake self-discipline guru like Mr. Money Mustache would be immune to this effect, but unfortunately this is not the case. I still get little thrills every time I earn an extra chunk of unnecessary money, and strive irrationally hard to avoid the pain of losing any of it. People with an even stronger version of this tendency will tend to work in unsatisfying jobs much longer than they need to.

Several MMM readers have shared stories in the past about reaching multimillionaire status and yet still feeling compelled to accumulate more. And just to prove they are not that unusual, a 30-year-old described the addictive process that led him to be unsatisfied with a $3.6 million annual bonus. He used the very appropriate term “Wealth Addiction” to describe his condition. The underlying brain chemicals probably function in just the same way as many other compulsive habits.

I find that the tendency to mindlessly heap more onto our plates even occurs with life experiences. I had a very happy life even back in 2011 before starting this blog. As it took off in subsequent years, more opportunities popped up as more wonderful people were brought into my life through the magic of the Internet. There were chances to go on more trips, speak at schools and conferences, meet people for lunches and dinners, write books and make videos.

This all sounds like very fancy stuff – the type of opportunities one should not squander, because they are not offered to everyone. But at the same time, every activity you add to an already-full life means that something has to fall out the other side (unless you can cut out sleep, which unfortunately is not an effective strategy). So I feel opportunities slipping away every day. I see how much more I could get done if only I would work harder and become more efficient at everything.

But then I calm down and remind myself, just as I am reminding you today, that it is not a contest. Life is not a contest, and we get more out of it by cooperating wholeheartedly with each other rather than beating each other’s asses at everything.

The young students should be encouraged to become scientists and engineers if they love the field as I did, but being artsy and creative, insightful and broad-thinking, or optimistic and good with people are equally valuable and rewarding skills. After all, Apple didn’t revolutionize the world of technology by adding more features and buttons than its Korean competitors – it did so by paring things down to a simpler and more human form.

Companies don’t pay the highest salaries to those who can memorize the most arcane technical details or work the most hours – those dollars tend to go to those who can inspire and influence the most people. But you can take any strategy that works for you, since making the highest salary should not be anyone’s goal anyway.

And you and I, as well as our kids, won’t attain the widest smile on our deathbeds by racking up the largest bank balance or longest list of countries visited. This achievement will probably be earned through a more balanced life.

Slow down and take the time to look around you. If you are a chronic lifetime overachiever, give yourself permission to accomplish a bit less. You might just find you are living a bit more.

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This is email #32 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: Moving to a Better Place

If you’re like me, you currently live somewhere. But can you explain exactly WHY you live there?

For most people throughout the history of our species, the reason they have lived somewhere is because they were born nearby. And the reason they were born there is because their parents were born nearby.

Very rarely, a brave and enterprising person will make a big move to a whole new place in search of wealth or happiness. Some of your ancestors did that, forming an interesting chapter in your family history. And maybe even YOU have done that in your own lifetime, and you’re currently living far from where you were born, probably because of a bold personal choice you made. And if so, good for you!

I’m bringing up this topic because I am often amazed at the sheer disparities in niceness between different regions here in the US, despite the fact that it’s all one country which makes it very easy to move around. There are some areas which have drastically better weather, or landscape, or outdoor recreation, tax rates, job possibilities, mountains, ocean, lakes, beaches – you name it. And yet, as I study the areas with the best attributes, the cost of living in these areas is often completely uncorrelated with how nice they are.

I like to make fun of the New York/New Jersey region, because it is just amazingly expensive and crowded, and yet it is completely unremarkable compared to the rest of the United States – humid summers, rainy and cold winters, limited access to wide-open natural areas. All wrapped in a package of heavy regulations on small business owners like myself and shocking property taxes (annual tax on a house like mine would be over $12,000 there vs. $2300 that I pay now, even while the house itself would probably be a one-bedroom shack in my price range).

It is true that some people make ridiculous salaries in New York City, and for those people it may be logical to live there for a short time to quickly sock away a freedom fund before escaping. Others actually like it there, and of course many are tied by strong family bonds, which are very important too. But after we set aside those groups, there are still millions of people who are just there because they are there, living a crowded and expensive life just because they haven’t realized how liberating and energizing it can be to MOVE.

Meanwhile, I’ve seen a lot of other parts of the US on my many road trips in the years I’ve lived here. When visiting Tucson, Arizona and Albuquerque, New Mexico, I was astounded by the gorgeous scenery, never-ending clear blue skies, and the extremely low cost at which you can pick up a stylish stucco house on a palm-treed lot in nice parts of town near the university. Although my own region near Boulder/Denver Colorado has grown quite popular (meaning expensive), the whole Mountain West still has plenty of affordable towns and presents a nice balance of culture, recreation, and reasonable outdoorsy year-round climate.

Update: this article was first written in 2011, and the US has been on a non-stop house appreciation binge since then. So, although many cities in my country remain very affordable, other prices are pretty out of date.

But more recently, an MMM reader developed a global search tool to help seek out cool, inexpensive places to live around the world. It’s really well done and still expanding: check him out at The Earth Awaits – https://www.theearthawaits.com/​
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In Las Vegas, you can often get much more for your money than other major cities – especially during recessions as the prices tend to fluctuate like a gambler’s fortunes. A stylish condo near the strip which you can rent out to tourists for massive profits as a vacation rental, or a spacious modern house with a pool out near the foothills where you can swim and hike out of your back yard, and never see winter again.

You won’t care about the housing market or even the job market, because your cost of living will be so low that you may be able to retire a decade earlier than normal! The same story of palm trees and never-ending warmth combined with reasonable living cost persists throughout the desert Southwestern towns of Nevada, Arizona, Utah, and even the less famous parts of California.

In the Pacific Northwest you can live affordably in the land of Beer and Beards in hip towns like Corvalis, Oregon or Bellingham, Washington. You can even live on a rainforesty island in the nearby San Juan Islands, and spend many of your days exploring coastlines by kayak.

In the 200-mile-stretch of beach cities around Miami, you can sometimes pick up a luxury house, or a snappy condo complex with a sweet pool and spa, or a skyscraper overlooking the beaches and turquoise waters, for less than you’d think thanks to bank foreclosures during each housing downturn, making a waterfront tropical beach compound less costly than a vinyl-clad shack in a Toronto suburb.

Ahh, Toronto, the Big City near my birthplace. It’s the Canadian version of NYC. People pay fantastic amounts for modest houses that are buried in stale brown snow for several months each year, and commute 40 minutes each way through a 16-lane traffic jam to get to their jobs. Or Fort McMurray, Alberta, where people pay Toronto prices to live in a Mosquito Tundra near the arctic circle, just to plug themselves into an above-market income stream from the Saudi-Arabia-sized Oil Sands project that is cranking out fossil fuels there …. for now. What kind of life is this!?!?

