TMBA 448: The Cult of Early Retirement

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Dan and Ian share stories of financial freedom every week on this podcast.

In this week’s episode, they wanted to drill down on what that freedom actually means. To some, living a life of frugality can allow yourself to retire early, but does it really bring you freedom?

One year ago, Dan wrote an article called The Cult of Early Retirement Meets (Or Strangely, Doesn’t Meet) The Cult of Entrepreneurship. This article turned out to be fairly controversial, with many readers sharing their thoughts on early retirement and financial freedom.

Today, we are going to present an audio version of that article, followed by some opinions and reflections on the discussions that arose from it. You’ll also hear our thoughts on why the writings of early retirement bloggers don’t entirely click with entrepreneurs, why we believe our time is more valuable than money, and a whole lot more.


Listen to this week’s show and learn:

  • What the entrepreneurial crowd and the early retirement crowd have in common. (4:25)
  • Why Dan believes that early retirement philosophies are brutal on the mind and soul. (9:14)
  • Our opinions on the article one year later. (22:01)
  • Where the entrepreneurial crowd and the early retirement crowd don’t see eye to eye. (27:10)
  • Why the early retirement lifestyle isn’t accessible for everyone. (32:53)

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Published on 07.04.18
  • Brandon McWilliams

    MMM was an entrepreneur far before Mrs. MM got her craft business off the ground. The fact is, the two movements are not mutually exclusive at all. As you say, they have several common first principles. It seems the differing focus may make them seem antithetical. Entrepreneurship is a fact of life, or at least aspirational, for most of the FI folks I know, and have spoken to, including MMM. The side hustle is a common theme amongst the community; making money is a pretty important part of all this after all. Retiring “to” something as opposed to “from” it is often discussed. It’s pretty easy to see that lounging on a beach gets old after a while. Fostering interests outside of stacking cash is key to a high quality of life. For many, if not most, this fostering culminates into starting businesses. Pursuing FI also leads to starting businesses from a stronger position. So, really, we can all be in the same cult together. Gooble gobble one of us!

  • Jim

    As someone that reads/listens/devours any content in both the entrepreneur world and the financial independence world, I loved this episode.

    There’s a lot of overlap between these two worlds but I think the problem is that most people view them as binary:
    -Either you’re an entrepreneur or you have a day job.
    -Either you live off of your portfolio of stocks or you live off the income of your business.

    I think the reason that the side hustle is so popular in the FI world is that most people already have a high paying job so starting a business is much riskier. It’s a lot harder to quit a $100k per year job to start your own thing than it is to quit a $30k per year job. Running a side hustle is a common way for people to dip their toes into entrepreneurship without all the risk.

    The biggest problem I’ve seen is that people can’t separate side hustles with second jobs. Doing what MMM’s wife did is a lot different than driving for Uber. She’s building an asset that can generate passive income and be sold later for a multiple of the profit. Driving for Uber is just a second job and isn’t an asset. Being able to find the right side hustle is suuuuper important or people are just wasting their time, selling it for $15 an hour when they earn $50+ per hour in their day job.

  • martyn

    I’m halfway through reading Early Retirement Extreme, and couldn’t agree more with your points Dan. There’s a tonne of useful tactics and strategies to take out of the frugality movement, and I have already tried to implement some of these into my life…

    BUT to me, most of these ‘early retirement’ mindsets are indistinguishable from a life in poverty. Sure, the consumer economy encourages massive waste of personal resources – but if I have to choose between a nice meal out right now, or a constrained menu choice in 10 years time, I will always choose the former.

    The fundamentals, however, around getting out of debt are sound. It’s just how you go about doing it that differs the most.

  • Avo

    Love this. Fear is a big thing. FI can also give courage to take more risks, or make a big leap from a stronger position. It can change the perspective so that you can have less fear and make better, more truer decisions for yourself. All good if you can have this mindset before FI.

  • Really loved this episode – because I too am on both sides of the fence (it’s the same fence, just painted a different colour each side).

    I was, unknowingly following the FI/RE path, saving 50% of everything I earned since working at a supermarket, then through my career in IT. Took a long time to learn step 2: uhhh, invest it.

    When I look back, this “freedom fund” ( has given me huge opportunity. Even when it was just money in the bank, it helped me to travel, to take a working holiday where I worked a job I (thought I) was passionate about (for peanuts), to start businesses, to permanently relocate overseas, and so on.

    I think there’s an argument for and against investing everything in your business.

    FOR: greater returns, sooner.
    AGAINST: if it goes tits up, you have nothing.

    There may be an even stronger argument for both parties to find a midway point.

    Once entrepreneurs build say, a company that pays them (personally) 6 figures a year, it could be time to invest in some retail/properly passive “safe” investments.

