We kick off Strong Citizens Week here at Strong Towns with a conversation with Mr. Money Mustache. MMM is—by far—the guest our listeners have most requested, and for good reason. He is the individual digital to our community analog. His insights will help you live a better life and, should you choose to be a true Mustachian, put you in position to help your community become a Strong Town.
Mentioned in this podcast:
- Mr. Money Mustache's Family Spending Report for 2015 from his blog
- The Scold, a recent feature in the New Yorker
Listen to the full episode
+ Podcast Transcript
Chuck: Hey, everybody. This is Chuck Marohn. Welcome to the Strong Towns Podcast. This is Strong Citizens Week here at Strong Towns. We're focusing on people who have chosen to live with a Strong Towns kind of mindset. There's nobody for me that fits that description more than our guest today, Mr. Money Mustache. He's been featured on CBS News, in the New Yorker and the Huffington Post and many, many other places. I'm really happy to welcome to the podcast today, Mr. Money Mustache. Welcome.
MMM: How's it going, Chuck? Thanks a lot. I'm a big fan of Strong Towns too.
Chuck: Well, that means a lot to me. I really do appreciate that. I was going to ask you, do you want me to, throughout the interview here, call you Money or is it Mr. Mustache or what's the best way?
MMM: No. That's fine, like my real name is Pete, right? Everyone calls me that once they get over the formalities.
Chuck: You don't go down the street on your bike and someone yells, "Hey Money," out the window or anything like that?
MMM: If I'm lucky on a good day that would happen or, "Hey Mustache," but usually it's just Pete.
Chuck: Yeah, all right Pete.
MMM: Or hey, get out of the way, another one.
Chuck: I've long been a fan of yours as well. It's fascinating because I started down this Strong Towns journey and then found you along it, and thought I've listened to all these financial people give advice on how to save five percent, and here's how to cut your credit card in eighteen months.
I thought, these people are nuts but here's a guy who actually gets it. The front of your website has these two terms. It's Financial Freedom and Badassity. I want you to tell us, what does financial freedom mean to you and how does badassity get you there?
MMM: Yeah, it's not two terms. It's supposed to be one phrase like Financial Freedom through Badassity.
Chuck: Through Badassity, yeah.
MMM: Because it's the badassity that lets you get the financial freedom. What badassity means is of course just a made up word, but it means being a badass which means embracing hardship and getting better at stuff. Stop just being such a comfort oriented sissy like they train us to be in our society.
For example, like a really simple idea of being a badass is like let's say you're a mom and you've got two kids and it's snowing. You've got to go get some groceries and then go to a party with them. Then maybe your husband has the car for whatever reason.
I don't want to make this sound gender stereotypical, but you go out and you get the grocery and the kids are in the bike trailer. Then you load everything up and maybe you're wearing two backpacks. Then you show up at the party, everyone's laughing and covered with snow. That is kind of embracing a badassity and everybody had a better time than they would have if they had just taken the SUV. Your friends have more respect for you and you feel great, because you conquered the elements instead of retreating from them.
That's the type of person that I seek out in my life. I love people like that. They happen to usually be more successful in everything else they do, like business and marriage because they're willing to go further to get stuff done instead of just complaining about the hardships.
Chuck: Right. I'm totally with you. I know you're Canadian. I'm from Minnesota. Hey, we can see you from here. You live in the United States now. I'm wondering were you raised like this? Is this something you came to appreciate later in life? What was the path that got you to badassity?
MMM: Well, I'm not really as badass as I would like to be, but I definitely aspire to the concept. A little bit of that came from my upbringing. My parents were frugal originally by necessity, because they grew up in the 1940s and '50s and then they kept that going through their later lives because it was just necessary. They had four kids and going into debt wasn't an option to them. They set their expenditures to make sure they didn't run out of money and run us out of our house. That's the upbringing part.
Then I think I was born this way as well. Because I did become an engineer, out of all the other professions I could have done, and engineers hate waste and they love optimizing stuff. To us it's an art form. It's just beauty when you do something right and you see that there's no waste left over and you think, wow, I designed this amazing car and it weighs half as much as the competition, but it does everything better than the competition. To an engineer, that's the highest form of beauty.
Chuck: Right. Did you have one of those grandparents that was like the old miser Commagene kind of guy?
MMM: Growing up I only really knew one of my grandparents, because the others died a little earlier or maybe they had their kids late or something.
MMM: I had a grandmother who went through the Great Depression. She was definitely cheerful, but she was also somewhat of a badass now that I think of it. She always did her own groceries. She kept her own apartment even when she was living alone at age ninety and just kept things spick and span, worked hard, and kept a very sharp mind right till the day of her death.
She was like, "Oh, I'll be out of the hospital in no time. I've got to clean up the apartment. It's a little messy and my guests are coming over on Sunday." Then she just like finished her life with that type of attitude right to the last minute.
MMM: Yeah, she's definitely an inspiration.
Chuck: Yeah. I was thinking as you were talking about my own grandfather, who kind of had that mentality too. Sometimes it manifested itself as a pack rat a little bit. He was one of these guys who lived in a barn during the depression and he did that so he could eat. The family he moved in with, he'd help them work in the fields and stuff and then they'd feed him. That was how he made things.
Boy, when I was a young formative guy trying to make choices in life, he would always step in and say, "Hey, don't do that. That's a waste. This is a lot smarter thing to do." He was kind of a badass now that I think about it.
