Extreme Frugality Revisited

piggypiggySo as you all know by now I’ve radically changed my life, now broadcasting this blog from Michigan. This move came with its own unique set of benefits and drawbacks, as any major change in life does. I wasn’t quite sure what to expect, as a lot of time has passed between the time I moved away from Michigan to start a new life path and my return home. But it’s been really great being close to family. In just the two weeks I’ve been here there’s been a family barbecue, mid-week drop-ins by various family members to say hi, and a Sunday afternoon ride on a pontoon boat. All activities that were impossible for me to participate in when I was 1,300 miles away.

Of course, one major benefit to this move has been my re-examination of all my expenditures and leaving nothing sacred. Once I decided I was going to try to live solely off of the income this blog generates, I knew I had to get serious about spending and figure out exactly where my experience with frugality could be leveraged. So what I’m doing is I’m cutting expenses when and where possible to a level where frugality is balanced with quality of life appropriately, which will give my three-month trial period time to incubate and see if it’s indeed realistic to write for a living.

What you see below is my explanation of individual expense categories and what I tweaked. I anticipate some costs to go up slightly, but overall I think most of my expenses will be reduced dramatically.

Rent

Before: I was sharing a two bedroom apartment with my girlfriend and her son. The rent was $925/month, and split down the middle. So my portion was $462.50.

Now: I’m renting a room in my younger sisters’s house. She has a three bedroom house where currently her and her husband (my brother-in-law) live. However, she’s seven months pregnant. My niece will take the second bedroom, and I”m renting the third. My rent is $200 per month.

Savings: $262.50

Student Loans

Before: I’m on a graduated plan, and my payment is currently $224 per month on a balance of approximately $18,000 with an interest rate of ~3%.

Now: I applied for and received a 60-day forbearance on my student loans. I may extend this a bit if I absolutely need to. This forbearance allows me to conserve cash flow as much as possible while I’m going through this transition. However, interest continues to accrue in the meantime. I may end up paying at least the interest in the interim depending on how cash flow looks.

Savings $224.00

Food

Before: I was budgeting approximately $280 for food every month, which I consider a bit high. However, this budget wasn’t just for me, as I often took my girlfriend out for dinner 1-2 times per month, and also grabbed takeout or pizza for the three of us here and there. As such, my food budget was a bit more stretched than I would have liked. And looking over the  past three months, I averaged $347 per month in total food costs, which includes groceries, restaurants, and fast food/takeout. This average was pushed higher by an expensive night out in April, which could almost be considered a gift. But no matter how you slice it I was spending too much on food.

Now: I’m going to budget $220 in total food, which I consider very realistic. This also includes the occasional times I take a family member out for lunch or dinner. I think I may even spend less than this, but I want to see how things go in new surroundings.

Savings $127.00

Utilities

Before: I was paying half of electricity and water, which wasn’t included in the rent. This averaged approximately $62.00 per month.

Now: I’m paying no utility costs, as the $200/month in rent covers all of that.

Savings: $62.00

Internet

Before: Me and my girlfriend were sharing internet costs, and my half ran $30 per month.

Now: The internet fees are also included in rent, as I just log into my sister’s Wi-Fi.

Savings: $30.00

Gym

Before: My girlfriend and I shared a family membership to the gym that was located right next to our apartment complex. It worked great because I could just jog from the apartment to the gym and immediately start hitting the weights without having to head upstairs to the cardio equipment. I paid $30 per month for my share of the membership.

Now: I vowed to get by without a gym membership up here. My sister lives in a fairly rural area, and the closest gym is more than 10 miles away and costs more than $40/month. This just wasn’t going to work for me. So I bought a pair of 25 lb. dumbbells last month and I now use them for almost my entire workout routine. This worked great because my brother-in-law had a quasi-gym already set up in the basement with a basic bench and a pull-up bar attached to the foundation of the house. I’ll probably write a post soon on my new workout routine which only required the $55 I paid for the dumbbells. And the great thing is that these dumbbells will theoretically last forever, so I should never need a gym again no matter where I live.

Savings: $30.00

So all told these changes have led to savings on the order of $735.50 per month. This should bring my total spending down near the $1,000 per month area. In addition, with limited income I’ll be extra sure to watch any small expenses that come up here and there, although I’ve been pretty good about this all along.

Of course, some of these changes are temporary. The student loan payment reprieve will only last 60 days, and then I’ll either have to reapply for another forbearance or start paying on the loans again. And there’s no definitive time frame as to how long I’ll live with my sister. At some point I’ll figure out where I want to live up here and start my own life again. I’m still contemplating a few different areas and looking at local rents. I may even stay in this same small town where one bedroom apartments run ~$500/month. I’m a big city guy at heart, but the only bigger cities I would consider living in up here – Grand Rapids and Ann Arbor – are a substantial distance from family, and family is the main reason I moved back in the first place. And, of course, the bigger cities come with bigger expenses.

And as I mentioned above I anticipate some costs to go up. Fuel may rise slightly since everything is much more spread out up here. In addition, insurance costs (health and auto) may rise, although I had to cancel my dental insurance due to the fact that they don’t offer the plan I had in Michigan. I’ll also  have to get registration on my car and a Michigan driver’s license soon, which will raise my expense load temporarily.

However, I anticipate the cash flow to be positive right away as my expenses drop significantly across the board. The income I can generate from writing and dividends alone should easily eclipse ~$1,000 per month, which would still allow ample free cash flow to continue my investing activities. In addition, I have an ace in the hole as the $300 per month I’m amortizing for my Toyota Corolla all-cash purchase at the end of last year isn’t actually a drain on monthly income.

What do you think? Did I cut enough? Go too far? Any areas I missed? Have you cut your expenses recently?

Thanks for reading.

Photo Credit: Feelart/FreeDigitalPhotos.net

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147 Comments

  1. The fact that your budget is $735.50 less, will surely stand you in good stead for upping your investments, and therefore your income in the long term. Now, even though your student loans break is temporary, I bet you’re going to do great! Do you have an entertainment/going out budget? Now that you’re back there and meeting new people, you may need to think about that – you probably have though.

    Best wishes,
    Nicola

  2. You cut quite a bit too start. Yes You might have gone too far I think. But its always better to cut first and add later rather than the other way around. Will be very interesting on how the next few months shapoe out for you. Especially when the baby is born. You might move out the next week lol!

    Good Day and Grind On!

  3. Nicola,

    That’s a great point there. I have thought about that.

    The thing is that me and my girlfriend are still in love and talking. We’re not ready to give up on each other quite yet, but if it doesn’t work out (most likely) then I’ll have to go out again. But if I do end up completely single and dating again up here then I think I can get by cheaply. Dates at coffee shops or in parks are cheap and offer plenty of opportunity to chat. And I don’t drink often, so bar tabs won’t be a problem for me. All in all, I think even if I end up single I’ll still be able to live frugally with minimal budget impact. Of course, I could be completely wrong. We’ll see. If that’s the route I take then I’ll probably put up a post on frugal dating. 🙂

    Best wishes!

  4. Asset-Grinder,

    Haha. That’s funny!

    We’ll see how it ends up with the little newborn. I don’t think it’ll be that bad, but then again I’ve never spent a lot of time around a baby. But I’m really looking forward to it. It’s a new experience and I’m excited. Besides, I sleep with earplugs so I don’t think she’ll keep me up. However, with or without the baby I’ll at some point have to figure out what my life looks like up here for the long term.

    Grind on, indeed!

    Cheers.

  5. I kind of think this is taking frugality too far… but whatever you need to do, I guess. It made me sad to read that your commitment to frugality/financial freedom took its toll on your partner and your relationship. It seems you’re sacrificing too much of your life for money. It would probably just be easier to try to earn extra income instead of cutting so many things out.

  6. I find myself coming to your site multiple times throughout the day, waiting for the next post. I’m new to DGI, but so far I have 4k in my portfolio which I think is a great start! As a 25yr old with an expensive college degree, I don’t have much extra $$ to invest, but I had $4,000 sitting in an Ally account so I pulled the trigger with that. I plan on adding $$ whenever I have any leftover after budgeting. Like you, I love to see my dividend payments, though I would like to diversify even more so I can get paid monthly!! Thank you for documenting your journey for all of us!

  7. DM

    Cutting out over 700.00 a month in expenses is impressive. We’re going to get to see old school DM flex those frugal muscles! 😉

    I think you should look into buying a house in the area. Not sure what the real estate market is like there, but I know several parts of MI have taken a hit. You might find a hell of a deal. Then again you know I’m biased when it comes to this.

    The Stoic

  8. When I was younger, I bought a 3 bedroom mobile home and rented out the other two bedrooms, allowing me to live for free and paying down the loan in the process. You can find a decent mobile home in a good park for ~20k or less in my area. Think of it as an investment, Just a thought.

  9. Hey DM – I hope that your full time writing experiment goes well; I certainly wouldn’t mind seeing more posts from you here. And hey, I’m doing my bit to help. I almost always click on an ad when I’m on this site. 😉

  10. Sometimes downsizing is great. I love the gym move, I have a set of 30s, 20s, and 10s, you can do almost anything with free weights and a little creativity that you can do in a gym. I would probably add in a pull up bar, but perhaps that is a future investment.

    – Grem

  11. Hi DM,

    A $735.50 cut in monthly expenses is very significant, and one to be proud of. Congratulations. Living with family and paying a lower rent, with bills included, looks like it’s going to save you a lot of money. It’s great that that lifestyle is working for all of you, and I hope that continues for a long time.

    As a fellow gym goer, I love the dumbbell purchase. You really don’t need to have a gym membership to lose weight, grow muscles, get stronger or faster. I’ve been working out from home for 4 months now. All you need is determination, creativity and some basic knowledge to make some gains.

    I think your 3 month review is very sensible, and I’m excited to see how well it works out for you. The cutbacks on your expenses are going to help you considerably in making your new lifestyle permanent. My finger and toes are well and truly crossed for you.

    All the very best with it all, please keep us posted!

    Huw

  12. It is wonderful that you were able to cut over $700 in expenses with the move. I wish I had a sister who will take me in for $200/month including Utilities/Internet etc 🙂
    Though I aggressively try to keep expenses down like you, it is not always possible with a family and kids. I try and save as much as I can and then invest in Dividend growth stocks as and when I have capital.

  13. What you are trying to do is basically a whole level of frugality above where you were before. It can and has been done in a happy and orderly way. Check out the ERE (early retirement extreme) website (google it) and book for a great example. Using the Pareto (80/20 rule ) principle I would say about 80 % of peoples expenses are covered by about 20% of the expense categories. I think Housing, Food and Transportation (in that order) are almost always the biggest personal expenses for most people. Going after rent and food is very smart, ditch the car for a combination bike/public transportation/hitch rides/rent model and you’ll probably be surprised at how much that dividend income will cover. Many expenses can be modified slightly so that they are no longer necessary or they become “capital expenditures”. For example if you bought some used dumbbells at below (or near) market value on craigslist you could just consider them an asset on your personal balance sheet. Typically you want to buy high quality stuff that keeps its value for this to work. If you wanted to switch to other exercise equipment just sell the existing to get the cash back out. Again the ERE book covers all this, I would highly recommend it for you in your situation with your new super frugal goals.

  14. The biggest assistance you have right now is the housing costs (which are probably around $400 lower than “normal”… $500 rent + 100 utilities) compared to what you would pay if you had your own apartment.

    Apart from that, HOLY CRAP THIS IS IMPRESSIVE!!!

    Total monthly living costs around $1k? That’s unbelievable… in a good way.

    It makes me feel even more annoyed when I have to see the $1,150 check get mailed to my landlord each month.

    Only thing I would change would be to at least pay the interest on your loans, otherwise you’re PAYING interest on interest. Come on. DGI is all about EARNING interest on interest (or dividends.. but you get the idea).

    Regardless, I’m impressed.

    Good luck on the changes.

    As far as my own budget is concerned, I’m tracking ~$4k/mo in NW contributions, or a 58% savings rate compared to gross salary. I’m actually trying to target 40-50% for this savings rate, by finding meaningful ways to spend a little bit more of my income.

    I know, I know. Spend more?? But, I think I tend to go overboard in saving at the expense of living in the present sometimes (at least that’s what I’ve been told). So I think I can afford a small hit. Naturally, I don’t like wasting money, so this will be a challenge for me to find quality ways to spend money that I feel are valuable. Probably gifts, charity, and spending on experiences with friends will be the best way to go. I don’t really have a plan yet, but we’ll see how things go.

  15. First time commenting here, but I’ve been following the blog for over a year. You’ve done great saving and investing for the past 3-4 years, just wondering why not continue to work and do the same for the next 4-5 years and really have some passive income then? Or are you planning growing the blog income to allow you to do that?

    Maybe I missed this in one of the previous blog posts.

    Congrats and good luck in new adventures.

  16. Bridget,

    Well, it’s not actually the frugality that took its toll on my partner and I. Rather, it was my desire to move closer to family that ultimately led to our position. However, I won’t disagree that there was some underlying tension there in regards to my frugal lifestyle. She was also interested in living somewhat cheaply, but not to the level I was interested in. But we could have easily continued to find middle ground as we had done for the past five years, but she didn’t/doesn’t have a desire to move up North. I sometimes wonder if I was being selfish in this regard, but I don’t know how much compromise is appropriate when you’re talking about living close to or far from family. And as mentioned, there was already a sign that we were perhaps going in different directions in terms of lifestyle.

    But I appreciate your perspective. We’ll see how the extreme frugality goes for a while. And I’m experienced in this arena, as it was just a few years ago that I was routinely getting by on ~$1,200 per month, including servicing student loan debt. But if it becomes too arduous then I’ll just look for ways to increase income, which would most likely be getting a conventional part-time or full-time job.

    Best regards!

  17. Hi DM,

    I’ve been reading your Blog for a while and this is my first comment. Congrats on the move! I hope you enjoy your new lifestyle. I’m just wondering if you have you considered selling a portion of your portfolio to pay off your remaining student debt? It would seem to me that in your current scenario, the extra $224 cashflow per month would be a lot worth more than the $600-700 you would earn each year in dividends having an extra $18,000 invested. I know everybody has their own take on this, but just curious what your thoughts are!

    Thanks,
    Mike

  18. Paul,

    Thanks for the readership! I appreciate the full support very much. 🙂

    $4k is a very nice start, and not much less than what I started with in early 2010. You’re well on your way. It just takes a lot of consistency and persistence. Stick with it and over time you’ll see the benefits. This is definitely not a get-rich-quick scheme, but you’ll eventually become wealthy.

