Early Retirement Can’t Work, Or I’d Have Heard Of It Before!

Little MM and I marveled at the fanciness of this toy, then went back to digging in the sand with sticks.

Today we’ve got a guest post from the esteemed Mustachian known as Arebelspy, who is also a Moderator over on the Money Mustache Forum. Since we’re both passionate about this particular idea, the article became a bit of a collaboration between Arebelspy and MMM.

Mustachianism Can’t Work, Or I’d Have Heard Of It Before!

There’s a fairly common doubt about the idea of Financial Independence and Early Retirement  that MMM and others espouse. Because it’s such a prevalent idea that one must work until they’re 65, people often doubt that retiring so much earlier than that could even work. The skepticism essentially boils down to this:

“If early retirement is that easy, why haven’t I heard of it before? It must not actually be possible.”

MMM has already shown the mechanics behind the idea, in the post The Shockingly Simple Math Behind Early Retirement.

I’m here to explain why most people have never heard of it before.

Today we have a unique opportunity to hit financial independence after only 10 or 15 years of work. Retiring in one’s mid-30s sounds crazy, but it is the unprecedented times we live in that makes it possible.

You see, 300 years ago, I’d likely be a toiling peasant. There’s no way I could save enough to retire. I’d need to be frugal just to get by.

100 years ago, the situation had improved for some of us, but overall it was still difficult to save much. A frugal worker might be able to save 10, 15, or maybe even 20% of his income, but probably not much more.

The difficulty of saving in the past continues to influence our thinking today: common wisdom suggests that you should be shooting to save those small percentages, because that’s what you could save, historically. This makes the 40-90% savings rates suggested by Mr. Money Mustache and his acolytes seem crazy.

But there’s a big difference between the economic situation of the average person 100 years ago and today. Compared to our incomes, the basic “cost of living” items have gotten much, much cheaper.

“But wait!”, I can hear the complainypants saying. “I hear stories (or remember) when soda was a nickel and a house cost only $5,000!* How can you claim goods are cheaper?”

The actual fact is, due to productivity and technology improvements, wages have risen faster than the cost of goods in real (inflation-adjusted) terms. According to information from the U.S. Bureau of Labor Statistics, real compensation per hour rose from 42 to 108 over the second half of the 20th century (normalized such that the compensation in 1992 = 100).**

This rising standard of living (made possible mainly by productivity improvements through technology) is the reason a Mustachian family can live on barely over $20k per year, even while the US median household income is about double that, and many in-demand jobs pay a single worker several times this amount.

This article from MIT gives a shocking fact that is key to why you can save so much to hit FI quickly. It says that “an average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950.”

That means that in theory, the proceeds of the other 29 hours they’re working could be saved.

So here’s a scenario. Your grandparents, in 1950, could work and save 10% of their income after working 40 hour weeks, and the other 90% of their pay was spent on basic consumer goods. You should be able to do the same, but it’ll only take you 11 hours (and you should be able to save 10% of that, like they did, so really only 10 hours) to cover your basic needs. That leaves you with 30 of your 40 hours EXTRA cash that you don’t need to be spending on basic cost of living items.

In the 1950s they had TVs, cars, dishwashers, and more. At the time, they thought they were living at the peak of modern convenience with all of the new luxuries – even with a single wage earner.

So what have we done with our over-100% increase in disposable income since then? We’ve bought even more things.  Consumerism.

As a society, we go out to restaurants far more often than our grandparents did. Our houses are more than twice the size, and in expensive cities we’ve bid up land prices to the sky using cheap credit, negating much of our income gains. We have more cars, we drive them more, and they’re packed with more luxuries (imagine going back to 1950 and insisting on a 16-speaker 550-watt audio system in your Chevy!). We also have more shoes, about ten times the amount of clothing (if closet sizes are any indication), and we do much more interstate and even international travel. We tend to buy things before we have the money, adding the significant cost of interest payments to our monthly expenditures. And don’t even get me started on the topic of big-screen television sets.

We’re flush with more disposable cash than we’ve ever had in history, but we don’t even realize it. The rise of the dual-income household should have made us even wealthier. But instead it just gave rise to the lament, “Nowadays you need two incomes just to get by!”

We should be laughing as we have cashball fights in rooms full of $100 bills. Instead, all we hear is about the ever-increasing cost of living.

The MMM way is to simply roll back the luxury train just a few years, then take all that extra disposable income and save and invest it.

“But we need all the extra luxury, to compensate for the ever-increasing demands of our work lives!”

Wrong again – even while increasing our income, we’ve also tripled our leisure time in the last 100 years***. People actually used to spend much more time working, because their work was toiling in fields and factories without the benefits of standardized workweeks, overtime pay, or even weekends in some cases.

So you can work an easy week, still have a good standard of living, still save the vast majority of your paycheck, and hit FI in a resonable number of years.

You haven’t heard of this idea because it wasn’t possible even 50 years ago. It’s still not possible in many parts of the world today. And it may never be possible if you continue to follow the same path as most of your neighbors, who think that a $30,000 car is a reasonable part of a middle-class lifestyle.

But if you live in a first world country****, you’re in a unique situation never before seen in history: you can easily hit FI very quickly by saving all that disposable income.

Hopefully this post has explained why you’re able to do so.

* No comments about current day Detroit.
*** http://eh.net/encyclopedia/article/whaples.work.hours.us
**** Germany’s another example:

  • darkelenchus July 8, 2012, 5:07 pm

    Re: the comment on leisure, this is from the cited source:

    “In 1880 a typical male household head had very little leisure time — only about 1.8 hours per day over the course of a year. However… between 1880 and 1995 the amount of work per day fell nearly in half, allowing leisure time to more than triple. Because of the decline in the length of the workweek and the declining portion of a lifetime that is spent in paid work (due largely to lengthening periods of education and retirement) the fraction of the typical American’s lifetime devoted to work has become remarkably small.”

    It’s interesting to see that education is included in leisure. I’m assuming this includes high-school, but what about college? One might think of college as paying to receive training that others in past decades would have received on the job.

    “Based on these trends Fogel estimates that four decades from now less than one-fourth of our discretionary time (time not needed for sleep, meals, and hygiene) will be devoted to paid work — over three-fourths will be available for doing what we wish.”

    This is also interesting. If Mustachianism is primarily about freeing up one’s time to pursue the things you value, then it may become more commonplace in the future. Of course, another possibility is that it’ll be seen as greater opportunity to engage in consumerism.

    • Apol August 10, 2018, 9:33 pm

      You’ve mentioned first world country?
      What about in third world countries? is early retirement not possible? I live in the Philippines

  • Lance@MoneyLife&More July 8, 2012, 5:08 pm

    I 100% believe it is possible and happens more than you think. The problem is is that everyone is so focused on keeping up with others and the new gadget that just came out or that beautiful house on the corner lot. If people live simply you can save a great deal of your income and become financially independent much earlier in life.

  • G.E. Miller July 8, 2012, 5:28 pm

    Since productivity went up 400% since 1950, theoretically, our standard of living should have done the same. And maybe it has. But the 40 hour work week is a remnant of yesteryear. Few people tend to think… “hmmm…. I could either a.) work 1/4 of the hours, or b.) work 1/4 of the years”. I’ll choose option b.

    I’m no economist, but a lot of this has been fueled by cheap fossil fuels and cheap 3rd world labor driving down cost of goods. When that labor eventually demands and receives more (they will) and when cost of fossil fuels increase at faster rates (they will), does inflation rise at rates exceeding wage increases to the point where our standard of living decreases back to mid 20th century levels?

    • Mr. Money Mustache July 8, 2012, 6:14 pm

      Nice questions!

      Regarding fuel and labor: It depends what portion of the economy is spent on fossil fuels, and what percentage is devoted to lower and middle wages.

      Since fossil fuels are an ever-decreasing percentage of modern GDP, we’ll become less and less affected by future price rises as time goes on. Especially given the fact that alternative energy sources are very rapidly approaching price par with oil – limiting the theoretical maximum price that oil could reach even if we did have a shortage.

      If labor wages were to rise due to a shortage, we’d see an increased percentage of national income flowing to workers. This would of course increase inflation, since haircuts and cars would cost more. But a doubling of wages would not double prices, because some of the cost of our goods is allocated to the underlying (commodities market) cost of the materials used, and profits for the companies that run them.