MMM: Yeah. These inspirational figures, they really have a big effect on people. I find kids who grow up with rich kind of consumery parents, they just adopt these behaviors by default like oh dad is going to give me a new car when I turn sixteen. Of course I'm going to have a car when I go to college, because how else could you get around?
We're such a social creature. We pick this stuff up from people. Actually I wanted to throw one more shout-out of badassity to the dad of one of my ... The parents of some of my best friends as a kid were these immigrants from Holland. Dutch people are kind of renown for being hardworking and no nonsense.
MMM: This one guy, also his name is Pete Prinsen, and if he ever hears this I want to say thanks a lot. He was a real like do it yourself, where like he would just take Pete and Cory. His wife would take their kids, my best friends, on these amazing like sailing trips and they fixed up their own house.
They did all their grocery shopping. They were very good financially, even though they were just like a teacher and an x-ray worker. They were kind of a model of how to do life in an optimized way and like really outdoorsy and super healthy and athletic.
MMM: That rubbed off on me a lot as a kid too. I think Pete actually reads Mr. Money Mustache now.
Chuck: Sweet. I want to talk to you about your house. Pretty much everybody when they get to be an adult goes through the process of looking for a house, whether to rent or to own. You own your house. You don't have a mortgage. I'd like you to talk about the process you went through to pick out your house. What were some of the things that you were looking for? What were kind of the Mr. Money Mustache prerequisites?
MMM: Well, I've always been a house guy. Ever since I moved out of my parents' house I had certain opinions of what I wanted, like open spaces and a place to make music where the neighbors wouldn't complain, because my first rentals the neighbors would complain and stuff like that. It's evolved over the years.
With the current house I've really realized what I want is enough space for everything, but not too much. I really like the sun and so I wanted the house to be solar lit and solar powered. That sounds fancy, but all that really means is a bunch of big windows facing south, and preferably facing something nice.
The current house, I'd just been shopping around casually for eight years while I lived in the neighborhood. Every time a house comes up, I'd just take a look. Then this kind of fixed wrapper came up that has the south side of it backing onto a park, like a really nice public park with no roads or anything between it. It's just my backyard.
When that one came up I thought that's perfect, because I could completely fix it up and put the sunny windows that I wanted. That's the story of why we live here now. It's a project that started in 2013. Still not quite done, but it's really fun to go through the process of working on it so much.
Chuck: Now, I understand that it's a little bit of a downsize too, going from the last house to this one. Is that right?
MMM: It is, yeah. The last house was like twenty-six hundred square feet of indoor space including a finished basement, plus I had nice two car garage, plus these nice work sheds in the backyard. The new place is about half of that. It's got fifteen thirty-two square feet with no garage and no real work shed.
I did have to compress some of my manly belongings like tools and drums and stuff like that, which is a bit of a hustle, but it's also healthy to not have too much room where you just buy stuff too much, too much. I'm just building a small studio in the backyard now like the size of a small two car garage, just to expand just to the right level, so I don't have everything piled up under tarps like lumber and stuff like that.
Chuck: Right, right. You've got a little Mr. Mustache too, right? I mean the point you are in your life, most people are saying let's upsize. We've got kids now. We got stuff, we need a bigger house. You're going the other way. What's that mindset? I mean, has that worked out well for you?
MMM: Well, you could think of it back to our first question about the engineer and the optimizing.
MMM: Originally, my wife and I we had one kid, just a baby, five months old when we bought that bigger house. We thought, well, we're going to have two kids so let's make sure we have enough for everybody. That was a little bit of an overreaction because my house before that and our string of houses was super tiny.
Anyway, we decided later on to have just one kid and our boy was eight or nine at that time. We figured when this amazing park side house came up, that we would keep it at the same size it is instead of expanding it massively. You need less space for one kid than you do for two. We're getting a little better at minimizing our possessions. It's just fun to make the most of your space. You use the whole house every day, instead of having parts that you only use once a month.
Chuck: Right, right. You paid off your mortgage. In fact, I've kind of skipped over the fact that you are retired. Let's talk a little bit about the process of paying off the mortgage at a young age. What was your goal and how did you go about doing that?
MMM: Right. A mortgage is really just one place to put your money. You can also put it into investments like index funds, where you own a chunk of the U.S. economy and you get dividends for that. There's nothing magic about paying off your mortgage.
In fact, when I quit working, which was my definition of retiring, I still had a mortgage because it was a low interest rate and then I had more money in the stock investments at that time. Then I decided it was just an emotional benefit to transfer money from the stock investments to get the mortgage paid off.
To answer your real question of how do you do this? The way you do it is by spending a lot less money that you earn. The first priority is living well. The second priority is putting the rest of that money into investments. When you streamline your spending and stop thinking with the American middle class as like a deprived situation, and realize that it's about ten times what a human needs to be happy, and human history proves this out.
Suddenly you have a lot of surplus and that can go straight to either paying off your mortgage. If you like, just send in extra checks or it can go into stock investing or it can go in fifty-fifty. I always talk as sort of a beginner step of saving at least half of your take-home pay.
If you do that, it takes under seventeen years from the first day you start working until the last day you have to work in your life, if you just simply save fifty percent of your pay invested in super boring conservative like Vanguard index funds and then you're done. That's roughly what I did. I just saved a bit more because I had an above average income, nothing ridiculous. That's how my wife and I finished working at thirty years old, just before turning thirty-one.
