We went on a bike ride down to the beach with the intention of spotting RVs stealthily parked on the beachfront.
I never used to notice the RVs–just casually taking them in as part of the scenery. I mean, there are quite a few RVs just hanging around Seattle, parked in the various neighborhoods that I’ve lived in for the past twenty years or so. Now that I think about it, how many of these RVs are actually the full time home of the people who own them? It’s amazing to consider!
At this point, I’m confident that the people living in them full time are more than I imagined, and the benefits of doing so include getting a beachfront property (which many people would pay millions for) for almost nothing. Parking there for under 72hrs is usually free and legal, or even longer, as long as “concerned citizens” don’t complain.
Why should any of this matter? Well, I’m secretly planning to purchase an RV and roadtrip across the U.S. one day, and I thought that doing research now would help me become fully prepared. I’ve been mentally preparing for a couple of months now, putting myself in the position of someone who lives in a small space, but treats the outdoors as an extension of their livable space.
This weekend we took our Dad race car driving (well actually, my sister purchased this surprise for him and I just tagged along). The experience was cool and it reminded me that we should constantly be trying new things, even if they scare us, because those new things will stretch our comfort zones and make us stronger.
Maybe we’ll find out we like the new experience, and maybe we won’t. But you never truly know until you try.
Another added benefit of doing things outside of the norm is that you’ll feel like you’re living a longer and more memorable life. Think about it: when you spend almost every day partaking in the same routine, the days blend together and you start questioning where the weeks and months and even years are going. However, when you try new things on a regular basis, you break up the monotony and have plenty of novel memories from which to draw upon.
You can find my new obsession in the title of this post. I stumbled upon the concept about two months ago via a blog called Mr. Money Mustache. I found this idea (retiring really early through very achievable means) because I was searching for a better way to live life.
Society dictates that normal American life means that you go to school for a fair number of years, kindergarten through college, then graduate and pop back into yet another system of corporate work for 40 or so years, and at the end of all of that you’re finally able to “retire” and finally do whatever the heck you want.
I originally had a small taste of a different way to live out life. A few years back, Tim Ferris’ concept of mini-retirements surfaced. Tim questions the model of retiring later in life when you’re least able to enjoy your time off, and poses the question—“What happens when you take lots of small retirements throughout your life?”
Others, like Steve Pavlina, shared similar sentiments—they worked hard on things they liked doing and were good at (for Pavlina it was programming games), then they fell into a business model and got popular on the internet and made some money that way. It all seemed too easy for them, and not very practical for the average Joe (or Jane!).
Then, when I came across the extremely early retirement community, something life-altering happened. My research and reading told me that anyone—even the most average of people, could retire very early. It does not matter what your gross salary is, as long as your savings rate is high (50%+), and you invest your money well, you can completely retire in less time than most people currently believe is possible.
The appeal for me is the idea of extremely early retirement. Why not just use your younger years to work really hard, save really hard, buy very little, and come out in 5-15 years done with your ‘accumulation phase’ as the early retirement community calls it? Let time do the work for you. Let your money make money. Ugh, it’s so disgustingly simple I’m not sure why I didn’t see the light sooner.
Before I stumbled upon the early retirement community, I had already had previous obsessions with the minimalist movement, tiny houses, ultralight travel, and a whole community of people who were focused on less consumerism and less environmental impact. This has really helped to set me in the right mindset to believe this is possible—I mean, I legitimately like this stuff. And although I’ve suffered from some lifestyle inflation, it’s not too late for me to turn back since I’m young, healthy, and without dependents.
And that’s exactly what I’ve done. I’ve slashed my expenses back to the bare minimum and I calculate everything in terms of how much money I would need saved up in a nest egg in order to have that item or service just by living off the interest of an investment. For example, if I consider purchasing a subscription to a service like Spotify at $10/month, it sounds reasonable initially. I mean, I’m a professional white-collar worker, working in downtown Seattle. Obviously I can afford such a luxury. But, am I really willing to if I consider that it will cost me $3,000 in savings to maintain this habit?
Here’s how I make the calculation—if Spotify costs $10/month, I will multiply that by 12 to get the yearly cost. This is $120. I will multiply the yearly cost by 25 to get $3,000. This is the amount I will need to have saved up in my nest egg to fund a Spotify subscription habit. (I am using a 4% safe withdrawal rate calculation). I’ll then ask myself if it’s worth a decent chunk of my life to work to collect $3,000 just so I can have access to Spotify forever. The answer in this case is no, it’s not a worthwhile trade-off for me. My life energy is way too precious to spend on a random expense like that which is not very valuable to me.
I always thought being able to do whatever you want with your day required huge sacrifices. Either you would have to return to work every so often just so you could have enough money to pay your bills. Otherwise, you would have to create some kind of business that would generate “passive income.” I thought the only way out of the rat race was to be an entrepreneur. So I focused heavily on that for a couple of years. I started up this blog, had dreams of making money from this baby, and crafted all sorts of business concepts. I read loads of books about businesses, entrepreneurship, psychology, and subscribed to all the top email newsletters from advice-giving gurus.
I was so deep into it that I didn’t realize that the most important factor that I could be controlling at the moment wasn’t the money I could be earning from my (non-existent) business, but rather, the money I should be socking away in savings and investments.
Are you currently at an ideal savings rate for your goals? Have you ever run across the concept of extremely early retirement before?
Here are links to other blogs that have also shaped my perspective on this early retirement deal:
- Jlcollinsnh - awesome concrete investment advice (essentially, stick to Vanguard with their low expense ratios, and invest in mostly a total stock index fund that matches the market, with perhaps some bonds and REITs thrown in there).