      So in theory we could end up with a higher material standard of living, especially if the change of market forces manages to squeeze out some of that big chunk that is currently allocated to the top few percent of income earners.

      But MUCH MORE IMPORTANT than all of this, and often overlooked by most pessimists, is the fact that our standard of living is influenced much more by productivity gains, rather than labor and fossil fuel costs.

      I can place 1000 finish nails per hour versus my grandfather’s 100, perfectly driven and countersunk, due to the invention of nail guns.

      The nailgun itself cost only $100, because a Japanese worker only spent a few minutes assembling it from just a few pounds of aluminum of plastic, and yet it can boost my productivity for a decade or more before I have to replace it.

      This story can be repeated for almost every human occupation, and it explains the vast majority of our standard of living.

      There I go again – this shit is so good, I’m going to have to cut and paste it to form part of the “why we’re not all doomed” article I’m working on :-)

      • Justin July 8, 2012, 10:09 pm

        “Since fossil fuels are an ever-decreasing percentage of modern GDP”

        That doesn’t really fit the facts though. If you look at the charts, it looks a lot bumpier, and the chances of oil ever approaching the inflation-adjusted prices of the 90s is laughably small. Here’s a chart if you don’t believe me: http://michaelaucott.blogspot.com/2011/01/oil-production-and-fossil-fuels-percent.html

        I think you may be confusing energy consumtion/gdp (which is indeed trending downward), with energy cost/gdp.

        I can’t wait to see your article on peak oil, but I hope you have better arguments than that. For instance, these productivity gains you speak of are only possible because of the amazing amounts of energy burned. That Japanese worker was able to assemble that nailgun so quickly only through application of vast amounts of energy in a factory, as well as the energy embodied in the materials which went into the gun, and the entire infrastructure which enabled its manufacture and delivery to you.

        Alternative energy comes at a cost too, in that it is expensive to build and retool infrastructure, and I mean expensive in terms of energy. If constrained energy supplies drive oil prices up enough to make alternative energy attractive, it also unfortunately drives up the cost of producing and installing alternative energy. There is a bit of lag, but is it enough to get the new energy sources up and running?

        I’m not saying this because I am a pessimist or complainy-pants. On the contrary, I just want to see a better argument that doesn’t just ignore the actual arguments presented by the other side.

        For a solid background on alternative energy mathematics you should check out the blog Do the Math. It is written by a physicist and is chock-full of charts and numbers that the evidence oriented like you should love: http://physics.ucsd.edu/do-the-math/. No article on peak oil will be worth the time to read if you don’t at least address the concept of the “Energy Trap”: http://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/

        • Mr. Money Mustache July 9, 2012, 6:10 am

          Great points, Justin and I’m enjoying those articles you linked to. You’re right, I was referring to the decrease in energy consumption vs. GDP rather than energy spending. I didn’t realize that energy prices had been roughly keeping pace with GDP. Another link on the same idea: http://www.instituteforenergyresearch.org/2010/02/16/a-primer-on-energy-and-the-economy-energys-large-share-of-the-economy-requires-caution-in-determining-policies-that-affect-it/

          So I’ll have to throw away that point. But I still feel I can prove that energy efficiency has been neglected due to the chronically low prices of energy for most of our history. In other words, we use a ton of energy precisely because it’s so cheap, and the graph of what we could accomplish with much less is very flat: there’s lots of low-hanging fruit. I’ve never toured a factory or visited a modern building or household that wasn’t just blasting wasted energy out the roof for sheer lack of knowledge of the many cheap ways to conserve it.

          Also, I think the very recent boom in fossil fuel reserves and production (North America’s oil sands and gas shales) is in response to the higher energy prices since 2005. Although I don’t personally like it, these discoveries which add to world energy reserves tend to accelerate in times of high prices, messing up the peak oil prediction repeatedly.

          Finally, I’m finding that even unsubsidized solar panels can already give me electricity that’s quite a bit cheaper than many US residents pay for fossil fuel electricity. Yet the cost keeps dropping. There’s encapsulated energy in a solar panel and a wind turbine, but it’s not that much relative to what they produce (sorry, can’t find the stats right at this moment).

          In one sentence: the doom predictors ALWAYS underestimate our ability to change in response to our situation!

          • FreeUrChains July 9, 2012, 12:58 pm

            Don’t forget about the advancements and benefits to the 500 Nuclear Power plants world wide. They save on the transportation, mining, and labor of Tons of Coal. They Give off no Gases, though increase Public Safety Risks of Radiation Exposure in the accident condition of a Core meltdown. 20% of Electricity consumption is provided via Nuclear power in leading nations. Once thermoelectric conversion systems increase in efficiency vs photovoltaic conversion efficiency, then fusion, fission, and annihilation reactions could power the world almost entirely whether or not it’s nighttime or no wind occuring.

          • deciduous July 15, 2012, 8:47 pm

            I don’t know how many times I’ve seen someone on the internet so gracefully and whole-heartedly concede a point after–gasp–reading something. It’s impressive, and stands in stark and welcome contrast to what’s going on in the more recent guest post from Financial Samurai.

            Thank you for your blog, work, and mature attitude.

          • Rosie August 2, 2016, 5:06 pm

            You make an interesting (and correct) point about energy wasted via inefficiencies. Unfortunately, it seems that most gains in energy efficiency are wiped out by increased use. That is, it seems (non-Mustachian) people tend to use the same amount of energy regardless of how efficient their appliances are. Dishwasher uses less energy? Means we can blast the AC all day! If you are a podcast listener Freakonomics did an interesting episode on this, mainly based on Georgetown economist Arik Levinson’s paper ‘How Much Energy Do Building Energy Codes Save?’


        • Russell July 9, 2012, 11:57 am

          You could very easily take the energy discussions and replace the word “energy” with “money”.
          Energy supply -> income
          Energy demand -> spending
          Fossil fuels -> salary
          Alternative energy -> investment/passive income

          The “energy trap” article that Justin mentions explains how up-front energy investments in alternative energy become very difficult/painful once the amount of available energy begins decreasing.
          This seems a bit like trying to save money for retirement once you are forced to reduce the number of hours you can work. At that point, it is hard to overcome the extra pain of putting precious money into income-earning investments.
          Instead, the time to start investing in alternative energy is now, while we still have an energy surplus. It takes a good dose of mustachianism to be forward looking enough to realize the oversupply won’t last forever, though.

      • Josh July 10, 2012, 1:32 am

        Technology hasn’t only affected us by making us more productive, like through power tools.

        At the same time it increased the effectiveness of advertising, convincing people they need things they don’t. Which is relatively more effective — today’s versus 1950’s nail gun or today’s versus 1950’s ads for children’s cereals?

        I think this other area of development explains a lot of how people end up materially rich and emotionally poor.

  • Heath July 8, 2012, 6:41 pm

    And here we have another wonderful post that I can send to all of the doubters that seem to populate my world these days :-)

    • ultrarunner July 20, 2012, 11:07 am

      It’s really astonishing how many there are too… I’m continually amazed by the pushback my friends and family give me.

  • rjack July 8, 2012, 7:07 pm

    I often wonder if 100 years from now, our descendants will say “People worked all that time just to get more useless stuff? Why would they do that? It makes no sense because everyone knows that all that extra crap won’t make you happy.” I’m hoping for a Star Trek-like future where every human being is entitled to basic food, shelter, healthcare, and education without having to do any paid work. This will allow a blossoming of new scientific inquiries, art, etc. based purely on individual interest and a collective desire to contribute to society. Maybe I’m an optimist. :)

    • Fawn July 8, 2012, 7:49 pm

      rjack–you are definitely an optimist.

      Most of us will spend our extra free time watching the Kardashians (or their equivalent) and trying to grow more impressive lawns than our neighbors.

      Humans seem to do their best when they feel challenged. From life circumstance, or an Olympian athlete in the family or a MMM challenge to ride their damn bike for a change.

      The more comfortable we get, the more sluggish and unable to exhert ourselves…..do not make me get up off this couch and argue with you, I have a sore knee and a migraine and a memory problem. It’s not my fault. My mom did too.

