I just read [amazon_textlink asin=’145360121X’ text=’Early Retirement Extreme’ template=’ProductLink’ store=’jonluskin-20′ marketplace=’US’ link_id=’cdbb5bdb-70a6-11e8-8733-7fcf6011c191′] by Jacob Fisker. It wasn’t bad. Here are a few thoughts on it.
Take The Red Pill
The first section of the book is eye-opening. For example, consider that Gross Domestic Product (GDP) is less a measure of all goods and services produced, but a measure of the rate at which we
- extract resources from the ground (i.e. oil, aluminum, etc.),
- transform those resources into staff (i.e. iPads),
- use that stuff, and then
- put that stuff back into the ground (i.e. landfills).
Obviously, Fisker is anti-consumerism. This makes sense for an early retiree. Extreme savings rates (75% in the case of Fisker) are only possible when you shun consumerism.
For Fisker – much like MMM – he’s not shunning consumerism for the sake of early retirement; he’s shunning consumerism in an effort to be efficient with resources. (For MMM, it’s to save the planet.) Of course, the byproduct of anti-consumerism is a high-savings rate (or planet-saving); and thus early retirement.
If early retirement is your thing, look to Fisker and MMM. Focusing on efficiency as the journey – and not early retirement as the destination – is your best bet for reaching early retirement. That’s because if your paradigm for early retirement is deprivation, you’ll likely fail.
It’s the same for a fad diet for the same reason. If the journey is untenable, the destination is unachievable. The journey (or means) must be enjoyable and sustainable. Otherwise, it’s just not going to work.
I’m Somewhat Efficient
For me, this is good news. That’s because I really enjoy both efficiency and savings the planet. Of course, I could be a lot better at both those things. But, I do have my moments. Not too long ago, I repaired a broken sandal. (Post forthcoming!) And I can’t say enough how much I enjoyed the process and the result:
- I saved money – by not having to buy a replacement.
- I saved the planet – from not only keeping this sandal from the landfill, but by lowering demand for a replacement – and thus all the pollutants that come from producing a sandal.
- I fixed something that was broken.
Math on Savings Rate and Working Years
Probably because I’m a math nerd, I enjoy the following part of the book the most. Fisker quantifies the value of saving money relative to working. For example, if you save 5% of your income, it’ll take you 20 years to be able to afford to take one year off (ignoring investing and inflation).
Let’s stop for a second. And let’s take a moment to revisit that idea. I feel like that’s a big deal. Here it is again:
You need to work for 20 years to take one year off.
Who wants to work for 20 years just to take one year off? That sounds crazy.
But, if you save 75% of your income (like Fisker did), you can work for one year and take the next three years off. There is something about that math that is just so powerful. Again, it’s a big deal – so let’s repeat it:
Work for one year and take off three.
Applying this to our life, we’re roughly in the 20% savings rate – which is shitty. That’s because it means we need to work for five years to afford one year off.
. . .
There’s a lot more to the book. The above are what stuck out to me (and what I felt like writing about.) But, if you want to learn more, you can always [amazon_textlink asin=’145360121X’ text=’read it yourself’ template=’ProductLink’ store=’jonluskin-20′ marketplace=’US’ link_id=’bd2e4c4a-70a6-11e8-8e78-95d15e8722c3′].