Are You Giving the Shaft to your Future Self?

mustache_sawUnfortunately for me, one of the concepts I find most annoying to read about happens to be one of those the mainstream financial media likes to write about the most:

The hard times that have befallen Hardworking Americans*, and how it is entirely the fault of the system in which we are all stuck.

Depending on the day, this same underlying story comes dressed up in different clothes:

  • The middle class wages have stagnated (while the rich keep earning more) so life has become too tough for us.
  • The cost of living in ExpensiveVille* has grown so high that people can barely scrape by on $150,000 per year.
  • Education has become so costly that students must take out $200,000 loans, which then burden them until at least age 50.
  • Americans are headed for a retirement crisis. Most people are still broke by age 50, which means they will have to work until at least 80 (because of course it would be impossible to live on only Social Security benefits).
  • The 1991 recession and subsequent economic upheaval hit Martha hard. After 30 years of rising wages as an executive in a typewriter company,  she found herself without a job and competing with other CEOs for jobs at the local K-Mart.
  • Bill and Jenny worked diligently at their jobs as well as caring for their two kids. But when the 2008 credit crisis hit, they lost one income even while the value of their Las Vegas house was cut in half, leaving them with a mortgage that was $100,000 underwater. Foreclosure was inevitable.

The dangerous thing about all these stories is that they sound so plausible. Income inequality has indeed been growing, as have house prices in expensive cities.  We do indeed suck at saving, and executives do sometimes end up falling far down the pay scale in the event of job loss. But there is one thing the journalists never say, and that most of us don’t like to admit:

In almost every tale of financial woe, the real villain is the victim’s Past Self.

These people had been giving themselves the shaft for years or decades without realizing it, and it was this shafting that allowed The System to get them down later on.

So what the newspaper describes as a medical bankruptcy could in fact be a Caribbean vacation bankruptcy** “victim” who happened to have the bad luck of getting sick when almost out of money.

A foreclosure caused by the recession could very well be more attributable to commuting 25 miles to that job for the preceding 10 years in a GMC Tahoe. 

In fact, if you’ve ever blown a dollar on frivolous spending, and years later find yourself a dollar short due to the arrival of hard times, it’s not the hard times that broke you. It was that dollar blown long ago.

Because a dollar is not an ephemeral phenomenon like today’s weather, it is a permanent accessory that sticks with you for life if you allow it to do so.

All this may sound harsh, it’s really just an expansion of one of my favorite concepts in personal finance: the idea of a present, past and future self.

You’re Borrowing from Yourself

Every financial transaction you make today is not so much a deal with a mortgage company, car dealer or department store. It’s a deal with your future self.

After all, when the 20-year-old version of you borrowed $32,000 to buy that fully loaded Honda Accord, who ended up having to pay it back? The past self got the new car with no responsibility, and her successor in the present holds the result: a debt hangover and a car that’s now worth only a tiny fraction of the new price.

Past You gave Present You the shaft.

But it goes further than just money. While your life as a baby has everything to do with the random luck of genetic composition and what sort of parents you were handed, you quickly get the opportunity to start influencing things yourself. By the time you get to my age, almost all of the features of your daily life, both the jewels and the turds, gifts and shaftings, are things deposited on the Conveyor Belt of Time by earlier versions of you.

You have your Past Self to thank for all of this. But until you acknowledge that, you can never become the generous benefactor that your Future Self deserves.

The Tragic Comedy of Rich Country Recessions

Every ten years or so, our furiously strong economy takes a very short breather.  Instead of setting a new all-time record for economic output every quarter, sometimes it only matches its previous all-time record. This is called a “sluggish” economy and we usually fire the president over it.

Sometimes it even goes down a percentage point or two. This is called a “Severe Recession”. Millions of us lose our homes and we fume about how irresponsible the bankers and politicians were for lending us so much money before taking away our jobs.

What they are missing, of course, is how ridiculously vulnerable we all made ourselves back when the times were still good.

Now is the Time to Stop the Shafting

Suppose you’ve just graduated into this booming economy and scored yourself a great job. Sure, you have some student loans, but they are easily dwarfed by your new Big City Salary.

Do you celebrate by buying a car, a house, adopting a couple of dogs, getting married and immediately having several kids like everybody else does?

Holy Shit No!!!

A new graduate with outstanding student loans is like a person riding a unicycle in November, just before the start of an icy winter. Balance is tricky, but it can be done. The pavement is dry now, but you know that ice is coming.

So do you jack up the seat of the unicycle another 20 feet and balance a few fire-juggling elephants atop a broomstick which extends from your hat? Do you open a can of grease with your other hand and squeeze some onto the tire of the unicycle, and then start pedaling through town to go see if you can find a half pipe to bust out a few frontsides?

Again, “Holy Shit No!” would be wise advice to your future self.

You slow down the unicycle, set your feet on the ground, and adopt a stable stance. Then you gently set down and free the elephants, find yourself some winter boots, a coat, gloves, hat, food and shelter.

With continued preparation and ingenuity, you can be out making snow angels and watching the winter moons, instead of having your frozen and crushed body blackening in the shadow of the elephant corpses, being nibbled away by raccoons until the eventual maggot infestation when the spring thaw comes.

The strange part to me is that while most people would consider this lesson in Unicycle Strategy to be self-evident, when it comes to money they are right there at the elephant shop adding the broomsticks and grease to their shopping cart.

So let’s set this gruesome metaphor aside and consider a more reasonable financial strategy. Something that will prove to be a gift to your future self rather than a crushing lifelong hindrance.

Getting Started 

When you move out of Mom and Dad’s house, your first job is to set your eye on the prize. You want a fulfilling, happy life with plenty of challenge and reward, but hopefully a minimal amount of tiresome bullshit (TB).

As it turns out, the amount of TB you must endure is inversely proportional to the amount of control you can gain over your own life. And control is something you build through a combination of skills, a wise yet optimistic attitude, time, and of course money.  Thus, everything you do should be done with an eye on building those four factors.

Buying a Car brings you no skills, wisdom, free time, or money. Nothing except a hole in your wallet. So you do it with an eye on efficiency and minimizing cost. Spend no more than four months of your net monthly savings, with an upper limit of $12,000 until you are at least a millionaire. Then make that machine last at least ten more years.

Choosing a Place to Live is not about kitchen countertop surfaces or closet arrangements. It’s about putting you in the center of where you want your life to be. You can always decorate and optimize, but you cannot teleport. So location is everything, even if it means downsizing or renting instead of buying. Living in the right place gives you back time, energy, and friends.

Your Job is a convenient source of income, but it is not your lifeline or your identity. Never be afraid to shop around for a new one, switch careers entirely, or dabble in your own businesses which may very well grow to be more lucrative than your main job.

Kids and/or Large Animals are not just things you pop out or pick up because hey, they are snuggly. These are enormous and fantastically expensive commitments, because they dictate where you will live, drive, and how much time and energy you’ll have left to work for money. It is a wonderful luxury that we can all afford these things if we prepare for them in advance. But make sure you’re on very firm ground before jumping in.

Good old-fashioned Hard Work  is almost always a gift to your future self, because it builds skills and earns you money. And the satisfaction you get from the subsequent lifetime of looking back on all that hard work is even better than the money and skills.

