Three books will be given away. Three ways to participate. One catch: You have to demonstrate actual effort Rules are given in the linked post.

Also read How I pulled in my early retirement by 20 years.

The podcast covers and expands on a lot of what I talked about in the most recent post about peak oil, Kondratiev cycles, and generational turnings.

We cover how different generations see retirement. We talk about the breakdown and rebuilding of societies, and how the economy and generations are influenced by this. How systems thinking concepts are applied all this.

We then move onto the Pareto law and how expenses are best attacked from the top: housing, transportation, food, stuff.

We talk about specialization and the prevailing product mentality that has develop and rendered many without skills to handle simple things in their personal life.

Go check it out! (1:15 minutes).

PS: I am very grateful for post-production and Jack Spirko’s infinite patience. We had to redo the intro three times over. I had a total radio-freeze in the beginning.

Let me introduce the Early Retirement Extreme Wiki. There’s a link to it in the upper right corner of the blog.

While the blog does a fine job of presenting random ramblings about extreme early retirement and the book does a fine job of presenting the strategies and how to think about extreme early retirement, the specific tips, tricks, and tactics have previously been assumed to be more or less known already.

The forums have provided some assistance in gathering this, but often the same questions are reasked and reanswered every 6 months or so because it’s hard to dig through the forum archives(*).

(*) There are over 20,000 entries now!

Therefore having been “strong encouraged” to start a wiki to gather the encyclopedic for some time now, I finally caved in. I hope this was a good choice. I had a similar reluctance to starting the forums, but those turned out to be very successful and now have more posts each day than I can keep up with.

I hope the wiki will enjoy a similar success.

Follow the recent changes and additions here.

Today’s episode of The Survival Podcast discusses consumerism and how companies are intentionally designing products to be faddish and break down in order to maximize profit. He also mentions the ERE book in the beginning.

For those who are coming over from from the podcast, let me say that the kind of everyday-survivalism Jack talks about and ERE has a lot in common. If you have a wide array of self-reliant skills and have chosen to live debt-free (no bills, no car payments, no mortgage or rent <15% of your income) you could be in a position of saving a lot of your income. If you ignore the standard advice to save 10-15% of your income in your 401k (this figure is based on people working until they're 65 and rather optimistic stock market returns which I don't think we can count on for the next 10-20 years), and instead save 50% of your income by relying more on yourself than walmart for your needs, you could retire at 40-50 years old---presuming you're 25 and start with nothing. If you save 75% you could retire, that is, have the option to no longer work for a living, within a decade.

See more in the menu bar above: About ERE, Frequently Asked Questions, etc.

In the past, I’ve held a couple of rather successful “twitter style” interviews.

The rule of the game is that you can ask me one question in 140 characters, or to make it easy, let’s just say you only have one sentence or 30 words to ask it.

Ask your questions in the comments below.

I will then attempt to answer them in a subsequent post.

Please respond in the comments here or directly on the forum thread if you can make it. Head counts are very useful! Time and place are yet to be determined. Use doodle to vote on your preferred date. There will be more information in the forum thread, so check back until they’re announced.

Also, don’t forget the Austin, TX Meetup on October 2nd.

I also wanted to say thank you for the $236.05 I’ve received in funded tips (from 20 readers) over the past couple of days. The size of some of the tips blew my mind, figuratively speaking.

A chance to meet other ERErs in person (not me though). See forum thread for details. Please RSVP here in the comments of this post or directly on the forum thread.

See Berkeley thread and Oahu/Waikiki thread for details.

Remember to check those threads for last minute cancellations.

Also see the newest reviews at

• Phil Brewer/Wisebread
  
• Canadian Dream: Free at 45
  
• Beating Broke
  
• Permaculture Australia
  

Check out the graphs at the last one. If I had actual land (other than planters), I would pursue permaculture as a planetary duty. Right now, ERE kind of follows permaculture without the “nature” part.

You probably want to start with the post on myths and the future and then look through my two lists of “best” posts.

In case you’re interested, I used to be active in the peak oil community, mainly in the energyresources and running on empty1/2 groups. I was also the webmaster on dieoff.org once upon a time.