      • DaftShadow July 9, 2012, 9:27 am

        The challenge of looking at “humans” as a whole is that we almost always treat the outliers as aberrations. Don’t get me wrong, I actively agree with almost everything you say… but only sorta! :-)

        There will *always* be challenges for people to fight. Making some of them go away does not make us weaker… it gives us more opportunity to tackle even HARDER challenges!

        For example, what about people who work out? These humans intentionally subject themselves to intense physical stress over continued periods of time. Why do they do this? It turns out that many humans actually ENJOY the feeling! Not the results, not the looks… eventually people get used to these. Most hard-core workout humans continue to do it because they enjoy the activity itself. They *love* feeling exhausted and spent and full of the body’s natural chemicals!

        Or what about young hackers? Everything taken care of by their parents, these teens turn inward, and may suddenly discover an intense joy to be found in writing code for hours and hours and hours, building something useful. Artists. Activists. People who work at non-profits even though they are long-retired.

        There are MILLIONS of outliers like these. Examples of human beings who enjoy tackling challenges for no purpose other than the joy of tackling challenges!

        Yes, paying for everyone’s basic living essentials would allow much of the world to sit around watching The Kardasians. But it would *also* allow them to spend time on their personal outliers (and we all have them; even us lazy ones :). There are many of us who believe that the weight of all this free time would not drown the human race, but instead it would begin to set us free to flourish in even more interesting and powerful ways.

        ~ DaftShadow

        • FreeUrChains July 9, 2012, 1:07 pm

          Well I for one would take up the Challenge to Explore the Universe, as long as there are 5,000 others along for the ride. Space can get very lonely! Though hopefully, maintenance/self-sustainability would only require 2 hours a day at most of Work! Star Trek emphasized the worker slave of working 8 hours shifts every day as though they were in the navy! Building a robot in your leisure time, is different when told to do it, or when you want to do it for your passion of the hobby.

    • Jen July 9, 2012, 8:25 pm

      You’re a communist :) It’s just like reading Karl Marx. Beautiful, has been attempted, did not work.

      • rjack July 10, 2012, 6:03 am

        No, I’m not a communist and I’m not assuming that people would never be challenged, do work, etc. If technology advanced to the point that little human labor was required to provide food, shelter, healthcare and education, why couldn’t it work?

        As the article points out, even now we could all work significantly less and still have a lifestyle that would be considered ultra luxurious 100 years ago. It is all about personal attitudes and social norms.

      • Sofie October 23, 2013, 8:50 am

        Communism failed because of dictatorship & that shit. The society that inspired it worked perfectly well. Check out Iroquoian Women by Barbara Mann.

  • mike crosby July 8, 2012, 8:33 pm

    The last few years, reading blogs has made a huge difference in how I look at money and how I live on a daily basis. And no doubt, it has been a life changing and life enhancing endeavor.

    But this article goes way beyond all of that. It draws a whole new paradigm. To see the concept of FIRE (Financial independence and early retirement) and how it relates to history is true. This is a game changing post.

    Combining incomes with a frugal lifestyle, financial independence can easily be in the reach of many people.

    I live in an affluent neighborhood with all the latest model cars. Many make more in one year than I make in 10. But I’m the one walking my dogs in the AM while they’re up early making sure they get their expensive cars in queue on our local freeways.

    • Matt July 9, 2012, 8:04 am

      “I live in an affluent neighborhood with all the latest model cars. Many make more in one year than I make in 10. But I’m the one walking my dogs in the AM while they’re up early making sure they get their expensive cars in queue on our local freeways.”

      Love this quote. Reminds me of “The Millionaire Next Door”

      • FreeUrChains July 9, 2012, 1:13 pm

        I walk across the Words, “Fire Lane” everyday intentionally to remind myself of my goals, “Financial Independece Retire Early Live Action New Experiences”, While Hundreds of Cars are parked while their 30-70 year old owners grudging to work daily for more consumption money and less Time. Thank goodness i had the Free time at Work to read blogs like this and learn how to free myself from the worker-consumer-taxed-slave system! (now i have the time to volunteer/free others ;)

  • fastbodyblast July 8, 2012, 9:21 pm

    This is a seriously good article. I have read a lot of MMM posts and I think this is one of the best that gets to the heart of what this blog is all about.

    Just like the time to get something done expands in direct proportion to the time allocated, expenditure expands to the income available. This post shows the nuts and bolts of why this doesn’t need to happen.

    In my line of work, I have a lot of trouble just getting people to set aside 5 minutes for a few stretches let alone schedule a little time each week for a workout. “I just can’t find the time” is the usual response.

    Next time I hear someone tell me they have no time for anything or complain about the cost of living, I will remind them how good we’ve all got it and show them this post!

    Here is a fun article that relates closely to this post called “The Busy Trap”: http://opinionator.blogs.nytimes.com/2012/06/30/the-busy-trap/

    • Mr. Frugal Toque July 9, 2012, 8:58 pm

      That has to be one of the most annoying excuses on the planet.
      Okay. If you have three jobs; you’re barely making ends meet financially; your spouse left you; medical debts are piled up; you have three kids and you collapse at night after getting them all to bed?
      Then you don’t have any time. I totally agree.
      Everybody else?
      Verdict: Complainypants!

    • mike crosby August 4, 2012, 10:16 pm

      Nice link Fastbody.

      It’s fun to read ideas that are contrarian but make total sense.

  • Posted On July 8, 2012, 9:25 pm

  • George July 8, 2012, 9:48 pm

    Thanks Arebelspy for reminding us that we are truly now living in the golden age. I feel so blessed to be living today in a rich country. Shame on the complainypants for not seeing a good thing when it is here right now.

    Almost everyone needs a good ass kicking to start learning about the past in order to put today in perspective; not enough time is spend learning about history; too bad most people are too busy watching their expensive TVs and driving expensive cars around to read and learn about the industrial revolution in the 19th and 20th centuries and learn what life was like then compared to now.

  • Fuzz July 8, 2012, 11:00 pm

    One of the things that appeals to me about mustachianism is that it’s about meeting the world on your own terms–or at least giving some careful the world’s possibilities for early retirement and making some short term sacrifices so that you’re able to meet the world on your own terms. And we’re lucky to live in a time where it’s possible for ordinary people to achieve enormous (financial) independence to spend our time how we choose.

    Is anyone reminded of this moment from Office Space?


  • Jimbo July 9, 2012, 6:34 am

    Another great one… Thanks Arebelspy and MMM.

    This might be the Canadian speaking, and I am not at all complaining, but… One thing that HAS changed, IMHO, due to the fact that ‘two salaries is the new normal’, is housing.

    I know Canada is in a housing bubble, and signs of a bursting bubble are starting to show up, but still, the amount of money people are willing to throw on housing makes it difficult to rationalize. Anyway, it’s still do-able, but it definitely impacts ‘basic needs’.

    Just a thought.

    • Mr. Money Mustache July 9, 2012, 8:51 am

      Definitely true, Jimbo – the irrational appreciation in Canadian city housing is eating into everyone’s income here.

      The trick is to always do the math, and I don’t believe many people are doing it. Does the job near Toronto really pay sufficiently more to justify the extra housing cost? Are there other areas of the country with a better income-to-housing ratio? Is a small central apartment a better idea than bidding on a bigger suburban house? Is there a way to get in, quickly save for early retirement, then get the hell out?

      In a more MMM-style world, companies would stop opening so many offices and creating jobs in expensive cities. Because the workers would demand 2-3 times the salary to work in Toronto than they would demand, say, 65km to the Southwest in Hamilton, or another 65km Southwest in Nanticoke where land is still free. They would therefore create the jobs in Nanticoke, and people would snuggle in to medium-density mixed-use developments within 5km of their jobs, eliminating car commuting. Busy train lines would sprout up between cities while highways were abandoned, because people would laugh at the idea of driving nearly-empty vehicles between cities. Labor would become FAR more mobile than it is right now.

      All jobs that could be done via work-from-home arrangements, would be done that way. Oldschool managers that insisted on physical presence at the office would be laughed out the door.

      Land prices would be less peaky than they are now, and only the richest people would concentrate in their overly pricey enclaves, bidding away each other’s prosperity while the rest of us enjoy equally satisfying amenities for far less. (See: Manhattan vs. Longmont)


  • Jon July 9, 2012, 7:17 am

    This is poppycock. You think the average Joe is better off today than in the 1950’s because technology allows you to do SOME tasks with 100 times greater efficiency than what your grandfather was able to do? Back then, a man of limited means was able to secure a middle class life because of unions and being citizens of countries that were left intact after WW2.

