“Early Retirement Extreme” comprises four parts, this blog, an associated forum, a wiki, and a book. It started out as a blog in 2007; some time thereafter I began to write a book to create a more comprehensive description of the philosophy and how to live it, and in 2010 the requests for a forum reached critical mass and I decided to start a forum. The book was published in 2010. The wiki was started in 2011.
These days I don’t spend a whole lot of time blogging for good reasons. Most of what is bloggable has already been said in previous posts; people often have different concerns than I do (hence the forums exist for asking questions); and I have completed the book after 2 years of working on it.
Now most of the [inter]action happens on the forums and if you are looking for a coherent and cohesive outline of “ERE”, the book is a better choice. Yet, for most people, the blog is still the first “point of entry” which is why I still keep it running despite the shortcomings of the blogging format. Note that I rarely if ever write any new posts. Most posts you see are recycled posts because many like a daily post. I try to only recycle untimely posts with content that is valid forever. Please forgive me should I inadvertently repost something that pertains to 2009. I will tag that post so it doesn’t happen again.
It is not unusual for people to discover this blog and proceed to read through it from the beginning to the end spending several hours (people have written me and told me how they plowed through a backlog of 900 posts) as if they have been intellectually or culturally starved and finally found the answer to something that had been bugging them for some time without knowing what it was.
For independent thinkers and creative radicals, this blog feels like the red pill of the Matrix movie. Some people have grown up having seen or heard nothing else about how to live than consumerism and careerism and yet it never felt quite right to them. ERE is a completely different philosophy and so it’s refreshing or eye-opening to learn that an alternative exists.
Some people have told me that ERE has helped them decide to completely change their life selling their collection of jet skis and their McMansion to seek a better life. You can see some examples here where readers journal their budgets and experiences.
Conversely, I have also had a few complainypants telling me that I’m an idiot for living in an RV (I don’t do that anymore, we recently bought a house in cash), eating home-made lentil soup (I don’t do that anymore), riding a bicycle (I have two), not spending my time earning money commensurate with my degree which I owe to society (they must have tuned into Karl Marx too much), and generally don’t understand how one can live with so much apparent pain from shopping withdrawal. Some even make things up like claiming my wife supports me (I pay half the household bills from my investment income with more than enough to spare—I make about
50%100% more than I use) or that blogging about financial independence is some clever scheme to be financially independent (news flash, that kind of “lifestyle blogging” only works for a few rock stars and I’m not it). These are mostly people who spend 5 minutes on the site and, then, based on their “detailed research” and general prejudices, try to understand what is essentially a different philosophy of life compared to what they know. That is, why would anyone want to do that when they can just get a McJob, drive a McCar, eat out at a McRestaurant, and become a millionaire when they are 60? Isn’t being a passionate assistant sales manager for Who Cares Incorporated, doing recreational shopping on weekends, and hopping on a jet plane for a 5 day stay in an exotic tourist destination a couple of times a year, supposed to be what life is all about? Isn’t “visiting Disneyland someday” the right answer to what your life ambition should be? Why not spend some money to “live a little”?
The reason I saved my money is so I can live a lot! There is satisfaction in knowing that you never need to work if you don’t want to and not being stressed about jobs, debt, and bills. There is satisfaction in beating the consumerist system by making things for yourself instead of buying some nationally advertised product. There is satisfaction in having the time to help other people instead of working for Who Cares Inc. Most importantly, there is satisfaction in knowing that with financial independence (more investment income due to savings than you spend) you can choose to work if and when you want to.
(For some inexplicable reason, some people resent the very idea that one should have the financial freedom to choose whether to have a job or not.)
Of course many people having been brought up in a world where everything from the school system to the way we eat has been institutionalized to the point where most people lack the energy or imagination to do anything but watch TV or go out to eat after they come home tired from work or think of other ways to have fun than buying an airfare, a beer in a bar, or a ticket to some sports game. These people just want to know how to pay off their credit cards, which kind of index funds to pick for their retirement plans and whether to contribute 6% or 7%, and how to stay or get employed on the treadmill.
ERE, however, goes [way] beyond personal finance 101. It is more of a different philosophy than it is a bunch of alternative tips. Lots of people think in terms of “tips” and never think about their philosophy of living: Why we do what we do? This is not surprising since we only tend to think about “whys” when making changes. After that, life just becomes different.
