Why the Middle Class Keeps Giving Itself the Shaft

stash_signalOh man. I was halfway through writing a nice, technical, do-it-yourself article about Radiant Heat for you, when the night sky over Longmont lit up with the giant ‘Stache Symbol*. It seems that our national network of Antimustachian Media Drivel detection volunteers sounded the alert based on this incredible doozy of an article about retirement in the US version of the Guardian. We need to make fun of it before we can go on with our regular lives.

The article is crippled by a few financial errors, but much more important is the hopelessly self-defeating tone of the thing. It manages to advocate shitting your own financial pants for the entire course of a lifetime, while simultaneously being sassy and witty about it so that you think the advice is perfectly reasonable. Just take a look at this early paragraph:

Indeed, all you need to do is save 22 times the annual income you hope to have when you retire. That means if you make $150,000, and hope to retire on $100,000 a year, you only need to sock away $2.2m in a bank account to be able to retire comfortably.”

Yes, that is all you need to do. If you make $150,000 per year, not only is it easy to amass 2.2 million dollars, but you should soon find chunks of that size floating all around you. You might have this much just sitting in your sock drawer waiting until you next get to the ATM machine to deposit it.

But wait.. this is necessary so you can retire on $100,000 per year!?! Are we planning to retire to the president’s suite of the Hyatt Regency? Or live in a Monaco Dynasty RV which we park on a 75MPH treadmill during vacations in order to maintain maximum fuel consumption? Who the hell needs $100,000 per year to retire?

So the article bakes ridiculousness right into its opening argument. Not a good start for a publication which supposedly has a reputation as “an organ of the middle-class.” But let’s read on.

“It’s simply a math problem. Let’s say you are in your 40s, making $150,000 a year, a generous salary in almost any city in the country. The taxman cometh, does he not? That $150,000, after taxes, becomes the slightly less dazzling sum of $100,000 a year.”

Okay.. except let’s assume you’re not a total idiot and that you contribute to your 401(k) plan, which shields the first $17,500 from taxes, or more likely $35,000 since most people in this age and income demographic are part of a couple filing jointly and sharing the $150k income. After all, we can at least assume that the $100,000 retirement budget mentioned earlier was not for a single person, right?

“Now you have to save that money as well as living on it. How much can you save? A standard and sensible budget, advocated by LearnVest and others, is to use a simple formula called 50/20/30. This means that you spend 50% of your salary on expenses. Another 30% goes to lifestyle expenses – the things that make life liveable unless you prefer living in a hut: cable and phone plans, clothes, books, gym fees, childcare and pets, restaurants and entertainment. “

Wait a minute here. You say I am spending 50% of my salary on expenses, and I make $150,000 per year, which is much more than average. So that’s $75,000. But then how do other people who make $25,000 live while spending only $12,500 on expenses? And what about $1.5M earners – do their expenses automatically rise to $750,000? Something is fishy here.

Then the final 20% goes to saving for retirement.  This is a reasonable budget. If you save more than 20% of your salary for retirement, you’re giving up enjoying your present life: you’re dedicating yourself to living in holy denial of all worldly pleasures like a monk or a nun, in the hopes of a lavish, or at least an exceedingly comfortable, life when you’re over 60-years-old. Twenty percent for retirement is, by the way, an aggressive goal. Most people save much less.

OK, this is getting ridiculous. I would define “Living like a Monk” as somewhere around $3,000 per year in the US. That is more than enough for food and a place to stay where you do some of the upkeep in exchange for a bed. And monks don’t need to budget for leather coats, dogs, children, or iPhones. At $25-30k, you are living like the Mustache family. Beyond that, it gets even crazier. What level of insanely plush luxury is required to achieve a meaningful human life? According to the Guardian and the standard “Waah, Waah, the Middle Class have it so hard!” script, the higher the better. No need for exceptions and no need to think for yourself.

The article goes on to rightfully make fun of the study from which it quotes, advocating investing your money instead of putting it into a “riskless” savings-account mattress and hey, look at that, they even mention Mr. Money Mustache in a paragraph near the end**, although I see the word “retire” is in quotes, suggesting affiliation with the Internet Retirement Police.

But here comes the conclusion:

“The other major issue: the retirement issue in this country is less due to personal failure than structural failures. Saving enough is not the primary problem with our retirement system. The primary problem is that wages have been dropping for decades, leaving people with much less to save – especially people who live on far, far less than $150,000 a year. That’s largely because corporations are hoarding profits, raising CEO salaries and skimping on what they pay employees.”

No! Cover your ears! 

Let’s be clear about this,: The retirement issue in this country is because people are buying way too much shit they don’t need, pampering themselves with ridiculous lattes, restaurants, shoes and massages,  and riding around constantly in huge bullshit bank-financed trucks for no reason. 

And many, many more closely related factors. Our problem is with our spending, so of course it can not be solved with additional income.

If you believe that the middle class has it even remotely hard in this country, you need to print out a picture of me, make it punch you in the face for 30 minutes and then reconsider the issue.

It’s not the CEOs and the pension plans that are giving you the shaft. If this were true, I would have had to become a CEO in order to become financially independent. (And even then, if that’s what it takes, nobody is stopping you from becoming the CEO!)

Sure, the pension system was a nice pleasant artifact of the olden days when the economy was a stable and slow-moving thing and people worked at the same company for decades. But those days are gone, and I say good riddance. Who wants to work at the same auto factory for 30 years? This is complacency.

If you put a human in a permanently comfortable situation, he will adapt to it and live a stagnant, boring life. Given enough comfort and convenience, we become huge water balloons with lazy grinning faces, expanding and becoming more delicate until the first sign of trouble, at which point we squeal and spray whiny fluids all over ourselves and our politicians. What kind of life is this?

In this much better new world, everything is in your control.

Your spending rate is not a percentage of your income. It’s whatever you want it to be, and your happiness grows right alongside the Badassity you develop every time you chop another thousand from what you thought was your “cost of living”.

Your city does not impose a cost of living upon you. You get to choose both the city in which you live, and how much you spend once you get there.

Your health and belt size are not determined by your age, being a parent, or “the terrible food they make for us these days”. For most of us, those things depend on what you choose to eat and how often you use your barbells and your bike.

Your retirement date is not “65” or “Never”. It is the day you have 25 times your spending invested, or sooner if you develop other sources of side income. For a motivated 18-year-old, this could easily mean age 25.

An unfortunate part of the standard liberal argument is that the middle class is in decline and it’s all the fault of the greedy rich people. The argument of this blog is that it’s better to adapt to the system than to complain about it. The Internet has made education and opportunity much more widely available. Knowledge about how to live efficiently and invest the proceeds productively is staring you in the face.

It is thus much easier to leave the middle class, become one of the rich, and then change the system to your liking from that position of strength, rather than to hold yourself down in that class, paying for cable TV even as it indoctrinates you to spend away your ticket out of the self-imposed prison. Or reading articles that tell you that you’ll never be able to retire. Or writing them.


*yes, just like Batman! Thanks to Mr. Frugal Toque and the others who have emailed me with this concept.

**My apologies to Guardian writer Heidi Moore who will probably see this article and not be pleased with me. But come on! Why not write an upbeat retirement article instead of just copying all the rest of the mainstream media, making money by sympathizing with people instead of telling them to shape up? People like feeling empowered, not defeated, and feeling empowered is the only way to get anything done around here.


  • Ron February 4, 2014, 5:19 pm

    Your example of living simply is inspiring to me, and obviously to many, many others. Having established that, here are some things I could use some help understanding. 1) Why not just focus on setting the best possible example of your preferred way of living and continue to inspire people that way? 2) Why spend the time/energy highlighting the fallacies in the Guardian article? Isn’t that similar to people spending time/energy on world news over which they have little to no control? 3) Why do so many Mustachians feel a need to rally to your defense whenever a critique of your ideas/lifestyle is offered? You’re badass, which means you can mix it up with the Heidi Moore’s of the world without any problem. 4) Why not just surround yourself with people with similar values, celebrate positive momentum towards living simply, and accept that those of us who live well within our means will always be in the minority?

    • Nick U February 4, 2014, 9:34 pm

      Hey Ron,

      Two reasons spring to mind. First, Mustachianism is a major shift in viewpoint for a lot of people, and even if they are interested and have begun trying to be frugal and bad ass, they may fall back into their old ways if they don’t deeply understand the problems with the mainstream approach.

      What MMM seems to be doing here is using Ms. Moore’s article as a way of pointing out flaws in mainstream thinking, and hence helping new Mustachians stay the path.

      Secondly, Mustachianism is not only about improving life for individuals, it’s about preventing an ecological collapse due to overconsumption. The “people should live however they want” perspective doesn’t account for the fact that, unless we start consuming less, we are all going to be screwed.

    • Mr. Money Mustache February 4, 2014, 9:44 pm

      Hey Ron,

      I think the answers to 1 through 4 are all the same and are accounted for by our personality differences.

      I do articles like this because they are FUN. Fun to write, entertaining to some, and effective at making this blog make its way around the Internet more quickly.

      In this and other deep analyses of the MMM blog you have done over the years, you seem to look at things in a SERIOUS way. I am not a serious person. Everything has to be FUN, or fuck it.

      And if I were to “accept that we will always be in the minority”, I’d have to shut this blog down right now.

      I find it absolutely inconceivable that frugality and a rational view of happy living will not take over the entire culture of this planet. It will happen, and you and I are helping to make it happen. Right now.

      • Steve February 4, 2014, 10:17 pm

        That is one BAD ASS MOFO reply! [read aloud in the voice of Isaac Hayes — “Shaft” style].

      • Ron February 4, 2014, 11:30 pm

        I definitely defer to you on how to grow a blog readership. Always will. Too serious is too simple though, but I understand it’s impossible to truly know someone through online commentary. I’m not sure anyone in my family or circle of friends would say I’m too serious. Introspective, take a wide-angle view of things, sure. The question I guess is how best to persuade people to a particular point of view, or especially a lifestyle. As an educator I value good questions and contending viewpoints more than prescriptive answers and group think. I prefer to persuade by example. I accept the limits of my approach and the fact that your readership will always dwarf mine.

