If I Woke Up Broke

riskThe Mr. Money Mustache you see today is flabby and weak. Although consumers often compare themselves to the Mustache family and determine they aren’t ready to become “so extreme”, in reality the only extreme thing is how far we are from living a truly frugal lifestyle these days.

The reason for this is of course that money is no longer a concern. We started out with an already-cautious retirement savings plan, and then ended up earning more money than expected after retirement, which naturally leads to an ever-growing surplus.

In this situation, as I argued with my brother recently when attempting to pay for his stuff at Costco, the logical behavior is to make most of your decisions as if everything were free. The catch is that you still have the same environmental and social values, which means you will still avoid blatantly wasteful consumption or personal pampering when you know your money could be used more efficiently elsewhere to improve your world. But you might find yourself splurging on organic groceries, giving more gifts, or taking the expensive toll road to avoid a traffic jam.

One of the keys to a resilient life is reminding yourself that you currently have it very good compared to how things could be, and that if the going ever got tough, you could easily re-train your Frugality Muscles to be bigger than ever before. The moment you convince yourself that your current life could not be improved and you are entitled to everything you now have, is the moment you become a helpless Consumer Sucka.

So what if I did wake up one morning and find that everything was gone? All my bank accounts, investments, 401ks, mortgage-free houses and other assets. Let’s assume that this blog disappeared too, since this thing alone is now producing enough income to fund a family’s lifestyle, meaning the exercise would be meaningless if you left it in.

It would be a shock, to be sure. I’d mourn the loss of so much savings. The proceeds of a lifetime’s work, reversed. And most importantly, the freedom to not work for a living, removed. Suddenly I would have no choice but to start earning money, because without it,  my family would be out on the street within months.

The first thing would be to assess our goals. We would be 38-year-old parents with a 7-year-old son and not a penny to our names. Not an uncommon situation today, as some people of this age actually have negative net worths. The first priority would be to maintain a healthy environment for the boy – somewhere he could continue to get a great education with the support of a warm community around him.

Note that I didn’t say “we would keep our current house and not consider changing schools”. This would be locking in an assumption that really should be challenged. But since we already live in an affordable, bike-friendly area with a great school system, we would probably stick around, but just move to a smaller house in a less expensive neighborhood nearby. Since owning is cheaper than renting in my area, we would still apply for a mortgage and buy a house if at all possible.

Current house: $400,000. Monthly cost (mortgage + taxes) if financed: $2100
Replacement house: $170,000. Monthly cost (mortgage + taxes) if financed: $911

Of course, in order to even qualify for such a mortgage, I would have to start earning some money. Mrs. MM and I both value financial independence, so we would probably both take full-time jobs in order to rebuild our savings as quickly as possible. But in this parenting stage, careers would still come second. So instead of going back into engineering ($100-$150k/year), I would probably just be re-open my general contracting business ($80,000/year) instead. The Mrs. would either work part-time in finance ($60k) or start accepting all possible customers for her local real estate business (which would probably bring in about $100k). Instant high income … in exchange for very little free time. And, of course, I’d probably start another blog.

Combined Gross Income: About $150,000/year

If you’re not comfortable with the easy money we are earning in this example, substitute your own value – even $25,000 if you like. From our perspective, we would be “broke” either way, because we measure wealth by assets rather than income. Which means that at least initially, we would be spending as little as possible.

Next we’d want to trim some of the fat that has accumulated on the rest of our lifestyle. We keep two vehicles in the fleet at the moment, but since we’d be starting from scratch, we would have no car and no savings to buy one. If possible, we would just operate car-free, since our city has high-paying jobs, groceries, and schools all within a 5-mile radius from home. But if a car were a necessity, we would set aside our first $5000 of free cash, and use it to buy a good mid-2000s manual transmission hatchback.

Monthly car cost (depreciation, registration insurance, fuel, maintenance) for 330 monthly miles of driving:  $125 – note that most families drive about 5 times this amount and spend about 10 times this amount.

