Item — HN Reader

Spending money sparingly is like reducing weight in an automobile. A car will get better gas mileage, go faster, break less often, and be more responsive with less weight.

So it is with spending. When you spend less, you can retire earlier, your finances are more secure, you feel less pressure and stress, etc. You have more flexibility in the kinds of jobs you can take. Perhaps best of all, you end up accumulating less stuff, and less complicated things, which makes your life simpler.

Frugality doesn’t get the flashy press that consumerism does, but it’s a winning life strategy.

2 comments

Retiring early is a single guy internet myth. If you have a family, forget it. If you have a health condition, forget it. If you don’t have low risk investments, forget it. In the US health care can reset your bank account in the blink of an eye which is why so many many people in tech work until Medicare kicks in. Early retirement with a family is at least 10 mil in cash. Better enjoy your job because you’ll be doing it for a long time like 98% of Americans.

If you're truly fortunate, you can end up with an expensive chronic but not deadly condition that penalizes you for saving and having assets. Your healthcare isn't an emergency, so if it isn't paid for, you don't get it. But if you have any money, no Medicaid for you. Instead, you get to drain your accounts until you're impoverished and then they'll help you.

Dear Mezzie,

(from your profile): "Live fast. Die young. Don't give HN an email."

I like the "Live fast", not so much the "Die young", but why not "give HN an email"?

Without an email, the account can't be retrieved if I forget the login information.

It's a reminder not to grow too attached to the account and that all things are ephemeral.

Healthcare is a US only problem. There are definitely people who make enough to retire early if they do not develop expensive tastes. In any case GP said, 'earlier', not 'early'. Why do you need that much if you live simply?

Aren't there health insurance plans with a high deducible (say $10k) that are quite affordable? In your early retirement, you can cover catastrophic health failures with them, and pay for everything else out of pocket.

Sure, but there also are expenses that end up not counting toward the deductible. If something "isn't covered" by the plan, then it doesn't count. You can easily end up in a situation where you'll need to see less experienced or capable doctors due to the network, or where something you need is totally excluded, excluded in practice due to certain narrow shortages, or just gated by step therapy where you'll need to go through multiple cheap drugs before having the more expensive drug that is best suited to your condition, even if doing this is expected to result in poorer long-term health.

Of course, these things aren't exclusive to the cheap plans, but I'd encourage you to compare your employer's plans to some of the marketplace ones.

Health insurance before Medicare is definitely possible. The ACA ( Obamacare ) provides subsidies to those with low or medium income. That means if you spend from cash savings, healthcare can be affordable. ( But note that in doing so you are going to pay more taxes in the future, because you are foregoing Roth conversions, which show up as income and reduce the subsidies. )

Early retirement is absolutely attainable. To hear stories ( of questionable provenance), visit FIRE forums. I can personally attest to knowing people that have done it— married people with kids. It takes nowhere near the figure you’ve cited. Listen to retirement podcasts, you will hear from plenty of people that have done it.

To get real, actionable advice join the Bogleheads community. Good luck.

Retiring early is the only hope I have for the future, it's my singular goal. I'm not forgetting it because without it I will spiral in a bad way.

I hate working. The sooner I don't have to anymore the better.

I like your analogy; but of course, there comes a point where reducing weight in an automobile does have downsides: it might be more noisy because of reduced sound deadening, less safe because of removal of crash structures, less waterproof because of removed seals, and so on.

The point being, in both cases, the virtue lies in finding the optimal balance: maximising the benefits of frugality without going too far and falling down the other side of the curve.