Should it be this easy?

[minority_finance_mo]

It seems to me that every post I read someone is talking about how they just got a pay bump into six figures, or bumped up their net worth another 100K+ this year. I know there is some selection bias in the folk posting on this site (and in those visiting MMM in general), but the growth numbers are pretty outstanding.

My own numbers scare me a bit as well. I'm pretty early in my career, and at the current pace could retire in less than a decade (around the age MMM retired). And I definitely do not feel like a really badass mustachian - in fact I've had firehose levels of wasteful spending the past few months. My question is: should it be this easy? And if so, why the heck aren't more people doing it??

[marty998]

My question is: should it be this easy? And if so, why the heck aren't more people doing it??

Because they failed that infamous marshmallow test when they were 4.

[Zikoris]

I'm continuously amazed at how easy this FIRE thing is once you've got your system in place. I haven't put any serious effort in since around early 2012, when I finished laying all the foundations. I just throw most of my paychecks into index funds every couple of weeks, live my normal life, and watch those numbers grow.

[SwordGuy]

Well, first of all, median family income in the USA for 2015 was $55,775.   That varies by state.  See http://www.census.gov/library/visualizations/2016/comm/cb16-158_median_hh_income_map.html

So, by definition, half of all families are making less than that.   Those families are darned unlikely to be increasing their net worth by $100,000 a year at  a young age.   

And, of course, only about 74% of US families are making less than $100,000.    https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/ 
Obviously, it's a lot harder to grow your net worth by $100,000 a year when you make less than that.   Still possible, but definitely hard.

Now, for the 26% of US families making more than $100,000, it's a whole lot easier.

So, even if those families have the same annual expense of $30,000, the higher income families will pull ahead a whole lot easier if they act accordingly.

That said, if a family can get a surplus of $12,000 a year, and invest/re-invest it such that they earn, on average, 7% over inflation (the historical US Stock Market return) at a very low fee, they can expect around $1,000,000 at the end of thirty years.    https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator

Frankly, barring illness, legal bills, or some other tragedy, any family routinely making $75,000 or more a year and entering their retirement years dead broke has no one to blame but themselves.   Any family routinely making $100,000 or more a year and entering their retirement years without a good sized nest egg has no one to blame but themselves.     (For those who are self-employed, "Making $x a year" means your salary and profit, not your gross income before expenses.)

For those who have a family and a family income below the median level, well, they have a much, much tougher time of it.   If they can routinely invest just $300 a month they could expect to have over $300,000 in 30 years.   That may not be enough to retire on early, but it's a hell of a lot better than a lot of American families manage.

For most American families, again barring illness, legal bills, or some other tragedy not of their making, a comfortable retirement is a distinct and predictable possibility.   For some their income is so low it's very unlikely unless they can get their income up to something in the ballpark of median family income.

[gliderpilot567]

It is exactly the same and the exact opposite of the typical consumer sucka model, which is to (very easily) take on lots of debt, whereupon the debt grows and grows very easily without you having to do anything.

The feedback loop works the same whether the principal number is positive or negative. Push it just a little bit enough away from zero, and it tends to run away by itself in an ever increasing first order equation. If you keep adding to it along the way (whether debt or wealth), it grows faster still and becomes even harder to stop.

This is why having even a small amount of invested money (and minimal to no debt, obviously) makes such a huge difference. The stash will grow back if you have to take some of it for an emergency.

It is easier to go from poor to rich, than from "middle class" (or rather, indebted consumer sucka) to rich. The truly poor person (at least the poor person with no debt) doesn't have the massive negative forcing function of monthly debt payments that the consumer sucka has holding them back. If the poor person and the indebted sucka both manage to save just one dollar, then the poor person is further ahead because the sucka's debt and interest on it mathematically cancels a lot of the growth potential of that saved dollar.

[HappierAtHome]

If you earn a high income, yes, it's this easy :-)

[okits]

It seems to me that every post I read someone is talking about how they just got a pay bump into six figures, or bumped up their net worth another 100K+ this year. I know there is some a lot of selection bias in the folk posting on this site (and in those visiting MMM in general), but the growth numbers are pretty outstanding.

