And since this is Mr. Money Mustache and not a standard financial publication, you’re willing to think about the bigger picture:
Not necessarily “Maxiumum money at all costs so I can have a nice, spendy retirement!”
More like “A good, fun amount of money so I can walk outa this cubicle with confidence and never look back.”
Making that mental leap is a huge one. It takes you from a life of permanent pursuit of the unattainable, to one where you get to the “Enough” stage pretty quickly. This alone will change the course of your life for the better.
But what if there were an even bigger mental leap that we were leaving out? One that starts with the hard-nosed math of living off of your investments, but then puts it on a more flexible scale that allows you take shortcuts and attain the freedom you want, much sooner?
Well, there is such a shortcut of course, and there is even a story right from my own life that illustrates it.
The Unnecessary Fears of Teenager MMM
Since I was a kid, I’ve always had confidence issues....
It is pretty well known at this point that Mr. Money Mustache is enamored with solar power. Besides the obvious Sci-Fi coolness of it (Electricity, Satellites, Futuristic Robots!) and the eco-friendliness of it (energy with zero noise or pollution), in the last five years the money side of things has finally matured, so that solar power is now the cheapest way to make electricity – even before you account for the added bonus of any available subsidies and the benefits of pollution-free living.A Watt of Solar Panels: From $100+ to under fifty cents (2017) in less than my lifetime (image source cleantechnica). And the 2017 number for the blue side of the graph hit over 95,000 MW.
It works for individuals: In many cases, if you can get a good rack of solar panels on your roof, your monthly savings will be equivalent to making an investment that performs better than the stock market. But the numbers look even better as your solar setup becomes larger, like if you’re running a solar energy utility or a community solar farm.
Related: In recent Colorado Energy Bids, Solar energy is the cheapest option, even when backed by battery storage...
One day last week, the icy grip of a winter storm broke and the skies of Colorado returned to their normal state of deep blue with bright sunshine. So I decided to head out for a hike on the warm red rock trails just outside of Boulder.
Taking a break on a big rock at the summit of the mountain, I pulled out a snack and a tiny glass-encased computer from my backpack. I unlocked it with my fingerprint and casually learned a few things, shared a few ideas, and conducted a few thousand dollars of business before the bag of carrots was done, then snapped a twelve-megapixel image or two before pressing the lock button and tossing the phone back into my pocket.
I took a brief moment to marvel at the efficiency of this whole situation, and how much wealth it brings to people like you and me who are privileged and clever enough to get set it up in our lives.
Efficiency reduces waste and multiplies your productivity, and even a small helping of it is enough to tilt you into a lifetime of financial surplus. Yet it is so rare that most people in the...
Well, shit. I’ve been watching this situation for a few years, and assuming it would just blow over so we wouldn’t have to talk about it here in this place where we are supposed to be busy improving our lives.
But a collective insanity has sprouted around the new field of ‘cryptocurrencies’, causing a totally irrational worldwide gold rush. It has reached the point that a big percentage of stories in the financial news and questions in Mr. Money Mustache’s email inbox are about whether or not we should all ‘invest’ in BitCoin.
We’ll start with the answer: No, you should not invest in Bitcoin. The reason is that it’s not an investment. Just like gold, tulip bulbs, Beanie Babies, 1999 dotcoms without any hope of a product plan, “pre-construction pricing” Toronto condominiums you have no intent to occupy or rent out, and rare baseball cards are not investments.
These are all things that people have bought in the past, and driven to completely irrational prices, not because they did anything useful or produced any money and value to society, but solely because they thought they would be able to sell them to someone else for more in the future.
When you make this kind of purchase, which you should never do, you...
If you have more money than you need, you should start giving some of it away. That’s the lesson I learned about a year ago, when I took a gamble and donated $100,000 to a variety of charities, centered around the Effective Altruism movement.
At the time, I had no experience with giving to anyone other than immediate family and friends, so I didn’t know how I would feel about it. But over the course of this past year, I have had many late nights to reflect on life and what it means to live one that feels worthwhile. There have been successes and failures, mostly happy times but also plenty of sadness shared with my siblings as our Dad made his departure.
