The Cheat Codes of FI

For those of you following along, you know I've been a bit busy lately. In addition to my own music, podcast, and software projects, I've also been popping up on other people's podcasts. A few weeks back I sang a few bars of Michael Bublé on The FI Show with Justin and Cody, and I just appeared on the What's Up Next podcast with Paul and Doc G as well. But being away from the blog has given me some time to reflect on FI, and the length of the journey itself.

It took The Wife and I roughly 5 years to reach financial independence. For others, it can easily take 10, 15, and even 20+ years. We know that the only variable that actually matters in terms of the math is your savings rate, but there are a ton of factors that influence this figure. How much debt are you starting off with? What career do you have? What's your income? How big is your family? Where do you live? How hard are you willing to work?

We all have individual preferences and constraints that guide our decisions. Some people want to go slower, easing their way into the financial independence journey. Others want to go faster. Some have the resources to go VERY fast but choose to go slowly out of comfort or family priorities. Others really DON'T have the resources to go as fast, but work like crazy and make it happen anyway!

But what, dear reader, if you want to get to FI as quickly as possible, throwing all caution to the wind? What if you could somehow apply a few ‘cheat codes' to your life and really jump ahead in the game? The truth is, such codes actually exist! There are five heavy-hitting areas of your life you can optimize to radically increase your income and decrease your spending, giving you the most bang for the proverbial buck.

The Cheat Codes of FI

Allow me to introduce the “cheat codes” of financial independence. I didn't coin the phrase; other bloggers in the FI space have written about cheat codes before. The problem is most of these posts are too short, vague, click-baity, or philosophical to be helpful.

I wanted something concrete and actionable, just as when I wrote my Milestones of FI post. When you Google video game codes, you don't want someone describing something obvious like “avoid taking damage.” You want to learn that you need to press A-B-A-C-A-B-B during the opening credits, or hold down on a white block for five seconds to find the next whistle.  This is what this post attempts to achieve.

But first, a word of caution: just as in video games, cheat codes aren't for everyone. Some folks are completionists and want to explore and collect every item along the way. Others want to take it slow and enjoy the journey, and I'd argue that this is the healthier option. But for those of you who want to reach the end credits of your traditional working career as fast as possible, this is the post for you!

Get ready, because we're about to skip straight to world 8!

There is a catch, however. When people ask me if there's a sure-fire (FIRE?) way to ‘get rich quick', I usually hesitate and respond with “yes, but… you're not going to like what you have to do!” No, I don't mean robbing a bank or anything like that. It's just that the cheat codes we're going to discuss here are hard to execute, and absolutely not right for everyone.

But boy, can they skip you ahead in the game! If any of these seem too extreme, simply ignore and move on to the next cheat code, until you find one that works for you and your family. Are you ready to level up?

House Hacking

DIFFICULTY: Moderate to Advanced



ABILITIES ACHIEVED: Transformed housing from the most expensive budget line item into a source of income


Housing is usually the largest line item in most people's budget. For many, it can make up 30% to even 50% or more of their total expenses. House hacking attempts to flip this convention on its head, and take those expenses down towards zero. Or, better yet, earn you money instead of costing you each month!

My favorite part of walking through IKEA is getting ideas on how to live effectively in smaller spaces!

The Cheat Codes

  • The Family Man: move in with parents, siblings, or extended family to reduce or eliminate housing costs.
  • The Roomie: Move in with multiple roommates to reduce housing costs.
  • The ‘Be Our Guest': Rent out a room (or two) of your house and make enough money to cover your housing expenses. (Airbnb and VRBO are perfect for this)
  • The Multi-Family Man: Purchasing a duplex, triplex, or quadplex, living in one of the units, and renting out the others for a profit. (Your tenants pay the mortgage for you!)
  • The Live-n-Flip: Move into a home that needs some TLC, stay a year or two fixing it up, and move out, selling for a sizable profit.
  • The Landlord: Manage one or more traditional rental properties to increase your passive income. (Just be sure not to rely too much on leverage, as it can come back to bite you!)
  • The Small & Mighty: Downsize into a small apartment or tiny home to reduce housing expenses.
  • The Road Warrior: Ditch the traditional house concept completely and live in an RV like my friends recently did!
It's less traditional, but RV living could shave years off of your working career.

What Cheat Code(s) Did WE Activate?

The Wife and I lived with family for free for a few years while we rented out our own home (The Family Man). Some friends thought we were crazy, and it did test our sanity a bit, but it was well worth it in the end. This hack shaved YEARS off of our time to FI, allowing us to live rent-free AND pay off our (then underwater) mortgage at the same time.

Our property made for a pretty terrible rental, missing the 1% rule by a mile, but this hack was still effective (The Landlord). On most properties, this strategy should bring your cost down to zero, or even earn you a monthly profit. Figuring out how to live for free, even for just a few years, can really speed up your savings! Anything to reduce living expenses goes a long way.

Years later, we sold our rental and used the profits to pay off our primary residence. We now pay an ‘equivalent rent' of only $300 per month, covering taxes, maintenance, and insurance. Our latest cheat code? Serendipitously, a friend we met at CampFI years ago recently moved to town for work and needed a place to live. We happily rented out our guest room for a few months, making a small profit to live in our own house (The ‘Be Our Guest')!

Housing costs before cheat codes: $1600 per month.

Housing costs after cheat codes: $300 per month (we actually profit $200 per month when renting out our guest room).

Interested in-house hacking? Here are some links to get you started:

A word of caution, however. Getting into real estate can be a very effective way to house hack, but it's not always a cake-walk. I've posted here on the blog about our adventures in real estate and our house purchase fails, so I'm not here to sugar coat anything. Was it an effective cheat code? Yes. Was it a pain in the ass? Also, yes.

Transportation Hacking




ABILITIES ACHIEVED: Reduced automobile, fuel, and related costs by over 50% while simultaneously reducing commute time


Most people severely underestimate what they spend on transportation. As I lamented in my post The Car Problem, the average car costs $10k per year just to own, not even counting the cost of the car itself. It's not just cars, either: if you live many miles from where you work, other public and private transportation options can be just as expensive. Most Americans pay between 20 and 35% of their take-home pay on transportation, making it second only to housing in terms of opportunity for hacking. It’s no wonder finding money to save for investing is hard!

Traffic jams cost you a lot more than time…

The Cheat Codes

  • The 5K: Move as close to where you work and play as possible. Aim for a morning commute of 3 miles or less!
  • The ‘Every Day is Leg Day': Walk or bike to work instead of driving. MMM is a big proponent of the magic life-changing habit of bicycling.
  • The Carpool: Consider carpooling with friends and family, and reducing the number of cars in your household down to one, or even zero!
  • The Uber Cool: Consider up and coming private options, such as Uber and Lyft's new monthly subscription plans that could save you money over traditional car ownership.
  • The Man With The Plan: Plan and consolidate your trips into weekly or monthly outings when possible.
  • The Home Body: Negotiate with your employer to work some (or all!) days from home, or a closer location to home. Depending on your job, this could save significant money!
  • The Smart Car: If you must buy a car, be smart and research car buying on Fiology before you buy.

What Cheat Code(s) Did WE Activate?

After the car accident, The Wife and I decided not to buy a replacement vehicle and instead became a one car household (The Carpool). Reducing down to one car eliminated the insurance, registration, and maintenance costs associated with the second car. Carpooling also helped reduce our fuel consumption as well, as at least 5 miles of our commute was in the exact same direction every day.

