How to Go from Middle-Class to Kickass

73-year-old Jacinto Bonilla demonstrates what happens when you defy preconceived notions of your society. We define such independent thinking here as “kickass”.

Dear Mr. Money Mustache,

Sure, I’m interested in becoming rich and maybe even having the option of early retirement. But nobody ever got rich by clipping coupons or skipping lattes. Shouldn’t I concentrate on boosting my income?

A member of the Middle Class


A few days ago, I had the opportunity to go out to lunch with a dozen of my old coworkers from the high-tech company. It was quite a reunion, as I hadn’t seen many of these gentlemen since September 2005 when I retired from my engineering job. Everybody seemed just like I remembered them. A few distinctive silver strands had sprouted from many of the heads and beards. Many of them had moved on to jobs at other local companies. But the most notable thing to me was that they all still had jobs.

Since the Mr. Money Mustache identity has become quite a fun little part of my life, I let some of them in on this secret of what I’ve been doing with my free time. But invariably, when you talk about early retirement with a person who gets by on a high middle-class income, they become baffled by how small things like riding a bike or understanding electricity consumption can make such a big difference. To a standard office worker, early retirement is what happens if you win a lottery, get a huge inheritance, or have ground-floor stock options in a company that makes it big.

I was baffled in the opposite way. I imagined what would have happened if I had stayed at that company for all these years. I would have earned an average of perhaps $110,000 per year in salary, as well as cashing in about $200,000 in stock option profits (I gave up quite a few in-the-money options upon departure, with strike prices set during the tech crash of the early 2000s).  The company’s generous benefits plan would have further saved me some out-of-pocket expenses, like the cash we paid to the hospital when our son was born.

All in all, I would have earned at least $1 million since then. And assuming Mrs. Money Mustache had kept working, she would have earned close to that amount as well. $2 million before tax, which would have gone straight to the bottom line and compounded since income from investments was already covering our expenses as of late 2005. In short, as we added that income to our existing savings, we would be ridiculously wealthy by this point.

But yet many of these coworkers, most of whom are older than me and were already working before my career, continued throughout my career, and are still doing it seven years and counting after my career, still somehow need to work, according to their own accounting. Some people in this situation are even living from paycheck to paycheck.

Quite accidentally, this group of coworkers has formed a nice control group for the study of Mustachianism. They have a wide variety of incomes, but all live in the same area, so the base cost of living and the tax rates are held constant. But one participant in the study tweaked only one variable while leaving the rest unchanged: the spending rate.

Somehow, Mr. Money Mustache maintained an outwardly-normal appearance among this peer group, showing up at work in acceptable clothing, achieving similar job performance, earning an average amount, and participating in all the usual social activities, yet adjusted his spending downwards enough to make a drastic difference in his financial outcome. How could it be?

The answer is as simple as the following table. Observe the monthly spending of a Typical Fancy Professional Worker versus a Future Early Retiree. To be fair, let’s adjust the spending estimates to assume we are comparing two double-income families with two school-aged kids.

