Mr. Money Mustache was on the Tim Ferriss show in an interview that changed my life. I don't say that casually.
I have been listening to podcasts for over ten years. Of the thousands of podcast episodes that I have listened to, only a handful are worth listening to a second time. I've listened to this interview a dozen times.
Mr. Money Mustache's message is simple and profound -
- Be extremely efficient in your spending. Efficiency and optimization is beautiful, wastefulness is offensive. Mr. Money Mustache consistently spends only 25k per year, for a family of three.
- Be a "badass," i.e. do things that are hard, which makes you strong, resilient, and healthy. His canonical example is to get out of your "gas powered wheelchair" and ride your bike, everywhere.
- Combine these ideas into being a badass with your spending, opting instead to wisely invest that money in index funds. Once you have accumulated and invested 25 times your annual spending, you can retire. Mr. Money Mustache retired at age 30.
- You now have the rest of your life to pursue joy.
I've recommended the podcast to most of my friends, especially those who are young and can really take his advice to heart. Most of them enjoy the interview, but I have yet to find anyone else for whom it affected at a deep level. When I try to verbalize why it has had such a deep impact, I fall short; my explanations are shallow or incomplete. In this post, I attempt to explain my thoughts at a deeper level, and give a better defense as to why this is my all-time favorite podcast episode.
Why it Spoke to Me
There are three reasons this podcast had such a deep impact on me.
First, I'm of a similar mind and disposition to Mr. Money Mustache, opening me to the message. We both live in Colorado and love the Colorado outdoor lifestyle. We're both avid bikers, and believe in the power of the bike. We both work/worked as software engineers. We both have a son as our only child. We're within 5 years of the same age. We both get great satisfaction out of hard physical work. We both challenge ourselves.
Second, I'm in the sweet spot of being able to act upon the advice. If we place Mr. Money Mustache as a perfect 10 out of 10 at "badassity," I think I'm about a 7. A solid C. I'm high enough that his advice is actionable and his goals are attainable; yet low enough that his advice is energizing, rather than overwhelming.
Third, his advice gave me a mental model and game plan for how to think about spending and saving. Up until this podcast, my wife and I saved money at a decent clip, were reasonably frugal, and never took on any debt besides a mortgage. We live below our means, but hadn't put any deep thought into the endgame of spending and saving. We assumed working to a standard retirement age, trusting the finances would take care of themselves.
I'm ashamed at how little I questioned that tactic. Can we do better? Once I had my eyes opened to the possibility of retiring by age 40, it really changed my perspective not only on saving and spending, but how I think about my career.
How He Changed my Thinking
Would I do this For Free?
The question, "Would I do this for free?" is profound. I aspire to be able to pick and choose what I spend my time on, without consideration of how that task provides income. I love Mr. Money Mustache's definition of retirement as "the activities you pursue when you are done searching for money." What a brilliant reframing of status-quo thinking.
Many of the people I talk to about this concept say something to the effect of, "I don't want to just play golf all day." Agreed, I don't either. But, that's a straw man argument. I like to think of it more along the lines of being freed-up to do your life's work. Maybe that's raising kids. Maybe that's pursuing a career in a social, environmental, or charitable arena that can't match your current salary. Maybe it means being able to ski on any day that there is new snow, while otherwise working hard on a passionate side-project.
A similar push back that I get is that I should be searching for a job that I genuinely love. Agreed, but that's a separate issue. I have a great job, by almost any standard. I get paid well to do something that I mostly enjoy, with people I like, and with almost infinite flexibility. It checks all of the boxes, but I wouldn't do it for free. There's a difference between a really great job that you find enjoyment in, and your life's work. If they happen to be the same thing, consider yourself extremely lucky, and in rare company.
I've embraced the concept of voluntary hardship. I rode my 20-mile work commute 112 times in 2017, and I'm hoping to better that in 2018. I'm extremely proud of that. I now bike by default. I'm not a total badass yet, but I've moved the needle. I've taken my 2-year-old in the bike trailer to the grocery in all weather - snow, rain, and heat. It's how we do things now. He even asked for a windshield wiper on his trailer. I think that's a success.
Irreverence for the Status-Quo
I've embraced Mr. Money Mustache's irreverence for status-quo advice. It's as if he never heard about standard retirement ages, and instead devised his own rules based on first principles. I love that. I try to apply that to as many areas as possible - work processes, parenting advice, nutritional advice, and what society tells us should be our goals.
Index Fund Investing
I embraced the index fund investment advice. I had mutual funds that didn't perform as well as the index, and cost more in fees. So I moved them to index funds. We were also way too conservative with the "emergency fund" idea, keeping too much money in cash, missing out on thousands of dollars in investment gains over the years. I like his advice to put your money in low-cost index funds, forget about it, and move on to more important areas of your life.
We decided to take a 3 month sabbatical this year, a direct result of the podcast. I like to think of the sabbatical as a mini-retirement, or retirement experiment. Tim Ferriss often advises trying something before fully diving-in, as an experiment to see if reality matches expectations.
The sabbatical is a reset for me, a preparation for thinking about the next stage of my career. I have some ideas about what I want to accomplish and spend the next few years working on. Maybe that's with my current employer, but maybe not. I'd like to explore organizations that are trying to solve a problem that I believe in. If salary isn't the main concern, a bunch of opportunities open up. Maybe contract work is a better fit, where I can work hard on something for 6 to 9 months, and then take 3 months off to travel and refresh. There's an outside chance I'd change careers entirely. Stay-at-home dad? Teaching? Landscape Architecture? I have some ideas around remote mountain cabins that would be fun to explore.
Why His Message Might Not Strike a Chord
Maybe Mr. Money Mustache pushes too hard. If you're someone who thinks that his ideals are unattainable from your current situation, I can see writing him off as too extreme.
Maybe you're past the point of early retirement. If you've followed the standard path, saving money at a good rate, and are close to a retirement age of 60 or 65, his message isn't for you.
Maybe you're barely getting by, and his advice seems moot. Mr. Money Mustache fights pretty hard to show that his advice isn't only for those with high-paying jobs, and I think he gives actionable advice for almost everyone. But, I can see how his advice seems inapplicable if your circumstances are just too tough.
Maybe you don't see hardship and challenges as something to overcome, but rather as something to avoid. If the idea of voluntary hardship is foreign, and life is about making your circumstances as cushy as possible, you'll never find Mr. Money Mustache very appealing.
I'd encourage anyone to take a listen to this podcast. I think it will change how you see the world. It may not have as profound an impact on you as it did on me, but I would be surprised if anyone, at any stage of life, doesn't extract some pearl of wisdom from this discussion. Enjoy!