      • winstongator February 5, 2014, 4:54 am

        MMM, ironically, you take a very serious approach to retirement. Prioritizing spending and having enough left over is a very serious issue. Imagine families that don’t have enough for health insurance or to pay for college. Evaluating their spending patterns isn’t a serious issue?

        Those that preach pipe dreams (spending $100k/yr in retirement) and sell financial services are the ones being unserious.

    • Matt (Semper Fi) October 30, 2016, 8:30 pm

      Hi Ron. Late reply, but maybe somebody will see it. My thoughts on the matter: Once you know something, and you believe it at your very core, and then you see that belief denigrated, I feel it is my responsibility to defend my cherished beliefs, up to a point. By that, I mean that there is a point where the back and forth becomes tiresome and unproductive. So, in that light, I think it is very important to offer up a rebuttal, state it very clearly and with “calm passion”, and then just quietly go about your work of changing the world. Some people are just not ready (perhaps ever) to change their minds, but you can at least plant a seed. Plant the seed, and move on.

  • Frank February 4, 2014, 5:21 pm

    Oh my! I knew it.. I knew I should not have retired.. I simply don’t have enough money.. So I’m going back to work. Seeing as (according to this article) I will never have enough I might as well buy that F150 at 14% interest.

    I mean its what everybody does so it has to be the right thing.

    Even my Mother in the UK is paying on the car they bought 10 years ago (yes I did come unglued when I found out).

    I will admit, it has taken me three weeks of actually being retired to run the numbers on how much tax we’ll be paying and doing budgets to convince myself we actually have plenty of money.

    Now I have never been so relaxed in all my life.. I’e done almost nothing and after 30 years of busting my tush I am quite happy about it.


  • Bob Hall February 4, 2014, 5:24 pm

    I’m not defending Heidi’s article in any way and I’m very Mustachian myself, but the way you go on about how the middle class has it just fine, that it’s purely or mostly their spending habits that are the source of their financial insecurity, and that people who complain about it are silly makes me crazy.

    Middle class spending has NOT increased. Please watch this video from Elizabeth Warren: http://www.youtube.com/watch?v=akVL7QY0S8A

    • Mr. Money Mustache February 4, 2014, 5:49 pm

      Why would this assertion make you crazy? It doesn’t matter what our spending is relative to earlier middle classes – it matters that it is still much more than we actually need to be happy. And it results in burning more than our own ecosystem can sustain in the long run.

      In a country where the average driver covers 15,000 miles per year in a financed 25MPG vehicle and the average family eats $15,000 of food, 60% of households actually pay to watch TV and on average we watch 4+ hours per day of it, I think it is safe to say that yes, it is our spending that is our problem, even while we are tricked into thinking it is the cost of necessities that holds us down.

      • winstongator February 5, 2014, 4:51 am

        My point of contention is that a household making $150k a year is not ‘middle-class’. They are in the 89th percentile in income. Now I know many of them beyond not feeing rich, aren’t rich. But a lot of that goes to their lifestyle, as MMM says. My parents live in a home roughly 2-3X more than they need. Even if you don’t have a mortgage, you have maintenance (which they don’t enjoy, so usually pay someone to do), taxes, and insurance (live in a hurricane prone area, so this is a non-trivial expense). They eat out a lot, and also approach some expenses in some of the least cost effective means possible.

        The plight of families around the median is completely different.

        Reducing your spending habits is the single biggest way to prepare for retirement. You lower your target savings, and save more each year. MMM is one of the few that preaches this. Why? Nearly everyone writing about retirement has a connection to the financial services industry, which wants its 1-3%/yr of your stash. They want to scare you into giving your money to ‘professionals’. That is also why they want to define 150k as middle class. Those making $50k have much less to invest, and are thus not their targets.


      • Jackie February 5, 2014, 7:03 am

        @Mmm: I don’t think you can say it better than that!

      • Bob Hall February 5, 2014, 3:23 pm

        Well if you had watched the Warren video, you would have learned that a four person family’s spending went like this:

        Went down:
        Clothes: 32%
        Food: 18%
        Applicances: 52%
        Per car average: 24%

        Went up:
        Monthly mortgage payment: 76%
        Health insurance: 74%
        Total on cars: 52% (because now Mom goes to work)
        Childcare: New cost (because now Mom goes to work)
        Taxes: 25%

        Your assertion that consumer spending (clothes, tv, food, lattes) is what is ruining the middle class is not backed up by data. Spending on those items has gone DOWN and the middle class financial situation has gotten worse.

        I’m right up there with you that software engineers like you and me make the error of scaling up their lifestyles to match their income and many of my friends spend too much on travel, clothes & iPads. But we are not middle class — median household income is $55K, not $130K.

        • Mr. Money Mustache February 6, 2014, 2:05 pm

          You’ve got me on health care, but cars are an optional luxury, most of the driving we do of them is self-inflicted, and our house size has increased drastically even as family size has decreased.

          The majority of the middle class could become drastically wealthier just by cutting out car-clown behavior: live close to work whenever possible, bike for all trips under 3 miles (bike trailers for kids and groceries, hats and gloves for winter), drive only fuel-efficient cars and never borrow money for them.

          But also remember this blog isn’t about helping the middle class gain more disposable income. It’s about helping all income ranges – especially the upper ones – buy far less of everything. For happiness and sanity reasons as well as environmental ones.

          • Frugal Epicurean February 8, 2014, 11:18 am

            Totally agree with you, MMM on the car thing. We drive an ’09 Fit and an ’07 Mazda5, both paid for, and drive under 7,000 per year. I walk to work.

            Health care costs are an increasing problem, and despite being an Obama fan, i fear the Affordable Care Act is going to hurt a lot of middle class people. Our family’s monthly premium for a $12,000 deductible plan will be $1,100 (up from $524 now). That’s for four healthy, non-smoking people with zero health problems and on no prescriptions. That’s the best price available on our state’s Marketplace. When a family pays $13,200 per year just for premiums, it’s pretty hard to keep total living expenses to $25,000, no matter how many $50/month cable bills you get rid of. Not complaining because we can pay the premiums; just stating the numbers.

            • Neil February 9, 2014, 12:11 pm

              Question: based on your stated driving habits, why do you own two cars? Seems like a lot of money tied up in a depreciating asset, even if it’s fully paid for.

              My family has similar numbers, and I’ve found that a single car is more than enough to meet our needs. It can be cheaply supplemented by a rental in the event that scheduling just doesn’t work. In 8 years of shared single-car ownership, I’ve had to rent a car once for scheduling reasons…my bike, feet, and transit tickets have worked just fine in all other instances. There’ve been a few other occasions of renting a larger vehicle for hauling needs. Total spend on such things over 8 years is somewhere between $200 and $300.

            • mysticaltyger February 9, 2014, 7:44 pm

              I don’t get how people can not like the Affordable Care Act and still be Obama fans. Seems like a major disconnect there.

            • Frugal Epicurean February 10, 2014, 7:21 am

              Mystical – I didn’t say that I do not like the Affordable Care Act; I said it will hurt a lot of middle class families financially, (including a $6K increase in my own annual premiums). The ACA is probably a needed first step to get overall health care consumption in the U.S. down to sustainable levels. And it does make sure everyone has insurance. That’s a good thing, but is why people in my income bracket will see their costs go up.

              I guess my main point is that it is naive to think you can totally control your expenses. One change in the tax laws or insurance laws can make a significant swing on a percentage of income basis. You can only completely control truly discretionary spending.

              Neil, good point. A second car is definitely a luxury, but one I can easily afford. The Mazda5 is a relic from days when we were hauling three kids around. It seats 7 in a pinch, and gets decent gas mileage for being able to do that. Now I loan it to friends frequently, and use it to haul an amazing amount of stuff with the back seats folded down. It’s inexpensive to keep. I couldn’t sell it for much. It is a luxury that improves my life beyond what it’s costing me (in my own idiosyncratic, non-mathematical calculations), and is probably one of the least of my sins.

          • Matt (Semper Fi) October 30, 2016, 8:44 pm

            Right on, MMM. Just because spending in certain areas has gone down, that does not necessarily mean that people are at the “suffering” stage. What if their clothing budget went from $200 per month to $150 per month? Yes, it went down, but it is still stupidly high. So I guess we would need more data, some actual numbers, to go along with the “went down in spending” category. We have it pretty damned nice in America, comparatively speaking.

      • Joe D February 5, 2014, 6:03 pm

        Is that the Pringles Mustache?

        • notquitefrugal February 5, 2014, 8:39 pm

          My thought exactly! The “‘Stache Symbol” looks oddly like the Pringles logo.

  • Nic February 4, 2014, 5:39 pm

    The only thing that kept me from standing up and yelling out, “Fuck Yes!” in the middle of your retort was the fact that the little ones were within ear shot. Go get ’em MMM!

  • Fred February 4, 2014, 5:40 pm

    For the average American I believe the future holds smaller cars, smaller homes & smaller incomes. We can look at it as a sentence or an opportunity. Either way it happens.

  • JayP February 4, 2014, 5:51 pm

    This makes me think about the lifestyle inflation all around us. In our area we have homes built from the 1900’s to today. Check out homes built in the 20’s-40’s – they rarely have large closets, multiple bathrooms, or garages. During the 50s the houses got all fancy and added 1 car carports. If a family had multiple cars during that time I’m not sure where they would have even parked them. Familes were larger then too.

    I remember during college a big shot buddy of mine got a cell phone – it cost like a $1 per minute to use it, so of course his conversations were short. My company gave me a smart phone last year, now I think I could never go back to an old flip phone. The government gives low income folks a cell phone, it would be cruel for them not to have one I guess.

    Funny how all these luxuries have become necessities in our mixed up world.

  • chad February 4, 2014, 6:03 pm

    This article is totally brimming with classic MMM gold. Thanks for the great post, MMM, and thanks for everything you do!