SwordGuy laid out the numbers for you, but if 3/4 households don't make six figures a year, an even bigger proportion of individual earners aren't cracking the six-figure mark.  If this board were representative of the U.S. population then nowhere near "every" post on here would be about $100k pa pay or NW increase.  (And, while plenty of people on here achieve this, there are lots of posters who don't earn that much or see their NW rise that much in a year.  Their posts may just not stand out as much because their numbers seem more commonplace.)

As far as the "should it be this easy?" question, you are asking on here, so you're really asking if Mustachians find this easy.  Ask a non-self selected sample of people if you want answers representative of the broader population. 

[Guesl982374]

And if so, why the heck aren't more people doing it??

I agree with most of what has already been written. As far as why more people aren't doing it? Prior to finding out about MMM, I was saving 20-30% of my income and allowing lifestyle inflation to take place as my income increased. Seeing 'everyone else' take trips, buy luxury cars/SUVs, living in fancy houses/big city apartments, eating out 3-5 times per week and being exposed to advertising makes it all seem normal. There's no profit in advertising to encourage people to lower than monthly expenses to save/invest/FIRE.

[wenchsenior]

I'd guess that compounding interest doesn't feel 'real' to many people in the abstract. It didn't to me, despite that I came from a family of business types and my father owned  his own business and retired with a couple million at 55. But I wasn't very interested in math or business, and didn't bother to think about saving until I was out of college, which didn't occur until I was close to 30 because of grad school. I figured there wasn't much point until then...I was living in a one room studio for nearly 10 years, sleeping on a futon, and driving crappy old autos. Did I waste money? Yes, but not THAT much and not on the 'big things'. I also didn't earn much.   

Once I started 'adulting', I had student loan debt, a car payment, and a new house payment. So money felt just as tight, and I felt proud just putting match into the 401k, and gradually increasing from there. It wasn't until we cracked about 100K of gross income, paid the student loans off, and accumulated 100K in savings that I started 'seeing' the possibilities. Then it started feeling real, and we started focusing hard on it and made fast progress.

There are a lot of analytical, planning-oriented, personality types on this board, but that is a self-sorted selection. Most people don't run numbers or think hard about this stuff until they've already missed their optimal saving/investing window.  And most of them don't earn 6 figures/yr+, which definitely makes this a lot easier.

[Slee_stack]

Spend far less than you receive in income and it really is super easy.  The actual magnitude of the numbers don't really matter.

Luck (birth place, genetic advantages, early role models, etc.)  plays into it, but that's out of one's control.  One can only choose to try to earn more and spend less.  That part also usually involves discipline and sacrifice.  Not everyone feels its worthwhile.

[CheapScholar]

Just think about how many people wouldn't even CONSIDER applying more money to their outstanding mortgage (after buying the biggest house the bank would let them), putting more than the minimum into 401K/403B, open investment accounts.  As stated by a few people above, we live in a spend society.  I was just reading that half of Americans have little to no savings. 

I'm still amazed how fiscally irresponsible some of my friends and family members act.  It's a world of private mortgage insurance, Starbucks coffee, dinners at restaurants, gas guzzling SUVs, new clothing every month, etc.

It is easy to FIRE for most Americans who grew up in a decent home and were lucky enough to get an education, and avoided serious setbacks.  Consider yourself lucky that you see what is obvious and just go with it.

[Mr. Green]

My question is: should it be this easy? And if so, why the heck aren't more people doing it??

Because they failed that infamous marshmallow test when they were 4.

Damnit! I knew that test was going to mean something someday!

[Counting_Down]

My question is: should it be this easy? And if so, why the heck aren't more people doing it??

Because they failed that infamous marshmallow test when they were 4.

+1,000,000

[BrokenBiscuits]

Choose Life. Choose a job. Choose a career. Choose a family. Choose a fucking big television, choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of fucking fabrics. Choose DIY and wondering who the fuck you are on Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing fucking junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, fucked up brats you spawned to replace yourselves. Choose your future. Choose work… But why would I want to do a thing like that? I chose not to choose work. I chose somethin’ else.

Earn more, spend more is pretty standard, but When you Earn more, and so, save more it does become fairly easy to grow your stash. Personally, I'm hardly the most frugal person and have increased net worth by more than my income 2 years running now.

