Mr. Money Mustache » The MMM Blog Early Retirement through Badassity Thu, 30 Oct 2014 01:39:55 +0000 en-US hourly 1 MMM Challenge: Can You go Car-Free This Weekend? Wed, 29 Oct 2014 01:32:30 +0000 local haul

local haulThere’s a subtle yet powerful difference between the Standard Consumer, who manages to spend all of his income regardless of how much is coming in, and the Mustachian for whom saving is an effortless activity. For the first type of person, saving money means deprivation, struggle, and painful budgets. For the second, saving consists of living a rewarding life, then casually sweeping the few thousand dollars of leftover cash into investments at the end of each month.

The difference seems to lie in the design of the underlying lifestyle. If you get this part right, success comes almost automatically.

At a party recently, I met yet another Prototypical Modern Successful Family, a rather common occurrence in my area. The guy was a doctor. The woman was a professor. They had appropriately hip Colorado-style clothing, muscular calves, cool rectangular glasses, and rode bikes to the party along with their two cute young children. Everything looked stellar on the surface until my new friend and I got to talking after a few drinks.

“It’s a bit of a mess these days”, he said, “These kids are so precious, but they’re growing up fast and I hardly ever see them. I took a job at a practice in the city because it pays better, but it means I get up at 5AM. The kids do competitive swimming and ski racing on the weekends, so we’re never home to recharge.”

This seemed like a pretty simple set of White People Problems to me, so I decided to throw in a bit of advice disguised as self-effacement: “Oh yeah”, I said, “We solve that problem in my family by making our lives much less exciting than yours. We just hang around Longmont most of the time, and because of that we have a lot more recharge time and were able to cut back on the two-career thing f0r a while.”

“Man”, he said, “That would be nice. I’ve been in medicine for 16 years now, and to be honest I’ve had enough of it. But we could never live on just her income. Professors just don’t make that much, even tenured ones at a good university.”

And therein lies the trap that ensnares so many otherwise-fortunate people. It is called the Poisonous Pitfall of Piss-Poor Lifestyle Planning.

Fortunately there is an antidote, which is quite literally Simplicity itself. If the situation above sounds even remotely familiar to you, I am excited to deliver this bit of good news, because it is very easy to solve. You can very quickly give yourself the gift of a much better life, just by chopping out a good chunk of the unnecessary activities that currently distract you from living.

We could go on and on about the detailed benefits including greater happiness, lower stress, better health, better relationships with your significant other, family, and children. More money, lower needs, deeper wisdom and even a longer life*.

But instead, I thought it would be helpful to just start with one giant baby step. An instantaneous taste of the good life, at no cost to you and with the chance of starting a massive life transformation. Are you ready? Your assignment is as follows:

Give the damned car a break for the entirety of this coming weekend. Instead, try living two days of non-motorized life.

That’s right. This weekend, there will be no errands, shopping trips, drives to the mountains or the beach, horseback riding lessons or Harley cruises. Just you and your actual body, doing things that it is actually meant to do.

You’ll want to prepare in advance. If you live far from a grocery store, make sure the house is stocked with food. Get your library books ready, make sure the television is unplugged, tune your guitar if applicable, dust off the bicycle, walking shoes, recipe books and board games, invite some local friends over if desired, and let’s make a weekend of this.

What you’ll be doing, although it may sound somewhat novel to my new doctor friend, is living approximately like the Mustache family has always done. Although I’m not a hermit or a homebody, I often feel just a bit of anxious terror when I hear about how much activity most of my fellow wealthy Americans pack into their weekends. And I’m simultaneously filled with Pure Joy every time I wake up on a Saturday morning, walk with bare feet through my back yard and into the park beyond to watch the sun rise, and only then decide what I  might want to do that day. If he’s awake that early, my little son often comes along for the event.

On weekends, we simply chill together. It is my idea of living, and it is the foundation of our relationship together as a family. We sit on couches and read and write books and comics. The boy and I ride down to the creek and carve channels and dams in the rocks and sand. Then we’ll climb some trees, max out the swingsets at the park, and maybe do some urban planning in the sandbox. We get home tired and nicely sunned out, and he’ll disappear to his room and make songs with Ableton while the lady and I will make some dinner. At this time of year it tends to cool down and get dark outside pretty quickly, so we’ll start a fire in the woodburning stove I built into the new house. Some wine may be poured. All of that, and it’s still only Saturday night.

A key to successful chilling is the complete removal of television as one of the options. As much as you like your favorite shows or sports events, the experience deprives you of what you would have done if the TV hadn’t been there. It is in the void left behind when TV disappears that real life can start to occur.

Living a Local Life

The headline of this article sounds like just another meaningless personal finance tip. Sure, you can save fifty dollars if you cut out the 100 miles of driving that gets packed into the typical weekend. Maybe a couple hundred more on the restaurants and shopping trips you forego. All told, changes like these would increase your wealth by about $200,000 per decade.

But the transformation of attitude and lifestyle that you can learn from it is much greater. What I’m really hoping we can all learn about is living a local lifeYou can become friends with the people who live right around you. There are trees and hills and features of your environment that you miss completely if you never slow down to actually live where you live.

Once you give it a try, you will find it quickly becomes very natural to live this way, because it is really how we were meant to spend our days. If an event pops up in another city, my own family usually considers it briefly, then politely declines. Because we realize we don’t live in that city, we live in this one.

The world gets more exciting every day. There are more activities, opportunities, and bits of entertainment packed into the atmosphere than ever before. The modern culture dictates that we take every chance to pack our days with exciting things, limited only by our need to sleep. If you don’t do this, you are “missing out.” But I propose that the opposite is true: the Good Life is found in between those times when you are engaged in travel, being “entertained” and participating in too many organized activities.

So by living a life driving around afraid of missing out, you are in fact missing out on your entire life. Let’s fix that this weekend.



* In a sad coincidence, on October 27th, the day this anti-car-culture article was originally scheduled to publish, Mrs. MM’s childhood best friend died in a car crash back in Canada. Rest in peace Janet.

Further Reading: In this Article, researchers found that kids who are allowed to spend more of their time in unstructured play develop greater independence and judgement. Could this be related to why some adults are hopelessly sucked in by the consumer/debt/industrial complex and others are able to step out and make their own choices? 

I like to imagine this all as an evolutionary response – you can adapt to a regimented life or society if that’s what you are born into, but given a more freeform existence, you are better off becoming more experimental or creative. I feel that the second option is now much more productive: both for early retirees, and for dealing with a rapidly changing world. But this is pure La-Z-Boy scientist chatter – real scientists are welcome to make fun of me for throwing out such a speculation without any testing :-)


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Aquaponics – the Automated Ubergarden of the Future Mon, 20 Oct 2014 12:00:47 +0000 tamaterAn Introduction from MMM:

I was late to the party in learning about aquaponics, but it made a big impression on me when I toured a massively creative food facility two years ago.  

The slightly wild entrepreneurial founder had converted some cheap, remote industrial buildings in Loveland, Colorado into a spectacularly productive indoor farm. Expensive herbs, heirloom tomatoes and fluffy fish were popping out at high speed, with (mostly solar) energy and sparse human labor as the only inputs. With over 40% of the Earth’s land area already converted to farms, I was excited by the idea that someday we may be able to get much more food out of much less land with a lower input of oil and chemicals.

This kicked off a bit of an aquaponics reading binge on my part. And quite coincidentally, a reader named Jeremiah wrote to me towards the end of it to tell me about his own inventions in the field. I was impressed, because he has combined the art and science of Aquaponics with a Mustachian ethos of time and money efficiency. According to Jeremiah, you don’t need to be an advanced entrepreneur or scientist to build up a fancy food factory of your own.

So we collaborated over the past four months to create something worthy of sharing with you. And by “collaboration”, I mean I made the unrealistic demand of a “Zero to Hero” lesson in Aquaponics that would culminate in something readers could actually build, and Mr. Robinson diligently cranked it out with a summer of design and documentation. I am thankful for his generous work on your behalf, and I hope this great article he wrote becomes a primary source on the Internet for learning about the craft. It’s a great read.

High-Tech Gardening and the Kick-Ass ROI
by Jeremiah Robinson

MoneyGroceriesA new gardening technique is about to save you a crap-ton of money on your food bills.

Can you guess what it is?

I’ll give you a hint.

It was invented separately in ancient times by some badass farmers in both China and the Amazon.

In China, it allowed subsistence farmers to survive on plots of mountainside land that no traditional farmer could ever survive on.

It helped the indigenous residents of ancient Bolivia and others the power to develop a wealthy and sophistocated agricultural civilization atop worthless soil for 1000 years.

For the past 2 millenia, these farmers quietly developed the most efficient and sustainable method of growing food known to man.  And nobody noticed.


Nobody, that is, till 40 years ago the New Alchemists and others put 2 and 2 together.  Their modern methods, combined with the ancient techniques, got rid of most of the work associated with traditional growing (eg. weeding, watering, mulching, soil building, etc…), allowing for much higher production output at a much higher quality.

This ancient-turned-modern method of growing is called aquaponics.

It combines the raising of fish (aquaculture) with the growing of plants in nutrient-rich water (hydroponics).  The fish fertilize the plants, and the plants clean the water.

Hotter than Carhartt, aquaponics is beginning to revolutionize the world of home-grown healthy food.

DesertPonicsNow it’s much easier to grow your own safe, local, healthy food yourself in your own backyard, roof, balcony, or basement.

It doesn’t matter where you live.  It works in the desert.  It works in the tropics.  You can do it urban or rural.  I live in Wisconsin where the polar vortex gave us -25°F (-32°C), and it works here all winter long (actually improves the taste).

For the Zero-to-Hero system I’ll describe later, you just need an area that’s 5′ wide by 14′ long, exposure to either the sun or some fluorescent lights, and a weekend to build it.  To make a smaller system, you just use smaller parts.

The Math

SpinachThe ROI (return on investment) on this thing will kick Warren Buffet’s ass.

I haven’t run the Zero-to-Hero (Z-H) system long enough for good measured data on its output, so I’ll tell you about the larger system I use.  The Z-H system should give proportional results until you decide to upgrade.

My 8’x16′ aquaponics greenhouse (which is about 2x larger than the Z-H system) cost me $3,000 to build, soup-to-nuts.  In one year my system can grow the following fish and better-than-organic produce (local farmers’ market prices in parenthesis):

  • TroutPrices50 lbs of fresh trout fillets ($15/lb)
  • 100 lbs of fresh, cold-finished, food-purged tilapia fillets (Not sold anywhere.  If they were, $10/lb?)
  • Basil Prices75 lbs of pristine basil leaves for pesto ($20/lb)
  • 50 lbs of winter spinach ($5/lb)
  • 40 lbs of fresh unwashed lettuce ($4/lb)

Add all this up and I get a yearly gross output of $3,660, not to mention eating like Louis the XIV.

Here are my yearly costs:

  • Electricity ($0.20/kWh) – $200
  • Fish Feed ($40/bag) – $400
  • 7-8″ Tilapia ($3/fish) – $300
  • 7-8″ Trout ($2/fish) – $100
  • Water ($2.80/1,000 gal) – $15
  • Seeds (prices vary) – $15

Add these up and you’re looking at $1,030/yr.

As a good Mustachian who goes shopping with your middle finger, let’s say that somehow you find a way to pay half the farmers’ market price, or $1,830/yr. Subtracting out the $1,030, you still bank $790, for a simple ROI of 27% or a four-year simple payback, which is very good.

The Z-H system is ¼ the price for ½ the size, so your ROI would be even better.


System BuildBut, you object, the missing element in my budget is obvious: labor.  So true!  I haven’t included it for three very good reasons:

  1. Building it is fun: With good instructions and ideally with the help of good friends, building an aquaponic system is one of the most fun projects you’ll ever do.  It’s the sort of thing I hope to fill my time with after I quit the rat race.  As MMM says, hard work can be joy-filled and life-giving, especially in small doses.  This past weekend I built a Zero-to-Hero system with a group of 10 people in a few hours at a permaculture workshop.  I’ve rarely had such an enjoyable time!
  2. Checking on my fish is the best part of my day: I love checking on my greenhouse, feeding my fish, and harvesting food, especially when the neighbor kids come and help. You’d have to pay me not to do it.
  3. Nearly zero ongoing labor: This is especially true compared to soil gardening.  Unless you make some dumbass mistakes that you have to fix (which happens while you’re still learning how it works), the only time is daily feeding (5 minutes), weekly water testing (5 minutes), monthly planting (2 hours), twice/year runs to the fish hatchery (3 hours), and harvesting whenever you want to (5-20 minutes—you don’t have to clean your veggies, but you do have to clean your fish).

Another objection you might raise is that you want to visit your long-lost relatives in Azerbaijan, or attend the MMM gathering in Ecuador.  Don’t you have to be home every day to feed your fish, or at least every week to check your water?

Actually, you don’t.

Fish routinely go for 3 to 5 months without eating.  In my area, they do it every winter.  They survive these fluctuations just fine, if a little leaner by the end.  With no food in the system, the water chemistry remains stable as the plants slowly absorb all the excess fertilizer.  So go ahead.  Throw some basil or spinach seedlings in the system and come back in 3 months to full grown plants.  If you want, find a neighbor kid and teach them to how to throw some food in the tank and use the water test kit once per week.

I monitor my system online using an Arduino controller along with Xively.  Incorporate Zapier and you’ll get a text message when there’s a problem.

It’s high-tech, low-maintenance gardening.

The Zero-to-Hero Aquaponic System

SystemDiagramThe Zero-to-Hero system offers you a simple jumping-off point if you’re interested in this kind of growing.  You can buy all the products in an afternoon for about $730, build it in a weekend, and grow a significant portion of the fresh greens and herbs that a family or a frat house can eat.

It will allow you to grow year-round in USDA zone 7 or warmer.  To grow in winter in colder climates (like I do) you’ll need to make some additional improvements, such as a small hoop house to store it in. You can also shut down for the winter, and harvest your fish in October.

While you probably won’t see the kinds of outputs described above in year one, you will see them as you learn to operate your system better, which fish you can find locally, and what plants you eat the most of.

It’s difficult to exaggerate how convenient it is to have mostly maintenance-free and exceptionally fresh / tasty food right at your doorstep.

However, one point worth emphasizing is that while aquaponics is very easy and labor-free to manage once you’ve got it working, the process of making it work is a learning curve. It will take about a year and result in some dead fish, dead plants, and problems you’ve got to solve.  I’ve never met anyone for whom it didn’t, though I’ve also never met an aquapon for whom solving these problems was beyond their reach.

On these occasions, your best resources are the online forums, which are full of helpful people eager to answer your questions.  After that (or if you don’t have time) you can contact most any aquaponics instructor or product seller and they will help you for a reasonable fee.  There are also a number of books that can help you on your journey as well.

Growing this way is a lot of fun, and can be habit-forming—in a good way.

The Zero-to-Hero system plans are available for download free for MMM readers at the page linked to below.  To get them free, type in the coupon code mr_mmm at the checkout page.

Link to Zero-to-Hero system plans.

Aquaponic Farming

Some of you might be thinking the following thought:

If this works so great on the small scale, I’m going to cash out of my bank account, scale up, and start farming!

CommercialFarmIf this is you, I offer this caution: Aquaponic farming is still farming.  Nobody gets rich off it.  If you have the unique combination of skills to make it work it can be profitable.  But you still have to plant, harvest, market, transport, and sell your products, as well as manage employees.  This is hard, challenging, sometimes unrewarding work.  Many aquaponic farms go out of business after a few years.

Because the USDA is behind on their regulations regarding fish, organic certification is hard to get for aquaponic vegetables and nearly impossible for fish, even though any unhealthy fertilizer, pesticide, herbicide, or fungicide (even those used on organic farms) would immediately kill all your fish.  This means you have to convince your customers that your products carry a higher value than conventional produce and fish from China, in most cases without organic certification.  This is more difficult than you might think.

