It is commonly accepted that in the long term, stocks have offered a 10%+ annual return.
Even inflation-adjusted, it looks like from 1950 to 2009, stocks have average a 7% return, assuming dividends are poured back into the portfolio:
http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htmThis is very good.
However, in that very article, it concludes:
"As can be seen, the stock market was very profitable, in real terms, in the 1950 to 1965 and 1983 to 2000 periods. On the other hand, it didn't perform well from 1965 to 1983, and neither it did for the last decade. Still, during these periods, it partially worked as a shelter from inflation."
So you can see that there are 15-20 year periods of amazing growth, where investors made a killing, and 15-20 years where they were getting killed.
If you happen to be in that 15-20 years of prosperity, you're doing very very well. If not, you're doing very badly. Look at the chart from 1965 to 1983, and from 2000 onward.
The problem with all this is that we don't choose which time period we start investing. If I graduated college at age 22 and aimed to retire at age 32, and this time period was in the 2000s onward, following the passive index-investing advice would not have yielded me great results. I may be doing okay at age 52, but my aim is to retire at 32. At 32, if my inflation-adjusted return is -3.4%, I'm not ready to retire. I have to keep working.
Mr. Money Mustache's main source of passive income is from his rental properties, and he and his wife do a lot of little projects here and there. They also have the skills to get above-average paying jobs if necessary. Long story short, they have a lot of safety nets.
TLDR
The good news: from 1950-2009, a period of 60 years, the market returned 7% over inflation.
The bad news: if a person aims for 10-year retirement, they better hope they aren't unlucky enough to be investing in one of those 15-20 year recessions, or they better have some other sort of income that can let them wait out the recession periods, because the last thing you want to do is start selling your holdings to pay for living expenses when the market is stagnant (or worse).
Of course, Mustachianism isn't just about 10-year retirements - it's about being able to do the things you love (and maybe those things put money in your pocket) and learning to be content with very little. But this is just food for thought.