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Early Retirement Extremists
Yesterday I attended a meet-up of readers of the blog Early Retirement Extreme (ERE). The author proposes that anyone with a full-time job can become financially independent (no longer have to work for money) in only five years. All you have to do is save 80% of your income each year, even if that means spending only $500 per month.
The author lives in California, so what he does is share a trailer with his wife, share an extremely used car though he usually bicycles, eats the same cheap yummy nutritious foods over and over so he can bulk buy, gets high-deductible health insurance, and has mostly hobbies that are cheap, free, or money-making. And the point is to have way more free time to use however you like.
I spend less than many by living in a smaller than average house (though it's in town), having a roommate, buying my car used, cooking most of my own food, buying most of my clothes at thrift stores, and having mostly cheap hobbies.
But I thought I might be just a poser at this meeting. I'm a spendthrift compared to early retirement extremists. Plus I am already too old to retire extremely early. Plus I'll probably just wait to retire until my pension kicks in. Plus apparently I'm not willing to take my spending down to "extreme" levels.
I've actually been doing calculations lately hoping can leave my job, which has become much too stressful for my tastes, before my pension kicks in. But no matter how I slice it, my budget is $1650 - $2000/month. Even when the house is paid off, there are still some relatively high property taxes because I insist on living in Texas. Because I don't live in a tiny house, utilities and maintenance are going to be much higher forever than for a smaller place. Because I want locational freedom as well as financial freedom, I've got car expenses. Specifically,
Rent: proposed: 200 - 250; mine (taxes + insurance + maintenance): 338
Health insurance: proposed: 75; mine (for the same sort of high-deductible health insurance + 100 to save for health happenings: 300
Food: proposed: 50 - 75; mine (groceries, toiletries, restaurants): 167
Transportation: proposed: 0 - 75; mine (taxes, insurance, maintenance, saving up for my next car): 234
Utilities: proposed: 25 - 100; mine: (utilities, natural gas, phone): 118
Low-cost miscellaneous: proposed: 0; mine (clothes, gifts, supplies, tools entertainment): 269
High-cost miscellaneous: proposed: 0; mine (travel, electronics, etc.): 200
Renovations savings: proposed: 0; mine (I want a dishwasher, covered parking, separate laundry room, extra closet): 134
Charity: proposed: 0; mine: 10%
Actually I fit in just fine. There were ten people. At least one other guy was already too old to retire extremely early. His plan is to be ready to retire when his youngest child turns 18 and he's done with child support payments.
"Only" three people were able to save 80% of their income, and two of those only during the good months.
Only one person appeared to be living an extremely low-cost lifestyle. She told a very interesting story, which I couldn't quite hear because she was at the other end of the table. But somehow she got sick of working and decided to backpack a certain trail. But a guy she met on Craigslist when buying her backpack told her "or you could live on a boat with me." So she's been living on a boat. She really can't stand to work more than 4-6 months a year or for more that 30 hours a week. Currently they are between boats and working the pedicab (actually bicycle cab) during the summer season. She actually has a smart phone so she can accept credit card payments. Her boyfriend couldn't attend the meet-up because he was locked up doing a medical study. They're renting a room in a cheap house in east Austin just over a mile from downtown where they work, and lots of people around there keep the same odd hours. Because their bicycles have trailers, they have no trouble getting their groceries home. On their next boat, she wants a bigger solar panel so they can have refrigeration. It's just too depressing to cook only enough for one meal at a time because you can't save your leftovers.
It's quite possible that not a single person there was married. At least two people were divorced partly due to differences of opinion about finances. At least one person was trying to figure out how to compromise with his partner; another was learning that having a lot of clothes was important to his partner even though she was frugal in many other ways.
Two people had come up from College Station: one was visiting his kids and wants to move back when he quits his job. The other was trying to sell her car--she's about to move to New York City, already has a job, and had budgeted $675/month for housing, but it looks like she'll be able to get a room even cheaper than that in Brooklyn, Harlem, or a third place I don't remember.
People talked about investing. Lots of people in the ERE forums are into the Permanent Portfolio, but most of the people who spoke up at the meeting were more into dividend stocks--they like the way it keeps them from worrying so much about stock price fluctuations and if they can live off the dividends alone, they don't have to worry about outliving their savings.
Someone asked how people got interested in ERE. Several mentioned the book Your Money or Your Life, which gives you a nine-step plan to financial independence involving making conscious choices about your spending and earning. One person was playing on the web and found a website about IRAs and it hit her that you don't have to be rich to invest, but can gain wealth by investing.
Some people learned that you can check out books for the Kindle at the Austin Public Library and that you can learn to fix your bike at Yellow Bikes. I learned that there is a copy of the ERE book in the library (and that it is currently checked out).
We may have a meet-up every month (which I am likely to attend), and we may have low-cost social events such as board game parties (which I am less likely to attend). There were too many people to really talk one-on-one with people, but I did enjoy talking to the gal going to New York after most people had left. They seem like a smart and interesting bunch. They remind me a little of the no-kidders group because most of them really didn't like their jobs and had real problems talking to their friends and co-workers about their notions of super early retirement.
