Mr. Money Mustache » The MMM Blog Early Retirement through Badassity Wed, 27 May 2015 22:56:02 +0000 en-US hourly 1 What I’m Teaching my Son about Money Wed, 20 May 2015 16:02:12 +0000 climbing

Most of the best money lessons are learned without shoes.

I’m not going to lie to you – being wealthy is a lot of fun.

And I’m not just talking about novelty fun that you get from driving around in a fancy car. True wealth is more of a big picture thing – freedom from negative stress and a higher confidence about how great life is. It hits you like a pack of wild butterflies every morning when you wake up. Holy shit, here comes another great day.

I want to pass this gift along to my son if at all possible, because it is truly a great way to live. After all, as parents we are really in the business of producing the happiest and most capable adults we can, given the constraints of the real world. If my boy eventually ends up as happy with his lot in life as his parents are, we will be more than satisfied.

Surely every parent wants the same thing – to pass on their happiness if life is good, or if not, to give their kids a better life than they had.  So they do their best to dish out financial advice, and to model good behavior for their offspring to emulate. Unfortunately, the results are not always good.

In a country where Ridiculous is Ubiquitous, most people’s best attempts at getting ahead are in fact recipes for financial disaster. I get emails from high school and university students telling me, “Dad advised me to finance a reliable NEW car with 4WD, so I can be safe in the winter and spend less on repairs.” Other people rack up $200,000 in student loans for a elite degree with few job prospects, because their parents cautioned “You can’t get a good job without a degree these days.” Still other families stress over how much to spend on olympic-caliber toddler birthday parties, how to afford ivy league preschools and how to fit in with the other high-income families in their private schools.

While any one of these pieces of advice might work fine for a family with infinite money, they have trickled deep down into the middle classes where they become unhelpful for those wanting to truly get ahead.

I just read a book called The Opposite of Spoiled, by Ron Lieber. While the book was thoughtful and thoroughly researched, I was still fascinated by how much things have changed since I was a kid. There were chapters on how to handle the social pressures of a high-income neighborhood. What do you do when the other kids have nicer stuff than your kids, or vice versa? How do you say no to your kids when they want things that you can’t afford for them? How do you handle allowances, jobs, paying for education, mobile phones, cars, and giving to others?

All of these perceived social pressures of the Wealthy New York style of childraising were unfamiliar to me. It was three decades ago in a small town in a different country that I approached my own teenage years, and we followed a much simpler model of family finance back then. Much like the Unfrozen Caveman Lawyer, I found myself wondering “What the hell are these modern people fussing about? Do they really worry about this stuff?”


It seems to me that if we bring the financial values of a small working-class 1980s town forward to today, life gets a lot simpler for kids. And in the long term, richer.

Little Money Mustache and Money

In our household, money is an open subject without any attached baggage or taboos . Our 9-year old knows exactly how money is earned, what happens when you spend it (it’s gone), and what happens if you invest it instead (it works for you, for life).

Since we retired just before he was born, he has grown up with the idea of financial independence – if you own assets like rental houses or shares of businesses, they provide income which means you don’t have to leave home for 9 hours every day and commute to an office unless this is your idea of fun. He sees this every day by comparing the daily routine of his own parents, to what other parents do each day.

So ever since he has been old enough to have a use for money himself (age six or so), I have tried to give him a chance to learn for himself how it works.

Making Money:

Being a kid is quite a lucrative proposition these days. On top of the free rent, he gets occasional cash gifts from relatives and a salary from me that consists of 10 cents for every mile walked or biked as part of family life. These tend to add up in a mostly-car-free family, as he already has more than 1200 miles on the little 20″ tires of his mountain bike and we wear through quality shoes before growing out of them.

Over the coming years, I’m expecting him to move from these little-kid sources of income into more independent ones. Whether he pursues traditional employment or hardcore full entrepreneurship right off the bat is up to him*.

Some parents like to focus on academics: “Until you graduate, getting good grades is your only job.” But I like to think of a good education as a highly diverse set of experiences. Working and earning your own money at any age – even if it includes stocking shelves and assembling wheelbarrows at a hardware store – is a key part of this. School is just a tiny part of a kid’s education, and not even the most important part. In fact, most my most vibrant experiences from high school were side effects of work rather than classes at school.

The Spreadsheet:

bankaccountThis is where things get a bit unconventional. Instead of a physical piggy bank, my boy prefers to keep his money in the Bank of Mr. Money Mustache, a spreadsheet that contains every transaction he makes with money. To make a deposit, he just hands me some cash. To withdraw, he asks me for cash or has me buy something for him online.

But for every dollar that remains in the account, he accrues interest at a 10% annual rate with monthly compounding. I’m excited about the teaching value of this, because it shows him that

  • his money is finite (not just an limitless pool that you tap by nagging parents to buy you stuff)
  • keeping the money invested is profitable (his $600 account is now bringing in a very tangible $5 per month in interest)
  • new windfalls can be added, interest compounds exponentially, and an account like this of sufficient size means lifelong financial freedom

Where the Money Goes:

Right now, he has only a few true consumer loves in his life: PC games, books, and the occasional phone or tablet app. So he has spent over $100 on those things (quite a large percentage of income) in the past year. But in most cases, he has felt the fun value has been worth the spending.

Interestingly enough, he has already started to display a high degree of generosity. When something breaks in the house or another kid doesn’t have enough money to pay for something they want, he immediately offers up a large sum of his own money to cover the shortfall.

What the Parents Cover:

Meanwhile, I still cover the basic infrastructure of educational childhood fun – to build his computer I bought about $500 of parts and we assembled them together into a pretty spiffy gameworthy PC. We build robots with a $400 kit of VEX IQ stuff, and many books, bits of outdoor equipment and trips come for free as part of being in the family. Any organized activities also come from this freebie budget, at least until he reaches his teenage years.  But like his Dad, he has shown a strong preference for self-guided activities with friends rather than adult-organized ones so far, and I’m happy to let him continue with this style.

Living By Example, and Giving:

In Ron Lieber’s book, the tricky subject of “why do we have so much, when these other people have so little?” comes up. It’s a good one, because this observation is often the gateway to taking an interest in helping other people. But for me, it would be hard to answer a question like that while living at the pinnacle of American luxury with multiple homes, boats, and jets. Since our annual spending of around $25,000 is lower than average for our own country, and it stays that way even in years when we make many times that amount, I’m hoping the example of “spending does not need to scale with income” will jump to the next generation.

When your own needs are capped, it becomes only logical to find an efficient outlet for the surplus money. So there is an understanding that we operate with an informal, non-billionaire’s version of the “giving pledge“, meaning there will be no large Mustache family inheritance – each generation will be left free to generate its own massive surplus.

Higher Education, Performance, and Stress:

For me, this is where the rubber really meets the road.  If you can’t leverage money to live more happily, then what good is it? And yet consider the stunning case study of the children of the nation’s uber-wealthy enclaves like Palo Alto, California. Despite incredible wealth and some of the best educational institutions money can buy, kids there are more stressed, less happy, and more likely to commit suicide than others who live with a fraction of their privilege.

The problem arises when high-achieving parents assume that their kids need to be pushed to achieve more themselves, to beat out the other high achievers and gain access to the most elite schools, in order to compete in this incredibly challenging modern world.

Remember way back when I started this blog in April 2011? Right there in the first paragraph of the first post, we hit this sentence:

“… when it boils down to it, we are talking about money, and the freedom it can give you. Freedom from worry, and freedom from most forms of bullshit.”

To me, raising kids to feel pressure and fear so they can be COMPETITORS is bullshit. Life is not a competition. It’s a gigantic collaboration, and the world welcomes and rewards people who see it that way.

It may be that most parents of the very-upper-middle class are still operating from a scarcity mindset. If they are addicted to a high consumption lifestyle, earning $600,000 per year but still making car and house payments, they will assume that their children will need to earn and consume just as much in order to be happy. This of course dictates a job in the top fraction of the top percent of the economy, and education with enough prestige to secure such a job.

On the other hand, having crossed the threshold of having more than enough money for a good life almost a decade ago, I cannot even imagine my son not earning a plentiful and permanent surplus very early on in his adult life. Thus, there is no need to fight for traditional elite status. It is much more efficient to rise up to into your own niche without the constant drag of material addiction telling you you aren’t good enough. Paradoxically, this path is rare enough that you might end up earning even more money in the end.

What I Really Want Him to Learn:

All of this kid stuff is just the groundwork for the bigger (and slightly radical) perspective on money that I want to instill over his lifetime: that money is something you can master and control, rather than letting it control you.

Observe the following statements and see if you agree with them. While you can poke holes and find exceptions to each one, the overall philosophy is remarkably true if applied forcefully over a lifetime:

  • Income is not something that employers or the government ration out to you based on a rigged system. It is a something you generate yourself. It is the byproduct of your hard work, combined with learning and mastering the system itself. Even the system itself is subject to your control if you choose.
  • “Expenses”, “Needs”, and “Cost of Living” are terms that come from a mindset of weakness. Instead, use the words, “My Spending”, and realize it is in your control. By making the right moves and the right arrangements with other people, you could theoretically live for free. You can end up in any job, any city, any country, with any number of additional dependents – all at your own choosing. Even if you never do so, knowing that you have complete power over your spending is a key ally for financial freedom.
  • And finally, money is not the end of the quest of having a good life. While it is currently a major barrier to most people, it is easy to master it early in your life. Then you move on to the real challenges: finding out what life is really about. Hard work, being good to others, a good amount of proper difficulty, and learning as much as you can pack in during your time alive.

This is my experience so far in raising a Junior Mr. Money Mustache. Although I feel the foundation is solid, like everything in life it is an ongoing experiment. I’ll let you know how it turns out.


* My first jobs were paper route, lawn maintenance, and gas pump jockey. Out of these three, I’d only discourage a teenager from pursuing gas station work – avoiding toxic vapors during key periods of brain growth seems wise in retrospect.


A Technical Note: Due to higher traffic these days, our current server can’t keep up with traffic unless I have the comments feature disabled. We are still in the process of moving to a bigger system and some more modern comment-handling technology. I hope to have everything in order, better than ever, very soon.

A Fun Note: I started a sub-page of this blog called “Should we Meet?” – this is just a place where I keep track of places I’ll be passing through in the near future, just in case you want to come out and meet some real-life Mustachians with me. This page is just my tiny personal version of the Forum’s Meetup Section, where people are hanging out all over the world.

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A SoFi Review: Slick Technology vs. your Student Loan (or Mortgage) Wed, 06 May 2015 17:09:43 +0000 refi

sofi-riverAlmost two years ago, I started getting reader emails asking me if student loan refinancing was a good idea, and if a company called SoFi was a good place to do it. Never having carried such a loan myself I wasn’t sure if I was qualified to answer, but other emails were coming in reporting positive results with the company. So it seemed like a reasonable business to me, but maybe not suitable for the main page of this blog since it only applies to a certain slice of readers.

Since then, things have changed quite a bit. I ran into a SoFi employee at a pub one night, and over a beer he gave me a much clearer picture. I read about the history of the company and then talked to cofounder Dan Macklin about what they are up to now.  It started to get more interesting and I put the idea into my list of draft articles. More emails came in so I figured we should ask the readers about their own experiences via informal quizzing on Twitter and Facebook. There is also a detailed discussion of experiences right here on the MMM Forum. Out of those who successfully refinanced,  the results look good.

Why Would you Refinance a Student Loan?

I don’t get excited about lower monthly payments, loan forgiveness, or any other financial frills. I also don’t think anyone should borrow money for a wedding, vacation, or car, regardless of the rate. But for any debt you are currently stuck with, I do want you to end up with the lowest possible interest rate. You combine this with the making the largest possible monthly payment to destroy the loan in the shortest possible time, and thus escape from your Debt Emergency very quickly and move on to build real wealth.

You can then go on to optimize small details like “should I pay off my mortgage?” if you are an expert on interest rates versus expected investment returns, but at the end of the day you get wealthy by working hard, earning lots, and spending much less than you earn. Truly large investment gains become easy once you have a large, positive net worth.

How SoFi has Expanded its Usefulness

The company name derives from the words Social Financing, because the company was originally born on the idea of allowing alumni of Stanford and a few other elite universities to fund the student loans of the next generation of students. It was a novel concept at the time, although for a relatively small audience.

But as the company has grown and found success, it has expanded both the source and destination of its funding. Nowadays, instead depending on alumni to write checks, the company has tapped into the current wild surplus of institutional investor money looking for somewhere to invest.  And SoFi’s goal is to connect YOU to this money, via a very modern and simplified interface.

They have also expanded their program to include graduates from a much larger number of universities (over 2200 when I last spoke to them), and started offering mortgages as well.


Fig.1: The SoFi Business Model. Money is easy these days, but this only helps you if you use it to buy freedom from debt, not new cars and fancy weddings.

This business model appeals to me, because I am fascinated by the current low-yield environment. There are trillions of dollars of institutional money swarming around trying to find a good return, while US government bonds pay almost nothing. This has driven up stock market valuations and also brought a surplus of investors to companies like Lending Club in search of cashflow. In general, it is a poor time for value-oriented investors, but a good one for borrowers.

I have also been frustrated with the perpetually low-tech environment of lending. Although I now maintain a peaceful balance sheet with no debt, I’ve gone through at least ten mortgages and refinancings over the past 15 years, and every one was more trouble than it needed to be. Sometimes I’d find myself sitting in a bank employee’s cubicle slowly reciting figures while she typed them into boxes of some rusty old Windows XP application. Other times I’d be signing and scanning paper documents and using various hacks to send them in the antique “Fax” format to bankers who didn’t even have a way to open a PDF.

Student loan refinancing was even worse – the private market for loans was undeveloped, which means there were few options open for many graduates. Thus, many are still stuck with rates above 6% despite rising income and credit worthiness. Much like the taxi industry before Uber arrived and started steamrolling things, the lending industry was ripe for a massive and convenient overhaul, and SoFi has been working on its small revolution since they began in San Francisco in 2011.

With tens of thousands of borrowers and billions of dollars funded so far, they are off to a good start. And it is a big market to grow into: US student loan debt is now measured in the trillions, and some are calling it a bubble. While it may become a problem on a national scale, hype like that doesn’t matter to you – you’ll be eliminating your own student loan within a very short time.

So How Does It Work?

250-20I got myself a SoFi account just to see what the user experience is like. Their system asked about my income, employment and educational status. I even found my own Canadian university in their list of approved schools. From there, you would go on to submit a scanned copy of your diploma, information about your existing loan, and then hand it off to SoFi staff to do the fussy work of verification.

I had no student loan debt to refinance so I pretended I had a mortgage on my house and started a mortgage refi application instead. The whole application took me less than 5 minutes.

With a test case of $50k down on a $250k mortgage, I saw rates of 3.245 to 3.495%. As you might guess, rates increase for larger loans and smaller downpayments, but the premium for these bigger loans was remarkably cheap.

Loans from SoFi carry no origination or other typical lender fees, which was a refreshing change. Their 10% down loans also require no Private Mortgage Insurance (PMI) which could provide a massive savings in certain cases: PMI generally sucks and should be avoided.

But the most interesting part to me is that you can then slide your loan amount and downpayment back and forth to strategically get the best rate for your own situation. Considering a smaller downpayment so you can keep cash in reserve to buy a rental property next year? You can instantly see how much that will cost you. Comparing 15 to 30 year and fixed to ARM? All that data is right there and it adjusts in real time.

This felt like Justice to me. After years of harassing my bankers to give me dozens of hypothetical rate quotes to help me decide how to structure my mortgages, now the data is all properly presented to me on my own computer screen, rather than filtered through a pipeline of slow-talking human mouths connected by Low-Fi telephone line. So much more efficient!


Some US student loans currently come with niceties that you will lose if you refinance. The Public Service Loan Forgiveness program lets you off the hook if you hold a qualifying job and make your loan payments for 10 years, and this works well for certain people who love their jobs.

On the other hand, my own freedom-oriented personality type would wither under such a long-term job obligation: I’d rather earn as much as possible, devote as much of it as possible to debt elimination and investing, then be free to choose any job from beach bum to tech company CEO without regard to how it affects my loans.  This is why I care mostly about low interest rates.

Also, SoFi is not for everyone. They are deliberately skimming only certain categories of borrowers, which means a good experience for those who qualify but a frustrating (but quick) rejection if you don’t.

Ready to Learn More?

I’m going to be honest with you: SoFi really wants access to the Mustachians, because our combination of higher education, income, and financial discipline makes for an excellent lending pool. They have sent me a pile of T-shirts over the past two years and an unsolicited pecan pie showed up at my house during the holidays.

They also have a referral program (every member can get credits for referring friends). So in keeping with my affiliate policy I joined their program, but pushed them to give as much of the slice as they could to you the readers. The result is this link for student loan refinancing:

If you get approved, the result should be a $300 cash bonus to you, which you can use to wipe off that first chunk of your student loan.

The bonus does not apply to mortgages, but you should still investigate their rates if you’re in the market for a refinance, just as it pays well to shop around every year for car and house insurance and comb your other monthly bills for things that need streamlining.

Share your Own Experience:

I had to draw heavily on reader experience to write this post, but there is surely more to learn. If you have experience with SoFi or an alternative, please share it in the comments below. The goal for all borrowers should be maximum flexibility at minimal cost, and collectively we have a good amount of knowledge in this area. Eliminate debt and prosper!

Further Reading:

Student Loan Eligibility: SoFi can currently refinance student loans in every state except Nevada.
Mortgage Eligibility:  this program is still expanding – currently in 23 states plus DC

Sofi Student Loan Rates: Shown in this chart
Darien Rowayton Bank (DR Bank) competes in this space and in certain situations some readers have found even lower rates there.
The White Coat Investor reviews SoFi from a physician’s perspective.


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What Does Your Work Truck Say About You? Tue, 28 Apr 2015 21:33:01 +0000 c4500-partytime

c4500-partytimeTo my Brothers of the construction trades, the oil industry, the armed forces, and even plain old civilian office jobs.

