Early Retirement Extreme: A philosophical and practical guide to financial independence

A strategy where he first identifies the best place to hunt (skill), and then waits patiently for the opportunity to present itself, will be more successful. In this sense, the farmer-turned-hunter is his own worst enemy. Patience is a virtue that can take years or maybe even decades to develop. An impatient investor is likely to fire off all his arrows before the situation is optimal and will never make as much money as someone who can wait.

Many associate effort with taking action, but not taking action is also a form of action. In fact, often not taking action is just what is required. The easiest way to get in the right frame of mind is to stop thinking like a farmer and start thinking like a hunter. A farmer (and a modern salary-, working-, and businessman) gets rewarded by activity. The more he does, the greater his reward. Conversely, a hunter isn’t going to catch anything if he thrashes around in the woods, frantically looking for prey.

“mortgage” is French for “death pledge.”

This frame of mind is pervasive. Retirement is seen as spending hoarded savings, and survivalists tend to focus on stocking up on tools and supplies. Rather than forming an environment which can sustain them, they accumulate assets to survive in an environment that isn’t conducive to their living. Conversely, a hunter-gatherer lives in an environment conducive to living. The traditional hunter-gatherer works 15 hours a week to gather resources from his environment. With our level of technology and understanding, we can gather resources from our environment more effectively and only work a few hours a week, or part of the year, or develop enough assets to no longer work at all, letting others do the work.

Unfortunately, so many people see it differently. That is why they keep working to both cut down existing trees, as well as planting seeds and cutting down the saplings as soon as they get the chance. They don’t see the freedom that the mature forest offers. The entire focus is on maximum wood production in the present rather than minimum effort in the future.

Make a list of activities (verbs) that you need to do—sleeping, eating, washing up—and what you want to do—writing, hiking, cycling, entertaining, working, skating, talking, cooking, playing, exercising, etc. Now consider whether you do some of these activities often enough to have “in-home” facilities or whether you’re better off outsourcing them. Consider this list and extend it to your general facilities—for example, how long since you last used the guest room, the bar room, the home cinema room, etc. Consider that some rooms could have multiple uses (see Monouse and Multiuse). In particular, are the facilities available nearby already? In this case, there’s really no reason to duplicate them at home. For instance, if you’re a gym rat and spend six days a week at the gym, maybe you can shower there and thus don’t need elaborate bathroom facilities at home. If you eat in cafeterias most of the time, maybe you don’t need anything fancier than a microwave and a minirefrigerator for your in-home kitchen facilities. Hence, if you currently have rooms and facilities that mostly go unused or could go unused with a change of habit or hobby to something that requires less stuff on location, yet provides as much enjoyment, don’t include them in your next home.

In general, people who live a life of abundance, like “primitive” tribesmen (see Human capital and necessary personal assets) or Californians, will be happy to give things away, the latter primarily to create more space in their garages, and the former presumably because they can easily build replacements.

Yet enormous amounts of resources in our society are aimed towards solving problems heterotelically. Sometimes the solution is the cause of a new problem, but thanks to short-term thinking, the focus is often on responding to problems rather than preventing them. Our culture seems to have an ongoing fascination with action, and “reaction” is ironically more visible than “proaction.”

It’s important to understand that doing the right thing (good strategy) is much more important than doing things right (good tactics).

For instance, at any one time I have four to six simultaneous projects going. If I restricted myself to just one project for the sake of simplicity, or tried to switch projects on a pre-arranged schedule dictated by time management, there would be a lot of downtime when my subconscious was processing a problem while I would be sitting around doing nothing and being underutilized. Hence, not allowing yourself to do anything but focus on one specific task will actually not increase productivity for creative work. It will only increase productivity for assembly line work

it’s more useful to look at expertise by considering the following list, which parallels the development mentioned above. Copying Comparing Compiling Computing Coordinating Creating

However, working in the same place for five years does not imply five years of experience. If you’ve been doing exactly the same thing, day in and day out for five years, and it only took a day to learn, you have one day’s experience, five years over.

technically adept person will be able to quickly crunch numbers and manipulate equations, while perhaps not quite understanding the underlying concepts of his chosen specialization, whereas a more experienced person will quickly understand the underlying concepts of even unfamiliar subject areas. In physics and mathematics, such experienced people are said to have physical intuition or mathematical maturity, respectively. Sadly, many educations focus more on technical details because they are more easily testable. Even without the need for testing, many authors and educators are guilty of obscuring the fundamentals by giving equal time to all pieces of information.33 Automatically grasping what is important only comes with experience. Now, there are

the present methodical, milestone-governed specialist approach is largely a mopping-up operation which leads to increasing levels of detail but no new ways of understanding things. This way of thinking has dominated our culture for some time, where problems are formulated and solved within the present framework of thinking, leading to the world and way of life described in The lock-in. If you want to change your life, don’t be tempted to outsource your life or your operations. You’ll never know which kind of connections or synergies you’re missing and you’ll only make yourself

