EXPOSED - The Money Monk's Spending for February 2012

Well here it is, all my dirty laundry laid bare for all to see. This month was slightly atypical for a couple reasons, which I will get into later. But without further ado, here is the month's spending:



FEBRUARY 2012 SPENDING:




Housing: 410
Utilities: 110
  - 80 electricity, gas, water
  - 30 internet
Phone: 90 (phone + text + data)
Food: 220.2
 - Groceries: 150.8
 - Restaurants: 69.4
Gas: 169.28
Crossfit Gym: 195
Gifts: 271.44
Misc: 170.88
 - entertainment: 17.00
 - projects, home improvement: 19.46
 - Totally unnecessary stuff for myself: 74.63 (comics, motorcycle helmet, pants)
 - other: 59.79

TOTAL Spending: 1636.8 

A couple notes: I am counting expenses as they happen, so that's why you don't see some things like car insurance. I pay less than monthly, so it will show up in the month I pay it. This method will cause more variance for the individual months, but there is less chance for error, it's easier, and after the year is done the total will be the same.

The gifts bill is unusually high due to a Valentines day error. I thought the outrageous price of the nice meal I was buying was for a couple, when that was actually the price for each person. Doubly outrageous! OUCH!

Gas bill is high due to having to travel 280 miles round trip once a month for my National Guard obligation. So it is a recurring cost for now, but not due to my general lifestyle. So that accounts for about 50-60 of the gas bill.

I am obviously unhappy with the gifts bill being so high, but that is definitely atypical so I am not too worried about a repeat of that. Luckily I had some atypical income boosts as well to offset it. Other than that, I want to get my food below $200 next month, and get that Misc down as well.


FEBRUARY 2012 INCOME:

Paycheck: 1008.73
Paycheck: 1008.74
Army Drill pay: 607.88
Birthday Gift Cash: 300
Home Escrow refund: 359.42
Online earnings and junk sales: 161.94


TOTAL INCOME: 3446.71

TOTAL SAVINGS: 1809.91
SAVINGS RATE: 52.5%

Relatives were generous for my birthday, and drill pay was for a day longer than usual this month. To top it off I got a refund of an overpayment into my mortgage escrow account.
Overall I managed a 52.5% savings rate, which is inline with my goal for the year. Which is good, but my earnings were unusually high this month, so even without the high gift bill I will have to cut some spending to stay above a 50% savings rate, or increase income somehow.  The obvious big one is my $195 dollar Crossfit gym bill. But it is important to me, so for the time being I am leaving that be. Although it is good to know that if push came to shove I could instantly drop $200 off my monthly spending.

Needless to say I failed miserably on my goal to only eat out twice over the month. I think it was more like 8 or 10 times. Instead I am going to go with a more realistic target of once a week for next month, and an overall food bill of under $200, and Misc under $125.


Well there it is. On to the next month of (semi)frugal living and saving for retirement.





-The Money Monk

Are you correctly counting ALL your costs?

When calculating your expenses you have to be careful not to disregard bills and spending that doesn't necessarily happen on a monthly basis. It's easy to write down all the bills that you have to pay every month and say "Ok, I'm spending 1800 a month". But what about expenses that don't happen every month? If you spend $600 every Christmas on gifts for your family, you basically have an extra $50 bill that month. So you can't really maintain your current lifestyle on $1800 a month (you'll also need an extra $12,000 before you retire!).

This is something that I am very bad about. My base monthly expenses are very low, but I have a habit of not thinking about expenses that are recurring but not necessarily every month. That is one of the reasons I have this blog, to keep a running tally of everything I am spending, by month, and later by year. This will give me a much more accurate picture of my spending, saving, and retirement needs.

keeping track of every expense for at least a year is the best way to do this. But even then there are some expenses you should consider. A typical house roof needs to be re-shingled about once every 15 years or so. If that is going to cost $5,000, then you really have an extra $30 a month you should be putting away for a 'roof fund'. This replacement cost can be amortized for other things too, like vehicles, appliances, etc. The costs are infrequent, but they are real and they are guaranteed to hit you at some point. So best be prepared. I personally use a general maintenance fund, and don't save for each of these things individually.

