Nov 4, 2013 257 comments

Reader Case Study: Should This Man Claim his Freedom?

“Badass Mustachian Eagle of Freedom” by M. Mustache. 2013, 8.5″x11″, Kid paint on scrap paper

I’ve had the chance to go to lunch with quite a few visiting Mustachians of late, and a theme has been popping up in the conversations. Like my own family, many of these readers have been leading slightly-less-ridiculous-than-average lives for years, which has led to a considerable surplus of money.

But amassing money is just one side of the coin. The other is knowing what to do with it: deciding upon your own definition of freedom, figuring out when you have saved enough to accomplish it, and gaining the confidence to make the jump when you get there.

So when this incredible comment showed up on the post about The Rules, I knew I had to get in touch with the guy who wrote it. His general theme is not uncommon among readers of this blog, and if we study the theme, we may all be able to learn a thing or two.

(our conversation has been edited for length)

Dear MMM,

Love the blog. Actually, I read it obsessively, and have even begun preaching the precepts to all (including friends and family – I’m trying to convert the kids into Mustachians before it’s too late).

Anyway, here is my problem: I am a BIG FAT GUTLESS PHONY! That’s right. As far as I’m concerned I can afford to retire now at 54 years of age. Our net worth (the wife and I) incuding the house, is $4.25 million. However, any time I suggest to the wife that I am packing it in (I hate the meaninglessness, imposterism, drudgery, uncertainty, depression inducing self-esteem sucking, soul wrenching boredom, of my useless pseudo-middle-management-faking-it-all-day-$100K a year plus automobile-desk-job), she disagrees and expresses concerns about our lifestyle and the children.

I tell her it doesn’t have to be that way, and point out the huge wealth of information that you have so concisely articulated in hundreds of articles. But, alas, it does me no good.

I’m just a regular dude who happens to have some very basic Level 3 Mustachian instincts (assuming the levels go from Level 1 at the lowest to Level 15 at the highest) who got lucky with my timing in life. I bought a house 30 years ago before prices were insane, moved once, 25 years ago, paid off the mortgage aggressively a long time ago, and enjoyed the quadrupling of its value.

Similarly, I was as frugal as I could be, earning a basic salary through employment over the last 30 years, with a semi-spendthrift wife and 3 kids with quasi-rich friends, while investing in basic stuff .

So now that I’m TIRED, FED UP, DEPRESSED, and I JUST WANNA QUIT and read books, and fix up my house, and ride my Harley, and exercise, and go skiing, and ride a bike (a real bicycle), and do my photography, and cook, and volunteer, and indulge in a mid-day Bota Box if I get the urge, and stay in California, or Arizona, and shop at Trader Joe’s in the U.S., and beach bum in Florida for a couple of months a year.

Yeah – I know it’s my fault. I SUCK. So, other than just manning up and breaking free, do you have any advice on an alternate way to present the facts to convince her we’ll still be OK, even with keeping the house for now, and investing the $3M for income?
Please. I’m ready for a change. Time to break the rules.

Sincerely,
Yin Yang

This comment blew my mind. So many aspects of Mustachianism, so many successes and failures and emotions and common themes, wrapped into a single comment. This is a man of 54 years of age who is ready for a plate of Freedom, but thus far has failed to walk up to the counter and claim it. So I wrote back to him and requested further details. His reply was:

It’s difficult to explain the situation to “non-Mustachians”. Most people I encounter do not hate their jobs (or at least do not ADMIT to it). When I mention “retirement” to anyone, I get looked at as if I had a third eye…. There’s a weird combination of guilt and pressure I feel – from my wife, parents, colleagues, acquaintances, etc. – that somehow has a psychological grip on me, and keeps me “playing the game”. It’s as if I would become a pariah if I stepped off the treadmill. The worst thing I fear is setting a bad example to my children, none of whom have even started to work yet. I don’t want them thinking “If dad can be a bum, why can’t I?”

Financial Figures

Combined Employment Income:
$140,000.00 Gross (pre tax) (My portion is $110K – that will disappear with retirement.)

Monthly Expenses:
Property Tax $670.00
Electricity $400.00
Heat:$125.00
Phone: $30.00
Internet: $125.00
Home Alarm System: $30.00
Home Insurance: $200.00
Car Insurance: $660.00 (4 vehicles)
Motorcycle Insurance: $100.00
Lawn care/Maintenance: $100.00
Life Insurance: $200.00
Disability Insurance: $250.00
Critical Illness Insurance: $225.00
Cable TV: $70
Cell Phones: $160.00 (Wife’s plus 1 kid)
College Tuition and Living Expenses (2 kids): $2500.00
Food: $650.00
Fuel for 4 Cars: $400.00
Vehicle Maintenance: $200.00 (4 vehicles)
Vacations: $1000.00 (3 trips a year plus some long weekends)
Miscellaneous:$200.00

Total expenses $8295/month

Assets:
Home -mortgage free; Estimated market value: $1,000,000.00

Liquid non-tax sheltered investments: $2,350,000.00
Includes an allocation of Stocks, Bonds, Preferred Shares, REITS (real estate investment trusts), ETF’s, Mutual Funds, GIC’s (CD’s), and some Cash.
Income yield across the board on all of this is approximately 5% annually. The market value of the holdings fluctuates depending on the way the market goes, interest rates, and other variables.

Registered (Tax sheltered) Funds (RRSP) (i.e., 401K)
$750,000.00 in ETF’s, Mutual Funds, GIC’s
Mostly growth oriented equity funds, some dividend reinvestment. Mostly long term outlook.

Rental Income Property
Value: $325,000.00
Mortgage: $200,000.00
NET positive monthly cash flow (after all expenses): $450.00 ($5,400/year)
(If I bailed on it now, I could likely add $100,000.00 liquid cash to my portfolio).

I have 3 “adult” children: 26, 25, and 21 – two in university. There is a potential massive expense coming if they pursue law and medical education outside of Canada ($100k for a domestic education, $500k for the US equivalent)

The house will definitely be downsized within 3-5 years, freeing at least $400,000.00 cash for more investments.