Many aquaponic farmers live off grants and free intern labor, while a few market brilliantly and make a profit selling to high-end restaurants and grocers.  If you’re interested in growing commercially, I recommend you do the following:

  • First, build the zero-to-hero system, operate that for a while, read all you can on aquaculture, horticulture, and greenhouse design, visit some farms, and start getting involved in forums.
  • Next, scale up your backyard greenhouse system, trying new designs and keeping up the research and experimentation.
  • Once that’s running smoothly for a couple of years, contact Nelson & PadePentair Aquatic EcosystemsFriendly Aquaponics, and Green Acre Aquaponics, and ask if there are any farms you could contact to inquire about an apprenticeship.
  • Also, make sure you find some farmers that have gone out of business and talk to them about what went wrong, asking them if they think your plans can work when theirs didn’t.

It can be done.  Maybe you’re the one to do it.

Aquaponic Investments

FairOaksThere are a number of existing farms out there that would be happy to accept investment funding to expand their operations.  It will take you a lot of due diligence to ensure that their farm is profitable and likely to remain so because – as I’ve said before – farming is tough!

One interesting investment opportunity I stumbled across this year is Fair Oaks Farms in Indiana, a combination farm and tourist destination with a fascinating ownership structure. They are getting a lot of people interested in farming, which is a good thing as most farmers these days are late-middle-age or older. Currently expanding into aquaculture, they are likely to include aquaponics in the next couple of years. Give them a call to talk about investment opportunities if you’d like to invest in this space.

Aquaponic Produce

ASCMagIf you’re not the farming type, aren’t looking for new investments, and can’t find a weekend (or the space) to build a Z-H system, you can still take advantage of aquaponic produce and fish.

Because you and I know that it’s better-than-organic while not actually certified, we can get the high-quality food for a cheaper price.

While there’s no directory of aquaponic farms, you can google “aquaponic farm” in your area and find out where they sell, or if they sell direct.

Give it a shot.  Once you go aquaponic you’ll never go back.

– Jeremiah Robinson
Frosty Fish Aquaponic Systems


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Credit Card Churning: for Mustachians or Sucka Consumers? Mon, 13 Oct 2014 15:57:43 +0000 fiddy_leaves

fiddy_leavesIt’s a beautiful October morning, and you are taking a stroll along the sidewalk in your neighborhood. Mixed in with the red and orange autumn leaves at your feet, you notice a hundred dollar bill. Do you stop to pick it up?

Most of us would say “Yeah!”, and that makes sense. Autumn mornings are fun and pleasant,  as are the factors of bending down, colorful leaves, and the rewarding feeling of increasing your wealth by a hundred dollars. Then you get the reward of telling the story to others, and maybe even a second reward of doing something unusually generous with the found money.

But what if the bill was buried in some mud with just a corner poking out? What if you had to climb a tree to get it? How much would you reduce your effort if it were only a $50, $20, or $1.00 bill? How would all these factors change if you were desperate for money, or financially independent with more money than you could possibly spend?

These are the silly questions I spring upon myself when making decisions about money these days, and they come up in the context of credit card hacking (also known as travel hacking or credit card churning) as well.

What do Credit Cards have to do with Hundred Dollar Bills in Autumn Leaves?

Until a few years ago, I thought credit cards were just a slightly irrational but necessary byproduct of our modern financial system. Retailers accept them universally without extra charge. Online shopping is safe and convenient. We all get nicely summarized tracking of our spending and a small percentage of cash back each month. In exchange, we all pay about 3% more for everything, and those foolish enough to leave their monthly bills unpaid lose a much larger amount to high interest rates and other charges.

But then an arms race developed, and certain credit cards started offering incentives of  $500 or more just for signing up. I diligently tried one of them out and found it worked just as advertised, and since then I have repeated the trick on an annual basis. But meanwhile others have gone much further, making me look quite lazy in the process. With moderate effort, some of these people collect over $10,000 in annual profits from the activity, for what seems like about a week of total work distributed throughout the year.

For those interested in going further, I figured we could meet a few of them and learn their tricks. With that knowledge in mind we can decide how many hundreds are appropriate to scoop up ourselves.

Meet the Wealthy, Frugal Woman with a Dozen Credit Cards

clinkAt an event called Camp Mustache, MMM readers and other friends gathered for a weekend to share knowledge on topics of interest to our type of people: Real estate investing, home brewing, advanced bike maintenance, and travel hacking with credit cards were just some of them.

I stopped in on the hacking one and overheard the phrase, “So when I’m setting things up for my next round of card applications”, and I knew I had to sit down and listen in.

The speaker was Marla, a woman who I knew to be financially independent and retired in her 40s, creative, entrepreneurial, and a hell of a lot of fun to hang out with. But she also enjoyed pulling the various levers of the credit card system to extract well over $10,000 per year of cash and mostly-free travel. From her I learned the key to making it fun is to make it efficient:

  • Set aside one morning per quarter  to apply to 4-8 strategic cards
  • Keep track of everything in a spreadsheet to ensure that all necessary hoops are jumped through to collect each reward.
  • The net pay rate for the simple bookkeeping involved is about $250 per hour.


The Young Entrepreneur Who Deals a Mean Deck of Rewards

Earlier this year I met Greg, a 24-year-old who runs his own successful Silicon Valley technology camp for kids, teaches snowboarding in Colorado in the winters, and will quite enthusiastically sleep in the back of his 2007 Honda Fit at temperatures far, far below freezing in a high mountain valley if it gives him more convenient access to the slopes. He whipped out a well-organized flipbook of glistening rewards cards.

“Is it really worth your time to keep track of so many credit cards? Isn’t that like a binder full of ticking time bombs?”, I asked.

“Not really”, he said, and he wrote a whole article for me on the subject. I have summarized it in the box below:

Last November, I flew from Rome, Italy to Jakarta, Indonesia for $66.70. My friends and family were shocked at how little I spent, and were even more shocked to find out that my flight from Jakarta to San Francisco was only $42.50, and my night in an executive suite at the 5-star Marriott Grand Flora Hotel in Rome was only $8. But how else was a Mustachian to travel? Certainly NOT by spending thousands of dollars to fly through the air in an aluminum tube towards a landing strip in the shape of Mr. Money Mustache’s fist.”

Here are some examples of how far you can go with just a couple of churns:

Chase Sapphire Preferred – 40,000 bonus points after $3,000 spending in 3 months
Option 1: A one-way flight to Amsterdam on United (30,000 points), plus $100 cash (10,000 points)
Option 2: A round-trip flight to Mexico on United (35,000 points), plus $50 cash (5,000 points)
Option 3: $400 cash (40,000 points)

American Express Business Gold – 50,000 bonus points after $5,000 spending in 3 months
Option 1: A round-trip flight to Trinidad and Tobago on Delta (35,000 points), plus a night at Hyatt Regency Trinidad (15,000 points)
Option 2: A 3-day lift ticket at Breckenridge (27,000 points), plus 3 days of snowboard rental (15,000 points), plus $48 in statement credits (7968 points)
Option 3: $301 in statement credits (49,966 points)

Churning exists because credit card companies make more money off of non-Mustachians racking up huge bills than they lose from more financially savvy folk who simply move their normal spending to a new, high-bonus credit card every so often.

The Process:

  • Be sure to keep track of your spending and accounts using an online tool like or Personal Capital.
  • Don’t even get mixed up in advanced use of credit cards if you still have a credit card Debt Emergency to clear up.
  • Monitor your credit score quarterly with a free service like Credit Karma or Credit Sesame .
  • It’s best to wait 3 months or more between card application rounds to lower the impact of the hard credit inquiries on your score.
  • Before even activating a card, I call customer service to verify the bonus and the annual fee, since it’s very easy to apply for the right card with the wrong URL and get no bonus at all.
  • Hardcore churners perform “manufactured spending” to meet spending requirements of multiple cards well over their normal monthly spending (beyond the scope of this short article and not recommended by MMM, but you can look it up. It involves things like gift cards and Amazon Payments).
  • Keep everything in a spreadsheet including dates, actions, and requirements. Use Google Calendar to serve up reminders for yourself.
  • If you aren’t planning on any travel, you’re probably best off sticking to cards with points that can be redeemed for cash. In many cases, 10,000 points equals $100 cash
  • But if you are planning on travelling, your points are usually most valuable when used for international travel, where they are often worth over $200 per 10,000 points.


Don’t let yourself get caught up in thinking about the number of dollars “saved” on travel.  Instead, ask a friend to give you a nice slap in the face when your eyes start glazing over, so that you can come back to reality and consider the true value and the true cost of your rewards travel, rather than what’s marketed to you. Think about this as you’re deciding how to redeem your rewards. Some airlines, like British Airways and Delta, like to tack on huge surcharges in the name of fuel and taxes. Exercise your own Mustachian Due Diligence when making your travel plans to find similar flights without the insane surcharges. If your international rewards flight costs more than $200, you’re doing it wrong.

A Cardiologist, Father … and Travel Hacker?

alexiIn Portland Oregon I met Alexi, a physician by day and a father of three, and free travel enthusiast when it’s time for a break. He also writes a blog called “Miles Dividend, MD“.

Alexi became a card hacker by necessity, since he married a woman with roots in Japan and they wanted to keep their kids connected with the rich heritage of her family who still lives there. Although I find it hard to imagine free time being a part of such a life, Mr. Dividend does it well with his analytical and efficient methods, and he had the following wisdom to offer.

Why is rewards card hacking a Mustachian pursuit?

  1. Because travel is expensive: In my case we previously spent over $16,000 in travel a year. Now we spend less than $1000.
  2. Because figuring out a new system is good for your mind, and it opens up more new ideas. As an example, I wrote here about a strategy to use nothing but the miles game as “springy debt” in order to replace (A.k.a. allow you to invest) your emergency fund.

The point is not that this is a wise strategy. (I don’t think it is.) The point is that playing the miles game gives you skills that allow you to access capital in clever ways. Which is a very useful skill set to have when pursuing early retirement.

Other notes:

  • Not for Debtors: The only way the miles game is even remotely worth it is if you pay off all of your Credit card bills in full every month and never pay a dime of Credit card interest.
  • Good Credit Score Required: In order to score the big bonus credit cards, you generally need a score of at least 700.
  • Not Detrimental to your Score: Surprisingly, in the long run, using multiple cards properly can actually help your score. Despite this, you will often see a temporary 2 to 7 point drop in your credit score for each hard credit check that accompanies each card application.
  • Watch it if you have an upcoming big purchase If you are in the market for a home, securing a low interest rate loan should be your first priority. The miles game is simply not worth having to pay an extra point or two of interest on a 30 year home loan.
  • Use travel hacking as a way to spend less on travel, not a way to travel more on the cheap. Investing the difference (instead of just spending it on first class seats) can cut years or even a decade off of your journey to financial independence.

Piecing together your strategy is not unlike a giant puzzle. It is a lot of fun, and really opens up your world to new and interesting possibilities.

Simply put, the miles game is happiness inducing.


Meet Brandon Cronan, Your New MMM Card Curator

Brandon Cronan, rewards card guru

Brandon Cronan, rewards card guru

Brandon was actually the founder and instructor of the credit cards workshop at Camp ‘Stash. Watching him present and share his deal finding prowess, I saw his enthusiasm spreading to the audience despite our best attempts to be appropriately scornful of the credit card industry in general.

Brandon and I have kept in touch since then, and I decided that the best way to benefit from his skill would be to share it with you. Although I can plainly see the benefits of credit card mastery, my own attempt at a credit cards page was unsatisfactory. The card companies would change their offers regularly, representatives would ask me to update my page, I would generally ignore their requests and continue building parts of my house, and they would kick me out of the program. With Brandon’s help, we have re-qualified this blog to link to American Express and other top-tier cards, and he has signed up to be our in-house expert on the topic on an ongoing basis.

Bringing it back to the leafy sidewalks of my own town, I do still stop to pick up a hundred every now and then. Sometimes they are within easy reach, and sometimes they take a bit more work. But whenever there is effort, there is also the opportunity for learning, so as long as it doesn’t involve compromising my own values, I’ll happily continue to harvest and may see you out there.

You can keep tabs on Brandon and his strategies at the new MMM Credit Cards page. I’ve even enabled the comments section for that page so anyone can ask specific questions and share knowledge. He also writes occasionally at his blog called Life Reengineered.


Many thanks to the enthusiasts above for sharing their expertise on the subject, since it greatly exceeds my own, and people keep asking me about travel hacking. If you’ve had success in this area, please share your own best cards, tips, and experiences in the comments.

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Getting Rich with Science Tue, 07 Oct 2014 17:58:25 +0000 doc


An angry man by the name of Jared stopped by the blog the other day and left this beauty of a comment on my old A/C article:

Oh, you anti-air conditioning freaks crack me up. Here in Alabama I keep my a/c unapologetically set between 68-71 all year around. [...] I do not care about utility bills. Some mornings I have my house so cold my windows are dripping with dew. I love my air conditioner. You guys toughing it out make me laugh. Even on 62 degree days the western sun warms it enough to bump on the air conditioning. When I’m drinking I set it even lower. Who are you air conditioning Nazis– judging your neighbors for running the a/c’s? Enjoy sweating, I guess. It’s currently 69 degrees in my house. I have two spare window units in my garage that serve as emergency backups should the central systems fail for any reason. Have fun saving $50. Buy 3/4 of a tank of gas with it or something. Cry about the climate change lie our government wants you to be afraid of so they can control you.”


Now, my first inclination was probably the same as yours – a deep sigh as you pull on the 20 ounce XL bloxing gloves and prepare to Deliver some Education yet again. But if you set aside the facts and just look at the feeling behind these words, I’m right there with Jared. He and I are not so different after all. If I were to paraphrase a little:

Do you outsiders really think you can tell me what to do? Fuck that. I’m going to continue doing as I see fit, and now I’ll even make a show of it, just to prove that you don’t own me.


In fact, defiance and standing up for your own freedom while rejecting the influence of invaders is a natural human instinct. It has been pretty useful to us in the past, and it can still come in handy today if you use that rage for a good cause.

Unfortunately for our defiant friend, the substance of the argument doesn’t stand up quite as well as the emotion. And a good chunk of our society’s self-imposed hardships come from falling into the same basic trap: becoming so convinced that you are right, that you block yourself from ever learning anything.

Looking at this example specifically, we start with a guy rightfully seeking happiness. But in doing so, he seems to have snarled in the idea of comfort and convenience as being part of happiness. Both old philosophy and modern science have shown that this is counterproductive: voluntary discomfort and mastery of hardship are far more powerful life boosters than avoidance. Even Jared has probably noticed that kicking the ass of a daunting challenge is more satisfying than having all of life’s luxuries flow in through an IV needle and then back out through the catheter and the bedpan. The key is in what challenges you choose to embrace: I suggest as many as you can handle. Especially those dished out by Mother Nature herself.

Then there’s the rest of those factual errors. Lowering your dependence on climate control and other electrical extravagances isn’t about saving 50 bucks. It’s more like $100 per month, which compounds rapidly into $17,300 every ten years. And that 17 grand doesn’t have to go into your gas tank and out through the exhaust pipe. Instead, it could buy portions of businesses and thus become an army of employees that work for you for a lifetime. That’s a solid start at becoming a millionaire, which is something best done ten bucks at a time.

Then his argument goes on to reinforce my point perfectly with the generalization about climate change. Here our man has singlehandedly outfoxed the world’s scientific community and declared the last few decades of their research to be incorrect. The incredible irony is that he confuses climate science with a government plot to control society, when it’s actually quite clearly documented that the opposite is true: climate change doubt is a strategic misinformation campaign designed to control voters to rally continued support for the fossil fuel industry. The doubt is most prevalent in countries where the industry has close ties to the political system and the campaign has been well-funded.