Some various expenses you may want to try to keep track of that happen less than once a month include:

- Car maintenance: oil changes, new tires, repairs.
- Gifts and holiday spending
- Vehicle registration
- Vacations
- Etc


So remember to keep track of ALL your expenses. It's the only way to make sure nothing slips through the cracks and  to get an accurate picture of your income/spending/saving balance. I am not trying to amortize each of these costs into a monthly amount, choosing to instead just keep track of every expense for a year, then get the totals. THEN I can calculate an accurate monthly cost of living, with less chance for error.

My Spending for the month of February will be posted within the next week. Stay tuned.



-The Money Monk

A new way of thinking about charity

Yesterday Mr Money Mustache had a reader case study that was very interesting. Of particular interest was the fact that while the reader's income was more than his spending by only 100 dollars, he was giving $250 a month in undisclosed charity donations, but luckily had a huge emergency fund of 18,000 in cash.

The debate at the MMM site focused mostly on the merits of holding the emergency fund vs paying down a mortgage or investing, but what got me thinking was the charity giving, which the reader described as 'nonnegotiable'. Based on the percentage, I assumed the charity is tithe to a local church, but I could be mistaken, and for the point of this article, it doesn't really matter. But I had an interesting thought on the matter:

There is no particular reason why the money has to be given in monthly installments. It could be given in a large lump once a year, or in an even larger amount after 5 years. In the meantime, you could forgo having a separate emergency fund and invest that money instead, paying off a mortgage or buying income producing assets. If there was a legitimate emergency, you could borrow against the charity fund at 0% interest, instead of having to use a credit card or HELOC.

This method seems to address many of the issues that come up when trying to balance the issues of still giving to charity, having an emergency that can be accessed quickly, but also not giving up earning interest on your money.

So with this plan the charity, whatever it is, will end up getting the exact same amount of money when all is said and done, and you will have an emergency fund without having to adjust your monthly budget. And 'your' money will still all be earning interest and invested productively.

Something to consider if you make regular charitable contributions.



-The Money Monk

EVERY bill is a big deal

I mentioned yesterday how the savings rate drastically affects your retirement date, and today we're going to demonstrate just how much each little bill you have can delay your retirement.

Just to clarify, I am using the term 'early retirement' to describe the moment you have enough in investments to live off of the passive income created by those investments. Most people agree that you an safely withdraw 4-5% annually from your portfolio, so that would mean you would need 20 to 25 times your annual expenditure in investments to be able to 'retire'. So far so good.

So obviously the lower your annual expenditures are, the less you will have to have in your "stash" to be able to retire. But how much less? Most Americans think of their expenses in terms of monthly bills, so we'll use that.

Many people have a variety of things that they spend $50 or so dollars a month on each (haircuts, coffees, movies, subscriptions, whatever) and individually they don't seem like much. But in terms of how it affects your retirement date, these expenses are ALL a big deal. Check this out:

A single $50 monthly bill requires you to have an extra $12,000 in your stash to retire. And that's using a 5% withdrawal rate (at 4% its more like $15,000).

So that $50 cell phone bill? $12,000
That $50 cable bill? $12,000 more
$50 in haircuts? $12,000
$250 in food a month? $60,000

You can use this to find out just how much each of your bills will require you to save for retirement. When put that way, it is a lot easier to figure out why you should drop your food bill from $250 a month to $200, or lose the cable, or cut your own hair, etc.  I am constantly reminding myself of these facts to motivate me to save. Remember, even those little bills make a big difference!



-The Money Monk

It's all about the savings rate!

If you are interested in early retirement you may be surprised to know a couple things. First of all, it doesn't matter how much you make!

You may be shocked to hear that, but it's true. Literally the only thing that matters is how much you save as a percentage of your earnings. I know I have said this before, but it bears repeating, as nothing else controls when you will be able to retire more than your savings rate.In my opinion the above image is the most powerful message you offer when it comes to early retirement.

You may be saving 50,000 a year, but if you are taking home $250K then it will still take you 37 YEARS to retire and still be able to pay all the same bills!

Or you may only be making 25k a year, but if you save 13K then you can retire in just over 15 years!

