Early Retirement Extreme

early retirement extreme

Retiring early means new friends.

In a recent post I laid out some money myths designed to keep people trapped in wage slavery. I want to talk today about how to buck those myths and try to achieve early retirement extreme.

One of these myths is that the government sets the retirement age. Some people use the age at which you can collect Social Security as their benchmark. They live their lives with this as the artificial and arbitrary endpoint of their working life.

But what if there was an easier way? What if you didn’t need $2 million in the bank and 40 years of work under your belt for permission to retire?

Early Retirement Extreme

So what is early retirement extreme? The phrase is actually based on a popular website and forum of the same name. Now essentially defunct (because the retiree who ran it actually decided to unretire), it was a place for people to share their stories about retiring VERY early.

From this description we can establish that early retirement extreme doesn’t mean you retired at 62 instead of 65. It means you retired at 40, 45 or even younger.

If you want to learn more about it, check out the book by Jacob Lund Fisker.

How to Retire Early

Retirement can be voluntary, or it can be forced.

Essentially, the only way to retire on your own terms is to reach that point where you are no longer dependent on income from a paycheck. This means you have saved up a lump sum to last you the rest of your years, or you have some saved up but enough passive income streams like rental income or dividends to allow you to meet your daily needs.

Obviously retiring very young leaves you with more pressures. You will live longer and require more money for expenditures.

So how do you minimize the pressures of retiring early?

You cut out all the middlemen in your life and become your own supplier.

Grow and raise your own food. Generate your own power. Other than healthcare, what else do you really need?

By cutting out the middleman, we are cutting out uncertainty – uncertainty over inflation and how much these products will cost in retirement. By doing this, we are taking control of our retirement and not waiting for the retail markets to raise the prices on us.

Retiring early is going to require some conscious spending. We are going to need to spend large sums of money before we are retired (without debt). This will allow us to take advantage of lower prices today.

So what are we going to be spending our money on?

This will depend on what type of retirement you want to have. For me, it means first buying a large tract of land. From what I can tell, this will probably cost twenty to fifty thousand dollars.

Once the land is purchased, the next step will be to save up to build a fully sustainable and off the grid homestead. This will require the capabilities of wind power, solar power, a well for water, etc.

As we save and spend, we get closer to that time when we need no more income to support our lives. Of course this can only be achieved by actually saving up for these items, not taking out loans or notes on them. 

Is Early Retirement Extreme for Everyone?

No way.

Most people will not ever even consider such a retirement. That’s okay. The hard work of others can prop up the system while you drop out.

Most people want to live an extremely social life. They want to move up in society as their peers do. They don’t work hard to retire – they work hard to afford the social trappings that come with money.

Early retirement extreme requires a sense of adventure and a great deal of independent spirit. It also requires a dropout attitude in a culture that invests so much into making sure new generations toe the line and help support those who came before them.

Make no mistake that early retirement extreme is a dangerous threat to the Ponzi scheme that is America.

If you try to engage in it, you will not find any support. More likely you will find criticism and thinly-veiled jealousy.

Why can’t those who want to work and those who don’t just get along?

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69 Comments
  1. It’s actually illegal in Canada to force retirement. The government doesn’t know the individual financial needs of each person so it is kind of unfair to force retirement.

    I don’t know that I’d want to retire that young. I want to be able to enjoy life in retirement, instead of having to scrimp and save, you know?
    Daisy recently posted..No Spend Days: What’s The Point?My Profile

    • Yeah, the pioneer lifestyle is a stretch for anyone. I guess in the US they can just lay you off and force retirement that way.

  2. I just came across your site yesterday and I love it! I’ll be back regularly. This blog is great; Retiring early would be really wonderful! For right now I have to work on getting out of debt. I could certainly learn to live independently if I knew that I would still have money to travel some. I want more years of retirement to enjoy with my husband and family!

    • Thanks for your kind words, Baley. Glad to have you as a reader.

      Getting out of debt is the crucial first step. From then on it’s about building wealth or buying your way out.

  3. Okay, don’t write “the Ponzi scheme that is America” while I’m drinking coffee ever again. I almost sprayed my keyboard.