- Mad Fientist - wonderful podcast that features lots of faces from the early retirement community; great retirement calculator tool that he programmed
- Afford Anything – I love seeing women in the space–I feel like women in the personal development/entrepreneurship/minimalism space are extremely underrepresented; she has great insight on how she is on a path to wealth by investing in multiple instances of real estate
- Brave New Life – lots of interesting philosophy about what it means to work, live, and retire, and taking back time for yourself; kind of reminds me of the book Brave New World in a way…
- Lacking Ambition – great posts about living with very very little and learning to love it
- Early Retirement Extreme – one of the blogs that really popularized the notion; he really takes things to the extreme by living off of a trivial amount of about $7k per year or something awesome like that; on minimizing the need for being “on the grid” and plugged into society
I’ll be the first person to tell you that you should save money. If we go shopping together, I’ll probably try to talk you out of buying a few items with phrases such as “Yeah but do you REALLY need it?” or “Don’t you already have a pair of black winter boots?”
I do this in pretty much every aspect of my life. Growing up with a scarcity mindset has caused much of this. You know, the whole idea that there just isn’t enough to go around.
It wasn’t really anyone’s fault—a lot of people think like this. Myself definitely included.
But lately, I’ve been trying to quit. You know why? Because it doesn’t make me happy. Sometimes, opting to spend less is the wrong choice.
The Opportunity Cost Outweighs the Minor Expenditure
You spend 45 minutes debating on whether or not you should buy a $1 headband. Poor decision.
I literally did this a few weeks ago. My rationale was that I didn’t want to waste something if I wasn’t really going to use it, and I also couldn’t decide on a color. For all the time I wasted standing inside of Forever 21, I could have just bought a couple of them and gone and earned back that money somewhere else—my time is worth much more than $1/45mins!
You End Up Buying Really Crappy Things
Poor quality items and services will eventually eat up your time and cause you more hassle in the long run.
In the race to save a buck, it can get awfully easy to skimp on quality. Just buy that lamp that costs $10 less, and the cheap plastic might melt on you after about a year of use. Worth it? Probably not if you have to buy a new lamp every year.
You waste money and resources in the long term because you don’t just lose the lamp—you also lose the time it takes to dispose of the old one and go buy a new one.
You Don’t Buy the Things You Truly Want
Of course, I’m all for saving money when you’ll be just as happy taking part in a free event versus a paid event, or using a cotton t-shirt for a casual gym workout instead of buying the newest Nike shirt with sweat-wicking technology (because I prefer the feel of cotton while working out, and that’s fine by me).
Sometimes I’m most comfortable using things I feel like I can’t break or ruin. (That’s part of the reason why I got a used car with a couple of scratches and dents already on the thing—so there’d be less of a flinch factor as I’m driving my car.)
When spending money pays off substantially
I used to throw money into my interests like website creation—I bought my domain name, and hosting for my personal website (this one). At the time, I was a student without a regular income, so it was hard to front the money.
This simple experience of being able to play around with a website and all of the nuances that go along with setting one up has paid huge dividends in my professional life. I’ve been hired in freelance capacities to help small businesses work on their websites, and it’s been an asset in my day job where I can manipulate HTML and CSS to update our marketing materials as needed.
Essentially, I’ve made my initial investment back…and many times over.
Another way I’ve spent money and have seen an even larger return on investment is through purchasing books—I’ve made a rule for myself that if I have interest in a book and it’s available for Kindle, I will allow myself to buy it without thought if it’s under $20. This is a heuristic that has paid off for me because I spend little to no time debating with myself about whether or not it’s worth it (therefore not losing the opportunity cost of my time).
I expect that the most I would ever spend on books in any given year is about $500 max. That’s a very small investment given the insights I’ve gotten by reading them. I read several personal finance books one year and that has led me to be extremely automated in the way I handle my finances, allowing me to save, invest, and spend pretty much guilt-free.
The key for me is to identify what I believe to be good investments (hint: these usually involve learning or paying to experience a process) so that I’m not wasting my time trying to decide whether it’s right for me.
Secondly, I sometimes need to force myself to spend the money when my logical mind is telling me it’s a good idea. Emotionally, sometimes I’m too conflicted.
So there’s today’s lesson. Spend more money on yourself. The likelihood of it paying off (as long as you have reasonably good judgment) is huge.
This is just a quick reminder to myself and anyone else out there who is reading this to eat healthy. The food you put into your body probably has the single largest effect on how long you live, and the quality of your life.
Pictured above is the oatmeal I make every weekend morning (when I have the time to sit down and make myself a proper breakfast). This batch includes old fashioned oatmeal (cooked for about 15mins on the stove), cinnamon, fresh blueberries, and apple chunks.
From the reading I’ve done, and even my own body’s reaction to food–if I eat too much I feel terrible. Limiting your caloric intake is apparently conducive to fighting off cancers, and other plagues to your body.
Sometimes I’ll do a quick salad like in the above picture. I threw in tomatoes, green leaf lettuce, blueberries, apples, avocados, and carrots. I dressed it with some lemon juice to keep the fruit from browning, and for some added taste. I find that if I go too long without eating something fresh, I’ll often feel sluggish.
I’m no saint when it comes to eating healthy food. I’ll admit, I love my chocolate and pastries are a godsend. For me, the main thing has always been to eat as much healthy fresh food as possible so that I’m satiated when the temptation for delicious sweets comes along. As you can see below, I had to literally stock up on fresh stuff at work so that I didn’t stuff my face with cookies later.
I’m pretty proud of myself on this selection of produce…today I ate the whole rainbow (red cherry tomatoes, an orange, a yellow banana, green avocado, and purple grapes). I was missing blue, so I came home and ate some blueberries and my rainbow was complete.