I was hoping it wouldn’t come to this, because I think we should all be free to make our own choices. But with the recent oil boom and bust, and the even bigger housing boom we are just starting to roll with here in the ‘States, there’s a big chunk of your money at stake, and I’d rather see you hold onto it instead of seeing it go up in smoke. So I’m just going to put this out there nice and clear:

Your Work Truck is Killing You, and making you look like a Big Dumbass in the process.

Now don’t get me wrong – not every work truck is a money-burning rolling clown circus with a 24/7 fireworks show shooting out of its roof telling the world how dumb you are. Only about 99% of them. So if you’re fortunate enough to already be in that top 1% who knows how to buy and operate a real work truck, you can just laugh along with me and then share the lesson with our other Brothers* when you get out of class.

“So what’s wrong with my truck?”

I know how you feel – trucks are fun, and everybody has ’em. How could this be wrong? To figure it out, let’s review the basics of what a truck is really supposed to accomplish.

  1. To make you money.
  2. To make you look good in front of other people.

You could get more complicated and start talking about horses and cupholders, but if you break it all the way down, those two points above are why we buy trucks.

You could say a truck needs to carry you and your crew to work, or haul your tools, materials and trailers. But why are you delivering yourself to work? Why are you bringing the tools and materials in the first place? To make money. These machines are business tools, designed to make us a profit.

And you could pretend a truck is only a business tool, but that would be ignoring the fact that your choice of truck says something about you – to the ladies, to other men, and to your employer. Or if you’re doing well, to the customers of the business you own yourself. What message do you want to convey to these people?

So Where’s the Problem?

The problem arises when you don’t understand the Two Commandments of Truck Ownership, and buy yourself something that doesn’t really meet those goals.

The Money


Look at this truck, compared to the one at the top of the article. Which guy would you rather hire to build a foundation for you?

A truck makes money by carrying as much shit as possible, safely, to your destination. This allows you to earn a good day’s pay. But the truck also costs you money, which is taking back a portion of that paycheck. The amount you get to keep for yourself is your profit. Since your goal is a nice fat profit, you obviously want to pick the truck that burns the smallest amount of your hard-earned cash.

The Looking Good

But you also want to enjoy the driving, right? You want good handling, a comfortable interior, and you want other people to see how well you are doing.  Maybe some flashy accessories and huge off-road tires, because hey, why wouldn’t you want to give your truck superpowers?

And this is the downfall of most truck-owning men. Because a truck that makes you a lot of money, and a truck that handles and accelerates (or climbs 45 degree boulder fields) and has the comfort of a car, are two completely opposite things. In fact, they are so far apart, that the more flashy and comfortable your truck becomes, the more obvious it becomes that you are not using it to make money.

In other words, you are telling the world you’re a big fake. Or at least that you’re too dumb to know the difference. Neither of these is a very impressive message to send.

How to Choose The Right Tool for the Job

So now we know a truck is a tool. It’s a tool for carrying heavy shit, and making money. We can take the emotions of vehicle ownership out of it by just comparing it to a drill.

When I need to make a small, precise hole in something, I’ll grab my smallest drill – currently this little Ryobi 18V deal. It’s the perfect tool for the job: lightweight, plenty tough as I’ve built quite a few houses with these things, and it only set me back about 50 bucks.ryobi

Of course, sometimes you need more power. To drill through a concrete foundation, I use this hammer drill. It does stuff the little cordless could only dream of, but in exchange it is so big you have to angle it properly to even carry it through a doorframe.


Then when things get really tough, I use the drill press. I have a Ridgid 15″ machine, which is the largest one I could find. With this thing, I can drill 50 half-inch holes through half-inch steel plate without breaking a sweat. On the downside, it weighs 163 pounds.

Now, when I need to drill a few small holes to set some hinges, which of these drills do you think I grab? Of course, I use the little Ryobi.

And yet, when a man buys a 360-horsepower pickup truck and uses it for anything smaller than hauling an excavating machine, this is what he is doing:


The Wrong Tool for the Job: this is what you are doing, if you use a full-sized pickup truck for anything smaller than hauling multi-ton loads. And I’m not even going to mention the folly of using a pickup truck to commute to an office job. Fuck.

In Ecuador, they know how to use trucks.

In Ecuador, they know how to use trucks.

See, when you buy a truck, you look smart only at those moments you are maxing that thing out. Payload and towing load at 100% of rated capacity, 16-foot lumber on the roof rack, and the cabin full to the limits of comfort. At that moment, the truck is earning the money you paid for it. Unfortunately for most gentlemen, this moment is Never.

At all other moments, you’re showing you bought too much truck. You are using the 163 pound drill press to countersink tiny screws in a door frame. You are wasting your own money and looking to the rest of the world like a dumbass who can’t choose the right truck. And unfortunately for most truck owners, this is Always.

For every inch you raise the suspension or every bump in tire size, you’re burning up thousands of your own dollars. For every extra horsepower you have on tap, the story is the same. If you want proof, just look at what the professionals use: real trucks that make millions of dollars for the owners who run fleets of them look like this:

Walmart is run by billionaires - they know how to use trucks.

Walmart is run by billionaires – they know how to use trucks.

Note the design of this real truck. As low to the ground as possible. Tires designed to roll easily on pavement, because pavement – not dirt – is where you make money. An engine big enough to haul the most profitable load, but no bigger. Fully loaded, these things take well over a minute to get to 65MPH – so why are you paying so much to get your work truck there in under ten seconds?

Sure, motor power is fun. But you know what is much more fun? Money power. Just by making different truck choices, you can end up with hundreds of thousands of dollars in the bank, or invested in your business making more money for you. At that point, your employees will be driving your fleet of slow trucks, while you can kick back with a fast car if you choose to do so.

Examples of Badass vs. Stupid Work Trucks

Now for the fun part of the lesson. All of this makes more sense if we go through a few real-world examples, and explain what they say about the man who drives them.

The Ridiculously Overpriced New Truck:


Only $66,610 (plus taxes/fees) after rebate!

Trucks like this scream, “I am a sucker for shiny toys and am horrible with my money!”

The new truck market is such a racket. I recently biked by this Ford “Super Duty” at the local dealership, and was astounded at the price. At over $70 grand including tax, this thing is an insane money pit. The depreciation alone in the first year is more than most of its customers actually manage to take home from their jobs. Even if you need to tow 20,000 pounds,  you can get an equally useful used truck, a trailer, and a Bobcat or small track-drive excavator to start your landscaping or concrete business for this much coin.

The Jacked up Boy Toy


“I’m bad with money, AND I don’t ever use my truck for real work!”

A truck like this leads a predictable life. It starts out as a ridiculously overpriced new truck (see above). After taking a $50,000 depreciation hit, the original owner trades it for a newer truck with a bigger loan, and a younger man comes in and buys it for $25,000, also on credit. He then spends another $15,000 on customization, making the truck less stable on the highway and the cargo bed even more useless.

Next he blows $15,000 on gas, then eventually runs into money problems and tries to sell it. After months of fruitless advertising, he gives up and lets it go for $9,000, which doesn’t even cover the loan he has on it. He may go bankrupt.  Meanwhile, the miniscule 6-foot cargo bed has never carried anything larger than a washer/dryer and a couch, as shown by its immaculate $450 decorator bedliner treatment.

The Millionaire Business Owner’s Workhorse


“I have a successful business, so please step aside as I have shit to do.” The Isuzu standard truck (sold in the US as Chevrolet W4500)

Meanwhile, quietly working in the background while this clown circus goes on are real trucks like this one. Notice how this W4500 (which costs less than a “Super Duty”) does not waste space on any bullshit. Instead of a 14-foot hood and cab up front with a uselessly small cargo bed in the back (all Hat and no Cattle), this truck reverses the ratio. These carry ten times the cargo of American-style pickups, while using less gas and being easier to maneuver into tight spots. You can also get them with dump or box beds, and they will haul a hell of a trailer as well. Depreciation is much slower with these, so you can buy a used one, and sell it many years later for almost the same price if you keep it maintained.

The Future Millionaire’s Truck

If you are earlier in your career or don’t frequently load and unload multi-ton cargo loads with a forklift, you can do very well with a truck like this:

Mazda B2300 or Ford Ranger - ideal work trucks

“I generally carry less than two tons, and I like to keep the money I earn from working” – Mazda B2300 or Ford Ranger – ideal work trucks. But avoid the 4-wheel-drive and V-6 engine options. Keep that money for yourself.

This beauty is owned by one of the guys who built the foundation for a house I’m currently helping out with. Note the fully loaded cargo bed and the excellent roof rack. This truck has a 4-cylinder engine, 5-speed manual transmission and will deliver reasonable 30MPG efficiency if you drive it properly. Lower height means easier loading and unloading and better handling. Lower cost (under 5 grand on the used market) means much more money for you.

My own Work Trucks

Here's my van collecting 1200 pounds of logs for firewood.

“I think minivans are a ridiculous invention for carrying 60-pound kids, but great inventions for heavy construction work.”  Here’s my van collecting 1200 pounds of logs for firewood.

At this stage with plenty in the bank, I have grown soft and have a bit more truck than I need. It’s a 1999 Honda van with 140,000 miles on it. I bought it for $4,800 four years ago, and current market value is maybe 3 grand. Less than what the juniors with no money spend on their wheels and tires alone.

And this thing can work. I have carried over 2,500 pounds comfortably, it can lock up a full selection of tools and keep them dry, and with the seats out you can close the rear door on 12-foot pieces of lumber or a stack of 20 full sheets of plywood. This is the truck I use now, but most of my carpentry career was done with something far less luxurious.

El Amarillo

The Amarillo - more than enough for 90% of truck users.

“I live my life to the fullest and waste nothing on silly frills” – The Amarillo – more than enough for 95% of truck users.

Back when money was tighter (I only had $700,000 in the bank but at least my house was paid off), I had this older truck – a 1984 Nissan compact pickup. This thing built multiple houses and kitchens, carried steel girders and landscaping materials,  and protected me from weather of all seasons. It has an aftermarket cupholder on the driveshaft hump which is currently full of hardened surf wax and 10 Peso coins.

And I didn’t even own it. I borrowed it for five years (in exchange for upkeep) from a good friend, who had earlier used it to cross the Continental Divide and Death Valley on his way to Mexico’s Baja Peninsula, where the truck served as his beachside home for an extended surfing-based stay.

So heed my advice, men of all ages who are not yet millionaires and wish they were. Your truck may be the biggest obstacle in your way.

The size of your truck is inversely proportional to the size of your wallet. Which one of the two would you rather supersize?

Related Reading (now that you realize you probably don’t need a truck at all):

Top 10 Cars for Smart People

Turning a Little Car into a Big One


* I speak mostly to men in this article, because they are the primary victims of the pickup truck racket. But women are not immune – they just tend to fall into the “SUV and Minivan” trap more often.

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Great News – Early Retirement Doesn’t Mean You’ll Stop Working Thu, 16 Apr 2015 00:07:23 +0000 Given Infinite Money, would my brother Wax Mannequin ever stop rocking? No, he would only rock MORE. (Image credit Tanya Plonka)

“If everybody retired early like those Mustachians”, the lament goes, “there would be nobody left to do the work.”

Given Infinite Money, would my brother Wax Mannequin ever stop rocking? No, he would only rock MORE. (Image credit Tanya Plonka)

Given Infinite Money, would my brother Wax Mannequin ever stop rocking? No, he would only rock MORE.
(Image credit Tanya Plonka)

We need people to do the hard, dirty necessary chores that keep society running. And we need other people to keep the innovation going, since technologies and ideas don’t invent themselves.

And besides, even on an individual level it is a bad idea. What about those studies that show life expectancy drops very quickly for those who retire? What about those of us who love our jobs? What would we do all day if we didn’t have to work?

Luckily for all of us, there is a simple answer to all of this:

I propose that you keep right on working well after your retirement date, and in an ideal world you keep working right up until the last day of your life. Only then and with the satisfaction of countless decades of doing your best, is it really worthwhile to take that final rest.

If this sounds like a prescription for living hell, the problem is not with my proposal. It’s with your definition of what “work” really is. The problem is likely that you are doing work because you need the money, rather than for the joy of getting the most out of each of your days. And there really is a better way.

How “Retired” People Work

These days, I seem to know quite a few financially independent people. They come out of the woodwork once you start writing a blog about the idea, and we end up keeping in touch because we have so much in common. They are fun friends to have, plus it is handy to have someone with whom to share a mountain bike ride on a Monday, or beers on a Wednesday.

According to their own definition, they no longer need to work for money because their investments cover their (usually below average) spending. And yet, at the present moment almost all of them are still doing things that look like working.  A couple of them are still charging away at expanding their companies. Others are still productive at writing books or investing and helping others start companies of their own. Even I get accused of not being retired on the grounds of either carpentry or writing. But there’s a reason behind all of this work-like activity, and it’s not money.

The Rule of Free

For the first few years after retirement, I found myself continuing old money habits without questioning them. Like everyone, I’m way more habit-bound than I like to admit. And besides, if money is good, then more must be better, right?

The problem was that these habits were costing me some freedom. When opportunities came up to earn little chunks of income,  I would tend to go out of my way to accept them. When spending decisions came up, I would stress unnecessarily to optimize each one. I found myself agonizing over whether to add a $14.50 order of delicious Baingan Barta to the order of Indian take-out, when the bill was already approaching $40.

Habits like these are very healthy when you are still earning your independence: it is the double-sided optimization that gets you to financial freedom 30-40 years ahead of everyone else, so the reward on effort is very high. However, once you have enough money, getting even more doesn’t do you much good at all. So once the job was done, I wanted to put the theoretical freedom into practice. I forced myself to adopt two new rules:

I try to make all spending decisions as if the price were $0.00

And I make all work and income decisions as if the wage were $0.00

But doesn’t this lead to infinite consumption and zero work? For the Beginner Consumer, most definitely. But by the time you are truly ready for early retirement, these guidelines should lead to almost exactly the same life that you already have. The key is that both factors become magically self-regulating if you understand what truly makes you happy.

I’ve learned that more stuff does not bring more happiness – as you add belongings, your stuff just starts to own you. Even upgrading to higher quality versions of existing stuff doesn’t help. I could swap my 10-year-old Scion  xA for a new Tesla P85D with just the spare change in my wallet at this point, but this upgrade would probably make me slightly less happy, because I’d have to watch the beautiful machine fading in the hot sun and being shat upon by birds, while I felt guilt over not driving it enough to justify the price.

But buying tools that let you accomplish things can be much more satisfying than buying luxury toys. For me, this means physical power tools, but also tools like a functional office, a nice kitchen, and good shoes. So I don’t skimp on the things that help me get more done every day. An upgraded car doesn’t qualify because it would only help me accomplish more driving, which is not on my bucket list.

 On the work side of the equation, the philosophy is reversed. My best days are the ones where I accomplish something truly difficult, preferably in both mental and physical realms. And my worst days are those that I just spend sitting around. So I’ve learned that work is an incredibly powerful source of happiness. The key is that it must be creative, social and engaging work that brings you towards a purpose you believe in. 

So if a friend asks me to spend a day helping him haul steel beams and welding them into his foundation so he can resume progress on a dream house, I’ll be right over. Although I usually get paid for work like this, I’d also do it for free. But when an advertising company hints at a seven-figure offer to buy this blog, I have no interest at all. After all, would I give Mr. Money Mustache away for free?

When you take money out of the equation, it is much easier to make decisions that really bring you a better life.

So Here’s What Would Really Happen if More People Pursued MMM-Style Early Retirement

I find that when people earn their freedom from money constraints, they usually don’t stop working. Instead they start doing their best work. Looking at many of society’s highest achievers right now, the world leaders and founders of the most productive companies, I see mostly people who have already made it. And yet are still working because it means something to them.

Early retirement, according to this new definition, does not mean quitting work, even while it may well mean quitting your job. It means opting out of the bullshit portion of your work. The commuting, the politics, the production of inferior products just because your boss has found a profitable niche to exploit. When used correctly, a sizeable ‘stash can help you become a more ethical person.

Early-retired Doctors might set up smaller practices which operate without any pressure for profit optimization, and without patience for insurance company shenanigans. They might treat their medical staff better than the larger operations do.

Early-retired Attorneys might refuse all cases that are based on questionable ethics, and do only work that actually helps somebody.

Google engineers who retire early might still work or contract part-time, or feel compelled to create completely new inventions with their newly freed minds. If some of these inventions grow big and end up being acquired right back into Google, it’s just another dividend of early retirement and the cycle will begin anew.

How would you run your own life, with a continuing desire to create but no immediate need to make the next mortgage payment?

Early retirement also leaves much more room for family life, because you lose your fear of falling behind.  Sure, I’m currently far less “productive” in conventional business terms than I would be if wasn’t a full-time Dad. In fact, before beginning this project I granted myself 20 years of slack time, just to make sure work would not take over. But who cares about conventional business productivity?  There will be plenty of time in the second half of my life to embark on bigger things.

And there is no such thing as skills going obsolete: A true Early Retiree expands his or her network of skills and knowledge every day in unforeseen ways. As the years go by, the friendships and business opportunities only multiply, whether you have time to capitalize on them or not.

The net of all this is that you probably have less to fear about post-retirement life than you thought. It also means you’ll probably use less of that war chest you have been amassing, because your energy (and therefore income) will only multiply over time. You have decades to build, accumulate and contribute after you make the jump. So make your plan with a heavy dose of optimism.

There is nothing to lose and everything to gain from getting as many people on this train as possible, including yourself.



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Early Retirement is an Impossible Dream for Most Wed, 01 Apr 2015 12:00:22 +0000 dinner

safety piratesWe’re about four years into this blog, and at this point I finally have to admit I am a complete and total fraud.

I mean sure, saved enough to retire in just nine years and have had a great time running around like a free man in this subsequent decade. But that was an isolated incident, which is a useless model for the average American. Above-average incomes, an appreciating market for stocks and houses, an unusually cooperative girlfriend-turned-wife, and of course plenty of White Person Privilege* came into the picture. It was really luck and fate that got us here, rather than individual effort and choices.

Just look at the bleak picture that the average person faces today in comparison. A dying economy**. Stagnant wages since the 1970s. Sky-high healthcare costs that just keep on rising. Long, congested commutes that could become unaffordable overnight on the whim of any Saudi oil minister. Poor school systems that necessitate private school if you want to live anywhere even close to affordable. A massive load of student loan debt from the ever-increasing cost of university tuition. The list goes on and on.