Maximizing your Luxury and Convenience right now may feel like a reward to your present self, but the belly full of expensive food will be converted to a turd on the conveyor belt by the time your future self retrieves the results. You leave your future self poorer, fatter, and with fewer skills. You may create a pleasant memory or two, but memories of hedonism are less satisfying than those of hard work.

This last rule applies to all categories of life, from purses to pickup trucks, iPhones to international travel. You can safely buy them if you have more money than you need, but you can also safely forego them without losing an atom of happiness or life satisfaction.

Of course, we will all enjoy breaking this rule and indulging occasionally, but in general the rule is to put down the golf clubs and pick up the tool belt a little more often.

 The Reward at the End

You could live your entire life as described above and it would still be a fine, deeply satisfying existence. By building strength and character, you design away the worry and whining that dominates modern life. It’s simply the right way to live. But there is pleasant little side-effect: standing here in the future and unwrapping all these gifts as they come off the belt.

I’ve always been almost pathologically focused on creating a better future for myself and anyone who happens to be along for the ride.

I endured four years of relatively horrible engineering classes because I knew they were the ticket to a good job. The happiness of the resulting jobs easily made up for all that hardship, but I was already looking ahead at the next step: how to invest all that money to make the future even better.

Every beer foregone, barbell lifted, bike pedaled, and fence post hole dug through hard soil in hot weather was done with the benefit of the future self at least partially in mind.

But suddenly I have noticed that I am that future self, and the rewards keep piling up. This bonanza of gifts from the past has been ongoing since about age 21, and yet I still have 60 years to live.

It still blows my mind each Monday that I never have to go to work: I can thank the 25-year-old version of me for that. Here at age 40 I can still sprint through the park with my boy or enjoy a long day hoisting roof rafters and balancing on ladders: I owe this good health to the generosity of my past self as well.

Even my pleasantly warm bare feet, which sit comfortably on an Oak floor heated to a toasty 80 degrees by a DIY radiant heat system*** as I look out the window at a snowstorm, are owed to the October version of me, who crawled around for hours in the dirt of the crawlspace to thread and connect all those hundreds of feet of PEX pipe. Thanks, dude.

The rewards are great, but the very act of giving (both to yourself and to others) is just as great. So with that in mind, I’m going to fold up this computer and get back to work, sending some more gifts into the future.


* You can insert your own city or country name here, as this phenomenon of crybaby journalism is a global phenomenon.

** Actual example from one of my less pleasant landlord experiences

*** It’s Alive! I am working on the long-awaited follow-up article for you, but this system is a joy to use, and it looks like the project’s plentiful naysayers will end up defeated.

  • Orngkat November 12, 2014, 11:18 am

    One of the things you realize if you live long enough to do so is that there are no guarantees. At 60, I am watching as once thriving, higher income “successful” people I know succumb to terminal illnesses, freak accidents, divorce etc. It amuses me then to see a sort of invincible attitude here as if one has ultimate control over all situations that may arise. I do appreciate the rush one gets from gaining financial intelligence over their lives which does allow a greater deal of choice down the road. Also, looking at my own childhood, I KNOW now that I did not have the proper guidance to make good choices. It set me back years and I KNOW that situation exists for many others so I will not judge.

    • Jason G November 12, 2014, 12:05 pm

      I think it is more productive to make choices based on the assumption that you will live the average lifespan than to make decisions on the assumption you may die tomorrow.

      If it helps MMM tries to encourage early retirement, so your successful friends who died still working in their 60’s do not follow this blog. If they did they would of had 20 years of retirement before death, or perhaps even avoided a divorce as their values changed.

      • Ellen November 12, 2014, 1:52 pm

        Some of us found our dream jobs when we were well into our forties and we are late bloomers. Better late than never. No reason to retire when the work is still challenging and fun. Of course, FIRE means you can be picky about what jobs you take because you do not have house or car payments. MMM makes it clear that a frugal lifestyle means you have more freedom. That is the real benefit for us.

        • Phil November 15, 2014, 6:51 am

          You know, I really needed to read that. Thank you. Being new to MMM, what does FIRE mean?

          • Heath November 16, 2014, 2:07 pm

            FIRE stands for Financial Independence / Retire Early. It’s 2 similar concepts, which encompass most of the financial goals of Mustachians.

    • Mr. Frugal Toque November 13, 2014, 12:18 pm

      And that’s no small thing, teaching the young not to be like their parents.
      I wish we had a school program where they actually teach stuff like this:
      a) Yes! Take the raise! The higher tax bracket won’t mean less take home pay.
      b) ZMG! 0.5% on a mortgage rate is huge!
      c) Credit cards are evil and scary! (We’ll discuss grocery points in the advanced course, once you’re securely traumatized.)
      d) Yeah, sex is totally fun! But also a huge responsibility. Here’s where your closest Free Condom Depot is.
      And so on…

  • Clint November 12, 2014, 11:27 am

    Great post! And I was just thinking this last night: “I hope MMM updates us on his new heat system? Wonder how it’s held up with this burst of cold weather.” Right there at the bottom of this post was the gift … to my future self. And I didn’t even have to work for it!

  • Tom November 12, 2014, 11:30 am

    Yesterday was Veterans Day 2014 here in the States, and a lot of my friends said “thanks” (I’m retired from the Army). It’s always appreciated, and speaking solely for myself, I gained a lot more from my service than I ever had to “sacrifice”.

    It occurred to me that lots of people like to SAY thanks for stuff like this, but how many people actually take advantage of the freedoms that people like me have helped preserve?

    If you really, truly want to say “thanks” to a veteran, stop complaining and stop blaming and get off your backside and do something like MMM and lots of others have done to create a great life for themselves. It’s time to experience the joys of hard work made possible by millions of veterans (and others) who have served through the years.

    I’m looking forward to the day that I say “thanks for taking advantage of my service” when people thank me.

  • Nick Bryant November 12, 2014, 11:37 am

    Hey MMM, longtime reader, fellow engineer and 24 year old. When I’m reading your posts, I always pretend they’re written by a time travelling future self. I can’t wait to enjoy my Mondays again. Not many people understand that longing for freedom that underlies my hard work and massive savings.

    Would love to hear what you liked about your engineering job. I actually loved engineering school but I don’t like my job nearly as much.

    • Tim November 13, 2014, 8:03 am

      I’m with you on loving engineering school!!! Difficult but rewarding… On the job front.. I would say your interest in the end product is important.

      I am an electrical engineer and all I knew growing up and in college was I loved and was amazed by electronics.. That could go many different ways post college right? consumer electronics, hand held devices, phones, computers, automation systems, cars, robots…. I could honestly type all day on different areas.. I landed a gig in Aerospace working with Flight management computer systems and weapon stores systems.. I am now more focused in commercial space than Aerospace… I LOVE the cool products we work on!!!

      Perhaps you need to find something to engineer that really peaks your interest in the final product!!

  • ael November 12, 2014, 11:37 am

    Excellent post. You just have to understand the communication strategy of somewhat hyperbolic statements used to make a point. The comments complement the original message by clearly saying “sometimes it’s complicated.” I see poor decisions made by people all around me, and once in a while by myself, that are instant gratification vs the Joneses. Those decisions may or may not be crippling or merely just leaving you in a tougher place later on.

