One of my posts was recently pulled into a forum from a member of Mr Money Mustache. The site is quite well known in the ‘early retirement’ crowd as he has some legendary status as being a guy who ‘retired at 30’. I have to say, I like a lot about this guy and the concepts, but I think that some people are missing the mark when they seek to replicate. I’m going to go into some of the good and bad that I saw in that site here.
Oh and my post was put into a subforum called ‘the Wall of Shame’ because the poster felt my travel of 2013 was ‘anti moustacian’…. check it out here:
Let’s start with some basic concepts. In my Burn post I detailed my trips for 2013, I took 8 trips (plus that again in weekend jaunts) and burned 1,500,000 miles and points in the process. Additionally I spent about $11,000 including all costs (airline change fees, taxes, meals and incidentals, diving, martial arts training in Japan etc) I purposely included the number to highlight that things weren’t free when ‘travel is free’.
I also am hesitant to claim how much ‘value’ that year of travel garnered, because I certainly would not have paid real money to stay in the hotels I stayed in, so claiming $1000 per night for this or that is just silly to me, but I was away for 42 nights of travel, and realistically I would spend about $100 per night on a 3-4 star hotel in most places where possible, so that is a minimum of $4,200 there, plus a lot of miles flown. I flew about 50% business class, but I wouldn’t have paid a business class ticket so I would claim those flights in the equivalent cost in economy.
Clearly, I have saved money on achieving the travel that I wanted to achieve, but the Moustachian view shown on that forum is that any such travel is a luxury, and that money could be instead spent on saving for your ‘retirement’.
Here’s where we differ in opinion. I don’t want early retirement if it considers travel to be a luxury that you must avoid. Nor do I want one that includes eating less meat to save money, nor do I want to not drink the occasional bottle of good wine from a good winery.
My concept here in Saverocity is to achieve the quality of life that you desire in a more efficient manner. The tools are the same for everyone, the underlying topics I discuss are:
- Earn more income – I explore concepts such as credit card arbitrage, setting up brokerage accounts filled from manufactured spending.
- Spend less money – I talk about bringing wine on a cruise so that you can experience things you like at a much cheaper price.
- Substitute Costs – I talk about traveling with miles and points rather than cash, and furthermore how to be more effective about spending them to squeeze out the best experience from the same cost.
This is the major difference between the ‘Moustachian’ crowd and myself, they seem to seek to reduce all costs at the expense of quality of life in order to improve quality of life. Me, I would say let me travel, and if I hate my job so much let me quit and set up my own company.
Things I like about the Moustachian’s
- They advocate saving – a lot.
- They seek to avoid wasteful spending.
Things I dislike about the Moustachian’s
- They are moochers. All of their financial plans involve retiring ASAP (say at 30 or so) and then relying on the Affordable Care Act and Social Security and welfare. That’s not only bad for society but going to bite them in the arse when the rules change.
- They don’t all show understanding of value, just money saved as a cash amount.
- Some of the financial plans are too lean, and they are at serious risk of being in trouble later in life.
I like MMM the man, he seems like a hard working guy who knows what he wants in life. A hard working retired guy. I myself see retirement in the same way he does, it involves ‘work’ but being happy to do it.
If you want to retire early the steps are simple:
- Decide what you want from life, what is important and what is not.
- Calculate the cost of achieving this passively.
- Factor in Monte Carlo simulations to account for events such as inflation rate changes, stock market crashes, social security changes, and unforeseen medical costs. Make sure your plan is watertight.
- Save like crazy.
- Find ways to earn more money, even in retirement through setting up businesses and side gigs.
- Enjoy the life that you want to live.
- Decide if you want your kids to enjoy the life you led as a kid, or in your retirement, and if you want to plan them into things or not.
I’m gonna keep shaving for now, but will be keeping an eye on those crazy Mustachian’s to see what I can learn from them.