A good friend of mine illustrated this with a Zen quote which goes like this
“Before Enlightenment, chop wood carry water. After Enlightenment, chop wood carry water.”
If you “get it” already, good! … It’s during the in-between that a lot of thought is needed to understand the transition [to enlightenment]. Obviously, you’re not really going to get “enlightened” here; or at least not more enlightened than realizing some aspects about consumerism and careerism, that is: 1) Why do you prefer to buy stuff when it used to be normal to make things for yourself; and 2) Why do you put so much value into work and jobs when other cultures think of work as something unfit for their citizens? In particular, that maybe there’s another way to live.
There are essentially two premises to ERE.
The first premise is that financial independence is much more easily obtained by finding ways to reduce monetary expenditure than by finding ways to increase monetary income. For 80% of all people it is much easier to reduce their expenses by a factor 10 compared to increasing their income by a factor 10. Only the poorest and the richest can easily increase their income.
The second premise is one can easily live a happy life on much less than is commonly assumed. In fact the difference is sometimes extreme. In a consumer society, the standard measure of utility is money. If it’s twice as expensive, it must be twice as good, right? Wrong! This misconception originates from consumerism where on the poor end of the scale you eat $3 mashed potato powder bought at a quickie-mart, and at the high end of the scale you buy one small scoop of superbly crafted mashed potatoes on a large plate for $25 at a classy restaurant. However, if you make your own mashed potatoes, you can buy a 10lbs sack of potatoes for $1 at the farmer’s market during potato season— or grow them yourself — and make a meal that is only limited by your own skill level; after a few months of practice that is probably at least 80% as good as the chef and easily much better than the pre-processed powder. And, yes, out of potato season, you either clamp them or don’t eat potatoes and eat something else that’s in season and therefore inexpensive.
What follows from these premises is that for those who are willing and able, it is often possible to reduce expenses significantly by doing things differently, more in tune with the natural flows of resources so to speak, rather than doing more or less of the normal way and expecting instant gratification without considering the short- and long-term costs.
If you put these together: Spend less, save more, then you can reach the point where your investment income covers your expenses much much faster than what is commonly assumed.
Following those ideas it is possible to retire in 3-8 years on a normal income, hence this is why this blog is named early retirement extreme.
But keep in mind that you have to do BOTH OF THEM. If you’re just asking for investment advice figuring that “consumption advice” is irrelevant, you’ll spend the next 30-40 years in your career trying to make up for your lack of self-reliance and skills in making things for yourself [instead of being dependent and buying them]. Conversely, if you’re a pretty competent and self-sufficient person but cares little about money, you will still need to work [albeit not as much] to pay things like health insurance, rent/real estate taxes, and other necessities of life.
Now for some boring facts mostly relevant to other bloggers, journalists, and advertisers…
Based on sitemeter (June 2011), the blog has an average of 2956 visitors per day who spend an average of 4:03 minutes each. This translates into 1381 hours per week or 34 full time positions. If only I had a dollar…, eh?
I’m not that interested, but if you insist on giving me money, though, maybe we can work something out if you make it super-easy for me.
Guest authors are welcome (see about me for contact details). I am primarily interested in individual accounts on extreme early retirement: plans as well as those who have actually done it. I reserve the right to edit submissions.
Note that if you’re a freelance writer looking to expand your portfolio or you appear overly concerned about the number of backlinks to your blog or website in your article, you’re automatically disqualified. I just don’t think we share the same goals.
Blog roll / Link exchanges
My blog roll is based on what I think would be relevant/interesting to my readers, that is, likely several years ago when I last updated it. I change it
fairly oftenjust about never and since link exchanges sometimes come with the implicit assumption of an obligation, I prefer to avoid them. If you want to get on my blog roll, it seems the best method is to write posts on your blog that link back to some off mine. This almost guarantees that I will read your post. If I then get an impression that your blog is similar to mine, I’ll add it to my blog roll.
I read and edit all comments. If I see any spam, that is, commentary that does not add any value to the post and includes a commercial link, I delete it, so don’t even bother. However, if you provide a valuable comment (more than two sentences), I will probably let it stand. That said, you probably shouldn’t be engaged in this kind of behavior. Customers generally don’t seem to appreciate it.