    Wherever you find yourself on the scales of consumerism and income you can almost always do a little to maybe a lot better. Read the book “Scratch Beginnings” to validate this point. That author intentionally began with a few dollars and started living in a homeless rescue mission. Tugging hard on those bootstraps began to pay off, but the key here is he was educated and socialized enough to be able to not just see but actually feel what was possible. So even the poorest of the poor can do that; the trick is to internalize the understanding of what could be. We need mentoring and hand holding for those–not blaming.

    Finally, you can lead a horse to water but you can’t make him drink.

  • Paul November 12, 2014, 11:39 am

    Thank you, Mr MM. I think this is the most lucid, pointed, and truthful financial slap in the face that anyone could ask for. And even those of us that think we know it all in the finance realm need a refreshing smack now and again to wake us up from the hypnotizing allure of the “consume now and pay later” mind frame.

    Your best writing yet, IMHO. Much appreciated.

  • Doug November 12, 2014, 11:49 am

    I’m understanding and sympathetic to you younger people trying to get started in life and are unemployed or underemployed, even after getting a college or university education. A lot of what’s happening is quite simply not your fault. The people I have little or no sympathy for are those who have been making a good salary for many years and yet when faced with job loss or cut in pay are in trouble because they have no savings but plenty of debt. I’m 53 years old and, while I’ve made mistakes like choosing some poorly performing investments, I also had the presence of mind to start saving early and putting money into investments that have performed better, as well as having the sense to scoop up equity funds when they were on sale during corrections. An example of my saving was, when I started working in 1986 I was driving a 1978 Ford Mustang that to my thinking worked just fine, the same car I pulled a trailer with as mentioned in another one of my comments. I had coworkers ask when I was going to buy a new car. I said: why do I need 2 cars when I only need one? I would get the reply: you trade your existing one in. I failed to see the logic in getting rid of a good fully functioning car, then tying up a big capital investment for something that’s used an average of an hour per day or less.

    Fast forward to the present. I’m retired now (no pension, but a decent sized portfolio) and that’s a good thing because I see there’s a lot of age prejudice out there. Employers appear to want someone under 30 years old with 40 plus years of experience. A lot of people my age, who are out looking for a job are finding that out the hard way. If you’re young and starting out and are making a good salary, one day you’ll be my age and it will come quicker than you think. Don’t waste those years, start building up your portfolio NOW!

  • Beric01 November 12, 2014, 11:55 am

    Sure are a lot of complainypants in these comments! I’m happy to see the good ol’ MMM back at work.

    Personal responsibility is what made America great, and yet we’ve lost so much of that today, wanting to blame anyone but ourselves for the effects of our decisions. Simply taking personality for my actions is completely changing my life right now, and each day I’m discovering new areas where I should stop blaming anyone but myself.

  • jc November 12, 2014, 11:56 am

    conveyor belt of turds….where do you come up with this solid gold? Love it!

    I’m not getting caught up in the medical care debate here- I get your point. I really like your emphasis on personal responsibility, hard work and choices that effect your current and future self. Really good.

    Maybe what is most arresting is your indomitable optimism. All the ‘but, but, but…uncertain future!’ comments slide off your back like so much hair off my head. This whole thing is about momentum, isn’t it? Accumulating mass and momentum. At some magical moment, the mass and momentum overturn nearly all resistance. If optimism, planning and clean living had mass…

    • Heath November 12, 2014, 3:07 pm

      Great metaphor :-)

  • Marianne November 12, 2014, 12:35 pm

    As many of the commenters have mentioned there is an element of luck-of-the-draw when it comes to an individual’s situation — innate intelligence, socio-economic surroundings and opportunities, etc. I just finished reading “Hand to Mouth: Living in Bootstrap America” by Linda Tirado, and it gave me a greater appreciation for the flaw in assuming that just anyone can improve their situation on sheer will.

    I would be interested in a MMM take on the book and the author’s situation. She writes that most money advice is written for people that already have money.

    • Kevin November 15, 2014, 6:34 pm

      Marianne, do you think that MMM is talking about something that he hasn’t lived? And I’m not sure what’s significant about “most money advice is written for people that already have money.” Isn’t most medical advice given by people who understand medicine, for example? Do you want money advice from people who haven’t been able to save money? Or does that author believe that most people giving money advice grew up wealthy?

    • JB November 16, 2014, 10:36 am

      There is no “luck” in becoming a doctor, a lawyer or a CEO. They just don’t hand out these jobs to someone standing in line at Starbucks.

      • Marianne November 18, 2014, 2:16 pm

        JB, I agree that “luck” is a pretty generic word to describe the world of privilege. It takes brains, time, drive, etc to be a doctor but you probably had some basic opportunities (maybe/probably invisible to you) to even start down that road. I came from a poor (but we’ll call it broke) family, in a small town, but I had educated parents that made sure I got an education. I realized I didn’t have the smarts, inclination or drive to be a doctor or an engineer — definitely something to be earned, but I still got a good education and found the profession I was clearly destined for.

        In Tirado’s book, she talks about her own life making minimum wage, at 2 or even 3 jobs. She talks about how that doesn’t begin to cover a basic life (even with a husband working for minimum wage and 2 kids), let alone saving for retirement. How working multiple soul-killing jobs leaves you too drained to care about your own health, or exercise, cook the best foods, or take classes. She mentions the comment about money advice being written for those with money — she has absolutely no margin of money that isn’t spent, so it isn’t like she has anything to cut out to save more money, like the “stop buying lattes”. And this is compounded by bad practices like payday loans. How does a person get out of this cycle? I am genuinely interested in how you would help that individual break this cycle.

        At any rate, I realized how lucky I was to get where I am today.

        • JB November 18, 2014, 2:28 pm

          “luck” is a pretty generic word to describe the world of privilege…..you could not have wrote a more offending sentence. Again, there is no such think as “luck”. Being born into the lucky sperm club of being a rich family isn’t luck, It just is what it is. To say that people from poor backgrounds can’t succeed is also a load of bull. I can’t help a person who doesn’t want to help themselves. If she is working 3 MW jobs then she has made life choices that put her in that situation. I have had to work 4 jobs and clean offices and wax floors at 4am. I had a ton of roommates and drove a crappy car. But I also knew the importance of education. Maybe she didn’t have family support to go to a big college, but community colleges are cheap. Nobody HAS to get payday loans. If those companies didn’t exist, people would just have to find alternative. Because it is easy money, people fall prey to them. 50 years ago nobody had credit cards. How did poor people survive? Well, maybe they didn’t, but they were willing to live is crappy apartments and maybe had to take a bus to work. Anyone that works a minimum wage job has minimum skills. Learn a skill.

        • JB November 18, 2014, 2:31 pm

          and I can’t come up with a single instance where “luck” changed my life or got me good grades or a job. I have busted my ass at many jobs doing what I have to do. I have had a ton of good/bad roommates to keep costs down. Driven crappy cars and had a ton of bad jobs. I did things to broaden my education that cost very little and learned that meeting people and networking are keys to better opportunities. That isn’t luck, it is effort. And many people don’t put out the effort to get a better job or to learn a skill.

