Book Review: Early Retirement Extreme

There is a small but growing social movement spreading around the world these days. It started long ago but has been accelerating recently. Although this revolution is tiny when measured as a percentage of the population, it has the Fiery Heart of a Golden Lion and thus it gets an unusual amount of shock, admiration, respect, and jealous complainypants scorn when it comes into contact with the rest of our society.

I’m talking, of course, about the Early Retirement movement – (also known as “financial independence” for those who still subscribe to the old-fashioned definition of “retirement” as never doing any form of paid work again).

It’s difficult to define the starting date of the revolution, because there have probably always been oddballs who realized early on that they could save and invest their money and then live off of the resulting income.  But some mark 1992 as an important date in starting the modern trend, because that is the year that the book Your Money or Your Life came out. That book started spreading the idea that money isn’t just for spending – it is really a form of life energy that you can keep for yourself in order to free up time.

Another big step in the Early Retirement movement was when Jacob Fisker, a fellow thirtysomething retiree, started writing his blog called Early Retirement Extreme back in 2007. By creating his series of highly detailed and analytical articles on the subject, I think Jacob  was giving a clear voice to the financial independence scene that was not readily available on the Internet before that point.

Common financial wisdom, then as well as now, has been something like this:

“Obviously, modern life is very expensive, so you’ll have to spend aaaalmost everything that you earn, no matter how much that might be. With the tiny sliver that you do manage to save, you must invest carefully for 30 years or more, until you get to a ripe old age and you have several million dollars of investments that allow you to continue spending just as much for the rest of your life! Cruise ships, wheelchairs, Cadillacs, and  a $50,000 wedding for each of your twenty-seven grandchildren”.

Jacob’s more logical voice of the Early Retirement movement instead said this:

“Obviously, we are all spending way the fuck more than we need to in the Western World and it is a complete waste of all of our time, energy, happiness, and the entire planet. So let’s analyze our true needs as humans and figure out efficient ways to meet all of those needs. Then we’ll enjoy our new more natural life while continuing to earn a rich-world wage for a few years. Since the earnings will be far more than our spending, we will save and invest it, and the work portion will quickly become optional”

I am of course paraphrasing a little bit, since Jacob doesn’t swear as often as Mr. Money Mustache does, but I added the f-bomb to make sure you knew that the idea was very important.

The interesting thing about the Early Retirement Extreme blog, (know as “ERE” by its followers in The Movement), is that it grew into an entire book by the same name. Mr. Fisker worked on his book on the side even while he continued blogging, collecting and refining his fanciest and most detailed writing on the subject,  eventually publishing it in both paperback and electronic (kindle/pc/smartphone/whatever) forms.

And being both a follower and fellow preacher, Mr. Money Mustache realized it was essential to read this book in detail and report back with this Book Review for you.

If I had to sum up the Early Retirement Extreme book by inventing my own title for it, I would call it, “The entirety of human civilization and thought, expressed as a series of equations and graphs”. It really is that broad-reaching, and densely packed. I had to read it carefully over a period of several weeks, because I found that individual sentences sometimes packed in multiple entire concepts, each one being the type of thing that I’d normally spend a whole Mr. Money Mustache article explaining.

Let’s just take one random passage from early in the book:

The Cost of Specialization

It’s obviously more expensive, both in time and money, for Person A and Person B to gain the required amount of knowledge in both fields X and Y than it is if A were to concentrate on X while B were to concentrate on Y. In this way, both can gain the same depth of knowledge in half of the fields, in half the time. Alternatively, they can get twice as much knowledge in the same field in the same time. It follows that the more a field is further split up into subfields, the less expensive this knowledge gets. These cost savings can be used to reach even deeper levels of competence (see this figure).

That’s a complete explanation for why we all have such boring and unsatisfying jobs and lives in general, yet Fisker just brushes through the material as a quick background on his way to teaching you how to design your wardrobe (“Now create one outfit by drawing lines, for example, “black jeans #1”, “Black socks #1”, “Red sweater”, etc.), and everything else, with scientific precision.

There is also plenty of philosophy. In the Kindle edition of the book, you get to see which passages other readers have highlighted. The most popular one is this:

When you identify with an object, you’re defined by the object, then controlled by it, and ultimately owned by it. If you relate to your possessions, you’re owned by your stuff, and it will make many of your decisions for you. This trap is not only mental, but also physical.

Looking through all of the top highlighted passages, I see that the more emotional ones related to the thought that our society is crazy and we’re defined by pointless materialism are the winners.

And indeed, those things are true even while they are very rarely acknowledged in the news or in conversations held between people who are not part of The Movement.