So work on getting that savings rate up! You can do it by raising income, or by slashing spending. Or better yet, by doing both! That is what I am doing. My goal for the year is a 50% savings rate for the year as a whole. I have had a bad month as far as spending too much, but it still looks like I will be able to save 50%. I will do a post at the end of the month detailing my spending and income. But for now, just remember, it's all about the savings rate!


-The Money Monk

How to have a kick-ass garage sale

I sell a lot of stuff on Craigslist and eBay, but many items just aren't practical to sell online. Either they are too big, too cheap, items that people wouldn't necessarily be looking for, etc. So once I build up enough of these items, I hold a garage sale.

Things like clothes are very hard to sell individually on Craigslist or eBay, and are really too heavy to sell in bulk lots online, so a garage sale is perfect for these items. Other items that are best saved for yard sales are dishes and housewares, books that are not high demand, trinkets, nick-knacks, etc.

Here are a few tips to make your garage sale run well:

1. Try to have a good location. If you aren't near a major road, try to do it at a friends house. If you are too far out of the way people will just not want to drive all the way out there.

2. Wait until you have enough stuff. If you just have a tiny amount of stuff people simply aren't going to be interested. You will get a lot of 'drive bys' where people follow the signs but then don't bother to even stop once they see your paltry offerings. So just save up until you have enough stuff to at least cover your driveway. 

2. Put things on tables, shelves, or racks. You probably won't have enough tables for all your stuff, but find some way to keep it up off the ground. It makes it appear like there is more stuff, and it makes the things appear nicer/more valuable, whatever. Clothes sell much better hung up then in a big pile, so try to rig up something to hang them up on.  At the very least put down a blanket or tarp and set the items on that.

3. Mark everything with prices. I have sold many things simply because they see the price and it is much lower than they expected. If the price isn't listed, they are going to pass on things they aren't specifically looking for. But if they see that the books are only .25 for example, they will be tempted to buy them simply because they feel like they are getting a deal, even if they wouldn't have said 10 minutes ago that they wanted any books.

4. Use pricing schemes. There is a reason stores use these tactics; it works. Make things cheaper to buy in groups, buy one get one free, sell things as sets instead of individually. Instead of selling glasses for .50 each, sell the whole set for $5. Sell DVDs 5 for $10 instead of $3 each. Better yet list both prices, for individual items and cheaper to buy in quantity.

5. Make your signs large, white, and exciting. Brown cardboard signs are hard to see, so stick with white or orange or something like that. Don't just put 'yard sale', add terms like "huge' " super cheap' whatever. It works. I wrote 'epic garage sale' on my last sign, and people specifically told me that's why they stopped. Put signs at every location you can. No such thing as too many.

6. Use Craigslist to advertise. Make an ad on Craigslist for your garage sale. They have a 'garage sale' section, so use it. It's free. Make it earlier in the week, like Tuesday or Wednesday, then renew it on Friday afternoon so it shows up as a recent entry Friday night or Saturday morning. You can even make multiple different Craigslist ads for the same sale. 

7. Lower the prices as the day goes on. If it hasn't sold in a couple of hours, lower the price. It is better to get $5 than to not get $10. I can't tell you how many people set stuff out there with a price, don't lower it all day, then just throw it away when it is still there at the end of the day. If you were going to throw it away anyway, ANY price is better. Even a quarter. They are literally paying YOU to haul off your trash! So lower your prices!


That should get you started on your way to having awesome, profitable sales. Let me know if you have any tips or tricks for garage sales.



- The Money Monk

The best way to spend your time

One of the great things about living in this day and age is that we don't have to work all day just to make sure we have food to eat. That gives us plenty of time to do fun things, or hobbies, or complain about being bored.

I never really got the people who can't imagine not having a job because they are afraid of being too bored. Don't you have any imagination? I can easily think of 20 things that I would like to be able to do for an hour each day at least. But I guess that's the topic for another article.

But suffice to say we all have hobbies and activities and other things that we do to pass the time. As with everything else the average American does, this usually involves spending a LOT of money.