If you need proof to go with all those negative statements, just look at the results. Americans are facing a retirement income crisis, with far too little in the average senior’s 401(k) plan to maintain their current standard of living, even when combined with expected payouts from Social Security. With budgets already stretched razor-thin, it is impossible to expect the average person to cut any further – either before, or after retirement. Did you get the memo? 73 is the new retirement age. Sorry, but that’s the way it is, nothing you can do about it.

The great experiment of the personal 401(k) plan, foisted upon us by the elites since the late 1980s  is a proven failure. The government and our employers should be providing for our retirement through guaranteed lifetime pensions, rather than forcing us to navigate the murky waters of personal finance alone. I feel I have misled you these past four years, functioning only as a pernicious savings scold and encouraging pointless individual effort, when instead we could have focused our collective efforts on reforming our system.


Oh, and April Fools, of course. 


I sure hope you didn’t believe those are really the views of Mr. Money Mustache.

Although I did my best to make the awful shit in those preceding paragraphs sound pretty mainstream, it was extremely painful to type it into my computer. My keyboard started to shoot sparks out of its orifices and it is now oozing pus and blood onto my desk. Thoughts like those are so pointless, self-defeating, and just plain wrong and it amazes me that people keep cranking them out.

The problem is not with the intentions of my detractors. These are public-spirited people who are genuinely trying to improve the world. Our difference of opinion lies only in which method we use to get the job done.

The writers who harp about “America’s Retirement Crisis” are really attempting to get the politicians to do something about it: increasing funding to the Social security system and throwing a leash on the some of the nastier elements of the financial industry, who set people up with high-fee 401k plans and then sit back and skim their profits for life. These are fine goals, as long as any rules are implemented in an open and scientific manner, without resorting to rhetoric and fear in the political battle to get them implemented. But as you have noticed, I prefer a different approach.

See, the problem occurs when you rob an individual of the belief that he is in control of his own situation. When you spread the social meme that the the system is stacked against us, and that the system needs to change in order to improve our lives. Whether or not the accusations contain a degree of truth does not matter – you train a legion of powerless people who can’t take care of themselves, you also end up with lazy voters who are easily manipulated by whichever politician will stoop the lowest to appeal to their cheapest emotions.

Just look at the excuses that go around unchallenged these days. We whine that the national savings rate is only 5% and that the average person in their 60s has only about $100,000 saved. But then nobody mentions that only one percent of trips are made on bicycle in this country, and the majority of travel and commuting is done in single-occupant vehicles bought with dealer financing.

We talk about healthcare expenses as if they are imposed upon us, despite the fact that most of the nation’s health spending is done to treat self-imposed diseases related to the biggest four factors: exercise, diet, stress and sleep. US residents spend over $20 billion dollars on soft drinks – a beverage so evil and toxic due to its sugar concentration that any figure above zero is astounding to me. The shit shouldn’t even exist, and yet we guzzle it by the tankerload! You can’t prevent the truly random and unpreventable, but you can lower your expected lifetime cost drastically.

How could anyone possibly complain about having money problems, while simultaneously paying tens or hundreds of dollars per month to have passive video entertainment and commercials streamed into their house? People are simultaneously robbing themselves of money and the necessary mental quiet time that is a prerequisite to getting ahead – building skills, meeting people, getting better jobs or starting better businesses.

The average person spends over 95% of what they earn and burns most of it on necessities that aren’t really necessary. We borrow money and drown in the interest payments. We spend most of our energy working directly against our own best interests. Somebody needs to call bullshit on this practice, because we’re not going to fix it just by raising everybody’s allowance in their retirement years.

Fig.1: America's "Retirement Crisis", Illustrated with Pen and Marker

Fig.1: America’s “Retirement Crisis”, Illustrated with Pen and Marker

No matter how much cash you pump into a sick culture like our own, you won’t solve our money problems. Because the problem is not a shortage of money – it’s a shortage of spirit. A lack of desire and fire in our bellies to embrace hardship and challenge, to get the most out of ourselves, rather than designing a lifestyle that allows us to exert ourselves the least.

So that is why I take this particular stand. I know from first-hand experience, picked up on my own unremarkable journey from minimum wage to early retirement, that taking control of your own time and effort and spending is everything. The same critic that called me a “savings scold” above admits that he hasn’t even started his first investment account. While there is a place for public policy in every great society, it seems unwise for those who have not yet mastered a field of study themselves, to make nationwide prescriptions on that very same field.

So let’s go with a hybrid approach in solving our retirement issue. Policymakers can make sure that the Social Security program survives, because not everyone is going to become a Mustachian, and we’re wealthy enough as a society that there is no need to handle people the death sentence just for poor financial skills. And sure, we should also cut down the worst thieves in the game – there is no honor in a rich person assembling a team of lawyers and marketing gurus to get poor people to sign up for a loan on a 92″ television.

But when it comes to talking and writing about personal finance to each other, let’s drop the sympathy game. We are in control of things, not our government masters or “the elites***”. We get to decide when or if to start our families, and where to settle. Our education and vocation is another choice, as is who we spend time with and how hard we work. So let us never talk about these things as if they get handed down to us from the outside world, because people are all too prone to believe it.

But most importantly of all, let’s stop talking about expenses and spending as if they’re out of our control and as if more is better. Even retiring with zero assets and Social Security alone is enough for a plentiful lifestyle (typically over $1500 per person per month) if you embrace the idea rather than fearing it. Living on a low wage (even minimum wage) and saving a good portion of our income is equally possible. Since there’s a good chance you earn more than minimum wage, plus will have retirement savings greater than zero, there is really nothing to worry about. So, with our new freedom from worrying about stuff, let’s return to work and actually get something done.

* OK, Mrs. Money Mustache is 50% derived from the country of India, so she only had half as much White Privilege. But that’s still better than nothing. Plus there’s Indian Privilege to account for as well – is that higher or lower than White? We need to factor this in to the amount of sympathy we demand.

Sure, privilege does exist, and it might make it easier or harder to inherit a company or win a senate seat. But it can’t control your choice to ride a bike, buy less shit, or read library books in your spare time and I argue that frugality is the most powerful factor in earning your independence. After all, most of my equally-privileged engineering coworkers are still stuck in the office to this day.

** Isn’t it funny how these doomer articles keep repeating those words even when it’s not true? The recession ended in 2010 and the country returned to setting all-time records within that same year. We’ve been breaking new ones ever since, and the unemployment rate at 5.2% is almost as low as you can get.

*** Actually, it is possible that some of the whinier reporters might now consider Mr. Money Mustache one of “the elites”. At what level do you lose your respectable credibility as a fellow underdog and become an out-of-touch elite. Do you need $100 million, $1 billion, or is simply having your mortgage paid off enough to put you out of touch with the common man’s plight?  

Related Reading: Top 4 SUVs for Growing Families

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Chasing Electrical Demons to Cut your Power Bill by 80% Wed, 25 Mar 2015 23:51:23 +0000 samsung

1994-kwhWorking in my yard the other day, I happened to notice that my power meter is just about to cross the ‘2000’ mark.

That’s two thousand kilowatt hours, or roughly $200 of electricity. About the amount it takes to drive your Tesla Model S from Los Angeles to New York and back, or dry 570 loads of laundry in an electric clothes dryer, or run a modern laptop computer continuously for 11 years. It’s also about the amount of power the average American household burns in two months.

Yet I installed the power meter you see in that picture in November 2013, and I’m writing this over 15 months later. Somehow, even accounting for all the power used to build this house and live in it since then, with all my welders and power saws, wife and boy, computers and audio systems, lights and appliances, we’ve averaged about 80% less than the average household.

The performance looks even better when you compare against high-income households: one of my Canadian friends ruefully admitted that his power bill tops $900 per month every January as his electric heat pump fights to keep his large custom home warm in the face of Ottawa’s near-arctic winter weather. A Texan friend reports a $300 per month cooling bill for the hottest four months of the year, and even a fellow Coloradan uses over $200 per month with very little climate control at all.

All of this supposed efficiency, even though I live in what I consider to be a bath of glorious electricity consumption.  I have a giant LG fridge that gets heavy use every day:


I also have this fancyass Samsung dishwasher from Craigslist that runs several times a week in order to protect my lazy hands from the dangers of too much manual dishwashing:


On any given night when viewed from the park, my house looks like this:


There is no shortage of electricity flying around in my residence.

How can this be?

The stakes are large: This electrical advantage saves me tens of of thousands of dollars per decade, and it takes very little effort to maintain it. If everybody ran their house and business like this, we could shut down most of our coal power plants (38% of the nation’s CO2 emissions) almost overnight*.  As with most Mustachian Life Hacks, the key lies in understanding what is actually going on.

1: Measure Everything, then get Angry at Waste

As a quick shortcut for understanding the impact of electricity waste, remember this rule: Every watt of constant drain costs you about $12.63 per decade in lost wealth.

A tiny 2-watt seashell nightlight in your guest bathroom?  25 bucks. A forgotten incandescent porch light that never turns off? $758.00  A hot tub or pool pump that is on for an average of just two hours a day? $1578 burned. If you think a decade is a long time to make such a measurement, think again – ten years is the minimum amount to be thinking about when your goal is to become wealthy.

In my house, devices don’t just get to slurp on power without supervision. I test everything at least once, so I can understand where my power goes and decide if that’s a worthwhile bit of spending. To accomplish this, I use a combination of measurement tools. But don’t be turned off if you’re not an electrical nerd like me – you don’t have to measure everything if you are not so inclined. There is a list of shortcuts coming up too.

efergyThe Efergy Elite Combo system comes with a very small wireless clamp that sits permanently around the main input wires in my circuit panel and measures power consumption right down to the watt with 10 second resolution. You set it and forget it. This power consumption is then displayed on a wireless unit in my kitchen and also logged permanently online, where I can review graphs from my phone or computer:

A day's electricity use: spikes are microwave/coffee machine. Small plateaus are the fridge. Evening buildup is lights and computers until we go to bed.

A day of our electricity use: spikes are microwave/coffee machine. Small plateaus are the fridge. Evening buildup is lights and computers until we go to bed.

By watching the display, I can see how much power it takes when the fridge kicks on, or when I run the dishwasher, or flip on a bank of lights in the kitchen. It also helps me find phantom loads: when you think everything is off, but your household consumption is still over 100 watts, something is wrong. I tracked down three faulty smoke detectors that were burning over 5 watts each and replaced them with units that use under 1 watt. Then I discovered that my Yamaha amplifiers burn 25 watts each if you leave them on, even when there is no music playing. This was bad, because I was often forgetting them overnight.

The benefit of the Efergy is its ability to measure even direct-wired devices: alarms, dishwashers, your central a/c system, or the unwanted pipe heater that the previous owner installed in your crawlspace to prevent frozen pipes.. but then left on for 12 months of the year regardless of temperature (which would cost you $1902 per decade, in case you were curious).

imgresThe lower-tech kill-a-watt meter is ideal for testing individual appliances over a longer period. For example, I was able to determine that my fridge uses 1.1 kwh per day, which translates to 401 kWh per year, or about 40 bucks.



Another favorite on my lab bench is the clamp-on current meter. Among other uses, this $40 wonder allows instantaneous measurement of the current running through an individual circuit in your breaker panel. It also comes in handy when diagnosing things like a broken electric lawnmower or vacuum cleaner:

This clamp-on current meter lets me measure an individual circuit (fridge 2.0 amps = 240 watts) or the whole house (4.92 amps).

The clamp-on meter lets me measure an individual circuit (fridge 2.0 amps = 240 watts) or the whole house (4.92 amps).


2. Put it all into Action

Here are the biggest power consumers in the typical home, and how I have optimized some of their worst guzzling out of my own bill.


If your interior space is lit with lamps or a few fixtures, it’s an easy fix: make sure they are all running on good compact fluorescent or LED bulbs.  But more recently-built houses (including mine) are usually done with a larger number of recessed lights within the ceiling itself. These produce a nice light with the builder-standard incandescent reflector bulbs but will destroy your electricity budget. Compact fluorescents of this format (PAR30) tend to be poor in quality and slow to reach full brightness. So I bypassed the problems by outfitting my house with the now-affordable PAR30 LEDs – the best bulb I’ve found for the job is the GE 66052 because of its warm 2700k color and nice narrow 25 degree beam angle, (or the 65140 if you require a dimmable bulb).

But if you look in detail at this picture of some of my interior lights, you’ll notice something odd…


..they’re off most of the time. This is because I built my windows into the side of the house that faces the sun, and keep those windows clean and free from curtains or other obstructions.  This is not always an easy thing to change in your current house, but is a great factor to consider when shopping for your next one. And there’s a much bigger benefit than lower electricity and heating bills: higher happiness. Having a bright, daylit living space will improve your mood, productivity, and entire outlook on life.

Only once house buyers start demanding daylight-oriented design, will house builders wise up and start providing it.

Exterior Lights:

Fancy houses are often designed to look like a luxury resort at night, with landscape and path lighting, uplights highlighting the structure, pool lights, driveway lights, and so on. The quickest shortcut is to live in a smaller compound. But if you do have outdoor lighting, keep it to a minimum and use LEDs in all fixtures since they run for many hours per day. In my house, I leave no exterior lights on overnight at all – the glow from streetlights is more than enough to find your way around at night.

The Clothes Dryer: 

This is an emotional one, since some people consider this appliance to be humankind’s highest achievement. But consider this: even with seven figures in the bank, the MMM family has not even owned a clothes dryer since June 2014. I just prefer hanging clothes to dry outside (or inside if the weather requires it). It’s a meditative and pleasantly physical task, and your clothes smell better and last longer as a side benefit. And it burns very little time, because we only do a single load of laundry per week. You don’t have to go dryer-free to get most of this benefit – just use it more consciously and only wash stuff when it actually needs washing.

Air Conditioning:

We’ve already talked about this here, but the basic idea is to take the opposite approach of certain residents of the American South: use the A/C, but as little as possible rather than as much as possible. Always challenge your temperature threshold just as you should always challenge your physical threshold and seek to do the most difficult things you can handle, rather than minimizing the effort you put out with elevators and self-closing car trunks.

Electric Heating of Anything: 

If you’re stuck with an electric water heater, your electricity bill will exceed mine just in the process of taking showers and doing dishes. Don’t put up with it! These days you can replace an old-school electric tank with a heat pump water heater**. Electric baseboard heat can be replaced by a heat pump ductless system. If you’re stuck with an electric range and you would prefer to cook with natural gas (which is awesome), it is surprisingly easy to add a gas line to your kitchen – I ran my own using the newer flexible stainless steel gas line system available at the major home supply shops.

If you live in an area with a cold climate and oil-based heat, look into a ground-sourced Geothermal heat system. Several years ago, our mutual friend Mr. Frugal Toque (just outside of Ottawa, Canada) ditched his oil furnace and hired a contractor to replace it with a ground-source heat pump. He forked over $25k (after rebates) for the upgrade, but it saves him at least $2000 per year in heating and cooling costs, and the capital value will easily be recouped at home resale time, as heating bills are high on the minds of people in that area.

Gadgets: DVRs, Playstation-type game consoles and cable boxes have gained notoriety in recent years because they can use 50 or even 100 watts when you’re not even using them. This is unacceptable – any vampire over 1 watt deserves to be starved, so you’ll want to shut down computers that aren’t in use. The cable and playstation issue is easier to solve: return the box to the cable company and cancel your service, and sell the game system.. you have more valuable things to do with your free time!

Your Sorry Old Fridge:

Saving the best for last, you may have a chance to upgrade the luxury in your lifestyle while making a good investment at the same time. New fridges often greatly outperform old ones,  because EPA rules and consumer demand have pulled the technology forward.

For example, my neighborhood friend The Garage Grocer replaced an old 1970s freezer with a 2007 model of identical size. Power consumption dropped from 155 kWh/month to 64.5, a savings that compounds to roughly $1582 per decade if invested conservatively. The new freezer cost him around $200 on craigslist. My giant fancy LG fridge uses well under 40 kWh per month and cost me $600 (also on Craigslist but much newer) – but only because I insisted on the  luxury stainless steel model, consistent with the rest of my ridiculous lifestyle.

With the right adjustments, your electric bill can be a trivial affair that feels like a small monthly reward for your thoughtful use, rather than a painful but necessary draining of your bank account.  Happy demon hunting!


*If America then went on to read the article about Car Clowns, we’d be down an additional 32%, meaning 70% of our carbon emissions would be wiped out just like that. Who says global warming is such a big deal?

** If you do buy something from GP conservation, try the coupon code MMM for a discount. I don’t get a commission, but the company considers Mustachians an ideal source of business because of our enthusiasm for energy efficiency.

Further Inspiration: in response to this post, a reader named Mark sent me the annual power graph, for his 2200 SF house in Minneapolis. His electric company allows you to compare your consumption to that of your neighbors. Of course, the Mustachian line is the blue one way, way down below any of the other ones, quietly saving him loads of cash.

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When Ridiculousness is Ubiquitous Thu, 12 Mar 2015 18:23:16 +0000 excursion ontario
The Loop of Lunacy

The Loop of Lunacy

Imagine that you are floating comfortably above an alien planet observing the really insane species that lives there.

We’ll call these beings Sheeple, because their incredible tendency to follow the herd even if it is running right off a cliff is quite similar to the behavior we see in sheep here on Earth. Almost everything an individual of this species does is heavily influenced by the Sheeple around it. Despite the potential for incredible intelligence, they rarely stop to evaluate why they are doing what they do each day.

As you zoom in on various parts of the planet, you notice fantastic patterns. In one area, the Sheeple wear red costumes and fiercely criticize those who wear blue. But just on the next continent, blue-wearers are in the majority and they are beheading those who dare to wear red. Great books and ornate traditions are built to describe how wearing Red robes is The Way, which are cited authoritatively to discredit those who believe in Blue, and vice versa.

