Becoming a Renaissance Man: Early Retirement Extreme

Early Retirement ExtremeDo you dread going into work in the mornings? Do you wish that you didn’t have to spend the best hours of your day in a cubicle, doing work that doesn’t interest you? I recently had the pleasure of reading “Early Retirement Extreme“, a philosophical and practical guide to financial independence written by Jacob Lund Fisker, who also writes at By following the practical advice in this book, you can restructure your life and get out of the rat race at an age you never would have thought possible.

The Rat Race

How do we get into the rat race in the first place? Well, there are a few causes: the first is education. Once upon a time, a high school diploma was more respectable than it is today. It was often sufficient for many different types of jobs, and college education was not simply a “marker” that was required to enter the workforce. Today, a bachelor’s degree fills the shoes of the high school degree of old, and it is seen as a general requirement to get almost any type of job except for certain trades and unskilled jobs. This has caused “degree inflation” — the more people that have a degree, the less it’s worth. Whereas a bachelor’s was sufficient in the past, one now often has to get a Master’s. This drive toward higher education eats up many years that could have been used generating wealth, and also leaves many students graduating with a heavy debt burden.

Is all of this education really necessary? Judging by the hordes of people who now loaf their way through a four year program, graduate, and, unable to find the job they expected, end up backpacking around Europe for a while before returning to do a Master’s… I’m not so sure. The price of education is increasing, whereas the quality is not necessarily following in step. I do believe that higher education can make sense if you can use it to your advantage, and while college was a mixed experience for me, I did enjoy university. Nonetheless, it may make more sense for many people to go into a trade school, instead, or to find another profession where they can make a decent living, but without having to spend many additional years in school, nor incur a mountain load of debt.

A mis-placed education is not the only way to shave years off your life and add up debt: the proliferation of low interest rates and easy credit (yes, even today) means that it’s very easy to pile onto that debt. Want a car? Go get a loan for it. Want a home? Go get a mortgage. Want to furnish the new home? Put it on the credit card. All of this consumption must come at the cost of future income, and the requirement to spend the best hours of the day working at an office in order to pay these obligations effectively turns a person into a wage slave; unless they want to go bankrupt and lose everything, they must continue to earn income. They have no financial freedom.

A side effect of this credit is that in our current monetary system, credit is not always backed by real savings. This leads to overheating which can drive up the prices of assets, such as homes. This price inflation punishes everyone except the first receivers of the new money who were able to buy in before prices were driven up. Everyone else must either borrow even more money, or go without a home for that much longer, until they can purchase in cash. Such inflation on the back of credit expansion can eventually lead to disastrous consequences, especially for those who end up in the most debt and are left holding the bag.

It’s usually not considered good investment advice to put all of your eggs in one basket, but that is precisely what many people do with their income. They don’t think like capitalists and try to accumulate assets which could generate income, nor do they look into diversifying their income into other activities. With all of the debt incurred to get an education, a home, transportation, etc… a person can become very dependent on their job and the income attached to that job. Without sufficient assets to cover the basics of life without having to work for it, this person is stuck in the rat race.

Getting out of the rat race

Hammock. Source: picture looks dismal, but there is indeed another way of doing things that won’t leave you chained to your job until your 50s or 60s. Increasing income is always good, but Jacob makes the case that reducing expenses is even easier and due to so-called “progressive” taxation, a dollar saved can have more of an impact than a dollar earned.

What are the biggest expenses for most people? Taxes are probably the #1 expense, but since we can’t do much about them short of leaving the country (and if you’re well-off and from the USA, even that won’t help), let’s go with shelter, transportation, and food. These are thus the areas that will have the biggest impact on your success, or lack thereof, of getting out of the rat race.

I recently explored a newish exurban development that’s about 30 minutes out of downtown by car, when the traffic is good. The development itself is surrounded by forests and farms, and the only way in and out is via a high-speed divided highway. It doesn’t contain any stores, schools, nor anything aside from stand-alone suburban housing. There are no cul-de-sacs, but the streets are laid out in such a fashion that it would take 5 minutes to drive to a house directly behind the house facing the street that you’re on.

The houses actually looked fairly nice, and each one was distinct from the one next to it. I was surprised, since most of these sort of developments are usually very cookie-cutter. Each home was also fairly large, at about an estimated 2500 sq. ft. per home. Although the homes were large and looked nice, the cars were all standard recent-model econoboxes.

Nice houses or not, if you want to get out of the rat race someday, this is precisely the kind of development you do not want to live in. You’d have to get in the car and drive several miles for something as simple as a loaf of bread. Two cars would be required for a couple living out there. Forget about walking your kids to school, as it would take two hours each way, with some of it along the side of a divided highway with cars and trucks going 100km/h. Heating and maintaining that large home can be expected to consume a large portion of the budget as well, and let’s not forget about the large mortgage!

So, what is one to do? Is one relegated to living in a dump if they don’t want to be chained to their job? Not really. One does have to live within one’s means, though, and this not only means lowering consumption today so that one can consume more tomorrow, but it especially means lowering consumption today that must be financed through borrowing, and thus paid for in a greater sum, tomorrow.

