Comments for Renewable Wealth

Comment on The Renewable Wealth Plan — Introduction by Petra

Petra — Sun, 15 Apr 2012 19:58:12 +0000

OK, so a little question: you go for 3% withdrawal every year… And as you say, Bill is not very good at investing and barely can correct for inflation with his savings. So… if he retires at age 33 (saving 75% of his income), he will only have 33 years of savings left before he runs out. Because his savings only would grow with inflation and so each year his assets would go down.

I like all the previous posts you made on how to be careful, but then you also have to be careful yourself. It would be more prudent for Bill to work say five year more, so that he is 38 when he finishes and has money until age 86…

Comment on The Renewable Wealth Plan — Introduction by DollarDisciple

DollarDisciple — Mon, 02 Apr 2012 16:37:07 +0000

Glad to see you’re back!
I had no idea that the Chinese were so good with their money. I think culturally, they are very different from Americans in a lot of ways, most notably: we have a huge sense of entitlement which makes us feel like we “deserve” all of these fine things. And somehow it seems perfectly rational to finance all of these luxuries up to and beyond what we take in every month.

Ridiculous!

Comment on The Renewable Wealth Plan — Introduction by Andrew

Andrew — Sun, 18 Mar 2012 21:52:46 +0000

Keep up the good work. I have recently come across your site as well as mmm, and it is great to find that there are others out there sharing the dream of early retirement via fiscal responsibility. The common thread I find is the “if only I knew about thids earlier”, I say it myself. This new savings and minimilism appears to be a small counterculture that was the norm 50 years ago. It is foolish this day and age to put your blind trust and money in a financial group and expect piles of money when you are too old to work. Thanks for the articles.

Comment on The Renewable Wealth Plan — Introduction by Sean Owen

Sean Owen — Thu, 15 Mar 2012 16:10:33 +0000

Yep. Savings trump investment returns in a major way, especially in the “extreme” scenarios. The power of compounding is all about time. Compress the timeframe with big savings and the compounding effect mostly vanishes.

Comment on The Renewable Wealth Plan — Introduction by jlcollinsnh

jlcollinsnh — Thu, 15 Mar 2012 00:27:08 +0000

I am “Bill” right down to the 50% savings rate and some truly horrendous investment mistakes. Yet by 40 I was FI.

If I had only found VTSAX and just poured my money into it sooner….

Comment on The Renewable Wealth Plan — Introduction by Sean Owen

Sean Owen — Wed, 14 Mar 2012 17:27:01 +0000

That’s an awesome story. The best part is how you didn’t allow that sudden inflow of wealth to inflate your lifestyle. Just think how most lottery winners are broke after just a few years. Professional athletes as well. But not you.

Honestly for most people, avoiding lifestyle inflation is all that is required to become wealthy.

Comment on The Renewable Wealth Plan — Introduction by Sean Owen

Sean Owen — Wed, 14 Mar 2012 17:20:51 +0000

Hey Greg, thanks for writing. You’re right that such a dramatic shift is extreme by comparison to the way most Americans live, to the point that when faced with it, many people will be forced by cognitive dissonance to assume that there must be something special about you that makes it possible for you and not for them. Or that your life must be miserable for making such terrible “sacrifices.”

It’s just human nature, and hugely reinforced by the prevailing culture. I fell into the same patterns for much of my life, and still haven’t made all the changes I’d like to make.

Comment on The Renewable Wealth Plan — Introduction by Sean Owen

Sean Owen — Wed, 14 Mar 2012 17:14:57 +0000

I’m in the same boat as you. It took me a bit longer in life to see the light than some of the people I admire, like Jacob and Mr. Money Mustache. But as you say, it only goes to show that there’s hope for anyone. You can get back on the right path at any stage in your career, and once you do, the road is much shorter than you would imagine coming in.

Comment on The Renewable Wealth Plan — Introduction by Patrick

Patrick — Wed, 14 Mar 2012 16:45:53 +0000

I have been drinking this Kool-aid for several months now and I cannot wait to hear your full take on it!

A big part of this for me was in shifting from a “consumer” mindset into a “creation mindset.” What I did specifically was to wake up one day and say to myself:

“Why am I just blowing money and wasting time playing video games? What is the point? How will this affect my life in ten years? Etc.”

I sold my video game system on eBay at that time and made a decision that I was going to create a side business in my life. I had a job, I had some free time, and I was sick of wasting time and money playing games. I wanted to build something. I wanted to create something, something with real value.

So I started learning. I got on the web and I started doing research.

I built a business online. It failed miserably. I tried to sell some horrible digital product, because it sounded like easy money. It failed.

But I did not mind. I knew that people were making money with lean businesses out there, and I was determined to learn the process. I had free time, I had the basic computer skills, and I was determined to create a profitable business.

So I learned more, tried a new tactic. This one caught hold. I built a successful business, slowly, and found success over several years. It did not happen overnight.

After over four years of working part time on this side business, I sold it for six figures.

Along the way, I shifted my mindset further to reduce my consumption, my spending, and so on….so that after I achieved this success, my lifestyle did not inflate. I did not run out and upgrade my car (still have a 2002 Hyundia). I still live in an apartment for $470/month.

So I am excited to learn more about your renewable wealth strategy, Sean. I have learned a lot from Jacob and MMM, and I know that you have some killer ideas as well. And, I think I am in a good position to put your advice into practice.

Eager for the next installment.

Comment on The Renewable Wealth Plan — Introduction by greg

greg — Wed, 14 Mar 2012 13:39:24 +0000

coming over here after reading MMM and ERE for a while, I totally agree. I am currently moving to a smaller place that will lower my annual expenses by 17% and am gearing up to ditch expensive smartphone monthly service for pay-as-you-go mobile functionality (among some other things). It took some frank statements from a friend who noticed my lifestyle was not matching up with my goals of financial independence, and they were totally right.

But I would argue that the 70% of my salary I will save is so extreme *when compared to the American average* that lots of people will gloss over the details unless there is careful consideration of the huge differences with entrenched behavior; this took me 2-3 years even though I had already begun thinking I should be doing it …