    Also the writers (and most readers) of this blog are in the top 10% intellectually speaking so it should come natural to be innovators and ahead of the curve in financial matters and it is not surprising that these people are successful and able to retire early. This group would be able to retire young in any time period after the industrial revolution. The affluence from 1950-2000 enabled the more “feeble-minded” to share in the group prosperity and to live and retire in comfort. Does anyone reading this blog think life will be better for their children than it is for themselves?

    • Mr. Money Mustache July 9, 2012, 8:36 am

      I definitely believe that for my own son. And that’s true with almost any definition of the word “better”.

      Will his food and shelter needs continue to be met without using up an undue portion of his income? Check.

      Will the Internet allow him to share his ideas and meet compatible friends earlier in life than I was able to do these things? Check.

      Will the ease of the world’s information flow allow him to learn more about happiness (and every other field) early on in life, allowing his life to be more fulfilling? Check.

      Will the average rich-world person be able to drive an even more powerful car and have a larger house than me, heated warmer in the winter and cooled more in the summer? That I cannot predict, but I’d argue that has nothing to do with life being better.

      As for a man of limited means supporting a family – are you thinking of trades that don’t require a university education? Like Carpentry, which I find I can easily earn over $40/hour for, or being an electrician ($60) or plumber ($80)? What about doing hard labor in the oil energy or working on wind towers? Even tree trimmers are charging $40-$60 in my low-cost-of-living area. I’m not saying all jobs pay this well, but I do insist that good work is out there if you search for it.

      You do have a good point about MMM (and other blog) readers being disproportionately well educated. We’re lucky in that sense. But even people with less education have the opportunity to save, and this blog is one attempt at making that type of education accessible.

      Part of being able to search for good work (as noted in the paragraph above) is never living beyond your means, so you are always in a position to do the search. For my fellow manual laborers, that means foregoing the shiny Ford F-150 and the ESPN cable package, and hitting the library regularly to check out books that expand your skillset.

      I’ve looked through the argument I’ve been making in this blog pretty thoroughly over the past 15 months, and I really don’t see much poppycock in it.

      • Jamesqf July 9, 2012, 1:22 pm

        “For my fellow manual laborers, that means foregoing the shiny Ford F-150…”

        Or it might be as simple (at least to start) as settling for the F-150 instead of the F-350 with crew cab, dual wheels, and two dozen cupholders.

        • Mr. Money Mustache July 10, 2012, 8:25 pm

          Fuck that! A 2001 Ford Ranger 2-wheel-drive manual transmission longbed smallcab will carry almost as much, burn half the fuel, handle and park much better, and costs under 2 grand in great condition.

          There are similar little trucks from Toyota, Mitsubishi and Mazda that are equally great workhorses.

      • SoCalGirl July 9, 2012, 4:51 pm

        lol – wow this is my first encounter with one of your “complainy pants!” I really thought you were making them up, Mr. MM!

        BTW – I’ve been partially laid off. Since it’s summer and SoCal, I’m going to teach the brood to surf. I always wondered what I would do with alllll that time on my hands, now I know!


      • jet July 9, 2012, 8:32 pm

        I love your irrepressible optimism MMM – adds a bit of balance to my own pessimistic/doomsday kind of perspective of the world. Maybe one day I can learn to be as positive and optimistic as you are!

    • Mr. Frugal Toque July 9, 2012, 4:50 pm

      What would be a “feeble-minded” job, from your point of view? A janitor? A carpenter? A department store cashier?
      Here, have a look at the tools a carpenter had access to in 1950:
      Handsaw? Seriously? A handsaw?
      Do you realize how much more productive a carpenter is just for buying a $200 electric chop saw? A $300 semi-portable table saw?
      That’s what we’re talking about. The electricity in your house, the lightbulbs, the tv, the carpets, the furniture. *Everything* is cheaper than it was back then when you compare the cost to how much people earned.
      We have way more disposable cash.
      But instead of living the same way the 1950s carpenter did and retiring early, we stockpile cellphones, laptops, cars and closets full of clothing,
      Add to that how quick we are to abuse and throw out the things we do have. My grandmother passed away at the age of 90. Up until the year she died, she was still using the pasta maker she’d received as a wedding gift.
      No. There’s no poppycock here.

  • Joe @ Retire By 40 July 9, 2012, 8:13 am

    That’s why I cringe every time I hear – work hard, play hard. People work so hard so they feel entitled to spend money, but that’s not the right path for everyone. I’d rather work hard for 10-15 years and save, then work only a little bit the rest of my life.

    • Oh Yonghao September 23, 2014, 1:48 pm

      Thanks for this comment. Sometimes I find myself falling into that path. Not quite as much as your standard consumerist, but sometimes when I make a bit extra I’ll feel that I should be able to take a bit of that for myself rather than just save the entire thing.

  • BeyondtheWrap July 9, 2012, 8:40 am

    Some things would definitely change these calculations. While productivity has gone up, wages have not risen for the same degree for the middle class. Most of the productivity increases have all gone to the top since the 1970s, while middle class wages have mostly stagnated in that time. So looking at the chart in the linked article, we would have to work ~20 hours to get the 1950 lifestyle, since we earn wages appropriate for 1970s productivity.

    Also, as mentioned by Jimbo above, certain items have increased in price faster than inflation. He mentioned housing. I would also add healthcare (and education, but that’s not as close to being a basic need).

    I know MMM likes to point out that the price of food has thirded since the 1950s, but I would counter that the quality of food has gone down, and that cheap grains now form a larger portion of our diets. (See http://www.thedailybeast.com/newsweek/2012/05/06/why-the-campaign-to-stop-america-s-obesity-crisis-keeps-failing.html ) If we ate like they did in the 1950s, our food would probably cost 30% of our spending again instead of the current 10%.

    Also: they had dishwashers in 1950?! Really?! I know they existed then (http://en.wikipedia.org/wiki/Dishwasher ) but I don’t think most households had them yet. Not that I’m complaining; I don’t have one either and I’m just fine with that.

    • Llama July 9, 2012, 10:24 am

      Don’t forget that the Kiddie Meal I get at a fast food restaurant is what USED to be regular. They didn’t eat half-pound cheeseburgers and 3 cups of fries in the 1950s.

      So yes, the quality of our diets has generally declined, but the portions have skyrocketed. If we ate reasonably sized meals and went back to preparing more of our own food, I don’t think we’d necessarily be up to a 30% food cost.

      And if it weren’t for my dishwasher I would do almost NO cooking at home. :)

  • zweipersona July 9, 2012, 9:23 am

    “We’re flush with more disposable cash than we’ve ever had in history, but we don’t even realize it.”


    It’s funny how people simply aren’t aware of their financial situation. They live their lives on a day by day basis, visiting Starbucks daily, a bar every friday, and miscellaneous entertainment throughout the week, easily eating up 300-500 dollars a month on just these unnecessary habitual items.

    It’s even worse when you see some people live in a shack of a home, but then drive the newest cars. In a LOT of homes in Florida, the cars people possess look in a much better shape than the home does.

    Basic (personal) financial courses should be prerequisites in high school.

  • Mr. Everyday Dollar July 9, 2012, 11:34 am

    I believe people want to show their economic power publicly by buying luxury services and luxury products. Why do they do this? It’s about showing social status and making others envious.

    If you can mind shift and give up the need to show social status, thereby decreasing your spending, then getting out of the workforce early is (as we know) very possible.

    I have a good friend who started working around the same time I did and who makes roughly the same amount I do. I will be retiring early. He’ll work forever. Why? He is someone that has lived a consumer driven and high consumption lifestyle. He lives paycheck to paycheck, has no retirement savings, rents a really expensive apartment, and blows a ton of money at restaurants and bars.

    It’s sad, because it doesn’t have to be that way!

