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2018-01-18T17:50:11.656Z
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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.

More on Effective Altruism: The Life You Can Save website, and my earlier article on the subject.

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.

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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...

Well, despite Mr. Money Mustache’s outrageous optimism, I think we all saw this coming. I opened up my premium renewal email from Kaiser and saw this:

Figure 1: My new insane medical insurance premiums for the minimum available “Bronze” program, with a $6500 deductible.

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:

  1. Fuck, when are these slimy cable TV...
Zeona M. enjoys a recent day at the office.

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...

I’ve been using this picture of a similar space at “Shift” coworking in Los Angeles for inspiration in designing my main room because the size and window/door layout are similar.

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.

Commercial building...

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...

Some of Houston’s cool and under-appreciated bike infrastructure.

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...

Well, I might as well come clean on our spending for last year.  It either went up, or way up, depending on how you want to account for things.

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.

(Related Article: How Rich are You? How to find your Net Worth and Savings Rate)

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...

You know what I have come to realize is almost always ridiculous? Contracts.

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...

Taking down the old sign at the future MMM HQ building last month. Much more has changed since then!

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...

For the past two years or so I’ve been keeping a secret from you, and I think today it is finally time to spill the beans.

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...
From my 2015 visit to check out Betterment’s operations in NYC (photo: museumhack)

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:

  • The tax loss harvesting system, which has sliced several thousand dollars from my income tax bill so far. (Note – this feature is generally most useful only at higher income levels, and I got extra benefit from having other capital gains to offset)
  • Tax Coordinated Portfolio Allocation, which automatically...

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...

About five years ago, one of the earliest readers of this blog was generous enough to share the life story of his beloved father, who had recently died before his time. I called the post Eulogy to a Great Dad. It was one of my favorite stories, because it was apparent through his son’s words that this man had really devoted his life to being a good father and a good person in general.

Dad stories are also particularly meaningful to me because it’s my own primary mission in life right now. My main motivation for retiring early was a desire to put that role as the top thing in my life. At age 30, I set aside 20 years for this project with a goal of being cool, understanding and infinitely supportive to any kids I might have, with anything else coming a distant second. Now eleven years into that project, it remains the one thing in my current life that I manage to stick to without any compromise, and thus without any regret.

Lots of this was inspired by warm memories from my own upbringing. Our entire family, while not the glamorous and self-actualized group of perfect humans they used to make...

My Brother Wax Mannequin and I poached multiple playground, hotel, and basement gyms during an extended road trip together – August 2016

If you look around on the street these days, you might get the impression that it is really, really difficult to stay in shape beyond the age of about 30.

Sure, there are a few competitive athletes, movie stars and Navy SEALs around that still manage to keep in strong form, but if you are not willing to devote your entire life to training, you might as well just head straight for the stretch pants, right? Older age strikes and there is nothing you can do about it.

Oddly enough, if you could peer at the financial statements of your fellow citizens, the story might be similar: consumer debt is normal, the bills keep piling up, and only the movie stars and athletes (and corrupt CEOs of big banks, of course) make enough money to actually get ahead.

These opinions are widespread, and often fiercely defended as Truth. This is why I have been happily surprised over the years as I...

MMM Note: The following is a lesson from our Canadian friend Mr. Frugal Toque, a long-time reader and contributor to this blog, and soon-to-be early retiree.

“This above all: to thine own self be true.”

– Commander Data, probably quoting some old English guy.

I can’t say for certain that we Mustachians need perfect honesty: I’d be lying to you. But if we’re to proceed with the utmost efficiency, we’re going to have to at least cut the crap out of our own lives when we look in the mirror and get down to business.

Do you drive a car? I do. Do you lie to yourself about how much the use of that car costs? I used to.

The Toque family makes an annual visit to Grandpa and Grandma Toque every summer, a family reunion of sorts to meet up with the entire Toque clan. Mrs. Toque and I would always record this journey, 600km in each direction, at a reasonable cost of about $100: billing the whole thing to ourselves as if it were simply the cost of gas.

We’ve made this journey for 18 years, every summer we’ve been married and the one before that, and sometimes more than once per year. To add to...