What is Extreme Early Retirement?

By Karl Thompson

What is Extreme Early Retirement?

Extreme Early Retirement (EER) is a strategic approach to the life-course through which the individual aims to achieve financial independence within five to twenty years by saving half or more of their income. Rather than focussing on generating extreme levels of wealth in order to retire to a life of leisure and luxury, the philosophy of EER is to reject the ordinary debt-driven, high-consumption, convenience based lifestyle of the typical consumer and instead practice ‘optimism rather than convenience’ and to develop a range of ‘resilience skills’ in order to live well on a relatively low income. EER also involves taking an interest in and learning something about the economics surrounding investing and personal finance.

Extreme Early Retirement finds most of its followers in America, where the two most popular foundation blogs are based – Mr Money Moustache, and Jacob Lund Fisker’s Early Retirement Extreme, both of which are written by individuals who achieved early retirement in their 30s..

Mr Money Moustache is closer to a more conventional early-retirement model: he and his wife were high income earners ($130 000 per annum between them) and simply saved two thirds of their income to accumulate a total net worth (TNW) of £600 000 and now live on an annual income of around $25 000. Fisker is a little more opaque about the precise details of this own capital situation but given that he lives on $7000/ year, my own estimate is that he retired with a TNW of around $150 000.

Both blogs are keen to emphasise that EER is achievable by even average income earners because the basic principle is that whatever your income, the higher your savings to expenditure ratio, then the earlier you can retire. Mr Money Moustache illustrates this by pointing out that if you can save half of your income then it will take you seventeen years until retirement, but at 75% it will take you only seven years.

While no precise figures exist on the number of people pursing extreme early retirement, overall numbers are small. The Mr Money Moustach Forum has 20 000 members, but it is likely that only a tiny percentage of these are people who are seriously practicing the early retirement philosophy: a brief analysis of the blog-role reveals a mere 60 people actively documenting their missions towards early retirement. Fisker’s more radical Early Retirement Extreme Forum is even less popular with only 3500 members.

In the United Kingdom, there are a mere handful of individuals actively pursuing and publishing their efforts to achieve financial independence and early retirement. The site which is the most dedicated in terms of regular posts and explicit details pertaining to finance is The Firestarter (Financial Independence, Retire Early) which is run by a 32 year old ‘normalish bloke’ who is aiming to retire within five years, having started with a TNW of practically zero.

Extreme Early Retirement as a form of Social or High Reflexivity

Those practicing extreme early retirement certainly seem to be engaged in what Giddens (1991) would refer to as ‘social’ or ‘high’ reflexivity as EERs clearly maintain a high degree of separation between their daily lives and their virtual reflections on early-retirement. EER blogs are not focussed on ‘what I like doing’ they are focussed on ‘here are the reasons I am doing this given the goal I am trying to achieve’. The EER community is also highly calculative – It is common to post considerable details of monthly finances; there is constant assessment of the transformative potential of lifestyle choices to bring forward or retard the date of early retirement; and a high degree of willingness to engage with a variety of new information in order to develop resilience skills to reduce dependence on money.

Our ideas about retirement are normally embedded within a broad set of existing cultural norms surrounding work, consumption and the life-course more generally, and these ideas are largely taken for granted and not reflected on, but the reflexivity of EERs clearly transgresses such normative boundaries forcing the individual the rethink their entire life-course.

Fisker’s Early Retirement Extreme especially offers a critical intellectual framework for rethinking about work-consumption-retirement, criticising what he casts as the ‘wage-credit-spend-consume-retire on a million-cycle’. It also offers us an overview of an alternative way of thinking about this nexus which ultimately means working and consuming less, retiring a lot earlier than normal, and rethinking what retirement actually means (which is not merely conceived as a life of never ending leisure in EER circles).

Extreme Early Retirement as a Critique of The Society of Consumers

One of the predominant themes in the work of Zygmunt Bauman is that in post/ late modern consumer society the rapid consumption of goods and services has become the primary mechanism of social integration, and the primary means whereby individuals seek to find biographical solutions to systemic problems: buying things plays a fundamental role in maintaining personal relationships; and shopping has become an end in itself through which we escape the harsh realities and instabilities of working-life.

Bauman also argues that seeking to construct an identity through consumption means that we suffer from ‘subjectivity fetishism’ – constructing an identity may involve freely choosing between objects, but we forget that we are, in fact, dependent on those objects, and thus not truly free. Moreover, we are not truly free of the economic system which requires us to rapidly become dissatisfied with today’s products so that we will buy new ones tomorrow, a system that depends on consumers buying and throwing away goods at an ever faster rate, which in turn requires credit.

Ultimately, if we buy into a life course mediated by consumption, we buy into a life of having to make progressively more choices pertaining to consumption as we age. The end result is that our subjectivity narrows and we end up suffering from the tyranny of choice and a curiously hurried life as we unconsciously react to markets in overdrive.

The Extreme Early Retirement community presents a sustained critique of what Bauman calls the ‘consumerist syndrome’, and, very much in the spirit of C. Wright Mills’ sociological Imagination – they make familiar consumption habits seem unusual, even pathological.

‘Convenience consumption’ is subjected to the highest degree of criticism – the poster child of which is the $4 daily Latte, and extending to a whole range of labour-saving goods and services.

There is also considerable criticism of wasteful consumption, which mainly focuses on buying products which we hardly ever use which includes everything from the obvious kitchen and gardening gadgets which are stored in the cupboard for most of the year to the less obvious – buying a house with a spare bedroom is widely regarded as superfluous expenditure for example.