    At first I must admit I didn’t know where you were going. I have to read this book. Sounds like great “outside the box” (I just cringed as I wrote that….) thinking. Generally, companies that decide to insource everything have found that a low cost supplier is a better option. However, if you’re starting with land and then building a maintainable “off the grid” system, low-cost provider won’t matter anymore.

    I have to think this through more, but I’m fascinated (which doesn’t happen much….). Thanks!
    AverageJoe recently posted..The Best Customer Service I’ve Ever ExperiencedMy Profile

    • I’m glad I was able to stimulate your brain and almost ruin your computer!

      I guess I’d look at my household as a long-term company. Yeah it would be cheaper to just buy power for a certain amount of years, but after that point the savings pay for the system then generate “profit” after that.

      Thanks Joe!

  4. Why can’t we get along? B/c SOME early retirees love to throw it in other’s faces that they are great, and working people suck.

    As Jacob has found out, living in a trailer and not working after spending another 4 years getting his PhD is kind of a waste of time. I don’t think he flaunted his early retirement, so he’s cool with me.

    Have a read of this post and let me know your thoughts! Got a couple hundred comments so far.

    http://www.financialsamurai.com/2010/04/30/the-dark-side-of-early-retirement-risks-dangers/
    Financial Samurai recently posted..A Look Inside Australia’s Education, Investment, Tax, Healthcare & Retirement SystemMy Profile

    • Ha! It is an interesting dance. Someone calls working people crazy or brainwashed, then the working people call the lifestyle designers lazy assholes.

      I call for a truce!

      Seriously though, I try to push these ideas in a completely non-judgemental way. I respect anyone who is doing what they want to do.

      Thanks for reading, Sam.

  5. Early retirement sounds great on the surface, but then that’s a whole lot of time figuring out what to do with yourself. For a lot of people, they’d just get too restless and need something extra to do. It is funny that the guy who was running that site ended up unretiring. it just goes to show that it truly isn’t for everyone.
    Modest Money recently posted..Modesty Reflected In Your ClothingMy Profile

    • I agree. I was going to add a whole part about the definition of retirement, but I am saving that for a future post. I guess the best way to look at it is a retirement from a job, but not a retirement from work. In fact, I actually picture myself working harder in ERE, just not for a boss.

  6. My idea of retirement is to stop working for the man.
    SavvyFinancialLatina recently posted..Don’t Forget the Thank You NotesMy Profile

    • Great point. Not necessary a stop to working, just working for others. Thanks for reading SFL!

  7. I’m going to go with jealousy and wide differences in lifestyle?

    Two of my grandparents died before even making it to retirement, so I have the little birdie in the back of my mind reminding me that I might not make it there either. Early retirement is in my sights, though by early I mean somewhere around 50. As for how I’ll get there, I haven’t gotten much past the “save money” point yet, because I’ve been a little occupied with paying off debt. Your plan for buying a plot of land and becoming self sustaining is awesome though!
    Cassie recently posted..Found!My Profile

    • Thanks Cassie. I always cringe when I hear about people who worked hard with no fun and then passed away before retirement. I feel like they got robbed somehow.

      There has to be more to life and society than work.

  8. I’m not sure I could the the whole live off the grid thing, unless I could do it Urban style. I just like the city too much.
    Go for a geothermal well too for Heating and cooling!
    Brent Pittman recently posted..Just How Bad Can Inflation Get?My Profile

    • In the city I think it’s called Warehouse Squatting, right? :)

      A lot of behavior is done to preserve what we have and maintain a certain quality of life. For some, being alone on the prairie will never be an option, and that’s totally cool.

      I’m an introvert, though, which is why it appeals to me.

  9. I’m all for retiring early but I think this is too extreme for me! :)

    I’m just down to create some passive income and semi-retire at an early age. Although, I really do like this idea and limiting my expenses on food/energy/debt will make retiring at an early age more achievable.

    I’m all for off the grid – who likes people anyway?
    WorkSaveLive recently posted..Recipe: Slow Cooked Beef BarbecueMy Profile

    • LOL – people are a necessary evil for society, I guess. It would be a bonus to be able to retire early with passive income, enough to continue one’s current standard of living. Definitely something I am shooting for, while planning for the exit.

