>> But simply cutting cable TV and a few lattes would instantly boost their savings to 15%, allowing them to retire 8 years earlier!! Are cable TV and Starbucks worth having two income earners each work an extra eight years for???<<
> Again, mathematically accurate, but not helpful
Is extremely helpful to those that have the willpower and motivation for early retirement. I personally think about this kind of tradeoff/decision every single day of my life, and as a result, I'm saving an enormous amount of my paycheck and will "retire" before I'm 35.
Of course, it's not helpful advice for lazy, unmotivated people who are stuck in a rut, but what advice is?
> Then, when he inevitably heads to starbucks he thinks he's failed.
I personally approach the whole thing like I approach my gym routine and healthy eating. When I have a "bad" or cheat day, I don't focus on that. I like McDonald's. I just look ahead to tomorrow and say that's OK, I can get back on track. It's not about focusing on what you did wrong, focus on trying to do a little better tomorrow.
> Finally, this quote is complete nonsense:
>> The reason is that every permanent drop in your spending has a double effect:(1) it increases the amount of money you have left over to save each month, and (2) it permanently decreases the amount you’ll need every month for the rest of your life.<<
Actually, I think that's the best piece of advice I've ever received in my entire life.
When you open a retirement plan at a bank, the adviser won't even blink when they say "The average person needs 70% of their pre retirement income when they are retired."
Let's think about that for a second - by very definition that's saying the more I earn the more I'll need to spend - FOREVER. That's saying that when I have my Ford Focus paid off, I will buy a BMW, then a Mercedes, Then a Porsche, then....
In my last job I wasn't even earning 70% of what I am now, was still saving tons, and yet people plan my retirement saying I'm going to need that much when I'm retired?!?!?!!? It's any wonder my "planned" retirement was at 65 years old.
I absolutely promise you from the bottom of my heart, you absolutely can train yourself to be extremely happy while spending less money, and the more years you do it for, the better you will get.
I will never have a TV, cell phone or new car for the rest of my life, I'm extremely happy about that, and it means I can have 50 years of my life to do exactly what I want every day.
It's doable but you need investment skills. 5% after inflation is likely pie in sky for most people. You need a lot more nest egg in the current low interest rate environment. Also at 35 you will still need money to put children through college so the future expense is likely higher than your past experience.
In Australia the government pays students a wage, called Youth Allowance[1], that is something between $268 to $400 every two weeks, depending on circumstances.
Combined with a roughly ~10 hour per week part time job, I had no trouble at all putting myself through 5 years of Engineering without any debt.
I'm confident my future kids can do the same thing, so I won't need to support them in the same way my parents didn't need to support me (once I went to University at 18)
Yep. No TV, No cell phone, a 25 year old car and I've never been happier.
I'm a Software Engineer, and I save towards 70% of my paycheck. I still bought a new laptop, DSLR, rifle and other toys all in the last 6 months. I don't earn tons for a SE, if that's what you're thinking.
It lets me do things like Drive from Alaska to Argentina for two years, simply because I wanted to[1]
That's great for you, nothing wrong with that at all. However, this is pretty anomalous, you know that right. :) Also, from what you describe, do you really think that will let you retire at 35? If so, is that retiring at 35 living, still, very minimally? If you plan to have a long life, which I think you do :) then I don't know if that math works. But it might, just saying ... Anyway, the main point is this wouldn't work for most people.
I live on the other side of the world from my home country, I drove from Alaska to Argentina for fun, and I don't want to go to work for the rest of my life so I an buy stuff.
As for retiring at 35, absolutely. I'll travel the world on around $15-20k per year for a long time, then see what happens. (before you tell me it can't be done, I've already done it for two years)
Interesting you think I'm living "very minimally" because I said I have no cell phone or TV and an old car, but in the same sentence I said I bought a new laptop, DSLR and rifle in the last 6 months.
You are very confused about what "very minimally" actually means.
> Anyway, the main point is this wouldn't work for most people.
Like MMM said in the article, you can start making this work for you, or you can complain about how it's not going to work for you or the majority. Which one are you doing?