But my own favorite part of the book was in the description of the “Renaissance Man ideal”. This is the idea that you will have the most enjoyable life, AND the best chance at very early financial independence, by developing a whole load of interesting skills. The amazing part is that these skills don’t just sit independently in your mind like a bunch of unused kitchen appliances in a pantry. They start to reach out and connect to each other in unexpected ways, and start solving all of your problems for you. They build your curiosity and start sucking in still more skills that you can’t help acquiring. And before you know it, you are able to live a superb life on only a tiny fraction of the spending that a normal person does, even while you might end up accidentally earning money even more easily than before you embraced the Renaissance Ideal.

This section of the book put into more advanced words the same thing I have been raving about on this blog, which is the idea that you should insource rather than outsourcing whenever possible. I stumbled only accidentally across this idea when I quit my specialized software job and started the house building company. The range of activities and people I became exposed to, when going from a lonesome cubicle software developer to a small company owner, changed everything. Since then, a chain reaction of useful new experiences continues to this day. And I have at last learned to appreciate the chance to learn new skills instead of dreading them (because these opportunities often come disguised as big hassles that you have to deal with unexpectedly at various points in your life, and you have to saw your way through the big smelly log of Dung to get to the golden nugget of opportunity hidden deep within).

So it’s a valuable book and if you read it carefully, it will definitely teach you new things. I will, however, throw in a critical side to this review. And that is just that the book is a little bit serious for my tastes. The engineer side of me appreciates having things laid out with the utmost in logic, just as I loved pretty much everything that Spock and Data ever said on the Star Trek shows. But the rest of me thinks that we need to have heart-touching personal stories, satire, mocking, and plenty of foul language if we are going to make a point. (On the other hand, it is nice that this particular market niche has been left open for Mr. Money Mustache to fill!)

Therefore, the ideal reader is probably a well-educated person (i.e., not a Dave Ramsey or Mister Money customer). Perhaps a Silicon Valley worker who is currently spending most of his enormous salary and needs to hear a well-thought-out counterargument to his current assumptions about life. Or maybe even some of my own friends and former coworkers.

Regardless of the style, this is a book like no other, and that alone may make it worthwhile checking out. And the author is a good guy, making an outsized contribution to the rich world by challenging its very foundation. So he maintains his status as a Grandfather of the Mustachians.

You can pick up electronic or paper versions of the book at Amazon.com if you want to dig deeper into the Early Retirement movement, even while you support a valuable piece of work.



  • Daniel November 12, 2011, 9:31 pm

    Hi MMM

    Curiously, I’m reading ERE on Kindle right now and was about to bug you to review it. Somehow you read my mind and beat me to it! Anyways, I’m trying to absorb all these different views and I found one big difference between you and Jacob. In ERE, Jacob claims the cult of index funds don’t work and relies on continued GDP and population growth. Instead he keeps a hand picked portfolio of 20 or so stocks and it seems to be working for him. I was wondering what you thought of your conflicting investment strategies.


    • MMM November 12, 2011, 10:09 pm

      It is a good question indeed. I partly agree with his thought on index funds, that if everyone piles into them blindly regardless of the underlying value of what they are buying, the prices will rise irrationally and the system will eventually have to crash. In other words, price-to-earnings ratio matters.

      In the time from 1993 to 2008, it was quite obvious to financially sophisticated people that stocks were wildly overpriced, as you can see on this graph: http://www.multpl.com/ .. Unfortunately, I was not one of those people, since I had only read the simplistic mainstream news explanation of stock investing at that point. However, with stocks 20% lower than today’s value (as they were earlier this year), things start to look more reasonable.

      Now I am somewhat on the fence: really good scientific studies show that it is statistically improbable for even well-studied people to be able to beat the market’s average return on a sustained basis. And they explain the psychological flaws that we all have that make us believe we can beat the market. Even though my own emotions tell me that I think I could do better with proper reading and study, I try to trust real science more than I trust my own emotions.

      To reconcile the differences, I keep some money invested in index funds and some in other places. And I think of dividends, rather than stock price appreciation, as an important source of income.

      As for GDP and population growth – I agree that things will be different when we fix the problem of a growing world population. On the other hand, the US will probably have a growing population for quite a while, because it is so sparsely populated right now and it’s a magnet for people.

      GDP growth really depends on productivity. And I’m an optimist in this department – I think we currently suck in the efficiency department, and there will be improvement as we learn to let computers do some of the work we currently waste our time on. The Internet is still new, and most people in positions of power are not taking proper advantage of its power. The economy is still driven by people who have telephone conferences, slow-talking meetings, expensive business trips, and even people who use fax machines.

