MMM interviewed by Tim Ferriss (ERE mentioned)

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George the original one
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by George the original one »

MMM is a couple with child, so divide their budget by 3.

chenda
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by chenda »

I didn't listen to the podcast but I've been reading a lot of MMM recently, I like his positive attitude and enteral optimism.
George the original one wrote:MMM is a couple with child, so divide their budget by 3.
Probably more than a third though for an individual; not all their costs will be variable.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by jacob »

@Olaz - It's not that simple. There's another thread on the forum on how the accounting gets increasingly complicated once people stop participating in the consumer economy and stop solving problems by writing checks, "paying bills", and spending money out of their paychecks or 4% SWRs.

RE taxes west of the Mississippi are much much lower than east thereof (about 4x higher than here). Conversely, RE prices are much higher (you can buy a lot more brick or stick east of the river for the same price than west thereof). Overall, pricing mostly goes with what people can afford in terms of cash flows which is set nationally be prevailing mortgage rates which is what most people (not us) still do. For those of us who have assets, we make our decisions based on what the prevailing interest rates and NAVs are. This is why smart people currently OWN rather than rent(+) ... unless they intend to go somewhere shortly .. or live in ridiculously overpriced areas. (We don't.)

(+) That particular trade was 2-4 years ago. Now I'm not so sure ... I currently prefer cash, but overall I "don't sleep well" currently. Not optimal, but the world is what it is :-P

Did you notice how Pete talked about buying cars in terms of being a millionaire or a multi-millionaire? If you own ~1M, buy this vehicle, but if you own >>1M, buy that vehicle? (Which is might got lost in the important msg of most ppl should WALK OR BIKE given their 4-5 fig NWs?) As someone [currently owning] just under 1M, I'm telling you that that level of wealth seriously changes one's perspective. Your perspective WILL change as you accumulate digits on your accounts. Dragline has separately noted that if you can't buy/replace your transportation in cash, you really shouldn't own/drive it! At this point (2017), money, both for me and MMM is like tap water, like Pete noted in a blog post. It's quite different than how the average consumer-wage-slave think about it. My point is ... as you get wealthier ... your perspective on money will change from scarcity ... to managing ... to .... tap water! It's just there. It's easy to change one's perspective when things are taken for granted, like air(&).

It doesn't mean you/we/I take it for granted. Because that'd be stupid. It means * don't worry much about it on a day to day basis.

We own a car. But we could buy that sketchy vehicle (we have 2002 model) as made by Fuji Heavy Industries and maintained by our neighbor mechanic 170 times over #webofgoals

Maybe I'm projecting but ... if anyone gets the idea that I am ... please start ignoring me beyond empathetically accepting that NW is really as journey of Wheaton levels ...

Now, if we (1 jacob) were to move to Longmont, CO, then as far as I can "craiglist-it", rent for our needs would be $1000/month ... and so, the proverbial "1 jacob&co" expenses in Longmont, CO would be around $15000/year given our current "2 person+1 dog+1 car+0 kid" level---so a smidge above what we spent in Chicago including rent. #NP

(&) So, fun fact, as the planet came out of the post-Permian extinction, air being at ~10-15% oxygen was actually entirely unbreathable---euphemism for quick death---- to humans. Put a human in that situation and they'd suffocate because the climate changed too drastically. Fun fact ... but it puts our human or mammalian confidence in how changing the climate in no big deal in perspective.

If we bought a house in cash, then, because RE taxes are WAYYYY lower west of the Mississippi than over here (we pay $4k+ in RE taxes due to IL financial mismanagement), I'd expect the "jacob&co" expense level for the same "2 person+1 dog+1 car+0 kid"-level" in Longmont, CO to come in around $7k/year sans rent insofar we're no counting house-owning imputed costs, and all that. Add health insurance, etc. Didn't bother to look up what health insurnace would be in CO. It varies widely which is why it _very important_ to consider state-level idiosyncrasies when it comes to where to live. If health insurance is $$$$ in CO or west of the river is >>>> then I'd appreciate some local info?

Yes, we're really eyeing moving moving west of the Biggest River to get out of the financial cluster@#$@#$ over here on the east side.