For the past 20 years or so, I have watched with wonder from the sidelines as this societal experiment raged, because I’m shocked that it actually worked so well. Why is our species so easily duped by such transparent (and centuries-old) methods of tomfoolery? How are the morally good air-conditioning lovers of Alabama converted into campaigners against science itself (and unwittingly against their own best economic interests)? How has science become a political issue, with liberals and scientists being branded together as out-of-touch elites, and a certain 50% of Real Americans united in a mistrust of the whole field?

Let’s clear this all up right now and get one thing straight:

Science is your friend. It is the most useful thing humans have ever developed, and there is absolutely no downside to it.

Regardless of your religious or political views, understanding what Science is, and using everything it offers to your advantage is the fastest way to accelerate your path to leading a rich and fulfilling life.

Science is not about ideology, or trying to cover the truth, or trying to manipulate people. That is what politics are generally about, and Science is exactly the opposite of that.

Science is all about looking for evidence through experimentation, and forever questioning itself and refusing to simply repeat dogma. By refusing to cling to existing assumptions about what “The Truth” is, Science gets us forever incrementally closer to understanding what is really going on in our world.

In other words, Science is the method that we have developed to protect us from our own tendency to cling to incorrect assumptions forever.

Luckily for all of us, we don’t have to get into the bullshit national debates about the current political hot topics (which politicians are using to control you). Instead, you can apply the principles of science to improve your own life right now.

How to Get Rich through Scientific Living

1. Understand more about yourself as the Human Animal, so you can work around your own mental weaknesses.

At the core, you were “built” for exactly one reason: to produce as many healthy babies as possible. Every finger and toe, emotion and follicle of your being has been optimized for this purpose. If you have other goals, like deeper life satisfaction or getting out of debt, you need to learn to override some of your default programming. Learning about how we are all Predictably Irrational is the key to this.

The moment you think you are a perfectly rational being is the moment you stop being able to think critically (and the moment you become easy for others to manipulate). A study of your own species by learning some basic psychology and behavioral economics is the best bit of education you can get.

2. Understand the difference between correlation and causation, and the value of the double blind test.

When society falls for massive misinformation, it is often because of our tendency to latch on to simple patterns and fall into the herd mentality. “I always win at Roulette when I wear my bright red shirt”, or “these $59.00 Chi Energy Alignment Pills always make me have a better day”, or “Buying this more expensive wine will provide me with a happier life” are common blunders that could be avoided if we were all better at conducting semi-controlled experiments upon ourselves. And fear of doing something differently from everyone else tends to lead us all into group mediocrity, even while stepping out and doing things in your own better way is much more likely to earn you attention, respect, and greater success.

3. Instead of fighting the gifts of Science, embrace them and use them to live a better life.

Climate change skeptics aren’t really uncomfortable with the science, they are uncomfortable with the implication that their fossil-fuel dependent lifestyle is immoral and endangered. This is an incurable condition that will lead to lifelong unhappiness, because the science is not going away.

Try as you might, you are not going to out-science the scientists by reading “skeptic” websites and repeating their memes. You’d need to practice in the field for many years to make even a small new discovery, and yet the “armchair” climate scientists are fond of grabbing each news story and squawking about how the deep ocean results prove this or disprove that.

Don’t waste your time. The real scientists will just keep collecting evidence until you’re the last one standing on the shore insisting the world is flat and those sailing ships are falling off of a giant waterfall at the edge of the horizon.

Instead, I prefer to learn more about the science by letting the specialists do their work for me while sit back and read the summaries as they come in. I then have my own time free to decide what it all means to me, and how to best deal with reality. I too wish that the world wasn’t warming so quickly, but there’s a happier way to deal with it than angry denial.  I can choose to lead a happy and engaged life in my own community and consume a bit less stuff. More money, better health and closer friendships: No loss there.

Sometimes you may still choose to blatantly burn plenty of fossil fuels despite a full knowledge and acceptance of the results. I’ve been known to drive across the country, hop on a jet, or even eat a steak. But I get to do it with the understanding that it is a tradeoff, instead of hiding behind a plastic shield of wimpy denial. The extra bonus is that understanding some of the workings of our environment has greatly reduced my craving for BMWs, which has saved me at least $250,000 so far. It also brings me great optimism – I think the world’s transition away from sloppy and expensive fossil fuels is the biggest business opportunity we have yet stumbled across. The progress and prosperity involved will keep the stock market and the economy booming for more than the rest of my lifetime.

Although I now have this blog to share my own ideas about better living, its effects are obviously very finite. But there’s no need to fret about what the rest of the world is doing, because that is outside of my circle of control. Worrying is 100% counterproductive, and it was psychological studies that helped figure out that very principle.

Science is bound to deliver news that is sometimes convenient (the news that sex is very good for your health, for example), and sometimes less so (that fossil fuels and alcohol are not). But knowledge is power, and power means the opportunity to make the best of your own life, which includes dominating on the financial side of things, as well as just the ability to go to bed with a broad smile on your face each night.

Science is the way you get knowledge – nothing more, and nothing less. You’re free to fight it at your own peril, but I’ll be hanging out here in my own Life Laboratory keeping the grand experiment going as long as possible.


Further Reading: An earlier MMM Classic called Safety is an Expensive Illusion digs into some more examples of how scientific thinking about everyday life decisions and risk can lead to huge profits.

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Electric Bikes: Gateway Drug to Bike Commuting? Wed, 01 Oct 2014 00:07:27 +0000 st1_b_m_e_c_ckeWhat would the world be like if almost anybody could ride a bike effortlessly, at any speed they choose, regardless of physical fitness, hills, headwinds, or drag from the bike trailer full of kids and groceries?  What if even those of us who are not athletes could get all the glorious benefits of cycling including invincible health, complete freedom from traffic jams, free Rockstar Parking everywhere, and Zero Dollar Gasoline, forever?

This is the promise of the Electric Bicycle, a trend that has become enormous in Asia and Europe and is finally making its way here to North America.

Temporary Note – the EbikeKit company has a sale running until October 21st. Jason has decided to allow combining the coupon code “MMM” created for this article on top of this sale to get a total of 21% off their kits

The basic idea is that you take a regular bike but swap out one of the wheels for a different one with an electric motor built into the hub. Add a battery, basic control electronics, and a motorcycle-style twist throttle, and you have created an astonishing Frankenbike that allows you to perform like Lance Armstrong at Maximum Sprint, without even breaking a sweat. Depending on the model and style, Ebikes can attain top speeds anywhere between 15 and 50 MPH, with ranges from 10-50 miles.

To put the value proposition into the simplest form possible, this is why I am excited about this invention:

Convenient range for various cyclists

Convenient range for various cyclists

This table is obviously just an approximation. Steep hills or humid summers may reduce a beginner cyclist’s range even further, and meanwhile some readers can crank out 15 miles before the first bead of sweat forms upon their brow. But the bottom line is that these things get you further and faster, with the option of little or no sweat.

At this point I need to admit that I’m personally not the ideal electric bike customer. I live in a town that is 5 x 5 miles and I rarely leave here except to go to the airport. Standard leg-powered bikes have been getting me around this place easily for 9 years and they allow me to carry everything from groceries and kids right up to major appliances. With my 40th birthday coming up next month, I don’t need to be getting any less exercise. And while we do also have a car and a minivan, both are still sipping on the tanks of gas I bought them in April 2014.

But hey, I like speed at least as much as the next guy, and I’ve been known to own a fast motorcycle or two in earlier years and also perilously approach highway speeds on a snowboard. On top of that, electric propulsion is absolutely the future of personal transport – chant out the usual oil exec slogans all you like, but electric cars are already here and they make their gas counterparts look like tragic clown dinosaurs by comparison. I’ve been researching electric vehicles for years now, and looking forward to the day when we can all make the switch.

I test drove a 2015 Nissan Leaf over the summer and was floored by its lightning acceleration, solid handling, silky silence even at 90 MPH, and general 5-door practicality. If we could take the benefits of that, and scale them down to bicycle size so we could still get some fresh air and exercise (and spend a lot less than the price of a new car), it would be even better.

So I built myself an electric bike recently, with the goal of evaluating long-term performance and reporting it back to you. It is a hell of a lot of fun, and I’ve been blasting around town (and country) on it for several days now. But before we get into the details of my setup, let’s take a look at the whole ebike scene to see where everything fits in.

In my mind, it breaks down to three categories, which will appeal to different people:

Off-the-Shelf Electric Bikes ($600 – $10,000)

The Stromer Sport (image credit

The Stromer Sport, with battery compartment shown open (image credit

These are the easiest (but generally most expensive) option. Last year, I toured the inventory at Small Planet E-vehicles here in my own town, and test rode some very fancy bikes. My favorite was the $2800 Stromer Sport, which senses your pedaling effort and adds the proportional boost of your choosing, which feels exactly like being a bionically enhanced superhero. However, the bionic boost gets you no faster than about 25MPH, as the pre-made bikes must comply with federal e-bike speed limits.

Pros: Ready to go immediately. Sit on it and start riding. Just plug it in every now and then to recharge. This is the option for people with more money than mechanical skill, and a desire to get out into the fresh air immediately.

Cons: More expensive, top speed (while still swift) will not appease speed demons like myself.

Examples: Stromer, Prodeco, and Pedego are some of the leaders in this field. Some car manufacturers are offering their own take on E-bikes including the SMART (owned by Mercedes), BMW, Audi (prototype only), and KIA.

 Complete Conversion Kits ($800-$2000)

Here's the kit I used, from

Here’s the kit I used, from

Several companies are now putting together kits that allow you to take almost any existing bike and convert it to electric drive. The motor, battery, controller, and any accessories are all designed to work together with matching plugs, voltages, etc.

This is the option I chose for myself, because I wanted to profile something within the technical skill of the average bike owner. If  you can change the back tire on a bike and install a bike speedometer, you can install this kit. On top of that, I was able to get advice from Ebikekit* founder Jason Kraft about exactly what setup would best fit my existing bike and align with the way I use it.

I ended up with a 500 watt direct drive motorized rear wheel, a 13 amp-hour lithium battery, plus everything required to use it and charge it at home. The total list price of my setup with shipping was about $1600, although with strategic use of discounts, this can be had for about $300 less. We’ll get into how well this system works at the end of the article.

Pros: Top e-bike quality at lower cost. Unrestricted speed. Flexibility in choosing your own bike and exactly how you want things installed. Easy to upgrade battery later.

Cons: A bit of work to install (mine took 1 hour). A slightly more homemade look to your bike.

Honorable Mention: Although it is not yet available for general delivery (release date seems to bump out another three months every time it gets close), the Copenhagen Wheel is a $700 conversion that has everything – battery, motor, and control electronics – packed seamlessly inside the wheel itself. It senses and boosts your pedaling effort and links with your smartphone to present an incredibly fancy yet simple user interface. Because of the splendid ease of use, this will probably change the face of electric cycling forever. But it’s still not as fast as the full kit above.

Fully Customized Systems for Hackers:

reader kit

This is the full setup of a monsterbike built by an MMM reader who helped me when researching this article.

Just as it works with home renovation, auto maintenance and most other practical fields, if you bring more knowledge and effort to the table, you can build a system to your own specifications and potentially save quite a few dollars in the process.

For example, if you search Ebay for “electric bike kit“, you’ll find basic straight-from-China front wheel kits for about $260, then you’d add a 48V Lithium Ion battery for about $400 – $600 with shipping, depending on capacity. The downside is the risk of part failure (and I wouldn’t expect the greatest support if anything breaks), and the need to splice and solder a few wires here and there to get everything to work together.

Or instead of cheap, you could go for high-end. At the forum called Endless Sphere, enthusiasts spend hours doing detailed reviews and extensive discussion. One MMM reader sent me a full description of the $3400 ebike he built from the ground up that easily does 35MPH and regularly rocks a 42 mile roundtrip commute in a hilly area with high winds.

A Quick Primer on Terminology:

If you are going to look into one of these yourself, here are the basic things to know:

The Motor: 250 watts, 500 watts, or more?

Think of it this way: a fit cyclist can put out about 150 watts for an extended period of time. If you combine this with a fairly streamlined bike, you’ll end up zooming along at about 20MPH. During a quick sprint of acceleration, the same cyclist can put out over 745 watts (1 horsepower) for short periods of time. So even a 250 watt motor can beat you in a long race, and 500 watts is almost like sprinting at full speed. Sure enough, my 500 watt motor tops out at just over 30MPH if you are letting it do all the work, which is about the fastest I can pedal a conventional bike for short sprints without assistance. When I set my own legs and the motor to maximum output, we can achieve over 35MPH together.

Voltage: 36 or 48 volts? This doesn’t strictly matter, although you will generally find 48 volt batteries and motors in the higher-powered systems.

Lithium or Lead Acid Batteries? In my opinion, Lithium batteries are the only way to go. The older technology Lead-acid batteries are heavy and bulky, which are both properties you want to minimize in a bike. On a trike or golf cart, however, Lead batteries are fine.

What are Amp Hours and How Many Do I need? To understand battery capacity, multiply the “Amp hours” by the “Volts”.  My new system is 13Ah x 48 volts, which gives us 624 watt hours (also known as 0.624 Kilowatt Hours, to put things in the context of my old Electricity article.) To put this simply, the battery holds energy equal to about four hours of intense cycling. The neat part is that charging it only requires about seven cents of electricity, which is way less than the cost of the enormous meal I devour after returning from a 4 hour ride!

So what is the range of these things?

Just as with a car, that depends on how fast you drive it. On a recent outing to the far side of Boulder (a 30 mile roundtrip), I rode my own bike at a swift 28-30MPH speed the entire time, pedaling along at my own normal energy level. This used up about 75% of my battery pack, which means the total range with this fairly intense use is about 40 miles. Just like an electric or hybrid car, you get better mileage in the city than on the highway, and my trip was mostly highway.

So tell me about the Mr. Money Mustache E-bike!

This post has grown quite long, so we’ll save the detailed analysis and testing for my second article in this series, which will come after I get some more miles on the clock . I’ve also recruited a friend to build one of those Customized Hacker Systems in order to compare his results with my own with the premade kit.

Here’s what my bike looks like so far. It is a fairly incognito setup, and the battery bag is simply held on with bungee cords at the moment. But so far, so good. The added speed of this thing has expanded my options for speedy errands around town, and it just might prove to be a revolution even for me. Tune in next time to learn more.


Here’s my regular city bike, now enhanced with Electricity. 100 miles into the test, it is already lots of fun, but more development is still in the works.


*Coupon code for EbikeKit – I have no affiliation with the company and don’t get commissions, but Jason did set up a coupon code for Mustachians – use “MMM” in the box if you are placing an order with them. The code can even be combined with any of their regular 15% off sales events which occur several times each year.

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Lessons in Badassity from a Night in Houston Mon, 22 Sep 2014 18:30:48 +0000 almonds

almondsThe great thing about this unusual lifestyle you and I lead is that it automatically reinforces and rebuilds itself from all directions. Although Mustachianism is built on the idea of embracing hardship, it becomes so automatic that it is soon the only way you could imagine living. Because of this amazing tendency, it is often easier to live on 25% of a professional income (and save the other 75%) than it is to try to scrape by on 90% and save 10.

Everything just falls into balance once you get the basic philosophy, and today I have brought a little Story about a recent experience, which is annotated with links to all the other articles that fill in the background of what is really happening. For the full experience, you can right-click each one and open it in a new tab, then go on to catch up after you have finished this story.

Not long ago, I found myself in the semitropical metropolis of Houston on a steaming summer afternoon. It was just a flight transfer on the way to Ecuador, but this time there was some trouble in store for those of us on the plane.