In other areas of the planet, the societies appear more advanced. They have built great cities. The Red/Blue battle is less noticeable in these parts, but it has been replaced by an equally bizarre pattern: a competition over how to decorate their heads, bodies, and habitat. In the great cities, Sheeple work ceaselessly to buy and trade decorative materials, and just as quickly put them to use. They give up sleep, autonomy and time with their loved ones to earn more of these things.

The heads pile taller with decorations. The habitats become so full that they can barely squeeze into them. Every year, the producers of decorations declare all previous iterations to be obsolete and release a new type of decoration. Believe it or not, this triggers an even more intense flurry of working and buying to acquire still more decorations. The most successful Sheeple buy larger dwellings and throw out and replace their decorations at the fastest rate, some even employing a sub-staff of Sheeple to buy, organize and replace decorations without the need for the leader to even see them.

It’s all an amusing day of Science from the comfort of your spaceship until you return to Earth and realize we’re exactly the same. Except multiplied by ten due to our ridiculous invention of consumer borrowing.

Noticing this myself, I’ve been doing some closer bits of scientific observation right here on our own planet.

In one incident, I traveled to a distant suburb with my son to attend a child’s birthday party. The homes in this middle-income area were tightly packed with short driveways, but each place was outfitted with at least two enormous luxury vehicles – often trucks – so big that they had to spill out to consume the entire street. The interior of the each house was clad with beige carpets, artificial finishes, and tiny windows placed with complete disregard to the prevailing direction of the Sun.

At the party, every food was an unrecognizable assembly of chemical compounds ripped out of a brightly-colored box, served on styrofoam plates which were promptly discarded into a black plastic bag. Every gift was a plastic and metal recreation of a famous movie character or vehicle, ripped out of another plastic package. There was a television in the kitchen blaring news and advertisements. The unhealthy parents drank beer and ate cake, and sighed about not having enough time or money to spend more time taking care of their home, or their kids, or themselves.

All of this took place in a neighborhood with beautiful walking paths and parks, and a modern utopia of a school just down the road. But every weekday at 2:45 PM, an ominous horror begins. An immense and powerful passenger vehicle will ease down the road and come to a halt at the prime spot of the school’s pickup loop. And the engine will be left running. This leader will soon be followed by another van or truck, and another ten, then another hundred.

Soon there will be a poison-spewing circus of completely batty people sitting there idling in sleek 400-horsepower Mercedes SUVs, or clackety Diesel jacked-up yellow offroad diesel Super Duty trucks, comparatively small-looking Honda and Toyota minivans, new cars, old cars, and anything else they can find that burns gas and wastes money. The lineup grows to fill not just the gigantic asphalt loop provided by the school, but also the driveway leading to it and hundreds of feet of the public road. Everyone talking on their mobile phone. Everyone idling. Killing each other, and each other’s kids. Everyone in debt, and many with a net worth less than zero. Most of them dangerously out of shape and beginning to suffer from health problems due to inactivity.

And every one of them convinced that he or she is going through life in a perfectly reasonable way, trying to get ahead and take good care of their kids, but things are just hard these days unless you’re one of those privileged lucky elite 1% multimillionaires that we read about in the paper while cursing our own fate, the fate of the middle class.

What. The Fuck. Is Going On Here?

Why are we so Ridiculous, without even acknowledging that we are?

Curing the Disease

See, I can pretend to be astounded by what is going on, but it’s a natural consequence of our evolutionary history – the way you and I and all of us are built. We are social beings, which is our greatest strength because it allows us to work together to accomplish bigger things. But it is also one of our greatest weaknesses, because it allows us to adopt stupid and irrational ideas in mass quantities as long as we see the other people around us doing the same thing.

It is hard to become any less ridiculous without realizing this massive, critical flaw in our reasoning that nobody ever talks about. Like the innocent beings on Planet of the Sheeple, we take our cues from our immediate surroundings.

Just look outside your own country or time period to see how big this effect is. In some areas, it is totally normal to require a woman to be covered completely in fabric so that no other male human can lay eyes on her, and some of these women even voluntarily enforce and pass on the tradition. This is happening right now, and these people are just as intelligent as those that surround you. In a nearby country, the women lounging in bikinis on a public beach may be attorneys or chief financial officers on the weekdays. Which tradition is considered ridiculous depends on who you are – in other words, which social surroundings you have absorbed and adopted as your own.

Here in my own country, similar social traditions have traditionally regulated what you can eat or drink, whether you can vote or marry, and whether you should teach science or the local religion in science class. The battle that I am currently fighting is comparatively mild: Is it reasonable to spend 80-120% of your money as soon as you earn it, or to spend a smaller portion while keeping the rest to reinvest in your own future?

In each case, the prevailing opinion seems completely normal, (often labeled as common sense) to the people who enforce it. But in many cases it has only become common because we are easily fooled social beings. To get ahead of the pack, you need to drop this weakness.

The key is to put the ridiculousness into perspective – the perspective of your current income and wealth, of human history, and of science.

Let’s start with a warmup. One of the richest Saudi princes has a 590 foot yacht, and one of the areas inside is reserved for a display area for 3-d models of all of his other jumbo jets and yachts. At least one of the jets has a “throne room” in it. Here in the US, a Texas woman made the news for her 3000-square foot closet. A flying throne room or 3 stories of shoes and handbags: obviously ridiculous, right?

But what about a Dodge Durango, a popular American-made SUV. Ridiculous, or normal? You see them in every suburban driveway, so they must be reasonable. But they are not! The SMALLEST engine you can get in this piece of shit is 3.9 liters, and the largest is 5.9! That is enough engine displacement to easily power ten passenger vehicles, if they were designed by vehicle designers rather than marketing representatives. It has the passenger capacity of a wagon, but the engine (and fuel economy) of a DUMP TRUCK OR A SCHOOL BUS! The performance is blundering, blind spots are enormous, build quality is poor, and yet the sticker price is astronomical. And yet people line up by the HUNDREDS OF THOUSANDS TO BORROW MONEY TO BUY THESE THINGS AND USE THEM TO DRIVE TO SHOPPING MALLS!!!

my_ridiculous_faucetBut it doesn’t stop there – I’m just revealing my personal bias because my own social surrounding is mostly Mustachians. My own lifestyle is also totally ridiculous.

I’m building the second bathroom in my house right now, which is already ridiculous because we already have one perfectly good one just at the other end of the house. Over 1300 pounds of floor-to-ceiling tiles and concrete, and that’s just the prep work so I can add the brushed steel trim kit to the insane Danze shower valve – a system that cost me over two hundred dollars.

This shower project has taken several weeks, because it is frequently interrupted by time spent with my family, or trips to go out for beer with friends, or host parties here at the house, or the trip to New York City last week. Sometimes I even have to go out and restock the house with internationally sourced bits of fine cheese, meat, vegetables and fruits. I barely have time to type stuff into my choice of high-end computers or make use of the other distractions around here. And this is in a life that is labeled by the newspapers as extreme frugality?

It is ALL ridiculous. Your life and my life, and the lives of all of the normal people around us.

If you’ve ever bought a garment, vehicle or dwelling with “style” as even a remote consideration, or prepared a multi-course meal with “taste” as one of the factors, then congratulations – you live a big, wonderful, ridiculous life. If you have any means of transportation besides walking, congratulations again, because you’ve hit the big time. You have so many options open to you – so much flexibility to change your lifestyle, empower yourself, spend less, earn more, and move to new places as you see fit.

But to claim that freedom, you need to look around you and see that these trapped, tiny Sheeple around you are not normal or sensible. They are obedient followers of the social script, trapped so tightly that they can barely move. And although you’re a social animal too, you can rise up to a far happier lifestyle just by becoming a tiny bit less ridiculous than average.

It is ridiculously easy.


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If I Ran the School, Things Would be Different Mon, 16 Feb 2015 19:57:35 +0000 Mountainscalling

MountainscallingAs a retiree, I have a special place in my heart for Monday mornings, because that’s when I would have had to go back to work if it weren’t for the joy of early retirement.  Despite the option of complete leisure, I woke up at 5:30 this morning because the sky was starting to brighten and I was too excited about the new day to let any of it go to waste.

I’m writing to you right now, but later on I’ll be building stuff, riding bikes, meeting with people and teaching kids. Later on as bedtime approaches I might fiddle around in the music room, read a book or listen to a podcast. It’s my idea of the perfect life: self-directed activities in pursuit of knowledge, self-improvement and even getting a chance to help others if you’re lucky.

This might not seem related to the subject of our school system, but at the core I think the idea is the same:

Humans are naturally curious and energetic creatures, and if you set us free in the right environment, we will get to work learning, producing, and having a great time at it.

This is especially true for kids, whose brain composition is set up for maximum-speed-learning-at-all-costs. And double especially true for my son, who has always loved the freedom to create and worked with every atom of his being to fight against any rules that might constrain it. This is a boy who, given an elaborate new high-tech Lego set, will immediately discard the instruction set, open the bags of parts, and dump them without hesitation into his main supply bins. “Great! we have way more parts now – let’s make some ships!”

This inspired (but very high maintenance) personality has been clashing with the public school system on a regular basis. Last year, he started to feel the crush of boredom and irrationality and Mrs. MM and I fought it for a long while.

“You have to stay in school”, we insisted, “that is what all responsible people do to ensure a bright future, learn to deal with diverse sets of people, and of course to socialize with other children. With you being an only child, this is especially important.”

But it started affecting his sleep, and his non-school hours started to become dominated by worrying about school, and then even his health started to follow down that road. Through research and a bit of professional counseling, we learned that he has an anxiety disorder. While this is fairly common in young kids of his type, the teachers he had to work with most often seemed unable to adapt. His third grade classroom had become a disciplinarian place with a constant shushing of kids, straight lines in the hallway, and stern words for anyone who didn’t follow assignment instructions without question. Explanations of his ideas to the teacher were shot down as “talking back” or “excuses”.

There are of course many schools of thought on how to raise a kid. In 19th century England, they used to whack them frequently with canes to keep them in line. In certain philosophies, cultures or religions it is still common to maintain an iron fist of discipline over kids until they move out of the house as young adults. The traditional Asian school system emphasized long hours, strict rules and rote memorization. The opinions of the parents and teachers are the only ones that count, and failing to perform well in school is considered a disgrace to your family.

While I’m happy to let those people do their own thing, my response to this style of education as a parent now is the same as it was when I was a kid: “Fuck That.”

The Pursuit of Soul Craft

Around the time we were going through all of this, I was reading the book “Shop Class as Soulcraft” by the badass philosopher/mechanic Matthew B. Crawford. The author shares my own opinions on the bullshitty nature of most of our traditional rules and their influence on the modern office environment, and the value of thoughtful but difficult physical work. To quote the man on the clash of school with human nature:

 “It is a rare person who is naturally inclined to sit still for sixteen years at school, and then indefinitely at work”

Don’t get me wrong. The idea of a free public education for all is still a great one. In my school, a noticeable portion* of the kids come from families where the parents don’t seem to be putting much effort into their upbringing. Nobody is reading to them at home, or talking about science or teaching them a trade. There’s no Lego, not enough bikes and too much TV, drowning out the chance to actually learn by creating anything for themselves. For them, school is the only hand up they have in life so we’d better make the most of it.

But damn, we could do so much better.

If I ran the school, there would be none of those leaky-tire teachers that are permanently shushing kids in the classrooms and the hallways.

I remember one vivid experience while volunteering in the school, walking down the hallway with a group of my little advanced math students. The hall was empty and our journey back to the main classroom was going well. Without warning, an attack of shushes came at us from a sniper who had positioned herself inconspicuously at a desk off to the side. We escaped without losing the flow of our thoughts, but at the midway point, a second attack came from a guy standing at the far end. Arms down, straight line, no talking.

When kids are talking to each other, that’s called a conversation, which is one of the most valuable things you can let kids have.

And nobody needs to line up in the hallways. I don’t do lineups myself, so why would I make kids endure this irrational suppression of natural body placement?

If I ran the place, there would be a red button on the wall, that would start Walking on Sunshine, pulsing LED rope lights and a disco ball. Anybody could run up and press it. The walls would be padded and there would be subwoofers. It would be an invigorating and ridiculous dance party going from one class to the next. Coincidentally, this is very similar to how I run my own house.

Some teachers are still taking away recess from kids as a form of punishment. The most valuable and educational part of the school day – experiencing nature and fresh air, refreshing the mind and training the body – gone because of an cruel desire to make a child regret not conforming to their irrational rules. I found this both enraging and ironic, because the school hallway proudly displays a large banner with the following quote:

“Leave all the afternoon for exercise and recreation, which are as necessary as reading; I will rather say more necessary, because health is worth more than learning.”
– Thomas Jefferson

In my school, recess would come first. There is more than enough time to learn the easy stuff like physics, chemistry and software design. Plenty of adults accomplish that. But how many of us spend enough time outside and maintain reasonable levels of strength and fitness into our old age? How many people over 50 even do barbell squats with any regularity any more?

In my school, play is not something to be suppressed – it is something you facilitate and hope for. There’s a reason that kids of all the most intelligent animals (whether kittens, dolphins or humans) are born with a desire to play. It is because playing is the most efficient way to learn. How could this blatantly obvious bit of evolution have been suppressed in the design of our school system? Thus, the ultimate achievement as a teacher is to trigger a marathon session of Automatic Learning Through Play, and sit back and watch the neurons connect.

 So We Decided It Was Time To Run The School

My rant above is overly idealistic, or course. Real school systems are faced with all sorts of constraints, just like any organization that involves a large number of humans. You have vastly diverse kids, some of them uncooperative or even violent. Meddling administrators, parents, and politicians. The flawed implementation of standardized testing which often displaces actual learning. Sure, it can be improved, but that’s a separate battle from the job of taking care of our own son because he needed a solution right now. 

Much like Mustachianism itself, we decided it was more efficient to try something new immediately and start learning from it, than to sit around complaining about the system we were stuck in. Since we’ve been experimenting with this for about a year now, I figured it would be worth sharing some of the surprising observations.

Is Homeschooling Only for Weirdos? Surely it Wouldn’t Work for Me?

This was my first assumption before learning about the option. I had never met anyone who didn’t go to school, so I thought it was necessary to grow up as an educated, well-adjusted adult. This turned out to be totally wrong and I have heard from (and read about) dozens of exceptionally happy, intelligent achievers who went this way. But it’s not for everyone – if you find yourself with a kid who already likes school, you might want to keep that good situation as it is.

How Can This Lead to a Good Education?

If you start with the natural hunger kids have towards learning, and subtract out some of the biggest obstacles (lineups, waiting for the slow trudge of big-class teaching, boring and repetitive activities), you find that you can exceed the actual academic learning contained in a typical school day with just an hour or two of concentrated effort. You can double the pace by throwing in a second hour or more. And this leaves the rest of the day to broaden the benefits – activities with other people, physical challenges, educational trips, etc. You can also let the kid run free with uninterrupted time when he does find a true interest – for example getting into a really good book, writing, music, programming, etc.

This fits well with the modern and future workforce, where employers are looking for people who can adapt, create, and produce, rather than simply follow rules. But even using the word “employers” is shortsighted in my book. I’m not teaching my kid to be an employee – I’m teaching him to be a creator, who will find it satisfying to start his own small companies. Employees will be the people he hires when the time comes.

Where do you Get your Curriculum?

Sal Khan is pretty much The Man when it comes to great do-it-yourself education. Thanks Sal!

Sal Khan is pretty much The Man when it comes to great do-it-yourself education. Thanks Sal!

Much of this becomes obvious if you ask yourself what really defines a good education. But for a shortcut, just look at Khan Academy. This brillant utopia of an organization has been creating well-organized, advanced, free learning for years now, and it just keeps getting better. Get your kid an account there, set him or her free and watch the sparks fly. Of course, you should also hover conveniently nearby to help expand the learning.

We also worked with the school and borrowed some textbooks, looked at the US core standards that help define the teaching done in conventional school, and did plenty of online searching to see what other people use for their learning.

But the fun part comes when you leave the conventional lessons. For example, to illustrate math and trigonometry (as well as a tiny bit about astronomy), I taught my son how to calculate the height of our city’s water tower based on the length of its shadow at noon on March 21st. To learn about science and engineering, you talk about how things work and watch the amazing documentaries they have now that explain how fascinating these things are.

Technology and Computing: The video game called Kerbal Space Program tricks kids into learning rocket design and planetary physics at a deeply intuitive level. Another called Robocraft involves iterative design, construction and testing disguised as a first person shoot-em-up. We also build and program real robots using a VEX IQ set, but you can ease into kid-style programming with a language called Scratch.

In fact, any strategic and complicated video game contains a lot of disguised learning, because your kid has to learn the subtleties of using a computer in order to get it to work in the first place. How to use a mouse, keyboard, and menus. How to read, type, copy files, install updates, search for information, even connect to another IP address to host a multiplayer game. These end up being really useful skills throughout life, and this is why I would never buy an Xbox, Wii, PlayStation or other simplified video gaming system. Those things preserve the recreation, but strip out the important technology. If your kid is going to have “screen time”, it might as well be on a nice, complicated real computer, which is another reason we haven’t had TV service since well before he was born.

Music: At the most basic level, you learn a lot about music by simply listening to it. I always have something playing in the house and I let my son change the Pandora station and create his own. But we also jam with real instruments which are left strategically lying about the house and make songs with Ableton Live. Music lessons are valuable for those so inclined, but due to our resistance to rules and structure, my son and I are not so inclined at the moment even as people who are unusually interested in music.


Art Class tends to change along with the current topics of interest in real life. Currently space travel and colonization due to a binge of reading we did about SpaceX.


Reading and Writing: kids reading to themselves at any time, parents reading books to kids at bedtime, hitting the Library at least once a week, and leaving blank notebooks and great writing instruments and erasers around the house to facilitate creation of new literature and comics.

The Typical Day of Homeschooling

Typical day's schedule

Typical day’s schedule

It changes along with the season, but there is the whiteboard as it appears today. You got some writing, building/programming, lunch, outdoor activities, and math. We keep things in the 1-4 hour range to avoid homeschooling becoming a drag. After all, kids are always learning, whether you label it as school or not.

Surprising Advantages

  • You can live wherever you like without regard to “school district”. You can also travel and take vacations without regard to the school calendar.
For example, nice weather last week required that we spend Monday hiking in the mountains.