  10. This is a very entertaining post and string of comments! Some of the thoughts in your post remind me of the concepts from the book “Your Money or Your Life.” Getting to the point where you can stop working ‘for the man’ is equally about socking away savings AND cutting your cost of living. Your post is about the latter, which is addressed much less regularly than ‘how to save more.’ Your Money or Your Life recommends plotting two lines on a graph: Your monthly passive income and your monthly expenses, over time. When they cross, bingo! The book calls it the ‘crossover point.’ Thereafter, you can continue with “paid employment” if you want to, but you don’t have to.
    Kurt @ Money Counselor recently posted..Have a Back-up PlanMy Profile

    • I really need to read that book, as I hear nothing but good things about it. yeah, it’s basically the same concept. I guess what I was talking about was forcing the crossover point much sooner. Once you have your living expenses covered, either by money or sweat equity, what’s left to work for?

  11. Wow, retiring at 40 or 45 seems very young indeed! But a thought-provoking article, nonetheless! I’ll have to read the book you mentioned when I get some time.
    Benjamin Feldman recently posted..Does Debt Consolidation Hurt Your Credit?My Profile

    • Hey Benjamin, thanks for stopping by! Glad to put forth some ideas to get people thinking about life and society.

  12. I’m with some of the other commentors. If i were still working at my corporate job, i would defenitely want to retire early but i would need to be able to do the things i love in retirement like travel, see the world, eat baguettes, drink wine, eat pizza in Italy.

    If i could live off the grid and have that as my homebase i would do it as long as i could do the above things i mentioned.

    Having said that, my idea retirement is what i am doing now. Living abroad and making a living doing something i’m passionate about so that work doesn’t feel like work. I need to keep busy and feel productive and help people. I don’t mind working it’s doing work i hate that i hate.

    ps
    My brother in law is building the exact retirement you are talking about. He lives in Virginia off the grid, in a huge solar powered Yurt with a well and plenty of land and dry food to last a life time. we only visit once a year and then we head for our hotels. :) WINK
    Annie Andre recently posted..The Secret To Long Term Travel and a Location Independent Lifestyle pt#1My Profile

    • Very cool that your brother is putting that together.

      What you are up to now is exactly what I’m striving for: a system that affords you to do things that help people, things you love.

      To be able to wake up and know that I only have myself to answer to is what I’m after.

      Thanks Annie!

  13. I am trying to retire by 1st Jan 2014. I don’t know whether I will be able to make it or not; but yes ! I will be very close to it. Thanks John for suggesting the book. I am certainly going to read it. May be it will hasten my retirement.
    Get Rich Point recently posted..Debt ConsolidationMy Profile

    • Awesome that you are so close, GRP!

      It certainly takes a lot of hard work and discipline to retire early, or even retire at all it seems. Congrats!

  14. There is a middle ground to the off the grid type of retirement. I’m still planning on retiring very early around 50 but I’m able to find a balance between aggressive savings and living a good life now. All the decisions I make are weighed against the dual goals of retiring early and enjoying life now.
    You mention passive income and dividends – two areas I’m focused on for income in retirement.
    Early retirement can be achieved but you have to be willing to do what it takes to get there.

    • Great points. Retiring early requires one to make that decision early on and have some big wins in saving money and setting up passive income. Making mistakes is almost not an option. Thanks for reading, AJ!

  15. Early retirement has its pros and cons. The pros are that the retiree can spend free time focusing on their passions and leisurely pursuits where they wouldn’t be able to otherwise. Also, there’s a lot to be said for not having to follow company rules, and going about your day strictly on your own terms. However, the downside is that if you don’t have some type of activity to occupy that free space, you stand a much greater chance at dying early (at least this is what the medical experts have said).

    Retiring early can be a good thing if you can swing it. However, don’t spend the remainder of your life wasting away on your living room couch.
    Anthony Thompson recently posted..Self Management – Strategies for Handling Verbal ConfrontationsMy Profile

    • Hi Anthony – I would say that dying early would be a big risk if that does indeed happen to early retirees. I’d be interested in seeing some studies on that – can you recommend any?