Some of the topics that Jacob explores:

  • Downsizing one’s home to what makes sense.
  • Lowering the thermostat in the winter and raising it in the summer. Don’t worry, you’ll survive and your body will adapt!
  • Living somewhere where a car is not required, so that a family can downscale to 1 car or even no car at all.
    • Rediscovering the lost art of walking.
    • Recovering minutes of your life that were used being stuck in traffic and used to earn money to pay for your car, and using them to build up your health and peace of mind instead.

To put it simply, save more, in fact, much more than the 10% that you’ve heard, though that is a good start, and stop living high off the hog by borrowing from your future!

Becoming a Renaissance man

What does becoming a Renaissance man mean? Think of a man like Leonardo da Vinci. Not only is the man famous for his inventions and scientific studies, but he is also one of the most famous painters of his time. His talents and interests were broad and deep, and there was no shortage of things to work on and explore.

Contrast that to the path that many people choose today. They become highly specialized in one particular area, but when it comes to the simplest house repair, an expensive contractor visit is required.  Since this high degree of specialization is draining and can leave little time for other pursuits, the only alternative is to fill the void by spending money on entertainment, fashion, and rushed vacations to expensive resorts.

Jacob makes the case that while this high degree of specialization is beneficial in some ways (it can lead to a high income, for one), it leaves one highly dependent on their narrow set of skills, and leads to fulfillment in other areas being sought with dollars, rather than life experiences. A “Renaissance man” on the other hand, is a person with a broader set of skills and knowledge and who is specialized in many areas, rather than one. Such a person will be much more equipped to handle disruptive changes, and will also have many more outlets for creative expression and joy. Since there is only so much time in the day, a good strategy can be to lessen your dependence on the one thing you’re pretty good at, and start becoming decently good in a few other areas as well. It could also help you to find more joy in your own life.

Areas that might be a little too extreme

Although job outsourcing is a valid concern in the modern-day economy, I believe that Jacob may be overstating the degree to which people are specialized. I work as an R&D engineer in software development, and right now I do most of my work in Java, which is a currently popular programming language. It’s possible to become hyper-specialized in one particular aspect of Java, but if you know Java decently well, many doors are open for you.

Should Java fade away and be replaced by something else, it’s not likely that I’ll have to start over from scratch. Why? Because the methodologies remain similar; software development is about solving problems. If I need to instruct the computer to display a dialog to the user and then use that result to fetch something from a database, chances are I can figure out how to do it, if the language allows it. If I’ve already figured out how to solve this problem using one set of tools, it will be easier to learn how to do it using another set of tools. I believe the same is true of those who work in the finance and business professions. It may be that one day that AIs will be smart enough to obsolete all of us, but that is another problem. 😉

When it comes to job outsourcing, my profession is at real risk, but the truth is that software quality from overseas can leave a lot to be desired, even if the team is being managed in-house. As Jacob alludes to in his book many times, quality is very important, and paying a bit more for quality can lead to spending less overall.

There is also a difference to me between being frugal and being too cheap. That line is crossed when the additional dollars saved do not compensate for the loss of well-being or enjoyment. I know I could save a few bucks by switching to fluorescent lighting, but the few dollars I would save would not make up for the negative health effects of fluorescent lighting nor the loss of enjoyment I get from a well-lit place. I have a friend that uses the overhead tubes everywhere and it’s horrible. I have another friend whose house is so cold that I need to wear my jacket indoors. I could save a few more bucks by setting the thermostat to 16 degrees, but it’s just not worth it to me to freeze my bones!

The path to early retirement

I personally enjoyed reading this book, and it opened my eyes to many changes I can make in my own life. Although we are taking a mortgage to purchase our new home, we are keeping our total home carrying costs to 33% of net income, and we have 20% down. We probably won’t be able to reach 75% of net income saved, but I think we could get to 50%. The new home is a small condo in a high rise, so we will save a lot on electricity and heating costs, and since it’s not far from downtown and there is a subway station nearby, we can also save on commute times and transportation fees.

I thought about it, and I also don’t think that we’ll be going carless. I did some calculations, and I believe we can bring the total carrying costs of the car down to $300 to $350 per month. I only drive on the weekends these days so I don’t spend too much on gas, but I visit my grandmother often and she lives a good distance away, and it’s not a fun trip to do by public transport. I also think it’s good to have easy access to on-demand personal transportation; I’d rather not be at the whim of car rental services or public transportation. $300 to $350 a month between two people is quite doable, I think.

Public transportation is another big expense, and one thing I might try in the nicer months of the year is to bike to work. It’s about 10 kilometers each way, and it usually takes me 25-30 minutes by subway. If I can get there in a similar time by bike, that could be a great way to get into shape and save money at the same time!

I also like the philosophy and theme of becoming a Renaissance man, and that’s something I’d like to work more into my own life as well.

The great thing about Jacob’s book is that it is not a recipe book; it is not simply a list of steps to follow, and then you’re out of the rat race. It is actually an entire philosophy that looks at taking a more hands-on approach to life, and finding satisfaction and joy through experiences, rather than material consumption. Jacob’s philosophy is designed to be robust, and he even tackles some of the great challenges of our century, such as peak oil, job outsourcing, and environmental degradation. By practicing Early Retirement Extreme, you won’t be immune, but you will be in a much better position to handle the challenges that lie ahead.

If you would like to read more, you can purchase the book from

Jacob also writes at, where you will find many interesting posts on early retirement extreme.

