Mr. Money Moustache/Early Retirement

[Bram]

Any of you check out this blog?

http://www.mrmoneymustache.com/

Through being super frugal (annual expenditures of 24,000$), he retired at 30 with a wife and kid.

The both had tech jobs, I'm guessing at around 100k each prior to retiring, stashed their money in 401k's, vanguard mutual funds and 2 properties.

[baffled]

He's been discussed here before, I think along with Dave Ramsey.

He's interesting.

[Grandpa's Spells]

He's an interesting guy. Long profile of him in the New Yorker recently.

[Bram]

I searched for him, but not Dave Ramsey, here's the link (with good links to his website from IGX'rs):

http://irongarmx.net/phpBB2/viewtopic.p ... ave+ramsey

I read the New Yorker article, but his own posts are more entertaining and valuable.

[milosz]

It's interesting but he's difficult to relate to in some respects - the fundamental grounding is that you're starting off young, at zero, and you're super fucking nerdy. You know at 18 that you want to power through a computer-related degree and immediately go into a soul-crushing job (if you can find one) that's so shitty you want to live like a monk for ten years to get out of it.

I dunno, maybe there's a middle ground - live within your means, avoid consumer debt, etc., don't stay in a soul-crushing job unless you have to - but that doesn't sell blog ads or books. Kinda like fitness and nutrition - eat meat and plants, the occasional treat, move around a lot and pick shit up fairly regularly are all the advice most people need to follow, but you can't sell seminars on that.

I'm curious how much debt he had graduating college - it's a lot easier to follow this path starting from zero. If you're the average college grad with $35-40k in debt, shit gets tougher.

[milosz]

For instance:
http://www.mrmoneymustache.com/2011/05/ ... education/

Whole lotta hand-waving - how many potential students can live at home and attend a university as respectable as Colorado-Boulder? Oh, they'll work and graduate with no loans - how much work is that, again?

"3 months at $15/hour" working landscaping or painting? Bulllllllshit. Menial labor positions in construction aren't paying $15 an hour and if you're a summer worker they're not going to train you to be anything more than menial labor. (In any case, 90% of landscaping and painting are done by immigrants working for less than that even in skilled positions throughout much of the country).

I made that much in college, but I was waiting tables full time - no decent restaurant is going to hire and train a college kid just for summer. Not a lot of seasonal jobs paying that well.

[Bram]

Yeah, I don't make 100 grand a year either, so I get the difficulty of relating to him. For me, I want to save more and do more fun things - so it's been good to look at my spending and try and approach it differently.

A couple changes:

Being as strict as I can about Craigslist and amazon instead of buying new things at full price (just bought a nice mirror for 20$ from CL).

Using the library as exclusively as I can over a bookstore.

A daily eating out spending limit of 10$.

I'm not sure what it will net me, retirement seems a long ways from here, but not being wasteful seems quite worthwhile.

[Shafpocalypse Now]

I'm pretty sure he is covering up some shit. They all do. The life hacking bullshit is really someone trying to hoodwink you into paying for something that won't work.

There's nothing wrong with working a job, marrying, having and raising kids...unless you are an idiot, there is plenty of time for fun shit along the way, and the day to day pieces of living can be immensely satisfying...after all, most of these cunts are trying to get you on board their ship because they couldn't hack into a real life.

[Bobby]

I'm pretty sure he is covering up some shit. They all do. The life hacking bullshit is really someone trying to hoodwink you into paying for something that won't work.

There's nothing wrong with working a job, marrying, having and raising kids...unless you are an idiot, there is plenty of time for fun shit along the way, and the day to day pieces of living can be immensely satisfying...after all, most of these cunts are trying to get you on board their ship because they couldn't hack into a real life.

!

[Turdacious]

"3 months at $15/hour" working landscaping or painting? Bulllllllshit. Menial labor positions in construction aren't paying $15 an hour and if you're a summer worker they're not going to train you to be anything more than menial labor. (In any case, 90% of landscaping and painting are done by immigrants working for less than that even in skilled positions throughout much of the country).

That hides a strategy I wish I'd have taken during college-- work in a trade and graduate as a journeyman with a degree.

[j-cubed]

There's a lot of problems. Not the least of which is easy access to student loans and every parent telling their kid they have to go to college, both of which allow for a ton of demand, and prices to skyrocket. However, lots (say anything over 20K) of student loan debt is dumb. Lots of student loan debt in a job field that doesn't have many openings or doesn't pay well is incredibly stupid.

