I’m building an army of some tough sons of bitches.
I’m recruiting my army from the orphanages.And if a shooting star goes by,
— Dylan, “Thunder on the Mountain”
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Aims to Provide Truly Practical Advice.
Most money sites appear to be practical. They avoid discussions of theory and focus on “News You Can Use.” Ironically, that bottom-line approach often does not produce good bottom-line results.
It is only by getting the theory right that you can identify effective action steps. My aim with this site is to save you time not by writing short articles, but by writing articles rooted in money management ideas that hang together and that will generate more benefits the deeper you explore them and the more often you put them to use.
A strong tips-oriented article hands you a few fish. A strong theory-oriented article (preferably with some tips attached as illustrations of how the theory works) teaches you how to fish.
I make demands on my readers. I do so out of respect. I envision my reader as a man or woman who cares enough about the topic to be willing to work it a bit. I never add words just for the sake of adding words. I add words because I believe they are needed for the article to achieve its desired effect. Ultimately, I see it as impractical to provide you with tips without supplying you with an understanding of the ideas used to generate the tips.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Takes Its Subject Seriously.
Too often you will be reading a thread at a Retire Early board and someone will say: “I could find evidence to support what I am saying here but that would be too much like work, har-de-har-har!” Yuck! That sort of thing sickens me.
I like jokes. I give extra credit to posts that include jokes as well as strong ideas. But it is never appropriate to treat the money ideas themselves as jokes. When someone is telling me how to save or how to invest or how to advance in my career, I want to know that he has thought through what he is saying and that he is trying with the best of his ability to get it right. Tell me that you can’t be bothered to think through your point well enough to be able to present your case effectively and I find more important things to do with my time. A measure of sobriety is called for when dollars are on the table.
Jokes have their place. I see it as one of my jobs to see to it that the jokes stay in their place.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Does Not Exclude the Typical Middle-Class Worker.
A small percentage of the population holds most of the wealth. Most advertisements in money magazines are aimed at that segment of the population. So the editorial content of most money magazines ignores a big percentage of the population.
It is my aim to attract people who earn typical middle-class incomes to this site. These people have a lot to teach us. One thing they can teach us is that it’s possible to live a perfectly fulfilled life without buying every new gadget that comes on the market. Those who earn more forget that.
When those who earn less are excluded from money discussions, it’s easy to fall into the trap of thinking that “everyone” is buying all the gadgets. “Everyone” is not doing so because “everyone” cannot afford to do so. Everyone would benefit from coming to understand that the discussions in many of the money magazines are slanted as a result of the desire to appeal to the demographic most favored by the advertisers of high-priced goods and services.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Disdains Stuffiness.
There’s one way in which most of today’s money advice is plenty “serious.” It looks the part. It’s mostly guys with expensive cars who are viewed as “experts.” Thank heavens for Warren Buffett, who is a wonderful exception to the rule; he doesn’t need to impress you with his car because he has something of significance to say.
I am drawn to money advisors who follow Buffett’s lead. Brag to me about how much money you made in the market and I turn the channel. Tell me what lessons you learned getting from the place where you once were to the place where you wanted to be and you hold my attention.
I don’t like know-it-alls and I don’t like those who pretend to believe that they know nothing only because they don’t want to be questioned on what they say anymore than the know-it-alls do and have found a more effective way to place themselves above the give-and-take from which all true learning experiences arise. Those who know a little something and who are willing to share it with the rest of us are the ones responsible for the insights that have made our little community justly famous in certain corners of the internet in recent years.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Takes a Skeptical View of the Conventional Advice.
Many sites see it as their role to report faithfully what the “experts” say. What if the “experts” got it wrong? If everyone repeats what they said, without directing fresh thought to the matter, you end up with an endless loop where people report what the experts say because they are viewed as experts and where certain people are viewed as experts because so many people report what they say.
We need to break the chain. Most experts really do have something of value to say and we should of course be grateful for the insights they impart. But the real test of “expertise” is whether the ideas work or not. Much of today’s conventional money wisdom does not hold up well when subjected to that test.
The conventional money advice has failed us.
Can there be any reasonable dispute raised on this point? The middle-class worker of today earns more than did his parents or grandparents. He saves less. What we see all about us today is what a failed money-management approach looks like live and up close.
So why is it that most of today’s money experts repeat the same old clichés as if there were some magic power behind them that was going to cause them to produce better results this time around? It ain’t gonna happen.
Good advice is advice that gets the job done. The conventional saving advice is not getting the job done. The conventional investing advice is not getting the job done.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Focuses on Financial Freedom.
Most of what we have learned in the first eight years is the result of our focus on the question of how to win financial freedom early in life. It’s because we pursue an ambitious goal that we have been able to learn things that a good number of the “experts” have never imagined.
It’s only those who are pursuing ambitious money goals who are able to determine what works. Why is it that I discovered that the Old School safe-withdrawal-rate studies got the number wrong? It’s because I needed to know the safe withdrawal rate to put together my own plan for early retirement. I read Bogle’s book with thoughts of putting together a Retire Early plan in the back of my head and when I read that valuations always affect long-term returns, a warning bell went off. I recalled that those safe withdrawal rate studies I had looked at earlier had not included adjustments for valuations. I never would have put two and two together had I been planning to retire at age 65 like most others. It was my more ambitious money goal that caused me to pay more attention to what I was reading. It was because I was planning to make personal use of the numbers I was reading that I wanted to make sure that they were accurate.
