Following the HUGE forum discussion of the ethics of extreme early retirement which resulted in 133 (and counting) responses. Sawbones Surio wrote a very useful thread summary on the forums. Since more people still read the blog compared to the forum, I asked him if he would be willing to turn it into a summary for the blog. Here’s part 1 of what he sent me. (You might want to read it together with the Borsodi post.)


Minor Preamble:
To me, the “concept of ERE” needed no explanation or understanding. It formed an instant connect because, in spelling it out, Jacob has tried condensing very many unifying themes. For instance, when I introduced the ERE site to my brother, his first response was “Ah, great! Looks as if we’re doing most of it in our lives already” :-). So, beware: you are reading the words of a ‘practicing journeyman’ (not ERE’d yet) :-D!

Before the forums came about, Jacob had to set about writing “clarification posts” about definitions and ideas that form ERE philosophy’s backbone. One of my favourites from those, is this one called “Blog comments in a parallel universe”. It sensitised me to things such as:

  • What “collective conscious” truly can be, and how it shapes “individual thinking”.
  • How much we become a “product of our times” without even our necessarily realising it, and,
  • A change in mindset needed to understand ideas going against ingrained thought patterns or one’s own ways of life.

With these points as my motivation, I’ve gone about this write-up on (Hat Tip: @Maus) “The way of the ERE”. Enjoy.


A sure sign that things are *not* tickety boo with the world (and forum membership comments seem to assert to this fact), is the number of relatively new readers who discover the blog though the “early retirement” keyword search! But, when they read on, they find that ERE requires a fundamental thought shift. So, let’s take a minute to understand, what exactly is ERE?

Assuming you are in your 20s, and have started work straight after college with no accumulated debt, then with a *high* savings rate all you need to do is work for 10 years straight, and you become “ERE”. Whoa! Yes. It is as simple as that, and it is aided by the following:

  • Save 70% of your income, and you can actually take 2y-4m off every time you work 1 year. With this savings rate, work 10 years straight and you can call it quits.
  • Save 50% of your income, you can take 1 year off every time you work 1 year. With this savings rate, work ~20 years straight and you can call it quits.
  • A low-impact lifestyle, reinvestment of your savings, compound interest, etc., and Your annual expenses < 3% of your invested savings, allow you to pace the rest of your life to your own terms and conditions

Considering the sustained and surging popularity of stories such as this, results of the Easterlin paradox and this recent one, you’d think people would take to this concept of ERE, like ducks to water if someone cared enough and actually explained it to them?

Paradoxically and bafflingly, *NOT* seems to be the case. Below, you’ll find a list of common “objections” to ERE, followed by my own thoughts on the matter.

1. If everyone did this, nothing will ever get done and society will break down.
2. You are withholding your economic contribution of working for society and are instead “using” the work of others to finance your life.

Ed’s note: And here are 10 more common objections.

A fundamental fallacy in this type of argument is a fixation with “circle of concern” (how can anyone profess to know how society will break down?) which no one can influence, or control, while conveniently and completely ignoring the inherently controllable “circle of influence” (what’s so hard about controlling *your own* savings rate?) (Stephen Covey’s new-agey phrases there).

To compound this is an added fallacy of the very same people’s total faith in saving 10% of their income into index funds that promise inflation adjusted returns in the distant future (30–40 years hence) even though “past performance is no guarantee of future results” is flashing in neon lights in all those discussions (This is prevalent PF-blogosphere thinking).

OK, getting slightly more serious, allegations of this nature are somewhat scary because, people don’t seem to realise that the fundamental premise of argument 2 is exactly what one Mister Karl Marx made, while critiquing Capitalism and simultaneously advocating the liberation of the proletariat. What we do know is that pretty much all of Karl’s ideas were unmitigated disasters(*) in implementation and practice. And recent events have also reinforced that unbridled capitalism can be just as disastrous. The beauty of ERE, however is that of one’s ability to make *hard* choices and therefore effect *real* changes in one’s own life in a very quick manner! Indeed, here’s food for thought: would this sort of lifestyle be possible (let alone a discussion of its possibility) in a communist country which practically forces everyone to “contribute to society”? Also note, that there is complete individual accountability in an ERE lifestyle because of the inherently clear and deep understanding of “need vs. want” before opening up one’s purse strings. Infantlilisation of public discourse and mass programming of mindsets through media has rendered any discussion on this topic mostly useless.