Canada has the fantastic Oceanside Cliffs of the Maritimes, where everyone is friendly, houses near the sea are nearly free, and the parties are legendary. It has the Sunny Granola/Marijuana hippy belt in Interior BC and the Okanagan valley. There’s the Hong Kong Cosmopolitan buzz of Vancouver, with its non-snowy winters, or the Indie Rock/University Town/Island vibe of Victoria.

I also love Australia and New Zealand, where pleasantly different and fun-loving cultures combine with much more Ocean and noticeably cheaper Food and Beer – all in a gorgeous climate that rivals the best parts of North America.

With the increasing number of careers and entrepreneurial businesses that can be done from ANYWHERE thanks to remote working, and the fact that an ambitious person can carve out a job for themselves in almost any city, I think that moving is often a fantastic idea, and it is mainly fear of the unknown and fear of change that is holding people back.

When I graduated from Engineering school, I moved 300 miles away from my hometown, because that was the location of the best jobs that I knew about at the time. It was also where my wonderful sisters and my girlfriend lived. But as my career progressed, I learned about the work opportunities South of the border. They sounded fantastic, as did the increased choice of geographic settings, versus those available in my native Ontario (“Smoggy metropolis”, “Mosquito Forest”, or “Mosquito Swamp”).

I did the research, got the interviews, fought for the work permits, and BOOM, here I was in a fantastic new land of untold adventure. I can’t even express the joy this decision has brought to my life since then.

This seems like a strange contradiction to the principle of Hedonic Adaptation, because I cannot deny that regardless of where you move, you are still the same person. So some would suggest that you should be equally happy regardless of your surroundings. But it doesn’t seem to work that way for me. I think that for some people, there really is A BETTER PLACE.

For me, it was the vast increase in Nature and Sunshine, with just enough city thrown in to make life convenient. And the odd combination of culture in the Boulder, Colorado area that starts with an entrepreneurial and educated base, but throws the whole Workaholic thing out the window and seeks quality of life instead.

And Let’s Not Forget the Money

For me, the irresistible combination of higher income, lower taxes, and a lower cost of living was the thing that allowed me to retire so early. If I had not moved here at age 24, I’d probably still be working an increasingly monotonous tech worker cubicle job to this very day back in Canada. Mr. Money Mustache might not even exist yet!

What would your own financial picture look like if you could cut your living costs by, say, $4000 per month while keeping (or possibly increasing) your salary?

What About Family?

I do miss my family, especially when I read the emails about casual get-togethers that I missed out on because of living 1700 miles away. But we were always a far-flung family who got together only a couple times a year anyway.

Even more important is what most people overlook: when you lower your cost of living, you don’t have to work as much, and you get to retire earlier. And when you live in a nicer place, you will generally be in better spirits. This means that you can make longer visits with more relaxed schedules. Since retiring in 2005, we’ve been able to spend entire summers with the family back in Canada, rather than having to pack the visiting into occasional weekends and holidays as non-retired people have to do.

Moving is especially easy when you’re young, fresh out of college, and with no kids. Considering new cities is like reviewing a broad and exciting variety of new dishes and deciding which one to eat, so I highly recommend doing this type of dreaming and strategizing before deciding where to settle down. Binge on those “Best Places to Live” lists, tour the country and the world in person, and fly around virtually to check out the terrain and the bike paths using Google Earth (and the house prices and ‘hoods using real estate sites like Zillow and Realtor.com).

The Ultimate Human-friendly city in my own view is one with a population between 50,000 and 200,000, in a compact and bikeable footprint, separated from neighboring cities by Actual Cows And Fields, as opposed to the suburbs-that-are-named-as-if-they-are-actual-cities that exist by the dozen on the sides of giant metro areas.

This “Distinct City” status ensures that you’ll have everything you need right in your own town, and yet you’ll be able to hit the streets and very quickly end up in the country soaking up open vistas and black starry skies, without even having to resort to car transportation. Your phone will have proper reception, and Amazon will still deliver your packages efficiently. But yet you’ll never find yourself paying to enter a parking garage or waiting in an endless line for a restaurant. There is space for everyone in these person-friendly cities.

For slightly older and more settled folks like me, moving is temporarily off of the menu – we decided to give him a stable upbringing in a stable place where the faces and friends stay the same from birth until high school graduation, and even the trees and hills and seasons become familiar through the span of his childhood.

But I’ve already got some more Adventure Moves planned for the many decades to follow in the future. Tropical winters and phases of Van Life and “Carpentourism” trips in various exotic locations, and eventually some sort of intentional community where lots of friends all get to live together in beautiful surroundings.

You should live in whatever place works best for you. But you should be able to prove to yourself that it really is the right place – instead of just being the place you happened to be born.

This is email #33 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.

​Why We are Not Really All Doomed​

Behold, the almighty Nail Gun. Symbol of human ingenuity and productivity, and also builder of my new house.

This particular one, my trusty Ridgid R350, has blasted just over 10,000 large nails into the framing members of this residence, and perhaps 100,000 additional ones into the other houses I have built or worked on since 2006 when I first bought it.

At the time it cost me $300, or about a single day’s wages for a self-employed carpenter. It seemed like an incredible bargain back then, since it can pay for itself in saved labor (compared to hand-driving those framing nails) in less than one day. And since 2006, the price of this machine has dropped by a further 25%, even as the prices of oil, steel, and even labor rates in China where these things are made have all risen.

As recently as my own childhood, nailguns were incredibly rare and expensive, and much bulkier – used only by large construction companies. Nails were driven with hammers, because nobody could afford the gun.

Today, I personally own five different sizes of nailguns, because the boost in productivity and work quality greatly outweighs the cost or the loss of manliness caused by the automatic driving of fasteners. In turn, I am using the time saved by these nailguns to write this article for you.

This example, although rather specific to my own favorite hobby, is the perfect illustration of why we are not all doomed. And the more thoroughly you understand and celebrate this phenomenon, the richer your life will be. Richer in monetary wealth, happy experiences and a lifetime of inner peace. And richer in an intellectual sense too, since everything makes more sense when you understand the true nature of how the world works. So let’s dig a little deeper.

The Doomer culture is alive and well in the peripheral areas of the mainstream media and the Internet. Crash predictors moan about the unsustainable levels of debt in this country or another one. The crazier ones turn to gold and silver, or ammunition and tinned food as their first and last line of defense. Even here in the intelligent confines of this blog’s Forum section, people wonder whether an upcoming financial crisis will wipe us out*.