When I was a Freshman in college in 1985 my tuition was $2,500/semester. This year the same college is over $18,000/semester. I rented a house with others at the school, which was an added cost. I was fortunate, I had a co-op job through college, and was able to graduate college with less than $2,200 in student loan debt. Fortunately my degree in in engineering, and I paid that bitch off before my first Christmas after graduating.

Now, I have two kids in college. We had it then, but we have it a lot more now, students that want to have a higher lifestyle than eating ramen noodles 24/7. Many help fund their lifestyle through student loans. Cars they shouldn't have, a daily $4.00 latte they don't need, vacations they shouldn't take, etc.

My goal is to get my kids through college as close to debt free as possible. Here is how it is working so far.

My son is 21, type B laid back personality, he didn't know what he wanted to do or study. I told him not to spend $20,000 a year figuring out what he doesn't want to do. He's been doing the local community college, and will finish there this summer. Basically taking 3 years to get a 2 year degree. He got a job with an IT company starting as the kid that climbs in the ratty ceilings running network wires. Now he supervises the other kids climbing in ceilings, and writes the bids on some of the jobs, plus other IT installation stuff.

He drives my wife's old 2002 Dodge Caravan (The swagger wagon), and it now has over 225,000 miles. We don't dump money into it, but just getting all we can out of it. He got his own apartment with a friend a few months back, and has cash flowed his school to this point, without asking for or using any of the money we had saved for him.

He's thinking of doing his last two years at a state university. I've been able to save about $25K for him for school over the years. Between that, his savings and his job, I think he can finish his degree and be debt free, or close to it. As long as he doesn't go all hipster and take three years of tuition to do two years of school.

My daughter is 18 and the type A Yin to her brother's Yang. She's a Freshman at a state university. While she is still undecided, she has it narrowed down, and is focusing her classes on that field. I would say she got lucky and got scholarships, but that would be incorrect. She busted her ass in high school, not just high school but a full International Baccalaureate high school program. She was co-Valedictorian and got a really good score on the ACT. She got a small scholarship and a larger grant for school, she paid the rest of her Freshman year from a small inheritance from her Grandmother.

She has a workstudy job in one of the labs, in her field of study, and next week gets an award for being in the top 5% of students for last semester. We're hoping the school will continue to provide some grant money. Next year, as a Sophomore, she will be a CA in the dorm (it's a step down from Resident Advisor, which you need to be a Junior for) and will get free room, she hopes to be an RA as a Junior and get Room and Board. One of her professors is recommending her for a work study job. I also have about 25K saved for her, which she hasn't needed yet, but probably will.

What I have saved, what she can make in work study, what she saves by being a CA and RA and hopefully any grants will really help out and get her close. Now, if she changes her major 3 times, and starts buying designer clothes and expensive food all the time, it'll derail the plans.

I'm fortunate in that I only owe three payments on my house, then I'm debt free, and would be able to apply what I pay for a mortgage to help cash flow school for my kids.

I think it can be done, or it can be done with minimal student loan debt. You just have to start early, set goals, be diligent, and not spend like a drunken sailor.

[TomFurman]

James Krieger the Nutrition/Fitness guy, day trades penny stocks. He used to have a blog on this, but took it down. He's not claiming millions by any means.. but income with two young kids and a wife who works outside the house. He says it's more fun to do fitness stuff when you don't have to worry about making $$.
He's very detailed about his fuck ups and wins.. too bad he took his blog down.... It was educational.

[milosz]

"3 months at $15/hour" working landscaping or painting? Bulllllllshit. Menial labor positions in construction aren't paying $15 an hour and if you're a summer worker they're not going to train you to be anything more than menial labor. (In any case, 90% of landscaping and painting are done by immigrants working for less than that even in skilled positions throughout much of the country).

That hides a strategy I wish I'd have taken during college-- work in a trade and graduate as a journeyman with a degree.

That sounds like a wonderful plan... but there's a reason that it rarely, if ever, happens.

Working full-time in college is difficult. Grades drop, dropout rates climb with hours worked beyond 20/week.
Working full-time in college at a physically demanding job is even more difficult.
Reputable 4-year programs that can be completed at night while working are becoming less common. Schools that did favor the working/returning/adult student have figured out that it hurts their overall reputation and so they're limiting those programs.

I'm sure that for someone out there it's a feasible option but not enough to be statistically significant- which consigns it to the realm of "paying for college by playing poker at the nearest casino."

