Gyroscopic Investing

Coffee wrote:- Your town has at two types of grocery stores: Expensive ones and cheap inexpensive ones.  (Hint: Albertson's falls into the former category).

I don't know about you, but if you have a Trader Joe's in your town, it is probably the cheapest grocery store outside of Asian and other ethnic stores you might find.  I've found Trader Joe's in our area (New England) is less expensive than even the super Walmart and Target discount stores.  Not only that, but their store brand merchandise is really good and is often organic or locally sourced.  It's basically like Whole Foods but half the price.

big fan of Trader Joe...i can walk there....get exercise, save gas & wear on car

a laundry rack for drying clothes gets a big savings over the cost of coin op,
i am looking into buying a portable washer for an apartment, but i haven't figured out how well it pays for it self yet..

Marry wisely and lovingly once.

l82start wrote: a laundry rack for drying clothes gets a big savings over the cost of coin op,
i am looking into buying a portable washer for an apartment, but i haven't figured out how well it pays for it self yet..

When I lived in Costa Rica, the natives all used these things called, "Spinners".  They were similar to small drying machines, but without the heating element.  The clothes would still be damp when you took them out, but they'd dry faster on the line.  You might look into one of those?

They used 'em to save on their electricity bill.

I find http://earlyretirementextreme.com/ and its associated http://forum.earlyretirementextreme.com/ to have excellent ideas on how to save money aggressively and retire very early.

ETA:  Check out the thread on the Permanent Portfolio (http://forum.earlyretirementextreme.com/topic.php?id=80).

6 Iron wrote: Marry wisely and lovingly once.

Absolutely!

One of my best money-saving "hacks" was to marry a woman who is not a gold-digger and is relatively low-maintenance financially.  For our first four or five dates, I deliberately chose inexpensive--even cheesy--activities like bowling, miniature golf, ice skating, and a local zoo.  A gold-digger or princess never would have tolerated such cheap dates.  But my future wife didn't make a single remark about the low cost of those first several dates.

I continued to pay close attention to her attitude about money as we continued dating, but her great attitude on those first few cheap dates really told me most of what I needed to know.

It seems like most men don't actively screen out financially high-maintenance women in this way (their minds are too clouded by their emotions), which is why I like to think of it as a money-saving "hack."

6 Iron wrote: Marry wisely and lovingly once.

Too late for that one. 

Our total wedding costs 11 years ago were $250. I wanted to spend less and have zero guests. My husband insisted that we have five guests and take them to lunch.

Anyway, it certainly makes life easier to have a mate with compatible tastes and values.

What a great bunch of tips.  I'll be bookmarking this thread.

I also like checking your state's "unclaimed property" records to see if someone somewhere owed you money but couldn't find you.  I found an embarrassing amount of cash this way that I'd forgotten about in a less-responsible youth.  The money had been earned in the late 90s but was still sitting around waiting for me.  Here's the Texas unclaimed property website.

Lone Wolf:

This site says I have $513 dollars coming to me (Yea!).  But it's asking for my social security number. 



... makes me a little uncomfortable.

You need for find a woman who has more money then you

Coffee wrote: Lone Wolf:

This site says I have $513 dollars coming to me (Yea!).  But it's asking for my social security number. 



... makes me a little uncomfortable.

If speaking to a human being makes you feel a bit more comfortable, you might want to try giving them a call.  Here are their numbers -- see the one for "Unclaimed Property Claimants".

Sounds like you found a serious chunk of change... congratulations!

LifestyleFreedom wrote: I find http://earlyretirementextreme.com/ and its associated http://forum.earlyretirementextreme.com/ to have excellent ideas on how to save money aggressively and retire very early.

This is a very interesting website.  I read some of his articles and found it a little "extreme"... I don't think I can live on $1,000 a month in such austerity as he does, but it is interesting to hear about people that can make it work for them.

The thing that kind of turned me off - I started reading on their forum - the investing advice is just terrible, extremely ill-informed.  For example, they had one guy that was using a margin account on 100% margin to invest in dividend stocks, completely unaware that a 25% correction would cause a margin call and just said something like "if I get a margin call, who cares, I'm up 6% so far this year." (Jan-Mar. 2011)  Other people that were investing in all kinds of crazy REITs, TIPS, etc.

I'm down with the early retirement, but you would think that people intent on retiring 5-6 years from now would be more careful with their investments.  After all, losing half of your meager $100K retirement plan would certainly set you back another 5-6 years, minimum.

Then again, I'm very impressed that people are starting this in their 20s.  If only I had such wisdom to start any type of retirement plan in my 20s, that would have been awesome for me.

That site strikes me as a bunch of college kids advocating the pauper's life.  Sure-- I can live like a 3rd World peasant, too.  But why???  So I can retire early and live like a peasant??

That's not what it's about, for me.

There is a mixed bag at the early retirement forum, with more sensible discussions on some of the nuts and bolts of early retirement. But just like at Bogleheads, there are some fringe ideas. I am looking to begin the transition in my 50's, but if it involves requiring that I use the same razor blade for a year, I probably should wait a little longer.

They do stress an important concept that underlies the essence of this thread: make it a habit to live below your means (LBYM).

6 Iron, I agree.  The general concept is great and I have a ton of respect for people that can make their life work on only $1000 a month.  Personally, I would be happy to retire at 50, and the wife and I love having cars, eating out occasionally, and enjoy the finer things in life such as a hot shower whenever we feel like it, a nice home cooked meal including the occasional steak, and not worrying about whether or not we can afford to buy new shoes when ours wear out.

