Early Retirement Extreme Forums

The formula is something like this: (Jacob likes formulas-more in his excellent book which I highly recommend)
$250,000 a year annual income (minus) a brain to manage that amount. Expressed as: 250K - ~0~. The "zero" comes in financial management.
Let's face it. They hypothetical family in the article are spendthrifts. There was a reference to gym memberships. Gym memberships? You don't need no friggin gym memberships! Anyone can walk for free. Spend the membership money on the fancy Nike running suit(whats wrong with a gray sweatshirt and jeans you already own?) even if you never jog a lick. Walk somewhere in the suit. Chop a few ricks of wood. Clean the house your paying someone else to clean. Do a few pushups or situps. Better than that do what I do at age 65:
Biweekly---Four mile walk/run in an hour.

Biweekly---20 pushups

Biweekly---20 situps

(yes, it hurts some at my age, but I have done it all my life)
I don't have no friggin gym membership, just some get up and go.

At home, I dust, put things away, run the sweeper or mop, take out the trash, clean our windows, wash down our porches, deck and driveway, and fix things, grow a fair garden, and mow and trim the lawn. I don't need no friggin gym membership. I cut trees and chop wood and split wood and stack wood and share with my neighbors. I cut a rick on his land and split up half the rick with him. Works great. Sometimes we both go out and cut all day and stack a cord of wood for both of us.
Although the article is hypothetical, and the 250K is quite a bit above most people, the truth remains of it even down to 40K earners. Some 40-60K earners are trying to emulate the 250K earner. These people fold because the life they live is unsustainable. Meaning they cannot afford it. To determine if you can't afford something, ask yourself to produce the money for it. If you cannot produce the money, you can't afford it. Casually borrowing money at interest means you could not afford what you spent the money on. None of this is all that technical. No formulas needed. A hand held calculator is helpful in this exercise, and would make an excellent wedding present for newly married couples. I would get them the business model that displays loans, etc and their costs over the life of the loans. The gift is worthless if they don't use it, they don't know how to use it, or no one teaches them to use it. Or you could insult them with:
OK--you have a dollar. You spend .10 and save .10. How much of the dollar is available for other things and uses? If you have .80 left, and your mortgage is .30 and your food is .10, then how much is left for other things and uses? Ok don't do this--you might get a blank stare and lose a friend or relative's friendship. But sometimes you feel like doing the above.
So-- The thread and posts are not about arrogance or snobbery

at all. They are about common sense and facts and suggestions that people begin to think their way out of the pit they are in. There are certain laws of mathematics. These laws cannot be changed. You have 'x' so you can accomplish "y". If you borrow money, "y" suddenly becomes much more expensive. We have all driven around subdivisions in the past, and watched expensive homes being built. We say to each other "Who can afford these houses?" Answer: Hardly anyone we know, but they being sold by brokers who appeared willing to lend money to a dead cat. (Don't worry, this is not a treatise on the housing bubble).

So no one should take offense at this thread, or at least at the posts I have read on it so far.

MERRY CHRISTMAS TO ALL.

This thread came to be much longer than I expected! It feels like we're preaching to the choir here.
I think it's safe to say that most if not all of us are on the same wavelength regarding the hypothetical family of four with a $250,000/year household income: they're stuck playing their shadow games on the wall.
But back to my original question. In the allegory of the cave (516a) http://www.carroll.edu/~msmillie/perspe ... legory.htm , our person who has seen the light goes back in the cave and takes pity on his companions only to be ridiculed. How do we sympathize with those still chained in the cave? Plato leaves us hanging and only goes on to describe a society run by a benevolent (we hope) philosopher-king.
I believe the Buddha ran into a similar predicament. After his enlightenment, the Buddha inclined towards resting into the ease of his own awakening, tiring at the thought of trying to spread the word. "This Dhamma is not easily realized by those overcome with aversion & passion. What is abstruse, subtle, deep, hard to see, going against the flow — those delighting in passion, cloaked in the mass of darkness, won't see."
Then, Brahma Sahampati invoked the Buddha to search for those "with little dust in their eyes" and to teach them: "There are beings with little dust in their eyes who are falling away because they do not hear the Dhamma. There will be those who will understand the Dhamma." Only then did the Buddha go forth, out of compassion and seeing that not all were hopeless. Whether or not you believe the Brahma was the spiritual being or a manifestation of the Buddha's own charisma is up to you =P
http://www.accesstoinsight.org/tipitaka ... .than.html
We're not all hopeless. For those on the fast-track, welcome to your place of refuge. For the rest, there's always the gradual path.

