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Extreme Early Retirement (EER)

Here's a summary of how Jacob did it.

http://earlyretirementextreme.com/2007/12/how-i-became-finan...

intercst
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No. of Recommendations: 2
1. He references "Rich Dad, Poor Dad," which is kind of scary, for reasons I shouldn't need to expand upon.

2. His standard of living, as described, was very, very low. Lentil soup and tuna for dinner, every night? And it goes downhill from there. You have to be something of a monomaniac to live the life of the medieval peasant.

3. He had substantial luck. 30% per year return on his investments?

- Gus
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I didn't see the part where he stated he earned a 30% return on his investments. I'm sure that would make for interesting reading.

I did note that he referenced "Your Money or Your Life". I'll second that recommendation. It's a thought-provoking book that influenced my thinking, as well (I semi-retired at age 50). I've recommended that book to many.
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"1. He references "Rich Dad, Poor Dad," which is kind of scary, for reasons I shouldn't need to expand upon."

He did a 'Rich Dad, Poor Dad'....he had the taxpayer put him through grad school apparently, with 'grants' and 'scholarships'......never mentioned a dime about paying tuition. Oh, he was a 'grad instructor'.....but I think he welched off the tax payer quite a bit. Just like Kiyobashi and his stint at the Marine Merchant academy, and then the minimum number of years of service, then quickly out. Just enough to 'pay off his obligation'. Hardly the intent of the program.

Now, he seems to be mooching off his wife.....( I wonder why she married him?).....no ambition..she is working, he is doing his '4 hours a week'.....

My niece could probably come close.....she was a teacher in NYC....got her teaching certification through a 'free' government program for ex-Peace Corp volunteers. She spent 2 1/2 years in Togo..they gave her $30/month in spending money, but nothing to spend it on..lived in a village of a couple hundred. The Peace Corp gave her host family some money for 'room and board'.....she taught in the school.

WHen she came back, she went to a program at Columbia to get her teaching certification.....with a stipend...she shared an apartment in Brooklyn..had no other income. Of course, after you live in Togo on a bare diet for 2 1/2 years - and she is mostly a vegatarian.....you can live cheap.

Now, she just seems to wander aimlessly.....she took a 4 month stint with the Peace Corp in Liberia giving out food aid.....and is working to try and get an actual paying job through the UN which runs the food program in Liberia giving out our tax dollars to mostly corrupt middlemen......very little actually does any good, and it costs a fortune in other costs to get a pound of food delivered. Gigantic bureaucratic waste, but that is what the UN is. We should stop giving them 90% of the money we do.

Anyway, she could probably live on a buck a day.....if she had a place to crash.....

Meanwhile, this guy seems to be doing a lot of mooching, living off his wife, putting her out to work.....doing his 4 hours a week......

But, heck, if everyone did that, the gov't would have to downsize to the size it probably should be in the first place.......

t.
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No. of Recommendations: 18
telegraph analyzes,

He did a 'Rich Dad, Poor Dad'....he had the taxpayer put him through grad school apparently, with 'grants' and 'scholarships'......never mentioned a dime about paying tuition. Oh, he was a 'grad instructor'.....but I think he welched off the tax payer quite a bit. Just like Kiyobashi and his stint at the Marine Merchant academy, and then the minimum number of years of service, then quickly out. Just enough to 'pay off his obligation'. Hardly the intent of the program.

</snip>


I guess I'm confused. Haven't your "pick 'em up by the bootstraps" conservative role models done much the same? The taxpayers took a real hit when they spent over $1 million teaching George W. "Dumbya" Bush how to fly an Air Force jet only to have him AWOL in Alabama a few years later working on a GOP political campaign.

intercst
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I didn't see the part where he stated he earned a 30% return on his investments.

http://earlyretirementextreme.com/2008/02/how-i-became-finan...

So today when I see people buying some company because they think it’s cool, I try to remind myself about the way I used to buy shares. As luck would have it, most of these positions turned out to perform spectacularly (except the airline) returning more than 30% a year.

It's a little fuzzy exactly how much money had in the "30% a year" stocks. The whole site really rubs me the wrong way. Not because of accomplishments, but the tone and the bolding feel like snake-oil salesmanship.

