If you're new here, this blog will give you the tools to become financially independent in 5 years on a median salary. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger of losing their jobs.
Here's almost a thousand online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before looking for the crowd's wisdom for your particular situation in the forum journals.
If you enjoy the blog, also consider the book which is much better organized and more complete. You can read the first chapter for free, listen to the preamble, or see the reviews (1,2,3,4,5,6,7,8,9, A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,Z). Subscribe to the blog via email or RSS. Get updates on the facebook page, join the forums, and look for tactics on the ERE wiki. Here's a list of all the ERE blog posts.
I do not know why this keeps popping up. It basically goes like this:
Take the most recent piece of history, here recent is a maybe a quarter of the characteristic time scale of anything, say the economy, technology, population, … and proceed to extrapolate it into the far future.
The reason this never works is that everything has a natural limit set by the system. The extrapolation is always done at a point where the thing being extrapolated is just a minor player of insignificant but slightly noticeable value. Like the space rocket launches of the 1960s that were projected into the Jetsons. Nuclear power too cheap to meter. Microprocessors developing superhuman intelligence, etc. The current fascination is with the economic development of the BRIC countries. It say this is just not going to happen to the extent it is being extrapolated.
At some point in not too many years (10), BRIC will have grown to become such a large player that they will meet the same boundaries that are keeping other players like the US, Japan, and Europa from growing their towers into the sky. Since the sum total is limited by planetary constraints, what is actually going to happen is that the economy share of the latter will transfer in a slight fashion to the former.
The only way to grow exponentially is to discover virgin territory, and this actually does not last long given the geometric character of exponential growth.
Originally posted 2009-08-11 14:33:00.
