My name is Jacob. I am 35, financially independent and extremely early retired. I have been retired for almost two years now thanks to what can be considered a crash savings program. When I was working as an academic researcher, I was saving over 75% of my income. This was mainly due to me being so engaged in my work that I never developed a taste for consumerism, fine dining, and other bling-bling. I was also moving around in the world relocating to a new country every 3–4 years, so I never got bogged down with mortgage payments, credit loan, cars, and other financial traps.
Over a period of 5 years this therefore resulted in savings sufficiently large to live on the investment returns. Two years later, I decided to quit working for money and spend my time on something else. I now withdraw less than 3% of my portfolio annually. In personal finance terms, I have something like a 40 year emergency fund.
I started my blog, Early Retirement Extreme; almost three years ago after discovering the concept of blogging. Previously, I had been writing a bit on my myspace account and gotten some of my creative writing published in an e-zine. For a while I also ran a very popular website on peak oil (that started back in 2003). Anyhow, I wanted to reach a larger audience than my approximately 75 myspace friends and I figured that maybe I could write about personal finance having just discovered the existence of personal finance blogs in the fall of 2007. I believe the first personal finance blog, I came across was Lazy Man and Money.
I started out with a free “blogspot”. A few weeks later I discovered some very helpful posts on how to grow a blog, networking, tracking, timing, commenting on other blogs, stumbling, etc. I forget which sites, but they certainly helped. I got a domain name and a host about three weeks later. In those days it was normal for people to blog for 6-12 months before they “got discovered” and became read by more than 10 people. I was amazed that I had about 500 RSS subscribers after about half a year. I enjoy helping out new bloggers in the yakezie community as a way of paying back. Avoiding the common pitfalls early on and having some early success helps one to survive the “90 day crisis” where many new bloggers give up.
Indeed, the longer I have been blogging, the harder I have found it to come up with new posts on a daily basis. When that happens, bloggers typically start hiring staff writers to take some of the pressure off once they have been blogging for a few years. I have not been successful in that regard. Instead I have branched out in other directions.
First, I started reposting old posts. While the reception was mostly positive—a chance to rediscover old posts—there were a few negative reactions from people who feel they deserve a new post with their morning coffee every day. Very importantly though, it removed a lot of the creative pressure. Now, I don’t have to write repetitive posts covering the same subjects over and over. Instead, I only write when I have something new to say.
Second, I started an apprentice program and a forum. The forum currently sees about 70 new posts per day and is a chance for people to talk about new things instead of waiting for me to do so on the blog. The apprentice program is a chance to engage in longer projects with renewed interest to bring people up to a level where they can live off the interest/returns on their savings and spend their time as they wish rather than because they need money to pay bills.
This means that the blog is gradually changing towards being more of a community of like-minded people. There are not many normal people who can envision life without a college degree, a mortgage, and 30 years of spending 9–5 on a job they don’t care about as much as they used to. The forum therefore acts almost like a support group for continued inspiration and it has been hugely successful in that regard. We have even had some meetups: Two in Silicon Valley, one in Chicago, and one in New York City, with more being planned. It’s very nice to meet people who share your financial beliefs.
Lastly, I have begun to focus my content creation more towards writing books. Books make it possible to present one’s thoughts in a much more cohesive and permanent fashion. This is a new and very interesting challenge. Actually, my first personal finance book should be available by the time you read this.
I guess if there are any conclusions to be drawn from this is that a blog can be, nay, is more than just daily post with adsense or textlinks. It can be a community of like-minded much like the Yakezie is. And it can even be more than that. As always, if anyone needs any help with anything, feel free to contact me.
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After saying ‘hello’, join us for further discussion in the Yakezie Forums.
Jacob, for someone who is “retired” you work pretty hard. But that is the point isn’t it, it’s not “work” if you are doing what you love!
Even for people who aren’t going the extreme way to early retirement, your thoughts, tips and tools can apply to all.
Keep it up, and see you on twitter!
Haha, you’re right. “Retired” is a fuzzy definition at best. I like to think of it as “not working for a living”. I had the discussion over on the early-retirement.org forums (a forum for those who are less extreme) that with the blog and the book, etc. I work too hard… yet some of them were writing hundreds of forum posts etc month which was more than I did. I just output some of mine in blog or book form. I’m pretty sure that as soon as it start feeling like work, that’ll be the end of it.
