It's always fun to unearth some esoteric piece of personal-finance history. I know there are only a few nerds out there who care (hello, Grant Sabatier!), but those of us who care really care.

Two years ago, I published an article exploring the history of financial independence in which I noted that the earliest reference I can find to the notion of financial independence comes from an 1872 book called Money and How to Make It by H. L. Reade. And it wasn't until the 1950s that the concept of early retirement (at least in the sense we mean it today) gained traction. But despite my research, I still have questions, such as: What's the source of the modern FIRE movement?

Who Coined the Term FIRE?

Recently at The Retire Early Home Page — a site so old that it existed (and still exists) at the dawn of the web — John P. Greaney answered the question: Who coined the term FIRE?

My mother's health has been declining over the past few months, and it's produced a wee bit of year-end financial drama in our family. (The word "drama" is a bit of an exaggeration. Maybe it's produced some year-end financial consternation?)

As long-time readers will recall, my mother has been in assisted living for more than a decade now. She lives a mellow life filled with television, her pet cat, and a regular routine. Because she has cognitive problems, it's difficult for her to communicate. The doctors call her "non-verbal", and they can't explain the cause. She cannot form complete sentences (sometimes two words is tough!), and it seems as if she cannot formulate complex thoughts. It's a mystery to everyone.

Today — at this very moment — my brother is driving my mom to the emergency room. It's her third visit in six weeks, and it's always the same issue: vomiting, dehydration, confusion. During the previous two episodes, a few days of hospital rest helped her, and she returned to the assisted living facility feeling better (and actually able to carry on a basic conversation, like you might have with a two-year-old).

So, Mom's health is declining. That's important point number one.

As the financial independence and early retirement movement (or FIRE movement, for short) has gained popularity, some myths and misconceptions have sprung up about what it entails. Too many people make assumptions about what the FIRE movement is and what it's made of.

A lot of folks think the FIRE movement is cult-ish. Some think that financial independence and early retirement are only for rich white people. (Or, more specifically, for white men in the tech industry.) Others say that early retirement is only possible with a high income. Or you can only do this if you're so frugal it hurts. And, of course, there are folks like Suze Orman who "hate hate hate" the FIRE movement because they believe you need millions in order to retire — early or otherwise.

I'll be honest. Each objection and complaint about financial independence contains a grain of truth. But each objection and complaint misses the point in some important ways.

Today, let's look at some of these myths and misconceptions about financial independence and early retirement, and explore why these myths and misconceptions are myths and misconceptions.

I used to be a collector. I collected trading cards. I collected comic books. I collected pins and stickers and mementos of all sorts. I had boxes of things I'd collected but which essentially served no purpose.

I can't say I've shaken the urge to collect entirely, but I have a much better handle on it than I used to. A few years ago, I sold my comic collection and stopped obsessing over them. Today, I collect three things: patches from the countries I visit, pins from national parks, and -- especially -- old books about money.

Collecting old money books is fun. For one, it ties to my work. Plus, there's not a huge demand for money manuals, so there's not a lot of competition to buy them. (Exception: As much as I'd love a copy of Ben Franklin's The Way to Wealth, so would a lot of other people. That one is out of my reach.)

One big bonus from collecting old money books is actually reading these books. They're fascinating. And it's interesting to trace the development of certain ideas in the world of personal finance.

For instance, there's this persistent myth of "lost economic virtue". That is, a lot of people today want to argue that people were better at managing their money in the past. They weren't. Debt (and poor money skills) has been a persistent problem since well before the United States was founded. It's not like we, as a society, once had smart money skills and lost them. The way people manage money today is the way they've always managed money.

Or there's the notion of financial independence (and the closely-related topic of early retirement). The standard narrative goes something like this:

• In 1992, Joe Dominguez and Vicki Robin published Your Money or Your Life, and that marks the "discovery" of FIRE.
• In the late 2000s, Jacob from Early Retirement Extreme picked up the FIRE banner, then handed it off to Mr. Money Mustache a few years later.
• Today that banner is being carried by newcomers like Choose FI and the /r/financialindependence subreddit.

When you read old money books, however, you soon realize that FIRE isn't new. These ideas have been kicking around for a while. Sure, the past decade has seen the systemization and codification of the concepts, but people have been preaching the importance of financial independence for about 150 years. Maybe longer.

https://www.youtube.com/watch?v=CN-deGi44UY

Today, using my collection of old money books, let's take a look at where the notion of financial independence originated.