    When FIs reach a point where 1/2 of their cost of living is covered from index funds, maybe they should consider investing like a “Portfolio Paul” ( For savvy buyers, 30% return is likely to be conservative and we all know 50-60-70%+ is doable. Imagine how much quicker they could retire!

    Even more pertinent to Dan and Ian is someone who is not yet FI, but is a cashed up investor… CEO Sally ( who COULD take the path to FI/RE but is probably wise enough to know that retirement will be a 12 month rollercoaster of emotions before returning back to some sort of work/project anyway. Investing in a business that better suits a great life style today allows for a form of “early part-time retirement with meaning”.

  • Brandon McWilliams

    ERE is the most extreme flavor (as the title indicates) of the FIRE movement. This is far from representative of the majority of people. It’s an interesting read, no doubt, but I wouldn’t use it to establish a basis for FI thinking on the whole.

  • Brandon McWilliams

    Well said, Jase. I’ve considered the Portfolio Paul approach myself, but am a bit risk averse, and haven’t taken the time to properly investigate the opportunities. I’ve scanned Empire, of course, but the prices are quite high to buy myself another job. Being in IT, I feel my skillset could help grow some of these businesses, so it may make sense at some point.

  • Tom Hannon

    This is a topic frequently discussed in our home. The gap that Dan and Ian point out is clear, do you want to live or try to save everything saving 50% then retire and still have a restricted life? Life is short, and I prefer to live. I could never do the 50% save thing either. That said we take calculated risks, for vacations, things we want, cars, toys, ect.
    As a lifetime entrepreneur, I have always beleived the way to freedom is business ownership. Right now I am taking a semi break from owning a business. I just don’t agree that owning a small business is the key to your future. As Dan and Ian point out they take 3 years to actually build and that is time you never get back. It is 3 years of 24/7 365 days a year. What are you going to give up during this time for your perceived freedom? I also know that owning a business I was never free, I did really well but I worked all the time, and when I was not working I was thinking about it. It didn’t matter if I had 5 or 60 employees it was never ending. Also, most businesses fail so there may be no ROI on this investment. So you need to be careful, hard work alone doesn’t pay the bills.

    If you have the skills and ability to jump a business to $15+M then I can totally see having the cash flow and customer base to hire a non owner vested CEO, COO and then allow them to steer the ship, but anything under $10M typically is pretty fragile. 50% of business is probably driven by one customer and the other 20 – 30% by another small handful then there is everyone else. Things can and do change fast in that world. The examples I can give are endless.

    I used to think being an entrepreneur was the only way too. Until I seen people my age now retired at 50ish, teachers, fire fighters, government workers, state worked with benefits, pensions, huge 401K’s, and stock payouts after the companies they worked for got bought. I love being an entrepreneur but it isn’t the only way. In my family and friends I can name a dozen people that went down this path and sure they are now doing a side gig but their life is basically taken care of. Yet only 2 entrepreneurs I know are in this situation. Not to say most dont have good lives but they are not retired at 50 – 55 and not worrying about anything anymore. Most are concerned specifically with benefits. I know my personal #1 concern is health benefits and the costs.

  • I agree with about 80% of the early retirement philosophy. Things like living below means and staying out is debt is an essential first step.

    My biggest beef is what you pointed out. So many of these people adopt a fear-driven mindset that forces them to live like they are in poverty and in debt when they don’t have to. They are basically mortgaging the prime years of their lives – 20s, 30s and 40s. The reality is the only thing you can’t get back is TIME.

    Depriving yourself of simple pleasures like a $4 latte, eating out and not taking any vacations for years at a time will allow you to save more money, but it comes with real, unseen costs like regret.

    For example, you could be in the best shape of your life, have saved 50% of your income for a decade and be running marathons multiple times a year and still be unlucky and suffer a heart attack or cancer diagnosis at 40. If you’ve deprived yourself for 10, 15 or 20 years (or worse stayed in a cushy job for a decade where you were miserable) simply so that you can save more money and then something like that happens, you are going to have so many regrets.

    By all means, it is still important to be financially responsible and only indulge in treats that you can afford. Instead of saving 50%, why not save 40%? Then, use the other 10% to have some fun and buy your dream car or travel around Europe or eat at fancy restaurants, etc. Sure, it might take you a few more years to reach your early retirement goals, but it is also an insurance policy against at least some future regrets.

  • Gerbz

    I left a beast of a comment but I think it was flagged as spam :( can it be recovered?

  • Many entrepreneurs mortgage their 20’s thinking they’ll be retired at 30. Before they know it they’re early 50’s and still working 60 hour weeks.

    I don’t think this phenomenon is exclusive to early retirement believers.