So, reader, what do you think about early retirement, extreme style? Giveaway: Would you be willing to save up to 75% of your net income and greatly reduce your consumption, but with the benefit of only having to work a few years and then being free for the rest of your life? Tell me about your dreams. I will be choosing a winner amongst the commentators by the end of next week, and the winner will receive a complementary copy of Early Retirement Extreme!*

*The contest is now closed; thanks for your participation!

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  1. says

    This is about the best book review I’ve ever read because you personalized it so much.

    I’ve been thinking about early retirement a lot lately and my #1 priority these last few years has been to reduce my fixed expenses. This of course is years in the making but the goal is to tick off my big ticket items one by one. I’m looking forward to life mortgage free. We already paid off ours but still have my mom’s to finish up. Our family blends our finances so it’s a little more complicated than most.

    I think long term I’d like to figure out a way I can have a job without having to incur daycare expenses. I wonder if Jacob is planning on having children and how that would change his situation if at all. My expenses went way up after kids.

    • says

      We don’t plan on having children. Usually when we talk about it we just take one look at the next random child we see and think “No, no way!” :-)

      If we did have a child, I’d provide free daycare. I sometimes wonder what would happen if young people (can I say ‘young’, now that I’m 35?) instead of financing the cars and the houses they can’t afford and paying thousands for a wedding, and getting in debt to their eyeballs etc. would think that the normal thing was not to start a family before they could buy their first home in cash and be financially sound enough to support a family before they actually started one.

      • says

        Haha. I agree with you about people having a solid financial base. I don’t think this necessarily has to go as far as owning the home clean and clear, but I hope that we will be significantly along that path within the next few years. It would be great for the kids to have the presence of their own mother around them and not that of a random stranger until they are old enough to go to school.

        • says

          We waited until my mid 30’s, my husband was almost 40 when we had kids. We don’t regret not traveling (because we went all over first), and we had no consumer, car, or student loan debt..only a mortgage. I can’t imagine doing it the opposite way..have the kids first and then figure out how to pay off everything and save for a house. I’m sure people manage, but it’s gotta be much harder. I’m glad we waited and also glad it didn’t cause any fertility issues as a result.

  2. says

    I have found this topic interesting for quite a while. I love reading about it from the perspective from someone who actually did it. I think the cookie-cutter issue is big and am glad Jacob chose to avoid writing it that way!

    • says

      I really liked Jacob’s book because of how authentic it seems. I am not willing to go as extreme as he did, but there is nonetheless a lot of things that can be learned and a lot of things that can be done.

  3. says

    Thanks for the detailed review Kevin! That’s one of the longest reviews I’ve seen! I think the strategies are a little too extreme for my temperament, but the author does explore some interesting ideas! Learning to love to walk is something I need to focus on…, I agree with downsizing, but not sure how easy it is given current economic conditions.

    Great review Kevin!

    • says

      If you believe in the 80/20 rule, then fitting in just some of the strategies may be enough to make a big difference! He calls it “extreme” because his version IS extreme, but no reason why you have to turn off your hot water heater or live with 4 roommates in a tiny apartment. There’s probably an optimal point that maximizes your overall life expectation — that is, the enjoyment you get in the present versus the enjoyment you get in the future, and that’s the place where you’ll want to be.

      • says

        Agreed, the author does make some good points. I may not go all the way, but some are definitely worth considering. (I haven’t read the book yet, this is just from your review!).

  4. says

    After some quick calculations, I’d have to say that this approach wouldn’t work for me.

    First, the logistics would make it very, very hard. I live in a somewhat expensive city, so just securing housing would take up a lot of my net income. Some quick figuring reveals that I could only spend about $400 a month on housing (rent and utilities) by sticking with the basic 33% formula. For such a small amount, I *may* be able to rent a bedroom in a shared apartment or in a house, but I’d have to really hunt for this deal. (I know it’s possible to find because I’m a supplier of it myself: I rent out two bedrooms in my house with all utilities included for less than that.) For all other expenses (food, clothing, transportation and entertainment), I’d have about $200 a week to spend. Wow, that would tight in this city.

    But the real downside of this approach to me is that it leaves me no money to spend on travel. I’d much rather spend money on traveling than save it all so I could “retire” early and sit around counting my cash. If I could be sure that I’d be able to “retire” early enough and have robust enough health that I could travel at that point — as well as enough saved to do the traveling at that point — I may be tempted. But there are no assurances like that. So, I choose to save quite a bit for retirement, but I won’t take this extreme approach.

    • says

      I was going to ask you if you’ve considered having a roommate, but then I read that you are already renting out two bedrooms! That’s probably a good start. $200 a week on food, clothes, etc… seems like a reasonable budget to me. 😉

      I agree with travelling now versus travelling only when you’re old and retired. It’s important to take a balanced approach. I still haven’t taken my backpacker’s trip across Europe or South America…

    • says

      Suppose you do save the money and become FI at 30 like I did. Then you can sell your stuff or put in storage and terminate your lease and go traveling for 3, 6, 12, … or 24 or 36 months … or the rest of your life without having to support an empty house or return when you run out of vacation time like short term travelers. I don’t think 30 is too old… is your present age plus 5 years too old?

      If I was interested in traveling, that’s what I’d be doing now.