You’re a good example for us all Jacob!
While only a small percentage of us have the ability or willpower to do what you have done. It’s still great to know that it’s possible with focused, hard work!
I think most of the willpower has to do with doing something different. Being the first one—actually I’m not the first, but examples are sufficiently rare (one goes public every 5-10 years) that it feels like being the first one—requires some ability, but what I do isn’t inherently hard. It’s just different from what most other people are doing. I have to “learn” to answer questions like “what do you do for a living?”, where most people can just give their job title. :-)
Yes, I use to think I was bucking the wealth accumulation timeline by doing what I was doing, then I read your site and realized that you are many times farther than I am on the scale.
By hard work, I meant avoiding the temptations of a high consumption lifestyle, and going against the norm. It’s paid off for you – big time though. And you are still young enough to still enjoy the money (vs being 80 and not as active).
…truly inspirational Jacob :)
What a fantastic story! Obviously you work hard, but it is at what you want to do, and there is no boss breathing down your neck.
I couldn’t agree more about building a community with a blog. I am only 7 months old, but I so enjoy the comments. I find that I enjoy responding to comments more than writing new posts. I wonder if that is bad??
It depends. Sometimes, even now getting close to three years, I write a post and it gets no comments and I wonder whether this is it or whether I lost it. It’s certainly best to enjoy writing for its own sake, at least to some degree and consider the comments a bonus. That way you’re dependent on your own actions for your happiness. If it’s the comments, you depend on others, which is risky [to your happiness].
Jacob, I love hearing your story and hope to follow in your footsteps soon.
I had a professor in college who was also a part time motivational speaker (Chris Neck) and he used to tell us “If you do what you love, you’ll never work a day in your life”.
That’s absolutely true. I remember myself making a statement 5 years ago (while I was working) that I’d probably be doing this for the rest of my life whether I was getting paid of not. It never felt like work; I was going in on Saturdays just to check on my projects to see if anything new had come out of the computer. I feel very fortunate not to have “worked” (under that definition) for very much of my life. Later on when it did begin to feel like work [because I wanted to do something else, but couldn’t because I had to go _work_] I had the financial freedom to retire, so I did.
Wow, your story is incredible! I am 35 and no where near retired, althouogh I would love to be. Congrats on that!
Sounds like you have a vision for your blog moving forward with the community aspect. I would say that you def have something for the people to learn and grow from being that you are 35 and retired.
Looking forward to reading and growing even further with you!
You may be closer than you think. A lot of it is made possible by going from “spending” to “doing”. The more you can do, the less it costs—I usually consider spending money on something as the last resort; it means all my other attempts have failed. Before financial independence, this was of doing things will increase savings rate; after retirement, it’ll make it possible to live with less money.
Thanks for the push! Will remember that and take it to heart. You are living the dream I desire!
Jacob,
I like getting to know a little bit more about you and have read your site quite a few times. Your strategy is a great one. Given all of your online ventures, are you currently earning enough to live on with out drawing from your savings?
No, unfortunately I suck at monetizing. My blog is currently making $75-150 per month; probably because I just recently started monetizing it and because I (still) refuse to sell text links. The initial book sales have paid for four months of living. It would be cool if it could keep on selling like that, but I’m not counting on it—depending on how it’s sold, I need to sell 2–6 books per day to pay for my cost of living.
I imagine having to blog to make a living would be quite stressful due to the possibility of writer’s block, etc. Even the alexa challenge was slightly stressful from time to time trying to “earn” traffic and keep it. However, I think if one is prolific writer (2 articles per day) and comments on other blogs, one could make it to the point of paying for the way I live within a year. The real question is … can you keep this going for the next 50+ years. I know I couldn’t! I think this is the challenge facing many of the “lifestyle bloggers”.
Great points. I agree that it would be very hard to keep going at this for the next 50 years…Even though you can always write, I often feel like i’ve already written about most stuff before.
If you have a good backlog of nontimely posts, it may be worth checking into the Original Post Promoter plugin.
[…] This post was mentioned on Twitter by Invest With Passion, Dr. Dean Burke. Dr. Dean Burke said: gr8 Read, C how Jacob at ERE was able 2 retire at age 35- Lifestyle control, & looking at life a little differently http://bit.ly/dge8xB […]
Hi Jacob,
Even though I think your approach is the reverse extreme of others spend like there is no tomorrow, I think it’s great you had such discipline.