A few years later, we moved much closer to work, reducing our commute to less than 15 minutes and shaving even more off of our fuel and maintenance costs (The 5K). We also found significantly cheaper auto insurance, dropped collision and comprehensive coverage, and raised our deductibles to the maximum allowed. Here's how we did:

Transportation costs before cheat codes: $600 per month

Transportation costs after cheat codes: $160 per month

We discuss these cost savings in more detail in our Savings Snowball post. Transportation and fuel costs are significantly larger than most people realize. I'm convinced the assumption that middle-class households ‘deserve' two new cars in the driveway is the very thing preventing the average American from accumulating significant wealth.

If you drive a car to commute to work, take a look at the sprinkling of fuel and car-related costs on your monthly statements. Is there any other expense category with so many transactions, each so expensive? The only one that even comes close is perhaps… food.

Food Hacking




ABILITIES ACHIEVED: Learned to cook restaurant quality meals; cut grocery budget in half, and total monthly food costs by a factor of five


Food is usually the third most expensive category, after housing and transportation (in our case it happened to be even more expensive than transportation, but we'll get to that in a minute).

The Cheat Codes

  • The Special: Limit eating out at restaurants and fast food to once per week, or even once per month, primarily on special occasions.
  • The Chef: Learn to cook food you actually enjoy. This took us quite a while to learn…
  • The Day of Cooking: Make Sunday a “cooking” day, and prepare lunches and dinners for the entire week. The 8-quart InstaPot has helped us with this significantly!
  • The Potluck Master: Don't use eating out as a way to curb boredom! Opt for potlucks at home with friends instead of nights out at bars and restaurants.
  • The Part-Time Vegan: Consider reducing your meat consumption. Meatless Mondays are a great way to start!
  • The Smart Foodie: Switch grocery stores to cut your food bill in half! Check out this Fiology lesson on food for even more hacks.

What Cheat Code(s) Did WE Activate?

Before our turnaround, we spent a ton of money on food- well over $1000 a month! Coffee shops, bars with friends, eating at restaurants twice a day, convenience foods from luxury supermarkets… if the game was spending money, we were winning. But, this just meant we had a TON of low hanging fruit to work with.

When we turned things around, we switched from Publix to Aldi for our grocery shopping and cut our bill literally in half (The Smart Foodie). We stopped eating out at restaurants every day, and learned to meal plan for lunches and dinners throughout the week (The Day of Cooking). We started keeping emergency pizzas in the freezer for days with low motivation, and carefully tracked our food waste to try and become more efficient.

The grocery store you choose matters!

We also started hosting weekly potlucks, brunches, and game nights with friends at our house, with our own food (The Chef), which was significantly cheaper than frequent nights out on the town (The Potluck Master). In addition, we reduced our meat consumption (The Part-Time Vegan), which was a significant win for our wallets as well as our waistlines. So, how'd we do?

Food costs before cheat codes: $1000 per month

Food costs after cheat codes: $400 per month

We discuss these cost savings in more detail in our Food Savings post.

Let me clarify something here. This process was NOT easy. Of all the habits we’ve changed over the years to become more financially fit, this was the hardest. As a couple who didn't know how to cook well, it took a significant amount of practice, patience, and teamwork. The rewards, however, speak for themselves.

Travel Hacking




ABILITIES ACHIEVED: Reduced travel costs by more than 50%, BOGO flights, more free hotel stays than we can use


Of all the cheat codes on the way to FI, travel hacking gets the most coverage in the blogosphere. This is likely because many bloggers receive payment for recommending certain credit cards, but travel hacking is a legitimate way for you to save tons of cash on travel every year.

The Cheat Codes

The Giant Wallet Dude(tte): Take advantage of sign-on bonuses. Many credit card companies offer generous bonuses to get you to sign up, sometimes offering between $500 and $1000 in incentive when you meet certain sign on conditions. Most commonly, you need to spend a few thousand dollars on the card within a few months of opening the account. Depending on the type of account, rewards can be applied to airfare, transportation, hotels, parking, and more.

The BOGO Flyer: The Southwest “Companion Pass” – lets you bring a designated companion along on every flight, for free! For couples, this effectively cuts your airfare costs IN HALF, and if done correctly, you can alternate earning the pass with your spouse every two years so the pass can last essentially forever!

The Slow Ride: The concept of ‘slow travel' – where you wander the world slowly, living like a local in exciting new locales. Depending on the country, your cost of living during slow travel can be considerably cheaper than where you currently call home. Even better – often times you can rent out your home while away, potentially paying for the entire trip!

What Cheat Code(s) Did WE Activate?

Before we knew about travel hacking, our plane tickets were often purchased at full price, on a whim a few days before traveling. This is not an affordable way to travel! These past few years, The Wife and I have gradually reduced our frequency of travel, and started credit card hacking to travel smarter (The Giant Wallet Dude). We also plan trips at least a few weeks in advance to help avoid the premium that often accompanies short notice travel.

I was initially pretty skeptical about signing up for a bunch of credit cards, but I decided to get into the game slowly by adding one card every few months. The Mad FIentist actually has a travel hacking email course that does exactly this, and I get an email every few months telling me which card to get, and when. It's pretty fantastic, and reduces decision fatigue on my part. You can sign up for this email list in the 'email series' section of this post.

I've also started opening new cards a few weeks before large expenses occur, when I can predict them. A perfect example: property taxes are due every November here in Florida, and are usually a few thousand dollars. This is the ideal time to search for those outstanding sign-on bonuses! And I recently found that American Express now gives a ‘temporary line of credit' for the 1 to 2 week period where your card is in the mail, so you could theoretically use this tactic even for unexpected large expenses.

The Southwest companion pass. It's kind of a big deal…

One of the best cheat codes in this space is the Southwest Companion Pass, which gives us buy-one-get-one-free airfare for almost two entire years. And if we time it right, when my two years are up, The Wife can earn another companion pass and we can keep the process going indefinitely (The BOGO Flyer)! With just a little expense planning, you can cut your airfare expenses IN HALF. How's that for a cheat code?

Just make sure you are responsible and PAY THESE CREDIT CARD BILLS IN FULL at the end of every month. If you can't, or worry you won't be able to, skip this cheat code completely. The second you pay interest on this stuff, you lose the big boss battle to the credit card companies. GAME OVER. (You remember my rant on debt, don't you?)

So how effective were these cheat codes for us? Let's look at the savings:

Travel costs before cheat codes: $1000 per month (average)

Travel costs after cheat codes: $150 per month (average)

Because these savings are dependent on specific deals available at the time, as well as the frequency that you travel, your mileage (pun intended) may vary. We discuss these cost savings in even more detail in our Savings Snowball post, so check that out if you want to dive deeper.

Ready to give travel hacking a try? Here's everything you need to get started:

Income Hacking

DIFFICULTY: Moderate to Advanced


DATE JOEL UNLOCKED: September 2014

ABILITIES ACHIEVED: An 18% raise, two free graduate degrees, a (brief) stint in the six-figure club


On this blog, I tend to focus more on lowering expenses than increasing income, and that's what this post has focused on as well. I usually tell people: if you have an annual household income above $50k, lowering your expenses is usually more effective than hustling for more income. The four big cheat codes we've discussed so far (housing, transportation, food, and travel) can theoretically cut your expenses in half in only a month or two… it would be hard to find a side hustle that can double your income in a similar amount of time.

If you have a household income on the lower end of the spectrum, however, it could certainly be worth the energy to hack the income side of the equation.