Groceries would be scaled back from the current “Retired Millionaire” style of eating to more of a nutrition-and-cost optimized one. More potatoes and peanuts, less organic chicken breasts and almonds. More Costco, less Whole Foods. We’d still make fancy salads at every meal, which I feel are the foundation of good nutrition. Even so, we could probably cut our budget in this area down by 50%, leaving about $250 per month

Travel, one of the biggest budget items right now, would be brought down. Winters in Hawaii might be cut, but camping trips in Colorado would be increased (there are even epic spots close enough to access by just throwing your gear in a bike trailer and pedaling for 90 minutes!)

Luxury items like gadgets, new clothing, furniture, gym memberships and other things could wait for financial independence. So our miscellaneous budget would be close to zero.

Given this suite of lifestyle improvements, what would our new annual spending be, if we one day woke up broke and theoretically decided to spend as little as possible?

If we refer back to the latest MMM family spending report for guidance but plug in our new numbers, we’d end up with the following totals:

CategoryAnnual AmountComments
Housing12000Including maintenance (all DIY, of course)
Utilities1200Water, electric, gas, trash
Transportation1500Mostly bike, occasional car
Vacations1000Not strictly necessary, but living it up a little given the high incomes in this example
Phone240Two $10 plans at Airvoice or Ting
Internet300City wifi at @25/month
Cable TV0Haha.. obviously this would be zero..just threw the category in for your amusement
Restaurants0Sorry, not while broke
Beer/Wine240One good Bota or Black Box per month to share with friends - another luxury. Transfer to restaurant category if you don't drink.
Clothing200You can look incredible, from that thrift shop down the road...
Everything Else1000Books, activities for kids, whatever we forgot above.
Total20680Not too bad.

At almost $21,000*, you can see that this total approaches the current MMM family spending – but the difference is we get “free” housing right now due to having a large chunk of money tied up in a mortgage-free house, whereas the broke family has to pay interest on theirs – meaning housing accounts for over 50% of their budget. Yet in real life, we squander this subsidy and more on additional voluntary expenses.

But in my Broke lifestyle above, the equity would start to build in that little 2-bedroom house, and I’d fix it up on the weekends, and we’d be working hard in our office jobs every day.

Given the income above, and combined with the tax savings provided by maximum 401(k), contributions this would lead to roughly an 80% savings rate, on an after-tax basis. And when you look up what happens with an 80% savings rate, you can see that we’d be financially independent yet again in about 5.5 years. As the financial cushion built back up, we could let our foot off the brakes again and become sloppy as we are today. But only when we could truly afford it – because that’s just how getting wealthy works.

Heck, with this level of expenses, even a dual-minimum-wage family would approach a 30% savings rate, before even taking into account various low-income subsidies like food stamps that kick in at that level.

Investments: Of course, a high savings rate does not lead to financial independence if you leave the money in a savings account or a mattress. There, the value of the ‘stash would be eroded by inflation on one end even as you nibble away at the other end for your grocery shopping. Thus, you need to invest it to generate passive income (and eliminate interest-bearing debts, which is just another form of investing).

In this example, we’d allocate the savings as follows, going for a mix of security and higher risk/return:

First $35,000 per year: 401(k) plans: this represents maximum contributions for each of two income-earners. If at all possible, we’d invest it in whole-stock index funds with an expense ratio under 0.2%, like Vanguard’s VTSMX. Note that even if you’re planning on early retirement, you can get your money back out of a 401(k) penalty-free, as shown here.

Next $30,000: Extra Mortgage Payments: This would get the mortgage paid off approximately at the same time we reach the other savings goals, which is a nice time to lose a mortgage. I assumed a 4% mortgage interest rate in the initial scenario, so the economic effect of this is similar to buying a 4% bond.

Everything Else: A rental property (2-to-4-plex**)

In exchange for a bit of local real estate and business knowledge, rental properties in the right area can yield over 10% after inflation and expenses, or more if you leverage them by locking in a low-interest mortgage. Since this is considerably more than you can expect from the the stock market on average, rentals are a way I don’t mind trading some interesting effort for higher yields.

I’m not saying living a spartan lifestyle and investing everything else is completely easy.. but it gets easier when you let go of assumptions like “I must have a car that I buy on credit and drive 15,000 miles per year”.

When you compare my personal barebones estimates above, based on 15 years of careful cost-tracking while living in Colorado, with this cost of living calculator put out by the Economic Policy Institute that tells me I’d need $58,000/year to maintain a basic lifestyle in the similar Fort Collins/Loveland area, you can see that challenging assumptions can make all the difference.