[Turdacious]

"3 months at $15/hour" working landscaping or painting? Bulllllllshit. Menial labor positions in construction aren't paying $15 an hour and if you're a summer worker they're not going to train you to be anything more than menial labor. (In any case, 90% of landscaping and painting are done by immigrants working for less than that even in skilled positions throughout much of the country).

That hides a strategy I wish I'd have taken during college-- work in a trade and graduate as a journeyman with a degree.

That sounds like a wonderful plan... but there's a reason that it rarely, if ever, happens.

Working full-time in college is difficult. Grades drop, dropout rates climb with hours worked beyond 20/week.
Working full-time in college at a physically demanding job is even more difficult.
Reputable 4-year programs that can be completed at night while working are becoming less common. Schools that did favor the working/returning/adult student have figured out that it hurts their overall reputation and so they're limiting those programs.

I'm sure that for someone out there it's a feasible option but not enough to be statistically significant- which consigns it to the realm of "paying for college by playing poker at the nearest casino."

With a transfer degree from a state CC, it is (lots of night and online classes there). With a four degree, it is more difficult-- college towns aren't known for having a lot of jobs, but working full time and part time college is would seem more doable (unless the degree is technical of coarse). I didn't go to a top school though; that world's probably different.

[milosz]

There's a lot of problems. Not the least of which is easy access to student loans and every parent telling their kid they have to go to college, both of which allow for a ton of demand, and prices to skyrocket. However, lots (say anything over 20K) of student loan debt is dumb. Lots of student loan debt in a job field that doesn't have many openings or doesn't pay well is incredibly stupid.

Easy access to student loans is not the illness, it's a symptom. Without heavy parental investment (even with, sometimes), it's all but impossible to graduate without loans.

Adjusted for inflation, tuition alone has increased around 50% at most public schools (including community colleges) in the last 15 years (in some states it has doubled). Nationwide housing costs have increased rapidly for renters (most college students for at least two years).

A student entering school in 2000 was looking at a cost of attendance that was damn near half of what a kid entering in 2016 is looking at. The kid in 2000 wasn't even lucky compared to a student in previous decades, who 15-20 years before was looking at a load half the size of 2000.

http://www.nytimes.com/2015/04/05/opini ... .html?_r=0

[Freki]

I'm pretty sure he is covering up some shit. They all do. The life hacking bullshit is really someone trying to hoodwink you into paying for something that won't work.

There's nothing wrong with working a job, marrying, having and raising kids...unless you are an idiot, there is plenty of time for fun shit along the way, and the day to day pieces of living can be immensely satisfying...after all, most of these cunts are trying to get you on board their ship because they couldn't hack into a real life.

He was featured in a Washington Post column 3 years or so ago and we'd happened to pick that one up. I checked out the website and over the next 6-8 months spent a good bit of time reading all his articles, some more than once, on his website and a fair amount of time on the forum (the Overheard on Facebook and Overheard at Work threads are simultaneously highly entertaining, repetitive and terrifying). My impression when the fascination started to peter out was that while I agree in general w/ the living simply, he's taken if much further than most would. He simply went at it w/ a very spartan approach to life and an engineer's efficiency. And was damned lucky to have found a woman to tolerate his "quirks". We already skew towards kind of his point of view but no where near to his extreme. Have applied some of the things he talks about though, partially responsible for a raise i got a couple years ago. And the reading list he has on the site is interesting.

The thing is, he doesn't try to sell you anything, he has no books, no seminars, nothing like that. He does occasionally promote a product or website, but that's about it. There's some seminar he's part of in South America/Central America, I forget where, but I think it existed before he started going. And he didn't start the blog until something like 5-6 years after he retired. According to the New Yorker article Troy references, he currently derives something like $400K annually from ads and endorsements from the blog. So who knows if they still live on $30K or whatever it was.

Two things I've noticed in the last year or so about him. 1 - he doesn't post the annual breakdown of their spending anymore and 2 - his posting activities in general have declined significantly since CO legalized pot, which is also touched on in the New Yorker article.

Good things about him, the blog and the approach IMO:
1 - You don't need as much shit as you think you do, you really don't
2 - Unrelenting positive can-do attitude
3 - A study in applied stoicism

Bad things:
1 - Dogmatic. Especially when it comes to cars/bikes, he's gotten more like this over time
2 - A weird vibe to them in general. That NY article portrays them as being a very weird couple in real life. They evidently were pretty worked up about it, I saw a tweet from the wife about it and he said he'd post something in response but it hasn't happened yet. See #2 of the things I noticed recently. ;-) Another red flag: all about saving costs and living simply, but at one time at least, huge CFers.
3 - Hard to say via the web exclusively, but I suspect he's probably really hard to deal w/ in person

[Boris]

I suppose 1 million in retirement/savings w. no debt would be enough to retire on very early if you resolved to live very frugally for the rest of your life.

