Have you ever been so fantasized about not having to work in a job that you hate but were stopped by the monthly repayments to your loans? Have you ever envied that guy in your office who always seems chilled out and not crazy about the rat race at work? Have you ever heard about the extremely popular synonym FIRE in the personal finance community? To the uninitiated, FIRE stands for Financial Independence/Retire Early.
I have now seen multiple blogs by fellow bloggers where they put in a target date and work towards financial independence and “retiring early”. The one name I found repeatedly being mentioned among this clan as an inspiration was Mr. Money Mustache. While there have been other early retirement blogs earlier, this one takes the cake.
As Wikipedia kindly informed me, Mr. Money Mustache (MMM) is the pseudonym for Canadian-born Peter Adeney. MMM is now popular for his extremely early retirement at 30! Yeah, he became financially independent and chose to retire early at the age of 30. 6 years later he decided to build a community (with members being called Mustachians) towards inspiring people to work themselves out of the rat race. Started in 2011, the community is so successful that within the first 9 months, the blog chalked up a million views! He now has a mobile app with a great user experience for all his fellow Mustachians.
What I love about it
The blog is mostly geared to calculations, mindsets and theories that are required to reach the stage of early retirement in 5-10 years. For a long time, I believed that MMM was advocating extreme frugality which he is kind enough to break down is not the point. In his words:
This is not about being cheap, minimalist, or extreme.
It’s about using logic and science to design a Slightly Less Ridiculous Than Average Lifestyle in order to live more happily.
Mr. Money Mustache or MMM has an interesting logic behind the name. He talks about how as a child he always viewed mustache being a symbol of seniority and respect. Adding money to it, mean respect and seniority with financial acumen. So, MMM is an acronym for a person who is well known or financial smartness and whom people refer to for financial advice.
I have turned up my nose at the idea of Early retirement earlier. However, in the world of MMM, “early retirement simply means a choice. A choice to do as you please without having to worry about “working for a living”. This could even mean working on what you like and earning money. Essentially, the word retirement does not disqualify you from potentially money earning jobs.
One big post
My favorite post of the umpteen that I read on MMM has to be – A millionaire is made ten bucks at a time. In a lot of ways, it reminded me of the latte factor, a theory which I believe is plausible and customizable to one’s life, despite how many people choose to turn their nose against.
The one line which defined this post to me was – If you start respecting your 10s by age 20, you will be retired by age 30.
In this post, he literally breaks down the numbers, as to how a few $10 decisions every week can lead you to early retirement in ten years. He mentions repeatedly that an undebted American family of 4 (one with no debts) requires $24000 an year to live a comfortable life and with the 4% rule, $600,000 is enough to live your life without having to work again.
The important distinction he makes in the post is how you must think before buying luxuries when you might still be paying off the debt on your earlier luxuries or when necessities are still not in order. In short, be clear on your priorities and your spending decisions might become more clear and rational. In our rush of daily life, we often forget how the little things add up to big events, and just focussing on the big things in life rarely helps.
Other 2 posts:
- Why hardcore saving is much more powerful than masterful investing
- Having “The Talk” with a current or potential mate