If we’re not fearing financial market collapse, we are fearing cultural destruction. The middle-class isbeing milked by the capitalists and will eventually crash and revolt, or the most productive members of the world are being suppressed by an ever-more-burdensome state, depending on which side of the political aisle on which you sit.

Either way, this is unsustainable and we are doing everything wrong, so we had best get worked up about it and post angry comments all over the Internet.

Doom, doom, doom. Sure, things may look pretty good right now if you look out your window. Sure, you’re reading this on a fancy-ass computer with a belly full of expensive food and nice clean clothes. But this is all fake. Tomorrow, the suffering begins.

I would like to present an alternative perspective, one with practical implications for good living for people of every wealth level.

Mr. Money Mustache’s Three Point Formula for Economic and Life Success:

1. Understand that everything is currently Fucking Great, and base all decisions on the general belief that things will continue to get more Fucking Great all the time.
2. Use this information as a happy basis to work hard, learn as much as you can, and deliver great value and help others as much as you can for your entire life.
3. Waste as little of the proceeds from this activity as possible, reinvesting them into doing more of step 2, further building and compounding both your strength and your happiness.

Yep, that’s all there is to it. It is bold, cheesy, simplistic and contains some profanity just to let you know I really mean it.

Yet it is oddly similar to the wisdom Warren Buffett just repeated in the 2014 annual letter to shareholders. In that classic, he compares market crashes and financial crises to a mouthy neighbor shouting his estimate of your farm’s value over the fence at you, while you are busy producing food from the land and the sunshine.

Humankind’s ability to live well and prosper depends at its core only on productive land, sunshine and our collective knowledge. While the first item on the list is currently under some attack, the second comes with a billion-year guarantee and the third is increasing so rapidly that it should easily be able to correct our current failures in the land department.

In fact, this whole website is one tiny contribution towards that correction – a chunk of human knowledge that grows over time and helps to solve an existing problem. Just like a nailgun.

So when you see people flailing their arms and saying things like

“We’re doomed! The Fed’s rate of QE is unsustainable and the resulting debt Armageddon is going to plunge us into hyperinflation!”

you could substitute the words,

“We’re doomed! China’s production of nailguns is unsustainable and we will all soon be plunged into hand-driving nails again forever!”

The nailguns are not going anywhere. We have figured out how to make them, and that knowledge will never be lost. This human invention has forever raised our productivity and can never be taken away.

Similarly, the financial system, another machine that greatly raises productivity, is just another human invention. Even in 2008 when things got hokey and a big house of cards collapsed, some humans just stacked up a few new cards in a haphazard way and we all agreed to continue using it, and thus we all remained happy and productive.

All of this will continue as long as most of us choose to remain happy, productive, and cooperative. This is inevitable, aside from those few doomers over there yelling stuff over the fence.

Wow. Inspirational stuff, Mr. Money Mustache. But how does this apply to me specifically in the area of getting rich?

In less fluffy and metaphorical terms, this means:

• Invest your money in index funds and real estate rather than “protecting” it while trying to predict the next collapse. You’ll still own your piece of land or your slice of thousands of businesses regardless of what the guy on the fence is yelling about what he would pay for it at the moment.
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• Invest your time in furthering your own education, health, and meaningful relationships, rather than drowning in worry, consuming passive entertainment, or protecting yourself from failure.
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• Produce value for the world much more than you consume things from the world. Producing is a happier activity, and the inevitable money surplus caused by this habit will allow you to capitalize on, rather than being crushed by, fluctuations in the general upward trend of those first two tips.

…

Are you going to be the one continually foretelling collapse, or will you spend the day out here growing some food for yourself instead?

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*Thankfully, the general consensus was that we’ll be fine, which is a good indicator for the future prosperity of those in the discussion.

But isn't it interesting to see that the forum discussion is from 2014, a full eight years before this article was renewed for this bootcamp series. The world has made incredible leaps in wealth since then, as has anybody who has remained fully invested in productive assets. And yet, people were worrying about the same things back then as they are today.

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This is email #34 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.

​Necessity Is The Mother of Badassity​

By this point in our conversation, it should be pretty obvious that Badassity is a trait to be treasured and cultivated. Although it is only a fabricated word, the underlying meaning of bold determination and persistence in the face of difficulty is one of the most real and useful tools in the mixed bag of attributes they hand you when you sign up to be a Human being.

Living your life with a properly Badass attitude makes all the difference in the world when it comes to achieving anything worthwhile, or attaining any sort of satisfaction. Without this philosophy, you are stuck perpetually chasing temporary comforts and luxuries and never feeling quite satisfied because there is always more to chase. Your money is drained and yet your heart is never filled. With it, you can properly say “Fuck It” to all of those fiddly details and start getting something done at last.

But our society and its marketing engine work ceaselessly to program this toughness out of us, and offer us pampering instead. You need it. You deserve it. Here, lie down on this table and let us give you a massage and soda. Or maybe you’d prefer a massage table and a soda dispenser built right into your automobile?

You can see the results of this all around you in the types of lives it produces, and you don’t want those results. But perhaps you still find your own badassity to be lacking in some ways. How can you get more of the good stuff?

The answer is sitting right next to you right now. In fact, it’s packed around you as part of the very air you breathe. Because just like Oxygen, junk, household budgets, or any other free-flowing substance, Badassity Expands Automatically to Fill Any Space Made Available to It.

How is it that some people find that life becomes strained to the limit after their first child is born, but then manage to go on to produce and raise several other children simultaneously?

How do some runners that can barely jog out a few blocks go on to finish a marathon less than a year later?

How do some people go from married, affluent lives of comfort, through divorce and perhaps career loss, then rebuild everything from scratch better and simpler than before?

It’s all through the simple fact that these people were faced with a feeling of necessity.

Some of us are self-motivated enough to create this drive out of thin air, but most people need do be dropped into a cold pool of urgency before they respond. Either way, the necessity forced them into action, whether they were ready for it or not. Then they pushed and this action made them tougher, which made the next bit of action all the more effective, and so on. Before they knew it, each had become a badass in his or her individual way, and the benefits began to flow.

Let’s use a recent story to illustrate this principle at work in my own life:

The MMM family showed up here in Canada for our usual summer vacation just a week ago. In keeping with the tradition I call “Carpentourism”, I scheduled some work to allow myself to stay active and help out a few friends and family members at the same time. The big one this year is a replacement of the shingles on my Mom’s 150-year-old house in downtown Hamilton, and a new kitchen inside that same house. Both things have been crying for a rebuild for at least a decade.