- Gus
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telegraph analyzes

Isn't that a contradiction in terms?

he had the taxpayer put him through grad school apparently, with 'grants' and 'scholarships'

Leaving aside my own qualms about what I read, grants and scholarships aren't synonymous with taxpayer money. Universities frequently fund those things, too.

- Gus
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"It's a little fuzzy exactly how much money had in the "30% a year" stocks." - Gus

I see what you mean. He's a bit "light" on the specifics. And if he made his nut by trading options...well, that's a bit too speculative for me. I've seen too many people lose BIG that way.
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The thing I liked about Intercst's site is that he didn't assume any special trading knowledge. Everything he said about how much money to accumulate was based on dirt-simple investing in S&P 500 index funds.

I went with individual stocks a long time ago, but retirement planning shouldn't require that.

- Gus
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intercst: "I guess I'm confused. Haven't your "pick 'em up by the bootstraps" conservative role models done much the same? The taxpayers took a real hit when they spent over $1 million teaching George W. "Dumbya" Bush how to fly an Air Force jet only to have him AWOL in Alabama a few years later working on a GOP political campaign."

I'd rather have a GWB in the White House as Commander in Chief that someone who is 'so afraid' of guns that he wants to confiscate every gun in private hands, and has real problems with folks 'clinging to the guns and bibles'......

We're fighting two wars, and Obam-bi is clueless. Can't make a decision about his policy that he set in place six months ago.....and meanwhile troops are dying by the hundreds - except it isn't front page news like it was when GWB was President. Funny, isn't it? Troops die, and Obam-bi can't make decisions......

Kiyobashi was a 'user'.....used friends until they couldn't help him, and discarded him. Wanted inside information to trade on. A real slime ball.

I see intercst still has a bad case of BDS....


t.
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Gus: "It's a little fuzzy exactly how much money had in the "30% a year" stocks. The whole site really rubs me the wrong way. Not because of accomplishments, but the tone and the bolding feel like snake-oil salesmanship."

COming next...the super secrets of retiring early...... ala Hocus....

If you have to brag about it...you probably are barely succeeding at it....

He might have lost 100% on his airline stocks..and wound up with zero for the year....

t.
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Gus: "Leaving aside my own qualms about what I read, grants and scholarships aren't synonymous with taxpayer money. Universities frequently fund those things, too."

usually with tax exempt money!....

t.
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The thing I liked about Intercst's site is that he didn't assume any special trading knowledge. Everything he said about how much money to accumulate was based on dirt-simple investing in S&P 500 index funds.

I went with individual stocks a long time ago, but retirement planning shouldn't require that. - Gus

-------------------------------------


The only individual stocks that Bonnie and I have ever owned is a little bit of McDonald's stock. I think it's worth somewhere in the neighborhood of about $16,000? All the other money in our retirement accounts is in some sort of index funds. That's all we've ever owned. The last time I checked I think we have about ~ $900,000 in retirement funds?

By the way, the McDonald's stock has done really well. It's split several times and grown quite a bit. We bought it years ago though. Like probably sometime in the late 1980's? It just sit there growing. We have it set up with the "income reinvest" option?

Art
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"By the way, the McDonald's stock has done really well. It's split several times and grown quite a bit. We bought it years ago though. Like probably sometime in the late 1980's? It just sit there growing. We have it set up with the "income reinvest" option?" - Art
-------------------------------------------------


<grin!> Maybe it's called "dividend reinvest" option? You can see why I don't invest more in individual stocks rather than just using index funds?

I'm easily confused.


Art
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His standard of living, as described, was very, very low.

He calls his blog "Early Retirement Extreme" for a reason! He lives on extremely little, saves extremely much, and used to have an extremely risky portfolio (I think he holds 100% individual stocks now--but I believe he's only in his 30s). I like his blog and check in regularly (I'm bored by his extreme exercise, though--heavy-duty weight-lifting or something).
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this guy seems to be doing a lot of mooching, living off his wife, putting her out to work

I seem to remember reading on his blog that his wife loves her work. He certainly isn't "putting her out to work."