    Mr. Everyday Dollar

  • Ron July 9, 2012, 12:25 pm

    I’m calling bullshit on MMM. I enjoy and appreciate your writing and the fact that you take criticism in stride. So here’s a little more. It’s disingenuous for your co-author and/or you to write, “you can easily hit FI very quickly by saving all that disposable income.” If it was easy, more people would have accomplished it. The main fallacy is overgeneralizing from your experience. “Because I’ve done it, anyone can.” Take your carpentry skills. I’m the third of three sons. Everything was fixed by the time I got to take a crack. I struggle to maintain my bike by myself, let alone the house. Could I learn? Yeah I suppose, if I apprenticed with a patient, skilled teacher. Also nearly all early retirees are well educated people who made better than average $ while they were working. Not everyone has the education or social capital or trade know-how to earn much more than a livable wage. Living more simply is important, but it’s only a portion of the larger picture of financial independence. Many people are being forced to live quite simply because they’ve dug themselves such a deep hole. No, their debts shouldn’t be forgiven, but neither should they be told early retirement is “easy”.

    • Jamesqf July 9, 2012, 1:40 pm

      I think I can offer a counter-example. Yeah, I made money in a relatively well-paid field, but I didn’t graduate from college until my mid-30s, with IIRC about $6K in student loan debt. (Which I thought at the time was a lot of money.) Took me about 15 years to reach that degree of FI that I call being independently poor. Did it with money saved from salary: didn’t get inheritances, win the lottery, or have any of the several startups I worked for go through IPOs.

      I didn’t do it by scrimping, either, but by being selective enough to only pay for what I wanted, instead of what society thought I should spend money on. New cars? No thanks, but I did own an airplane for years. McMansion? No, but for half or a third of the money, I bought a small country house on several acres. No HBO, big-screen TV, or cell phone (at least until it got to where a simple pay-as-you-go phone was significantly cheaper than a land line).

      So if I can do this in 15 years (on an admittedly good salary) via selective spending, why can’t the average Joe do the same in 30 years?

      • Ron Byrnes July 9, 2012, 3:57 pm

        There will always be exceptions, but the aggregate is much more enlightening. For clarification, you’re living off of passive income, just very simply, correct? Need more details to decide whether you’re a convincing counter argument. What was your salary for the 15 years and what are your expenses today? And was it easy? If so, why would that be true for other people given their different life circumstances?

        • Jamesqf July 10, 2012, 1:32 am

          No, I’m not actually living off passive income. I’m at a point at which I COULD live, frugally, off passive income. But I’m one of those people who utterly reject the idea of retirement at any age, let alone early retirement. (My role model is my neighbor, who still works part time at 97.) What the FI has given me is a considerable amount of freedom to choose work I enjoy doing.

          I’m afraid I couldn’t tell you what my average salary was for those years. There were several when it was in the $100K range, but others – like the years I spent getting advanced degrees, living as a student in Europe as part of it – when I might have made $25K. Say it works out to $50K on average.

          Expenses likewise vary, and I really don’t bother to track them closely. But a rough list (monthly):
          Mortgage & property taxes – $1050
          Utilities – power, phone, internet – $100
          Dog food & vet – $100
          Horse food & expenses – $120*
          My food – $200 (just guessing here)
          Car & truck (gas, registration, etc) $100
          Misc – books, clothes, bike repair, ski wax, etc – $230

          As I said, these are mostly ballpark guesses, but I figure I spend about $2000/month on average, so pretty close. Figure $10K for taxes, and out of the average $50K I’m left with $15K to invest. In 15 years, that amounts to $225K, plus market gains (and some 401K matching dollars).

          *That leaves out the time she tried to kick through a sheet metal building. The vet bills that year might have bought a good used car.

        • VeroGall July 14, 2012, 4:21 am

          Sorry, but it appears you are mixing up difficult and hard. There will always be people who find hard and others who find it easy. The subjective feeling of something being hard versus easy is an opinion, not a fact.

          “There will always be exceptions, but the aggregate is much more enlightening.” Yes, it is. The aggregate of information from not just North America, but Northwestern Europe indicates that it is possible to work less or work the same, save up to 50% of your income and retire early. Every example of success has a different story, different income, different variables.

          Statistically speaking if people who did not finish highschool have succeeded at this without winning the lottery or other exceptional advantages (statistically difficult), then yes, that means early retirement is simple. If you can show that each and every person who succeeds in retiring early has something that is impossible for the average person (medical benefits like oversized heart/lungs for an athlete, trust funds, savant status, etc.) and that benefit is what earned them unusually high incomes then the subject is difficult. When average people with average incomes living fulfilling lives succeed in living their dreams by age 30, 40 or 50 then yes, it is simple.
          And many of us find that to be easy, too.

    • Gerard July 9, 2012, 4:10 pm

      I take your points, Ron, but (you knew there was going to be a but), lifestyle expansion happens at all income levels… and thus, so can contraction. If you earn less, you gotta spend less. This is why immigrants and their children are often so socially mobile: we know how to live on less, and are willing to do it.
      Also, if you don’t get a pile of university degrees, you enter the job market much younger, and without a yoke of student debt around your neck. Our departmental secretary retired at age 49, which is pretty damn good… because she’d been working since she was 19. If she had been even the least bit frugal (she and husband own a freakin’ 42-foot boat, for God’s sake), and if early retirement had appealed to her, I’m sure she could have gone much sooner.

    • Brian July 9, 2012, 5:55 pm

      I think we could create a hypothetical case study of someone for whom FI would be sufficiently difficult. But when the median income of an American family above $50k, doesn’t the post hold true for most people?

      Everyone’s situations are different, but the math is pretty consistent. MMM shows that one can live luxuriously on roughly $2k per month. Cut out things like organic chicken and smart phones with data plans, and the numbers get easier. Logic dictates that, except for those living at or below the poverty line, FI can be achieved. Maybe a lower-middle class family can’t save 50% of their income, but they can save a lot more than the 1-2% that alot of folks are.

      The argument that “if it was easy, more people would have accomplished it” is a bit specious. It assumes that everything easy is commonly found. Making my lunch every day is easy — but most people still eat out. Riding my bike 2 miles to the grocery store is easy, but I still have the bike rack to myself. The sum of a lot of easy steps leads to a pretty easy path to FI, IMO.

      • Ron July 9, 2012, 6:20 pm

        Thanks Brian,
        I agree that it’s possible, just not easy or the result of a lot of easy steps. Luxurious and $2k/month also don’t jive. One difference between MMM and the median family that’s rarely discussed is he has one small child. We have two teens. In high school, will MMM tell his child he can’t play sports because of the costs or can’t buy the school yearbook or can’t take Advanced Placement exams or can’t go to a summer camp for a week? Yes, they can get part-time jobs, but some colleges provide so much merit-based aid they’re better off approaching their schooling as if it’s a job. Also, there’s auto insurance. We live very simply relative to our neighbors and well below our means, and I’m inspired and impressed by most of MMM’s writing, but our fixed auto/homeowners/health insurance and property taxes work out to 1.2k/month. Yes, we could reduce that by a few hundred by buying a smaller/less expensive home which we’ll probably do in the next few years as the nest empties.

        • Dragline July 9, 2012, 6:47 pm

          Yeah, I would agree its not necessarily easy, especially if there are dependents involved. Mostly it requires planning — if you fail to plan, you plan to fail. But I think he’s really addressing those who say its “not possible.”

        • Brian July 9, 2012, 10:38 pm

          Hi Ron,
          A few follow up questions:

          -I don’t find living frugally to be difficult. But If it’s not easy, what about it do you find hard?

          -How does the $2k/month not jive? MMM provides a pretty detailed account of that spending every year.

          -The FI family may or may not choose to send the kids to camp or play organized sports, but it’s a tradeoff. The FI family does get to go on a lot more camping trips and may have a catch with the kids more often, if you know what I mean. Nominal charges like AP exams and yearbooks can usually be worked into a budget without any real sacrifice.

          -Your $1.2k for insurance certainly doesn’t fit w/the $2k example, but all our budgets will have variance based on where we live, age, determination, etc. In the end, what matters in the path to FI is savings rate, not specific dollars. Do you mind sharing that metric?

