Extreme New Strategies for Early Retirement
Once again, thanks to Monevator, I found an awesome resource. This time it’s the story of a guy who retired at the age of 30 and saves 75% of his income. How did he do it? He calls his story Early Retirement Extreme.
Most people accept the 40-40-40 life plan: work 40 hours per week for 40 years, and then retire in poverty on 40% of your income. Sounds pretty crappy to me. But 99% of the people do it.
But not Jacob.
Why is Extreme Early Retirement so fascinating?
One of the things that I really love about his blog is that it is full of unconventional ideas. Most people accept what everyone else thinks as true, but that is really just a common opinion. And, more specifically, it is group hypnosis. Jacob destroys these common ideas by showing how it is possible to live outside the bounds of “normal” life.
One thing that he says that really got me thinking is when he was considering getting an air conditioner. He says he had a choice: buy an air conditioner or learn to sweat. What a great phrase: learn to sweat. Do we really need air conditioning, or do we just not know how to sweat?
Personally, I find it incredibly difficult to work or concentrate if it is too hot. But what if there were a way that I could do it? I think that would be an incredibly useful skill. But most people never even bother to consider it. They just buy an air conditioner and spend hundreds of dollars a month on electricity.
I think over 99% of Americans would immediately label learning to sweat as plain crazy. However, anyone can learn. I remember when I was vegan and only ate salad; I never got hot. In fact, Jacob even mentions in his blog that one of the major sources of heat inside our bodies comes from digestion. Eat less and stay cool. It’s simple. But most people will not even think about it, even though they would be much better off eating less anyway…
Another idea that occurred to me was getting used to the heat. Although I feel like I need air conditioning to work and think, I can tolerate more heat than most of the people around me. I don’t use air conditioning in my car and only use it a little bit at home. But for most people, they use it constantly and become more and more dependent on it.
What does this have to do with early retirement?
I think that early retirement really depends on thinking differently. If you can get through life by learning to sweat, then you are thinking differently. Because it does not apply just to air conditioning. It applies to everything. Do you really need a car, or could you get along with a bicycle? Do you need a cell phone? Do you need a house, or could you live in an apartment? These are the questions that Jacob answered in a way that is different from 99% of the other Americans. That’s why he was able to retire at 30.
What’s good for him is not necessarily good for you or me. However, I do think it is a good idea to rethink our lives and find new ways of retiring sooner. And his radical approach is a great place to start.
Related posts:
- Myth: Retirement Accounts Are Designed To Help You Retire Early
- 7 Factors That Can Rock Your Retirement
- This Is Your Brain on Retirement
- The True Cost of a Car
- Trading Strategies of the Rich and Famous: John W. Henry
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I'm George Ulmer. Matt and I started this blog and launched the Online Investing AI business. Our goal is to develop the technology to allow anyone to retire after working for 10 years.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
What a great life philosophy. This is also why entrepreneurs make so much more money. They are willing to take risks and think outside the box.
@Andy
I totally agree. Love your blog.
I’m glad Jacob retired earlier for us all to witness. It’s fun to live vicariously through others while working on your own dreams.
Hi Financial Samurai,
Yes, I think it is super motivating to see other people succeeding!
I read all of Jacob’s posts… which took me many hours of enjoyment!
its making a big difference in my families life. He is a good example of what can be done. Esp if your wife and kids are on board.
Hi Chris,
Funny you should mention that. I am reading each post, starting from the first. I guess there are about 2,000.
Kids is a funny point. I recently heard that it costs $300K to grow them to 18 years old. I think an extra $300K (or $600K!) would take a long time to save! Jacob doesn’t have any, but they certainly have a big effect on the calculations.
@George – No worries. I only got 800 posts or so, but you should also read the 8000+ comments which are often better than the posts
Sounds like some very expensive kids there. I suggest having less expensive kids which only cost a quarter of that. Same with spouses. And oneself.
Hi Jacob,
Great to hear from you! OK, I’ll check the comments too.
That’s true. $300K is an estimate for “normal” kids. I guess a quarter of that is a good estimate for extreme ones.
Glad to help George, and thanks for the credit!
Jacob’s blog has incredible stats for numbers of page views for visit. I think a lot of people do what you’re doing – try to read every post.
I’m pretty envious, but then Jacob is offering a very distinct world view. I admire the philosophy but it’s not 100% aligned with my own (I’m not so extreme!)
But I bet some people fall on it like mana from heaven.