Do you think Art & I are putting our spouses out to work, too? I can assure you that mine works out of personal choice--I keep begging him to retire! I get the impression that Bonnie loves her job as well.
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<<Apparently the personal finance blogging community doesn’t like Rich Dad Poor Dad because it does not contain enough “actionable” items. For me, though, it was like striking gold. That book completely changed my attitude towards money from being something one spends to buy stuff to being something one invests to make more money. Leave it to me to figure out the details, I am a smart guy, but it takes a genius to create a paradigm shift and I am not a genius.>>



One of the comments on the blog was that RDPD isn't a book about personal finance, it's an inspirational book. Just as with the comments above, it can change people's minds and change their approach to life.

As a How To personal finance book, it's not worth much. But as a means of inspiring people as to the ways they can live their life, it can be very good.



Seattle Pioneer
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"As a How To personal finance book, it's not worth much. But as a means of inspiring people as to the ways they can live their life, it can be very good."

The only way Kiyobashi made his money was shilling his books and 'theories' on how he got 'rich' (which may be in doubt as well).

If you read the detailed analysis of Kiyobashi, you'll find he contradicts himself continually, comes up with nice little homilies that he ignored, urges folks to use people, then discard them when they are 'used up'.

He disparages regular work that people enjoy themselves.

He's nothing but a con man. Oh, a few good ideas, but a lot of bad ideas, a lot of just 'me me me greed'.

And the rest of his ghost written series of books are nothing but a way to extract ever more increasing amounts of money from people looking for a 'magic way' to get rich.

Maybe his book is really a sad commentary on human nature - wanting something for doing the least amount possible with no regard for the consequences for other, or any guilt.

t.
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Do you think Art & I are putting our spouses out to work, too? I can assure you that mine works out of personal choice--I keep begging him to retire! I get the impression that Bonnie loves her job as well. -
alstromeria

---------------------


Bonnie told me she would keep working even if I won the lottery. She also told me one summer that she misses her students in the summer when she's not teaching. We don't have kids and she sort of mother's the kids she teaches. Her students love her. She gets a lot of recognition from her job. She wins awards and all that kind of thing.

Art
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The taxpayers took a real hit when they spent over $1 million teaching George W. "Dumbya" Bush how to fly an Air Force jet only to have him AWOL in Alabama a few years later working on a GOP political campaign.

intercst


thanks for reminding me why i was so relieved when you started your own liberal board intercst. the constant harping on bush hatred was just as boring as hocus'.
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Bonnie told me she would keep working even if I won the lottery.

Teaching, especially at the college level, is very satisfying for those who have "the calling." Several fields that require many years of education (law & medicine as well as academia) often see the elderly continuing to work.
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several of his points parallel my own experiences.

1. if you are willing to not keep up with the jones, you CAN get outta school with 0 debt. I did much the same as he in undergrad and grad and got the degrees with only $2400 in loans and $2000 in the bank.

2. if you are willing to pare your 'needs' to the basics, you CAN live pretty cheaply. I rented a cheap room and lived on ramen noodles for 2 years.

3. The LESS one spends on 'stuff', the MORE one has to put into financial independence... which seems a very intercstian concept.

some comments:
I'm not surprised that several posters were offended by his 'low level/quality life style' although he, in the blog, mentioned that and addressed why he lived that life style. Every one of us gets to choose how much of our resources we are willing to spend on 'stuff', and which 'stuff' is a 'need' vs a 'want'. This is a point that intercst continually highlights.


Our early retirement protagonist sounds a bit OCD. His description of the effort he puts into all his 'hobbies' sounds extreme, and he calls his method 'extreme' for a reason as Alstromeria notes.

As for RDPD, I agree with SP that the author clearly states that he found the concept that one can use money to make MORE money (and therefore to not have to work) to be an epiphany.

ralph :-)
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"1. if you are willing to not keep up with the jones, you CAN get outta school with 0 debt. I did much the same as he in undergrad and grad and got the degrees with only $2400 in loans and $2000 in the bank."

Millions of folks have done that. I could have gone to a less expensive college and lived at home. I elected to go to a private engineering school, and wound up with about 1/3rd of my first year's salary in debt. Paid it off in less than a year. I had two roommates in an inexpensive apartment, a 3 year old 'used' car which was also paid off in 18 months.

My grad degree was paid for by my company - all I had to do was buy the books, and pay for gas/commuting to get to class. They paid $18,000 (1980s) for my degrees plus more studies.

There are many who make it through college without massive debt.

"2. if you are willing to pare your 'needs' to the basics, you CAN live pretty cheaply. I rented a cheap room and lived on ramen noodles for 2 years."