The Cheat Codes

  • The Horizontal Tango: What do you do for work? Can you shift into a parallel field that has higher earning potential? Is there a related industry you could shift into? Have you browsed the jobs section of your local newspaper, Craigslist, career fair, etc? MMM has some great tips on how to stand out compared to others when interviewing for something new.
  • The Side Hustler: Can you add a side hustle to increase your income? Preferably something you're good at and enjoy doing.
  • The Social Butterfly: Can you network with others who have careers with higher growth potential? Can you become a more essential member of your team?
  • The Hopper: Can you switch to a competing company in the same field? It's been shown that switching companies every two to four years can have a dramatic impact on salary growth (and your résumé).
  • The Smarty Pants: Could you go back to school (perhaps night school) or get a certification that could make you more valuable? If you already have a low income, continued education might be completely free thanks to need-based grants, such as the Pell grant. With the right degree or certification, you could potentially double or triple your income. Is there any way to get your current employer to pay for your continued education?
  • The Tax Ninja: One straightforward way to give yourself an effective raise is to max out all available pre-tax investment accounts, lowering your taxable income and therefore letting you keep more of your gross income
  • The Ramblin' Man: Could you move somewhere new? Geographic arbitrage, both domestic and international, can significantly improve your income. Are there lower cost of living areas you'd be willing to work? Moving to a LCOL area is a quick way to give yourself an “effective raise”, even if your salary doesn't actually increase.
  • The Money Chaser: Another variation of ‘The Rambling Man', but this time with the strategy of following the highest salary instead of the lowest cost of living. Are you willing to move somewhere new to grow your paycheck? I have a family member who was a bank teller and decided to move wherever there was a need, as long as there was a pay premium. He lived in interesting places: New Orleans, Miami, North Carolina… After a decade of this strategy, he was making six figures.

A Note on Cost of Living

I have friends and family who live in very high cost of living areas like the DC Metro Area, LA, the Bay Area of CA, and Manhattan. I understand the appeal, but the cost to live in these areas is really high! If I wanted to live in California, I'd have to work many additional years, because I just wouldn't be FI there.

This isn't necessarily a bad thing if you love your job and working a few extra years doesn't bother you. But if you're trying to reduce the number of years to FI, moving to a lower cost of living area is a GAME CHANGER. As a point of reference: I live in central Florida. My ~2000 square foot house cost ~$200k, and it's paid off. Gas here costs ~$2.40 per gallon. Eggs are about 60 cents. And there's no state income tax.

What Cheat Code(s) Did WE Activate?

Income hacking is an area The Wife and I excelled at even before our Financial 180. We both worked really hard in high school to earn scholarships for our undergraduate degrees. We also chose to attend state schools, so our scholarship money went much further. (This, combined with the fact that we are extremely lucky to have parents who pre-paid our college meant we had no student loans after graduation).

We decided to pursue degrees in software, as it is currently in extremely high demand, and the pay is competitive. After graduation, we moved to a low cost of living city within a few hours drive of family (The Ramblin' Man), and got software jobs with great benefits, including company paid graduate education. I ended up completing two graduate degrees (Industrial and Systems Engineering, and an M.B.A.), all on the company's dime (The Smarty Pants).

“The Hopper” in action. Notice the effect of my last two job hops, in gold, on my salary.

I've also hopped between companies a few times in my career, on average once every five years (The Hopper). Not only is this beneficial from an income hacking perspective (each hop netted me a ~18% raise), but it also helps build a stronger résumé and gives you fresh new experiences along the way. You can see the effect two job hops had on my salary in the figure above. And remember: if you find yourself with an offer from a competing company, negotiate!

Additionally, I've kept my eyes open for opportunities to grow my salary whenever possible. During my working career, I'd work hard and do a good job, rating myself highly at review time. I'd network, and then solve problems for people to make their lives easier, making myself a more valuable, and subsequently well paid, employee (The Social Butterfly). And I took the opportunity to max out my 401k, IRA, and HSA in order to reduce my taxable income and give myself more of my own gross income (The Tax Ninja), effectively letting Uncle Sam give me a raise.

End Credits



CHEATS ENABLED: The Family Man, The 'Be Our Guest', The Landlord, The 5K, The Carpool, The Man With The Plan, The Special, The Chef, The Day of Cooking, The Potluck Master, The Part-Time Vegan, The Smart Foodie, The Giant Wallet Dude, The BOGO Flyer, The Side Hustler, The Social Butterfly, The Hopper, The Smarty Pants, The Tax Ninja, The Ramblin' Man


Housing, Transportation, Food, Travel, and Income. These are the five heavy hitters, and with the proper cheat codes applied, they can potentially double or even triple your savings rate in one fell swoop, getting you to that magic 50% savings rate, or higher. The thought process behind every one of these cheat codes is essentially the same: How can I take something expensive that I need or want and flip it around so that I somehow MAKE money instead?

Remember that none of these are easy. They are simple, but hard. Most of these strategies will require you to sacrifice something you don't want to sacrifice. But they will help you get rid of your debt and start saving money quickly. These strategies, while hard, are very effective. These cheat codes have saved The Wife and I over half a million dollars on our journey!

Note that you don't need to leave these cheat codes enabled forever if you don't want to. Some of them can be turned on temporarily to help you get out of debt quick, or skip ahead a few levels early on in the game. For example, after five years with all the codes enabled, we started eating out at restaurants once a weekend instead of once a month, and The Wife got a second car. Don't worry – we know the codes well and can turn them back on if we ever need to.

As I said at the beginning, this is all optional! If you like your job and your work life balance, you don't have to change a thing. I recently sat down with a couple at Camp FI who felt stuck at a 40% savings rate and wanted to ‘breakthrough' to something higher. After reviewing all of these cheat codes with them, they looked at each other and realized they weren't willing to try any of them. They had a pretty sweet work-life balance already, and didn't need to raise their savings rate any higher! They left understanding that a 40% savings rate was right for them, and that they didn't need to raise it just for the sake of racing others to the finish line.

I hope these codes are helpful for those of you on your journey who do want to speed things up, however. It's taken me years to curate all the info packed into this post. If you know other major cheat codes that I've missed, let me know in the comments and I'll add them in. That way, this post becomes the go-to resource for people who say they want to “get rich quick”.

Good luck playing the game. Let me know which boss battles you get stuck at, and which of these codes have worked for you in the comments.

FI is Hard

A common theme here in the financial independence community is simplicity. Mr. Money Mustache has his classic “Simple Math of Early Retirement” post, which took the FIRE world by storm. Jim Collins wrote “The Simple Path to Wealth”, which has become the de-facto starter kit for people looking to begin their own journey to FI.

The problem is, too many people hear SIMPLE but think EASY. There's nothing easy about FI: it requires hard work. The sacrifices you have to make to increase your savings rate are… hard. Testing out your frugality limits and going full on gazelle is hard too, at least at first, until you get into a good groove. For some, it's harder than others.

I like to use the analogy of getting into really good physical shape. Low body fat, visible muscles, maybe some six pack abs. It's actually quite simple: eat fewer calories than you consume, do about an hour a day of weight training, maybe sprinkle in some cardio a few times a week. For the more advanced you can watch your macros and supplement your protein intake. Simple!

But let me tell you, it's not easy. I've been working on my fitness for six months now, since quitting my job last November. I've put in over an hour a day, six days per week. And I'm still nowhere near the fitness level I want to be! Having discipline over how you spend your calories is HARD. Getting into a solid weight training routine is HARD. If it were easy, everyone would do it! It's simple, but it's still hard work. Reaching FI is no different.

When FI is even HARDER

I often hear feedback along the lines of “Of course YOU were able to retire early. You had no student loan debt. You and your wife had dual income! You have no kids!” And you know what? That's fair criticism! For someone without these advantages, FI is even HARDER. Your journey will take longer, and you'll have to become more of a financial badass than I did to hit FI in a similar amount of time.

Let's measure this badassity with something called the ‘frugality muscle', a term coined by Mr. Money Mustache that measures how hard you're willing to work to raise your savings rate. Before our Financial 180, The Wife and I were on track for a 40+ year working career, despite our above average household income, because of our poor spending habits and weak frugality muscles. Once we discovered how to strengthen these muscles, however, our journey shortened to under five years.

