[I've decided to move this to a different place on my website. I'll keep this version here but no longer update it.]
This is not a true list of frequently asked questions, but an explanation of the way I live in question and answer format. Back in 2004 I wrote How to Drop Out
, which has since become very popular, but the way I live now is better described as frugal early retirement. Here's another list of early retirement frequently asked questions
at the Early Retirement Extreme blog.
How did you get your money?
A way that's not available to most people. This page is not about how anyone can retire early. You need some luck. But there are people much luckier than me who have not retired yet, and people almost as lucky who could retire with a few more years of work, and even unlucky people might like to know how I live so cheaply. If you add up all the money I've received in my life, from all sources, it's less than the median American male of my age. The difference is that I've spent less.
What are some things you did in the past to spend less?
For most of the 1990's I didn't own a car, and there were probably some years when I bought two CD's and had one restaurant meal. In the late 90's I briefly owned a car and spent a few months driving around the country living in it. Once I lived a tiny detached room from which I had to walk through a parking lot to get to the rest of the house, which I shared with a bully, a psychopath, and a guy who never left his room. Another time I shared a one-bedroom low-income apartment with almost no natural light. For a few years I was the first one to hit the dumpster every Sunday at one Trader Joe's, hauling organic meat and eggs and produce on my bike. I applied for rooms in packed anarchist group houses but wasn't cool enough. I tried to squat a shed, which had been vacant for years, but a week later the owners came to fix it up. After that I squeaked by on couch surfing and housesitting, and finally got lucky with a great housesitting gig through most of the 2000's.
What assets do you have now?
I own a two bedroom house in Spokane, ten primitive acres north of the city, a pickup truck, a five figure savings account, and investments that pay out around $10,000 a year.
What are your annual expenses?
It's hard to say because I'm not finished with one-time expenses related to buying the house. After things settle down, if I continue to live alone and buy all my food, I might get by on $10,000 a year, which includes about $2000 property tax, $1500 utilities, $1500 vehicle expenses, and maybe $2000 food. As I find ways to reduce or share these expenses, I'll update this.
Do you keep a budget?
No. Spending money is painful for me. The danger is not that I'll spend too much, but that I'll spend too little, and unnecessarily reduce my quality of life and health. Every time I buy pastured butter it takes an effort of will, and I dream of not having to own a vehicle so I can avoid the horror of buying car insurance and gas.
Can you break down your food expenses?
I don't keep track of them, but I almost never eat out. My usual breakfast is boiled sprouted wheat berries. I buy organic wheat and grass-fed beef from a local farmer, various bulk foods and eggs at the co-op, and at Costco I get sweet potatoes and green olives and fish sticks and sometimes a pair of organic chickens. In the winter I buy salad greens, but whenever possible I eat wild dandelions for greens. If my weight drops too low, I make apple pies. I generally make everything from scratch, I don't drink coffee, soda, or fruit juice, and pre-grated cheese is an abomination. I don't clip coupons, but I load up on Organic Valley butter and Emerald Valley salsa when they go on sale at Fred Meyer. Sometimes I find great deals at Grocery Outlet.
Do you dumpster dive now?
No, but I totally would if I knew any good ones. In Spokane most grocery stores use trash compactors. There's a dumpster diving group on Facebook but I refuse to get an account, and I haven't yet found anything on my own.
What do you spend on clothing?
Damn near nothing. I did treat myself to a $100 pair of FiveFingers KSO Trek shoes, but generally I buy everything at the thrift store.
I'm against it. I'm not the kind of person who will put on a movie to fill the boredom or get drunk to cover the pain. We need to make life meaningful through our own actions. At the same time, some entertainment is really, really good. So I'll get what I can from online file-sharing and sometimes buy a DVD or CD or book or game. It might add up to $150 a year. I don't have anything like Netflix or iTunes because I'm allergic to monthly charges.
What do you do for internet?
For a while I was getting on through open wifi in the neighborhood, but one by one those all dried up. For now I plan to get on a few times a week by taking my laptop on my bike to a library. Getting home internet, without already having cable or a land line, would cost me about $50/month, which is not worth it.
I use the cheapest Verizon prepaid plan, which costs $100/year, or about $8.50/month, as long as I barely use it. There's probably a plan that will give me more minutes, but I doubt I can get the price much lower.
Did you have college loans?
I went to college in the late 1980's when even Stanford cost only $16,000 a year. My parents had been saving up for years to help put me through a high-status school, but because I didn't fake enthusiasm on the applications, I had to go to a cheap state school. This was lucky, because I avoided having to get any loans.
