Early Retirement Extreme progress

[Pointedstick]

I thought I'd post some numbers regarding my ERE progress in response to a query in the million dollar PP thread. These are the 6-month averages from mint.com. I didn't use a 12-month average since we've only been getting really serious about cutting our spending for a few months. Here goes:

Rent: $1422 (Ouch. Sadly, this will go up soon)
Food: $409
Health insurance: $250
Car: $126 (This will go down soon since I just canceled collision and comprehensive coverage)
Cell phone: $59
Baby stuff: $46 (At this point, mostly wipes and new cloth diapers as he outgrows the old ones)
Internet: $52
Shopping: $51
Electricity: $45
Dog: $42 (Mostly much lower, but this average reflects vet bills)
Laundry: $30 (Stupid coin-operated machines, our apt doesn't have a washer built-in)
Cod liver oil: $28
Renter's insurance: $17
Home supplies: $11 (toilet paper, plastic bags, paper towels, soap, dishwasher detergent, etc)
Netflix: $8

[Pointedstick]

Some observations so far:

1. I've been amazed by how hard it isn't. The difference between spending $4,000 and $2,500 in a month turns out to be easy to miss. If I didn't have mint.com to tell me that that the $1,500 savings came from not eating out, not ordering a bunch of pizza, not buying some new gadgets and video games, I'd easily not know. You forget expenses like these soon after you complete the purchases. That's the sign they don't really add to your happiness, so out the door they go.

2. WTF happens to the money you spend on food!?! It's ridiculous how easy it is to plonk down $700 a month on groceries and not know where the money went. Now we spend more like $350 and I honestly can't tell the difference. If anything we're eating better than ever before now that we eat high-quality meats, soaked beans, etc. This has been the hardest area for us to control the costs. I'm tired, just order some pizza, it's only $20...

3. Quality can pay for itself. I spent $77 on a nice trimmer and haven't needed to pay for haircuts. It's paid for itself in two months. I spent $150 on a nice straight razor (far too much money, in retrospect) and some shave soaps and I haven't needed to buy any disposables. Hasn't paid for itself yet but will in a few months. Bonus: nicer shaves! And so on and so forth.

4. Turning your expensive hobbies into businesses is way easier than I thought. I had an expensive 3D printing hobby that became an income stream without me even really realizing what was happening. Honestly, anyone can do it. If you're passionate enough about a hobby to spend money on it, you probably have a deep understanding of what other people who are also into it would be willing to purchase. Figure it out, supply it to them, and suddenly your hobby is paying for itself and even making you money.

[Kriegsspiel]

That's pretty fucking rad man, I didn't know I wasn't the only one trying for FI here!  What kind of cell phone service are you using?  I pay $45 for unlimited data/texts with 500 minutes.

[Greg]

Random thought but you ever thought of having your wife learn to cut your hair? So far in my life, I've only ever gone to the haircutter once in my life hah.

[Pointedstick]

That's pretty fucking rad man, I didn't know I wasn't the only one trying for FI here!  What kind of cell phone service are you using?  I pay $45 for unlimited data/texts with 500 minutes.

Thanks! The cell phone is actually my wife's (work pays for mine), and she has the standard expensive AT&T plan. We're thinking of switching to Virgin Mobile as soon as the contract runs out. The extreme end of what we're thinking about is ditching the smartphone entirely and using a one-time-purchase GPS unit in the car, coupled with an iPod touch or something. That would be zero monthly payment, save for loading more minutes onto the phone a few times a year.

Random thought but you ever thought of having your wife learn to cut your hair? So far in my life, I've only ever gone to the haircutter once in my life hah.

She actually does, some of the time. I'm still a n00b at using the trimmer, so sometimes she does it.

[Greg]

Depends on how "extreme" you want. Currently I use Virgin Mobile and love it and it's pretty much the cheapest phone I can have for my wants. Technically it is higher than my needs but the value-added I get out of having internet on my phone and just having a smartphone in general is might higher than the cost-added. Besides, I'm on the grandfathered-in plan so I'm still paying $25 a month till I get a new phone. Looks like that won't happen for a whiles

[WiseOne]

I thought I'd post some numbers regarding my ERE progress in response to a query in the million dollar PP thread. These are the 6-month averages from mint.com. I didn't use a 12-month average since we've only been getting really serious about cutting our spending for a few months. Here goes:

Rent: $1422 (Ouch. Sadly, this will go up soon)
Food: $409
Health insurance: $250
Car: $126 (This will go down soon since I just canceled collision and comprehensive coverage)
Cell phone: $59
Baby stuff: $46 (At this point, mostly wipes and new cloth diapers as he outgrows the old ones)
Internet: $52
Shopping: $51
Electricity: $45
Dog: $42 (Mostly much lower, but this average reflects vet bills)
Laundry: $30 (Stupid coin-operated machines, our apt doesn't have a washer built-in)
Cod liver oil: $28
Renter's insurance: $17
Home supplies: $11 (toilet paper, plastic bags, paper towels, soap, dishwasher detergent, etc)
Netflix: $8

Good for you!!