It works for me :-) It’s funny how working 8-9 hours a day (and that’s every day, weekends too) which the average American does is not considered extreme, whereas not spending money is. If everybody lived like me, how many would really want to work that much to pay for as much house as they can afford even as they only use it to sleep in before they head out into the 1.5 hour commute in their new car the next morning.
It’s all relative :)
Unfortunately since our fiat currency is debt based if everyone lived like you we would have no economy. In a normal world yes the world would be a better place.
I disagree. My investment income is mostly equity based. This would work even with a hard currency. Debt would work too; fiat or rather a reserve currency only makes it possible for banks to leverage savings. If everyone lived like me we would have a very different economy. Things would be built to last and be repaired. There would be a lot less waste and a lot more resource efficiency. People in the asset accumulation/construction phase would still work. They would be the economy in the traditional sense. Instead of building 10 gadgets with the intent of throwing one away each year to keep the economy going, 1 gadget intended to last 10 years would be built. If everybody lived like me, peak oil would not be a problem. The main problem with the fiat based reserve currency we currently have is unwinding it. A lot of people owe a lot of money to a few people at the top. That’s why everybody still works. It’s not because we couldn’t have an economy. It’s because our current economy is predicated on debt; however this is not the only want an economy can exist.
Jacob, you’re what every one of us here dream of becoming – financially independent while we’re YOUNG! I think most of us can reach that freedom by the time we’re OLD, but to do that while we’re in the 30’s is quite amazing! Your story really inspired me.
It’s not too late. There are a few public examples, just on top of my head… Dominguez@30 (you probably heard of Your Money or Your Life), Terhorst@35, Kaderlis@38. All of them used the work-save-invest method.
I love it all. It’s nice to have people like you out there living the dream so that the rest of us know it’s possible to achieve some day. Although the extreme frugal movement’s not for everyone (me included), it’s good for people to know just how much is possible if you put your mind to a goal.
That’s the most interesting thing: It’s a choice. Do you want to work all your life? You can do that. Do you want to avoid working all your life? You can do that too. It’s a free country :)
Umm, can I retire too. Oh wait, a quick check of the bank account says no :( Props to you my man for living the dream. Although, I do enjoy my work :)
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Here’s the acid test: Do you have more than 400 times your monthly expenses in liquid (investable) net worth? If not, you either need to save more or spend less. The interesting thing is that the two are equivalent. You work to save $400 or you can work to decrease your monthly spending by $1. The effect is the same. Do what’s easier.
You’re so intense. Intense in a good way, but I don’t think I share a similar passion! Get on with your bad self brotha!
I’ve definitely been inspired by your discipline! I initially found your site because someone posted one of my articles in your forums and it lead to a lot of traffic for me. I then went and discovered the amazing community that you have built at your site.
Then, I read your story, and how you were able to do it! As Dr. Dean said, you sure are a hard working “retired” man!
Ah.. I dream of that day I can “retire” and not have to work for a living, but instead work for fun! You did it by 35, huh? That means i have one year left to catch up. I don’t think it’s gonna happen. haha.. Still -your story is inspiring, thanks for sharing it!
I became financially independent right before turning 31. I retired from my career at 33. Since then I have been blogging and writing. The question currently is whether I should continue expanding that operation or whether I should go and do something else. The blog almost writes itself and the forum, where the community lives, is also self-sufficient. There are many interesting things to do. My choice depends on how well the book does. If the demand isn’t there, I’d consider the project done and I’m onto the next challenge. No reason to keep repeating myself for the next 20 years :)
It’s nice that you’re in the situation to do whatever you want to do. I wish I would have been saving like that, instead of financially wasting my 20s. Good for you!
There is so much here I admire. First, the independence. Next, the outside the box thinking and development of the blog.
I have a lot of thinking to do on this subject. You are a unique person and I can learn a lot from you. I’m heading over to your blog now…..
A 75% savings rate is quite impressive and you are financially independent at 35. That’s quite impressive. Congratulations!
Great intro for those few that don’t read your blog every day! I’ll keep reading as long as you don’t judge me for being too ‘normal’ hahah
Nah, you’re more like the opposite kind of extreme, the normal extreme :)
We are anything but ‘normal”.