      Also, the oil economy will eventually decline, but that opens up yet another place to gain efficiency – Solar and other non-stupid forms of power. Right now we waste great amounts of effort running a treadmill of oil harvesting and burning and dealing with its natural inefficiency (i.e., the fact that cars are complex, expensive and take a lot of effort to maintain). This same effort could go much further if applied to gathering solar power, which then just sits there and delivers nearly effortless free energy for decades. We first have to go through the painful adjustment of oil prices rising enough for us to stop wanting to use it, but then there will be a great slide down the other side of the pain curve as we switch to better energy and the price of it drops for decade after decade.

      • rjack November 13, 2011, 4:53 am

        I have read Jacob’s book twice and I highly recommend it especially if you have an analogical personality/mind.

        I’m also torn over the Index versus individual stock issue. I’m leaning more and more towards individual stocks.

        @MMM: There is solid research that indicates value investing in individual stocks is superior to the Random Walk hypothesis. See here specifically:


        Also, read the other research on this site:


        • rjack November 13, 2011, 4:57 am

          Oops…I meant “analytical mind” not “analogical mind”.

        • Mike November 13, 2011, 9:01 am

          Yeah, I firmly believe it CAN be done. When I was in business school, I learned about efficient markets and how they aren’t perfectly efficient and that smart / lucky / tenacious traders and investors can get into that space between perfect efficiency and reality and really make a ton of money. It seems that most people can’t do it consistently, as evidenced by the fact that most professionals (i.e. people who get paid to beat the market as their job which they do ALL THE TIME) can’t beat the market. Those who do it successfully treat it as a full time job. What I quickly realized is that I already have 1 full-time job and I what I really want is to have 1 less, not 1 more. This, combined with the observed fact that almost everyone will have far more impact on their financial situation by spending their time figuring out how to spend less rather than trying to outsmart the market, led me back to indexing.

          • Matt G November 24, 2011, 1:48 am

            After dabbling with picking stocks, I also came to the conclusion that I didn’t want a second full time job trying to beat the market, but instead of switching back to index funds, I stumbled upon some smart value investors in San Diego who now manage my money. Unlike every financial planner I’d ever talked to in the past, these guys obviously thought for themselves. For example, when many investors were loading up on mortgage-backed securities, my guys steered clear of that whole mess. Result: they’ve done very well compared to the market. After fees, their clients’ average return is 104% from inception in 2004 to the end of 2010 (for which they have audited data), versus just 26% for the S&P. If you’re interested, here’s their website:


            For a taste of their independent thinking, check out their commentary:


            I’ve become friends with these guys over the years, but apart from that and the fact that I’m a customer, we’re not affiliated, i.e., they’ve never asked me to mention them on a financial blog and I receive no compensation for referring new customers.

            One other thing: you’ll need at least $100k if you want to invest with them, but that shouldn’t be a problem for you Mustachians!

            • Glen May 14, 2016, 1:19 pm

              Thanks for this ad!
              My financial advisor is a super smart guy named Bernie Madoff, I’m guaranteed to beat the market by at least 10%. That’s GUARANTEED!!! I haven’t checked my account balance in a couple years, but I’m probably really close to being able to retire!

      • Gypsy Geek November 13, 2011, 10:54 am

        I’ve thought about this efficient market hypothesis, and the theory that in the long run we can’t beat the market, but as a Mustachian in training, and trying to achieve financial independence, my goal isn’t to beat the market as much as it is to live off my investments, which may be two different things.

        Sure, I’d like to optimize my returns, but not at the expense of risking my financial independence. So… I’d rather invest for a 4% dividend that increases with inflation than invest for a roller coaster that may go flat for many years and at the most inopportune times.

        Be that as it may, I need to preach this to myself, as I have most everything invested in index funds, if only for the lack of research on dividend returns over time (something akin to the safe-withdrawal rate Trinity study, but for dividend junkies). For example, I’d like to know what is the ratio of dividend cutters in a down market, or a recession. Can we build our own index fund of dividend payers by a mere 20-30 stock sampling?

        Hmmm… I keep telling myself that I should just hunt down the dividend data for mayor companies for the last 80-90 years and analyze the data myself.

        Anyways, my point is that perhaps we shouldn’t be trying to beat anyone, but to invest in a way that one can live off investments (even if our returns are less than the average). After all, when you invest in a rental property, your goal is not to beat other landlords, but to generate income to eventually live off of.

      • Early Retirement Extreme November 13, 2011, 12:06 pm

        I wrote a looong comment to this and decided to turn it into a blog post

      • Ravi September 18, 2017, 10:44 am

        Wow! I’m reading this in 2017 and you predicted the oil boom and crash of last 6 years in 2011. I wish I found this blog much earlier, would have saved me thousands.