I anticipate having these ridiculously high expenses for the next 3-5 years, but would still like to retire in 1 year (at 55). I would like to hang out in Florida and/or California for at least 2 months a year, and in Colorado (to ski) for at least 6 weeks a year as part of my retirement wish list.

Whoo. While that is a lot of information, and I can hear the WHOOSHing sound of 800,000 boxing gloves stirring up the nation’s wind currents as we all read that astonishing list of expenses, let’s start with an end-run around the whole heap of details:

This guy’s invested savings (taxable plus retirement): $3,100,000
Annual income provided by these savings, using the 4% rule: $124,000
Current (worst-case) annual living expenses: $99,540

See, once you amass a sizeable ‘stash, your money can work harder than you can. And while YinYang’s expenses are massive right now, his great collection of investments is providing passive income and growth that will on average easily outrun his family’s spending even if he never reduces these expenses. Doing the math, the current expenses are only 3.2% of the investments, meaning he has a huge safety margin beyond even that which is built into the 4% rule.

Since the worst case is already good enough, we could close this case study right now and tell our man to retire. Which is exactly what I advised him in my first response to his comment. But since I am Mr. Money Mustache, there is obviously more to be said on those expenses:

Property Tax: This will drop by at least $200/month when you move
Electricity: $400 a month – WTF? Do you live in a one-acre Bouncy Castle that you keep inflated with 1,000 blowdryers? My electric bill is under 25 bucks. You need to get yours down right now my man. Savings: at least $300/month.
Home Alarm System: These are a silly invention – the Timeshare Condos of the suburbs. Drop it, live free, and save $30.
Car Insurance and Gas: You are forking over $15,120 per year (and probably over $20,000 after accounting for depreciation), in order to trash your own environment while driving four unnecessary vehicles around in circles. Why are you punishing your children by addicting them to Motorized Thrones when they could obviously ride bikes? Where is your own bike? If the distances involved are too great, you live in the wrong place and need to move. Savings: at least $1,000 per month.
Life, Disability, and Critical Illness Insurance: What are you insuring against? Your savings are already equivalent to several life insurance settlements. Even if you perish before finishing this article, your family is financially set for life. Cancel all three policies immediately and save $675.00 per month.
Cable TV: Did you throw this in just to enrage Mr. Money Mustache!? Fuck the nonsense of nationally broadcast passive entertainment – as multimillionaires who are raising doctors and lawyers, your family is obviously intelligent enough to find more advanced forms of entertainment than watching TV, for a savings of $70 per month
Cell Phones: $160 is an awful lot of cash for occasional access to radio waves. You might check out this MMM reader’s quick guide to less costly cell plans in Canada. Savings: at least $60.
Vacations and Miscellaneous: with a tighter budget, I would grill you on these expenses as well. However, given your unstoppable cash surplus, I’ll leave these bits of luxury untouched, so you can be free to attack the other areas.

Investments: Although we won’t get into the details, you should conduct an audit and make sure you aren’t carrying any of the nonsense high-fee mutual funds (expense ratio over 0.5% or preferably 0.25%) in the portfolio. Instead I’d carry passive index funds that track the Canadian TSX index, US total stock index (like Vanguards VTSAX), and international stocks (VGTSX). Large REITs are nice too.

Total monthly savings after application of the MMM Face Punch: $2335. This is a 28% reduction of your expenses, even without touching the core of your lifestyle – the ability to help your kids with their education. Applying the 4% rule in reverse, this spending cut is equivalent to increasing your nest egg by about $700,000. And after downsizing your house, the newly liberated cash will add to that, resulting in a total equivalent wealth boost of $1.1 million.

In a Nutshell: Congratulations. You’re set for life. There is not even the slightest logical jusification for you not to hand in your two-week notice at the end of your workday today. While the agreement of a spouse is important, there is no sense continuing an unsatisfying job when all possible calculations suggest your salary is completely unnecessary. And as the final bit of unnecessary safety margin not mentioned in the box above, your wife is still free to keep her own job.

These objections based on fear are often rooted in a lack of understanding of the true nature of investment returns. Money really does produce money when invested, but this fact is not intuitively obvious if you haven’t soaked up the idea. The solution is then some sort of education – simple investing books, or talking to other early retirees. However, the facts are behind you on this one, so I am optimistic that anyone can learn to let go and let their retirement savings sustain them, given a sufficient cushion.

While there are many good solutions to the problem of a misunderstanding like this one, “Continuing to work an unnecessary job you hate”, is not one of them.

You have many adventures in freedom and years of healthy healing ahead of you. And if you’re so inclined, please keep a journal of your experience so we can take inspiration ourselves.

As for you: If you’re more than ready to pull the plug – go for it, and share your story as well!

Further Reading: an older classic on a similar theme theme: the Quitting Lawyer and the Despondent Millionaire

Previous Post: Obamacare: Friend of the Entrepreneur and Early Retiree Next Post: Get Rich With: The Position of Strength

Want More?

Chris November 5, 2013, 5:56 am

Anyone else wondering why retiring from a mind-numbingly boring job necessarily entails not working at all?

My parents retired in their early 50s and used their new-found time to start a non-profit (davidsrefuge.org).

Just because you’re not getting a big paycheck doesn’t mean you’re not working. Frame this as a career change.

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- rjack November 6, 2013, 6:31 am
  
  I like your idea. He could also reframe it as a 1 year experiment. At the end of the year, he and is wife could discuss what is next.
  
  Reply
Basenji November 5, 2013, 6:14 am

I feel sad that this is what our North American societies are like: paid work and earning money are more important than time and freedom. The fact that YinYang has to struggle with this demonstrates how messed up our group expectations are.

Obviously, YinYang needs to “retire” and live his life on his well-earned nest egg. But, as MMM is pointing out, I am going to use this case as a mindfulness bell of how assumptions we make and our beliefs create the prison we lock ourselves in. Birdy, fly free! And for the rest of us still working on FI, onward to the promised land!