    I don’t think that people here (including MMM) are trying to judge anyone or make anyone feel bad. MMM puts on a certain persona of badassity on the blog, of course–I imagine an old timey boxer–and that this is supposed to help people get motivated to break out of their sheep-like daze and think about what they’re doing.

    But I for one don’t think that people who spend as Heidi suggests are in some *moral* way worse than the mustachians. So talk of “judging” is just out of place. (I do wonder if MMM agrees with me here.) These people need help to realize that they really do have choices. When people realize this, lots of them agree that they aren’t actually making the choices that line up with *their own* values. After all, who wants to work away their lifetime paying for their idiotic car and their absurd designer coffee habit and a cell phone plan that is for literally no reason double the cost it needs to be? Maybe there are some such people, and, if so, good luck to them! But very few of us would choose this, I think, when we realize we have a choice. Most just haven’t spent any time thinking about it. MMM is trying to help people think about it. That isn’t in any way “judgey”. Face-punchy, sure. But not “judgey”.

  • Breathaholic February 4, 2014, 6:19 pm

    Money and things that money buys won’t heal any emotional discomforts in life. My buddy described his brother in law as “basically very smart guy who makes bad choices, a lot of bad choices”. Intellect is only a part of it. If one can also figure out what the fuck one feels, why one feels it, how that feeling developed, how feelings change from one to another, how thoughts contribute to it and also maybe learn to not beat oneself up and be kind in the process. Otherwise I know few dozen physicians that make several hundred thousand dollars, but spend all of it plus 15%, and some others that actually have built empires and are very good with money. Intellect is same, emotional side of things though holy shit, night and day.

  • Will Cole-French February 4, 2014, 6:31 pm

    I’ve only just begun to grow my moustache so I may not have the mental acuity yet to understand this all, but can I ask someone help me to distinguish the 50% expenses from the 30% lifestyle expenses as summarize in the MMM blog. Is this just a way for Heidi to avoid saying 80% expenses 20% savings? Seems like expenses are just expenses. All of them are chosen to suit our lifestyles at one level or another…

    • Elyse February 6, 2014, 8:18 am

      @ Will

      Yes, she is saying 80% expenses, 20% savings.

      The 50/30/20 rule is saying that 50% is “necessities”; 30% is cable, nicer car, vacations, etc; 20% is savings.

      But it boils down to 80% spent, 20% saved.

      The original idea was that if you got in a pinch, you could cut down to the 50% necessity mark. But few families cut down that whole amount.

  • Jack February 4, 2014, 6:35 pm

    What about people who want to ‘fit in’ and not draw attention to themselves (because they do not bike everywhere, or bring their lunch everyday, or eat meat and other ‘non-economical’ foods, etc)

    I am a high earner in a suburb outside a large metropolitan area, and I would be seen as a tightwad if I were to live completely “Mustachian” given my occupation (and assumed income)

    I don’t necessarily disagree with a lot of the views MMM espouses, and I do all I can not to waste in the name of ‘efficiency’, but in reality if we are saying that $25k a year is plenty luxurious to spend on life’s essentials, what about someone who makes 40-50x that annually? After 50% is paid to Uncle Sam, should we live like paupers so that we can retire a few years early by saving half or more of our wages? What about helping our progeny achieve a higher standard of living and success than we ourselves have – can that be guaranteed only by homeschooling and additional time spent at home, or does setting the right example (be it as a successful professional and setting up a proper career path for them via internships, contacts and role-modeling) add value to their development and put them on the ‘fast track’? What about giving back to society (and worthy causes) – who is funding all of the non-profit orgs that champion the arts, help maintain the environment and help those who are impoverished and at-risk?

    It sounds to me like the early retirement crowd is somewhat reliant on the extremely progressive income tax system (the US has perhaps the most progressive tax income tax rates in the world due to lack of VAT) as well as generous government subsidies (Obamacare?) that heavily favor low spenders at the expense of the average wage earner.

    NTTAWWT, given everyone is trying to improve his lot in life and doing what is in her best interest, but perhaps society overall would be better off if people worked harder for longer in an area they were competent (you yourself have mentioned that Mrs. MM is good at what she does – is she adding more value to society by being the best IT consultant and paying taxes to the govt to help fund all of the fantastic programs (sarcasm) vs hanging out at home as a part-time mom/real estate agent? Why has retirement become a ‘lifestyle’, when it never was before in the history of man?

    Pardon the tone and cynicism, but there is often more than one side to a story – and I question whether focusing entirely on ‘early retirement’ is best for individuals reading the blog as well as for society as a whole

    • Mr. Money Mustache February 4, 2014, 10:35 pm

      Agreed – this is why I have always suggested attaining financial independence with the help of a less materialistic lifestyle, then continuing to do work that is meaningful to you as long as you care to do it – without the pressure of money getting in the way. This is my definition of Retirement.

      The fact that I have continued to “work” is the reason you had that little box in which to type your comment!

      • Jack February 5, 2014, 11:12 am

        MMM, fair comment and good response.

        I read everything you write and agree with a lot of it. It occurred to me though that, taken to the logical extreme, if even a small % of the population followed your advice then there would be some potentially dire consequences: labor participation, which is already near 40yr lows, would continue to plummet; a smaller % of wage earners would have to pay for the infrastructure and taxes of the masses who are no longer ‘working’; tax rates for those ‘suckas’ left holding the bag and working 9-5 would have to go up, and a whole host of other societal problems.

        This is even before taking a ‘purist’ economic approach of flattening and simplifying the tax code and minimizing corporate taxes to end double taxation of corporate profits (which would really cut out a lot of cronyism and corruption from politicos as well).

        The only conclusion I can come up with is….a consumption tax instead of taxing income. This should theoretically be mustachian since it would disincentivize spending instead of labor.

        • Mrs PoP February 7, 2014, 12:49 pm

          Jack – while I don’t see the US government switching completely to a consumptive tax anytime soon, there are certainly states whose tax systems are far more consumptive based and you can choose to live there. We have actively made the choice to live in one (ours is FL).
          I’ve always called our tax system here “choose your own taxation” since with groceries tax free and a generous property tax exemption for homesteaders, the amount of tax you pay is largely dependent on how much *stuff* you want to consume/own.
          And because we consume less than most of our neighbors and friends in other locations, our overall state tax burden is lower than theirs even though our earnings are at least as much if not greater.

    • Mr. Frugal Toque February 5, 2014, 6:01 am

      “… what about someone who makes 40-50x that annually? After 50% is paid to Uncle Sam …”
      Hold your horses, there.
      How much is paid to Uncle Sam? Have you ever actually done the math on this particular cliché?
      I make quite a bit more than $50k and I live in Canada, that tax hell to the north you often hear about. Accounting for income tax, property tax, gov’t pension, Employment Insurance, and assuming sales tax on everything I buy (except groceries), my effective tax rate is around 25%. I have difficulty believing the U.S. taxes its citizens at twice that rate.

      • Jack February 5, 2014, 11:03 am

        Well I use ‘Uncle Sam’ generically, to include all taxes.

        But in reality, for NYC residents the tax total comes to $448k for someone earning $1mm: (rounded) $67k for NY State, $37k for NYC, and $344k for Federal.

        Yes there are deductions for state and city that credit to federal, but they are more than offset by real estate and sales taxes. And I don’t include Social Security/Disability and Medicare in the above amounts either.

        So yes, Toque, ‘governments’ take about half of the income of someone making $1mm (and the % goes higher above $1mm). Sounds a bit egregious, right?

        • Mr. Frugal Toque February 5, 2014, 11:23 am

          Yes, that’s how progressive tax rates work.
          People making more pay higher rates.
          I thought we were talking about person earning $50k, not $25k*50. I misunderstood.
          As an aside, I have no problem with people who make a million dollars paying high tax rates (even if, someday, I become one of them). At that point, you have so much stuff that
          a) it shouldn’t bother you and
          b) you owe so much to the society that gave you the opportunity to earn a retirement’s worth of wealth in just one year
          you shouldn’t begrudge that tax.

      • Spencer February 5, 2014, 11:30 am

        Frugal Toque–about the tax rate

        Not an expert here, just someone who pays a lot of tax. Feel free to poke holes in my argument.

        His tax bite could very well approach 50% if he makes 40-50x 25K= 1-1.25 million/yr. Assuming he makes this amount as a salary and not by interest, dividends, etc., his federal income tax rate on salary above 400k is 39.6%, plus 3.8% medicare tax (rate above 250k married filing jointly, no upper income limit on amount taxed) plus state income tax of 0-11% (about 8% in my state, applies to everything above 30k income or so). This makes for a total rate of 43.4 to 54.4% on all salary above 400k.

        I had a year-end bonus that partially falls in this top tier income tax rate bracket, and they took >40% of it for withholding.

        You might say, what about all of the fancy deductions? Well student loan interest, state income tax deduction, etc phase out with higher income/alternative minimum tax. At the higher income level, often the only untouched personal deductions are home mortgage int and charitable contributions. My total federal and state income tax rate (not including medicare/ss, etc) was 32% even though most of my income falls below the highest bracket.

        The fancy deductions come for the well off when they make most of their income from stock options and investments, not salary.

        I often wonder if I would have been better of from an early retirement persective to choose a career with much shorter training requirements. I make good money now, but did not start making anything more than stipend level salary until age 33. (min 13 years of post-high school education required in my field, often more) MMM is about my age and was already enjoying his third year of retirement when I graduated! Where was this blog when I was in college? ;)

        Interestingly, most of my lifetime earned income will be taxed at around a third, since I made very little before finishing training. It would have been nice to spread that income out over the training years to enjoy a lower rate.

        • AnnAnn February 8, 2014, 5:11 pm

          Early on you could have saved some taxes with income averaging.

        • Mr. Frugal Toque February 10, 2014, 9:32 am

          Yeah, I totally misunderstood that “50x” as “50k”.
          I blame small fonts!
          But I stand by my belief that paying a 42% marginal tax rate when you’re making a million dollars is nothing to cry about. You can still reach retirement, in a really big house somewhere, in about four years.