I figured I wanted to try an experiment on twitter, namely to find out how many degrees I was separated from Kevin Bacon. Then I figured that perhaps that would be too ambitious as well as not very productive, so instead I decided to ask if anyone wanted to ask me anything. It worked and so here is the first harvest along with the answers:

@MattJabs Is it possible for an “up-side-down” homeowner to embark on an aggressive retire early plan? If so, what are some ways?

Retiring becomes possible when incoming cash flows exceeds outgoing cash flows on a time-averaged (include depreciation, etc.) sustainable basis. The problem here is that you may have an outgoing flow that is too large making it hard to save enough in time to create a large incoming flow. There are many solutions. The indirect approach is to reduce the outgoing flow. This could be done by renting out the house and moving into something cheaper. You could rent out a room or the garage. You could cordon of a room and take a home-business deduction. On the side, you could make more money. More drastically, the house could be sold, even at loss, or it could be foreclosed. Both would affect credit rating. The question is, in ten years, what would the optimal choice have been?

@rcrispe How does your family (parents, etc) respond to your ultra frugal ways? supportive? critical?

They are amused but tolerant—this incidentally seems to be the general response to me . There are two issues here. The first issue is how they responded to me retiring from my career (I retired within one year of my dad, my mom is still working, and my dad has a part time job a couple of hours a day which he seems to enjoy, he’s an extrovert) and the second is the response to my frugal ways. In terms of the former, they have always focused on the importance of being happy in what you do (as long as you’re not doing something illegal). There was never any pressure to pursue a high status or a high income as long as you liked what you did; incidentally they like to work and have held jobs over the entire range of the socioeconomic spectrum. The second issue is not so much a frugal controversy, after all, I have the same things that they do, as much as it is a consumerism controversy. This mostly happens during birthdays and other events involving mandatory presents. I get a gift card and I’m frustrated because I don’t know what to do with it. Or I get money with them telling me to spend it on something nice for myself, so I buy stocks with it. Hey, that’s nice to me, but I think they were expecting me to go and buy some stuff instead. On the other hand, they have adopted a few of my suggestions. For instance, my 50+ y/o mom now rides her bike to work every day rain or not, I think it’s a 8-10 mile roundtrip, and she just had her first commute anniversary. I think they understand that I may be odd but generally quite competent and not crazy. It’s kinda like with the Highlander. First you may think it’s weird that he keeps to himself and wears a trench coat to conceal a sword. But then you learn that he’s an 400 y/o immortal who can only die if he gets his head cut off and then it all makes sense. Extreme early retirement is similar, it makes complete sense when it is understood on its own terms, but otherwise it seems a little weird.

@davecollins41 In reading through your prior posts, It’s difficult to see what you’re investing in. It appears dividend stocks – expand?

I have invested in many different things to find out what works for me—I think that is important. Using a strategy that does not fit your personality makes you sleep poorly and I think sleeping well is more important than alpha(*).

I have (owned) individual stocks, bonds, mutual funds, and I even have an index in my 401k (tracking the MSCI EAFE) due to limited choices there. I find that dividend stocks work the best for me because they offer some level of inflation protection, unlike bonds, they provide more control than funds, and they provide a somewhat dependable income which I like. If you find a good stock, you can hold it without fees and there are no gains taxes, even in taxable accounts, until you sell it. The capital gains tax is really a “trading tax” and I think many that tend to speak against owning individual stocks tend to ignore that that tax goes away if you are not changing position very often. If Berkshire paid a dividend, I would hold a really large position there, but the lack of dividends is really a big red flag for me. I do not like to depend on capital gains since I may be forced to liquidate low. Of course I could have a 3-5 year cash position and use that to get me over bumps in the market, but I still prefer the income.

(*) Alpha is returns generated in excess of the market.

@MoneyEnergy What are your investment strategies (& fave stocks?), given your thoughts on our ecological future, living simply, etc.?