Chuck: Now, most people listening to this, especially those that have not read your blog before, which for crying out loud people why are you not reading this blog? They're thinking, this sounds very nice, save half of your income. My gosh, I've got car payments. I've got house payments. I've got groceries I've got to buy.
You're not just throwing this out as kind of flipping. You're serious about examining every part of your life. Maybe we can start with transportation, because I feel like that's maybe the primary divergence point between you and most non-badass people.
MMM: Right. It ties in so nicely with Strong Towns too.
Chuck: It does, yeah.
MMM: It's basically a collective insanity that we have all signed up for without even realizing that it's completely bonkers.
Chuck: Talk a little bit about how you reach financial freedom with different transportation choices.
MMM: All right. Well, let's just use this offensive term that you spoke to me a few minutes ago, a car payment. Like it is ridiculous. Ridiculous to borrow money for a car, like if you don't even have ... You shouldn't spend all your money on a car, let alone more than all the money you have.
If you need a car, which would be a last choice, then you should take the amount of money that you're comfortable dropping your checking account balance for that month and spending that on a car. Then it's gone forever and it's going to depreciate. It's going to literally go up in smoke. You shouldn't be prioritizing fancy cars as part of your lifestyle goals. That's the first thing that most people do. Most people save about five thousand dollars a year, but spend ten thousand a year driving unnecessarily huge fancy cars around way more than they need to. That's kind of a nice place to start.
To become a bit less of a preacher about that and be more practical, like go to Craigslist, get yourself like a 2008 Honda Fit, which is a beautiful car. Holds five people, goes camping. It's almost forty miles a gallon. You can get it for about six thousand dollars. It will last you twenty years.
Then live close to work. Don't drive all over the place. Get a bike. Use it for any trips under three miles. Just start thinking about driving as a negative activity that you want to avoid, and then only do it when it really brings happiness to your life like a camping trip or whatever. Do all that stuff and you're already halfway to a fifty percent savings rate for many of us. Then you can go further like getting smarter about groceries and incidental expenses and housing expenses.
Chuck: How many miles do you think you drive in a year?
MMM: It varies. It's probably this year I did a couple of trips to Utah from my home in Colorado, which is about ... I think it might be like an eight hundred mile round trip. I did kind of sixteen hundred miles of pleasurable road trip driving for camping and snowboarding. I do feel guilty about that, but it's a pleasant guilt I'm like, "Ha ha ha, isn't it great living in such a rich country that I can just blaze this two hundred and fifty horsepower minivan through the mountains with my friends?"
Then I think we did about a couple of hundred miles of what I call clown driving, which is just driving when you didn't really need to like under ten mile distances. I have a second car for that like a used Scion hatchback, which is very efficient. At least it's not totally off the hook to drive that thing.
Chuck: Let's say, take the two trips out, so more or less ... I'm going to start at an absurd level, more or less than ten thousand miles a year.
MMM: Yeah, much less than that.
Chuck: Less. More or less than five thousand miles a year.
MMM: I think this game is already getting tiresome. I'd say probably about four hundred miles a year.
Chuck: Four hundred miles a year? Right.
MMM: I think we used two years ago, because I add this all up at the end of each year. Two years ago, we used two tanks of gas in the car. Our gas bill was seventy-one dollars for the year, because ... People who are engineers are saying, "Well, then why do you have cars at all?" You're totally right. I shouldn't even have cars.
MMM: Yeah, two tanks of gas for the Scion because gas was three dollars, three fifty back then. Nowadays that bill would be like forty bucks for the year.
Chuck: You're literally spending zero on car payments. You're spending less than a hundred bucks on gas a year. I saw that your GEICO bill, because you posted it, is like two fifty a year or something like that.
MMM: Yeah, a bit more than that. It's in the three hundreds, but yeah for two drivers and two cars with minimal use.
MMM: I'm also not in a big city, where there's a lot of smashups.
MMM: Yeah, insurance is cheap.
Chuck: Yeah. Right there, we just saved a family fifteen thousand a year.
MMM: Especially the higher income families who tend to have these bigger trucks and SUVs, which are very costly.
Chuck: Yeah. You replaced those auto trips then. By the way, just as a divergence, I don't know as I've been so proud of myself as when I read your automobile recommendations. Guess what car I drive?
MMM: A Honda Fit?
Chuck: A 2008 Honda Fit, yeah.
MMM: Yeah, really smart choice. Such a beautiful car.
Chuck: Oh my gosh, it's an amazing car. Great gas mileage, you can put the seats down and fit everything in it. I have hurled lumber in the thing. I mean, yeah it's a fantastic car.
MMM: Yeah, you can actually use that as a one-person hotel too if you have to travel to one of your speaking engagements. You need to have a comfortable bed in the back.
MMM: I have a friend who lives in the mountains, who's doing that as a snowboard instructor.
Chuck: We're four hundred miles a year in your car, but it's not like you're sedentary. It's not like you sit around. You go places day to day. Your kid had to get to school today. You're substituting those auto trips with what?
MMM: Well, the biggest thing is the local lifestyle. There's always a choice of what you can do. You can choose to have stuff to do on the opposite side of your Metro area, or you can find equally or better fun stuff to do locally. Mostly everything I do is within a mile or two of my house, like I have a great library. I have amazing collection of friends and all the stores and grocery stores I need to go to are there.