    • marie February 5, 2014, 6:22 am

      “and setting up a proper career path for them via internships, contacts and role-modeling”

      oh man. don’t get me started on this one. Look, I completely understand that for many many people a huge measure of success is the quality of life we can guarantee for progeny. But subscribing to this approach means that one completely abandons the idea of America as a [quasi]-meritocracy.

  • Frugal in DC February 4, 2014, 6:38 pm

    I would love a follow-on article from the Guardian author empowering folks to take control of their finances and consume less (and not trash our planet quite so much). Why not point out how the waste and silliness that are now assumed to be part of a middle class lifestyle don’t make people happy? From personal experience, I know it’s possible to lead a very happy life without stuff like multiple late-model cars, recreational shopping, crazy-ass kid activities, pricey electronic gizmos, cable TV, frequent outings to restaurants and coffee bars, designer handbags and shoes, silly hair/spa treatments…unfortunately the list goes on and on. Actually, I can’t imagine cluttering my peaceful and simple life with so much excess.

    Also, I can’t take the CFA study seriously. Consider that it was written by investment professionals, whose salaries often depend on how much money people invest with them. Another idea for a follow-on Guardian article: DIY investing with index funds.

    Giant MMM symbol in the sky FTW! :D

  • EscapeVelocity2020 February 4, 2014, 7:57 pm

    Looks like Mustachians have hit a comment goldmine! I can’t believe the author of the article wandered into the Facepunch Capital of the internet. Alas, when I started reading, I was a little disappointed MMM didn’t take on the USA Today headline story that Obamacare would lead to 2.3 million fewer workers. While politicians bandy it about like a football (as the Guardian will most likely say tomorrow), I see it as a huge win for us ‘2.3 million workers’, that we finally have the freedom to leave our employer and not have to worry about being both seriously ill and bankrupted by our bad luck!

  • Fuzz February 4, 2014, 8:19 pm

    I enjoy the back and forth and admire Heidi’s spirit. It’s cool that she is willing to get in the comments thread and go back and forth.

    Heidi – Have you seen any of Tyler Cowen’s writing on the low-income/high culture people he talks about in Average is Over? You know, the liberal arts educated hipsters that live in Brooklyn, earn little, live on less and have a good time.? That’s MMM but in Colorado. And that’s where I think we’re all going one way or another.

    The other thing is that people have horrible assumptions about how much things cost. Take cell phones. A friend asked on FB which smartphone phone to get–he had 20+ comments on different brands and whether to go iPhone or Android. No one mentioned the carrier, and whether he could get by with airvoice, ting, aio or republic wireless. The difference in savings is $60 a month forever. With a little reading, you can have an iPhone with data for $30 a month. Yet no one does that. When you read the Wirecutter, which is the best cost-conscious review of new tech, they talk about buying a phone with a carrier “subsidy” and 2-yr contract as if that is the only way to acquire a phone. Yet that hasn’t been true for years. It’s literally thousands of dollars more expensive to buy a phone that way over a two-year period. So for all the hustlers out there (read people that have better things to do than give Verizon $90/month for an iPhone), there are options out there with real savings.

    Same thing with Vanguard funds and lowering your dividend fees. The typical selection of mutual funds offered through a company’s retirement plan is horrible. You’re paying 1-2% for nothing. And it can add years to your work life. If you want to promote retirement savings, promote Vanguard.

    I don’t think you credit how much MMM’s ingenuity allows him to consume/live/enjoy/approximate the same lifestyle that other people spend far more for. No one should be allowed to complain about retirement savings and pay more than $5K for a vehicle. Any set of needs you have, a $5K vehicle can satisfy the same as a $20K vehicle (I’d argue that’s true for a $2K vehicle, but I’ll be generous to the skeptics and car lovers).

    If someone doesn’t want to save money because they *need* a V8 or are too lazy to buy a phone somewhere other than a strip mall, well, they get a little MMM facepunching. That’s the style on this corner of the Internet.

    And I like it. I like his tone. I love his wild optimism. I find it contagious. Inspirational.

    Anyway, thanks for braving the discussion. I’m not sure anyone is going to change their minds, but I like that we’re having the discussion anyway.

  • Ms. Must-Stash February 4, 2014, 8:29 pm

    Very exciting debate here – thanks to everyone for the lively conversation! I have enjoyed Heidi Moore’s reporting on Marketplace for a long time and it’s great to see her participating as well. Point taken that the study cited has a number of flaws. And I too am concerned about rising inequality on a macroeconomic / policy level.

    But at the level of the individual – it’s awesome that MMM categorically refuses to let us off the hook! Let’s stop make excuses and instead expect that everyone should design the life that works for themselves now AND later – without fearing that we have to sacrifice our presents or jeopardize our futures.

  • Marcia February 4, 2014, 8:58 pm

    Well, I will say that she has a point about the CEOs and the stagnating wages of the middle and lower classes. There’s a whole lot of ugliness going on out there, and I see it every day. I know people in this country like to admire rich people because they are “hard working” and successful and all that, but it’s not always the case.

    Now, I’m not going to argue with you that MOST of the retirement failure is due to people just spending too much damn money. I see it all the time at work – not so much the lattes but the eating lunch out and new cars for sure. Then again, those kids that eat out are about 25-30 years old, and I didn’t wise up until 31. There’s still hope for them.

  • Doc Tim February 4, 2014, 9:13 pm

    I am surprised by the focus on 25k per year. We currently have a family of three with the Mrs. working half time. We live frugally but not quite 25k frugally although kudos to those that do. Even if you think 25k is over the top, you could insert a larger number for yourself like 30, 40, 50k and still be able to retire relatively early. The key is that this number you decide for yourself need not be a function of income. Grab onto that key and you can unlock the good life.

  • rick February 4, 2014, 9:23 pm

    Oh come on… Has is occured to anyone,

    That it’s finacial planners that come up with these stats,

    and finacial planners make more money when more people invest through them

    And they make more money the longer people work and “plan” for retirement.

    and finacial planners are usually tied to banks or investment firms.

    It’s finacial planners that tell you carry debt for the sake of keeping up your credit score (even if you already own a house).

    After all the investment wing of a bank is more than happy to invest your earings at 2-6% interst, while thier credit department is glad to charge you 12% for the junk you buy. You get stuff and a “sound mind”, but they’re making an amazing amount of money off you. Of course that doesn’t include the brokerage fees and service fees and the unknown number of other fees that they’ve tuck away in the small print.

    And of course the newspapers have no vested interest in keeping you working and spending, since their real job is sell advertising.

    Personally I think the whole thing is designed by the powers that be to keep you working and slaving away (massa card anyone). After all if you have to think you’d realize that all of the consumerist economy is BS, and where would that leave “them”.

  • Mike February 4, 2014, 9:28 pm

    I’m a big fan of this site and your blog, but I think you missed the beat with this article by being so quick to call Heidi out. She was not advocating the 50/30/20 rule, nor was she advocating the ridiculousness of the 22 times your salary savings that you need. Why is everyone calling her article bullshit? If anyone takes the time to read it, she is merely calling out a study that was performed that was clearly giving poor financial advice. Take your time to read through the article, and she actually makes a lot of sense.

    • Mr. Frugal Toque February 5, 2014, 5:54 am

      Her article referred to the idea of saving even 20% of your salary as “Aggressive”, which she clearly meant in a negative way.
      “If you save more than 20% of your salary for retirement, you’re giving up enjoying your present life:”
      “Twenty percent for retirement is, by the way, an aggressive goal. Most people save much less.”
      From what I read, she thinks people like us live on ramen noodles and have miserable lives.
      That mischaracterization is what gets us upset.

      • Mike February 5, 2014, 7:01 am

        Heidi is more in line with Mr. Money Mustache than you may think. She is calling out the fact that you should NOT put your savings into a bank account, in which she quotes, “That is absurd”. Read her quote…. “Stacking up bills in a bank account and eating ramen won’t get you there”. She is merely making a point that studies such as the one that she was referring to are totally out of line. She then goes on to talk about and even praise Mr. Money Mustache for his saving, but just points out that it may not be for everyone to try. Now, I do disagree with a few of her quotes, calling eating ramen “utterly joyless and totally ineffective, but she was speaking of doing that IN TANDEM WITH putting your money in a bank account. Again, and maybe I’m missing something here… but it seems to me that the main point of her article is to call out the wage gap issue in our country, and the fact that the general public tends to be mis-advised when planning for retirement by putting all of their investments in riskless assets.

        • Mr. Frugal Toque February 5, 2014, 9:56 am

          She was discussing some retirement advice that she got from “the Financial Analysts Journal”. You and I and she all agree that this was basically bad advice.
          However, in addition to that, she accepted some of premises of that study. Where we disagree is on her acceptance of those premises.
          The worst premise was that people who make $150k must spend 80% of their money in order to be happy.
          This is very strongly anti-Mustachian and undoubtedly the source of the Giant Mustache Symbol I saw projected into the clouds over Longmont 2 nights ago.

          • Gen Y Finance Journey February 5, 2014, 12:07 pm

            Clearly nobody has actually read the study. The study did not give advice. It merely used a risk-free investment strategy as a baseline, showing that even if you take no risk, you can still save enough to retire at 65 as long as you save diligently through your entire working career. It also showed that if you take a little bit more risk, you can retire at 65 while never saving a very large percentage of your salary.

            And that $150k number Heidi kept quoting? That wasn’t from the study. It was a hypothetical example used in the WSJ article she referenced.

  • Luciana February 4, 2014, 9:33 pm

    It’s funny, I feel like I do a decent job saving money (about 50 percent of my net salary, and that’s living in NYC). I care a lot about saving and investing and someday having a nice retirement. In other words, I’m the kind of person this blog should be most catering to. But lately I find myself a bit sad at the judgmental tone so many people take. Can we please try disagreeing without patronizing? How about we try acknowledging that different people have different situations? I feel really fortunate to have a well-paying job and a good education – but I have plenty of friends who also have good educations and who can’t even find mediocre jobs. I know people who have had major medical issues, either their own or of a close family member, and who have struggled to deal with those bills.