On the other hand, does CO have a functional used-goods network. Is their library system as good as here? And so on ...

For non-consumers, it really does NOT come down to $$$ at all. For all I know, replicating my lifestyle might be more expensive if I were to live where MMM lives and vice versa. Think OTHER CAPITAL SKILLS. I think that was chapter 4 or 5. I forget. But please read both. :) ;)

Point being ... it's really asking about the difference between apples and oranges at this point. And another point ... simply replicating some internet person in a random spot using rules of thumb is ... ... ... I don't know where to begin.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by TopHatFox »

Just to be clear, I actually think Pete is great and he's doing great work. He reminds of Joshua Sheats in many ways, another excellent influencer in the PF/lifestyle design world.

I just always thought ERE was more relatable than MMM because the concept can work even with a relatively low income and has more alternative influences to it, like van living, tiny houses, etc. Perhaps ERE appeals to students who have minimal income and lovely weirdos, and MMM more to professionals who already have a nice income and more conventional folk :P?

And yeah definitely, following any one person to the letter is silly and not as interesting as coalescing a lot of different ideas into one's own unique path.

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Chris
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Chris »

jacob wrote: I realized that ERE City/workshop is like herding cats ... but maybe MMM city/workshop is like herding dogs? (as per the above) Value-judgments aside, ERE city never worked out ... nor did small workshops ... but this could be a Wheaton level thing---ERE could easily be too rare/far out. I would be quite pleased if this actually turned into something. Given that those concepts have been failing for 5+ years on this forum may or may not say more about this forum than the general condition of humanity. I'd be interested to know if it actually worked out at MMM.
Herding people is hard... optimally you have a large number of committed people to work with. I think people on this forum are more hardcore whereas the MMM forum are more numerous.

But gathering people hasn't been completely unsuccessful. We do have ERE meetups, and MMM has been able to get several camps organized in different places. Ok, so it's not ERE city, but hey, it's something! Getting Internet people away from their keyboards to meet IRL is no small feat.

The members of FIRE community are all working toward FI, which -- in most cases -- also affords location independence. This is pretty unique among online communities: as time progresses, there should be more people with time and location flexibility. But at the moment, most members are still on the path and not yet crossed the threshold. People naturally focus on their nearest target, and for most that is getting to FI. It's the minority that is already FI that thinks about what's next. As that minority increases in number, it may hit critical mass.

Dragline
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Dragline »

@jacob Damn straight.

Fish
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Fish »

jacob wrote:If I have one complaint, it's the lack of active promotion to the next level(*) from the rest of the FIRE community.
Maybe this counts?
http://moneyboss.com/do-what-works-for-you/

Readers are going to be lower level than the PF-guru writing the blog, so I wouldn't expect such promotion to generate much value for the readership. The problem takes care of itself because people self-select their gurus based on their personal goals. Gurus are replaced as people grow. But is there a responsibility to inform readers of the existence of higher levels of competence? That's very difficult to message while maintaining an image as an expert.

So, I think JD took a reasonable approach to present several alternatives and let the reader decide. I did appreciate how he ordered it from low spending to high. Get readers to first consider the extreme before offering a familiar and comfortable alternative.

However, what is really needed is a proper survey of the FIRE domain. A collection of the dominant ideas and how they relate to one another. Basically, the PF Wheaton table in written form. This would give people some idea of what the FIRE mountain looks like so they know how far one can climb, and where to go for help along the journey.

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Ego
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Ego »

Fish wrote: Maybe this counts?
http://moneyboss.com/do-what-works-for-you/
In that article the author says there is no one right answer. I agree. But that doesn't mean there aren't wrong answers. FI can buy people the freedom and more importantly the leverage to do crazy shit that affects us all.

halfmoon
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by halfmoon »

@ego, I don't understand your point in the context of this thread and that link. Can you elaborate?

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Ego
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Ego »

@halfmoon, In the linked article J.D. said this....
Let’s use my friend Jim from Wallet Hacks as an example. He too is financially independent. Because he’s managed to accumulate so much wealth, he lives what he describes as a “decadent” lifestyle. His family spends $120,000 per year, which includes $4500 per month for a mortgage and $2800 for daycare. (Jim spends as much on daycare as I do for a year of normal living!)