Well, good for you and all that, I mean that seriously. But I'm not confused; I think it is a bit minimalistic to not have a cell phone. A new laptop could be some $500 Dell, a rifle could be anything, so not I wasn't thinking of that as something akin to a middle class style, especially if that's basically it. :)
Of course, you are free to think that not having a cell phone is minimalistic. I personally think of it as very liberating.
I bought a brand new MBA ($1300), Canon 60D+Lens (Right on $2k) and a Remington 700 30/.06 ($1200), so I'm not without stuff, I just pick and choose the stuff I want and don't want. We're all free to do that, and I think a lot of people forget that.
It seems like you'd much rather complain about how this isn't going to work for you than start working towards making it work for you.
I'm not complaining that it wouldn't work for me. But you posted your experience in way that I think was really not showing that this is something realistic for most people but kind of as a way, let's be honest, bragging about your acetic take on income. So don't take this the wrong way, but I think it's a little disingenuous given what you were responding to. :)
Not at all. I posted because someone asked, and because I like to show people there is always a way.
Of course my way doesn't work for everyone, but I'll bet there is a way that works for others (that likely doesn't work for me).
I'm not saying everyone should do it my way, I'm saying everyone (including you!) should work hard to find the way that works for them (and it might be a way that nobody else has done yet...)
No, I'm sitting at my desk right now. I work for a large telco, so I just applied through the normal channels.
I have a flexible work arrangement now where I take every second Friday off, and I'm probably going to take a month or two of extra leave this year (unpaid).
When I travel, I outright quit and just live on my savings
So how much rent do you pay and what are your living conditions? Btw I never owned a car in my life and only have one cell phone which is prepaid and I almost never use it, so my expenses with it are minimal(around 10 $ every 3 months or so).
I pay $500 a month in rent for everything, and live with one other person who has become a good friend.
After work, I either go snowshoeing, cross country skiing, out walking for photos or mountain biking. On the weekends I am always out of town hiking/camping/hunting/canoeing/snowboarding/fishing/etc.
Besides cooking, eating and sleeping, I spent less than an hour a week at my rented house, so the fact that it's cheap works very well for me. It also has a grass backyard, so I sit out there and read books when the weather permits.
I went wifi-only last year and I've enjoyed the $70/mo in extra money each month. I don't call people often so I use Google Voice, and the GrooVe android app. which has great call quality everywhere but the office.
I have wifi at home, work, friends' places, and a lot of businesses, so I'm only really offline when I'm driving and maybe the grocery store.
> Again, mathematically accurate, but not helpful
Is extremely helpful to those that have the willpower and motivation for early retirement. I personally think about this kind of tradeoff/decision every single day of my life, and as a result, I'm saving an enormous amount of my paycheck and will "retire" before I'm 35.
Of course, it's not helpful advice for lazy, unmotivated people who are stuck in a rut, but what advice is?
> Then, when he inevitably heads to starbucks he thinks he's failed.
I personally approach the whole thing like I approach my gym routine and healthy eating. When I have a "bad" or cheat day, I don't focus on that. I like McDonald's. I just look ahead to tomorrow and say that's OK, I can get back on track. It's not about focusing on what you did wrong, focus on trying to do a little better tomorrow.
> Finally, this quote is complete nonsense:
>> The reason is that every permanent drop in your spending has a double effect:(1) it increases the amount of money you have left over to save each month, and (2) it permanently decreases the amount you’ll need every month for the rest of your life.<<
Actually, I think that's the best piece of advice I've ever received in my entire life. When you open a retirement plan at a bank, the adviser won't even blink when they say "The average person needs 70% of their pre retirement income when they are retired." Let's think about that for a second - by very definition that's saying the more I earn the more I'll need to spend - FOREVER. That's saying that when I have my Ford Focus paid off, I will buy a BMW, then a Mercedes, Then a Porsche, then....
In my last job I wasn't even earning 70% of what I am now, was still saving tons, and yet people plan my retirement saying I'm going to need that much when I'm retired?!?!?!!? It's any wonder my "planned" retirement was at 65 years old.
I absolutely promise you from the bottom of my heart, you absolutely can train yourself to be extremely happy while spending less money, and the more years you do it for, the better you will get. I will never have a TV, cell phone or new car for the rest of my life, I'm extremely happy about that, and it means I can have 50 years of my life to do exactly what I want every day.