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Weston November 5, 2013, 6:18 am

I’ve got to say that I’m a little disappointed with your response although several of the commenters do an outstanding job of trying to address the real issue. The vast majority of your response deals with the minutia of the numbers since that is where you seem comfortable. You then give only a cursory nod to what I think is really going on here, when you write…” While the agreement of a spouse is important, there is no sense continuing an unsatisfying job when all possible calculations suggest your salary is completely unnecessary.”

Yin Yang seems to have an outstanding grasp of the numbers. To me this is a post about relationships and I think that for many readers of your blog (both male and female) what is keeping them from the lives they want is not understanding the principles or doing the calculations, it is a spouse or partner that you love and respect who has a different view on this topic.

While I thought your “Selling the Dream…” post was excellent I still feel for many of us what is holding us back is not numbers, or society, or our own preconceptions but rather the very real response that will ensue from the person we love and share our lives and finances with.

Not saying you have the answer, and I deeply respect those that don’t spout advice on topics they are not qualified in, On the other hand, I think responding by focusing almost entirely on the numbers is just avoidance. Saying agreement of a spouse “is important” is at best the world’s biggest understatement. I think agreement of a spouse in such life changing decisions is crucial if not almost mandatory.

If you don’t have that agreement you will pay dearly for it one way or the other.

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- Yin Yang November 6, 2013, 2:44 pm
  
  In all fairness to MMM, this is primarily a blog about money management, fiscal prudence, frugality, philosphical views as they pertains to lifestyles and their effects on finance, and productively creative ways to spend one’s time in retirement once FI has been achieved. I never expected him to cure my psychosis! Most of the comments in reference to the psychological aspects of my problem are accurate. While I am fully aware of them, and readily admit to them, it doesn’t make it any easier to deal with them directly. There are deep seated cultural, familial, and societal aspects to contend with, and that’s what I am having trouble with. While I have been coping with this quite easily for years, I have finally run out of patience. This is what has brought it all to a head. I agree with MMM and most of the reader comments. The thing that has to change is me. Shopping list: Spine, balls, guts, courage.
  Thanks!
  
  Reply
  - Goatee Joe November 6, 2013, 10:19 pm
    
    Personally, I think you’ve already demonstrated great guts/courage by putting your story out there, so I’d like to thank you for doing that. The feedback has been great: this is the only MMM article for which I’ve ever read ALL the reader comments. Very thought-provoking and inspirational, so thanks again and good luck, whatever you decide to do!
    
    Reply
  - Ellie November 7, 2013, 12:11 pm
    
    You have a lot of external pressures to keep the nose to the grindstone. Have you considered any form of counseling to help you deal with all the naysayers? Just having someone who is completely on your side can be a big factor in developing a plan and the guts to make the change you want. Of course, this blog does that. :)
    
    And don’t count out the possibility of finding part-time work, either using your own background or something completely different from what you’re doing now. It might give you some of the time you desperately need while bringing in some income to placate those outside forces.
    
    Reply
  - Marla November 8, 2013, 7:28 am
    
    Hi YinYang – thanks for posting your story and putting up with all the feedback (some of which must sting). One of my favorite quotes is “Without fear there is no courage” – So you can likely knock courage off your shopping list :) I relate to the identity issues covered by many posters (I’m an early retiree, 43). It took a couple of years to learn how to answer “what do you do?” at parties and when meeting new people, but I’ve learned to flip the script and ask people different questions eg. “Planning any vacations?”. “what did you get up to this summer?”. It leads to much more interesting conversation (who wants to talk about work?) and a growing confidence in who I am being much more than what I “do”. Best of luck!
    
    Reply
nick November 5, 2013, 6:36 am

I suggest he quits now and he can always go back again.

I’m not sure how paying for your kids education teaches them the value of money. I paid for mine and retired at the same age MMM did.

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Erica November 5, 2013, 6:45 am

“While the agreement of a spouse is important, there is no sense continuing an unsatisfying job when all possible calculations suggest your salary is completely unnecessary. And as the final bit of unnecessary safety margin not mentioned in the box above, your wife is still free to keep her own job.”

Indeed….why should his wife be coddled? She can strive to earn whatever income she feels is lacking, in my opinion.

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SavvyFinancialLatina November 5, 2013, 6:49 am

Claim your freedom. Your kids can pay for their graduate education. I don’t think you should worry about that.

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Mrs PoP November 5, 2013, 7:09 am

I came across this and thought it appropriate…

http://www.nytimes.com/2013/11/05/booming/i-want-to-be-a-millennial-when-i-retire.html?_r=0

Reply
- dude November 5, 2013, 8:19 am
  
  Wow, Mrs.PoP — thanks for sharing! that’s one of the coolest articles I’ve read in a long time!
  
  Reply
Gerard November 5, 2013, 7:10 am

Off topic, I clicked through to Raptitude and enjoy it much. Thanks for the link.

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sara November 5, 2013, 7:42 am

Hooray for Ying Yang. It sounds like he just needs to spend some time away with his wife getting her on board and that he can tell The Man to suck-it very shortly.

While it is obvious that some of your readers are in the position of Ying Yang, I think more of us have numbers that aren’t nearly as impressive as YY’s, but still have a sizeable enough Stache to walk away. But we worry about healthcare, college, market unknowns, and wind up continuing the soul-sucking 9 to 5. I’ve totally bought into Mustachianism, but I (and especially my husband) need some more confidence/face-punches to pull the trigger.

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- bc_stache November 5, 2013, 12:45 pm
  
  You pretty much nailed it on the head for me sara. I’m late 40’s with two rugrats (10 and 8) and a lovely wife. We have about $1.6M socked away, as well as a paid off house. Based on our current expenses, logic tells me we’d likely be fine if we both walked away from our jobs right now. Wife is even fine continuing to work a few more years, with me pulling the straps right now (we’ve agreed I hate my job more than she does…). Still, like you, I need a few more face-punches to finally pull the trigger (very very close now though).
  
  Reply
  - sara November 6, 2013, 7:13 am
    
    bc_stache: DO IT!
    
    :)
    
    Reply
dude November 5, 2013, 7:49 am

This guy’s story reminds me of the “Mexican fishing village” story, which has many versions and is all across the internet. But I still find it relevant and on point:

An American tourist was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked.

