Early Retirement Extreme

Financial independence, frugality, self-sufficiency, ecology, capitalism, and voluntary simplicity

Retiring happy in the 21st century

Published in June 4th, 2008

Posted by Jacob in assets, consumerism, ecological footprint, financial security, inflation, planning

If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!One must save to retire, because savings transfer purchasing power from the present to the future and in order to stop working one must have claims on future goods. That much is obvious (if not, read this post). Since [...]

Choosing a retirement plan for extremely early retirement

Published in March 19th, 2008

Posted by Jacob in assets, personal finance, planning, saving, taxes

10 Comments

Consumers are widely recommended to contribute around 15% of their paycheck to a retirement plan. The question whether to pick a ROTH IRA or a traditional IRA does not have a definite answer. For instance, it depends on whether one’s future [retirement] income is expected to in a higher tax bracket (ROTH) or a lower [...]

Cash flow diagrams for the poor, the middle class, and the investor class

Published in January 26th, 2008

Posted by Jacob in assets, compound interest, debt, expenses, financial independence, financial security, investments, money, personal finance

16 Comments

Being poor or unable to get credit 100% of the expenses must be covered with wage income. Schematically the cash flow looks like this

Thus you put your time into your work which gives you a wage income that is used to pay for stuff that goes back to you.People with a credit score can go [...]

How I invest when the markets are bleeding

Published in January 23rd, 2008

Posted by Jacob in assets, economy, investments

No Comments

It is times like this when the markets are falling almost on a daily basis that I remind myself of why I invest. I invest for the following reasons.

The main reason is to provide an income stream; usually in the form of dividends. I also tried covered call writing, but this is too much of [...]

If I retire with a million dollars how well can I live?

Published in January 22nd, 2008

Posted by Jacob in assets, budgeting, cost of living, financial security, personal finance, standard of living

5 Comments

Financial planners universally use a rule of thumb that you can deduct about 4% of your retirement account annually without compromising your principal(*). With a retirement account of $1,000,000 you can therefore spend $40,000 a year.
As for how well you can live on $40,000 a year that is another question entirely.
If you live in New [...]

So you say my blog is worth $15000 already?

Published in January 21st, 2008

Posted by Jacob in assets, blogging, investments

5 Comments

I came across this tool for calculating the worth of your blog. I got $15000 which is not bad for 6 weeks of writing. I’m not sure exactly how this is calculated though. Is this a pure play estimate of what similar blogs have sold for. Quite possibly it is just a measure of some [...]

How I became financially independent in 5 years - Part II

Published in December 27th, 2007

Posted by Jacob in assets, budgeting, clothing, cooking, cost of living, spending, standard of living

13 Comments

I posit that most people can attain financial independence in less than 10 years and in less than 5 if they are truly determined. I also submit that many people not are willing to make the necessary changes.

Read part I here
One thing I noticed early on was that small expenditures could quickly add up. [...]

Forget about net worth, consider the bottom line

Published in December 25th, 2007

Posted by Jacob in assets, cost of living, financial independence, financial security, inflation, investments, liabilities, net worth, personal finance, saving

1 Comment

I think the income or p&l statement which catalogues earnings and expenses is more telling about a person’s financial situation on a day to day basis than the balance sheet which is where you calculate your net worth. The balance sheet is more useful when you are considering buying or selling assets. So for example, [...]

Wear a wide brimmed hat and retire extremely early

Published in December 22nd, 2007

Posted by Jacob in anticonsumerism, assets, budgeting, cost of living, expenses, investments, liabilities, net worth, personal finance, recipe, spending, standard of living, voluntary simplicity

4 Comments

And here’s the extreme version of Wear sunscreen and retire early. I promise this will be the last blog on sunscreen for a while
Spoken to the tune of “Wear Sunscreen”.
If I could give you a single piece of advice. This would be it: Be wealthy. The long term effect of accumulating wealth has [...]

On liabilities

Published in December 7th, 2007

Posted by Jacob in assets, investments, liabilities, net worth, personal finance

2 Comments

Anything that requires regular expenditures is a liability. Think cars, housing, cigarettes, eating and staying alive (for that matter)…
To get on a fast track to financial independency, it is helpful to route expenditures through capital assets. The idea is that you work to pay for assets such as savings, CDs, stocks, and bonds, and then [...]