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MMM and his wife both made good money. They both lived well beneath their means and have done extremely well with real estate investments. They do both still work, but totally on their own terms. They both still contribute to social security and bring in more than 2 thousand a month. They choose to spend only 2 thousand on living expense. My youngest son is a big fan of the blog.
Eight years out of college and they paid off a "pretty fancy" house and invested $600K? Really? One wonders what they started with, and from whom.
"...The food we eat is very high-end these days. And we live in a pretty fancy house full of nice stuff and take a lot of trips...."
I'm sure, on $24K a year.
I know of one person around my age (late 20s) who was able to do this. He happened to found numerous companies that brought in nine figures of revenue. Way, way different than what this guy did.
They'd have to be INVESTING over $50k a year. That's a large sum.
MMM and his wife both made good money. They both lived well beneath their means and have done extremely well with real estate investments. They do both still work, but totally on their own terms. They both still contribute to social security and bring in more than 2 thousand a month. They choose to spend only 2 thousand on living expense. My youngest son is a big fan of the blog.
The "made good money" and "did extremely well in real estate investments" are the crucial points. I'm 29, make above average money in my metro, and work in an office of mostly people within ten years of my age making more than I do. We work in the financial services space so we are not financially illiterate.
Only one person in my office (who is probably $120k+ himself with his wife as a principal of a school system) has any type of real estate investment to my knowledge. Most are too young to have accumulated the reserves to get into this safely, or are burdened with student loan debt.
The fact that they both work is also crucial. It doesn't seem to me they are fully confident in actual retirement, but have simply reduced their workload and are "working on the side."
I'm betting the $2k is what they take from their nest egg and the difference between that and what they actually live on comes from outside that nest egg.
You naysayers sound like haters. I was hooked on reading his blog last month and can totally get it. He's an engineer by training and construction worker by choice. He drives an old minivan instead of a fancy two-ton gas guzzling tax sucking over powered truck. His main mode of transportation is his bicycle along with his family.
It's easy to not spend foolishly and stay out of the red if you make a conscious decision to do so. His house is paid for, he has rental income, the ability to fix things himself, money coming in from his blog and a somewhat fanatical view of protecting resources. I doubt he use your precious social services because he's into maintaining his health. You don't need to go to the doctor very often as he gets his exercise from his mode of transportation.
I'm at a point of not wanting to spend my days laboring to maintain a lifestyle of consumption so have read quite a few author's perspectives. My conclusion is I will be alright if I just stop buying ****. And exercise a little more often.
You naysayers sound like haters. I was hooked on reading his blog last month and can totally get it. He's an engineer by training and construction worker by choice. He drives an old minivan instead of a fancy two-ton gas guzzling tax sucking over powered truck. His main mode of transportation is his bicycle along with his family.
It's easy to not spend foolishly and stay out of the red if you make a conscious decision to do so. His house is paid for, he has rental income, the ability to fix things himself, money coming in from his blog and a somewhat fanatical view of protecting resources. I doubt he use your precious social services because he's into maintaining his health. You don't need to go to the doctor very often as he gets his exercise from his mode of transportation.
I'm at a point of not wanting to spend my days laboring to maintain a lifestyle of consumption so have read quite a few author's perspectives. My conclusion is I will be alright if I just stop buying ****. And exercise a little more often.
The old minivan vs. the new SUV is a drop in the bucket compared to what is actually needed. Let's say the guy has a $500/month car payment or $6000/yr. Let's say that's $10k in before tax income. Even over five years, that's just $50k.
You're talking thousands of dollars per year when you need additional tens of thousands. You can't cut your way to what he is doing by cutting out lattes/smokes or even car payments. It's too big of a gap. It's also going to be difficult to buy these rental problems on average to even above average incomes this young.
You need income, lots of it and early in life, to get to where he is, as well as the frugality aspects and virtually no personal financial errors or anything that rocks the boat. Get laid off? Not happening. Get a major illness, death of a spouse, etc? Not happening.