For example, nice weather last week required that we spend Monday hiking in the mountains.

  • You get the best private school, with a commute and tuition cost of roughly zero.
  • I find myself learning more, just so I’ll have more to share with him (similar to the effect that this blog has had on my life)
  • My son is at peace with the world, fired up, and learning quickly.

What about Testing and Standards?  Is anybody watching what I do?

This part is easy. Although it is unlikely any authorities will ever be involved with your schooling, in theory you are supposed to do at least 4 hours per day of classes, and keep a journal of what you do. You may also be able to drop in on your local school for special classes if you make arrangements with the principal there.

You can order practice tests, and the real end-of-year tests (called the Iowa Test of Basic Skills), which you can administer yourself or do at the school. Mrs. MM bought her copies from**

Your kid does of course need to pass the test, but if you’re serious about learning you will be miles ahead of the requirements.

What about Socialization? 

As it turns out, the regular school day is mostly about discouraging socialization. Get the kids to sit still and be quiet so they can learn, except in widely spaced controlled group activities. Most of the fun happens in extracurricular activities, which you can still join, or in plain old free play, which you can do any time.

Little MM still has all of his earlier school friends, and he hangs out with them constantly outside of school hours and on the weekends. We also keep meeting more people, just by virtue of living in a neighborhood where people want to know each other.

There are also organized homeschooling groups where you gather for group activities or even classes at a dedicated location. While we haven’t had time to join any groups yet, I plan to start running some classes of my own out of the parkside studio building I’ll be building in my back yard once the main house is done.

In Conclusion

Homeschooling has turned out to be a highly Mustachian activity: packed with Freedom, requiring high effort in exchange for high reward, and a way of improving upon the system of our society while working peacefully with its boundaries. It is not for everyone and it will consume much of your mental and physical power, but in exchange you will deliver a truly excellent education.

Further Reading: Mrs. Money Mustache shares more about her homeschooling journey in this March 2014 post on her own site.

 * By “noticeable portion” I’m not talking about kids with a different race or language of origin. This parenting divide is caused some other way – perhaps even by stress. If your own life as an adult is pushing your boundaries, you might have less energy left over to help your kids. Now that I’m a parent myself, I feel less judgmental about how things work out for other parents, because this stuff is pretty damned hard even from my very privileged position of having only one kid, two parents, and more free time and money than most. So instead of bashing parents of disadvantaged kids, I’d rather just help them by trying to inspire their kids.

**BJU happens to be a religious group, but the tests themselves are just the standard national tests. In fact, you’ll find a high correlation between homeschooling and religion, but that doesn’t make the idea any less valid for completely non-religious people (such as the MMM family) as well. For me, it’s all about better learning and a better life, which are almost the same thing.

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The Radiant Heat Experiment – Did it Work? Fri, 06 Feb 2015 14:53:30 +0000 radiant_carrot

One whole year ago, I was in the depths of destroying and rebuilding a sagging 1950s brick ranch house, which has since grown up to become our actual home. Looking back through Google Plus’s automatic archive of my phone pictures, I can see the “kitchen” was still open to the great outdoors on that date:


Despite the lack of windows and insulation, I was already looking ahead with nerdy engineering glee to building a home-brewed heating system for this place, and I told you about it in the article called The Radiant Heat Experiment.

In a nutshell, this involved running thousands of feet of PEX pipe under my existing wood floor via the crawlspace and circulating hot water through it with a pump and a good quality tankless water heater.

The plan was met with both enthusiasm (generally from fellow engineers) and scorn (more often from plumbers), and since then people have been sending in emails and comments to ask how it all went. Although I’ve already dropped a few hints that I’m very happy with the end result, this experiment came with some good lessons and pitfalls which are finally ready to share.  I have also had a chance to measure the performance of the system (and the house in general) through most of a Colorado winter, and the numbers surprised me just a bit. So let’s dig in.

How it All Went Together

Last time I presented you with a daunting list of parts. The list makes a lot more sense when you stick everything together. Here is a picture of the heart of my setup as it stands now, with everything screwed onto a plywood board:


This funny part is that all of the brains of the system are right there on the board. All the research and shopping boils down to just that 2×3 foot rectangle. The input is hot water from your water heater on the left, 120 volt electricity for the pump through the orange cord, and a pair of small wires you connect to your thermostat to indicate “ON”. Then the hot water flows out through the zones, delivers its heat to your house, flows back into the cold side of the manifold, and returns to the heater for another round. If DIY radiant heat were more common, this whole setup would come as a single product for $199 at Home Depot instead of the $600 or so you see here.

It took only about two hours to attach all this together, and then I confidently crawled down under the house with it to get to work on the rest of the installation. Little did I know that the real work was yet to begin.

Running the Heating Tubes

This system proved to be quite torturous to build, but it was because of plain old physical challenges rather than anything technical or mental. The problem is that to install radiant heat below the floor of a wood-framed house, you need to thread a huge length of stiff, fussy pipe through an unyielding grid of tightly spaced floor joists. I divided my house into six zones, each one about 250 square feet in area. For each of those zones, I had to do the same steps:

  • Meticulously review the underside of each joist bay and clear out any remaining scraps of duct work, old plumbing, spider webs, etc.
  • Grind off a few hundred flooring nail ends poking through from the original Oak floor above using a cordless grinder with a cutoff wheel
  • Drill a 7/8″ hole through the end of each joist
  • Pull through the whole required length of PEX pipe, fighting the stiff tangly coil the whole way
  • Staple it up to the underside of the floor, using aluminum reflector plates
  • Run the ends of the tube back to the manifold and connect them into the system
  • Cut and fit R-13 insulation batts underneath the whole area to force the heat upwards into the floor instead of down into the crawlspace.

The end result in each bay looks something like this:

Here's the end of one joist bay. Tubing, aluminum diffuser plates (optional), R-13 insulation batts underneath (essential)

Here’s the end of one joist bay. Tubing, aluminum diffuser plates (optional), R-13 insulation batts underneath (essential). The fluffy spray foam insulation on the right is part of my new crawlspace insulation – not strictly related to a radiant system but handy for keeping the resulting heat from leaking out through the rim boards of your house.

I found that each 250 square foot zone took about eight hours of work. But not just a casual eight hours that flies by like it does when installing kitchen cabinets while your radio plays happy bluegrass music in the background.  This is eight hours of proper torture, crawling in a 40-inch-high space with sharp rocky dirt beneath and obstacle-laden floor joists above. Even the slightest movement stirs up thick dust, so you have to wear a full-face respirator. That’s handy, since the grinder also throws down hot metal sparks towards your eyes and face. Gloves and kneepads are essential too. And ear protection. It’s dark down there, so you also have a bright LED headlamp strapped over top of all the other accessories on your head. But the ground-driven temperature of 60 degrees is far too warm for the work pants and long sleeves you need to wear to avoid skinning your arms and legs, so you also sweat a lot. In general, I could only withstand about 2 hours of this work at a time, so each zone was done over four days.

But if the paragraph above sounds horrible, you’re just thinking about it wrong. This is voluntary hardship at its best. The physical and mental benefits of crawling and sweating and fighting with stubborn tools and materials for so many hours are incomparable. Every possible move is constrained, so you must overcome the constraints with strategy and strain. The feeling of suiting up and descending into the crawlspace each morning while knowing I could earn much more money by outsourcing the activity and instead simply typing a bit more shit into this computer was enlightening. The feeling of emerging two hours later into the fresh air and bright sunlight, stripping off the dusty clothes and seeing the beauty of the world again was life itself.

Even with all that struggle and joy, I paused the effort* after finishing four of the six zones. Those cover the primary areas of the house and are more than enough to keep up with our heating needs for the rest this year. I’m finishing up the main floor carpentry and a second bathroom, and those last two zones will go in before next winter.

Real World Performance

The Living Experience

This was the unexpected surprise – how nice it is to have warm floors. Your feet get a pleasant reward with every step you take, or as you rest them on the wood floor under the dinner table. On top of that, anything you leave on the floor gets extra toasty: a pair of wet winter boots, a forgotten coat, or even the socks you threw off before hopping into bed – perfectly warm and dry when you pick them up the next morning. The bathroom floor also dries quickly after a shower.

Keeping up with the Cold

On a “normal” January day in my part of Colorado, daytime temperatures reach about 43F/7C, but the extremely bright sunshine makes it feel much warmer. The South-facing glass of the house sucks in about 10,000 watts of heat at high noon and it gets stored in the copious thermal mass of the various interior stone and brick walls. I blow it around with a ceiling fan to accelerate this process and the interior temperature reaches a peak of around 76F in the afternoon. Then the sun goes down, the stored heat is gradually released, and we make it through the night (low around 20F) with the house dropping to a comfortable 66. If you’re lucky, the sun rises into a clear sky the next morning and you repeat the cycle – with no heating required at all!

But weather adjacent to the Rocky Mountains is anything but consistent, and this winter we have also seen an all-time record low of -26C (-14F) as well as a daytime high of 77F (25C) just a few weeks later. This is why you still need a heating system with some juice.

With only four zones running at -26C, my house was a bit underpowered – the temperature would drop slowly unless we lit a fire (the house also has a high-efficiency EPA woodstove). From a standstill, the system also takes about two hours to get the floors to their full operating temperature of 80F. However, the remaining two zones should provide the extra bit needed to keep up in worst case conditions.


To test this, I had to calculate the amount of natural gas I burned every hour, and compare it to the amount of heat actually being pumped into the house. I did this by cranking up the system on a cold day and taking “before” and “after” readings of the gas meter, and noting the flow rate and temperature drop** across the whole system:


Here are the things you need to look at to calculate system output and efficiency.


To make a long story short, the gas meter told me I used 40 cubic feet of natural gas over my 144 minute test period.  The gas bill tells me that each 100 cubic feet is 0.945 “therms ” (94,500 BTU) worth of heat. One therm costs 62.67 cents in my area. The net result is I was consuming 15,740 BTU per hour of gas, which is just under 10 cents worth per hour.

Next, I added up the (approximate) flows of those four flow meters and saw the system was pumping out 1.68 gallons per minute of water with a 16.5 degree F rise. You can calculate the energy delivered to the water with the “Universal Hydronic Formula” like this:

1.68 GPM x 16.5 degrees x 500 = 13,680 BTU per hour

Back in the design stage, this is roughly the heat loss I calculated my house would experience at a temperature of 20F, so the numbers seem realistic to me. Also, dividing the output by the input, we get a water heater efficiency of 88%, which is close to my unit’s stated efficiency of 94% (efficiency rises for lower input water temperatures, so I’m very happy it can perform this well with a 118F input).

On top of all this, I measured total electricity consumption (for the tankless heater and water pump combined) at only 55 watts, which is under $4 per heating month even if you run the system 24 hours a day. To add it all up, my home’s total gas cost this year breaks down roughly like this:

Gas company fixed monthly fee whether you use any or not: $12
Regular monthly gas use for showers, laundry, dishwasher, cooking, etc: $4
Heating for Oct 14 – Nov 12: $8
Heating for Nov 12-Dec 15: $55
Heating for Dec 15 – Jan 16: $58

And that’s probably the peak – here in February, the weather is already warming up and the system is off most of the time again.

So What’s the Catch?

When I started this experiment, I was optimistic that we could revolutionize home heating and make the forced air gas furnace obsolete. After all, the cost is lower, living comfort is greater, and you save a lot of interior space that would normally be consumed by ducts and chases – especially in multi-story homes. But until the industry advances a bit, there are a few flaws:

Building was Quite a Bitch

Installing this was near the limits of my skill and endurance, and I’m a not-all-that-old dude with lots of great tools who has been building things for over 30 years.  However, it would be much easier if you installed it in an unfinished basement instead of a crawlspace. Also, recruiting as many friends as possible to thread the pipe will speed you up exponentially. Overall, I’d recommend it only for experienced handypeople.

Heat Output is Lower than Expected

I’m getting under 14,000 BTU per hour over the 1000 square feet I have installed so far. This works out to 14 BTU/hr per square foot. This place is pretty well insulated, so I should be fine. But an older and draftier house would lose more heat. The problem lies in the slow transmission of heat through the 1.5 inches of my subfloor and the oak floor above it. To increase that, I’d need to raise the water temperature further (it is already at 140F) or add some extra radiators.

On the positive side, you can get really creative with radiant heat, embedding the tubes into tile walls, or making heated towel racks in your bathroom that tie into the system. Each extra heated feature will deliver more BTUs. Also, installing under a tile floor instead of wood floor will increase heat transmission.

Not all Tankless Water Heaters will Work

In reader feedback, I heard stories of tankless heaters dying early or cycling constantly. Cycling is not a problem with the unit I used*** – it runs at variable speed so the system quickly reaches a nice loafing steady state where the pump is going slowly and the heater is barely murmuring to match the required flow and temperature rise. Time will tell how long it lasts, but I’m betting it will prove to be far more cost effective than a $3000 boiler.

The Open Loop System Has Drawbacks (as well as advantages)

I am using a single tankless heater for both home heating and domestic hot water – this is called an “open loop” configuration. It would be easy to add a second basic heater for $600 for the domestic water. This would separate the water systems, and I may do that someday.

The main drawback of combining them that you need to keep the water heater set very high (140F) to get enough heat output to the floors. This means somewhat fussy water temperature balancing in the shower, whereas with a dedicated tankless heater you just type 110F into its remote control unit, crank the hot water handle, and enjoy a computer-regulated perfect shower every time.

A second issue is that the hot water can sometimes smell like new plastic pipes. This effect is fading now that we’ve been running the system for several months, but it does mean the hot water will never be tasty enough for drinking or to use in cooking,

On the positive side, I found that if you run hot water when the pump is off, water is drawn through the system through natural pressure differences. This means that in the summer, my floors will actually be cooled down by the cold water supply as it sucks unwanted heat from the house. So the floors will pre-heat the water before it hits the water heater. Double energy savings and free air conditioning.

Because the water supply is constantly refreshed and/or heated to 140 degrees Fahrenheit, bacteria growth and stale water in the pipes is not an issue at all.


It has been a worthwhile experience. Loads of learning, plenty of hard labor, a luxurious end project, and an $8,000 savings over having a new forced air furnace and duct system installed into this house. Although DIY radiant heat is not for everyone, I can declare this particular experiment a success.


* To finish up next fall, I will also swap out the manual adjustment dials (white knobs in the picture) for electrically controlled actuators, and use a multi-zone WiFi thermostat to control the whole house. This thermostat is being developed by an MMM reader who has started his own company to produce it – more details on that in a future story.

** The temperature drop is configurable with a little knob inside the computer-controlled circulator pump by Taco. I set my own pump to maintain a differential of 20 degrees F, which is typical for a system like this. Then if the pump starts seeing a drop of more than 20 degrees, the pump runs faster to compensate. If it is less, it means your house is already warm so the pump runs slower.

*** This has proved to be a kickass water heater so far. If you decide to pick one up from GP conservation as I did, try coupon code “MMM” – when I last checked they were running a small discount plus free shipping on tankless heaters for readers of this blog.


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How Rich are You? Find your Net Worth, Spending, and Savings Rate Mon, 26 Jan 2015 15:56:04 +0000 wheel of consumption

wheel of consumptionMr. Money Mustache can tend to get a little high-level at times, talking about all these feelings and philosophies that underlie the proper path to wealth.

But you can’t just smile your way to the top – there are real numbers at work in the background, whether you understand them or not.  These can gang up and torture you (as in the case of a person with a crushing 60-hour workweek who maintains a paltry 10% savings rate), or they can boost you right out of a mandatory work sentence in unprecedented time.

This is especially relevant in the wake of the annual spending article, which always brings up a lot of questions about how Mustachians accumulate wealth so quickly. So let’s start with the big picture, which is how to become wealthy:

Financial Independence in 3 Easy Steps:

  1. Figure out how much money you are taking home and subtract the amount you are spending.
  2. Be sure to keep all that surplus money at work, by paying down high interest debt first and then investing the rest.
  3. Once the total value of all your investments reaches 25-30 times your annual spending, paid work is now entirely at your discretion. For life.

So with this post, let’s explain these three fundamentals of rapid wealth accumulation the MMM way, so the schooling will be there for all future students.

Net Worth

We’ll begin with the end in mind. Net Worth is a bit of a degrading term, as it incorrectly implies a person is only worth the amount of money he or she has accumulated. But you can use this for motivation, since as a Mustachian your figure will tend to be unusually high.

The overall formula is easy:

The Value of everything you own (-subtract-) The total of all your loans

The details are equally easy, although sometimes debated. So I’ll tell you the way I happen to think about it:

  • You do include the value of any properties you own, including your primary house
  • All 401(k)s, IRAs, savings plans, and other hidden assets are included
  • All mortgages, loans, credit card balances and other nonsense get subtracted
  • Don’t bother with depreciating consumer stuff like your cars,  furniture, or Apple products, unless you are willing to sell them right now.

Let’s start with a deliberately twisted example:

Joe Consumer (age 33) is a Washington DC Lawyer pulling down $250,000 per year.

He has a condo he paid $517,000 for with a current market value of $580,000 and a mortgage of $460,000. He also has a BMW 535i sedan that cost him $61,300 including tax a few years ago, payment is $539 per month and remaining balance is $43,000.

401(k) balance is $50,000, IRA is $27,300 and he has $90,000 left on his Harvard student loans, which he plans to get serious about soon and pay off over the next 10 years. Credit card balance is just a bit high at $8,000 right now, what with the holiday season hangover. What is his net worth?

Whoo! Look at that collection of financial spaghetti.  Oddly enough, when people write to me with financial problems this is usually how they are described: a big list of confusing and unsorted details. They just heap them on a plate and hope it will straighten itself out some day. When you’re confused about your own money, it is likely that you are wasting a lot of it.

Joe’s Net Worth

Ownership of the Condo: $580,000 – $460,000 = $120,000
Retirement accounts (401(k) + IRA): $50,000+27,300 = $77,300
Student loans, car loan, and credit cards: $-90,000 + $-43,000 + $-8,000 = $-141,000

Total Net Worth: $120k + $77.3k – $141k = $56,300

If you ask the average Josephine, Joe is a successful rich guy, doing very well for a 33-year-old. Expensive house, flashy car, massive income and even some money in the bank. If he just keeps on the current path and saves a bit more during those “peak earning years” in a couple decades once he makes partner, he’ll have a nice fat retirement fund by age 65.

