|
tuyop posted:Guys, please tell me how to become a TIGHTER. 
|
#
?
Jan 23, 2014 17:33
|
|
|
|
| # ? May 9, 2024 22:35 |
|
|
Cicero posted:The whole point of financial independence isn't that you do zero work, it's that any work you do is chosen without the implicit coercion of "I have to do this or I won't be able to afford rent." Besides, writing roughly one blog post a week doesn't exactly strike me as a time-consuming endeavor. He probably spends what, a few hours a week actually writing? My point is more that Financial Independence is really easy when you're pulling in (presumably) six figures for making one blog post a week, so any information about his current situation isn't really relevant to me.
|
|
#
?
Jan 23, 2014 17:39
|
|
|
It doesn't matter how much he's making now, just that he's spending <$25k/yr and is presumably happy. All because he saved up $600k and can now live off those dividends alone. Not getting why his current income is relevant.
|
|
#
?
Jan 23, 2014 17:44
|
|
|
Saint Fu posted:It doesn't matter how much he's making now, just that he's spending <$25k/yr and is presumably happy. All because he saved up $600k and can now live off those dividends alone. Not getting why his current income is relevant. I may be mistaken, and it's difficult to say since he redacts all the numbers whenever he posts stuff about money, but I am under the impression that he's no longer living that lifestyle and his blog has basically become a work of fiction. I could be wrong, and it's honestly not my business how he lives, I just found his blog to be taking a shift towards more political opinion than useful financial advice, and it was no longer relevant to me so I stopped reading it.
|
|
#
?
Jan 23, 2014 17:49
|
|
|
I agree that he's said about all there is to say on the topic. But his family is still living that lifestyle for the most part: http://www.mrmoneymustache.com/2014/01/12/exposed-the-mmm-familys-2013-spending/
|
|
#
?
Jan 23, 2014 17:54
|
|
|
Ah cool, I hadn't seen that post, so that's some interesting insight. That said, I don't even see that as a particularly frugal budget. For somebody that champions bicycles and calls people "car clowns," he sure spends a lot on gas. 25k sounds like a cheap annual expense, but considering he pays no rent or mortgage, it's not that unusual. If you figure average is something like $1250/mo on mortgage or rent (and this varies wildly by location, but humor me), that's an additional $15k, bringing us to $40k annual expenses. To afford that, you'd need an annual pre-tax household income of over $50,000, which is right around the median income in the US. Again, I don't mean anything personal against the guy, and there's good advice to be had there, but he's honestly a pretty average guy with pretty average habits. The big huge important advice he gives, is that you don't have to expand your lifestyle as your salary increases, and everyone can be pretty happy living with totally normal and average spending habits. If this were the way he phrased it, I think I'd be more likely to continue reading his blog, but he's got this awful attitude where he thinks he's better than everyone else and it's really off-putting. He's a fortunate dude who was smart enough to exercise common sense and take advantage of windfalls, but I don't think he deserves his reputation as a champion of frugality. I don't think that means he's lazy or a sell-out or anything though, and I agree that the criticisms of that nature posted earlier have got to be trolling.
|
|
#
?
Jan 23, 2014 18:05
|
|
|
SlightlyMadman posted:I may be mistaken, and it's difficult to say since he redacts all the numbers whenever he posts stuff about money, but I am under the impression that he's no longer living that lifestyle and his blog has basically become a work of fiction. I could be wrong, and it's honestly not my business how he lives, I just found his blog to be taking a shift towards more political opinion than useful financial advice, and it was no longer relevant to me so I stopped reading it. http://www.mrmoneymustache.com/2014/01/12/exposed-the-mmm-familys-2013-spending/ I also don't read the site so much anymore. Now that I've taken the time to wrap my head around the math and work things out for myself, I don't really need the site anymore. It's a morale booster for when I feel like I've started to loosen up on my spending and I need to get motivated to regain my footing. But that's about it. edit: beaten
|
|
#
?
Jan 23, 2014 18:07
|
|
|
Yeah reading the blog isn't very useful me any more, he's written plenty more words than are necessary. His case studies are still good when they happen. (PS don't ever click on the forums there, christ.) The most useful thing he's done for me is make me think vaguely of mustaches when I'm considering taking a cab home for no reason.
|
|
#
?