It works the same way in the saving area. Most middle-class workers view early retirement as out of the question; they feel that they will be lucky if they can finance a decent retirement by their mid-60s. The reality, though, is that anyone who can finance an age-65 retirement can finance an early retirement if he or she puts his or her mind to it. Your money choices affect how soon you attain financial freedom. Most workers pay little attention to those choices. Paying attention to them yields better results. It follows that paying attention to your choices will get you to retirement prior to the conventional retirement age.
Most money advice was developed to appeal to those who don’t pay much attention to their money choices. But those who pay attention to their money choices achieve far better results. Do you see the disconnect? We’re following the followers instead of the leaders.
Most money advice is aimed at the lowest common denominator. People cooked up this stuff to have appeal on broadcast television or in magazines that sold in huge quantities. There aren’t many magazines like that around anymore. Today everything is segmented. But many of us are still listening to money advice that was designed to work “okay” for everyone but not particularly well for anyone. You don’t need to settle for that sort of thing anymore.
Lots of people retire early. We know that. We have attracted people from all ages, from all income levels, from all parts of the world. These people know what it takes to win financial freedom early in life. It’s these people who you should be listening to, not people who constructed general advice for a general audience of people with a limited desire for doing what it takes to achieve a very special financial status.
There are enough of us today doing remarkable things with our money for all of us to be able to learn a lot from all the rest of us. The Retire Early movement is a movement whose day has come.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Is Community Property.
I own this site and the material contained in it. But I don’t view this site as in all senses “my” site. This is a community learning resource. I don’t believe that I have a right to exclude all competing points of view from expression in the comments section of the blog. And I don’t believe that I have a right to comment on other viewpoints in an unfair or unbalanced way in the articles that I write. None of this should sound too remarkable. The reality, however, is that other site owners have played it in other ways. I strongly believe that those other site owners are wrong to do so.
The reality is that most of the insights described in the articles posted to this site were in some way influenced by community discussions at the various Retire Early boards. There’s great power in putting your ideas before a diverse group of people when they are still in the formation stage and then adjusting them or refining them or cutting back on them or expanding on them as the result of what you learn through community interaction. I want all community members to know that this is their place, their home.
I won’t be sharing the royalties with you; my wife says that I need to make sure that you don’t get any funny ideas. But I am grateful for the input that has been provided by thousands of smart and kind and generous souls over the past eight years. I am proud of what we have built together. What we have built together is something that no one person could have built solely by himself or herself. All who have a desire to provide constructive input have a right to take part in our deliberations and are entitled to respect for the contributions they put forward. And all of us benefit from the magnificent work product that results from those deliberations.
It’s not just our findings that are exciting. The process by which they are developed is pretty darn exciting too.
Personal Finance Advice for the Rest of Us — PassionSaving.com is Different Because It Is a Learning Site.
We don’t know all the answers to the question “How do I go about putting together an effective plan for early retirement?” How could we? Our movement will only be eight years old come this next December (this article was posted in July 2007). We’re only just now getting our feet on the ground. We’ve produced an amazing work product already. But the reality is that we are only now warming up for the action-filled days still ahead of us.
We disdain defensiveness at PassionSaving.com. Defensiveness stands in the way of learning and learning must be the focus of a movement only eight years young. We’ll make mistakes. And then we’ll fix them. And in the process of fixing them we’ll learn things even more exciting than the things we had thought we learned when we made the mistakes. We suffer from the uncertainty of youth, but we benefit from the flexibility of youth. There’s good mixed in with the bad, or bad mixed in with the good, depending on how you want to look at things.
This is the web site that provides personal finance advice for the rest of us. My sense is that “the rest of us” is “most of us.” Many middle-class workers have become skeptical of the conventional saving and investing advice. Most lack the background and experience to identify the holes in the conventional approaches on their own. Our purpose is to help them (us!) identify the holes and explain why they do such damage. And then to offer superior strategies, strategies that work in the real world.
How presumptuous of us! If it weren’t our own money and our own lives at stake, we wouldn’t dare to be so bold. But it is our own money and our own lives at stake. So we do what we must.
This isn’t the place to go to get the conventional take on saving or investing. This is the place to go to get the take of those who care enough about what money can do to make a life rich to want to do better than what the conventional advice lets us do. This isn’t the place for those enthralled by the “experts.” It’s the ordinary middle-class man or woman who cares about meeting his or her life, work and money goals who is recognized as the true expert here.
We’re ordinary and we’re not. You don’t need any special knowledge to be a respected member of our club. You do need to want to learn about how to change your money habits in ways that permit you to live a life bigger and bolder and better than the one you live today. That’s a lot. If you’ve got that in you, you’re one of us. If you’ve got that in you, you’ve got something to teach us.
The sky is a blackboard high above you,
And if a shooting star goes by,
I’ll use that star to write “I love you!”
A thousand times across the sky.— “Teach Me Tonight” (sung by Ella Fitzgerald and Phoebe Snow, among others)