One of the best things you can do to reach financial independence, and lower your cost of living in general, is to try to engage in hobbies that actually make you money. Or at the very least are cost neutral. The activities don't have to make you a lot of money, just the fact that your time away from work is spent NOT spending money is extremely helpful.

Somebody's book writing hobby may only make them $10 a month from ebook sales, while they are spending 5 hours a week on it. Many people would look at that and say "he's only making .50 an hour, that's not worth it!". The fact of the matter is, this guy got to indulge in an interest of his for 20 hours last month and actually came away with MORE money than he started. So not only did staying busy writing keep him from spending money doing other things, but it actually made him a little too. And there is always the chance that one of these endeavors could take off and actually make a substantial amount of money.

Look for activities you enjoy that fit into one of the following categories:

1. Gives you skills that could be sold or traded (construction, mechanics, art, design, music skills, etc)

2. Allows you to make money (writing, blogging, ebaying/craigslisting,)

3. Basically free hobbies ( Reading, playing music, drawing, etc)



This is one area that I am good at. Most of my activities are either free or actually make money, even if only a little. The difference this can make over a period of years can be huge.




-The Money Monk

How do you value your money?

One of the best ways to increase your ability to refrain from spending money is to find some way to measure your dollars against that is meaningful to you. We are constantly bombarded with prices of various things, and hear of billion and trillion dollar figures tossed about flippantly on tv so often that the worth of a single dollar (or even five or ten) can lose its meaning and become sort of abstract.

Finding something real to anchor its value can really help you to see the opportunity cost of your spending and help you save.

I have written before about a number of meals you can make for a dollar or less. I could use that to 'value my money' if i wanted. For example, if I was about to go to the movies for $10, I should stop and think that I would be giving up TEN meals worth of money just to see one movie. That's 3 days worth of food. Is it still worth it?

Personally, I value my money by how many hours of my life it took to get it. Right now I only make about $17 an hour, so a $10 movie would cost me well over half an hour of work, and that is pre-tax! 

If you were really into calculations, you could probably calculate how many minutes earlier you could retire for each dollar saved! Now THAT would be some motivation!

How do you value your money?



-The Money Monk

Frugality doesn't have to hurt

Fellow financial-independence seeker Dividend Mantra has a great article about striking the balance between frugality and quality of life. This is something that a lot of people struggle with, especially in the beginning. I think one of the primary reasons people struggle with it is that they try to fit into somebody else's definition of frugal living.

If your goal is financial independence or retirement, there is only one rule that you absolutely have to follow:

Spend less than you make!

Other than that, it's just about how quickly you want to reach your goals and what you are willing to sacrifice to get there. And this will be different for every person. It's important to remember too, that the reason we want to be financially independent is to increase our enjoyment of life. If you are OK with being miserable all the time, then why does it matter if you are financially independent or not?

I have written before that my method is to save on the things that don't matter to me, so I can spend a little on the things that do.

Some people couldn't use 100 cellphone minutes a month if you paid them to, while another person just cannot fathom giving up their daily phone usage. Same goes for eating, car usage, and whatever else you are spending your money on. As long as your expenditures are controlled and part of the plan, it doesn't really matter what they are. So don't get caught up on working super hard and suffering trying to drop your power bill to $50 a month if it is a lot easier for you to shed $50 off your grocery or gas bill.

I am currently spending about 1500 a month on all my living expenses. If you take 100 people who are all spending that much, I guarantee our budgets are all TOTALLY different. And we would probably all be shocked at how much/little somebody else is spending on something we are spending almost nothing/ a fortune.

The key is to focus on eliminating WASTE, not just on eliminating an activity altogether. For example, there are a lot of things you can to do lower your power bill without actually changing your lifestyle at all. Same with pretty much every other category of spending. Obviously you should change your lifestyle in some categories, but you don't have to go extreme in every single one. Even Jacob Fisker of Early Retirement Extreme was spending $1200 of his annual $7000 budget on his martial arts training, because it was important to him. 

It's better to have a plan like: I need to save X% of my income every month for X years, then to just try to never spend any money, ever. Not only is the first type of plan more likely to succeed, but your life in the meantime will be a lot more enjoyable as well.