“I’m an extreme case,” Jim told me. He spends a lot, and he knows it. But he also knows that his savings can support this level of spending.
I am not so much concerned with the spending. To each his own. It is more about the consumption and waste involved in that level. What would happen if we all did that?

MMM made the point in the podcast that you haven't truly lived until you build something yourself. That is about leaving a mark. A legacy. Combine that desire (compulsion?) with leverage and people can do some serious damage. At the extreme end we see someone like our illustrious POTUS. Closer to home we probably all know some local power broker using the same dynamic on a smaller scale.

Fish
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Fish »

The concept of a PF Wheaton scale seems to be generally accepted by the FIRE community, at least relating to spending. Here's a post from another forum which conveys the general sentiment.
FUEGO wrote:
ginadog wrote: I [posted in the MMM forums] and man I was ripped a new one because I had $60,000 in yearly expenses (which included several big ticket one-time items). It was down right hostile and unfriendly so I did not feel posting over there again.
Yeah, it's funny how you have to pick the right forum to ask your question. If you spend $60,000 and are okay with it, post here [on E-R.org]. You'll be told you are just fine as long as you have $2 million and are okay with a 3% WR.

Go to the MMM forums if you want to be told how to cut it to $30,000 and how wasteful you are.

Go to the Early retirement extreme forum if you want to learn how to cut it to $15,000 and how that amount is still really wasteful. :mrgreen:

Different strokes for different folks I guess.
Where this could be improved is having someone authoritative provide a comprehensive and objective survey of the various FIRE ideas/paradigms along that Wheaton scale. If we're leaving it to random people on forums to write about it, there's a lot of potential for misrepresentation and errors of omission.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by The Old Man »

What distinguishes ERE from all the rest is not spending level, but its incorporation of the Renaissance concept.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by halfmoon »

Ego wrote:@halfmoon, In the linked article J.D. said this....
Let’s use my friend Jim from Wallet Hacks as an example. He too is financially independent. Because he’s managed to accumulate so much wealth, he lives what he describes as a “decadent” lifestyle. His family spends $120,000 per year, which includes $4500 per month for a mortgage and $2800 for daycare. (Jim spends as much on daycare as I do for a year of normal living!)

“I’m an extreme case,” Jim told me. He spends a lot, and he knows it. But he also knows that his savings can support this level of spending.
I am not so much concerned with the spending. To each his own. It is more about the consumption and waste involved in that level. What would happen if we all did that?
Thanks for the clarification, Ego. I read the article but didn't make the connection you did. Justifying a spending (consumption) level because one can afford it reminds me of people who think it's okay to have 6 kids because they can afford it. The "affording" ends up being on a much bigger level than imagined.

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Ego
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Ego »

I am somewhat skeptical of their worship of building for the joy of building for several reasons. The main one being that the act of building things (homes, careers, businesses, cult-like followings, objects, credentials, movements, internet forums :D ) can indeed be fun. The trouble comes with the maintenance. Building and maintaining are two different things. I dare say that most people in the middle and later part of their lives spend a big chunk of time and energy maintaining things they loved building but now hate maintaining. Loss aversion bias causes many of us to go to great lengths to hold onto those things. We built them so we place a high value on them. Who else might care for our creations as much as us?

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by BRUTE »

brute has no problem with MMM enjoying hammering nails into shit. brute has a problem with MMM moralizing this as "good".

Beloved Leader jacob sometimes has a similar thing, claiming that "the majority of humans aren't clever enough to do ERE" (or similar). jacob is simply substituting intelligence for moral superiority, a similarly vacuous concept. some humans enjoy lentils, some humans enjoy Ferraris. no need to moralize.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by bryan »

@brute, https://en.wikipedia.org/wiki/Moral_psy ... #Evolution

related but I'm not that great at putting my feelings into words.. Was thinking of saying something like "which humans are more likely to pass on their genes, the ones that enjoy lentils or the ones that enjoy Ferraris? Are a mix of morals necessary? What is the goal of human evolution?" etc

All humans seem to enjoy serotonin/dopamine/etc, unless they are mutants, and it seems neuroscience may be a dominant factor in moral psychology. Moral psychology, and a complex system of conflicting/agreeing morals, seems a fact of life and one side may beat the other.