I concentrate on individual stocks but I also have three large fund positions, FPACX, HSGFX, and DODFX. The former two provide excellent market commentary and I use that to guide my own investments. My buying strategy is to buy yields>5% and sell when the yield<3%. Also P/B<0.8 is a good guideline to cut down the universe further. For REITs the numbers are 15% and 10% respectively. Of course, this could lead one to buying crap close to the market top (I made that mistake, so I need to find a better measure for when things are undervalued. I think the recent crash made me realize that the market really does return from being overvalued. It's hard to believe when you've never seen it, though. I build positions by buying 100 shares at a time. I have 15-20 positions at any one time. I sell using the above guideline. The way I sell is to write a call on the position at the price where I would sell. Suppose that a stock pays $1 in dividends a year. Then $1/3%=$33.33 dollars, so I write a call close to that, say $35, 3-6 months out, if the stock is already trading close. This would give me about $100/100 shares in immediate cash. Written calls is a short strategy, so that reduces my volatility (by about half since the call is close to the money). If the stock(market) is on a run I use a trailing stop instead.

In terms of the future, I think more expensive energy will make things more local. I like WAG (Walgreens) because they are conservatively managed and have good locations and they sell drugs to old people (selling drugs is very profitable ). I also like NVA (Novo Nordisk) which makes insulin to treat diabetes. So those two have demographic backing. I have a substantial position in GE due to their focus on alternative energy and nuclear. I also have a big position in Wells Fargo (WFC); I figured they would be one of the survivors of the financial debacle and lo and behold. Unfortunately, due to political interference, they have taken hits along with all the others and hence the stock price went all the way down to $8 at some point—I kept holding—and now it’s back up at $25. If I could have called the timing on that I could have been a millionaire now One stock I’m currently looking at is TRMD, a bulk shipping company. In general I do not try to pick stocks over a time range of 30-50 years which is when I thing sustainability will really make an impact. This also means I have positions that are not sustainable, like UPS.

@philipbrewer How do predictions of future macro issues (inflation, recession, exchange rates, taxes…) affect your plans & strategies?

Did you mean economic macro-issues exclusively? A big reason I’m in dividend stocks rather than bonds is inflation protection. I do not care about the recession for the same reasons — this would be a much bigger problem if I required 10% total return or growth. I do not think the market is cheap enough to make those strategies winning strategies over the next 10 years. In terms of exchange rates I keep a substantial foreign position for historical reasons. I am more than 50% international in my exposure. Even more if you count in transnational companies with US headquarters. I plan to beat the tax problem by staying in the lowest income tax brackets possible. My long term goal is to pay zero taxes. Non-economically, I do not want to depend exclusively on the market, so I try to develop skills that I could sell for, say, $500 a month on the free market, that is, without requiring an employer. I have one such skill already. I could probably make it two with some work on the blogging. I’m working on #3. I also plan to relocate north and most importantly, to stay very healthy.

If you want to ask me a question for a future twitter interview, my twitter account is extremejacob. If you’re not on twitter, you can also ask in the comments. The only rule is that you can’t exceed 140 characters

I added a “favorite posts” widget in the hotspot (top left sidebar). These are not necessarily my favorite posts, rather judging by views, etc. they seem to be your favorite posts. Let me know if you remember other posts that you think should be there or if there are posts you think shouldn’t be there.

To make room I dropped the categories widget, since few people seemed to be using it.

I’m curios, which 5 blogs do you read the most. Let me know in the comment section. Also, if you don’t mind, let me know why.

• Top ten personal finance blogs you never heard of.
  
• The 10 most readable blogs that I like.
  

According to my calculations, I reached financial independence right around my 30th birthday. Like peak oil, it is however something you can only really see a few years after the fact: Have you made enough non-job related income every year since then, have you controlled your expenses, etc.

Prior to that period, I had a fairly good estimate of the cross over point thanks to the fortran program I had made (I suppose everybody else just use a spreadsheet) so I knew FI would happen right around going over the hill. I think having a target date for FI firm in my mind was a very helpful motivator.