-The Money Monk

Don't step on what you can step over

I have always been a wilderness survival hobbyist, and have consumed dozens of books on the subject since I was a kid. In one book, I don't even remember which one, was a passage that I have always remembered, and I'm not even sure why. It was in reference to traveling through the wilderness in a survival situation, and doing so in a way to minimize energy spent and lower your risk of injury. The advice was, to paraphrase:

"Don't step on what you can step over, and don't step over what you can walk around."

I was thinking about this today and how the concept of not wasting energy or exposing yourself to unneccesary risk can be applied to your every life in a financial/spending sense. This is what I came up with:

Don't Buy new what you can buy used
Don't buy used what you can get for free
Don't try to get for free what you can improvise of re-purpose
Don't bother improvising what you can do without.


Just as with the wilderness survival example where you will end up walking around almost everything, if you follow this metric to its logical conclusion every time you go to buy something, you will almost always just end up realizing that you do not NEED whatever it is. In the occasional times that there is a legit need, following this metric will at least allow you to accomplish that need in the most frugal and cost effective way possible.




-The Money Monk

The best way to get more traffic to your blog or website

I've mentioned several times before that part of my plan to reach financial independence is to increase my income through online ventures. This includes blogging, videos, and whatever else I can come up with to do online.

A lot of people have tried this before though, and most don't end up making any money. Not any serious money anyway. It's easy to throw ads on your blog and start making money. Anybody can do that. Living off the income from a blog is a different story.

There is really only one major difference between the guys that are making 50 cents a month, and the guys that are making 5 grand a month: Traffic.

Traffic is what drives everything online. If you have a lot of traffic you WILL make money online, regardless of how shitty your site is. If you don't have traffic, you won't get money, even if your blog is totally awesome. Traffic trumps all when it comes to making money online. You want more money, get more traffic.

And most people understand this to some extent. The problem is, it's like a recipe for elephant soup (step 1. Find an elephant) you know what you need, you just don't know how to get it.

Sometimes people's blogs will go viral, or get picked up by a big news site, or any number of other things that will gift you with a bunch of views and a nice jump start, but you can't count on that. Luckily the most guaranteed way to increase your traffic is something that anybody can do:


UPDATE YOUR SITE!

Seriously, it seems like it goes without saying, but it doesn't. Plenty of people have great ideas for websites, blogs, or videos, but they just DO NOT make enough content. And that will KILL your traffic, especially in the beginning. Once you are at super high levels your traffic can be somewhat self-sustaining (Maddox may only make a post once every 6 months and still get millions of views) but that isn't going to work for you. He has already built up a huge viewer base with links to his site all over the internet.

The bottom line is, if you are producing a content based website you have to update your site at a MINIMUM twice a week. When you are getting started it should be more like every day. Slightly less is necessary for videos, while blog posts should be on the higher end. Multiple times a day is even better. 

The way the internet works helps your traffic snowball, and the more content you have, the better. Also, a lot of traffic will be based on repeat viewers. So give them a reason to come back. Even if they LOVED your last article, if they know you only put out content once a month, they aren't going to check back in that often.

Each article, blog, or video you do will get picked up by slightly different search terms, and different people, and has its own chances of getting linked, etc. That's what makes the traffic snowball. Each of your articles may only get one person to come back and check in next month. But if you have 100 articles, then your article next month will get 100 views. So maybe that article gets 5 or 10 people to come back. So then next months 30 articles get a total of 150 to 300 people stopping by regularly. So you can see how it builds. And by simply having more content you are increasing the chances that eventually SOMETHING of yours will get mentioned by another big site or blog and give you a decent chunk of traffic.

This blog is only 2 months old, and it's traffic has already surpassed another blog of mine that I just do for fun when I feel like it. But that blog has been around for 7 years!



If you have a content-based site, you are expecting people to show up for that content. So give them what they want! UPDATE YOUR SITES!!




-The Money Monk

My Goals for 2012

I wrote a while back about some of my longer term goals, but today I am going to list a couple of specific benchmarks I am trying to reach by the end of 2012.

- Average at least a 50% savings rate for the year

- Increase my income from online ventures to $250 a month. I am currently at about $100 from all sources combined. (this isn't including eBay or Craigslist sales).