  • Andrew Smith November 12, 2014, 12:45 pm

    MMM, while I agree that most American workers drink the consumerist cool-aide and have screwed their past selves, I surely did. (Thanks for helping me see this, BTW.) The point of those financial reporters still stands. The American worker is still getting screwed by the system. If GDP has gone up but wages haven’t, that money is someplace, and it didn’t go into the pocket of the worker to be traded back into the economy. It’s in the top .01%, not just the 1%.

    Most of us think that income distribution is pretty well normed by a bell curve. It’s not, by along shot.


    I’m not against free markets. I’m against robber barons. There has to be a balance.

    In the meanwhile, I sock away at 44% saving rate and I’m working to grow that. (Really, I can’t thank you enough. It’s like scales have fallen from my eyes. And my wife is starting to think along the same lines now too. Another MMM convert in the making. We seriously chose not to inflate our lifestyle when she started back full-time. And we’re still looking to live even closer to work than we are, 1.5 miles.) Walking and biking now back and forth.

    Seriously, you’re the first of these financial blogs that was so straightforward, it finally began to make sense to me. Thanks.

    • Mr. Money Mustache November 12, 2014, 4:12 pm

      Yeah, the income/wealth distribution in this country really is pretty amazing. I’m just not totally convinced that it is all that awful or driven by evil.

      It seems to me that automation and outsourcing of manufacturing decreased demand for many of our core jobs. (Although crappy ones – who wants to work in a garment factory??). Meanwhile, the owners of those companies (i.e. shareholders, who tend to be wealthier) benefited from higher profits.

      The US consumers got the benefit of all the outsourced stuff becoming really cheap, which lowered most of our costs, except for non-outsourceable stuff like doctors, houses, etc.

      Meanwhile, the high-skill jobs that most people can’t do still keep rising in salary (software developers, for example).

      My proposal is that a few million people need to immediately become carpenters, electricians, sewer line replacers, plumbers, etc. There is a massive shortage and the fees are very high. You can make $1000/day if you just learn how to pour house foundations, which I speculate could be learned in a week or two by a clever person.

      But yeah, not complaining about taxes when you are at the top of the pyramid is good form as well – because there is some irrational pay inequality due to the way our system has evolved.

      • Beric01 November 12, 2014, 4:35 pm

        Good post.

        The other thing to note is that one of the best ways to build wealth is to save and invest, not to simply have a higher salary. If you spend all of your salary, you aren’t building wealth!

      • Hugerat November 12, 2014, 8:10 pm

        But automation affects workers in France equally as much as in the USA and the share of national income of the top 1% of earners there is the same as it was 35 years ago. Extreme income inequality is a policy choice that we’ve made. Many of us wouldn’t know that we’ve made it, but we did nonetheless.

        Agree that that more people need to learn to become plumbers and carpenters. How have these professions kept it a secret for so long?

      • Kristine in Santa Barbara November 13, 2014, 10:48 am

        But wait. A few million people did become carpenters, electricians, sewer line replacers and plumbers in 2003. And they moved to Reno and Las Vegas and Bakersfield and AZ and FL and anywhere else building was going gangbusters. By 2008 most didn’t have enough work to sustain themselves. That could happen again pretty easily. Are we going to have to adapt to new careers/jobs every 5-10 years? Or is your suggestion to just do these jobs while they are available and save for FI and retirement? Kind of how the West was won. Move for work, stay for the work, leave for new work when it’s over. Only those with savings and who bought land or started a business got ahead. Everyone else has to keep looking for work.

        • rob aka captain and mrs slow November 14, 2014, 2:06 pm

          if you really want to understand what happened than read The Two Income Trap, that book totally changed my thinking, yes there are points you can quible on but the overall premise of the book is right on

      • EMML November 15, 2014, 12:08 pm

        There is also some outrageous tax inequality contributing to the wealth inequality, and I’m not talking about progressive taxation. I’m talking about investment income getting vastly preferential treatment over income coming from actual work. This leads to people like doctors and lawyers paying something like a 35% marginal rate, while stockbrokers and billionaires only pay 15% on their “investment income”.

        • JB November 16, 2014, 10:33 am

          Do you understand why capital gains are treated differently? If not, learn. If your tax rate is the same working as well as investing money, why bother to invest in companies? Part of the difference is the risk you take by investing in companies. And undetstand the tax system. YOu aren’t taxed on all of your income at 35%, it is taxed at 35% over an amount. The rich pay more taxes than the poor, so if the rich have the income to invest, why tax it at the same rate as income?

          • EMML November 16, 2014, 11:29 am

            Yes, I understand the con-job behind the different tax treatment, and that’s all it is–a con. Just because it may work for you, doesn’t mean that it’s fair. IMO, working stiffs risk much more by trading large chunks of their limited time on this earth, than investors do in the risk of their losing pieces of paper. In fact, it could be argued that this favorable tax treatment contributes to speculative bubbles.

            • Geek November 22, 2014, 9:29 pm

              But what does the tax rate of multi-millionaires have to do with you if you are saving 40-75% of after-tax dollars?
              Sure, lobby for them to pay more and whatever, but the problem isn’t the tax rate, it’s people spending too much. Most of us reading probably pay far less than the 35% marginal rate as our actual rate…
              If you’re paying a 35% marginal rate you’re earning well over 300k and have nothing to complain about.
              Hell the 25% vs. 15% marginal rate doesn’t hit until 72k for couples, well above the average income.
              tl;dr Federal taxes have nothing to do with your ability to save.

      • JB November 16, 2014, 10:30 am

        OK, but if a million people all decide to be a plumber or electrician, is there enough work for everyone to sustain the salary’s? Too many lawyers, not enough jobs. The scarcity is what creates the high salaries.

  • John November 12, 2014, 1:05 pm

    Solid. As anyone who’s read “The 7 Habits of Highly Effective People” knows, it’s very silly to blame your current situation on the government, the economy, etc. These are in our circle of concern, but not in our circle of direct influence. Look at the steps we are taking for ourselves. Learn from the missteps (financially or otherwise) and make future steps the right ones!

  • Big Guy Money November 12, 2014, 1:06 pm

    For how indoctrinated a majority of Mustachians are, many commentors still don’t seem to understand the target audience of MMM’s posts. That’s really neither here nor there – 400+ posts is a heck of a lot to read through.

    “You slow down the unicycle, set your feet on the ground, and adopt a stable stance. Then you gently set down and free the elephants, find yourself some winter boots, a coat, gloves, hat, food and shelter. With continued preparation and ingenuity, you can be out making snow angels and watching the winter moons, instead of having your frozen and crushed body blackening in the shadow of the elephant corpses, being nibbled away by raccoons until the eventual maggot infestation when the spring thaw comes.”

    This is the most entertaining paragraph I’ve read in a LONGGGG time. That’s a heck of an imagination MMM. Just… Wow…

  • Diego November 12, 2014, 1:21 pm

    I have a 2013 Tesla. I love the car. Its half paid off but I’m not sure if this is a gift to my future self. I can travel across the country in it for free and it helps the environment/fuel bills but it ain’t cheap. I’m a new convert to the mustacian ways but still rough around the edges. What do I do? Plus its an awesome car! Did I say its an awesome car? I still have a few credit cards but thanks to MMM ways I’m gaining on these and I just acquired a dirt cheap rental that is already paid off. What do I do? Maybe MMM will buy it from me when he comes to talk to my math class here in southern Colorado?