The FI estimate has turned out to be amazingly robust. The reason is that when the external environment changes (like interest rates, … ) I adjust and adapt my personal behavior accordingly. So for instance, whereas I’m not as rich as I figured I would have been three years ago (thanks to the market plunge), I have adjusted my expenses and returns accordingly to remain committed to my target date.

I’d be really interested in knowing if my readers have a target date as well and I thought it would be cool to make a list. Let me know in the comments and I’ll add it to the list.

• Jacob (2005)
• Spork (2007)
• Brauhster (2008)
• Fubeck (2009)
• Dividend Growth Investor (2009)
• Alex (2010)
• David (2012)
• Julie (2012)
• Oscar (2012)
• Wanonymous (2012)
• Over the Cubicle Wall (2013)
• Debbie M (2015)
• Jayadeep (2015)
• aquadump (2015)
• Retire at 40 (2015)
• firefighter (2016)
• Brip blap (2017)
• Lazy Man and Money (2019)
• George (2020)
• Mjukr (2020)
• Blogging Banks (2020)
• Shanti (2022)

I just learned a new baking method from 30 Bucks a Week. Previously I have done my unleavened breads by basically making flat fist sized balls out of the following

• flour
• water
• spices

Forming them into a dough and baking them in the oven. For the flour, I use whatever is at hand, and I also try to experiment with different spices like ginger and cumin. You can add oatmeal for a more spongy feel (recommended) and butter for the consistency of regular rolls. If you add yeast or baking soda+something sour, you pretty much have regular bread. Not adding the yeast means that the bread is much more compact, one bread becomes an entire meal (Elvish waybread ).

However, there was still the hassle of cleaning one’s hands or industrial implements for those who are into that after baking. An even easier method, as described on the link above, is to use 1 part flour to 1 part water (you want the consistency of thick pancake batter, the exact ratio depends on the type of flour) and mix it in a bowl with a fork. Since the consistency is batter rather than dough, the bowl rinses easily. Just pour the batter onto a cast iron pan with a little(!) oil and fry it a bit. For our type of pan and flour, one cup of flour and slightly less than one cup of water works perfectly. Once you get the usual “pan cake holes”, put the pan in the oven. Everything washes off very easily.

This one works surprisingly well although it has practically no “taste”.

• Handful of spinach
• Tablespoon of oatmeal
• Tablespoon of peanut butter
• Tablespoon of milk powder
• One orange
• Half a zucchini
• Half a cup of water

The worms will eat the ends of the zucchini and a little of the orange peel.

Retiring from my career has turned out somewhat differently than I expected. I figured my subconsciousness would be in denial, simply out of habit, and first treat the new experience as a long weekend and then roll over to an extended vacation as I slowly built up my reserves again. I had expected I would be watching old Red/Green shows for a week while turning my brain into mush and generally doing very little and then … eventually slowly get on with my new work.

Interestingly enough it turned out different. On the first day of “retirement” I turned out 4 blog posts. In the following days I have been busy, very busy, working on grant proposals, reading books on global warming, learning about community organization, thinking up ideas combining basic ecology and technology, and a outlining a new online magazine.

You may have noticed that blogging activity has also increased substantially.

It might be interesting to see what a day looks like now. I generally wake up around 7:45 after having slept like a stone. This may have something to do with ditching my coffee addiction (I don’t have any excuses anymore, nor any coffee machines). I had almost forgotten how good not drinking coffee feels. Then I check the stock market, prosper, and swaptree. So far so good.

From this point on I switch between responding to emails (there’s a lot more “management” interaction in my new job, reading books and taking notes, updating our database, walking the dog, going outside to practice shinkendo or lift weights, napping, working on a paper or a blog post, copyediting to earn a little dough, and so on.

I eat when I feel hungry and I go to bed when I feel tired without having to worry that I have to get up by a specific time. In other words, two sources of friction are gone: The 9-5 friction of subordinating the rest of the day to the punch clock and the “you can not work on anything else while you are on this job”-friction.

