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Interview with Mr. Money Mustache

blog.ycombinator.com

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Re: Interview with Mr. Money Mustache

#271

Post by dublidu »

mod wrote: post #188

Something that seems to be lost in this thread, which looks to be mostly a debate about whether or not early retirement is feasible for normal people: For normal people, MMM strategy is about making uncomfortable decisions (plain, reliable used cars, no fine dining, no fancy houses, no downtown-big-city living locations) to avoid the most uncomfortable thing of all: work. If you would rather have a job your whole lif…

Just because you want to work forever doesn’t mean you will have the opportunity to. There are plenty of 50 year olds who unexpectedly find themselves out of work and unhireable.

Re: Interview with Mr. Money Mustache

#272

Post by kamaal »

nilkn wrote: post #73
hammock wrote: post #46

Earlier quoted context omitted.

To apply MMM's ideas, on a 50K salary assuming monthly expenses of 1,250 (that's the hard part), if you put away 50% every year you can retire on a 375K nest egg (4% safe annual draw) after 15 years, or age 37. Roughly.

Assuming you only live to be 80, you'll have to stretch out that $375k nest egg for a whopping 43 years of inflation, rising healthcare costs, and unpredictable market conditions. And God forbid you reach 80, run out of money, and then... keep living, old and frail and weak with no job prospects. FIRECalc suggests a probability of about 20% of running out of money by age 80 with a 4% annual withdrawal rate (adjusted…

>>Plans like this just seem downright dangerous to me.

Retirement doesn't mean one sleeps 15 hours a day. It generally means one doesn't care much about the day to day financial demands of life and does what he/she always wanted to do.

If you give these $50K/yr people $400K at the age of 37, these people will very likely go on to a lot of other important things which can help them make more money.

Re: Interview with Mr. Money Mustache

#273

Post by kamaal »

otterpro wrote: post #184

The easiest way to retire early is to enlist in the military, at least in the US, anyway. After 20 years of service, you are set for life with life-long retirement pension and healthcare. Of course, there's a high risk, since there's always wars and deployments, etc and many don't make it past 10 years, after they get fed up with being in the military. When I was in the army, I saw a lot of people in their early 40's…

Military pensions continue to be the top reason why most young people across the world are attracted to join the forces.

But there is a catch though. You really have to serve the minimum time. And like you said most get either fed up, or they are discharged early. The other part is in many parts of the world, there is relative peace, so its a safe bet. Plus most of the times apart from the training days, they actually see good physical exercise everyday to its like a win-win job.

In India armed forces have asked for a kind of roll over pensions, where every year your pensions are revised and you are paid as much as the highest paid servicemen retiring in the rank you retired from. Of course there is a lot of opposition from the civilian side for something like this.

Given the relative peace in the Indian subcontinent, in most cases its possible for many people to make it through without much risk, and if you join early, you can come out by 40, with a neat yearly increasing pension for the rest of your life.

They also have short service commission jobs in the Indian army, which don't carry these benefits. And they often go unfilled for the obvious reasons.

Re: Interview with Mr. Money Mustache

#274

Post by [deleted] »

mod wrote: post #188

Something that seems to be lost in this thread, which looks to be mostly a debate about whether or not early retirement is feasible for normal people: For normal people, MMM strategy is about making uncomfortable decisions (plain, reliable used cars, no fine dining, no fancy houses, no downtown-big-city living locations) to avoid the most uncomfortable thing of all: work. If you would rather have a job your whole lif…

[deleted]

Re: Interview with Mr. Money Mustache

#275

Post by AjithAntony »

troupe wrote: post #105
joeax wrote: post #19

I've been reading his blog for a few years, and he does some have some insightful advice on shedding unnecessary expenses and living on a frugal spending diet. I've been able to get down to one car that is almost paid off, and double my savings and investment portfolio. My favorite article from him is living close enough to work to bike (although working from home is most ideal). However, his blog comes with a bit of…

I would assume that an important part of trying to retire early is to choose a career path that doesn't max out at $50k per year. From what I've seen he suggests two things are necessary to retire early: 1. Save lots of money (which requires making money that you can save). 2. Don't spend lots of money. He seems to be pretty transparent in how he does both. If you want to save lots of money, but choose a career that…

$50k earner and $150k could have the same retirement schedule if they have different lifestyles. If both can live comfortably on the same proportion of their income, then they can retire at the same time. If both had expenses that were 50% of their income, for example.