  5. says

    I’ve been following Jacob’s website for a while now and I must say his approach won’t work for most people. The “Extreme” part of ERE is way too extreme for most regular people and there is no way the Mrs. will go for the cold shower thing. It’s not worth a divorce. 😉
    We also live in a high rise downtown and downsized to one car. We pay a big HOA fee, but I think the savings covers it.

    • says

      Haha. We take our showers seperate so I could go for the cold shower thing, but I don’t know about showers where I only open one faucet. That would be one damn cold shower.

      I think that a savings rate of up to 50% and beyond is possible after graduation and before the kids come; afterwards, I don’t know. Might be possible if you can build up enough passive income during the squirreling years.

  6. says

    When I am exposed to new ideas, I pick the things I want to include in my life. My lifestyle emphasizes the things that are important in our lives. Most of which is pretty low key. In many ways, I see myself as a Renaissance man because I use my broad background in business in teaching more than a particular class, coaching, blogging and problem solving.

    • says

      The Renaissance man approach is something I find pretty interesting, and something that could even give the early retirement extreme method a sexy allure if marketed well!

  7. says

    The best way to become a Renaissance man is to live at home with the parents 4-ever with no rent, go to college, get a good paying job, stash as much money away as possible, never marry or have kids (they are big money drains), and never take a vacation. A lot of people could retire around 40 using this approach. And then as an added bonus for government employees you could retire with close to full pension by going out on disability, most likely mental if you’ve been living this lifestyle for an extended period of time.

    • says

      Haha. I’ve done the opposite of early retirement since I moved out from the parents at 19, paid for much of my own education, and I’m practically married and kids are probably not too far away. I didn’t really have much savings at all by 25. However, since graduation I have greatly increased my savings rate and toned down the expenses somewhat. I think if we could keep up this rate of savings for 5 years and I could build up some side income, we would be well on our way there.

    • says

      I don’t know anyone pursuing ER who live at home with their parents. Nearly everybody are willing to relocate for great job or living opportunities (I’ve lived in 3 countries by now). Education levels vary from self-educated (typically IT) to PhD or skilled trades. Traveling is either professional (I’ve been to 14 countries) or visiting one’s (international) friends in a couch-surfing manner. Most have very little stuff in order to facilitate this mobility. Most are also willing to try out different living arrangements to find what’s working for them. Most are married or have girl or boyfriends. Some have children and agree that children can cost as much or as little as you want. Most are willing to take a chance to see if something is working rather than declaring its “impossibility” outright. As a consequence, people have some interesting stories… like biking across the US, living for a year on a sailboat, living for a year in a desert, …

      • says

        I agree that a lot of the barriers are mental. It sounds so extreme that people write it off outright and say “I could never do that”. I think there are different approaches and some will make more sense than others, depending on the person involved.

        For me personally, 50% net savings would be a good target to hit, and our condo is in an area where rents are high, so even though we paid a decent chunk of change for it (while staying under the 33% net income mark), if we really wanted to pack it up and go, we could, and rent the place out. Going by your formulas, the place is a bit overpriced but not significantly so.

        I think we’re going to sit tight for this year and reevaluate in the next. See how things are and what we want to do, and whether we’re happy with our jobs at that moment or not.

      • says

        I was just making a joke with my earlier comments about living at home with parents…… I do know several youngish folks who have the “work when they feel like it kind of lifestyle”….. maybe work a job for a year, do some extreme saving, then take off on an adventure for 6 months, come back and get another job. That’s the closest thing to an early retirement I’ve seen for non-government workers. Government workers, on the other hand, it’s not unusual to see them retire in their late 40s, early 50s with excellent retirement packages.

        • says

          Hey Biz,

          Given that these government workers get paid through taxes, which we are obligated to pay if we don’t want to suffer serious criminal and legal repercussions… don’t you find that quite unfair? I know that I do. Well, another thread for another time. 😉

          • says

            My father-in-law retired from the government at 48 with close to a full pension, gets cola’s practically every year, and has been drawing that pension for over 25 years now. Pretty sweet deal.

  8. says

    This is one comprehensive review. It seems the book really got you thinking about your personal situation. the question that always comes to mind is: what is the cost you are willing to pay in order to reach early retirement? are you willing to skip kids for example? I prefer a balanced approach to life where early retirement is still possible, just not that early or extreme.

    • says

      What I wanted to show is what’s possible. Many behave as if there’s only one choice: go to college, get a good job, buy the biggest house you can afford and fill it with stuff and spend the next 40 years working to pay it off; then retire at age 60 or not at all. Fair enough, that’s what everybody’s been telling them since they were 12.

      You can have the house and the car and the two week vacation and the 40 year career OR you can have the 5 year career and the enough money to provide financial independence for the rest of your life (and you can have kids and go to other countries), but then you can’t have the 4 extra bedrooms or the new car smell or the spontaneous shopping trips. Conversely, if you want the extra rooms and the stuff, you can’t have your freedom. You have to go to work to pay the bills.

      It’s one or the other, but not both. Everybody’s point of balance is different. I value my 9 hours a day that I don’t have to work more than I’d value having two extra bathrooms in my home and so on. Some may value other things.

    • says

      I don’t think we’re willing to skip kids, but we’re probably going to have them later than the usual age. 100 years ago people had kids at what, 16? Nowadays 23-28 is a more usual age. I think we’ll be in our early 30s when our time comes around.

  9. Kristy OT says

    That’s more or less our plan once the husband gets out of school. I just hadn’t put any concrete numbers on it – saving 75% of our income sounds really hard, but definitely not impossible.