Anyone can improve their frugality muscles, regardless of income, but those who earn less are still at a disadvantage. If two different people have equally strong frugality muscles, the time to FI can still vary based on their income level. But didn't we learn that the length of the journey depends entirely on savings rate, not income?

The discrepancy is that you might need to work harder and apply more frugality muscle to achieve the same savings rate as someone with a higher income than you. This is compounded by the fact that at severely low-income levels, a significant percentage of your income goes to essential purchases like food and shelter. Because this concept of ‘frugality muscle' is still a bit vague, let's look at three concrete examples of how the wife and I strengthened ours.

A One Car Household

After the car accident that kickstarted our Financial 180, we decided to become a one-car household. Many of our friends and coworkers thought we were crazy – how can two adults working at two different companies get by with only a single car?

It wasn't easy. We would have to coordinate everything. Every day we'd need to plan out our agendas. “What off-campus meetings do you have today? I need the car for an errand at lunchtime. Can we do a car swap at 3pm for my after work activities? Oh, you need to work late? I guess I'll work late too. Can Jim give you a ride home today?”

There were some days where our schedules would line up, and things worked out nicely. But more often than not, our shared car arrangement was a pain in the behind. I was stuck at home some days with no car. Or The Wife had to stay at work a few hours later than she would have liked. This was hard, but we flexed our frugality muscles and stuck with it.

As I wrote about in my Car Problem post, the majority of drivers severely underestimate the cost of their cars. I estimate in the five years we've been a one-car household, we've saved around $30,000 in depreciation, insurance, registration and fuel-related expenses that we'd incur with a second car. And that's just over five years. In perpetuity, accounting for average market return on the difference, our savings would be closer to $200,000! By simply eliminating the second car, we were able to shave years off our journey to FI.

What if we earned less but still wanted to reach FI in the same amount of time? We would have needed to push our frugality muscles even harder to reach the same savings rate. We could have started biking to work. We could have carpooled with friends and split the gas. We could have moved within walking distance of the office. Some of these options are harder than others, but the financial reward is usually proportional to the effort.

House Hacking FTW?

As I wrote about in my Frugality vs. Sanity post, we house hacked by living with family for a few years to help us pay off our mortgage. We were able to simultaneously live rent free and rent out our previous home for a few years (albeit it still at a loss). This was frugal, but also tested our sanity and pushed our frugality muscles almost past their breaking point.

It's not easy living with family, especially when your lifestyles don't line up well. Navigating the murky waters of family favors, guilt, and indebtedness is painful, particularly if you're a bit of a control freak like me. Saying it was hard is an understatement. I bit my tongue so much I'm surprised it didn't fall off! It wasn't without its reward, however.

I estimate our four-year arrangement saved us around $50,000, and jump-started the savings snowball that led to our mortgage payoff. The accelerated timeline and larger up-front investments we were able to fund as a result are worth even more.

We could have saved even more if we had trained our frugality muscles harder. Instead of moving into a new single-family home after our house hacking journey, we could have moved into a small apartment with roommates. We could have bought a modest duplex and lived in one side and rented out the other. We could have AirBnB'd our guest room. The harder you work, the more your frugality muscles grow, and the shorter your time to FI.

Learning to Cook is… Hard

For years, The Wife and I ate most of our meals at restaurants before our Financial 180. This was one of our particular problem areas, and in 2012 we spent over $12,000 eating out! We knew we needed to start cooking at home to save money, but it was hard because we were bad at it, and didn't like our own cooking.

We spent the better part of a year learning to actually cook well. I'm going to be a complainy-pants for a minute and tell you – this process was the worst. There were so many secret shame pizzas ordered to cope with our many failures. But practice makes perfect, and through the hard work of persistence, we started to improve. Eventually, we got to a point where we preferred our own cooking to our favorite restaurants. We even optimized our grocery shopping, learning how to plan meals for the week in advance, and where to shop for the best prices.

When all is said and done, I estimate our frugality muscle saved us over $40,000 in food expenses over the past five years. In perpetuity, we've shaved well over $200,000 off our final FI number. And there's plenty we could have done to push this even further: we don't clip coupons, we don't have a big chest freezer to stock up on deals when they happen, and we don't even have a Costco membership!

How extreme you push in the savings direction is entirely up to you. If you're happy with your current lifestyle and savings rate and have a good work-life balance, there's really no need to go crazy. The stress associated with achieving extremely high savings rates can be daunting and throw you off course. However, if you want to accelerate your timeline, you can always push harder, as I've shown in the examples above. Work together with your family to figure out where your balance is, and tailor the journey to meet your needs.

No Pain, No Gain

Hard work is rewarding, and indeed, Mr. Money Mustache claims it's one of the secret ingredients to true happiness. But it isn't always fun, especially in the beginning. Everyone has different pain points and different levels of comfort. And some people just want all the things.

I miss having unlimited cell phone data. I secretly envy my friends with Amazon Prime and Hulu and Spotify premium. I intentionally avoid looking at the new iPhones to keep the desire to upgrade at bay! But these choices, while uncomfortable, added up to well over a thousand dollars per month! This is what it means to work your frugality muscles.

Becoming comfortable with being uncomfortable is one of the keys to our success. But instead, what do many people do when they discover something is hard? They make excuses! There are SO many articles like this popular one from The Outline that make it seem like only those with high incomes (in this case, the Frugalwoods) can reach financial independence.

Articles like these get me so fired up because they just aren't true! They seem to be some sort defense mechanism against the FI movement; in fact, this isn't even the first time I've written about this. Check out my “Why You Can't Retire” post for my a rebuttal against a similarly voiced New York Times piece.

Everyone wants a reason to believe that their inefficient, expensive lifestyles are justified. That way they don’t have to change anything. Because FI is hard! Reducing your expenses dramatically isn’t easy. Saving money requires work. You HAVE to get out of comfort zone. Just doing what's comfortable is what everyone else does. And living like everyone else doesn't make you wealthy.

The ironic thing about the above Outline article is that the Frugalwoods are actually some of the most transparent in the FI community. They fully acknowledge all the good fortune and privilege they’ve had thus far. But because the article only focuses on the income variable, they completely discount this concept of frugality as a muscle.

Increasing your frugality muscle is extremely effective at shaving years off your working timeline, in most cases significantly more so than simply raising your income. In fact, If you look at our annual spending vs. asset growth below, you can see how quickly a change in frugality muscle can turn around your finances. If this doesn't show the power of good financial habits, I don't know what will!

We drastically cut our spending
We drastically cut our spending
...and started a dramatic financial 180!
…and started a dramatic financial 180!

How Strong Are Your Muscles?

So, based on the potential savings we've discussed so far, the literal million dollar question is: what are you willing to do that most people will NOT? Where can you go to get out of your comfort zone and save money? Here's a sampling of some of the areas we've chosen to flex our frugality muscle thus far:

  • We stopped eating out every day, because, money
  • We worked really hard to get better at cooking
  • We did a TON of reading – probably 2+ hours per day – on FI
  • We moved in with family for a few years even though it sucked
  • We went down to one car even though it was inconvenient
  • We canceled a lot of fun stuff. We don't even have Amazon Prime
  • We moved closer to work to reduce our commute and fuel costs
  • We broke out of our unlimited mobile data addiction
  • We got used to warmer house temperatures in summer
  • We resisted the urge to upgrade our phones, electronics, cars, etc.
  • We dramatically reduced frivolous traveling, shopping, etc.
  • We said no to friends who wanted to do expensive things all the time
  • We installed low flow heads in all of our showers and sinks
  • We drove a small Honda instead of a larger SUV or Truck
  • We altered our schedules to avoid traffic
  • We reduced our meat consumption
  • We avoid expensive insurance options in favor of high deductible plans
  • We mitigate our driving risk by driving slower and less frequently

There's plenty of other ideas that our frugality muscles are still too weak for: renting out spare bedrooms, downsizing to tiny house, moving in with roommates, subletting out of someone else's spare basement, renting a place in walking distance to work, couch surfing, whole house pet sitting… and so many more. I met Scott Trench from Bigger Pockets at CampFI earlier this year, and he wrote an excellent book called “Set For Life” that really dives into some of these items in detail.

