Comments on: How I became financially independent in 5 years - Part III http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html Financial independence, frugality, self-sufficiency, ecology, capitalism, and voluntary simplicity Fri, 21 Nov 2008 22:27:09 +0000 http://wordpress.org/?v=2.6.3 By: miniangel77 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-2342 miniangel77 Tue, 30 Sep 2008 00:43:44 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-2342 Just recently joined your blog...great stuff, you have me inspired! I was wondering: what were the necessary items that you packed in the two suitcases? I am in the middle of moving and am trying to let go of a lot of things, but it's really hard. Any words of advice are appreciated! Just recently joined your blog…great stuff, you have me inspired! I was wondering: what were the necessary items that you packed in the two suitcases? I am in the middle of moving and am trying to let go of a lot of things, but it’s really hard. Any words of advice are appreciated!

]]> By: Marc Goodin http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-768 Marc Goodin Sat, 15 Mar 2008 01:06:13 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-768 Great site & great post. Most people can't even retire early never mind in five years. I have never been frugal but I have always been an invester, saver and willing to work more than most. I've found it was always easier to make more than spend less. Today I gave my notice (civil engeneer) and am retiring at age 50. Great site & great post.

Most people can’t even retire early never mind in five years. I have never been frugal but I have always been an invester, saver and willing to work more than most.

I’ve found it was always easier to make more than spend less. Today I gave my notice (civil engeneer) and am retiring at age 50.

]]> By: Steve Austin http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-414 Steve Austin Sat, 16 Feb 2008 22:57:32 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-414 I've been on a path largely parallel to Jacob's over the past 5-10 years. Re: Jacob's comment to Jane about capital gains taxes, I have arranged my financial affairs this year such that I will pay no income taxes. No W-2 job, of course. Domiciled in a state without income tax. And the 2003 Job Reconciliation Tax Reduction Act (or whatever it's called) says that for 2008-2010, as long as you keep your AGI in or below the 15% marginal bracket, all qualified dividend and long-term capital gain income are taxed at the low, low rate of 0%. I can easily live on $12-15k per year, and exploiting this tax law will save me around $1k this year. Of course, due to the standard deduction and personal exemption, I can offset around $8k in otherwise taxable income anyway. I play to use that offset to afford me a tax-free partial Rollover IRA to Roth IRA conversion. I have hope that this law will either become permanent or at least not immediately repealed by the next Administration and Congress. If not, I will have enjoyed my 2008 financial hobby: legally paying no income taxes, yet still living the life of freedom in this great land. I’ve been on a path largely parallel to Jacob’s over the past 5-10 years. Re: Jacob’s comment to Jane about capital gains taxes, I have arranged my financial affairs this year such that I will pay no income taxes. No W-2 job, of course. Domiciled in a state without income tax. And the 2003 Job Reconciliation Tax Reduction Act (or whatever it’s called) says that for 2008-2010, as long as you keep your AGI in or below the 15% marginal bracket, all qualified dividend and long-term capital gain income are taxed at the low, low rate of 0%. I can easily live on $12-15k per year, and exploiting this tax law will save me around $1k this year. Of course, due to the standard deduction and personal exemption, I can offset around $8k in otherwise taxable income anyway. I play to use that offset to afford me a tax-free partial Rollover IRA to Roth IRA conversion. I have hope that this law will either become permanent or at least not immediately repealed by the next Administration and Congress. If not, I will have enjoyed my 2008 financial hobby: legally paying no income taxes, yet still living the life of freedom in this great land.

]]> By: PT from Prime Time Money http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-232 PT from Prime Time Money Sat, 26 Jan 2008 05:55:39 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-232 Fascinating read. Fascinating read.

]]> By: Jacob http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-189 Jacob Sat, 19 Jan 2008 19:48:39 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-189 @ jane - the good news is that as far as I've heard after 2009, capital gains will not be not be taxed at all if your income is below $15000. I have to admit that I think that most government expenses fall under "other people's bad choices", so not paying for that is a comforting thought. A tragicomical anecdote about diabetes when a family member got diagnosed, the first thing she did was to start looking for recipes for sugar free cakes. It boggles my mind. @ jane - the good news is that as far as I’ve heard after 2009, capital gains will not be not be taxed at all if your income is below $15000. I have to admit that I think that most government expenses fall under “other people’s bad choices”, so not paying for that is a comforting thought. A tragicomical anecdote about diabetes when a family member got diagnosed, the first thing she did was to start looking for recipes for sugar free cakes. It boggles my mind.