    • says

      75% of gross would probably be impossible… for us, I don’t think 75% of net will be possible this year, but perhaps in the next. If we can hit 50% this year I will be quite happy.

  10. Gordon says

    Right now my wife and I work so we can eat and pay off my student loan. We both love children. In fact, I am working as a preschool teacher right now. However, one of our dreams is to ‘retire’ to build and run an orphanage overseas. We want to give millions not just thousands a chance at life. Its a big dream that until we paid off the last of my debt be able to do. Thanks for the opporunity.

    • says

      That sounds like a really great dream. Maybe it would always be possible to get sponsors to help out with the dream, as it’s for a good cause.

  11. chris says

    In November of 2009 I found myself over $300k in debt, going through a divorce, and hating every minute of my job. I had the BMW, I had disposable cash and most of my debt was in real estate that I was absent land lord renting out. The property being on the East Coast and I on the West Coast. I don’t know what it was but I just realized how much my life wasn’t real. I ate out most nights because I had to work late at work. I had stopped exercising for lack of time. My first inclination to solve a problem was to go buy my way out of it. I started in January 2010 to start shedding some of my debt by selling the houses and slowly started to pay down the other debt. I found the ERE website about spring of 2010. The gems of wisdom I found were great. The most being that to decrease my expenses would be the quickest way to increase my income. Long story short – today I am debt free, sold the BMW and I am in the processing of quitting my job (I’m in the military so it takes some time to actually get out) and should be done this spring. I have saved, since the spring, about 70% of my income and now have enough to put a down payment on a small farm and have enough for a couple years operating expense. Yes, that’s my dream. To start an organic farm and raise a family on my land. It’s a dream that will be realized this year!

    One thing that hasn’t been considered (I haven’t read the book so maybe it has) is living with extended family. I know one post joked about living at home. But my grandparents are getting close to needing someone with them full time. We have offered to have them come live with us once we get our place later this year. We have all discussed – me, my fiancee, my parents, and grandparents – and we agree that it is better for them to stay with family then to go to a retirement home. They have offered to pay half the expenses which helps us with what will be a start-up farm and they both grew up on farms so I have all that wisdom to tap into. My parents are considering moving closer to us once they retire in 4-5 years which would help us out as my grandparents need more and more care.

    I’m 34 and though I’m not financially independent to not need a job (the farm will be my income) I feel like I’m retiring. Going to do what I love.

    • says

      The farm dream sounds very romantic. Organic farming is in demand, so you may very well be able to make a good living with that life, and very honorable to take care of your grandparents. Sometimes I wish that the extended family was more in vogue; my own feels like the result of a nuclear fission reaction. Maybe a side consequence of SS and things like it is that it encouraged reliance on impersonal government instead of family, which I feel is a sad outcome.

  12. Mark says

    I’m 24.

    I live in a house larger and safer than that of 90% of the rest of the world, which I own. I own two cars, which are also paid for. I have a wife, who has the luxury of spending her time pretty much however she pleases, and two baby boys. We eat nice food at home. Lots of meat, fruits and vegetables, whatever we want. We go out to eat, watch movies, and party with family and friends. I work at a job which is basically stress free, despite only having a two year degree (which was paid for with grants and scholarships). We have nice cell phones, high speed internet, netflix, and lots expensive toys.

    The greatest thing about this is that we live on 25% of my income. The other 75% goes into investments. What’s even greater is that I have an average, middle class income. If you’re reading this, and you have a Bachelor’s degree, you probably make more money than I do.

    So how is this done? In High School, I worked at Mcdonald’s, and I saved my money. I paid cash for my first car. I leveraged my car to deliver newspapers, which paid more than fast food. I saved my money. I went to college while working full time. I bought a house for 20 grand, and used what little spare time I had to fix it up. I stuffed it full of insulation and installed the most energy efficient appliances money can buy. While going to college, I also got a decent job. Not a good job. Just a decent job. I married a good woman, and continued to save money. I learned how to invest. I graduated college with zero debt, a house, two cars, and quite a bit of money in savings already.

    While most people are living off of future earnings that may or may not exist, I am always living off of past accomplishments. I still own the car that I bought with McDonald’s money. My family lives in the house that I paid for with newspaper deliveries, and fixed up with my own two hands. In a few short years I’ll be transitioning to doing charity work full time and we’ll be living off of the investments that I’m currently saving.

    I know how to use a hammer and a wrench. I’m an electrician, a plumber, and a mechanic. I’m a software engineer, and a web developer. I’m a financial advisor, and an investor. One of these is actually my ‘profession’. The rest are just other things that I do ‘for fun’.

    I don’t consider early retirement to be a sacrifice at all. I would consider it very normal. Working your whole life just so you can pay for the next colorful trinket that catches your eye – that’s a real sacrifice. Normal people sacrifice far too much for their little trinkets.

    P.S. I originally wrote this to see if I could win a free copy of Jacob’s book, as I’m too cheap to purchase it myself. After writing this I think a lot of other people need the book a lot more than I do. Not that I wouldn’t mind reading the book, but I think I would be morally obligated to give it away to someone else who actually needs it if I were to win the book.

