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Total household comp is somewhere around 25k/month gross but we spend $3.5k/month including our mortgage. The difference gets saved and invested. I didn't know who MMM was but I have always been fairly frugal with money before I came across his postings.
One thing you learn is buying things won't make you happier. A new car doesn't make you happy (in the long term). You just always want another new car. We typically do experience outings instead of buying electronics and other goods. We do travel but use work perks to do so freely and credit card sign up bonuses to pay for hotels. For example we are going to New Zeland or Australia for 10 days this year and it shouldn't cost much out of pocket.
I find typically the lower income folks live in the "here and now" phase and don't move past that into thinking about the future. Quite frankly they don't really have the $ to do so. If we were stuck making low wages for our lives we would probably spend it differently because working until social security kicked in would be a given.
Delayed gratification is what it's about. The higher your earnings, the more delaying positively impacts your future life. So instead of rushing out to buy that half million dollar home or $60,000 car, if you can save and invest your high earnings for a few years you will be much further ahead of the pack.
The story about the posters husband who retired at 50 then died is actually a really good reason to save early and often. Most people who practice the MMM lifestyle retire/become financially independent in their early to mid 30's, not their 50's. If you could retire that early and do whatever you want with your life for 15 years, wouldn't that beat going on a two week vacation until 50 but having to work that entire time?
Within limits. I don’t spend money foolishly but I don’t squander it away, I make and invest enough money that I’ll be fine in retirement. Just need a happy medium. Going full bore off one way or the other is bad in itself. I mean I’m still going to enjoy my life without needing to pinch everywhere. I’ve done that for a long time to get to where I am now
Biking isn’t really something I can do. Running errands can’t be done on a bike due to the area I live in. I can’t bike to work either. So that suggestion doesn’t work for everyone.
Last edited by Electrician4you; 06-24-2018 at 09:49 AM..
I found MMM while searching online for strategies to live frugally and save a lot as I was doing at that time. I was desperate to escape the job, and had crafted a plan to pay off debt, save as much as possible, and have enough to retire in ten years. I got many useful tips and tools from the site even though it’s mostly geared to young, high earners (I’m old with a modest income). I only managed to save more than 50% of my income for a couple of years before I got laid off, but it made a big difference to the long-term goals. My current job doesn’t pay well enough to save so much, but I’ve almost reached the goal despite the layoffs (more than one!) and would do OK if I were laid off again tomorrow. I wish I had done this when young, but it's never too late for financial freedom (you don't have to retire early, or retire at all). And my level of happiness did not decrease with lowered living expenses. I learned that simple living suits me best.
Within limits. I don’t spend money foolishly but I don’t squander it away, I make and invest enough money that I’ll be fine in retirement. Just need a happy medium. Going full bore off one way or the other is bad in itself. I mean I’m still going to enjoy my life without needing to pinch everywhere. I’ve done that for a long time to get to where I am now
Biking isn’t really something I can do. Running errands can’t be done on a bike due to the area I live in. I can’t bike to work either. So that suggestion doesn’t work for everyone.
His point about biking is that in order to cut costs, move close to work and cut the car. Cars have significant costs associated with them that go beyond just the operating costs. Direct and indirect costs are quite high.
So while it's true they don't work for people, it's because they set their lives up to be car focused.
When I first graduated college I sold my car to pay off my college credit card bill and rode a bike to and from work each day. I made very little money compared to today so cutting the $100/month insurance bill plus the operating and mtc costs associated with it had a huge impact on my monthly budget. My bike ride was roughly six miles each way, in central FL. It did suck in the summer but at least going to work it was cooler out in the mornings.
I like his website, and he's got a lot of good advice.
But he annoys me a little. He acts like it's all common sense, but he is also quite fortunate to be smart and trained as an engineer with a very good career straight out of college, marrying young with a wife who was also making good $$, skilled enough to be able to renovate his homes himself and not have had any major medical issues/divorces/caregiving issues to disrupt the security and stability in his family.
It annoys me when he calls himself retired, when in fact he is a blogger/speaker/writer, who also is a landlord who renovates properties etc... So I agree that he isn't retired, he just changed careers.