My diagnosis would be quite different: “Holy Shit, Joe! What the hell have you been blowing all your money on?! You should have had a higher net worth than that many years ago, given your career!!”

Very Rough Guideline: Take the total money you’ve earned after taxes in your lifetime (suppose that for Joe it happens to be $1,243,100). If you don’t have at least 40% of it still around to show for it today, you are spending way too much.

Bonus: Suppose his nearly-new BMW can still be sold on Craigslist for $33,000. Although he has already lost $28,300 in depreciation on this horrible money pit, he could end the bleeding immediately by selling the car and taking the $33k plus $10k of his own money to pay off the $43,000 note. This would increase his net worth by $33k and set him on a much more prosperous path for the future.


This was Joe’s problem above. The key is to understand where your money is going, and for most of us that means tracking your spending. I calculate it like this:

Everything that flows out of your wallet, bank account, credit cards,  or automatic payroll deductions for things like insurance.

Finer Points:
I include property taxes and sales tax, but do not count income tax or other payroll taxes.
I include all loan interest and fees, but do not count the principal portion of loan payments.

Why? Because I’m very interested in financial independence: that point when your passive non-work income is enough to pay for a hypothetical retired life of your choosing. Right now, Joe might be earning $250k and paying over $60,000 in income taxes. In retirement, he will probably be in a lower tax bracket. Plus income might come from dividends, long-term capital gains, or rent checks from investment properties he owns. He might even live in an area with a different tax rate.

You need to deeply understanding your spending needs and wants in order to know if you can afford to retire. Instead of taking random guesses at the factors above, I prefer to think of everything in terms of after-tax dollars. Take-home income instead of gross income.

So if we sort out what is surely a twisted ball of credit card,  EFT and ATM transactions, Joe’s monthly spending might look something like this:

Joe’s Spending

Interest portion of his $2500 mortgage payment: ($2000)
Interest on credit card and student loans: $480
Car Payment: $539
Employee contribution for health insurance: $150
Full collision+comprehensive car insurance: $200
Car Registration/licensing fees: $200
Gasoline: $200
Unnecessary checkups at BMW Dealer: $150
Condo fees: $450
Property Taxes: $500
Utilities: $200
Travel: $800 
Country Club Membership: $200
Groceries: $400
Dining out: $1000
Wine and Scotch collection: $400
Clothes, Suits, and Gentlemanly Accessories: $600
Haircuts and Massages: $200
House cleaner: $400
Dry Cleaning: $150
Cell Phone: $150
Cable TV/Internet: $150
Miscellaneous Shopping, Gifts, Etc: $500

Total spending: $8919 per month

So how can a busy person track all of these transactions and categorize them well? You have two choices:

  • Manually save all receipts and enter them into a spreadsheet or piece of budgeting software every night, or
  • Do all your spending on a credit card and let some financial software like Mint, YNAB, or Personal Capital grab all your transactions and sort them out (this is what I prefer).

In either case, you’ll probably spend at least some cash which you pull out of ATMs. You will see this in your automated spending report as well – I suggest assigning your cash spending to a category called “the decadent throwing around of unnecessary $20 bills.”

Take-home pay

This boils down to the amount of your paycheck that you eventually get to spend yourself. So let’s look over Joe’s shoulder as he opens a biweekly paycheck:

Gross Pay: $8620

401(k) plan deduction: $692
Employer 401(k) Match: $300
Automatic deduction he has set up to pay towards student loans: $1000
Professional Fees/Insurance: $200
Federal Tax: $1724
State Tax: $689

Net pay to his bank account: (8620-692-1000-200-1724-689) = $4315
Since there are 2.16 pay periods in the average month (52 / 24) you would scale this up to see that he gets an average of $9349 per month showing up in the bank.

But this is where many people get confused, because this paycheck he takes home is not really his take-home pay. You need to add back in the money that he is actually using – including to pay off loans –  or will get to use – including all retirement and savings account deposits.

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month

If this sounds like a shitload of money, that’s because it is. Anyone making $250k gross pay should be rolling in it and saving the vast majority, therefore able to retire within just a few years. If you get your savings rate right.

 Savings Rate

Now that we’ve done all the hard work, we get to hit the gas pedal and show off a little, since we can make some bold forecasts.

The savings rate is simply the percentage of your take home pay that you’re not spending.

(Take home pay – spending) / (take home pay) , then multiply by 100 to get a percentage

For Joe, it would look like this:

($13,839 – $8919) / ($13,839)    x    100

= 35.5%

Hey, Joe is still saving a third of his income, even with the most outrageous spending list that I could invent for a single guy. It’s not completely suicidal, but he is still squandering an opportunity that only a tiny percentage of humans have ever been offered: the opportunity to become financially free while he’s still young.

To steal a few data points from the most popular article in this blog’s history: The Shockingly Simple Math Behind Early Retirement:  Joe’s 35% savings rate means he is on track to retire in about 25 years. He is already 33, so this means he is sentencing himself to be locked into that office until age 58.

This may seem “early” by current American standards, but if the reports I get about high-octane Washington DC law careers are accurate, that shit can get old in a hurry. It is far wiser to earn your freedom while you are still fired up about working.

From this point, it can get far worse or far better. Joe could get married, have multiple children, and expand the level of spending (larger house, more vehicles,  private schools, etc.) to consume even more of his income.

  • If he adds just $3000 to this monthly budget, he drops to a tragic 15% savings rate and is set for a 43 year working career
  • On the other hand, if he trims down the excess and goes to a still-insane $5000 monthly spending level, he’ll be saving about 65% of his income, which means he will be set for life less than 10 years from now.
  • If he can streamline life to just a slightly less ridiculous level than that, let’s say to my own level of spending, he will be retired well before 40.

So there you have it: The easy way to calculate spending and savings rates, and your net worth.

Although I illustrated it here with an outrageous but very common example of high income and high spending, the principles work just as well, and are even more important if you are living on an average income. In the US, it is quite possible to live well on under $7000 per person per year, and even gradually become wealthy on a below-average income.

But the first step is to understand how all these dollars fit together. How are YOU doing?


Bonus: For those who love to calculate, my friend and fellow early retiree Darrow Kirkpatrick maintains a really thorough roundup of the best retirement calculators on his blog here:

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Mr. Frugal Toque on Mortgage Freedom Wed, 21 Jan 2015 13:00:24 +0000 solo

Foreword from Mustache:

Almost exactly one year ago, our Canadian correspondent Mr. Frugal Toque and his family reached a nice milestone: a mortgage balance of Zero. Although early retirement and financial independence do not strictly require you to pay off your mortgage (or to own a house at all) as long as you have other investments to cover your housing outflows, for many of us there is an irrational and long-lasting glee that comes from owning the place in which you live.

From a rational perspective, sure, stocks and other investments will tend to return more than the 4% you’ll save on mortgage interest. But the mortgage “return” is guaranteed, and fully non-correlated to the stock market. Plus your home will always be yours regardless of what shenanigans the financial system might pull. 

Whatever the reason, mortgage freedom tends to deliver long-lasting happiness to many of those who buy it, which makes it one of the better ways to spend money in my book.

Mr. Toque wrote the story below right after he first killed the thing, then added an afterword to explain how he felt one year later. Finally I have found the right time to publish it. Enjoy!


Mortgage Freeedom

soloI’ve never liked debt.

I should say that first because, of all the privileges I’ve had in my life, developing a hatred of owing someone money has been one of the most profitable.  Every time in my life that I’ve ever borrowed so much as a loonie[1], there’s been a flashing red sign over my head:  “NEGATIVE $1″.  Once I forgot to pay back a guy ten bucks I owed him and he had to remind me.  I am ashamed to this day.

This has given me an edge in life that I can’t overstate.  The idea of running a balance on a credit card is so alien to me that I can’t believe anyone does it, never mind the breathtaking number of people who are comfortable with it.

On the subject of a mortgage, however, I ascribed to the wisdom of the times.  Given the size of house Mrs. Toque and I had decided was appropriate, it made more sense to get in on a fairly cheap market (Ottawa in 2002) rather than rent while gaining no equity.  With our down payment, we took out a mortgage for approximately $260 000.  For the first couple of years, when we were financially flopping around like fish out of water, we didn’t even pay attention to our mortgage.

“Strange,” we seem to have been thinking.  “In this one hand I have extra money.  In this other hand I have a mortgage.  I suppose we should buy a big television.”

Yeah, we really did stuff like that.  Not only is it a sad story, it’s also the tragic plot followed by the vast majority of house-“owning” humans in North America.

“Well, you see,” common thinking goes, “I’ve got a 25 year mortgage.  Can’t do anything about that.  I guess this extra money in my bank account should be turned into a boat, some leather clothing and a heated, indoor swimming pool.”

Then, about two years ago, when Mustachianism had already started chipping away at our habits, I got laid off.  You can read about that in detail, but the relevant bit is that Mrs. Toque and I enjoyed my period of unemployment so much that we became determined to make it a permanent thing.

The first obstacle on that road, from our perspective, was to kill off the mortgage.  Neither of us could rest easy knowing that a monthly payment so large would be hovering over our heads.  So we looked at our budget.  It turns out we live on about $2300, eating fancy seafood and enjoying our family martial arts workouts.  Our mortgage, as well, was set at $2k per month.  Without going into super personal detail, let’s say my salary is quite a bit more than $51k.

So I went into Kung Fu spreadsheet mode and my predictions looked something like what you see below.  The green line is how long it could have taken us.  The red line was another, more serious route.  I turned to Mrs. Toque to say:

How it could have gone vs. how it really went

How it could have gone vs. how it really went

“Honey?  We can beat this fucking thing into the dirt by the end of next year.”

“Really?” she asked.

I waved my hand at the undeniable, mathematical facts displayed on the screen.  A tingly, Han-Solo-saves-the-day, euphoria rushed over us both.

“Hell.  We’re that close?” she said.  “Let’s do it.”

What ensued was a laser like focus that would have made Mr. Mister proud.  Oil changes became things done in our own garage.  The barely used motorcycle was sold.  While I toiled at the 9-5, Mrs. Toque engaged in a culinary conquest that involved making large batches of chilis, sauces and curry dishes and freezing them in yogurt containers.  Our house was scoured and cleansed of numerous Products and Outgrown Clothing in exchange for hundreds of dollars through various Internet intermediaries.  Every bonus or raise was purposely channeled toward this one goal.

Video game purchases were put off, allocated as exceptional acquisitions belonging to special occasions like Christmas and birthdays.  We cut out restaurants in similar ways, doggedly keeping to our $2k budget.

There have been a few times in my life where I have felt something seize hold of me like this: a karate tournament when I was young; the desire to run 10k in under 50 minutes in more recent times.

This was something more intellectually powerful and more enduring than any of those previous desires and it drove the two of us for just about a year and a half.

On January 1, 2014, the Toque family made its final mortgage payment.

My grandmother and her sisters could drink you under the table.

My grandmother and her sisters could have drunk you under the table.

As promised, a bottle of whiskey was purchased.  You can’t really do anything impressive in my family without shots of Crown being involved, and this goes for births, deaths, weddings, birthdays, religious holidays and the stomping into cinders of a mortgage.

And though the shots were hammered back to mark the occasion, the gravity of the situation didn’t pull us in right away.

Mortgage freedom, like any other widening of the straits through which we guide our white-water kayaks, takes a while to register.  There’s this uncomfortable lack of turbulence and drama that makes you think something is about to go wrong.

As February came around, the instinct to “check the bank account” still nagged at me.  By March, money was just sitting there, comfortably reassuring us of the reality of our financial situation.  I scratched my head in dismay.  We’re in June now and it’s really dawned on us that our monetary burn rate has dropped by half.

Yes, it's exactly like this.

Yes, it’s exactly like this.

I wake up every morning and I can take a deep, relaxing breath knowing that I don’t owe anybody anything.  I ease into my morning cup of tea as if I were Patrick Stewart lounging in the ready room.  Every paycheque that comes in?  That’s ours.

The danger now, as with any reduction in stress in our lives, is that we let the new width and relative calmness of the river we fare allow our paddle strokes to become sloppy.  This is not the time, in the first months of our mortgage freedom, to start piling up the Lego sets, golden-handled frying pans and $500 bicycles that the 8 year old will outgrow by next summer.

We need only remind ourselves that expensive items, and even expensive experiences, will not make us happier.

As per the advice of the Mustachian horde, we cranked open a Questrade account and started dumping that money into Vanguard ETFs via RRSPs, but we can only do that for so long.  The key to our existence now, as we run the last leg of the race to early retirement, is not to let money sit around idly, tempting us with its purchasing power, but to get it stashed away as quickly as possible.  Online brokerages make that bit pretty easy: you can deposit money directly from your bank account into RRSP or TFSA accounts (The Canadian equivalent of Roth thingies and 401 what’s-its-nuts.)

But that’s only the technical side of things.

The heart of the matter is something else entirely.  It’s looking at the debts side of the spreadsheet and seeing nothing there.  It’s also a clear, wide open path from this point to the spot on our life journey where neither of us is ever again obliged to work in order to have the necessities of life.

Early retirement wasn’t an entirely real thing, at least in my mind, despite having seen that the Mustache family had clearly achieved it.  Making our mortgage a thing of the past, however, emotionally solidified the mathematics.  The equations and the spreadsheets, like the one you see above, aren’t nearly as tangible until you actually see the descending line hit the x-axis.  Then, very slowly, you realize that the math was a map of the world as it actually exists.  There actually is money piling up in the bank account.

And if the road to mortgage freedom is real, then the road to early retirement is real, too.

Update: January 2015

This article was written some time ago, as the feeling of being mortgage free was just starting to sink into the Toque family.  Our primary worry, naturally, was that we might be tempted by all this money floating around into becoming the sort of Consumer Suckas that we detest.

I’m glad to report, on further examination, that no such thing has happened.  Our monthly expenses did rise, from $2391/month to $2416/month, which is actually less than inflation.  So being mortgage free came without any statistically significant change in our spending habits.

Separately, what have we done with the money?  Exactly what we said we’d do: it’s all gone to fill up our RRSPs and TFSAs, which still had room from previous years.  As I discussed in a previous article, my priorities were:  RRSP, Mortgage, TFSA, due to my own hatred of debt.  So once the RRSPs are full up for the year, I dump everything into TFSAs.  Sadly, I’m going to run out of TFSA room sometime in the next year or so, necessitating further investigation into “Dividend Mutual Funds” and the magic I can work with them.

[1] – no seriously, that’s what we call a dollar in Canada.

It is now easy to find everything from Mr. Frugal Toque on this blog since he has his very own category.

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You’ll Never Believe How Much the MMM Family Spent This Year… Fri, 16 Jan 2015 16:52:47 +0000 Hiking near home, fall 2013
Hiking near home, fall 2014

Hiking near home, fall 2014

Here we go again!

As we do once every year, Mrs. MM and I have spent the day nervously tallying the sinful blizzard of excessive spending that we have been committing over the past twelve months.

If you aren’t familiar with my budgeting style, it is “I Don’t Have a Budget“. Since we know there’s no chance of running out of money at this point, we make spending decisions based on our values rather than splitting up a fixed stream of income into categories every month.

While this is a hazardous approach for beginners*, it works very well once you have trained yourself with my alternative point-of-purchase approach. In short, whenever you feel like buying something, ask yourself the following questions:

  • Will buying this really improve my overall lifetime happiness?
  • Is there another, more efficient way to meet this same need?
  • Can the same benefit be had if I delay the purchase?

While I still follow these rules because they have become a habit, the application can be sloppy at times due to the fact that we are still just ordinary flawed humans.

Highlights of 2014 in the Mustache Household


First day of framing the new roof, January 2014

Even retired life seems to be full of change and adventure, and this suits me just fine. This year our boy grew up another notch, and we found his need for creative freedom really started to clash with the formal structure of school. This led us to full-time homeschooling. That required much more time from both of us parents, curtailing some of our other activities but also teaching all three of us a lot more about life and learning. Although the transition amounted to a couple months of emotional face punches, it was worthwhile as such punches generally are in retrospect.
We Moved

2014 will also go down in history as the year of the new house. Although we actually bought the place in late 2013, I started the project in earnest by tearing off the roof last January, framed and welded and sheathed the new structure through February and March, then stepped inside to do the electrical, plumbing, insulation and other trades before outsourcing the drywall. We moved in to the barebones residence in June and I’ve been working since then on more carpentry and details. All in all, we’ve spent about $80,000 on the complete rebuild so far, which I have kept separate from the regular spending budget. This is because the net spending on the new house (after selling the old one) is still a large negative number.

Details of the new house project, where the money went, and before and after pictures will get their own separate post. It is taking a while because work progress has slowed dramatically due to the aforementioned homeschooling

Business and Pleasure Endeavors

Little MM seems to be following in his father’s path – finding machines, space and science fiction, and creating electronic music (under the stage name Killbone7) to be more interesting than any organized activity we try to coax him into. Luckily he has a growing club of other junior nerds that have banded together for these activities, so he will have company when he starts the next Microsoft or Google from our garage in another six years or so.

This detail is relevant in a spending article because although stuff like this is amazingly educational, it costs the parents very little. We would fully support him if he were into more expensive things like sports leagues, and I do remind him that that is a better way to meet girls once he gets to high school.

Mrs. Money Mustache took the lead on homeschooling, burning through stacks of books and websites and distilling it down once she realized the practice is incredibly unregulated here in the US. As long as you can get your kid to pass a very basic test at the end of each year, you can do whatever you like. We are using this as an opportunity to speed up the educational pace considerably and do fun stuff instead of boring stuff. She also started a secret crafting business on Etsy which I won’t dare mention here lest she lose all her free time to an increase in sales.

And of course old MMM continued to build stuff out of wood and occasionally type some shit into the computer, juggling the demands and opportunities of the Internet against the pleasure of real world physical work. I indulged in a couple of these opportunities for some blog-related travel including Ecuador II and Camp Mustache, both of which will happen again in 2015.