      • says

        I agree! You are miles ahead of where I was at 24. I think we could all learn something from your example, although it also depends on the costs of living. I don’t think you’ll find even a beaten up house in the far-flung ‘burbs for less than 150k around here. Jacob would say to move, though, or to find another way of lowering costs. 😉

  13. says

    I like what Jacob mentioned in the first comment about having kids after becoming financially secure. One of my major motivations for becoming more financially secure at a younger age was because I’d like to stay home with my kids (or at least be secure enough to have my wife do it) when they come along. Some of my friends who are already cash strapped seem to be having a much tougher time now that they have kids, which is probably my biggest fear. Nice review on the book, I like how Jacob challenges the sense of normalcy we’ve all come to think of in America.

    • says

      I’m glad you liked the review. I agree on having kids when better prepared financially for it. The next few years will be consolidating our base.

  14. says

    Jacobs book is part of what led me to start my new site. I think the idea of the “renaissance” human really rung true for me. I’ve spent a lot of time thinking, and truly, no one career seems to fit exactly. Instead, I think that there are several things that I want to pursue.

    I don’t think that I’ll go to the far extremes that Jacob did, but instead try and fashion a “career” out of the things that I want to pursue and make money doing those while still saving for a traditional retirement of sorts.

    • says

      I like the romantic image of the “Renaissance man”. I won’t be going to the extremes that Jacob did today or tomorrow, but the book has given me a lot to think about and question.

  15. says

    Wow, that’s a thorough review. Much more useful than 99% of the reviews you see out there, it actually helps people decide whether they want to buy the book. Very well done!

    Like most of the commenters above, the ERE methods sound a little too extreme to me and I don’t think I could pull all of them off (especially not with a wife and 3 kids in tow!).

    But that’s kind of the point, isn’t it? Jacob has gone to the very edge, the extremes, and shown what is possible. The more conservative of us can read about it, see how it went, and then decide for ourselves just how far we are willing to go. There’s a lot of value in that.

    Just because you’re not planning on mounting a South Pole expedition, doesn’t mean you can’t learn something by reading the accounts of such expeditions.

    And let’s face it – most of us have a lot of low-hanging fruit we could easily harvest when it comes to saving for retirement. Sure, I couldn’t do what it takes to save 75% of my income, but even saving 25% of my income would be a massive improvement! Jacob gives me a lot to think about.

    • says

      I’m glad you liked the review! And yes, I think you hit the nail right on the head. We don’t have to go as far as Jacob did in order to learn from his example. Many people could probably save up to 50% of their net income without altering their lives all that much, so long as they respect my 33% max rule for housing, don’t buy a new car every 4 years, aim to maximize their life EV by considering the future versus the present and making the proper trade-offs. Jacob’s lit up the path for us; it’s up to us how far down we want to go.

  16. says

    I find this interesting, but couldn’t be that extreme. However, it’s made me re-think my current saving habits! I believe because of this I’ll save considerably more.

    Very thought-provoking!

  17. says

    I love Jacob’s website. Occasionally, his writings are very extreme, but I think that’s why I love it so much! It really forces me to stretch my mind to what’s possible! :)

  18. ET says

    No not willing/able to save up to 75% of your net income (very small income about to become smaller). But great reduction of your consumption (housing, energy, taxes) set in motion for 2011.

  19. Marianne O says

    Would I be willing to save up to 75% of my net income? Absolutely, if I were single, I’d be working two or three jobs and saving like mad to achieve financial freedom. In fact I would probably be far too extreme (and therefore miserable). However I’m married to a man with the view that money is for today as well as for tomorrow. We’re constantly working on reconciling our points of view. It would be fascinating to read and discuss this book together!

    • says

      Extreme does not equal miserable. It just means different from normal to a large degree. Normal is not necessarily good. Away from not is not necessarily bad.

      Miserable is when one has to do something one does not want to do. I encourage everybody to find their level of misery just to see where it is, and then back off a few notches.

      • says

        It’s also about balancing today versus tomorrow to maximize the overall curve of happiness. Maybe you find that you’re overweighting today. Maybe you find that the marginal benefit of spending 1.5x to 2x as much on something does not make you twice as happy. Maybe it did in the past, but no longer and you can downsize. There is a lot to explore!

  20. says

    Great review! I am more of the Renaissance man than I am extremely frugal. One can be one without being the other…right? Besides, I am too old to retire extremely early. Would I do things differently (be more extreme?) if I could start again? Probably not. I have always loved life and never really considered myself as being in a rat race. Weird, huh?

    • says

      Haha. Well to me getting out of the rat race means retiring from what constrains you. If you don’t feel constrained, you are already retired and out of the rat race!

      There’s also a difference between frugal and cheap. To mean, being frugal means maximizing your happiness given a certain $. Being cheap means being miserable just to save money, and I don’t agree with that.

      Jacob does make the point that miserable is relative, and (for example) maybe rediscovering the lost art of walking will mean that you enjoy walking in the future rather than seeing it as a chore.

  21. says

    The problem for us is that there aren’t many places we would want to be financially independent and not working in… the places that we would love to have a lot more free time are places we cannot afford to live in without jobs. So I’m good with pulling down a regular salary. And there’s always the health insurance thing.

    It is nice being a professor… except that you have to get stuff done and you have to teach class and do service, there’s a lot of flexibility over what to work on and when to work on it.