Great post, Oz. I loved the allegory as well as that episode from the life of Buddha. Herman Hesse's book "Siddhartha" happens to be one of my all time favorites - highly recommend it.
"It feels like we're preaching to the choir here" - do remember that many of us 'choir members' live in societies where we are the odd ones out. I certainly feel pressure from family, friends and colleagues to conform/consume still. This forum helps clear some of the dust in my eyes.

It's not only the pressures from friends & colleagues that cause us to break the good habits. There are also the jealousies within ourselves, driving us to consume like others because "we deserve it" and "why can't I live in that McMansion?"

@ktn: At first, I was disappointed when I started reading Hesse's "Siddhartha" because the title led me to think it was about Siddhartha Gotama, the Buddha, not about a fictional contemporary named Siddartha. Nevertheless, it is a poignant story about the spiritual journey.
As an economic fact, the Buddha and his monastics, as well as other teachers and their groups, were also in the minority in their times. There had to be enough lay followers to provide the material requisites for the monastics who devoted their lives to non-materialistic goals. The difference though is that India had and continues to have a long tradition and culture of supporting this alternative lifestyle. ERE definitely goes against the stream in this American life. And we have to do it on our own without that same culture of support.
The advantage we enjoy is that the division of lay/monastic and material/spiritual is no longer an economic necessity. Those of us who enjoy the material abundance of western modernity have access to the tools and materials necessary to fashion a life of our own with with that kind of austerity, if we so choose. No need to go begging for food with an alms bowl.
The problem is that we no longer have to be connected to a community. The marketplace has taken over many of the functions that a tightly knit community use to provide (i.e. daycare) and we have to be careful in choosing to still be a part of a community, lest we begin to harbor misanthropic thoughts.
@George: I sometimes feel the same tendency. I chalk it up to not developing a large enough sense of disenchantment. All the necessary logic can be mustered and written on the wall, and it still won't matter if I feel an attachment tugging away. Maybe a "scared straight" session would do the trick? We no longer have debtor's prisons, so we'll have to look a little harder to find people to yell at us to change our ways.
We can also find other illustrative examples. Currently, I like Thales, the pre-Socratic philosopher who was ridiculed for his poverty-inducing occupation with philosophy (which included the sciences). He took it as a challenge and applied his knowledge of astronomy to predict a large crop of olives the following summer. He then went on to corner the market by buying all the olive-presses before demand picked up. Having made his fortune, he went back to the life of philosophy. Neat, huh?
http://www.perseus.tufts.edu/hopper/tex ... irect=true

> Who would have thought that ALL you get for $250k

> these days is a big house with heat,AC, and electricity,

> two expensive cars, almost limitless medical care,

> unlimited food and drink, a clean unlimited reliable

> water supply, suitable clothing, military and police

> protection, dental care, an annual family trip,

> gifts, various forms of entertainment, someone to

> clean your house, meals out at restaurants, a few

> retirement plans,a couple of college savings plans

> for the kids, and a dog. I really would have thought

> you'd get more than that-- like daily fireworks.
lol!!

@OZ: The way that ERE-minded folks live will be very inticing to those who see the value in it (those with "little dust in thier eyes"). I'm going to keep doing what I'm doing and be an open book to the curious.

This thread also reminds me of Orwell's great book "Down and Out in Paris and London", where he chronicles living on poverty wages in those cities.

What I don't like about the chart in the article is where they failed to research the costs in different areas. According to that chart, food, medical insurance, car insurance, and utilities cost the same everywhere. Preposterous!