Since it is my summer vacation, I figured I would be Mr. Executive Carpenter and make things easy on myself. We arranged for the invincible local rocker (and handyman) known as The Kettle Black to do most of the re-roofing work with the help of my brother and just a bit of guidance from me. Shingles would be delivered to the rooftop right on cue. Meanwhile, the cabinets would be ordered from Ikea well in advance, fully assembled by my equally hard-working mother (who is celebrating her 70th birthday in two weeks), and I would concentrate simply on rebuilding the kitchen, reworking a few electrical and plumbing fixtures and popping in the new cabinets. Piece of cake.

Of course, as with most construction projects in foreign territory, it didn’t go down quite so smoothly.

I secured my brother-in-law’s old VW Golf Diesel and filled it with tools for the 500 km trip from Ottawa to Hamilton. I found that the car had a barely-functional rear hatch, a cassette deck radio, noisy snow tires and broken air conditioning. So instead of my usual roadtrip style of riding in abundant comfort with a custom-crafted MP3 playlist, I had the opportunity to adapt to the vehicle’s 37C (100F) interior temperature and rely on my own singing and Kazoo playing for entertainment. Miraculously, I still arrived at the same destination, and in great spirits and with the benefit of improved heat tolerance. And I was going to need plenty of tolerance. Badassity Through Hardship: Score #1.

That cabinet pre-order never happened, as my Mom’s best efforts were thwarted by the Kafkaesque bureaucracy of IKEA’s kitchen department. We also had to start from scratch on the roofing – the color and style had been chosen from Lowe’s, but no materials were on site or in stock and the friendly but incompetent staff had no interest in getting them there in a timely manner. It was Wednesday morning and we were ready to rip off the roof, so a delivery the following Thursday would be of no use for us.

The Kettle and I left the Lowe’s parking lot in disdain but immediately noticed a smaller professional roofing shop right across the street. Within minutes of stepping in, the knowledgeable owner had our order completed and scheduled for a next-day rooftop delivery, at $300 less than we would have paid at the big box store. Now we had the roofing materials we needed, and an improved knowledge of how to do roofs in Ontario next time. Badassity Score #2.

So we hit the roof just a few hours later than planned and began to strip the crumbly old shingles, heaving them down into the dumpster. There was only a single layer of them and we were speedy and feeling efficient again. Until the following horrific scene confronted us:

Ho. Lee. Sheeyit.

So in other words, when this house was last reshingled sometime in the early 1990s, the previous guy who was obviously completely off his rocker,saw this same expanse of shitty 150-year-old wood and decided “yeah, that looks pretty good. let’s install some shingles.”

So the hardship had returned. We now needed 1400 square feet of 1/2″ OSB to build ourselves a proper roof deck atop this aging expanse of barnyard scrap. That’s 45 sheets, or about 2300 pounds worth, which is not going to fit onto the tiny roof rack of the Volkswagen Golf. And the clock was ticking as this area has a very temperamental climate with frequent torrential summer rainfalls.

I made some telephone inquiries around Hamilton to see if anyone could get it delivered by the next day. No dice. My distant second choice was to make the 10km trip up to Ancaster Home Depot and carry the sheets home in an HD rental pickup truck, so I headed up there at 7PM to avoid traffic. Only to find out that they wouldn’t rent the truck to me since I only carry a Colorado drivers license.

So my mother and I returned the next morning at 7am to catch the store opening and rent the truck in her name. Someone else beat us to it and rented the truck minutes before we arrived, but we were able to secure their van instead. Massive paperwork and delay ensued, but I rallied a forklift and some staff to help fill the van more quickly. I broke the rules and did the driving myself, since my mother had no interest in piloting the 7000 pound behemoth through the downtown streets and backing it into her steep narrow driveway. She did however help me unload the full metric tonne of wood sheets, the Kettle arrived at that moment and we were back on track. After just 6 hours of lifting cutting and nailing in the blazing July sun, our rooftop looked like this:

Badassity Score #3: This new OSB roof will permanently improve many aspects of the home’s performance. And the Kettle and I got an incredible day of weightlifting and more practice in production framing techniques as a side benefit.

At this point, we were finally able to get to work on the actual roofing job. Since we both have the same general attitude towards summer construction work (you get up at 6am, eat something, then work as hard as you can until just after it gets dark at 9:30 with occasional pauses only to drink gallons of water and barbecue a few pork chops), this part went quite smoothly.

We finished the thing just in time, at the very end of the fourth evening. The lines were straight and the ridge caps gleamed tidily in the sunset light. I woke up this morning to a heavy rainfall on the properly flashed skylight over my bed, and knew we had been wise to take on this job.

Experiencing hardship and the rewards that come from overcoming it are quite simply what makes life worth living. As an almost-40-year-old with some dough in the bank, I should be seated comfortably in a Lexus and cruising around between the golf courses and restaurants and starting to pile on the pounds and disabilities each year. Instead, I feel better than ever, and the extreme nature of this project coming right at the end of 8 months of construction on my own house has whipped me into the best shape of my life. (Badassity Score #4!)

But I still have much to learn by gaining inspiration from those more badass than me. The Kettle Black just turned 50, and while I went straight to bed after work each day, he went out tothe live music venues or worked on his own gigs through the night. 10 years older than me, he looks like this:

KB: A Canadian Badass at the half century mark

This week’s lesson? Plunge in over your head and do something you’re not quite ready for. With the right attitude, you can only come out ahead.

This is email #35 of roughly 52 in the MMM "Just the Classics" boot camp series. (Although it's looking like it might start growing beyond 35 because we're only up to 2014 and there are so many more Classics in the list!) You can always find the original versions of any of my posts in this complete list of all posts.

​If You Wouldn’t Buy it, You Should Probably Sell it​

Dear Mr. Money Mustache,

I just came across your blog a few weeks ago after seeing a story about it on ABC.

While the idea of cutting back my lifestyle sounded horrible at first, once I dug in I saw what you were really talking about and it has been like a giant boxing glove hit me in the face. Until recently I thought we were doing pretty well. But suddenly I could see money leaking out everywhere in our lifestyle: the cable package, remaining student loans, restaurants, excessive driving, excessive air conditioning – everywhere.

My question is what to do about the decisions that are already “locked-in”. We have some expensive and not-that efficient cars (A fairly new Mazda CX-9 and also a nice Acura sedan), but at least they are paid off so we might as well drive them forever, right?

