Meet Mr. Money Mustache, the man who retired at 30
By Kelly Johnson, Published: April 26
To hundreds of thousands of devotees, he is Mister Money Mustache.
And he is here to tell you that early retirement doesn’t only happen to
Powerball winners and those who luck into a big inheritance.
He and his wife retired from middle-income jobs before they had their
son. Exasperated, as he puts it, by “a barrage of skeptical questions
from high-income peers who were still in debt years after we were free
from work,” he created a no-nonsense personal finance blog and started
spilling his secrets. I was eager to know more.
is Pete (just Pete, for the sake of his family’s privacy). He lives in
Longmont, Colo. He is ridiculously happy. And he’s sure his life could
be yours. Our conversation was edited for length and clarity.
(Mr. Money Mustache)) - To hundreds of thousands of devotees, he is Mr.
Money Mustache, the creator of a no-nonsense personal finance blog. He
and his wife retired from middle-income jobs before they had their son.
imagine the Mr. Money Mustache character as this old-fashioned
financial sage from days gone by. He runs his old western town with
quiet wisdom: The business leaders from Wall Street seek his advice, and
the mayor checks with him on issues of town policy. He takes time to
dish out a wise lesson or two to the local children, occasionally, and
with a sparkle in his eye, he flips them each a golden coin with the tip
of his thumb. “Invest it wisely, children, and you too will grow to be
there’s that, and the fact that all those M’s just sound great
together. Plus, the convenience of how Mustache rhymes with Cash — as in
“You Must Stash your Cash.”
So you retired at 30. How did that happen?
was probably born with a desire for efficiency — the desire to get the
most fun out of any possible situation, with no resources being wasted.
This applied to money too, and by age 10, I was ironing my 20 dollar
bills and keeping them in a photo album, just because they seemed like
such powerful and intriguing little rectangles.
I didn’t start saving and investing particularly early, I just
maintained this desire not to waste anything. So I got through my
engineering degree debt-free — by working a lot and not owning a car —
and worked pretty hard early on to move up a bit in the career,
relocating from Canada to the United States, attracted by the higher
salaries and lower cost of living.
my future wife and I moved in together and DIY-renovated a junky house
into a nice one, kept old cars while our friends drove fancy ones, biked
to workinstead of driving, cooked at home and went out to restaurants
less, and it all just added up to saving more than half of what we
earned. We invested this surplus as we went,never inflating our
already-luxurious lives, and eventually the passive income from stock
dividends and a rental house was more than enough to pay for our needs
(about $25,000 per year for our family of three, with a paid-off
house and no other debt).
What sort of retirement income do you have?
bread-and-butter living expenses are paid for by a single rental house
we own, which generates about $25,000 per year after expenses. We also
have stock index funds and 401(k) plans, which could boost that by about
50 percent without depleting principal if we ever needed it, but, so
far, we can’t seem to spend more than $25,000 no matter how much we let
loose. So the dividends just keep reinvesting.
We also have hobby income occasionally — I love to build things, so I do some carpentry work for friends and family. Usually it is free, but I also get paid sometimes. My wife got a real estate license after retiring, and though she doesn’t accept real clients, she
will occasionally help a friend buy a house, generating some commission
there. More recently, even my hobby of writing the blog has started
producing some cash, which I hope to reinvest and snowball into a big
charitable operation as well as funding interesting projects related to
a word, exasperation. After retiring at 30, my wife and I were subject
to a barrage of skeptical questions from high-income peers who were
still in debt years after we were free from work. Yet the reasons seemed
so obvious: the bank-financed $30,000 cars and $2,500 road bikes, the
20-mile commutes, $50 haircuts and the $100 happy hours every Friday.
“Little” things that are only a few hundred dollars a month add up to hundreds of thousands of dollars shockingly fast. But the lack of this understanding of the numbers is what keeps most middle-class people from getting ahead.
describe the typical middle-class life as an “exploding volcano of
wastefulness.” Seems like lots of personal finance folks obsess about
lattes. Are you just talking about the lattes here?
latte is just the foamy figurehead of an entire spectrum of sloppy “I
deserve it” luxury spending that consumes most of our gross domestic
product these days. Among my favorite targets: commuting to an office
job in an F-150 pickup truck, anything involving a drive-through, paying
$100 per month for the privilege of wasting four hours a night watching
cable TV and the whole yoga industry. There are better, and free, ways
to meet these needs, but everyone always chooses the expensive ones and
then complains that life is hard these days.