Most of these will really test the strength of your frugality muscles. Some of them may work better than others for your family's specific situation, but if you put in the hard work, your frugality muscles will grow. We're actually relaxing some of these now that we've made it to our FI point, which means we may have pushed harder than what was sustainable for the long term. But we did put in the work, and the results were truly dramatic.


The Wife and I hit FI in less than five years, and it was hard. Having only one car was inconvenient. Living with in-laws for a few years was unsettling. Learning to cook well was arduous. Giving up my unlimited data plan wasn't easy.

We still had it easier than others, however. We were able to avoid some of the more extreme savings scenarios because of our dual income. We didn't need roommates*, we didn't need to downsize into a tiny house, and we didn't even need to eat macaroni and cheese in the dark**!

Mr. Money Mustache often tailors his content to people like my wife and I. With our relatively high middle-class income, if we had chosen a ten-year period for our Financial 180, we could have done it with significantly less effort. Not EASY, but perhaps quite a bit more comfortable. But we chose a five-year turnaround, which made things much more challenging. We chose to go outside of our comfort zone to attack the heavy hitters in our budget: transportation, housing, and food.

Yes, we had a pretty good income***, and I'm so thankful we were able to turn things around as quickly as we did. I realize that others might have to work harder and for longer to accomplish the same thing. But given a good income, would you still be willing to make the choices we made? Would you still be willing to do what others won't to maximize your savings rate? Dave Ramsey has a quote that's always stuck with me: “If you will live like no one else, later you can live like no one else.”

What are you and your family doing to work your frugality muscles??


*But we still had a roommate last summer! And it was an awesome experience I plan on writing about in a future post. Spoilers: Our roommate was also on the path to FI! 

**This is an expression I use when describing someone who might be pushing so hard to reach that FI finish line that they are no longer enjoying life. Don't actually do this.

***At least according to east coast, low cost of living standards. For transparency, if you average our annual household income across our working career, it comes out to about $150k a year.


So hopefully this post helps inspire you to go out there and start saving! If you haven't already, the very first step is to determine your current savings rate, and compare it with your desired FI timeline. Then, start tracking all your spending and investments so you can follow your progress against the Milestones of FI.

Adventures in Real Estate

It's been a busy month for the FI180 household! My wife had a birthday, I wrote a guest post over on the FireyMillenials blog, a mustachian friend from Warner Robins made a visit, and we got to record an episode of the ChooseFI podcast, scheduled to air later this month.

But perhaps most exciting for the wife and I, April marked the end of our decade long adventure in real estate! As you may recall from our previous post on how NOT to buy a house, we blindly purchased our first home in 2007, right before the big real estate crash. Less than a year after our purchase, our home was valued at only 40% of its mortgage balance, with a $1,614.96 monthly payment that contained exactly $0 of principal.

When we started our Financial 180, we knew we needed to cut our losses and figure out an exit strategy. Unwilling to walk away from our financial obligations, we decided to buckle down and pay off that mortgage as fast as possible, while simultaneously renting the property out and living with family to increase our pay down even further. Two years later, we were able to pay the mortgage off, but we still had a poor performing rental property on our hands.

Last week, we finally closed the book on this house from hell and sold the property. It was a wild ride, and we’ll be taking a nice break from real estate for a while.

First, Some Numbers

OK, here's the damage report:

Principal $168,990.00
Interest $102,060.00
Taxes $19,560.00
Insurance $9,960.00
HOA $17,760.00
Maintenance $5,020.00
TOTAL EXPENSES $323,350.00
Rents received $46,305.00
Sale Proceeds $129,113.00
TOTAL REVENUE $175,418.00
NET -$147,932.00

So… yeah. We didn’t do so well in our decade in the real estate market. We ended up selling the property for $40k less than we purchased it for, and we were only able to recoup about 14% of our expenses in collected rents. The property was simply a poor performing rental. While mortgaged, it was nowhere near cash flow positive. Even when fully paid off, the expenses were still more than half the revenue. With high HOA fees, low rental income, and an expensive sticker price, this property was a good lesson of what NOT to look for when choosing a rental property.

Perhaps it isn’t quite as bad as it looks on paper, however. We did live in the property the first few years, so some of those expenses would have gone to rent if we lived somewhere else. Also, it’s important to keep in mind, when we purchased this property we never considered how it would perform as a rental. Like most of our clueless friends, we assumed we would sell it a few years after buying and pocket a few thousand bucks of appreciation. And you know what they say about assumptions…

So, why did we sell at a loss? Why didn’t we continue collecting rent and wait for the property value to continue increasing? So many reasons… let’s start with our rental experience.

Lessons in Landlording

NOTE: Names have been changed to protect the innocent. And the guilty.

When we first embarked on renting out our property, we decided to go with a property manager. Our first property manager, Kate, was wonderful. She was sharp, professional, and kept great communication between my wife and I and our tenants. She helped us find our first tenant, Dave.

Dave, a middle-aged engineer with a wife and one kid, was the definition of the perfect tenant. He took good care of our property, paid on time each month, and rented for multiple years with no issue. He was easy to get a hold of by phone, and never had an issue with the occasional inspection. On the rare occasion where I’d need to enter the property, I’d give him a day's notice and everything was fine.

Ironically, Dave looked bad on paper. He had a very low credit score, because he walked away from a large mortgage after the crash. He also had pets, which worries most property owners. But in actuality, Dave was as good as it gets. After a few years of bliss, Dave had to move on though, and we got a new tenant, Steve. Unlike Dave, Steve had great paperwork. Awesome credit score, no pets or kids living with him. He even claimed to be a self-described ‘neat freak.’ We were sold.

As you might have guessed, Steve turned out to be a horrible tenant. He was perpetually ten to twenty days late with paying his rent, nearly every single month. While this worried us a bit, he always paid the late fees, so we allowed it to continue. A few months later, things got worse, and twenty days late turned into over thirty days.

A Perfect Storm

It was around this time that a perfect storm started to brew. Our favorite property manager Kate left for another broker, and our property was handed over to a different manager, Shelly. Shelly already had dozens of other properties she was managing, so she was swamped. She didn’t know our situation. No personal touch. In fact, she often got details about our property wrong and didn’t communicate well. She took our late rent problem and made it worse.

This past November, the very first time Steve was late more than 30 days, Shelly encouraged us to wait another month and see if he would pay. Possibly due to his track record of late payments, but also probably because she didn’t want the hassle of starting the formal eviction process. When December rolled around and he was two months late, Shelly told us not to evict someone right before Christmas. She played into our emotions, and so we waited.

When January came, I contacted Steve directly and made him an offer. If he left by the end of the month, I wouldn’t file a formal eviction on him; he just needed to get out so I could re-purpose the property. In the county I live in, a formal eviction means you can’t rent again in the county for five long years, so I considered this a very considerate offer.

He assured me that there was no need to worry, however. The money was coming. He even sent me a screenshot of his PayPal balance showing funds that were ‘on hold’ from eBay sales. Shelly persuaded us to give him a few more weeks (this is an example of a bad property manager). Contractually, I had to continue paying money to Shelly each month for that bad advice, regardless if rent was collected or not (this is an example of a bad management contract).