That doesn't really happen by accident, which is why I try to emphasize local life instead of just saying, "Ride a bike." Because if you just say ride a bike, people are like, well I'm in Los Angeles and the city is two hundred miles wide and I have stuff to do all over the place and I'd be biking like twenty-seven hours a day.
You have to combine like a priority of not making yourself travel all the time, because that's not a naturally human activity. Then use a bike for those trips, and that's more for physical fitness and joy. If I used a car for all my local trips, I'd still only use like an extra tank or two of gas per year. It's those two things together, valuing locality and kind of thinking of your local area that you live as your true community, and that's where you want to find friends, and those are the businesses you want to support.
Chuck: Obviously at Strong Towns, we talk a lot about the physical form and the layout of communities. There's got to be some places that are more suited for badassity than others then. I mean if you're living in the cul-de-sac or on the edge of town, this is going to be a lot more difficult than if you're living in a place like you've described with a library, a park, and the stores and all that. If I'm starting out in life and I want to be a badass, is moving going to be maybe a prerequisite for me?
MMM: Well, moving is a great idea. People should always keep that in mind, like you get a new job that's your dream job but it's thirty miles from home, of course you should move closer to that job. It's easy to move. Even if you have a family, even if you have a house, but it's even better if you think about this earlier in your life so you can get that dialed down before you have a family. Yeah, moving is good.
The other thing is in one area where my approach differs a little bit from yours with Strong Towns is like yeah, we should certainly rebuild our towns and change these urban planning rules so things can be designed in a non-ridiculous manner in the future. Let's also not use that as an excuse, because to use my own neighborhood as an example, I'm the only one sometimes who is walking.
I'll get passed by fifty cars just doing stupid one or two mile errands or just like dropping their kids off at the school. I'm one of the furthest houses in my school district at about a mile away, and of course we walk because you'd never drive a car one mile, but almost everybody is driving past us. There's this line of trucks spewing smoke right into the lungs of the children as we walk past into the school. I'm like why?
My neighborhood is fine. Most neighborhoods are fine to right now stop driving and right now start biking and walking. Do that now. Don't wait for the world to make everything into like lollipop paved unicorn paths like down to the Wizard of Oz's house.
Just do it now and then we'll also fix our cities as we go, because when you're out there walking and biking, you're an advertisement for the Strong Towns concept. Everybody else in the car is just like, "Huh, I didn't know you could walk here."
MMM: Certain number of people will do that and that will change their voting patterns as well. They're like, "Yeah, I saw some people walking to school and they looked pretty happy. They're actually a lot more physically fit than me too. Okay, maybe I will vote for this new arrangement in my city."
Chuck: I do think that it is an advisement in a sense. People do look at you like you're crazy. I mean I ride my bike around here, and the drivers get kind of angry, like why are you in my space? This is my street. What are you doing here?
I don't know. There's enough people I think who kind of follow that that I get a little satisfaction from that as well. Like okay, at forty-two I can do this fairly easily. Maybe I'm making room for people who are elderly or very young and maybe not as adept at doing this as I am.
MMM: Yeah. I feel very happy even if I'm the only one biking. It changes quickly. Like even since 2001, the amount of people biking to work is up in hundreds of percents if you look at the stats especially in these big cities that people say we're unbikable.
The cities have changed a little bit, but much more important is that the people have changed. Just going about it politely like you don't want to be aggressive towards drivers, like politely and confidently. That's how you create change is just by being one of these people.
Chuck: I'm sure there's people who are listening who are saying, okay I'm with you on the car thing. I'm with you on locating a good space. I'm maybe going to struggle to do those things, but I get it. You are obsessive about this. You are obsessive about this to the point where you build your menus around it, the way you consume coffee, for example.
All of these things you've kind of taken into the point saying like look, this is the life I live and it brings me satisfaction. If you're talking to someone who is your average, slightly overweight driving the clown car every day kind of American, where are you telling them to start?
MMM: First of all, that perception of obsessive is something that I like to fight and the recent New York article ...
Chuck: Please do. Yeah, go ahead.
MMM: Yeah, the recent New York article, New Yorker article, about me once again made that mistake. I'm absolutely not obsessed of it all. I'm a super casual like relaxed hippie type guy who lives this crazy decadent lifestyle with like intercontinental travel, like the best food, the nicest house in my entire city in my opinion.
I just do whatever I want. I buy stuff as if it's free. It's not obsessive. It's just that I see the waste in things and then I consciously decide when I want to waste or not. For example, I do eat meat and eggs and stuff. I'm not a vegan.
I know that that's a super decadent way to eat and it's like somewhat unethical. I do it in moderation, but I'm not obsessive about it. I'm like okay, I'm just going to indulge in what other humans do, just because I'm up for the big picture, enjoying a whole life.
I drink beer. Sometimes I drink too much beer. I know that that costs money and it's not the best thing for my health, so I do it reasonably. I describe my approach as being slightly less ridiculous than average. I look to people who are more along that spectrum to me for inspiration, instead of looking at them with scorn.
MMM: To answer your question about the person who is even earlier on this process is just like look for some ideas and realize that this type of lifestyle makes you happier. The benefits begin immediately. It's not like you wait until you retire and then you're happy. It's like you immediately walk to the store instead of driving the one mile, and you feel great the moment you get out of your front door.