Awesome intro Jacob, I feel inspired to retire. It sounds like you’ve got a great community going on at your blog, I can’t wait to check out more of your story.
I posted my story here.
Jacob,
I think that your story is *amazing*. While I personally would not go as far as you have due to personal preference, I highly commend you for standing up to conventional wisdom and for showing people that there are other paths, and that there are alternatives. That is something that we can all learn from.
Congrats on finishing your book; I am looking forward to reading it!
P.S. Re: “While the reception was mostly positive—a chance to rediscover old posts—there were a few negative reactions from people who feel they deserve a new post with their morning coffee every day” — I remember reading the comments! It’s funny as to what some people think they are entitled to get for free! It was pretty funny, but no sweat. I think republishing your old posts was a great idea, and it allows people like me that discovered your blog only recently to enjoy a lot of great content, that we might have missed otherwise.
Jacob,
I started following you site a few days ago. I’m slowing going over your “21 days” make over. I don’t think we can live the Early Retirement Extreme lifestyle. I’m shooting for the Early Retirement Moderate instead. I just started my blog and the goal is to retire by 40, I’m 36 now so I don’t have a lot of time left. Once I get my “how will I get positive cash flow” post done, I’ll ask you for some feedback. It’ll probably be a couple of months though. Thanks for your site! :)
Those who have access to the Product Review Team on the Yakezie forums should check out my post there. I’m offering up some books for reviews. The idea is to review it, sign it (because you’re famous :) ), and mail it to the next reviewer. When each book has been signed a few times, we’ll auction it off and give the money to one of the yakezie projects. I think doing it that way is an all around win compared to the usual way of giving it to a random reader because it builds a lot more connections. You can mention it in your review and when it’s auctioned. I’ll mention/link to you when it’s reviewed and everybody who signed it will mention/link to you again when it’s auctioned off. On top of that I save some money (since I pay for the review copies) and yakezie gets some money.
I admired you before the book and the fame :) You are in a category by yourself. I know it’s lonely at the top but what a great problem to have.
by the way, I ordered your book, can’t wait to read it
Fascinating! I started reading and could not stop. Way to go! I don’t view it as a “retirement” but mostly “I can do what I enjoy the most.”
Me too. In retrospect “retirement” was a poorly chosen word, but now I’m stuck with it.
“Financial Freedom”?
Yeah, but that has the same kind of problems. For same financial freedom means being able to spend as much as they can imagine. For others it means simply being debt free. “Early Retirement Extreme” does have something going for it in that regard. In principle I could be playing golf all day, it’s just not my thing.
Hi Jacob,
Got your book review up! haha. Glad we can be part of the Yakezie community together. I don’t know why I left blogging for so long. But I am glad to be back and getting involved in all the various communities again.
Cheers,
Jeremy
Jacob,
I loved reading your story…what an inspiration that someone can actually do what others dream of doing. Myself? I too am retired, but in a traditional (not extreme) way. Still, I can identify somewhat with working because I want to not because I have to. Life is good.
Wow, what an awesome story – it can be done! Congrats on the new book launch, very unique story!
Great stuff. That’s very cool. What I like is how you did not follow any typical norms, and saved a massive percentage of income. You put it well – you didn’t follow into the typical traps. Yours is a story that’s really good: save a ton, and do it early in life. Congrats on your success.
A lot of conventional advice seems to be about making “mistakes”, the student loans, the mortgage, the car lease, the traveling, … during one’s 20s and then spending the 30s, 40s, 50s, and 60s paying it all off again and then maybe have the freedom during your 70s, 80s, … Conversely, save enough for financial independence during your 20s and you have the freedom during your 30s, 40s, 50s, 60s, 70s, 80s, … It’s a little over 5 years vs the next 30 years.
Inspiring story – great job of getting to a point to where you can afford to do the kind of work you want to do – now that’s retirement!
Your blog is one of my favorites; probably because it’s great to see someone actually living the principles of Your Money of Your Life. Well, that and I enjoy your writing!
I never cataloged my possessions and rarely put things in the life-energy perspective, but I did take the concept of the cross-over point to heart. I think of my book as the advanced version of YMOYL. It explains the principles rather than giving tips or steps.
Hi Jacob, You have a unique voice and I have appreciated you as a support and blogging mentor. I applaud your commitment and direction. Although not my own direction, your site is nevertheless an inspiration! I wish you all the best.
