Mr. Money Mustache is a Colorado blogger and family man who graduated college and set out with the goal to retire at 30 (which he did). He started by changing or rejecting his buying habits, and he advocates simply taking a sober look at your money. Any weekly expense that you plan on having for ten years—debt or otherwise—should be multiplied by 752. That Spotify membership? $7,512. One big $100 dinner out every month for ten years? $75,200.

Now here’s the crazy part: If you then invested that money in the way he suggests, on those amounts alone you could retire wealthy.  (Just for a test, I did what he said with that $82,712 just from listening to my own music and having date night at home and—holy shit—10 years later, through “the worst economic crisis since the Great Depression,” it would now be worth—holy shit. I’ll post it at the end. I can’t deal with it yet.)

If you had to start investing right this second or as a New Year’s resolution, what would you do?
Most beginners don’t know where to start. So they never really get into investing, other than checking a box to have their employer auto-deduct 5% for the company 401(k). Other people start in “clueless-hotshot mode—I was unfortunately one of these—buying individual stocks based on tips from friends or stock-analysis websites, then trading them based on varying moods of greed and fear.

You need to spend much less than you make. That’s the hard math, and everyone tries to deny it, which is why almost everybody is permanently broke.

You don’t recommend this?
Your best bet is just owning a tiny slice of thousands of big companies from around the world, adding to that collection over your lifetime, then living off of the considerable bounty whenever you decide to retire. This means low-cost index funds like Vanguard’s Total Stock Index fund and Total International fund. You can own just these two funds in 50/50 proportion and outperform most people.

The short answer is, get yourself a Vanguard account and start throwing in money. Or even easier, an account with Betterment which allocates your money across a swath of Vanguard funds automatically. That’s the important step, because it is the action. Then, grab a good investing book like “A Random Walk Down Wall Street” and read it to understand why you just made such a good choice. Then later, read another investing book, and another, and keep going as long as you’re interested.

What funds are best for company employees vs. freelancers?
A good investment doesn’t care about your working status, so the advice about what funds to buy would apply to either type of person. But the exact account type you use to hold the funds would vary.

If you’re employed and you have the option of contributing to a good low-fee index fund in the company 401(k) and getting some employer matching, that would be where you put the first chunk of your savings, up to the limit. Then you can put the next bit of your investments into an IRA up to the limit, then the rest into a standard taxable account.

If you’re self-employed and have a profitable business, you have the option of throwing an even higher percentage of your savings into a self employment version of the 401(k) that is also tax-sheltered. The limit is about 25% of your profits or $52,000 per year, which is much higher than that available to regular employees.

The poor man follows society’s rules, while the rich man gets to dictate them.

What can young people start to think about to keep their expenses low?
The key to getting richer is to spend less than you make. If you want to get there quickly, you need to spend much less than you make. That’s the hard math, and everyone tries to deny it, which is why almost everybody is permanently broke, even when they make six and seven figures a year. It’s easy to blow any amount of money. Lucky for all of us, it’s also easy to save almost any amount of what you earn by getting smart on your expenses.

What’s the best way to do that?
The exact strategy depends on where and how you live. NYC people usually spend a lot on housing, so finding a good housemate situation can be key—sometimes a creative arrangement where you help a wealthy building owner with their business needs, maintenance, or whatever in exchange for free or cheap rent. Personal connections can really outperform blind Craigslist searching in this area.

I live in a big city, but slowly I find my friends trickling out to save money.
For those of us in smaller cities or suburbs, the car is usually where the money is going. In that case, you profit if you stop depending on a car (or worse, a truck) to compensate for your lack of confidence. If you’d be ashamed to “be seen” in a tiny Korean hatchback, then you suffer from this lack of confidence and you need to address it. The poor man follows society’s rules, while the rich man gets to dictate them. So you get good used Hyundai or Toyota off of Craigslist, make it last forever, and be done with it.