(*) In the interest of fairplay, the distinction between Communism and Socialism, in Howard Zinn’s words (scroll to end)

Mostly, a corollary objection also emerges to the above point, which I paraphrase below:

You’re very selfish, as you haven’t paid your dues back to the society that has *educated* you and continues to provide services (army, fire services, etc.) for you…

At this point, I usually sense a growing breakdown of communication. With a narrow world view, it is easy to take that line of thought, but a brief reading into history will tell us that education in the form we knew, grew as a public service in European medieval monasteries and was provided completely *free of charge*! Over centuries, this system has been progressively mangled, destroyed and hijacked to the form that we see now. My question is: Should we accept today’s world of specialised “price marked up” degrees as progressive, or those earlier days, when education was provided to all members as a free service? There are a lot of fundamentally flawed approaches in the propping up of modern society, and the sooner they are understood, challenged and resolved the better it is for future generations.
If it is our tax that ought to pay for an education system, shouldn’t it go all the way to ‘equip’ us to contribute to society? If so, can anyone explain why students carry so much debt when coming out of college? I posit that we’ve moved from a system of education to a system where too many “gatekeepers”(**) have started milking and gaming education out of greed.

As to those misplaced concerns about breakdown in army and fireservices; I say “misplaced”, because I see in such remarks, a lack of awareness of other alternatives and a belief that the prevalent social model is overarching in all forms and therefore worthy of full reliance on it. Briefly, I would like to point to the Switzerland for functioning “volunteer” models for both services mentioned, that any other country can freely adopt for its own needs. Indeed, I am willing to take a bet that several EREs will volunteer for such activities, as their lives no longer revolve around earning to pay for their own upkeep! And since this is my post, I am making one sweeping statement here: If everyone does adopt ERE, you won’t even need a colossal army to maintain “peace in Iraq” or maintain “shipping presence in Deigo Garcia island”, because an ERE lifestyle will thoroughly wean us off current levels of fossil fuel consumption, resulting in our not needing to “protect US interests” all the time :-P

(**) Analogy for “gatekeepers” being sneaked to artificially inflate a thing’s value in the eyes of people: Frederick the Great of Prussia faced the challenge of overcoming the people’s prejudice against the potato and accepting it as a staple food. So, Frederick used a bit of reverse psychology: he planted a “royal” field of potato plants and stationed a heavy guard (with explicit orders *not* to guard it well) to protect this field from thieves. Nearby peasants naturally assumed that anything worth guarding was worth stealing, and of course, this was entirely in line with Frederick’s wishes.

Thought: Is modern “education” valued because of the ‘value’ placed on it by “gatekeepers”, or does it really hold that much stead as most people claim? I am not taking an anti-education stance here. I want people to lower their lances and think a little bit critically for themselves! Also, I consider student loans as evil! Period.

Moving on, there’s something called Myers-Briggs Type Indicator that people should spend some time getting to know. Perhaps, it will bring an awareness about the fact that not all personality types gravitate towards a “collectivist” lifestyle. This is a distinction that carries a lot of significance. So, while it takes some time, find out what your own personality type is. Most people that answer the siren song of ERE would also answer to the roll-call of (add: rugged, highly, etc.. ;-)) “individualists”. And this is another predominant reason why ERE is bound not to become a “universal practice”. There are people who value strength in numbers, in conformity, and not having to take responsibility for their lives and their action. But, please know this. It wasn’t always like this. It’s a malaise of the industrial revolution. First and foremost, this is what history has now made of the two foremost industrialists that shaped our modern lifestyles and memes:


Edison preferred experimentation to theory, relying on meagerly paid “muckers” to test and implement his ideas. Ford treated his engineering staff the same way; many Ford engineers had surprisingly little training, and their job was not to think, but to follow Ford’s orders. For all that, Edison was widely considered America’s foremost genius, and many people described Ford in similar terms.
(Source)

And now here’s an excerpt from Henry Ford’s autobiography, “My Life and Work”. Here’s what he said back then (emphasis mine)

There is no difficulty in picking out men. They pick themselves out because–although one hears a great deal about the lack of opportunity for advancement—the average workman is more interested in a steady job than he is in advancement. Scarcely more than five per cent, of those who work for wages, while they have the desire to receive more money, have also the willingness to accept the additional responsibility and the additional work which goes with the higher places. Only about twenty-five per cent. are even willing to be straw bosses, and most of them take that position because it carries with it more pay than working on a machine. Men of a more mechanical turn of mind, but with no desire for responsibility, go into the tool-making departments where they receive considerably more pay than in production proper. But the vast majority of men want to stay put. They want to be led. They want to have everything done for them and to have no responsibility. Therefore, in spite of the great mass of men, the difficulty is not to discover men to advance, but men who are willing to be advanced.

Paradoxically, Henry Ford paid the highest wages of his day (you can see I am alluding to Easterlin here) and still his workers ended up going on strikes!


Here’s a link to part 2.