    • says

      If you have a job that works for you, that’s good, but don’t let location deter you. Zev (editor) found a solution for $250 in NYC and I live in the bay area for $475/2. There are some other examples in the forums I run. Unless we’re talking beach front property, it’s not the location as much as it’s the size of the home. There’s pretty much a safe and convenient solution is every city in the world. It just requires some footwork. In the past I’ve shown how to find these places, but many have made up their mind in advance that it’s impossible. I typically use something like craigslist and google maps to scout them out. A search will yield maybe 60 results, 5 of which are worth checking out in person. Out of those 5, typically 1 or 2 are good solutions. It takes about a week to sort through them. It gets easier and easier. The less locked down one is by stuff, memberships, and address-change forms, the easier it gets. Also, the good opportunities go fast, so one needs to check into opportunities daily and pounce immediately. Effort is rewarded.

      • says

        Nah, see, if I have all that free time I also want money to enjoy it with. Not much point (for us) in living in the bay area if we can’t go to restaurants and farmer’s markets regularly and drive to the mountains and so on. Yes there’s a better library system so less need for books, but if I have so much free time then I’ll want to do hobbies that take money too! If we’re just going to be living a quiet life, the Bay area doesn’t have that many more attractions for us than where we’re living now. And fewer attractions for us if we would have to live in an apartment and stop eating fancy cheeses to make ends meet.

        Out here there’s nothing to do so I don’t want the free time as much and there’s not so much to spend money on. But we make money and work mostly fulfilling jobs. We’d rather be independently wealthy in the bay area but we’re not.

        • says

          Re: The health insurance, isn’t it really the catastrophic coverage that you need? People always equate full-time employment with benefits, but the one real benefit I’m getting aside from my employment and salary itself is the retirement match. The dental, etc… is really a waste of money when you consider how much the company has to spend. I’d rather they just give me that money and I would spend it on these services directly, and probably negotiate a better rate too since it’s not a third-party paying for it.

          • says

            P.S. I also consider the taxes I spend on health care to be a waste of money. I’d rather just pay for catastrophic coverage. I already pay for tests out of pocket because I don’t want to wait a year when it’s my health and life on the line, and the insurance doesn’t cover all of it.

          • says

            Woops, I’m spamming my own blog. I just happened to remember that when I didn’t have coverage at one point, the costs of dental services were sometimes 1/3rd to 1/2 of what they normally would be! I got a deep discount because I was paying for it directly and not via an insurance company. The whole insurance thing for EVERYTHING is a racket IMO. It doesn’t work that way for cars or homes or anything else, so why for health?

          • says

            It is difficult to get catastrophic coverage as a fertile-age woman with a pre-existing condition. It gets harder for both sexes as we age. That will change as the new health care bill rolls out, but we’re not there yet and there’s no guarantee we will get there.

  22. Michelle says

    I already read the ERE blog, and although I do not follow all of his suggestions, I do find them motivational.

    My partner and I are 25 and 26 and own a condo in Vancouver (not a cheap place to buy!) but we don’t live there. Instead, we share an apartment with a roommate close to downtown where all three of us can walk to work. Meanwhile, we rent out our condo at a profit. As a result, we were able to get rid of our car and instead, sign up for a car co-op service. There are 5+ cars within 2 or 3 blocks that we can use at a moments notice.

    We’re also slowly scrapping many of our unused belongings with the goal of moving once our lease is up to a cheaper apartment in the same area. Rents go up yearly around here, so I’ve always moved once a year or so, to chase cheaper rents. Having less stuff makes this a lot easier.

    We also eat very cheaply, spending only $200 a month on groceries for 2 people. But we eat well because we cook at home – regular meals at my house includes trout and salmon, beef roast, and various stir frys and noodle soups. Yum. My roommate contributes home made bread and treats.

    Because we spend so little on “necessities”, we are able to put away enough money a month that a financial adviser told us we were well on our way to retiring at 45, even if we never received a raise or increased our contributions. 45 is not as amazing as Jacob, but I don’t want to give up my vacations or my fine wine just yet 😉

    So yes, I am definitely willing and trying to reduce my consumption and save more and more of my income, so that my time is my own. It’s a good goal!

    • says

      You guys sound like you are doing great! I thought it would be over as soon as you said you lived in Vancouver, but that sounds like a very reasonable strategy to pursue! We’re going to live in our condo for a while, but it’s in an attractive location to rent out. There isn’t much room for expansion unless they bulldoze the subway station/bus terminal to refit it and replace the parking with a building. I don’t rule it out but given that the area was just renovated a couple of years ago and that there is high demand for parking, I don’t think it’s happening anytime soon.

  23. Anita says

    ERE has helped me focus on what’s really important. Currently downsizing and now completely out of debt (paid off the car, the residence, the credit cards). At my current job, I like my actual duties , but incredibly unhappy with the environment in which I work. Live on a small farm, where I have an opportunity to create a position that would generate more money than the current job, and would not be considered a full time job. Also have a “green” idea that I’ve tried out that gets lots of laughs, but in the next breath is considered a great idea. I have been wanting to make the jump, ERE makes me think about what it is that you REALLY need (not the big house and the big car, or a car at all).

  24. says

    I’ve heard of this book before, and yours is the best review I’ve read on it so far. I’m going through a bathroom remodel, and I’m struggling right now with whether to outsource the tile work around the enclosure (practicality vs. cost). I know how to tile, although the last time was 20 years ago. There is a compromise between quality and taking the opportunity to pick up a new skill. If you know how, then you’ll be more able to manage the outsourcing. I’ll probably hire it out.