Congrats on the book! I hope it is a smashing success, Jacob! I’d love to do the ERE thing too – in fact, I am quite certain I could make it work right now even with a wife, kids and home in SoCal. I floated a trial balloon with the kids and the Honeybee, but they aren’t too thrilled with the idea of throttling back on what they’ve been accustomed to. Then again, who knows; I am one layoff away from perhaps forcing the issue anyway.
Best,
Len
Len Penzo dot Com
I love it! A 40 year emergency fund. You’ve clearly got this PF stuff down and I’m glad you made the jump from myspace to bloging! :) Also, congrats on the ERE book. That is super impressive and I hope it does amazing.
Jacob,
I love what you do. I rarely go to your site without taking away some insight, which I cherish. Thanks for sharing your stories and your wisdom.
Best Regards,
Shawn
You are quite an inspiration! Congratulations on your personal finance book as well. I often think I can do something similar -quasi-retire before I’m 50 (30 would be going backwards for me ;) ). I just need my Little House and I’ll be off!
Hi Jacob.
I’m wondering how instrumental is it to move to a different country for EER. You know that utilities and taxes are going higher and higher in the U.S. due to the devaluation of the dollar. I know you did it early on but yet you’re back here now, what’s up?
I’m not really planning to move out of the US. There are several examples of people emigrating to stretch their dollars further. Mexico and Thailand are popular destinations.
My husband and I have more consumer in us than you do, but I love the idea of living on as little as possible so you don’t have to work so long to save for it. I also love the community spirit of your forum (I never was a part of a forum until the Yakezie and I love it). I also started my blog with that interaction in mind, so I get that. Thanks for the intro!
great question and points raised by “Friend”. i am sure many of us are curious about the same. this is an areas of personal interest (i have studied the tim ferris success extensively) – a lot seem extreme, but some very good points nonetheless. interested in your path, step by step process, and most importantly the investment structure that has enabled you to benefit from the residual income resulting from it…
I have generally found step-by-step processes to be useless as most people are never willing to follow them to the letter anyway. However, if you want to give it a shot, follow the 21 day makeover in my sidebar (it includes the investment suggestions). My personal story didn’t have the benefit of hindsight, but it may be interesting anyways. I would say my method is more robust than the 4HWW. In the 4HWW you either need to build a successful company (95% fail) and proceed to automatize it; or you need to do what Ferris himself is currently doing (and many of his lifestyle blogger followers are doing) and use a lot of effort to market “informational products” on the internet. This does give you a lot of freedom compared to someone with a normal job. It’s not true freedom in the sense that if they stopped promoting themselves, their sales would likely fade away and they’d have to go back to work. If I stopped blogging, I wouldn’t have to go back to work.
Good points Jacob. Now I’m more curious, you must be very content in the particular spot you have chosen to spend your time am I right? Or, have you found a way to travel (within the U.S.) cheaply? I mean do you ever get cabin fever?
I don’t get cabin fever and I’m not particular fond of tourism. But I do like to relocate completely every 3-5 years though. I’ve been doing that since I was 21 and it’s getting to be about time to do it again.
Hi Jacob, I admire that you’ve created a retirement that works for you. Most impressive is the community you’ve built at ERE. Can’t wait to read your new book (when it gets around to me).
Awesome story, Jacob! I found your blog via GRS comments probably in 2008(?) I have been a regular reader/lurker. I would love to be financially independent. I won’t say that we can’t right now, more like we chose not to do it right now (no one is asking us to spend as much as we do ;) ). Hopefully by 40 we will be. Thanks for the inspiration!
I have always enjoyed your blog and read a lot more than I comment so it’s very cool to read your story. I guess I am kind of like you in the sense that I sort of feel retired even though I work on my blog. Difference is for me is that I have to pay my debts off then get those savings in place. You have done an amazing job.
Nice work.
I’m working on being financially independent in a number of years as well. I am fairly extreme in my anti-consumerism and saving habits, which led to the theme of “Monk” for my site. I do plan on working longer, though to build up more wealth than I need to live off of.
Again, great work, and definitely a worthwhile success story.
Truly inspiring! I am struggling to save a quarter of my income right now, but hope to work up to saving a much more significant chunk as the income grows. I’m not sure there is much else to cut! Your story makes it feel like it is really possible to work hard, live modestly, and live the life of your dreams. Thanks for sharing!