In addition to these I will continue to create new mini-goals each and every month, as I have been doing.

Financial independence, here we come!




-The Money Monk

what's the difference between Financial Independence and Early Retirement?

I have seen some forum posts and articles among the early retirement community about the proper terminology to use, and what most accurately describes our goals and situations.

Here's how I see it:

Early Retirement: I consider retirement to be receiving most of your income from investments, and your current spending level is not dependent on any extra income other than your investments. This is not to say that you don't do anything to earn any extra money, just that you don't have to.

Financial Independence: You have enough in income from various sources that you no longer are enslaved by what would be called a day job, but you are predominantly living off income still, not savings. But that income may be adsense blog revenue, ebook sales, rental income, online videos, ebay sales, etc. So you are still living off income from 'work' but the sources are varied and are not typical jobs.


So while my long term goal is to be independent of all income sources other than that generated by savings, my current goal is to simultaneously develop alternate streams of income. And I'm well on my way. Keep reading to follow the journey.




- The Money Monk

Fnally Getting My Homestead Tax Exemption

I just submitted the paperwork to get my homestead exemption from my property taxes! I wasn't eligible until i was a resident on the property as of Jan 1st. So since I moved in back in July I had to pay full taxes, even though it was my primary residence.

The specifics vary by state, but in most states you can get a property tax deduction of some kind for your primary residence. Usually this is in the form of a deduction off the assessed value of your house. And this is definitely something you should take advantage of. I am ALL about saving money, especially when i'm saving it from going to the government!

Here in my county in Florida, property taxes are pretty high, so for my $110,000 house the taxes were still around $200 a month (ugh). However the homestead exemption removes $50,000 from the value before the taxes are assessed, so from now on they will be just over 100 bucks a month. So my savings will be about $1000 a year! Booyah

That is going straight to the stash for early retirement.

Always check and see what kind of deductions are available for you, as some of them can be substantial.


-The Money Monk

Boost your craigslist sales

As I have mentioned before, the quest for financial independence involves not only decreasing spending, but also increasing income. This allows you to reach your goals quicker than by just focusing on frugality.

One way I personally work to get extra income is to sell things on eBay and Craigslist. If you are familiar with eBay you know you can set up a 'store' where shoppers can see the other items you have for sale. Craigslist doesn't have an option like this, so the people seeing your items will only see what they search for, and won't know about any of the other things you are selling. I usually have multiple items listed at once, so it is helpful to have the buyers be able to see everything I have for sale. They might see something they are interested in, but wouldn't have thought to search for.

The way I have been doing this is to take advantage of the free website/hosting that is now available, and to make a simple blog. I post all the items I have for sale there, and post a link to the blog in every Craigslist posting I make. I also went ahead and put adsense on the blog because, well why not. It gets me a buck or two extra a month. Everything helps.

So make your own blog or website to increase your sales of Craigslist. It has definitely improved my sales performance. You can also have links to any other websites or videos or products you sell, and get increased traffic that way. So there is really no reason not to create a free blog listing the items you have for sale.


-The Money Monk

Why you shouldn't try to retire early

If you are on a quest for early retirement like I am, you will consistently come across plenty of resistance to the idea. I'm not sure what problem people have with others taking their own path in life, but the strength of the resistance you will receive can be startling if you aren't ready for it.

It may be because you expose their consumerist lives as the pointless slave existence that it truly is, and they aren't ready for the red pill. Or it could be that they really really would love to be able to retire early too, but aren't willing to accept that it is their personal choices and lifestyle that makes the difference, so they would rather pretend it is out of their control. Similar to how a lot of out of shape people insist they simply 'can't' lose weight, even when their behavior and lifestyle is the polar opposite of the in-shape people.

The Early Retirement Extreme Forums had a thread a while back where some members listed many of the arguments they had heard against early retirement. I am going to give brief rebuttals against these arguments.

Not really so you can argue with the sheeple, but more so that you have internal answers and your mental frame isn't shaken. Of course if you are a glutton for punishment or simply enjoy stripping bare the lack of purpose in your colleagues' lives, go for it.