    Stay in touch, and let us know how you’re doing!

    Best wishes.

  19. Stoic,

    Haha. I feel like I’m going old school here…back to the early days! 🙂

    Actually, I have been scoping out houses around here. You can get a pretty decent abode for under $50k. But I just don’t know how interested I am in the upkeep, maintenance, repairs, etc. It’s really a lifestyle call at this point rather than a financial decision. I think I would come out ahead over the long haul financially if I buy a house for under $50k, do most of the work myself, and stay in it for at least a decade. But as a lifelong renter, I enjoy my low-maintenance lifestyle. We’ll see. It is something I ponder often.

    Thanks for stopping by!

    Take care.

  20. Iowa,

    Nice job there! Sounds like a great way to go. Obviously, that can go the other way if you get some really shitty roommates, but it sounds like you made out very nicely there.

    They sell nice manufactured homes around my area for ~40k, but traditional built ranch homes from the 60s and 70s also go for around $50k as well. So it appears that you’re better off buying a SFH in my neck of the woods, and then renting rooms if possible.

    Great job there!

    Best wishes.

  21. Anon,

    Hey, I really appreciate that kind of support. My income is now solely derived from writing, and I don’t directly sell anything here. So I do appreciate it!

    And I’m doing my best to put out more content. I’ve had a nice week so far, and I’ve published four articles in five days. And I’ll likely put something together tomorrow too. It’s funny because I anticipated a ton of unstructured free time without my full-time job, but it’s really not like that. A little more time here and there with the writing and managing investments, and all of the sudden I’m out of time. It’s amazing how that works. Your activities just expand to fill the available time you have. I won’t deny that I also have some time where I’m just screwing around, but, overall, it’s not how I anticipated. Makes me wonder how I did it with the 50-hour job before!

    Best regards.

  22. Now, you’ve got me thinking…. maybe I should leave my husband and live with my sister. Surely I will be able to control the grocery budget much better. It almost sounds appealing. 😉

  23. DG,

    You can get a pull-up bar pretty cheap. Even the ones that are attached to a base with a dip station are typically around $100. And the ones that attach to a doorway are 1/3 of that.

    I’m absolutely getting a great sweat and workout in with just what I’ve got. I should put a post together outlining what I’m doing, maybe with some pictures of the space. It doesn’t take much to get a great workout in. I was always the type who went for size and strength back in the day, but now I’m just after overall fitness and low fat, so I’m resting much less between sets and favoring reps over weight. It’s great!

    Take care.

  24. You took my question away Mike! 🙂 I was thinking the same thing. A little thought experiment, if were given just enough money to pay off your debts what would you do with it? Invest, payoff your debts or something else? I ask, because like you mentioned having the reduced expenditures ($224 this month), could be viewed as dividends from paying off the loan. This idea may make more sense for longer loans (house/student).

    Personally, I would pay off my loans, because then I would have a much lower fixed cost and be able to reach financial independance much faster!

    Take care!

  25. Well I actually already lived through that thought experiment (kind of)! I graduated with ~$20k in student debt, and was lucky to be in a situation where I could work hard and pay it off within about 2 years. Like you said, I am now able to invest much more agressively, and as a bonus, I feel much more financially secure not holding debt.

  26. Huw,

    The cut is pretty significant, but I’m just not sure how long it will last. We’ll see. Everyone in my family is encouraging me to stay here for as long as possible, but, of course, we’ll see what life brings about. Life can be funny sometimes, you know?

    And I agree wholeheartedly in regards to the redundancy of a gym membership. I’ve always felt that way, but I kept one because whenever I tried to go without a membership I inevitably lost some of my mojo. It’s hard to stay motivated when it’s just you. But I’m more motivated than ever, not just in terms of cost savings as I really have to clamp down now, but also in terms of fitness. I’m honestly in the best shape of my life right now, and I’m anxious to keep that train moving.

    Thank you so much for the encouragement. I’m really excited to try this new path out and see where it goes. In the end, I also know that I can’t really fail. If it doesn’t work, then it’s just back to the grind in some form or fashion…which is what I was doing before anyway. It’s not like I have a lot to lose. And that’s what’s wonderful about living frugally and developing alternative/passive income sources – the flexibility is incredible, and so your worst-case scenario is everyone else’s best-case scenario. When you don’t need that much to live off of, you all of the sudden see the world in a different view. It’s not so scary anymore.

    Appreciate you stopping by! And best of luck with your continued progress and success. You’re off to a monster start there.

    Take care.

  27. DGJourney,

    Haha. I’m a lucky brother with a great sister! 🙂

    I can sympathize with your plight. I never had much of a desire for children, and not for financial reasons. But I can certainly understand how children can crimp your savings. Of course, the benefits of such far outweigh the drawbacks. And what you’re doing is really all you can do. Just save as much as you can, do your best, and let the capital do the rest. However, as I understand it you’re investing quite aggressively now and you guys should be sitting very pretty in no time. Keep it up!

    Cheers.

  28. BlueNote,

    Thanks for the suggestions!

    I’m actually already intimately familiar with ERE and Jacob’s book. I’m actually a forum member over there, and have been since 2010. 🙂

    But I agree with you on the Pareto Principle regarding spending, among pretty much everything else in life. I’ve talked about what I call “The Big Three” – housing, transportation, and food as where people should be tackling expenses before looking at cable, coffee, or anything else. Once you get the big expenses under control the rest is easy. And those three are where I’ve always focused the most.

    As far as the car goes, it’s difficult. I actually went a couple years without a car, and got around by bus and scooter. I miss the days of $50 bus passes for the month and $4 fill-ups for my 49cc scooter. However, living up here in rural Michigan makes living without a car nigh impossible. But I do plan to create a “local economy” of sorts where I drive very short distances with the car, and try to get by with walking as much as possible. Everything is spread out here quite a bit, but I’m hoping to limit the 20-30 mile drives as much as possible.

    I actually got by on about ~$1,200/month for quite a while there, but lifestyle inflation slowly crept in with health insurance and the car. But I think these are positive moves to bring things back down a bit.

    Thanks for stopping by!!

    Best wishes.

  29. Ravi,

    Thanks!

    I’m definitely hoping to get down to around $1k or so. I’ve done it in the past with ease, but back then I was car-free and mostly eating ramen noodles. Now, I have a car and I’m eating much healthier. Of course, the rent situation is helping immensely.

    And I hear you on the interest. It’s very unlikely I’ll be passing on paying the interest while the loans are in forbearance; I would only do so if the cash flow was crunched more than anticipated. Although, for just two months I don’t think it’ll have a major impact on my long-term finances either way.

    We all have different means, methods, goals, and lifestyles. If spending more makes you happy based on what you’re getting for your money, then I say go for it. I’ve often found my money better spent on great experiences over accumulating stuff, but I do agree with you on giving. I’ve experienced tremendous happiness from giving gifts, and you’ll notice a lot of that in my monthly budgets. In fact, at this point I may as well just add an expense category for gifts since they come up so often. 🙂

    Best wishes!

  30. Interesting question.

    If this were $18,000 remaining in a mortgage at 3%, I’d say absolutely not, DO NOT pay this off early. In that case, you are financing an asset that retains its value (most likely) at 3%.

    In the case of $18,000 in student loans, it’s a pure expense. 3% or 10% or 1.5% is all just a straight expense as there is no asset. It’s sort of like just taking a personal unsecured line of credit from a bank and buying something with it.

    Seems like the marginal return on “investing” $18k in the debt would be the present value of the interest expense over the life of the loan… discounted at the opportunity cost… in this case, 3.5% (or whatever the portfolio return is).

    Very interesting thought exercise

  31. Simke,

    That’s a great question there.

    Basically, had I continued to stay in Florida that’s what I would have done. Although I was burned out, my motivation to continue saving and investing was high. However, I started to miss my family a lot – especially over the last year. And then when I found out my little sister was pregnant it became clear to me that I was going to move back to Michigan. So I’m now at this interesting spot where I’m able to live quite cheaply and give this a shot, so I figured I may as well. I hate working for a car dealership, so I honestly never want to do that again. Even with the high income, it’s just a miserable job for me. But I’m not opposed to working part-time or even full-time again. But I think I’d like to do something else if I were to go that route. And the job market here in Michigan isn’t great, as we have one of the highest unemployment rates in the country. So that’s something to contemplate as well.

    But if I could continue down the path to FI by writing then I would gladly do it. So I’m at this point where I’ve got this incredible opportunity and little to lose, so why not? I look at as the destination (FI) is the same, but instead of driving down the freeway, I’m now driving down a slower country road. The view is better, but slower.

    I hope that explains my thoughts a bit! And I appreciate the readership.

    Best wishes.

  32. Having a budget and your priorities in place are really important lessons for all of us. As others have commented, that student loan is worrisome because you’re on the wrong side of the compounding machine there. However, I don’t like selling any of my positions unless there’s something wrong with the underlying company, akin to your LO sale. I ended up putting investing on hold and focussed everything on eliminating all my debts and accumulating an emergency fund so that I am less likely to be forced to sell.

  33. I didn’t realize I was preaching to the choir DM. Good luck and best wishes to you also!

  34. Mike,

    Thanks for stopping by and dropping your first comment! 🙂

    As far as the student loans go, I’ve indeed thought about just paying them off. I should probably write an article to explain my thoughts a bit, but I’ll share with you what goes through my mind.

    First, the interest rate is about 3%. I say “about” because two loans are, I believe, 2.85%, and the other two are 3.15%. So basically 3%. I think I can do better than that in the market, as the yield alone on many of the stocks I buy are above that range.

    Second, the interest is tax-deductible.

    Third, are tax considerations and lost opportunity costs on the stocks I sell. I could likely try to pick overvalued securities, but I’d have to pay capital gains taxes on any securities I sell and lose the income they’d generate.

    Fourth, is flexibility. This forbearance is a great example of that. In addition, there are flexible repayment plans like IBR. So if my income drops significantly from here I can further ease the drain on cash flow.

    I thought there was a fifth reason because I had an idea for an article along the lines of “Five Reasons I Keep My Student Loans On The Books”, but I can’t remember the fifth reason. I should have written my thoughts down. 🙂

    I hope that explains my reasoning. Obviously, if this were credit card debt or something I would have paid it off a long time ago. In addition, I hate debt and think it’s the worst four-letter word of all. So it does irk me sometimes to have this debt on my balance sheet, but I don’t necessarily think I’d be better served paying it off. I suppose it depends on the performance of the $18k invested, depending on what I would have to sell to pay off the loans.

    Best wishes!

  35. ILG,

    I think it all depends on the terms of the loan, type of debt, interest rate, and any tax implications.

    Mortgage debt is one of the first types of debt cited where people aren’t in a particular hurry to pay off due to the unique rules around that debt. On the other end of the spectrum you have revolving consumer debt like high-interest credit card debt. I explained my reasoning for carrying the student loan debt, but there’s a possibility I’d be better served by paying it all off in one shot.

    Best regards.

  36. That’s one hell of a budget! If you can maintain it I see no reason why the writing gig has to be short term.

    I’m a bit envious since I regularly spend 2 grand a month or more. It’s the car that’s killing me…

  37. People!: Don’t spend so much on cars. I picked up a 2001 Honda insight for $3800, it gets 65 MPG, nice AC no issues. I insure it myself so expenses are minimal. I don’t change the oil more then once a year or wash it its my 5th Honda, they don’t break down. Parts are cheap. Don’t buy a mobile home for 40k that is insanity, I picked one up in Florida for $1500. It needed some work but was livable.

    I would not leave my woman for any price, just find one that is frugal. If you can’t find one domestically go to the Philippines. The woman there are great and speak English and won’t divorce you. Find a girl that is studying nursing, marry here, educate her in the US. Then she can make 85k-100k a year no problem. Imagine compounding that! Jeez maybe I should start a blog or something..lol

  38. I have been following your blog for a little while now and admired your dedication to living frugal and building a future that you want. I was a little disappointed to read this article though. What you claim as savings is actually just someone else flipping the bill for you while you reap the benefits. By all means if it was a temporary plan due to a unforseen situation I understand, but that does not seem to be the case. Kind of disappointed by your angle now, but just my .02, best of luck to you.

  39. One of the benefits of your FI life now is time, including time to work on upkeep/maintenance, and even improvement of your house….throw in the fact this gives you a chance to learn new skills (that might be profitable at some point, career wise), and I’d say you really should strongly consider buying a place, particularly since family is very important to you and you say you want to stay near them. Any appreciation on the house would just be a bonus for when you sell to pursue world travel or whatever other goals your freedom fund provides.

    So, buy a house….make it an adventure.

  40. If you ever do get serious about it let me know. I would be happy to come up and help you out. Give me a place to lay my head and feed me and I’ll take that as payment! You can see from my post today what my expenses have been over the year I have been in current place. It doesn’t have to be expensive.

  41. CI,

    Hey, I was spending close to $2k not that long ago myself. Life just has a way of throwing this and that at you, and then before you know it the expenses have gotten a bit out of control. For me, health insurance and the Toyota have been some of my budget busters over the last year or so. But such is life.

    Best regards!

  42. frank,

    Great job on the Insight. I’ve heard they’re pretty legendary on the gas mileage. Although, I don’t think I did too bad with my car. I bought a 2006 Toyota Corolla with a little over 20k on the odometer for $5,400. I got lucky, however, as the older woman selling it couldn’t drive anymore.

    Interesting take on the Philippines there. I don’t think I’d want to meet someone for those reasons, but I do have a desire to maybe travel there someday and perhaps try living there for a bit. But that’s still a ways off in the future.

    Cheers!

  43. I figured you were also apart of the ERE forums! Jacob’s forum is so thought-provoking. It’s one of the many blogs I try to frequent.

    I already see some flack from people saying you are being too extreme. That’s ridiculous. If anything, cutting expenses severely will only make you happier. The satisfaction that you will get from becoming more minimalist and surviving purely off blogging and dividend income will outweigh the fleeting joy of eating some nicer food.

    “It seems that perfection is attained, not when there is nothing more to add, but when there is nothing more to take away.” – Antoine de Saint Exupéry

  44. sadpanda,

    No offense, but I think you’re way off there.