The jet was pointing straight down the runway and I was looking forward to a timely departure. But instead of the excellent blast of power followed by liftoff, we just kept idling. And idling. After quite some time, the pilot crackled on to the speakers to inform us all that we had to wait out some thunderstorms. And sure enough, I saw lightning bolts here and there, shooting from a line of clouds off in the distance. The rest of the sky was clear.

This tarmac delay dragged on for two hours. The sun went down. One engine was eventually powered down. My longish limbs were folded politely into a miniature middle seat way back in the cheap section of a United Airlines plane. Stretching whatever body parts I had room to move, I pondered the consequences of this delay. I sent an email to the people I was expecting to meet at the Quito airport to let them know I’d be late. Hopefully not too late.

I really don’t like sitting still for too long, and I’ve already been up for two little walkaround breaks and a wee bit of second breakfast since I started writing this article. But there in that seat, I found myself perfectly content as I had cracked open a can of Stoicism much earlier in the day and been mentally sipping on it ever since.

“This may not be my idea of perfect comfort and convenience”, I reminded myself, “But it is infinitely nicer than starving to death (or being eaten), and indeed it is just a tiny blip in a life of incredible good fortune.

Dude, you are on your way to South America to meet an amazing group of people, an experience you earned by occasionally typing some shit into the computerThis is what you do instead of working now. Can you remind me what you are complaining about as your healthy body sits in a padded chair awaiting the takeoff of this immense flying machine?”


Reminding yourself of your blessings is an essential part of any worthwhile life philosophy, and Stoicism is just one of my own personal favorites alongside Buddhism and some of their more modern incarnations.

The flight was eventually canceled and our jet sulked back to the gate to disgorge its unhappy cargo into the terminal building. “We’re sorry folks, but the flight will run tomorrow morning at 7:00 am.” All 200 passengers immediately formed a spectacularly long line at the service desk, perhaps to request flight rebooking or a credit towards overnight accommodation.

I watched the line for a short while and noticed that it took almost a minute to process each person. A quick back of the napkin calculation told me that this could be a 3-hour wait, and it was already 10:00 in the evening. Besides the fact that I don’t do lineups, I had been up since five that morning and knew that the chance for a night’s sleep was rapidly eroding.

Luckily, technology and psychology were there to save the day. Since I had a Republic Wireless smartphone with an unlimited data plan in my pocket (no good wi-fi in Houston), I was able to confirm booking on the next morning’s flight, making that immense lineup completely optional.  Then I used the phone to find the nearest hotel, a Mariott Courtyard just a few miles away. At $115 per night, it was a bit of an unplanned expense. But thanks to the Gift of Not Worrying about Money, I paid it with glee, thankful that I had the luxury of purchasing a bit more sleep when it was most needed. Besides, everything about this trip would be fully tax deductible, thanks to the Joy of Self Employment. I headed out to find some transportation.

Bypassing the gigantic lineup at the taxi stand, I fired up the Uber application on my phone and called for a driver (I have amassed a surplus of free ride credits so all my trips are free). Since modern transportation options aren’t allowed in the taxi pickup area, I had to sprint a fair distance through the evening heat with my heavy backpack and hop over a few hedges to get to a suitable meeting point. It was sweaty work, but I viewed it as an ideal caveman workout, Mark’s Daily Apple Style. Instead of cursing the humidity, I viewed it as a positive opportunity to work on heat tolerance, which is the world’s most efficient air conditioner.

The Uber driver and I had a great conversation during our short time together and exchanged life stories and 5-star ratings. Stepping at last into the air conditioned hotel lobby to pick up my room card, I suddenly remembered that I had not eaten since lunch and there would be no chance for a real meal until arrival in Ecuador the next afternoon.

Again the solution materialized: I always travel with a big Ziploc of raw almonds (since I know the world is not my personal buffet), and there were still a few small handfuls remaining. While this would not be enough food to sustain a man for the next 15 hours, the situation would be considered exceptionally easy when judged by the standards of fasting.

Of all the badass concepts I have come across in recent years, fasting is one of the best. You simply shut your mouth and relish the feeling of mild (or strong) hunger instead of complaining about it. Suddenly, you can travel the world and do almost anything without the standard rich-world obsession of planning your next meal. Because if you lift up your shirt and inspect the area just above the belt, you’ll see that the next several meals are already pre-installed. The physiological and mental benefits of this are profoundly good. And as it goes for eating, so it goes for gorging upon modern luxuries of any type.

By the next morning, this eerie but educational vortex of hardship over Houston had cleared, and we took off into the clear sky without a hitch. Life since then has continued to be abundant yet inexpensive. Not because of superlative effort or any sort of smarts, but rather just because prioritizing experience and challenge over convenience and consumption is a natural human behavior if you let it develop.

A wealthy lifestyle is really built on rich habits. And it doesn’t take much of this change in attitude, to completely change your life.


Further Reading: This article in Psychology Today shows how people who can take discomfort in stride tend to have much less anxious lives.

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Great News: You’re Allowed To Have Only One Kid! Wed, 10 Sep 2014 15:50:11 +0000 hands1

hands1It was a black and frosty night, sometime in the dead of winter 2007. I was in the rocking chair holding my baby son, who was about one year old at the time. I was offering him a bottle and I knew he needed food, but he was upset and had been screaming for much of the night. My wife and I had been trading off baby shifts as usual so each of us could get half a night’s sleep, which is a very helpful tactic since the sleep deprivation stage of raising a child can go on for more than a year.

“Wow, raising kids is an incredibly difficult thing”, I thought to myself, “But worthwhile in so many ways. Every day this little guy advances through more milestones, and it’s amazing to think he will be walking and talking pretty soon, bonding with his parents over common interests and learning, and maybe even staying up at night to care for his own son or daughter someday. It’s too bad we have to start all over in only a year, to have a second child and go right back to zero. I’ve survived this first year of sleep deprivation, but can’t help but to dread two more years of it”.

Time went on, and we continued to reap all the joys and strains of parenthood. We took him on hikes and reacquainted ourselves with the joy of being alive, through the eyes of someone who is seeing it all for the first time. The three of us took trips together, read books, made snow forts and blanket tents and wooden boats, and mixed it up with family and close friends often.

But it wasn’t always easy, or even fun. Our marriage was stretched to the thinnest of threads at times, as the needs of the child displaced the needs of a relationship. Personal interests and even a moment’s peace and quiet were long forgotten. Social and travel opportunities were postponed for years, or indefinitely, because they weren’t compatible with our son’s temperament or limited diet, no matter how much we worked on the various issues. In the thick of the bad times of raising a young child, you sometimes feel like your whole life has been one long screaming, screeching, smashing, crying argument.

Luckily, you tend to wake up the next day and it’s back to joy. But it is still essential to say what most people avoid saying: parenting is more than just curling up on a couch with their cute little faces gazing at you while you read them an adventure novel (which is the way I always pictured it).

So anyway, one day we had a two-year-old son and thus it was time to produce the next child. He was sleeping well and flourishing beautifully, and the two children would be spaced closely enough that they could be friends eventually. We dutifully started making the arrangements, and I braced for the next round of caring for an infant. I looked far into the future and pictured my future 8-year-old explaining scientific concepts to the 5-year-old using the teaching medium of Lego, and determined that all would be well. Then I pictured them at 28 and 25, and it was even better – helping them with their houses and careers, traveling together meeting their girlfriends or boyfriends or spouses, and a lifetime of friendship. If only there were a way to get there without the torture stage.

At that moment, my wife came home from the library with a nice load of books. One of them was “Parenting an Only Child”, a book about only children and how most of the conventional assumptions about them are wrong. They do exceptionally well as children, flourish socially, and end up with lives that are at least as happy as people who grew up in larger families.

Thinking about it, this was the main reason I was assuming we’d have two kids. You have the second one as a gift to your first one, so they can go through life together. After all, I have two older sisters and a younger brother, and my wife has a younger brother as well. We both have fond memories of our childhoods together and we get along with them well today.

But on further reflection, most of my social life as a kid was with other kids that were closer to my own age. And my relationship with my parents was probably diluted by the high effort (both financial and emotional) they had to put into raising such a large flock of us. Their marriage broke up towards the end of that multi-decade effort, and I wouldn’t be surprised if the strain of kids was part of it. Hell, a full 40% of my own friends and acquaintances who had kids when we did in 2006 are already divorced. So once again, there are negatives to be considered alongside the positives.

The bottom line is that we read the book, and then poked through a few other books and articles on the same topic, and I was sold on the idea.

“Honey! This is amazing news! We’re allowed to have only one kid, and everything still turns out great! This is what WE should do!”


Mrs. Money Mustache was thrown slightly off balance, since she had brought home the book expecting discussion rather than such an immediate transformation, but the more we discussed the issue, the more we realized it was the right one for us.

Having (or not having) kids is an extremely personal decision, and it’s not something that I (or your friends, parents, in-laws, church, government, religion, or society) should really have much say in. It’s between you and your partner, and even then it is questionable practice to try to force a partner into having more of them than he or she wants.

As a person who tries to put things into a logical perspective, kids are a tricky one. After all, it may seem somewhat illogical to voluntarily create a new being, and make such a big sacrifice to your own life to support it. Especially since there is no shortage of need in the world – why not help others instead of creating still more need?

On the other hand, if your goal of living is to understand what being a Human is all about, reproduction is pretty logical. It is the reason for all life on the planet, and it really the sole purpose of your existence from an evolutionary perspective. It would be hard to say you’ve had the full experience of humanity without experiencing this core part of it. Every cell in your body exists just to allow this to happen. That still doesn’t mean that you should have kids, it’s just an explanation for why it could be considered logical at some level.

The bottom line is that there are enormous positives and negatives that go along with your baby-making decisions, and it helps to step back from our dumb evolutionary programming (see the part about every cell in your body above), and realize that following your immediate emotions is not usually the path to the happiest life. You could even make an oversimplified decision-making chart on the issue. For me, it might look like this:

Figure 1: My own family planning chart.

Figure 1: My own family planning chart.


For others, the chart will look totally different, and that’s fine too. The real point I wanted to make here is that it was nice to find out that One Kid is a wonderful way to go, and how nicely it has been working out for us. If you didn’t know you were allowed to do this without being perceived as a weirdo, I hereby give you permission.

Further resources:

Parenting an Only Child: the Joys and Challenges of Raising Your One and Only by Susan Newman, can probably be found in your Library, as well as possibly on Better World Books (used) and Amazon. And there are many other great books, documentaries, interviews and videos about the idea.





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The Colorado Meetup (and a report from behind the scenes) Sun, 31 Aug 2014 20:26:51 +0000 newhouseAfter almost two months on the road, the Mustache family is really glad to be back in Colorado where we belong. Our extended absence (and the corresponding lack of updates to this blog) has fueled speculation among people with a bit too much time on their hands.

“He used to post way more often, but recently there have only been a few articles a month” … “Has Triple M run out of ideas?” … “Maybe he sold the blog!”

As is usually the case with speculations, these are all wrong. The list of partially written articles is longer than ever (I see 164 of them, or roughly a 3-year supply in the queue). I’m more charged up than ever about this job, the blog is reaching more people than ever with about 6 million pageviews last month, and I’m selling off the rental house and other distractions so I can devote more time to this fun stuff as well as writing The Book.

But I’ve also been trying my best to uphold the promise I made to myself before starting all of this: Real Life always comes before Internet Life, and family and real life friends come before Internet ones. So let’s start with an event where those of us in the immediate area of Longmont, Colorado can get together for real:

The Colorado Meeting of Mustachians
Saturday, September 6th, from 3PM – 9PM
At a public park right here in the historic district of central Longmont.

 I’d like to invite the locals out to come hang out.   I’ll gather a few BBQs for cooking and provide an acre or two of beautiful grass and trees for gathering.

You can bring along your family, friends, kids, food and drink, folding chairs and frisbees, and maybe even a slackline or two. Beer and wine are permitted as long as they are in inconspicuous non-glass containers.

Because of the size of past events and our town’s limits on public-park events, we’re setting it up on an RSVP basis using the EventBrite link below. There are 100 ‘tickets’ (which are free of course), and once you sign up your spot will be reserved. Then we’ll email you the final location on the day before the event.

Update: This event is sold out! In a single day on a holiday weekend. Nice work, fellow Coloradans – see you on Saturday.

(and my apologies to anyone who wanted to come but didn’t see the note in time. It just raises the bar for next time – we apparently have enough people around here to get a real venue .. and imagine what else we could accomplish with such a group!)

Come out, bring your best ideas and even optional business cards, as I find the Mustachians are a like-minded, fun, and entrepreneurial crowd.

Bike transportation is highly encouraged, and we’re just a few minutes walk/ride from the central transit station at Roosevelt Park with direct buses to Boulder and Denver.

To finish up this weekend edition, here is a report on the the rest of the Real Life events that have been getting in the way of responsible blogging.

San Francisco (May 2014)


To celebrate the end of the school year and the arrival of summer, we hopped on Amtrak’s California Zephyr sleeper train and headed West, just to experience long-distance train travel for the first time. It was a very nice peek into the past and a great adventure. While the train was quite slow and the dining car’s food selection was uninspired, the beautiful views from the observation car made up for it. And the novelty of turning in after a good night of conversation and wine, then being gently rocked to sleep while the train travels through the night was one of my favorite parts.


Bay Area Mustachians, enjoying sunset at Heron’s Head Park

Once in California, I had the chance to meet with quite a few interesting people including one of the officials who plans out San Francisco’s bike network. His department must be doing a great job, as there were cyclists of all ages everywhere, and I was able to bike comfortably even in the densest parts of the city. San Francisco is truly moving toward Badass Utopia status.


I also hosted a gathering of Mustachians at the beautiful Heron’s Head park, which was amusingly enhanced by the arrival of a WSJ MarketWatch camera crew who did a few interviews to find out what we are all about.

The North Coast and Redwood Forest


At this point we rented a small car and headed North for a peaceful week of hiking and exploring the forests and coastlines of Northern California. The experiences and beaches were incredible, especially the harrowing cliff climb from our seaside VRBO rental down to the secret beach. Another highlight was a glorious Antimustachian indulgence at the Petaluma Whole Foods. We blew $30 on prepared luxury foods from the buffet and ate it in the meticulously crafted flagstone patio, overlooking manicured subtropical gardens and a parking lot packed with high-end hybrid and elecric cars and some of our country’s liberal elite ultraconsumers. Just for a moment, I envied their pleasant and convenient lifestyle.redwood

Portland, Oregon

3 Blog Night

A moment from Three Blog Night

After the family leg of the vacation, I parted ways from the wife and boy and took a short flight to Portland. Upon arrival I had the pleasure of meeting with a group of local readers for dinner, and spending the night on a couch in a basement apartment. The next day I walked across the precarious Sellwood bridge, stopped in at J.D. Roth’s apartment, wrote an article, then borrowed a bike in order to do a full tour of the city.

In the evening we hosted the Three Blog Night meetup and then went to dinner with Ryan Carson, the founder of a glorious online learning company called Treehouse.





Camp Mustache

The next day, J.D. and I carpooled North to Tacoma, Washington with Joe (RetireBy40) for the incredible honor of attending an event entirely organized by readers of this blog.


J.D. hosts a discussion called “Crazy Rich People Talk”

There were about 50 of us, and we shared beautiful lakeside views at the foot of Mount Rainier, food, friendships, and some excellent learning sessions on topics like real estate investing, bikes, home brewing, and advanced credit card hacking.

Moving to a New House (June)

house constructionUpon return and recovery from this blast of travel, we were suddenly faced with the emergency task of moving out of our old house, preparing it for sale, and then listing it on the open market. The incredible volume of stuff we had accumulated triggered the article called Recovering from the Pat Rack Years

Summer in Canada (July)


Members of MMM Extended Family demonstrate our version of motorboats.