    • prolin November 29, 2014, 5:18 am

      The problem with index funds is that they do not generate enough income. Dividend yield in an index fund that tracks the S&P 500 is about 3% far too low if you want to retire in five years. Furthermore, index fund appreciateion is not guaranteed. I’d rather get massive dividend income now rather than uncertain capital gains tomorrow. One in hand is better than two in the bush.

      This is why I invest in numerous actively managed high-yield mutual funds. I believe these are best for those serious about ERE. You don’t have to worry about stock selecting because fund managers do it for you. You simply select the highest yielding actively managed funds and simply invest in all of them.

      • Mr. Money Mustache November 29, 2014, 4:25 pm

        It sounds good in theory, but on average these actively managed funds will underperform the index by at least the fee charged by the managers, and with at least a 50% chance of being significantly worse – but you can’t predict future performance based on a manager’s past performance. You might look into John Bogle books to understand why.

        • FMaz January 14, 2017, 5:09 am

          As ERE said, an individual can beat the average, but most people will be average.

          There are a lot of mutual funds out there, and I’d say the majority are horrible and design for ignorant people.

          But, while past performance is no guarantee of future performances, you have to admit that some mutual funds have consistently beaten the index. And what I mean by that is: if you invested 10k in the index and 10k in a good mutual fund, after 10 years you would have a lot more money in the mutual fund.

          Mawer is one of mutual fund company that I like in Canada. They had a bad year 2016 bjt overal they outperform the indexes, no load, and they outperform by more than the MER.

  • GL November 12, 2011, 11:11 pm

    I was wondering when you were going to review Jacob’s book… I’ve been reading his blog for years, and while I disagree with some of his ideology, I have to give credit where it’s due – without him, a lot of people would still be stuck in the rat race. He’s the Bodhisattva of personal finance. :))

    I’m not sure if the book has any new material that’s not found in his blog, but I’m buying it on Kindle anyway. Like you pointed out, it seems to be a treasure trove of concentrated knowledge – with any luck, it’ll pack as much of a punch (and have as big an impact) as Joseph Campbell’s “The Hero with a Thousand Faces” did when I first read it…

  • The Peter November 12, 2011, 11:22 pm

    Ha, I actually only know about your blog because of his. AND, coincidentally enough I am reading the book right now and literally had it open in my hands and was just checking my blog feed before I moved to a new paragraph when I saw this post.

  • Bill November 13, 2011, 12:00 am

    I just finished the ERE book. If you have weak frugality muscles like I do, you will find yourself challenged at many different points throughout. For instance, doing laundry with a 10 gallon pail and a plunger. That’s pretty badass.

    One of my favorite concepts Jacob reminds us of in the book is buying quality items (typically used) that will retain their value well and can be sold for close to your original cost once you’re done with them. Basically the opposite of cruising down to Target for [insert name] item that’s going to get thrown out in a year.

  • anonymous November 13, 2011, 12:32 am

    re. population growth. The question is what happens to the S&P500 when the baby boomers, who greatly outnumber the generation below them start liquidating stocks, and trying to find some sucker to buy their 4000 sq ft McMansion 30 miles outside of the city. Or when medical care is burning 20% of GDP? The only thing that gives me pause in this regard is that most stocks are owned by the 1%, who won’t be forced to liquidate to buy medicines and heart stents.

    re. GDP growth. GDP includes debt growth. If debt growth goes into reverse, so does GDP. The curve representing the ratio of debt growth to the real economy is exponential. One day, it will require $100 of debt to create $1 of real value. And then, $1000 to 1, etc. Another issue, is that GDP measures a lot of junk, such as divorces, psychotherapy, and ICU medical care for ghetto warriors. All of those are a drag, even though the government counts them all as economic “growth”.

    re. solar. Almost all U.S. major cities are designed around the car. It’s difficult to imagine solar energy providing enough kilo Joules to move 3500 pounds of steel motoring around the suburbs at 60 mph. Global trade is also dependent on liquid fossil fuels. If diesel climbs to $10/gallon and beyond, what will that do to long distance transport via cargo planes, cargo ships, and 18 wheel trucks?

    We will adapt to these things, but its probably not prudent to expect much “growth” and free money from the stock and bond markets, going forward. Even real-estate is dependent on debt growth and government support / bailouts. If people were required to front 20% down on any house purchase, housing prices would drop dramatically. Housing and rental markets, aside from debt growth, are ultimately tied to incomes. If salaries decline, then so do housing and rental markets. With the new “the world is flat” paradigm, I think its safe to expect continued downward pressure on salaries for as far as the eye can see. The exceptions will be in monopoly powers, such as government and medical care.