    • Mr. Money Mustache November 12, 2014, 2:51 pm

      HOLY SHIT MAN!!! A Tesla is not something you borrow money for!!! Those are for people raking in $100,000 per month with absolutely nothing left to do with their money. You need to sell it and look into a 2007 Toyota matrix with manual transmission.

      Did I mention Holy Shit? Fuck.

      • Diego November 12, 2014, 9:42 pm

        Thanks for the excellent face punch! I’m feeling like crap like I just let down my family etc. To let you know I’m serious I’m posting my ride on craigslist and will sell ASAP! http://denver.craigslist.org/cto/4759053281.html Like I said I’m just learning. Hell this was a kick in the balls and I’m rolling on the ground in agony but at the same time I’m doing something about it. My wife was an mm before I even found your website. She’s rolling her eyes at me and probably high fiving you at the same time. I used to watch dumb and dumber and laugh and now I’m not sure who was dumber. At least I can say that was my past self and I’m going to work hard to give my future self and family a better life. I hate putting myself on blast but I bought 10k in Tesla stock and pulled it at $30/share to buy the freaking car! dumb!!! I wanted to help the company so much. I didn’t want the car nor Elon to go the way of the EV1. So I agree it was a dumb financial move but I wanted mankind to have electric cars. They’re here and ain’t goin nowhere! so I’m ready to sell.
        Maybe MMM you can forgive me for being an optimist. By the way I love that about your articles.
        Like I said things are improving so fast around my place and the future is so bright I gotta wear shades! Next week my Solar Hot water system that I got for 2k (used) will be up and running and pumping in free heat! I hope everyone learns from this. Your changing lives man! Your fans love you and my life is seriously improved and I can’t wait to thank my future self for having read all your articles and apply them! My high school students will thank their future selves too because I have a few reading your articles :) the future is bright and your helping make it so! Email me and maybe you’ll be interested in talking to our students for college days. We can pay of course.

    • Jason G November 12, 2014, 3:02 pm

      Should of waited until 2016/2017….


      I was thinking about getting the $35,000 cheaper model used in 2020.. to splurge.

      Money aside its a great car company!

    • Kyle November 12, 2014, 6:25 pm

      Did you really buy a Tesla when you have credit card debt?

      And buying a Tesla to save on gas sounds like buying a mansion so you can stop paying $50/month for a storage unit.

    • Allen November 14, 2014, 6:53 pm

      Uhh… you do realize that approximately 40% of electricity in the U.S. is generated by coal power plants right? “helps the environment” LOL

      • Sir Osis of deLiver November 15, 2014, 7:17 pm

        Varies hugely by location. Here in Seattle, coal is 0.7% of the power generation mix, and with the Green Up program you can opt to pay a small premium to ensure your entire consumption is provided by renewables.

        Not that I’m endorsing buying a Tesla if you’re building a ‘stache. But around here I do expect the environmental impact would be vastly lower than for any internal combustion car, which may be one of the reasons I see such swarms of them on the street every day.

  • Mary November 12, 2014, 1:49 pm

    We started with 2 VWbugs full of whatever we owned and moved to Colorado as young naive dummies. But we decided to never go into debt except for a house and always to buy older cars with cash. Now in my 50s I thank my younger self because we now own our home free and clear and can save and invest all kinds of money due to this decision. We started out with no college degrees making minimum wage. Years ago we read the book Your Money or Your Life. It was life changing. Love what you wrote in this. It makes so much sense!

  • James November 12, 2014, 1:50 pm

    Mr MM,

    I saw this article and thought of you, the site and the work that you are doing. Not for everyone, for sure, but talk about walking the talk!

    From the article:

    Enjoy! I most certainly am.
    Keep up the great work!!

  • Mrs. WW November 12, 2014, 1:51 pm

    Wonderful! Yes, even when circumstances shift carefully made plans; an attitude of strength and character will simply embrace the new plan without being all tied up in entitlement that plagues an indebted life. All ends up well with the right attitude.

    It’s like being a submarine. No matter how topsy turvey and woe-is-me-ey it is up there, we’re all good and moving along.

  • ann November 12, 2014, 2:30 pm

    This is a great Ted talk on “Grit” that summarizes a lot of the reasons why some people can work towards their future self others may not be able to… plus the science of changing that personal characteristic. 6 minutes well worth it.


  • Michelle November 12, 2014, 2:32 pm

    I sometimes seriously love this blog. When everyone around me is bitching about every flippin’ thing, I truly enjoy reading the things people say here. The people I deal with on a daily basis just will not pull themselves out of the mudholes they have created for themselves. Thanks much, MMM!

  • Prudence Debtfree November 12, 2014, 2:48 pm

    If I had read this post 5 years ago, I would have been defensive. I blamed the economy and the high-tech bust for our unenviable circumstances, and any suggestion that we were to blame would have had me responding with silent outrage. Now, I accept that we are to blame. We set ourselves up to fail with over a decade of sloppy money management and the pursuit of keeping up with the Joneses in comfort. The great part about this humbling acknowledgement is that we now recognize our power to do better for our future selves. And although we have a good 10 years on MMM (slightly more, actually) we are excited about how that future is shaping up.

  • K Coghlan November 12, 2014, 3:03 pm

    Mr. MMM: I think you do a great job here. One of the many projects I plan for my retirement (in the next few months) is to read all your articles. However (of course, there is always a “however”), I’m retiring from a career as a lawyer, working mostly for what is euphemistically called “creditors’ rights”. I say that so you know that I know plenty about the dopey things we all do to get ourselves into financial trouble. Sure, that’s the vast majority, BUT, if you, Ms. MMM, or junior has some horrific, longlasting health crisis, you would go through your measly millions in less than a year (and, as a friend of mine said about his mother back when we were 15, “she died anyway.”) Even if you have health insurance, the costs are amazing. Don’t kid yourself, there are plenty of people who file bk due to medical costs. Have more sympathy, you’re a strong, smart, healthy, white male. You need to understand more the advantages that gives you. Signed, Simon Legree

    • Mike S November 13, 2014, 10:50 am

      This is frustrating. Why would you focus on such a small group of outliers as an excuse to invalidate the much broader message of this post? Medical bankruptcy is an outlier, particularly if you carry health insurance AS YOU ARE SUPPOSED TO! But more importantly, it is not the target group of MMM’s blog. Don’t make the huge mistake of missing his enormously relevant message in your rush to defend something not needing to be defended. Really.

      • TK November 15, 2014, 9:57 am

        I don’t think acknowledging the fact that medical bankruptcies occur invalidates the broader message of the post. More of a qualifying footnote to better understanding the issue as a whole rather than the predominantly financial empowerment skew MMM takes.

        Medical bankruptcy is one valid exception – in a world where there can be many valid exceptions determined by the X number of conditions somebody chooses to place on the definition of ‘valid exception’ – to the overall idea of investing in the present in order to give to your future. The statistical improbability of an ‘honest’ medical bankruptcy doesn’t null its presence and possibility. Acknowledging that there are valid exceptions opens the door for the benefit of a doubt just as much as the tiresome bullshit excuses – it’s knowing the difference between the two which is important.