Just try it. Try on the physical side I would say is the first thing to do. Just get your ass outside in the shoes and find something to do with yourself, and then it starts to become a chain reaction from there.
Chuck: I'm really glad you made that clarification. Let me reflect back to what you said and you can clarify me, because I heard you say I look at this world and it just seems crazy to me. I'm slightly less crazy than everybody else. That doesn't make me obsessive or overly frugal or like some Sunday school teacher who's walking around wrapping everybody on the wrist for running the water an extra five seconds. It's just a paradigm that I view the world through. Is that a fair way to say it?
MMM: Yeah, it seems pretty reasonable. I mean the reason you can identify that you're still excessive is to look at the big picture. Most people have a scientific model of the earth that is basically them, their peers and what they see on TV. If you watch like political debates, that's even worse distorted picture of the world.
However, if you study the entire history of the human race and then the world that was here before that as well, then you get a much more interesting and big picture. You realize this tiny little slice of time where we all started going crazy and going blah blah blah, and buying all this stuff. It's very recent and it's very bizarre.
I watch a lot of nature videos, it's a lot like these bizarre birds-of-paradise videos that you see in Madagascar, where the birds develop like a crazy elaborate feather pattern and dance. To them, that's their whole world. They're like that's just how I get a mate.
MMM: To us we're like that's so bizarre. The thing has weird clown lips painted on its feathers through evolution.
MMM: We are these birds-of-paradise jumping around doing ridiculous dances and not even noticing how ridiculous we are, unless you can zoom back and think about ourselves as a bigger, like a species and what these certain social needs and the social needs of what have been manipulated through commerce to make us do some very preposterous things.
Chuck: I was in Italy, it's over a decade ago now. I was staying with this person there for just a brief period of time. She had a refrigerator that was like the refrigerator for her apartment, which was a decent sized flat in southern Italy. The refrigerator was like the size of my college dorm refrigerator that we used to keep drinks in.
That was the whole thing. When she opened it, she opened it very quickly and like grabbed what she wanted and closed it very quickly. It kind of stuck with me, because I mean here we have this huge refrigerator. You open it up and stand there and look at you know, let me decide what I want to pull out of here. It does seem to me like we are on like the very far crazy end of decadence in a sense.
MMM: Yeah, and you can celebrate that, like while still being slightly less ridiculous than your peers. I also have a giant fridge. It's stainless steel. It's got two doors. You open it up and all the seven zones of digital temperature sensing, to keep the food or different stuff. It's like lighting different zones of lighting in my fridge.
Still, that thing cost me seven hundred bucks on Craigslist. I carried it home into my 1999 minivan. It's a super top of the line, Energy Star rated one, so it uses less energy than other fridges. I get this much more than your Italian lady's fridge situation.
I get a very decadent lifestyle that is still, instead of spending three thousand dollars on a fridge brand new at Home Depot and financing it on a credit card and costing myself six thousand dollars by the time it's paid off. I get the exact same benefit for seven hundred. Then I got to keep the other eighty percent of my money or whatever.
This is the whole Mustachian philosophy, is getting the benefits of the modern lifestyle while sacrificing the things. Not sacrificing, slicing out the things of the modern lifestyle that don't really bring us any more happiness. I do feel happier by having food stay fresh at home, so a fridge to me is actually a happiness booster.
MMM: Payments on the fridge are not.
Chuck: Well, I'm glad we did that diversion, because I think there is this natural reaction to say well, what Mr. Money Mustache is telling me to do is deny my impulses. What I hear you saying is not that, but more just don't be crazy, right?
MMM: Right. I mean I also besides, instead of having a 1999 minivan, I'd like to have like a 2016 Cadillac Escalade that I paid like seventy-two thousand dollars for. It would carry exactly the same size of fridge that my three thousand dollar van, which is pretty luxurious by the way. It's still got like leather seats and power, everything.
Chuck: You'd be all pimped out on the Escalade and everyone would be looking at you like hey, this peacock has got it going on, right?
MMM: Yeah, or they might be thinking what's he trying to compensate for? I don't really understand the fancy vehicles. I do. I'm a total gear head, but at the same time I understand quality rather than peacock feathers, which is what I think some of these SUVs are for, because they're not actually good engineering.
Chuck: I want to talk about debt. I want to read a quote from your blog, and then I want you to react to it or expand on it. You say, "If you're still in debt, you need to get much more bold about wiping it out. Sure, you can do it slowly, but I recommend a more efficient path, put on your walking shoes, start walking as much as you can. Eight hours a day. Go straight to the most healthy and balanced eating regime and never deviate.
Stay on it and let the forward progress accelerate your progress each day. Consumer debt and excessive amounts of body fat are virtually identical." I thought that was beautiful. It's a great metaphor between the two. Talk about how consumer debt is like body fat.
MMM: Okay, there's a little bit, people are going to have to go read my article called News Flash: Your Debt is an Emergency!! You missed a little bit of that, but it's basically at the beginning I mentioned that you need to be bold about wiping out debt, just as if you were working on ... You woke up suddenly a hundred pounds heavier than you were just yesterday, what would you do about it? It would be an emergency.
Chuck: Yeah, you become obsessive about it day and night, right?