If both want to live a lifestyle where they spend $75k, then the lower earner will never retire.

Re: Interview with Mr. Money Mustache

#276

Post by tonyedgecombe »

astura wrote: post #189
tonyedgecombe wrote: post #114

Earlier quoted context omitted.

I think MMM knows his audience, it isn't for me but I can imagine many people do get something out of it. Really the main problem is there just isn't much to say, spend less than you earn, invest the difference, develop some self-sufficiency.

I didn't know what "spend less than you earn, invest the difference, develop some self-sufficiency" meant 15-20 or so years ago though, they were just words. I didn't know what a 401(k) was, I didn't know what an IRA was, I didn't know what a brokerage account was, I didn't know what a mutual fund was, I didn't know what an ETF was, I didn't know what "equity" meant, I only had a vague idea of what investments were,…

All those things you didn't know are irrelevant if you spend more than you earn, this is the situation most people are in. It applies whether you are a student or coming to the end of your career. Most people need to absorb that simple message.

Re: Interview with Mr. Money Mustache

#277

Post by [deleted] »

yessql wrote: post #233
nilkn wrote: post #194

Earlier quoted context omitted.

Sure, but that changes the topic a fair bit. Part of the allure of MMM is telling people they can retire at age 30 to 40 with a relatively small amount of money if only they can keep their expenses under control and live frugally. The reality is that as you get deeper into that 43 year period without pursuing your career, your marketable skills will diminish as well. Many careers don't "scale down" either. A person w…

Well, you said this was a dangerous plan. The biggest danger is that you have to go back to work. If you continually only withdraw 4% of your nest egg (reducing your absolute withdrawal during market drops), then make up the difference if you need to in order to cover current expenses, then you'd be just fine.

[deleted]

Re: Interview with Mr. Money Mustache

#278

Post by CodeCube »

roel_v wrote: post #234
jmilloy wrote: post #172

Earlier quoted context omitted.

There is a position in between "all rental arrangements are okay" and "no rental arrangements are okay". I think the parent and others that dislike rent-seeking would have no ethical objection if the landlord charged an amount corresponding to costs of maintaining and renting the house (taxes, upkeep, risk, management, etc). The objection is when a landlord is able to work a few hours a month managing their propertie…

"I think the parent and others that dislike rent-seeking" Jesus fuck I just wish people would stop throwing that word around trying to sound like economists when they obviously have no idea what it even means . Renting out real estate is not rent seeking .

ok, then perhaps I should say, "seeking rent for long periods of time on a necessity, with no exchange of value in the long term for the person paying"

Re: Interview with Mr. Money Mustache

#279

Post by CodeCube »

kbutler wrote: post #161
CodeCube wrote: post #79

Earlier quoted context omitted.

Personally, I find rent-seeking landlords to be an unethical pursuit. I know that's not a mainstream thought, and is the underpinning of many people's income strategy ... but I can't support the idea of letting a family live in a property for decades, and then something happening, and they're on the street with nothing to show for the tens of thousands of dollars they have given in rent.

"I can't support the idea of letting a family buy food for decades, then something happening, and they're starving with nothing to show for the tens of thousands of dollars they have spent on food."

Housing is not a perishable resource (to an extent, yes I realize maintenance is a thing). It's not comparable

Re: Interview with Mr. Money Mustache

#280

Post by CodeCube »

reverend_gonzo wrote: post #224
codydh wrote: post #217

Earlier quoted context omitted.

It's common for people to get stuck below or near the poverty line. It's difficult to save for a house down payment (much less build up the credit to get a loan for the rest) when you're struggling to pay for rent, bills, and food. Ignoring this cycle is missing the reality for many, many people.

Absolutely. Some people definitely do have it a bit harder than other people. But, outside of medical/mental issues, or just a stream of bad luck, people generally make it harder on themselves due to certain choices in their life. My parents came to America without a dollar in their pockets. My dad's income was running a convenience store which barely made enough to pay his bills. So both parents worked, effectively…

You say "outside of ...", as if those things aren't common. So what, a stream of bad luck, or a sickness should relegate you to lifelong poverty?
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