          • Ron July 10, 2012, 11:05 am

            Joint reply to James and Brian. I appreciate the spirit of the exchange, a much more rational and civil one than normally found on-line. And both of you are doing well and should be commended. My critique isn’t meant to discourage anyone from pursuing financial independence. I’m also mindful of a friend who rightly says “Better to light a candle than curse the darkness.” I’m also not questioning MMM’s numbers, just whether one should generalize from them. A few more fairly common variables that many people can’t perfectly control. The first personal, the others more generic. We pay room and board for one daughter at college. In another year, we’ll pay for the other. Seven years at 10-12k, one at 20-24k. Mental health. Sometimes people need to see therapists. Conflict resolution. Sometimes couples need to see counselors. Sometimes someone succumbs to chemical dependency. Sometimes people divorce. Sometimes people’s teeth need to be capped, straightened, or replaced. Sometimes people get laid off, have to pay to get retrained, and struggle to find work that pays similarly. Sometimes people have to help their elderly parents who can’t afford everything in the last chapter(s) of their lives. We could debate whether people have an internal or external locus of control and whether they bring misfortune on themselves or whether misfortune is done to them. Psychology versus sociology so to speak. Personally, I believe it’s usually both/and. The U.S. isn’t a perfect meritocracy, but there is a lot of opportunity. I’ve been successful mostly because of my family which prioritized education. Also, my dad set the example of living well below his means. My Christian faith also inspires me to live more simply as has having lived and worked in developing countries. All I’m willing to say about my savings rate is it’s too high. If anything I need to get more comfortable spending. My point wasn’t that frugality is hard for me, it’s not. My point is financially independent people run the risk of losing touch with how tough day-to-day economic life is for many people. Saying financial independence is easy is evidence of having lost touch.

            • Brian July 10, 2012, 12:58 pm

              I don’t see that statement as evidence of having lost touch, though I can see your viewpoint. It’d be easy to turn that around to another ‘truth’: stating that it’s hard to achieve financial independence shows that someone’s lost touch with what is a necessity and what is a luxury. For example, room and board at a university is a great thing, but it’s surely not any true necessity standing in the way of FI. It’s a luxury standing in the way of FI. Though, admittedly, the other examples you cite are harder to classify as such.

              All that said, I think we’re a bit in the weeds. Can we agree that there are enough ridiculous luxuries like cable television, regular restaurant visits, cell phone data plans, car leases, and the like, that, for nearly all Americans, there’s sufficient room for improvement before we can state that FI is truly ‘hard’?

            • Jamesqf July 10, 2012, 1:16 pm

              I don’t know about having lost touch. On the contrary, I think my own aversion to excess spending, and consequent saving/investing, is the result of many years of having lived in intimate touch with the bottom of the economic scale.

              While I agree that various personal emergencies can arise which can derail savings for a while, it’s also true that having saved & invested before the emergencies happen makes them much easier to handle. Take the daughters in college: at $10K per daughter for four years means that if you’d started saving at their birth, you’d need to save (if I pushed all the right calculator buttons) $1520.95/yr, or $126.75/month to have the $40K when she turns 18, assuming just a consistent 4% rate of return. Now that hardly seems impossibly difficult for most people.

            • Ron July 10, 2012, 5:32 pm

              Team Brian/James,
              Yes we’re in the weeds, yes there’s a lot of ridiculous luxuries, and yes there’s sufficient room for improvement for people to become debt-free. I think that’s the distinction. James’s point on building a cushion is well taken too. Ultimately, we’ll have to agree to disagree that even relatively frugal families with two older children spend more than MMM, approximately 2x. 40k/year in passive income at 4% requires a base of $1m+ given dividends and cap gains. Similarly, it appears we’ll have to agree to disagree that it’s feasible, but not easy for self-disciplined educated people with decent paying jobs to save seven figures.

            • ErikZ July 25, 2012, 3:43 pm

              Three Texas universities have announced a 10k BS degree program.

              That’s 10k over four years.

              The higher education bubble is popping.

        • Marcia @Frugal Healthy Simple July 10, 2012, 4:31 pm

          Well, when I was a teen, that’s what it meant, yes.

          I was allowed to play sports because back in the 80’s, they were free. I saved money to buy my school yearbook. I could not join junior historians because there was an annual fee and an annual trip that cost a couple hundred dollars.

          I did not plan on taking any AP exams, because I could not afford it. I ended up taking the only one offered at my school (English) because my HS principal insisted and the teachers and he took up a collection to pay for it themselves (it was probably $25 back then).

          I only applied to 2 colleges because that’s what I could afford, and one of them waived the application fee.

    • Mr. Frugal Toque July 9, 2012, 8:33 pm

      Willpower is a fickle thing.
      It’s actually, technically speaking, quite easy to lose large amounts of fat.
      You just eat less greasy, high sugar, crappy food and exercise more.
      See? Done!
      It’s also easy to save for retirement.
      Just live in a cheaper house close to work, stop wasting money on incidentals, and stash your cash.
      See? Done!
      Doing it, however … well … everybody knows damn well they shouldn’t be eating cola and potato chips, but I don’t see companies that make the stuff going out of business, do I?

      • Mr. Money Mustache July 10, 2012, 7:39 pm

        Yeah, this has been an interesting discussion, but I am NOT accepting that call of “bullshit”.

        Ron spends money differently than me. I could reallocate some of my ridiculous travel and housing budget to buy more conflict resolution or team sport equipment. But there’s already plenty to do in life so I don’t need those extra things.

        I did free stuff throughout school, which was already more than enough activity. Similarly, I’m strongly in favor of kids paying most of their own tuition at a school close to home (and the parents can move as needed to make sure this is a good school).

        I also think kids should pay for their own sports, luxuries, cars, yearbooks, beer, clothes, and other adult-style costs starting around age 15 as I did. Parents are on the hook for food and shelter only.

        I’ve got the cash to pay my son’s full tuition if the situation makes it appropriate, but I betcha he will be more than capable to pay his own by that point. Tune in 11 years from now to find out!

        The bottom line is that many families with more kids than me spend less.

        But the point which eludes the Bullshit call is simply this: you gotta save at least half of your income. Find a way to live on less, just as your ancestors did. It will initially be harder, but it won’t make you less happy, because half is still plenty.

        When Arbelspy and I say “easy” in this article, we really mean “entirely possible, and very rewarding”.

        Of COURSE this shit is not easy for untrained non-Mustachians – if it were, I wouldn’t have written 250 articles on the subject and the blog wouldn’t keep attracting new readers!

        But it’s not bullshit.

        • Mr. Frugal Toque July 12, 2012, 7:56 am

          My parents were willing to pay for, basically, one sporting activity at a time. At one point it was karate, at another point it was soccer. Later, it was softball (which was something like $20/year somehow).
          To supplement this, I participated in sports at school. Badminton, curling etc. etc. My parents would kick in for my racquet or my broom.
          But no, I wasn’t in baseball, karate, hockey, soccer and violin lessons *all at the same time*, which seems to be the source of great expense for many of my agemates. Children just don’t need that much structure.
          A good chunk of the problem in that case is that parents are either unwilling to say “no” to their children occasionally, or they see other parents enrolling their kids in a million things and can’t say “no” to the Joneses.
          Technically easy to remedy.
          Just as he talks about people being forced to live simply because they’ve piled up debt. Well, if you can live simply enough to pay off that debt, it’s a lot easier to have never piled up the debt, lived at the same level, and saved all that cash.
          Why isn’t that obvious?

        • Harelip March 6, 2024, 3:57 pm

          As requested, tuning in 12 years later. Assume JMM elegantly navigated the minefield of US education funding? Curious minds would like to know. Also, great appreciation for you MMM. Tasty cold beers await you in Brisbane.

    • BobTX June 25, 2013, 8:34 am

      I think it is hilarious that Ron’s line “If it was easy, more people would have accomplished it” is directly followed by: “The main *fallacy* is…”

      That first statement is some seriously flawed logic. The math works. It simply works. To rebut this fact requires showing that the early FI math doesn’t work, not speciously claiming that popular non-participation proves anything.

      The rate at which people in our population choose to put it into practice or even become aware of said math has no bearing on how real that math is or how available it is to everyone. Early FI on any income above rock bottom is sitting on the table to be taken for anyone who decides to take the steps necessary to choose it. I say this as someone who grew up in a family that put this into practice (Parents have been retired for over a decade now and I’m just barely beginning my career).