Enough Is Enough

When February came around, my patience was gone. At this point Steve was over 90 days late and over $3000 behind on rent, not even counting late fees. I tried to get in touch with him, but he had changed his phone number. I told Shelly we needed to file for the eviction. “Sorry Joel, I can’t file for the eviction until you mail me a check for $250 for the associated fees.” This was puzzling.  “Can't you take it from Steve’s security deposit?” I asked, frustrated by the situation. “No, we can’t touch that money yet.”

My property manager telling me it's OK the rent is 90 days late
My property manager telling me it's OK the rent is 90 days late

So I mailed the check and waited. Weeks went by with no news. I finally realized that the best way to get this management company to move their ass was to incentivize them. “As soon as we get this property vacated” I said, “I want to put it on the market for sale. No new tenants.”

Suddenly, things started moving. When the judge took too long to sign required paperwork, the management company visited the property to find that Steve had already abandoned it. The power was off, the water was off, and there was a fridge filled with rotting food and garbage all over the house. The smell was apparently so offensive that instead of asking me if I wanted to clean the property, Shelly decided to hire professionals to do it, at a cost of $700, without confirming with me first.

Perhaps the strangest experience for me in this adventure was the damage to the property. It was beyond bizarre. Steve stole our smoke detectors, our air vent registers in the ceiling, our fire extinguisher, and an interior bathroom door. He also removed many other doors from their hinges, and ripped up the tracking system for the closet doors. Not the biggest expenses to fix, but still, so very bizarre!

A Postmortem

In the engineering world, after a project fails, we have a meeting with all stakeholders involved to understand what went wrong, and what we would do differently in the future. We call this lessons learned meeting a postmortem. For those of you in the real estate game, here's our lessons learned.

I should have seen the warning signs. Unlike our good tenant Dave, Steve never wanted us to enter the property. It would usually take 5 minutes of loud knocking and repeated phone calls just to get him to answer the door, and when he answered, he would only open it a crack so I couldn’t see inside. When I came over to put up hurricane shutters before the big storm we had last year, he wouldn’t let me inside, and raced to the back of the house to close the blinds before allowing me access to the back patio. When I told him we’d be back the next week to take the shutters down, he assured us he could handle the task himself. Five months later, when he abandoned the property, the shutters were still up.

Sure, this was partly our own fault. The signs were all there. Why weren’t we inspecting the property more frequently? Well for one thing, the house is a forty minute drive south of where we currently live, so trekking out there every weekend to spy on our tenant was not high on our to-do list. Also, we hired a property manager to take care of this for us, so we could relax a little bit on the weekends after spending fifty hours working jobs we don’t enjoy. The management company held quarterly inspections (or at least, they said they did), and never notified us of anything unusual.

Additionally, things went so smoothly with our previous property manager Kate that we didn’t even realize all the things she did on our behalf. Kate didn’t take crap from anyone. She solved small problems all the time, most of which we didn’t find out about until after they were already resolved. She felt like a team member who was looking out for our property for us. This is how a good property manager should feel. Otherwise, why else would you give up 10% of your revenue?

Our new property manager Shelly didn’t do much of anything, other than call us to tell us that while we wouldn’t be getting a rent check each month, we still owed the management company money. She made no attempt to familiarize herself with our property or our situation. For example, I told her numerous times that Steve had only been renting from us for a few months, and yet she’d often say “give him a few more weeks on the rent… he’s been a good tenant with you guys for years, hasn't he?”


Real estate has been an adventure for us. I haven’t even told you about the crazy time we had selling the property. The insane buyer who wanted us to hire a licensed contractor to change some light bulbs, and show her an invoice. The drama with the property appraisal coming in thousands of dollars less than our contract price, and the buyer wanting to walk. The crazy closing costs that consumed over 11% of our sales price, which itself was only 80% of our purchase price over a decade ago. While a lot of people made good money in real estate over the past decade, my wife and I were not among them.

Enough complaining though. These are sunk costs. The past is behind us, and we’re finally done with that property. No more late night phone calls. No more giant HOA payments. No more pleading with tenants for rent payments. Much of our misfortune was due to bad timing, impatience, and lack of due diligence on our part. I still think we learned a lot during the process, and the lessons are probably worth the money we paid in on our real estate ‘investment.’ Besides, with a savings rate of over 80%, we're able to afford a six digit mistake like this and still make it through ok.

So the big question… why did we sell at a loss? If we had waited and rented for a few more years, couldn’t we have recouped our losses? Well, possibly. But we already waited over a decade. There are no guarantees the property would go back up to its bubble heights, either. There’s an equal chance the values will drop again in the next few years. Plus, we were tired of late rent payments. We were tired of being under contract with our crappy property management company. We were tired of all the work that went into fixing up and cleaning the property between tenants.

In the years since finding the FI community, we’ve embraced the passive “Simple Path” to wealth that Jim Collins describes in his stock series and book. These are genuinely passive ways to build wealth. While real estate is an equally valid (and potentially even faster) way to build wealth, it is not truly passive. Even when we had our excellent property manager Kate, it was still work. And we don’t want more work at this point in our lives. We already sit in cubicles 50+ hours a week at jobs we don’t enjoy. Time is the thing we are short on; not money, and certainly not work. So for right now, I am happy to report that we are taking a nice long break from real estate.

In FI, we'll likely have plenty of time for DIY projects, and will likely jump back into the real estate game. The wife enjoys it more than I do, spending hours browsing Zillow and scheming about various housing projects. With time and planning, I could see us buying four or five small rentals in FI, and diversifying our income stream. With all of our lessons learned, I could see us successfully skipping the property manager and doing everything ourselves. But for now, we want to keep things truly passive, and unlike Steve, Vanguard has never been late on a dividend payment.

There’s one more thing we haven’t discussed though. One other big reason we wanted to cash out now, even at a loss. The truth is, we have plans for those home sale proceeds… On the next Financial 180!

Frugality vs. Sanity

A few years back, my wife and I were presented with an interesting opportunity. A family member, let's call him Mike for this article, wanted to retire to Florida to take advantage of the amazing housing prices here. At the bottom of the market, homes had dropped 60%-70% in value from their 2007 peaks.

The problem was that Mike was still over a year away from retirement. He offered us the opportunity to live in his new house rent free, as long as we maintained the property and paid the utilities. He sold us on the fact that we could then rent out the townhouse we lived in at the time to help increase cash flow and pay down our horrible upside down mortgage.

I mulled over the idea for a few weeks. I wasn’t particularly crazy with the location of his property. It was far in the outskirts of town… too far for city water even. Instead, it had a well in the front yard and an aerobic septic tank and drainfield in the back. There were no sidewalks in this area, let alone bike paths or crosswalks. Moving here was going to be a big step out of my comfort zone, especially since I’d be leaving my cushy townhouse in its well manicured gated community.

I was hesitant, but my wife insisted, so we moved a few weeks later. We did rent our townhouse out shortly after, but the rental income wasn’t enough to pay the mortgage, let alone the expensive HOA. Still, it was better than nothing, and the extra cash did help accelerate our mortgage payoff. Months later, when we discovered MMM and began our financial 180, we decided that we’d do everything we could to pay off that mortgage as quickly as possible. This is when we increased our savings rate to over 80%. For you Dave Ramsey fans, we were going full on gazelle.

While we were successful in paying off the mortgage in less than two years, we made ourselves miserable in the process. Here’s what we still had to learn, the hard way.

Location, Location, Location

The primary problem with our house-sitting plan was the location. This house was a 40 minute commute to the office, and 15 to 20 minutes of driving just to reach civilization. As MMM face punched us through the computer screen, I convinced my wife that we should stop using the car on weekends.