]]> By: jane http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-185 jane Sat, 19 Jan 2008 01:26:37 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-185 Man - you hit it again in your response to moneychangesthings (taking advantage of the crazy consumer behaviour by investing in companies that provide bandaids). I have never been too keen on having to pay for others bad choices - ex. not putting the sugar down when diabetes has been diagnosed - over the top really crazy behaviour in my book. One of the other blogs I enjoy is brip brap - (I will get to my point in a round-about way) -well, reading his entry re fairness & then your response re investing was a touch of kismet = I could get reimbursed for some of my tax dollars spent on social services by investing in those companies purporting to cure some of the self-generated problems. YES. Yes on the power of others telling their stories. Maybe I should get in on this blog action. So refreshing to know I am not the only crazy one :) Keep up the crazy ideas Jacob! Man - you hit it again in your response to moneychangesthings (taking advantage of the crazy consumer behaviour by investing in companies that provide bandaids). I have never been too keen on having to pay for others bad choices - ex. not putting the sugar down when diabetes has been diagnosed - over the top really crazy behaviour in my book. One of the other blogs I enjoy is brip brap - (I will get to my point in a round-about way) -well, reading his entry re fairness & then your response re investing was a touch of kismet = I could get reimbursed for some of my tax dollars spent on social services by investing in those companies purporting to cure some of the self-generated problems. YES. Yes on the power of others telling their stories. Maybe I should get in on this blog action. So refreshing to know I am not the only crazy one :) Keep up the crazy ideas Jacob!

]]> By: moneychallenge http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-184 moneychallenge Fri, 18 Jan 2008 23:55:04 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-184 I'm with Jane :) You have some fantastic posts Jacob! I’m with Jane :) You have some fantastic posts Jacob!

]]> By: Jacob http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-183 Jacob Fri, 18 Jan 2008 05:37:34 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-183 @ jane - hey, you were one of the first if not the first to leave a comment on this blog :-) Wow, a book, yes maybe at some point I will have enough material to compile into a book. Thanks for the encouragement! Reading blogs is a good zero-cost hobby. Net access has saved me a ton of money. Of course I'm regularly accused of having no life, but one gets to meet such interesting people online and with a little work, one can actually do interesting stuff as well. I used to summarize news articles for a website on a volunteer basis for instance. @ brip blap - It's also a lot easier to keep finding things to write about when talking about experiences. I also have this perhaps crazy idea that I want some hands on experience with any theory that I come across. For instance, when it comes to investments, I have done funds, covered calls, delta neutral strategies, P/B plays, ... In terms of physical fitness which is another hobby of mine, I have also tried a lot of things, workouts, diets, ... to see what works and what doesn't. BTW my pf blog pet peevees are the phrases "magic of compound interest" and "million". @ moneychangesthings - I mentioned some of it in part 1. I think maybe genetically I'm a hoarder like my grandfather (we have the same MBTI personality type as well - INTJ) but my sister (SP) turns out to have a different relationship with money than me. In addition my parents (SJ) keep telling me to stop acting like I'm 60 and spend some more money. The cultural influences are complicated though. My first influence was anticonsumerism coupled with the idea of not being dependent on a job e.g. the "debt is slavery" concept. Many anticonsumers are environmentalists as well. My environmental concern was more zero population growth / resource depletion/ sustainability oriented. Hence I wanted to try to reduce my ecological foot print as much as possible. At some point I decided - it was a gradual decision - that rather than opting out, I would simply take advantage of all the crazy consumer behavior by investing alongside and in some sense against society e.g. I see people eating too much, I buy companies that produce insulin. I see people not exercising. I buy companies that produce joint replacements. I see everybody playing the subprime game. I buy solid banks that'll buy up the smaller banks when they fail. There's just no use telling people that they're heading into trouble. Sometimes I feel like a Cassandra. I have given up trying to influence people on a grand scale though (I was a coauthor on one of "the end of the world as we know it" books (not y2k ;-P ). On the other hand, I have not dropped of the surface of the planet either. I guess my current motivation is to try to show people that there is an alternative to "normal". Rather than talking or ranting about grand ideas that individuals have no influence on, maybe there is a way for individuals to significantly improve their own situation that in the aggregate could improve the situation of the country and the planet as a whole. That's my hope. Wow, that almost turned into an entirely new post. @ jane - hey, you were one of the first if not the first to leave a comment on this blog :-) Wow, a book, yes maybe at some point I will have enough material to compile into a book. Thanks for the encouragement! Reading blogs is a good zero-cost hobby. Net access has saved me a ton of money. Of course I’m regularly accused of having no life, but one gets to meet such interesting people online and with a little work, one can actually do interesting stuff as well. I used to summarize news articles for a website on a volunteer basis for instance.