CategoryMiddle ClassKickassNotes
Mortgage Interest13331000MiddleClass: $400k house, Kickass: $300k
Property Taxes200150
Car Payments700100MiddleClass: 2 new cars and bikes every 5 years. Kickass: 1 used car every 10 years
Gas, Insurance, Stealership fees, Maintenance, registration, on the auto fleet800100Kickass lives close to work and bikes
Home Maintenance, Renovations (appliances, roof replacements, pest exterminators, house insurance, painting, carpets, floors, plumbers, tree trimming, etc, etc). Plus water and trash service.
1000450Insourcing instead of Outsourcing
Miscellaneous "shopping" (stuff you buy at the mall, coffee shops, trinkets on vacation, $4.00 gourmet juices at the airport, voluntary ownership of multiple large animals, plus anything else not covered in this table!)600100
Groceries1000400Killing your $1000 Grocery Bill
Beer and Wine20050Bota Boxes, drinking only a reasonable amount, and even home brewing
Restaurants and takeout/deliveries60050Cooking great food at home.
Work Lunches20040Kickass goes out every Friday, otherwise uses the Secret Food 'Stash
Gym Memberships1000Barbells at Home, Rocky Balboa-style urban workouts
Lawn Service1000Don't be a giant wuss! Put Muscle over Motor.
Ivy League Child Activities800100Avoid
Ivy-league preschool syndrome.
Toys and junk for kids (and other people's kids)10010More creative and less consumerist gift giving
Clothes and Shoes20050If you can't live on $600/year of clothes, I have a fist you need to meet
Outdoor and Sports Gear10020Craigslist, plus realizing you do not need the same bike as Lance Armstrong
Haircuts, nails and waxing805A $1.00 pair of nail clippers and a $40
Universal Men's Grooming Device (aka hair trimmer).
Golf Membership500
Apple Products10010Unless you earn a living as an iOS/Mac developer, you may own one Apple device per person.. period. Upgrade every five years.
Music and Movies5010Netflix and Pandora. No, you may not buy DVD series of TV episodes!

Electricity10030I'll show you mine if you show me yours
Heating/Cooling10050Understand then Destroy your bill
Cell phones15050Check out Google Fi ($20 per person, 15 for each additional)
Cable TV1000Cut your cash-leaking umbilical cord
Landline Telephone250News flash: it's not 1998 any more, which is when I last had a land line phone.
Books and Magazines600 The Library will make you rich.
Vacations500200Kickass still likes to travel, but avoids Tourist Traps
Prescription Medications and doctor visits for stress and overweight conditions1000Allowance for healthier body due to more exercise, less restaurant food, and no stress about money or career
Monthly Total$9898$3025
Annual Total$118776$36,300
Annual Income (after tax)$140,000$140,000
Annual Savings$21,224$103,700
Savings Percentage15.16%74.07%
Years to Retirement437.5

Wow! Just by switching from the typical high-income family’s spending, to the slightly-less-ridiculous-yet-still-luxurious level of spending that comes as part of adopting a more Mustachian lifestyle, this typical family was able to reduce its annual spending by over $82,000 per year. Far from being stuck in a deprived lifestyle, the family on the right still gets to live in a $300,000 house, own a car and some bikes, eat great food, stay in shape, read great books and watch great movies, and in general lead a solidly kickass life.

And as you can see in the table, each of the areas of optimization aren’t just wand-waving or imaginary – they are documented in more detail in the underlined links in the right column. It is essential for the typical high income reader to understand that I am not making this shit up.  The “Middle Class” column represents realistic numbers gleaned from my own middle-to-high-income friends, peers and former coworkers. And the “Kickass” column is a mashup of the typical spending of my own family and those of other people trained in the art of more efficient living.

And all of this comes with a time-tested guarantee that you will gain, rather than lose, happiness as you implement the changes.

So now I can turn the question around: what do YOU think is more effective: optimizing your spending, or relentlessly working overtime and hoping for a “generous” $10,000-before-tax raise?

And is the effort of learning how to do it worth the reward of slicing 35.5 years from your mandatory working career as shown in the table?

I think we’re going to see a lot more ass-kicking in the months and years to come.


  • Mikey March 13, 2016, 7:23 pm

    140K after tax income? I’ll say that’s kickass! I could wealthy pretty quickly too if I had a third of that.

  • shannon thornton May 29, 2018, 12:22 pm

    Just discovering this blog and am wondering why only Mortgage interest is shown on budget tables such as the one in this post, instead of Total Mortgage payment.

    • Mr. Money Mustache May 30, 2018, 1:40 pm

      Hi Shannon,

      It’s because only the interest/taxes/fees portion of a mortgage payment is an expense. The other part (principal) is simply transferring your wealth from one account to another.

  • Brent May 9, 2023, 3:21 am

    MMM, you killed it on this post. I’ve obsessed about containing expenses and retiring as soon as possible for the last 5 years, and you give us the perfect x-ray of the American way of life and why more people aren’t doing it: waste, waste, and more waste.


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