 * this budget assumes that health insurance would be covered by an employer, which is likely in our case. However, at lower incomes the Affordable Care Act kicks in with considerable subsidies, which can help balance things out if you are self-employed and not raking in the big bucks described in this hypothetical story.

**For even more efficiency, you could change this example to have us buying a 4-plex and living in one unit while renting out the rest!

  • Andrew July 11, 2013, 11:54 am

    I think you made two big oversights in here, which helped you avoid two traps that are hard to avoid for most people who wake up with no money every day.

    You mention that owning in your area is cheaper than renting, so if you woke up with no money, you would buy a house, because it makes the most financial sense. With what would you buy this house? You woke up poor, where did you get the $40,000 downpayment from? You talk about the kind of car you would buy, again, how are you buying any car?

    I’m sure many working poor know that if they had some money, it would make sense to buy a small house, but they still get trapped in a cycle of paying too much in rent, and not being able to save as much as they could otherwise, or paying predatory interest on a car from a zero down/zero credit, shady car lot, because it’s the only way they can get a working car to take them to the only job they could find (which if they are unlucky, may not be close).

    I’m certainly not saying waking up with no money is a financial death sentence, it just might be a little harder than you make it seem for those already there.

    That being said, this is still a great exercise, and makes a very valid point that it’s not just income or assets that make up your financial future in the long term, but also your financial outlook and strategy.

    • Albert July 11, 2013, 12:30 pm

      You are right in principle, but I think MMM, as long as his health is not affected, wouldn’t end up as poorly off as those folks. He has well above average skills which would sooner or later translate into well above average income resulting in savings, investments etc. Most poor people are also poorly educated in the widest sense of the word.

  • Gerard July 11, 2013, 1:35 pm

    Multiple totally random observations:
    1. The median income varies wildly by subset of the population, especially based on education (presumably we’d all wake up with the same education level that we went to sleep with).
    2. Couples with young-ish kids (especially nice clean well-educated couples) might want to consider having one parent run home daycare until the kids were big enough to get jobs in a carpet factory. In high-income cities like Toronto, rates for good-enough daycare, especially for toddlers, are crazy stupid high.
    3.MMM’s examples for housing and the like are based on “nice” places. If I felt that the most I was likely to earn in a year was 40K, we’d be riding the bus and living in the nicest block of the ghetto until we got some decent savings together.

  • Insourcelife July 12, 2013, 8:06 am

    Lots of complaining going on in these comments! I do this kind of reverse engineering all the time to play with different What If scenarios. Keeps you on your toes and eager to scrutinize every line in the list of monthly expenses. I actually have a spreadsheet which has 3 columns: Current Expenses, FI Expenses and Shit Hits the Fan Expenses. My SHFE column is pretty close to MMM’s numbers. One thing I would do different is get a duplex or a 4-plex to have someone else help me pay the mortgage instead of buying a SFH again – an option that was mentioned at the bottom of the article. If you are complaining, I think you might be missing the bigger point – your attitude and your perspective is what makes the difference. Details, while relevant, are much less important.

  • Frugal Kiwi July 13, 2013, 2:03 am

    I tracked our food spending for 2012 in NZ. Buying as cheap as we could and doing all our own cooking except takeaways or eating cheap with others about every 6 weeks we spent just over $9000 NZ on food ~ $7000 US. We eat pretty basic food. From what I’ve seen NZ is more expensive for housing, food, power, clothes…. second hand goods in NZ are generally not worth it either. I’ve lived in Australia and the UK and there is a marked difference in many costs. However New Zealand was the best place to live and I wouldn’t change anything.