Inside the small boat were several large yellowfin tuna. The tourist complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “Only a little while.”

The tourist then asked, “Why didn’t you stay out longer and catch more fish?”

The Mexican said, “With this I have more than enough to support my family’s needs.”

The tourist then asked, “But what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life.”

The tourist scoffed, ” I can help you. You should spend more time fishing; and with the proceeds, buy a bigger boat: With the proceeds from the bigger boat you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor; eventually opening your own cannery. You would control the product, processing and distribution. You could leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York where you could run your ever-expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

The tourist replied, “15 to 20 years.”

“But what then?” asked the Mexican.

The tourist laughed and said, “That’s the best part. When the time is right you would sell your company stock to the public and become very rich, you would make millions.”

“Millions?…Then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

Dude, get thee to the mountains and rip some pow — you are not getting any younger, and at this point in your life, you should be fully aware by now how fragile this existence of ours is (surely you’ve known people cut down in the prime of life by cancer, accident or other disease). Tomorrow is not guaranteed to any man. You are a paradigmatic example to your kids of how working and saving aggressively when young can result in the life one has dreamed of. Don’t run away from that — embrace it! I wish I had a father who set such an amazing example for me to follow!

If your wife loves you, she has to come around. If not, then (and I don’t say this to be callous, but rather to be realistic if your happiness means anything to you) it might be time to consider whether you can live the life you’ve dreamed of on half your assets. I know I sure could (and I’ve got a fairly similar lifestyle and income as you — though not nearly the assets because I started much later in life).

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Robert from Boston November 5, 2013, 8:11 am

It seems to me that his wife may be concerned because their spending could be A LOT higher than reported here … I mean, I don’t see anything for clothes or medical (doctors/prescriptions – unless everything is covered in Canada) or income taxes or miscellaneous house expenses/repairs, pet expenses if they have pets, hobbies/entertainment … let alone furniture, gifts or splurges or drycleaning or possible hair cuts & etc. for his wife.

Plus $650 a month for food seems low for YinYang’s family, with 3-4 people at home and their patterns of spending otherwise. No word of credit card expenses but nothing about being credit card debt-free either.

His wife could be being overly concerned. She could be way too attached to The Lifestyle. Or she could be worried sick about money (without being able to stop spending).

I love the Mustachian lifestyle and I hope everyone, including YinYang, gets to live it. Just find myself wondering if there’s more to this story than YinYang wants to admit!

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- Yin Yang November 7, 2013, 2:13 pm
  
  What does this term: “Credit Card Debt” mean?
  
  Alternate response:
  
  If anyone out there has credit card debt, GET OFF THIS BLOG NOW AND DON’T COME BACK UNTIL YOU’VE ELIMINATED AND LEARNED YOUR LESSON. (Credit card debt people cannot call themselves Mustachinans).
  
  Reply
  - Happyback November 8, 2013, 3:31 pm
    
    AMEN BROTHER!
    SAY IT AGAIN!!!!!
    ;)
    
    Seriously, pull your wife close, look her in the eyes, and tell her you love her. Tell her you want to spend the rest of your life with her.
    Tell her you want to whisk her away to enjoy the sunsets….
    And that you happen to have saved lots of money for lots of years, just for this purpose.
    
    And hand her 2 tickets to a vacation you both would enjoy.
    Then retire hand in hand.
    She just needs to know you’re not going thru a midlife crisis. She needs to know you love her, and that you’re sure. She loves you. She believes in you. If she didn’t she wouldn’t be there.
    
    Now, love her into it!
    ;)
    
    Reply
HD November 5, 2013, 8:23 am

vern November 4, 2013 at 10:18 pm #

“This guy’s main problem is that he actually gives a shit what people think about him.
That can be a very expensive way of going through life.”

Boom!

Sanne November 5, 2013 at 3:39 am #

“So true. It’s bad enough when you feel pressured to keep up with the Joneses… let alone share a bed with them. If I was married to a man who tried to guilttrip me into selfdestruction because he values his lifestyle over my health and happiness, he would be sitting with a sore butt on the curb before he even realized I kicked him out.”

Boom!

As much as I appreciated reading the other posts, these 2 commenters nailed it on the head.

If Mr. Ying Yang listens to only these 2, problem solved yesterday in my opinion.

Best,

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sheri November 5, 2013, 8:32 am

While I don’t think for one minute that he’s obligated to do so, I can understand, sort of, if YinYang wants to pay for his kids’ on-going education. But I seriously think those “adult” children need to be facepunched themselves for expecting their parents to pay for the insurance, gas and maintenance for their cars. And they really need to take some responsibility for cutting down on the use of all those blowdryers for the bouncy castle. They just need to take some responsibility, period.

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TOm November 5, 2013, 8:40 am

I find it crazy that none of the kids have started to work yet given their age..

the oldest is only 3 years younger than MMM was when he retired.. at what age will these kids need to start working for themselves.. I believe MMM has a blog post that discusses having to earn things vs. being given everything..

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Dollar Flipper November 5, 2013, 8:45 am

I’m just blown away. Father in law retired at 55 with a sizeable nest egg. Kids are done with school and he enjoys fishing now instead of working 10+ hours. You won’t look back once you take the plunge. I think the biggest issue is getting your wife on the same page and understanding why she’s so afraid of you not working. Is she working? Is that fair? Lots of fun stuff to discuss/figure out!

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Jack Ludden November 5, 2013, 8:57 am

“WTF? Do you live in a one-acre Bouncy Castle that you keep inflated with 1,000 blowdryers?”

Hahaha. Awesome.

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Kenoryn November 5, 2013, 9:07 am

Let me get this straight: you are concerned about your kids not being hardworking because they will see your early retirement as an example of not working hard. Meanwhile your GROWN CHILDREN are not yet working, and are having their living expenses, college tuition, even car insurance and maintenance and GAS?! Paid for by their parents! Holy crap! That is insane! How on earth will they learn to be hardworking if Mom & Dad are handing them everything in life on a silver platter? Coddling and pampering your adult children will not help them out in life. You would do your kids a much greater service by giving them a cut-off date after which you will no longer pay for any vehicle-related expenses or living expenses, and tell them to get a part-time job (and of course work during the summer) to cover their expenses. Keep paying their tuition if you must. But the rest is just crazy. Time for your kids to take on some responsibility here.