    It’s great that Mr. Money Mustache retired early. Yes, his above-average salary definitely helped, but he also clearly is devoted to saving money and was disciplined about investing. Awesome! But man, it bums me out that so many people here seem not to think about how not everyone has the same circumstances, and how a lot of people do indeed have it a lot harder. If you’re handling your finances well, that’s great! But maybe try some gratitude and some humbleness instead of so much of the smugness I see here.

    • Mr. Frugal Toque February 5, 2014, 5:47 am

      Some lessons must be taught the hard way.
      When this blog was started, it was because MMM found too many of his fellow telecom-salaried acquaintances making complaints like you see in the article linked above.
      “Oh, we can’t make ends meet. Wah! Wah!”
      But you’re making over $100k/a. How can your ends not meet? Does it have anything to do with your multiple SUV fleet of autos? Your multiple all inclusive vacations? Your habit of eating at restaurants almost every weeknight?
      There’s no polite way to tell people that this behaviour is wasteful, but if they weren’t complaining so much about their finances, we probably wouldn’t tell them at all.
      But if you come out and write an article complaining about how it’s impossible to save for retirement because YOU MUST SPEND 80% OF YOUR INCOME, regardless of much that amounts to, we’re going to tell you – and we’re going to tell you hard.
      This is not, however, an indictment of people who actually *have* to live on $25k/a, possibly working jobs that don’t include health insurance, possibly without having saved up the nest egg that makes a high deductible policy appropriate, possibly balancing children and weird work hours in a way that doesn’t allow for the kind of money savings techniques advocated here . *That* is a completely different situation from what we are discussing today.
      Today, we look at a firmly middle class case of Excusitis and we make our judgements.

      • Luciana February 5, 2014, 9:00 am

        I agree that a suggestion that you *must* or even *should* spend 80 percent of your income – no matter whether that income is $10,000 or $10,000,000 – is a really bad idea. Like, really really bad. That idea deserves to get dismantled because it’s horrible advice.

        But to clarify, I’m not just talking about the comments on this post. I’m talking about a general sense I’ve been getting from here lately, this lack of acknowledgement that earning $100K or above is, in fact, the exception, that not everyone gets to have these advantages. Lots of people are still struggling in this economy – they are working but making terrible salaries, or they are long-term unemployed and are increasingly desperate. I just wish more people here would come off as grateful for their advantages instead of smug and, yes, occasionally superior. There’s this idea that, hey, anyone can do this, it’s easy, and if you’re not doing it you’re an idiot, no matter your individual circumstances.

        But I think that belittles the very real difficulties many people face. Not everyone is lucky enough to make MMM’s salary – or my salary, for that matter.

        And before I get attacked as an excusist, let me note that I am in fact not talking about myself. I’m doing just fine. But a lot of people aren’t, and I don’t like pretending otherwise.

        • Mr. Frugal Toque February 5, 2014, 11:16 am

          That *is* one of the themes of this blog. You know that, right?
          The idea that the middle class in developed countries have it better than 99% of humanity ever has throughout the history of humankind?
          MMM specifically talks about it in this article; the idea that we should stop complaining and learn how to live a good life without massive consumption.
          I don’t get the sense that we’re sneering at people who have it worse than we do. We’re sneering at people who have it just as good as we do, but still complain that they can’t make ends meet.

          • Emmers February 8, 2014, 6:42 pm

            I think MMM is pretty good about that theme, but sometimes the commenters (not you – generally people without such a high profile) can get a bit vicious.

        • AnnAnn February 8, 2014, 5:38 pm

          You don’t really know anyone’s situation — except your own. Even if someone tells you their story — you don’t know that it is completely true. So you assume that people are truly struggling when they may be just reaping what they have sown. If a person is educated — did they bother to get an education that has a reasonable chance of finding a job. Did they chose Accounting because there are jobs in this field most everywhere and at all levels even if they would have enjoyed a career in Anthropology more?. Did they want to be sure they could always find work? Anthropology doesn’t insure that.

          Did they educated themselves with no (or minimal–quickly repaid) school loans? Did they work their way through school while maintaining an A average.? Have they taken the time, money and effort to live a healthy lifestyle?

          Did they save money so if the unexpected happened they had a cushion? Did they maintained family and friend relationships so they had social, emotional, and occasionally financial support. Did they never used alcohol, drugs, or tobacco because they were too expensive?

          Bottom line is that we all make choices and the choices have a lot to do with how our lives turn out. Anyone can have something serious derail their lives but the odds are they will not. So much of what happens to people that put them in the positions where you are now seriously concerned about them is from poor choices and short-sighted thinking.

          This site is primarily about teaching people about the consequences (good and bad) about their choices. Most folks live their entire lives thinking that they don’t really have many choices–but we do.

          You have a good heart and you belong here because all these people are telling their stories not to brag but to show people who need to know that this stuff works. They have very good hearts.

    • Geek February 5, 2014, 10:06 am

      I’m interested in how you save 50% in NYC with all the taxes and rent and whatnot. I’m not there, but my NYC friends-with ok incomes- are sounding really complainypantsy lately.

      • Mr. Frugal Toque February 5, 2014, 12:12 pm

        *Net* salary.
        I assumed that mean “net after taxes”.
        But, also, if you’re saving in registered plans, that part at least does not get taxed. (The last time I checked. I understand American “Roth IRAs” and “401(k)s” are similar to Canadian RRSPs and TFSAs).

      • Luciana February 5, 2014, 5:48 pm

        Geek, I save about 50 percent of my gross salary thanks to a few key things:

        1. I make a good salary and I do not increase my spending when I get a raise.
        2. I own my apartment. I have a mortgage, but the house payment + maintenance are still less than rent on a similar place. (I was strict about buying only what I could afford – maybe even a little less- I put down a decent down payment and I got a great interest rate.)
        3. I’ve never been a big spender and am pretty diligent about finding less expensive options for the things I want. E.g., I love to read, so I frequent the library instead of buying books.
        4. I fully fund my 401K to take advantage of the tax benefits (taxes are my single biggest expense in New York).
        5. I don’t drink alcohol. No kidding, a bar tab in this city can run $60 easily. A soda water with a twist of lime (looks like a drink, so people don’t hassle me about staying sober) with a decent tip for the bartender is usually $5 mad.

        It’s an expensive city, sure, and if you like going out to nice restaurants, you will spend a lot. But I’m just not a very fancy person.

        MFT, I do know that’s a theme of this blog. And I’ve actually lived in an emerging market, so I know very well that the American middle class has a much higher standard of living than much of the world is lucky enough to have. We have clean drinking water just by turning on the tap! We don’t have to be afraid (in most places) of getting mugged whenever we speak on our phones in public! We have libraries and we have free Wifi in many places and we have, wow, more things than I can count. I absolutely agree that all that is amazing.

        But I do feel that there is occasionally some sneering here. I’m not saying you’re the one sneering, but yes, I definitely feel there’s sneering running through the comments quite often, this idea that anyone who doesn’t retire early or who doesn’t save up several hundred thousand in a few years is somehow stupid or pathetic or weak. “Anyone can do this” is stated repeatedly around here.

        We are the lucky ones. We get to do this. Not everyone does. Sure, plenty of people should cut back on their spending. I tell this to plenty of my friends! I’ve argued with many of them to start funding their 401Ks so they can get a tax break, or even just to track their spending so they can see just how much money they’re spending on stuff they simply don’t need. Loads of people can save more money if they refocus.

        But there are people who can’t. And it’s not because they’re bad people or because they’re stupid or because they’re weak.

        I work hard, but I’m also amazingly lucky. I was born into a family where I was always loved and cherished; I got to go to public schools where I got to take Latin and learn to play the violin; I grew up in a country where women can go to college easily; I’ve never been hit by a bus, not even those few months after grad school and before my next job started, when I was freelancing and didn’t have health insurance and a bad accident would have bankrupted me.

        Anyway, I realize this comment is too long. And by this point, I don’t know how I can explain my position any further. Thanks for the dialogue; while we disagree, I appreciate that you’re willing to engage with me on this.

        • Al February 6, 2014, 10:48 am

          Luciana, I share some of your concerns. I’m like you in that I have a good salary and many of the ‘tricks’ to minimize spending were always followed by me long before I found this blog. However, I rarely comment here because I feel that I don’t toe the party line. For example, my family lives on 36 k a year, I’ll loose my wife if I try to go lower. I only ride my bike to work in nice weather when I can go through the trail system, not the streets which I don’t consider safe. Other times I take the bus. I agree with the principles but I’m not going to argue about the shades of grey of where I fit on the scale. Recently I’m facing job insecurity and I have come to realize that my ‘master plan’ is reflection of my salary. I don’t personally define myself through my job but I do admit to starting to think that I was especially clever with my retirement/investment plans. Having said that I still feel the advise on this blog is spot on.

        • conchita February 6, 2014, 9:02 pm

          Lucianna, you’ve been much more eloquent that I was. I concur with everything you’ve said. Thanks for sharing some dissenting thoughts.

    • phred February 5, 2014, 10:17 am

      If they can’t even find mediocre jobs, then they did not receive a good education. A self-indulgent education, possibly even with stellar grades, but not a good education.

  • Tim February 4, 2014, 10:02 pm

    One point that I think may help bridge the gap: the MMM family spending is $25k AFTER a paid-off house. For a renter, and applying the 4% rule to the value of the MMM house, the MMM effective spending is about $40k. This is at the 36th percentile of household income in the US (http://en.wikipedia.org/wiki/Household_income_in_the_United_States). In other words, about 113 million people live at or below this income level in the United States.

    Note that this doesn’t include taxes, which I’d guess would bump up the MMM spending percentile to the 40-42 range.

    • phred February 5, 2014, 10:19 am

      How about applying your rule to a 1100 sq ft house, and not the 2600 sq ft house the Mustaches have?

      • Tim February 5, 2014, 11:19 am

        Sure! Taking a rough guess that an 1100 sq ft house would cost about half as much, the 4% rule would be $7k per year, so total spending would be about $32k. That’s in the 32nd or 33rd percentile.