During all this questioning of life, I kept thinking back to the times I’ve been less selfish and less fearful, and more willing to help other people. These were the things that reassured me that my life was indeed a good one, and that I wasn’t squandering the opportunity too badly so far. In short, being a good...
Special Surprise: Did you know there is now an MMM Android App? It’s really good. Beautiful offline reading. Alerts you to new articles automatically, if you want. Thousands of users already. Free. Many more features (plus an Apple version) to come. It’s on the Google Play Store.
About two years ago, I switched from taking my personal car to the airport, to hailing Ubers and Lyfts. The math of it was pretty simple: Uber was cheaper than paying for my driving and parking*. And that was before the considerable joy and time savings of not having to park in the airport lot and cram in among the huddled masses in the shuttle buses. Nowadays I sit in the back and get some work done like an Executive, leaving the driving to someone else.
Once I arrive at my destination city, these ride sharing services have replaced at least 90% of instances where a car rental would be useful. Between walking, renting a bike, public transit and calling a Lyft, a car rental is only useful for destinations deep in the boondocks such as a ski resort or a distant beach cabin. Which is another great improvement, since renting a...
My family’s monthly health insurance premium, which had already more than doubled in the last few years to $674 per month, was going up a further 44% for the coming year. For no good reason, other than perhaps the the current government’s attempts to kill off the Affordable Care Act. (By cutting various parts of the structure, the insurance market becomes less stable and predictable, and thus more expensive).
Now, before we go any further, I have to note that this is a situation that only affects high income earners. If we were really retired on a $30,000 passive income as we were for some of the decade before this blog started making significant money, our family’s monthly cost would be more like $128, due to tax credits and the...
Just a few days ago, I got a surprise in the mail. It was a very expensive registration renewal bill* from Boulder County, reminding me that my brand-new 2016 Nissan Leaf was already a whole year old.
The car has now been through the full cycle of Colorado’s interesting driving conditions including blazing sunshine, blowing blizzards, rough roads and high mountain passes. More importantly, it has carried large loads of heavy people and one hatchback-busting load of cargo after another as I used it for endless construction projects as well as shuttling around visitors and even a few paying passengers as part of a related Uber-driving experiment.
Since I bought the car primarily so I could tell you about the experience**, this one year anniversary presents the perfect opportunity.
Electric cars have been getting better and cheaper very quickly. Even a year ago, they were competitive with gas cars (especially after applying the various tax credits available here in the US). And as of late 2017, Nissan has just announced a thoroughly updated 2018 Leaf with longer range, new styling, and even semi-autonomous highway cruising, at the same list...
I was enjoying a walk downtown with my son recently, when I noticed something wasn’t quite right. A man was emerging from the background of other pedestrians, trying to make eye contact. We kept walking.
“Excuse Me! Gentlemen! How much are you paying for your Cable TV right now?”
I could now see that he was carrying handful of glossy flyers for one of the monthly television subscription outfits – Dish network or Comcast or whatever. The same stuff that floods my front mailbox in far greater quantity than my ability to use it as kindling to start the woodstove on winter evenings.
“Nothing”, we both said almost in unison, “We don’t have TV.”
“No TV? What about Netflix? Hulu? TiVo? Google or Amazon? We can beat ’em – first month is FREE!”
“Nope – none of it. Sorry, we gotta go but good luck with your work today!”
The solicitor was left slightly speechless. To be fair, my last line was a slight lie just for the sake of getting out of the sales pitch. We do rent movies from Google Play occasionally, but this mildly stressful street scene made me realize two things:
By this point you probably know all you ever wanted to know, and more, about Mr. Money Mustache’s long-ago path to early retirement. But my story is only one of an infinite number of possibilities, which means it is valuable to look around at how other people are doing it.
Because of that, I’ve been sharing more reader success stories recently, and I’ve been particularly excited to share this one for quite a while because it comes from a completely different direction.