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- Kenoryn November 5, 2013, 9:22 am
  
  Also, I think it is worth you and your kids considering whether they really want to be doctors and lawyers. Preferably before you invest hundreds of thousands of dollars in those career paths. By growing up with the extravagant lifestyle and seeing your massive spending levels as their example, they may feel they are trapped and forced to pursue only high-paying careers because they couldn’t afford to keep up the level of luxury they grew up with on a normal salary. And low-paying careers like being a writer or an artist probably never entered their heads as a possibility. And if they haven’t worked yet, they probably don’t have a clue what they do and don’t want to do with their working lives as they’ve never been exposed to any of the options. Getting your kids to start working now and teaching them to be responsible for their lifestyle expenses, and setting an example by reducing your own expenses, could save them from the lifetime of drudgery that you experienced.
  
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Joe November 5, 2013, 9:28 am

One thing that I found really helpful was to show my wife that we can live without my paycheck. We saved all my income for a year and she saw that it was doable. Try that and see if you can convince her. Just keep trying to convince her and she’ll see the light at some point.
Law school or med school? They can get some student loans.

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- Spoonman. November 5, 2013, 11:23 am
  
  We did this for a while too – we only lived on my wife’s income, and mine went all to savings. When her company instituted a 401k that was far more flexible than mine this changed a little because she started maxing out her 401k.
  
  With a baby on the way, we have been worried about the seemingly insane cost of college, but I’ve realized two things:
  1. what can’t go on forever won’t – college will not keep increasing in cost at the pace it has been
  2. we could pay for a child to go to college purely from her current salary and easily live on mine, and presumably we’d both be making more money than now in 18 years if we’re both still working.
  
  Reply
  - Kenoryn November 6, 2013, 1:36 pm
    
    Plus your child will be making money and helping pay for it too – right? :)
    
    Reply
- grum November 5, 2013, 3:41 pm
  
  Great idea – That’s exactly what I’m doing this year – saving 100% of my income. If my family can live without it for a year (just 2 months to go, and we will make it), we don’t need it.
  
  Reply
Brian @ Stocks and Cents November 5, 2013, 9:38 am

I think we have a winner. This guy has worked hard, done very well on his investments and it’s time for him to reap the rewards! Yes, he needs to have a hard discussion with his wife and kids but other than that and some minor lifestyle changes, it’s time to retire!

And sell one or two of the cars. That’s a bit much and I’m an American saying that.

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Jacob November 5, 2013, 11:07 am

Holy Junk! What’s crazy to me is to constantly see the infectious disease of lifestyle inflation rampant as ever. This man obviously was KILLING it for a few decades, and his expenses followed him up the income ladder. Could you imagine if he kept a simple lifestyle during his run up of good fortune?! That $4M could easily be $10M!!!

MMM, I also love that you just gave a man with a $4M net worth a $2300 per month Face Punch. No one is exempt!

Next, I’d love you to review Kanye West’s budget and bust out the brass knuckles….

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Green Money Stream November 5, 2013, 11:22 am

The best line here has to be in regards to this guy’s electric bill. I laughed out loud imaging a one-acre Bouncy Castle. But that would be my son’s idea of heaven.

This brings up a point though. I can’t get my electric under about $60 a month. It’s not bad, but I don’t see where I can cut it further. We have a well, so I think the water pump associated with that must burn through electricity. I need to visit the forums for some inspiration here.

Anyway, thanks for the laugh MMM and the great article.

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Christine November 5, 2013, 11:22 am

Wow.. I still have to work on the income and wealth building.. clearly!

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chris smith November 5, 2013, 11:48 am

@MMM

Like the person in your case study, I question my own ability to cut free from the man. After reading this study, I thought, is it possible to have a “work sheet” that would give someone like myself and YingYang a thumbs up or down on our ability to retire and start living the good life?

Or maybe I’ve missed such a tool that has been created already.

See you at hh tomorrow.

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Ricky November 5, 2013, 12:26 pm

One can’t assume that their spending will remain the same pre-retirement and post-retirement. They could get incredibly bored and spend much more or realize that they don’t really need to drive or use as much electricity since they are going to actually pursue things that make them happy. Driving only rarely makes someone happy, it’s usually only a means to an end.

Even if they use a 3% withdrawal rate, they are still incredibly well set, and they shouldn’t have to ever dig into their principal at that rate.

One thing not really factored in and I would be a little skeptical of is the kid’s exuberant college expenses.

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- Kenoryn November 6, 2013, 1:40 pm
  
  I think you mean exorbitant. :)
  
  Reply
  - Glen September 5, 2016, 9:39 am
    
    No, exuberant is the right word. Re-read the article: the kids were raised in a heated bouncy castle, of course they’re exuberant :-)
    
    Reply
- Kenoryn November 6, 2013, 1:43 pm
  
  Also I believe that’s 2 kids’ expenses, not one. That would be maybe $6,000 in tuition and $9,000 in living expenses each.
  
  Reply
Debt BLAG November 5, 2013, 12:37 pm

He hints at it in his emails, but my guess is that what’s holding him back has a lot less to do with finances, and a lot more to do with appearances and how he or his wife, or a combination of both,

To me, it seems like a silly question. If they shift some things around, he and his wife could have his current salary for 40 years, even without seeing any returns; what’s the point in being miserable?

I might suggest something of a partial retirement — one at a new job where he looks forward to going to work, that appears respectable enough, and yet may not pay as much as he’s been getting.

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Rob L. November 5, 2013, 12:59 pm

MMM,

I have 2 questions…

1. What is your opinion on starting a life insurance policy as a savings/investment vehicle?

2. What is the difference between the Vanguard VTSMX and VTSAX besides the minimum investment amount and the expense ratio?

Personal details:
I’m 24, just paid off all of my student loans last week and now my focus is on investing for the long haul (need to choose between VTSMX and VTSAX).