But what really annoys me is when he complains about how much he has to pay to get health insurance for his small, healthy family. He is a multi-millionaire and he complains about having to pay full price for health insurance (no longer qualifies for a subsidy because his visible income is too high). He is exactly the type of person who should be paying full price. He "retired" in his 30's and is a millionaire.
I read him here and there but I think he's too black and white sometimes.
I remember for awhile before his wife retired, she worked part-time and they had really great insurance through her flexible job that I believe was a family business of sorts. If you don't have that kind of thing, maybe you're lucky enough to end up with a 100K medical bill and then you're not living so well anymore. Yes, I agree, he's not retired.
He talks a lot about biking but I think about people who cannot bike for physical reasons. I'm not sure what they're supposed to do. I mean, I'm young and relatively healthy, but I have major issues with my joints sometimes that cause a lot of pain and even some arthritis but I won't be on a bike those days. (I usually take mass transit to work so my car isn't super important. But living in a city with good mass transit comes at a major price.)
Most of all what turned me away was some of the people on the message boards.
Yes, I get what he's saying. No you don't have to take it so literally and you can apply the philosophy to whatever fits your life. But I don't really need that advice. It's geared more towards the people in the "your debt is an emergency" kind of posts.
His point about biking is that in order to cut costs, move close to work and cut the car. Cars have significant costs associated with them that go beyond just the operating costs. Direct and indirect costs are quite high.
So while it's true they don't work for people, it's because they set their lives up to be car focused.
And some of us live in areas where the entire metro area or county is set up to be car-focused, mass transit is limited or non-existent, and there is no point where work and everything you need to reach are within a five mile radius.
I think some of you might be underestimating how car-centric Colorado is, especially in outlying communities like Longmont where MMM lives. He's made very deliberate choices that are way out of sync with his peers.
Its almost too late for me. I discovered him a year ago and now listen to the Choose FI podcast. But the recession and divorce ruined me and I started over financially at 44. Way late. I would kill to have this knowledge at 24 and been smarter financially. I was never in a lot of debt, but I did buy new cars and didn't keep expenses low enough with roommates, etc. I kind of blew it and was underpaid at he same time. Got married and she saved her money while I paid most of the bills. Stupid stupid stupid. Lost money on my house despite owning it for 12 years and buying before the bubble. Just disaster all the way around. Now I max 401k for the last 4 years, but it will never be enough. I also save an additional 30% of my monthly take home. I'm scrambling is the bottom line. I have 17 years to full retirement, but I'd like to retire before then. Its possible I can save enough and move to a cheaper country (Colombia) in about 8 years and live on $20k a year and be fine. I may if I'm still not remarried by then so I can enjoy my life while still being fairly young.
I don't think retiring early is everything in life. I think MMM focuses too much on that. To be frank, some of the people on that site are downright cheap in a miserly way. They also waste too much time on boards bashing and judging other people's financial choices and lifestyles.
So here you are criticizing people for spending too much time bashing other people's lifestyles and choices.
Quote:
Originally Posted by PriscillaVanilla
I don't want to eat ramen noodles every day and ride a bike everywhere for 15 years just to achieve early retirement.
Yet here you are doing the same thing. That whole "eat ramen noodles for 15 years" BS stereotype has got to go. That kind of stereotype is what p*sses frugal types off.
But heres the thing mystical when you begin to develop cult following how can one understand if it is "out of context" I've WATCHED his show and listened to some advice that has been bad and then his followers will come back and say "oh its not geared for you, its really geared for XYZ type of person".
I've disagreed with some of his advice as well. I think his investment advice sucks. And his acting as if 12% stock market returns can be expected. Ultimately you have to think for yourself. There's not much you can do for people who won't.
Quote:
Originally Posted by eliza61nyc
I watched most of the tv gurus for a while. Tony Robbins, Dave, Suzy all of them. Im not saying they don't serve some purpose. I'm saying that I advise people to take them with a grain of salt.
But yet the example you used implying Dave advises people pay cash for houses as a standard piece of advice really sucked. He doesn't advise that.
Quote:
Originally Posted by eliza61nyc
Now Dave says take 15 year mortgages.
See--even you know that he advises 15 year mortgages, but in your previous post, you implied he advised paying cash for houses as a general financial advice. I get p*ssed of when people say stuff that just isn't true--especially when they know it.
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