Being a newcomer to the financial guru circle, Mr. Money Mustache decided to check out what his competitors have been saying throughout historical times to see if they have their stories straight. So he spent a recent weekend listening, in full, to the audio book version of Dave Ramsey’s ultimate career work: the Total Money Makeover*.
As a disclaimer before I launch into the comparisons, Dave Ramsey seems like a good guy whose work has improved the lives of many people. He’s already rich, but he continues to tour the world and sell motivational products to people and make even more money. Mr. Money Mustache will NEVER appear on infomercials or try to sell you books and CDs. He’s already retired, and that would be way too much non-fun work. So I wish to arouse no wrath from any of his lawyers.
But fuck, what an annoying audio book that is. I’d never heard of this Dave Ramsey guy before becoming a public figure myself recently. But it turns out he is this Southern Preacher-type guy who has had a talk radio show for many years. He yells a lot when delivering his material, and sprinkles in plenty of biblical quotations and references to the interventions that god(s) make into the financial affairs of deserving subjects. He likes to repeat a small group of mundane quotes over and over, while chuckling to himself as if they are funny. “Because if you live like no one else today, you’ll get to live like no one else later!”. And he inexplicably repeats the incorrect statement that the stock market averages returns of 12% per year in all of his examples.
So how does the Mr. Money Mustache target audience differ from that of Mr. Ramsey? I’m crediting Junior Mustaches as being a bit more adult than the folks needing the “baby steps” in his plan. You don’t need be slapped around to get your first $1000 available for tiny emergencies like a water heater replacement.
You are already making enough money and paying your bills.. you’ve got some self discipline. You’re just wondering how you can get some actual RICHES going on and have the option of having some more freedom in the not-too-distant future. And perhaps you like the funky rhymes that Mr. Money Mustache writes more than what spills from the keyboards of the other MCs.
What else do we do differently here? Well, I think the way of the ‘stash is different because I’ve never used any kind of budget. Never in my life. It seems inefficient to me, and a possible stumbling point because really, who can remember to do a chore like that every month? I believe budgets have worked for many people. But I have had greater success breaking it down to a much smaller level: the individual transaction. As a Mustachian you will learn to THINK before you make EVERY money transaction and optimize that transaction right at that moment. In short, you just don’t buy ANYTHING until you’ve really thought about it. This eliminates most purchases outright. Then you optimize the remaining purchases so they cost about 75% less than normal whenever possible.
For those wanting to wade in to test the waters and still see immediate benefits, I’ll present ideas for optimizing EACH AREA of life’s spending. And a few for income. You can adopt each one, and win, or ignore it, and not win in that area. Assuming you are currently getting by with very little savings, your savings will increase based on the number of changes you make. If you make them all, you’ll be rich in just a few years, woohoo!
This sounds simplistic, but it works because this country is so rich, and so cheap, that even on a minimum wage income, you still have enough to buy food and shelter. And as someone smart enough to be reading Mr. Money Mustache right now, you’re probably earning much more than the minimum wage. That allows you to add luxuries like an efficient used car and carefully spaced extras like entertainment and toys, while still keeping MOST of your money for kickass saving and investment.
The other thing that Mr. Money Mustache will not do, is say things like “God brought a Jaguar back into my life” and “God tends to pour blessings on people going the direction he wants them to go”. (These are actual quotes from the Dave Ramsey book, by the way). I think we get enough religion by just listening to the political debates, and when it’s time to get rich, we do it using Solid Mathematics and Occasional Manly Swearing.
That’s why here, we maintain a separation of Church and ‘Stash.
Because we’re using Math, for example, I’m not going to tell you to pay off your smallest debts first as with the Ramsey “debt snowball”. I’m going to tell you to pay off your highest interest debts first. And I’m not going to tell you to cut up your credit cards and that you can’t have a home equity line of credit. I think these things are GREAT – but you will use them with the same discipline as if you were spending crisp cash freshly pulled from the Lips of a Cute Baby Angel. You must love your money and feel great pain every time you lose it by spending instead of keeping it by investing. And because you love it, you must always put it to work in the most efficient way possible. That is my specialty. Thanks for choosing Mr. Money Mustache.
*Don’t worry, I didn’t actually buy something like that at 30 bucks, are you crazy? Just borrowed it from a friend.