This past month I started a life insurance policy ($100/month) as an investment vehicle. I can’t find anything on your site in regard to life insurance policies and whether or not you think it is a solid idea.

Thanks for the honest advice. Your blog is one of the few I trust and look forward to reading with each now post!

-Rob

P.S. Tell David I say hi and congrats on early retirement. His blog led me here a few months back.

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- Mike September 30, 2014, 1:46 pm
  
  You should only get life insurance if you need life insurance, not solely as an investment vehicle. The mortality fees are too high, and there is nothing investment wise you can do with insurance that you can’t do with other lower cost investment types, at least until you have over 5 million and are worried about estate taxes.
  
  Reply
Faith November 5, 2013, 2:11 pm

I can relate. I would sell everything we own and live in a camper traveling the globe if my husband would let me, but alas, we are in our mid 30’s and have no retirement. We have been married for 14 years, and over those 14 years, we have had over 20 jobs. Only twice have we left a job for a better job. The other times plants have closed, jobs were moved or done away with. I hate my desk job. I do close to nothing and get paid $47k a year. I am bored out of my mind. My main problem? Our 12 year old son is a baseball prodigy. He plays travel baseball, and this year, we will have forked out over $25,000 for fees, travel, and other expenses. He has won every award imaginable, and we travel almost every weekend of the year. I want out! I want to be able to pick my kids up from school, do volunteer work, and cook! I don’t want to close loans! I just can’t get my husband to agree. He comes from a money hungry family that values life based on how much stuff you can buy. I’m happy with thrift store clothes. I just can’t get him to see my point of view :(

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David C. November 5, 2013, 2:15 pm

This guy has done a remarkable job and If I were to find myself in his position, I would give my employer my Two Cheeks Notice pronto.

Unforutnately, marrying a non-Mustachian spouse and failing to convert her has set me back a few years. The good news is, my son is already sprouting Mustachian tendencies. He seems to be learning from my mistakes and I suspect he will do quite well.

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tony November 5, 2013, 3:40 pm

Some comments already touch on an important dimension to this problem:

‘…read books, and fix up my house, and ride my Harley, and exercise, and go skiing, and ride a bike (a real bicycle), and do my photography, and cook, and volunteer, and indulge in a mid-day Bota Box if I get the urge, and stay in California, or Arizona, and shop at Trader Joe’s in the U.S., and beach bum in Florida for a couple of months a year.’

Which of these retirement activities involves Mrs Yin Yang?

Have you asked her what she wants from (your) retirement, when it comes? And does it involve you?

This might sound harsh, but perhaps that is the core of your problem, not the money.

Thank you for an honest post that has helped me to clarify my own priorities.

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- PawPrint November 7, 2013, 11:32 am
  
  This comment strikes to the heart of the matter, IMHO. If I were his wife, I would wonder where I fit in with these plans.
  
  Reply
Jason Reed November 5, 2013, 8:10 pm

Nice post.

With respect to investing I would suggest having a global approach for equities for a Canadian investor. The TSX is 75% concentrated in energy, commodities, and banks. There are several reasons for this view:

1. The S&P TSX is pro-cyclical and will suffer during global recessions since there will be less demand for Canadian resources.

2. If foreign businesses aren’t buying our resources, they also aren’t buying the Canadian dollar, and so the CAD will tend to sell of more than other major world currencies. This means foreign equity returns are higher in Canadian dollars, providing an element of downside protection when it is needed the most.

3. There are more opportunities globally. For example, technology in the US and consumer staples in Europe.

4. If your employment is highly dependent on resources (and it probably is if you live in Canada), you really don’t want your stock portfolio and your employment prospects to diminish at the same time.

Just my thoughts.

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cwebb November 5, 2013, 8:43 pm

My biggest advice (assuming this guy is legit) is for him to sit down with his wife and figure out what THEY want to do when they retire. He will get bored with riding his harley and beach bumming after a year or so. He doesn’t have any kids to raise like MMM, so there’s no falling back on that.

I would suggest they think about what they care about and would like to contribute to. They have a unique opportunity to use their time and professional skills to really make a difference in their community. They could volunteer at a non-profit, or start one of their own. This would be a fulfilling challenge and would probably strengthen their marriage. It would also still allow them the freedom to travel whenever they want.

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LAL November 5, 2013, 9:31 pm

Maybe part of it the idea of retiring is terrifying. That you might need money in 30 years and can’t earn it. That when you really need it, you can’t get it.

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Neo November 6, 2013, 1:03 am

Your time is limited, so don’t waste it living someone else’s life….Don’t let the noise of other’s opinions drown out your own inner voice.” – Steve Jobs

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Mark A. November 6, 2013, 8:09 am

It’s actually expensive to work. This summer I was between jobs for 4 months and it was AMAZING to see so many work-related expenses evaporate: parking, clothes, lunches, gas, light rail, vacations and weekend-getaways with spouse to recuperate, end of week dinners out, not to mention income taxes. I cut spending temporarily by 40% in that period and, so far, 25% permanently that we don’t even miss (good bye cable and Kroger, hello Netflix and Costco). I hope Yin Yang and family experience same.

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Cath November 6, 2013, 10:02 am

Yin Yang, if you’re reading comments, please consider:

If your child, after working hard in a difficult and soul-sucking job, wanted to retire at the age of 54…would you look at him and say ‘Oh my God, you’re just a bum. I can’t believe you want to quit working NOW when you can keep working until you’re old”.

WHAT? Of course not!

Your child comes to you and says, “Dad, I am immensely unhappy and need to make a big change. My wife doesn’t want me to – and I am worried about what others think”.
What is the advice you’d give that child? Or anyone that you love? Does what others think (or fear) need to be the driving force behind decisions made for personal health, peace and happiness? (Hint: NO.)

Whatever advice you give your kid in this situation, give to yourself. Care for yourself as much as you’d care for your kid. Allow yourself the strength and freedom to do what you KNOW you need to do. And quit calling yourself names – that doesn’t help anyone, least of all you.

You are not a bum, a bad father, a bad husband, a gutless wonder. You are a hard worker, a loving dad, a life partner, and a soon-to-be retiree. Woot!

