Retirement

Why are so few successful?

If you want to become financially independent within 10 years, Todd at Financialmentor.com makes a compelling case for it How does mathematics work. The extreme saving method is considered powerful, unlike other methods such as real estate or companies that… It requires a great deal of luckIt has a high rate of failure for reasons beyond your direct control. This means that a big savings will work in about 100% of cases, while real estate or startups will only work for a small number, maybe 5-10%.
However, not everyone succeeds with this savings program, and the post gives some reasons why. Having succeeded myself and seen others fail, I agree/disagree to some extent, but I also have some understanding of why the over-saving approach can fail. Hint: It’s not the theory, it’s you

“It takes self-discipline “A celibate monk lives in a brothel to survive on 20-30% of what most people earn in our current culture,” Todd said. I would say it takes a high level of independence, confidence and leadership to turn the tide. Perhaps this is why extreme early retirement attracts so manyINTJ

Because this personality type shows these traits more than most other types. “Survival” is easy; It’s ‘spend less than you earn’ and it’s hard because it makes you different. For example, think of two families. One makes $90,000 and the other makes $27,000. The latter lives on 30% of the former well. No problem. However, it will take self-discipline and independence so that the $90,000 family does not spend the same way as its friends and colleagues. On the other hand, if these friends and colleagues spent less, there would be no problem at all. It’s the “inadequacy” that’s hard. That’s why the ERE forums have become almost a support group for highly efficient people who “should” be spending 5x what they are spending, at least according to everyone else. Many of the questions actually deal with grief caused by other “well-meaning” people who don’t understand it, rather than by actual “survivors.”

Self-discipline is not that important. I eat take-out food sometimes. Sometimes I buy *gasp* new things. [for money] In defense of extreme frugality: First, it certainly depends on your values. These values ​​don’t always mean retiring early. For me my initial motivation was environmental after realizing how much waste our consumer culture generates. It took me a few years to realize that with the high savings rate I had, I would be FI in a few more years. I used to enjoy buying gadgets a lot. And by the way, that’s what I enjoyed most about my stuff. Doing “consumer research”, comparing specs, buying the gadget, playing around with it for a couple of months, and then I lost interest. Then you are on to the next tool. If I had continued, I would still be working 60 hours a week, but I would have the latest iPhone and drive a Prius or Volt. It took a few months for my values ​​to change, but eventually, I felt so happy not spending money like I did when I brought home wrapped boxes of new toys. It is said that your needIt is inversely related to your skill level. Money buys convenience but more importantly it makes up for lack of skill. My favorite example is a broken toilet. Let’s say your toilet fails to flush. Now, you could say that the extreme saver won’t have the money to fix the problem, and so will quickly find themselves stuck

Shit

Discomfort. However, a very frugal person is more likely to learn (quickly) or learn how to solve the problem on their own. The end result will be the same: a working toilet. So both solutions are ultimately appropriate. However, imagine your toilet broke on Saturday night (don’t ask!) and you couldn’t get a plumber until Monday morning. Wouldn’t it be more convenient if you could fix it yourself?

It takes time and effort

To learn such skills. It reminds me of another quote from Illich which I paraphrase into something like “A man learns in proportion to his ability to understand and influence his immediate environment.” In this regard, most of us are barely out of the toddler stage. If we have a problem, many of us reach out to authority. We often pay others to “understand” and influence our environment because we never learn ourselves. We are like stupid scientists who only understand one thing, which is our job, whatever it is, but we understand that well to the exclusion of everything else.

This could change. Fixing a toilet, knitting a sock, building a bicycle, installing a compressor to make a refrigerator, and similar projects are not rocket science. It can be learned by anyone who can read and follow instructions. Only in this society no one does that. Furthermore, there is an enormous sense of satisfaction when you are able to say “I made that” or “I fixed that” which far outweighs, at least for me, saying “I bought that”. For me, the latter always comes with a sense of shame.

To be clear, I’ll think your new sports car is beautiful and fun to ride in, but what really impresses me is a self-modified truck that gets twice the mpg that runs on biodiesel or an electric scooter made from duct pipe, old frame parts, and discarded golf cart batteries. Standard cars mean nothing to me. Conversely, I understand that the dating scene in Los Angeles is based entirely on the price of a person’s car.

So I’m probably only spending $6-7,000 a year, but consider the value I add by using that money for parts and improved living and location compared to someone blindly spending $60,000. Maybe we get the same value from it.

It is sometimes said that the absence of money rules out certain things. This is true, but it also includes things that are out of reach due to lack of time spent at work. When you’re FI, things change. Things are done differently. It would be very expensive for me to take my family to France for a month every year. However, it would be completely possible for me to move to France (yes, I have an EU passport) and stay there for years because I don’t need a job, the plane ticket will be used up, and I won’t support a house in the states. If I had kids, I wouldn’t be able to afford expensive private schools, but I would have 12 hours a day to help them with their homework. I don’t have the budget to shop at Whole Paycheck, but I do have time to garden. The same applies to sports. I can devote more time to an activity that usually beats having a personal trainer and the latest equipment. There is a strong limit to what money can buy, and it can easily be exceeded with time and effort.


Conversely, using the examples above, a person who works for a living cannot go to France for longer than a year because he certainly cannot pay for two houses (unless he has already saved 50%) and may as well be underwater in “The biggest house they can afford,” which can make the sale difficult. If they are high-income they are likely to be better off economically if they outsource the raising of their children, because they need to work to pay for their “fun time.” Who has the energy for serious exercise and gardening if they work 60 hours a week?
More important than confidence and independence is the ability to imagine the possibility of doing things differently. If you can’t wrap your head around it, you can’t set the goal, and without seeing the goal, you can’t intentionally reach it. Many cannot imagine doing things for themselves instead of paying others. I think that’s where all the “I can’t live on $10,000 a year” comes from. To be clear, $1,000 will buy you a good bike. However, $1,000 will also buy you enough parts to make six bikes that are the same quality. Most people can’t imagine doing that, don’t you need a cycling degree or something?! (But many are willing to stretch their minds far enough to acquire two used bikes of the same quality.) By the same token, a hundred dollars worth of carefully handled seeds will feed a family for months, organically as well. One hundred dollars spent in a restaurant is enough to feed a family for one day.
I find this to be the biggest barrier for most people, which is largely why I go public with my life. Of course this is just meant to be an inspiration. The goal is not to imitate what I do, but to understand the principles and philosophy. For example, I wouldn’t move to France, but some people probably would. And you don’t have to live in an RV. That’s just what I do.

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