What are the different ways you think about debt?
have become too complacent about debt, making piddly monthly payments
on a high-interest credit card while they continue to go out and buy
more luxury products for themselves, ensuring the debt is never retired.
combat this tendency, I encourage people to consider it a huge
emergency, like running around with your hair on fire. Or like standing
in an enormous cloud of killer bees, which are stinging every square
inch of your body. Occasionally I’ll even have to pull out
the old “cauldron full of boiling lava and poisonous snakes” metaphor to
properly convey the urgency.
internalizing these scary scenes, people develop the appropriate
aversion to doing something like financing a new car, instead of waiting
until they have cash to afford a used one.
Talk a bit about the power of habit.
amazingly powerful. By the time you get to be a big fancy adult with a
career and a house, your daily routine is basically just a collection of
unconscious habits: You make coffee, commute by car, attend meetings
and answer e-mails, shop in certain stores, watch TV and repeat. It
becomes effortless. Your brain goes into autopilot. Unfortunately, this
also means it becomes hard to make changes.
different habits, while being equally effortless, tend to add up in a
good way over time. If you have a $50,000 take-home pay but are in the
habit of living on $25,000 and investing the rest, that will put you
ahead by about $350,000 every 10 years after compounding. A
habit of biking instead of driving can keep you lively and fit into
your 80s while saving you hundreds of thousands of dollars as well.
key thing to remember is once you establish the habit, it becomes
effortless and even pleasant to stay in the groove — even while your
friends think you are some kind of unimaginably frugal bike-riding
What to do if your spouse isn’t on board?
be shocked at some of the conversions I have been hearing about
recently. There’s a compelling logical, psychological and philosophical
case for why living a simpler, less materialistic life makes us happier
as humans.Far from being a sacrifice, spending less and saving more is
actually an incredible life-boosting experience.
there’s not much money in teaching people to spend less, so the job is
left to people who no longer need to earn money, like myself.
Unfortunately, I’m handily outgunned by the $34 billion U.S. advertising industry, which is why your spouse is not yet on board.
by presenting the case with both logic and emotion, you can usually
break a person’s mind free from its little Gucci birdcage.
series of calm conversations paired with you yourself living the
example of a simpler and heartier way of life is a hard thing to resist.
a person still clings to consumerism? I guess you have the choice of
agreeing to disagree, or seeking out a more open-minded person for your
Is your life possible just because you grew up in Canada? (The Canadians are thrifty, no-nonsense people, no?)
say we were back in the 1970s and ’80s. That country has more of a
consensus-based culture with less hard-core individualism, and it is
reflected in the government as well, with things like universal health
care and higher gasoline taxes. But things have changed in the latest
decade as the relentless oil boom has pumped up incomes, property prices
and the mouth-frothing consumerism that goes along with such wealth.
Okay, so once you’ve paid off debt and piled heaps of money into savings, what do you do with it?
You’ve already gotten off track, in my book. Instead
of thinking of “savings,” think of “investments.” You invest every bit
of spare money you can get your hands on, as soon as you can. Like little green employees, each dollar bill needs to be kept at work for you at all times.
in the day, I would just empty out my bank account after each paycheck
and distribute it into my investments of choice: Vanguard’s S&P 500
index fund, their small-cap value index fund, a bit went into paying off
my mortgage early as well.
advanced investors should read a book or two on investing and asset
allocation. And people interested in being a landlord should consider
owning a rental house or two (but only in a city with affordable house
prices, which yield a good price-to-rent ratio).
is clogged and expensive. Many folks who work downtown for the higher
salaries live in the suburbs for more affordable housing and better
schools. Do you think you can scale your approach for a place like this?
Does it just take longer to retire early? Or is it better to move?
Don’t think reducing the corporate tax rate would keep companies from financial engineering.
