Mr. Money Mustache is a forty-something retiree [retired at 30 I believe] who blogs about how everyone can live a frugal yet fulfilling – or Badass as he states – life of leisure. I first heard about him and his blog soon after I started blogging a couple of years ago and he is regularly mentioned in the personal finance blogging world.
On his About page, he notes, “My wife and I studied engineering and computer science in Canada, then worked in standard tech-industry cubicle jobs in various locations throughout the late ’90s and early 2000s. Then we retired from real work way back in 2005 in order to start a family. This was achieved not through luck or amazing skill, but simply by living a lifestyle about 50% less expensive than most of our peers and investing the surplus in very boring conservative Vanguard index funds and a rental house or two.”
He – and his feat of retiring at 30ish – were recently brought to my attention again while surfing the net and stumbling across a Business Insider article. The article noted that Mr. and Mrs. Money Mustache didn’t win the lottery or inherit a fortune at the time of their retirement. In fact, their household income was a comfortable, but not necessarily enormous, $134,000 a year. Today, 11 years after retiring, although he’s earning about $400,000 a year via his blog, he and his family spend just $24,000 annually on expenses.
A good friend of mine, someone I consider something of a financial mentor and whose opinion – particularly as it relates to financial matters – I value greatly, would be considered wealthy by most. While I don’t know his exact household income nor his net worth, we have talked enough and shared enough personal information to know that his (and his wife’s) household income exceeds $250,000 annually and his net worth is likely in excess of $2M.
This is an individual that has been financially savvy for 30+ years (he and his wife are in their mid-50s), started saving at an early age and made great decisions with respect to his education, training and careers (plural as he is retired active duty military, like myself, and is currently working in a second career). I have no doubt that he could absolutely retire comfortably today and probably could have 10 – 15 years ago. However, while his wife is eyeing a retirement date in the near future, he currently has no plans to leave the workforce.
On a recent Well Kept Wallet podcast, I listened to the story of Chad Carson, an individual that molded himself into an entrepreneur and plans to retire within the next year, at age 37. His chosen path? Flipping houses and rental properties.
Check out the podcast [after you finish here, my friend] to learn more about Chad and his chosen path:
My own situation – and values – dictate that the wife and I will be working until we are 60. Some of the factors that have contributed to my unique situation?
- Financial ignorance in my 20s
- Early marriage and children
- Credit card debt in my 20s to mid-30s
- Divorced at 35
- Retired from active duty (Army) at 38
- Focused on education and earned graduate degree (MBA) later (age 40) in working career
Add to those my desire to live very comfortably now. Three examples. A few years ago I spent $14,000 to travel with my parents and wife (then girlfriend) on an Alaskan tour and cruise. We – my wife and the friends I referenced earlier – are currently planning a trip to Machu Picchu next year. In fact, we are having dinner with them on Friday to start nailing down specifics, including dates. And finally, later this year I will be buying my wife a luxury SUV, most likely an Audi Q5, for her birthday.
While retiring at 30-something, 40-something or really at any time before 60 sounds intriguing, it isn’t in the cards for me and the wife. In addition to the factors noted above, the most significant factor is that both the wife and I currently are working for an employer whose defined benefit plan requires that we work until age 60. Could we make it if we retired earlier? Probably. We have another source of income – my active duty pension – and a fair amount of money in savings/investments outside of retirement accounts. However, we have concluded that we are not prepared to become hardcore frugalists and we should stay the course with our current careers, invest regularly in our retirement accounts, and retire at 60.
The good news is that at 60 we project we won’t even need the money in our retirement accounts. We should be positioned to live a very comfortable life on the three employment pensions and our Social Security pensions, which we plan to start taking sometime after age 65.
The bad news, if you want to view it as such, is that we have to work until 60. Again, because of some choices/actions we made, or failed to make, in our 20s and 30s, and some factors that were out of our control; and the choices we make today with respect to lifestyle.
I have no idea if Mr. Money Mustache or Chad Carson would have spent that kind of money to go to Alaska, spend the money it will take to hike Machu Picchu or buy their significant other a luxury vehicle. My guess is that a lot of the personal finance bloggers out there, particularly the hardcore frugal people (frugalists? Frugalers?) would not.
There is no one correct approach to retirement planning nor a singular destination. Moreover, we all inherit advantages/disadvantages that make a given path easier/harder, make choices (often bad, or less than ideal, earlier in life), have different lifestyle values and learn about the importance of being financially savvy at different points in our lives. The key is to start making better decisions once you do get clued into how to more effectively manage money and realize that financial freedom is really about proper planning and managing your finances in such a way to exponentially increase your options and give you choices. Ideally you will adopt practices and philosophies learned from others (e.g. magazines, blogs, family, friends, etc.) and fashion them into your own approach and plan.
Don’t waste your time trying to exactly replicate what someone else is doing; embrace and work with the factors (e.g. inherited pros/cons, education, marital status, age, goals, etc.) that define, and are unique, to you. Have no doubt that there are many, many paths that lead to what constitutes financial freedom, a satisfying life, and a satisfying retirement.