MMM: Yeah. I think we are trained to be complacent about debt, because that's what the lenders want us to feel. They think yeah, just make a payment, everything. Life happens. You can't always pay your bills every month. Don't worry, we've got you. You just make the minimum payment and we'll just charge you twenty-four point nine percent and some extra fees.
Then we actually believe that and like car manufacturer is like only one ninety-nine a month to buy this car. People think wow, I have a hundred and ninety-nine dollars. That's great for a Camaro. It's completely the wrong way of thinking. Debt is not a natural state. It's something that happens when you make a mistake. I'm going to make an exception for a mortgage for a house, for a reasonable house.
Chuck: Right, yeah.
MMM: Everything else, debt for anything else is ... Well, here I go again, maybe for education in certain cases too, but for consumer stuff it's always just nonsense. You wait until you have the money to buy that thing. You were trained the wrong way, but now it's time to wake up, because Mr. Money Mustache told you to, and realize that it's draining your life energy.
No matter what your goals are, there's no benefit of carrying consumer debt. You have to stop buying anything else. Like I'm saying, go straight back to potatoes for dinner until that's gone. You're not going out to movies and making small payments on the debt.
You're paying all the money to the debt. It's an emergency. That's kind of how I encourage people, because otherwise you end up with student loans when you're at my age, like forty-one years old and you're still paying off this college degree that you finished at twenty-one. It's just ridiculous how long we carry it.
Chuck: Right. That article is one of my favorites, the one on debt. Your debt is an emergency. Could you tell a little bit the story about your friend in college, who you made the like friendly loan to?
MMM: Yeah. Hopefully he doesn't recognize himself, or if he does he'll realize this is a humorous and happy story.
Chuck: Yeah. I thought it was a beautiful story.
MMM: It was just I didn't realize that people had different attitudes towards debt. I always thought it was something you paid off right away. I had extra money, because I worked for about three or four years to save to pay for my first year of college. I worked all through high school, and so I had a bit of extra. Paid for my tuition and then I had some money to pay for my groceries for the rest of the year.
Then my friend said, "Hey, I can't quite cover the tuition payment. Can I borrow like two thousand dollars," or something like that or maybe fifteen hundred. I said, "Sure, I've got way more than that in the bank account. Here you go." He paid his tuition.
Then we proceeded to go together in our friendly, like we were buddies. We did all the stuff together and we were going to parties and everything. I noticed he was still buying stuff, like clothes and alcohol at bars and more expensive stuff.
MMM: It took a while for him to pay me back. He's like, "I almost got enough for you." Then finally he did pay me back. He was a good guy. We're still friends of course, but I was just shocked.
I was like, wow, that's weird because why did he buy that other stuff when I wasn't paid back yet? I guess we have different attitudes about debt. Then that was my first taste of that because I'd never borrowed any money before that point. Then I had never lent any money before that point, so it was kind of an education to me in the different attitudes humans have towards debt.
Chuck: I think the reason why that's such a powerful story is because it's not like with the bank or some like nameless, faceless entity that you owe money to. This is a friend. Even with that kind of moral aspect to the debt that you have, it's very natural for us as humans to in a sense like live for today or say these things are prerequisites, going out, buying new clothes, all these other things. The Mustachian approach is to say, no your debt is like this big, glowing, blinking red light that should be causing you a lot of distress until you get rid of it.
MMM: Right. It goes away very quickly once you think about that.
MMM: That's an immediate stress reduction in your life, which is an immediate happiness boost. You're not sacrificing the shoes and the lattes and stuff like that. You're actually becoming more badass and then becoming happier very quickly, and then you still have the option to buy that stuff.
The cool part about this is that the training of withholding from your desires a little bit, self-restraint, that carries over into the debt-free period and suddenly you realize like oh, maybe I can go without this item. I consider the low cost car in my driveway to be a great proof of my self-restraint, just because I love cars so much but yet I don't have an expensive car even when I can afford one now without any debt.
That feels really good. The fact that you can afford something and not buy it is much more of a happiness booster in my opinion than affording something and then caving in and buying it. It's even more great to get over your desires.
Chuck: You go with the prudent car option in order to get out of debt, but then when you find yourself out of debt, you actually look at the more prudent car option and say, "Hey, I kind of like this."
MMM: Yeah, it just feels right to not be wasteful. It's an art form in itself. Then suddenly you look at the rest of your life and think, hey, I can be more efficient in this other way too and it keeps making me happier. I feel like I'm being smart with my resources.
This is why humans have taken over the planet in the first place, is because we were originally very smart with our resources. We knew how to use every part of the animal. We knew how to use nature to make shelters. This is really a very rewarding human activity, once you get into it. They've kind of tried to train it out of us. If you take it back for yourself, this is what really makes us happy, is solving these problems.
Chuck: I want to give you a chance to talk a little bit about the life that you live. You've alluded to it a little bit. One of the things that you recently published on your blog was basically your P&L statement, your list of expenses for the year.
I think most people if they heard someone lived off of twenty-four thousand dollars a year would think oh my gosh. You're below the poverty line. You're living a destitute life. Certainly that's not a life that's going to include things like eating out or going to the movies or anything like that.
Talk a little bit about what the life looks like once you reach, once you're further along that badass scale, where you've got the mortgage paid off. You've got the debt paid off. You're living with prudent habits. What does that feel like?