This was the usual mixture of family, friends, and Carpentourism. This year’s projects were a new roof on my Mom’s house as well as a new kitchen, plus assorted things at a scenic cottage owned by the inlaws.

9 Days in Ecuador (August)


Just to push the limits on this ridiculous travel bonanza, I had to head straight from Ottawa, Canada to Quito, Ecuador in order to get to the Chautauqua event on time. A thunderstorm in Houston added an unexpected night’s stay in that city, but the magic of smartphone hotel reservations and some free credits I had amassed for UberX transportation ensured it was a pleasant break.

The Ecuador trip itself was spectacular and packed with lifetime memories.

And now, back to real life (right now)

I am so glad to be home, it is ridiculous. The boy has gone back to conventional school for the first semester (an update on the Homeschooling experiment is forthcoming), which gives me 6 peaceful hours each weekday to finish more of the house, meet with friends, write to YOU, and live a proper retired life.

We’re just getting started around here, so I hope you’ll stick around for the journey.

Mr. Money Mustache

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Introducing IndexView: Become One with the Economy Mon, 25 Aug 2014 16:56:34 +0000 old_king

punditGood investing is really simple: get yourself into the position of owning a portion of a profitable business or property, keep it as long as possible, and live off the resulting stream of dividends and appreciation. For even greater wealth, just reinvest the earnings into still more profitable ventures.

This high-level view is liberating because it allows you to tune out of what the politicians and financial pundits of the day are up to. Joe Trader is raving on his TV show about interest rates and technical analysis, and Josephine Doomer is speculating about the role of precious metals “once all this fiat currency goes up in smoke”. While they keep speculating, we’ll keep quietly owning the show and working in our garden or woodshop while our stable of thousands of companies and their millions of employees remain innovative and productive on our behalf.

Although you don’t need to know much more than the above for successful investing and even early retirement, many of us enjoy going further and learning about  how it all works behind the scenes. I still like to read a book or two on investing, economics or the stock market every year, and I am also fascinated by the trends of world history and finance that slowly evolve over the decades and even centuries. This helps you take the long view on finance, which in turn brings you back to the start of the first paragraph so you can remain relaxed.

To make this Long View even more fun and convenient to absorb, I’ve commissioned the creation of a very handy (and free) interactive piece of software called IndexView, because I think it paints the picture of US economic history in a uniquely useful way. Let’s go straight to the tool itself, and then explain what is so cool about it immediately afterwards. To use it, try rolling your mouse wheel, pulling that scrollbar left and right, and using the pulldown and date boxes.

First of all, let’s give credit where it is due: This tool was entirely programmed by a young (and completely brilliant in my opinion) reader named Tristan Hume. I met this guy last year at an Ottawa MMM meetup, and he whipped out an iPad running a slick app he had created called StashLine. It is a financial planning app designed specifically to help plan the early financial freedom that is so rare outside of readers of this blog. I mentioned my own idea: a web-based graph that lets you really easily see the returns of the stock market with and without dividend reinvestment, as well as other useful data, over recorded US history. He emailed me a few days later with an early version, and we’ve been developing it ever since*.  At this point, I think it is great enough to share with you.

Why This is So Important

The stock market is still widely misunderstood. Beginners dive in and think you can outsmart it by identifying the next “head and shoulders formation” (you can’t). Others repeat common misunderstandings like “The stock market actually returned nothing for 25 years between 1929 and 1955″. This is incorrect, because companies were paying dividends like crazy during those years, and if reinvested the wise shareholder would have returned almost 7% compounded – not bad for the famously worst period in recent investing history.

To look at a more contemporary example, I like to be able to identify when stocks are on sale. This golden opportunity pops up when the stock market’s overall price is cheaper than average. In June 2011, I did the analysis for you and determined that they were priced just about right: the 1-year price-to-earnings ratio was about 16.2. If you had bought stocks then, you’d have seen compounded annual returns of about 16% to today.

Just two months later, the pundits and doomers got scared and caused a crash, and the stocks were on sale. I wrote about it again in an article called A Summer Clearance on US Stocks! Plugging the dates into IndexView again, smart readers who bought at that moment would have seen returns over 20% per year to this point.

Understanding history is useful, but it is still only a general guide in predicting the future. Right now, for example, our stock market is more expensive: the P/E ratio is over 19, and the even more meaningful trailing 10-year P/E (also called “Shiller P/E” or “P/E10“) is over 25. Is this a scary bubble and a terrible time to invest?

Consulting the IndexView oracle above yet again, we can use the dropdown to select “Shiller P/E ratio” and see what happened the last time stocks were this expensive. Roll that mouse wheel to zoom way out. It was at a similar price in 1903, then again in the ’20s, 30s, 60s, 70s, and then way more expensive for much of the time since the Internet was invented. The peak of overpricing was in the year 2000, when the P/E10 was over 40.

Going back to S&P500 with dividend reinvestments, we can see what has happened to people who invested in these situations before:

Investing in the worst time of 2000 (P/E10 was over 40), you would have a seen annual compound returns to date of just under 4%. Pretty terrible by stock market terms, but still an overall increase in your money of 64%, because 14 years is quite a long time, and compounding is some powerful shit.

More significantly, let’s see what happens if we invest at some earlier time the market was at its current moderately expensive P/E10 of around 25. Set IndexView to invest from 1996 to 2014. Over that 18-year period, investors have made a compounded 8.2% return, or a total of 321% before inflation.

You would probably get quite excited and proclaim yourself to be a real estate genius if you bought a $200,000 house in 1996 and found it to be worth $642,000 today. But to the long-term stock market investor, this is just typical performance.

I think IndexView is a great educational and investing tool, and thanks to Tristan for building it. If you like it, set yourself a bookmark and share it around the web so others can share the benefit and encourage further development of a promising** new set of financial tools.


*and it’s still a work in progress, of course. If you have suggestions or bug reports for Tristan, feel free to mention them in the comments  for future development.

**And by the way, this guy just finished high school. If you’re running a tech company and in search of unusually bright talent, you might get in touch with him before it’s too late ;-)

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We Sold the House! Here’s How I’m Investing the $400,000. Thu, 21 Aug 2014 01:18:48 +0000 014061775_640x480

014061788_640x480The good news is, we sold our old house shortly after moving into the new one. The bad news is that the net proceeds (just over $400,000 after all related costs) are on the way to the bank account, where they will immediately become a sea of donut-munching, water-cooler-gossiping Idle Employees doing no useful work for anyone other than the bank.

If you’ve been reading here for a while, you know that I view this as a bit of an emergency. Financial independence and early retirement are built on the concept that your money can work harder than you can. Money invested into productive assets begets more money, which pays for my groceries as well as rolling itself into still more productive investments. This cycle allows the MMM family to ignore money entirely and instead focus on living life how we see fit.

But money in the bank today earns under 1% interest, which means it is shrinking after accounting for inflation, and not benefiting me at all unless I want to start draining away that precious principal instead of living off of the returns. So I always try to keep all available money at work.

This brings up a big question. How do we put such a large batch of money to work in today’s financial environment? Checking and savings accounts are no good. Bonds are paying very little as well. Stock Index funds like my own favorite VTSAX are at record highs, and everybody and their barber is forecasting a crash in the near future, so we have to hold out and wait for the crash before we buy, right?

The best time to invest in stocks was long ago. The second best time is today. The basic reason is that on average, the stock market always goes up, and it pays you dividends all the while.

This is the mental game that holds many of us back. But it tends to be a losing one, because it involves trying to predict the unpredictable movements of the stock market. When you wait for a crash, you are betting that you can guess when the market will drop, even though we all know that it tends to go up over time.

For an example, let’s take one of my own proclamations of ‘high’ share prices. Way back in March 2013, I wrote a post called “How About that Stock Market!?“. At the time, the S&P500 index teetered at a dizzying 1450, and we were all sure it was done rising until the next 50% haircut. The graph looked like this:


1974 to 2013: surely a crash is coming, right?

But now as I take a  peek at Google Finance, I see that same index is at 1981.60, not even counting the dividends that have been paid in the meantime. A further 37% rise in just 18 months.

In fact, when you look at a graph of any bit of exponential growth, you tend to see a mountain just at the right hand side that proves you are in an unsustainable bubble. If you don’t believe me, take a look at this graph:

Ahh, it must be a bubble! (1993 edition)

Ahh, it must be a bubble! (1993 edition)

Here we have backed up the time machine by exactly 20 years to look at the spring of my final year of high school.  What an unsustainable stock market we thought we had those days. If only we could have invested in stocks back in 1954, instead of this ridiculous high we have here in 1993. We’d be rich.

But what if the market crashes right after I invest my life savings?

There are two ways to respond to such an event: kicking yourself because you failed to predict the timing of the crash, or patting yourself on the back because you still own a bunch of stocks and you are now collecting dividends on them, which are rolling back in to buy more of the low-priced shares.
Seriously: what do I care about the sticker price of some shares I just bought? I am investing this money for the long haul, and the shares I buy today won’t be sold for 30 years or more. By that time, I’ll happily place my bet that they will be worth much more. Stock market crashes mean nothing to long-term investors, other than perhaps a reminder to buy a few more shares if you have any idle money.

Investing can easily become a psychological head game. Even I feel it, with this large stock purchase looming in my immediate future. But if I would delay a lump-sum purchase in current market conditions, would I also cancel regular 401(k) contributions if I were still employed? Would I go even further and sell all my shares and wait until the market drops to reinvest? Precious metals anyone?

No, of course I wouldn’t – to me, these are easy questions to answer and thus the answer to whether to make a lump-sum investment is also an easy “Yes.”

Shouldn’t I buy small lumps of shares over time instead via Dollar Cost Averaging?

This can be a good compromise for those still not willing to take the plunge with a single investment. As long as you realize that on average, the historical odds are that you’ll do better with a lump sum purchase according to this Vanguard study*.

With all that conventional stock wisdom out of the way, I will admit that I’m not putting the whole $400k straight into VTSAX. My own investing picture includes domestic and international index funds and real estate, as well as a preference to be absolutely debt free except in a few rare exceptions. So here is where it’s going:

Paying off debt: Your ‘return’ on this is equal to the interest rate on the loan. I happen to have a line of credit that I used to partially fund the new house we moved into (the rest was paid with cash). The credit union has been charging me 3.5% on the $160k balance, which is about $466 per month. In this case, I paid it off, which accounts for the first chunk of that $400k. The reason: I value safety and stable cashflow above higher returns, so I only used this loan as a temporary measure to bridge between the two houses.

Maxing out the Self Employed-401(k) for the year: As semi-retired/self-employed people who now find ourselves in a higher tax bracket**, Mrs. MM and I have the opportunity to contribute up to $51,000 per year(!) of pre-tax money to a separate Vanguard retirement account we created for this purpose. This is a powerful way to defer taxes, especially since we don’t expect to need this surplus money before age 60. But if that expectation proves wrong, you can always withdraw from a 401k early without penalty if you’re in a pinch.

Investing in Rental Properties: this is a profitable and adventurous field for many, and I have enjoyed it myself for almost 10 years (we still have one rental house left in the collection). But with this blog taking more of my time  these days, I’m getting out of this business to free up more time for other adventures. Instead, some of this dough will be allocated to  a Real Estate Investment Trust (REIT) – a passive way to accomplish the same thing.

Lending Club, Prosper and other alternative investments: These have grown into promising new asset classes that I am hoping will be around to benefit investors for decades to come. Returns of over 7% seem very easy to achieve (mine are sitting at 11.3% on a loss-adjusted basis after two years). This type of investment is essentially just a high-risk/high return junk bond. But it’s fun and performance seems promising, so I do plan to put at least a chunk of the idle cash into this class, perhaps in an IRA account. (You can read more about my ongoing Lending Club Experiment here)

So the final distribution might end up something like this:

40% VTSAX (US stocks of all sizes)
40% VGTSX (An even bigger basket of International stocks)
10% REIT fund
10% Lending Club or other bonds

There’s a lot more to say on the subject of investing and the stock market. In the next post, I’ll share a new interactive tool developed by one of your fellow readers which allows instant visualization of historical market behavior, dividends, housing prices, and much more. But for now, I’m off to put some employees back to work.

While I believe the Vanguard study, I’m wondering if the retirement researcher Wade Pfau has done any more advanced calculations on the matter. Given the current P/E10 ratio of the market, does it change the probability of success when comparing dollar cost averaging vs. lump sum? Maybe he’ll get back to us.

** Don’t tell the Internet Retirement Police about that, though.

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Is Mr. Money Mustache Ruining Your Marriage? (Part 2) Wed, 30 Jul 2014 23:44:05 +0000 Scene from a recent sunset, where I paddled out on the lake and wrote down a few things.

Scene from a recent sunset, where I paddled out on the lake and wrote down a few things.

In our last episode, we reviewed a particularly spirited example of the classic battle over frugality, cheapness, and the freedom to spend one’s own money the way one sees fit. Some version of this same clash is surely occuring a thousand times over in every city of the world on a continual basis, for it lies at the root at human nature itself. This is why I find it so interesting.

For example, while some couples end up at war and never get anywhere, others find that frugality brings peace. Check out this quote from an email someone sent me the very next day in response to that last article:

“My wife absolutely loves Mustachianism too, even though she has never read your stories or visited your website. She just loves the man I’ve begun to transform into (biking to work, fixing things in the house, carpentry, no more TV, long walks, etc.)”


Another woman shared her story of sudden Mustachianism-induced change the same day:

“Since then, we have sold the SUV and bought a used compact car, paid off all of our debts, sold the house and gotten another (1000 sq ft total!) in the city, close to transit and work, and live on 30% of what we used to. I have lost 30 lbs in the process, hubby lost 40 lbs, happier and feeling so much more accomplished. (…) I’m not planning on retiring soon as I’ve made my priority working one day per week for now until my daughter gets into school, but with the changes I will have my home paid for in 5 years and will be retirement ready by 48. This is truly a 180 degree change from before.”


We could write a whole encyclopedia about personality types, feelings, and relationship dynamics before we even got to the start of what is going on here, then move on to take an expensive series of counseling sessions. But to take a massive shortcut and just go right to the answer, I believe that the biggest cause of fights like this is in our different responses to authority.

Through a combination of genetically-inherited temperament and socially programmed character, we all end up at different places on the obedience scale. Some kids actually listen to their parents and do things like eating whatever is put in front of them at dinnertime, whereas my own son will gladly enter a battle to the death before accepting verbal commands to do something he feels is irrational or unfair.

I could write this off as childish, but unfortunately I am the same way*. If a person or society  imposes a rule on me, it had better have some identifiable logical reason behind it. Otherwise, I find myself digging in and willing to fight against it – quite enthusiastically to the death if required. Watching the response of Gimli (that Invincible Dwarf with the Giant Beard in Lord of the Rings) when the prospect of battle comes up, I feel an eerie kinship with the diminutive badass.

So let’s suppose you are the frugal one in your relationship, and your spouse is prone to wasteful spending. Hey, I’m on your side too – most of the shit we spend our money on is rubbish and you end up richer and much happier if you just simply stop buying it. But how do you spread this obvious logic to your spouse?

Well, for starters, you don’t do it by watching over his or her spending and then nagging every time you see something you don’t like. While this is your natural temptation, and it does work for those who happen to have obedient spouses, it will backfire miserably for the other 75% of us. This is because you are trying to impose authority on someone who does not like to be bossed around. Note that in the success stories above, each side was fueled by the positive results of frugality rather than just obediently following the instructions of a spouse.

So instead of nitpicking the symptoms (individual spending decisions), you need to address the root cause: Your Goals in Life.

Your first task is making sure you both are working towards the same common “Why?”

This step may take minutes, or it may take years.