In early October 2016, I flew to New York City to attend Ramit Sethi’s Forefront event, a weekend conference about entrepreneurship and excellence. As I always do when travling, I agreed to meet with a few readers and colleagues while I was in town.

One sunny morning in Madison Square Park, for instance, I sat on a bench and chatted with Travis Shakespeare. "I'm a film and television producer," Travis told me. "But I'm also into the FIRE movement. I just got back from the chautauqua in Ecuador."

The FIRE movement, of course, is all about financial independence and early retirement. And the chautauquas are annual gatherings for FIRE folks who want to dive deep into the subject. (I've now attended four of these myself.) Continue reading...

Could you pay your mortgage, groceries, rent, insurance, medical expenses, and other bills on $2000/month? If you could, what kind of lifestyle might you lead?

Millions of retirees across America live it every day.

The Social Security Administration reports that 50% of elderly married beneficiaries and 70% of singles rely on Social Security for more than half of their monthly income. Considering that the average Social Security check is around $1361/month, this is a really tough place to be in for so many of these retirees.

And I’ve met them. Many of them.

Every year at my insurance agency, we meet thousands of baby boomers aging into Medicare at 65. We often see their shock, dismay, and confusion when they realize that the cost of their healthcare in retirement will easily eat up at least 20% to 30% of that Social Security check every month.

No matter how you slice it, even the best of the retiree budgeters out there are likely to have trouble making ends meet on Social Security income alone.

Sometimes when it comes to personal finance, budgeting isn’t the problem.

Sometimes income is the problem.

Fortunately, there's good news on that front, because we live in an age where there are more opportunities to earn extra money than ever before. Our digital world has made this possible, and it couldn’t have come at a better time.

When you're on a fixed income and struggling to make ends meet, a side hustle that pays you even a few hundred dollars a month can be a tremendous help.

At Boomer Benefits, we polled our Facebook fans – largely baby boomers and seniors - to ask what kind of side-hustles they are rocking out there in the real world. What we learned is that there's a wide array of ways in which creative retirees are supplementing their Social Security income.

Today, I’ll share a few of their stories to give you some ideas for your own possible side-hustle that could potentially help to reduce financial worry and afford you a better lifestyle in retirement.

J.D.'s note: In the olden days at Get Rich Slowly, I shared reader stories every Sunday. I haven't done that since I re-purchased the site because nobody sends them to me anymore. But earlier this year, Mike did. I love it. I hope you will too.

Earlier this year, I sent my wife a text message: "On a scale of 1 to 10, how freaked out would you be if I quit my job this afternoon?"

My wife and I had only been married a short while, but she'd known since our second date that I didn't plan to work in my traditional job until normal retirement age. She also knew that I hadn't been very happy at work in recent months.

We're very compatible financially — both savers raised in working-class families that didn't always have a lot. We make a point of having what we like to call "Fun Family Finance Day" from time to time. On Fun Family Finance Day, we do everything from competitively checking our credit scores to discussing questions that get at the root of our money mindsets to help us create our goals.

But this question wasn't part of the plan. Not then.

And it was never on any of the lists of questions that we'd discussed with each other. It was like a pop quiz, a pothole in the smoothest relationship road I'd ever traveled...and I was the one putting it there.

Dreams Remain Dreams Without Doing

My wife and I rarely argue, but when we do it's usually about food. It's the kitchen and the grocery store that are our battleground. Our finances are fine. Thankfully, when you're confident in the life you've created and the person you chose to build it with, it's a lot easier to be honest about what's on your mind.

That still doesn't always mean you get the answer you want. Or the answer you were expecting. She responded: "Wait what. Kinda. What would you do?"

A completely reasonable and fair question. Not to mention one that I'd probably have to get comfortable answering from a lot more people.

I think my immediate reaction was: We talk about this stuff all the time, where is my, "No worries baby, YOLO!"? (I must have watched too many romcoms back before we cut cable from our lives.)

Being a grownup, it turns out, is actually really hard sometimes. I was about to learn that talking about something, and actually doing it, are a world apart.

Life is full of dreamers and doers. Sometimes those two personalities cross over. But there are plenty of people who go through life talking about so many things they'll never have the courage to try — or the discipline and determination to follow through with.

Which person was I? The dreamer? The doer? Or that fortunate combination of both?

Today, I'm pleased to present a guest article from one of my favorite money bloggers of all time: Jacob Lund Fisker. Fisker founded Early Retirement Extreme in 2007. It quickly became an influential voice for the nascent FIRE movement. In fact, I think it's fair to say that FIRE wouldn't be what it is today with his work.

