Early Retirement Extreme Book Review
This is my first book review and hopefully one everyone likes. One of the first things I did when I thought about retiring early was go to my library and begin searching for books on this topic. I was unimpressed, most of the books I found were about people retiring in their 50’s and early 60’s all I could think about when I skimmed through these was you have to be f***ing kidding me, this is it? I found books about retiring early and going overseas, which certainly has it’s perks but is this really how everyone retires early? I mean retire early by living in a foreign country, living off of early social security/pension draws, this couldn’t be it right? This is one of the reasons I moved towards my research online and found MMM, 1500days, and Early Retirement Extreme(ERE). I’m a very quick read on people and can usually give a quick summary of what I think of them in a couple minutes. ERE struck me to be the crazy extremist guy, he said things like living on 7K and becoming financially independent in 5 years. So my 2 minute review was this guy is f***ing nuts! Is he camping and hunting his own food? Does he shower only when it rains? Does he not drive, bike, or buy shoes? This was early on in the game, like it was the first day in kindergarten and you see ERE picking his nose, your first thoughts are how gross that is, but after looking around and trying it yourself you realize maybe picking your nose isn’t so bad, certainly not for everyone of course. I have blogged more and more and more about financial independence and have made it a destination and journey I am traveling towards, so it seemed only fitting to read the Godfather of Early Retirement.
Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence
The first thing you have to understand about ERE is the book is about a philosophy not a personal finance book about numbers. Yes, you will find numbers and formulas in the book but this is not the focus, it is the philosophy. The first chapter, brings up the allegory of Plato’s cave, I’m not much of a philosophy guy, so I wanted to give you a little background, you can read about the first chapter here,(affiliate link) click “Look Inside” after you click on the link and also here is a YouTube clip for a quick visual and verbal overview.
Jacob, the author, explains that like the prisoners in the cave we are chained up, not physically but mentally to our jobs, debts, and over consumption as a way of life. Society has made it very easy to spend money, so what do we do? We do exactly that and spend money, we tell ourselves to go ahead and buy that nice purse or new suit, you deserve it you worked hard or had a rough day at work. He goes on to talk about some very simple tasks that instead have been turned into must have gadgets. We are talking about egg cookers and that sandwich maker you got for a gift from your sister. I have actually never heard of an egg cooker, I had to look it up on Amazon, go ahead click on the banner to your right and look up an egg cooker it’s crazy.(While this is an affiliate link I ask that you don’t buy an egg cooker, please for the love of all that is personal finance don’t do it).
What did I take away from the book?
We really need to think about how much items cost and how we are using them. He uses a few examples mostly kitchen items, in my example we are going to buy 15 piece cookware. Let’s say you use these items 57 times a year you are at a $1 per use in the first year, .50 per use in the second year, and .25 per use in the 3rd year. Let’s say that it lasts 3 years at .25 each use, you then give the item away to your sister and buy a new one for the same $57. This means you are spending $57 every 3 years for average cookware and little return value even if you did sell it. What if instead you bought one cast iron skillet for all of your cooking, it’s a stretch but not terribly out of line. This one item costs $25, which is about half of the entire 15 piece cookware set. Instead of the 3 year use, since it’s cast iron, the item lasts 10 years, to make the math simple you use the item 50 times per year, so it costs .50 per use in year 1, .10 in year 5, and .05 per use in year 10. This made me think of 2 actionable items for my life. 1.) Don’t buy crap, if you are going to buy something do your research and your math, if that iron skillet is $120 and is the best thing out there, 2.) do some math and figure it if it’s really the best thing for you. Every time you spend money you really are making an investment decision for your future.
Since the first time I heard about ERE and living on 7K a year I have been skeptical. My immediate thought was yes I can live on 7K a year, if I live in a tent and hunt buffalo, live off the land in my 8×10 tent in a forest, sure I can do that. Did I forget to mention I would need to have $0 coming out in any payments what so ever, so yes, skeptical. However while ERE is certainly extreme it’s really not that far off. What Jacob proposes is what many of us are doing and some are doing without knowing we are crazy Early Retirement Extreme disciples. He took everything down to the bare minimum: living in a paid off RV, using a very basic grocery budget including eating from his garden, buying only what is meant for the long haul and is paid for without any debt, and finally he preaches DIY or Renaissance skills intended to save money and create opportunity. How far is that away from how many of us live our lives or at least are in the progress of working towards?
- Even Steven Money is currently paying off our home(s) and finishing up making payments on my personal debt, we will be without any payments in July 2020 Extreme?
- We make grocery lists and go to Costco to buy in bulk for items we use more regularly, going out to eat is a treat. Extreme?
- We mow our own grass, clean our own house, paint our own walls, build our own patio doors, but occasionally ask ourselves is DIY for us? Extreme?
Maybe you think Jacob Lund Fisker is the most bats*** crazy man on the planet and maybe he is, he does talk about not needing a refrigerator like I talk about not drinking a craft beer. His book really does make you think about your philosophy and challenges many of the cultural norms of society. I have already begun to challenge many of them, but having this book made me challenge even more.
As a final note about the book, I want to tell you what Early Retirement Extreme is not. Jacob does not map out a plan for you, he does not say put 15% in your 401K and buy a car that is only 10% of your income, he instead wrote it from a perspective that anyone can take the reigns and apply this to your life, challenge everything, save like you plan to retire tomorrow, research and make your own decisions. I really enjoyed the book and hope you will to, make sure to at least read the 1st chapter which is free of charge on Amazon, who knows it might just be the best financial decision you make today.