The Goal: More money than I will ever need

Recently, my high school friend Michael introduced me to one of the most useful personal finance bloggers of all time: Peter Adeney at https://mrmoneymustache.com.

Adeney, more widely known by his ironic personal finance superhero name Mr. Money Mustache (or MMM), used frugality and badassery to unlock financial independence and early retirement. Using these principles he, along with his wife and young son, was able to retire at the ripe young age of 30. He has also ironically inspired a cult following of Mustachians to follow his principles and achieve their own financial independence through badassery.

Here are some examples of this badassery:

  1. MMM lives a couple miles from his workplace, grocery stores, and his son’s school. He bikes to all of these places to save on gasoline and car upkeep costs.
  2. After he got a job after graduation college at age 22, MMM has maxed out his Roth IRA contribution and steadily increased his 401k contribution until he has maximized it.
  3. MMM’s hobbies include Do-it-yourself home and car maintenance projects. Throughout the years, he has learned how to do home renovations, fix plumbing, fix and upgrade his used car, and build benches.
  4. MMM buys groceries in bulk from Costco with staples such as steel-cut oats, fresh, non-organic produce, chicken thighs, and parmesan encrusted tilapia. He also cooks in bulk with these items.
  5. MMM keeps a fridge at work with an ample supply of food, including peanut butter sandwiches, lunch sandwiches, yogurt, and fruit. He calls it his secret work stash.
  6. MMM has created a home gym with weights and bars to save on gym membership costs.
  7. MMM has cut all but the most essential recurring bills, which include a Google Project Fi phone service, utilities, and a Netflix account.
  8. MMM has grown his blog to a readership of millions, who in turn generate substantial passive income for his family.
  9. MMM is committed to donating 10% of his profits to charities and causes that he believes in. He believes that one of the greatest uses of money is to use it to push forward causes that we believe in. Whether that is cancer research, starting micro-finance and micro-lending programs for the unbanked in third-world countries, or helping girls and minorities to code, money can be a powerful tool for good.

Through bold, courageous, and frugal acts of financial badassery such as these, MMM has managed to save and invest over 1.25 million dollars by age 30. This is enough for family to live indefinitely off, given a save withdrawal rate of about 4%. He does this through a carefully calculated annual withdrawal rate of around $50,000 a year (50,000/0.04 = 1.25 million dollars). He is careful to have about a 10% cushion, in case of changes in spending and emergency situations.

I love MMM’s definition of early retirement. He calls it “Fuck-you” money. In other words, it is money that allows you to tell your employer to stick it up their ass and and allow you to pursue what you really love to do. For MMM, these activities are carpentry and blogging. For someone else like myself, they might be creating art, blogging, angel investing, and creating successful tech startup businesses. Money is a fantastic tool for freedom and independence.

I would highly recommended MMM’s blogs, starting with his MMM Classics, as well as his AMA on reddit at https://www.reddit.com/r/financialindependence/comments/662nzh/i_am_mr_money_mustache_mild_mannered_retiredat30/ and interview with Vimeo at https://vimeo.com/183016901 to everyone. I would especially recommend it to people who want to take control of their finances, retire early, and have to power to choose what they want to do with their time and money.

Consider me a Mustachian now! Hope you have see the light as well!

Visit the original post at https://www.onepercentbettereveryday.com/money/2017/5/27/blog-3-lessons-from-mr-money-mustache-mmm

Investor/Entrepreneur/Data Scientist; Blogger at www.onepercentbettereveryday.com; Connect with me on LinkedIn: https://www.linkedin.com/in/peter-shi/

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