    $200 per month rent for a room here in this small town is not far off from market rate. As I mentioned above, houses are routinely for sale for ~$50k around here. A fixer-upper can be had for $20k. And not that rooms come up for rent often because this is a fairly small town, but I have seen them here and there on craigslist for $300 or so per month. I’m getting a family discount rate, sure. But it’s not like I’m taking advantage of anyone or mooching. $200 more than covers any additional water/electricity I’ll be using while also allowing a little extra cash my sister’s way. The offered to keep me here for free, but it was I who insisted on paying something.

    As far as a temporary plan, as I noted this may very well be temporary. To be honest, I don’t know how long I’ll be living here. I’m certainly going to enjoy living cheaply for as long as makes sense, but at the same time this is by no means a permanent solution. However, my next living situation will be as cost effective as possible.

    Cheers!

  45. Great job on eliminating tons of expenses! I especially like the gym removal part. I have to put a word in here for Slackline. Rural areas are great places to put slacklines to use, and for about $50 you can get a decent 50 footer. The reason I recommend one is the incredible amount of core workout one gets from learning and doing slackline. There is no limit to the ways one can exercise on a slackline, and my favourite part is doing yoga moves (not many) on a slackline. You will never sweat so much standing in one place as you will on a slackline. I highly recommend one! Good luck with you new location, life, and expense level!

  46. Chadnudj,

    That’s a great point there. If writing full-time works as planned then I would indeed have a lot more time on my hands to take care of a place. However, I don’t have quite as much time as I thought I would. I sometimes wonder how I had time for everything before. 🙂

    A house would definitely be an adventure, though. If the right place comes up at the right time with the right price tag attached it may be something I consider. I quite enjoy the lifestyle renting affords, but having a place to truly call my own certainly has its attractive qualities.

    Appreciate the perspective! You never know what I’m going to do sometimes, so I may end up surprising myself.

    And traveling is something I think about, but that would likely be down the road. But, like you said, the house could always be sold by then.

    We’ll see!

    Best regards.

  47. I’m also in the camp that says pay off the student loans. That is a serious drain on cash flow. I don’t know much about them but will the deduction really be of any benefit going forward on a very small annual income?

    Also, I would consider not just the interest rate (which is certainly low) but interest coupled with principal adds up to a large percentage of your monthly budget. You know me…I hate debt (apparently worse than you do) and as much as I want to grow a dividend growth portfolio, I won’t do that until my rentals are completely paid off. I can then live off of them and begin the next chapter of investing with ABSOLUTE freedom from debt. No fears or worries about anything. I am happy you are considering it. I think you would make a lot of people jealous to be sure.

    Either way, DM, welcome back to extreme frugality.

  48. Wow! That’s frugality! It reminds me of the old days when I was living with my parents… A lot of free time, minimal monthly expenses… That was the best time of my life ahaha! But… I spent all my money instead of investing it…

    I’m currently in the process of selling my girlfriend’s house and furnitures… It takes almost all my free time and it’s also pretty stressful but when I’ll be done with that, I think I’ll try some frugality too and try to cut my expenses a lot more… I’ve never been really good at it. That’s why I decided to be good at earning more!

    I prefer the “pay you first” method over the budget method and ask my employer to simply withdraw my savings from my paycheck and when I have enough funds, I transfer them in my brokerage account..

    I think I’ll simply kill my credit cards, keep my atm card home, pay things in that order : savings, withdraw cash money for my food and fun and pay debts and bills with the rest. When I’ll have spent all my cash money, I’ll have to wait until I get another paycheck. Cards, either atm or credit cards, are evil… I always spend more when I keep them with me. But, when I have a 20$ bill in my wallet for the week, I’m able to manage to make it last all week…

    You’re a terminator man!

    Keep going but don’t forget that money can’t buy you love and in the end love might be the most important… After or before freedom… I couldn’t say… But I think love is important…

    I read that you don’t want kids. I respect that. But do you also want to be alone? Someone that you truly love, that you can have full confidence in is not easy to find… You seem to miss her a lot…

    Plus, with all you life lying here on the web you could make the perfect victim for a bad girl wanting a share of your success and money! 😉 sorry for my paranoïa lol I’m a criminologist and I think I met too many bad people in this life… I have a tendancy to suspect everyone to be a potential fraudster… Which is partly why I prefer managing my own money by myself 🙂

    Anyway! It’s your life and even though you asked what we thought of your decisions or lifestyle I think in the end that finding the perfect balance for you is something that belongs to you. Make all your tests and share them. I’ll be there to read!

    With all that free time you’ll be in the best position to think about your life and what you really want to do with it and with who you want to share it!

    I don’t believe in god… But if I would I’d say “god bless you” man!

    Take care and keep writing. Reading you is my zen moment of the day.

  49. Josh,

    The ERE forums are a great place to spend some time. I love reading through some of the conversations there. I’m actually over there quite often, but I don’t post as much as I used to.

    I couldn’t agree with you more in regards to quality of life vs. spending money. I simply don’t subscribe to the money = happiness equation. If anything, my posts try to explain my perspective on why time = happiness. And this is simply me carrying out my beliefs. Or at least giving it a shot. 🙂

    Thanks for the support. I appreciate it!

    Take care.

  50. Dave,

    Wow. I just looked up a Slackline. That’s some pretty crazy stuff right there. I think I’d have to ease into something like that.

    Maybe I’ll give it a shot sometime. In the meanwhile, I’ll just sit here in awe. 🙂

    Good for you for taking that on. That’s pretty hardcore.

    Cheers!

  51. I don’t think your budget is too extreme, Jason. I’ve worked to get my budget under control to give me the ability to make less money in the future, if necessary. I miss my family too, and I totally respect your decision to move home.

  52. Looks like they did a great job on the recent rehab. I was looking at the property history from the link you provided and it was purchased June of last year for 25K? My only word of caution if you do get serious is consider the age of the home. The cosmetics look great, but that house is a over 100 years old and you have to think about foundation issues in a structure that old. One of the properties I looked at before settling on the one I have now was a four-plex and had issues with the foundation. It was an older home, but I really had my heart set on it. I’m glad I didn’t go with it because the repair expense for that alone was going to be 15k. The numbers just didn’t work.

    Deciding on whether to go with a home that doesn’t need work or one that requires some sweat equity is a personal choice, but if you have the time and desire you can save yourself some money.

    I’m no expert, but I’m more than happy to share what I’ve learned if you decide it’s a route you want to pursue. Drop me an email anytime.

  53. Curtis,

    Well, the deduction is actually more helpful on low income. I believe it caps out at $75k AGI.

    But I hear you on debt. The student loan debt is the only debt I carry, so I’m definitely looking forward to one day kicking it to the curb. But I also think it’s one of the better kinds of debt to carry, relatively speaking. The major drawback to student loan debt is that it’s usually difficult/impossible to discharge in bankruptcy. Of course, I hope that’s not something I’ll ever have to worry about.

    But I hear you. It would definitely be nice to not have the drain on cash flow. And congratulations to you for slaying that debt so aggressively and sticking to your guns. I admire that!

    Best wishes.

  54. Allan,

    Love is indeed extremely important. I could be poor as dirt, but if love is in my life I’m a happy man. And money can’t buy you love. And it’s because of the love I have for my family that I moved back. Unfortunately, that choice came with the major drawback of separation from another loved one. It’s really tough, and we just talked earlier today. But you never know what the future will bring, right?

    Thanks for the kind words. And I’ll make sure to keep an eye out for the fraudsters. Any funky Nigerian emails go straight to the spam bin! 🙂

    I wish you the best of luck in your continued journey and finding the best balance between time today and more time tomorrow.

    Cheers!

  55. Addison,

    Thanks for the support. I appreciate it!

    And I see you’re getting pretty creative there with both lowering expenses and boosting income. I wish you the best of luck with that, especially if you go through with the basement idea. 🙂

    I didn’t know you lived far away from family. I guess I just assumed they all lived close to you there in Nashville. If not, I hope you get to spend time with them as much as possible.

    Thanks for stopping by.

    Best wishes!

  56. The Stoic,

    I hear ya loud and clear.

    If you don’t mind, what do you think about this one?

    http://www.realtor.com/realestateandhomes-detail/803-S-Manfred-St_Durand_MI_48429_M39305-86839?row=1

    It’s a foreclosure, but I could do cash if I had to. $25/square foot seems pretty cheap, no?

    I don’t think it needs much work from first glance, but it’s only a block or two away from where I live now. I could take a stroll or set up a viewing. That would permanently reduce my housing costs going forward, similar to what you achieved.

    Appreciate your perspective!

    Best regards.

  57. Kudos to you and the increased frugality. I too moved back into my parents with my wife and newborn this past month and it’s been great. Minus my mom always saying, “what are you going to do to help around the house?” every 5 min. And I thought I would decrease my expenses dramatically, but somehow my wife finds new ways of spending… haha Like we just book a plane ticket for her to go back and see her family. Like who needs to see their family when I can put that money to work instead!?!? JK!

    I’m going to try and keep our expenses down to the $1000/month range. As long as I can keep my wife home and not out and about shopping and stuff… got to love women…And then hopefully, end result will be maintaining an 80% savings rate while living here at my parents. My wife wants this to be temporarily, but I’m thinking longer term… haha Man I’m cheap!

    Anyways, keep it up!

  58. This is an excellent post! The way you lay it out, it almost sounds like frugality is a sport!

    I think all of your estimates make sense. It’s amazing how cheap rooming with other people can be. If you don’t mind rooming with other people, then the possibilites are great.

    I think you will succeed going forward. The real monkey on your back right now is the student loans, I think you should find a way to knock those down at some point.

    I look forward to seeing how your income and expenses unfold in the coming months. I’ll have the popcorn nearby =).

  59. Jason,

    First of all, Kudos to you for being so intentional and goal focused. These are the key ingredients to winning in life, and you have demonstrated a great deal of discipline in this arena.

    I think it is great that you are taking a “sabbatical” of sorts. It’s good to change gears and get a fresh perspective. Quitting your job was a critical necessary step, and something I’ve been anticipating you would do for a while now (I was about to suggest it even before you up and did it yourself).

    Obviously, nobody reading your blog will ever truly have the necessary insight to weigh in on your relationship ending, and your reasons seem very valid. If you really desired to make it work, you would still be down there. This is life happening to you, revel in it.

    I think you are on the cusp of radically reinventing yourself over the next three months, and us readers will be the beneficiary of this. You have amply mastered one side of the “wealth coin”, and that coin is about to be flipped over.

    Perhaps I should explain. I’ve been following you for a while because I enjoy your writing, and we have very similar stories. We are both:

    – Dividend Growth Investors
    – Self Starters
    – In our early thirties
    – From Michigan and moved someplace warmer to be successful
    – Intend to be financially independent around 40

    How are we different?

    – My monthly expenses are around $2400 (this is being frugal for me!)
    – My monthly earned income is well over $20,000 and rising (I don’t consider this very much).
    – I invest a minimum (and usually much more) of $10,000 per month
    – My definition of financial independence is much different, my goals are quite a bit higher
    – I plan to continue earning income past the point of FI, because I enjoy my “work”, and my entire definition and view of work is radically different from most people.

    The main difference is that I obviously earn a lot more money, which allows me to do much more. Before anyone reading this puts up a defensive wall, I do not have a fancy college education, and I am not lucky. I was born to very poor family, and lived in financial ignorance for most of my 20’s.

    I own a business I started from scratch with zero capital, and have built it to these six-figure income levels over the past four years (about the same time you’ve been doing this blog). I also expect it to keep growing at a fairly steady rate.

    Jason, I am not sharing this in order to be competitive with you, quite the contrary. I have a deep admiration and respect for you and your amazing accomplishments. I just feel based on my personal life experience that a guy as smart and talented as you should not hold himself back. I’ve noticed in your writings that you have a bit of a mental block and bias towards certain concepts, especially in the area of income.

    So many people believe that all jobs are grueling, that work is something to be avoided, and that money is difficult to come by. I’m not questioning your work ethic, but I think it is fair to say that you strongly disliked your job at the dealership. And you should have, it sounded terrible!

    Now that you’ve started to earn a nice income from activities you enjoy, I think you may be starting to realize these things. It takes time and experience to really internalize the belief and self confidence required to pave your own way in this world, and you are squarely on that journey. And in all fairness, you started on that journey when you first started your investing.

    Like I said above, the wealth coin is two sided, and you are a bona-fide master of the “what to do with it” side (frugality, saving, investing). Now you will begin to master the “earning it” side of the equation. It’s a myth that a person needs a college education to earn six figures. It’s also myth that a person has to do something miserable for 50+ hours a week to earn six figure. And it is a myth that six figures is a lot of income – that kind of thinking is what holds people back.

    I work about 30 hours a week by choice (I own a media company and creative agency), and what I do for work I don’t really consider as such. Not that it’s always sunshine and giggles, life is life, but even on a bad day I just have to think about when I was waiting tables in my 20s…

    As a relevant aside, I think life is more about satisfaction than it is about happiness (I think happiness is human construct that we sabotage ourselves with these artificial expectations). If you can do something that brings a sense of satisfaction to you at the end of the day, that’s what matters. (I guarantee even someone with a glamorous job and wealth, maybe someone like Brad Pitt with his seemingly awesome life, has shitty days on a film set or whatever, where he temporarily loses site of the big picture and gets muddled down in the daily stresses. This aspect of life can never be escaped, whether you write for a living, live 100% off dividends, or anything in between.)

    Your decision to start writing for a living is a great one, I fully support it. This is going to open lots of doors for you and give you the time to plan your next big move. Obviously, being a young single guy, it won’t be long until you will want your own place. You eventually you will want to get out there and meet people. The dating game can be really rough for a guy on your budget, but it can be really awesome for just a few hundred dollars more.

    It just comes down to one thing. Just decide, that somehow, you are going to earn $x per year. Which means you need to earn $x per month. (With $x being a significantly larger number than you are used to). It’s just one simple decision, today I decide to make this change. You have already proven you can do that with your investments, YOU MADE the decision that THIS is what is going to happen – and it did!

    Your idea of what your lifestyle was going to be like when you became financially independent can happen NOW! I assume you must be starting to realize this, with all the change in your life, and you will see over the coming weeks how true it is. Frugality serves a purpose, but just think of all the stocks you could buy if you earned $200k+ per year! It’s well within your power. What form will this income take? This is for you to discover, and it lies within your talents and creativity, but you will crack this nut. Jason. Now is the time for you to blossom.

