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I recently had the opportunity to sit down to dinner with a group of writers who focus on real estate investing and entrepreneurship. At dinner, I shared that I wrote about early retirement planning. I revealed that, at the time, I was a few weeks away from my own early retirement at the age of 41.

After talking for a few more minutes, one of the people at the dinner said, “That’s interesting, but I just prefer to go out and earn more money than to have to live on $25,000 per year.” Others nodded in agreement.

I found this statement extremely interesting. My family’s annual spending is about double the $25,000 casually mentioned in conversation. Besides, I never told anyone at the table what my living expenses were. We had just met.

It quickly clicked inside my head that the assumption behind the $25,000/year budget was a reference to the popular early retirement blogger Mr. Money Mustache. He publicly shares that the annual spending for his family of three is in that range.

Then it hit me. Even at a table of financially literate investors, educators, and generally smart people there were misconceptions about what it takes to achieve financial independence and retire early (FIRE). 

Reaching Outside the “Cult”

Mr. Money Mustache is by far the most popular and well known voice in the FIRE space. He has been featured everywhere from the Washington Post to the New Yorker. He credits his success in part to creating a cult.

I admit I chose a clickbait title for this article. I also chose a colorful cheerful picture as a contrast against the ominous black and white photo of a pair of fists on Mr. Money Mustache’s introduction page.

However, this post is not in any way meant to be an attack on Mr. Money Mustache. If anything, it is the opposite. In the process of creating a cult-like following, he has changed the lives of many for the better by sharing his irreverent way of looking at the world. I count myself among them.

However, when you create a cult there is by definition an “us vs. them” component. You are either in or you are out. This is unfortunate.

Many people could benefit from the principles espoused by Mr. Money Mustache. They range from those early in their careers looking to build a solid financial foundation, to the overworked, discontented, burnt out professional, to the person approaching retirement with far too little saved. Many of those who are not “in the cult” will miss these key lessons because they are turned off by the messaging.

I would like to deconstruct three concepts that tend to turn people off to Mr. Money Mustache specifically and the idea of FIRE in general. My goal is to expose solid underlying principles that have changed my financial situation and bettered my life. They could do the same for yours.

The Budget and Extreme Frugality

Many people equate Mr. Money Mustache with FIRE. As a consequence, they associate FIRE with extreme frugality. Mr. Money Mustache’s publicly shared household spending is just above the Federal Poverty Guidelines for a family of three.

The Mr. Money Mustache blog comments and forum feature robust arguments. Some people attack while other defend the validity of his numbers. Others simply don’t believe that someone who makes so much spends that little.

This misses the point of sharing the budget and the bigger underlying principle. Very few people pay attention to their own personal spending. This is how the vast majority of Americans, from minimum wage earners to highly paid professionals, lock themselves into a similar narrative. Most follow the same script of going to a job for 40+ hours/week until age 60-70. Then they retire.

This is reflected by the average American savings rate fluctuating between 3-5%. Before anyone claims that most people simply can’t save, you may find this article from the site Financial Samurai interesting. He analyzed savings rates and opined that even “the top 10% to top 1% of income earners save roughly 12%, which I find surprisingly low. It’s only the top 1% who saves an impressive figure at roughly 38%.”

What you earn doesn’t matter if you continue to spend all or most of what you make. This brings everything back to the importance of the annual budget. 

Your Budget Matters

Unless you learn by observing the example of others, there is no need to concern yourself with Mr. Money Mustache’s budget or level of frugality. It is not a contest to be most frugal.

However, you do need to know what you spend. It is a simple truth, though it is not obvious to most, that you choose how much you spend. It does not need to be tied to what you earn. Many times we spend with little intentionality.

Another simple, but not obvious, truth is that you determine how much money you need to retire by how much you want to spend in retirement. This stands in stark contrast to conventional wisdom that says the income you need in retirement is an arbitrary percentage of the income you had in your working years.

The simple acts of learning to disassociate spending from earning, being intentional with spending decisions, and tracking your spending can allow you to save far more during your working years. Your lower spending then provides the double benefit of needing a far smaller portfolio to be able to retire.

Name Calling and Value Judgements

The personal finance space has long been dominated by “gurus”. Each has their own set of rules and strong opinions. See Dave Ramsey’s “Baby Steps” and strong stance on credit cards as another example.