    With all this, I am calculating that money today, properly invested, will simply track broad inflation. This means with $1m today, and a burn rate of $30k, that will last roughly 30 years. There are a lot of variables and moving parts in the global economy, but I think its relatively prudent calculation. Note that this represents a spend down, because if you just live off dividends and interest, at say 3%, $1m in a couple of decades won’t be worth very much. It wasn’t long ago that gasoline was 25 cents / gallon, and houses were $25k.

    • MMM November 13, 2011, 7:13 am

      Yeah, yeah.. the Bearish case always sounds more intelligent and there have been an unusual number of you running around in the forest since 2008. The problem is, you’re usually wrong over the long run, and the optimists generally win – perhaps because we aren’t wasting our time focusing on complex predictions of what might go wrong.

      I remember discussing exactly these same “problems” with professors in university, yet I went out and got a job anyway and became financially independent in the time the bears spent moaning and worrying. Then the economy crashed, so we were all screwed, but I cluelessly kept pursuing my interests and investments and almost doubled my wealth again.

      I appreciate the analysis but it’s not a Mustachian way of thinking – so I’m not wasting any more time trying to debunk the obvious funk. Feel free to seek out websites about Igor Panarin and discuss additional doom and gloom there : http://www.associatedcontent.com/article/1531821/russian_foreign_policy_expert_igor.html

      • GL November 13, 2011, 7:16 am

        “A pessimist is right oftener than an optimist, but an optimist has more fun, and neither can stop the march of events.”
        Robert A. Heinlein

      • Bill November 13, 2011, 7:47 am

        Not to mention, Jacobs premise of focusing your efforts on a broad range of skills, the Renaissance Man, will likely suit you better in the event of a failing economy.

        Being highly specialized in one field really is putting all your eggs in one basket. Most of us aren’t awesome enough to develop our Renaissance skills without suitable time for the pursuit. Basically, the sooner you can get your expenses covered through passive income for the foreseeable future the sooner you can learn how to insource rather than outsource more things.

        Even if the doom and gloom predictions are true, the resulting conclusion should be: “I better learn how to really take care of myself and not rely solely on my highly specialized job.” This is what Mustachians are doing. Saving up a big sum of money is only part of the equation. The other two parts are a frugal lifestyle and developing a range of skills to create your own solutions rather than rely on the market (plumbing, auto/bike repair, etc). This will serve them well in the event their investments end up not providing enough money to live and any related doom and gloom scenario.

      • Gypsy Geek November 13, 2011, 11:01 am

        Bearish case? Sounds like a bad case of complainypants syndrome!

  • Michael November 13, 2011, 3:50 am

    Great review. I loved this book altough extreme (but hey, it’s written on it !), it is a whole life philosophy that one can embrace to redesign his day to day thinking and doing.

  • Al November 13, 2011, 4:09 am

    One thing that always strikes me as odd about the early retirement mindset is that if everyone did it, consumption would rapidly decline, causing peoples’ incomes to rapidly decline as well, which in turn would make it harder to save large sums of money quickly.

    Having said that, I realise that this would also mean a decline in real estate prices, food prices, etc., so maybe it’d all balance out?

    I guess what I’m saying in short is that it’s a good thing that not everyone has this mindset!

    • Al November 13, 2011, 4:18 am

      Sorry…”mindset” isn’t the right word here. “movement” is slightly better. Can’t quite nail the right word at the moment.

    • Matrix June 10, 2012, 7:32 pm

      If everyone did it ERE? It’s like what if everyone become monks? It never gonna happen. There’re things/ideas/desires people cling to that they won’t let go no matter what. It’s like an inertia.

  • m741 November 13, 2011, 5:53 am

    Glad to see a review of the book. As someone who arrived at MMM through ERE, I’m a huge fan.

    I think it’s one of the few books that treats its target audience as adults. It’s also one of the few books that really talks directly to someone with an engineering mindset, which is why I like it. Less of the touchy-feely and more raw data and hypotheses.

    Anyway, YMOYL and the ERE book are among my favorites. Now MMM just has to write a book!

  • firefighterjeff November 13, 2011, 7:36 am

    Another MMM reader through ERE. Maybe you need to start giving Jacob some kick-backs for all these new members of yours. Hehe. You had me with the comlainypants article. I want to print out a stack of those and give them to every whiny little shit that I meet.

    Back to Jacobs book. It is an excellent book that addresses what actually causes the problem to begin with. There isn’t any 10 steps to success or any of that cookie-cutter advice we normally read or hear about, but a fundamental look at the change that will have to occur within us to accomplish our goals. And each point he makes is proven without a doubt.

    If I had to criticize the book, I would mirror what you have said. The book is chock full of cold, hard facts, but sometimes while reading the book you don’t want that proven with another graph. And much as it embarasses me to say it, it is written at a level that will leave many behind because the book requires the reader to engage their brain.

    Get the book, it’s worth it.

