This is a guest post from TL Black, who recently wrote another guest post on her early retirement plans. It has to do with the difference between experts and beginners and the law of diminishing returns. I have some further comments at the bottom.

Extreme early retirement compared to sports and fitness? Clearly, I’ve been reading this blog too long and have undergone some kind of frugal brainwashing. But learning extreme saving techniques is, in fact, a lot like swimming.

I worked for years as a lifeguard (talk about boring jobs working for ‘the man.’) My job was to sit and watch people swim back and forth. Two kinds of visitors frequented our pool.

The sleek, speedo-wearing veterans swam for hours and practiced efficiency drills to shave seconds off their race times. The blubbery beginners struggled–awkward, gasping and hanging on the lane lines because they couldn’t make 25 meters in one go.

On more than one occasion, the beginners would come to chat with me after a 15-minute swim and gaze on the experienced athletes still in the water improving their style. They’d express frustration at their comparatively inefficient bodies and embarrassment at being watched by an observer (me) as they swam. (And yeah, it wasn’t just paranoia, I really was watching them more because they looked more likely to drown.)

What I often told the new swimmer (and what holds true for the beginning saver) is this: The super efficient guy you’re looking at—the one practicing the same stroke over and over again? You’ve got him beat in at least one way. Every time you swim, you’re heart rate shoots sky high and you’re improving your fitness level faster than the expert over here. If you work at it little, you can also make huge gains just by fine-tuning your technique. If you keep this up for a few months, I’ll see real improvement in your swimming—I’ve been watching the experts for years and I can’t detect their improvements without a stopwatch.*

The same is true for beginners in the area of savings. I’m going to be visiting some family in SoCal shortly, and they’ve asked me to help them do a few things. We’re going to work on clutter and savings on groceries and eating out. For a household of 4 adults, they currently spend upwards of 1,200 a month in groceries BUT they also eat out several times a week, sometimes more than once a day. They haven’t calculated the cost! I don’t even want to talk about the clutter, but I will say this: the condition of my help is that for any room I reorganize, they agree to get rid of 50% of the ‘stuff’ in there by volume. You get the picture.

Now, one might think that this is a lost cause, but I think it’s quite the opposite. I’m sure I can help them shave $2-300 of their grocery list while I’m there. My goal is to get them to cut it in half, but we’ll see. It seems easy to me, but I may be underestimating the pain factor as they make radical changes—at least from their perspective.

For those of you out there who are a lot more efficient in your saving and investing habits, can you imagine having the possibility of saving $3-600 in groceries alone? DH and I would jump at the opportunity. We have nearly nothing easy left to remove (except for wine—anyone who knows how I can get a Frenchman to stop buying wine without getting a divorce let me know).

The beginner phenomenon is part of the reason I think that the posts at Early Retirement Extreme are just relevant to the beginner as they are to the experienced saver. In fact, the techniques may be even more relevant. A beginner who does just a few of these things can make significant gains in a short time.

*Note this is for swimming and saving, not investing!

Jacob comments: I think this post is useful to answer the question regarding the “hardships” I went through to get to where I am today as discussed in the comments of a recent post. I actually used to be a competitive swimmer and the key to swimming is “efficiency”. Back then I could swim more than 4 kilometers of freestyle without breaks and more importantly without the feeling that I was doing something that was tremendously tough. Indeed, operating at a given level is usually never that tough. What is tough is moving up to the next level (The club where I swam had six teams: beginner to elite) where you are suddenly out of your comfort zone and being challenged and expected to do much better than you have previously been doing. But if you grow as a person/swimmer, you do become better and after that things become easy even though you are now operating at a level that used to be challenging. Eventually it will even be hard to “reach down” and connect with the beginners because you simply do not remember what and why certain things were challenging. (This is also why I believe graduate students sometimes make better instructors than professors. The former still remember what was difficult and what wasn’t.)

This blog is extreme. There are blogs out there whose main purpose is to get you off the couch and into the water. There are blogs whose main purpose is to get you to swim a lane without hanging on the ropes. There are blogs who sets up a fitness programs for those who just want to stay in shape. (I won’t mention any names, but I do have specific ones in mind 😀 .) This blog is for the “elite”; not that you have to be extreme, but you should at least have the attitude of wanting to become one unless you just read along for entertainment.

I don’t mean to say that “elite” is better (the problem here being to define “better”), but it is intended for a certain kind of people who have certain goals in mind when it comes to personal finance.
I strongly believe that the challenge is not so much physical as it is mental. For the longest time it was believe to be impossible to run a mile in less than 4 minutes (it was also believe to be impossible to fly faster than the sound, that is, break the sound barrier). However, then someone did it and soon thereafter many people started running a mile faster than 4 minutes. Did something change physically? No, people simply reset their targets and changed their beliefs of what they thought possible. I am trying to do the same thing with personal finance.

The hardship or challenge in personal finance is to change one’s frame of mind, specifically one’s values. The technical details of personal finance are very simple. Anyone can learn them in a few months. (It is amazing this stuff is not taught in the school system but I guess this would not entirely be in the interest of the school’s sponsors.) If that was all there was to it, most pf blogs should shut down immediately, as they would have nothing new to say. However, the primary function of pf blogs is to support/suggest/guide attitudes. For example, if you live to eat, eating a very basic diet is not going to be amusing. If you eat to live, you will likely be able to eat most things as long as they can be justified from a health perspective. I for one live to learn and read so when I experimented with not buying books, that sucked, but at least I tested my limits and that is what athletes/extreme persons do.

Originally posted 2009-11-26 00:23:00.