I think it's great to hear about how they can make it work, but personally, I would rather live like a king than a pauper, and if I can live like a king and save money like I'm living as a pauper, all the better... :-)

Coffee wrote: That site strikes me as a bunch of college kids advocating the pauper's life.  Sure-- I can live like a 3rd World peasant, too.  But why???  So I can retire early and live like a peasant??

I participate in that forum too, although I am only "extreme" in some areas.  A lot of people have a strong desire to make their livelihood independent of wage income at a young age for various reasons.  Examples: the rat race is unfulfilling; unable to find stable work; anxiety about long-term career prospects in the US; wish to pursue a life's work which is not compensated well (e.g. art, writing, parenting, activism); peak oil concerns.  ERErs prioritize economic freedom over luxuries and status symbols.

Mathematically if your savings rate is >50% it doesn't take long to reach financial independence due to the perfect storm of rapid savings and only needing a relatively small portfolio to cover expenses.

Storm wrote: The thing that kind of turned me off - I started reading on their forum - the investing advice is just terrible, extremely ill-informed. 

Yeah.

Storm wrote: The general concept is great and I have a ton of respect for people that can make their life work on only $1000 a month.

I can't fault anyone pursuing this lifestyle because it lies within the established parameters of honest society.  They choose to spend very little, invest in the capital markets, and live on the proceeds.  The other models for opting out of paid work seem to involve mooching off someone, abusing social programs, pyramid schemes, or some other violation of the golden rule.

FWIW, Fisker (the author) cites "How I Found Freedom in an Unfree World" as a key influence.

KevinW wrote: I can't fault anyone pursuing this lifestyle because it lies within the established parameters of honest society.  They choose to spend very little, invest in the capital markets, and live on the proceeds.  The other models for opting out of paid work seem to involve mooching off someone, abusing social programs, pyramid schemes, or some other violation of the golden rule.

I agree.  Very interesting stuff.  It's not for me but I applaud anyone who finds an honest lifestyle that makes them happy.  Whether it's a fit for my personal situation has no real meaning for practitioners of this lifestyle.

If nothing else, this kind of material is a great illustration of boiling things down to their essentials and categorizing the things you need vs the things that you just thought you needed.

I'll have to check out how they handle health insurance.  Hopefully the recommendation is some kind of HDHP (this is what I use) rather than suggesting that you just wear a helmet everywhere or something.

Lone Wolf wrote:I'll have to check out how they handle health insurance.  Hopefully the recommendation is some kind of HDHP (this is what I use) rather than suggesting that you just wear a helmet everywhere or something.

http://earlyretirementextreme.com/how-t ... -care.html

Yes the most common approach is a HDHP, HSA, healthy lifestyle, and taking care of little things yourself.

KevinW wrote:

Lone Wolf wrote:I'll have to check out how they handle health insurance.  Hopefully the recommendation is some kind of HDHP (this is what I use) rather than suggesting that you just wear a helmet everywhere or something.

http://earlyretirementextreme.com/how-t ... -care.html

Yes the most common approach is a HDHP, HSA, healthy lifestyle, and taking care of little things yourself.

Another positive with a HDHP while you are employed is that if you lose your job the COBRA premium for the HDHP will not be prohibitively expensive (as PPO plan COBRA premiums normally are), which will allow you to maintain health coverage for up to 18 months without breaking the bank while you either look for another job or enjoy your early retirement.

KevinW wrote: Yes the most common approach is a HDHP, HSA, healthy lifestyle, and taking care of little things yourself.

Some very nice tips on there.  Grabbing a HDHP for $71 a month (wow) really does seem like a great way to go.  If you then dump the max into an HSA, you're left with a great way cushion for medical expenses or an IRA-like instrument if the money's never needed.  It's a nice instrument and very positive for savers, particularly low-income savers like the ERE crowd.

MediumTex wrote: Another positive with a HDHP while you are employed is that if you lose your job the COBRA premium for the HDHP will not be prohibitively expensive (as PPO plan COBRA premiums normally are), which will allow you to maintain health coverage for up to 18 months without breaking the bank while you either look for another job or enjoy your early retirement.

Ah, great insight.  I had never considered it from that angle but that's one more way of buying yourself a little bit more freedom.

Storm wrote: 6 Iron, I agree.  The general concept is great and I have a ton of respect for people that can make their life work on only $1000 a month.  Personally, I would be happy to retire at 50, and the wife and I love having cars, eating out occasionally, and enjoy the finer things in life such as a hot shower whenever we feel like it, a nice home cooked meal including the occasional steak, and not worrying about whether or not we can afford to buy new shoes when ours wear out.

I think it's great to hear about how they can make it work, but personally, I would rather live like a king than a pauper, and if I can live like a king and save money like I'm living as a pauper, all the better... :-)

I also agree with this.  If people want to live a spartan lifestyle, that's fine by me.  But cutting things out of your life has diminishing returns.  I think it's much easier to earn more than to cut more expenses.  I know I've said it before, but GC'ing your own house is totally worth it and I'm blown away that more people don't do this.  Where else can you earn $100K+, tax free, in your spare time (save for MT's carpet cleaning)?  I'd rather build and move every 2 years than have to cut down on vacations and eating out at restaurants. 

Wonk wrote: Where else can you earn $100K+, tax free, in your spare time (save for MT's carpet cleaning)? 

I made $300 over the last two evenings, so I'm probably not on pace for $100k annually from this gig, but my forearms are starting to look like Popeye's.

MediumTex wrote: but my forearms are starting to look like Popeye's.

It will be time to quit if your wife starts looking like Olive Oyl.