This is a guest post from J_, a reader from the Netherlands. Despite the many comments that “I’m too old to retiree early”, ERE really is relevant for all ages and it’s never too late to start. (In fact ERE is particularly relevant for those who rely exclusively on diminishing payouts in real terms from nationalized pension systems like social security and yet find a way to live well.)

Many in their forties, fifties or sixties now see/think that their future pension will be frustrated by the financial crisis. Around me, the outlook for a (reasonable) pension is dwindling, especially in European countries, but I suppose also in other developed parts of the world like the US. Pension funds have mistakenly relied on rising stocks, on high returns in interest and dividends. Countries such as The Netherlands, Germany, Great Britain among others are scrimping on their state-pensions.

ERE is not only for young ones, but good for anyone approaching their fifties or sixties.
The first thing I learned was to live comfortably and spending less and less. For starters, to live in a dwelling with just enough space as I and my wife need and no more. No extra bath- or bedrooms. No oversized rooms or gardens.
To cook our own meals from scratch is much healthier, it gives the possibility to look for healthy food with as few chemical additives as possible. I live in walking or cycling distance from where I (used to) work and now go by bicycle or on foot for shopping. I have become (almost) car-less.

Doing this and thus spending less gave me the insight, the practice, and the confidence that I do not have to worry even as my pension becomes (much) smaller than I had expected long ago. By moving towards a spending reduction of thirty or forty percent of what I was spending eighteen years ago, my pension can go be reduced much more before it will really hurt me.
Besides, I consider it a sport. As I started in 1993, it became fun to live a live to the fullest, and still need fewer money and things. In nominal terms I now live happy and wealthy on only 68% of what I spent in 1993. So depreciation was and is not a problem. I am 64 and financially independent now for eleven years and even if I get no pension at all, I still have enough funds to live on. And I know exactly how I can reduce my spending further if I think it is necessary. (In 1993 I was inspired by: Your Money or Your Life of Dominguez and Robin, ERE refined my insights and enhances my pleasure to live such a live.)

The next important thing goes for free along with it. By eating cheaper while my wife cooks nearly all our meals from scratch and by studying which foods are really good for us, we have become healthier, and, while our car is (mostly) parked, we cycle/walk much more. I got inspired to do my own gymnastics. I do it with a simple kettlebell (as I learned from the ERE blog/book), which I do in or outside our home. No gyms!

I saved my unused earnings. I have used it to free me from my mortgage, thereafter to build my own fund, and after it had become substantial I had to learn in what ways it will get proceeds of its own, mostly interest. The size of my fund is not public, but the system is simple. For example, if you have learned to live of $ 10,000 per person per year, you need a fund of about $ 330,000 per person. This is 400 times your monthly expenses, see ERE the book/blog why.

Originally posted 2011-10-27 12:54:10.