But enough of this blathering on, for it is time for the final number. In the wealthy and spendy year of 2014, the MMM family managed to blow the following incredible of money on ourselves:

$25, 330

And here is where it all went:

Mortgage Interest00
Property Taxes2,5172,120New house has $1000/year cheaper taxes. This figure pro-rated based on months lived in each
Food and Dining7,7397,109
   Groceries   6,984   6,593
   Wine/Beer   466   322
   Restaurants, Coffee Shop   288   194
   Doctor Visits   425   484Includes some personal therapy surrounding our boy's school issues.
   Health Insurance   2,855   3,272$273 / month
   Dentist   366   512Mostly for kid dentist preventative work
   Pharmacy   143   n/a
Auto and Transport2,231490
   Gasoline   1,022   71Excellent!
   Insurance   330   347
   Registration & Testing   294   72
   Express Tolls   80   
   Service & Parts   422   n/a
   Public Transportation   81   n/a
Cell Phone300300
Internet Access360360
   Home Renovations   383   19
   Home Insurance   392   410
   Landscaping/Plants   85   n/a
School Tuition00
   Shoes & Clothing   606   492
   Sporting Goods   566   76
   Shopping Misc   965   654
   Books   46   61mostly used books
   Other   440   815Netflix, kids activities, homeschooling school supplies, local plays, apps, CC annual fee, cash withdrawals, foreign transaction fees
Travel1,9345,057Wow!! $1908 for xmas trip to Canada, $382 passport renewals, $216 flight home from SFO, $552 vrbo in San Fran, $880 safety pirate trip, $245 train travel, $727 flights for summer trip to Canada, $51 Super Shuttle, $96 Mrs. MM 40th Birthday Trip
   Subtracting Tuition, Donations   24,567   24,175
   Subtracting travel, crossfit   21,983   18,788
   Subtracting organic/luxury food   19,678   16,442Assuming a 33% increase on groceries due to organic + meat.
   Subtracting home renovation expense19,29516,423This is what our "no frills" living cost would be, unless we moved to a smaller house (Note: Misc category could be cut down a lot as well)

What the heck is going on here? With completely reckless spending and all of life’s variation, we are still within $150 (0.6%) of the previous year’s spending. There were a few notable things, however:

Groceries were still Ridiculous:

The place our sloppy nonbudgeting manifests itself most strongly is in groceries: high-end local organic stuff from the deli counter, ridiculous little triangles of cheese from the gourmet section, dark 85% chocolate chunks with my espresso, coconut and almond breakfast every morning, and an overflowing salad bowl alongside the dinner every night. And some sort of entertaining almost every week, where we actually prepare and give away large quantities of this fancy food to friends and visitors. It is hard not to feel rich and spendy when this is part of your life.

Driving Performance was Good:

Somehow, we went the whole year on only two tanks of gas for the car. In the past, I have talked up our impressive driving avoidance skills and called everyone else Car Clowns because we don’t use the car for local errands.. but then hypocritically embarked on long cross-country trips that burned hundreds of dollars of gas.  This year it seems I actually walked the talk, and the car was fired up mostly for shuttling people to the airport and to occasional hikes in the nearby foothills. I’ve even started biking for my occasional nights out in Boulder, thanks to the added speed of my Electric Bike. It also helps that the car is a Scion xA, a 5-passenger hatchback that easily exceeds 40MPG. Not on the budget is one tank of gas for my construction minivan – because it incurred no personal use this year other than carrying materials for the house.

Travel Spending was Way Up: 

The flip side of less driving is sometimes more spending on other forms of travel. In spring, we took an adventure on the Amtrak sleeper train to San Francisco and went North to explore the amazing coast and Redwood forests. And we closed out the year with a set of three overpriced plane tickets ($600 each!) to Canada to visit family for the holidays, something we haven’t done in winter for many years (usually we just spend every summer in Canada). Plus a great train ride to get the three of us from Toronto to Ottawa for phase two of this trip. This trip is an example of spending I would have avoided if money were tight, but it was nice to be able to afford it.

On the positive side, our out-of-pocket spending for this travel was really much lower than shown in this budget, because much of it was paid for with points from various rewards credit cards. But I decided to list the sticker price in the annual spending just to keep reporting simpler. In other words, we thought of the credit cards rewards as a form of income rather than a reduction in spending.

Health Insurance Held Steady:

We use a basic plan from Golden Rule that costs about $275 per month for the family. If this pre-ACA healthcare plan eventually expires, we’ll switch to a Bronze level plan under the new health insurance setup that will  offer more coverage in exchange for more money. You can read more about that in this 2013 post on our health insurance situation. None of us had any health issues besides checkups this year.

So that’s it for 2014. Although these updates are starting to look awfully consistent from a numbers perspective, I still find it quite revealing how powerful habits can be in dictating your spending, regardless of income.

And as I go through each year knowing that I’ll have to justify each expenditure to YOU the reader at the end of it all, I find my own life being guided gently away from the temptation to stray into bullshit spending as well.

Luckily for you, you will get exactly the same benefit this year. Because I’ll be right there watching over your shoulder every time you take out your wallet in 2015.


Quick answers to questions that seem to be coming up:

Why is your car insurance so cheap? Living in a city of only 90,000 people, age 40, cheap car with liability insurance only, nothing on driving record. I still use Geico insurance.

Why is your mobile phone bill so low? Republic Wireless – $25/month unlimited everything including data, or $10/month unlimited voice+text. Hint: Get the $150 Motorola G unless you are a serious techie – it is almost as good as the higher end $300 and $400 phones they offer.


* If you are going to train your fiscal discipline muscle with some budgeting, I am still a fan of YNAB software (You Need A Budget), which you can try out for free for a month to see if it fits your own style. Disclosure: I am a friend of the founder Jesse Mecham and think he tells excellent stories.

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New Year’s Resolution: Getting Your Brain Back Thu, 08 Jan 2015 21:08:27 +0000 brain_500

braindanceWhen you think about it, that brain of yours is both the cause of and the solution to every one of your problems.

With the right thoughts, you can trigger yourself into actions that will change your life – or even the entire world. With the wrong thoughts and actions you can just as quickly end up dead. And in between, you can experience complete joy or utter dissatisfaction purely through different perceptions of an identical set of circumstances.

It is both obvious and miraculous to state all of this, and thus it is pretty ridiculous that we don’t put a higher priority on maintaining our and improving our own noodles in a more systematic way.

Imagine that you’re an Olympic athlete, or at least a well-muscled Underwear model. Your body is the key to your success. What if you were forced to live on a cruise ship with no weight training facility and a 24-hour buffet stocked mostly with beer and cake? Would the input to your body affect its performance?

Similarly, suppose that you’re a rising star of an Engineer at Google (which is statistically much more likely given this blog’s readership). Your career will live or die based on how much brilliance you can crank out of your brain and deliver to the world in usable and elegant form. Given this fact, should you feed your mind with whatever happens to be sloshing past in society’s slop trough? Viral posts forwarded by your Facebook friends or the latest update from the stock speculators on Wall Street? Or is there a better diet available for that high-performance machine?

Let’s take Mr. Money Mustache himself as an example. I’ve always had a cordial relationship with my own mind, and it has helped me accomplish some worthwhile life goals in the past. But as I worked through my twenties, I found I was renting that mind out to an ever-greater degree for pay as a software engineer. The more information and algorithms I burned through at work, the less fire I had left to do much real thinking about anything else after hours.

It wasn’t always like that. When I started that career, my phone was a dumb brick with an LCD screen, and only rarely did the odd email trickle in to my computer’s small, low-tech Microsoft Outlook window. Social networks were not yet invented, books were made of paper, and I was in heaven whenever I could spend a long day deeply wired into the compiler, debugger, logic analyzer, and on a good day even the soldering iron. The concentration I could summon back then seems to be in another league, considering how long it has taken me today to get even to the fifth paragraph of this completely non-technical article.

But a funny thing happened over the years. Wi-Fi was invented so suddenly my laptop was always offering up servings from the Information Buffet. I advanced a rung or two on the corporate ladder, so I became ensnared in more emails, documents, and meetings. The Internet started producing ever more distracting options for slacking. And I started a construction company on the side, which opened up a whole firehose of new information to guzzle. Gradually, I became less and less effective at my job, and I started delegating the fun but difficult technical stuff to people who could dig in and get it done properly. I started to feel pretty useless.

Luckily for me I had also been working on the early retirement project in the background, and at this point in the story it came to fruition. I quit the entire corporate world in 2005, never to look back.


Suddenly, everything was great again. I felt like I got my brain back. I would wake up each morning and break into a broad grin as I realized that all those projects, meetings, and emails I had been dreaming about no longer existed in my world. They were gone, replaced only by that blue Colorado sky outside my window, and the short walk to the kitchen where there was food and equipment in place for the preparation of a fine breakfast. I started learning again – reading books, doing new things, and meeting new people. Although we had a new baby at the time, plus I stumbled into some foolish business hardships during those first few years of retirement, there was no question that they were a time of great education, easy focus, and some pretty good accomplishments.

But secretly, complexity was brewing in the background and planning its next attack. In 2007, Apple dropped the iPhone bomb on the world, and within just a few years there were two of them in our household. Two otherwise capable adults found themselves unnecessarily swiping and pecking around on the little screens for hours. The baby became a boy, full of information, curiosity, and urgent requests for attention that did not care what you happened to be working on at the moment. And worst of all, Mr. Money Mustache was born.

This blog started as just a quiet writing outlet, where I would collect a few of my own thoughts, and send them out to a very tiny collection of strangers throughout the Internet. But gradually, the blog grew and the tide turned. More information started coming back in my direction. Comments, emails, tweets texts, and Facebook messages started as a trickle, but grew and grew into an overflowing torrent. Not a torrent of crap like you get by watching the news, but one of fascinating, useful information from genuine and brilliant people. So much information and so many opportunities to have fun and do good things for the world.

This is a wonderful problem to have. I’m ridiculously lucky. But it turns out it is still a problem, since human attention only scales up to a certain degree. At a certain point, you end up hearing from amazing people and thinking about amazing things all day and still not keeping up with it all. I started ruthlessly skimming and archiving emails, turning down anything involving more commitment than walking down to the Indian Buffet for lunch, and still not keeping up. Dropping the ball on even the most golden of opportunities, and probably mildly pissing off a friend or two due to email inattentiveness. Although my mind was busier than ever, my productivity was dropping in most areas of life. You can see the results in the slowing writing schedule on the list of all posts.

Getting Your Brain Back

Luckily, this problem has a solution: I call it Getting Your Brain Back, but it is a time-honored problem that has been solved by many people in the past. Originally limited only to company CEOs and world leaders, the excess of information has trickled down to the rest of us. To survive in this flood, we need to learn how to swim, in much the same way as busy and important people have always done.

The problem is that I’m taking in too much peripheral information and scattering my attention around. Instead, I should be feeding my mind in rich, controlled meals and giving it plenty of calm resting time between them.

Paradoxically, if you take in less random information, you will find that you can devour more useful stuff, and produce much more as a result.

New Year’s Resolution

byebye_twitterIn the olden days, I would have just made some top-level plans: “In 2015, I will spend less time and get more done. I’ll finish the house, publish my first book, write a blog post every week, and move up another level of physical fitness.”

But we’ve learned from the study of human habits that if you want macro-level changes in your life, you need to attack them with micro-level changes in your daily routine. Through the 365 chances we get every year, tiny things add up to surprising results more quickly than your intuition would suggest.

So this year, I resolve to change only a few things to change the balance and focus of information:

  • I removed the phone charger from my bedside table and put it in my office instead. No more mindless surfing before bed or immediately upon waking.
  • I uninstalled the Twitter app completely from my phone. This will seem insignificant to normal people, but any blogger will recognize it is a massive change. A nonstop stream of information candy and ego dopamine, gone from the day. I can still use Twitter from the real computer.
  • I cleaned up the longstanding pile of move-in debris from my office and replaced it with a tidy arrangement of heavy barbells and dumbells. Now instead of being faced with a mess when I come in here to write, I get the invitation to do a few quick lifts, then sit down and get some shit done.
  • I am giving up pointless casual drinking (disguised as the well-deserved beer or red wine at the end of a good workday), although keeping social drinking because it’s less frequent.

These changes alone have been very powerful (I actually cheated and started in mid-December), but to make them even better, I am using the concept of the keystone habit to replace the sad craving left behind by each bad habit with something good and equally rewarding.

  • When I wake up (usually before sunrise), I still immediately feel the urge to check my phone. This urge reminds me to go to the couch in my quiet office, flip on a little lamp, and read more of whatever book I am currently working on. I write down notes as I read each book and it tends to lead to a better and more motivated day.
  • When I find myself swiping through the screens full of apps on my phone and find Twitter is missing, I am reminded to put the phone back down and pull the little oldschool notebook out of my pocket – this is where I keep current ideas and my to-do list.
  • When the sun goes down and I suddenly feel the usual craving for an adult beverage, it reminds me to do something useful and physical instead. I pour a glass of cold water and step out to the back patio where I keep the squat rack permanently loaded to remove all barriers to this ultimate of exercises.

With these tricks, I have cut out most of the brain’s junk food and replaced it with things that are actually good for mental function. I still need plenty of computer time to keep up my cherished hobby of being Mr. Money Mustache, but now it comes in shorter, focused sessions at this bigass desktop computer in a quiet room with no distractions.

If all goes well it will mean getting more done with less unsatisfying gear-grinding. Better days and calmer nights. All in all, a worthwhile resolution in my books.

What are you changing this year? Are you going after big objectives or tiny habits?


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It’s Winter… Get Out and Enjoy it! Tue, 23 Dec 2014 09:01:31 +0000 moons

MunetI’ve decided to grant myself the rest of the year off*. But don’t worry, I’m extending the same privilege to YOU as well.

As those of us in the North endure the coldest and darkest days of the year, everything seems to shut down. Some of this is a good thing – the holiday season brings with it plenty of time away from work and school. But some of it is rubbish as well – I am seeing drastically fewer bikers and walkers out there, and parents are even driving their kids to school to protect them from my area’s not-very-punishing winter.

Last month, a friend of mine reported his total biking miles to commemorate “the end of the biking season”, as if there were some imaginary and tragic season when we had to stop using our bikes. And at the risk of causing a domestic dispute, my own wife has started using the climate controlled motorized throne for her weekly grocery run, despite the fact that we live only 1.5 miles from the grocery store. Even YOU might find yourself spending more time indoors in the winter, taking shelter from the discomfort that lurks outside.

Beware of this tendency, for it is a perfect example of Bullshit Lifestyle Creep. You experience discomfort or inconvenience, and your efficient but misguided survival mechanisms kick in, gently nudging you to avoid the discomfort. You stay cozy inside, knitting on the couch or watching a quality series on Netflix, and the winter passes safely by outside your window. And you miss all the benefits she has to offer.

So in case you forgot, let me remind you: going outside is FANTASTIC. Especially in cold or rainy weather.

Sure, you already knew that a stroll outside on a beautiful day is a good thing. Everyone does that, and many of us fly great distances just to be able to have the experience during a Northern winter. But it turns out it is not the warm sunshine that is making that experience so worthwhile – that’s just the comfortable and convenient layer on top. The real benefit is just the fact that you are outside, walking, moving, and working on things as you are meant to be doing. And as it turns out, all of these things are possible in any weather, and they are even more rewarding in adverse conditions.

When you go out in cold and darkness, it is an adventure. You have to prepare in advance. It actually takes some brainpower to strategically design your outfit, because you could die if you spent too long out there without clothes. Do you need a hat? Gloves? Thermal underwear or a wind layer? A mobile phone and flashlight, just in case? Awesome.

You step outside and suddenly your world expands dramatically. There’s the black sky far above.


Says the moon as it looks straight down at you. Do you realize that thing is 250,000 miles away? And yet it hovers perfectly in the sky, because it’s really whipping around your planet, held by a quarter million mile gravitational bungie cord. That is infinitely more amazing than whatever you were doing before you stepped out for this walk.

But wait, look at all those stars scattered everywhere else. Some of them are really planets in our own solar system – Venus is a big one at 100 million miles away, but the stars of the Big Dipper are 100 light years away, which is more like 590 trillion miles.  And yet there they are, presented for your amusement as you stand there to take it all in.

If you’re lucky, it is damned cold out here. The air bites just a bit at your well-protected cheeks and your mouth can shoot out a good 3-foot plume of steam when you exhale. You start to walk.

Nobody else is out tonight. As you travel down the silent street, you can see the ridiculous lights flashing in the window of every home and apartment. These suckers are all wasting away their precious time watching TV, while you are out here being alive. In our future Badass Utopia, this experience will be different. Everyone will be outside, reverently taking in the beauty of the night and the freshness of the air. Every night will be like a Midnight Mass, with the Cosmos as the host. But for now, you’ve got the place to yourself. You are the pioneer of the evening walk.

This meditative feeling you have is like hitting the mental reset button. All of your stresses, worries and bad moods become less with each step you take. If you do this often enough, they will be gone altogether. But it’s not just the machinery atop your neck that is getting a tuneup, the rest of your body is jumping for joy as well.

Every one of your physical systems is coming alive. Clean blood is circulating through, healing the pipes from the damages of sitting down too long. Fat cells are being drained and deflated, while muscles are pumping up. And the exposure to cold air is having mysterious positive effects on your metabolism and everything else, best summed up as General Badassity.

You might even break into a little jog at this point. The jog feels so good that you keep it up for a while. And just to prove you’re really alive you decide to SPRINT for this next little bit of your journey, just until you reach those two trees way up there. Everything is whipping by now – the air is roaring in your ears and your eyes are watering from the cold wind. You can think of those as tears of joy from your cardiovascular system. You run out of sprint power and return to walking, with heart pumping and steam drifting from all exposed skin, and turn back toward home.

As you return to your warm, bright home you are the hero. Alive, glowing, creative and invincible. You are a mysterious force to anybody who chose the wimpier path of staying inside or taking the car. You are someone who has finally figured out how life is meant to be lived.

Now grab a pen and paper and list a few additional ways you’re going to make your life better from now on.