    In fact as a contrarian I’d say that I had a LOT better work/life balance while in a full time JOB than I do while as an entrepreneur. Way less stress, work was done when I left the office, exercising daily.

  • Pavel Sivolin

    A note from young father: the trouble with MMM cult and FIRE is that children too often are excluded from the equation. Thank you for the episode!

  • So many things that come to mind with this topic. Everything you all discussed resonated with me.

    Starting around 2012, I discovered the FIRE movement and became a card-carrying member of it. I planned to be miserable at my job for ten years. I mean, literally planned…as in, actively thought about what I would do to get through it.

    Well, that didn’t last too long, because by 2017, I turned in my notice and left the corporate workforce. I’ve been on this sabbatical/mini-retirement/journey of self-exploration…whatever you want to call it…for going on 11 months now. And I really feel that entrepreneurship is a fulfilling route. It excites me like nothing else. I think I always wanted to be an entrepreneur, but I never gave myself permission to go after it. Largely because I didn’t think I could succeed. And that’s because I was comfortable…even in discomfort, know what I mean? I thought it was ok to hate my job, to be uncomfortable, to take the path of least resistance.

    Now, the jury is still out on this entrepreneurship thing. But I’ve filled my time for these last 10+ months building skills and even earning some money. I believe in my heart that it can work out for me.

    On the flip side, I don’t think entrepreneurship is for everyone. So while I agree with your thoughts on the competing philosophies of FIRE and entrepreneurship, I think it’s a bit unfair to assume there are only 2 buckets. Some people will never pursue entrepreneurship – perhaps out of fear or just an attachment to stability or any of a plethora of reasons.

    I really loved this episode though. Got so many wheels in my head turning.

  • You bring up an excellent point. Entrepreneurs can fall into this same exact trap. The one difference is there’s at least more autonomy and hopefully have started a business that get a sense of satisfaction from as opposed to an employee staying in a cubicle job that they hate simply to keep saving money for the early retirement dream.

    As for work/life balance, I think this isn’t something people should strive for. If you are constantly trying to balance everything in your life, you are basically going to settle for mediocrity in everything you do. The results come from the extremes.

    A better goal in my opinion is work/life integration. Knowing that you can only really prioritize three big things at any given time. You can shift your focus and lean heavily on one or two things that mean the most to you or need the most attention at any one point.

  • Paul Bleisch

    Agree. I would love to hear more discussion in the FIRE, lifestyle business, and entrepreneurship communities about families. I’ve read/heard a bit of discussion on the topic (including on TMBA podcast) but how are people dealing with the costs of children – both young and older.

  • Yes, you’re right, there are definitely more than 2 buckets. A fact.

  • Nothing like an accusation of blaspheme among cult leaders to fire up the old comments section, I guess? haha

    While I’m working my way through select titles in the back catalogue, this one did inspire me to seek out the 2016 episode interviewing Mr Money Moustache. A great listen, it also includes perhaps my favourite quote among the guests so far – having “f*ck you money” haha

    They’re great cults, but why can’t we be the Boba Fetts of even financial or lifestyle counterculture? Why can’t I be the great galactic bounty hunter of whichever cult suits my needs at a given time? Bootstrapping life or freelancing my savings???

    If we’re to believe that someone can be both working and retired at the same time, which are, by definition, mutually exclusive, why can’t we subscribe to both?

    In fact, why can’t the Money Moustache household subscribe to both? I don’t see how Mrs Money Moustache’s entrepreneurialism violates the integrity of Mr Money Moustache’s frugality…

    I don’t know about you, but I’m leaning toward the dark side, wait, or is it the light???

  • THIS>> We’ve been conditioned since childhood to work hard and fit in to get into a good college. Do well in college to get a good job. Then work hard and save to enjoy a fruitful retirement.

    I kind of feel like I spent a good chunk of life being sold on what’s effectively kicking the can down the road – take the right classes in high school so you qualify for the right classes in university >> go to university so you can get a good job >> get a good job so you can buy a nice house and car and be “successful >> get married so you can have kids >> blablabla >> retire so you can do what you really want

    I often wonder if The Four Hour Work Week was so successful because it gave people permission to ignore the script we’re sold

    Great pod guys, enjoying the underlying narrative of evolving mindset and perspective – would love to hear Ian’s perspective and how its changed (if its changed) on biz/life/etc now that he’s been living the #dadlife for 7.5 months

  • Arunas

    Hey Dan and Ian, thanks for a great episode! I’ve been listening to TMBA for almost 2 years now and you’ve been such an inspiration for self-improvement and a huge source of knowledge and bang-my-head-against-the-wall-doooh moments :D

    Huge fan, hoping one day to meet you guys. Thanks for the great content!

  • TravelShy (:

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