MR. MONEY MUSTACHE (Pete Adeney in real life) grew up in Canada in a family of mostly eccentric musicians. He graduated with a degree in computer engineering in the 1990s and worked in various tech companies before retiring at age 30. Pete and his wife live near Boulder, Colorado, with their now 11-year- old son, and they have not had real jobs since 2005. This begs the question of “How?” In essence, they accomplished this early retirement by optimizing all aspects of their lifestyle for maximal fun at minimal expense, and by using basic index-fund investing. Their average annual expenses total a mere $25,000 to $27,000, and they do not feel in want of anything. Since 2005, all three of them have explored a freeform life of interesting projects, side businesses, and adventures. In 2011, Pete started writing about his philosophy on the Mr. Money Mustache blog, which has grown to reach about 23 million people (and 300 million page views) since its founding. It has become a worldwide cult phenomenon with a self-organizing community.
What is an unusual habit or an absurd thing that you love?
Hanging my laundry on a clothesline to dry in the sun, harvesting and chopping firewood, and shoveling enormous quantities of snow after a big storm. I find it joyful to spend good solid hours on these real, traditional human activities to avoid getting sucked into the vortex of the more artificial layers of business, money, and Internet chatter.
In the last five years, what new belief, behavior, or habit has most improved your life?
The most important one by far is realizing that the real measure of a good life is “How happy and satisfied am I with my life right now?”
This turns out to be a lot simpler than you might think. We all have our ups and downs, so your goal is simply to maximize your “up” time and minimize those downs to as close to zero as possible.
If you ask yourself this question at the end of a thoroughly great day, the answer is very often positive. After a horrible day (or a string of them), you’re more likely to say that life sucks. I came to realize that the key to a great life is simply having a bunch of great days. So you can think about it one day at a time.
And it turns out there are some pretty simple buttons you can press to give yourself a great day. Start by waking up from a good sleep, eating good food, leaving your phone/newspaper/computer behind, and simply writing down your plan for what will make the day great. Several hours of physical activity, some hard work, a chance to laugh with and help out other people—and you’re pretty much there.
So the longer-term challenge is simply designing your life so that you have more of this stuff and less of the fluff. Look at every activity as you go through your day and think, “Is this contributing to getting me a better day—today—and if not, is there anybody in the world who has managed to design this activity out of their lives and still succeed beyond my level?”
What advice would you give to a smart, driven college student about to enter the “real world”? What advice should they ignore? The worst piece of standard advice is more of an assumption that spans the entire middle class: “Get yourself into a nice, prosperous 40-year career of being completely dependent on your employer.”
It’s an assumption because it happens automatically if you follow the standard path: Spend 85 percent or more of your income and borrow freely if you ever want something that you don’t yet have the money for. You’ll spend most of your life with your head just above the financial water, if everything goes well.
Instead, rewind that story and think of it in terms of freedom: You are free for life once you have 25 to 30 times your annual spending locked up and working for you in low-fee index funds or other relatively boring investments.
If you save the standard 15 percent of your income, this freedom arrives roughly at age 65. If you can crank that up to 65 percent, you’re free just after your 30th birthday, and you often end up a lot happier in the process.
Of course, there are other ways to solve the money problem: Own a profitable business, or find work that is joyful enough to do it for life. But even these things happen more quickly if you don’t get mired in the earn-to-borrow-to- spend trap that is part of that big middle-class assumption.
So the one-liner is: A high savings rate (or “profit margin on life”) is by far the best strategy for a great and creative life, because it’s your ticket to freedom. Freedom is the fuel for creativity.