    • Early Retirement Extreme November 13, 2011, 12:40 pm

      I have the same critique. About 5% of the amazon reviews complain that “the book was too hard to understand”. On the other hand, there are more reviews of the “I’m happy to finally read a personal finance book which isn’t dumbed down”-kind.

      A few authors can write things that are deep yet simple to read (Hemingway, Orwell, Musashi). But I’m not one of them.

      (Another 5%, ironically, say that the book was “too extreme”. I think maybe I should have double-underlined EXTREME in the title? Hmmm…)

  • Mike November 13, 2011, 8:50 am

    Case study: a massive load of wet snow fell in my leafy Denver neighborhood in late October. This storm took a limb the size of a small tree off the maple in our backyard. This limb broke about 5-6 feet from the trunk and was resting mostly on the ground, with a sliver still attached to the remnant about 7 feet off the ground. Option 1: tree company. Cost: $750. Option 2: buy chainsaw, do it myself. Cost: $150 – $200, but I get a tool I can use over and over. Option 3, explored literally on my way to Home Depot: see if my brother-in-law has a chainsaw I can borrow. Cost: $0. Option 3 it is, now I have prevented $750 in spending, I know where I can get a chainsaw, I know how to properly remove a broken limb without killing the tree and I have a big pile of firewood.

  • burntout November 13, 2011, 9:06 am

    Been following Jacob on ERE for a while now, need to figure out how to get my hands on his book here in India. I have always thought the “extreme” in ERE is the “norm” here in India. To elaborate a little, what is considered “extreme” frugal in a developed country like the US is pretty much the “norm” in most of India. The part that I still struggle with here is “Early”. Income levels are still not at the point here, where one can accumulate a stash rapidly enough to accomplish “early”. However, I am working on it.

    • Wrecked November 14, 2011, 11:11 am

      Your experience is exactly like mine. I live in Jamaica and frugal living is a way of life for most here. Hanging up clothes on a line to dry is the norm. A/C at home is a luxury ,we use fans to keep cool. We pay 0.30 cents US per kwh for electircity so we try to save as much of it as possible.

      The only thing is living frugally only allows your paycheck to cover your expenses with maybe a little bit left over for saving. Salaries don’t allow one to live from month to month while setting aside 50% or 70% as savings.

      Even though, I am enjoying this blog and ERE and there is still a lot to learn from both.

      • financial anarchist / aka palmera November 14, 2011, 7:50 pm

        I’m Jamaican too! Or, rather, my family background is, though I live in Canada.

        I think my family’s 2nd world/back country roots have helped me cope with extreme savings, making do and doing without. Example: I grew up eating real, nutritious food, no matter how poor we were — twinkies and fruit roll ups and fancy breakfast cereals were unheard of. Avoiding the dryer and hang-drying clothes is a given and in my 29 years on this planet, this is the first year my mother has used air conditioning in the summer.

    • MadIAm January 9, 2015, 5:55 am

      I am an Indian too. I downloaded the free ebook from Library Genesis (http://gen.lib.rus.ec/search.php?req=Early+Retirement+Extreme&lg_topic=libgen&open=0&view=simple&phrase=1&column=def)

      You can read it on mobile or on PC with Calibre (http://calibre-ebook.com/download) for the epub or mobi formats.

      Incidntally Calibre is founded by Kovid Goyal who sounds to be of Indian ethnicity.

  • et November 13, 2011, 9:13 am

    You could also mention ERE blog (http://earlyretirementextreme.com) & forums for interactive, current content & discussions.

    I thought the book was okay – a mix of obvious things (quality is worthwhile, consider you life choices carefully don’t do what everyone else is doing) and the investment bits which I’ll have to spend time on to understand.

  • Dividend Mantra November 13, 2011, 9:52 am

    Great stuff. Count me among those that found your blog through ERE.

    Jacob is a bit of an icon for some of us. I know that he inspired me to start my own blog, which is basically a journey to my own ERE. My journey is 2.5 times longer than Jacob’s at 12 years, but I’ll likely get there before 40.

    The weird thing with ERE is that after following it for a while it’s no longer “extreme”. I’m now disappointed if I only save 50% of my net income and I get angry with myself when I spend more than $2 on a meal. I always knew that the mainstream “save 10%” advice was crazy, and I’m so glad that Jacob is doing his thing and he has led us out of the cave!! I no longer see lights dancing on the cave walls, I see the whole world now.

    I will say one of the best things about Jacob is that he presents his ideas in a no-bullshit manner. Whereas other bloggers and personal finance “experts” give vague ideas on how to achieve true personal finance, Jacob puts together a map with every road and mountain already drawn in. He also “walks the walk” by living in an RV and biking everywhere. He’s not some Suze Orman who recommends saving a ton of money while living in a mansion. Jacob is “real”. And, that’s what I really admire and what I’m trying to emulate. I split a small apartment, got rid of my car, eat lightly and I’m putting away more than half my net income.