I missed the big picture though: we needed to live closer to work to drive less, not punish ourselves with isolation on weekends. We couldn't walk or bike anywhere interesting, so we spent most of our weekends sitting at home. Alone. Friends didn’t even want to come visit because we were so far away. After a few months, my wife had enough.

I glanced over to her. I could tell she was frustrated with our situation.
“Yes dear?”
“I’m getting cabin fever.”

I knew she was at the end of her rope… but we were so close! At this point we had roughly a year left on the mortgage, and I wanted it done. So we decided to double down. We cut out every expense we could think of. We stopped eating at restaurants completely. We pushed ourselves to limit. And then, Mike moved in.

Fully Out Of My Comfort Zone

It all happened very suddenly. One weekend, we received a text from Mike saying he was moving down to Florida. We didn’t have time to make any move out plans. The very next weekend he was here, along with a full house of possessions.

I have a confession to make. I'm a bit of a control freak. My wife can attest to this. I get feedback at work reiterating the same. I’ve actually gotten better over the years, but living with Mike was a true test for me. Don’t get me wrong- he’s a nice guy, and I enjoy his company (and he may be reading this blog!). But there are some things I just don’t handle well.

Leaving doors open, for example. I have two cats, who are part-time escape artists, and leaving doors open is an invitation for them to run out. It’s also an invitation for flies to come inside. So. Many. Flies. In the kitchen. In the sinks. In the refrigerator. In my bedroom. Where did all the flies come from?!

Not to mention, this is Florida, where the A/C runs almost non-stop in the summer. I try to keep my thermostat around 80, which is not comfortable but still tolerable. Keeping the doors open does NOT help with this. I was also still paying the electric bill, remember.

My two escape artists
My two escape artists

My other pet peeve was dirty floors and sticky counter tops. With Mike's eyesight not what it once was, the floors and countertops in the kitchen were always in a superposition of both sticky and dirty. At first I would clean them religiously, but then, as I wore down, I just stopped. This was his house, after all. If he wanted to leave the doors open and the floors dirty, it wasn’t my place to complain.

We could have moved. We should have moved. But greed took hold of me. “Less than a year left on the mortgage… we can do this!” I reassured my wife, and myself. I was obsessed with increasing our savings rate. Every day, I wanted to come up with something new to bring our savings rate up. I sure as hell didn’t want it to go backwards by moving out of a free house. I just convinced myself I was strengthening my money mustache and practicing tolerance.

My House, My Rules

But then, other things started to bubble up. Mike was living a very different life than we were. The wife and I both worked 10+ hour days and liked to go to bed early. Mike preferred to stay up into the late hours of the night conversing with us. We liked to stay home and cook, but Mike preferred we join him at fancy restaurants multiple times per week. This is an expensive hobby.

The Wife and I also enjoyed working out in our home gym. Mike would poke fun and encourage us to skip the gym to go shopping with him. When we pushed back, he’d go out on his own, coming home in the wee hours of the night. It was like we had a teenager in the house.

But unlike living with a teenager, this was his house, his rules. The harder we pushed back, the more he asserted his position. Our marriage was beginning to strain with the stress of the situation. And our relationship with Mike was deteriorating. We needed out.

Not a Moment Too Soon

Perhaps we were ungrateful. Maybe we just expected different things from one another. But one thing is certain: moving into our own house was an immediate boost to our sanity. Our lives were instantly better. Our 40 minute commute turned into a 10 minute commute. Our marriage improved. And our relationship with Mike improved, as well. Joining him for a dinner out once a month now is a pleasure when we get to go back to our own homes afterwards. We simply needed our own space.

The truth is, we should have moved out much sooner. All this stress over a few hundred dollars per month. Who cares if it added a few extra months on to our mortgage payoff plans? A few months is a small price to pay for sanity and happiness.

Had we moved sooner, home prices would have been cheaper, too. We waited so long to move that we completely missed the buyers market in our county, and bought back in just in time for a small local housing bubble. We made mistakes for sure, but we also learned a few valuable lessons.

First, it is perfectly OK to spend money on the things that actually make you happy. The original plan was only to house sit for Mike until he was ready to move in, but I got greedy. I was penny wise, pound foolish. Not to mention I didn't consider the gasoline and time savings of living closer to work. Mustachianism is about reducing spending in areas that don’t bring you happiness so you have more money to spend things that do. Living close to work, in a house that we own and make the rules for, brings us real happiness.

The next lesson I learned is that it's actually a great exercise to go outside of your comfort zone. You don’t know what's valuable to you until you go without it. I learned that I truly value sidewalks in a community, while at the same time realizing well water isn’t so bad with proper treatment equipment. I learned that location is absolutely the most important variable when choosing where to live, while amenities like entry gates and fancy fountains are overrated. And I learned that relationships with family members improve when everyone has space to live the way they please*.

Finally, I learned that there is such a thing as pushing frugality to the extreme, and it’s not healthy. While my threshold may be different than yours, it’s important to acknowledge that you can get so obsessed with savings that it lowers the quality of your life and your relationships with family and friends. I’m not the first to go through this… apparently it is somewhat common here in the FIRE community. The Mad Fientist went through this in a story that seems eerily familiar. Just as I did, he made himself (and his wife) miserable for small increases in savings rate. He couldn't see the forest for the trees.


While I wish we would have moved sooner, I’m still happy I tested my limits. I feel like I know myself better, and am better prepared to handle similar situations in the future. I also have more respect for familial relationships, and doing what is necessary to keep well-defined boundaries. These experiences have helped me become a less obsessive control freak, and a more laid back guy in general.

Most importantly, I’ve realized that you need to be happy on your journey to financial independence in order to be happy when you reach the finish line. Life is a series of habits and routines, and other FI bloggers have reiterated the importance of the journey! If you're a stressed out, unhappy mess now, stopping full time work won’t magically make everything better. Solve these problems along the way and discover your true self now.

Enjoy the ride, even if it takes a little longer to get there. It’s so worth it.


*Ironically, a month after we moved out, Mike put his ‘retirement’ house on the market to take advantage of the mini bubble in the county. He sold and tripled his money. Mike has always been a shrewd investor.

Why You Can’t Retire

Last week, I read along on twitter and bit my lip as MMM tried to talk some sense into a mainstream finance writer & editor who tweeted a link to a New York Times article. Above the link, she wrote:

“The basic flaw at heart of so many retirement calculations: you cannot possibly save enough to live on for 30 YEARS.”

This wasn’t tongue-in-cheek. She was serious. I don’t know this writer, but she appears to be a professional. Her name is Heidi, and she has a twitter verified check-mark next to her name. She’s been a self-described financial journalist for 18+ years. Her twitter bio shows she’s an alumnus of Marketplace, Guardian, and the Wall Street Journal. In all seriousness, this woman is significantly more qualified to talk about finance than I am!

As Pete, myself, and numerous other defenders of Financial Independence chimed in, she dismissed us one by one. Pete was a special case: he and his wife had high incomes when they were employed. The stock market is dangerous because of frequent dips and recessions. The year 2008 was ‘proof’ that the stock market was not the vessel to choose for retirement savings.

Others came to her defense, reminding everyone that saving a million dollars is incredibly hard, that most Americans don’t make enough money to save let alone invest, and that low-income is the problem, not lack of saving. Eventually, she accused someone of mansplaining finance to her, and the conversation got quiet.

You Cannot Save Enough

Perhaps Heidi’s bold statement is technically true. From her perspective, Pete, myself, and the entire FI community are a bunch of frugal weirdos. We don’t play by the standard set of rules. We save the majority of our dollars and don’t take on debt like everyone else, which is why we can live comfortably near the traditional poverty line. Our methods haven’t made their way into mainstream financial circles yet. At the time of this writing, we are just a bunch of outliers.

