How to retire early, even with 2 kids! Blah blah blah...

[MJ DeMarco]

For the love of God, I'm growing tired of these stories.

Another compound interest scam story with the survivor bias front and center..

How to retire in your 30s or 40s—even if you have kids

On a closer look, they aren't even retired. The wife is working for health insurance and I'm not even sure how the numbers add up. Without the wife's job, a health insurance plan for 2 adults and 2 kids on the ACA.gov website would be in the THOUSANDS!


Almost feels like there is an unmentioned inheritance somewhere and that the wife HAD to go back to work because the insurance cost was so ridiculous.

Even the commenters are skeptical... which to me, is even a bigger red flag.

ADDED:

 

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[lludwig]

Unfortunately, there are many of these PF bloggers at the financial conference I go to FINCON. While overall a great conference I have to weed through these types of posers.

A big one is Mr. Money Mustashe and his ilk.

 

[MJ DeMarco]

they make a great living by NOT practicing what they preach.

Ha Ha...

PF Blogger: "Get rich quick is BS! If you save $100/mo for 50 years, you'll get rich slow and retire rich!"
PF Blogger sells blog for $10,000,000 and doesn't see the irony.

 

[MJ DeMarco]

Finally did a video on compound-interest...

And if anyone wants to read that chapter (free, no email required) visit this page:

The Compound Interest Scam: Truth VS Reality

90% in stocks, brave guy.

Just thinking about having 90% of my NW in stocks gives me indigestion.

 

[MJ DeMarco]

Here's one bogus story exposed.

The Millionaire [Liar] Next Door | Budgets Are Sexy

Ah yes! That story made it into my book Unscripted whereas I dig deep into the compound interest narrative.

 

[lludwig]

Another popular site The Simple Dollar once had an article of how to save money on xmas wrapping paper to save money by using newspaper! Or the other article I remember reading on how to make your own soap!

Stuff like this just drives me batty with personal finance bloggers.

Focus on generating more income. There's only sooo much fat you can cut before you are sacrificing yourself. But that's a common theme in society.

Why I Don't Budget and the Three Things You Should Focus on Instead

 

[Deleted50669]

Just out of curiosity, what do you find troubling about Mr Money Mustache? (serious question from occasional reader of his blog)

He singularly focuses on frugality. He makes no mention of money systems, or serious innovation / value contribution to make more money. He is all about making the most of a pittance.

 

[lludwig]

Here's one bogus story exposed.

The Millionaire [Liar] Next Door | Budgets Are Sexy

 

[socaldude]

He singularly focuses on frugality

it's really hard to be a fan of a personal finance philosophy or blogger that never addresses the problem of income.

You always need an income in life cause you always have expenses.

Most personal finance these days just revolves around cutting expenses.

 

[socaldude]

It seem like these days they will publish anything without verifying anything.

The couple was making a little over $100k combined and yet they had $1.3 million already saved up? And he was 33? Thats like working since you are 23 years old and both not having any expenses.

Usually when things don't add up it's probably not true or something intentionally left out.

 

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[socaldude]

90% in stocks, brave guy

And these are the same people that would say business is "risky".

 

[MJ DeMarco]

MJ, am still going through UNSCRIPTED . Hat's off to you on this! btw, how many words is the book!?! I'm still at 65%!

I can't remember, I think 170,000 words. TMF was 120,000.

 

[lludwig]

Just out of curiosity, what do you find troubling about Mr Money Mustache? (serious question from occasional reader of his blog)

Because he himself makes at least $400k/year from his very site stating how to live off of $30k/year and how is bikes to F*cking everywhere and goes to the local library to rent his videos and books.

Mind you he lives in Colorado. He isn't biking in the winter! I get the self-sufficient and independent but most FIRE (Financially Independent/Retire Early) individuals aren't "retired" by any sense of the word.

 

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[MJ DeMarco]

there is only so much you can trim from the bottom line before you have to think about increasing the top line too (which you should be thinking about anyway).

Yup, the game is WON on offense, maintained and preserved by defense.

You mention about survivor bias of 401(k)/slow lane retirees, which I agree. It's horrible.