    Since I have already rambled on quite a bit with the unsolicited advice, I might as well weigh in on these matters:

    Student Loan: Don’t sell investments to pay it off, but do put all your disposable income towards it going forward until it is gone. Yes, this will mean not adding funds to your portfolio for sec, but it is worth it. It’s not even that much money. I hate debt, am out of debt, and will never go back in debt (I’m so extreme I won’t even get a mortgage, but that’s a different debate). This is more about the psychological win of getting that monkey off your back than the numbers, but the numbers here make sense as well. I always view debt (any debt) as much riskier than just the interest rate vs “what you could be earning” math. It’s a burden to your cash flow that would be very unwelcome if a major life change happened. Kind of like what you are doing with it now in your current situation, clearly it is unwelcome during this life change or you would not have gotten the extension.

    House: The last thing you should be doing now is buying a house. A house, even paid off, is a huge liability for someone like you who needs to be agile. Somehow, I doubt you will be living in rural Michigan more than a few years, you have a much too adventurous spirit. Moreover, a house will take your focus and capital off of earning solid dividend income (your favorite thing) for what? A chance to speculate on Michigan Real Estate. Nope friend, you have bigger fish to fry, I think. (And as you always say and I absolutely agree with, that’s what your REITs are for.) Don’t even get me started on the hassle factor of home ownership. Not that you should never be a homeowner, I just think right now it would be a mistake for you.

    Jason, my intention here was just to give you some food for thought, not to be critical. I hope I have not overstepped my boundaries, these are just some things that I’ve been wanting to say to you for a while. If I in some way have contributed to a positive “paradigm shift” for you, then I am happy. If I have said anything to offend you, then I am deeply sorry. I have nothing but respect for you, and would not have taken the time to write all this for just anyone.

    Best wishes

  60. I have a friend who never went to the gym. All he does to stay in shape is use his body and gravity. No weights even. Just run, push ups, sit ups, stretches, yoga, squats etc. is all you need. And he looks amazing too.

  61. I don’t know if I should say this but…from an Indian perspective, okay?
    25 years ago after college when I was living with a cousin in her apartment, I remember having to be very handy with the chores– more than my fair share– I remember bringing groceries and stuff even when it wasn’t my turn… but then there was no rent or money payment so i guess it was a kind of a payback.

    Also, sharing with close relatives who also have their own family, is not a long term solution.

  62. Looks like you’ve made some substantial savings for little/no sacrifice. Great stuff.

    Have you considered buying a road bike? Cycling is great for fitness and it sounds like you’re in a rural area now which would be ideal. Once you’re up to speed a 20 mile journey should be no issue. I regularly ride 20 miles each way to the station before/after my daily commute. I can thoroughly recommend it.

  63. Damn that’s impressive that you were able to cut $700+ from you budget, even if some is temporary. I think a quality bicycle could be something else you invest in to be able to stay in shape. Although maybe it’s not worth it depending on how many good months you have out of the year to be able to use it. Looking forward to seeing where you go from here.

  64. It doens’t necessarily have to be a ‘good’ (read expensive) one. I do most of my miles on an old steel frame from the 70’s I got for free then converted to a fixed gear (low maintenance).

  65. From what I see in the listing is certainly something that would pique my interest. The inside looks as if all it needs is some updating. At first glance the thing that jumps out at me is why no pics of the basement? I’ve found that the best pics are always placed on these adds as a bait. When something is missing you have to question why?

    With a basement you want to make sure there are no leaks in the walls. It isn’t a deal breaker as there are companies that can seal the basement and offer a guarantee. The best time to look at a home with a basement is right after a heavy rain (actually this is the best time to look at a home in general, because you can also look into the attic and see if there are any leaks in the roof) as you will be able to see any leaks in the walls.

    It’s good that you know the area as location is going to be important. Whether you decide to live there yourself, sell it or rent it location will always be important. I’m not saying it has to be prime real estate, but it has to be a “good” place to live. Best time to visit these houses is on weeknights and weekends. This is when people are home and doing things. If you go on a Monday morning people are going to be at work/school and you aren’t going to get a good vibe of the place. Soak in your surrounding. Are people taking care of their homes? Are they out working on them during your visit to the area? Tangible evidence of pride in ownership can tell you volumes about a place Don’t underestimate the value of talking to neighbors if they are out. They can give you a lot of information both on the property and neighborhood.

    Prepare to look at many places. I looked at dozens of actual properties and hundreds of online listings. I got to the point I had my “tools” ready at each place; overalls for getting under crawl spaces, flashlight for examining attics and crawl spaces and nice long screwdriver for testing weak wood to see how much water damage/rot was involved. You learn a lot about a home in this process alone.

    It’s a lot like the due diligence of purchasing a stock, except with a house it’s much more hands on, but when you find he “right” one it makes all the effort worth while. Let me know if you have any other questions and get out this weekend and check on some houses! 🙂

    The Stoic

  66. I’m kinda in agreement with Briget about the extreme frugality and how it is shaping your entire outlook on life. I really enjoy your blog and will continue to read it, but to be honest, I separate your investing ideas from your personal life. I like how you think out your investment style & what you choose to buy and do some of the same things myself. With all due respects my friend, I believe your extreme frugality has and is taking a toll on your life in many ways. You have sacrificed a relationship to move in with a family member at an age where you should be self sufficient, whether married, living with someone or on your own. In addition, I appreciate the fact that you don’t drink, but I never see a round of golf with buddies, a concert, a baseball game or even an outing with friends other than family or your ex gf. I really hope you consider the fact that saving to the extreme point of buying cheap food, not enjoying friends or life experiences, travel, sporting or musical events is ( in my humble opinion) not living, just existing. The problem is at some point when you are older, you may look back & ask yourself other than my writing and my portfolio, have I really lived a full life. I’m trying to put myself in your headspace at 32 & imagine giving up travelling, golf, concerts, evenings out with friends ( and family) all in the interest of saving a bit more, and I couldn’t / wouldn’t want to do it to that extent. It may work for you, and you seem like a really decent guy, but I hope you are really sure about taking frugality to the max. Best of luck my friend.

  67. Slackline is not all jumps, bounces, and tricks that you see in on the ‘net. As a recently turned 50-yr old, I limit myself to statics on the line: walking forwards and backwards, sitting, turning round, and a handful of yoga moves. I’m not in to the dynamic stuff, don’t want to risk an injury at this point in my life. Having said that, I must say that everything about a serious core workout applies even to the limited-movement stuff that I do on the line. IMO, slackline is a great companion to weight training. At least think about it, and if you see folks in a nearby park, ask them to show you the ropes. Its a great community and people are more than willing to let you have a go!

  68. The best part about owning a house with 3 beds is that’s 2 beds you can rent out. Although then you gotta deal with roomates. I just did a calculator for 50k – 30yr mortgage and i died a little inside living around Boston area and comparing.

  69. With a lower income, you should quality for a subsidy for your health care. If you earn 24,000 a year.. a single male would pay around 100 per month for similar coverage of what you have right now. I don’t believe you can sign up for that until next year though, although there might be exceptions since you had to drop your Florida insurance when you moved.

    On the student loans, you could also quality for a IBR plan. That should lower your loans payments quite a bit. I play with this calculator quite a bit myself: http://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action

  70. Jason, I’m going to have to agree with Brian. This blog — and your life with it — seems to have taken a somewhat dark turn. I understand it can be a fun game to see how cheaply you can get by, and I’ve done the same myself. I could utterly destroy your $220/month budget if I needed to and still eat a healthy diet (and I have, btw). However, as Brian points out, at some point you have to live and enjoy life. There’s no guarantee of tomorrow, so you may scrape by on a monastic lifestyle with the hopes of being “truly free” after 40 — ignoring the fact that you still won’t have enough money to actually enjoy life, just to continue your very basic existence — but you may die at age 39 and never be able to “enjoy” what you’ve sacrificed so much for.
    I really think it’s important to find balance in life — whether that be with money, finances, social activities, or hobbies. I fully support and appreciate that you don’t place a high value on material possessions, as I don’t really either. However, to echo what Brian said, I do place value on experiences and memories (I think you do, at least in regard to family). That means something different to everyone, but you’re going to remember that concert, that ball game, that trip to Las Vegas, etc. more than you’re going to remember that overpriced couch/car/jacket or whatever it may be.
    I would encourage you to stop and smell the proverbial roses once in a while instead of skipping by them and hoping to eventually plant some roses that you might be able to smell somewhere down the line.
    I enjoy reading your blog or I wouldn’t be here, so this isn’t a troll post, nor was it meant to be preachy or judgmental. I trust that you won’t take it as either

  71. Trev,

    Haha, that’s some funny stuff right there! And I hear you on being cheap. 🙂

    Impressive stuff if you can keep things down to around $1,000 per month. Sounds like you guys are in the midst of some changes in your lives, and I’m in a similar boat. I also don’t know how temporary all of this is going to be, but like you I enjoy the savings in the meanwhile. I don’t think I’ll be hitting 80% savings rates like you guys unless I go back to dealership work, but I commend and congratulate you. That should put a serious spring in your step on your way to FI. Keep it up!!

    Best wishes.

  72. Spoonman,

    I’ve never thought of frugality like a sport, but that’s a funny take on it. I suppose it is indeed like a sport sometimes! I suppose this is like a Hail Mary – not a permanent strategy to win every game, but can get you caught up in a hurry if it works.

    I agree that the student loans are the monkey on the back. I wish I could shake them. I keep them around because of the low interest charges and the flexibility, but the drain on cash flow kind of sucks. I’ll see what I can do with this in the future.

    Yeah, I’m excited to see how things shake out here. I’m not only enjoying life quite a bit more than I was in Florida, but I’m also spending much less. So things are looking up. Obviously, the ending of a relationship is unfortunate, but I guess maybe we were trying to drive a car in two different directions. But we still talk and love each other. Maybe at some point life will bring us back together.

    Thanks for stopping by! And I’m so glad that you and your partner are on the same page and going in the same direction. That’s really wonderful and important.

    Best regards.

  73. Daniel,

    I really appreciate the time you took to write all that out, and I sincerely thank you for the advice and the perspective. Although I derive income from this blog and my writing, I think the advice I receive here is worth far more.

    First, congratulations on all of your success in life. You’ve “made it”. Your position is something to be really proud of, and I’m just thrilled that someone of your stature took the time to stop by here and drop some major tips on me.

    I tell ya’, you’ve got me pretty fired up. Although, I honestly don’t think I’m in the right market for what you’re talking about. I might be able to crack the nut and eventually get to that kind of income if it was all I thought about and was driven enough for it, but I’d have to be somewhere else. $40k is big income around here. I honestly would have been much better off staying where I was at if it was all about the income. And it’s not that I’m not interested in making much more money. On the contrary, I’d love to make the kind of income you’re talking about, as it would act as a time machine and bring the idea of FI much, much closer to today. However, I’ve chosen to focus more on the spending side of the income statement lately because I just don’t see how it’s possible to make that kind of income up here outside of me selling off my entire portfolio to start my own business, and that would require a vision of a business that I just don’t have. I suppose I also don’t have the risk tolerance. If you have any specific ideas or tips on this, I would greatly appreciate it. I understand certain industries are better for this kind of income, and something in finance would be the most obvious path for me. I’ve honestly looked into it, but my attempts have been futile.

    I hear you on the more specific ideas regarding student loan debt and housing. I’ll take this to heart. It seems a lot of people I talk to are a fan of getting rid of the loans as soon as possible, and I’m not against it. I also hate the fact that my balance sheet has any debt at all on it. As far as housing, I’ll be honest and admit I’m in a state of flux. I’ve long been against home ownership for many reasons. Being agile, as you mention, being one of the chief reasons. But the sheer work they require, lack of appreciation over the long haul, and liability being other fantastic reasons. I’ve been a lifelong renter and have quite enjoyed myself. However, real estate up here is almost too cheap to not notice, and so I crunch the numbers from the pure standpoint of hedging future housing costs. So a house to me isn’t a “home”, but rather a hedge against rising rent over the long term. Of course, I also can dig the idea of having my own space to call my own, but it’s just not a lifestyle I’ve wanted because I have no desire to raise a family. But I also do think about the adventurous side of myself, and as you point out owning a house in rural Michigan might crush my soul a bit. It’s something to think about.

    Anyway, I really appreciate your ideas here. I’m a “big idea” guy, so all input and perspective is important to me. And maybe I will indeed crack the nut. I guess we’ll see. In the meantime, I’m really enjoying the journey right now! 🙂

    Thanks again.

    Best regards.

  74. DivHut,

    I’m with you. The gym membership is totally unnecessary to get in shape. I’ve always known this deep inside, but I kept the membership around because I’ve had a hard time staying motivated without it. But it’s now or never. And I’m doing well right now. I just hope I can keep it going!

    Cheers.

  75. austere,

    I hear you there. I think it depends on the individual. Even within my own family there are people that this situation would probably not work with.

    However, I also realize this isn’t a permanent solution or a long-term situation. As I stated in the post, at some point I’ll figure out where I want to go and make my way there. However, I’m going to enjoy this situation in the meanwhile. My little sister is incredibly sweet and it’s so nice seeing her everyday. Keep in mind that in the last five years I’ve only seen her a handful of times. So this is all really fun right now. Will those feelings wear out over time? Not sure. But, again, at some point I’ll be moving on into my own, more permanent situation.

    Thanks for stopping by!

    Cheers.

  76. Thanks for the quick reply! I really appreciate it. I knew you would have put a lot of thought into this, and its nice to hear your perspective. I agree with your points, and i obviously don’t know your situation as well as you, but I just have to play devil’s advocate haha.

    Back of the envelope calculation, worst case capital gains tax would be ~$500 and you would only be giving up a tiny bit of tax savings from paying the interest, maybe $200 a year? So after paying the loans off, if you put the first few months of $224 “savings” aside to cover the tax implications, you’d be free and clear. I can relate to not wanting to let go of any of your investments, however there must be many of them which you feel are currently WAY overvalued. Of course the market could go higher, but now is as good a time as any to realize some gains! You have seen huge gains over the past 4 years and (to me) it would make sense to put some of that cash towards eliminating your debt and improving your current cashflow.

    In your situation right now (low income and slightly lower expenses) cashflow is king! An extra $224 per month could be the difference between living off your writing income, and having dip into your dividend payments, until you see some higher writing income… which I’m sure you will soon enough!

    Anyway, it’s just a thought! Looking forward on a full article on the subject if you end up writing one!