        My larger point is that this amount of money is one that a huge swath of the population would be overjoyed to live on in retirement. And it doesn’t result in an ascetic lifestyle.

  • Dakota February 4, 2014, 10:37 pm

    Yet another excellent middle finger of a post at the conventional wisdom of retirement planning. $100k/year? I’d have to search around online for ways to spent that. Maybe more Wheel of Fortune-type vacations to the Bahamas for a 5 day retreat for a screaming deal of $6,249 (airfare not included)? Ack.

    Even with a 15 year mortgage on a home in an expensive, yet very walkable/bikeable, metropolitan area, we spend less than $60k/year with an expensive bike habit, all organic food consumption, frequent travel, and eating out (and picking up tabs) whenever we please. I guess we need to drink more $150 bottles of wine to hit six figures…good to have goals I suppose.

    MMM, keep sticking it to stupidity and fear mongering. People are listening. And for those who are complainy pants whiners, it leaves more mountain biking and running trails clear of people mid-week for those of us rocking FIRE.

  • just call me al February 4, 2014, 11:03 pm

    Heidi, I think a lot of us here are/were above average earners, educated, and are/were fed up. We found MMM because we were fucking tired of living like auto pilot zombie slaves. Some here are still working their way to full freedom, the rest of us have lived that shit and the light bulb finally went off. To answer your queries: Yes, you can happily live a full, spoiled American lifestyle on 25-30 thousand per year; Yes, you have to save a large amount of your earnings to do so up front, preferably 25 times your spending (not earnings) or more; Yes, you should go into “retirement” without a mortgage; Yes, when you do all of that, it’s nice to have a side stream of income but it’s not because you have to…it’s because you want to. I, consider myself to be mustachian—but MMM would certainly not. We have a 4000 sq. ft home, a vacation home I adore, 2 gas guzzling BMWs– and we drive them in the winters. But, I have zero debt and live frugally fine. I did this on a handsome salary in which I only woke up from my comatose slumber after too many years in—only to save/invest my ass off for the last 6 years of my working life. Presently I live on a couple dollars more than 35,000 per year to have it all to this day (yeah, I have cable…). I could cut the budget to the bone, buy a much smaller home, and sell the extravagant fancypants cars if I had to (mustashian insurance). 6 years is all it took, I’m 42—no one can make this shit up. It’s real. Your article is just another whiny no-can-do article. It’s fodder and fuel for the weak and uninformed. You asked for the blowback when you mentioned MMM within your article. Now that you are here, accept the facts and thankfully read on. We’re not outliers. By definition, we are revolutionaries.

    • Aussie Outlier February 6, 2014, 6:18 pm

      I did it in 10 years. Went from spending every cent I earned (six figures) and being in debt (student loans, credit cards, personal loan) to now living comfortably on $30k a year without needing to work. And I actually have a better lifestyle now than back then! Focusing on WHERE your money goes allows you to enjoy everything that you want, while avoiding spending on things that don’t add any value to your life (eg. do you really need to upgrade your 40″ tv to a 60″? do you have to drive a BMW when you could own a Toyota? do you really need to repaint your home a different colour and buy all new furniture and homewares to go with it?). Most money is spent frivolously without thought on stuff that doesnt matter – thinking about it and asking “do I need this? do I really really want this?” will ensure that money is available to save and invest without any sacrifice of lifestyle.

  • Petra February 5, 2014, 3:36 am

    This is why the 50/30/20 rule is ridiculous: it makes people believe that if they have $10k of posttax income in a month, they are absolutely correct to spend $5k on “necessities” and $3k on “wants”. (By the way, I wonder how they classify their $50k car, for example, as a “need” instead of recognizing that roughly 80% of that car is actually a “want” – the “need” to be transported can actually be had for AT LEAST 80% less than what they paid for it.).

  • JTS February 5, 2014, 4:52 am

    MMM is offering a classic false choice in this post. That is, he is correct that avoiding lifestyle inflation is the best and simplest way to get one to financial independence for the middle to upper-middle class, who are the target audience for this blog. But because (pre-ACA at least) health care costs have skyrocketed, employer pension/401k contributions are smaller, public transit is undersubsidized vs. car travel, real wages have stagnated, etc., the reality is that financial independence would be easier with significant structural legal changes to make the US more like Canada or Western Europe. I appreciate that the focus of this blog is on what you can control, and MMM is right that complaining/voting/raising awareness of the income side of the equation is much less likely to bear fruit compared to watching spending. But if one’s goal is financial independence as soon as possible (which is mine), there’s enough time in the day to make my own coffee/walk to work *and* explain to acquaintances why the country’s wealth concentration makes financial independence a harder task. So if the complaint of the Guardian article was the whininess and lack of a mention of what you can control, fine. But the system in which we live could be improved to help raise incomes/lower unavoidable expenses to make me be able to retire earlier. Making that point doesn’t need to diminish the importance of living more simply; that is, as I say, a false choice.

    • Mr. Money Mustache February 5, 2014, 7:40 am

      Well-spoken, JTS.. but having grown up in Canada and corresponding regularly with readers in many other countries, I still find the structure of the US is the best one for early retirement. Higher incomes for young people are more easily available here, taxes lower, and the cost of most necessities incredibly low.

      Other countries might make early retirement more “fair”, in the sense that people with disadvantages might be cared for better, and that is a valid thing for a human society to pursue. But for pure efficiency of saving and investing, this is the place.

      • Daniel February 5, 2014, 4:52 pm

        As evidenced by constantly high immigration rate over the last decades…the land of opportunity, not necessarily social fairness

      • mysticaltyger February 9, 2014, 8:41 pm

        Excellent point. Mr. Frugal Toque’s post about the rip of expense ratios of Canadian mutual funds vs. their U.S. counterparts was just one example of this. Then in other Western Countries, the sales tax/VAT is much higher.

        My BF just got back from Australia and he said the prices there were really high. Those $16 minimum wages they have don’t go nearly as far as people think.

    • sage antoine February 6, 2014, 9:34 am

      totally agree. AND there is something to be said for a social and government structure which supports the public provision of services which improve the quality of life for everyone and which keeps the bad guys from spoiling the good things we have going in the US and Canada.

  • Frugal Epicurean February 5, 2014, 6:38 am

    Perhaps we should be thanking Heidi and other main-line, status quo journalists for perpetuating the myth and mentality that we have to over-consume to have a fulfilling life. Don’t we, as mustachians, have to admit that we need the panicky, shopping masses to provide the underpinnings for creating the structures that allow a frugal lifestyle? If we own stock (an index fund with Vanguard, for instance), our fortunes are inter-related to the people propping up the value of the companies that make up the fund. Much of this propping comes at the expense of the people who choose to over-extend their credit, buying all the middle-class “necessities” Hieid talks about.

    In my work as an estate-planning lawyer (nearing SWAMI status, and likely to keep “working,” if you can call it that, for a long time) I see many boomer clients approaching what they hope will be “retirement” with decades of spendy habits and meager savings. I try to educate these clients one by one – kind of like throwing a few starfish back in the sea among the thousands stranded on the beach.

    I feel a duty to help individuals see the financial light, but also recognize that I need the masses to keep over-spending. If a critical mass suddenly turned mustachian, we would be in trouble. Somehow I’m not worried.

    • Money Ma$ter February 5, 2014, 1:34 pm

      I couldn’t agree more. I loved reading this healthy debate and it seems to me that the fundamental issue between the two sides, where to draw the line so to speak, is something much simpler. Did you hear the Canadian radio interview with MMM where he described the 20 mile bike ride to the radio station, with people passing him in their cars? His reaction of “WOW how lucky am I that I get to ride this shoulder instead of having to ride in a wasteful car!” CLASSIC. There are two types of people…..those who can see the real value in that experience and feel that same emotion of how gloriously rewarding the “hard road” can be, and then are people who can’t. People who can’t see any value in sacrifice of silly wants, people who DO because they CAN…..they miss the entire message of badassity. Of course, level 2 is to not view it as the hard road at all.

      The meaning of our lives is something we choose. For some, it’s the stuff we are able to buy or the convenience we can afford that makes life meaningful. For others it is being less of a burden on the planet, or having freedom from desires, or toughening skin over years of self-imposed comfort-forgoing that makes life rich. These two sides won’t really ever agree because their life-meaning don’t match up.

      Not unlike the batman and joker who both need each other to exist #darkknightrises

      • Tara February 5, 2014, 3:30 pm

        I feel lucky every day because I get to walk and take the metro to work… I look at those driving cars in the hideous traffic, lack of parking, digging their car out of the snow. with pity. It`s so much nicer to be walking outside, enjoying the seasons, helping avoid pollution by taking public transportation.

        • Insourcelife February 7, 2014, 12:37 pm

          I would love an option like this here, but unfortunately owning a car is essential as public transportation is less than adequate. Funny, because growing up in a big city all I wanted was a car, but now that I’ve had it for years I would love to get rid of it and switch to bikes and public transport… Not happening in this town though.

      • LoneStarStateWorkerBee February 6, 2014, 12:55 am

        I think its worth pointing out that most progressive thinkers who want a raised standard of living for the middle class also want enhanced protection for our environment… and given the track record of the average person with disposable income, those two goals don’t always live in perfect harmony. The MMM approach – learning to identify your real needs and separate them from your wants, and respecting our shared home at least as much as you respect your urge to consume more products – is much more in line with traditional liberal thought than complaining that you can’t have two (or three) crossover vehicles and eat out all the time and still save enough to retire. If people in this country could learn to stop overextending themselves, maybe the planet would be better off. And the higher taxes and greater equality they call for could benefit those living in developing/third world countries, where they are much more urgently needed.

      • Orngkat February 6, 2014, 10:06 am

        This reminds me…Sadly, I know of a family man (four kids) in a town nearby who rode his bike to work and back on the shoulder of a busy street every day. He was a bike fanatic and he is now dead – hit from behind and killed instantly by an automobile at dawn who claimed not to see him. This is something I think about when I read MMM – when you are still in your 30s-40s and have been lucky thus far, you don’t understand yet that you don’t really have all the control of your life that you think you do. Even doing all the “right” things, one’s circumstances can change in an instant.