Also, we live about 15 miles from work in a house that is way too big for the four of us, but on the bright side we bought it eight years ago and the value is up about $200,000 since then.

Finally, and I have an old (2000) speed boat and a camp trailer we use occasionally in the summers – these are paid off as well, but they do cost something to store and maintain (about $2400/year).

We’ve started biking more and doing more local activities and the kids like it. I just wish we hadn’t locked in these earlier poor decisions.

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I still get letters like this one every week, and so many of them follow the same general pattern that I figured we could create a great lesson by breaking down this case into a big overall life lesson. And that lesson is the one right there in the title:

Don’t let the boat anchor of your past mistakes drag on you forever into your future.

Clinging to past behaviors is one of the built-in weaknesses (also known as Cognitive Biases) that we humans are born with. In this case, we’re talking about Loss Aversion and maybe a bit of the Sunk Cost Effect: we tend to value things we already have, and things we have poured a lot of money into, even if they are in fact pieces of crap when measured on an objective quality-of-life scale. So you end up with statements like this echoing through America’s suburbs, year after year.

“I’d hate to take the depreciation hit on this three-years-new Dodge Ram 1500 BigHorn after making almost $30,000 of payments on it!”

These prepackaged flaws are so powerful that we need to pull ourselves deliberately in the other direction in order to end up at a reasonable middle ground. Even when you think you’re living life in a reasonable fashion, this bias will still sneak up and bite you.

And it still bites me too – let’s look at another example from my own life right now. Do you remember that rental house I was so happy to have sold in the last article?

On paper, it looks pretty good: I was stuck with a supposed-to-be-$650,000 house back in 2010 that I was having trouble selling even with the listing price dropped down to $480k. Probably because the market value was more like 450. At the time, I felt stubborn and defiant:

“There’s no way I’m selling this prized bit of my work for $200,000 less than it is worth! I’ll just rent it out, collect some income, and ride the prices right back up. Then, justice will be served and my past mistakes won’t look so bad.”

However, and this is the key to this whole article, if the situation were reversed I would have given a completely different answer.

Suppose it was the year 2010 in a different universe, and I was not saddled with that house. I was retired, had that same $450,000 sitting happily in index funds, and looking out at the carnage in the housing market. If someone had suggested I invest in this house, it would be a different conversation:

Random Person: “Hey man, do you want to buy a $450,000 house in a high-end neighborhood with a strict Homeowner’s Association? It’ll give you $2400 in rent, plus whatever appreciation the housing market provides. Property taxes will run you around $3200/year and the HOA fees are another $960. And don’t forget maintenance!”

Me: “Are you Effing Crazy!? I’m retired! I don’t need some fussy high-end rental. I’ll sit back and enjoy my index funds, or at least get something like a 4-plex that nets $4000/month for that kind of money!”

But cognitive bias struck, and I decided to rent out the place anyway.

And sure, things turned out roughly as a reasonable forecast would predict: I put it up for rent, and collected over $144,000 in rental income over the next five years. On top of that, the housing market recovered so the house appreciated by an additional $115,000. A total income of $259,000, which sounds pretty good on a $450,000 investment, right?

But wait. Let’s subtract the taxes and HOA fees at $20,800 over those five years.
Then subtract my maintenance costs, which added to about $10,000 (most of it spent just this past May as I restored the house to its original sparkling condition for sale).
Plus an estimate of the value of my labor for managing and maintaining it: 200 hours at $40, or $8,000.

This yields a net profit of about $220,000, meaning my $450,000 grew to $670,000.

It still sounds like an amazing windfall, but that’s just because $450 grand is a lot of money, and five years is a fair amount of time. On an annualized basis, this is like earning just 8%. Yet another example of how your money can work harder than you can.

What if I had put this money into the plain old conservative Vanguard S&P500 index fund (VFIAX) instead, and allowed all dividend payments to automatically reinvest?

Plugging the dates into our amazing IndexView tool, I can see that a stock investment would have roughly doubled in that time period if you include dividend reinvestment. In other words, if I had ditched that house at $450,000 and just kicked back for the next five years, that chunk of money would be over $900,000 today.

Hindsight is 20/20, as they say. The stock market could easily end up going sideways over a five-year period. Then again, so could the housing market.

But what matters is making the choice that is most likely to be the right thing for you. And that means thinking about today’s big decisions as if there were no past baggage attached to them.

In the introductory story, the brand-new Mustachian is currently burdened with a money-burning Mazda SUV, which would fetch about $18,000 on the used market. If she were starting from scratch with $18,000 in the wallet and no car, would she buy the same vehicle? Or perhaps the far superior 2015 Honda Fit which handles better, cuts the running costs in half, and costs over $3,000 less?

The $3000 cash difference plus a savings of $2500 per year in fuel, depreciation and maintenance will compound to a wealth difference of over $30,000 per decade, just from this one decision. Not many people realize the staggering effects of a poor vehicle choice, which is the reason SUVs exist in the first place. But now that the new knowledge has been acquired, it is time to act on it.

Since she wouldn’t buy the SUV right now, she should sell the SUV right now.

Similarly, moving a double-commuting couple 15 miles closer to work will save you close to $100,000 every decade in direct car costs alone, but much more than that if you factor in the value of your own time and health. Most people don’t realize the shockingly high cost of car-commuting. If they did, distant suburbs and the the entire phenomenon of “rush hour” would not even exist.

But once you do get the secret memo, it is time to act on it and move.

Lifestyle trinkets like motorboats and rarely-used cabins, ATVs and country club memberships seem like an harmless treat you indulge in when you get your first promotion at work. But they tend to add up and become a massive tax on your life – draining attention and cashflow to the tune of hundreds of thousands per decade. Once you realize that these little weekend amusements are equivalent to chaining yourself to an office for an extra 30 years, you might weigh the decision differently. And so you can change your decision. Right now.

But What about Transaction Costs?

The Economists of the audience are probably a bit annoyed right now: “Mustache’s examples don’t account for the time and money you need to spend to change cars, or change houses! Often if you take these into account it would wipe out the first several months of savings or more!”

They are right to a certain extent. But I encourage people to push through the pain and get the deals done anyway, because making transactions is good for you.

Transactions, deals, friendships, and other arrangements with other humans are the highest-paying and often most rewarding thing you can do with your time. Even the ones that don’t go perfectly build your perspective and your Badassity.

Most of us make far too few transactions, and this lack of experience keeps us in fear, so we avoid them even more with each passing year. Your skill and comfort with life transactions is reflected directly in your wealth and the quality of your life.