    Thanks,
    Mike

  77. UTMT,

    Thanks! The biggest sacrifice has obviously been the loss of a wonderful partner down in Florida, but perhaps life was just taking us in different directions.

    And that’s a great idea on the bike. I had a bike in Florida, but the heat was a killer. In addition, I couldn’t ride it all the way to work because I would show up too sweaty. It just didn’t work. But up here I don’t see why that wouldn’t work. Great suggestion. I’ll look into this. If I do stay in this town on a more permanent basis, the good thing is that we have a local grocery store, a couple restaurants, a bank, and a pharmacy, so it would be easy to create a local economy where I don’t have to go very far for much of the everyday stuff. I’ll have to drive for stuff like entertainment, but that’s okay.

    Appreciate the idea. Although, I hear a lot of people prefer touring bikes. I guess they’re more of an all-around bike. And the roads around here are pretty rough, so I think the frame would have to be pretty sturdy.

    Take care!

  78. JC,

    Thanks, bud. Appreciate the support!

    Yeah, I think a bicycle could work well for 6-7 months or so up here. Just depends on the year. I might look into this pretty soon and see what I can come up with.

    Cheers.

  79. Wow, that’s commendable. I think it’s great that you’re so dedicated to making it work. The nice thing I see here is that as your writing income increase, you’ll have more breathing room. This level of extreme frugality probably can’t last long term, but I’m sure you’ll figure out how to balance it out.
    It seems to be easier to cut back when you’re single.

  80. Reading your post reminds me of the days when I had just graduated college and started my first job and moved in with my uncle since he lived somewhat nearby and I needed a place to crash for a few months before getting my own place (I eventually bought a condo in 2012… what a great time to buy!).

    Anyway, I remember the $3k/mo I made after taxes was incredible! I felt like I was barely spending anything as my meals (except lunch, and going out on weekends with friends) were covered since I was working so many hours, gas and maintenance was mostly covered through car mileage reimbursements due to working on a client that was pretty far for me, and that was basically all I spent. Food + going out. For about 4 months I lived there and probably jacked up my savings by over $10k. I’m sure my savings rate was similarly high 80%+, if not more.

    Man, I sure do miss living at home… not really, but I do miss the savings. 🙂

  81. The Stoic,

    I appreciate the perspective.

    I tell ya, I’ve never been particularly enthusiastic about home ownership. However, your recent post about the cost savings has me a little more excited. I’m looking at the experience as a mitigation of rising housing costs – a hedge on rent inflation. And I wonder if that’s really the right way to go, because I think at least a piece of me should “want” to own a house for more traditional reasons, be it pride of ownership, a place to make my own, a yard, etc. But those things really mean nothing to me. I just don’t get much satisfaction from an abode. But maybe that’s because I’ve never owned my own place? It’s a catch-22! 🙂

    I will say that this isn’t a particularly attractive place to live. And that’s why houses around here are cheap. It’s a decent town where you’ve got a grocery store, a bank, a pharmacy, a small downtown area with a couple restaurants, and local access to the freeway. But you’ve also got big railroad center, so the town has this, perhaps imaginary, film of dirt everywhere, and you’ve got noise issues with trains and everything else. The town is called Durand, and locals actually call it “Dirtland”. Anyway, it’s no paradise. But my family lives here and it’s cheap, so that counts for something. 🙂

    I may end up taking a look at the place, at the very least. Can’t hurt!

    Thanks again.

    Cheers.

  82. Brian,

    I hear you. And maybe it’s my writing or what I’m putting out there, but I enjoy life. Many things that I do don’t always show up on my income/expense reports. For instance, my girlfriend and I used to routinely go down to the Farmer’s Market in Sarasota on nice Saturdays and walk around, grab a smoothie and she would buy veggies and fruit. One thing I didn’t enjoy in Florida was a lack of a real social group of people I could spend time with. And maybe I haven’t outright said that, but that’s one of the big reasons I moved back. It was wonderful spending time with my girlfriend, but keep in mind she was quite a bit older (more than 10 years) than me, and we had different interests at times. And because Sarasota’s demographic skews quite old, I had a hard time meeting people my age. I do regret not taking more time for concerts and sporting events down in Florida, and I’m sure my girlfriend would agree quickly with that assessment. But she wasn’t big into stuff like baseball or hockey, and the football games down there were just egregious. I couldn’t even enjoy the event if I knew it was costing me over $200 for four hours when I could just as well enjoy it at home where I have easy access to seating, the bathroom, and food I like at a much cheaper price. I guess that’s just me.

    However, it is the lack of experiences that factored into my decision to move back. And since I’ve been back I’ve already enjoyed a family backyard barbecue, a Sunday afternoon out at the lake on a pontoon boat, and tonight I’m meeting my best friend out for dinner at a burger joint. So it’s stuff like this that I just couldn’t really do down in Florida because everyone I knew was so far away. Maybe I’m not good at meeting new friends. I am an introvert at heart, which makes frugality easy, but perhaps comes at the cost of a small social circle.

    So it’s not that I’m purposely going out of my way to avoid some things. It’s just that the situation I was in down in Florida wasn’t optimal for me to go out with buddies because I didn’t really have any. I was commonly the youngest guy in the room by far. For instance, I had a friend I would occasionally hang out with in Florida, but he was in his mid-40s. He was a co-worker at the dealership, and the only one who didn’t have a wife and kids and even close to my age. It was just weird like that. And that’s another thing. I’m 32 without a wife and kids, so combining that with a desire to live frugally naturally puts me out on the fringe sometimes. Again, not a desire to not “do stuff”, but rather a lack of company at times.

    But I’m looking forward to doing much more up here. I’m not someone who sits at home all night every night counting my pennies. Rather, I’ve always had a social circle and am a introvert by heart, so going out to concerts with 10-15 people has just never been my thing. Even my best friend, who isn’t frugal or interested in early retirement, is married with two children now. His time is mostly spent with his family. And now mine is as well. I guess I just naturally enjoy stuff and experiences that don’t require a lot of money, and I really enjoy time. So if you gave me the choice of going back to the dealership and hitting the town like a rock star, or this lifestyle where I’m creating my own schedule and writing but don’t have a lot of excess capital for concerts and sporting events I’ll choose the latter every time. And I think there’s room in the middle as well, and I’m interested in that. I’ll likely get a part-time job or something here soon and have plenty of time and money to do whatever I want while still saving, which is really a great place to be. However, even with money I still enjoy quiet nights at home with a pizza and a good movie over big events out. It’s just my personality.

    I hope that clears up my position?

    Best wishes!

  83. Zol,

    I can imagine Boston is crazy. Of course, we’re talking apples and oranges. Boston is a world-class city with exciting amenities, and I’m in a tiny town in the middle of nowhere! 🙂

    Although, I’m not sure about renting rooms out. While I’ve never minded renting a room from someone else, I’m not sure I’d want to deal with it on the other side of the coin. But I think if you get your house cheap enough you might not need to rent rooms out anyway.

    Take care.

  84. Duke,

    I’m all over it!

    I already applied for health insurance on the exchange, and qualified for entry due to a qualifying event since I moved and my insurance isn’t valid up here. I got a quote on a BCBS plan that was similar to what I had before, but with a lower deductible and out-of-pocket costs. However, next year if my income stays at this level I suspect I will be eligible for subsidies.

    And the IBR is something I also keep in the back of my mind. I mentioned it as one of the reasons I continue to keep student loans on my balance sheet. However, the IBR isn’t a total free lunch. The interest paid over a longer period of time jumps quite a bit, and if you stretch it over the max (25 years) you’ll have the loans go to zero, but owe taxes on the forgiven amount as income. So the IBR may actually end up costing you more over time, while the benefit would be stretching out the costs…so there is some opportunity cost/time value of money at play there.

    Cheers!

  85. Bruce D.,

    I tried to answer Brian with a pretty lengthy comment there, so I’m going to reference that.

    However, I think it’s important to note that I’m not skipping by the proverbial roses to instead save money, but rather that my idea of roses might be different from yours. Even before I was living frugally way back when I was never big on hitting the town, taking big trips, going to concerts, etc. I’m an introvert, and so I just enjoy different things. I guess maybe that makes this idea of living frugally pretty easy for me. I mentioned this in a podcast a while back, where your personality type might be a benefit or a hindrance to living frugally and attaining early FI.

    Meanwhile, I’m enjoying spending my time more than ever now that I’m back here. Unfortunately, I just didn’t have a big social circle with which to enjoy the area down in Florida. Maybe that’s my fault, but I would content that I was limited by my schedule and the demographics. Now that I’m back in Michigan I have a big circle of people that I can spend time with. I’m enjoying being back up here already, and it’s great so far.

    I think moving forward, however, that my being single with no children remains a sticking point, because most of the people my age are married with children, or at least have a child.

    In addition, I prefer “big things” with my money. I’ll give you an example. Instead of going out to 10-20 concerts or sporting events, I’d rather be able to afford 1-2 years of freedom and money to travel to, say, Thailand. Or maybe instead of 10-20 weekend jaunts, I’d rather buy a house in cash. I suppose it’s my nature, but I always think of things in a bigger picture sort of way. It’s not that I don’t enjoy today, but rather my idea of enjoyment might be different than most of society…which is probably why most of society is working until they’re in their 60s or 70s.

    And I don’t take your comment as judgmental or preachy at all. I enjoy other perspectives, and I relish in the opportunity to discuss this stuff. I love talking about stocks and living frugally, but really also enjoy talking about life in general, and different approaches.

    I think also that one can go through different phases. I wouldn’t mind at all a year or so of real quiet time to read and think, and maybe a year or two to travel the world, and then maybe a year or two of real hard work on a big project, etc. I just don’t think of life in linear terms, and right now I’m going through a phase where I’m really close to family, and I enjoy it so far. 🙂

    Best wishes!

  86. Mike,

    Nothing wrong with playing devil’s advocate. 🙂

    I think, based on your calculations, that there’s some evidence that suggests I might be better off paying the loans off now. It really all depends on the performance of the $18k worth of stocks sold off for the purpose of paying the loans. I think I’d have to be careful with that selection, and even then I’m sure I’d make some mistakes.

    I think the ace in the hole here might be the IBR possibility. If my income takes a bigger dip than I anticipate and the loan payments are hard to cover, I could always enter into a payment that would be based around my income. As I commented elsewhere, this isn’t a free lunch. It simply provides flexibility and eases cash flow, and comes with benefits and drawbacks. Of course, well before that I’d have a job somewhere to help with cash flow, but it’s nice to know that this debt is somewhat flexible.

    I’m going to think about it a bit. I’m basically looking at ~$45 per month in interest expenses, which are tax-deductible and going lower, against ~$45/month in dividends which are taxable, but rising. In addition, as my income drops, the taxes on the dividends do as well. It’s an interesting scenario. I may actually end up in an income position where the dividends aren’t taxed at all, but the payments are lowered significantly and any interest I pay is still tax-deductible. Not that I’m trying to game the system, but it is interesting!

    I may end up putting a post together on this one. There might be more math involved than I originally anticipated. 🙂

    Cheers.

  87. Joe,

    I’m with you. The extreme frugality is probably more of a short-term adjustment to a loss of income, but it’s nice to know that I can actually adjust in such a way. And you’re right in the fact that this is much easier being single. I think it’s still possible to live very frugally as a family, and you guys are doing pretty well over there. Pete @ MMM is another good example. But I agree it’s easier to tend to one than three or more. 🙂

    Thanks for stopping by!

    Best regards.

  88. Brian,

    I also had one other thought.

    The comment about living on your own or being self-sufficient is interesting. Many cultures around the world have multiple generations living under one roof. So you’ll see people in their 20s or 30s taking care of parents, even while they have children of their own at home. And then you see siblings live with each other as well. Now, there are economical concerns and reasons there. And I’m not saying that my choice to live with a sibling is right for everyone, or even right for me. But I do sometimes question the status quo, as if living alone is somehow better than living with a family member you care about?

    I think sometimes Americans treasure independence too much, and there is a cost to that. So you live alone, get lonely, and then want to go out and hit the town and spend money to maybe fill a void there.

    I’m not defending my choice, but I do think the tendency for people to want to fit other people into a neat little box is sometimes questionable. I don’t think there is anything more admirable about a person who owns his own home in the suburbs over someone else who splits a loft in a downtown with a family member, friend, or roommate. Just different lifestyles for different people.

    Furthermore, I don’t think there is anything necessarily more admirable about having a family or being single. Just different ways of living. As such, your “home” is going to look different, depending on how you’re living.

    Cheers!

  89. One thing is for sure, there definitely isnt a ‘right’ answer on how to handle it haha. While the future stock performance is important, its unfortunately unknowable, so not much point worrying about that. I would say it really hinges on what you currently value more right now – increased cash flow or a larger portfolio. And that probably depends on how long you will be living the ultra-frugal life, which I’m sure is hard to say! In the end you’re in an envious position…chosing between a slightly larger portfolio or eliminating your loans… it’s a high class problem!

    Anyway, sorry for harping on this subject, and thanks for all the great articles over the last few years. I really appreciate that you take the time to share your thoughts with us!

    -Mike

  90. It’s an exciting experiment!

    I don’t know why some people thought you cut too much–it was just a little food, major housing expenses due to a new living situation, and a gym membership. Maybe you should have mentioned all the categories you’re not planning to cut spending on (like the car) to help them see that things are still okay.

    The only things that surprised me were putting off repaying the loan (because long-term it costs you a little more) and food. Do you eat separately from your sister’s family?

    I also quit a (relatively) high paying job to move to a lower-paying situation a couple of years ago and made some cuts to my budget:

    Food: from $167/month to $100 – I barely notice any difference from that huge (percentage-wise) cut–I just do a little more of the processing myself. I will continue doing this amount of processing myself permanently, but once I have more money again (I get a pension next year), I’ll starting buying organic and local and other more polite foods in a lot more categories.

    Fun: Quit taking group dance lessons (about $63/month) because my boyfriend was often blowing them off (and after 25 years, I wasn’t learning much). I kept going dancing, though.

    I tried cutting my savings for travel and computer expenses in half (from $200 to $100), but found that I didn’t want to. Still, we have been doing only domestic trips since then, and this year we are doing only super-local trips (weekend trips). That’s just temporary, though.

    Charity – I still have memberships with public TV, public radio, and the local wildflower center and I still donate 10% of my income to charitable causes (anti-poverty, pro-environment, etc.), but I no longer donate an extra 1-3% for less important, self-serving causes (wikipedia, local causes, etc.). That’s also temporary.