        • Joseph February 6, 2014, 2:49 pm

          This kind of comment makes no sense to me. Are you saying that a responsible adult shouldn’t ride their bike to and from work on the road because they could be hit and killed? By the same logic you shouldn’t drive your car to and from work on the road because you could be hit and killed. In fact I’d bet money that more people were killed this past year in cars than on bikes.

        • Jonathan February 8, 2014, 11:22 am


          The reduction in life expectancy due to cycling accidents is more than offset by the increase in life expectancy due to better cardiovascular health which cycling produces, relative to automobilists.

          See, for example: http://www.bikeradar.com/news/article/regular-cyclists-could-live-14-months-longer-than-car-drivers-28162/

  • Chaz February 5, 2014, 8:31 am

    It’s ironic that people think about blaming those “greedy CEOs” when it’s their own needless spending that is ballooning the revenue to these corporations. Classic case of shafting oneself while blaming others.

  • Zach February 5, 2014, 9:21 am

    What is the drop date on this Radiant Heat article? I have been considering heating a sunporch room without HVAC for a while now…

  • Angry German February 5, 2014, 9:27 am

    Thanks MMM – this Guardian article definitely deserved to be poo-pooed. I noticed it in one of my RSS feeds a day or two ago and stopped reading when I saw the 22x annual income statement and the needle on my bullshitometer pegged itself.

    The title of your article poses an interesting question though, one I’ve been asking myself for some time. I know many middle class folks who in one breath will complain about how they’re getting the shaft on their taxes, health care, etc. and in the next the price of the gas they need to keep their used, financed, Hummer H2 on the road. It defies all logic.

    My opinion is these people gain more from presenting the appearance that they are wealthy, than actually being wealthy.

    • phred February 5, 2014, 10:37 am

      yeah, it’s all about the need to have bragging rights to make up for an otherwise meaningless life

    • greg February 8, 2014, 3:00 pm

      “It defies all logic.” — but who will teach them? There are those that don’t fail math and can understand a geometric series, but without basic knowledge around money it can really be difficult.

  • Mr. Grump February 5, 2014, 9:53 am

    After reading through the comments and trying to digest all the back and forth of the different authors, I got lost. MMM admits the article is written in an effort to drive traffic to this sight by offering a well thought out argument to an article in which he was mentioned. Why is everyone so alarmed that the viewpoints of retirement vary so greatly between these two websites? At the end of the day both articles were published with the goal of increasing page views and to give the author an avenue in which to share their thoughts. You can simply agree with one or the other and move on. I think it’s safe to say arguing with one another is not going to solve anything.

  • Ryan S February 5, 2014, 10:25 am

    “It is thus much easier to leave the middle class, become one of the rich, and then change the system to your liking from that position of strength, rather than to hold yourself down in that class, paying for cable TV even as it indoctrinates you to spend away your ticket out of the self-imposed prison.”

    MMM, that has to be the best quote from your blog I’ve ever read. so true! thank you for always providing such good advice

  • Young Limey February 5, 2014, 10:42 am

    Excellent post Mr. MM!! Would love to see more like this, it’s so true.

    The middle class does not understand they are mortgaging their future with lifestyle inflation. You are leading the change of the perspective and helping people get it. Keep up the great work!

  • Joseph February 5, 2014, 11:04 am

    If I made $150,000 a year, even after taxes, I could double ALL of my living expenses and still have $2.2 million saved in 44 years, and that doesn’t take into account 401k or any interest which would surely allow me to reach that mark well before then.

  • Elle Navorski February 5, 2014, 11:18 am

    I do not think Guardian reporter Heidi Moore will be offended. Instead I think it’s more likely that she will write a follow-up article linking to the MMM piece above and then note, “I could be wrong.”

  • frugalparagon February 5, 2014, 11:30 am

    These “poor middle class” articles are particularly galling to those of who sort of feel middle class but who make muuuuch less money. In fact, we qualified for the Earned Income Tax Credit this year! An actual government handout! (Housing is provided free by husband’s employer, so we’re not quite as broke as that sounds… But next year we will have not much more income and will be back to paying rent.)

    Living on $25K EXCLUSIVE of housing? We can only dream of having that kind of money. It’s interesting that you don’t see a lot of finance articles aimed at households making under $100K, under $75K, under $60K a year. I can only assume that either they think we aren’t reading finance articles or our situation is hopeless! (Fortunately for us, that’s not a view that we share.)

    • phred February 7, 2014, 2:19 pm

      Many financial advice blogs are started with the hope that advertising money will soon pour in. A target audience making under $60k a year is probably not too interesting to many potential advertisers. Hence, the financial articles never get written

    • greg February 8, 2014, 3:02 pm

      “interesting that you don’t see a lot of finance articles aimed at households making under $100K, under $75K, under $60K a year” — well, following the money is generally the pattern of many things =P

  • Doug P. February 5, 2014, 11:33 am

    I love this. Thank you (again) for pointing out that people (self included) don’t have to be victims. We own our lives, our lifestyles, our waistlines, etc. Keep writing.

  • Loren Whitney February 5, 2014, 11:35 am

    Have you taken a step back to see where most of these messages are coming from? It’s the brokerage companies and retirement plan providers that sell securities. No telling if they come up with these figures required for retirement but the reality is that they want you contributing to their plans and growing their portfolios. Make sense?

    Most people aren’t aware that non-traditional investments are allowable inside a retirement plan (real estate, precious metals, loans, private equity). It’s an easy way to take advantage of the tax-advantages associated with tax-deferred or tax-free accounts. Look at Mitt Romney and his mega-IRA. Just food for thought. Take control of your retirement America!

  • Tyler February 5, 2014, 12:12 pm

    I just want to throw this quote out there because it trumps all personal reasons to retire early and puts into perspective why we need to consume less.

    ““if all insects on Earth disappeared, within 50 years all life on
    Earth would end. If all human beings disappeared from the Earth,
    within 50 years all forms of life would flourish.” ― Biologist Jonas Salk

    • Nitpicking February 8, 2014, 1:02 pm

      Tyler, I applaud and share your environmentalism, but this pushes my logic button. “Insects” (a major grouping of life) versus “humans” (one species) is a false comparison. For instance, if monarchs disappeared, it would be a shame but wouldn’t matter much in the grand scheme of things, whereas if all animals disappeared I think it would throw things out of kilter in a terrible way (for insects as well, many of which rely on animals for food, shelter, etc.).

      • Mr. Frugal Toque February 12, 2014, 6:21 am

        Nitpicker … insects are included in “animals”.
        So are humans.
        When you say “animals”, you’re probably thinking of “mammals” or, as most people do, “mammals other than humans.”

  • Chris February 5, 2014, 12:29 pm

    “we become huge water balloons with lazy grinning faces, expanding and becoming more delicate until the first sign of trouble, at which point we squeal and spray whiny fluids all over ourselves and our politicians.”

    Please sweet baby Jesus write more funny shit like this. Hilarious!

    I’ve been lucky enough to get to travel for extended periods to some very, very poor countries for my job and let me just confirm here and now that pretty much all of us Americans have it so damn good we have no right to complain. Shut your face America and enjoy the opportunities! I’m recently FI at age 32 after 8 years working as an engineer here and investing in rental property (biggerpockets.com style). No windfalls, just steady investment growth and a 75% savings rate for the wife and me. Still working, but enjoy the work so much more now that the money / job security question is largely gone. I did have to live with a $2k car. Whaaah!

    • tall-rick-west February 5, 2014, 1:03 pm

      I 110% agree with you chris. I too work as an engineer and traveled A LOT over the last decade (and have rentals like you) and other countries don’t have it EVEN close to what the “average” person expects here. the cars they drive, the size of their places, extra money, etc. are all much lower then what americans here think is near poverty here. I think we are all long over due for a lifestyle adjustment here. This whole idea of maintaining the american “way of life” is such a bunch of BS!! WE need to get smarter about how we live and what we are doing here that is realistc….at least we have mostly backed away from Hummers! that is a start I guess. But I still see some idiots commuting to work in HUGE, barely parkable trucks with 8 liter turbo diesels,..it makes me sick to see this!

  • tall-rick-west February 5, 2014, 12:36 pm

    This is a great debate! I do love this openess without getting nasty. so here are my 2 cents that I have never really seen discussed at length and that has to do with the gradients of housing costs even in one area.
    I live in California (Sacramento) Area and I work at a good company and make a high salary of >$150K a year. I should mention I am 100% bought into the idea that you make the lifestyle you want no matter your income. With that however, I COULD choose to live in a very low income area and save more…but then you have worse schools. shootings, wanna be gang bangers walking down the streets in the middle of day (notice they have no jobs)…car glass on the side of the road (cars constantly broken in to), higher thefts, drug sales on the corners, and on and on. I am SURE you all know these areas and have them where you live. SO…..my point is that having the “luxury” of living in a safer area does cost more and when your home is not paid off, you have this HUGE HUGE hurdle of getting that monthly payment out of the way to get to living on 25K a year….which BTW even in CA in my area is VERY VERY doable—IF IF IF I had no house payment. Even a modest 3bed/2bath in my area START at least $350K. Sure you can get a house for $200K—but welcome to the hood for that price. And in this long debate here, that seems to me to big one of the big issues–if we could eliminate that bill every month, then saving and letting it CAGR would be EASY!!
    In the end, I envy those that have no house payment, but I suspect most of have a house payment or rent that even paid off aggressively still takes 10+ years to do even with a six figure income. Once that hurdle is gone, I can totally buy living on $25K a year or even mush less, even in CA. I welcome any thoughts that can counter this—as I firmly believe that the cost of a roof over your head is that really holds most back from doing SERIOUS savings.

    BTW…I will add that I am 40, have 2 rental properties, and able to save thousands each month while paying $2000 a month in child support for the last 8 years (another topic that doesn’t get mentioned much that I suspect many men–maybe some woman–pay here).