You can do laundry in your apartment for a lot less than $30/month, and you reduce your risk of collecting bed bugs along with your laundry.  A lot of people in my building got the Haier portable washing machine, but the wonder washer/spin dryer combo works nicely too.

Food is just expensive.  If you live near ethnic groceries check them out - you can find some amazing prices and great quality.

Consider buying an apartment, even if the taxes + insurance + mortgage looks high.  It's a really good time to do it.  I just added up what I pay in "rent" (maintenance plus mortgage interest minus tax deduction), and it's about what your rent is even though I'm in an incredibly expensive market.  I bet you could do even better.

[Ad Orientem]

Some observations so far:

1. I've been amazed by how hard it isn't. The difference between spending $4,000 and $2,500 in a month turns out to be easy to miss. If I didn't have mint.com to tell me that that the $1,500 savings came from not eating out, not ordering a bunch of pizza, not buying some new gadgets and video games, I'd easily not know. You forget expenses like these soon after you complete the purchases. That's the sign they don't really add to your happiness, so out the door they go.

2. WTF happens to the money you spend on food!?! It's ridiculous how easy it is to plonk down $700 a month on groceries and not know where the money went. Now we spend more like $350 and I honestly can't tell the difference. If anything we're eating better than ever before now that we eat high-quality meats, soaked beans, etc. This has been the hardest area for us to control the costs. I'm tired, just order some pizza, it's only $20...

3. Quality can pay for itself. I spent $77 on a nice trimmer and haven't needed to pay for haircuts. It's paid for itself in two months. I spent $150 on a nice straight razor (far too much money, in retrospect) and some shave soaps and I haven't needed to buy any disposables. Hasn't paid for itself yet but will in a few months. Bonus: nicer shaves! And so on and so forth.

4. Turning your expensive hobbies into businesses is way easier than I thought. I had an expensive 3D printing hobby that became an income stream without me even really realizing what was happening. Honestly, anyone can do it. If you're passionate enough about a hobby to spend money on it, you probably have a deep understanding of what other people who are also into it would be willing to purchase. Figure it out, supply it to them, and suddenly your hobby is paying for itself and even making you money.

I'm impressed. I only shop at discount grocery stores. That cuts my grocery bill hugely. I bought a trimmer 10 years ago. Trips to the barber are now extremely rare. The razor is a great idea but one I am not sure I am ready to go with. While I have been toying with the whole str8 razor idea everyone I have talked to has warned me that there is a learning curve and that pain and bloodshed are the price of learning how to do it right.

[smurff]

I am impressed at how the cod liver oil bill is more than toilet paper, trash bags, and dishwashing supplies combined. 

[Pointedstick]

Thanks WiseOne! I hadn't even considered buying a little mini-washer. Duh! What a great idea.

I could buy a condo, but and I don't want to entirely deplete my portfolio to afford the down payment!  And I'm not even sure I really want a condo in this area. One thing I really like about my current place is that I can walk to work as well as the grocery store. There's a lot of value in that for me. All the condos within walking rage cost $500,000 and have > 6k/yr property tax bills. After the HOA fees, that's barely better than renting, and the opportunity cost of blowing a huge chunk of cash is just too much for me to bear. Extending it out to biking range yields condos in the 400k range with tax bills of only 4k but man, I dunno. I'll admit that I'm a little irrational about home ownership. I really don't like debt and have this dream of buying a modest house in cash.

[Pointedstick]

I'm impressed. I only shop at discount grocery stores. That cuts my grocery bill hugely. I bought a trimmer 10 years ago. Trips to the barber are now extremely rare. The razor is a great idea but one I am not sure I am ready to go with. While I have been toying with the whole str8 razor idea everyone I have talked to has warned me that there is a learning curve and that pain and bloodshed are the price of learning how to do it right.

To be honest, if I was starting from scratch, I think I might go with a safety razor instead. It's cheaper up front, has a lower learning curve, and while it takes disposable blades, they're dirt cheap. One expense with the straight razor that they don't tell you about is the cost of having it periodically re-honed, which is about the cost of a box of safety razor blades. I could hone it myself eventually, but as you can see from my other thread, I can barely sharpen a kitchen knife. On the other hand, shaving with a straight razor makes me feel like a badass. 

