Well, if it takes a moustache to get me where I wanna be…so be it!

Have you ever seen or read something and found yourself nodding your head in agreement, it just made that much sense?  (It doesn’t happen that often for me—at 51 years of age, I’ve learned to doubt everything.)  But several weeks ago, while exploring various financial advice websites, looking for ideas on what to do with my life savings (which was sitting idly in the bank and gathering dust) I stumbled across the writings of ‘Mister Money Moustache’. 

Have you heard of this guy?  In his late thirties, he was an engineer who retired from the workforce after following a few simple principles.  In a nutshell, here’s what they are:

1.  STOP BEING A CONSUMER.  That new car, iphone or purse is not going to bring you happiness in the long run.

2.  PAY OFF ALL YOUR DEBT.   If you use a credit card, pay it off every month—and no more car loans!

3.  SAVE 25 TIMES YOUR ANNUAL SPENDING (not what you earn in a year, but what you actually spend) & stick it in the stock market, in low cost index funds.

4.  YOU CAN NOW QUIT YOUR JOB, YOU’RE COVERED.  (Really?  He says yes, based on your portfolio reinvesting dividends, and you withdrawing 4% annually.)

I seriously love this dude; he thumbs his nose at financial experts like Suze Orman, like here:  “So this woman calls Suze Orman & says ‘Hi Suze, I’m 57 years old, single, I’ve saved 1.5 million dollars and carry no debt, I want to retire, should I do it?’  Suze tells her ‘Sorry girlfriend, work for 10 more years and build that 1.5 million to 2.5 million!’  Are you EFFING INSANE Suze?  She has 1.5 million dollars, let the woman retire!!”

If you’re curious enough to check him out, here’s 2 of his more popular posts.  I’ve read them both several times, in fact.

  

Click on first picture to read “From Zero to Hero in One Blog Post” and on second pic for “The 4% Rule: How Much do I need for Retirement?”

He’s actually written around 300 money-related articles, and aside from his belief that you need to give up cable television (gasp!)  he just makes good, practical sense.  I decided to take his advice.

I began with tracking my spending for the last two years.  I couldn’t believe these numbers were correct—Mister Money even says that good savers will be surprised at how low their total spending actually is—but when I totaled my paychecks for 2012, then looked at what I’d been saving, everything added up.  (Funny, I don’t feel I’m living that frugally, but the numbers don’t lie & I’ve got the savings to prove it.)

Still, if I use Mr.Money’s formula of 20-25 times my spending in investments—525K seems doable. (But I plan on having around 10% of that allocated in cash.)

A short while back, I took the plunge and moved the bulk of my life savings into several stock mutual funds.  (And then this past week, there was a “bond-bubble” burst and a 23% stock crash.   Hard to see such a big chunk of money vanish from those new accounts.)

I can’t look at it that way though.  I’ve got the same number of shares, the same stocks.  They’ve just lost some value & as long as I don’t panic & sell, I should get that money back and then some.  

So this is my goal: including my 401K from work (which is already a mix of Wall Street funny money) and my new personal portfolio, which I plan to add to when I save some more, I’m beginning to delude myself into thinking I can retire when I’m 57, maybe even sooner!

Now I just need to figure out what I’m going to do once I get there…