  • Fawn July 13, 2013, 9:40 pm

    I needed to read something like this, even though your wage numbers will never apply to us. When my husband joined the military I had no education and no skills. I decided to go to school (someone should have shook me and screamed “go to nursing school”, but that’s another story). I went and got a BS in criminal justice- I wanted to work in probation/parole. Found out I needed a masters to even apply, and went back and got one. Found out that wasn’t enough to make me competitive, and I went back to school again for a post masters certificate in forensic medicine. That did the trick and caught the eye of my future boss. I was hired on as a probation officer making around 65k a year. We had racked up debt from my schooling (89k) and from previous PCS moves (about 7k in cc debt), and so all we did with my newfound salary was start to pay that off (and pay around $400 a week for after school care for our kids). Then, after only six months my hubby got orders to move across the country. No more job for me, and we racked up new debt in the move. To add insult to injury, my hubby’s housing allowance was positively slashed when we moved to LA, which horrifies me because its the most expensive place we have lived. Been here a year and cannot find a job. No offers and only two interviews. In a year. Peolple are not interested in local government workers who will move on in one to two years. The point is, we lost about 78k a year and moved to a pricier area, and I have been floundering and wallowing in bitterness at the situation. It’s time to stop and just get control of it all, and not let it bring us down any further. I wish I could get a job in my field.. Or any job that would pay more than my daycare would cost- because yes I know I could go work fast food but I would end up at a loss, but even with numbers realistic for US we could do more to stabalize our family, and we should.

    • Nine-O-clock Shadow July 15, 2013, 8:56 am

      Hey Fawn – your situation would definitely fit into the comment I had before. You and your family sound pretty stoic, and it comes through in your comment.

      The principles here can definitely help you out, but with repeated moves and job changes you may be suffering from decision fatigue, where you weigh everything in the context of your debt and financial goals. The goal of MMM and this community is to help your decision making ability become stronger, so you are not as fatigued (or feel hopeless) in making the very sensible changes you see plastered all over this site.

      MMM is an engineer by training, which is an Applied Science – a.k.a practice what you learn. My situation is not like yours, but others’ may be.

      Anyone similar to Fawn (Military Family) who could help her strengthen her family’s decision making muscles? There must be a few soldiers here with 6-pack financial Abs!

      Good luck & keep reading.

  • thepotatohead July 13, 2013, 10:20 pm

    If I woke up one day without anything I definitely don’t think I would take it as well as you lol. There would certainly be a lot of cursing and gestures on my part, followed by a long thought process of “oh sh*t”. It is good to think that though as long as I still mentally and physically posses the skills to do what I did in my previous life that I could certainly recover

  • Bob July 14, 2013, 7:16 am

    Mister MM, how do you guys handle your taxes? Do you just write a check in April or is it already figured in your budget ?( I am a new reader and haven’t read all the previous posts)

  • Brian July 16, 2013, 1:03 pm

    It’s interesting that I came over here and read this after the shitstorm that was kicked up by McDonald’s “Buget on a Minimum Wage” story. I’ve seen it everywhere today.

    MMM, do you have a crystal ball or something?? :-)

  • No Waste July 18, 2013, 8:46 am

    I really, really, really enjoyed this. I imagine this post illuminated many of those who drink the MMM Haterade.

    My takeaway from MMM posts has always been, this is how I did it and here is guidance on how you might be able to do it too.

    As opposed to, this is what you must do to retire early and if you can’t replicate it, too bad so sad!

  • Lee July 19, 2013, 7:31 pm

    As someone who has a nice income and savings rate, but recently blew their life savings gambling on stock options, this article was refreshing. The emotional hit of losing 6 digits in a couple weeks was very hard to take. However, a month out now and depositing my paycheck into my brokerage account feels like I’m getting back into the game now. If only I had listened to you MMM and bought index funds instead of trying to get to financial independence over night…. I’d be a lot better off. 5.5 years seems like a long time to me as a fairly young guy, but I suppose if you have the discipline to work hard, save aggressively and invest conservatively you can do it.

  • Margie July 20, 2013, 9:34 am

    MMM, please share a couple of your favorite ‘fancy salad’ recipes.

  • Eric July 24, 2013, 8:54 pm

    This site could have been created by me. I’m a big saver and many of the methods I’ve seen so far are old hat to me. For example, we just bought our first LCD/LED TV this year, only because our tube-based TV died. I kept my high school car 8 years – through grad school and 3 years of working. It was 14 years old when it died. My current car (purchased new in 1999) is also 14.5 years old and getting “iffy”. I figure it has cost me around $130/month ($23k), including maintenance, over those years.