In college, I lived cheaply. Had to - lived in the dorms. Ate on the meal plan which was OK and about as little as you could eat on, other than noodles and such. After college, ate meals at home. Eating out in the 60s and 70s just wasn't done to the extent now. Maybe I ate out once every two weeks? We (roommmates) cooked at home.


"3. The LESS one spends on 'stuff', the MORE one has to put into financial independence... which seems a very intercstian concept."

True....... however, life isn't all about trying to be the scrimpiest, stingiest living person of all time. You can scrimp and save, and die with 50 million in the bank....at age 80.......and maybe that is your goal.

On the other hand, this guy seems to have no problem mooching off his wife, and family members.

As to buying stuff, I did buy a townhouse in Arlington VA...not much more than renting. In 7 years, I sold it and made a $100K profit. That paid for half of my next house purchase.

Yeah, I could be living in a rented one room place, saving 80% of my pay, but I retired 10 years ago, and now enjoy spending my money and enjoy my hobbies.

The guy could have become a monk or priest, too, a lived on beans.....no need for any income.

I'm sorry, but I enjoy my computer and cellphone. I enjoy cable TV, and not having roommates and neighbors 2 feet away through the wall. I enjoy the privacy of my own home, a place to store some of my 'junk', a home base, a place I expect I will still be in in a few years - and won't get kicked out by a landlord.

So, apparently did the original poster - in his house.

There's a point of being penurious - and going too far.

I saved a bunch of money - more than 35% of paycheck for years. Could I have saved more and retired earlier? Maybe.....but work was interesting and often fun, I enjoyed it, it paid well, I got to travel on the company nickel to interesting places (From Saudi Arabia to HI to ND to WA to KY, to England, France.....to all sorts of professional conferences) and do interesting things.

Then I bailed out at 52.5 when the industry started to really go through major transitions and the telecom business basically cratered in 1999/2000. Good time - at the peak of my career before the big downhill slide which is still going on.

I don't buy a lot of 'stuff' that other people do. No HDTV...I don't own an iPod or other 'i' stuff. Don't download tunes. Not many 'gizmos'. On the other hand, I eat out a lot at inexpensive places - lots of them in TX.....

The guy's blog is 'extreme' and that is what it is .......It would be interesting to see what his wife really thinks of his penury.

t.
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rainphakir writes,

As for [Rich Dad, Poor Dad] RDPD, I agree with SP that the author clearly states that he found the concept that one can use money to make MORE money (and therefore to not have to work) to be an epiphany.

That was the part of the book that resonated with me -- the fact that rich people have lots of investment assets rather that big homes with mortgages and fancy cars (unless the big home and fancy car is a small portion of their net worth.)

I agree that Kiyosaki's actual investment advice is often worthless.

intercst
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as to Rich Dad, Poor Dad...

http://www.johntreed.com/Kiyosaki.html

"On 8/15/01, a reader told me Kiyosaki now has the words “Although based on a true story, certain events in this book have been fictionalized for educational content and impact,” in the fine print on the copyright page of Rich Kid Poor Kid. I had not previously been aware that “educational content and impact” justified lying"

now....talking about getting out of college debt free...

"The idea behind Kiyosaki’s title is that his real father was upper middle class. He graduated from Stanford, Chicago, and Northwestern Universities, all on full scholarship, ultimately earning a Ph.D. He pursued a career in education and became the head of the education department of the State of Hawaii. He owned the home in which the Kiyosaki family lived. Kiyosaki calls him his “poor dad.”"

Sad, isn't it? His dad went through college debt free, owned the home outright....but Kiyobashi thought he was an investment idiot. The dad probably loved his job, and would retire likely early with big fat pension and health care benefits.

as to fiction

"One visitor to this site asked me if I was sure “Rich Dad” really exists. No, I’m not. In fact, I now lean to believing that there never was a “Rich Dad,” that Kiyosaki made the whole thing up. If I had written such a book, I would have named him in the book, if only out of gratitude. It is noteworthy that Kiyosaki refuses to identify “Rich Dad” and the Honolulu Star-Bulletin was unable to figure out who it was, in spite of the rather obvious “next-door neighbor Mike whose father owns convenience stores, restaurants, and a construction company” clues."

as to not buying 'stuff'

", like Kiyosaki bragging about his Rolex"

Likely, the only thing Kiyosaki has made money at is seminars and book sales..