There are plenty of good Whys out there, but they can be elusive at first. My own Why is simply “to live the best life possible”, from which stems a desire for health, personal growth, free time to explore my interests and even more free time to raise my son. I found that none of these could be optimized with a full-time job getting in the way, so my very first task was eliminating dependence on that job.

When you add in the environmental side of things and the fact that to waste natural resources is quite simply to be an asshole to all other humans and other living beings on the planet, the choice for me became even clearer.

Some people might get stuck with irreconcilable differences at that very first step. A vegan might find it unacceptable for moral reasons to live with an omnivore like myself, for example. And I’m personally stubborn enough that I couldn’t live with someone who insisted on a full-sized SUV for personal transport. Better to just sidestep such lifelong conflicts instead of spending a lifetime fighting them. But if you’re already locked in with a wife and kids, it is time to be more patient and creative because honoring your responsibilities comes above serving your own personal ideology**.

Once you can agree on your definition of The Best Life Possible, it often helps to start by Painting the 10-Year Picture.

For example, one brilliant reader named Andy wrote in and shared a story of his own success at flipping the frugality switch. His approach in a nutshell was, “If we keep doing what we are doing now, here’s where we will be in 10 years. But if we do it this other way (sell the expensive car, pay off our debts, live a different way), we will be over $200,000 further ahead, which will make our lives much better.”

He conveyed this message by giving a slightly silly Powerpoint presentation to his own wife. And the results were so good, he sent in the slides to share with you:

Make Our Money Sing: A Money Mustachian Adventure

Most people cannot see the connection between lattes, sandals, V-8 engines, and a million dollars. But it’s really there – changing relatively simple spending habits will indeed make the difference between Broke and Millionaire over a reasonably short time period. A slideshow like that one makes the math clear.

Other people might be more impressed by emotional appeals rather than monetary ones. The fact that you start living more happily immediately when you spend more time outdoors, for example. The relationship between debt, stress, and death. The idea of retiring in your 30s or 40s instead of after you get your discounted senior citizen bus pass. Or the incredible benefit of not having to worry much about money and careers when you’re busy with the bigger job of raising your kids.

All of these things are the direct result of living a frugal lifestyle, which is in turn just a slight change to a few dozen little daily life habits. These little changes are ridiculously effective, and also ridiculously easy, which is why I find it ridiculous that almost everyone is broke in this country except those with such ridiculously high incomes that they can’t manage to spend it all.

But the enforcement over those little decisions needs to come from within each person, rather than from an outside authority or an angry budget. You can make yourself save, and Mr. Money Mustache can make you save because you’re reading this freely and then independently deciding whether or not to implement it. But your husband or wife can not make you save. At best, they can only inspire you to want to save.

On the other side of the coin, the Frugality Enforcers among us may need to sit back and do their own math. If you are already saving over 50% of take-home pay, for example, the odd indulgence will not derail your dreams of early retirement. And if your income is really high, you can indulge almost constantly – you just have to be a bit strategic and avoid the biggest money pits like luxury cars, long commutes, and yachts. My own frugality is hampered by my taste for luxurious housing and food, for example. But by approaching these luxury add-ons as part of a generally calculated and frugal lifestyle, the bank is not broken and the family’s spending still ends up around $2000 per month.

In fact, I find that allowing yourself to be imperfect enhances the experience of being human. Beer and wine are bad for me, but I still get drunk occasionally. I know that luxury is just another weakness, but I still indulge in it occasionally. The key to all this is to acknowledge that you are doing something unnecessary and slightly wimpy, laugh at yourself, and then do it anyway with full gusto. Then you’re free to get back to your normal disciplined self in regular life.

Strategy for Frugality Without Deprivation:

Start with your regular life. Start introducing challenges for yourself which build your Frugality Muscle. Embrace the successes and laugh at the inevitable failures. Note how quickly this becomes fun and makes life worth living. Now throw in the odd unnecessary luxury and laugh again at how large and decadent your life is. You could do this all day. What were all those other people whining about who said this would be hard?


*And have been since birth according to Mom. This is why I cut my own son some slack for his stubbornness, and attempt to use rational logic rather than fist-backed discipline to do my half of the family’s management.

**Which sounds a bit Unyielding and Old Testament, but the science on happiness seems to back this up: being honorable and consciously choosing to serve others leads to a happier life, because you’re constantly challenged and reassured that you are doing the right thing. Making selfish choices is like having that third piece of cake: thrilling initially, but quickly followed by a much longer period of unhappiness and repercussions.


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Is Mr. Money Mustache Ruining Your Marriage? Thu, 17 Jul 2014 13:14:59 +0000 hoopty

octoThe following is an actual conversation from my email. Abridged a bit for sanity and privacy.

An Enraged Reader Writes:

Subject: Please Stop

Dear Mutilator of My Monies,

Please stop writing. My husband is enthralled. I am watching all of my dreams of a mommyhood filled with Tahoes, lattes, endless monogramming, and a pottery barn dream house go up in smoke. I am tired of hearing about your stupid blog. My husband actually used the phrase “the power of positive thinking” in conversation yesterday…like it was his original thought!!! Vomit.

I stopped by my husband’s office to visit him yesterday. I walked into the lobby there were patients waiting, so this is good. I walk through to the back, more patients waiting in chairs, so this is good. I walk back to his office. There he is! “Hey Ba – ” What is he doing??! He was reading your stupid blog!!! (I was secretly pleased that he was doing this at work during his time and not in the evenings during our time.) I now watch movies by myself. He lays beside me with one eye on the screen and one eye on his computer. He wakes up at 0500 bc he “can’t sleep” and reads the blog. Wahhhh You’re ruining my life.

I thought I was the most wonderful spouse on the planet because we recently paid off 6 years of student loans. And now here we are planning to scrape by for the next 50 years. I do not want to talk about money every hour of every day for the rest of my life. I don’t want to buy already crapped in cloth diapers for my baby on Ebay!

Please think about female spouses. There has to be a limit to the money talk, and the money supervision, and gearing our whole lives around counting dollars. We already live in one of the cheapest apts in town. We sleep in a double bed that was bequeathed to me at age 8. Our “couch” is a blow up bed. A broken blow up bed. WE ARE TOO CHEAP TO REPLACE OUR BROKEN BLOW UP BED COUCH. I dream sometimes about just coming home from work and stabbing it with a kitchen knife and watching it deflate.We live in a stifling, muggy, suburban town that takes 20 min to get to work. I am NOT riding a bike. I do drive a Prius which is as far as I go. No need to punch me in the face.

There has to be a balance. Your theory is flawed bc it is based on men. Families are comprised of men and women. The number one reason a man is able to save adequately is having a wife who saves adequately. How does a modern, style conscious, professional woman thrive with a male-infused idealism of mustachianism? The two cannot coexist. Women and men have different opinions about what is valuable. I value Starbucks as a treat. However, my husband and I literally drive away from the drive through to the same tune every time “This is RIDICULOUS! I can’t believe people pay this much for coffee!”

Don’t be mad. Just consider that a blog for men is only 50% of the fight. Maybe your wife wears a mustache like you, but this is rare. Very rare. Where is the other 50% for normal people?

I was both interested and amused by this submission from a non-reader. While there were definitely some misinterpretations and complainypants in there (especially with that incorrect attitude about biking), I also thought I sensed some light-hearted humor. So I wrote back:

Mr. Money Mustache Replies,

Dear Enraged Reader,

I sense a mix of sarcasm and real problems in there. Obviously no sane person would mourn the loss of a GMC Tahoe, but an inflatable sofa could be a valid source of long-term concern. Can you tell me more?

You can turn the tables on your husband and have him read ‘Frugal vs. Cheap’ to you. My lifestyle has always been pretty luxurious, after all. (I’m on a train to California drinking wine as I type this on my fancy phone).

On the other hand, you might want to explore your feelings towards challenge. I mean, who is so soft that they prefer a gasoline-powered throne to a muscle-powered bike? And is this weakness something to cherish and cultivate, or to overcome so we can live a more fully human life? We should talk more. I think there is a happy middle ground.


Enraged Reader Replies,

Hmm. Well, first to address the Tahoe issue which seems to be the most concerning to you. I drive a Prius. I drive a Prius with 4 hubcabs.

Correction, I drive a Prius with 4 broken, cracked, bent, hubcaps. Actually, I believe I still have a piece of one of them stuck in my side door pocket. Why? I seem to have a blind spot for curbs and large rocks next to curbs. I can’t seem to miss them. I have friends that have the same problem and also want SUVs. SUVS allow you to ignore conventional road side barriers as well as get elusive parking spots other sedans cannot get. The reverse can also be true I suppose. I like the thought of being up high, and I like knowing that I would be safe in the event of a wreck. I just recently discovered that people in SUVs can see TWO cars ahead of them. My whole life, I thought that we were all on an equal playing field, but we’re not. The SUVs know what’s going on before I do. They’re all in the fast lane, while I’m stuck in the slow lane!! I also like the thought of just being able to throw my whole life inside a Tahoe without having to tetris-pack my belongings. For example. “We need to go borrow a latter to paint the living room? Sure! Let’s pick it up in the Tahoe!” Or, “Let’s go by some large bushes or small trees at Lowes, and we can put them in my Tahoe!” Or “I don’t have time to pack- just grab everything and throw it in my Tahoe!” Or, “Girl trip to the beach? Everyone pile in my Tahoe!” When we have little kiddos, I want to be able to keep everything they could possible need in there – diapers, small stroller, jogging stroller, baby toys, extra wipes, etc with extra room for groceries. Sounds great, right?!!!

Also, I fear that the comment, “who is so soft that they prefer a gasoline-powered throne to a muscle-powered bike?” has quite missed its mark. I like “soft.” Remember, I am a woman? I put conditioner in my hair so that it’s softer, I shave my legs, so they’re softer, I put lotion on my arms, so that they’re softer. I even smudge my eyeliner a bit to give it a softer look. “Soft” is a feminine thing to be desired and in no way is it a turn off. Sooo YES! I am SOFT! And if a Tahoe makes me softer, bring it on!!! Also, I’ve never had muscles in my life and am totally ok with it.

Also I feel like you may not have tried to transport yourself by bike through a large suburban town. That means it’s 10 minutes by car to the grocery store, 20 minutes to work by car, 20 minutes to church, 15 minutes to our friends’ house, and 10 minutes to the canal in your car, where most bicycle enthusiasts then unload their bikes from their cars and then go biking along the river. What would be your solution to biking in a sprawling suburbanopolis?

And I guess it’s not just the blow up couch that drives me crazy. It’s the cumulative effect of a cheap life where we scrutinize every penny and are reticent to indulge in simple life enhancing pleasures. We are poor. Not financially, but outwardly, we are poor. My husband has an orthodontic practice, I work full time as a nurse practitioner, and yet we live like going out to eat at a restaurant with waiters will bankrupt us.

We were listening to a podcast last weekend, and you said that some people have a predisposition to the MMM lifestyle. I would like to introduce you to my husband. Watching him research different financial strategies has been like watching one of those toddler toys where you have to match each different shaped block to the appropriate shaped hole in the container and push it through. Mr. C is an MMM block. He didn’t know it until he tried to fit into several different financial holes without really fitting all the way around, and then finally found the MMM shaped hole and slid right in. He wants to retire early and take up hobbies, and travel, and be at home. He wants me to jump on the band wagon. That’s great. Except for the fact that I’m tired of self-induced poverty. My understanding of the MMM lifestyle is that you work hard to be poor while your young so that you can be poor without working when you’re old.

Being poor is okay if that’s what you’re called to or that’s what you’re life situation is. I would be okay being poor if I could stay home and have babies or was doing overseas missions or something. But I work hard Monday-Friday, and I can’t even enjoy a bottle of coke once a week! It is not a lifestyle that I want forever. And my husband would have to loosen up with the little things before I could throw my block into the MMM shaped hole. Something has to give.



park_cityAs you can see, quite a battle has formed between the three of us, and it scares me a little, since it’s a battle in a much younger couple with a much newer marriage than my own. Are these folks doomed?

They may be. Some people just develop drastically different perspectives, which may not be compatible. For example, my own wife would take strong offense at the idea that women are supposed to be soft. I would personally spend my time shooting holes in those amazing misconceptions about cars, bikes, and SUVs and the concept of “scraping by”.

At the same time, it sounds like the husband depicted in these letters could also use some tips on Selling the Dream of Frugality, as well as the difference between Frugal and Cheap. And if you are battling over monthly spending allowances while simultaneously feeling the desire for $100 golden sandals, something is bound to give.

But by gaining a broader perspective, there may still be hope. Every time I get a chance to meet with readers, I see couples who have arrived from both sides of the gender gap. About half the time, it is the girl who was frugal, and wrangled in the dude. Sometimes (as in this case) the man is the instigator. In my favorite stories, a high-income person, couple, or family spontaneously sees the light and chops a $200,000 lifestyle down by 75% or more, then shows up to report how much happier their lives have become. Doctors and successful financial advisors sell their golf course McMansions and move into the neighborhood next to their practice, and start walking to work and setting priorities straight in life at last.

Successful frugality must come from an alignment of philosophies, not an ever-stricter regime of bean-counting. So in Part Two of this article, I’ll share another story of a different confrontation between partners – one which led to much greater agreement and better results.  Until then, we can all chill out and realize that even the worst of financial disagreements is still a tiny detail in the grand scheme of our excellent lives.

Update: A Word about Internet Troll Speculation

A few dozen comments into our morning here, I can see quite a few speculations about the true intent of this email. Some think our author is a “troll”, which is someone who writes something artificial and inflammatory just for the sake of getting a reaction.

While I can’t prove it because I don’t know these folks personally, I would strongly disagree. Trolls are common on Reddit, but rare in the Mustachian community, because we are a smaller group with a more focused mission. Plus, this was a series of personal emails where the author had no idea it would get published.

More significantly though, is the fact that I hear about battles exactly like this one every single day. The perspective of the typical non-Mustachian consumer really is exactly as you read it here: frugality is deprivation, SUVs are valid road-going vehicles and little luxury purchases make you happy. When you try to spring a low-spending lifestyle on a person with this perspective, this is exactly what happens, and this is why we see effects like 90% of cars in the US being bought on credit. People are buying depreciating mechanized sofas that cost more money than their entire net worth. By the million. Every single month.

This shit is for real, and that is why I believe the sentiments here are genuine. The question remains, then: how can you completely turn this perspective on its head and end up with a person that actually enjoys frugality?


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Necessity Is The Mother of Badassity Mon, 07 Jul 2014 11:06:00 +0000 wood

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

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

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

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

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

How is it that some people find that life becomes strained to the limit after their first child is born, but then manage to go on to produce and raise several other children simultaneously? How do some runners that can barely jog out a few blocks go on to finish a marathon less than a year later? How do some people go from married, affluent lives of comfort, through divorce and perhaps career loss, then rebuild everything from scratch better and simpler than before?

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

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

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

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

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

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

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

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

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

Ho. Lee. Sheeyit.

Ho. Lee. Sheeyit.

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

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

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

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


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

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

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

Experiencing hardship and the rewards that come from overcoming it are quite simply what makes life worth living. As an almost-40-year-old with some dough in the bank, I should be seated comfortably in a Lexus and cruising around between the golf courses and restaurants and starting to pile on the pounds and disabilities each year. Instead, I feel better than ever, and the extreme nature of this project coming right at the end of 8 months of construction on my own house has whipped me into the best shape of my life. But I still have much to learn by gaining inspiration from those more badass than me. The Kettle Black just turned 50, and while I went straight to bed after work each day, he went out to the live music venues or worked on his own gigs through the night. 10 years older than me, he looks like this:

A Canadian Badass at the half-century mark

KB: A Canadian Badass at the half century mark

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



* Ikea kitchen cabinets are great products at an excellent price. But they make it infuriating to order them. If you visit a store, they’ll make you wait in line for a helper, use their clunky kitchen designer software, fuss around for hours, then maybe get your stuff after the end of a long and sweaty day in the store.. if the stuff you want is even in stock. OR you can order from their website, but in this case the local store is not even involved, and you pay a $200 delivery charge and wait at least a week to get everything. Why not arrange it so you can order from the site, have the closest store collect the appropriate cartons in your absence, and you show up later that afternoon so they can quickly help you load it into your hatchback or truck?