You can maintain your health then get hit by a drunk driver or come down with cancer through no fault of your own and be wiped out. It's sometimes not all about your decisions.
I live in the suburbs and it's not feasible to use a bicycle as a primary mode of transportation. It's unsafe and not really doable in winter in Indiana. You can't claim bicycling as a viable mode of transportation for the vast, vast majority of Americans.
If you go on to some personal financial forums, this guy is talked about like some patron saint. I think the advice is misleading at best. The biggest fault this advice has is that it comes off as repeatable - that if you follow the precepts he lays out, you'll get his results.
There are ways to live on less, but even if you ride a bike everywhere and are very healthy you can still get hit by a car, or fall down a flight of stairs. You do need some kind of medical insurance. During the 1980's we had two children and paid $40/month for major medical. We never needed it, but I was happy to have it just in case something catastrophic happened.
We lived very simply. We had a wood burning stove for heat and bought several cords of wood per year. We sold some for a profit because we bought it when green (and cheap) and then dried it out and sold it for more when it was getting cold, which paid for our wood, so heating our home cost us zero. We had a washing machine, but not a dryer to save on energy and lined dried everything. We bought a fixer upper and paid $39,900. The payment was $251.46/month and the yearly property taxes were $440. Our total expenses were $800 a month and that included a date night once per week for me and my husband. Our budget for the night was $25, which was plenty for dinner and a movie. We had a Wild Animal Park/Zoo membership that was something like $35/yr. for the family. Plus, there were parks and the beach we could go to for family fun.
We had more than enough and enjoyed our simple lifestyle. Now that we are retired, we live on about $27,000 per year. If you exclude medical expenses, we live on about $1,200/month. That covers everything except for house maintenance and appliance replacement, which we have savings to cover. So, we're still living simply and still have more than enough.
I think someone said a family of three with $24K income would have to be leaching off of the rest of us and "gaming the system" getting benefits such as medicaid. But, I think it's more what the OP said originally. "it's about enjoying life with less. That's what we did with a family of four and what we do now in retirement. We've never gamed the system, or leached off of anyone. We worked, we lived simply, we saved for our children's education and for our retirement. What appeals to me is the freedom that's gained by living on less.
If you're not carrying a mortgae and/or a car payment I think it's very plausible. Insurance would be your biggest expense (health and life). I think the decider is choices. If you choose to live in an inaccessible suburb then you will incur the costs of that choice.
In my situation, my kids school, our dentist and the grocer are within a 1.5 mile radius. My job is 8 miles away. I've come to the conclusion that I don't need a 30k or even a 20k car to get me there. The bus stop is right behind my house, a 3 minute walk if I so choose. I'm also working a per diem job where I fund my kids college accounts instead of waiting until i'll have to borrow money. We converted to a 15 year loan to get the house paid off in half the time. My check goes mostly to funding my retirement account. Thanks to my spouse, we have Tricare for life (health insurance). He also works ans we will make over a million dollars in the next 10 years. We wised up late. 42/43. I realized we make an insane amount of money and it's a shame to not know where it's going. That may not be a lot to some but it's more than enough for most.
Also consider the compounding interest of said retirement accounts. Even if they go nowhere which is my fear cause I don't totally get the stock/mutual funds thing. Our house will be ours and we've slowly learned to live within our means. I dream of retirement but I've always been a worker so know i'll always be doing something. Probably per diem or just volunteering. But my happy place is having the choice.
Last edited by MAXIALE02; 09-27-2015 at 09:51 PM..
I think it is BS.. Citing Rental income and a paid off house among other things, smacks of having lots of money beforehand to do this... Also they make money of the side (not sure we really know how much) BUT that is not included in what they supposedly spend.... 24K a year for three people is 2K a month... Possibly feasible, but like I said add in rental income and no house payment cause of big money beforehand and well then we all could probably do it...
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