      Then, the next part of Ron’s the argument is an attack on MMM’s side skills in carpentry. Those are gravy, yes. They have given MMM some additional savings and income. But they are entirely superfluous to the basic math of limiting expenses to a small portion of income, and stashing the rest in something that allows for some degree of compounding. Maybe MMM shaved a year off his working life with carpentry? Maybe two? Whining about this does not in fact constitute an effective rebuttal to the basic plan/math of early FI, and is entirely unrelated to the point that most people can choose it if they really want to.

      I will agree with Ron that most people won’t, even if more people hear about it. The mere fact that most people buy a car and a half (or more!) for every financed car they acquire shows that most people are pretty resistant to applying the most basic financial logic – you don’t need MMM around to see that this is idiotic, but for some reason, everyone I know does it. Additionally, at least at the moment, choosing to live like MMM advocates also requires quite a bit of willingness to go against the social grain, which most people are hesitant to do. My friends think I am strange for not having a TV, not liking blowing money going out, shopping with such an eye toward bargains, wearing (nice) second hand clothing, driving an older car of a type chosen for efficiency rather than image, resisting getting a phone with a data plan (although I’m about to try out Airvoice based on what I’ve seen here), and living in very cheap housing. But I’d argue it is more of a social tension than cost – simply having to put up with confusion and and explain my choices if friends are interested enough. But I get that this alone is a pretty huge hurdle for many.

      Nothing changes the reality that early FI is sitting right there for nearly anyone to choose if they can understand this and are willing to choose it. The math works.

  • JaneMD July 9, 2012, 1:11 pm

    I would recommend reading “The Two Income Trap” to discuss the numerous issues and problems for families with two incomes. To summarize the main points – people with two incomes will move into a neighborhood that is more expensive than they can afford – which leads to other two income families moving in – thus creating an expensive area in the city/school district and robbing less expensive areas of its good, productive citizens. It also comes down pretty heavily that you lack flexibility if one person loses their job.

    Yes, JaneMD and HubbyJD have two incomes. However, frugality measures are in effect as one income goes toward student loans. HubbyJD has requested that I read less MMM since I enacted the ‘Beer Austerity Measures’ Program.

    • Emmers July 21, 2012, 7:20 pm

      We’re a dual-professional-income family (which is IMO the best way to be, especially if you want FI at any point — plus it’s better to have two potential earners in case disaster strikes), but we deliberately bought a house we could afford on just one income, because you never know what the future will bring. I think more people should do this. But then, I *would* think that, wouldn’t I? ;-)

      • Oh Yonghao September 23, 2014, 3:00 pm

        While I lived in Taiwan with my wife, a native, we purposely lived on only half my income, roughly equivalent to her income. We didn’t want to depend on her income in case of starting a family (I was religious then and thought it our duty) or some other reason why both weren’t working.

        Now we’ve moved to the States and live on a little more than half my income still. As I’ve read more we’ve made some adjustments and fine tuning to our budget and have been slowly putting more aside. This will be the first year that we fully fund our Traditional IRA’s for both of us, and are excited at the progress we are making each year. We now have a solid plan with milestones of FI.

        If my wife did work now it would just be extra income that would help us meet our goal earlier.

  • Sean July 9, 2012, 8:42 pm

    Not 12 hours after reading this article a coworker was complaining to me that he and his wife are under serious financial strain. This strain is due to the fact that his wife is going to be out of work for 2 months due to his child being born. “How can I be expected to pay the bills on one income?” , I replied that I supports a wife, son, and fat dog on my single income. His resposne “well that just isn’t the way things work anymore.” And THIS is why I keep reading this blog!

    • Marcia @Frugal Healthy Simple July 10, 2012, 4:35 pm

      See, I was worried when I had my first son that we would go into debt during the 3 month mat leave. And we didn’t. Turns out, we were too tired to do anything, and the energy I *DID* have, I spent cooking really delicious frugal meals, so we saved on eating out.

      People don’t really plan much.

      • Emmers July 21, 2012, 7:21 pm

        We’re saving up money so that when we go on parental leave (which we will both be taking), our mortgage will be automatically paid. Saves *so* much stress.

        Would be easier if this country had paid parental leave, but since it doesn’t, I’m doing what I can to make my own life easier!

  • Jill July 10, 2012, 6:03 am

    I love this topic and it’s definitely controversial because we really don’t like to be told as a people that we don’t “need” a,b, and c. I have always believed you can live well on little and while I am in no position to retire due to a divorce, I am raising two kids on a $10 an hour job and you really wouldn’t know we made so little. I am sometimes shocked at how little I can spend. I have cut out all impulse buying and research the best price on all my bills and everything I need.

  • Rebecca @ Trim Waist Fat Wallet July 10, 2012, 8:15 pm

    I wish colleges and high schools taught Behavioral Economics as part of their general education. It wasn’t until my husband and i took a hard look at our finances after getting married that we started to “see the light” of some topics addressed in that field. People are so fixed on immediate gratification that they can’t hold out for ANYTHING anymore. Want a new set of furniture? Get it delivered tonight and pay no interest for 6 months! Want a new car? 0 down 0 APR! Most people will prefer $5 now over $10 later and that fact simply astounds me. Same thing with diet pills and dieting.

    To the point about early retirement being too hard: its for the same reason that losing weight is hard. You actually have to do something and not be a lazy sack. The people that complain about how hard is it are the ones that don’t change their habits and continue to make snide remarks at skinny b**tches, or in this case, Mustachians.

    Also, your use of the word complainypants was awesome.

    • Crazyworld July 11, 2012, 11:14 am

      Please enough with the weight loss is easy analogy…i eat super healthy, exercise, and yet, have been overweight as long as i can remember. It aint that easy. On the other hand, i have always been naturally frugal-ish and don’t find that stuff hard at all.
      Sorry to be off topic but this analogy is just plain annoying to me sometimes and i take it very personally =)

      • Mr. Money Mustache July 11, 2012, 11:31 am

        I agree that weight loss can be difficult.

        Just out of curiosity, what are the primary foods in your diet and the primary components of your exercise? I’m not asking this as a challenge, but some of us are pretty good in the fields of nutrition/exercise.. From past experience, I’ve learned it is possible that you’re putting in a great effort but in entirely the wrong areas related to changing body composition.

        • Crazyworld July 11, 2012, 2:13 pm

          I am vegetarian, so it is a lot of beans and rice, vegetables and fruit (love em all), lentils, salads, some eggs and cheese. I am indian, so used to being veg and have lots of options. My problem areas are portion size and sugar (baked goods). Both in my control and if i lived a hermits life, i would do without the sugary things, but there is only so many times you can say no before you break down. Still, i would say 80 % of my intake is good wholesome food. I tried low carb and it did work, but the excess of soy and possibly the artificial sweetners led to graves disease (autoimmune hyperthyroid). So now no more soy and a/s for me. My “numbers” have always been and still are all good. No borderline sugar/ cholesterol etc.
          Exercise- currently zumba 2-3 times a week, strength 1-2 /week. I have also done other things at various times – yoga, walking, biking, step, bootcamp etc. I walk the dog atleast a couple times a day, but i don’t think that counts for anything- too mich stopping and starting.

          I find if i stay on task, i will maintain my overweight weight. If i look away for a few weeks, i am quickly rewarded by a 2-3 pound gain.

          • rjack July 12, 2012, 6:09 am

            Your exercise is good, but body weight is about 80% diet.

            You already found that low carb works, but you have a problem with soy. If you are willing, I would add meat, fish, and more fat instead of soy and artificial sweeteners. This is basically the Paleo diet.

            Anyway, it has worked great for me for the last 1.5 years. I dropped about 30 pounds and now I have fairly low body fat.

            • crazyworld July 12, 2012, 7:46 pm

              Low carb worked…until it didn’t I guess..i would happily go paleo, except I don’t like the taste of meat at all – I tried it several times while actually low carbing but just can’t – its the taste & texture. I wasn’t a huge fan of eggs either, but I make myself eat them, in lieu of meat. Once can do lowcarb without meat in theory, but I find it to be an unsustainable way of life – if you don;t eat meat, or soy, or a/s, sooner or later something gives. I have been trying to work on portion control instead, while still minimizing empty calories. But it must be said it is a hard grind.
              There are people (like my husband), who even with the same diet and zero exercise have only very moderate weight gain over the years, which brings me to my original rant about weight loss is not same as FI – results vary widely =)

            • Kay February 10, 2015, 9:04 pm

              Excellent book by an MD specifically for south asians: the South Asian Health Solution. It’s a great book for anyone who would like to try the low carb paleo style eating yet remain vegetarian. It addresses the cultural challenges facing many south asians too, and has the clearest explanation of cholesterol, triglycerides and what all the numbers really mean (most of today’s doctors and the media read and interpret them wrong).