        Personally, I’ve found it can be relatively easy to get caught up in the main message – the overall judgment/judgmental attitude toward one set of people and have that bleed over into another, similar-looking-but-in-reality-different set of people – and have that impact my willingness or openness to just be a little more understanding, kind, or empathetic/sympathetic. I’m still trying to strike that equilibrium for myself.

        In general, I think it’s quite possible to accept and be powered up by the main message of “Control life where you can/Work hard/ Educate yourself/Change low-quality circumstances/Make good financial choices” while keeping in mind the sympathetic exceptions of “Shit happens” and apply that kindness as warranted. These two mindsets don’t appear mutually exclusive to me (a point which I believe Mr. Frugal Toque alluded to in some of his comments above regarding the Canadian system). There are also some very irksome limitations to each individual quality (judgment/sympathy) in their extremes as well.

        From a writing perspective, I can definitely see how emphasis on one idea *can* be read as lessening the impact of the other. It’s seems to be the question of balancing relevance to the topic while preserving the main theme. Focus too much on the statistically small valid exceptions and it *can* take away from the empowering message of being in control; focus too much on the empowering control that everyone has at their disposal and it *can* potentially encourage less empathy for/from some folks. Have everything spread out in precisely even distribution and it *can* make for a bland article in execution. (Happily, not the case here.)

        Overall, I quite liked the article. It was like a good, unexpected cup of hot chocolate in the middle of a long and intense work week.. Definitely needed a pick-me up between two jobs, studying for my tech certifications, moving in with a new roommate, and obsessing over where I can cut more expenses on my bills/lifestyle changes and still keep healthy with my fancy food/exercise routine. I eat like a queen…

  • Hea November 12, 2014, 3:17 pm

    This is in reply to Barbolarb above, but it kind of veers off topic, so I’m throwing it out as a new comment thread…

    Fantastic link! (http://money.cnn.com/2012/01/04/news/economy/world_richest/)

    It’s kind of mind blowing to think that I’m in the top richest 1% of people in the world.

    Also, to all of those people (not you, Barbolarb!) who are complaining about how MMM is not accounting for societal forces (such as media-driven consumerism) and truly unfortunate circumstances just think of this quote from the article…

    “In the grand scheme of things, even the poorest 5% of Americans are better off financially than two thirds of the entire world.”

    Keep things in perspective. 50% of Americans are ABSURDLY rich, including myself. Virtually 100% of us are just RIDICULOUSLY rich. Period.

    Does that mean we shouldn’t fight against the consumerist mindset? Does that mean we shouldn’t try to enact programs which improve the baseline for America’s destitute? Does that me we shouldn’t rail against injustice in our own backyard? Does it mean we should ignore a corporate culture whose goal is infinite wealth at an infinite cost to everybody else (especially our future selves)?

    FUCK NO! But granting anyone (especially yourself) the 100% Victim Badge doesn’t do them any favors either. Victims don’t have any power. Victims do not have any control over their future. All Victims can do is suffer.

    Nearly every single adult has a not-insignificant amount of choice with which to impact their future. And most of us have not-insignificant amounts of influence over the future of other people.

    Yes, circumstances sometime suck, and yes we should recognize the unfairness while fighting it. But, we’re also not all trying as hard as we need to to improve our future lives both at the individual level, and the species as a whole. Let’s do that and reap the benefits, ok?

    This blog is just trying to nudge us all in that direction.

    Additional reading: http://www.mrmoneymustache.com/2013/10/07/how-big-is-your-circle-of-control/

    • Sully November 13, 2014, 11:18 pm

      We’ll said!

  • Andy November 12, 2014, 5:03 pm

    I have been keeping my eye on the MMM for a bit, great articles and feedback in the posts. Some life events happened where I was away from MMM for a bit ( bought an investment property and then moved). As I get back in to MMM I have realized that MMM himself lives in Longmont when I have relocated to Fort Collins CO! I swear in reading the posts at MMM it is like we are on the same thought train. Here is to you MMM! I have found that relocating to Colorado has made my life as a frugal financially conscious consumer much easier. For example I now ride my bike to woo work where in Milwaukee I was commuting 1 hour everyday and spending 280 on gas monthly. In colorado I can raise rabbits and chickens in my backyard and have a bountiful garden. Happy to be in CO, a moustachian, and in beautiful country!

    • John November 14, 2014, 6:54 am

      Maybe biking is more pleasant in Fort Collins; there are some hills here in Milwaukee, but you can plan around the steepest ones. But I really don’t get the 1 hour commute. Milwaukee is not that large and there is affordable housing all over the city. I can only assume when you say Milwaukee, you were either choosing to live in Milwaukee but working in in a far suburb like Waukesha or the opposite. I know when I was looking for a cheaper place to live and raise a family 10 years ago, I looked at Fort Collins and Milwaukee; Milwaukee was the clear winner. Then again I did assume similar weather which may tilt in Fort Collins favor.

      • JB November 16, 2014, 10:24 am

        I live 9 miles from work and it takes me about 45 minutes to bike to the gym. Most of the time is waiting at lights and waiting to cross streets. It is hard to just blast at 20MPH unless you go at 5am with no traffic.

  • Adam November 12, 2014, 6:37 pm

    This is the best article I’ve read in a while. People need to hear the harsh reality, myself included. Two things that I’ve learned from all of the blogs that I follow is –
    1. I don’t have it nearly as bad as some people
    2. Holy shit, I could be so much farther along in life if I would have thought about all of this earlier.
    Past Me definitely gave Present Me AND Future Me the shaft in so many ways. Luckily, Present Me is putting a stop to that and thinking about Future Me with every dollar I spend now. Thank you for the refreshing article and not being afraid of offending people with the truth.

    • Joel November 14, 2014, 3:51 pm

      I agree. It’s always nice to look at my savings/investment accounts and notice the nice balance, which was made possible by the Past Me. A little sacrifice now pays off in the future.

      I think that as we get older, our bodies begin to not handle stress as well as it does now. Sacrificing/Saving some money now will relieve some of that financial stress from the future you.

  • Tara November 12, 2014, 8:43 pm

    You are great at analogizing to portray perspective and emotion. Helpful stuff!

  • MichikoMustache November 13, 2014, 12:06 am

    As always, your posts are not just about money, they are about mindset and worldview. My future self thanks my past self all the time–when I wash the dishes, drink a green smoothie, call my grandma even though I’m tired, get out of bed when the alarm rings and paddle out even though it’s cold. Like a frugality muscle, building your delayed gratification muscle helps not just with finances but in all of life’s endeavors. Great post.

  • RD November 13, 2014, 6:41 am

    I see the same principles applying to people’s health. Most people eat such a processed-foods diet and wonder why they don’t feel well. Chronic illnesses, food allergies, ADHD, immune disorders, skin disorders, and many more ailments can be linked to the typical American diet of processed chemicals touted as food and can be greatly helped by changing one’s diet to a more natural, whole foods diet and it doesn’t have to be expensive. It just may take sacrifice and that’s where people don’t want to pay attention to anyone other than their Present Self and what that Self wants now. And Woe to the Future Self after 20-30 + years of eating what Big Ag wants us to eat. . . .