    $800k by 30 is however mind boggling. 20’s is when most people start their family and buy a house…so saving is not at all easy unless you’re making a lot more than your expenses (duh!). Houses (unless your parents bought the house or something), kids, and the wifey staying home (unless you have family members watching the child for free) are all very expensive. So having a healthy “margin” during those years is very rare, even for those with good degrees like us.

    I graduated with a MSEE with honors in 1994. I started working a year earlier, in 1993.
    I started at $36.5k (BSEE’s started at $34k back then, I haggled to get $2500 more since my MSEE was almost done when hired). This is at a top paying company (Lockheed), so I wasn’t “underpaid”. Almost nobody found jobs in 1993 (I had a 3.8GPA and it took me nearly 2 years to find work!).

    My wife’s a teacher, so she made mid/upper 20’s back then, and only $55k now.
    Plus she stayed at home a year, then worked full time the next year – big mistake (neighbor babysitter quit on us and we hate daycare). So then my wife stayed home full time some years, half time other years between having our two kids. We lost around 5 years of her salary total between age 28 and 35.

    I made $50k 3 years into my career (raises were great back then) when we bought our current/first home for $135k (very nice 7 year old home back then for 25 year olds).
    We had our first child the next year (funny how that happens). We barely could get by w/o her working that year, but we had enough in liquid savings in order to be able to max out my 401k starting that year (and ever since) to sort of “move” the bank account money into the 401k. We had to spend some savings to pay bills with her not working after our son’s birth and a $120k, 15 year, 7% mortgage)).

    We had no cell phones (did they even exist back then?), no cable TV until a few years after buying the house (when 6-7 years out of school). We had to replace my old car when we bought the house ($12k for a one year old 1995 Taurus).

    Very hard to see how we could have spent less frankly. I also worked quite a bit of paid overtime, and my raises were solid. We never ate out or went on vacations back then…we went to the park and took walks, as I still do!

    So hardly could we have saved/invested and grown our savings anywhere close to $800k by age 30 (year 2000).

    I think I hit my goal of $100k of investments at age 30, plus we put down 10% on our house and were a few years into our 15 year mortgage). So we were worth maybe $150k at age 30 (year 2000), and worth around $550k at 40, and perhaps $750k now at age 43 (including our $200k home which is almost paid off)…oops, forgot we’re idiots and are siting on $150k+ in cash too (waiting for the market to crash again – I’m cheap when I buy stuff, it needs to be on sale!). So I think we’re worth $900k total now, not quite $1m.

    Property taxes are $6000 here in NYS for our average 2000 sq ft 3 bedroom home. Our home is slightly under the average cost for this middle class area (based on recent/weekly average selling prices). It would be worth 50%-200% more in many other areas of the country though (the high taxes and lack of jobs keeps demand low – it’s like Europe here. :-) ).

    Utilities (partly due to the high taxes and union labor) are also expensive here. Our utility company sends usage comparison reports. We are in the group of 20% lowest users for our sized home, yet our gas/electric bills average almost $200/month.

    I’m an engineer with almost 20 years of SE experience at Lockheed, yet I was making “only” $95k there when I was laid off last July (along with 200 others who were almost all over 40 years old). Almost nobody else pays that much around here, and ALL defense companies are laying off year after year for 3 years, very hard to get a defense job, especially in NYS.

    I finally have a job lined up which pays $25k less, unless I’m successful at haggling…but I only asked for $13k less than what I used to make since it’s rarely successful with this employer to get anything.

    Besides the huge cut in pay, my pension ($1500/month) will be around $2000 less per month than if I had worked there 15 more years, so I figure that’s a $500k loss over a typical 20 year retirement. Some guys (SW engineers) found good paying local jobs, but quite a few of us outside of SW engineering are taking 30-40% cut. A good handful took temp jobs w/o any benefits at lower pay. Older guys retired right away or have given up since the layoff. A handful were Phd’s with 30 years of defense experience – what a loss for the country.

  • Eric August 6, 2013, 9:10 pm

    In upstate NYS, people earning over $150k often pay $10-$12k per year just in property taxes! You get a 50% reduction if older than some age…65? So retiring young isn’t easy here.
    My house ($200k) is slightly below the average selling price in our town (the newspaper lists averages every week), and we pay $7k in property taxes.