I am impressed at how the cod liver oil bill is more than toilet paper, trash bags, and dishwashing supplies combined. 

That stuff isn't cheap! But IMHO it's worth it.

[WildAboutHarry]

To be honest, if I was starting from scratch, I think I might go with a safety razor instead.

I started using a double-edged razor a couple of years ago (an old Gillette). I bought 100 blades and I still have a bunch left.  I splurged on a fairly expensive badger brush (still looks new).  Shaving soap lasts forever, too. 

The thing that pushed me over the shaving cliff was when the new multi-blade incarnation Gillette razor was in a locked case at the store.

Of course there is always this.

[WiseOne]

I could buy a condo, but and I don't want to entirely deplete my portfolio to afford the down payment!  And I'm not even sure I really want a condo in this area. One thing I really like about my current place is that I can walk to work as well as the grocery store. There's a lot of value in that for me. All the condos within walking rage cost $500,000 and have > 6k/yr property tax bills. After the HOA fees, that's barely better than renting, and the opportunity cost of blowing a huge chunk of cash is just too much for me to bear. Extending it out to biking range yields condos in the 400k range with tax bills of only 4k but man, I dunno. I'll admit that I'm a little irrational about home ownership. I really don't like debt and have this dream of buying a modest house in cash.

Never mind!  I'm impressed with how low your rent is given the condo prices and taxes in your area.  $500K apartments here have similar property taxes but they rent for around $2600 - $2800.

[clacy]

This is just a thought but I've often thought that if people that lived with extreme frugality funneled that time and energy into their career (or a new one, side business, etc), they could probably double or triple their income relatively easily.  Obviously if you're already making $100k+ that becomes more difficult but if you're in the $30-60 range, it seems like that might be relatively easily obtainable.

[dkalder]

This is just a thought but I've often thought that if people that lived with extreme frugality funneled that time and energy into their career (or a new one, side business, etc), they could probably double or triple their income relatively easily.  Obviously if you're already making $100k+ that becomes more difficult but if you're in the $30-60 range, it seems like that might be relatively easily obtainable.

Extreme frugality is often less about positive net balance, but more about becoming independent from other people/society as much as possible.

[Pointedstick]

Very impressive, PS. However, I think you are missing a few things.  What about the amortized expense of replacing electronics like computer and TV? You might be able to go 10 years without replacing the TV if technology doesn't change too much, but 5 years for a computer is pushing it.

You're right, I cheated a bit.

Amortized cost of last TV: $0 (didn't have a TV)
Amortized cost of current TV: $14 (foolishly bought it during a period of lifestyle inflation after I got a great job)
Amortized cost of next TV: $0 (not planning to replace it once it breaks)
Amortized cost of last computer: $20 (will be much lower once I sell it; anyone want a late 2010 Mac Mini with 4 gigs of RAM?)
Amortized cost of current computer: $85 (Only built it 7 months ago; planning to make it last forever by replacing individual parts as needed)

Amortized cost of electronics: uh, I guess my wife has an iPod nano I bought her 5 years ago? that's been $2.50. What else… the 3D printers were expensive but they're paid for by the business. Oh, I also bought her a Kindle which I guess has been $5… as you can see, we don't really buy a whole lot of electronics.

Also, what about maintenance and repair on your car? Plus, if you were retired, or worked elsewhere, you would no longer have your phone free.

Maintenance and repair on my car has been basically nil. I bought new tires two years ago after driving along some really narsty gravel backroads and basically destroying the old ones, and since then it hasn't needed anything. The worst thing you can do to your car is drive it! I keep it under 6,000 miles a year now so things don't really go wrong. I guess you could say that the amortized cost of the tires has been $16 a month.

Once I need to pay for my own phone, I plan to get a prepaid dumb phone for about $5 a month. Google Voice and Skype are awesome and already heavily used for times when I'm at home.

Agree with AO, you can save a fortune by shopping at discount grocers vs Safeway. When my son was in grad school in SF, and we went shopping for the first time to stock his apartment at Safeway, my jaw almost hit the floor when I saw the pricing.

That's a great point. Switching from Safeway to Costco has saved a bucket of money so far. I haven't managed to find an ethnic grocery store nearby that can stay in business, sadly.

[Pointedstick]

Agree with AO, you can save a fortune by shopping at discount grocers vs Safeway. When my son was in grad school in SF, and we went shopping for the first time to stock his apartment at Safeway, my jaw almost hit the floor when I saw the pricing.