  • Green Gyal November 13, 2014, 9:12 am

    Thank you for stating what I am always thinking when I see articles like this, or crybaby posts shared on Facebook. Our lack of responsibility, it’s not my fault society really irks me. I am particularly annoyed by the “student loan debt forgiveness” movement that has been slowly gaining traction, and now is at a heightened fury. You needed money to get your education, you went to an agency willing to help, all of the rules and regulations were clearly explained to you (i.e. you must pay the debt back and you can never file for bankruptcy to get out of it), and yet, now when things aren’t working out with your j-o-b, you want to blame the agency and get off the hook – wtf???

    Anyway, love your stuff and keep up the good work. Only through people like you does our society have half a chance of learning to take back the acknowledgement that ultimately everything that happens to us can be attributed to our own actions nine times out of ten.

  • Spencer November 13, 2014, 9:47 am

    Love this article!

    You mentioned your toasty floor from the DIY radiant heating…what a cool idea. Ever since I read you post on the project I have been curious about how well it would work in the winter. Is it able to keep up with this cold snap we’ve been having lately?

  • Frugal Bazooka November 13, 2014, 10:10 am

    Mr M,

    I assume you’re tired of praise being heaped on you so I won’t bother to mention how dead on this blog entry is…for me it encapsulates most of what the rest of your philosophy espouses. For people like me it hits a nerve so hard that it sends permanent sympathetic tones through out my frugalistic operating system. So thanks for one upping your economic common sense mantra and doubling down on the black jack of working your ass off now to pay yourself off in the future.

    You also ring a bell that a lot of people on both sides of the political spectrum refuse to hear. Regardless of how crappy we might assume the economic system is or how biased it is or how tilted it is in favor or one group or another ANYONE can improve their chances by working hard in school and busting their ass at work. I can do a very scientific analysis of this for anyone who doubts this idea:

    1. Complaining and creating conspiracy theories about why someone failed = zero income
    2. Getting good grades in school and working hard at any job you get = some income
    3. living large and spending all your pennies buying pancakes at IHOP = no savings
    3. living frugally and saving whatever fucking pennies you have left = some savings

    Thankfully most Americans understand and appreciate what you are trying to sell, maybe some day when the frugal dinosaurs once again roam the earth – the rest of the idiots will get on board.

    in the meantime keep up the good work you magnificent bastard

  • Erin Chavez November 13, 2014, 1:09 pm

    The message in this article is still helpful if you have already fucked up (or if life has shit on you regularly). For the intended audience of young 20-somethings and mid-career professionals making 6 figures, MMM uses an appropriate tone. I don’t personally fall into those categories, and yet I find the concept of paying your future self to still be incredibly valuable. There seems to be an exponential relationship between fucking up in the past and getting on track in the present, to where the difficulty of recovery is proportional to the exponential of the magnitude of previous fuckup. An example: I chose culinary school out of high school. Very bad decision as cooks make jack shit for income. No way to save when you’re living in poverty. I realized that I needed a better profession, chose engineering, and am just now finishing graduate school, which pays worse than my cook wages. Waiting for financial independence to have children is great advice, unless that means waiting until you can’t have children, because you already fucked up financially. So a small fuckup like buying a Tahoe can be recovered from by flexing the muscles of frugality. Recovering from choosing the wrong damn profession? Shit, that’s taken over a decade, and I’m still working on it.

    I sometimes rewrite MMM’s story using his current profession of carpentry, which he loves. What if he had pursued carpentry out of the gate, instead of computer programming? Would he have been able to retire early, even with all of the frugality? And, perhaps of equal importance, would his life have been any worse? On some days, I think it would have been better, because he would not have had to slog through 10 years of an unsatisfying career path. But he would not have the stash of cash he has currently accumulated, which provides the freedom of choice and subsequent unlimited stability, which is a key factor in happiness. So on par, original choice of profession is a key factor in the pursuit of Mustachain ways, and a poor choice at the outset will lead to countless turds down the line.

    P.S. The constant ‘Well, that person should have made this other way better decision, obviously,’ is not fucking helpful. The decision is made. The consequences are what they are, and now must be dealt with. If someone has a crapload of student loans, helpful advice would consist of giving tips on how to strategically manage and pay those loans. Ditto for medical bankruptcy. And, actually, also for Caribbean cruise bankruptcy. The message in the article is clearly an admonishment, meant to encourage good decisions from this point forward, not to demoralize those of us dealing with giant turds. It would be nice if fellow commenters could follow suit.

  • Carrie November 14, 2014, 1:37 am

    Thanks for this, it’s a nice perspective. Hopefully it’ll make it easier to persuade more people to see things this way!

  • Jen November 14, 2014, 5:16 am

    Whenever there is an article like this, you get the inevitable responses like “I had cancer and a million dollars in medical bills, this is mean!” Duh, that is a tragedy, this is not what the article is about. Of course bad things happen! But this article is not for those people, it’s for those of us who make $100k a year, spend $105k a year, and have nothing saved for when something bad happens. I worked at a big 4 accounting firm where my co-workers made very good money, and they still would have been in deep trouble if they were out of work for a month. Meanwhile, they went to Panera Bread and Starbucks every day, bought clothes constantly, and took $10k vacations. THIS is who this article is directed at, so the rest of you can spare your outrage.

  • Eric November 14, 2014, 7:15 am

    So I’m now (at 37) finally getting serious about crushing my student loans. I had a scholarship that paid tuition and books, worked 25+ hours a week while in school, but still borrowed every penny they offered. Because of my parents’ bad credit, I was directly offered way more than they normally offer kids for bachelors degrees. Now as I make those payments, I picture my 20 year old self living in my basement. He parties all night, sleeps all day, and eats all my food. He’s obnoxious, disrespectful and loud. He never says thank you, just takes and takes and takes. I think about the money I’d like to be investing for my future self, but I can’t (yet) do it because I’m too busy supporting that bum in the basement. I wish I could go back in time and kick my own ass! Oh well, some people learn the hard way . . . and future Eric will very much appreciate the hard work present Eric is doing despite past Eric trying to bring him down. Great article MMM.

  • Anthony McDougle November 14, 2014, 8:27 am

    Awesome article. One of the best I’ve read in a while. I’m pretty sure I tend to indulge more than most on this site, but I try to keep this mindset all of the time — I’m always trying to think about how each decision will effect me long-term rather than right now.

  • Kayla November 14, 2014, 8:28 am

    Wow! An eye-opening post. You are right, things really aren’t as bad as we often make them out to be, and they certainly wouldn’t be as bad if we hadn’t robbed ourselves in the past (by taking on debt or high expenses). I could be so much further along in my life’s goals if I hadn’t racked up so much credit card debt and took on such a high house payment.

  • Cathy November 14, 2014, 8:41 am

    I came across this article today, which is a good illustration of the “medical bankruptcy” reference from the article: http://www.channel3000.com/news/woman-taken-to-wrong-hospital-faces-bankruptcy/29648000

    The article covers the story of a woman who is facing bankruptcy from $50k of medical bills.

    The protagonist of the article is apparently 30 years old. By age 30, $50k should be less than 10% of your net worth if you have been saving responsibly — a nontrivial sum, but not at all crippling. I wouldn’t be surprised if she had purchased one or more luxury cars over the years, each of which may have cost more than $50k.

    I think it’s unfair that somebody could be stuck paying $50k in those circumstances, but the fact that she’s facing bankruptcy is almost certainly a function of financial irresponsibility.