    Renovation – stopped saving for renovation. That’s also temporary–I really want a dishwasher, covered parking, and a separate laundry room (instead of a washer in the kitchen).

    Transportation – I thought seriously about going without a car when my last one died. But I value locational independence as well as financial independence. And I like how my car gets better mileage and pollutes less than my boyfriend’s truck, so we take mine for all cross-town and longer trips.

    I did not cut housing (except for paying off my mortgage), utilities (though they are about the same), or health (went up when I had to pay for my own insurance–though I did get to contribute to an HSA during that period).

    My idea of frugality (besides processing more of my own food) is to try to remember to brainstorm ways to do what I want besides go buy something new at the obvious place. My clothes are mostly from thrift stores, I get my glasses online, I turn lights off when I’m not using them, I use dish towels instead of paper towels (except for wiping grease off food), I cut my own hair and don’t wear make-up or perfume, I do most of my reading from libraries and only buy books, movies, and music that I already know I love.

    I wish I knew more ways to think outside the box. For example, for the last family reunion, we found a different hotel than the recommended one–it cost half as much, was much more convenient to the train into town, and was on a bus line to the recommended hotel.

    I do still get to read a lot, donate to important causes, buy green energy, stay away from growth hormones, keep up with preventative doctor and dentist visits, read as much as I want, exercise as much as I want, eat delicious things (which happen to have more fiber, less fat, and maybe more shredded vegetables inside since I make more of it myself), write, learn stuff, make stuff, listen to music, make music, dance, and stay cool in summer and warm in winter.

    I’ve never looked hip or cool or beautiful, and although it’s probably possible for me, I really don’t care. I also don’t have a big house (but I get to live closer in town than most of my friends). I stopped paying for college degrees, but kept auditing classes. I don’t have kids or pets, but I don’t want the responsibility. So a lot of the obvious sacrifices are not sacrifices for me.

    I wish you continued good luck in your new place!

  91. As long as you are comfortable with your level of frugality then that’s what truly matters.

    People tell my bf and I that we need to get out more, but neither one of us likes clubs, sport events, bars, or parties. We’re both introverts. Honestly, a fun Saturday night for me usually is me at home, reading a book or watching a movie, having DiGiorno pizza, drinking hot chocolate, a Smoothie, or a Pepsi and being around my bf (we live together). Also a good time for us is being around nature like hiking, going to a state park, etc.

    I’m not trying to be “better than thou” a good time for us is just different from what most extroverts would think a good time is so being frugal is not hard. It’s just normal.

    Speaking of extreme frugality.

    I’ve been reading “The Tightwad Gazette” a frugal book about this lady Amy Dacyczyn and her husband. She was a graphic designer in Boston and her husband was in the Navy, anyway they decided their big life dream was to have a big family, a New England fixer upper, and live out in the country. They used to spend like everyone else but when they started to think about their dream and put it in motion they became very frugal.

    The Navy relocated them to Maine and they found a house they liked in Leeds, ME, she quit working and they both lived on her husband’s $30,000 income (she writes it was less than that but won’t give exact figures). They started a newsletter called “The Tightwad Gazette” which ran from 1990-1996.

    Anyway, they did things like buy second-hand clothes for themselves, they even bought their kids second-hand clothes, they had a garden, canned, etc. She would wash and reuse plastic baggies. If their kids wanted animals then they found a way to get them, they bought their kids what they wanted through the second-hand market. One of her kid’s had a minor cosmetic dental issue and she got them braces.

    She and her husband stopped eating out, after a bad lobster dinner, they both decided eating out wasn’t worth it to them. They didn’t buy their kids Frito’s or processed foods, etc. If their kid’s wanted to get something new or junk food, they had to earn the money themselves. Anyway in her book she writes how she went on the Phil Donahue show and she was attacked for “child abuse” for buying her kids second-hand items.

    But now that her kids are older, she was interviewed recently and said that her child, the one who complained the most was actually the most frugal now as an adult. She admits in the book everyone has different levels for frugality and what works for her doesn’t work for everyone, but the point is to find a way to achieve the things you want in life.

    Her book isn’t useful to me for the most part. Mostly what I loved was that she has several philosophical articles about money which I found interesting, and her story has proven frugality can get you ahead. Too many finance experts focus on finding a “better” job and the hottest investments, and that’s not always easy even in a good economy.

    To this day she and her husband are retired, they didn’t think FI was achievable at first because they had six kids.
    They still have their home and didn’t lose it during the great recession. So yes I do believe in the “power” of frugality.

    People criticized her like they criticize you, however she’s not the one with debt, she doesn’t have to work two or three jobs at her age, she didn’t lose her house, she has a marriage with her frugal husband (they’re on the same page), so keep going.

    You never know Jason, you might end up meeting a person who is as frugal as you are. Or at the very least someone who has the same life goals that you do and that you mesh with better.

  92. I thought it was funny when Bruce said your blog has taken a dark turn. 😀

    I think some folks seem to get the idea that you are going to end up living with your little sister forever.

    When I first moved out I remember eating cheap fast food that cost about $1 or 2. Naturally I didn’t do that forever. Many people end up doing that when they first move out, living with 2-4 roommates, etc. I think many of them block out that part of their lives when they graduate college and make more money.

    Sometimes it’s more special to take one or two nice trips once a year for 2-3 weeks instead of taking 10 short weekend trips. It’s more special to me to go out to a nice expensive $60-80 dinner with my bf a few times a year than every weekend.

    A year ago, my bf and I used to eat out every single day and honestly it got boring. We ended up discovering restaurant food every day is bad for your heart and wallet, and after awhile boring. Dave Ramsey says that if you eat lobster every day then it will taste like soap. So we learned to cook healthy and delicious food at home.

    There’s this great book called “Quiet: The Power of Introverts in a World That Can’t Stop Talking” by Susan Cain. She talks about introverts and how much they have influenced the world. It’s a great book, do check it out from your library when you have the time.

    When you’re an introvert people don’t always understand how a person can have a good time either on their own, or doing something entirely different from an extrovert.

  93. You could cash in the Freedom Fund at a all time stock market high, pay the taxes, buy four houses for 30K cash each, live in one and rent out the other three for $600 x 3 = $1,800 per month profit. Bam your free!

    But to me, I’d much rather have $0.75 of divdend income then a $1.00 of rental income; dividend income is 100% pasive, rental income is 75% pasive.

  94. Jason, I think this move is a positive one despite the concern some others may have that you’re “missing out” on something by doing so. I mean you’re creating memories with your family. What’s better than that? Good luck man, I hope your writing efforts are wildly successful and you never have to work a soul sucking job again.

  95. Welcome back to the midwest! My family and I currently live in southern Mn.I wish you the best. You are an inspiration to us all.Thanks. We are trying something new too. We sold are two year old house and bought a house built in 1921, that will more than be able to fulfill are needs, the best thing is, is that the mortgage is 25% of the new house. Here we come Mr. Market!

  96. Jason,

    My 2 cents…don’t do it! I am guessing your money will grow much better in the market then in those houses. It will take many years before that housing market recovers. Plus I once made the mistake of buying into an area before I knew the ins and outs. Big mistake!

    If you are really focused on buying a place…sit on it for awhile.if it’s the right thing to do the feeling will be there in a year and you will find a gem thru a friend or family without having to pay real estate commissions.

    Lastly go review Jim Collins’ take. There is a lot of truth there. I have owned many homes and wish I was in your place now.I do my own maint. And after a while it isn’t fun. Hiring it out is expensive. If you loved that kind of thing it would be totally different but from what you have wrote, sounds like it is not your passion?

    Cash in the market with no chains to hold you back gives you many options! ESP that you are thinking of traveling. Being a landlord from afar is no fun and will not add anything but stress to an otherwise fantastic opportunity.

    Lastly..a home by yourself can be lonely. Even for an introvert. I would much rather be with a family member, helping out, sharing the experiences of a young family while still having my own space.

    Enough for now..

    C

  97. Mike,

    First world problems. They’re wonderful problems to have. 🙂

    We’re all lucky. To simply have the choice of being able to pay off low-interest debt or invest is just a great spot to be in.

    We’ll see how it goes.

    Cheers!

  98. Debbie M,

    I’m totally jealous of your food budget. I think the lowest I’ve ever been able to go on food for a month was about $120, and that was tough. My problem is that I hate to cook, so it’s tough sometimes to save on food. Although, a decent portion of my food budget acts as a quasi-entertainment fund, because stuff like going out to a burger joint, wing spot, or a coney island is common in my family. And I want to participate, so I’ve included some of that there. I could easily get by on less than $150 for just me, but I’m juicing the budget a bit.

    It sounds like you are pretty thoughtful when it comes to spending, and that’s really what I am for. I’m not out to live a miserly life, but rather I’m thoughtful about what I spend money on. I try to maximize value and happiness for every dollar spent. And I generally do a good job. Sure, I waste a little here and there, and sometimes I cut back when I should spend a bit more. Nobody is perfect with this stuff, and finding that right balance is a constant work in progress. But I’m pretty happy, and in life I think that’s more than half the battle.

    Thanks for sharing your thoughts and your lifestyle. You’ve got a great handle on expenses there. Keep up the great work!

    Take care.

  99. Lila,

    Thanks for stopping by and sharing that.

    We’re pretty much on the same page here. I just enjoy activities (and sometimes non-activities) that maybe others don’t enjoy. Luckily, the lifestyle I enjoy just doesn’t cost that much money. If I was an extrovert that liked hitting the local bar on Friday and Saturday nights then it would be tough to live the way I do, and I certainly wouldn’t be on this blog typing this right now at 9:15 p.m. on a Friday night. 🙂

    And I’m with you on a pizza and movie night! Those are the best. I’d much rather grab a blanket, a few slices of good pizza, a cold pop, and jam out to a couple movies. That’s just good stuff to me.

    That’s an interesting anecdote there on the Gazette. Crazy that people accused her of child abuse. That’s just nuts. I suppose when you come from the perspective of buying whatever you and your children want at the slightest whim, then an opposite lifestyle can seem pretty extreme.

    I think you’re right in that frugality is quite powerful. It has the power to radically change your life and bring freedom much closer to reality. If they were able to do all they did with that many children, imagine what you and your boyfriend can do, or me! I know I’m anxious to find out. 🙂

    Best wishes.

  100. Lila,

    Great stuff there. That’s an interesting quote by Ramsey. I tend to agree. Eating at restaurants is still kind of a special event for me because I don’t do it all that often. If I go to restaurants three times in a month that’s a lot. The more you eat out the more pedestrian it becomes. So you’re paying more and more to get less and less. Its hedonic adaptation on a micro scale, and can be applied to just about anything in life. I always try to keep that in perspective so as to not wear myself out on anything.

    Yeah, I’m definitely not going to be living with my sister forever. I’ll stay here for as long as makes sense, but I’m not just here for the cheap living. I genuinely want to live here and spend time with family. Even when we’re not actively doing something together, it’s just nice having her over on the other side of the couch. It’s the small things in life, you know?

    And I’ll look into that book. We have a very small library here, but I’ll see if they have it! Thanks for the suggestion.

    Best regards.

  101. Scott,

    Yikes. Landlording just isn’t for me, but I have much respect and admiration for those that do it. I’m with you: I’d much rather earn a smaller income via dividends because the income is about as passive as it gets. Sure, there’s a little work with managing a portfolio and researching companies, but once your portfolio is all set up, it’s pretty much autopilot from there. A little monitoring here and there, but that’s easy if you have any interest. Landlording, meanwhile, requires just a tad more work. Of course, if you have an interest and you’re handy it’s probably easy money. I’m just not built for it. 🙂

    Take care!

  102. wes mantooth,

    Thanks for the support! I appreciate it. 🙂

    I’m actually a bit surprised some people think I’m making this big sacrifice, but I really enjoy the small things in life. And like you said, what could be better than creating great memories with loved ones? Life is nothing more than a collection of memories, and I think I’m doing a pretty good job there. I have wonderful memories from my time in Florida, and now I get to create new ones up here.

    And I hope you’re right about avoiding a soul-sucking job. I’m not against working; I have a great work ethic. But I hope the next job I take on, if I take one on, will be something I’m passionate about. Something that involves finance or somehow helping fellow man would be high up on the list. We’ll see!

    Best wishes.

  103. Fozzy,

    Man, that’s a fantastic move right there! That dramatically assists your cash flow while bringing the idea of freedom much closer to reality. I hope it all works out for the best for you guys, but even a repair here and there should easily be covered by the 75% savings on housing. Nice job!

    Thanks for the warm welcome. Nice to be in the Midwest again. The summer is phenomenal so far, although the mosquitoes are pretty rough up here right now.

    Take care!

  104. Chris,

    I hear you. I’ve long been against home ownership. I’d probably rather catch the flu then do yard work and landscaping. I’m only in a bit of flux right now because the housing stock up here is so cheap. However, I also would venture to guess that yo’re right on stocks far outpacing housing in a small town in Michigan. I mean if I had to bet on even a mediocre company or a house in rural Michigan, I’d bet on the company every time. Stocks outpace real estate (especially SFH) by a long shot over the long haul, so I’ve always preferred to own the former and rent the latter.

    And I’ve read Collins’ take. Great stuff. His list of why houses are such a horrible investment is pretty inclusive and hilarious. Also, James Altucher had a nice series of articles that are pretty appropriate on this. I think one was titled “Why I’d rather shoot myself in the head then own a house again”…or something along those lines. It seems he may possibly have a mild aversion to home ownership. 🙂

    I was also watching Kevin O’Leary recently on CNBC talking about why people are crazy to buy houses with the maintenance, transaction fees, lack of likely appreciation over the long haul above inflation (especially compared to stocks), etc. Of course, real estate is something you have to judge on a local case, neighborhood by neighborhood if you’re running the numbers. But it’s also a big lifestyle call. Do you want to deal with leaks? Painting walls? Doing yard work? Replacing carpet?

    I appreciate your perspective. And I’m really enjoying living here with my sister. It’s nice to chat with her every day and goof around, and plus we’re all very excited for her little girl here in a couple months. And I know what you mean about living alone. Although I’m an introvert, I get lonely easily. I’ve never liked living alone. I don’t like partying, drinking, or hitting the town. But I do like to have someone else to “introvert out” with. 🙂

    And I am thinking about traveling at some point. That’s actually one of the reasons I moved back to Michigan. I would have regretted living in Florida for another 5-10 years and then jet off to Thailand or something without spending much time with family before I go. If I travel in a decade or so once the new kiddies are older then I won’t feel too bad about it.