Fisker retired from blogging in 2011. Since then, he and I have exchanged long emails on sometimes arcane subjects. Occasionally I ask him for advice. Recently, I asked him if he'd be willing to update people on where he's been and what he's been doing for the past decade. He agreed.

Here, then, is Fisker's story of life after Early Retirement Extreme (and extreme early retirement). Be warned: His story is not short.

Starting in 2007 (and largely finishing by 2011), I formalized a philosophical alternative to consumerism in the form of a 1000+ post blog and 100,000+ word book [J.D.'s review], which I mistakenly called "Early Retirement Extreme" (or ERE in acronym form). These days, I stick to the acronym form. :-P

Central to my philosophy was the renaissance ideal of spending your life mastering a productive level of competence in a broad range of subjects. This arsenal of "renaissance skills" would then be combined into a mutually reinforcing web-of-goals, which made living more interesting and balanced — but also more cost- and resource-efficient and resilient in the face of the growing complexities and uncertainties of the 21st century.

Being a theoretical physicist by training (and remaining one in spirit) compelled me to present all of this as a theory of everything, rather than the more typical format of a light non-fiction autobiography or overview. As I didn’t really figure on a general audience — it was fairly non-existent back in 2008 — that also meant using graphs and equations when applicable.

The benefit of that format was that others could use the ERE design principles to construct their own particular plan according to their own individual circumstances and goals instead of retracing the footsteps of one particular individual.

Retiring from blogging

Eventually, I considered the problem of "How to escape the earn-buy cycle in order to live a more interesting life" solved and sufficiently "communicated". In 2011, I stopped blogging. I continued to follow the ERE principles in the spirit of the renaissance ideal with the goal of solving other big problems. Being financially independent (FI), I no longer require any compensation even if I still appreciate it — if nothing else than just to keep score or divert the lucre towards more useful purposes (e.g. supporting people on Kiva or Patreon).

Career workers who don't know me typically ask me what I do for a living, expecting an answer in the form of a job title. (That tends to get awkward and I still don't have a clever response.)

Similarly, people in the FIRE community (and the media that now covers it since they discovered it a couple of years ago) expect a curriculum vitae in the form of instagram-friendly bucket-list of accomplishments. However, following the systems-based web-of-goals approach, it's really hard to answer that in a way that satisfies linear formats.

I follow many different leads and do many different things — often concurrently — and sometimes in ways where they combine and result in new, unexpected opportunities (the serendipity effect). It's therefore difficult to summarize the last ten years of my life in chronological order, so let me instead attempt it as a "skill" or activity-based resume in no particular order.

This format makes more sense since the ERE strategy is to learn something and add value to the process and its environment, a side-effect of which is that I usually don't have to pay to solve problems and that I sometimes get paid. As a consequence, my spending also remains ridiculously low. (I'll get to that near the end of this article.)

I apologize that this is long and boring, but ten years is a long time and one can get a lot done in ten years — not all of which might be as interesting to the reader as it is or was to me. So, for the sake of completeness and in no particular order, and perhaps with the hope that I don't have to write another autobiography for the next ten years, here's a first-hand answer to the question: "Whatever happened to Jacob Lund Fisker?"

J.D.'s Introduction
While reading an obscure book about retiring early to a life at sea -- Voyaging on a Small Income by Annie Hill (1993) -- I discovered a short story from a man named Joseph Weston-Martyr.

First published in 1932, The £200 Millionaire reads like "Mr. Money Mustache at Sea". It's fascinating. Because today I start a ten-day Mediterranean cruise, I thought it'd be fun to share this story at Get Rich Slowly.

This is a long story. It contains 8001 words, which is 32 printed pages. I've formatted it for web-based reading (I don't think you want to read a 500-word paragraph on your phone!), plus added images and hyperlinks. Please enjoy it as weekend reading!

Some images are obviously meant to illustrate the text. Others are from Michelle at Making Sense of Cents, who graciously agreed to let me use her photos here. She's been living on a sailboat since May 2018.

The £200 Millionaire

My wife and I were sailing a hireling yacht through the waterways of Zeeland last summer, when one day a westerly gale drove us into the harbour of Dintelsas for shelter.

A little green sloop, flying the Red Ensign, followed us into port. She was manned solely by one elderly gentleman, but we noted that he handled the boat with ease and skill.

It was blowing hard, and the little yacht ran down the harbour at speed, but when abreast of us she luffed head to wind, her violently flapping sails were lowered with a run, and she brought up alongside us so gently that she would not have crushed an egg.