Jan 23, 2014 18:18
|
|
|
SlightlyMadman posted:He's a fortunate dude who was smart enough to exercise common sense and take advantage of windfalls, but I don't think he deserves his reputation as a champion of frugality. I don't think that means he's lazy or a sell-out or anything though, and I agree that the criticisms of that nature posted earlier have got to be trolling. You say "early retirement" and 95% of people look at you like you have three heads. I'm happy with him keeping the blog "active" because millions of people could still benefit from reading the site. Including almost all of my friends from college. (note that MMM admits that he's not even very frugal anymore. If you want that, go to ERE) No Wave fucked around with this message at 19:23 on Jan 23, 2014 |
|
#
?
Jan 23, 2014 19:19
|
|
|
No Wave posted:(note that MMM admits that he's not even very frugal anymore. If you want that, go to ERE)
|
|
#
?
Jan 23, 2014 19:45
|
|
|
Why can't you be financially independent and still have a job? My boss "retired" 20 years ago but went back to the work force because he loves to work (and his friends were all still at work all week anyways). He can walk away at any time, and to me that is the definition of financial independence.
|
|
#
?
Jan 23, 2014 19:48
|
|
|
Nocheez posted:Why can't you be financially independent and still have a job? My boss "retired" 20 years ago but went back to the work force because he loves to work (and his friends were all still at work all week anyways). He can walk away at any time, and to me that is the definition of financial independence. Early retirement: actually not working for money. There's some gray area though in between not working at all and working a normal full-time job where some might classify it as "semi-retired".
|
|
#
?
Jan 23, 2014 20:20
|
|
|
No Wave posted:They're not trolling. I don't think you're in touch with the reality of how people see money in the US. I think we're talking about two different things. I was referring to the comment that being frugal and riding a bicycle is lazy. That just seems intentionally inflammatory to me. I do however think statements like the above can be dangerous. What's relevant to the people who subscribe to SA is not representative of the general public. Most people will think you're crazy to consider early retirement because they're living paycheck-to-paycheck not because of irresponsible spending but rather being born into inescapable poverty. That's outside the scope of this thread though.
|
|
#
?
Jan 23, 2014 21:02
|
|
|
Cicero posted:Financial independence: not having to work for money. I think that is where I want to be. I would like to be in a position where if I need to scale back working I can comfortably without worry. I live a relatively light lifestyle in terms of monthly expenses, but I also enjoy working at something I like doing so I can finance some fun hobbies if I want to.
|
|
#
?
Jan 23, 2014 21:08
|
|
|
Most people in the US aren't born into inescapable poverty though, and yet most Americans still live paycheck to paycheck. What is with the whole "lol the US is a third-world country" thing going around SA these days? Yes the US has crappier social services compared to western Europe and things suck more for the poor here, but goons seem to be intent on exaggerating the problems until it sounds like the US is some North Korea-level hellhole.
|
|
#
?
Jan 23, 2014 21:08
|
|
|
Maybe he meant most people in the world? Like, 2 billion living on $1/day or less "inescapable poverty"?
|
|
#
?
Jan 23, 2014 21:14
|
|
|
Cicero posted:Financial independence: not having to work for money. I always thought this was kind of a good place to be: http://www.mrmoneymustache.com/2012/05/26/guest-posting-financial-independence-23-years-later/ This guy has been financially independent for 23 years and he pretty much would just go from job-to-retirement-to-job when he felt like it, and he would enjoy the often long periods of time between the jobs. I'm simplifying it a bit but that seems like a good place to be. As someone who was unemployed for a period of time I know that when I wasn't working it got a little bit depressing. Choosing when to work out of want instead of necessity would be what I would like to achieve.
|
|
#
?
Jan 23, 2014 21:16
|
|
|
Cicero posted:Most people in the US aren't born into inescapable poverty though, and yet most Americans still live paycheck to paycheck. What is with the whole "lol the US is a third-world country" thing going around SA these days? Yes the US has crappier social services compared to western Europe and things suck more for the poor here, but goons seem to be intent on exaggerating the problems until it sounds like the US is some North Korea-level hellhole. You're twisting my words around, but this thread isn't the place for this argument. I didn't say most people are in poverty, I said most people who can't comprehend early retirement are, but maybe my experience is different from yours. Anyone I know who's well-off enough to be able to consider a 401k have at least had a brief mental debate about the possibility of retiring before 65, even if they ultimately discounted it. The only people I've met who would "look at me like I have two heads" if I mentioned ER did so because they had no money to set aside for retirement at all. Whether or not we need more social programs or anything to that effect has nothing to do with what I said, and I never called the US a third-world country, so I don't know where the hell that came from and can only assume you're the one with an agenda.
|
|
#
?
