Early Retirement Extreme
“By sowing frugality we reap liberty, a golden harvest.” – Agesilaus
Lessons learnt: Align your goals, let them build on each other. Money should work for you instead of the other way around. There are better ways to live than the 9-5 lifestyle.
What is money to you? Is it something you always spend when you have it? Or is it something you save up for a rainy day? In the Early Retirement Extreme, Jacob Lund Fisker proposes another way of thinking about money: as your employee. Instead of working for money, what if it could work for you! Of course, that’s not only what it’s about, the book describes everything from frugal living to aligning your goals. It’s the perfect book for the renaissance man (or if you don’t know what that is, it’s also perfect for you!)
In the first few chapters, Fisker describes the ‘lock-in’, or the current way of how we look at finances. ‘Normal’ people pursue a degree, a career, a big house with a white picket fence around it. Most don’t save for the future and an emergency fund is almost always small or non-existent (read: people on average have more debt than savings, in America). Is there a way out of this cycle?
Before we get to that, let’s consider four types of men. The salary, working, business-, and renaissance men. They are of course only prototypes, so imagine that you can also be anywhere in between these four:
- Salaryman: The cog in the machine. A person who is dependent on salary and can’t stop working without going in deep debt.
- Working man: The freelancer. A person who work intermediately and needs to have an emergency fund.
- Businessman: The entrepreneur. He or she turns assets into income.
- Renaissance man: The diversified intellectual. Independent of a job or income. Vast amounts of savings.
The renaissance man is a person who thinks about his or her life and takes a conscious decision on what is important. The renaissance man thinks about goals as building blocks that should complement each other. And he or she breaks apart the expenses into needs, wants and savings.
The renaissance lifestyle considers living frugally as one of the main philosophical pillars. It ponders whether we should own that brand new car (no) and if we can’t borrow the drill from the neighbours instead of buying one (yes). One of the key takeaways I found most interesting is that you should think about the lifetime spending you will have on things. Your TV subscription ‘only’ costs you 10 euros per month, but in 20 years that is easily 2400 euros (or much more if you incorporate returns). Throughout the book you will be introduced to many more frugal principles, relating to everything from health to transportation.
“Creation is a better means of self-expression than possession; it is through creating, not possessing, that life is revealed.” – Vida Scudder
In the end, the book is much more philosophy and contains little actual financial advice. There is a good reason for this, financial advice is always personal and differs greatly per situation, philosophy can be good for more than 3000 years. And so when you finish The Early Retirement Extreme you will be educated on living the renaissance life. And if everything works out you will become financially independent in only a few years.
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