    • says

      My girlfriend’s parents remodeled their entire basement for a good price because they hired Chinese contractors (they are Chinese themselves) that did the work for near cost rather than charging a large premium, and they also helped out with the work by doing some of it themselves. Sometimes this in-between solution can work out pretty well.

  25. says

    Ahhh… the old retirement thing. I think about it all the time, philosophically. Today, as I was coming home from the airport (after a great 3 week holiday in Laos and Thailand) I thought about…….never retiring.
    Don’t get me wrong. I had a great time. But I once took a year off work and traveled the world, finding that as enjoyable as working. That sounds weird, but my job is a lot of fun, and the working days make the holidays better. Without the working days, I’m not sure I could enjoy holidays as much.
    But I’ll admit that my situation is really rare. I have enough money to retire, and I always saved and invested so I could get to this point, but now…. I think it’s best for people to find a hobby or a job they love so they can work forever (at least part-time). The world’s oldest people (in the blue zones) all seem to have that one thing in common: they keep working. But they laugh a lot too, so perhaps you really have to find the right balance.

    • says

      Welcome back, Andrew! My own view on these things is that people like you are already retired and out of the rat race. Retiring means retiring from constraints. If there are no constraints, there is nothing to retire from, as you already have your freedom.

      When did you take your year off work?

  26. Kari S says

    We’ve been following Jacob’s blog almost from the beginning. My husband and I have been debt free for 4 years now and are aggressively saving to retire in the next 3 to 4 years. We indulge in more luxuries than Jacob does, but we find his story to be very motivational and a good way to reinforce our ideas about mainstream living.

    • says

      The fact that Jacob is so extreme helps, I think, because you think “well if this guy is going this far and still enjoying life, why can’t I go 80% as far, still enjoy a few luxuries, but still get most of the benefits?”

      I’m glad I discovered his book and site.

  27. says

    Hey Kevin,

    I took a deferred salary leave for the 2002/2003 school year. I gave 33% of my gross pay to the school district for three years (Comox Valley, Vancouver Island) and after taxes, it amounted to far less than that. Then the school district gave me a leave for a year, while paying me the money back, monthly, with interest. I’d just go to an ATM in Morocco, Portugal or Mexico and draw money out that seemed to just float into the account. I think I made about $4000 writing freelance articles for MoneySense magazine that year as well, which also helped. I remember getting $2,500 for my first article and being over the moon.

    The best deal I had was a flight to Portugal from Vancouver, and one month’s accomodation at a 4 star resort in the Algarve. Total cost of airfare and accomodation was just $1,400 Canadian. It was November…off season. But southern Portugal in November is warmer than Victoria in July, so I was able to swim daily.

    Although I was guaranteed my old job back, I never took it. I came to Singapore instead.

    • says

      I don’t think my company has a similar policy, though I could just save up the money myself and pay myself later! I’m hoping to build up the blog to the point that I could get some income similar to freelancing, or better. I won’t build any castles in the sky until I see it happen, but it’s one of my goals to strive toward.

      I’d like to hear more about the story of how you ended up in Singapore sometime. I’ve read parts here and there, but I’m not sure I have everything connected in my mind. 😉

  28. says

    Oh, you’ll get a kick out this Kevin. Despite traveling practically everywhere, I still saved money. And even when making 33% less (in gross wages) during the years leading up to my year off, I was able to save as well. But, to use Cervantos expression…I was tighter than bark to a tree!

    • says

      My girlfriend seems deathly scared of the image of backpacking everywhere and sleeping in dirty hostels with shared showers or stuff that looks like out of The Beach, before he went to the beach…… we need to become more experienced travellers!

  29. says

    I would love to save the majority of my income, but that would force me to make MORE money and reduce my expenses as much as possible. I would definitely do it though. I would love to work from home (or wherever I choose to be dwelling at the time) for a few hours a week (shout out to the 4 Hour Workweek) and make a living that way. I would spend my time helping others, especially kids, until I had some of my own.

    • says

      Working from home is definitely the dream of many. I personally wouldn’t mind being in an office now and then, but it would be nice to have more flexibility and control over the process. The good thing about a corporate job is that the money is there so long as you do a decent job! More companies should investigate the option of having smaller workweeks and more employees for those who want it; I think it could make a lot of sense in many industries as well as cycle more people through different tasks and companies. Hmm… interesting stuff to think about here!

    • says

      You can do the 4 hour work week if you reduce the amount of money you spend significantly. I showed how here
      If you earn $35/hr on contracting then 4 hrs/week is 208 hrs/yr = $7280 minus taxes which is more than I spend. So it works.

      If you spend significantly more than this you either have to work very hard to build a company and then live off the income stream this produces like Tim Ferriss did or you have to work for many years to save enough to provide investment income like many people do with their retirement incomes.

  30. says

    My first goal is to be mortgage free. That’s our main priority. Ticking off one goal at a time is the only way to go and succeed in retiring early. Some great stuff to think about. Definitely will pick up the book to read. Great book review!

    • says

      Thanks! I think reducing expenses is so important, because while increasing income is great, the power of early retirement comes from the gap between your expenses and your after-tax income, and the longer this gap, the more powerful the lever.


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