Though you can say the same about small biz owners making a decent income, or like me who sold their business in 10 years.

Most don't.

Absolutely. Which is why I wrote 2 books about increasing your probabilities for making it happen, and going beyond the old "90% of all new businesses fail."

If you steer people into the right opportunities (ones that have CENTS components) odds go up.

If the failure rate for both options was 70% (slowlane v fastlane), which is the better route to take? One pays millions in old age, the other pays millions and freedom in youth.

 

[Computerchest]

"How do you invest your money?
McCurry: We’re 90% in stocks. … We’ve got about five years of living expenses between cash, bonds and CDs."
90% in stocks, brave guy. Would love to hear an initial planning meeting with a swiss banking wealth management firm and see their reaction (if his goal is to fund his family with these funds).
Funny how these articles don't come with a warning, first time I have seen ones like this, usually sticking with Bloomberg/Zerohedge/Earnings reports don't expose you to them.

 

[lludwig]

Full disclosure, McCurry did write in fact for my site. We hired him for his tax articles which were pretty good IMHO.

After writing just a few articles outside of taxes, I started looking at his background and yes it didn't add up when I started looking closer at his site.

His returns were from either:

1. Large returns he got (like 15%+/annually)
2. Made much more than what he was stating (ie off the books to help decrease taxes) from odd jobs.
3. Partially inherited money

This is all estimates since details aren't revealed.

This isn't even including a home purchase, or putting money in 529 accounts for three children.

If I was a betting man I would go with 2 and/or 3.

So something wasn't adding up. So I too would like to know how he exactly did it.

 

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[The Abundant Man]

it's really hard to be a fan of a personal finance philosophy or blogger that never addresses the problem of income.

You always need an income in life cause you always have expenses.

Most personal finance these days just revolves around cutting expenses.

If I wanted to cut expenses I'd go live in the jungles of the Amazon Rainforest

 

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[lludwig]

Overall I agree with the message though critical of one part.

You mention about survivor bias of 401(k)/slow lane retirees, which I agree. It's horrible.

Though you can say the same about small biz owners making a decent income, or like me who sold their business in 10 years.

Most don't.

Yes it's true you have more control when of owning your own business and can control your destiny. Though many individuals fail at business ownership and have a worse success rate than say putting money in their 401(k).

When I first started in business I thought anyone can and should start a business. Over the years I've come to realize it definitely takes a certain about of "chutzpah" to start and more importantly skills which many lack. I'm not suggesting people shouldn't start a business but to "go big or go home". Just some aren't cut out for it and may never be.

I guess what I'm saying some shouldn't even try to go the Fast Lane and accept mediocrity, because they just can't do it. It's not their lot/purpose in life. No different than me trying to become a professional ballplayer.

It just ain't happening.

 

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[lludwig]

I originally had much more content on Investor Junkie to talk about business ownership.

I consider investing to be much more holistic and should include business ownership. Unfortunately, most of the readers I had didn't think that way.

The problem was my audience wanted more slowlane topics, so I removed most discussion of it on the website. They had no interest in owning a business.

They were looking for what they considered the "fastlane" to success. Optimization of what they currently were doing and knew.

The fact remains while entrepreneurs are glorified in the media (ie Elon Musk, Mark Zuckerberg, etc..), the stats show otherwise. I don't know if this stat still holds true today from 2014, but at the time less new businesses were being created than the amount being shut down. The trend overall is bleak. :-(

Where are all the startups? U.S. entrepreneurship near 40-year low

On a whole Millenials don't want to take the risk of business ownership. Could it be because of political reasons (ie more socialistic and capitalism is a dirty word), amount of debt, or just the red-tape of regulations? Who knows but I'm very saddened by this trend.

I do think sites like this should be used and small business owners. Go out and get all the help you need, as they are becoming a rare breed. Their success rate should be increased as much as possible.

Perhaps my next business venture will go off into this area exclusively to help other fellow small business owners.

 

[garyfritz]

Mind you he lives in Colorado. He isn't biking in the winter!