MMM: Well, it feels really great of course, because you can buy whatever you want and there's no monetary pressures. Everything is complete freedom. Just to avoid people being scared off by the twenty-four thousand dollar number, because that doesn't include any house payments, you'd have to pretty much double that right away if you're trying to compare that to what my expense statement would look like if I did have a mortgage, which most people do.
MMM: It also doesn't include any saving, because that's not really spending. Really if you made seventy thousand dollars with a mortgage on a house of my cost level, then that's about the lifestyle that I live.
MMM: The twenty-four that I spend, because I don't have these unwanted expenses, it all goes to fun stuff like really, really good food, travel. Sometimes a little bit over the top, but it's like I said conscious ridiculousness like occasionally renting an expensive house on a beach or whatever and getting a nice bike, keeping our bikes in great shape. I don't know. It's everything we could want.
I can't really imagine. I'm willing to spend more money if it were to actually bring us more happiness. We've doubled in that here and there. It just seems to not add up to that much as long as your desires aren't super consumer based.
Chuck: Did you see the movie The Big Short?
MMM: No. People have been talking about that a lot in my circles, even though it's around for a while. I started reading the book instead. I thought I would finish the book. I'm in the middle of it right now, or at the beginning I guess. Then I'll watch the movie after that.
Chuck: The book is fantastic. I think you'll really, really enjoy it. Maybe not. Maybe it will make you ... It's also really frustrating. There's this one scene in the movie where the Steve Carell character is aware of how crazy the sub-prime mortgage crisis is. He's walking down the street, he's talking to his wife. He actually says to his wife, he goes, "I feel like I'm in an Enya video, and all these people here are walking around like everything is happy and wonderful. They're just completely unaware of how it's all screwed up."
I just wonder for you, you look around and you see people buying hundreds of thousands of dollars of house with no down payment. You see people getting sub-prime auto loans and they're stretched out over eighty-four months. You know the average net worth of an American is negative.
We have these huge credit card debts with twenty plus percent interest rates. Is there ever a point where you look at that and say this is too insane for me to comprehend. I'm struggling to be a human in America today, because of the insanity that surrounds me.
MMM: I think you get used to it. I certainly acknowledge that we are bizarre in our behavior, but because of that earlier comment I made about thinking of us as a species with these social needs, you can really just ... It's like watching a nature video when I walk down the street and I'm like, "Oh, look at these interesting apes just like me," but they're really soaked up in this behavior.
I feel almost like I'm a scientist watching my own species. At the same time, it's not all negative because first of all there are many people who see it the same way that we do which is it's joyful in a way. It's great that we even made this prosperity for ourselves.
Sure, some of us are prone to getting sucked into persuasion to do stuff that's not in their best interests. In the grand scale of humanity, we're still on a pretty great place. My idea right now with this activism through the blog is just to try to nudge us a little bit more. Like apply those same principles of persuasion in the other direction, where we focus on happiness instead of status through material acquisitions.
It's just going to get even better. It is crazy, but as long as your friends, your immediate friends aren't crazy you're all set. I hang around with people who don't borrow money for SUVs, so it's all okay.
Chuck: Yeah. How important is that to have a community? At mrmoneymustache.com, you've got some great forums. There's a lot of people who talk about this stuff. When you post things, there's a big conversation that goes on. How important is it to have physical friends near you that think like you? How important is it to have this broader community of people talking about this stuff?
MMM: It probably depends on what kind of personality type you have. Some people are introverted and they like to be at home, and maybe they have like a spouse or something, a partner that's with them and they don't need a lot of physical friends. Maybe a few and then they can bond through the internet.
Whereas other people, I'm a bit more extroverted and I love being in crowds with people that have a lot of the same values and we have fun together. In my case, I'd say it's pretty important. I think everybody, introvert or extrovert, will benefit by being around more people of this type.
We are everywhere. I mean even just on the Mustachian situation, the blog, you can go to any city and host, call a meet-up and hundreds of people will come. It's not that rare to have beliefs that aren't entirely based on traditional consumerism.
Chuck: I'm interested in your reaction to this. Let me give you a little bit from my side, because I started writing Strong Towns because I thought the world was crazy.
MMM: Did you start before me? I forget.
Chuck: I started at the end of 2008.
MMM: Okay, yeah way ahead of me. I was in '11. You win.
Chuck: Okay yeah. I went through the housing crisis and that 2008 election and I thought the whole world is nuts. My wife has this saying. She says this to me about being crabby. She goes, "If the whole world seems crabby to you, it's probably you that's crabby."
MMM: It's an excellent point, yeah.
Chuck: Yeah, she's a brilliant person. I kind of took that and said, well if the whole world seems crazy to me, maybe I'm the crazy one. I started writing what turned into Strong Towns. I think the thing that I am most grateful for now in 2016 is that the things that I kind of thought were crazy or that I thought maybe I was like alone in this world.
Like you say, I've found thousands and thousands of people now who are there with me, who support this, who want to see something different. What has this been like for you as a person to start blogging, start writing about this and have such an overwhelmingly positive reaction from people who want to be Mustachians, who want to live this badass life? What has that done for you individually?
MMM: Well, as you might imagine, it's quite a bonus. I was already retired for six years before I started the blog. I was just going about my normal being a dad, raising kids, having friends in the neighborhood type thing. Everybody knew my deal. They knew I was retired and into carpentry, and not being too wasteful from an environmental perspective.