If I were 18 years old and starting college today, I would probably do what most young people are doing: get massive loans with no way to ever pay them back, and hope for the debts to be canceled by the zombie apocalypse. But that's not what I recommend. I recommend not going to college at all unless you can do it without debt, and maybe not even then. A college degree and a college education are less useful now than they've ever been. The main thing you learn is how to think and act like an educated person, something you can learn just by hanging around a large campus and sitting in on giant lecture hall classes.
Do you have health insurance?
No. And there is no acceptable option here for most Americans. I could get a catastrophic plan that would cost me $2000 a year, and limit my costs to $10,000 in any one year -- unless they found a way to deny me coverage, which they have every incentive to do. Most Americans who declare bankruptcy do so because of medical costs, and most Americans who go bankrupt from medical costs had
insurance. Medical insurance no longer serves the original purpose of insurance, to protect people from financial ruin, but instead serves to insulate consumers from the market, to enable outrageous prices and massive profits for the medical industry. The waste in the system is now locked in by millions of jobs and investments that depend on it. This is the one issue where I can't see any non-catastrophic path to a better world.
At the same time, the American medical system often does more harm than good. Procedures are derived from the needs of medical corporations to grow the money of stockholders, not from the needs of patients to be healthy and have a high quality of life. Massive amounts of money are spent stretching out the pain of dying in the final weeks. Treatments that prolong sickness, rather than curing or preventing it, receive positive feedback for economic reasons. It is politically impossible to cut harmful or useless treatments that remain profitable.
The best cure for chronic illness is a healthy diet and lifestyle. If I got a broken leg or appendicitis, then I would need the medical system, and I would have to take a hit of many thousands of dollars. But then, if I save the money I would have put into insurance, I'll have more money to cover emergencies.
Do you have a mortgage on your house?
No. I chose a house that I could buy with cash. Maybe if my life had gone differently, I would have found a job paying $30,000, lived on $5000, and saved up for a house. Or I might have gone to the rust belt and bought a house for a few thousand dollars, or squatted. Or I might have continued couch-surfing and housesitting, or looked for some kind of caretaker or apartment manager job, or lived in a homeless encampment, or loaded this website with ads and rented a cheap room. Because of my strong aversion to debt, a mortgage was never an option.
Can debt ever be good?
It depends on your personality. If it's easy for you to spend less money than you make and build up savings, then there's no reason for you to ever go into debt, even for a house. If it's difficult for you to save money, but debt motivates you to work hard to pay it off, then debt is basically a way to hire lenders as life coaches. Some people need this.
What about tax writeoffs for mortgage payments?
When you think about it, this is a giant subsidy for the banking industry, with borrowers serving as money launderers. Instead of paying cash for a house, you get a loan and pay extra money to the bank in the form of interest, and the government pays this money to you in the form of lower taxes. Even if this makes me a bit of money, it's not worth the complication and the knowledge that I'm channeling government money to banks. Also my income is low enough that I pay little or no federal tax, so a deduction is not useful to me.
What about Social Security?
I'm not going to get it, because I didn't pay in enough. Anyway I don't trust the government to handle my retirement, and I suspect that by the time I retire, Social Security will have been cleaned out by the baby boomers.
What if your investments get wiped out by economic collapse?
I've put most of my money in low-yield low-risk funds, and some of it in commodities and real estate, which tend to hold their value over the long term. But yes, most if it is probably going up in smoke. My more stable investments are house, tools, land, and yard, which I have begun converting to food production. If I lose all my money, so will everyone else, and I'll still be in a relatively good position if I'm growing food.
An even safer investment is skills, which cannot be taken away from you. The main way I learn skills is by doing stuff myself instead of hiring it out.
Do you travel?
In early 2012 I traveled for two and a half months via bus, train, and shared rides, staying with readers of my blog. Someone without a blog could use couchsurfing.org. I spent about $800 for travel and $700 for food, which comes out to around $7500/year, if I had no permanent residence and traveled full time.
Would you ever get another job?
I think I would enjoy teaching philosophy at a community college, or editing good books, or playing in a space rock band. But I have no incentive to look for paid activities, because I already have enough money.
Do you feel any desire to make more money?
Like everyone else, when I get money, it makes me feel good. But this feeling is temporary. Anyone can see that the pleasure of getting
does not translate into the pleasure of having
. The correlation of money with happiness exists only below the poverty line. Once a person's basic needs are met, more money does not buy more happiness -- but it usually carries hidden costs. Studies have shown that when a task requires any thinking or creativity, extrinsic motivators, like money, make you perform worse, and you perform best when you are doing something you enjoy, autonomously, as part of a larger story. Getting money is not part of a larger story, unless it's the story that I'm saving up to not have to think about money.
If you had a lot more money, what lifestyle changes would you make?
I'd eat a pound of organic blueberries and two avocados every day, get a weekly 90 minute massage, and do most of my travel in Amtrak sleeping cars.