    Again, good stuff!

  • Chris November 13, 2011, 10:18 am

    I read Jacob’s book a couple months ago and it rocked the house! Yes, it is a bit dry, but the logic is pretty impressive. I like reading Jacob’s daily blog for this reason alone, he has a razor sharp sense of logic and reasoning. I highly recommend it as philosophical guide to FI.

  • Joe O November 13, 2011, 10:36 am

    I’ve read ERE for years. Agreed with some.. Far more than I agreed with most other financial bloggers.

    Yet it wasn’t til MMM came along that I agreed with 90+% of things a financial writer wrote.

    Jacob is too extreme for me in terms of cost savings and his spending level. That works for some. Not my cup of tea. MMM has the perfect mixture of frugality and life enjoyment, IMO.

    Not to say Jacob doesn’t enjoy his life, I believe he does, very much. But I wouldn’t enjoy that level. I find lots of enjoyment in the MMM style life.

    And thus we save ~60% of my income.. Not Jacob’s 90% extreme. Mustachian, but not extreme. ;)

  • Anna November 13, 2011, 11:08 am

    I actually found your blog first, and then found Jacob’s through one of your links. That was like, 3 weeks ago, and since then I’ve read the entirety of his blog (and yours!) and I’m just now working on getting up the gumption to buy a book new (the last new book I purchased was in 2009).

    One of the things that I’ve learned since reading both of your blogs is that taking on something (be it bicycle commuting, or washing your clothes in a bucket) seems really hard and ridiculous before you do it, after you’ve been doing it for a week, it seems really easy and logical. Before, it seems really extreme, but afterwards, it just seems like a perfectly logical option.

  • M November 14, 2011, 7:22 am

    Jacob’s book is a deep read overall, but I think anyone can relate to at least 60% of the book – engineer type or not. His blog is a good supplement to the book, and it seems to fit the “deep yet simple to read” criteria better.

    All of this book talk begs the question: is there a MMM book in the future?

    • MMM November 14, 2011, 9:52 am

      I think that writing a book is a cool thing to have under one’s belt, but I can’t see how it would fit into my own little life plan. After all, thanks to the magic of the web, you can already write whatever you want and then click ‘publish’. If people want to read it, they can! Plus you get to talk with the readers every day.

      The book format definitely allows you to get paid much more for your writing, if anyone actually buys it. But would I do something that seems less fun than what I already have the privilege of doing right now, just to try to earn more money? I’m not sure about that one. Maybe someday the idea of trying to make a nice organized book will seem appealing.. right now I’m imagining it feeling like school homework. Are there other book authors reading that can dispel this fear?

      Maybe the very fact that it DOES sound unpleasant means I should do it. I could definitely use some more of the badassity that comes from doing a bunch of hard work that I was originally afraid to do.

      • Early Retirement Extreme November 14, 2011, 12:15 pm

        I don’t think money should be the arbiter as there are more effective ways of making money with your writing than with books. (I’ve just about cleared the minimum wage level with mine.) Rather, it’s whether you want to express concepts that fit best in the 50 word (poem/forum post), 500 word (blog post), 5000 word (essay), or 50,000+ word (book) category. As you keep writing, this preference will probably change. I’ve found my preference to become polarized: I now prefer books and forum posts. The attraction of books to me is that it allows one to say everything in one place in a comprehensive, cohesive and coherent manner. Essays are similar except for not being comprehensive. Forum posts are lightning fast. (Blogging also has a been-there-done-that feel now. Discovering that I’ve already written 3 other blogs on the same topic after writing a new blog is incredibly annoying :) ).

        • MMM November 14, 2011, 9:09 pm

          I see. I guess I’ll just keep blogging and see what happens. The blog posts I do here seem to be 1000-2000 words, and that feels about right for one topic. If I made a book it would probably be a bunch of short chapters like that – and thus be no different from the blog.

          Minimum wage does sound pretty good – at least double what I’m earning for having those little ads at the side ;-)

  • Dragline November 14, 2011, 12:54 pm

    ERE — its a bootiful ting.

    Books like ERE are important precisely because they explore the nth degree — the outer limits of a topic. Even if you don’t want to go to that “extreme”, the very fact that something is empirically possible opens up horizons of ideas and possibilities.

    This site and ERE are very complementary and useful together because this one includes a “family element” whereas ERE is mostly directed towards singles and couples.