** I have become spoiled by the incredible service of Alpine Lumber in Colorado. If I’m up on my own roof and suddenly realize I need something, I can whip out the phone and tap an email to the stupendously efficient and personable B.J. Hart. The order will go straight to the construction credit card and a truck will drop it off on the back driveway within a few hours. It has been an amazing boost to my own building productivity.



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How to Carry Major Appliances on your Bike Mon, 23 Jun 2014 16:11:45 +0000 old_range

Right around the same time I bought this new fixer-upper house, I bought a special piece of equipment to help make the project more efficient.

With the new house a five minute walk from the old one, commuting time was not an issue. But with the hundreds of trips carrying tools and materials required for a project like this, I didn’t have the right vehicle.

On foot, although I try my best I am simply not badass enough to drag a table saw and miter saw along with a stack of 2x4s for much distance down the street. My old Burley bike trailer will easily carry a load of cordless tools or a few weeks worth of groceries, but does not have the capacity for real construction work. But my construction van,  a 1999 Honda Odyssey with seats removed and a plywood floor, is overkill for minor daily hauling. This is a luxury construction rocket, a leather-appointed 220 horsepower Rolling Cavern. It is well-suited to carrying thousands of pounds of goods or people on multi-state voyages at 75MPH, but I would be a wasteful car clown if I used it to haul a tool belt and a compressor up and down the small hill in old-town Longmont*.

So with your entertainment in mind, I acquired this extremely large and badass bike trailer from a small Iowa builder called Bikes at Work:


These things are highly configurable due to the modular design. Lengths range from 32 to 96 inches, width is 19 or 27 inches, back wheel can be mounted in various spots to accommodate an overhanging load up to about 15 feet (such as a canoe), and you can even get a Duallie version with two wheels on each side that will roll 600 pounds.

I picked the longest 96A model but skipped the “wide” and “heavy” options since this still provides plenty of space and I figured 300 pounds is plenty of capacity. The empty weight of my 96A is 47 pounds – very trim given its size.

The idea was to test both the trailer and myself over the duration of my fall/winter/spring construction season and see how well we perform together (measured by just how much duty we take away from the big Honda). And I can now say that the results are very positive. A few shots of the trailer in action:


A complete patio set including 4 chairs, a 6-person table, and an umbrella (250 lb)


The kit for my radiant heat system (2000′ of PEX pipe, plus various pumps, tanks and valves)


The old electric range that came with the house, on its way to be donated to the recycled building materials store .

Note that for some of the loads pictured above, I used the trailer in bare form – no load floor. But for strapping down smaller items, you’ll want to cut and mount in a piece of 1/4″ to 3/8″ plywood to create a flat surface more like a pickup truck. Another option is to just get a few 17-gallon Rubbermaid bins with lids – the trailer is designed to hold these perfectly and they barely need to be secured.

What I Like About This Trailer

These Bikes at Work trailers are solidly made and trouble-free. That would make them ideal for the owner of a bike-based business that needs performance without maintenance downtime. There is also some nice Bling in the form of well-finished fenders and a beefy curved aluminum hitch arm.

The trailer shipped with a bountiful set of the best bungie cords I’ve ever used. Plenty to strap down almost everything, although you’ll want some racheting straps if you are carrying really awkward items (like last week, when I brought my gas barbecue up from the old place:)


Plus a few spare propane tanks, added after this picture was taken.

A trailer like this also comes with some unexpected prestige. People tend to smile when they see you riding by, the unfortunate drivers of jacked up F-250 farm trucks stare in envy, and cool people inquire earnestly about the features. In mid-December, I was strapping down a Christmas tree and a bunch of ABS drain pipes in the Home Depot loading area as a crew of bearded carpenter/snowboarders was preparing their own cargo for a work trip to Vail. They strolled over to see the setup.

“Kudos Dude, that is awesome”, was their assessment. And while I had become pretty accustomed to the trailer by this point in my ownership, the comment reminded me that yes, it is pretty awesome to be able to carry large stuff around town without a car or truck.

Things That Could Use Some Improvement

The most glaring problem with Bikes at Work stuff is that it is expensive. At $750, my 96A trailer cost me more than twice as much as my bike. Financially speaking, I’d need to displace at least 1500 miles of van driving before this trailer pays for itself, and this will take me about 5 years given the current rate of use.

On the other hand, a more casual carpenter or homeowner could use a trailer like this to completely replace a pickup truck or SUV, and live with only a small car (or no car at all)  in which case it would pay for itself instantly. When I finally finish building my current house, I may sell my own van and reap the life simplification benefits.

Plus, measuring the benefits of biking in strictly financial terms is a foolish exercise. We are comparing sitting on your ass pushing some power-assisted pedals and levers to pulling some fucking major appliances up a steep hill using the power of your own bulging quadriceps. This is the difference between a slow passive death and a long vigorous life. Obviously, any time you can replace driving with cycling, there is some powerful winning involved.

The other thing that really needs re-engineering is the Bikes at Work hitch connection system. They provide a sturdy welded stainless steel bracket that clamps to your bike frame, but installing and removing it is a fussy and haphazard affair. Let us compare their hitch installation to the excellent one that comes with a Burley brand kid trailer by taking a look at this picture:


Although “several minutes” sounds like a fussy thing to whine about, it is a significant issue for me because I switch between the two trailers (and riding with no trailer) on a daily basis depending on the size of my cargo. Luckily, with the power of Welding, I can create a new hitch for the big trailer that installs quickly. I’ll update this article once I get it built.

A Clever Upgrade

The obvious drawback of a huge cargo trailer is the huge amount of human energy required to pull it any significant distance. This isn’t much of an issue for me, since my building supply stores and the recycling yard are all within 3 miles of my house, and the elevation gain from the lowest point in town to my house is only 100 feet. But for larger cities or those days when I’m in a rush and tempted to drive instead of cycling, an electric bike conversion kit** (or a complete electric bike) would make an ideal companion for a trailer.

A Frugal Do-it-Yourself Alternative

Close inspection of the Bikes at Work trailer reveals that it looks an awful lot like a half of an aluminum extension ladder, with a hitch and axle bolted on. While not completely trivial, a handy person could make a trailer like this by combining an old ladder with some reused and reinforced parts from a Burley trailer. In fact, one reader wrote in to share his own photos of such a project here. Or you could mix various home-sourced parts with components from Ebay or the Bikes at Work parts list. Complete trailers also very occasionally show up on Craigslist, but as a very niche product, this is a rare occurrence.

My hope is that as we move the United States further towards its inevitable future as a Badass Utopiaeveryone will need a good bike and a trailer or two. Pickup truck sales will drop by 95% as they return to farm-only use, and bike trailer prices will drop as the market grows.

Here's the new place in its current state, seen from a guest's vantage point as the summer party season begins.

Here’s the new place in its current state of construction, seen from a guest’s parkside vantage point as the summer party season begins.


* I can only imagine how embarrassed people must be to use one of these Odyssey behemoths to drive 50-pound kids to school, and yet it seems to be the most popular vehicle for this task.

** I’ve been pondering the systems at EBikeKit for inclusion in a follow-up science experiment. I even contacted the company with the hope of getting them to send me one for evaluation purposes so I can share the results with you here. But they never wrote back. If some of us click that link to let them know how interested Mustachians are in learning about electric bikes, it might get their attention and they could send me an email :-)

Update: that did the trick. Company founder Jason Kraft got in touch right after publication to rave about an unprecedented rush in  traffic to his site. Thanks Mustachians! Now we have some great plans in the works for an E-bike experiment in August, when I get back from the upcoming trip to Canada.

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J.D. Roth: How I learned to Stop Worrying and Love Mustachianism Thu, 19 Jun 2014 13:57:56 +0000 JD Camping

Today our mutual friend J.D. Roth has stopped by to tell a story. I am happy to share this one with you because in real life he is the real deal and a very nice guy. If you weren’t already aware of his fame, this is the guy who who founded the blog Get Rich Slowly in 2006, then later sold it and went on to dabble in early retirement,  write some books, and do a bunch of inspirational presentations at various cool events like the World Domination Summit

How I Learned to Stop Worrying and Love Mustachianism

My name is J.D. Roth, and I’m a Mustachian. But unlike many of you, I wasn’t born this way. In fact, I’m only a recent convert to this budding “religion”.

When I was young, my parents were poor. Mom stayed home to raise us three boys in our single-wide trailer. When Dad could find work, he sold staplers and boxes and chocolate bars. When he was out of work, he dabbled with starting businesses.

Even when my parents did have money, they spent it all. My father once sold a business for a tidy sum, but he didn’t save a dime. He squandered the proceeds on a sailboat, an airplane, and a new stereo system. In a short time, he was just as broke as before he experienced his windfall.

Some kids might have learned from their parents’ mistakes. Not me. I left home and promptly adopted the same habits. In fact, mine were worse. I had access to credit cards and personal loans, which allowed me to take on debt — something my parents had avoided.

Get Rich Slowly
Eventually, I realized the error of my ways.

In 2004, I was 35 years old and carrying over $35,000 in consumer debt. I resolved to turn things around. Because I’d done well managing a couple of businesses, I decided to manage my personal finances as if I were managing a small company called JD, Inc. I set a goal to eliminate my debt by the end of 2007.

I read everything I could about personal finance. I began to make smarter choices. I found ways to cut my spending and boost my income. I paid off my debts, one by one. I learned how to flex my frugal muscles.

As I turned my life around, I documented my progress at a blog called Get Rich Slowly. I hoped my story would help others — and I hoped that others would share what they knew with me.

My plan worked.

In December 2007, right on schedule, I repaid the last of my consumer debt. But I didn’t stop there. As Get Rich Slowly grew, my income grew. Instead of spending the money, I saved it. I quit my day job to write full time. And eventually, I was able to sell the blog for a large sum of money. Today, ten years after deciding to get out of debt, I’ve achieved financial independence.

Over time, I developed a financial philosophy, a smart, safe set of guidelines designed to help people develop smarter money habits. For a while, I thought I had things figured out.

But then I met Mr. Money Mustache.

Intro to Mustachianism
I first encountered Mr. Money Mustache at a blogging conference in September 2012. I liked him right away. While the other speakers were talking about monetization and search-engine optimization, MMM spoke about building a cult through the power of story — a topic near and dear to my heart.

A sound blogging philosophy
MMM’s conference presentation


After his presentation, MMM and I sat down for a chat. I learned that not only did our blogging philosophies align, but so did our financial philosophies.

For instance, I believe that:

    • Smart money management is more about mindset than it is about math. Financial success comes when you master the mental game of money. It’s not about understanding the numbers. The math of personal finance is simple: spend less than you earn and invest the difference. We all get it. Instead, it’s controlling your habits and emotions that’s difficult.


    • The road to wealth is paved with goals. Without financial goals, you have no direction. If you have no direction, it’s easy to spend money on things you’ll regret later. But if you’re saving for a house, your daughter’s college education, or a trip to Europe, your goal will keep you focused, making it easier to spend on what’s important and ignore the things that aren’t.


    • Financial balance lets you enjoy tomorrow and today. You don’t have to choose between spending today and saving for tomorrow. You can do both. Strive for moderation in all things: Pursue your goals, but don’t forget frugality; be frugal, but don’t forget your goals.


    • You can have anything you want  but you can’t have everything you want. Being smart with money isn’t about giving up your plasma TV or your daily latte. It’s about setting priorities and managing expectations, about choosing to spend only on the things that matter to you, while cutting costs on the things that don’t.


  • It’s more important to be happy than it is to be rich. Don’t be obsessed with money — it won’t buy you happiness. Sure, money will give you more options in life, but true wealth is about something more. True wealth is about relationships, good health, and ongoing self-improvement. Everything else is a lower priority.

While many parts of the Get Rich Slowly financial philosophy were Mustachian before I met MMM, others weren’t. Or, more precisely, they weren’t Mustachian enough.

I hadn’t yet learned the power of badassity.

Learning the power of badassity


You CAN Get Rich Quickly
Most financial advisers urge people to save ten percent of their income. The bold ones recommend twenty percent. For years, I’ve followed suit. Since 2008, I’ve encouraged people to set aside twenty percent of their income for retirement, and I believed I was doing a noble thing. Since converting to Mustachianism, however, I’ve changed my tune.

Mr. Money Mustache taught me that traditional saving advice is far too timid. Slow and steady finish the race, but they don’t win it. Fast and focused finish first.

The shockingly simple math behind early retirement clearly demonstrates that with a saving rate of ten percent, it takes nine years to save enough to fund one year of living. (Or, to put it another way, if you maintain a saving rate of ten percent for nine years, you accumulate enough to take one year off work.) At this pace, it takes about fifty years to accumulate enough cash to retire — and that’s only because the power of compounding comes into play.

Compounding is great, but it’s still an external force — something beyond your control. MMM helped me see that the more you save, the more you’re taking matters into your own hands. Compounding becomes icing on the cake.

  • With a twenty percent saving rate, it takes only four years of work to fund one year of expenses. At that pace, it takes nearly forty years to prepare for retirement. Again, at this level of saving, you’re relying on compounding to boost your nest egg.
  • If you make the leap from timid to badass, something amazing happens. With a fifty percent saving rate, you save enough each year to fund another entire year of normal spending! And at 75 percent, each year of work would fund three additional years. If you can save half of your income, you can reach financial independence in just seventeen years!

I’ve argued for a decade that it isn’t possible to get rich quickly except by chance. My philosophy has been that the only reliable path to wealth is to get rich slowly, and my motto has been “slow and steady wins the race”.

Today I realize that what I’ve been opposed to for so long isn’t the “get rich quick” mentality; it’s the “get rich easy” mentality. If you follow the principles of Mustachianism, you can get rich quickly. By altering your lifestyle so that you’re able to live on less than half your income, you can save enough to become financially independent in fifteen years — or less. That’s quick, but it’s not easy.

Saving Is NOT Sacrifice
The trouble, of course, is that it’s tough to save so much money — especially if you’ve already bought into the modern adult lifestyle.

If you’re just starting out in the Real World, you can simply continue to live like a college student for the next ten years, and you’ll be golden. But if you’ve already spent time and money embracing the Western way of life, getting to a fifty or seventy percent saving rate can seem like real sacrifice.

That’s how it used to seem to me, anyhow. Mustachianism, however, has taught me that saving is not sacrifice. Instead, saving is deferred spending.

My friend Jim (better known as jlcollinsnh to most of you) explained it to me this way: “Saving isn’t deprivation. That money is still spent. It’s just not spent on a Mercedes or a big house. It’s spent on the future. Saving is money spent on buying freedom.”

I recently had a chance to chat with Tom O’Donnell, a senior vice president at Chase Bank. We talked about personal finance and our shared interest in travel. O’Donnell told me that a lifetime of saving has bought him freedom. “I get to choose what I do now because I saved when I was younger,” he said.

Saving is the choice to spend on tomorrow instead of today. (And debt is the choice to spend money on yesterday.)

The Mustachian salute!
Mustachians in Ecuador!


Financial Freedom Is a Process, Not a Place
I used to believe that financial independence meant just one thing: Having enough money that you never had to work again.

But Mr. Money Mustache taught me that financial freedom exists on a continuum. It’s not “all or nothing”, but an ever-increasing range of options. The more you save, the greater independence you achieve.