Screw your courage to the sticking place, man! You’ll be so glad you did.

I wish you the very best with these decisions.

Oh, and it’s amazing what happens when you’re true to yourself. That kind of strength is inspiring to others, and while initially you may meet resistance from the wife, I’d bet that she’d come around pretty quickly. Your shoulders will be straighter, your eyes brighter, you laughter will come more easily. You’ll be happier. And that can do nothing but GOOD for everyone around you.

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ap November 6, 2013, 11:59 am

My dad retired at 55 from a teaching profession while I was still in undergrad. My mom worked 5 more years because she wanted to. This taught me a lot of lessons, namely that early retirement is awesome. He gave me the life goal of aiming to do the same or better. Contrary to your fear about turning your children into bums, this has turned me into a frugal saver, because I want to be in that position someday.

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Stefanie November 6, 2013, 3:58 pm

All I could think while reading these numbers was SO MUCH INSURANCE. Granted I’m 27 years old, super healthy, and have no dependents, but I spent a TOTAL of $400 on insurance last year. No dental, but all other health covered.

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MacPeter November 6, 2013, 4:48 pm

Do you have any suggestions for people who make a great deal less money?

My wife and I only bring home about 60,000 a year between us. We are both in our early 20s and are skimping every which way we can. We don’t take fancy vacations. We don’t have expensive internet and cable plans. We only have one car and barely use it. I take public trans to work. Yet it seems we can still barely afford to save much more than 16% of our income. We did not start marriage with alot so there is alot we need to save up for and it just seems like the list goes on and on. We are also trying to start up a business for my wife. I was just was curious if you had any suggestions for young mustacians as ourselves who are just starting out with life. At this rate it seems it will take the normal amount of time until retirement to save up any where near what you are talking about to retire early.

Thanks,

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- Mr. Money Mustache November 6, 2013, 9:31 pm
  
  Hey MacPeter – $60k is still a great income and if you can streamline housing, food, and transportation you will probably find you’re saving over 50% of that as a couple. The first thing is to study your spending in detail and see exactly where it is going – and compare it to people who are spending much less.
  
  My family’s 2012 spending ($25k) is listed in this post: http://www.mrmoneymustache.com/2013/01/21/exposed-the-mmm-familys-2012-spending/ It’s a little weird because there is no rent/mortgage, and we spend an unusually large amount on travel and food because of it.. but if you shuffle some of that back to account for rent (and reduce various categories if there are only two people), many couples can live very well on a similar amount or less.
  
  Reply
CincyCat November 6, 2013, 5:11 pm

Mr. CincyCat read this study, and he had this to say: In an airplane crash, you put your own O2 mask on before you put on anyone else’s.

What options will this guy’s family have if he drops dead from stress (self-inflicted or not)? He needs to have a serious family meeting with the wife & all three kids and lay it on the line. The family has a choice to make: either dad works indefinitely to support all of them in the level of comfort they are used to, and risk losing him altogether in the process, or the three adult offspring & wife need to make some lifestyle choices (that really aren’t so tough) so that everyone wins.

He is the one who needs to initiate this conversation. The sooner, the better.

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MonicaOnMoney November 6, 2013, 7:58 pm

This is an awesome and inspiring case study! I think so many people keep working hard until retirement age just because they think we have to. I love how you broke this down and I would love to see an update on if he decides to leave work and retire now.

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Trevor November 7, 2013, 6:51 am

Interesting article but the first thing that came to mind for me
(and also mentioned in at least one other comment)
is that the current state of Yin Yang’s assets do not seem to have been possible to attain based on the family’s excessive expenses.
Did the family exercise frugality in the past to have saved and ended up in such a positive position?
That doesn’t seem plausible, and so something seems to be “odd” here.
MMM, perhaps you could comment.

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Jane Savers November 7, 2013, 8:39 am

If he is a 3 out of 15 on the Mustachian Scale than I might be a 4.

I would have to make a lot of changes to my life to even get close to a 15.

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1WineDude November 7, 2013, 8:54 am

YES

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Pittsburgher in Flux November 7, 2013, 11:23 am

Wow… I am so blown away by the immense amount of information everyone gives on this site.

I, like the man, at the top of this post am ready to retire and gain some freedom in my life. I am 59.5- an age I like because I can, if need be, begin withdrawing from my 401K, etc.

My dilemma is that I am scared of taking the jump to freedom- only because it is a scary world out there and there is a noticeable lack of information for single people with no kids on how to figure this all out.

My 401K (institutional plan) is now at $550,000. I owe about $113,000 on my home that is valued at $300,000 leaving me with $187,000 in equity. I also own income property that brings in $800 a month and is valued at about $75,000.

My savings account is $13,000 with a target of $30,000 by June (my secret target date to jump). I have a car payment of $205 per month that will be finished in four years- and have it only because I was able to get 2.9% for the loan.

I don’t watch cable tv- use over-the-air capture of free HD TV here in Pittsburgh. 21 channels and counting! Enough to entertain me…

If my calculations are correct, I have about $810,000+ in assets ($262,000 in real estate- my home and income property.)

My monthly expenses- on the high side are $3500…

My question for the masses is… now wait for it… Is it safe to Jump for Freedom in June and retire?

My gut tells me yes, but all of the reading keeps telling me that it will be tough. My $2350 per month SS will kick in in 6.5 years at 66 and by that time I want to be rid of snow, living in Florida- exercising, beaching it and working parttime or volunteering for a non-profit.

HELP ME GET OVER MY NERVES… or no?

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- Snow White November 8, 2013, 6:57 pm
  
  You might want to try posting your question on the Forum under “Ask a Mustashian” since your letter is toward the end of a couple of hundred comments! It will get more views there and I ‘d like to hear the thoughts on your situation too. Good luck.
  
  Reply
Frank November 7, 2013, 2:22 pm

OK let me get this straight…Your doing something you hate for a reward you have no need of!

Lets flip this around… Your are MISERABLE and therefore by definition you are under considerable stress.

What if this time next year when you have $4.1M you drop dead of a heart attack.