    Appreciate the perspective very much! I hear you loud and clear. 🙂

    Take care.

  105. I definitely agree with canceling the gym membership scam. I can get many choices of classes through Hulu including yoga which I learned is insanely expensive to go to a class. And speaking of Hulu, love it, cut out our cable box to save $153 a month. I’ve been following your blog for a while and do enjoy it but one cost you’ll have to consider moving from FL (right?) to Michigan is all the new winter clothes you will be purchasing, as I learned the same lesson when I moved back to NJ from Fort Lauderdale many years ago for the same reason, though you will no doubt shop smart 🙂

  106. Greetings from frugal Narnia,

    Read all the comments and there seems some division amongst the commentators regarding buying a house and renting a room from your sister. My two pence worth after owning 16 fixer-upper houses is, it depends, if its a rising property market where you live then pick up a cheap fixer-upper if you can do the bulk of the work yourself, if its a static or falling market then dont do it because houses have a way of draining money just in their normal up keep.

    Also renting a room for 200USD per month is not only cheap living for you but its also doing your sister a big favour in that she has 2400USD per year extra income, your costs to your sister, electric/water etc are negligible unless you plan on installing a 60 foot heated aquarium full of tropical fish in your room.

    My own situation here has improved, my portfolio is Sterling based and with the Euro (Lev pegged to the Euro) falling this past month life has got a little cheaper, I’d write out my own budget here but I dont think anyone would believe it 🙂

    Cheers,

    Dave…

  107. Jason,

    You earned almost ~$1200 from online writing activities and your expenses are currently ~$1000. In my eyes, you have already attained the goal of being FI, much-2 earlier than age 40. Congratulations.

    Owning home has its own expenses, even if you’ve fully paid it: taxes, insurance, maintenance, HOA fees & pain somewhere, yard, pest control, mowing, decorating your empty walls to please your senses and others 😉 you name it. So, house ownership does not come cheap, even if the house is bought cheap. I’ve recently got an appraisal of my house and it went up by almost $25K, some folks may be happy, but I’m not since I now have to pay more taxes on it! Damn. Working on filing protest.

    I’ve thought about landlord ship for passive income and every time, it scares me due to above reasons and on the top of it, managing the tenants. I know some friends who own 4-10 homes and doing good. For now, I’ll concentrate on buying REITs for passive income.

    Enjoy your time under the sunshine!

    Best wishes.

  108. No such thing as ‘gaming the system’. You are entitled to take whatever deductions you are allowed. How you fit in that mold is up to you.

    You always hear of how Warren Buffet thinks the wealthy need to pay more taxes, yet he still takes every deduction he can not to mention taking social security when he doesn’t really need it.

    You’ve got the right mindset. Work around your assets/liabilities to get the best tax advantage for you ;). Gaming the system almost sounds like trying to pull something shady off. The real slim shady (MI reference for you).

  109. Barbara Mines,

    Nice job going without the gym membership and cutting cable. I was without cable for quite some time there, but my sister has it in the house. So I’m watching cable again, but I can see I wasn’t missing much. Now in the mornings I’ll have CNBC on in the background, but it’s generally on very low volume.

    I actually don’t anticipate buying any clothing. I generally wear pants most of the time anyhow, and have a few sweaters and light jackets still from when I used to live up here. So I think I’ll be fine. Of course, we’ll see if my tune changes with January hits! 🙂

    Thanks for stopping by!

    Take care.

  110. travels,

    Frugal Narnia sounds pretty great!

    Great point there on the additional income my sister will be receiving. I meant to talk a bit about that in the post, but forgot to include it. Although some of that will go to the rising water and electricity costs, she should largely benefit from it. Plus, we get to spend a lot more time together. It’s really a win-win for everyone. 🙂

    Keep on enjoying the cheap living over there in Bulgaria!!

    Cheers.

  111. PIM,

    Sorry to hear about the new appraisal on the house. That’s rough! I hope the hearing goes well and you get some support there. 🙂

    I’m not quite FI yet, because the blog income is active income. As long as I’m working for a living (as enjoyable as this “work” is) I’m not truly financially independent. However, I’m a lot closer than I was just a few years ago. I’m very, very excited!

    And I hear you on being a landlord. I think that’s either something you’re cut out for or you’re not. And I already know I’m not. I don’t even know if I’m cut out to own my primary residence, let alone other people’s residences. Like you, I’m perfectly fine with the REIT income!

    Have a great weekend.

    Best regards.

  112. ed69,

    Big Eminem fan. Love the reference. 🙂

    And you’re right: It’s all about maximizing the potential of your assets, while minimizing the drag of any liabilities you have. I do my best with that, but I could optimize a few things here and there. For instance, I don’t use tax-advantaged accounts for reasons I’ve discussed before. Overall, I think that I’m doing a pretty decent job. If income keeps up this way it’ll be interesting to see what taxes look like next year!

    Enjoy your weekend.

    Cheers!

  113. Hey Jason, the site is being weird in my browser, so I hope this comment posts in the correct spot, as a reply to your reply. Thanks again for an open-minded response to my comment that could very easily have come across as sort of rude (sorry about that). Like you, I am 100% introvert as well as being about as a linear of a thinker as there is, so perhaps that’s why I find myself returning to your blog. It actually sounds like we might be kindred spirits!
    I have always been someone who enjoys the “big purchase” as well, rather than the smaller stuff, even when I was growing up; I didn’t need lots of toys, but I always had the money to buy a bike, stereo, or whatever other big thing I decided I was really passionate about. As an adult, when I worked in an office, I always brought my lunch or lived close enough that I could go home for lunch. I told everyone that I would rather save up for a trip or a nice meal than drop 10, 15, or 20 bucks on lunch every day. I was actually appalled by some of the people who had 2-3 kids and who would regularly spend $15-20 on lunch. “Sorry you don’t have a college fund. Mommy spent $100/week on lunch for the past 18 years.”
    My wife and I talk all the time about how we would rather save up for a higher quality unique/memorable dining experience than going out to pick up dinner all the time. Since I enjoy cooking and feel like I am good at it, we aren’t missing out, and we’re certainly doing it a lot healthier.
    You and Lila are both spot on about introverts — it’s impossible for extroverts to understand that social situations actually drain us, whereas extroverts are actually energized by being around a lot of people. I am judging by her comments that she thought I might be an extrovert who didn’t understand you. Believe me, I enjoy a night on the couch more than a “night out” 99% of the time, so I am right there with you.
    I think the “dark turn” on your blog was just the manifestation of all the transition in your life and perhaps getting out of a less-than-optimal situation in Florida. I trust now that you’re back in your comfort zone, surrounded by friends and family, the tone of the blog will perk back up. FWIW, I’m pretty sure if I had to write a blog about my life, everyone would think my life was fairly “dark” or depressing because I don’t do a whole lot either. “This week I worked, went to the gym, cooked dinner every night, read about stocks, and watched a couple movies at home” isn’t exactly riveting material 😉
    One more thing: I didn’t get married until this year, and I am 32. I didn’t think I would ever get married, because most women were too crazy or otherwise unstable; at least for men, there isn’t the same stigma or pressure attached to being 30 and unmarried like there is with women. With that in mind, I can’t imagine too many women being interested in an unemployed guy who rents a room with his sister and is too “cheap” (i.e. interested in saving for retirement) to take them out to dinner, so if that becomes important, you’re either going to have to his the relationship lottery or change some part of that equation haha. That last sentence isn’t a criticism, just playful ribbing. Thanks for taking the time to write a lengthy and thoughtful reply.
    — A fellow introvert

  114. Bruce D.,

    Not riveting material, but I guess that’s why none of us have our own reality TV shows. 🙂

    And I hear you on the dating scene. It doesn’t look good, huh?

    I’ve thought about that. But that’s why my food budget is actually a big higher than what I think is necessary. I actually pad food a bit as it acts as a quasi-entertainment budget, and I’m not totally upset when I go over a bit. But dating can be fun and cheap. Hitting a coffee shop, a park, going for a walk, a local free concert, or even doing drinks (if it’s not too crazy) are all great ideas which don’t cost a lot and allow plenty of time to talk. Besides, my situation naturally weeds out those that are after the almighty dollar. 🙂

    Thanks for sharing your story there. The good news is that, as an introvert, this stuff should come pretty easily to you. I actually feel sorry for extroverts, because I imagine it’s much more difficult to live frugally and save for the future because of the perceived “sacrifices” they’re making. Not that it’s impossible, but the focus has to be a bit stronger.

    Best wishes!

  115. This is one of the best comment threads I have ever read. I never comment and read everything on ERE, jcollins, MMM, conservativeincomeinvestor, here and others.

    Dude, just pay off your student loans and pay your sister $200 per month and take $50 and set up a dividend trust for her kids. You will feel like a boss.

    My wife stays home and we only spend $2000 per month with 3 kids under 4yrs old.

    I am like you and can barely spend $10 per month personal money and love buying more KO “anytime I got money”

    My salary sucks, but I loved studying Philosophy and Theology and learned a ton about life and myself.

    Thanks for all the inspiration.

    Keep it up and I will star clicking those ads my friend.

  116. Jason – looks like you’ve got it pretty well figured out. With the $735 savings, and the likelihood that your online income may increase now that you have more time to put towards your blogging, you should do well with your semi-retirement choice. Best wishes. AFFJ

  117. Bulletproof. I think you will quite enjoy this new minimalist phase. I read some of the comments about how you might be “missing out on life” by being “overly frugal.” No offense to them, but those folks are guilty of putting themselves in your shoes. I’m guilty of that too, but you and I wear the same kind of shoes, so I know minimalism can really feel quite good. I look forward to continued updates on your new path.

    Best wishes,
    Josh

  118. Hi Jason,

    Thanks for taking the time to read my comments. You asked for specific ideas, and based on your response it looks like some clarification is in order. Also, perhaps read to my first post again, because it is filled with nuance and I refer back to it below.

    Firstly, I appreciate your kind words, but I won’t consider myself having “made it” until my portfolio is bringing in a passive six figure income, so I have a lot of work ahead of me. I’m certainly no millionaire, not yet.

    You said: “…I honestly don’t think I’m in the right market for what you’re talking about…I just don’t see how it’s possible to make that kind of income up here outside of me selling off my entire portfolio to start my own business, and that would require a vision of a business that I just don’t have I suppose I also don’t have the risk tolerance…”

    I definitely would not expect you to find a job paying very much in that area of the state of Michigan, in this economy. Likewise, I would not expect a traditional business dependent on the local economy to do well either. I would never suggest you ever sell your amazing stock portfolio in order to start a business, that would be madness. Remember, the goal is to earn lots of money so you can invest in more dividend paying stocks. Dividends are the end game, they should still be your Mantra!

    Its quite an amazing world full of opportunity, and as long as you are connected to the internet, you have access to it. It does not (and should not) matter where you live. As I mentioned, I happen to run a media company / creative agency, but most of my clients are not even in the same state as myself (I’m in Nashville, TN), and many are in the UK and Australia. Hell, the economy of Nashville is actually quite robust, but I don’t rely on that as a crutch, I think global. I can move anywhere.

    I did not start my business with any capital or debt, I started small and grew large. Nor did it quite resemble a “company” when I first started, it was more of a one-man freelance operation. You have to “bootstrap it”; super low overhead, no liabilities. The idea is to create value in exchange for value, usually best done with a humble servants attitude. We try to help as many people we can with whatever service, product, or value we create – and if we get paid along the way, that’s great (hint: if you excel at helping others, you WILL get paid). I don’t expect you to go out and start earning a six figure income tomorrow, it is an incremental process. When a person “learns to earn” a certain amount of money, the next milestone seems achievable. A person earning 4k per month can’t just jump to 20k, they first have to hit 5k, then 7k, 10k, and so on.

    By the way, you are already doing this with your blog. You are earning money on your own terms. I’m not suggesting one path or the other, there are many lines of service/value creation you could be in, but it seems like your online income is a great indicator of where your talents lie. Perhaps keep pushing the freelance writing, keep growing and evolving this site. Maybe Dividend Mantra is the beginning your own little Financial Media Empire. I know you were discussing a book deal, that is certainly a great step in the right direction. Or educating people on how to replicate your blogging success, there are all kinds of outlets for you to earn more.

    The point is to be as intentional and goal focused with your income goals as you have been with your investment goals. (This is the most important sentence in this post.)

    I could not agree more, sure patch all those holes in the bucket with frugality, but the spigot can be “turned up to 11” as well. Why can’t you do both? Maybe if I was suggesting this to the Jason of 3 years ago, it would have been too much to worry about all at once, you were in the zone with your investing and bucket hole patching. However, at this point, I bet you can do the frugal budgeting thing in your sleep, and you are ready to flip the wealth coin to master the income side.

    Now, as to this house business, I can give my approval of this move if you have the cash sitting around to by this thing. I can’t get behind getting a mortgage, and I DEFINITELY CANNOT get behind you selling your awesome investments. You worked so hard to accumulate income producing assets at a great value (remember, you started in a down market). The only reason you should sell any of these companies is if the fundamentals of one of those companies changes based on your previously established criteria. These stocks will pay you dividends for the rest of your life, and you put your blood, sweat, and tears into obtaining them. Buy more of them, don’t sell them. Don’t trade a high quality income producing asset (puts money in your pocket) for a speculative liability (takes money out of your pocket). If you buy a house, it will play havoc on your budget, they always do.

    Some people will tell you that if you pay rent, you are wasting your money. No, actually, you are trading value for value, and getting something very important in return – a roof over your head. More importantly, you are getting a guarantee of fixed living costs and maintenance support, which makes cash flow management much easier. Between property taxes and endless maintenance costs (not to mention mortgage interest for some), it will be more difficult to manage that cash flow, and now you have lost a big chunk of your dividend income as well if you sold investments.

    Not to mention, this is not a liquid asset. Good luck selling this house in a timely fashion if you suddenly have a change of circumstance. It could take 10-20 years, if ever, for the housing market to appreciate in a state that is perpetually depopulating itself. You don’t buy stocks looking for capital gains, you buy them for income growth. Treat Real Estate the same.