That makes him a successful fiction author,nothing more....

t
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telegraph posts,

"The idea behind Kiyosaki’s title is that his real father was upper middle class. He graduated from Stanford, Chicago, and Northwestern Universities, all on full scholarship, ultimately earning a Ph.D. He pursued a career in education and became the head of the education department of the State of Hawaii. He owned the home in which the Kiyosaki family lived. Kiyosaki calls him his “poor dad.”"

Sad, isn't it? His dad went through college debt free, owned the home outright....but Kiyobashi thought he was an investment idiot. The dad probably loved his job, and would retire likely early with big fat pension and health care benefits.

</snip>


Isn't that the type of "big fat Gov't pension" that GOP Tea-baggers and regularly rail against? If he wasn't a Commie, he'd have a real job in the private sector screwing poor immigrants by selling them sub-prime mortgages.

intercst
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intercst: "Isn't that the type of "big fat Gov't pension" that GOP Tea-baggers and regularly rail against? If he wasn't a Commie, he'd have a real job in the private sector screwing poor immigrants by selling them sub-prime mortgages."

I don't know about intercst, but I suspect he doesn't know a single peron who worked in the private sector screwing poor immigrants by selling them sub-prime mortgages.

90% of the sub prime mortgage problem was caused by ACORN, Barney Franks, Chris Dodd, the 'community organizers', and congress insisting that banks loan to people barely or not even qualified to borrow money....then Congress made sure that Fannie and Freddie would buy any crap loan that banks for forced to issue....... Community RE-ivestment act under Carter.....strenghened by Dodd and Franks and the lib dem congress....hee hee....

ANd they are still at it, insisting that banks aren't loaning enough to barely or not even credit worthy people.....so they can buy houses they can't afford......and attmpting to bail them out time and time again.

The lib dems (Franks and Dodd) have done more to destroy wealth in the lower income brackets than anyone else.

And, its funny that intercst picks on screwing 'poor immigrants'. MOst of the likely are doing fine, living 8 in a house in Houston, paying the bills. It's the 'I'm entitled to government handout African Americans' wanting their "Obama Money" types who got suckered in by ACORN, the Community Redevelopment Act.....and the lure of horrible loans backed by Fannie and Freddie.

Even now, the gov't is shoveling out money so people go out and buy their first home...likely insuring another 35% default rate..by giving them subsidies to buy a house when they likely would be better off renting. Intercst is the prime proponent of renting, no? YEt, the lib dems do everything they can to urge people to borrow money and buy something that will sink a large percentage of them.

Really funny.

I do have a neighbor who is involved with trying to rework loans.....he was never involved in selling or shilling. Heck, it was Dodd, Chris, and the lib dem ACORN types who foisted the sub prime crisis upon us, and the mortgage brokers, which intercst failed to mention, 'helping' people buy a home on terms they never bothered to understand.

Now, intercst, exactly how many people do you know who had a job 'screwing poor immigrants by selling them sub-prime mortgages.'???????

Curious minds want to know!......

I do remember CC (Catherine Coy) who bragged how she had managed to obtain financing creatively for people!......long time poster on the REHP board....when intercst was there.....other than that....no one here I know......

t.
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Teaching, especially at the college level, is very satisfying for those who have "the calling." Several fields that require many years of education (law & medicine as well as academia) often see the elderly continuing to work. - Alstromeria
----------------------------------------

Preaching is the same way. Bonnie's father is 86 years old and started preaching when he was stationed in Hawaii during WWII and is still preaching today some 65 years later. He never stopped. I think he likes being the center of attention and everyone having to listen to what he has to say. He enjoys the recognition but mostly I think he just likes to talk.

Art
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Bulgogi asks,

Who is extreme?

http://earlyretirementextreme.com/who-is-extreme.html

</snip>


The author of that site, Jacob Lund Fisker, is no longer retired and works as a quantitative analyst for a Wall Street firm.

{see item #37 on the list)
http://earlyretirementextreme.com/about

intercst
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Yeah, I am aware that he is working again...I am reading through his blog and found this thread from the post I linked to. Really surprised on the reaction from some fool members.
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