So even if it does take a few hours to photograph the gas guzzlers and get them onto Craigslist, and even more hours to search out a new ride, make the investment and get the job done. The momentum you gain will start a chain reaction that helps you clean up all your other past mistakes.

What would you do differently if you could go back to age 19 and design your wealthy dream lifestyle from scratch?

How many of these things can you change and improve right now if you really put your mind to it?

I’m looking forward to getting fewer excuses for the past, and more announcements of massive change in the present, in my future emails.

This is email #36 of roughly 52 Classics in the MMM boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.

​Happiness is the Only Logical Pursuit​

If you set aside your fancy adult concerns for just a moment and think deeply, it’s hard to avoid the conclusion that this entire world is really just a giant zoo. It is a giant zoo packed with silly animals, and we’re just the one who takes itself most seriously.

Every speck of life exists simply to make copies of itself, from the simple gooey process by which single-celled organisms split in half every few minutes, up to the angst-ridden mating dance of complex letters that tomorrow’s world leaders are currently crafting in their college dorms and emailing to their boyfriends and girlfriends if they have the courage to click ‘send’.

As humans, we’re stuck at the top of this pyramid. We have become so complex that the reproduction part is just a footnote in our lives, so we move on to get caught up in interestrate predictions, celebrity magazines, war, philanthropy or fantasy football. We have created all of this complexity, a sloshing sea of ideas and activities completely unrelated to raising babies, and it’s all because of one underlying thing we’re all born with: The Desire to Be Happy.

People do things, whether it’s making a baby, upgrading a pickup truck, or researching vaccines, because they think it will make them happy. Whether you’re just following a strong and sexy animal impulse, or giving away some money so that people on the other side of the world can live longer, the behavior comes from the same place – a desire to feel good. But our feelgood activities vary widely because our complicated brains get pleasure for a wide variety of reasons.

Although it’s a little spooky to think about, it is essential to start with the biology: a realization that you are nothing more than a complex machine made of meat. Fleshy chunks, tubes, hormones and electrical signals are the underlying stuff that powers your deepest insights and emotions. So, in much the same way that fear is just a chemical, so happiness is mostly a squirt of Dopamine, Oxytocin, Serotonin, and maybe a few Endorphins. If you’ve ever consumed mood-altering drugs including caffeine or alcohol, or found yourself in an inexplicably bad (or good) mood, you have already felt these things in action.

It is very useful to know all this stuff, because it helps protect you from taking your own moods too seriously. Even the deepest depression is just an unfavorable mix of brain chemistry. But it’s a poor gamble to try to solve all of life’s problems with prescription medication alone, when you can get more consistent and powerful happiness by going out and enjoying life in the real world.

When deciding how to make the most of this, it is usually helpful to look at the surprisingly insightful triangle known as Mazlow’s Hierarchy of Needs.

Figure 1: Maslow’s Excellent Triangle

I first learned of this thing in history class when I was about 13 years old, and ever since it has been popping into my mind at the strangest and most useful times. While it was impressive even to my teenage self, I notice its wisdom seems to grow even more with each passing year.

It’s useful because it is so true. The first pleasures in life are the physiological ones that keep you alive: food, sleep, breathing, and so on. If you don’t have these, nothing else really matters. But if you have enough of them, you quickly start looking up the pyramid for the next level: security, or things that help save you from worrying too much.

If you have basic security, you are finally happy enough seek out family, intimacy, and friendship. From there, you move up to confidence, and earning and cherishing the respect of others. If you are lucky enough to have all of that going on, you get to roam around in the exotic land of self actualization, being creative and moral and working on personal growth.

How Consumerism Chips Away at the Pyramid

Oddly enough, the flaw in our rich world is a tripwire that we have set up way down at level 2: security. Our consumer culture encourages us to look upwards and earn respect, sexual intimacy, confidence, and even self actualization with the new Toyota Highlander or Ford F-150, when doing so actually destroys our security. By draining our money, luxuries like cars make us desperately insecure and dependent on constant employment. And by keeping us seated and inactive, they drain our strength and health so our lives become even more precarious.

Figure 2: Effect of Ridiculous Vehicle Purchases on your Happiness Triangle

This is why Mustachianism is mostly about money and health – it’s supposed to be a bridge over the traps laid out by consumerism, so you can step over and move on up to the happier parts of the pyramid: family, confidence, and self actualization.

If you understand all this, you can start to really understand human happiness. To extract the most happiness from your life, your job is to intelligently press the reward buttons at each level of Maslow’s pyramid.

• You get your first reward (level 1 of the pyramid) by eating enough nutritious food to maintain a healthy body. But you get no more by gorging on dinner and dessert every night in expensive restaurants.
• Your next reward comes from ensuring safety and security for yourself and your loved ones. But there are no additional happiness points for owning multiple houses and boats scattered throughout the world.
• Family and friends are the core of happiness for most of us, but there is a limit to how many people you can be truly close to. This is why fame and celebrity status don’t help us with our close relationships, (although they might help as a crutch for increasing self esteem at the next level).
• At the top level, things get really wacky: some people give away significant portions of their time and money in the interest of helping others. It sounds noble, but it’s actually just another way to press your own reward buttons: by feeling helpful and essential, you complete your own life. The effect is so powerful that even people struggling in the bottom levels of the pyramid feel the joy of generosity. But on average, as we all become more secure, we have less interest in theft and more motivation to be kind to others.

In other words, because full-pyramid happiness automatically includes both feeling good, and being good, it makes sense that happiness is the best thing to work on in life.

But How do I Press The Buttons?

I found that just understanding Happiness 101 as I presented it above is a gigantic shortcut to living a happy life. Suddenly, you can start weighing every decision against that simple chart. On top of that, you can check your decisions against the wisdom of ancient philosophers, who were simply happiness researchers from the era before formal science.

To illustrate this compressed jewel of an answer to the Entire Purpose of Life, let’s throw it into the test arena with some real world scenarios:

Badassity and Fitness vs. Convenience

When raking leaves one fall day, you start to feel sweaty and tired. As if by magic, a Home Depot flyer comes in the afternoon mail which advertises gas-powered leafblowers at 50% off. You are tempted. But will this purchase make you happier?

If you are currently more muscular and lean than you’d like to be, and you have been searching for ways to reduce your fitness, then the leaf blower may be a great choice. On the other hand, if you have a shortage of health (which is pretty fundamental down at level 2 on the pyramid), you will generally find more happiness from any activities which increase it – raking, cycling, foregoing all elevators and escalators, and so on.

