This is not a true list of frequently asked questions, but an explanation of the way I live in question and answer format. Back in 2004 I wrote How to Drop Out
, which has since become very popular, but the way I live now is better described as frugal early retirement. Here's another list of early retirement frequently asked questions
at the Early Retirement Extreme blog.
How did you get your money?
A way that's not available to most people. This page is not about how anyone can retire early. You need some luck. But there are people much luckier than me who have not retired yet, and people almost as lucky who could retire with a few more years of work, and even unlucky people might like to know how I live so cheaply. If you add up all the money I've received in my life, from all sources, it's less than the median American male of my age. The difference is that I've spent less.
What are some things you did in the past to spend less?
For most of the 1990's I didn't own a car, and there were probably some years when I bought two CD's and had one restaurant meal. In the late 90's I briefly owned a car and spent a few months driving around the country living in it. Once I lived a tiny detached room from which I had to walk through a parking lot to get to the rest of the house, which I shared with a bully, a psychopath, and a guy who never left his room. Another time I shared a one-bedroom low-income apartment with almost no natural light. For a few years I was the first one to hit the dumpster every Sunday at one Trader Joe's, hauling organic meat and eggs and produce on my bike. I applied for rooms in packed anarchist group houses but wasn't cool enough. I tried to squat a shed, which had been vacant for years, but a week later the owners came to fix it up. After that I squeaked by on couch surfing and housesitting, and finally got lucky with a great housesitting gig through most of the 2000's.
What assets do you have now?
I own a two bedroom house in Spokane, ten primitive acres north of the city (which I'm ready to sell to a permaculturist for below market value), a five figure savings account, and IRA's that pay out around $10,000 a year.
What are your annual expenses?
It's hard to say because things are always in flux. In practice it's been $12-15K, but I had a some one-time expenses around buying a house, and now I'm supporting my girlfriend through college. In a few years we might move to a bigger city and have to pay much more for housing. My minimum expenses include about $2000 property tax, $1500 utilities, and maybe $2000 food.
Do you keep a budget?
No. Spending money is painful for me. The danger is not that I'll spend too much, but that I'll spend too little, and unnecessarily reduce my quality of life and health.
Can you break down your food expenses?
I don't keep track of them, but I almost never eat out. My usual breakfast is boiled sprouted wheat berries. I buy wheat from a local farmer, bulk foods and milk at the co-op, and lots of stuff at Costco. My yard produces lots of summer fruit. I generally make everything from scratch, and I don't drink coffee, soda, or fruit juice, but I love Bark Thins chocolate, and my favorite beers are Deschutes Red Chair and Ninkasi Dawn of the Red.
Do you dumpster dive now?
No, but I totally would if I knew any good ones. In Spokane most grocery stores use trash compactors. There's a dumpster diving group on Facebook but I refuse to get an account, and I haven't found anything on my own.
What do you spend on clothing?
Damn near nothing. A few years ago I treated myself to a $100 pair of FiveFingers KSO Trek shoes, but generally I buy everything at thrift stores. I frequently go to Goodwill Outlet where the stuff that doesn't sell at the regular Goodwill is thrown in bins and sold by the pound.
I'm not the kind of person who will turn on the TV to fill the boredom. At the same time, some entertainment is really, really good. My favorite TV shows include Game of Thrones, Orphan Black, and Fringe, and there are several options for watching them free with home internet. When I was single I got internet at the library but now we pay too much for CenturyLink. Sometimes I play video games, and my favorite is Starsector which had a one-time cost of $10. My computer is Dell Latitude E6400 made around 2008.
I have a Motorola E815 dumb phone, and the $80/year plan from Page Plus, which gives me more minutes and texts than I need.
Did you have college loans?
I went to college in the late 1980's when even Stanford cost only $16,000 a year. My parents had been saving up for years to help put me through a high-status school, but because I didn't fake enthusiasm on the applications, I had to go to a cheap state school. This was lucky, because I avoided having to get any loans.