Finally there is the issue of your time. You’ve got your working hours, and your sleeping hours already spoken for. That leaves only a bit of precious time for you to get ahead, so each of those hours need to be cherished. Invest more of them in learning new skills, getting yourself into better physical and mental shape, or meeting worthwhile new people. Sometimes you can find things that accomplish all three at once.

This automatically steers you away from things that pull you back, like watching TV, paying to be passively entertained, and subjecting yourself to long, expensive commutes to and from work. It also ensures you will think about food more rationally: you should eat to live, rather than living to eat. More simple, strategic meals at home, less time sitting around at restaurants waiting for others to bring you food.

The cool part about this method is that it brings synergy: it cuts your expenses at the same time as raising your income and making you more satisfied with your life.

The thing that everyone misses is that there is no sacrifice or pain involved with spending less money. If you do it right, the benefits begin immediately.

I love the part about easy expenses to cut without looking home-schooled.  I got a haircut in 2004 for $90.  Fresh out of college.  Wanted to look good for job interviews. I hated it and that day went out and bought $22 haircutting shears.  By your calculator, that had saved me $54k.
Yeah, I love the haircutting example as a model for how to think about life in general.

You can either spend your whole life making haircut appointments, spending an hour or more getting there, sitting and getting back home. Paying a good chunk of change plus tip for the service, and still spend most of the time with a haircut you don’t even like, because your hair is always growing and you can’t spend every day in the salon.

Or you can learn the ridiculously simple art of cutting your own hair. And the hair of roommates/partners/whatever. Which takes about the same amount of time as getting a haircut from someone else. Then you can take care of your own forever. Each cut takes you five to ten minutes, so you make a huge time profit every time you do it. And it also adds up, to tens of thousands of extra dollars over the time you do it.

It’s a total win/win on all fronts. Although I have nothing against hairdressers (they are fun people and some of my friends even work in this field – sorry guys!) I’m amazed the profession exists.

Mr. Money Mustache
Mr. Money Mustache, speaking at FINCON12 (Photo: Jeremy Vohwinkle/Flickr)


Is there a piece that everybody misses? Not in haircuts, but…
Yes! The thing that everyone misses, until they get into this lifestyle themselves, is that there is no sacrifice or pain involved with spending less money. You’re not making your life less good now so you can be free later. If you do it right, the benefits begin immediately.

This is a Jedi mind trick that is essential. It involves learning that overcoming hardship and challenge, and learning new things, are pretty much the most satisfying things you can do for yourself as a human. As long as you continue to idolize convenience and avoidance of effort, you’ll never get anywhere. Go do something hard every day.

Also, in the new edition of Random Walk Down Wall Street, which is the bible of the index-based investments, the author sort of smugly adds that since he could have retired years ago but he finds investing to be so much fun. Is there an element of that in your blog?
Yeah, although I’m not sure he’s being smug as much as just trying to help people by telling them the truth.

Money and meaningful work are two separate things. Once people earn enough money that you don’t have to work any more, many just go on to keep working on projects they enjoy or care about. This is just a sign of a healthy, curious person, and you see it everywhere. People at the bottom of the wealth pyramid often don’t understand, and they assume everything must be motivated by money, but that’s a misunderstanding.

I encourage everyone to dig in and figure out what they really enjoy working on, because that is how they will probably end up spending their days in retirement. Sitting on a beach might be fun for the first week or month, but in the long run you need some challenge.


OK, I’m hooked. I did an exercise: If I took $110 out of my weekly entertainment budget for 10 years (no fancy restaurants or subscription media, while still seeing movies and drinking quite a bit or just not ever ordering delivery) and stuck the money in my mattress I would have $57,200.  If I invested that money the way MMM says I would have about $82,712. If I then invested that amount in an index fund for 10 years, the total would be $201,850.01. Wow. Just wow. 

I worked this out in a chart (starting a decade ago, to account for the market crash during “the biggest recession during the Great Depression”):

As Of

Index Portfolio



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



New Index Portfolio 100



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