I first met Zeona McIntyre just over two years ago, on a warm early summer day in Boulder. Without my knowledge she had created a Facebook group called Boulder Mustachians and already amassed a substantial collection of fun people before I even got word of it. We coordinated to hold a gathering in a beautiful riverside park downtown.
Late that night, after the main party and a smaller afterparty at a pub with a group of diehard survivors, the two of us were walking and talking the two miles across town to get Zeona back to her apartment, and me...
Almost exactly six years ago, I wrote a simple post about a pawn shop opening up in my town. It was during the very early days of this blog, and I figured it was an easy way to take some shots at that financially predatory industry. Also, the shop was called Mister Money, which had an ironic similarity to my own name, Mr. Money Mustache.
So anyway, in that post I joked that I was going to buy the building next door, and if anyone walked into my shop trying to borrow money, I’d PUNCH THEM IN THE FACE and tell them to embrace frugality and sensible living, rather than high-interest borrowing, as the solution to their financial problems. For some reason, this idea of the “Face Punch” really stuck with the early readers, and became a bit of a brand for MMM.
As sheer coincidence would have it, in early March 2017 a cryptic ad appeared in the local Craigslist.
If you’ve been keeping an eye on the US economy in recent years, you might notice that things are looking pretty darned rosy. Unemployment is at its lowest level in 40 years, wages are rising, and house prices have not only recovered from their fiery crash of 2009 – they have had several years of record breaking prices in most regions, just like the stock market.A current snapshot of how expensive the stock market is – not in sticker price, but in the more instructive price-to-earnings (P/E10) ratio. In all of US history, it has only exceeded this expensiveness once – for the late-1990s bubble. Not something that should make you sell your index funds, but probably a clue about an upcoming bubble-based recession. Image source is the very useful site multpl.com www.multpl.com/shiller-pe/
In short, today’s situation is very similar to what Mr. Money Mustache, despite no magical forecasting skill, forecast back in 2013, in an article called “How to Prosper in an Economic Boom“. In that post, I...
In this extremely wealthy country of ours, the chief barrier to wealth is often the information, or misinformation that gets stuck inside our own heads.
People with the right knowledge can develop the right habits, and these habits lead them to accumulate wealth very quickly. Meanwhile, the majority of people pick up incorrect financial ideas and bad habits, leading to permanent debt. But they mingle mostly with their own type, so the failure habits keep spreading.
Sometimes, to break out of the Herd Mediocrity Mindset, you just need to see an example to learn what is possible.
So with that in mind, let’s review an example of yet another allegedly completely impossible thing, that an MMM reader is doing every day.
Jeremy Stone, aka The Rock, engages in a rare – and yet incredibly profitable – activity, in a city that is legendary (in the public mind, anyway) for making this activity completely impossible.
The following tale is drawn from our past year of occasional email conversations.The Lawyer Who Actually Bikes to Work. Year-Round. In Houston.
Dear Mr. Money Mustache,
“I’m a lawyer...
Every year, this annual report seems to come out a little bit later – mostly because I’m no longer all that interested in how much money we spend. And Mrs. Money Mustache, my faithful assistant in creating these reports in past years, has disappeared completely from the blog – justifiably more interested in her Etsy Shop than family finances. Such is the nature of retirement.
If you are early on in your journey to financial freedom, you should not do what we are doing. Until you have your finances on auto-pilot so that you are saving 50-75% of your income, you should absolutely be reviewing every piece of spending and adding up all the categories.
But we’re all done saving for retirement. Our cash outflows feel both luxurious and reasonable, and they are well below the retirement income budget, so it seems less and less necessary to measure them.
After all, if you are happy with your...
Contracts, paperwork, and bureaucracy. Guarantees, warranties, and excessive caution in an attempt to ensure a trouble-free future. Not all of it is bullshit, but the older I get, the more I realize that a surprising portion of it is.
I mean sure, if I’m Tesla and you are Panasonic, and we’re partnering to build the world’s largest structure and produce the majority of the world’s energy storage products, and we each have thousands of employees involved in the process, we can write up a contract and sign it.
