Early Retirement Extreme: A philosophical and practical guide to financial independence
Jacob Lund Fiskeramazon.com
Early Retirement Extreme: A philosophical and practical guide to financial independence
compound interest in itself never made anyone rich. Invest $1 at 8% and wait 30 years to get $10. This is hardly a worthwhile sum for 30 years of waiting. But invest $100,000 at 8% for 30 years and you get $1,000,000. That is real money. To get anywhere, it's thus very important to quickly build a substantial foundation. Setting small goals in a si
... See moreCompared to a plan, which may be thought of as a string of actions, subject to complete failure if it breaks, a strategy is better thought of as a web of actions.
If you only have a hammer, the whole world becomes a nail--the most common hammer is in the shape of a credit card. The more myopic the focus on a particular method, the more difficult the solution, if and only if the focus is on the wrong method (and it can't be correct all the time, if you only have one). For example, when tackling an obstacle li
... See moreSecond, having significantly reduced expenses, invest the difference in businesses.
choices that maximize personal utility
Some problems are self-created; one must learn to avoid these. A common solution to problems is to go and buy some product. Too weak to open a lid? Go buy a tool rather than exercise to become stronger.
Compare this to the amateur enthusiast with more time than money, who rides every day and thus has the power to ride his much less expensive
Here, a large problem is that previously acquired, specialized knowledge can't be used as a foundation for new specialized knowledge--by definition, only generalized knowledge can serve this purpose. The only thing the specialist knows is how much effort it took to reach the level of the former specialization and that this must now be repeated prob
... See moreUnlike a business, which invests the money in assets with a higher return, allowing businesses to use debt as a leverage, consumers "invest" in higher consumption. The lack of return on assets to pay the interest means they must either work harder or longer for their consumption, and so they do.