Mr Money Mustache (early retirement, frugalism)

[veloman]

Does anyone read his blog? http://www.mrmoneymustache.com/

I've been frugal since I started working years ago. I dislike overconsumption and waste. I've been reading a lot on his blog the past few months. So much of it is gold. He's a big supporter of bikes as transport and ebikes too.

 

[teslanv]

I am also a reader of MMM. A few months ago, he wrote an article on ebikes.

http://endless-sphere.com/forums/viewtopic.php?f=7&t=63761

 

[cal3thousand]

Thanks for sharing! I just read one article and I like his writing style. I will keep it bookmarked for further bathroom time.

 

[upward]

I've followed his blog for a while and he makes a lot of sense. Do stuff yourself and become self-reliant. Get rid of your car, you can't afford it. Ride a bike and live close to work. Enjoy life now, not when your are old.

 

[veloman]

The basic philosophy of expenses costing you time is something I've been aware for a while. Some times I have a period of over spending (usually on hobby stuff like ebikes). But reading his blog has helped me get back on track.

I really like the way he just cuts through the BS and tells you straight up that many 'normal expenses' are needlessly pushing your freedom/retirement further away.

There is so much good stuff in his blog. Its more than just retiring early. You have to read each article to get the real value.

 

[zombiess]

There is a careful balance that one should keep. It's a great idea to live below your means and save money, but I would not forgo doing things that are really enjoyable.

I've had extra income from small businesses since I was in my 20s and that money usually went into whatever it was related to, usually modding cars to stupid fast levels which I found technically challenging and a lot of fun. I learned so much from that. I'd guess I probably spent $50k doing that over a period of 10yrs including the prices of cars purchased. That's a lot of money and I often did a lot of my own work. At age 30 my joints (mainly my spine) started to fail and cause me serious pain. If I had saved that $50k it would most likely be over $100k, but I'm 37 now and I don't really have anything I want to spend it on except maybe a way over priced $400k California shack. I figured out how to fund my interests without dipping too much into my regular earnings and was able to start saving.

There is a balance that needs to be found. MMM is an example of an extreme and I don't see anything wrong with what he did. I just wanted to add some words of caution on not knowing what the future holds.

One of the best feelings you can get is becoming debt free and watching your bank account climb, it removes so much stress from your life. Soon you stop thinking about having a credit card for emergencies and realize you have the cash for that surprise $1k bill you just got hit with.

A great way to real in spending is to stop thinking about how much $$ something costs and think of it in how many hours you have to work after taxes to purchase it. This type of thinking will really alter your perspective. Make $40k/yr gross and want to buy a $30k car, get ready to work for an entire year to pay for it.

Live close to work, reduce your bills to only what you really need and next thing you know you have an extra $100-200/mo you can save.

 

[veloman]

MMM does spend a fair bit on family stuff, he admits he spends a lot more than he needs to. So I wouldn't even called him extreme. Someone who writes about frugalism who is indeed on the extreme end would be Jacob at Early Retirement Extreme.

I agree you should have fun, but draw the line and know how its is affecting your goals.

 

[amberwolf]

Frugalism...have y'all read my posts around here? :lol:

 

[Ch00paKabrA]

He has some very good tips.

What most people don't understand is that debt kills you. I would be willing to bet that most people don't even know what the term "debt service" means. Just for the record it is the monthly amount you have to pay to "service" your debt. how much your interest accrues each month.

Until I started borrowing to buy rental properties, I had none. zero. Now I have figured that if I sell 2 of my properties I can, again, have zero debt. It is something I have been considering. Ever since debit cards came out, I have not had an actual credit card. I had a Costco Amex charge card only because of the cash back. Now I just use my debit card at costco too. No debt.

I love the excuse that peole have cards for "emergencies". It is a crock. Save up the money in an emergency fund and then get a debit card against the account. Its funny how when it is actually your money, suddenly that new pair of shoes is no longer an emergency.

People don't realize how much the interest on their debt costs them. That is one of the biggest failures of people in general.

 

[veloman]

CC can be fine if you pay them off each month. I've never paid any interest or fees for mine. I get 1-2% cash back, which adds up, and it's free.

But yeah, interest on debt is something you want to stay away from except for maybe a low rate home mortgage on a reasonable house.

 

[Ohbse]

Interesting site, definitely some good advice for the masses.

One thing that continually blows my mind is the obsession with new cars in the US in particular. Having a 'car payment' is considered not only normal, but essential and as soon as you finish paying off a car it's time to sell it at an enormous hit and buy another one! I'm assuming there's a lot less of that particular madness on this forum. Given the limited income and the large amount blown on financing new cars, the actual vehicle ends up being pretty mediocre. For the same money many people spend on a Chevy Cruze I would much rather be driving an AMG Mercedes from several years prior. If you're going to blow cash on some wheels they may as well be nice ones.

 

[The fingers]

I'm an old frugalist and I married a young spendaholic. Hopefully I croak first so she can pay off the debt from my life insurance.

 

[hydro-one]

i like what he is saying

 

[Ch00paKabrA]

CC can be fine if you pay them off each month. I've never paid any interest or fees for mine. I get 1-2% cash back, which adds up, and it's free.

But yeah, interest on debt is something you want to stay away from except for maybe a low rate home mortgage on a reasonable house.

The problem with CC is that it is possible to over charge and get to the point where you can not afford to pay them off at the end of the month. If you save up your emergency fund and have a debit card against it, then it is still a card in you wallet but it make you think twice about what is an actual emergency.

Just my $0.02.

 

[neptronix]

cool.. thanks for the link

 

[Joseph C.]

Cheers, veloman.

I think short-term on an individual level it is good practice. Long-term if everyone adapted frugality it would rapidly accelerate the race to the bottom. If 100 million people in the US each saved an extra $5,000 per annum that would draw half a trillion dollars out of the economy and all that entails.

I'd also be very wary of stock investments - there is plenty of scope to get burnt and quantitative easing has created an enormous stock market bubble.

If you can get in and out unscathed you will do very well but if you get caught you could lose a lot of money. You could invest a portion of your savings - money that you can afford to lose and go with that as a safe buffer.

 

[veloman]

Yes, if everyone was frugal, there would be a major economic disruption. But over time it would be fine. A healthy economy doesn't need frivolous spending to survive.

I agree about the stock market. I am not a buy and hold forever type. I have done a lot of trading in the past, and have set rules to exit if I lose a certain amount. Currently reading Jesse livermore's book.

 

[Joseph C.]

Yes, if everyone was frugal, there would be a major economic disruption. But over time it would be fine. A healthy economy doesn't need frivolous spending to survive.

I agree about the stock market. I am not a buy and hold forever type. I have done a lot of trading in the past, and have set rules to exit if I lose a certain amount. Currently reading Jesse livermore's book.

I agree completely with the trust of what you are saying. I suppose the point I would be concerned with is degrees. If nobody bought new cars...etc

I'm fascinated by stocks. I would have liked to have taken a punt on Tesla ages ago but it would have been very tricky for a non-US resident to buy shares in a relatively obscure US company.

So far what I have read of the Mustachioed one seems pretty straightforward and logical. Thanks once again.