Mr. Money Mustache amplifies this pattern. He created his “cult” by clearly sharing his values and criticizing those that are in opposition, inviting readers to take sides.

He states that the most important thing you can do to improve your finances and your life is “ride a bike.” Those that don’t share his opinion are “car clowns.”

His criticism of pet owners drew well over 500 comments of people who felt the need to respond. He attacks popular destinations people like to visit with the article “Money Mustache vs. Tourist Trap.”

What Are Your Values?

While people eagerly line up to agree or disagree with Mr. Money Mustache, or other “gurus”, I fear they again often miss the more important message. None of us need to worry about the values and opinions of any guru. We don’t have to follow all of their rules.

Instead, we should mimic what they have done by intentionally determining our own values. Then we should build our lives in alignment with our values, including how we spend our time and money.

I originally read FIRE blogs and felt that to find happiness I needed to be ultra-frugal to retire as quickly as possible. In the process I made myself very unhappy and created unnecessary stress in my life by trying to live up to someone else’s standards.

My wife and I ultimately realized that we needed to develop a retirement plan that reflected our needs and wants. This included building an ample security cushion and enabling a life of abundance consistent with our values, allowing access to the activities we love to do and the people that we want to spend time with.

Internet Retirement Police

Since retiring as an engineer, Mr. Money Mustache has developed a massively successful blog. In addition to his blog, both he and his wife have started a variety of other business ventures.

This has drawn criticism from people who are quick to point out that he is not really retired, since he continues to do work and bring in money. He fired back with the article “Mr. Money Mustache vs. the Internet Retirement Police”.

This again builds the us vs. them mentality of a cult. While people “outside the cult” waste time arguing over why someone else is not really retired, they miss the much bigger point. 

Traditional Retirement Is Not Working

The National Institute on Retirement Security reports that “62 percent of working households age 55-64 have retirement savings less than one times their annual income, which is far below what they will need to maintain their standard of living in retirement.”

Compare this to Mr. Money Mustache and the FIRE community in general. Their definition of financial independence is having investments equal to 25 times annual expenses. Mr. Money Mustache and his wife accomplished this by their early 30’s. Instead of nitpicking about whether or not he is really retired, doesn’t it make sense to try to learn from those with such unconventional results?

Aside from financial concerns, a traditional retirement where you stop work completely can be associated with increased incidence of depression and other health conditions.

The American Psychological Association reports, “Research by psychologists and others has found that working or volunteering during retirement can help stave off depression, as well as dementia and hypertension.” However they also note that “this is not true for everyone as only those people who are truly engaged in their post-retirement activities reap the psychological benefits.”

Redefine Retirement

This reinforces the importance of letting go of our traditional notions of what retirement is or should be. Many people spend their best years slaving away at a job to achieve a secure traditional retirement that never comes. Others are successful financially, only to discover the retirement they have been waiting for is not what they had been expecting.

Mr. Money Mustache models a totally different way of life that focuses on building wealth rapidly and then using financial freedom to pursue whatever it is that you are passionate about for the rest of your life, regardless of whether or not you make money in the process. Maybe we should stop caring whether he is “really retired” and start caring about how to redefine retirement to build better lives for ourselves.

My Personal Mission

I have been helped by a variety of influences on my path to early retirement. Darrow’s work on this blog drew me in to get detailed and nuanced understanding of issues surrounding retirement planning that I did not find elsewhere. I also enjoyed his non-dogmatic approach that avoided politicizing issues, pushing personal opinions, or passing judgements on others.

As I become a regular contributor here, I vow to continue to bring those same qualities as we continue to help readers to save more, invest better, and retire sooner.

However, there is no denying the impact of Mr. Money Mustache and other “extreme” voices on my life. They changed the way I looked at retirement specifically and life in general. This is an equal part of my own personal success story, enabling me to retire early.

My goal is to challenge readers of this blog to question conventional wisdom, challenge your assumptions, and learn to think differently. This is every bit as important as understanding technical issues in successful retirement planning, particularly for those of you looking to retire early.

[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to chris@caniretireyet.com. Financial planning inquiries can be sent to chris@abundowealth.com]

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