Mr. Money Mustache
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Anonymous
| He is an illegal immigrant |
Anonymous
First, honestly its a bit of luck. Good investment returns go a long way. Second, there's been a lot of strategies I put in place, some obvious, others not. For instance, everyone knows to ditch cable, live on hulu and amazon, buy old cars and drive them till they explode, etc. I think living somewhat frugally is obvious. Ever since I was in my early 20s, I treated each subsequent raise as if it didn't happen. Eventually, you have to buy up (cant raise a family comfortably in a studio!) but I honestly think thats the biggest single thing people can do to make a difference. I shop *ALL* of my expenses annually. Home owners insurance, car insurance, *everything*. I even shop my electricity (did you know you can buy electricity from someone other than PepCo?). I have a calendar where I every 3 to 6 months I call these companies and I ask for a discount. You'd be surprised how often that works. I save hotel and airline points. Last year I took a week vacation in Greece at a 400 euro a night hotel for the grand total of about $700 in taxes, flights included. (Admittedly this is only an option because I periodically travel for work). It can pay real dividends to watch for these types of specials - two years ago BA offered 100,000 miles just for getting their credit card. That might sound crazy to say yes to, but 100,000 miles, properly used, is enough for two business class tickets to South America. Obviously need watch your credit - but for $10,000 worth of flights.... There's always something like this going on like this. See http://boardingarea.com/blogs/viewfromthewing/ or http://thepointsguy.com/ for good blogs on the topic. Another trick people don't often think about is using non-tax advantaged gains to increase your tax-advantaged ones. For instance, lets say you make $10,000 in the markets this year in your regular savings account, but you don't make enough money to max out two 401Ks? Rather than let that $10K sit in a non-tax advantaged account, simply figure out the increase in % that $10K would fund and then take disbursements from it monthly to replace the lost salary. Viola, you've moved $10K from a tax-disadvantaged asset to an advantaged one. Tada! Maybe a lot of people do this, but I'm always surprised at the number of people who don't. Or in the case of 529 plans, you can open DC ones for a tax deduction. But the fees don't make it worthwhile you say? Ah, but there's a clause that says that once those funds have been in there for 2 years you can move them to another plan free of charge. So, what do you do? You put the maximum per person in immediately (I believe this is $13K per spouse per kid), and you roll over the tax deductions every year (which you can also do), and then at the 2 year mark you move them to VA or another plan of your choice. I also heavily front load my 401K contributions, meaning I try to max things out well before December. Why? Built in Christmas budget. My firm also does 401K true up matching so there's no lost benefits or employer matches. Admittedly some of this is a "it takes money to make money" stuff, but honestly the best advice I can give you is as boring and predictable as you think - live below your means, surround yourself with people of similar mentalities (if all your friends are buying M3s you'll eventually want one too, its just human nature). |
Anonymous
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A couple questions for MMM:
How much money does he have stocked away? Does he splurge on anything? (I live pretty frugally, but I still have the newspaper delivered, in part because I want to support the newspaper industry... and also I like a daily newspaper.) |
Anonymous
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I'm more like MMM, and not on purpose, but there's nothing worth buying other than what makes money for me down the road?
I'm a female who has to be dragged to the mall. I make about 45k,pay mortgage, I own a rental, Roth and contribute to 529 plan.nothing to spend money on-don't care for organic chicken and wine. |
Anonymous
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$7k can cover community college and tuition at many state universities.
Moving back to Canada isn't an option for most of us, so there's that. |
Anonymous
| I am fascinated by this blog. Some of the options he proposes don't really fit my current lifestyle, or I would have to make major changes. But it's impressive to live off of 50% of your income! I wish I had done that in my 20s; now that I'm almost 40 with two young kids, it would be harder. Also, biking 12 miles each way to work, after dropping two kids off at daycare, would be interesting... not so easy to leave my 100k job, find another one nearby and make this easier for me. |
Anonymous
We live off 60% of our income. You have to be a delayed gratification kind of person to be happy doing it. |
Anonymous
I think people like the Mustache couple really get off on saving money.. it is hoarding of sorts, collecting something for the sake of collecting (except that hoarders collect used magazines, and Mr. and Mrs. Mustache collect US Treasury bills). I can understand saving with a financial goal in mind, although even that doesn't mean that a person should totally forego the present. But in this case - imho - we're dealing with a pathology. |
Anonymous
| This is a classic mental illness of hording money and not spending it. I forsee many medical bill in the near future. |
Anonymous
| What good is money if you can't enjoy it? |
Anonymous
He uses his money so he can spend his time in ways he finds more meaningful and enjoyable than being an an office/cubicle for 40+ hours a week. I agree-- I prefer finding a job that isn't a grind and then spending money on other things-- but i think what he says is interesting. |
Anonymous
| I like the gist of what he's saying too -- live below your means, pay yourself first, etc., but I'd find him much more interesting/relateable if I knew that there were one or two small luxuries that he allowed himself. I don't have the energy to read the whole blog, so if someone has found it, let me know. |
Anonymous
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http://www.mrmoneymustache.com/2012/06/01/raising-a-family-on-under-2000-per-year/
And don't forget, he has a paid-off house. Even in this area, I think I could survive on $27k, if my mortgage was gone! |
Anonymous
It'd be damn hard. $1500 a month for everything? Food, insurance, heat, electricity, gas, clothes, etc.. |
Anonymous
How do you calculate the $1500/month figure? 27k/12 months would be $2250, no? That seems do-able, especially with no mortgage/rental payment. |