» My favorite writings of January 2008 Early Retirement Extreme: —doing in 5 years what usually takes 30 years or more

My favorite writings of January 2008

Published on February 1st, 2008

If you're new here, this is the one personal finance blog that tells you how to become financially independent in 5 years instead of 30 years or more. You can read my story here and read more about where I am now here. You may want to subscribe to my RSS feed or use one of the other options in the top right sidebar. Thanks for visiting!

On Friday December 28th 2007 I decided to move from blogspot to my own domain after having blogged for about 3 weeks. During the following month subscribers increased from 27 to 176 and I reached 10,000 unique visitors. As this is much more than I expected I have stopped setting small intermediate goals. Instead I’m going all out as advocated in the “S-curve“-post below.
Here’s a list of the posts that I wrote in January which I personally think are the most useful.

Useful tools

Two useful tools to align your behavior for early retirement

Better goal setting with S-curves – explains why starting slowly or not knowing when to stop is a bad idea.
Cash flow diagrams for the poor, the middle class, and the investor class – it’s not how much money you earn, it’s how you earn it.

How to get wealthy and successful

Everybody seems to want this for some reason

How to get wealthy on minimum wage – as always some of these suggestions will be obvious to some and eye opening to others. But if wealth is a priority, it can be done on low wage.
Stranger in a strange land – a controversial essay on my definition of success and how to achieve it.

Saving money

… by not spending it.

Eliminating heating bills and cutting down on heating costs – so far it has been a great success for us.
Is your stuff holding you back? – a lot of stuff means it’s harder to move and find a cheaper place to live.
Getting in shape without paying a dime – on bodyweight exercises.

How much do I need to retire early

One frequently asked question is whether 1 million, 2 million, … or even 7 million is enough to retire on. My answer is that it depends completely on the level of your annual expenses. Typically investments worth 25 times annual expenses is the minimum requirement. 30-35 is safer.

If I retire with a million dollars how well can I live? – ’nuff said

Transport

Is it the engine that is the problem?

Bicycle commuting – saves a hundreds of dollars and tons of carbon dioxide emissions.
Walking in the rain – saves wear and tear on the bike if it rains

Here are my favorite posts of December.

As always I am interested in knowing if there is anything anyone wants me to discuss. I am already working on a post about index funds and also on part IV of How I became financially independent in five years. Please leave a comment and tell me or send an email to “my first name” (hint: it’s five letters and begins with J) at earlyretirementextreme.com

3 users responded in " My favorite writings of January 2008 "

greentea said, in February 4th, 2008 at 23:52

What do you think of traditional retirement accounts? I was planning on maxing out both a Roth 401(k) and Roth IRA this year, but now I’m wondering if there are better investment options for those desiring early retirement.

Thank you for starting this blog! It’s very inspirational.

Jacob said, in February 5th, 2008 at 07:45

@ greentea – My retirement accounts comprise about 3% of my entire portfolio. However, I have lived in three different countries so starting and trying to move retirement accounts would be a major hassle. I think it depends on how you want your retirement to play out. For instance, you could continue maxing out the Roths and if you have money left you could start a taxable account. This way you would still have to work for money close to age 60. Maxing them out you might have enough money long before that but would be unable to get at it (without penalty). In the mean time you could scale down to part time work just to cover expenses. Of course this all depends on what your expense level is <=- that is the most important determinant. The alternative is to think about how many years you got left until retirement and how many years you expect to have left after retirement and fund accordingly to taxables and roths. This would require some number crunching which I haven’t done.

greentea said, in February 5th, 2008 at 14:25

Thanks for the reply. I’ve been defaulting to throwing as much savings as possible into retirement accounts, but since I’d like to retire long before age 60, I’ll start looking more into taxable accounts.

When you suggest to save 70% of your income, do you mean net or gross?

With my current plan, I’d be saving about 70% of my net but only 45% of my gross (damn taxes!).

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