  • The Objective Historian August 9, 2013, 10:53 am

    That’s 4 people, too. One person, especially if they get a roommate to split the rent, make it $5000.

    So, I think you’ve made a conceptual error. Housing should be half that if your are financing because some of that is building equity. You still have half of that $991 in the house.

    I think just put rent if you’re broke, presume you can’t get financing. I think you can rent a decent house in most of the USA for $500/month.

  • WalletEngineers September 12, 2013, 9:25 am

    Due to my wife and I’s consistently frugal ways over the past 5 years we are finding ourselves easily able to afford many of our wants in life. Convincing ourselves to not purchase every single thing we want is the only reason we are still on track to retire early and enjoy life past the 9-5 grind.

    The best advice I can give any young couple is to convince yourself you actually make 60% of what you actually take home every year. When you learn you can live comfortably on much less than you make you free yourself up to invest in the future.

  • drea September 25, 2013, 8:23 pm

    I have been soaking up this blog since a friend passed it on to me about a week ago and have gone through an interesting phase-like process during my mustache-ducation. First was intrigue as I’m in to simple, practical, boot strappy financial advice and really enjoyed your style; then on to excitement at the similarities in worldview we share – who doesn’t love reading about or meeting someone who feels the same way they do, sweet validation!; and now I find myself at hopelessness as I calculate my own situation and realize certain things likely simply cannot be part of my life because we (my husband and I) will be ‘broke’ (by your standards) for, likely, another 20 years. At the age of 29.5 that doesn’t leave much room for having children or traveling the world or doing lots of other things I want to do and man does that sting. I don’t know how you two easily pick up 100k+ jobs and are able to afford a 400k house (I’m also new to the site, I’m sure it’s explained somewhere) but that is entirely outside the realm of possibility for us. We are almost debt free and live well within our means with a modest emergency fund and average jobs that total about 110k TOGETHER. All this has finally happened at nearly age 30, the age you were when you fucking retired! I was feeling so good about these gains and having gotten our ducks more-or-less in a row, and then MMM happened and I can see how far we still are from financial independence *le sigh*.

    I’m hopeful we’ll figure something out but man it looks bleak as I see it right now. I’m at the beginning of my financial education and will keep going of course. Whatever the next stage in this process is I hope it comes soon; hopelessness needs to be replaced ASAP.

    • Mr. Money Mustache September 25, 2013, 9:57 pm

      Drea! You need to go back and read the post about optimism. Your income is spectacular and you could EASILY be financially independent in a small number of years. It is time to celebrate, not to mourn! Remember that we never had two 100k jobs. Average salary while working was in the mid-sixties per person.

  • Nunayo September 26, 2013, 8:12 am

    Drea, there is so much hope for you!

    I am your age, and make around $40,000, and I often feel the same way you do, however, since I started reading MMM & ERE blogs, I have improved my situation dramatically in terms of spending. Rather than think of how long it will take to cover all of my expenses with investments (about 13 years), I have been setting goals to invest enough to pay for certain expenses. Right now, housing & heat are covered for life. So, if I want to switch gears and do something “while I am still young” I can choose to do that, rather than push on the same work/saving path. For example, I would like to volunteer on organic farms in France, in exchange for room/board. That won’t add to the nest egg, but It won’t cut into it either. If I do switch gears, I will keep the investments compounding in the background.

    My point is, we can make choices about when to build wealth, and still allow for major life events in the meantime. The numbers work better the earlier you start, though.