  • green_knight008 November 14, 2014, 10:52 am

    Great post, nice motivational to bring us into “spending season” otherwise known as the holidays. Although I do see it has evoked a number of whiny responses, can’t say I buy into them as someone who assigns a very low value to the imaginary concept of “luck.”
    The Past Self/Future Self concept is quite aptly described here, and I have to admit I had a chuckle or two at your imagery as well! I suppose that you’ve perhaps read the research about people being more willing to save and invest when they see an age progressed picture of themselves (the future self), and I would consider this in a similar vein.

  • Jenny November 14, 2014, 1:14 pm

    MMM, I love your blog but am freaked out that this post is revealing that you have a “poor people are just lazy takers” kind of attitude. I know your blog is mostly about offering advice to individuals, but don’t ignore the structural implications of what you’re saying. I hope you realize that the dramatic lack of income mobility in the U.S. compared to other developed countries means some people are born into poverty, get crappy public educations, work two or three low-paying jobs to try to support their families, have to scramble for child care which is not affordable and often not available on nights and weekends when their crappy jobs schedule them to work. They can be as frugal as Mother Theresa but may still end up bankrupt due to an unexpected hospitalization, accident, etc. I second the recommendation that you read “Hand to Mouth: Living in Bootstrap America”–I’d be interested to hear your thoughts on it.

    • Mr. Money Mustache November 15, 2014, 9:30 am

      Jenny, it looks like I didn’t quite get the subtleties right for a few readers, but I’ll keep trying. Read it again and think about this:

      Do I have a “Poor People are Lazy” attitude? Or is it really more of a “Middle and high-income people who still manage to spend all their money are behaving like idiots” attitude? Because I really tried not to mention poor people at all in this article.

  • JT November 14, 2014, 1:17 pm

    It ain’t hard to receive gifts from past self, or give gifts to future self, but breakin’ out of the consumerism those Jones’ like to keep up with and dumpin’ any other indoctrination – ooo, I dunno, say like working until you’re 65! – is the crux! Thanks for spreading the word with such enthusiasm MMM/Mrs MMM, if we hadn’t stumbled on your blog back in 2012 we would have been poked when I lost my job this year. Instead, we’ve had a five month holiday with no real money worries. Thanks past self, that was a great gift to receive!

  • Mother Fussbudget November 14, 2014, 1:33 pm

    And the promised follow-up on the Radiant Heat Experiment? Interesting because this has been exactly the thing I’ve been researching for installation (including solar hot water) in my new house. I’ve been reviewing the DIY manuals on the website: http://www.radiantec.com/installation-manual/do_it_yourself.php Solar water heating pumped to a gas hot water heater, and an almost identical setup for a 1,300 sq. ft. rambler a mile east of Lake Washington.

    My house has a tiny crawlspace, so I’ll be putting pex in grooved plywood subflooring (after ripping out the current carpet). The roof retrofit will include solar heat, and photovoltaics. I’ll clean up the crawlspace, and rip out the old forced air ducts once the sub-floor hydronic runs are in-place.

  • Reader of the Rockies November 14, 2014, 1:47 pm

    This is such a great post that I printed it out to have my kids read it. They are NOT excited about reading any financial stuff, but I hope I can get them to read this. Keep up the good work and thanks for helping us parents out.

  • JJ Hendricks November 14, 2014, 2:14 pm

    Great article. Delayed gratification is probably 50% of the battle in personal finance and savings. GI Joe used to say “Knowing is half the battle”. So right there we have 100%.

    Knowing about the importance of savings and how to do it is important but you still need to be able to do it. And that is where delaying gratification comes in.

    Thanks for this reminder.

  • Mike November 15, 2014, 7:56 am

    Wow great article, thanks.

    Wow lots of people with thin skin, who didn’t read it very carefully.

    BTW bankruptcy is a great gift for those who are stuck in an untenable situation. It gives them a chance at starting over. At least it is not debtor’s prison.

  • Kevin November 15, 2014, 1:53 pm

    There are a lot of disgruntled comments that show a sad lack of understanding about how good we have it now, and how much control we really have in our lives. Every time I read a comment where someone states as a fact something like “the middle class has a much harder time now than they used to…” or “people now are born into poverty and have no chance to escape…” I shake my head.

    Read a little history, folks. Take a look at what passed for ‘the middle class’ before WW2. Take a look at what it actually meant to be part of the ‘working poor’ prior to WW2. In those days, the majority of the population would fit our definition of working poor, except then it meant working almost every waking hour for 6-7 days/week with zero safety net. Medicare, Medical, SSI, workers comp, unemployment insurance are all recent developments. And the illness that might bankrupt someone now would have simply killed a person decades ago. Our perspective has become so skewed that I can barely talk with young coworkers who complain about 6-figure debt while buying brand-new cars and getting packages from Amazon Prime several times a week.

  • Heather November 15, 2014, 2:02 pm

    Great wake-up call for us. While I have always tried to be frugal, I never thought about how my past actions still affect me today. I cannot go back and change some of my mistakes, but it is a good reminder that my current actions will affect my future self and the lives of my children. Definitely makes me think twice about my indulgences.

    On a side note, I don’t understand why others think this article is attacking people living in poverty. Rather, I see it as punch in the face of middle America like myself. Keep up the great articles!

  • Jonathan November 16, 2014, 7:36 am

    I was wondering if you could expand on what the mustachian rent should be in correlation to your net pay. I’ve seen several people say 1/3 of gross, but that just seems ridiculous to be basing a recurring monthly expense off money you don’t have (since you to account for taxes).

    • Mr. Frugal Toque November 17, 2014, 9:54 am

      It’s a Trap!
      Why should housing expenses correlate in any way with income?
      Housing expenses should correlate with the amount of space you need to live a reasonable, pleasant life. Don’t squeeze a family of four into a two bedroom basement if you can avoid it, but don’t live in 7 bedroom mansion just because you can afford the 40-year mortgage or $12k/month rent.
      Remember that the difference between your income and your spending determines your time to reach retirement. Thinking “I make $X, so I should live the life of an $X earner” is the trap that leaves so many middle and high income earners into lives of debt service.

      • Zambian Lady November 17, 2014, 3:56 pm

        I agree with you. Live in a place that is enough for you, otherwise you end up in a mansion and have a big mortgage. One thing I have found interesting living in Europe is how people live in apartments that are just big enough for them unlike in the States on Zambia. It was an eye opener.

  • Geek November 16, 2014, 10:31 am

    Unfortunately my future self is lazy and not nearly thankful enough for all of the hard work I do. ^_^

  • Pete November 16, 2014, 5:38 pm

    This article definitely hits home for me. Even though my wife and I paid off our outstanding debt years ago and were saving the “recommended” 15% for retirement I always felt like we should be doing more than spending what was leftover. Now that I’ve read through this blog and a couple of other related ones, I do feel a little bit like a dope that I’m not already FI, being in my late thirties with two small kids. This article confirms that I have in fact been shafting myself and my family and provides the extra motivation that I’ve needed to really kick ass on our savings so I can reach FI as soon as possible.

  • George November 16, 2014, 9:33 pm

    Thanks for the great article, I could not agreed more with you MMM. These are my thoughts too exactly.


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