17 August 2012

Look at Literature: Early Retirement Extreme

The ERE Episode

Early Retirement Extreme (ERE) may very well go down as one of the better books in history. The author is a Danish immigrant, Jacob Lund Fisker, to America who has effectively gamed the system and "retired" by around age 30 after only about 5 years of real work after graduate school. However, the book itself isn't so much his life story as it is his life philosophy. Some may disagree with the ideas he presents in the book while others may find them good guidelines to consider. I personally fall more under the second category, as there are some things he mentions that I wouldn't necessarily do myself. He discusses these ideas in acute detail throughout the book by way of his philosophy, addressing each major portion of life in a manner that is supposed to encourage personal efficiency and minimal use of money to acquire both goods and services.

However, despite his writings on frugality, I believe that the most powerful chapter in the book is the one about finances and financial responsibility. In that chapter, he details how one can maximize earnings, spending, and investments. Naturally, investment changes all the time, but the basic principles and tenets of it do not. Because of that, the investment section would be a mere smattering of the options available, and anyone interested in seriously investing should look to other books in the specific sectors they want to invest in. But what is also equally powerful about the chapter is the manner in which he breaks down the various cashflow situations that an individual can find themselves in. It's one thing to continually hear about personal finance, but to see an actual visual can help with motivation.

In addition to the power of that chapter, he also has some other gems for you. With annual spending at his household hovering right around the official poverty level (even though earnings are several multiples), Dr. Fisker provides you a prime example of how you should structure their life to both get yourself out of that situation, or at least avoid decisions that will sink you into painful poverty. Despite the negative connotations, the poverty level isn't unlivable. However, since poverty is generally viewed as being pretty bad, those of you living in (or somewhat near) poverty have all kinds of free stuff thrown your way. As a result, you should be able to better your condition in short order if you're able-bodied and healthy. Follow his path to prosperity.

His writings have inspired many others, with a whole community of like-minded people/other ER hopefuls who all read his blog and congregate over at his web forum. Others, such as MMM (and I guess I'm on that boat as well), have taken the next step and established blogs of their on. Altogether, they have joined Jacob's large contribution to the concept of FIRE--Financially Independent/Retire(d) Early. Dr. Fisker, MMM, Len Penzo, and other financial bloggers interested in at least the FI side have all been interviewed and had their blogs syndicated among themselves and on several different mainstream financial websites. As a result, I would say the concept is certainly not completely unknown to the general population. However, each of those articles usually comes with quite a number of detractors who all insist that they are living lives of dejected poverty because they don't spend money incessantly and on everything.

Who Should Read Me

I'll have to forewarn you. The writing style in the book is definitely a bit abrupt and in-your-face. The book is a challenge to you, and many people may find they're not up for the challenge. It really causes you to sit down and take a look at your life and come to terms with how it has progressed thus far. However, don't brush it off without first taking a crack at it. Even if one doesn't feel like reducing life expenditures as ruthlessly as Dr. Fisker has, valuable weapons can still be added to your arsenal by reading this book so I'd recommend doing it. To get your hands on a copy, you might first want to try your library. I have low hopes for you, but you might get lucky. I ended up having to buy a copy on Amazon, but there are a decent number of used ones available so it shouldn't total more than $10. Not as ideal as the library, but beggars can't be choosers. Anyway, happy reading!

No comments:

Post a Comment