  16. I want to quit my corporate job and do what ever the heck I want. I call it retirement, but I won’t stop working completely. I’ll be a stay at home dad and work part time on my blog and other websites. When the kid goes off to school, then I’ll have more time to try other things.
    Who knows, maybe I’ll find a job that is a perfect fit and come out of retirement too.
    Joe @ Retire By 40 recently posted..2012 Goals and Resolutions – Spring UpdateMy Profile

    • Everyone should check out Joe’s site Retire by 40, as he is an example of how you can retire early, the right way. I always love to be able to point to people like Joe when critics lean towards saying retiring early is irresponsible.

      Thanks for reading, Joe!

      • A simple thought here that I brought up with my dear wife the other day. Since she’s a SAHM (as opposed to a SAHD like Joe), I asked her how her retirement was going so far.

        Strangely enough, she’s such a sweetheart and probably used to my semi-sarcastic comments, that she didn’t even slap me. Taking care of 1 child is somewhat difficult … taking care of 4 kiddos is a feat in itself … taking care of 18 or more is just crazy.   :-)

  17. I’d like to get to a point where I can cut back and consult or do freelance work for a fraction of what a corporate career would pay. But I think I would miss the intellectual stimulation of paid work… so maybe instead of early retirement extreme, I’m going to shoot for financial independence. And then I can work for the sheer joy of it. ;)
    Well Heeled Blog recently posted..Are You an Abstainer or a Moderator?My Profile

    • That’s a great approach – you could probably work out a contracting agreement where you work 6-9 months out of the year during the busy times and relax the rest of the time. Thanks for stopping by!

  18. Great intro. for those who the early retirement idea is new.

    I would highly recommend you read Your Money or Your Life. The stories are entertaining and the exercises are insightful if you take the time to do them. I would read this one before Jacob’s book. His is great as well, but you need to be ready to do some mental work before tackling it.

    I like your idea of retirement. Like you I’m an introvert (INTJ if that rings a bell). I think for us introverts the idea of homesteading somewhere is appealing.

    I have to confess, up until a year ago I was ignorant of the early retirement idea. I still don’t get the rift between the “workers” and “retiree” mindsets. To me, share the idea, let people apply it to their life if it meets their needs and be happy. That said, I have always been guilty of being and idealist. :-)
    The Stoic recently posted..Changing Your Life By Working Abroad: The Fun StuffMy Profile

    • That book is definitely on my reading list. Definitely agree about the introvert thing, and how our social needs can shape our retirement.

      Thanks for reading!

  19. Guilty! I read this and had a light-bulb moment. — I don’t have to wait until I’m 65 to retire? What? It never occurred to me to set up a plan and get out of the workforce early! GREAT post, thanks for the thoughts!
    TB at BlueCollarWorkman recently posted..Hearing Gunshots on the JobMy Profile

    • I think cultures find the easiest way to pass on education, and early retirement is a bit too complicated and off-topic to fit easily into mass marketing. Plus there is no money to be made off early retirement (maybe…)

      Thanks for reading TB!

  20. Great article, one that really inspires. I hope to retire early and am doing everything possible to do just that. You only live once.
    Jeremiah recently posted..How To Save Money On A New Cell PhoneMy Profile

    • Thanks, Jeremiah. Glad to see you are thinking about it, which puts you closer to it than a lot of people. Glad to see you.

  21. I totally respect the pioneer lifestyle, but I honestly could not do it. I lived on a farm for years, and I don’t want to do it again. I’m not even a social creature (very introverted). I just don’t like to weed :-)
    Christa recently posted..Kid’s Recipe: Fruit SkewersMy Profile

    • Ha! It’s either weeds, dust or grass when living in a rural area – or concrete in the city. My dad grew up in a farming village in Europe and I think he felt the same way, though he didn’t exactly stay in the city.

      Thanks for reading!

  22. I use to read ERE before it went defunct. It kinda takes the wind out of the sails when the main patriarch of the forum goes against his own theme.