Starting the blog was ... Everyone says you start a blog, no one is going to read it. I just did it anyway, because I like writing. To have people start reading it and then start reading it in huge numbers, and then all this new stuff, it seems like I often think I'm going to wake up and like, "Wow, that was a pretty amazing dream." Because why are all these people listening to this crap that I'm typing into a computer. I'm also really happy about it.
I think I've learned that there's no benefit to fame. Fame is actually kind of a negative thing. Personal connections, there have been a few people that have made very close personal connections with the blog and that's been a really, really nice thing. There's just a lot more people to talk to now.
Also from personal level, it makes me feel like I'm not wasting my life as much, because I have this nice feedback from people like, "Hey, you've helped us, my family, make our life better too." You feel like yay, because really the happiest thing you can do in life is to be useful to other people to help them be happy there in themselves.
MMM: From a personal level, that's how the blog has made my life more happy.
Chuck: Blogging and podcasting too are very intimate kind of ways to communicate with people. I do feel I mean for me I feel this connection to you because of the blogging and because I read the stuff that you write. For you, this process of writing, of figuring things out, has it been an exploration for you? Has it been something that's kind of helped you? I know occasionally you'll say this has liberated some thought in your brain. What's the process that keeps you blogging?
MMM: That's a good point. I started out originally with the idea of preaching. If you read the early articles, it's like you must do this. Here's what everybody is doing wrong.
MMM: Some people those are the best articles, but I think it got better later when I ran out of original lessons. There's more and more but then it's more like reflection. Like all these people write back, many of them who are better at whatever you're writing about than you are, so you can learn and increase your skills at that. For example, something about cars or something about physical fitness, all these different subjects I like to write about.
It's nice to go back and forth and then you realize where your own shortcomings are and you can constantly be inspired to be better. For me I find that I'm being forced to live a better life than I otherwise would, because now I know I'm writing about it. In a virtual sense, people are watching so I can't screw it up.
MMM: That's a really great motivation to lead a better life.
MMM: Of course the leading the better life part is what makes you a happier person.
Chuck: It's strange every day when people will say, "I'm an expert in this or an expert in that," because I do find so much more value in the feedback that I get from people. I've learned more from the readers than I think I've ever shared with them. I'm assuming you get that same sense as well.
MMM: Yeah, it's definitely true, especially because for whatever reason, a lot of the readers who show up in Mr. Money Mustache are these really extremely smart people like founders of big successful companies that they are uniquely talented in one way or another. Or people who are PhD or whatever, well educated, specialists or extremely badass people who can just do anything. They're all there and then they're generously sharing their time with me and realizing how non-advanced I am in every way, which is a pretty handy ...
They share with the readers too. Sometimes I'll publish guest posts from other people or they'll share stuff in comments. They'll start their own blogs and I can help send people to those blogs. It's really great to have a collection. It's almost like a human library where the human beings are the books that you can check out and everybody is fighting to donate their own human skills to the library.
Chuck: What are you working on? You're retired. You've got a lot of time to think, right? What's the new thought that's rolling around in your brain that you're trying to discern and pull out?
MMM: Well, my biggest chunk of my day is still always being a dad. I'm not really Mr. Money Mustache, really I'm dad. That takes a huge amount, especially with homeschooling like my son is always around. We're always doing things together. That really limits the rest of the stuff, in a good way too because this was my goal. That's why I quit working, is because I wanted to take twenty years off and raise a kid and then go back to personal pursuits.
Then secondarily after that, I really like the physical world. I do a lot of building things. I'm currently building this studio thing. It's an extremely meditative thing for me to be hanging out often by myself, with just good music on a good stereo outside and just build. Just build, you're climbing around and you're like figuring problems and attaching things together and designing. That's answer number two.
Then number three, the smallest part which is this Mr. Money Mustache blog even though it affects the most people. I really want to find ways to change society, which means studying human nature and psychology and what makes things persuasive and what makes us tick. Then applying that through writing and appearances on things like the Strong Towns Podcast and stuff.
It's just a long running experiment to see what works. In general, over a long term, I'm hoping that this can have a pretty big impact, especially if I get some more of these aforementioned super smart people helping me.
Chuck: Yeah. Well, you are a fascinating person. You are one of my very super smart people. I think we all add to each other in a way. I'm inspired by you, and I know a lot of other people are. I did not want to go through this Strong Citizens Week without getting the person who I think kind of personifies the Strong Towns spirit individually, and that's you. Mr. Money Mustache, Pete, it's been fantastic to talk to you. Any time you want to come on, you just let me know and we'll chat.
MMM: Thanks a lot and likewise. I hear that you actually go to towns in order to strengthen them, so if you haven't been to Longmont, maybe we should have an event with you here that I can help get everybody rounded up for.
Chuck: I can't tell you how excited that that would make me. Yeah, we definitely should make that happen. I've got a couple of things in Colorado that are brewing. If that comes through, I promise you I'll reach out to you and we'll figure out a way to make something happen.
MMM: Yeah, Longmont is already a bit of a strong town. We're a right field for planting.
Chuck: That's fantastic. Well, for all of you that want to start growing your own Money Mustache and live financially free through badassity, head on over to mrmoneymustache.com. Thank you so much.
MMM: Thanks Chuck.
Chuck: Yeah. Take care everybody and keep doing what you can to build a strong town.