Don't be too sure! I live in Colorado, and I know guys who ride year-round. Back when I worked for Hewlett-Packard I knew one guy who rode his bike to work, 5 days/week all year long -- and he lived 15 miles from work.

When I first started in business I thought anyone can and should start a business. Over the years I've come to realize it definitely takes a certain about of "chutzpah" to start and more importantly skills which many lack. I'm not suggesting people shouldn't start a business but to "go big or go home". Just some aren't cut out for it and may never be.

Sadly, I agree 100%. I totally agree about the survivorship bias in entrepreneurship -- not everybody is going to succeed like MJ, or even at all. A lot of people will throw a lot of time effort money at it, and go nowhere.

And some aren't cut out for it. I suspect I fall into that camp. My mild ADD tendencies make it very challenging for me to be productive on the simple contract work I do, let alone trying to stay hyper-productive and laser-focused on birthing a business.

Especially now that I'm in my 60's with less fire & sass than I had decades ago, I don't have the limitless energy a true entrepreneur needs to draw on sometimes. Given my challenges, I really don't think trying to start a business is a good risk for me.

 

[MTEE1985]

On a closer look, they aren't even retired. The wife is working

Funny how probably 99% of these stories one if not both are still working but they hide behind platitudes like “loving their job” or “because it’s making a difference” or as mentioned above “healthcare”

 

[Michael1359]

Reminds me too of the “frugalwoods” who’s book I saw at the store the other day. “Retired” early to live and preach a life of Craigslist purchases and dumpster diving. And as with most of these and others that Unscripted points out, they make a great living by NOT practicing what they preach.

Dumpster diving is not a retirement plan I want![emoji23][emoji23]


Sent from my iPhone using Tapatalk

 

[lludwig]

How do you know it's not for you if you don't try at first?

Yea I agree there's no way to really know. Unfortunately, there's no "if you do this as a career this is your best outcome" crystal ball.

 

[MAB1138]

One of my personal favorites was David Bach's The Automatic Millionaire. He relied heavily on "the latte factor" saying that you should take the money you spend on frivolous things like a daily latte and invest it in your 401k. In 20-30 years you'd be a millionaire!

He called it the magic of compounding interest. It smelled a lot like just keeping up with inflation to me.

A million dollars in your 401k 20 years from now will be the equivalent of a middle class income. Nothing wrong with that, but certainly not what people picture when they hear "millionaire."

Sent from my VS995 using Tapatalk

 

[lludwig]

If you steer people into the right opportunities (ones that have CENTS components) odds go up.

Yes I agree. It's opportunities, it is skills, with a dash of luck added in. I guess what I'm saying is skills (the execution) is where most fail. I don't expect your books to answer that specifically, but it's a real problem.

If the failure rate for both options was 70% (slowlane v fastlane), which is the better route to take? One pays millions in old age, the other pays millions and freedom in youth.

Well in my case you know the obvious answer ;-)

 

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[The Abundant Man]

This reminds me of the Austin Powers movies.

In the first movie they unfreeze Dr. Evil. He tells the world council that he wants $1 million or he'll blow up the world. They all start laughing at him. #2 tells him that a million dollars means nothing in the present day.

Same things happens in the second and third movies. Though when he finally says that he wants a kazillion dollars they oblige by his demands.

 

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[Deleted50669]

Unfortunately, there are many of these PF bloggers at the financial conference I go to FINCON. While overall a great conference I have to weed through these types of posers.

A big one is Mr. Money Mustashe and his ilk.

Triple M is a trap indeed

 

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[lludwig]

Ah yes! That story made it into my book Unscripted whereas I dig deep into the compound interest narrative.

Oh shit forgot about that part in the book I just knew about it personally as well and rocked a few people in the PF space.

 

[MTEE1985]

Reminds me too of the “frugalwoods” who’s book I saw at the store the other day. “Retired” early to live and preach a life of Craigslist purchases and dumpster diving. And as with most of these and others that Unscripted points out, they make a great living by NOT practicing what they preach.

 

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[jpmartin]

Compound interest? Oh you mean like this... Riz International on Instagram: “Don't be afraid of starting small. The key is to start! As you can see, compounding and incremental contributions makes a HUGE difference…”