    • At one end of the spectrum, you’re completely dependent upon others for your financial security. As a child, for instance, you’re dependent on your parents for support.
    • When you no longer need financial support from your family, you achieve one degree of financial freedom. You still might be dependent upon other creditors (your bank, your credit card company), but these are companies and not people.
    • When you break free from the chains of consumer debt, you achieve another degree of financial freedom.
    • Further along the continuum, you achieve greater freedom when you do things like eliminate your mortgage or have enough money saved that you’re no longer glued to your job.
  • At the far end of the spectrum is complete financial independence. Here, you have enough in savings that you could fund your lifestyle for the rest of your life.

The more money you save, the more freedom you have, and the greater risks you can take. As your financial independence increases, you chip away at the wall of worry. You’re able to make decisions based on happiness and not on dollars. “The ability to let go of doing things purely for the money is a life booster,” MMM told us last year in Ecuador — and he’s right.

When he was young, the afore-mentioned Jim Collins wanted to go to Europe, so he saved $5000 from his $10,000 annual salary. Financially prepared, he went to tell his boss he was quitting. When his boss learned that Jim could afford to take the time off, he offered to hold his job for him. Saving gave Jim power he never knew he had.

“When you have even a little fuck-you money, the balance of power begins to shift in your favor,” Jim says. “You lose your fear. Fuck-you money buys freedom.”

Money Won’t Solve Problems — YOU Will
Still, money isn’t some magic pill that will make all of your problems go away.

I used to think that if I were rich, all of my problems would magically vanish. I’m not alone. A lot of people believe this. The mass media tells us that money can solve any worry. But it’s not true.

When I was younger, I wasn’t just deep in debt. I was also fifty pounds overweight. I had time-management issues. My relationships were built on a false projection of myself. When I achieved full financial independence, these problems didn’t disappear. Quite the opposite.

Supplied with what seemed like limitless time and money, I realized that I was the one responsible for fixing everything that was fucked up in my life — and it had been up to me all along. It was a harsh epiphany.

Todd Tressider (the Financial Mentor) told me recently that when he achieved financial independence at age 35, he had a similar insight. He felt directionless for a while, and it wasn’t until he realized that only he could solve his problems that he found his way again.

Money buys you freedom, no question. But you have to seize the freedom or it all goes to naught. (See: Lottery winners and professional athletes who piss away their fortunes.) You may have a a billion dollars, but that won’t make a difference to your health if you still survive on a diet of donuts and vodka.

Make Decisions as If Money Didn’t Matter
MMM slept on my sofabed last Thursday night. In the morning, as we packed for Camp Mustache, I mentioned that I was thinking of selling my condo.

“Hmmm,” said MMM. “You have a beautiful place here. I like your view of the river and all of the nearby parks. Yesterday, you and I walked through the neighborhood to do our shopping. To me, your home seems almost ideal. Why would you want to sell?”

“I don’t really want to move,” I said. “But I think I can make a lot of money on the deal. It seems crazy not to cash in on this market.”

“I see,” said MMM. “You know, I prefer to look at things in a different way. When I’m faced with a decision like this, I ask myself what I’d do if money weren’t part of the equation. What decision would I make then? Since you’re financially independent, you should make decisions based purely on your personal values. You should ask yourself: If you could live anywhere, where would you live?”

My condo in autumn
A lovely place to live


I thought about it. While I mulled things over, my girlfriend chimed in. “I’d live here,” she said. “I love this place.”

I nodded in agreement. “I love it here too,” I said.

“When you don’t have a shortage of money, you should make your decisions as if money didn’t matter,” MMM said. “You should choose to do work that you’d do even if you weren’t getting paid. And you should make buying decisions as if everything were free. I mean, if TVs were free, would I go pick up 37 of them? Of course not! I wouldn’t even have a single TV if they were free.”

The bottom line: Once you’ve achieved financial independence, you’re free. You can make decisions based purely on happiness. If you keep this ultimate reward in mind, the pain is worth it. It’s like going for a run. It takes effort. Sometimes it even sucks. But you do it because you know a short burst of effort will lead to a lifetime of health.

Maximum Mustache
While Mr. Money Mustache was in town last week, I got a chance to meet many local readers. I was pleased to learn that a large portion of these people are current or former readers of Get Rich Slowly.

But I noticed something interesting. When I met a Mustachian, the conversation often went like this: “I’m so pleased to meet you, J.D. I read Get Rich Slowly all the time…” …awkward pause… “…or I used to, anyhow. I guess you could say I graduated from GRS to Mr. Money Mustache. I don’t read your site anymore.”

“No worries,” I’d say. “Neither do I.” And it’s true. I’ve moved beyond the Get Rich Slowly philosophy. There’s nothing wrong with the site or its advice. But more and more, I find myself has moved beyond the basics. I believe more people should aim for maximum mustache.

In fact, I’m ready to retire from the world of personal finance. Based on my conversations with Mr. Money Mustache, I want to shift my focus so that I’m pursuing my passions. I want find other ways to improve the world. I still intend to expand my knowledge of personal finance and to help other people improve their money skills. But with a 8 years of writing about it under under the belt, I’m going to hang up my spurs. I’ll become a quiet Mustachian.



Mr. Money Mustache’s Afterword:

Part of financial independence is that you don’t have to advertise yourself anymore. So while J.D. didn’t mention all of his other work, I don’t mind sharing it with you: He recently finished an edition of the Unconventional Guides series called the Get Rich Slowly course, as well as Your Money: The Missing Manual and is the “Your Money” columnist for Entrepreneur magazine. 

The Get Rich Slowly course features recorded interviews with various personal finance and business personalities including the unusually honest and spectacularly productive web business guru Pat Flynn, my charismatic frugality arch-rival Ramit Sethi, fancy company founder and all-around cool guy Jesse Meecham, a beer-fueled session with Mr. Money Mustache, and various other more famous people.

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Mr. Frugal Toque on why Tax Freedom Day is Bullshit Mon, 16 Jun 2014 13:11:53 +0000 "Badass Mustachian Eagle of Freedom" by M. Mustache. 2013, 8.5"x11", Kid paint on scrap paper

A Foreword from MMM:

I’m taking some time away from the computer this month as I swim in the torrent of self-imposed work caused by moving to a new house and selling the old one. But my friend Mr. Toque insisted that we run this rant on Tax Complainypants Disease, a topic dear to my heart. I’ve never really liked the whole practice of complaining about the government, since it is a distraction from our real job of living rich lives, which is obviously easier than ever. His numbers are Canadian, but you’ll find exactly the same complaints in the news here in the ‘States and elsewhere. So take it away, Toque.toque

Tax Freedom Day is Bullshit

If you’re not familiar with the concept of Tax Freedom, it is best explained thusly:

Imagine that your employer had to remit your whole year’s worth of taxes, to all levels of government, up front, before they could give you a single penny.  How far into the year would you be before you actually received any of your income?  That day is your “Tax Freedom Day”.

What you’re doing, essentially, is figuring out what percentage of your income goes to taxes and expressing that as a percentage of a year.  In previous years, I’ve calculated my own tax rate to be somewhere in the 25% range by counting all possible payroll and income taxes, property taxes, alcohol tax and sales taxes.

My more recent job came with a higher salary and that tax rate is hitting about 34% these days.  Since I’m now earning an “above average” salary, my personal Tax Freedom Day (May 5, 2014) ought to have been much later than the average one put out by the right-leaning Fraser Institute, shouldn’t it?

But no.  I’m being told that the average Canadian has a Tax Freedom Day that only just passed: June 9, 2014.  How strange.

These calculations were based on an average Canadian couple making about $100k.  Apparently, such a couple would be paying 43.5% of their money in taxes.  The first thing we have to establish is that this number is wrong.

If you were a married couple who came to Canada and were promised salaries combining to $100k, would you pay $43 500 of taxes to various levels of government?

Unequivocally:  No.

There are a number of utterly fatuous factors involved in arriving at that number and I want to hit a few of them right now.

Payroll Taxes  $9903

In Canada, the government collects a certain percentage of your income for the Canada Pension Plan and for Employment Insurance.  These have upper limits which, even for two people, can’t reach the $9903 in this document.  What the Fraser Institute has done here is to add the CPP and EI that your employer would separately remit to the government and claim that this is your tax burden.  So, of your $100k combined income, you lose nothing because of such employer remittance, and yet this is considered part of your 43.5%.

Sales Taxes $6764

In Ontario, where I live, the combined federal and provincial sales tax is 13%.  In order to spend $6764 on sales taxes, you would have to spend over $52k on items which are fully taxed.  Note that raw foods like meat, fruit, bread and vegetables, are not taxed.  Given that you’re probably spending at least $4000 per year on such food, I don’t see how you even have enough money left over to spend $52k on consumables.

Profit Taxes $3709

The bullshit grows heavy and rank here.  You don’t actually pay this tax at all.  You can’t even pretend you do.  Although I can’t be completely certain, because there is no clear explanation, the implication is that the Fraser Inst. is taking all of the taxes that corporations pay on their profits and then distributing this evenly across the population.  This $3709 is “your share” of corporate taxes because, I suppose, when corporations pay taxes, we all cry a little inside.  Or something.

Liquor/Tobacco/Excise Taxes $2335

Holy Shit!  Are you kidding me?  I’m not even going to talk about Tobacco.  But who the hell buys enough liquor that the tax bill comes to more than $2000?  Even if the taxes are 25% on liquor, and I don’t see any reason to actually pay them, you’d still be spending TEN THOUSAND DOLLARS per year on booze.  Shit.  Get some help.

The Fraser Institute vs the Toque Family

Here’s a chart indicating what my life was like, just a few years ago, when the Toque’s family income was approximately $100k. All figures on an annual basis.

Tax Fraser Institute Toque Family
Income $14,140.00 $16,758.00 This is for a $100k/$0k split[1]
Payroll + Health $9,903.00 $3,947.82 With one income, only one set of payroll taxes[1]
Sales $6,764.00 $1,800.00 13% of 24k of expenses, minus groceries[2]
Property $3,620.00 $5,000.00 We could have picked a smaller house
Profit $3,709.00 $0.00 No
Liquor/Tobacco $2,335.00 $0.00 I make my own wine and beer now[3]
Vehicle Fuel $1,135.00 $600.00 We still drive way too much
Other $953.00 $0.00 No[4]
Import Duties $346.00 $0.00 No[4]
Natural Resource $529.00 $0.00 No[4]
$43,434.00 $28,105.00

[1] In Canada, you can’t split income with your spouse, so people with a 50:50 division of income pay quite a bit less income tax, but more payroll tax.  I suspect they come out a bit ahead.  There isn’t much a salaried Mustachian can do about this, but there are some other areas where we make significant changes from the supposed “average” tax bill.

[2] The big savings, obviously, are on the sales tax.  Sales tax is not charged on real, non-processed food.  When you buy meat, dairy, vegetables, fruit and bread, you pay no sales tax.  This makes about 25% of the Toque household’s expenses sales-tax-free.  The rest of our expenses total roughly $14k for the year for a sales tax bill of $1800.  In order to run up a sales tax bill of $6764, you’d have to spend $52030 on taxable items – on top of any non-taxable groceries.  No Mustachian could possibly brook such idiocy.

Property taxes are obviously a self inflicted wound.  Mrs. Toque and I could move from our unexpectedly expensive house any time we like, but we’re settled in here and we’re willing to pay that premium.

I already commented on the bullshit “Profit Taxes”.  You do not pay this out of your $100k income.  It does not belong in this list.

[3] The cost of 48 bottles of wine from one of those make your own wine stores is about $200.  Even if you drink twice as much as we do, that’s still $400 a year for wine – and zero liquor tax because you don’t pay tax when you make your own.  What are “average Canadians” doing that they pay over  TWO THOUSAND DOLLARS in liquor taxes?

The amount I spend on gasoline is embarrassing.  I must learn to drive less.  I consider myself chastened.

[4] As for the “Other”, “Import Taxes” and “Natural Resource Tax”, I doubt very much that I see these in my spending anywhere.  This is probably one of those mystery taxes, like the Profit Tax, that someone else pays and the Fraser Institute believes “filters” down to me somehow.  If you wanted to take that concept far enough, I’m sure we could delude ourselves into believing that 100% of our money is eventually tax.

Summary of Taxes

So there we are.  We have a study that says “Oh. My. God!  43.5% of your money is going to taxes!  How will you ever live?!” and we have a Mustachian who has looked at his actual taxes for a similar year and determined that the number is close to 28%.  My point is that you shouldn’t freak out when you see studies like that.  Don’t worry, you still get to keep a lot of your money.  But even if you didn’t …

But wait, what about my Services?

I don’t know if you knew this, but governments actually do things for you.  In Canada, for instance, they pay for all of your doctor’s visits, surgery and hospitalization, public schools, police, fire departments, libraries and road maintenance.  The Toque family has two children.  If we had to send those two kids to a private school, I’m dead certain the cost would come to more than the tax bill you see there.

How come that isn’t part of the Tax Freedom calculation?

I’m sure it’s not because we’re just trying to freak everyone the fuck out about taxes, is it?  I’m sure it’s just an oversight.  Because that would be totally irresponsible if it was on purpose.

Stop Whining about Your Taxes

We’ve already established that we live in one of the most prosperous eras in the history of humanity.  The selection of food you can eat on any given night dwarfs anything the richest kings of the past could have commanded to appear at their tables.  There is a certain cost associated with maintaining the society that makes that possible.  There are people to heal, children to educate, roads to build and banditry to prevent.  When you start making a lot of money, it’s your turn to pay into the fund that got you here, so the next impoverished kid to come along can have the same shot your impoverished, post World War II refugee grandparents had.

What about my Mustache?

That’s the question you should now be asking.  Mustachians are not the sort of people who sit around moaning about how the government is keeping them down.  We’re the people who look at what we got, figure out what we don’t like, and fix it.

Does your local government have a high property tax rate?  Move to a smaller house.  Those are almost always cheaper.

Is the income tax rate high?  Put as much money as you can into tax sheltered retirement funds.

Sales taxes are high?  Why are you even talking about this?  If sales tax is a problem for you, stop buying so much shit.

But, but, but, gasoline tax!  Hm.  If only there were a way to live that avoided gasoline tax.  Help me out, here.  Anybody?  Bueller?  Bueller?

And if you really, really can’t stand the way the man is keeping you down in your province or state, you can always pick a different one.  Mr. Money Mustache did that and he’s quite happy with his adopted home.  I’m living in Ontario and I’m quite content with life here as I finish my final leg on the road to retirement.  But if I wasn’t happy, I wouldn’t just complain about it.  I’d rearrange my finances or move my family.

Why are you telling me this?

“Tax Freedom Day” is a disingenuous, selfish, short-sighted bit of fear mongering.  Every year I see the numbers and dates come out, I think “What privileged jackass decided to count only the taxes being paid and completely ignore the services being returned?”  Who, in either of our countries, has arrived at the point of having to pay taxes without having also been helped along on the path to becoming a taxpayer?

It wasn’t until I did the calculations, however, that I realized how truly out of whack the “Tax Freedom” percentage is from the actual experience of an actual Canadian.  So I should thank all of you for making me want to do the math.

I will be over here enjoying by 28% tax rate, even while others less informed are crying over their make-believe 43.5% rates.

Toque, out.

MMM Afterword: I should also note that if you are a rich do-gooder who is frustrated with the inefficiency of government compared to your own capabilities, it is still possible to evade taxes for the good of humanity: Simply have your business(es) operate as a separate entity from yourself (or even a nonprofit), pay yourself a small salary, then have the business go to town for the social good of your choice. You can choose to treat the employees really well, all while inventing better electric cars or solar panels, curing malaria and polio, or any number of other things – with high efficiency and very little tax burden. 


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