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Mr. Money Mustache Reveals a Huge, Hidden Obstacle to Early Retirement

By Brian Stoffel - Updated Mar 7, 2021 at 9:56AM

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It's not healthcare costs or the size of your nest egg.

Early retirement is just for the super rich or those who are willing to eat ramen for breakfast, lunch, and dinner. Right?

That might be the narrative that many people assume. But Pete Adeney -- who is better known as Mr. Money Mustache -- would argue that's far from the truth. While he's certainly sympathetic to the fact that many people struggle to make ends meet, he thinks far more people could retire early than they realize.

In the Motley Fool Live video clip below, recorded on Feb. 23, Adeney talks with Motley Fool contributor Brian Stoffel and longtime guest Morgan Housel about the huge mental and emotional reason that most people don't realize how easy early retirement can really be.

Pete Adeney: A lot of these people really could afford to retire if they just do a little soul searching and realize like, "You know what? I don't need this multi-million-dollar CEO job and it doesn't really fill my soul very much, so let's just do something else."

Morgan Housel: How much of that do you think is people moving the goalposts? That maybe, when they're early in their life, they think, "If I had $100,000, I'd be set." Then they get to $100,000 and they think, "Okay, if I had a million," and then, "If I had two million," it's just a constant chain that you were able to fight that goalpost but for other people, it's just a never-ending hamster wheel.

Adeney: Yeah, it happens a lot and that's actually a big part of what I do as a writer and in person, I council people to stop moving the goalpost and say, "All right, you can quit, you should quit."

We used to have these annual retreats to Ecuador for about 25 blog readers, and there would always be one or two people who after talking through their numbers with each other and with us as the host to that event, they would announce at dinner like, "OK, I just want to announce that I sent an email and I quit my job, and I'm going to retire as soon as I get back to the United States." Everyone is like, "Yay!"

It's like alcoholics anonymous situation except more of a success-aholics anonymous. Because when you're in that position, you're surrounded by other people in that position so they think it's normal that you just keep going up and up in your career to the expense of almost everything else. Like maybe you play squash or maybe you collect fancy cars or something, but really, it's a very one-dimensional life. Yeah, I think it's a really good to question yourself and say, "I'm not going to go further and I'm going to challenge myself in other areas as well."

Brian Stoffel: You just talked about how you created something where you could give people the space to make that decision. Did someone do that for you? I know you've written about how part of it is just how you were raised. Were there any other influences in there?

Adeney: I don't think so. I'm strange in that I'm in my own little world, and that's maybe why my blog and my writing has struck a chord because people are, "This is strange that Scott does not talk like other people that I have previously read about." Yeah. To me, it was just a logical thing. I just thought, well, I'm making more money than I'm spending, so what's the logical thing to do with surplus money? Then I realize, well, I noticed my weekends could be a little bit longer. Perhaps, we could optimize out the workday part of our lives. So I just read up on how much you need to retire and I just calculated it based on regular stock market expected returns, and then just quit. That was a rush for me. I mean, I wanted to do as soon as possible. No one had to push me. Say like, "you're ready to retire." If anything, I did it sooner than most people would have counseled me to do. Yeah. Most people will do the opposite. They wait till they have $3 or $4 million dollars and they are still thinking may have to pad it a little bit more, and it's pretty much never the case.

Stoffel: Just on that point real quick. One of the things I've learned from you is that just because you retire, and I think we almost need to do away with that word, but whatever word we choose. It's not like that has to be the end of your earning potential. If you get to a point where you've got enough to support 75% of your minimum income needs, you're probably going to figure out how to get that other 25 and have a lot more freedom, and that's something that I really appreciate that you put out there because I think a lot of people think of it very black and white, and you're like, "Look, it's not like your life ends when you quit this corporate job. There are other things that you can do, and some of it you get paid for and some of it you don't, and you'd be surprised how things unfold."

Adeney: Yeah. By the time you get to about 75% funded level, what that really means is that you have 15 or 20 years of living expenses saved up, so you have a 20-year headway. If you realize the plan isn't working out, you still have 20 years to think about it before you ran out of money. I often joke like, "Well, if this didn't work out, I can go back to school, get a medical degree, become a doctor, and then have a full-on doctor job with high salary before I ran out of my previous savings." Just as one silly example that I wouldn't actually want to do. Then now, that would not happen because I have multiplied my savings even more since then just through good luck and not expanding the lifestyle. Yeah. It's true. Think the income is a possibility. Also, when people are getting ready to consider financial independence, you should also never look at your spending level as fixed. People all think, "This is my expenses," and instead, encourage them to use the word, "These are my spending choices," because you could spend any amount of money, including zero if you're resourceful enough. You can have luxurious life on zero-spending if you have a good enough friendships, and let's say you do house-sitting for people and barter everything and people just like you and to give you money it doesn't happen often, but that's hypothetically possible. You take that extreme and then you take the opposite extreme, like I need $20 million to live, and you can choose where do you want to be on that spectrum.

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