And physical fitness is not just an optional goal – it’s a fundamental creator of the happiness chemicals noted above. A simple daily walk is more powerful than most prescription antidepressants and artery-scrapers.

That’s an obvious example, but it translates to something much more emotional: the car. Upgrading the reliability of your car might indeed provide an increase in life security. Likewise, getting a more efficient car boosts your financial security, while also providing the self-actualizing benefits of “being less of an asshole to other people”. However, most car purchases are done for the opposite reasons – initial thrills aside, a full-sized pickup truck will bring only pain in the long run.

Novelty, Complexity, and Gadgets

What about novelty, like you buying an Apple watch or me buying a Nissan Leaf? We can justify it under the guise of “learning” or “streamlining our lives with efficient new apps”, but once again, it helps to check if we are really fixing anything in the pyramid.

Learning about a new gadget keeps you on top of technology and may speed up things like checking your heart rate or translating phrases during international travel. But does your life currently suck in any way due to the lack of heart rate data or the difficulty of using Google Translate on your existing phone? If not, you are unlikely to see a happiness boost.

My often-cited Craigslist electric car shopping mission is another good one to test. Buying an electric car would eliminate my spending on gas. But is my gasoline spending currently something I think about? No. It would also provide silent, speedier acceleration. But do I have a problem with the noise and rate of acceleration of my Scion xA? No again. In fact, my only justification for a Leaf is the self actualization it might provide when I wrote about it on this blog and heard that other people had replaced serious gas powered commutes with clean, cheap electric ones. But does my life currently suck due to a shortage of self actualization? That’s the only question I need to ask when deciding if I should buy this car.

In one sentence: Happiness Boosts come mainly from reducing Life Suck.

Producers Have More Fun Than Consumers

Which would you rather be: a dedicated fan celebrating your favorite band by lining up for $100 concert tickets, or a member of an amazing band, feeling the love of thousands of people as you share the grooves that you and some of your closest friends create together? If you’re not that into music, try the same trick on professional sports, founding a great company, writing, art, carpentry or gardening. Creativity sits right at the top of that pyramid, which means the rewards are high. Bonus: producing stuff earns you money, while consuming it costs you money.

Stoicism: The Surprising Life Boost from Embracing Voluntary Hardship

As these techniques get more advanced, you’ll find we move from changing your daily actions, up to training your mind. Stoicism is an easy form of mental barbell lifting that reminds you to appreciate what you have, and make a point of venturing out into unknown adventures and difficult conditions occasionally, just to refresh your appreciation of how good your life currently is. You can start your training on Stoicism by right clicking this article and opening it in a new tab for later reading: What is Stoicism and How Can it Turn Your Life to Solid Gold?​

Buddhism: the Advanced Mental Ninja Leap Over Maslow’s Entire Pyramid

Saving the strangest but most powerful happiness booster for last, we arrive at Buddhism. I’m only a few books into this study, but its ideas are valuable even if summarized in one paragraph: Happiness comes from reducing your suffering. And suffering is what happens when you cling desperately to thoughts and observations and wish they were different, rather than just accepting them and letting your inner core remain content.

Another way to put this is in an equation: Suffering = Expectations – Reality.

For example: The beginner would say, “I’m cold! I don’t want to be cold – this sucks!”, while the Buddhist would think, “I feel a cool sensation on my skin. My body registers this as discomfort. That is all.”

Both beginner and Buddhist have thoughts flowing through their heads all day, like waves coming in to crash on a beach. But the beginner notices the negative thoughts and dives in, trying to fight them back: “I have to go to court next week! It’s scary! I might lose! This sucks!”, whereas the Buddhist would think, “There goes a thought about mangoes. And one of opportunities. And one of my court appointment next week. Like waves, each of my thoughts comes, and goes.”

Despite the obvious wisdom of older philosophers, I remain fully engaged with the world, enjoying table saws and craft brews and stock markets along with everyone else. But by simply pausing before each major life decision and comparing it to our real goal of a happy, satisfying life, we can keep the ship moving in a better direction and thus get more from life.

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This is email #37 of roughly 52 Classics in the MMM 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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Further Reading: several people in the comments have asked about recommendations for books on Buddhism. I’m a big fan of The Art of Happiness, because it combines a mildly scientific approach with the badass calmness of the Dalai Lama. The link above is to a batch of used copies on Amazon, but you can also get Kindle versions and of course your first choice should be checking if there is a copy at your local Public Library.

Making Space for Badassity

If you’re going to become rich, you need to either earn way more money than you spend, or spend way less money than you earn.

This is the basic math of it, which even the worst complainypants cannot dispute. The whining usually starts when Mr. Money Mustache starts talking about how to implement the ideas above.

For example, observe the following simulated but very typical conversation as I counsel Joe and Josephine Consumer on how to escape from their current situation (buried under a mountain of debt with no hope for retirement before 75), and instead reach early retirement before their young kids even finish high school.

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Mr. Money Mustache:

So, Joe, you tell me it’s hard to pay the bills. But I can’t help but notice this nearly-new Chevrolet Silverado 4×4 pickup in the driveway of your home here in the suburbs. That was a $50,000 truck when you bought it on credit. It costs 8 times more than any reasonable vehicle given your financial situation, consumes 3 times the fuel, and depreciates twice as fast.

It’s like pointing a firehose of your hard-earned cash, straight at your toilet while holding the flush lever down, 24 hours a day. So we’ll need to sell that on Craigslist – tonight.

Joe Consumer:

But…But… All my friends at the law firm will think I’m a sissy if I show up with a little Honda Fit! Plus, I need a reliable vehicle because I have to drive to meet clients. And I once hauled a dishwasher with this thing, and was thinking of getting a boat to tow with it since we’re looking at buying a cottage this year.. Plus, I’m underwater onthe truck: the loan is bigger than what any dealer would give me for it, and I’ve never bought or sold anything on Craigslist before because I’m scared of talking to strangers and don’t know who I can trust, and (voice fades into background)…

MMM:

Right. Well, guess what? None of this matters, because you won’t even be driving to work any more – that’s a sucker’s move. Y’all are moving to a smaller house within 8 miles of your workplace, and biking to work from now on. As a bonus, that’s right next to the university where Josephine teaches, so she can walk to work.

Josephine Consumer:

Now hold up Mr. Money Mustache. We’re all settled in this house in the suburbs. Plus, our kids are starting school soon and this school district is better than the one downtown. And I’m not walking to work – winters are cold and slushy here. Nor am I biking around town with my kids – I don’t even have a suitable bike and it’s dangerous to ride bikes in the United states and (fades out)….