The author lives in California, so what he does is share a trailer with his wife, share an extremely used car though he usually bicycles, eats the same cheap yummy nutritious foods over and over so he can bulk buy, gets high-deductible health insurance, and has mostly hobbies that are cheap, free, or money-making. And the point is to have way more free time to use however you like.
I spend less than many by living in a smaller than average house (though it's in town), having a roommate, buying my car used, cooking most of my own food, buying most of my clothes at thrift stores, and having mostly cheap hobbies.
But I thought I might be just a poser at this meeting. I'm a spendthrift compared to early retirement extremists. Plus I am already too old to retire extremely early. Plus I'll probably just wait to retire until my pension kicks in. Plus apparently I'm not willing to take my spending down to "extreme" levels.
I've actually been doing calculations lately hoping can leave my job, which has become much too stressful for my tastes, before my pension kicks in. But no matter how I slice it, my budget is $1650 - $2000/month. Even when the house is paid off, there are still some relatively high property taxes because I insist on living in Texas. Because I don't live in a tiny house, utilities and maintenance are going to be much higher forever than for a smaller place. Because I want locational freedom as well as financial freedom, I've got car expenses. Specifically,
Rent: proposed: 200 - 250; mine (taxes + insurance + maintenance): 338
Health insurance: proposed: 75; mine (for the same sort of high-deductible health insurance + 100 to save for health happenings: 300
Food: proposed: 50 - 75; mine (groceries, toiletries, restaurants): 167
Transportation: proposed: 0 - 75; mine (taxes, insurance, maintenance, saving up for my next car): 234
Utilities: proposed: 25 - 100; mine: (utilities, natural gas, phone): 118
Low-cost miscellaneous: proposed: 0; mine (clothes, gifts, supplies, tools entertainment): 269
High-cost miscellaneous: proposed: 0; mine (travel, electronics, etc.): 200
Renovations savings: proposed: 0; mine (I want a dishwasher, covered parking, separate laundry room, extra closet): 134
Charity: proposed: 0; mine: 10%
Actually I fit in just fine. There were ten people. At least one other guy was already too old to retire extremely early. His plan is to be ready to retire when his youngest child turns 18 and he's done with child support payments.
"Only" three people were able to save 80% of their income, and two of those only during the good months.
Only one person appeared to be living an extremely low-cost lifestyle. She told a very interesting story, which I couldn't quite hear because she was at the other end of the table. But somehow she got sick of working and decided to backpack a certain trail. But a guy she met on Craigslist when buying her backpack told her "or you could live on a boat with me." So she's been living on a boat. She really can't stand to work more than 4-6 months a year or for more that 30 hours a week. Currently they are between boats and working the pedicab (actually bicycle cab) during the summer season. She actually has a smart phone so she can accept credit card payments. Her boyfriend couldn't attend the meet-up because he was locked up doing a medical study. They're renting a room in a cheap house in east Austin just over a mile from downtown where they work, and lots of people around there keep the same odd hours. Because their bicycles have trailers, they have no trouble getting their groceries home. On their next boat, she wants a bigger solar panel so they can have refrigeration. It's just too depressing to cook only enough for one meal at a time because you can't save your leftovers.
It's quite possible that not a single person there was married. At least two people were divorced partly due to differences of opinion about finances. At least one person was trying to figure out how to compromise with his partner; another was learning that having a lot of clothes was important to his partner even though she was frugal in many other ways.
Two people had come up from College Station: one was visiting his kids and wants to move back when he quits his job. The other was trying to sell her car--she's about to move to New York City, already has a job, and had budgeted $675/month for housing, but it looks like she'll be able to get a room even cheaper than that in Brooklyn, Harlem, or a third place I don't remember.
People talked about investing. Lots of people in the ERE forums are into the Permanent Portfolio, but most of the people who spoke up at the meeting were more into dividend stocks--they like the way it keeps them from worrying so much about stock price fluctuations and if they can live off the dividends alone, they don't have to worry about outliving their savings.
Someone asked how people got interested in ERE. Several mentioned the book Your Money or Your Life, which gives you a nine-step plan to financial independence involving making conscious choices about your spending and earning. One person was playing on the web and found a website about IRAs and it hit her that you don't have to be rich to invest, but can gain wealth by investing.
Some people learned that you can check out books for the Kindle at the Austin Public Library and that you can learn to fix your bike at Yellow Bikes. I learned that there is a copy of the ERE book in the library (and that it is currently checked out).
We may have a meet-up every month (which I am likely to attend), and we may have low-cost social events such as board game parties (which I am less likely to attend). There were too many people to really talk one-on-one with people, but I did enjoy talking to the gal going to New York after most people had left. They seem like a smart and interesting bunch. They remind me a little of the no-kidders group because most of them really didn't like their jobs and had real problems talking to their friends and co-workers about their notions of super early retirement.