    • Mr. Money Mustache February 6, 2014, 11:04 am

      YES! For most of us, paying off the house is a good part of a retirement savings plan, and I would agree with you: live in a neighborhood that makes you happy, or move to another city. With your salary, paying more to stay probably makes sense.

      Making extra payments on the mortgage is just another form of saving, so give yourself a pat on the back as you wipe that loan out. Your savings are not delayed by mortgage payments, it is just that they currently ARE partially in the form of mortgage payments right now.

  • Magicube February 5, 2014, 12:43 pm

    “Who wants to work at the same auto factory for 30 years? This is complacency.”
    My dad was eligible for retirement after 30 years working for an auto company. He worked three more by choice. He retired at 51 with a paid-off home, paid off cars for him and my mom, and bought a building not far from home. From that home he offers a free weekly dinner to anyone who wants it, which draws upward of 60 people some nights. Someone donated a piano to the space, so they often have singalongs. In the meantime (during those 30 years), he taught himself screen-printing, stained-glass, letterpress printing, pottery, woodturning and a ton of other crafts that make him happy and provide a nice side income. He also raised three happy kids, never missing a school event along the way.
    I’m a fan, but I don’t see why you feel you should impose your narrow view on everyone. My dad’s 30 years, including the generous health insurance it included, allowed him to live his life pretty much on his terms, and returned him to health through a series of serious health issues. He was never complacent and continues to live an exciting life. I haven’t even mentioned a lifetime of volunteer service he and my mom have given to the community.
    In short, he DID want to work at a factory for 30 years. I realize “those days are gone” but the life it has afforded him has been rich and fruitful for him and the thousands of people his life has touched.

    • greg February 8, 2014, 3:08 pm

      I find it interesting that you mention all the things **outside** of work as being the interesting ones. What if those 40+ hours every week could have been spent with family, helping others, refining such joyous skills, getting to know others better?

      In my mind it is definitely valid to choose to work at the same place for 30 years, but why only stay for 3 extra years if it really was so enjoyable? “When is enough enough”?

      Also, what if that pension fund is mis-managed?

  • Eduardo February 5, 2014, 12:43 pm

    MMM, This is one of your best posts yet! If people could only understand that it really is in their hands rather than the government/the man etc. It worries me that one day people will revolt because they believe they do not have a fair deal, whereas with a little understanding they would not have to blame someone else. How can people possibly say we have it hard today compared to the ways people used to live. Please keep up the good work, hopefully your readership will increase here in Britain and people will take notice! Thank you.

  • Free to Pursue February 5, 2014, 12:47 pm

    Unfortunately, I think Heidi was misunderstood by some commenters on both The Guardian comment thread and this one and that is unfortunate. It may be that the sarcasm in her article did not come across, she did not make her position clear, or a mix of both.

    What matters is what we agree on: $100K per year as a retirement income is absurd, putting money in a savings account as opposed to investing it for a higher return makes zero sense (double meaning intended) and anyone making six figures or more has more room to save well into the double digits.

    One implicit theme that might merit some discussion though is “status sickness”. Not only are we taught that you consume in line with your income, but that you “have to” consume in line with your income. How else are you going to claim your rightful place in the pecking order? Better salary = better car to go to work, better work clothes, better home for entertaining, better vacations, better entertainment, better…spouse? You have to show people you are successful and that you should be respected for it by perfect strangers, don’t you?

    The #1 trigger for increased spending is whether the rewards of increasing success are intrinsic or extrinsic. External rewards = seeking more stuff, more status (to fill the need for external validation by others or what others think of us). Intrinsic rewards = personal satisfaction of investing in oneself, gaining self-sufficiency and ultimately self-determination. The effects are lasting and no one can ever take it away from you (knowledge, skill, experience, ability).

    Interestingly enough, the folks who seek intrinsic rewards are usually happier, more successful and healthier people. And, those rewards are either relatively cheap to obtain or 100% FREE! Well, from a pure cost perspective at least. Time and focus is most certainly required, but that’s what makes the investment so rewarding!

    The one with the most toys (before and after retirement) doesn’t win after all. Go figure!

  • Graham (Ace) February 5, 2014, 12:52 pm

    My fellow Mustachian friend told me of the “gold” that awaited me on MMM this morning, but this delivered even more than gold. This is pure, functional olive oil. We’ve been going around for the past few weeks threatening heave all complainers into the river, and continuing to peel our mangoes and avocados for dinner.

    “The argument of this blog is that it’s better to adapt to the system than to complain about it. ”

    And then you mention to address issues from a position of strength. It doesn’t get more solid than that.

    Gushing aside, this article brings up an idea I have been pondering often lately: how can Mustachian ideas be best presented to lower class citizens for their benefit? Well, it doesn’t bring up the point directly, but the discussion of class is a worthy segway. I think that the lessons of MMM are valuable for more than just the more affluent readership, and that MMM could find a way to create a “Po’ boy’s guide to the galaxy” to educate poor folks on microfinance. My public school went out of its way to teach us about personal finance, and even before MMM, it gave me a huge advantage over my peers in college.

  • Cincy Stache February 5, 2014, 1:06 pm

    WOW. Thanks for pointing us to that comedy. Glass half empty much? I’m poor by many standards and I still think I can retire in my 50’s. I say 50’s because my career is a dream job and i’m in no rush.

  • sage antoine February 5, 2014, 1:35 pm

    Nobody else knows how to live well on not much money better than Mr. Money Mustache. That is why I follow this website.

    However MMM is much less persuasive in his diagnosis of the maladies afflicting the sinking middle class.

    There can simply be no denying that the relative decline in earnings and purchasing power of the middle class is inversely correlated to the rise in earnings of the so-called 1%. This has been accomplished largely through changes in the tax system and the painful strangulation of the state from Ronald Reagan on. This has meant a real decline in quality of life for most Americans (and Canadians as well) and a reduction in economic mobility.

    No amount of libertarian philosophy will change that and for my part I will do everything I can to ensure that we stop this ongoing regression to the 19th century.

    • greg February 8, 2014, 3:15 pm

      “relative decline in earnings and purchasing power”

      purchasing power of what? Most figures simply use “inflation” whereas many real crucial parts of a happy existence have dropped in cost even faster than the inflation-adjusted salary.


      “if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week … shorter hours were assumed to be a natural consequence of increased productivity in the US until the 1930’s, appearing in the platforms of all major parties”

  • Maggie February 5, 2014, 1:57 pm

    Howling — howling — with laughter at this (dogs frightened, neighbor worried)

    “If you believe that the middle class has it even remotely hard in this country, you need to print out a picture of me, make it punch you in the face for 30 minutes and then reconsider the issue.”

    And I’m one of those that DOES think the middle class is getting squeezed. That doesn’t mean I whine about it, it just means I need to play the game differently. Mustachians rule!

  • spider1204 February 5, 2014, 3:03 pm

    Better be careful Pringles doesn’t come along with a cease and desist letter… that moustache looks awfully familiar!

  • spider1204 February 5, 2014, 3:21 pm

    I love the paragraph at the bottom where they basically say “Well there’s also this blog that totally debunks everything we just said, but “.

  • MonicaOnMoney February 5, 2014, 3:32 pm

    I think this article is just another example of the bad financial advice that is out there. Granted, we all make our own financial decisions but SO MANY people just google “retirement” or whatever they’re looking for and read the first article that comes up. Who knows how true that article is and if the advice is relevant.

  • AtlStash February 5, 2014, 3:37 pm

    Good article MMM.

    I don’t like the disparity with regards to CEO pay but I think we are responsible for our own problems to some degree. Since personal responsibility doesn’t go too much past wiping your own ass these days, we have ignored a lot our own culpability. In years past we spent a greater portion of our incomes on food and this is still the case for the very poor in the US and globally. While food prices did not keep up with inflation, spending exceeded inflation (debt creation). This spending went mostly to wants rather than needs. Open the file in the link and see the disparity in spending between $16k and $32k. http://www.atkearney.com/documents/10192/278946/consumer+wealth+and+spending.pdf/2e8877d8-01ca-4655-909b-4236721ecbb0 Somewhere between those levels you have covered your wants and only spend on needs. (Is it coincidence that the $24k that people talk so much about lies directly between these values? I think not) Of course where you live affects that number but just adjust the COL scale and it is the same affect. The problem lies in the fact that as income continues to rise, people continue to spend. The companies that people vilify so much are out to get an ever larger portion of your dollars. They do not care if it comes from your “wants” piece of the pie or your “needs” piece of the pie. They employ scientists, psychologists, focus groups whatever they can to understand what makes their product more appealing, what brings about emotions. They make your brain confuse wants and needs. And most people are happy being oblivious to this. It is like the guy in the matrix movie that just wanted to get plugged back into the matrix. “Ignorance is bliss” Actually, I think I could get really annoying finding parallelisms between the matrix movies and the fight between consumerism and mustachianism.Is MMM “The One” :^{)?
    So next time you go to Disney, go left, not right, as is human nature (wife is an environmental psychologist, going left really helps avoid lines for 1/2 a day) or don’t go to Disney at all and enjoy a stroll in the park.
    I think education is the key, not some form of wealth redistribution. Start with universal pre-k. The earlier we start teaching, when kids are able to learn faster, the faster we will reverse course. Next, unemployment must include retraining if needed and/or cover the cost of relocating to areas with jobs. Those should be the safety net, not just a handout. I know several people that didn’t try looking for jobs until they were within a few weeks of loosing benefits, then when benefits were extended, they stopped looking again. This is not all people, but too many will sit on their asses as long as they are getting paid.
    Food insecurity needs to be improved, but I think if we fix job security, food security will improve. Of course nothing will cover 100% of people but we can definitely improve.
    Healthcare should be universal, and I believe we could find a balance between good care, profits for businesses (profits drive research and innovation that has generally improved life spans), not a “Universal” health care plan that is far from universal and was basically written by lobbyists and fanatics (my opinion).
    A lot of things and people we try to blame our problems on are a symptom, not the cause. When we look to assign blame in the world, look at yourself first. Of course it is hard to see the matrix when we are still plugged in. (Done with matrix references! Honest!)


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