But if I invite you over to my house for one of our customary Sunset Beers in the Park events tonight, how appropriate would it be for me to send along a little PDF contract with five places for you to sign?
I, Jane Mustachian, agree to arrive at the Mustache residence between 5 and 6PM, and consume between 1 and 5 servings of beer and/or wine, over a period not to exceed six (6) hours, to convey myself to and from the event using only muscle-powered transportation… blah blah any food served may...
In early April of 2011, I started a blog. Although I secretly hoped that lots of people would end up reading it, it was partly just a form of personal therapy – a place where I fight back against a world that had obviously lost its mind, by sharing some financial and living advice that should have already been obvious.
This weird hobby ended up being a pretty good idea, as it has blown up my life in many ways and made it even more satisfying. Early retirement is already a great thing, but enjoying a long, youthful retirement where you get to feel like you’re actually helping other people is far better. This website has served about 25 million unique visitors, and even the regulars are now in the seven digits. On top of that, I’ve had the honor (and sometimes embarrassment) of showing up in several bigger bits of...
The secret is that my wife is no longer really retired, and in fact she started a business that is now big enough to fund our entire family’s lifestyle. Making this confession will subject both of us to the full fury of the Internet Retirement Police. But it’s worth it, because there are some valuable lessons in her experience that could be useful to other people hoping to take control of their own income.
I’m always fascinated and happy to see people making money through self-employment, (especially in fields that don’t require a university degree) because it presents a nice shortcut around most of the problems that the world of work presents to us. Prefer to set your own schedule? Go right ahead. Unhappy with work conditions? Change them. Want a raise? Company profits are under your control. Don’t like your boss? Just find a mirror and have a quick word with yourself. Sure, there are loads of great jobs out there, but...
One of the joys and frustrations of being an engineer who is also a hopeless dreamer, is that you can see the beauty of what the world could be, while also feeling the burden of every single thing that is in the way of achieving that beauty.
Envisioning this potential (and sometimes even having the opportunity to design some of it) is one of the greatest joys of being alive. But slamming up against the stubborn wall of society’s inertia, all day, every day, can lead to some displays of choice language.
If only we could grasp onto even a tiny fraction of the improvements that are hanging right in front of our faces, our society could bypass decades or centuries of pain, and billions of people could lead happier lives, starting this afternoon.
We can illustrate this problem perfectly with an example from right here in my home town. Take a look at this Google Maps satellite image of where Colorado Highway 287, (also known as Main Street) crosses over the St. Vrain Creek:Colorado Highway 287...
Since 2014, I’ve been using the Betterment investing service for a growing portion of my own savings. I funded an experimental account with $100,000, and have had a monthly auto-deposit adding in an additional $1000 per month since then. The results have been documented on a page I call The Betterment Experiment.
So far, the experience has been better than I had expected. The company’s behavior – both to me as a customer, and through their relationship with the public and the media has been solid and classy. And their already-good investment system has continued to advance. I joined for the automatic rebalancing of shares, but since then have been impressed by two more obscure features that are surprisingly effective:
About three years ago, my family was happily living in a comfortable, mortgage-free house. There was more than enough room for everyone, it was in a walkable neighborhood, and thanks to some unexpected boosts in our family income, life was more affordable than ever.
But suddenly, perhaps due to some combination of a romantic whim* and the quest for constant optimization, we decided to downsize to a house that was about 50% smaller.
While the above-ground space only dropped by a couple hundred square feet (from 1734 to 1532), this move also cost me my nicely finished basement, a warm dry attached double garage, a garden shed, plus a nifty “tiny house” building I had built out back. The total pain was thus much larger: my almost-3200 square feet of dry indoor space was cut down by more than half.
I use the word “my” because in our family, I really am the main consumer of space. While my share of bedroom and closet space is minimal, I am responsible for a bulky drum set, too much audio and computer equipment, most of the bikes, and of course the whole Confused Renaissance Man’s set of tools for working...