I've still got quite a few years left at this working game but even now, with a couple of years income saved, I seem to be the least stressed at work right now.

[Iron Mike Sharpe]

Choose Life. Choose a job. Choose a career. Choose a family. Choose a fucking big television, choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of fucking fabrics. Choose DIY and wondering who the fuck you are on Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing fucking junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, fucked up brats you spawned to replace yourselves. Choose your future. Choose work… But why would I want to do a thing like that? I chose not to choose work. I chose somethin’ else.

Earn more, spend more is pretty standard, but When you Earn more, and so, save more it does become fairly easy to grow your stash. Personally, I'm hardly the most frugal person and have increased net worth by more than my income 2 years running now.

I've still got quite a few years left at this working game but even now, with a couple of years income saved, I seem to be the least stressed at work right now.

[tonysemail]

it's pretty easy when the stock market is up and inflation is down.
the last few years, it has felt like someone enabled the cheat code on a video game.

[Slee_stack]

it's pretty easy when the stock market is up and inflation is down.
the last few years, it has felt like someone enabled the cheat code on a video game.

Cutting back spending is easy regardless of the market.

Diversification is as boring as paint drying and puts one a slower moving train.  I've sat through all the downs of the stock market of my lifetime as well.  Still 'easy'.

[accolay]

And if so, why the heck aren't more people doing it??

Complicated answer to a simple question. Because most people don't really know what to do with money except spend it. It's the American Way. People have little to no financial education and if they do get any financial advice more often then not it's shit, myself included. A relative once advised me that "money is made to be spent." People on the lower end of the income scale and poor people aren't who we're talking about here: MMM has always been for those of middle income or above. Before I started reading MMM, it never occurred to me that I could retire early because that's a fucking crazy pipe dream idea that only rich people think about. My idea before this was to be able to get my living expenses as low as possible ...so I would have more money to do whatever. Researching how to invest some of that surplus I came across an article about Pete retiring at 30.

Like most people here my coworkers are the Normal American Spender- and shitloads of them don't have $1000 to their name. It freaks me out that they have such a garbage financial position, but it's not given a second thought. Fuckers who have worked for years on middle class income. It just never occurs that money problems aren't because of overspending, it's because of X that is out of their control: because they have kids, or evil taxes, or the government, or whichever scapegoat is clickbait that particular week. Nothing to do with the commute or the big suburb house or the new truck, or eating out or whatever. I don't expect everyone to retire early, but maybe only to be able to retire at all. These people I work with are people with solid middle class incomes, union benefits etc. Maybe they're planning on staying until retirement and getting the pension, but that's a long way away when you're in your 30s and 40s, right? Spend now, live today. There's more to it than this, including our whole economy and spending/credit norms, but you get the idea.

[BTDretire]

My question is: should it be this easy? And if so, why the heck aren't more people doing it??

  It helps a lot that VTSAX is up 80% in th last 5 years, (includes dividends).
At least if you had any money 5 years ago.

[Bateaux]

It can take a long time to get here.  Some faster than others.   2016 may work out to be the first year that our accounts grow larger than our paychecks.  Mustacians often can retire when their investments replace half their income since amny save more than half their pay already.  I want a bigger safety net

[Paul der Krake]

Regarding people posting their accomplishments: this board has hundreds of active members.

You are seeing the curated version of the interesting portions of our lives: the pay bumps, the yearly milestones (especially at this time of year). Not the $6 dividends that don't quite pay for a burrito. Not the days where nothing interesting happens and we sit around in our underwear.

There are enough of us that it can give the false impression that everyone is making out like bandits all the time. Add to that the very successful outliers and it's easy to start wondering if there's something wrong with you.

[Mattzlaff]

I find at the start it is so easy to focus on what everyone else is talking about(raises, realestate, actually being FIRED) and harder to see that it does take a lot of work and a lot of patience in growing ones personal stash. For some it's a slow process. I have read the blog and been on the forums either active in conversation or just lurking for many years now and I'm still far from where I want to be with my spending goals.

It's easy to see some one get a pay raise and say "oh they're doing much better than me". But you may not entirely know what's going on with their financials, they may be a little in debt and you not in any debt. They may have a 500k mortgage and you may have 60k. Who's doing better depends on the choices each is making with that raise.