But,...

According to the New Yorker article Troy references, he currently derives something like $400K annually from ads and endorsements from the blog. So who knows if they still live on $30K or whatever it was.

...would make it a lot easier.

[Freki]

I suppose 1 million in retirement/savings w. no debt would be enough to retire on very early if you resolved to live very frugally for the rest of your life.

But,...

According to the New Yorker article Troy references, he currently derives something like $400K annually from ads and endorsements from the blog. So who knows if they still live on $30K or whatever it was.

...would make it a lot easier.

Again, they were well into retirement, 5-6 years I think, before the blog even started, let alone became the money maker it apparently is now.

That's the other thing, he's not really "retired" but rather "does what ever he wants". A lot of it boils down to what he/they want doesn't cost a whole lot. He actually originally quit the IT world to start a construction company that tanked in fairly short order.

[vern]

he doesn't try to sell you anything, he has no books, no seminars, nothing like that.

This...plus he allows cursing. (No porn though.)

I've been hanging out there for a while. (Before Jacob at Early Retirement Extreme passed him the torch.) http://earlyretirementextreme.com/

It's good stuff, and there is a lot of gold to be mined in the forums.

[Boris]

I suppose 1 million in retirement/savings w. no debt would be enough to retire on very early if you resolved to live very frugally for the rest of your life.

But,...

According to the New Yorker article Troy references, he currently derives something like $400K annually from ads and endorsements from the blog. So who knows if they still live on $30K or whatever it was.

...would make it a lot easier.

Again, they were well into retirement, 5-6 years I think, before the blog even started, let alone became the money maker it apparently is now.

That's the other thing, he's not really "retired" but rather "does what ever he wants". A lot of it boils down to what he/they want doesn't cost a whole lot. He actually originally quit the IT world to start a construction company that tanked in fairly short order.

Yeah, I got that. What I said still stands, I think - a mil is enough if you're debt-free and young as long as you can live frugally and nothing catastrophic happens.

[Bram]

I worked 3 months full time over summer, every year of college. If you skip summer semester, it's possible for anyone.

[Herv100]

This guy sounds like a douchebag loser with no friends

[j-cubed]

There's a lot of problems. Not the least of which is easy access to student loans and every parent telling their kid they have to go to college, both of which allow for a ton of demand, and prices to skyrocket. However, lots (say anything over 20K) of student loan debt is dumb. Lots of student loan debt in a job field that doesn't have many openings or doesn't pay well is incredibly stupid.

Easy access to student loans is not the illness, it's a symptom. Without heavy parental investment (even with, sometimes), it's all but impossible to graduate without loans.

Your own article you posted agrees with my second point - demand is up:

While the college-age population has not increased since the tail end of the baby boom, the percentage of the population enrolled in college has risen significantly, especially in the last 20 years. Enrollment in undergraduate, graduate and professional programs has increased by almost 50 percent since 1995.

And the New York Federal Reserve had this to say about student loans

We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent. We also find that Pell Grant aid and the unsubsidized federal loan program have pass-through effects on tuition, although these are economically and statistically not as strong.

I believe it is more of a cause than a symptom.

Adjusted for inflation, tuition alone has increased around 50% at most public schools (including community colleges) in the last 15 years (in some states it has doubled). Nationwide housing costs have increased rapidly for renters (most college students for at least two years).

I'm guessing you didn't read the rest of what I wrote after that, No matter.

Seriously some hopefully practical tips for the kiddies:
(1) Not everyone should go to college. Seriously, we need moldmakers, machinists, die setters, etc. (OK some of that requires college, but you get the idea, not everyone should get a generic business degree) Plus, many of them pay pretty well. Does the sales person at the auto dealership really need a college degree?
(2) Don't go until you are ready to learn. Tons of kids start college and aren't really ready, effectively wasting a year or two of tuition. Take a gap year or two to work some, save some, explore some.
(3) If you are unsure of what you want to do, don't spend $20K+ per year figuring out what you don't want to do. Go to a less expensive community college and explore different topics.
(4) Don't take out big loans for a program where the jobs pay shit wages. Parents telling their kids to "Go to college" and "Do whatever you want" makes no sense.
(5) When at college, you don't need the latest toys, new cars, designer clothes, or expensive eating out options. People waste a semesters worth of tuition on luxuries over an undergrad degree.
(6) Work your ass off when at school, people like me, that interview graduates for employment, and can tell what your work ethic was.
(7) Don't invest a ton of money into a major, then suddenly do a 180 and change it.
(8) Don't take out a ton of student loans, then graduate, immediately get married, knocked up and say, "I want to quit my job", then call Dave Ramsey and explain how your life is a mess, you dug yourself into a deep hole, and don't know how to get out.
(9) Parents, you want to help you kids with college? Don't buy a house unless you can afford it on a 15 year mortgage.