@ brip blap - It’s also a lot easier to keep finding things to write about when talking about experiences. I also have this perhaps crazy idea that I want some hands on experience with any theory that I come across. For instance, when it comes to investments, I have done funds, covered calls, delta neutral strategies, P/B plays, … In terms of physical fitness which is another hobby of mine, I have also tried a lot of things, workouts, diets, … to see what works and what doesn’t.

BTW my pf blog pet peevees are the phrases “magic of compound interest” and “million”.

@ moneychangesthings - I mentioned some of it in part 1. I think maybe genetically I’m a hoarder like my grandfather (we have the same MBTI personality type as well - INTJ) but my sister (SP) turns out to have a different relationship with money than me. In addition my parents (SJ) keep telling me to stop acting like I’m 60 and spend some more money. The cultural influences are complicated though. My first influence was anticonsumerism coupled with the idea of not being dependent on a job e.g. the “debt is slavery” concept. Many anticonsumers are environmentalists as well. My environmental concern was more zero population growth / resource depletion/ sustainability oriented. Hence I wanted to try to reduce my ecological foot print as much as possible. At some point I decided - it was a gradual decision - that rather than opting out, I would simply take advantage of all the crazy consumer behavior by investing alongside and in some sense against society e.g. I see people eating too much, I buy companies that produce insulin. I see people not exercising. I buy companies that produce joint replacements. I see everybody playing the subprime game. I buy solid banks that’ll buy up the smaller banks when they fail. There’s just no use telling people that they’re heading into trouble. Sometimes I feel like a Cassandra. I have given up trying to influence people on a grand scale though (I was a coauthor on one of “the end of the world as we know it” books (not y2k ;-P ). On the other hand, I have not dropped of the surface of the planet either. I guess my current motivation is to try to show people that there is an alternative to “normal”. Rather than talking or ranting about grand ideas that individuals have no influence on, maybe there is a way for individuals to significantly improve their own situation that in the aggregate could improve the situation of the country and the planet as a whole. That’s my hope. Wow, that almost turned into an entirely new post.

]]> By: MoneyChangesThings http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-182 MoneyChangesThings Fri, 18 Jan 2008 03:06:32 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-182 Is there something in your cultural background (class or ethnicity) that predisposed your to frugality? It doesn't seem to come so naturally to most folks. I know you are frugal partly for environmental reasons. Which came first - eco-concern or frugality? I was surprised to discover that once I no longer needed to be frugal, I stuck to it anyway, because by then I was an affluent eco-maniac! Is there something in your cultural background (class or ethnicity) that predisposed your to frugality? It doesn’t seem to come so naturally to most folks.
I know you are frugal partly for environmental reasons. Which came first - eco-concern or frugality? I was surprised to discover that once I no longer needed to be frugal, I stuck to it anyway, because by then I was an affluent eco-maniac!

]]> By: Brip Blap http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-181 Brip Blap Fri, 18 Jan 2008 03:00:00 +0000 http://earlyretirementextreme.com/2008/01/how-i-became-financially-independent-in-5-years-part-iii.html#comment-181 Fascinating stuff! Keep it up - you've got some great foundation posts going here. It's easy for people to theorize - and this is a constant complaint about mine about the blogosphere - but someone who's actually DOING it is well worth reading. Fascinating stuff! Keep it up - you’ve got some great foundation posts going here. It’s easy for people to theorize - and this is a constant complaint about mine about the blogosphere - but someone who’s actually DOING it is well worth reading.

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