That's a great point. Switching from Safeway to Costco has saved a bucket of money so far. I haven't managed to find an ethnic grocery store nearby that can stay in business, sadly.

Costco is not a realistic solution for a small family, imho, due to the ridiculous sizes of the produce and meats. If you have a Walmart or, better yet, an Aldi in the area it would be worth the drive. You will easily offset the cost of fuel by the amount you save, unless it's really far.

Actually, it's been great for us. We buy the huge sizes and then divide the contents into plastic bags, most of which go into the freezer. Then we thaw enough for the next day's meal and nothing gets spoiled. There's no WalMart nearby, but I believe the west-coast equivalent of Aldi is Trader Joe's, and I'll admit I haven't checked that out.

[smurff]

You can find cheap produce in San Francisco's Chinatown.  Just go around the block from where tourists shop for trinkets (where the prices will still be low), and shop where Asians and Asian-Americans shop (but the prices will be lower).

[MachineGhost]

I could buy a condo, but and I don't want to entirely deplete my portfolio to afford the down payment!  :) And I'm not even sure I really want a condo in this area. One thing I really like about my current place is that I can walk to work as well as the grocery store. There's a lot of value in that for me. All the condos within walking rage cost $500,000 and have > 6k/yr property tax bills. After the HOA fees, that's barely better than renting, and the opportunity cost of blowing a huge chunk of cash is just too much for me to bear. Extending it out to biking range yields condos in the 400k range with tax bills of only 4k but man, I dunno. I'll admit that I'm a little irrational about home ownership. I really don't like debt and have this dream of buying a modest house in cash.

It's not irrational.  Owning a home is dumb.  It is a money pit masked as a forced savings device.  Only in the subprime bubble did perceptions of home ownership turn from consumption to an investment.

I have not yet found the happy living medium and wonder if one even exists?  Maybe I ought to go back to living in a planned community or even try a commune or just live in a van down by the river.

[MachineGhost]

Agree with AO, you can save a fortune by shopping at discount grocers vs Safeway. When my son was in grad school in SF, and we went shopping for the first time to stock his apartment at Safeway, my jaw almost hit the floor when I saw the pricing.

I honestly don't know how those grocery stores stay in business.  1.5 quarts of Breyer's All Natural Ice Cream is a whopping $5.99 at Ralphs (Kroger).  Those prices are what I would expect to be paying in the middle of nowhere in a small general store in Montana or something.  I am looking into an ice cream machine (to go along with my new bread machine and pizza stone).  Its is pointless wasting money on subpar, overpriced food out of the house nowadays.

The weird thing is I think those grocery stores used to be more affordable before the discounters came about.  What happened?

[Pointedstick]

I hear you, MG. Living in a van is an interesting option. You could refurbish the interior of a step van and live fairly nicely! My ultimate housing dream is to purchase a plot of land and build a house out of earthbags. I'll do the plumbing and electrical work, with solar panels and a windmill. Zero electricity bills, zero water bills, zero sewer bills, zero heating and cooling bills, close to zero maintenance bills (I'll be able to repair anything since I built it, and the materials will be earth and scrap wood). The cost of this endeavor will be below $60,000, and the monthly property taxes will be probably under $120 (based on my research). It will be bulletproof and comfortable in any climactic condition with an appropriate design and the judicious use of a woodstove.

Oh, how I can dream…

[Kriegsspiel]

Did you just read that post on resilient communities about earthbags?

[Pointedstick]

I've been drooling over earthbag building for quite a long time. My wife actually has a friend who just built an earthship with the rammed earth tires and everything! It's really cool.

[smurff]

 I am looking into an ice cream machine (to go along with my new bread machine and pizza stone).  Its is pointless wasting money on subpar, overpriced food out of the house nowadays.

I have a new shopping list, made from the PP Forum. In addition to a bread machine and pizza stone, I've added an ice cream machine and crock pot-type slow cooker (to make the grass-fed beef stocks and broths recommended here). What other tools do I need for a great PP kitchen?

[MachineGhost]

I have a new shopping list, made from the PP Forum. In addition to a bread machine and pizza stone, I've added an ice cream machine and crock pot-type slow cooker (to make the grass-fed beef stocks and broths recommended here). What other tools do I need for a great PP kitchen?

Just to note...  I use the bread machine to make the pizza dough, specifically a gluten-free pizza dough (still working on finding one that doesn't taste like crap).  But it can come in handy for other family members that eat the S.A.D..

I'd say you need to add a bidet, a Roomba and some leather chaps to your list!