Jan 23, 2014 21:22
|
|
|
I'm also very interested in the idea of mini-retirements or long sabbaticals. Like, set your finances up to allow you to take five years off to raise your child(ren), or take two years to hike the PNT and AT, you know? It's just that once you have the habits that allow you to save for five years of no work plus emergency and traditional retirement, the difference of funds is not that much to allow you to just live on a little less or work one more year to get the nest egg up. And then one more year "just in case". And then... But I think once my wife leaves the army and I finish this degree, it would be excellent to take $5-10k and do the Appalachian Trail together. If I can.
|
|
#
?
Jan 23, 2014 21:22
|
|
|
I'd be happy with just having a 3-4 weeks to go hike the Annapurna trail or something.
|
|
#
?
Jan 23, 2014 21:24
|
|
|
I think financial independence simply means that you don't have to work for a living because you have enough money that you don't need to. Hence "financial independence". Your life is independent from your financial situation. You can work while being financially independent. It's not called "job independence".
|
|
#
?
Jan 23, 2014 21:36
|
|
|
tuyop posted:I'm also very interested in the idea of mini-retirements or long sabbaticals. Like, set your finances up to allow you to take five years off to raise your child(ren), or take two years to hike the PNT and AT, you know? I took 3 years to get a law degree debt free and with no interruption to standard of living for my family. This was right through the worst of the recession too. Literally, the market crashed two months into my first year. Ultimately it was a bad investment, but a great experience. It feels a lot better when I cast it as a sabbatical, because it added about 5 years to my retirement timeline. But I should have done the Appalachian trail instead. Also, I scrolled through a lot more of those comments. I swear, nobody understands insurance. One guys said MMM was crazy for not having life insurance. Why would he need life insurance? What risk would that insure? And they can't fathom the idea of a high deductible policy. There are comments from people who are paying more per year for their health insurance than MMM's family would pay if they maxed out the deductible every single year. Folly fucked around with this message at 22:22 on Jan 23, 2014 |
|
#
?
Jan 23, 2014 22:03
|
|
|
SlightlyMadman posted:I think we're talking about two different things. I was referring to the comment that being frugal and riding a bicycle is lazy. That just seems intentionally inflammatory to me. I do however think statements like the above can be dangerous. What's relevant to the people who subscribe to SA is not representative of the general public. Most people will think you're crazy to consider early retirement because they're living paycheck-to-paycheck not because of irresponsible spending but rather being born into inescapable poverty. That's outside the scope of this thread though. Note sure why my statement was "dangerous", either.
|
|
#
?
Jan 23, 2014 22:24
|
|
|
This is actually a pretty cool thread. I posted in some other thread about our families long term saving plans, based around a fluffy "retire early" sort of concept with no real idea of when just sock cash away and maybe escape at 60 or 65 or something and not have to eat cat food, but click here almost at random and having a read made me do some sums and we are not a million miles away from being able to do something like this. poo poo like should be taught in schools. We're behind the curve age wise, already at the ~30 mark with embarrassingly small savings, but you know what, paying off the house and building up an egg so between us we can drop the high stress jobs and do some part time work\side gig whatever earning a couple hundred a month each if we want by age 40-45 sort of time period is pretty inspiring. Certainly helps makes for a more rational consideration about how much various luxuries are actually costing us. Has anyone run the numbers on paying off a mortgage via overpayment early\late vs saving? Or is it a straight interest paid\gained comparison over the time period?
|
|
#
?
Jan 24, 2014 11:31
|
|
|
Look up Karl's mortgage calculator in a Google search. It has a ton of functionality for showing how much you will save by paying x amounts early.
|
|
#
?
Jan 24, 2014 12:27
|
|
|
I like this thread and want to play too. I graduated college in 2008 and went right into military flight training with the national guard. Immediately following flight training I enrolled in a M.S. program and just recently finished in May of 2012. The time period between 2008 and 2012 I knew that saving was a good thing, but I didn't quite understand the idea that money can buy freedom from having to work. I figured I'd just save what I could and it'd work out in the end. This resulted in my maxing out my roth IRA (5000) every year from 2009 - 2012. I also saved a crap load of money (in my mind) for a down payment on a house. Now it's 2014 and I've been working at a grown up job for a year. Frankly, it sucks! I thought I would enjoy working. My job is great by all outside standards. I'm paid relatively well, and I don't have a tremendous amount of stress. However, I hate how I don't have time to do anything anymore. It's like every day I go to work, come home, watch an hour of TV and go to sleep. By the time the weekends come around I spend Saturday cleaning the house/running errands and Sunday watching football or whatever. I miss all the free time I had in school to go do whatever. At this stage in my life value time more than money. My wife and I are working towards FI on all fronts. We save a boatload (~52k in 2013, with plans to continue that rate). We try to keep our spending low (~36,000 in 2013). Lastly, I'm working on a web business that may or may not generate some extra income. The one thing I learned is to enjoy the moment NOW. I constantly find myself running spreadsheets and daydreaming about having enough cash to call it a day.
|
|
#
?
