3733: [Part 1] Making Space for Badassity by Mr. Money Mustache on Frugality

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[00:00:56] This is Optimal Finance Daily. Making Space for Bad F***tty. Part 1 by Mr. Money Mustache of MrMoneyMustache.com and I'm Justin Malek. Today I have a bit of a longer post for you. I'll read the first half today then finish it tomorrow. So with that let's get right to part 1 as we optimize your life.

[00:01:20] Making Space for Bad F***tty. Part 1 by MrMoneyMustache of MrMoneyMustache.com. If you're going to become rich, you need to either earn way more money than you spend or spend way less money than you earn. This is the basic math of it, which even the worst complainy pants cannot dispute. The whining usually starts when MrMoneyMustache starts talking about how to implement the ideas I just mentioned.

[00:01:49] For example, listen to the following simulated but very typical conversation as I counsel Joe and Josephine Consumer on how to escape from their current situation, buried under a mountain of debt with no hope for retirement before 75, and instead reach early retirement before their young kids even finish high school. I start by saying,

[00:02:13] So Joe, you tell me it's hard to pay the bills, but I can't help but notice this nearly new Chevrolet Silverado 4x4 pickup in the driveway of your home here in the suburbs. That was a $50,000 truck when you bought it on credit. It costs eight times more than any reasonable vehicle given your financial situation, consumes three times the fuel, and depreciates twice as fast.

[00:02:40] It's like pointing a fire hose of your hard-earned cash straight at your toilet while holding the flush lever down 24 hours a day. So we'll need to sell that on Craigslist tonight. Joe responds, But, but, all my friends at the law firm will think I'm a sissy if I show up with a little Honda Fit. Plus, I need a reliable vehicle because I have to drive to meet clients. And I once hauled a dishwasher with this thing and was thinking of getting a boat to tow with it,

[00:03:09] since we're looking at buying a cottage this year. Plus, I'm underwater on the truck. The loan is bigger than what any dealer would give me for it, and I've never bought or sold anything on Craigslist before because I'm scared of talking to strangers and don't know who I can trust. And I reply, Right. Well, guess what? None of this matters because you won't even be driving to work anymore. That's a sucker's move.

[00:03:36] Y'all are moving to a smaller house within eight miles of your workplace and biking to work from now on. And as a bonus, that's right next to the university where Josephine teaches so she can walk to work. Josephine responds, Now hold up, Mr. Money Mustache. We're all settled in this house in the suburbs. Plus, our kids are starting school soon, and this school district is better than the one downtown. And I'm not walking to work. Winters are cold and slushy here.

[00:04:05] Nor am I biking around town with my kids. I don't even have a suitable bike, and it's dangerous to ride bikes in the United States, and I continue. Got it. So anyway, we'll start cleaning up and staging your house tonight so we can have it photographed for sale next week. You'll start by moving to a rental downtown since renting is a better deal than buying here in Expensiveville. Later, you can buy a fixer-upper fourplex and renovate it yourself over the next few years

[00:04:33] as you develop your do-it-yourself skills. Also, why the hell do I hear your air conditioner running in the background when it's only 80 degrees outside while you keep the daylight out with curtains and use antique 60-watt heaters instead of LED bulbs to light your indoors? And why is your clothes dryer running simultaneously as this beautiful sunshine shines down upon your back porch?

[00:04:57] This casual waste of electricity is burning about $15,000 of your wealth per decade. We'll fix this, then move on to your food, entertainment, child-raising activities, vacations, phone service, and soon enough, you'll have a reasonable 60% after-tax savings rate and be set to retire in your 30s. Joe and Josephine respond together,

[00:05:23] Gah, we can see your wisdom, mustache, but this is all too much for us. We're not really in good enough physical condition to ride bikes. We don't even know how to change a faucet, let alone renovate a fourplex ourselves. The kids are crying, dogs are barking, our garage is piled high with boxes and broken items, and we have daycare schedules, trips coming up for friends' weddings, golf games and happy hours, ski passes, and TV series to watch.

[00:05:52] There's just no time to handle all these changes you want us to make. And now, turning back to you. See, this is what it really all boils down to. Time, energy, mental and physical overload. When your life is already overfilled, it is very difficult to gain the power to make the major positive changes you need to actually get somewhere. In other words, if you want to create more wealth and happiness in your life,

[00:06:21] you might need to clear some space for it first. To be continued, you just listened to part one of the post titled, Making Space for Badassity, by Mr. Money Mustache of MrMoneyMustache.com. And I'll be right back with my commentary. Back in 2010, I started tracking every penny coming in and going out, in a spreadsheet. Back then, I wanted to know where my money went. These days,

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[00:08:10] Thank you to Mr. Money Mustache. I think that last objection is a little different from the one about what the guys at the law firm will think. By the end, Joe and Josephine are being asked to do a lot of work. Even if they agreed with every suggestion, they'd still have to find time to do it all. And that's not easy. For example, selling a truck means figuring out what it's worth, taking pictures, answering messages, and arranging to meet someone.

[00:08:40] Those things might be worth doing, but they don't happen just because you've decided that the truck costs too much. There's a lot of discipline, motivation, and so on involved. So if you hear an idea that you think would help, and your first reaction is that you don't have time, I wouldn't automatically call that an excuse. It might tell you something about what needs to happen first. If every evening is already busy, when exactly would you do it?

[00:09:09] But we're just halfway through this one. I'll finish the rest tomorrow. So for now, thank you for being here and listening every day, and I'll see you tomorrow where we'll finish up this post and where your optimal life awaits. My friends is about to learn and if you say