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Mr. Money Mustache: An inspiration for wannabe retirees

Lizzie O'Leary Sep 6, 2013
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What if you could walk away from the working world at age 30?

That’s just what Pete did nine years ago when he realized that he had enough money saved to retire early.  Pete writes about his experience at the wildly popular blog, ‘Mr. Money Mustache,’ where his followers — known as Mustachians — absorb his advice on how to support themselves independently long before traditional retirement age.

Pete and his wife decided they wanted children and  they both wanted to be full-time, stay-at-home parents.  So, they started working toward the goal of retirement. How did they do it?

“It’s kind of a mindset of buying less stuff and not missing it, ” says Pete. “For example, in our area of Boulder, Colorado the friends were all buying the brand-new Volkswagen and $100 haircuts and stuff.  And we just kept the ways of our youth which are biking to work and buying groceries from the grocery store.  It just results in you spending somewhere between half and a even a third of what you could otherwise spend with almost the same quality of life.”

How did Pete know when he had enough to live off of in retirement? He used the following equation:

“Number one, your time to be retired or to work a lot less really only depends on your savings rate, how much of your take home pay you can keep for yourself as opposed to spending.  And if you can save half of your take home pay, then you’re going to be wealthy enough to retire after about 17 years of work,” Pete says. “So if you start at age 20, you’re all set at age 37 and you can do even better than that if you save more than half.”

Pete says the other thing to remember is that retirement savings isn’t a percentage of your income. It’s a multiple of your spending.

“You need about 25 times your annual spending saved up and then you can quit working forever,” he says. “So, if you spent $20,000 a year, you need $500,000 of savings invested in normal stock index funds to provide you with income.”


One of the features of the Mr. Money Mustache blog our Marketplace Money producers love is the ‘Random Article’ button.  Press it, and you’re treated to a surprise article written by Pete about such things as:


Even if you’re living paycheck to paycheck, Pete encourages people to attempt the aforementioned equation.

“It’s kind of a continuum of skill levels. You know, like if you’re starting out with expenses more than your earnings then you have a long way to go before you start thinking about these giant percentages,” says Pete.  “I actually get to hear from people everyday who have done stuff way, way more impressive than my own easy situation.  There’s people who earn $20,000 supporting a family with three kids and are still saving almost half their income.  It’s all done through creativity.  You find a neat living arrangement, maybe you take care of somebody’s house in exchange for cheaper rent, get rid of cable TV, drive your car less and ride your bike more.”

If you  like going to work, Pete suggests considering semi-retirement.  And no matter when you decide to leave the workforce, be mentally prepared.

He says, “I wouldn’t suggest that people just quit their jobs and have no plan, like ‘I’m gonna just sit home and sweep the garage after this,’ because that’s going to be unsatisfying.  People should always have a challenge everyday of their lives, if possible.”

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