  • Everett October 22, 2013, 3:54 am

    Let me start by saying I love the blog and find your lifestyle to be inspiring, but WTF!? Seriously that would be your plan? I know this entire post is about a strange hypothetical, but FULL time JOBS for BOTH of you? Sounds like somebody needs a face punch! The whole inspiration for your early retirement was to spend time with Junior. Your blog is about the philosophy of stopping wasteful consumption and living a life of Badassity (You solidified this with your FU to Chase to the tune of $675k over ten years). I really was expecting a big reveal to the tune of having the huge stash and the passive income only gave you the courage to adapt to this lifestyle, but honestly you can be Mustachian without a stash. Clean Shaven. Sure the IRP will have a field day if you call yourself retired without generating passive income, but you can just say you are living a Badass life. Your budget is quite impressive. Pulling in 24k/year is a piece of cake. Certainly no need to begin using an alarm clock and re-joining the rat race. (For the complainypants just refer to MMMs list of 50k jobs and work one for 6 months/yr ). You could do the contracting for a few months and cover a year of your expenses. The missus could do the same selling just one house a month or so. Alternatively, you could charge for some eco friendly lawn maint using your push mower and manual shears, give bike tours, self publish a book, or a million other income-producing-non-jobs with your multitude of mustachian skills you’ve acquired. Reading between the lines of the blog, it seems like your accidental non-passive income already covers your expenses. Is the psychological power of the stash honestly worth working 5.5 YEARS “in office jobs every day?” In fact, reading through the blog, I wonder what advice you would give to the younger version of yourself. Would you have stuck around Cisco for as “long” as you did? There is something to say for the experience (that’s what life is all about, right) but you could have left after two years with 100k employees and begun your Badass life much earlier. So honest question, is having the passive income really required to live your ridiculously Badass life?

    • Weedy acres January 13, 2014, 9:03 pm

      I just got through all the comments and was about to make the same observation. I figured your answer to the what-if question, given all that you have lived and earned over the past 8 years, would be to keep your more leisurely pace of life, perhaps kicked up a bit, to replenish the stash. But since the initial reason for retiring early was to devote your time to raising Little MM, why would you abandon that for five whole years?

      Instead, I would envision an initial flurry of work (selected based on optimizing your earning potential per hour) to get a roof over your heads and bikes for everyone, followed by a ratcheting back to 9-3 work hours (still optimizing for that time chunk) until you had $200-300k (enough to generate passive income) and then re-retire. Why stick it out for several more years, just to get more money than you need?

  • Sara Davis November 5, 2013, 11:41 am

    Curious as to how you buy and invest in real estate if you are broke?

    Possibly a newb question.

  • Milizard August 29, 2014, 9:06 pm

    I’m making my way through all the posts since the beginning, and the part-time finance job paying $60k strikes a nerve. You see, I went back to get a 2nd degree– in finance.
    I’m stuck in a really bad sandwich generation situation, where only a part-time job will preserve my sanity. Unfortunately, they don’t seem to exist in finance, unless you want to really be a salesperson. I’m simply not one, and it seems that most of those positions involve questionable morals, as someone above mentioned. So, what do I do, get a part-time job paying $15/hr after having quit a full-time one that paid $20/hr? I would be extatic to get a fulltime job at $60k, or whatever the equivalent would be for less hours worked.
    I scored in 99th percentile on the Bloomberg Assessment Test, so I’m not an idiot. Although I’ve had 9 resume requests due to the score, I’ve never gotten any more interest.

    I will keep reading to see if any more was written about finding a good job. I think there was some good stuff about interviewing or resumes or something earlier on. Meanwhile, I’m learning more about Access on my own, and plan to increase my Excel knowledge as well. I’m willing to learn whatever I need to, I just need a direction. Is the computer knowledge what really gets you the good jobs, or should I go for a CPA?

  • Kyle February 8, 2017, 7:19 am

    What if you were only saving 35000/year?

    Would you put it all in the 401k? Or max out 1 spouse’s 401k (only one spouse gets a match in our house) and the other half to the mortgage payments?

    Thank you,

  • WTK April 18, 2020, 9:23 pm

    Hi Pete,

    The re-read of this post gives me the new perspective of not being afraid of starting all over again if the unforeseeable circumstance occurs unexpectedly.


  • Tony June 22, 2021, 4:07 am

    Hi MMM, pretty new to this but really enjoying the articles. A quick question, if i may.
    Im self employed, earning decent money.
    I have a relatively small mortgage on a very low interest rate.
    No other debt or borrowings
    I have a pension setup and contributing on a monthly basis.
    I also have approx €10k in shares currently.
    However, im sitting on another €15k cash at present.
    Would you recommend putting this all into Vanguard fund in one go or DCA over something like a 12 month period?
    Thanks and keep up the good work


Leave a Reply

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!


welcome new readers

Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article.

For more casual sampling, have a look at this complete list of all posts since the beginning of time or download the mobile app. Go ahead and click on any titles that intrigue you, and I hope to see you around here more often.

Love, Mr. Money Mustache

latest tweets