If you're new here, this blog will give you the tools to become financially independent in 5 years. Here is how I did it and here is how I currently do it. The method is robust and replicable (no need to win the lottery, start a blogging business, or win at real estate), but not easy; much in the same way that a diet results in weight loss but is hard to follow persistently unless you set your mind to it. The key is to save 75%+ of your net income and invest it in income producing assets (bonds and dividend stocks). There is a "21 day" step-by-step plan for how to get to 75% in the left side bar. I try not to be too trite, so if I cover a topic, you will probably not see it again for a very long time, thus you may want to read the older posts here and here. Also, check out my answers to frequently asked questions and while you're at it, don't forget to subscribe to the blog via google or RSS.

Heads up!

The Silicon Valley #2 meet up will take place at Lake Vasona in Los Gatos on September 11th @ 2pm. See the forum discussion for ongoing refinements.

The New York City meet-up will take place at Columbos Park in Chinatown at September 18th @ 3pm. See the forum discussion for ongoing refinements.

It would be nice to have an idea of the head count. You can make your intentions known in the appropriate forums—if that’s not possible, you can do it in the comments below.

There has been two meet-ups so far. Silicon Valley #1 and Chicago. There hasn’t really been any traditions established for the meet-ups. No presentations, no anything. One thing I have been doing outside the meet-up is to lend out some of my books presuming that everybody will meet again at some time, so I may bring some next time.

Dear Graduate,

By now you should have obtained a degree. While this shows you have no particular useful skills, except for a few notable professions, it will make you employable in the corporate world. You now have a choice to make. You can join the majority, have a career, and work for the next 30 years while dreaming of retiring to Florida someday unless prematurely stopped by a heart attack, or you could retire in 5 years.

For the former cookie-cutter lifestyle, allocate 15% of your income to a so-called retirement account (401k, IRA, etc.) and invest it in a index fund (I suggest 50% world and 50% US), buy a house in the suburbs, so you can start itemizing your deductions. Get a mortgage you can understand (e.g. 6% fixed for 360 months). Pay attention to the resale value. Also buy a car that will survive the commute. Equip the house with furniture, entertainment electronics, and a BBQ. Don’t make any modifications to the house. While it may be cool to have a firemen’s pole from the attic, it’ll not help the resale value. If you get married, don’t get divorced (or at least get a prenup). Also hire an accountant, a lawyer, a gardener, a plumber, a baby sitter, a personal trainer, etc. for the things you don’t have time or skills to do yourself and you’ll be set.

For the latter, you got some learning to do. It is very likely that you do not know how to cook (especially if you went to a fancier school where dinner was served), which foods are good and which are bad, how to mend socks and patch clothes, how to fill out a tax return, how to evaluate a business and how to invest, how to fix a blocked sink, how to raise kids, how to clean a house, how to stay in shape, how to wash clothes (while making them last), how to change the car’s oil or ride 10 miles on a bike, or how to grow your own food. So regardless of how tempting it is, learn this instead of crashing in front of the TV all the time. Get a job, but don’t get the house in the suburbs. Furthermore, find somewhere to live within walking or cycling distance of your job and the nearest supermarket. Get your furniture used and get a roommate. Or two. Cook your own meals. Buy a very small but classic wardrobe. Get quality, not quantity — this may require some research as most things today are not built to last. Stay healthy, watch what you eat and take care of your teeth. Avoid the car or get an old beater if you absolutely have to. Never pay interest on your credit cards. Save 75% of your income while learning the difference between gross profit margin and net profit margin and start investing slowly for income.

If you choose the second approach then after five years, you will be a fairly competent and independent individual, and you will have enough money from your investments to pay your living costs, forever. Don’t forget, life is an adventure, not a race.

Good luck!
Jacob@ERE

Originally posted 2008-06-17 07:08:34.

I am currently looking into both in more detail to derive fortitude in the face of the permeating growth/consumerism mentality.

Stoicism and Zen Buddhism are very similar. They both try to deal with the problems of the ego. Conversely, consumerism is all about gratifying the ego.

I don’t think I’m qualified to comment in detail, however …

Zen Buddhism and Budo eliminates the ego through “practice”. This practice can take the form of meditation or detailed repetition of say martial arts techniques or brush strokes. The goal is to reach the state of no-mind, also called enlightenment.

I find it interesting how one can replace “upgrading” and “acquisition” as the meaning of life with the act of “practice”. Of course in some sense, one can think of going to work as practice. What’s important, however, is the intention behind the practice. Just going to work or even practicing by going through the motions is not going to do anything. By practicing one must strive for that one perfect move—I think “filing a form perfectly” does count in some sense.

Applying this concept, which for business is called Kaizen is probably also why the Japanese car industry creamed the competition. It is also a good way to live. Or at least it gives you an excuse for your inner perfectionist

Stoicism eliminates the ego through active rationality. It is not as time-consuming. I don’t think this can lead to the no-mind state, but I do think it can more easily render ego-gratification less relevant. Stoicism seems to be quite appealing to the INTJ mindset. This may be because emotional appeal and external accumulation or status-by-title/status-by-stuff hold little natural value to the INTJ so they are easy to replace with another framework. In fact, it only requires a hint, such as this blog, to do so.

The key difference between Zen Buddhism and Stoicism seems to be whether rationalization or the intellect is embraced or rejected. A student of Zen will study koans with the objective of eventually realizing that trying to rationalize an intellectual answer is futile. Conversely, a student of Stoicism will study logic to fine-tune his intellect.

I think that usually, when two different “schools” of opinion or thought seems to achieve the same results or success but differ on a key issue, then that issue is actually not very “key” at all.

I’ve been pondering this some weeks now. I wish I could expound on it in more detail, but this is what I have for now.

If you want to “study along”, A Man in Full by Tom Wolfe is a story where two of the characters become stoic. You need to get to page 300 before anything relevant to this happens; then a long break and finally some more development around page 650. I read that book after reading A Guide to The Good Life as suggested in the forums. Next I’m going to read The Stoics.

I don’t have any good references for Zen Buddhism. I have focused more on Budo—not having the patience/time for extended meditationbeing more of an active person. My favorite Budo book is Budo Mind and Body. It is a very quick read and I try to read it every so often to reinforce my training and stay serious. This book also contains a very good bibliography of related titles complete with detailed descriptions.