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The early retirement movement setting Australia on FIRE

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James Lee* has never told friends he has more than twice his annual salary invested in a share portfolio, a paid-off apartment and an investment property.

But 37,000 strangers on an internet forum know all about it.

Sprung from a blog of the same name by Canadian-born Peter Adeney, the Mr Money Mustache forum is an online sanctuary for a growing number of people working towards the audacious goal of early retirement.

“According to my own money philosophy, the standard retirement age is already so hopelessly late that it might as well be 100,” Adeney told Money from his home in the US state of Colorado.

“You can do much better, and you are in control of your life, not your government.”

Adeney says the Mr Money Mustache forum “is very valuable to many people”, with almost 40,000 registered users collectively writing more than 1.7 million posts since 2013.

“And even more significantly,” Adeney says, “there are many millions of people who have found these conversations online, and simply lurk and read along to learn from the people who do the writing.”

Mr Money Mustache founder Pete Adeney.

While the liberation of anonymity is not new, experts say it is an increasingly valuable tool when it comes to sensitive topics such as weight, mental health, and money.

Claudia Hammond, a UK psychologist and author of Mind Over Money, says financial forums connect like-minded people in the face of a persistent taboo about discussing finances.

“It is striking that online forums on money have been so popular and that people are often happy to discuss their own finances with strangers in a way they wouldn’t want to do with their friends.”

There is still a taboo around discussing money, from what you earn to what is considered an extravagant purchase, she adds.

“So an online forum provides somewhere to use as a sounding board without having to discuss it with your friends.

“The rise of forums like this parallels the rise we’ve seen in online forums discussing other topics which people don’t always want to discuss openly, such as mental health.”

Hammond says online forums, Facebook groups and blogs strike a balance between providing anonymity and accountability.

“Just as dieting forums do, they also give people the chance to make a commitment to behave in a certain way and we know from psychological research that people are more likely to stick to their resolutions to spend less, eat less or drink less, if they’ve said in front of others that this is their intention.”

Australian woman Joanna Jones*, 60, retired at 51, years before the Mr Money Mustache forum started.

She says the existence of such a group when she began working towards early retirement “would have stopped me from going in circles for years, and I would have been able to retire much, much sooner”.

“The community has a lot of people doing different things. Some are purely focused on getting the best from their investments. Some are into self-sufficiency, and others into minimalism,” she says.

“It was great to find a group of people who are interested in the same financial things that I am.”

The candour and support of her online network was a sharp contrast to the reception Jones experienced when discussing finances with family and friends.

“I tried to share things at first, but it appeared to be skiting, and it came across badly – particularly after I refused to invest in the Pyramid Building Society when the family all did,” Jones says.

“After that, I’d learnt not to discuss those things.”

It is the experience of those who have been there, done that, that inspires younger members of the community, says Lee, a 34-year-old Melbourne man who hopes to retire within eight years.

For him, the early retirement community means “seeing that it can be done, following the path of people who have been able to reach the finish line”.

While his friends are successful and financially literate, their end goal is different, Lee says.

“They want to earn more and make more so they can spend more.

“It’s quite difficult to bring this up in ordinary conversation with friends, whereas on a forum, you know that you’ve got a community of people who will understand.”

He says many Australians are too focused on their super preservation age, not realising they can invest outside of super and retire before that.

“You’ve got to make two plans: one to get you from your early retirement date to super, and another one for when you reach super preservation age,” he says.

“It frustrates me that people seem to think they have limited options – either super or the aged pension. They don’t understand they have other options.”

Adeney agrees.

“Nationally required savings plans are a good thing in general … but they are always very mild – shaving off just a tiny percentage of your income for a distant future, which would leave you stuck in mandatory work well into your 60s,” he says.

His approach is to work with that system, then do much, much more.

“Because the real value comes not in crimping a few dollars off of your existing budget, it comes from completely rethinking what it means to live a happy life, and then living that happy life starting right now.

“If you get creative and combine the happy life with the efficient use of money, you can end up saving more than half of your income, which will leave you financially free decades earlier.”

*Not their real names

RELATED: Meet the Frugalwoods: the couple who retired in their 30s

6 Comments

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  1. Well said, Tom. And also, so what if people can afford not to work? Shouldn’t they work anyway, to contribute to society? They should keep working and donate all the money to charity.

    • Mr. Money Mustache models a totally different way of life that focuses on building wealth rapidly and then using financial freedom to pursue whatever it is that you are passionate about for the rest of your life for your happiness and the greater good — regardless of whether or not you make money in the process.

  2. The risk I have experienced is ease and temptation becoming consumed with money in attaining ones financial independence. AKA Financial Porn, selfish, proud…etc

    “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money”. Matthew 6:24

    Or maybe consider this….because none of us are getting out of here alive.

    “The ground of a certain rich man yielded an abundant harvest. He thought to himself, ‘What shall I do? I have no place to store my crops.’

    “Then he said, ‘This is what I’ll do. I will tear down my barns and build bigger ones, and there I will store my surplus grain. And I’ll say to myself, “You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry.”’

    “But God said to him, ‘You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?’

    “This is how it will be with whoever stores up things for themselves but is not rich toward God.”

    I encourage you to discover and try putting God first. Not your work, your money or financial independence because doing so you heal everything in your life including your finances.

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