Book Review: Early Retirement Extreme

It started out with looking for quick, informative podcasts I could play during my vigils on The Wall (scraping paper off the upstairs rooms).  I landed on Money Girl, with its fast and upbeat episodes.  That got grating after a couple hours.  It was the same basic advice on rotation:  budget until you earn more than you spend, pay off your short term debt, max out your tax shelters (be slow to repay mortgage and tuition, fund your 401K and IRA).  From there, it's just a long habitual slog towards retirement.  Despite the lip service to frugality, every show is sponsored by someone looking to send you a new bill; even when there is no sponsor, the host is hawking her book or "financial coaching" services.  Sigh.  Where is the finance 201 course?

The best personal finance books I've read have been A Random Walk Down Wall Street and Your Money or Your Life.  Starting there, I found a lot of folks on Amazon had also purchased something called Early Retirement Extreme.

Jacob Fisker is an hardcore austerity advocate, in a similar vein to Tim Ferriss when he's out to achieve a mission in the shortest possible amount of time.  Fisker says it is possible to get yourself to "Financial Independence" within 5 years.  His main focus is on cutting back on unnecessary consumption through a combination of minimalism and DIY cross-skilling.  This could bring your yearly costs down below what others would call the poverty line.  From there, if you keep the same employment, you'd by default be saving  more than half your income which you could plow into investments and income generating initiatives which hedge inflation and perhaps offer a small real return.

I'm not quite ready to take things to The Extreme, but his points of view helped reset more ambitious goal posts-- I agree that we have an unnecessarily large house for 2 people, 2 furs, 2 scales, and 4 feathers.  If we'd wanted to buy a mobile home instead, our cost structure would be a lot lower.  But I agree with paying it off faster than 15 years because that debt structure ties you into working for a reliable income for a really long time in a pretty fixed location.  Sublets or some other income generation might be an even more lucrative way to convert square footage to income.  You'd be hard pressed to start a B&B in a trailer park.  Likewise, ditching the car exclusively for a bike does not seem like a savvy cold turkey move in Socal.  Perhaps a slightly more moderate interpretation will play out well as Fisker has only been formally "retired" for 2 years and has been making decent royalties on his self-published book in the interim.  Who knows if he will revise his position on financing if he has kids or encounters health problems in old age.