 Before I give you the list of common objections to early retirement, realize that most of them can be refuted with one simple core argument: Everybody plans and expects to retire at some point, and spend the rest of their days living off of income generated by work that was done earlier in their lives. Whether this is at age 65 living off a retirement fund and social security, or at age 30 after saving 85% of your earnings for 5 years is irrelevant. Any delineation between the two would be arbitrary. Any argument that could be used against retiring at 30 could just as logically be used against retiring at 65, or ever.  So realize that many of these objections are defeated by that simple argument already, and will need no further rebuttal.


Here is the list of common objections to early retirement as offered by members of the ERE forum (my responses are in red):

1) Once you cover your own expenses, you are morally obligated to continue producing to help other people who are less productive. You are lucky and privileged to be productive, and you shouldn't forget this.

First of all, refer to prime argument. Second, almost nobody in America has a 'productive' job in the real sense anyway, so it is actually MORE productive for the economy to invest your money in real assets and businesses than to just buy stupid plastic shit from china that is headed straight for the landfill. 

2) Raising kids on a frugal budget is selfish because it denies them important things that cost a lot of money.

All relative. Even most normal sheeple don't spend EVERY penny that they possibly can on their kids. So are they being selfish because they are spending less on their kids than other parents are? Any spending level below which was 'child abuse' would be totally arbitrarily set. 

3) Wouldn't it take like 50-100 million dollars in assets to actually live off your investments?!

You can retire when you can live off 4% of your stash. Whether you do that by having a bigger stash, or being able to live off less doesn't matter. Both work.

4) If you realy believed this was the right way to live, shouldn't you be trying to convince everyone else to live like this too?

It's a personal life choice, it isn't necessarily about right or wrong. I may think it's stupid to waste all your money and work for 50 years to earn more, even when you have no time to use all the shit you buy. But that doesn't mean it's sinful, it's just not how I am choosing to live my life. 

5) That's just plain lazy.

again, see prime argument.  Nobody is at maximum capacity. People will only ever accuse you of being lazy if you are doing less of something than them. And even though there will always be people doing more than them, they will never call themselves lazy. It is no more lazy to retire at 30 instead of 65 than it is to go home after 8 hours at work when technically you could have worked 10 or 12.

6) You say you want to be free of money as an influence on your actions, but now you're spending *more* time concerned about money, not less.

I am not attempting to live without money. Just to have more freedom in my daily life and not be bound to one income source that dictates exactly how I spend my time day in and day out. It really has never been about being free from the influence of money completely. 

7) The desire not to work for money is indicative of a short-sighted need for immediate gratification. (I found this one particularly baffling)

Yes, baffling, since early retirement requires constant DELAYING of gratification to be able to save and live frugally. 

8) Working is the only way to derive meaning in life. Life without work is pointless.

I pity the fool. 

9) If everybody stopped working it would be the end of the world as we know it (you got that right!), therefore you can't stop working.

If my aunt had testicles she would be my uncle. What's your point? Nonsensical 'what-ifs' Argument.  

-The Money Monk

Cutting Costs - Round 2 - Austerity measures

In the last round I stopped buying plastic cups/utensils and paper plates, and drastically cut back on my purchase of UFC pay per views. So far I have kept with these resolutions, having not bought any PPVs or utensils/plates.

Now on to round 2. I have a couple more adjustments I am going to make for the month of February, and of course continuing with the previous cuts.

1. Eat out no more than 2 times the entire month. This includes fast food, anything.

2. Spend $50 less on groceries. I have been eating very clean lately, but I spent too much last month. Fresh fruits and veggies are expensive, so I am going to stick with the cheaper versions and spend at elast $50 less this month on groceries.

3.  Switch to biweekly mortgage payments: I haven't finished researching the refinance yet, which is a carryover from last month. But regardless I am going to switch to biweekly payments. Every 2 weeks, not necessarily twice a month. That will add a 13th payment every year. Depending on how the interest is calculated, it could save on that too, with or without the extra payment.





That's all for now. It may not seem like much all at once, but if I can do 2 or 3 things like this every month and keep them up, that will snowball into a significant monthly savings by the end of a year or two. And it won't be as much of a shock as trying to enact all these 'austerity measures' all at once.


-The Money Monk