Early Retirement Extreme

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

My emergency fund (transfer) in action

Published in January 28th, 2008

Posted by Jacob in budgeting, financial security

If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!Today I went to my new dentist for the first time. I was pleasantly surprised since they did not seem to have a ton of fancy gadgets in their clinic. This generally means that they don’t have huge debts [...]

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 [...]

Dollar cost averaging at the pump for cheaper gas

Published in January 18th, 2008

Posted by Jacob in budgeting, expenses, freebies, transport

1 Comment

This may be taking it to extremes, but try dollar cost averaging at the pump for cheaper gas. Obviously this does not work if you have to detour to get gas, but if the gas station is on your route and you merely have to pull over, do this. Instead of filling the tank up, [...]

I don’t need an emergency fund, I have a credit card

Published in January 14th, 2008

Posted by Jacob in budgeting, compound interest, financial security

8 Comments

I don’t have a disaster fund or an emergency fund. For emergencies, I use a credit card. Why do I do that? The reason is that emergency funds must sit in a checking account to be liquid. While sitting there they earn less than a savings account (in general) typically only a few percent.
If I [...]

What I would teach children about savings

Published in January 8th, 2008

Posted by Jacob in budgeting, compound interest, money, net worth, saving, standard of living

5 Comments

I do not have any children, so this discussion will be largely academic. However, if I had children, I believe that instilling the proper financial values so that children know what to expect from money is much more valuable than a 529 plan or any kind of donation, gift, or allowance. My parents saved about [...]

How to get wealthy on minimum wage

Published in January 2nd, 2008

Posted by Jacob in budgeting, cost of living, expenses, financial security, standard of living

11 Comments

This is an interesting challenge which I believe I could do if I had to. To reiterate: This posts shows what I would do. As always, I am not you, and it is your responsibility to decide whether you want to and whether you need to hire a certified financial professional to consult before following [...]

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. [...]

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 [...]

Wear sunscreen and retire early

Published in December 21st, 2007

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

1 Comment

Spoken to the tune of “Wear Sunscreen”.
If I could give you a single piece of advice. This would be it: Live within your means. The long term benefits of living within your means have been proved by economists whereas the rest of my advice has no basis more reliable than my own observations.
Buy a [...]

Frugality is not deprivation

Published in December 19th, 2007

Posted by Jacob in budgeting, economy, personal finance

1 Comment

Frugality seems prevalently to be considered a form of deprivation. It is seen as something people resort to when they have no other choices. This is not how I see it. In my idiosyncratic world, which I apparently share with successful entrepreneurs and capitalists, frugality equals economic efficiency.
Economic efficiency means

Achieving the most output with the [...]

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