The mainstream financial community would agree with her. The New York Times article she linked spewed the standard “people are all living longer, savings is hard, we have to work forever” complainypants sentiment.

Let’s talk about the average American household, with their average $168,614 mortgage, average $27,141 auto loan, average $15,762 credit card debt, and average $48,172 student loan debt. If you live in this household and don't change your spending habits, then Heidi’s statement is true: you likely can't save enough to live this way for 30 years! If you are expected to continue down the average consumer path, then yes, saving for retirement is going to be an insurmountable challenge for most Americans, even the ones with high incomes.

Let's Talk Spending

So, what’s the big deal here? Someone was wrong on the internet! Is this really a shock? Why get worked up over this? Why is Heidi different than any other member of the internet retirement police, telling us what we are doing is impossible?

What do you want me to do? LEAVE? Then they'll keep being wrong!
What do you want me to do? LEAVE? Then they'll keep being wrong!

Because it’s an opportunity to start a dialogue about underlying assumptions. Heidi clearly has the assumption that the average American doesn’t earn enough money to save for retirement. She seems to think it’s an income problem. I disagree. I am under the assumption that the average American doesn’t put any effort into budgeting or even tracking their expenses, and is therefore incredibly wasteful. I think it’s a spending problem.

So who’s right? Well, outside of the FI community, no one really likes talking about reduced spending. It’s easier to blame income: if I had a few hundred dollars more each month, I’d be able to save. If I made as much money as Pete and his wife, I’d be able to save. If I won the lottery, all my financial problem would be solved!

But this just isn’t true. The hedonic treadmill immediately robs you of the imaginary additional hundred dollars. Lottery winners don’t hold onto their winnings long and end up back at square one. Most Americans simply have a spending problem they don’t realize because everyone else has it too, and it's become completely normal. I suspect the same is happening in Canada and other wealthy nations.

Change Your Perspective

At the end of the tweet storm, Mrs. MM chimed in with what I consider the smartest statement on the entire thread:

“I think a huge shift in perspective has to happen to understand early retirement. That can't happen on Twitter.”

This. One thousand times this. The truth is that savings doesn’t have to be hard, but people need to shift their perspectives to realize it. They need to challenge many popular assumptions.

For example: having your own home and two cars in the driveway is practically a right in the United States.  I mean, everyone deserves these things, right? It’s the American dream! Check out this ad from Quicken loans to see what I mean:

“None of this makes rational sense. It only makes American sense. Here, the hard things show us who we are. Leaving your job to start your own thing. Having a kid, when you still feel like a kid. Signing a 30 year mortgage on a home. Scary? Sure. But no match for our colossal self-belief. We’re supposed to do scary. Without scary, we don’t get to be brave. BUY IN.”

To those outside the FI circle, this commercial seems innocent enough. But to me, I see predatory marketers pressuring a new generation of young home buyers to sign the damn contract and literally BUY IN for 30 years. As argued on Millennial Revolution, if you're in a high cost of living area, and you BUY IN on an ‘average’ sized mortgage, this is pretty much guaranteeing you won't have enough money at the end of the month to invest for 30 years.

Or perhaps longer… my hardworking parents owe more on their home today than they did when they took out the mortgage three decades ago… these are dangerous products when used irresponsibly. Remember, in old French, mortgage literally means ‘death pledge.’

The American Nightmare

Owning your own home is not a right. It’s not the American dream. Suburbia is nothing more than a marketing ploy. The mortgage industry is big business. There is significant profit to be made in interest payments, as we discussed in our last post. Remember: banks buy and sell mortgages, not houses. They don’t want houses. Houses are terrible investments.*

There’s nothing wrong with buying a small, affordable house when you have a respectable net worth and a sizeable (say, 50%) down payment. But treat it like the luxury it is- not a right! You don’t need a house: you can rent a small apartment. Better yet- rent a small apartment with roommates. Or live with family for a few years after high school or college. Dave Ramsey has a quote that has always stuck with me:

“If you will live like no one else, later you can live like no one else.”

Essentially, if you are willing to live slightly ‘less than comfortable’ for five years or so, you can spend the rest of your life living exactly the way you want to.

So when shopping around for that house, don’t forget: housing costs scale with square footage. The larger the house, the higher the taxes, the more it costs to insure, the higher your air conditioning and utility bills, and the higher and more frequent your maintenance expenses. With housing, less is more.

A similar concept applies to cars. Shiny new cars not only have a higher sticker price, but are significantly more expensive to insure. If you buy a high performance car, you’ll likely need to pay for premium gasoline. You’ll likely drive it more aggressively too, using even more gas. And luxury cars indirectly encourage driving more often, scaling the above costs even more.

When you get your driver’s license here in Florida, they reiterate that driving is a privilege, not a right. I completely agree. You don’t need a car for every member of your family. Especially not a shiny new car. Save up and buy a small used car for $5k cash, change the oil, tires, and brakes regularly, then drive it for ten years. Worried about increasing gas prices, or perhaps your family's safety driving in a small car? DRIVE LESS. Carpool more. Utilize public transportation. Move closer to work. Walk. Rearrange your life in such a way that you are in control of, not a slave to, your car.

Let’s Fix the Leak

OK. So you’ve taken my advice: You've moved closer to work, or relocated to a more affordable city. You rent or own a small affordable house, and share an affordable used car. You’ve done everything right but you STILL can’t find any money to save at the end of the month. Perhaps you are a single mom, working near minimum wage just to pay the bills.

Well then, let’s track your money for a month on Mint or Personal Capital and see where it’s going. Compare your monthly household spending on these common problem areas to mine:

Cable television $0.00
Car payments $0.00
Cell phone plan $50.00
Childcare $0.00
Cigarettes and other vices $0.00
Dry cleaning $0.00
Gasoline $40.00
Going out to eat $100.00
Insurance (car, home) $88.00
Interest on cars, credit cards, loans, etc. $0.00
Landline home phone $0.00
Lottery and gambling $0.00
Monitored alarm service $0.00
Soda and other gas station conveniences $0.00

Cut out the waste from your spending!

How do you stack up? You don’t actually need to spend money on any of the items above. Any spending in these categories should be planned and intentional. I used to pay for a monitored alarm service, until I realized I was just being paranoid. I used to pay for cable TV, until I realized I was paying money so I could be less healthy and have less free time. My long car commutes and dry cleaning bills were the worst: I was literally paying money just to work! I had to change my perspective on what expenses were ‘normal', vs. what expenses I actually needed in my life.


JD Roth makes an excellent point in his interview with Brandon on the Mad Fientist Podcast. I’ll quote it here:

“…Take responsibility for your situation, for your future, for your destination, where you’re going. Don’t wait for somebody else to solve your problems for you. I like to say your situation may not be your fault, but it’s your responsibility to get out of it and to change it if you don’t like what you’re in.”

He goes on to reiterate that it doesn’t matter how or why you reached your current place in life, what matters is to focus on the hand you're dealt. This is crucial to achieving the shift in perspective that Mrs. MM mentioned. YOU are in control of your money! If you don’t have have any money to save at the end of the month, that is your own decision, whether you recognize you are making it or not. It is YOUR responsibility to fix it.

There are a growing number of us becoming financially independent and proving that you absolutely can save enough for a 30+ year retirement. If enough of us change our perspectives on money, we can change mainstream financial advice. Start tracking your spending! Cut out the waste. Don't fall for the ‘American Dream' of a brand new house in suburbia with a white picket fence and two new cars in every driveway.

With the right perspective, we can all enjoy a very early retirement, whether Heidi thinks so or not.


*This doesn't mean you can't make money in the real estate market. Many do, with intelligently purchased flips and rental property portfolios. I am merely challenging the age old “your house is a great investment” advice. Absolutely wrong.