    Again, if you have the cash laying around to make this purchase and your income gets up past 5k a month, then I think you might be able to afford buying a house. If you are considering getting a mortgage or selling your stocks to do it, bad idea.

    One way to increase your income by a couple hundred bucks a month, pay off that student loan… (not by selling stock though!)

    Again, take my advice or not, but I am just telling what I would do in your situation, and I hope with my success in this arena that my opinion has weight (the “proof is in the pudding”, as you say.)

    Looking forward to reading this blog over the coming year.

    Best wishes,

  119. jonathan,

    Glad you enjoyed the comment thread! I’m really lucky in that everyone that stops by here is very thoughtful. It’s wonderful to get such differing perspectives, right?

    It seems the consensus is to pay off the loans. I’ll definitely have to look at the portfolio and see where/if I’d want to cut out $18k worth of securities. The move would immediately be accretive to monthly cash flow.

    Sounds like we’re on the same page in regards to money. I also won’t make much writing, but I enjoy it and also learn a great deal about myself. It’s fantastic to wake up every day and be excited about what you’re going to do. And I’d much rather buy $1,000 worth of stock than spend $50 on something for myself. I’m just wired that way.

    Appreciate the support immensely!

    Stay in touch.

    Take care.

  120. AFFJ,

    Thanks! I’m hoping it all works out, but I also know that I won’t fail if it doesn’t. If my worst-case scenario is getting a part-time job while still focusing more on writing and living than I was before, then I’m still in a great spot. 🙂

    Keep up the great work on your end with the recent accumulation of solid businesses!

    Cheers.

  121. Josh,

    Thanks! I’d like to think the shoes we wear are cheap, worn, but still perfectly usable. 🙂

    And I’m actually doing a lot more now that I’m back home. For instance, tonight I’m meeting my parents at a restaurant to hang out, eat, and chat a bit. This is a good example of why I moved back, and why I think my life has improved. Stuff like this was impossible when I was so far away. I think I can actually do more up here while spending the same or less. If I can keep my base expenses very low I’ll be able to have fun and live very frugally all at the same time. And as mentioned, my idea of “fun” is perhaps a bit different because I enjoy more downtime than most. But the occasional Red Wings game or Tigers game is within the budget, and I won’t go crazy spending a bit here and there. As long as I’m able to keep housing, food, and transportation way down I’ll be fine.

    I’m a big fan of minimalism. Everything I own fits comfortably inside a Toyota Corolla. 🙂

    Cheers!

  122. Daniel,

    Thanks so much for getting back to me. Truly appreciate it.

    I hear your advice loud and clear. I’m with you on not selling any equity off. As you point out, it took a lot of hard work to get to this point, so selling seems to be moving backwards. I’ve built a nice little worker bee that sends me a decent little check now, and it’s that success that has partially provided me the opportunity of freedom that I so lovingly enjoy right now – I say partially because the blog has a lot to do with this as well. I’m so excited to see where my dividend income is going to be 5, 10, and 20 years from now. Even if I never add another dime to my investment portfolio (which isn’t going to happen!) I’ll be a millionaire at a traditional retirement age, and my dividend income will be well into the thousands. The income should double within 10 years without any additions (rule of 72), so at 42 (two years off from my goal) I’ll be receiving $12k/yr worth of dividend income even if I stop investing. So I feel really on track right now because I know I’m going to continue regularly investing and building the portfolio just as I always have.

    I suppose that I’m bootstrapping my own business via the blog, although I don’t look at this like a business. I suppose I should because it generates enough income to largely support my frugal lifestyle right now, but I just look at it as a passion I really enjoy. I’m incredibly lucky that I’m able to generate a modest income right now. And I do plan to grow that organically via more writing and perhaps putting a book together. In addition, freelance writing is something that I hope to expand on in the future as well. We’ll see, but I’m very excited. Even if it doesn’t grow from here I should be able to continue growing my passive income via the investments, so I feel like I’m locked in either way. And maybe one day I do get to six-figure income, although in a very accidental way. I’m certainly very open to cranking the spigot up to 11 or higher, and I’ve never been opposed to it. Rather, my focus was always on containing the leaks within the bucket because I felt that was more within my control. And it served me well. I suppose now that the hole in the bucket is very small, adding more water is the next logical step. I’m excited to do so, and hopefully my efforts contribute additional flow.

    And I’m with you in regards to the house. I’ve always been a bit anti-ownership for all the reasons you cite. I’ve also never felt renting was throwing money away. You’re simply exchanging money for shelter, which is just the same as owning a home. Of course, you never truly own your own house. You’ll always be a serf because you’re “renting” the land on which the home sits. You’ll always owe property taxes, so even once you pay the bank off and “own” your residence, you’ll continue to pay a yearly fee for that right. In the end, there’s no real free lunch. There are benefits and drawbacks to both, but I’ve always contended that dollar-for-dollar you’re better off renting. Plus, it’s easier to live a minimalist lifestyle renting because you’re better able to find small, cheap spaces renting. You can “right size” a rental much easier than a house simply because of building codes and popular trends. Of course, that isn’t factoring in condos, but I’ve already discussed why those perhaps take the worst of both worlds (buying and renting) and combines them into one package.

    I guess for now I’ll sit tight and do what I know best. I’ll live cheaply while focusing on writing, and hopefully that writing brings value about and the income rises. We’ll see. I’ll also brainstorm a bit on the student loans.

    Appreciate the support and all the ideas. Your perspective carries a lot of weight, so your time to write to me is not in vain!

    Thanks again.

    Best regards!

  123. Just don’t go back to the top ramen diet, it may save you money now but long term it could do wonders on your health. If you don’t take care of your body then what’s the point. Good luck with all your changes. I can’t wait to hear about your experience being an Uncle.

  124. Zol,

    Haha! Those people are crazy!!

    Good thing I’m not in there anywhere. I’m glad to say that I’ve never hurt myself or done anything stupid…yet. 🙂

    Cheers.

  125. Zee,

    Oh, I won’t be going back to ramen anytime soon.

    I actually have a funny/gross story about ramen, and why I’m not eating it anymore. I ate ramen noodles for a year straight every single day at work for lunch. And one day – the 200th or so such lunch in a row – I was heating up my ramen like normal. Well, after they were cooked I took a fork and put some in my mouth, and my gag reflexes kicked in without any warning. Those noodles quickly reversed course back into the bowl, and that was my body telling me “no more!” I haven’t eaten any since that day, which was a couple years ago. So I literally ate ramen noodles until my body couldn’t take them anymore. Not bragging about it, but it is funny. 🙂

    Cheers!

  126. jonathan,

    I don’t even think that much weight is necessary. I’m in pretty decent shape, and fairly strong. But two 25 pounders do more than enough, as long as you’re focusing on speed, reps, and range. I’m in the best shape of my life. 🙂

    Cheers!

  127. Well, at least your body knows when to way when! I bet if your stomach didn’t decide to go on a hunger strike you’d be eating that to this day!

  128. Bruce, I liked your comment. I think it’s great that you waited to get married. So many people rush into marriage, only to end up divorced a few years later.

    Sometimes they stay together for decades if they have kids and don’t want to have to become single parents. Then when the last kid leaves the nest, they end up divorcing.

    I think that’s the nice thing about this blog, you meet other people whom are on the same page as yourself. Take care. 🙂

  129. Great blog mr DM. Always inspiring to read how others are doing to achieve their F.I. You are obviosly doing a great job at it. Much better than I do. I’m afraid I lack the stomach to follow your frugal path, even though I try my best. In the case of ramen noodles literally so. I used that diet too once. At first I even liked them but after only a month the very same thing happend to me :p I haven’t aten a ramen since then. So not only am I impressed over your very frugal lifestyle, I’m also impressed that you managed the noodles for a whole year 😮

  130. You probably also should weigh more than I should, so that would increase your food intake! Also, I put eating out in the “socializing” subcategory of “short-term fun” category rather than the food category unless I’m eating alone.

  131. Felix F,

    Haha. Yeah, I don’t know if I should brag about being able to eat ramen noodles for an entire year straight, but I suppose it does showcase my willpower. 🙂

    And we all have different strategies and different comfort levels. What’s frugal to me may be extreme to some, yet not frugal enough to others. As long as your plan works for you and you’re sticking to your plan…that’s what matters.

    Best of luck as you continue to march down the path!

    Cheers.

  132. Jason,
    I know you asked our opinion if we think you did enough or too much.
    The bottom line is that none of our opinions matter–it’s what matters to you!
    I also want to note that some folks think you’ve gotten too unrealistic, to the point of damaging your relationship. I disagree.
    I am amazed at your lifestyle and truthfully wish I could edit my life of all the BS as you have. I am greatly inspired by your journey and I want to thank you for posting your journey.
    Keep up the great work!
    Jane O.

  133. Jane O.,

    Thanks for the support!

    Ultimately, this journey is all about happiness. Financial independence, to me, is just a state of being that should be used to maximize happiness. And I’m closer than ever to FI right now; I’m also very happy. I do miss my former partner in crime, though.

    I’m sometimes extreme in my ways, but I do hope you find a way to edit out some of the BS in your own life. We all have a lot more control than we’d like to think.

    Best wishes.

  134. Indeed we all do have different comfort levels. Alhough my friends think I’m a miser I’m obviously out of your League. I like caffee latte too much :). However IMHO I’m not totally irresponsible with the $$. I ‘m positive that I can see financial freedom through dividends somewhere at the horizon, near the foot of the rainbow. Though it seems to take a bit more time than first anticipated. Current prognois is F.I. @ 65

    So it certainly is long march for me. Happy (faster) marching you too 🙂

    Cheers!

  135. I’m interested to see how things turn out for you, and just how sustainable your budget is in the long run. The majority of your savings (~83%) are only temporary and largely dependent on your living arrangements.

    As for Florida, aside from the climate it doesn’t seem like there was much keeping you there. Personally I think you and your partner probably weren’t meant to be, just based on the fact that both of you felt other things in your lives were more important than being together. No doubt you care for each other, but I think you’ll both be happier in the long run with more compatible partners.

    With only your blog posts to go on, it’s difficult to properly know you, so take this with a grain of salt. I think there are times when you seem to have an emotional attachment with your money to the point that it’s dictating your life. On the one hand you don’t get troubled by Mr. Market and the financial buzz, but on the other the notion of spending $200 on a concert ticket emotionally distresses you. I’m not saying anyone needs (or even should) spend money as a means for happiness, but considering you already live a rather lean financial lifestyle I wonder if there is a point where being extremely frugal overshadows the very happiness you are trying to preserve. My father is one example that comes to mind. He worked hard through his career and has manged a 7-figure portfolio with no debt that pays enough dividends to cover his basic expenses, but his obsession with being frugal has significantly coloured (I’m in Canada) his view on the world. Nearly everything revolves around money for him, and it saddens me that it is also his definition of success in life. I’m all for being economical, but not to the point that it changes you as a person and changes your personality. Try spending money on a few things without looking at the price tag, I dare you! You don’t always have to get the cheapest thing on the menu at the restaurant, if you know you want something else. In the end spending money to be happy is no better or worse than saving money to be happy. As the great Buffet has said before, try not to look at your portfolio more than a couple times a week. I think the same can be applied to any other day-to-day financial matters too.

  136. Chris,

    Thanks for the very thoughtful comment.

    I think you could look at things a few different ways. For instance, if I would have never taken frugality to the nth degree, I very likely wouldn’t be in the situation I am today. So I’d still be burning 50+ hours of my week away at the car dealership, trying to find a way out. I’d be spending more money on things, sure, but would that be the better way to go?

    I think a lot of what you’re talking about comes down to really what you value in life. And speaking of value, I don’t spend money without looking at price tags precisely because there is always a value proposition at stake. I might go to a Detroit Tiger game for $30; but would I go for $200? No. Just like with buying stocks, I value every experience and object in my life against the price. Price is what you pay; value is what you get. That’s true with stocks and everything else, in my opinion.

    And perhaps I do have an emotional attachment to my money, but only in the sense that I have an emotional attachment to the time it buys. I look at my money as freedom, and so that money/time becomes precious to me in that regard. Every time I spend money I really look at it as time spent, and whether nor not that time could be better spent elsewhere. But I’m not a miser. I’m just thoughtful and considerate on how I spend money and time.

    For instance, since I’ve been back in Michigan I’ve had more time than ever to spend with my family. And it’s been truly wonderful. Had I never realized the impact of money on time I wouldn’t be in this position. Maybe I never would have moved to Florida, and maybe I would have spent time with family all along. But I certainly wouldn’t have the freedom I have now, which goes a very long way.

    But I do agree it will be interesting to see how the budget goes over the long run. As you note, the bulk of my savings are a direct result of rather temporary living arrangements. We’ll see how it goes. 🙂

    Thanks again for stopping by. I really do appreciate the perspective. I always enjoy discussing this stuff. And I also know that my strategy isn’t for everyone. We all have different ideas of what life is all about.

    Best wishes!

  137. The toys that I buy, I buy for entertainment and leisure purposes. These are generally one time costs, but I get to use them for YEARS other than minor maintenance costs. I have a Cannondale mountain bike that I purchased in the early 1990’s that I still ride together with my wife on local park trails. This year, old man winter played a nasty trick on our tandem kayak and a block of ice fell on it and made an un-repairable hole in the hull. So we found a brand new tandem kayak on Craigslist for half price. (note: kayak will now be wintered IN THE GARAGE). I am trying to teach my wife that biking, hiking and kayaking in God’s great and beautiful world is a fabulous way to spend time with each other without the need to spend a lot of money on entertainment. For instance, last Sunday we had a fabulous mushroom and truffle oil pizza (small extravagance) for lunch and then went for a leisurely scenic bike ride along the Delaware River and canal.

    Even our extravagant entertainment I try to do frugally. We subscribe to The Walnut Street Theatre in Philadelphia. For about $200 total for the two of us, we get 5 Broadway type production shows per season. Retail these 5 shows would be about $700 total.

    So one can blend extravagance with frugality to have a high quality of life.

  138. Ron L,

    Completely agree. If you have certain interests that are typically high in cost, there are always ways to reduce that capital outlay if you’re flexible and crafty. Craigslist is a great way to procure certain used items at big discounts. Coupons, memberships, and clubs are also great ways to engage in certain activities on the cheap.

    It’s not about sitting at home all day. It’s about properly valuing your purchases, and being conscientious when spending money.

    Thanks for adding that! And great job living life on your terms, enjoying your life, and maximizing value.

    Best regards.

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