Jan 24, 2014 16:23
|
|
|
Velochis posted:I like this thread and want to play too. You're saving impressive amounts, but I think the most important thing that all the FI folks try to hammer home is saving percentage. If you save 80% of your income, then you only have to work for five years as long as you make 5-7% returns and maintain your lifestyle at the same cost as that 20% living expense. This post goes into this stuff in more detail.
|
|
#
?
Jan 24, 2014 16:38
|
|
|
If he spent $36k and saved $52k then his savings rate is about 60%. That will get you retired in < 10 years, I think. Also, because this thread is back from the dead, we should all remember that it's January. Time for most of us to hold our family's annual budget meeting. Analyze last years goals and set next year's goals. I'd like to keep the thread alive, so I'll offer mine up in rough numbers. We were ~9% over on projected spending for 2013 and that year was projected to be an expensive year with the following non-repeating expenses that accounted for about 25% of our total spending last year:
For 2014, we intend to cut our base spending by about 30% and I have already identified where/how. This will result in a total spending of about 35% of my current income. The new spending plan has been in place since October and has thus far been successful. However, next year will have the previously mentioned remodel, which might exceed the money we've set aside. If so, we will reanalyze.
Advice is welcome.
|
|
#
?
Jan 24, 2014 19:45
|
|
|
God, this threads and the Newbie Personal Finance one remind me that 1) I'm single, and haven't had a lot of luck in the dating world 2) Maximizing savings is of course way easier with two income earners and reduced joint expenditure (housing/utilities/food), especially early on for the best compounding interest benefits 3) Whomever I do eventually find, I may have to convince them to get under the same financial goals. Luckily, the MMM article linked above about savings rates graphs and years off working also had a link to an article about convincing your spouse to follow the same path (haven't read it yet though).
|
|
#
?
Jan 25, 2014 01:02
|
|
|
SpelledBackwards posted:God, this threads and the Newbie Personal Finance one remind me that Just put an ad out in craigslist for a "Herero life mate" with those reasons as the rationale. I tried that when I was like 21 and it didn't work, though.  But there are people like me out there!
|
|
#
?
Jan 25, 2014 01:53
|
|
|
tuyop posted:But there are people like me out there!
|
|
#
?
Jan 25, 2014 03:04
|
|
|
SpelledBackwards posted:God, this threads and the Newbie Personal Finance one remind me that There are advantages to being single and saving a lot too though. I'm happy in my relationship, so this ultimately doesn't matter, but from a pure financial perspective, I think it's a wash, or slighly more expensive for me. My girlfriend doesn't make a lot of money, and I definitely spend more on trips/food out/entertainment with her than I would alone. You can always just get a roommate.
|
|
#
?
Jan 25, 2014 04:46
|
|
|
Grumpwagon posted:There are advantages to being single and saving a lot too though. I'm happy in my relationship, so this ultimately doesn't matter, but from a pure financial perspective, I think it's a wash, or slighly more expensive for me. My girlfriend doesn't make a lot of money, and I definitely spend more on trips/food out/entertainment with her than I would alone. Being single avoids problems such as if your partner is perfect in every way, but doesn't want to travel with you, or if they aren't particularly interested in financial independence. For me that would be really disappointing. The idea of financial independence is really intriguing, so I've started off by just calculating my living expenses and investing appropriately (I had been planning on investing anyway, but the idea of financial independence wasn't really on my radar before). Right now I've invested in some ETF's so that (in theory) I will never have to pay for my mobile phone or internet bills ever again using earned income. Yes, I know it's a silly way to go about it, but for me it's easier to just tick off one bill after another in order of smallest to biggest amount because otherwise I just lose interest. froglet fucked around with this message at 08:15 on Jan 25, 2014 |
|
#
?
