# Mr. Money Mustache’s Own Story

## By Mr. Money Mustache

## Sat, 09 Apr 2011 02:14:31 +0000

Ahh, I see that sissy the “Realist” has been posting on my blog. I hope that doesn’t happen too often. Sukka’s too soft. You’ll never get anywhere with piddly numbers like 25 bucks a month or even ten dollars a day.

And I had to laugh at that example.. would anyone really start buying lunch at a restaurant when they were already so tight on cash that they were saving NOTHING? And would they continue buying it once they saw that their credit card balance was starting to grow? What kind of idiot would do that? Why does this guy call himself the “Realist” with such an unrealistically stupid example?

What I want you to do is start thinking of REAL savings. Not putting away $5 or $150 per month, but more like FIVE THOUSAND per month. Not everyone can do that. But a middle-class American family with two teachers making $60k each per year, who are currently saving zero and struggling to get by? THEY SHOULD BE SOCKING AWAY $5000 PER MONTH. Word.

Here’s my story, so you can see how it’s done.

As a boy, I learned frugality by growing up in a family where my parents didn’t buy much stuff. Instead of having stuff given to me, I had to get a paper route, trudging 6 days every week in the bleak Ontario, Canada weather for thirty bucks.

The shittiness of this experience made me realize that I had it made when I upgraded to a better job at age fifteen: working the pumps at the corner gas station. Earning $4.15 per hour, serving four customers simultaneously because we were so busy that rarely had time to “rest” in the oil-stained, partially heated standing-room-only metal booth. Imagine then, how amazing it was the next year to earn $6.50/hour to work in a convenience store with not only windows and doors to protect you from the weather, but heat and air conditioning that allowed you to wear indoor clothing year-round? I was making $650 ever month, going to high school, and by the end of a year, I had $5,000 in the bank.

My point is that in the United States and other rich countries, you’ve got it good. Even if you work in Wal-Mart, you make more money than I did, you get to walk around in a huge fancy store, and you can save almost everything you earn if you don’t get ridiculous and waste it all. When I made $6.50 an hour, I knew it wasn’t enough to afford a car or my own apartment at age sixteen. Well, it was enough, but only if I wanted to spend everything I earned. So I kept living at Mom’s house, and was sure to make myself useful by helping take care of the place. When I started making more, I was ready to up the lifestyle a bit… but only a bit.

From here the MMM story goes on. I went to university, but picked the local one so I could continue to live in affordable manner in the spare bedrooms of family members. I worked in the summers and found affordable ways to party so I graduated with no debt. A decent professional job awaited at graduation, so I upped the ante to include my first used car and a house shared with many roommates (rent: $270/month).

After a few raises and new jobs, I moved to the USA, doubled the salary, but kept the used car and the living-with-roommates situation. Finally, a 20% downpayment had been saved for a house, so I made the jump to buy my first fixer-upper, sharing it and working on it with my future wife.

At this point, we had it made – double incomes and a low mortgage. We let the good times roll a little bit, enjoying the same luxuries as our peers and even doing plenty of international travel. But the difference was, we were spending only about 25% of our disposable income, while they were spending 90%.

The difference? They were subjecting themselves to just a few hidden additional expenses like auto loans, higher mortgages, newer clothes and more nights out at the restaurants. This meant we were saving a good $4,000 per month, which starts compounding when you invest it. We each earned a few pay raises over the years and found that our expenses actually decreased once we had the house fully outfitted and we had satisfied the travel bug a bit. The result was that we had a net savings of $7,000/month pretty soon, and we were on a treadmill that was pushing us forwards instead of fighting one that pulled us back. Life was fun and it looked normal from the outside. The difference was that we were amassing wealth very rapidly with each passing day.

At this point, we could have bought a huge house or a small fleet of nice cars. But instead, we spent the money on the ultimate luxury – quitting our jobs. For other people, a sailboat or a starting a local charitable trust might be the luxury of choice. You get to choose your own reward. But it’s all about not getting stupid when you can’t yet afford it.

For example, when you’re making $35,000 per year, you can’t be out buying $9.00 martinis on the weekends and financing a $25,000 new car. At this level, you are still in the cooking-at-home and riding your bike club. Maybe a $3,000 used car if you can buy it in cash and if it’s really necessary to get to work.

When can you truly afford a fancy car like a BMW? Well, once you have the cash for it in the bank, your house and all other debts are fully paid off, and you are either retired or very comfortable with delaying your eventual retirement for a year or more to pay for this depreciating piece of luxury property, THEN you can roll into the dealership.

The funny part is, if you follow the ways of the Money Mustache, you’ll hit these levels sooner than you think. So you can borrow to buy the BMW today, and pay for it forever. Or you can pick it up with the spare change in your wallet in the surprisingly-near future, and be a happier person for the wait.