{"id":84142,"date":"2011-05-17T04:00:57","date_gmt":"2011-05-17T11:00:57","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=84142"},"modified":"2023-10-26T10:56:05","modified_gmt":"2023-10-26T16:56:05","slug":"book-review-early-retirement-extreme","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/book-review-early-retirement-extreme\/","title":{"rendered":"Book review: Early Retirement Extreme"},"content":{"rendered":"

\"Early<\/a>For over five years now, I’ve spent most of my waking hours reading and writing about money. I’ve learned a lot. Using this knowledge, I’ve been able to get out of debt<\/a>, build savings<\/a>, and even begin pursuing my passions<\/a>. What’s next? As time passes, I find myself thinking more about financial independence<\/a> and early retirement.<\/p>\n

No surprise then that over the last couple of months I’ve been obsessed with Jacob Lund Fisker’s Early Retirement Extreme<\/a><\/b> blog. And no surprise that my first book review since September is of Fisker’s book, also called Early Retirement Extreme<\/i><\/a>.<\/p>\n

<\/span>Early Retirement Extreme<\/span><\/h2>\n

Imagine a personal finance book written by a theoretical physicist. What would it be like? Full of formulas and figures, right? Well, that’s what you get with Early Retirement Extreme<\/i>. But you get more, too.<\/p>\n

Fisker’s story and style are unique. After graduating with a PhD in theoretical physics, he worked for five years as a research associate. For that five years, he saved 75%<\/i> of his net (after tax) income. Fisker reached financial independence at 30 and then, at age 33, he retired.<\/b> (How does Fisker define financial independence? By the time he was 30, he’d saved the equivalent of 25 years of living expenses. That’s a 25-year<\/i> emergency fund<\/a>.)<\/p>\n

While many people think you need to earn big bucks to retire early, Fisker did it differently. Instead of boosting income<\/a>, Fisker cut costs drastically. While drawing an average salary, he learned to live on less. Much<\/i> less. He started to do things himself. (He wrote, edited, and published this book, for example.) His pre-retirement lifestyle and post-retirement lifestyle are essentially the same. Except now he doesn’t have to work.<\/p>\n

Early Retirement Extreme<\/i> feels like a book written by an engineer for other engineers. This isn’t a bad thing, but it is<\/i> unique. Some people will love it; others will hate it.<\/p>\n

Here’s a scan from page 111 to show what I mean:<\/p>\n

\"excerpt<\/div>\n

While this sort of thing isn’t on every<\/i> page, there’s still plenty of it in the book. Because Fisker is (or was) a theoretical physicist, his book is filled with formulas and figures. If this bugs you, Early Retirement Extreme<\/i> probably isn’t a good choice. I found these passages amusing. Instead of letting the math intimidate me (my only college math course was behavioral statistics, and that was over twenty years ago), I glossed over it looking for the core concepts the book was trying to convey. (In the example above, “spend your time and energy on the things that will give you the biggest returns”.)<\/p>\n

Note:<\/b><\/i> Fisker notes that the book only has about twenty<\/i> equations, and sixteen of them belong to one argument about investing. This is true. But Early Retirement Extreme<\/i> does read like a textbook, and there’s other math, even when there aren’t complex calculations involved.<\/div>\n

Fisker’s technical mind manifests itself in other ways. When writing about how to save money in the kitchen, for instance, he approaches it as an optimization problem. How do you choose what food to buy? Fisker writes, “The most optimal method is to shop for ingredients, and then, based on the ingredients one has available, determine a recipe.” In other words, start with what you have (or what’s on sale) and go from there. Learn to improvise. And optimally, you wouldn’t have a stovetop or a refrigerator. (You would<\/i> have a slow cooker and a chest freezer, though.)<\/p>\n

But Early Retirement Extreme<\/i> is more than just a personal finance book filled with formulas and figures. It’s also philosophical.<\/p>\n

<\/span>Philosophical Extreme<\/span><\/h2>\n

In many ways, Early Retirement Extreme<\/i> is a book of philosophy<\/i>. Fisker doesn’t set out to give you a step-by-step map to wealth; instead, he tries to give you the tools to draw your own map. He wants readers to think<\/i> about their choices and about the world around them. He wants to challenge their assumptions about what’s financially feasible.<\/p>\n

When I say this is a book of philosophy, I don’t mean that in some vague metaphorical sense. I meant it literally. To challenge his readers’ assumptions, Fisker begins the book by exploring Plato’s allegory of the cave<\/a>.<\/p>\n