            • VeroGall July 14, 2012, 4:45 am

              I’d like to answer, rjack. I’m sure the food suggestion is made with consideration, however, it misses the point. And sorry it’s a bit long.

              Some of us (statistically, a large minority of overweight/obese people) are not eating too much and/or exercising too little. Many have medical conditions that make it impossible to be slender. Even more are in family/social situations that give them no resources/rewards for exercising & eating healthfully. American culture ignores this by and large & shows contempt towards us. (Unfortunately for me it’s infected European cultures over the last 10 years, making them far more intolerant, too.)

              Many of us are overwhelmed by the negative stereotyping & prejudice. It’s continuous & even when a discussion acknowledges medical reasons there is alway (and I’m using that word thoughtfully) a “but” in the conversation that negates the fact. In that respect, comparing weight loss to financial independence isn’t fair. Few of us are ridiculed & humiliated, day & night, in person & through all forms of media for being average financially.

              Now, having said that, I disagree with Crazyworld and think that the two are comparable and the comparison legit. Both are impossible for some people and difficult for many. Both are stigmatized. Both have a large amount of nonsense written about them and many people are clueless about how to implement the habits in their lives. And for both, knowing the theory isn’t enough. It’s also about know-how (doing) and all the emotional baggage attached to both.

            • crazyworld July 20, 2012, 11:26 am

              What I mean is, if you earn $10, save $5, you are always left with $5. But with weight, eat less, exercise more leaves someone with $7 and someone with $1. Therefore not the same in & out effect. People tell me (the slimmer ones), that yeah, if they pay a little bit of attention to what they eat and a little bit more regular walking (or whatever), they would lose a lb or so each week. This NEVER happens to me. Even low carb, it took several months/year+ before I lost ~20lbs. And then clearly did not keep it off…
              I say weight loss is more akin to the Investment area of personal finance. Here is where not everyone has the same results =)

  • TwoPupsOnACouch July 11, 2012, 6:14 am

    MMM, please clarify- is principal payment on a primary home considered saving or spending?

  • Russell July 11, 2012, 2:22 pm

    My wife and I are at the beginning of our financial journey and working through our financial goals. Whenever I bring up the idea of early retirement, she uses the counter-example of her grandparents, who made a good middle class income and were extremely frugal their entire lives (having grown up during the Depression). Never the less, they retired at a typical age, and are running out of money as Grandma reaches her mid 90’s (Grandpa died 10 years ago).
    This is an anomaly which I’ve been struggling to explain. Part of it may be the increase in real compensation per hour that MMM mentioned above. I suspect that they were also extremely conservative with their investments (life insurance & bank savings, probably). Does anyone else have any other ideas how to explain this?

    • Mr. Money Mustache July 11, 2012, 3:45 pm

      Yeah, we’d need to know their actual savings level at retirement, annual spending thereafter, and where the cash was invested to really make heads or tails of such a story. I’ve got tales of old people in my own family and friend groups that have different outcomes.

  • TwoPupsOnACouch July 11, 2012, 4:21 pm

    Thank you MMM! You made my day!
    Crazyworld, I see where you are coming from. I’m also a strict vegetarian, and exercise intensely everyday. I don’t eat sugar or many carbs as my hubby has childhood diabetes. I always had an athletic figure until I had some crazy medical issues which caused massive weight gain a few years ago. Now, I definately have a Rubenesque figure. But hey, I’m totally healthy and can keep my own when excercising with even my most fit friends, so does it really matter that my body isn’t society’s ideal? Since mustachian ideas stretch beyond social norms, I hope they would be able to recognize that healthy fit bodies come in many sizes. Before my illness I was very slim, now that I’m not, I don’t feel any less attractive. In fact, if I could snap my fingers and change my shape I’m not sure that I would want to go back to my old size. (Shocking, I know!). But really, as long as I can still do all the things I love doing- swimming, kayaking, hiking, yoga, aerobics, ect., then why would I want to give up some sexy healthy curves? Heck, even if your healthy lifestyle doesn’t make you skinny, you’ll still have a much nicer shape then someone who does nothing.
    Ok, rant over! Just wanted to provide some comfort to CrazyWorld as I see your frustrations as another celery-muncher-and-exercise-lover-but-still-too-plump-for-society-to-think-you’re-pretty.

    • Crazyworld July 11, 2012, 6:05 pm

      Thank you twopups for chiming in…atleast i am not alone in my frustration! I will say though, that in my case i really do need to shed some fat. I have a good layer all over, but especially on my thighs and stomach. Not for society, just for me =)

  • TwoPupsOnACouch July 11, 2012, 7:50 pm

    Crazyworld- Hehe! Well health is wealth indeed! I thought it was cute that MMM offered to help and give some tips! I must say, I’m looking forward to a possible article on MMM and P90x. Maybe we Mustachians can get a bulk discount if MMM tries it out and approves.

  • Bill July 13, 2012, 6:25 pm

    I really appreciate your post here. In particular, while I read many articles about how “screwed” the middle class is and how poor everyone is, your philosophy rightly informs me that we are indeed more rich than ever, if we’d focus on the things that matter. Thanks!

  • win July 20, 2012, 1:35 pm

    Here’s a doctor who lives on half of his salary and has a second job.


    “Married, with four children under the age of 9, Ko lives in the same 1,700-square-foot, three-bedroom house he and his wife bought when he was a resident in his twenties, even as his earnings have risen substantially.

    Ko and his wife, Eileen, are frugal in other ways too: They invest in low-cost index funds, buy groceries in bulk, clip coupons, skip cable, and drive cars with more than 100,000 miles.

    “We live well below our means, but we still live well,” says Ko.

    He also supplements his salary — and his savings — with a part-time job at a second hospital. Result: Ko currently saves 40% to 50% of his income.”

  • Craig July 26, 2012, 7:44 am

    I plan on retiring early. I just need to find my wife a second job soon.

  • Doug September 20, 2012, 1:02 pm

    I’m a latecomer to this discussion, having only discovered this web site recently, but the ideas presented in the topic are consistent with my observations. Despite all the bellyaching you hear about hard times and falling wages, we are better off than ever before. Just look around at all the stuff in shopping malls, in peoples homes, at yard sales, or that gets thrown in the garbage. The economy can produce far more than one needs to live comfortably, and can only function (at least in its present dysfunctional form) if everyone consumes far more than what they need or will produce happiness.
    The obvious solution is to turn more of that productivity into more free time rather than more useless stuff. That solution would go a long way to solving the social problems from this nagging unemployment problem. The problem is most people don’t realize this simple idea as we money mustache types do.

  • Money Bunny May 12, 2014, 6:28 am

    The other factor is that 20-30 years ago most people did not have access to the stock and bond markets via discount brokers if access at all. Only the rich did, or via very high commissions.

  • Mr. JC Nagel January 8, 2015, 3:06 pm

    Great Site Mr. MM, I can relate to so many of your ideals. It’s a pleasure to know so many other like-minded folks are out there sharing these common goals that you write about. I wrote a book about my experiences and how I retired before what the “Town Elders” say is the right age and I’m savoring every precious moment…. Here is my book for your readers: “Don’t Let The System Tell You When to Retire” – because time is your most important finite resource. It’s available on Amazon and for those that want to save it’s starting to circulate in libraries now. It details how I earned, saved, invested, budgeted and retired early. Best Regards, Jon

  • Cody September 4, 2015, 11:13 am

    I am new to this blog so I am starting at beginning and catching up. This article reminded me of another article I read the other day that pissed me off. He goes through tons of math that shows why you are doing it wrong but his math is so wrong (assumptions mainly). Then people are probably listening to his as the truth.

    Sorry just wanted to share that. Link to BS article below.


  • kindoflost August 18, 2016, 2:34 pm

    Parkinson’s law says that “works expands to fill the time available”. There has to be an analogy to the fact that expenses (so-called “needs?”) expand to consume all the money available.


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