We took her lines and made them fast, while her owner hung cork fenders over the side and proceeded to stow his sails. Urged by a look from my wife which said, "He is old and all alone. Help him," I offered to lend the lone mariner a hand. But he refused to be helped.

Said he, "Thank you, but please don't trouble. I like to do everything myself; it's part of the fun. But do come aboard if you will, and look round. You'll see there's nothing here that one man can't tackle easily."

We went aboard and found the green sloop to be one of the cleverest little ships imaginable.

Aboard the Green Sloop

It is difficult to describe her gear on deck and aloft without being technical; suffice it to say, therefore, that everything was very efficient and simple, and so designed that all sail could be set or lowered by the man at the helm without leaving the cockpit.

The boat was 30 feet long by 9 feet wide, and my short wife, at any rate, could stand upright in her cabin.

Her fore end was a storeroom, full of convenient lockers, shelves and a small but adequate water-closet. Abaft this came the cabin, an apartment 12 feet long, with a broad bunk along one side of it and a comfortable settee along the other. A table with hinged flaps stood in the middle, while in the four corners were a wardrobe, a desk, a pantry and a galley.

Abaft all this was a motor, hidden beneath the cockpit floor. A clock ticked on one bulkhead, a rack full of books ran along the other, a tray of pipes lay on the table, and a copper kettle sang softly to itself on the little stove.

"What do you think of her?" said our host, descending the companion.

"Before you tell me, though, I must warn you I'm very house-proud. I've owned this boat for ten years, and I've been doing little things to her all the time. Improving her, I call it. It's great fun.

"For instance, I made this matchbox-holder for the galley last week. It sounds a trivial thing; but I wish I'd thought of it ten years ago, because during all that time I've had to use both hands whenever I struck a match.

"Now I have only to use one hand, and you know all that implies in a small boat, especially if she's dancing about and you're trying to hold on and cook and light the Primus at one and the same moment. Then there was the fun of carving the holder out of a bit of wood I picked up, to say nothing of the pleasure it gives me to look at a useful thing I've made with my own hands. The carving brought out the grain of the wood nicely, don't you think?

"Now I'm going to make tea, and you must stay and have some with me."

Last month, the Society of Actuaries (a group I was born to belong to!) published a mammoth (84-page) report entitled "Viability of the Spend Safely in Retirement Strategy". Despite its opaque title, this report (written by Steve Vernon, Joe Tomlinson, and the estimable Wade Pfau) contains some interesting info about planning for retirement income.

On the surface, this report's advice seems stupid simple: To optimize retirement income, delay Social Security and make the most of required minimum distributions from tax-advantaged accounts. Isn't this pretty much what most of us plan to do? Maybe so, but I doubt that anyone else has crunched the numbers like this.

Plus, this strategy provides a specific plan for folks who haven't considered how to approach retirement income. As the authors note, most retirees fall into two camps.

• There are the people who are scared to spend their savings, so they sacrifice current lifestyle.
• There are those who "wing it", spending without a plan.

The Spend Safely in Retirement Strategy is useful for both groups. It shows the specific steps needed to maximize retirement income. Those steps might seem obvious to those of us who read and write about personal finance every day, but they are not obvious to our family and friends.

Here's a quick overview of the Spend Safely in Retirement Strategy (or SSiRS).

The Spend Safely in Retirement Strategy

Vernon, Tomlinson, and Pfau introduced the concept of the SSiRS in their 2017 report through the Stanford Center on Longevity: "Optimizing Retirement Income by Integrating Retirement Plans, IRAs, and Home Equity". (You can download a PDF of the paper from Stanford.)

"This strategy has a significant advantage," they wrote. "It can be readily implemented from virtually any IRA or 401(k) plan without purchasing an annuity."

That 2017 publication was mostly theoretical. There wasn't a lot of info on how to approach their strategy from a practical perspective. This new project is more about actual implementation.

They write:

The SSiRS includes two key steps:

1. Optimize expected Social Security benefits through a careful delay strategy; in this case, many middle-income retirees may have all the guaranteed lifetime income they need.

2. Generate retirement income from savings using the IRS required minimum distribution (RMD) rules, coupled with a low-cost index fund, target date fund, or balanced fund.

The authors stress that the SSiRS is meant to be a baseline strategy, a starting point from which retirees (and/or their financial advisors) can build a more customized plan. It's like a basic bread recipe that yields good results every time. If you want to make fancier bread, you're free to do so. But you don't have to.

Let's look at these two key steps in more detail.