Frugal Living

The Master Archive!

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Why the FIRE Movement Will Never Die

By Keith Taxguy / January 21, 2019 / 11 Comments

Retirement, or at least the ability to to live a hedonistic lifestyle, appeals to many people. Age has nothing to do with it. Punching a clock working for the man get old real fast when you don’t have perspective. Until you realize how useless life becomes when you spend each day creating no value and have no real reason to live. Then the job looks more appealing. Or starting a business. In either case you get real interaction with people on a similar mission and it brings the spice back to life. (Redditors, fire up your engines!)

But I contend, as I often have in this blog, that retirement had nothing to do with the FIRE movement. It was never about retirement; that was the dream sold to get victims in the door. FIRE has always been about wealth, about independence and freedom. People never wanted to be retired like and old worn out machine. They wanted meaningful activities. Financial independence allows the freedom to choose and that is what people really wanted all along.

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The Anatomy of Wealth

By Keith Taxguy / January 7, 2019 / 5 Comments

My grandfather always had a saying that has stuck with me: Never take off the pile. Granddad was an old farm boy living the dream in the backwoods of Nowhere, Wisconsin. He lost the farm in the farm crisis of the early 1980s and then rebuilt his fortune doing nothing more than saving a serious portion of all his income. Most money was only deposited in bank accounts. And he still managed to re-grow his liquid net worth well into the seven figures starting over from an old age.

The corpus of your investments, that original seed money, is sacred. If you never touch the sacred you will always be safe! The income stream keeps growing larger with time. Dividends reinvest to earn more dividends. You don’t need a pension when you have one far safer.

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The Best Books I Read This Year

By Keith Taxguy / December 31, 2018 / 14 Comments

There are many forms of communication; none are as vital as the written word. It is the edited word which conveys more information than any other media. Sure, video is superior when showing majestic vistas, but words, when edited well, are the most powerful learning tool we have. There is a reason the written word has survived so long even with radio, television and YouTube desperate to overturn the monarchy.

Wealthy people the world over credit their success to reading. From Warren Buffett to Bill Gates to Elon Musk to Richard Branson to your favorite accountant, good books are part of the history of the people currently in the winner’s circle. Educated people possess the tools to create the future the rest of us are forced to live in. Most failures can be traced back to a lack of understanding or misunderstanding.

For these reasons I’ve been a dedicated reader since my late high school years. Before that I couldn’t get myself to read a book the the end and it showed. I struggled with direction in life until the magical day I picked up a book from the school library on weather. It was a mere 128 pages and there were a few drawings of clouds and cloud formations, but when I finished that book something clicked and I never looked back.

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The Benefits of Having a Mortgage

By Keith Taxguy / November 19, 2018 / 21 Comments

Paying off the mortgage is the American Dream and the first step toward retirement; it’s harder to retire with a mortgage payment blowing a hole through a fixed budget. Owning your home is the foundation of any vibrant financial plan. Until your home is unencumbered (without a mortgage) the bank still owns it in a manner of speaking (and they’ll remind you of it if you miss a payment).

Still, a home mortgage has its benefits. The traditional reasons to carry mortgage debt are bad reasons to carry the liability, but there are still a few good reasons.

We will review the traditional reasons for borrowing against your home and why the benefit is perceived rather than real. We will finish with the three reasons a mortgage can help you build wealth.

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What is the secret to a happy retirement with lots of money? Here are a few who actually did it.

How to Retire Happy with Lots of Money

By Keith Taxguy / November 13, 2018 / 21 Comments

It didn’t exactly start with Mr. Money Mustache, but the FIRE community solidified around Pete and his work. Pete retired at the ripe old age of 30 and set a new standard in early retirement.

News feeds have a litany of stories of 30-somethings living the good life as they travel abroad. Coupled with the stories of people paying off a gazillion dollars in debt in four and a half minutes and it starts to look easy.

Except it isn’t that easy! It’s actually damn hard. Personal circumstances play a vital role. Where you live, your health and education opportunities determine at least a part of the outcome.

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The History of Polarized Politics in the U.S. and Money

By Keith Taxguy / October 15, 2018 / 16 Comments

In recent times we were told the U.S. was caput because  a womanizer like Clinton was president. Did anyone take the time to research Franklin and Jefferson? Caput! I think not!

Then Bush was a sign of the End Days. Nope! President George W. Bush proved to have human failing, but we did fine.

President Obama was the worst. I had clients who came into my office saying their life;s mission was to prevent Obama from getting a second term. What a waste of time! The economy grew, the stock market was up and America and the world did great after a serious economic debacle.

And now we have the hated President Trump. Many tears have been shed. The Supreme Court is forever tainted (unless you read few history books where you’ll discover it was always tainted). I’m not a fan of Trump. I disagree with many of his policies. But not all! An honest person will find issues where agreement exists. Who doesn’t like lower taxes? We can debate who gets how much and the fairness of taxes, but com’on! I also agree with more infrastructure spending. I’m against tariffs which are nothing more than a tax on consumers. Call it a quasi value added tax, if you will.

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Paying Off the Mortgage vs Investing the Difference

By Keith Taxguy / September 24, 2018 / 36 Comments

One of the most difficult decisions you can make as you struggle toward financial independence is deciding between paying off the mortgage quickly or investing the excess funds instead. The water is more muddy when we see a roaring stock market for as far back as the eye can see coupled with low interest rates. The answer seems simple and obvious: pay off the mortgage as slowly as possible and invest the difference in broad market-based index funds.

You might also think people well past the mile-marker of financial independence would have an even easier choice. Once the risk of a market decline passes due to your excessive net worth, it is tempting to automatically choose the course with the greatest opportunity for maximum gain.

Your favorite accountant has struggles with the same decision: pay it off  or invest. It all came to a head recently when the topic came up on Facebook. I gave my opinion and the fur flew. Before long my inbox was stuffed with requests for a fully fleshed out explanation of my position.

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Free Tickets to Any NFL Game for You!

By Keith Taxguy / September 10, 2018 / 4 Comments

I preempt our regular programming. I had an awesome post planned for today, but then my oldest daughter returned from college and told me something that made my mouth sweat. (You can enjoy the planned awesome post Thursday.)

Regular readers may remember I swore off commercial television decades ago, including my beloved football (not to be confused with soccer, my non-North American friends). Still, football is a massive part of the backwoods lifestyle of Phuket, Wisconsin. (Can you blame us? It’s all we have! Either that or admiring our frozen tundra.)

Now I know what you’re thinking. You like football and if you enjoy the sport you should be able to enjoy the sport. I agree. But readers around here are frugal and it takes a king’s ransom to get into the game! If you’re lucky enough to be in the 1% it’s still affordable, but if you’re in the 1% somebody else paid for those tickets or you don’t attend such extravagant events. Paying for NFL game tickets is for the 99% and chumps.

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