In general, I do whatever I feel like I would do most efficiently at the time. This is spurred for my personal drive for efficiency — getting work done as good as possible with the least amount of effort — but more importantly by the new reward structure that pays for output rather than for time. Essentially, it means I work for me rather than for my employer and that I can schedule things according to my convenience rather than the other way around.

Any regrets?

Maybe it’s too early to say, but I should probably have done this years ago. Yeah, I know you purists will say I’m not really retired because I just got a new job. Well, maybe that is so, but this is so different from anything I have ever done before. To me it feels like a grown up summer break, except it’ll last longer.

I updated About Me and wrote a new page called About the Blog. Check them out if you haven’t already.

Today I read a post on GRS on the third stage of personal finance. I left a comment and said I would think more about it. So …

I have thought more about it.

General cognitive development follows an increasing list of stages as follows (these do not necessarily reflect JD’s stratification)

1. Copying
2. Comparing
3. Compiling
4. Computing
5. Coordinating
6. Creating

On the first stage, a person is unthinkingly copying what he sees his surroundings do. This is why advertising works. A person at this stage is entirely at the mercy of his surroundings. Good role models (parents?) lead to good financial behavior. Bad role models (TV shows?) lead to bad financial behavior.

In the second stage, the person becomes aware that there is more than one way of behaving. Keep in mind that some people never get to the second stage, maybe because advertising actively try to prevent it. This is the stage where the person might realize that there is another way to do things and that the other way may be better.

In the third stage, the person is actively collecting ways of doing things. Many personal finance blogs operate at the third stage compiling large lists of tips and tricks each describing a fragment of what constitutes good behavior.

In the fourth stage, the person is able to apply several of these tips to every day life. For instance, the person will be able to make a budget and follow a plan. This stage is about implementation. Many blogs also discuss this stage.

In the fifth stage, the person will be able to combine and refine different tips to achieve specific objectives. There are relatively few blogs discussing this problem, which falls under general lifestyle design. These lifestyles share the commonality of being built out of existing ways of doing things.

In the sixth stage, a person will be able to synthesize and create entirely new ways of doing things from seemingly unrelated tips in a lateral fashion. The important becomes unimportant and vise-a-versa. Things become holistically integrated and side effects are either eliminated or made beneficial.

So what is the mode of stages, that is, which stage has the most people in it? Given the preponderance of pf-blogs in stage three and four, one can perhaps surmise that most pf-blog readers are in stage two, hence the great appreciation of lists of 100 tips. I doubt that very many people in stage one would consider reading about personal finance. There are a few blogs about stage five and six. Perhaps people in those levels don’t care so much to write about it (I do). Perhaps there are not as many. It is difficult to say.

Some interesting questions to be pondered…

How does one grow from one stage to the next? Is regression possible? Do you think/feel/act differently in the different stages? Do your fundamental values and priorities change? And perhaps most importantly: Are you happier in some stages than in others?

With the coming new year, the air is buzzing with resolutions (see here, here, here, here, here, and here — it seems that things have gotten quite goal-oriented in the pf blogosphere this year). Now as for me, I never understood the point of making resolutions simply because it was a specific date. Then again, there is so much I don’t understand. For instance, I don’t understand anniversaries and birthdays as a cause for celebration either, so maybe I just don’t get it. Perhaps I am a lost cause. Perhaps not. I see the significance of the actions taken on those particular days but I don’t see the point of taking action just because of the calendar tells me to.

To me new year resolution bears the mark of the “Yeah I know I have a problem right now and therefore I will take care of it … next week”-philosophy. Hence a resolution uses a particular event to move one from stage III to stage IV of making changes.

I have noted, however, that new year’s resolutions are usually forgotten in about 2-3 weeks when the initial fast gains slow down and the struggle becomes harder. The problem is that new year’s resolution do not automatically come with a strong self-discipline or a strong support group. It is those things that must be established first, because merely moving past January 1st is not automatically going to cut it. Fortunately these can be engaged in all year long.

I’m trying to set up a website in Joomla (not related to ERE in any way).

If anyone knows more Joomla than me, that is, if you know anything at all, and you are willing to answer my stupid questions about it, please get in touch with me: jacob at early… etc etc.