Titans of FIRE: Mr Money Mustache – The Guy Who Started a Movement

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Who started the whole Financial Independence / Retire Early movement? Who was the first person to really break down this concept in an easy and understandable way? Introducing: Mr Money Mustache.

In the series “Titans of FIRE” we highlight the stories people in the FIRE community which have had a huge impact on the community. We will cover their stories, their contributions and our favorite articles. There is no better person to kick-off this series than the “Jesus” of the FIRE community: Mr Money Mustache.

Mr Money Mustache’s Back Story

Mr Money Musache’s birth name is Pete Adeney. He originally grew up in Canada and moved to the US sometime after university.

Both him and his wife studied engineering and computer science. At the ripe age of 30, they decided to retire from normal work to start a family.

How did they manage to retire at this early age?

1) Through saving more than 50% of their income every year.

2) Through applying the 4% rule.

In 2005 at age 30, the living expenses of the Mustache family were somewhere around USD 25’000 per year. His net worth was at USD 600’000 with an additional USD 200’000 in his debt-free house.

Applying the 4% rule which says that you are financially independent when your annual expenses are 4% of your net worth, Mr Money Mustache and his wife were financially independent at this time.

To put it in Mr Money Mustache’s own words: “At this point, we could have bought a huge house or a small fleet of nice cars. But instead, we spent the money on the ultimate luxury – quitting our jobs. For other people, a sailboat or a starting a local charitable trust might be the luxury of choice.”

Mr Money Mustache’s Contribution

In 2011 Pete Adeney decided to create the blog “Mr Money Mustache” (MMM in short) out of “exasperation”. This exasperation came mainly from him having been retired a full six years, living happily with his children and wife, while his friends complained about how little money they had.

At the same time, these friends were spending money on brand new cars, overpriced beers and going on high-class holiday trips.

What makes the MMM so special is that Pete Adeney has a very direct and “in-your-face” kind of writing. For him there are not many right ways to live, but only one way. Mainly his way.

At the same time, he manages to convey the underlying messages in a simple and clear way. Even if you do not agree with the whole concept of living frugally, you cannot deny the arguments and the often very simple math that he makes.

For me, Pete’s basic message is the following:

Simple Frugality + Boring Investing = Freedom

By simple frugality, he does not mean having only bread and butter for dinner. But being intelligent with the places you spend money.

His favorite objects of ridicule are things like buying a new car, having cable and food. One of my favorite articles for example is called “The coffee machine that can pay for a university education”.

The basic question he answers in this post is that of how to pay for your children’s education (at a US university), because the costs are so horrendously expensive.

Then he goes on to first calculate the costs of the university in his state which amounts to roughly USD 148’000 for the full four year. Quite a massive amount if you come to think of it.

Then he makes the assumption that an average person in the US spends roughly USD 7 per day on take-out coffee (i.e. not brewed at home) and some fancy lunches. Adeney then performs a simple calculation where he shows that if you had invested the USD 7 for 18 years (i.e. the time from birth until your child goes to college), these savings would have transformed into USD 148’000 at a return of 7% per year.

One simple, easy change in your lifestyle and you have enough money saved up for your child to go to college without student loans. 

This is a good example of the way he takes concepts with big impacts and makes them simple.

Mrmoneymustache.com blew up and has a huge following. People who follow his blog and lifestyle call themselves “Mustachians”.

Pete now makes roughly USD 400’000 per year with his blog, but maintains that he would not have needed it to fund his lifestyle.

Mr Money Mustache’s Most Popular Posts

Getting Rich: from Zero to Hero in One Blog Post

This is a blog post where Mr Money Mustache re-introduces himself to his community. It is meant to be the perfect starting point for anyone who wants to understand his mind-set and life philosophy.

He briefly outlines his life story and the quickly moves on to statements such as: “Your current middle-class life is an Exploding Volcano of Wastefulness”. 

Then he outlines the most important aspects where you can and should be more frugal. What is great is that he links to all the most important articles of his blog, kind of the foundation articles of Mustachianism so to speak.

Read this post and any other post mentioned, then you will be set for life. At least according to Mr Money Mustache.

The Shockingly Simple Math Behind Early Retirement

In this post, Pete outlines the impact your savings rate has on when you can retire. The basic concept is, the higher your savings rate, the earlier you can retire.

And this is for two reasons: 

  1. Because you are saving more, you can save more. 
  2. 2) Because you are spending less, you can live longer in case of an emergency.

The most interesting aspect of the blog is a table where he shows how many years you would have to work until you could retire based on your savings rate (and the 4% rule).

For example, if you save 10% of your income, then you have to work 51 years to be financially independent. If you save 50%, then it is only 17.5 years. At 75% you are left with 7 years of working.

Mr C&M’s Favorite MMM Posts

Apart from the post ““The coffee machine that can pay for a university education” mentioned already above, I have two favorites:

Weekend Edition: Retire in your Mind even if you Love your Job

 

This post is super short, but hits the nail on the head when it comes to my own philosophy on why to pursue financial independence. In short, Mr Money Mustache makes the argument that even if you do not plan on retiring early, it absolutely makes sense to pursue financial independence.

Why?

Because you are making the choice to work. This means that you enjoy your work, you are not stressed by financial worries and you are enjoying life.

Who would you prefer to hire? A person feeling the financial pressure of having to go to work who is stressed about not getting that pay-check at the end of the month? 

Or the person who voluntarily decides to come to work every day to make the business better? 

How to Go from Middle-Class to Kickass

In this post, Mr Money Mustache does a comparison of the expenses of a standard middle-class person vs a “kick-ass” person.

The differences are striking, but what makes this post really fun to read are the comments Pete makes for the individual line items.

Its just a great read with lots of links to other posts on how to reduce your expenses to get to that “kick-ass” level.

Conclusion

Pete Adeney, aka Mr Money Mustache, has had a tremendous impact on the FIRE community. Some call him the “Jesus” of this movement, others credit him with starting the movement.

In essence, his blog is one of the most read worldwide and has all the basic information needed to reach financial independence in a simple way.

Actionable Items



What are your favorite MMM posts? Where do you disagree with him? Where do you agree with him?

Let me know in the comments or send me an e-mail at info@chocolateandmoney.com. Any questions, concerns, feedback and constructive criticism is highly appreciated.

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