Finally, EER blogs rail against what Mr Money Moustache calls ‘Tiny details exaggeration syndrome’ or the practice of paying hundreds of dollars more for a car with a bespoke paint job or thousands of dollars of more for a house with a better view. Where the later is concerned, wanting to live in a ‘good neighbourhood’ may well be the thing which prevents you from living close to work and locks you into needing a car rather than being able to walk to work, then you pay for a gym membership to keep fit.

However, it is not just high levels of the wrong type of consumption which EER critiques, it also emphasises deferred over immediate gratification, and the fact that its adherents have extremely long term plans regarding their finances EER can also be seen as an alternative to living a hurried, fragmented, Pointillist existence.

The Limitations of the Critical Potential of Extreme Early Retirement

Despite its critique of consumer culture it would be inaccurate to describe the Early Retirement Extreme community as a movement because it operates firmly within the Capitalist system, given that each individual’s ultimate aim is to generate sufficient capital to provide a return sufficient to meet their needs.

The EER community also appears to be little more than a lose network of isolated individuals seeking privatised, individualised strategies towards early retirement, individuals whose most committed relationship is ultimately between their individual selves and international financial markets. There appears to be no affective commitment or collective-investment that binds the community together in any significant way, with connections limited to that of knowledge exchange. It cannot be said to offer anything like a viable systemic solution to problems such as job insecurity and work based alienation, rather it offers a means of escape for the relatively well off.

Having said this, there is some overlap with the more radical elements of the EER community and movements for social change – Fisker’s approach involves a much higher level of frugality, and stems from a unique criticism of the inefficiencies of the present economic system and at times chimes with the ideals of self-reliance found within anarchism, although Fisker himself is definitely not anti-capitalist.

A further problem of Extreme Early Retirement is that it is clearly not open to everyone. Its two leading proponents both had solid professional careers – in Engineering and Astrophysics and earnt significantly above the average salary, which meant they were able to save considerable sums in a short time-frame and retire very early.

Where the UK is concerned I have elsewhere calculated that the median income earner in the could retire at the age of 52 if they started on an early retirement strategy at the age of 35, this assumes, however, an extremely frugal existence and no significant life events that would detract from savings, and on the median salary the kind of sums being put away every month would hardly be motivational to keep one going for such a long period.

Obviously Extreme Early Retirement is not an option to anyone living in at least the bottom quintile of income earners, given that such a low income would require 100% of expenditure for meeting basic needs within nothing left to save.

Conclusion – The Social Significance of Extreme Early Retirement

Given its reflexive and highly individualised nature, the EER community is very much a product of late modernity, and its social utility lies in the fact that it encourages us to think critically about the sub-optimal nature of the consumerist mode of existence, and for those with the means it offers the potential to gain a high degree of financial freedom very early in life. However, precisely because of its highly individualised nature and strategic dependence on personal wealth generation, extreme early retirement in its present form can only ever be achieved by a tiny minority of people, thus while it remains of sociological interest, it is of limited use in helping us to translate personal troubles into broader public issues.

Sociological and Other Works drawn on

Bauman, Z (2007) Consuming Life

Giddens, A (1991) The Consequences of Modernity: Self and Society in the Late Modern Age

Fisker, J L (2010) Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence

About The Author

I’m Head of Sociology in the best marketed sixth form college in the country. I’m now in my 14th year of teaching, having originally intended to do the job for a year and then get back to my PhD research into radical eco-communities in the UK. I guess I stayed because all things considered it’s quite a nice job – you get to make interesting ideas accessible to people, it’s stable and permanent, well paid and now I’m established I get a genuine 13 weeks of holiday every year. Sad to say but had I carried on with the PhD I doubt if I’d be able to tick any of those boxes by now. 

I blog at ‘RealSociology’ – mainly focusing on various aspects of Sociology to do with the A level syllabus (most of it’s pretty interesting), Buddhism, and Extreme Early Retirement. 

When I retire (in six years aged 47) I intend to establish an edible forest garden, graze and meditate for a few years and then figure out what do with the rest of my life.

Categories: Rethinking The World

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2 replies »

  1. Interesting blog post – I take it EER overlap with people who aim for a similar date but don’t plan to retire? On my current projections, I’ll be about to pack in at 52 – but I wouldn’t because – what would I do all day?

    It’s an interesting worldview because it dictates all sorts of life choices that are not apparent to others – I work at a post-92 university and have turned down offers to work at RG universities – my academic friends are astonished – “but it’s big london university X!”

    However although I like academia – it’s a way of earning a living not a lifestyle for me. Yes I would get a short-term ego-boost from moving to an more impressive university but I’d take a massive cost of living hit.

    Moreover once you live that way – all sorts of other ‘behaviours’ that academics take for granted and the academy tries to ‘breed’ into you no longer make sense – pay your own money to attend a conference? 0_0

  2. Great summary of ERE Karl… and a thoughtful post to read on a sunny Thursday morning 🙂

    You bring up some of the drawbacks and criticism which is interesting as it’s not written about so much in “our” sphere, or if it is I often don’t find that the answers given are really that satisfactory. MMM in particular makes a lot of sweeping statements and is far too over optimistic about what if everyone lived this way. I mean it would be good for getting more/all people to live the good life that is described, but IMHO individually we’d all end up working more again as returns on investment would be much lower. Saying that I would happily trade that for a better functioning, more efficient, more equal and happy world.

    To Charles – The “what would I do all day” is a common reply to retiring early and you are lucky that you have found a job you enjoy and has purpose (sorry I am assuming there but that is what it sounds like you meant by your comment). ERE people are either usually in a job they don’t particularly find fullfilling or just have far too many other interests to have to concentrate on one area 40 hours per week. I am a little of column A and a lot of column B. Most of us will never(?) be short of something to do in early retirement, I have so many things I want to see, do and learn it will easily last me out a 50 year retirement span (if I last that long, fingers crossed!)


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