It's also easy to drop a post saying "yeah I've gotten a 11% raise this year" but harder to acknowledge and definitely something that many people shy away from is how much they actually spent this year in comparison. For example, I got a 11% raise this year in total. However I spent 3k on hunting equipment and 2k on motor bike parts.

Or as a better example. This year I calculated I have saved something like 42%. This includes my pension, work savings plan, personal investments, mortgage payment% towards equity ect. In reality I could have very much saved more but I made my post patting myself on the back regardless and did not once mention that I could have done way better(by not getting my hobby stuff)

[UKMustache]

Try harder not to compare yourself with others, seriously.

There was an article on the BBC recently that found people that actively used social media over the festive period are more likely to be unhappy with their own life because others appear to be doing Christmas in a bigger, better, happier way than they are.

This board is an extreme version of that, there's a lot of readers (myself included) that make reasonable salaries but are still making steady progress. 

Those that take the time to post tend to be represent the two extremes.
"I've just found this site, please help" and "We have so much money I don't know what to do with it".

Also remember that you're picking up some of these posts after missing the first 10, 15, 20, 30 years of the story.

[Much Fishing to Do]

I liken it to running a marathon.  Just about anyone can do it. Some start out of shape, some start in pretty good shape, but they all can get there fairly quickly.  Once you get started training its just about habit and a little bit of doing things smartly and a little good luck to avoid injury that will prevent the goal from happening.  Once people go out for a 5 mile run its not a big deal to then go out for 6 mile run.... and etc...

A lot of people say they want to run a marathon, but few do it, because few start training.  Starting is hard, because you have to create the habit.

[ender]

Regarding people posting their accomplishments: this board has hundreds of active members.

You are seeing the curated version of the interesting portions of our lives: the pay bumps, the yearly milestones (especially at this time of year). Not the $6 dividends that don't quite pay for a burrito. Not the days where nothing interesting happens and we sit around in our underwear.

There are enough of us that it can give the false impression that everyone is making out like bandits all the time. Add to that the very successful outliers and it's easy to start wondering if there's something wrong with you.

I think the journals section is where you see more of the "monotony of life" aspect, too.

As an example, my journal (see my signature for shameless promotion) is a lot more a slow and steady progress rather than big flashy events continuously.

[YoungEwok]

should it be this easy? And if so, why the heck aren't more people doing it??

Yeah, it's as easy as everyone on this forum make it out to be!  I believe that the problem with the average person, though, is they do not view efficiency, finance, and money related things as a hobby.  None of my friends at work - except one - cares about what they do with their finances.  My one friend that does is a little interested in churning, and we compare our Vanguard accounts all the time - we make it a competition.  The rest of them, however, don't invest any free time in learning about finance related material.

Part of my free time is spent researching trips, and how I'm able to get the best deals on them, or just on churning cards in order to finance them.  I find this fun, and a reasonable way to spend time. 

[Prairie Stash]

It seems to me that every post I read someone is talking about how they just got a pay bump into six figures, or bumped up their net worth another 100K+ this year. I know there is some selection bias in the folk posting on this site (and in those visiting MMM in general), but the growth numbers are pretty outstanding.

My own numbers scare me a bit as well. I'm pretty early in my career, and at the current pace could retire in less than a decade (around the age MMM retired). And I definitely do not feel like a really badass mustachian - in fact I've had firehose levels of wasteful spending the past few months. My question is: should it be this easy? And if so, why the heck aren't more people doing it??

My number growth for NW is composed of multiple parts
House: up 3%/year on $300K - $9,000/year
Investment gains - 7%/year on lets pretend  $300K - $21K (actual numbers are not used, this is for illustration)
Work Pension - $4K
Savings - $50K

that's how I would get an $84K off $100,000 gross salary. I lose $20K to taxes, live off $30K save $50K and NW goes up $84K. Since my portfolio is increasing by 60K/year I get another 3K/year (the power of compounding) in NW so in 5 years if I do nothing I'll be increasing NW by $100K/year.

That's how its so easy, as you progress the portfolio starts doing the heavy lifting. Don't compare yourself to people half way there when your still starting out, its not a fair comparison.