*The Mustache family is headed to Canada for the holiday season until January 6th – Hamilton first, then Ottawa. That’s where you’ll find some real winter night walking weather. Maybe we will even get to band together for an evening walk. Stuff like this shows up on the Twitter feed if you want to click the follow button there. The stream is also presented at the bottom of the blog’s front page.

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Case Study: Average Everyday Complainypants Seeks Redemption Wed, 10 Dec 2014 16:06:54 +0000 Average consumer's daily commute vehicles
Average consumer's daily commute vehicles

Average consumer’s daily commute vehicles

Today’s case study is a classic, because it addresses a problem suffered by tens of millions of families: the chronic time shortage caused by a double income, double commute, kid-raising lifestyle. While some practitioners of this game do it by choice, many other would rather have more free time … if only they could afford it.



Dear Mr. Money Mustache,

I am new to your blog but have been seriously enjoying this new found financial porn on a daily basis. I think I have the basic principles down. Bike good; car bad. Mindful spending good; mindless consumer orgy bad. Early retirement good; endless wage-slavery bad.

Instead of sitting in my beige 8×12 government cubicle daydreaming about how cute I would look with a new red Guess bag and tall leather boots from the mall across the street…I am now in my beige cubicle fantasizing about a simpler life with a smaller home, more time at home with my tiny humans and more time to read.

At the risk of being labelled a complainypants, I genuinely do not understand how to move from this wageslavery to being a Mustachian. It seems to me to be bit of a chicken and egg conundrum. How do I live on 50% or less of my income while still being stuck in said cubicle with all the expenses that it incurs?

The Basic Stats:

  • I am a fellow Canadian and as such am exceedingly polite
  • I live in one of the coldest winter cities in the world (temperatures in January and February routinely dip to -40 degrees)
  • Aside from the extreme temperatures in which I live, I am otherwise average in virtually every way.
  • Average height, average weight, average number of kids (2)
  • Average home (1200 sq feet), average mortgage (260K, worth about 420K in today’s market)
  • Average income (75K/year, 165K/year household…although according to you…I have already made it big)
  • Average cars (2 –one 2006 Honda Odyssey mini van and one…wait for it…2011 Ford F-150 Eco-boost Extended cab truck)you saw that coming from a mile away didn’t
  • you?…but amazingly both are paid off)
  • Average commute time (20 minutes direct, 45 minutes if you include the kids daycare/school drop time. My husband works 15 km in the opposite direction so we can’t even car pool.)
  • And last but not least, average amount of consumer debt ($12000 on a line of credit).
  • We have an average amount of savings (120 000 in RRSPs and $12 000 in a few different savings places)
  • And best of all I am in 15 years into a 30 years sentence with Her Majesty the Queen to be given my golden hand shake at the age of 55 (ie 70% of my income for the rest of my life…or if I cashed it in today 280K)…which as you might guess, I am starting to think isn’t worth the next 18 years of my life.


A basic sampling of our current overall monthly budget is below:


Take-Home Pay$7500
Retirement accounts, emergency fund, etc$500
Debt Paydowns$500
Property Tax$325
Home Improvement /maintenance$300
Groceries and Personal care$1200
Insurance (home, life, van, truck)$475
Kids' sports (hockey/swimming)$100 (we're Canadian - hockey is a fixed expense)
Miscellaneous (birthday parties, lunches out, hair cuts,
gifts, golf, hobbies, entertaining)
Total Spending$6500

My days and nights consist of rushing around like a chicken with its head cut off.  How do I get from here to retirement and more time enjoying life with tiny humans?

Interestingly my husband is a structural engineer, who does carpentry and custom wood working on the side, which is his passion that he would like to make his career, he is not interested in ‘retirement’ he would just like a career change.

Whiny in Winnipeg

Mr. Money Mustache Responds:

Dear WW,

While your situation sounds horrific to me, it is of course the standard situation for most two-jobs-plus-kids families. Let’s begin with the end in mind: getting you some freedom ASAP.

Right now, you earn $75,000 before tax or 45% of your family’s gross pay. Since you listed take-home pay at $7500, let’s assume you are bringing in $3400 of it.

Out of that, the following monthly costs might be byproducts of your job:

  • Gas and direct/indirect car costs for almost 2000km/month of driving around in a van: $1,000
  • Parking: $95
  • Daycare: $1200
  • Convenience foods and services that show up in your grocery and miscellaneous bills: $200

    Total: $2495

This leaves only about $1000 per month of “profit” from your job. So, including commuting and shuttling kids around to child care, are spending about 250 hours a month to earn $1,000 – or four bucks an hour. If you can think of better things to do than working for well under half of Manitoba’s minimum wage, you should quit immediately. Since this is what you wanted anyway, congratulations!!!

But it gets even better than that. Since it sounds like properties increase in price as you move towards your job downtown, they might well decrease as you move towards your husband’s job. If so, you could find a new place close to his work, and eliminate his commute as well – potentially saving the $600 per month he is currently burning up commuting in the opposite direction.

The savings from owning a less expensive house might free up an additional $200 per month in interest, since the equity from your current house would easily wipe your debts and you’d also have a lower mortgage payment.

So far we have only addressed basic strategy – the simple choice of where to live and work. There’s even more wealth on tap as soon as you activate a bit of Mustachian frugality.

For starters, since this is the MMM blog we’ll need to fix your insane choice of vehicles.



You have two kids, and yet you drive around in a BRAND NEW GAS GUZZLING LUXURY RACING BUS. The 2006 Honda Odyssey is not a vehicle for an indebted mother to use to drop the kids off and then head downtown. It is something a hopelessly spendy multimillionaire might use to shuttle around six pampered passengers on a cross-country roadtrip while hauling a giant trailer full of supplies. For two kids, you use a Toyota Yaris or similar. That will cut your gas bill down by 50%.

Your husband appears to be driving alone and not even a multimillionaire himself, and yet he has a TWIN-TURBO SIX PASSENGER RACING FARM TRUCK!!! Holy shit, brother, how many heads of cattle and pigs are you hauling on that roundtrip, while simultaneously carrying international heads of state in the stately cabin? That is a fucking ridiculous vehicle for ANYONE to drive except the rarest breed of Farmer/Diplomat, and I’m betting none of them also hold jobs as Structural Engineers.

So you’ll be selling that, and walking to work. For those rare times you drive, you can ask to borrow the wife’s manual transmission Yaris hatchback. You are also permitted to buy a used mountain bike, and if you’re REALLY getting serious with the carpentry, a 2001 Ford Ranger pickup, 2 wheel drive 4 cylinder manual longbed. You may weld a 12-foot lumber rack to it in order to outperform your current clown truck.

The savings on depreciation, fuel, and insurance will compound an additional $86,000 per decade into your family’s wealth.

Once you have these big wins in place, you’ll have much more time and energy to go after the medium-sized ones: your grocery bill can easily be cut in half, according to most Canadian Mustachian 4-person families. Restaurants and other takeout frivolities may drop as well, depending on your priorities.  Another $1000 per month is possible in this area, which will go directly to your financial independence fund.

When you add in Mrs. WW’s outstanding windfall of a $280,000 early pension payout, all my calculations indicate that you will be further ahead than you are today, even after ditching the government job. In fact, after a year of making these changes, Mr. WW may even start getting the itch to scale down his own job and do exactly as he sees fit as well. And that would be nothing to whine about at all.

Best of luck!

Do YOU see any parallels to your own life? It is almost always possible to avoid the two-commute family with kids if you make it a priority.


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All Wheel Drive Does Not Make You Safer Mon, 01 Dec 2014 15:15:33 +0000 1950s_cat

1950s_catEvery year right around this time, millions of consumers are tricked into a massive financial and lifestyle mistake as the natural incompatibility of snowy roads and safe driving take them by surprise.

“I know Mr. Money Mustache insists that I drive only efficient cars, but that’s because he lives in the dreamy semi-desert of Colorado where it never snows. Where I live, the roads are ice-packed for the entire winter, and you’re doomed if you don’t have All Wheel Drive. Therefore, I will buy a enormous four-wheel drive truck for the safety of my family. Or at least a Subaru.”

This is just plain wrong, and as a recovering gearhead, I need to make a public statement on it.

Just like any other great marketing-fueled deception, automakers have captured both our irrational fear of loss and desire for status, and channeled them into a product line that just happens to be more profitable for them. And it’s shocking how well it has worked, as even some of my most esteemed readers have been writing in to ask for advice on “which AWD vehicles are Mustachian?”

The answer is “Whichever one the Forestry service or the Military issues to you when you show up for duty in an area without roads*”. Because for the rest of us, it’s Hip and Knee Drive for your shoes, Chain Powered Rear Drive for the bike, and Front Wheel Drive for those rare occasions you need to use a car.

The reason I can state so confidently that the AWD hype is pure marketing bullshit is simple physics. Although this was one of my favorite subjects in engineering school, you don’t need a degree to understand it fully and cure your desire for AWD.

Car safety depends at the core on two things: not crashing into anything, and not letting anything crash into you. To accomplish those goals, the ability to steer your car in the direction of your choice is the top factor, with braking coming as a close second. A certain amount of acceleration is important as well, but not nearly as critical as the first two: note the extremely low collision rate of transport trucks and city buses per mile traveled.

Every car, truck, and SUV has four wheels. And every one of them has front-wheel-steering and all-wheel braking. So we’re all on a level playing field so far. The place where the safety in accident-avoidance starts to diverge is:

  •  How firmly the car sticks to the road (more grip means more safety)
  • How effectively the car lets you change direction or speed (cars with a lower center of gravity and stiffer suspension are safer)
  • How the power and braking affect vehicle dynamics (applying power to the rear wheels while cornering tends to break the grip and cause you to fishtail and spin out – this is why rear-drive-only vehicles like sports cars and pickups are terrible in snow, but front-drive works well)
  • Fancy computerized add-ons that compensate for human limits (ABS and Vehicle Traction/Stability Control) can increase safety by modulating power and brakes.

That’s it for the physics. You’ll note that there is not much in there that would allow cranking all four wheels, instead of just the front wheels, to make you any safer And in some cases it will send you into the ditch faster than front-wheel drive.

Note the implication of this: If anyone gets an AWD vehicle “for safety” but uses it with all-season tires, they have performed a Consumer Sucka Fail. A front wheel drive vehicle with snow tires would have more grip.

So When IS AWD useful?

All wheel drive is a performance feature, not a safety feature. With all other things being equal, AWD lets you accelerate more quickly on slippery roads. This is usually a bad thing, because it masks the true slipperiness of the road from you, leading to overconfidence which will put you into the ditch, courtroom, or emergency room. But it is useful if you need to plow through unusually deep snow in conditions that would normally get you stuck (for example a steep snowy driveway, or if you run a snow plow). It’s also useful on extremely steep unpaved roads or in areas with no roads at all – places you are unlikely to need a car.

But Why Does Mr. Money Mustache Hate AWD so Much?

I have nothing against all wheel drive. It’s a cool bit of mechanical engineering that gives a vehicle superpowers. Whenever my son and I make a LEGO Mindstorms or VEX IQ robot, you can bet we’re going to give that sumbitch AWD or even a set of tank treads, because hey, why not?

The thing that pisses me off is that people have started using AWD for no reason on paved roads. Here we are, a society who has spent trillions of dollars building a road network so wide and glassy smooth that you can get almost anywhere in the country in all seasons even if you are driving a 73-foot tractor trailer rig, and we are still wasting money driving off-road vehicles on it.

Make no mistake: In a gas-powered vehicle, AWD requires huge sacrifice in weight and complexity. Hundreds of pounds of steel shafts, gears, lubricating oils and reinforcements are required to get the power from the engine to that extra set of drive wheels. And not only must you pay to carry that dead weight around for the life of the car, you burn even more gas fighting the extra friction of the additional gears every second the car is moving. And then you have to pay to maintain and repair all those extra moving parts. It’s like carrying all your camping gear on your back every time you leave your house. It is also akin to a man attaching a set of 13-pound Decorative Testicles below his real ones, just for show. You would do it if absolutely required for a social event, but not when you actually had to get some work done.

My Subaru Story

Back in the day, even Mr. Money Mustache slipped into the Subaru trap at one point. It was a 2004 Impreza wagon. I bought it for the impressive cargo space, but sold it just a few years later for the abysmal gas mileage. Even with a 4-cylinder engine and a manual transmission and my best attempts at hypermiling, that little machine could suck down gas at 27 MPG on the highway, meaning it consumed as much fuel as my 15-year-old city bus of a construction van does. By comparison, the 2005 Scion xA I replaced it with holds the same number of people, but has averaged about 42 MPG in its life with me. But at least those Subaru years gave me plenty of time to evaluate the effectiveness of all-wheel drive**.

What I found was just what physics would suggest: it’s all in the tires. The car came with reasonable all-season tires, which gave it fast acceleration and average stopping power in blizzards. On the other hand, I would end up Dukes of Hazzarding through slippery intersections because the rear wheels would break their traction more easily than a front-drive car. On the positive side, the car could do outrageous drifting power doughnuts in an empty ski resort parking lot – a longstanding Subaru owner tradition.

Later I upgraded to a set of Pirelli 215/45ZR17 performance tires on fancy wheels (hey, I was just a clueless lad back then), which greatly improved its handling on my area’s usually-dry roads, but turned it into an all-wheel-drive toboggan in the snow.

I vividly remember a moment in my town’s level, well-plowed Lowe’s parking lot, pulling out with a small load of lumber. It was a sunny but crisp day in January, so the snow was melting only slowly. I found myself stuck right in the pedestrian crossing in front of the store, with all four of those big alloy  wheels whirring cheerfully but uselessly as they polished the packed snow and I went nowhere. It took a couple of friendly but sarcastic contractors to push me out by hand. They mocked my vehicle for not being a truck, but the real joke was the tires.

 But why is my Aunt’s Subaru so much better in snow (even braking) than my Prius?

Last year my van pulled a heavy load up a grassy hill covered with 8" of snow.  Front wheel drive is more than enough.

Last year my van pulled a heavy load up a grassy hill covered with 8″ of snow. Front wheel drive is more than enough.

The tires are the biggest thing, but a few other factors than can also affect traction:

A wheel and tire combo with a longer contact patch can grip the snowy road better. Larger diameter, narrower width, taller sidewall profile, softer rubber compound, and lower air pressure all contribute to this. The Subaru comes with larger, softer tires than the Prius.

A heavier vehicle can crush the snow enough to get slightly more grip in certain conditions, but this is tricky since extra weight also means more trouble changing directions. Extra weight also makes you more lethal to everyone else on the road, which would make it a pretty selfish way to try to defend yourself. If you choose to play this game, just be honest and add machine guns instead.

Higher ground clearance allows you to skim over deeper snow without scraping the car’s belly. But this is a smaller deal than you’d think. For example, the Nissan Pathfinder SUV has 6.5 inches of ground clearance, while the Toyota Prius is only an inch lower at 5.5. A road with even 5 inches of snow is insane to drive in any vehicle above about 25 MPH, so you might as well get out your mountain bike or cross country skis.

The Ultimate Solution

The first choice, of course, is to design your life so you don’t need to drive in the snow very often, or very far. I accomplished this partly by moving away from the extremely snowy area of Canada where I grew up. But you get equal effect by doing your house and job shopping with car commute avoidance in mind. A person with your level of skill is definitely entitled to work from home on snow days – your boss will agree.

Oddly enough, once I laid the ground rule of no snow commuting, the freedom from cleaning off cars and driving them in snow has been one the longest lasting bits of happiness I have ever experienced: 15 years of smiles and still going strong. Nowadays, although I argue strongly for snow tires, I don’t own any – because I just don’t bother driving on those rare days it snows in my own area.

Second best: Snow Tires on Dedicated Rims

Blizzak WS-80 - slightly pricey, but your Honda Fit will outperform Jeep Grand Cherokees with them. Highly recommended for extremely snowy areas.

Blizzak WS-80 – slightly pricey, but your Honda Fit will outperform Jeep Grand Cherokees once you outfit it with these. Highly recommended for extremely snowy areas.

This part is really easy.  We now know that SUVs and AWD are not useful for those driving on paved roads. We know that summer tires and even all season tires are death traps compared to snow tires. I’m serious about this: there is a night and day difference in snow grip between all season tires (sometimes referred to by driving professionals as “no-season tires”) and good snow tires, because of the different rubber compounds and tread patterns.

But you don’t want to take your car to a mechanic twice every year and pay to have summer and winter tires swapped. This costs time and money, and damages the tires and rims. Instead, you simply get a second set of rims with snow tires permanently installed.

In the US, you just go to, look at their winter catalog, and pick out a set of wheels and tires that are guaranteed to fit your car. They come via UPS, and you jack up your car and swap them on one at a time, just as easy as putting on the spare. Any dedicated tire shop or Costco is also a good choice (Tire Rack will still help you get an idea what a good price on tires and wheels looks like). And as usual, the auto dealer is to be avoided – they’ll just try to sell you two thousand dollar tires and rim sets, or worse,a brand new model with AWD.

Happy Holidays, and may this set of snow tires be the last you ever need.


* If you read all this and insist on disobeying Mr. Money Mustache to your own detriment, the least ridiculous new AWD cars on the market right now are the Subaru Impreza wagon (they have improved it to 33MPG highway) and in the Large SUV category, the Subaru Forester (up to 32 hwy). Another good choice for large off-road camping families with an extreme money surplus is a 2010-ish Honda CR-V. SUVs larger than this have no rational reason to exist at all – just get a van.

** Thanks to my upbringing in Canada and various subsequent snowboarding trips around North America, I’ve also snow tested a few other all-wheelers: the Subaru Legacy/Outback, WRX wagon and Forester, Jeep Wrangler and Grand Cherokee, Toyota Tacoma and 4Runner, Audi S4 wagon, Nissan Pathfinder, Ford F-250 pickup, Chevrolet Trailblazer and Traverse, Honda CR-V and Element, and even an Eagle Talon turbo AWD. Diagnosis: It’s all in the tires.

Further reading on cars: Top 10 Cars for Smart People

Car and Driver: Snow Tires Still Beat Four Wheel Drive

Jalopnik: let’s settle the Winter Tires vs AWD debate forever, and Snow Tires: to buy or not to buy

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