    But regardless – early retirement is a reoccurring theme that I discuss often on MyMoneyDesign. My goal is combine both aspects – traditional retirement plans with strategies for creating passive income. No being a hippy, growing my own cotton to make my own clothes, or any of that nonsense. I believe that a modest lifestyle, appetite for wealth, and some skill at picking the right means to income generation will lead to financial freedom at any age.
    MyMoneyDesign recently posted..Why Is It So Hard To Buy Something?My Profile

    • Yeah, it really does get to the heart of what retirement is and what it means to each person. What he truly had was the freedom to do what he wants. Nothing if he chooses, or quantitative trading if he gets bored. It certainly helps that he was a high income earner.

      Thanks for stopping by!

  23. Didn’t know you were looking to get some acreage. It’ll be interesting to see what you finally end up with. Just today I took a ride with a friend on his newly purchased 30 acres. He’ll be building a “generational” home on it, meaning that he has no plans to ever move again after it’s built.
    101 Centavos recently posted..Bonuses and IncentivesMy Profile

  24. People are obsessed with the word, “retirement.” I prefer not to think of it like that. As long as you are doing something that you love all the time, why retire? Find what you love to do all day every day and figure out a way to monetize it.

    This reminds me of the book, The 4-hour Work Week. I recently started listening to it via audio book, but quickly realized that it doesn’t apply to a blue-collar trucker like me. It started to bore me, so I only listened to 3 of the 7 discs.
    Matt @ RamblingFever Money recently posted..Where To Tithe When You Don’t Regularly Attend ChurchMy Profile

    • My buddy just listened that book on audio. It does get kinda boring near the middle. It really did change my outlook on life, but I work in an office setting. As a married person, I found that a lot of it wasn’t geared towards my demographic, but it was neat to think of ways that a married family could make some of the ideas work.

      You are right, though – it does come down to the word “retirement” and what it means to each person.

  25. I disagree that you need to live off the grid to retire early. There are many other ways to achieve this goal. A low income/expense ratio can get you there as well. Or you can put in your 20 years with the military. Or you can get lucky with a “startup.”

    There are many paths to early retirement, and having your children pedal stationary bikes for lights at night or traveling the world can or cannot be part of your plans.
    Bichon Frise recently posted..Why you should use 5 year CD’s for your emergency fundMy Profile

    • It’s definitely not the only way to retire early, but it’s probably the only way to cut out the “middlemen” in our life and to be truly reliant on ourselves for our needs. ‘

      Certainly making a couple million on a startup would free you from the price pressures of life, but you’d still be dependent on others for your consumption.

      Thanks for weighing, in, Bichon.

  26. Cut out things like cable and unnecessary beverages and you can save $2k per year. There are other things that can be lived without too. Start adding those things up and if you can do without them, you can retire a lot sooner than you think.
    JAMES recently posted..9 Super Stocks For the Long TermMy Profile

    • Those are great ways to save money. Can’t quite convince my wife to drop cable, but I’m working on it. I personally don’t love cable more than I dislike working until I’m old.

      Thanks for commenting!

  27. I think I would be too bored if I retired early. I actually enjoy my work most days so long as I’m not completely overwhelmed. Instead of retiring, I think I would maybe just work less so I had more time to do the other things that I enjoy.
    Mike@Investing in Silver recently posted..Identifying Fake SilverMy Profile

    • Hey Mike – glad to hear that you enjoy your job. An arrangement where you work less and have more free time sounds like a great compromise.

      Thanks for stopping by again!

  28. I think everyone should find out when/if the best time for them to retire is, and leave other people alone. I will probably be one of those people that never retires, just because I enjoy working/being productive. But I’m still saving and investing for retirement by the time I hit mid 60′s. Of course this timeline might change as I get older and hopefully I can have the option of retiring sooner if I want. But it’s definitely a personal decision for each of us.
    Carrie Smith recently posted..Jaime Tardy Interview: Becoming an Eventual MillionaireMy Profile

    • Thanks Carrie – I agree. I hate when people make judgements about others based on how they view work. It helps no one to call each other names. The economy is plenty big for all types.

      Thanks for reading!

  29. Love the post! My husband and I actually want to do this! We want to build a self sustainable house so we can live off the grid if things go sour!
    SavvyFinancialLatina recently posted..Gender Roles in BusinessMy Profile

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