MMM:

Got it. So anyway, we’ll start cleaning up and staging your house tonight so we can have it photographed for sale next week. You’ll start by moving to a rental downtown, since renting is a better deal than buying here in Expensiveville. Later, you can buy a fixer-upper four plex and renovate it yourself over the next fewyears as you develop your DIY skills. Also, why the hell do I hear your air conditioner running in the background when it’s only 80 degrees outside, while you keep the daylight out with curtains and use antique 60 watt heaters instead of LED bulbs to light your indoors? And why is your clothes dryer running simultaneously as this beautiful sunshine shines down upon your back porch? This casual waste of electricity is burning about $15,000 of your wealth per decade.

We’ll fix this, then move on to your food, entertainment, child-raising activities, vacations, phone service, and soon enough you’ll have a reasonable 60% after-tax savings rate and be set to retire in your 30s.

J+J (in unison):

Gaaah! We can see your wisdom, Mustache, but this is all too much for us. We’re not really in good enough physical condition to ride bikes. We don’t even know how to change a faucet, let alone DIY-renovate a 4-plex. The kids are crying, dogs are barking, our garage is piled high with boxes and broken items, and we have daycare schedules, trips coming up for friends weddings, golf games and happy hours, ski passes and TV series to watch. There is just no time to handle all these changes you want us to make!

Mustache (turning to face you, the audience)

See, this is what it really all boils down to: Time. Energy. Mental and physical overload. When your life is already overfilled, it is very difficult to gain the power to make the major, positive changes you need to actually get somewhere.

In other words, if you want to create more wealth and happiness in your life, you might need to clear some space for it first.

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The MMM Family’s Secret Frugality Weapon

When people encounter this site for the first time, they usually see my family’s $25,000 annual spending number and assume that we have an extremely frugal lifestyle.

“My family could never be as radical as those guys – Mustache’s ways are extreme!”, they say, “but we’ll implement a few small changes in our own way.”

This frustrates me to no end, becauseI don’t even try to save money any more – all I see is an abundance of luxury in every direction when I gaze out my kitchen window. But I’ve recently come to realize there is one way that we are extreme when compared to other families of similar background: we schedule a lot less stuff into our lives.

While others will buy an unlimited annual ski pass and ride the mountains every weekend, I’ll get a four-pack of lift tickets and make a single weeklong trip with my friends. Others will buy a cottage and split their time between two houses, I’m happy with one. While others will start with a cat, then have a kid, then adopt a dog, then another dog, then create second, third, and fourth kids, I’m feeling plenty busy with just my boy.

None of this is done with money in mind – it is done out of a desire for balance, free time, and a safety margin in life. By keeping our non-negotiable commitments to only 50% of our time, we leave the other 50% open for growth, self-development, and an ability to work much harder to deal with the black swan events that life inevitably serves up.

While others might imagine we’re missing out on life by not stacking it up with more activities, I feel we’re allowing ourselves just the right amount of space to actually live it. And of course, the side effect this has on the money side has been very large as well.

I think this difference in life planning style might boil down to my slightly compulsive tendency to think of future consequences.

When I was a 26-year-old deciding between BMW and 401(K) as the destination for each financial windfall, I always chose the more responsible option because I predicted my future self would appreciate it. Even today, when I open the fridge at dinnertime and face the tempting selection of ice-cold Colorado microbrews laid out in front of me, I usually leave them untouched, notbecause I don’t crave one, but because I don’t want the future me to have to deal with a flabby beer belly.

The same thought process applies when I consider signing up for a big future commitment, like a busy weekend trip or yet another well-meaning project related to this blog, or even adopting a cat: sure, it sounds lovely in theory, but will my future self appreciate having that much time taken away from him, when he might have other plans?

Of course, you can take future fixation too far and end up with a boring life today, but I correct for this by imagining a future me regretting a boring youth, and do my best to strategically misbehave at optimal levels today. So far, so good as I do not lead an overly pure or monk-like life.

Getting back to the point: To become richer, you need to make changes in your life. But changes take effort, and to perform this effort you’ll need to free up the time and energy to become powerful enough to do it.

How to Make Space for Badassity

When find yourself in a hole, the first thing to do is stop digging. In the world of gaining more leverage over your own life, this means to stop adding complexity. To get you started, here are a few tips from my own book of rules.

Discover the Power of No

For the next several weeks, say NO to all optional plans which are outside of biking distance of your house. If you don’t have a bike, make that walking distance. You need to start focusing your lifestyle on your local radius. Try having a weekend with nothing planned except catching up on things around the house and exercising right within your neighborhood.

Next time someone other than your very closest friends or family invites you to a distant wedding, make up an excuse and give yourself the gift of staying home instead. Save that energy for the people nearer and dearer to you – including yourself.

Institute a “Purchase Procrastination Program”

Pause any and all research and shopping trips besides food, and make do with the things you have at home. If you have a vacation coming up, promise yourself you’ll get that special purchase made after the vacation instead of before it. If you’re working on a major life goal, delay the purchase until after you achieve it.

Clean, Cancel, and Declutter

By now, you’ll already start having more free time. Use it to attack your garage, your closet, your kitchen junk drawer. Sell stuff on Craigslist, recycle, give away, and trash anything not important to you. Note the new breathing space that opens up in your mind, and even your lungs.

And of course, if you haven’t done so already, cancel cable TV and stop consuming the daily news.

Sharpen the Saw

The most efficient thing you can ever do with your time, is to make yourself a better person. So spend some of your new free, quiet time by starting each morning with a 45 minute walk in the quietest local area you can find. If you’re already knowledgeable in weight training, do a bit of it each day. If not, at least do some push-ups and Yoga for now. Learn about basic meditation, and do it.

And Then,

If you follow these steps, within a week or two you will have roughly doubled your free time and energy, which gives you the power to start really making the more difficult changes.

Sell your expensive cars and replace them with efficient ones at least ten years old (which is still plenty new). Get a bike. Find a smarter place to live that is closer to work, or a smarter place to work that is closer to home (and get a raise for yourself while you’re at it – the US labor market is quite literally at its strongest point in most of our lifetimes).

Look through this blog’s list of all posts and implement all of the ideas from the early articles, one by one and watch how your life expenses peel away.

None of this is all that difficult – at this point millions of people, many with far fewer advantages than yourself, have done exactly this and have drastically changed their lives for the better.

If you’ve been poking around here on this site for a while and, still find that major change and plentiful surplus money is in short supply, stop struggling and start by slowing down.

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This is email #38 of roughly 52 Classics in the MMM boot camp series. You can always find the original versions of any of my posts in this complete list of all posts.