Early retirement extreme : a philosophical and practical guide to financial independence

This book provides a robust strategy that makes it possible to stop working for money in less than a decade. It provides a shift in economic perspective from consuming to producing. Your value to society is not how much you earn or buy, but what you create and produce. Consumers are often forced to buy expensive solutions, but producers have the flexibility to create their own solutions at a quarter of the cost. The resulting savings are invested to cover the remaining expenses, resulting in financial independence. The strategy can also be used to pay off debt, travel the world, volunteer, go back to school, or simply work without worrying about the next paycheck. It offers a compelling alternative to the default choice of getting a college degree, buying a car, buying a house, filling the closets with stuff, and then spending the next 40 years paying it all off. Cover Half title Imprint Contents About the book 1 A different frame of mind 1.1 Is this for me? 1.2 Barriers to change 2 The lock-in 2.1 Education and training 2.1.1 College degrees 2.2 Career 2.2.1 Specialization 2.2.2 The cost of specialization 2.2.3 Job competition 2.3 The pursuit of stuff, status, and happiness 2.4 The problem with personal finance 2.4.1 Mortgage, car-loans, and consumer debt 2.4.2 Savings and investments 2.0 Retirement 2.6 Breaking out 3 Economic degrees of freedom 3.1 Economic classifications 3.1.1 The salary man 3.1.2 The working man 3.1.3 The businessman 3.1.4 The Renaissance man 3.2 Succession and the cycle of change 3.2.1 Ergodicity and destiny 3.3 Our current world 3.3.1 Leaving the Dark Ages 3.4 The next generation 4 The Renaissance ideal 4.1 Human capital and necessary personal assets 4.1.1 Physiological 4.1.2 Intellectual 4.1.3 Economic 4.1.4 Emotional 41.5 Social 4.1.6 Technical 4.1.7 Ecological 4.2 The Renaissance education 4.3 Gauging mastery 4.4 Decoupling and increasing complexity 5 Strategy, tactics, and guiding principles 5.1 Strategic principles 5.1.1 A modular design 5.1.2 Contingency goal-setting 5.2 Tactical principles 5.2.1 Identifying needs and wants 5.2.2 Building blocks 5.2.3 Construction methods 5.2.4 Appropriate response 6 A Renaissance lifestyle 6.1 Things 6.1.1 Which things should I own? 6.1.2 How to avoid getting things 6.1.3 How to get rid ofthings 6.1.4 How to get things 6.1.5 How to make things 6.2 Shelter 6.2.1 Sleeping and other living arrangements 6.2.2 Howto find shelter 6.2.3 Telecommuting and work 6.2.4 Domestic food supply 6.2.5 Lights and electric 6.2.6 Heating and cooling 6.3 Clothes 6.3.1 Fixing up a wardrobe 6.3.2 Laundry 6.4 Health 6.4.1 Moving 6.4.22 Eating 6.5 Transportation 6.5.1 Driving 6.5.2 Walking 6.5.3 Cycling 6.6 Services 6.6.1 TV, cell phones, and other money sinks 6.6.2 Money, credit, and insurance 6.7 People 6.7.1 Spouses and significant others 6.7.2 Children 7 Foundations of economics and finance 7.1 Financial cash flow cycles 7.2 Working for money 7.2.1 Salaried work 1.2.2 Nonsalaried work 7.3. Making money work for you 7.3.1 Important financial ratios 1.3.2 Financial independence and investing 7.3.3 Investing and reasonable return rates 7.3.4 Asset management Epilogue Further reading Index A strategic combination of smart financial choices, simple living, and increased self-reliance brought me financial independence at 30 and allowed me to retire from my profession at 33. Early Retirement Extreme shows how I did it and how anyone can formulate their own plan for financial independence. The book provides the principles and framework for a systems theoretical strategy for attaining that independence in 5-10 years. It teaches how a shift in focus from consuming to producing can help people out of the consumer trap, and offers a path to achieving the freedom necessary to pursue interests other than working for a living. The principles in Early Retirement Extreme show how to break the financial chains that hold people back from doing what they truly want to do. The framework has been used by many people over the last few years to accomplish a variety of goals. It provides people a means to achieve almost any goal, whether it's debt-free living, extended travel, a sabbatical, a career change, time off to raise a child, a traditional retirement, or simply a desire for a more resilient and self-sufficient lifestyle. The book was initially written for people in their 20s and 30s, but its ideas aren't limited to early retirees. Middle-aged people in the grips of consumerism can use the principles to take back control of their lives. People closer to retirement age who don't feel adequately prepared can use it to set themselves up for a comfortable retirement in a relatively short period of time. Anyone worried about their financial future can use the principles in Early Retirement Extreme to make their future more secure "Early Retirement Extreme provides a robust strategy that makes it possible to stop working for money in just a short number of years. It provides a paradigm shift in economic perspective from consuming to producing. Your value to society is not how much you earn or how much you buy. It is what you create and produce for yourself and for others. It is what you leave, not what you take. Consumers are often locked into expensive options, but producers have the flexibility to create appropriate solutions at a quarter of the cost. The resulting savings (the difference between income and expenses) is one's monetary contribution to society. When savings are put to work through investments, society will pay dividends which cover the remaining expenses resulting in financial independence. The strategy can also be used to pay off debt, travel the world, volunteer, go back to school, or work on otherwise nonprofitable endeavors without worrying about the next paycheck. It offers a compelling alternative to the default choice of graduating high school, getting a college degree, buying a car, getting married, buying a house, filling it with furniture, clothes, TVs, washing machines, lawn mowers, and electric egg boilers, and then spending the next 40 years working 9-5 to pay it all off."--Publisher description "How to retire in your 20s and 30s (without winning the lottery). This book provides a robust strategy that makes it possible to stop working for money in less than a decade."--Page 4 of cover