Early Retirement

The Master Archive!

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Create Your Own Basic Income

By Keith Taxguy / May 24, 2018 / 4 Comments

I don’t know who first came up with the idea of a universal basic income. My earliest exposure to the concept was from Sinclair Lewis’ 1935 novel It can’t Happen Here. There is no doubt the idea was around much longer.

It’s an age old story. Mechanization and technology will destroy all the jobs. Computers and machines will do everything so people will be left with nothing to do but wander around the cities and countryside with dazed stares.

The solution is to provide a basic income to everyone so income inequality is reduced. The cause is noble; the solution fraught with problems. If you have freedom, you have inequality; if you have equality, you have no freedom. The real question is: how much inequality will society tolerate?

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Financial Independence is Getting Easier Every Year

By Keith Taxguy / May 21, 2018 / 9 Comments

It’s hard to see when watching at the speed of life, but there is no doubt it keeps getting easier to reach financial independence. Some in the crowd might disagree with me. The statistics are clear, however. As the hand of time ticks by the human race is finding greater and greater opportunity at every turn until now when it is laughably easy to reach virtually any financial goal.

But we need to start at the beginning.

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Price’s Law and Why the Early Retirement Community Will Not Harm the Economy

By Keith Taxguy / May 14, 2018 / 6 Comments

The FIRE community has been educating the public in attaining financial independence and early retirement for a decade or so now. Whenever the topic arises it is sure to be followed by the exasperated rebuke, “We can’t all do this! Who will do the work if we all retire at 30? The economy will fail.”

The argument has a sort of logic on the surface. If everyone retired by their 30th birthday there could be a problem. A 50% savings rate could crush the economy! Right?

Or maybe not. A high national savings rate doesn’t harm the economy! The United States had a double digit savings rate in the 1950s and the economy roared. China and many other nations with vibrant economies have high savings rates. A low savings rate seems to be the real problem. In the U.S. we struggled more as our savings rate declined to its current low single digit home.

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Investing Alternatives When Index Funds are Unavailable

By Keith Taxguy / May 10, 2018 / 11 Comments

Anyone who has been around the FIRE, leanfire, FI blogosphere, podcasts and book tours know the demographic is heavily invested in index funds and for good reason. Active management’s record tends to be unflattering compared to index peers and with a heavier expense ratio for opportunity to enjoy underperformance.

People serious about building wealth as quickly as possible learn the index fund trick early on. But there are times when index funds are not an option.

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A Free College Education Made Easy

By Keith Taxguy / April 30, 2018 / 7 Comments

The first turning point came when Heather decided the local technical college was an okay place to start her formal education. She busted her tail working to fund her education so dad relented and provided a modest—around $2,500—of financial support. When my kid puts in the effort I’ll do my best to help them.

Choosing a local college and a career she could reasonable expect to earn enough at to calculate a return on her education investment gave dad hope. Heather likes to travel the way I like to nest on the farm. Heather wants to see Asia. She is in love with the cultures and peoples. The only thing missing was some scholarship money to grease the process.

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The Greatest Secret Between Debt and Wealth

By Keith Taxguy / April 12, 2018 / 29 Comments

There is a secret seldom spoken of by the financially independent. Those in the know can hear echoes of the secret periodically in the utterances from great financial leaders like Charlie Munger when he said the surest way to get in financial trouble is with the three Ls: liquor, ladies and leverage. Then Munger’s buddy, Warren Buffet, laughs about the comment in an interview saying Charlie was joking about the first two; it’s leverage where all the trouble lies.

Did you miss the secret? Unless you are loaded (financially, not with liquor) there is a good chance the greatest secret of wealth whistled past your left ear unnoticed.

Here is the secret for those who missed it:

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Peer Street Review

By Keith Taxguy / March 28, 2018 / 24 Comments

Building wealth is simple when you understand the rules. Spending less than you earn provides seed capital for investments. Index funds provide the opportunity for superior growth with reduced risk due to diversification across the broad economic spectrum.

Once you have the basics it becomes clear you need additional cash management tools to serve your financial needs. Short-term cash for emergencies or living expenses are best held as bank deposits or in high-yield accounts like Capital One 360 or Discover Savings.

With long-term investments set in index funds and short-term needs covered by liquid money market type products it’s time to fill in the remaining gap. And there are some reasonable alternatives paying a respectable rate of return.

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Attributes of a Wealthy Individual or The Smartest Guy in the Room Isn’t the Richest

By Keith Taxguy / March 26, 2018 / 23 Comments

Twin brothers walk into the Wealthy Accountant’s office. One brother is as smart as a whip with an IQ of 147 and a wiz with numbers. The other twin, while looking identical to his brother, is a bit short in the mental category. The less bright brother is hard working, but knows he can’t outthink his twin brother.

Which twin do you think has the greatest financial advantage? Which one is likely to become a millionaire?

Would you believe me if I told you the super-smart twin is orders of magnitude less likely to amass a financial fortune? Yet time and time again I see it in my office: smart people underperforming and average people hitting it out of the park.

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