If I were 18 years old and starting college today, I would probably do what most young people are doing: get massive loans with no way to ever pay them back, and hope for the debts to be canceled by the zombie apocalypse. But that's not what I recommend. I recommend not going to college at all unless you can do it without debt, and maybe not even then. A college degree and a college education are less useful now than they've ever been. The main thing you learn is how to think and act like an educated person, something you already know if your parents are educated, and you can learn it just by hanging around a large campus and sitting in on giant lecture hall classes.
Do you have health insurance?
Woo-hoo! I'm covered now through Obamacare. Medicaid now requires only a low income, not low assets, and I'm well under the ceiling. At the same time, I think Obamacare is bad for the country. Medical insurance no longer serves the original purpose of insurance, to protect people from financial ruin, but instead serves to insulate consumers from the market, which enables escalating prices, massive waste disguised as "jobs", and unrealistic expectations of medical miracles for everyone. This system is now locked in, and I can't see how we'll ever cut costs.
Do you have a mortgage on your house?
No. I chose a house that I could buy with cash. Maybe if my life had gone differently, I would have found a job paying $30,000, lived on $5000, and saved up for a house. Or I might have gone to Detroit or St Louis or Buffalo and bought a house for a few thousand dollars, or squatted. Or I might have continued couch-surfing and housesitting, or looked for some kind of caretaker or apartment manager job, or lived in a homeless encampment, or loaded this website with ads and rented a cheap room. Because of my strong aversion to debt, a mortgage was never an option.
Can debt ever be good?
It depends on your personality. If it's easy for you to spend less money than you make and build up savings, then there's no reason for you to ever go into debt, even for a house. If it's difficult for you to save money, but debt motivates you to work hard to pay it off, then debt is basically a way to hire lenders as life coaches. Some people need this.
What about tax writeoffs for mortgage payments?
When you think about it, this is a giant subsidy for the banking industry, with borrowers serving as money launderers. Instead of paying cash for a house, you get a loan and pay extra money to the bank in the form of interest, and the government pays this money to you in the form of lower taxes. Even if this makes me a bit of money, it's not worth the complication and the knowledge that I'm channeling government money to banks. Also my income is low enough that I pay little or no federal tax, so a deduction is not useful to me.
What about Social Security?
I'm not going to get it, because I didn't pay in enough. Anyway I don't trust the government to handle my retirement, and I suspect that by the time I'm eligible, Social Security will have been cleaned out by the baby boomers.
What if your investments get wiped out by economic collapse?
I've put most of my money in low-yield low-risk funds. If we get such a severe collapse that I lose my money, so will everyone else, and then the best things to have are friends, skills, and an adaptable state of mind. I'm mentally ready to live under a bridge when I'm 70 years old.
Do you travel?
In early 2012 I traveled for two and a half months via bus, train, and shared rides, staying with readers of my blog. Someone without a blog could use couchsurfing.org. I spent about $800 for travel and $700 for food, which comes out to around $7500/year, if I had no permanent residence and traveled full time.
Would you ever get another job?
I think I would enjoy teaching philosophy at a community college, or editing good books, or playing in a space rock band. But I have no incentive to look for paid activities, because I already have enough money.
Do you feel any desire to make more money?
Like everyone else, when I get money, it makes me feel good. But this feeling is temporary. Anyone can see that the pleasure of getting
does not translate into the pleasure of having
. The correlation of money with happiness exists only below the poverty line. Once a person's basic needs are met, more money does not buy more happiness -- but it usually carries hidden costs. Studies have shown that when a task requires any thinking or creativity, extrinsic motivators, like money, make you perform worse, and you perform best when you are doing something you enjoy in your own way. After basic survival, the only real value is in "fuck you money": if people offer money to do stuff you'd rather not do, you can always say no.
If you had a lot more money, what lifestyle changes would you make?
I'd live in a spacious apartment in Portland or Seattle, eat a pound of organic blueberries and an avocado every day, get a weekly 90 minute massage, and take long tours in Amtrak sleeping cars.