Jan 25, 2014 08:08
|
|
|
Also note that from a financial perspective, while being single is mostly worse than being DINKs, it's way, way better than having a family on one income. If I didn't have a family at all, becoming FI at my current level of income would be trivial.
Cicero fucked around with this message at 08:30 on Jan 25, 2014 |
|
#
?
Jan 25, 2014 08:14
|
|
|
Folly posted:
About how much do these things cost on first arrival? I ask for a friend who sleeps in my bed and is beginning to make demands. 2014's set to be a good year for us. The side gig is still powering along and kicking goals, I decided to stick with my job for the time being so that's going well also. My entrepreneurial mate is also undertaking another new little hobby business this year making soaps, so hoping that will also add stashing power. I'm dipping my toe into 'dividend growth investment' this year, it appears to be the best solution to my long-term finances, especially with Australia's franking credits system. I'll attempt to explain more if anyone is interested. The only problem is I check my excel spreadsheets way too often. This whole thing is definitely a marathon, rather than the sprint I was considering taking last year (leaving the job and living off the business). Oh, and I recently actually read through Jacob's whole book (Early Retirement Extreme) - the guy is a massive brain, it's hugely entertaining to read him focusing all his neuronal power at being frugal in a wasteful world. It definitely flipped some switches in my head. Without even trying to, I appraise everything I think about purchasing and I'm more considering in the way I approach problems. It's massively simple to make your own flyspray, to take a small example. It's a hell of a lot more fun actually making solutions instead of buying them. Lots of other takeaways, highly recommended read.
|
|
#
?
Jan 25, 2014 09:56
|
|
|
Chadzok posted:I'm dipping my toe into 'dividend growth investment' this year, it appears to be the best solution to my long-term finances, especially with Australia's franking credits system. I'll attempt to explain more if anyone is interested. Go for it, I'm interested.
|
|
#
?
Jan 25, 2014 11:48
|
|
|
froglet posted:Being single avoids problems such as if your partner is perfect in every way, but doesn't want to travel with you, or if they aren't particularly interested in financial independence. For me that would be really disappointing. You really have to remember what part of life they are at too. I know for me, I joined the military at the age of 19 after 2 years, and being broke in college. I spent 8 years in, and got out and got a decent job. However, my fiance is a bit younger than I am, but is just finishing in grad school with massive student loans. She already had a job lined up luckily, but I've been living frugally and investing for the last decade. She just puts in a few hundred a month towards rent, but that certainly helps.
|
|
#
?
Jan 25, 2014 12:00
|
|
|
Another advantage of being single is that if you want or need to rice and beans the gently caress out or otherwise make some major sacrifices for something its much easier to be hard on yourself than on people you love. Even if they are totally on board with it.
|
|
#
?
Jan 25, 2014 12:07
|
|
|
Chadzok posted:About how much do these things cost on first arrival? I ask for a friend who sleeps in my bed and is beginning to make demands. I think the hospital told us the price out of pocket was going to be $3750 because that's what the insurance company had negotiated with them. It's always a few hundred dollars more because there are some tests you want that aren't covered in the standard package. The insurers have a new trick where the split the deductible between mother and child, so you pay 40% instead of 20%, and we're still fighting about that one. But I hear that the average birth costs $4k to $10k. The good news is that you have time to shop around for a good price. The bad news is that the sorority of mothers puts a lot of emphasis on the mother's comfort with the OB. A first time mother would have to have a formidable will through a time of overwhelming uncertainty if she were to overcome that social pressure and consider price. Still these prices are pretty solid and if you're going to have a baby, then there's not much room for savings here. The place where I think most people waste money on new babies isn't the actual birth. It comes from 2 other sources instead: 1) the stuff, most of which you barely need. Talk to frugal parents who have 2 or more kids and they'll tell you what you actually need. 2) the fact that your life suddenly went into chaos and you're suddenly more willing to spend money just to keep your head above water It's the second one that kills budgets. Use whatever mental tricks you have already developed to help you keep a budget. It's kinda like running when you're tired; you have to push harder just to keep the same pace. Also, assuming you're in the US, if it's your first kid, expect your health insurance premiums to increase to cover the Family Option instead of the Self + Spouse option. Good luck. 
|
|
#
?
Jan 25, 2014 20:00
|
|
|
|
| # ? May 9, 2024 22:35 |
|
|
SpelledBackwards posted:God, this threads and the Newbie Personal Finance one remind me that It could be worse, my girlfriend has six figures of student loan debt and can't find a job.
|
|
#
?
Jan 27, 2014 15:22
|
|