  • Ryan November 14, 2011, 2:40 pm

    I also heard about MMM through ERE and am a regular reader of both blogs. I know this was mentioned on ERE, but not yet here; probably the most mustachian way to get this book.. from your local library! Now I know this book probably isn’t already on the shelves, but I just requested the book at my library, and promply got a response saying they’ll be ordering it within 10 days! Can’t wait for it to come in!

    • MMM November 14, 2011, 9:18 pm

      Yup, good call – I normally suggest the library for everything.. I just thought I’d try to send Jacob some dough by putting the Amazon link in the article. Plus, just as with independent vs. commercial music, I always buy the CD to support the touring musician at the bar … but I’d rather just Pandora or borrow more popular stuff rather than buying it from a big record label.

    • Kira September 2, 2014, 12:00 pm

      Late stumbler on the blog soaking up every last bit (from the beginning). I still have plenty of MMM articles to read, but like to have books when I’m on the go. Just checked my library and they have 3 copies of ERE, and all are currently checked out! Exciting to know there are at least 3 others like me nearby ;-)

  • herbert salisbury November 16, 2011, 5:33 pm

    I notice you didn’t mention hassling my library to get the book for me to read for free…

    • herbert salisbury November 16, 2011, 5:54 pm

      oh wait, you did.

  • Bullseye November 21, 2011, 12:52 pm

    On this topic, what are some other books that are similar to ERE?

    I’ve read;

    Your money or your life
    How to survive without a salary
    The 4 hour work week
    Voluntary Simplicity

    I have a hard time finding good personal finance books that are not too simplistic!

  • Invest It Wisely December 11, 2011, 10:31 am

    I loved reading this book. I’m not sure I agree with insourcing rather than outsourcing, as in my view it’s better to concentrate on what you’re good at and leave the rest to others. This is also how the world has gotten so wealthy in the first place.

    On the other hand, I don’t think you should be totally ignorant of other tasks, as then you become dependent and vulnerable.

    • MMM December 11, 2011, 8:51 pm

      Ahh, but remember that this is an early retirement blog – i.e., we’re talking about what you do when you are no longer concentrating on that job you are so good at.

      Unless you’re a CEO, the math usually works out better to develop many skills so you can live a great life on lower spending, as opposed to saving an extra $1-2 million so you can pay people to do everything for you once you retire. My life is at least 75% cheaper than it would be to live the same lifestyle I lead now without skills in cooking, carpentry/maintenance, car+bike repair, bike riding, gardening, etc.

  • Highyieldsoldoer December 28, 2011, 12:09 pm

    I havent read the book yet, but I love Jacob’s site, and this one too. Just wanted to chime in on the index fund vs individual stock question. I come down so far on the individual stock portfolio. There are a number of good companies that have been paying dividends for a very, very long time, and raising them to boot. They are companies with mature businesses, good profits and some of them basically are monopolies. Some are government backed monopolies in their local areas—Im thinking utilities. ConEd and So are a couple. Coke is basically a monopoly in effect if not fact. McDonalds is another. The list is very long. These type companies if pooled together and made into a portfolio, will beat the market over the near and short term in my humble opinion. I hesitate to add MO to the list, because some of your readers may object to investing in cigarette makers, but it is another great dividend payer, and thanks to the agreement with the government, it is basically another monopoly inside the US. I dont see any of these companies having any great difficulty over the next 5 to 10 years maintaining their market share and profits. And Id rather own these companies, along with a dozen or so others, instead of a sideways moving index fund.

  • Jack July 18, 2012, 6:05 pm

    I learned the following quote:

    “When you identify with an object, you’re defined by the object, then controlled by it, and ultimately owned by it. If you relate to your possessions, you’re owned by your stuff, and it will make many of your decisions for you. This trap is not only mental, but also physical.”

    From Fight Club:
    “The things you own end up owning you.” – Tyler Durden

    Like Fight Club, I read this blog weekly ;-)
    Keep posting, very inspirational!

  • Dustin November 6, 2012, 9:28 pm

    Maybe the compounding advantages of insourcing explain why a software engineer can get an order of magnitude higher salary by getting a startup acquired in a “talent acquisition”.

  • mattbkk May 31, 2013, 3:37 am

    Dear Mr MMM,

    I notice a lot of heavy and somewhat dry reviews of ERE here which is fair enough as it’s on topic but is also somewhat boring. Being a Swearypants adds a cool image of of street cred and rebellion and I admire it intensely. In fact in daily life I personally aspire to swear at least hourly and I have a suspicion you are the same.

    In your excellent article above, you said, “I added the f-bomb to make sure you knew that the idea was very important”. I think you missed a golden opportunity here. Can I suggest you revise this as follows –

    “I added the f-bomb to make sure you knew that the idea was very fuckin’ important”.

    Thanks for a kickass site! Hope you don’t mind if I suggest further sweary modifications in the future.



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