Would seem pretty freaking stupid now wouldn’t it!

And guess what.. Doing what your doing IS STUPID… I have way less than you do and I’m only hanging on till next April cus I said I would…

Frank

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Chan November 7, 2013, 2:25 pm

Whoa. I can’t believe there is even a debate on whether or not to retire here.

Apparently, I better re-think my saving strategy because I won’t even be close to this when I get to the point where I’d like to retire….. I guess I better get un-discouraged and figure out a way.

MMM, your point about making sure your finances are in order so that you can contribute back to the community, offer your services, and unleash your true creativity is so true. That’s my goal. I feel like I’m at the optimum point in my life to offer hustle, passion, spirit, and creativity. Unfortunately, I’m not set financially and I fear that once I am on stable ground with money, I’ll have lost some of the fire and horsepower to give back to people as I now have the ability to do so.

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Michelle November 7, 2013, 7:20 pm

I’m left wondering why he’s paying for medical school/law school? That’s at $300,000 a kid! Why aren’t they applying for academically based scholarships. If he pays for their schooling that’s a huge hit to his finances. Also, I’m thinking his kids are too old for him to be paying for their insurance. They drive, they pay. Am hoping he does what will make him happy. I’ll think about him when I’m snowboarding in Colorado…because that’s my home! LOL !

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Just Riding Along November 8, 2013, 4:53 pm

First time poster here — I’ve been enjoying reading this blog and learning a lot from it.

First off, I want to applaud Mr. Yang’s courage with his original post, and following up with MMM’s inquiry and being willing to be a case study. It takes some serious courage to put one’s self out there like that!

I agree with those who say that this is not about math. Because of the items Mr. Yang put on his shopping list, I also don’t think a big, drastic step will work; I think he will have to start with smaller steps and keep moving until they add up to a big change.
While I think communication with his wife is important (and I’d love to hear more about her background and why she feels the way she does), I think the first step is for him accept that he may not be able to change her, what she wants or what she thinks, but ultimately his happiness is his responsibility. I think he is well on his way to that understanding.

I would suggest some or all of the following steps, not necessarily in the order given, tailored to suit him:

–Identify his goals clearly and write them down. For example, “Within x years (months?) I will be retired / working at a job I enjoy / fill in the blank. My wife and I will still be happily married. I will have finished paying for my children’s education and we will no longer be supporting my adult children. We will be living in (blank) and doing (blank).” Etc. it could be several goals with different specific dates, but the idea is to have a very clear picture of where he wants to go. A lot of it is in his original post, but write it all down with a desired timeline.

–I like the idea of getting counseling to get unstuck, to understand why other people’s happiness is more important to him than his own, and ultimately how he can start to make some changes that make him happier. When I wanted some help dealing with some issues, I started with my company’s EAP. Through the web-site I identified five highly rated providers, called them, and asked to speak with them about what I was looking for and how they would approach helping me, their rates and if they took my insurance. Every one of them called me back, and after these short conversations I could make an informed decision about who to see. Bonus: the first five sessions were covered by my employer’s EAP.

–Start taking other concrete actions to make changes. Just doing SOMETHING can be very empowering and help one to feel like less of a victim, and provide the courage to take another step. Examples could be:
-pick one or more of the cost-cutting suggestions from MMM and implement it;
-apply for a job posting that looks interesting (an intermediate step in the big picture but a way to address the “meaninglessness, imposterism, drudgery, uncertainty, depression inducing self-esteem sucking, soul wrenching boredom, of my useless pseudo-middle-management-faking-it-all-day-$100K a year plus automobile-desk-job” until he’s ready to make a bigger change);
-if he’s not been taking all of his vacation time, schedule and take a vacation to do EXACTLY what he wants to do from the list in his post and not cater to everyone else’s whims. If that seems a stretch, find a local group that does these things and go to their events. If he is not doing the things he enjoys, it’s time to start.
-start setting some limits at work if that is a problem. Although it took some time to get there (and an employer change), I now have a job where I can take most Fridays off, and I’ve politely but firmly managed to communicate that I am not available on evenings and weekends for *emergencies*. (I would be flexible on this for a true emergency, but most of these are lack of planning / procrastination.) It’s been a lot of work on *ME* to get to this point; and my current employer is clear that he wants to keep me so I don’t feel it has hurt my overall career. It IS possible.

Of course he will need to decide for himself what these actions should be, but the point is to start taking some concrete actions, outside of his own head, that push him out of his comfort zone and toward his goals.

Finally, I’m glad to see the Mr. Yang has been responding to some of the comments and hope he keeps us apprised of his progress. I am pulling for him!

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Monevator November 9, 2013, 2:32 am

I suspect this chap’s problem is to do with his definition of identity (and possibly that of his spouse and children). He has defined himself as a hard working wage slave who suffers to support those who love and love him. He fears losing that role — and perhaps the love — and wonders what he will replace it with.

The best solution is to have an ‘internal compass’ of course, but he’s 54, it’s nice that he cares what his wife thinks even though he supposedly hates his job (I’d have quit yesterday and the wife could take a walk if she didn’t like it, which is (a) why I am not married and (b) why she probably wouldn’t) and it’s hardly a crime to be such a fine upstanding citizen.

Perhaps he needs to aggressively redefine his early retirement as something like “local businessman and investor”. He can put a few $25,000 investments into 5-6 small local companies and go visit them once every six months. Maybe do a bit of active investing on a Friday afternoon.

It needn’t take long or too much money, and it sounds better than ‘couch potato’. (Yes, WE KNOW that isn’t what early retirement needs to be like, Mustachians. I get it. I’m just saying this may help for him :) ).

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Aspiring Mustachian November 9, 2013, 8:00 am

This is off topic, but I wanted to share an interesting documentary-style film that I think most of you guys will enjoy. If you have some free time give it a try. The first 45 mins or so is mostly about people and behaviors, and later it discusses the economy.

ZEITGEIST: Moving Foward

http://www.youtube.com/watch?v=4Z9WVZddH9w

PS: I am incredibly lucky to have found this blog at such a young age, thank you MMM. Please do not ever stop writing for us. haha :)

Reply

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