BRUTE
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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by BRUTE »

their genes - or their ideas? scumbag memes.

yes, mix of morals is likely very resilient in the evolutionary sense. brute hasn't ever heard it said like in the link, but it makes complete sense. just as mono-crops are vulnerable to devastation by a single pest, incestuous populations develop inbreeding problems, why wouldn't ideas and therefore morality follow the same dynamic?

doesn't mean brute has to like the guy.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by jennypenny »

I've always thought of the morality component of ERE as a sort-of global impact overlay -- the 'what if everyone did it' scale. Those at the high end of spending/consumption/fragility are pushing the planet at full-speed towards peak everything and will take all of us with them. The ERE community is at least aiming for neutral or a net-positive impact. The others, from Bogleheads to the MMM crowd, are somewhere along that scale.

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Dragline »

BRUTE wrote:their genes - or their ideas? scumbag memes.

yes, mix of morals is likely very resilient in the evolutionary sense. brute hasn't ever heard it said like in the link, but it makes complete sense. just as mono-crops are vulnerable to devastation by a single pest, incestuous populations develop inbreeding problems, why wouldn't ideas and therefore morality follow the same dynamic?

doesn't mean brute has to like the guy.
In evolutionary terms, morals or moral psychology are probably better viewed as simply one component of an entire "cultural package" that includes that component along with technology, language, social structures, etc. These ideas are explored in detail in J. Henrich's "The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter" (2016), which builds in part off of the research in that wikipedia article but makes the point that its probably a mistake to treat these components as separate or any one of them as the "one thing" that drives humanity as some researchers/philosophers have tried to do.

"Living on less" or some form of frugality is an idea that has popped up in virtually every society that has achieved some level of material success and organizational stability, so it is probably a positive cultural driver.

Splash piece on that book: "Humans are a puzzling species. On the one hand, we struggle to survive on our own in the wild, often failing to overcome even basic challenges, like obtaining food, building shelters, or avoiding predators. On the other hand, human groups have produced ingenious technologies, sophisticated languages, and complex institutions that have permitted us to successfully expand into a vast range of diverse environments. What has enabled us to dominate the globe, more than any other species, while remaining virtually helpless as lone individuals? This book shows that the secret of our success lies not in our innate intelligence, but in our collective brains—on the ability of human groups to socially interconnect and learn from one another over generations.

Drawing insights from lost European explorers, clever chimpanzees, mobile hunter-gatherers, neuroscientific findings, ancient bones, and the human genome, Joseph Henrich demonstrates how our collective brains have propelled our species' genetic evolution and shaped our biology. Our early capacities for learning from others produced many cultural innovations, such as fire, cooking, water containers, plant knowledge, and projectile weapons, which in turn drove the expansion of our brains and altered our physiology, anatomy, and psychology in crucial ways. Later on, some collective brains generated and recombined powerful concepts, such as the lever, wheel, screw, and writing, while also creating the institutions that continue to alter our motivations and perceptions. Henrich shows how our genetics and biology are inextricably interwoven with cultural evolution, and how culture-gene interactions launched our species on an extraordinary evolutionary trajectory.

Tracking clues from our ancient past to the present, The Secret of Our Success explores how the evolution of both our cultural and social natures produce a collective intelligence that explains both our species' immense success and the origins of human uniqueness."

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Re: MMM interviewed by Tim Ferriss (ERE mentioned)

Post by Lucas »

jacob wrote:I wonder whether he's a citizen or a greencard like me or a TN visa (subject to NAFTA).
He uses Betterment, whose "customers must have a permanent U.S. address, a U.S. Social Security Number, and a checking account from a U.S. bank" (according to its FAQ), and since the holders of a TN visa cannot apply for permanent residence, I think they wouldn't be able to claim a permanent U.S. address either, thus a green card seems more likely to me.

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