And, if you do take out student loans - LEARN HOW THEY WORK, learn the differences between Federal and private student loans, and how they accrue Interest
(10) Live as simple a life as you can, like the MrMustache dude, and pay down on principal as soon as you can, before buying expensive shit you can't really afford yet.

Some student loans start accruing interest the moment you take the money, so by the time you graduate, you already owe more than the original loan amount was. Then, they are set up so that you pay a lower amount at first, after you graduate, and your payment goes up a few years later. So basically, all you are paying at first is just current interest, and no principal. I know a person that was complaining because she had paid on her $50,000 student loans for 5 years. The first 4 years at the lower payment rate, then the normal rate the 5th year. After 5 years she had paid $19,000 in payments, and reduced her principal by $500. First thing she did was buy a car when she graduated. If she'd have just spent that car payment to pay off her student loan, she would have made a decent dent in it.

[milosz]

Your own article you posted agrees with my second point - demand is up:

While the college-age population has not increased since the tail end of the baby boom, the percentage of the population enrolled in college has risen significantly, especially in the last 20 years. Enrollment in undergraduate, graduate and professional programs has increased by almost 50 percent since 1995.

Driven in large part by three factors: larger birth cohorts ('95 is the tail end of Gen X entering college and Millennials are a much larger population than Gen X), minority access and the entirely sane presumption that a college degree is the primary entry-point to middle class life. College grads earn far more over a lifetime than non-college grads.

All of which is irrelevant to your argument - the cost of attendance hasn't risen due to scarcity, it's risen rapidly because of cuts to public support for higher education.

Whatever other side-argument you want to make, you can't simply blame college students for taking out loans to get the degree they've been raised to feel like they need - and, to be statistically accurate do need - to be successful. They don't have other options.

And the New York Federal Reserve had this to say about student loans

We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent. We also find that Pell Grant aid and the unsubsidized federal loan program have pass-through effects on tuition, although these are economically and statistically not as strong.

I believe it is more of a cause than a symptom.

If college tuition had stayed at the rates of 1967, 1977 or even 1987, there would be no need for student loans in the first place. Students could, as Baby Boomers did, pay for college by working over the summer or middle-class parents could afford to foot the bill.

I'm guessing you didn't read the rest of what I wrote after that, No matter.

The "rest of what you wrote" is irrelevant to the argument I responded to. Yes, trades are wonderful - you can't ship an HVAC degree to India, as you can a vaunted STEM degree.

Not everyone needs to go to college, blah blah blah - this is both true and a reaction that punishes the people who are trying to bootstrap their way up in society.. Going to college is the best way for a child of immigrants, or a black kid from a shitty inner city school, or whomever to move up in the world. It is not only a financial boon, it establishes social credibility in a way that being a well-paid landscaper or plumber does not.

In any case, you can only have so many plumbers and HVAC guys and machinists - what's your argument when that reaches a saturation point? We had millions of jobs that didn't require a college degree and could support a middle-class life but they have been systematically gutted over the last 40 years and are never coming back.

Further, physically demanding jobs - like most of the trades - cannot be pursued the way a white-collar position can in a world where retirement is essentially a fiction. There aren't a lot of 75-year old machinists on the factory floor.

[milosz]

I worked 3 months full time over summer, every year of college. If you skip summer semester, it's possible for anyone.

Sure, I hire them every summer. For $8.50 an hour - for the 2.5 real months of 'summer off.' Over a summer that's $3400 before taxes.

Even with his BS $15 number, you're looking at $7200 or what, a touch under $6k after FICA? That's not even meeting his number for "tuition and fees" where the student lives at home, gets every morsel of food, clothing, entertainment funds, transport, etc.

For that matter, what parent wants to have a 20-year old who is functionally identical to an 8-year old?