We have an economic model that is based on pulling resources out of the ground and mostly turning them into unnecessary products, getting people to buy the products by convincing them that they need them, then getting them to throw the products away because they’re obsolete. This makes people buy the next model and bury the other one in the ground. The sole goal of this seemingly pointless exercise is to work faster and grow the gross domestic product, which measures the resource churn.

Anyone who has been out in the world for a while and experienced a lot of different situations has a good idea of what is normal, and thus can describe a bad situation as what it is: simply a bad situation. Conversely, people with less agency and a belief that they are not in control of their destiny are more likely to be stressed and to suffer the associated health effects. Combined with self-confidence, agency is the attitude that any problem can be fixed, given enough resources in the form of time, effort, and determination. This attitude rests either on a thorough knowledge of or training in what is to be done, or on the surety that such knowledge or training can be attained. This attitude is often transferable from one field to another, completely unrelated field.

Many more people started prodigally wasting the abundance of resources and goods that were suddenly at their disposal. This has now turned into a collaborative/exploitative arrangement, where a few get wealthy selling waste to the many, while the many are employed in arrangements in which they have little control over what they produce.

garage and parking the car on the street. People don’t seem to realize that the quest to bring more possessions in through the front door is a chronic disease, and that the shortage of space is a symptom rather than an underlying problem.

Our culture was founded on the idea that maximizing production equals maximizing happiness. In the past, pursuing this goal was admirable since any increase in production resulted in an increase in well-being: better food, better medicine, better clothing, better housing, better work, and better living. At some point the focus changed from better to more: more food, more medicine, more clothing, more bedrooms, more bathrooms, and more work. But can we honestly say this still results in better living and greater well-being?

The means to survival for a specialist is his ability to rapidly learn new subjects, quickly produce saleable works, and then move on. This is called skimming. It’s the same strategy pursued by weeds, to use an ecological analogy. At the expert level (see Gauging mastery), a person needs 80-100 hours a week to stay competitive. For masters level, it’s 60-80 hours, and to remain competent requires 40-60 hours a week.

The Darwinian “survival of the fittest” often has undertones of “survival of the best,” a belief that the “fittest” are happy to reinforce. The distinction should not be forgotten, though. In competitive environments, the selection isn’t for the best but for those that best fit the environment. People are not selected for the best attributes, they’re selected for the fittest attributes. A world without trees selects the short-necked giraffe, which is better adapted. Similarly, the career track selects people who are willing to give up their lives for the sake of work.

The Darwinian “survival of the fittest” often has undertones of “survival of the best,” a belief that the “fittest” are happy to reinforce. The distinction should not be forgotten, though. In competitive environments, the selection isn’t for the best but for those that best fit the environment.

Changemongers thus have the following four variables to play with: Increase your dissatisfaction with present situation. Strengthen your vision of future situation. Build a plan to get from the present to the future. Lower the perceived cost of the plan.

Dissatisfaction with the current situation may be high and the vision of an alternative may be high as well, but without a plan, this can only lead to frustration. There must be a strategy or at least a plan, and it must be practical. To get things done, it’s much better to have a plan than to have passion, at least insofar as you act on it.

one’s entire philosophy must change. Later on I offer a philosophy modeled on the Renaissance ideal of the 17th century and the craftsmen of the 18th century who wrote the Constitution of the United States at the peak of the Age of Enlightenment. This is a framework of complexity where a person is skilled in more than just one area. It is, in a way, a contrarian approach to the contemporary idea of “one man-one specialization.” It’s an interlocking way of arranging one’s life. In risk management parlance, one wants to transfer from a tightly coupled linear system of financed consumerism to a loosely coupled, complex system of the financially independent Renaissance man.

Remember that the shadows on the wall are just a part of life. There’s no reason to only follow the rules of the shadows. I have been inspired by many different sources: books on backpacking, observations of animals and ecosystems, boating, cycling, people living in cars—even the homeless. I have read books on systems theory, biology, physics, finance, as well as more practical manuals on plumbing, house wiring, construction, etc., and then I have adapted these ideas to my own life.