The Simple Math Behind Early Retirement

> Assumptions:

> - You can earn 5% investment returns after inflation during your saving years

Take home quotation:

    Mustachians will remain a rare breed, is because this
    article will never appear in USA Today. (Or if it does,
    people will be too busy complaining about how it can’t
    be done, rather than figuring out how to do it)

> As soon as you start saving and investing your money, it starts earning money all by itself.

No, it doesn't. Money cannot earn money, people do. Saving/investing money only allows people (via an arbitrarily complex system of indirections) to become indebted to you so they'll pay you some of the money they earn.

This is vitally important because it means it's impossible for a significant percentage of people to retire early unless the remaining workforce becomes correspondingly more productive. Otherwise, if everyone started following the advice in that blog to try retiring early, what would happen is that average returns would go down across the board, and that "4% safe withdrawal rate" would become 2% or even 1%, making the whole math work out quite differently.

Arguably, that is already happening even without additional early retirees, simply because the increased average life expectancy (and thus the time people spend in retirement). Effectively, everyone is already doing an early retirement, compared to people 50 years ago.

Once you stop complaining about how difficult it is to become financially independent in this economy and look in how you spend your money, the mustachian philosophy is a viable way of life.

>I've stopped buying myself a new computer every six months or so.

Err.. why would you do that to start with? Even my hardcore gaming friends can make machines last for years.