That’s a great question, because most people assume they are stuck wherever they live.
you take a job in downtown Washington, make sure it’s for a good
reason. Either it should pay well enough to allow you to live close to
work and still save most of your income, or it should be in an
occupation you can’t do anywhere else and you love it so much that
you’re willing to be poor for it.
are lots of tweaks you can make, too, like renting instead of owning a
house, or earning big bucks while living in a small apartment, then
escaping to freedom once you are financially well-off.
always challenge the expensive-city option. This country is full of
fantastic, gleaming cities with a low cost of living and nice climate
and recreation options. Apply for jobs there. Move. There’s usually no need to be a small fish fighting for scraps in a big pond like Washington. So go big, or go elsewhere. One of the best decisions I ever made was moving 1,500 miles from my birthplace to live here in Colorado, for example.
mostly what you talk about lifestyle choices or do you think there are
policy changes Washington could make that would encourage more people to
live this way?
great thing about this country is that we’re all free to go completely
against the flow and prosper in our own way. But it would be nice if the
government didn’t subsidize self-destruction quite so heavily,
burdening its own citizens with inefficiency.
example, we could change the tax policy to encourage energy
conservation and discourage waste, while remaining revenue-neutral. Tax
the hell out of gasoline to reflect the true cost of it, like every
other country in the world does. Ensure that every road which receives
federal funding places at least as much priority on bicycling as on
these changes would initially annoy people who are in the habit of
driving, the shift away from spending almost all our money (and time) on
transportation would feed back into the economy in the form of more
productive, healthier and happier people, lower road costs and all sorts
of other things.
don’t think you can effectively invent government policies to limit the
way marketing is done, but you could reduce income taxes and shift some
of them to consumption taxes. And discourage consumer debt while
increasing the incentive for capital investments.
You must really scrimp in your daily life. How do you eat well, for instance, and keep the food budget under control?
family eats so well, it is almost embarrassing. Enormous gourmet feasts
of fresh organic food. It doesn’t cost much because we prepare it
ourselves at home rather than paying someone else to make it, and we buy
some ingredients in bulk at stores like Costco.
Do you see frugal tendencies in your son?
At age 7, he’s definitely becoming a cute, little disciple.
rides his bike to school, even when it’s 20 degrees outside. He prefers
making his own toys with me in my workshop to buying them in the store,
because he is rarely exposed to TV ads. So his piggy bank tends to
accumulate in an uninterrupted fashion.
I hope for his sake that this trend continues.
You’ve built quite a following on the blog. How do you keep it from becoming a job?
it is a rewarding pastime, I try to put the blog last on my to-do list
these days, in order to prioritize living the actual early retiree
lifestyle that the readers are there to read about. If I stay home all
day and write, I’ll quickly run out of adventures and frugality life
lessons to write about.
How do you define the word ‘retirement’?
to me, retirement means you no longer have to work for money. You then
proceed to do whatever you like, without regard for whether or not it
earns you money.
try to promote the idea that rewarding, meaningful work is an important
part of retirement for many of us. If you don’t allow work as part of
“retirement,” many people say, “I’m never going to retire, because I
like working.” And they use that as an excuse to always spend everything
they earn, which leaves them job-dependent and addicted to high
consumption for life.
Regardless of what you do, it’s better if you don’t need the money.
What’s your idea of a great vacation?
really like Great American road trips, where we bring tents and
mountain bikes and stay in a bunch of beautiful places, riding the
wilderness trails in each. In big cities, we’ll still get a hotel in a
nice spot and bike around to explore the city, but the real joy for me
comes whenever I get a chance to put some effort into the vacation —
either physical or mental, like figuring out how to make blackened fish
tacos on a camp stove.
In short, what are the main ways to live well on less?
challenge and shun convenience for its own sake. Ask, “Will this really
make me happier in the long run?” about all life decisions. Realize
that happiness comes from accomplishment and personal growth, rather
than from luxury products. Seek out voluntary discomfort as
a way to become stronger, rather than running from it. Develop a
healthy sense of self-mockery, and acknowledge that you are a wimp in
many ways right now (and only by acknowledging it can you improve). Practice optimism. And of course, ride a bike.
pretty high-level stuff. If you just want the meat and potatoes: Live
close to work. Cook your own food. Take care of your own house, garden,
hair and body. Don’t borrow money for cars, and don’t drive ridiculous
ones. Embrace nature as the best source of recreation. Cancel your TV
service. Use a prepaid cellphone. And of course, ride a bike!