Early Retirement Extreme

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

Weekend roundup - garage sale edition

Published in July 12th, 2008

Posted by Jacob in announcements, carnival, money

If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!To prepare for downsizing we had a garage sale today. We got rid of a bunch of stuff. The median price was about $1 and the average price was not much higher, and overall we sold for about $60, [...]

TurboTax proved too difficult for me

Published in March 11th, 2008

Posted by Jacob in investments, money

3 Comments

This year I figured I wanted to save the 30+ hours I spent last year doing my taxes. I have heard a lot of good things about various tax preparation programs that can fill out taxes and thus obviate the need for an accountant. After all if individuals need to hire experts merely to comply [...]

When Good People Give Bad Financial Advice

Published in February 29th, 2008

Posted by Jacob in investments, money, personal finance

8 Comments

In this guest post Hunter Nuttall talks about the challenges of giving financial advice. Although well intended, some advice can be ill suited for the person or just plain wrong. It is something we should all be aware of whether we are giving advice or taking it. If you like this post and want to [...]

Do you save to invest or to spend?

Published in February 27th, 2008

Posted by Jacob in money, saving

9 Comments

Do you save for retirement, emergencies, or big purchases? Or do you save to invest and obtain an income from your savings? One may say it does not really matter but there is a crucial difference in perspective between the two different approaches(*)
I used to be a saver. “Savers” ultimately save money to spend it [...]

Get wealthy trick: Don’t spend any money until it is re-earned.

Published in February 23rd, 2008

Posted by Jacob in compound interest, money

7 Comments

Some people use credit to spend their money before they have earned it. Other people spend money as they earn it. However, if one wants to get wealthy, one needs to re-earn the money.
First order re-earnings work like this. Pick an interest rate, let’s say 4%. Once $100 is earned, it is deposited in a [...]

5 ways to help get a prosper loan funded

Published in February 7th, 2008

Posted by Jacob in debt, investments, money, personal finance

3 Comments

As someone who has lent out over $12,000 over the past 1.5 years here is what I prefer to see in a loan request before I bid.

Be accountable! The original idea with peer to peer lending was that a group of people (like a knitting club) would get together and hold each other accountable. Needless [...]

The problem with the economic stimulus package and what to do about it

Published in February 2nd, 2008

Posted by Jacob in economy, investments, money, sub-prime

10 Comments

Economically speaking, the government is a zero-sum game that takes money from one group and distributes it to another group with the intention to somehow improve the world. For instance, when the government engages in war, it gets money from taxpayers (through the IRS) and savers (by issuing and selling bonds) and gives it to [...]

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 [...]

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

4 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 [...]

Are budgets required or just a good idea?

Published in December 18th, 2007

Posted by Jacob in budgeting, expenses, money, saving, standard of living

3 Comments

I have a confession. I don’t have a budget. In fact I never had one. It is my opinion that a dedicated focus on decreasing expenditures at every point excludes the need for a budget. Here’s how I understand budgets. Budgets are a way of allocating income to different accounts e.g. the food-account, the rent/mortgage-account, [...]

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