Welcome to Notes on Quotes, a new article and podcast series in which Stephen Harrison chats with interesting people about a quotation of their choosing.
Pete Adeney is a popular financial independence guru and the author of the Mr. Money Mustache blog, which has received millions of visitors since 2011. At age 30, Pete retired from his comfortable middle-class job as an engineer and set off with his family to live a life free from work. His blog provides practical financial advice on resisting consumerism and investing for the long term. Over the years, Mr. Money Mustache has developed a loyal following of thousands of fans who call themselves Mustachians. Pete lives in Longmont, Colorado, and has been profiled by Vox, the Chicago Tribune, and The New Yorker magazine, which noted that the central principle of his writing is “financial freedom through badassity.”
This print interview has been edited, condensed, and annotated. The podcast version is currently private – contact email@example.com with inquiries.
Stephen Harrison: Before we get too far, I thought I’d ask whether you prefer to go by Pete or Mr. Money Mustache. Do you have a preference?
Pete Adeney: Since this is not an official advice call, we should pretend that I'm just Pete. On the blog, I like to pretend that I'm only Mr. Money Mustache, because it’s a bit of a persona that is fun to keep going, so that I can be a bit more bossy and opinionated than I would be in my real life.
Pete it is, then. So what quote are we chatting about?
It’s a Henry David Thoreau quote that goes like this:
“A man is rich in proportion to the number of things which he can afford to let alone.”
I like this quote. It’s direct and concise, but also a bit provocative. Henry David Thoreau was the 19th century American writer and philosopher. He’s famous for his essay “Civil Disobedience,” which a lot of students read in high school, as well as his book Walden. Thoreau sets out to live in a cabin nearby Walden Pond in Massachusetts, and the idea is that he is going to focus on living a simple and deliberate life. Do you remember when you first came across Thoreau’s writing?
It was only after I had been retired about six years that I even started writing about these concepts. Some of my readers left these comments like, “Hey, you sound a lot like Thoreau; check out these quotes.” Ever since then, I’ve been seeing more Thoreau and I love that he’s persisted through the centuries. I agree with everything I’ve heard him say so far, but there’s probably more reading I should do to get the full picture.
Your Thoreau quote comes from Walden. In the context of the book, Thoreau is saying that he could have turned the area around Walden Pond into a farm, an orchard, or a pasture. He could have developed that land, but he made the deliberate decision not to. Why do you think someone like Thoreau might decide not to develop the property like that?
It sounds like he had his needs met in other ways. He didn't need to farm for additional food, or he didn’t need income from the property—or maybe an average person might have needed more income, and he was happy with less. That’s how I've always taken the quote.
It’s something I’ve noticed in my own life: I’ve gone from a teenager coming out of a lower middle-class and very frugal childhood, where we didn’t have a lot of stuff. As an adult I moved into a higher-income career of engineering. In my twenties, I was excited about the flashy stuff that I was now able to buy. Then as I got through my thirties, I realized, wait a minute, these things aren’t making me happier. I feel wealthier when I am above wanting something rather than just being wealthy enough to buy and possess it.
I zeroed in on the word “proportion” in the quote since I associate that word with math. You’ve described yourself in emails to me as a ground-level engineer. What role does mathematical optimization play in your life?
That might be one thing that’s a bit different about me from your average person—I see the numbers, even if I'm not looking for them. Back in the day, when I was deciding how close I should live to work, I would immediately see that’s about ten dollars a day I’d be spending on driving, between the cost of the car and the cost of gas. Then I’d multiply that across the number of days I'm going to be working, which is like 200 or more per year, and then across the course of a decade, and think about the investment returns. These small decisions add up to hundreds of thousands of dollars. A relatively small package of changes in your life can make the difference between being broke and being a millionaire—at least a single millionaire—between the ages of 20 and your early thirties. So that’s where the math comes in. I apply math to other stuff, too—all of my hobbies end up having some numbers behind them. I like the efficiency that brings.
The quote again is, “A man is rich in proportion to the number of things which he can afford to let alone.” Pete, can you tell me about some of the things that you have deliberately let alone?
Cars are the biggest expense people incur that’s truly optional. People think that it’s not optional, but it’s really a lifestyle design choice. I got around that whole deal by designing my life so that it doesn't need cars. I chose a city to live in that’s only five miles by five miles, even though it has a lot of great amenities and it’s a wealthy place. And I always chose my houses to be close to work. Even now, almost 15 years into retirement, my latest little hobby business is a coworking space that I started downtown. I chose it in a part of town that’s within walking distance of my house.
You can apply that trick to everything else, too. I’m not really into fancy restaurant meals all of the time. I definitely love a great meal, and I love being out with friends, but I don’t use eating out as a source of calories when I'm hungry. I use that for special occasions. So I keep my fridge well-stocked so it’s extremely easy for me to get a great meal at home, which makes me not miss restaurants.
Other examples include second homes. As they earn more, a lot of people say “Where can we get a cottage?” or “What kind of expensive vacations can we go on?” But you really don’t have to make those updates. They don’t actually make you any happier, if you’re able to meet your needs in other ways.
You’ve mentioned some financial decisions—not having a car, not buying that cottage or second home. But I was reading that you’ve also made some non-financial decisions because of your philosophy. For example, you said that you don’t pay much attention to political debates or the day-to-day political polling—those are some things that you’ve intentionally decided to leave alone.
That’s very much true. I have realized that my brain has limited capacity. Especially as a blogger, with this website, it’s got millions of people passing through, and a certain percentage of them are sending me emails and commenting on the articles. A lot of these are really interesting things. It’s people who run companies asking for advice, or it’s people like this situation here, an invitation to be interviewed. It’s just a lot.
And I realized, I can pay attention to that stuff, which is quite valuable to me, or I can watch the news. The news is a great thing to chop first because it’s completely noise. It’s very sensationalistic. “What did Trump say today? What other dumb thing did he say today?” That doesn’t matter. You just need to know where you are going to place your votes every two and every four years, especially. And then you can tune out. Because otherwise the day-to-day crap these politicians are saying to each other is wasting your very valuable and limited brain power.
I think the idea is something like: be careful what you care about. You’ve written a lot about how reducing the desire for material possessions is really liberating. Can you talk about how your philosophy has helped you personally?
In this world economy, goods and services keep getting better and cheaper relative to our income. Even if you’re a middle-income person, you can buy all of this equipment. And it just clogs your garage and leaves you feeling guilty that you haven’t done enough things this month. The idea of deliberately saying “no” to more things and just focusing on the few things you really like will bring you a lot more joy.
One interest that has stayed true for me since I was a teenager is carpentry. Building stuff ranging from chairs, all the way up to entire houses. That always brings me a lot of satisfaction. So when I have free time, I put more time into carpentry. Between being a dad most of the time, a blogger a very little bit, and a carpenter somewhere in the middle. I can only be awake for 15 or 16 hours a day, and those are pretty blissful hours, as it is.
I was curious about how this idea of drastically reducing spending affects your personal relationships. To what extent has it had repercussions—either positive or negative—with your friends and family?
It has been amazing. It’s really the best decision that I ever stumbled into in my life. I can’t give myself credit, at age 30, for being wise enough to predict this, but I just had this vague idea that work was sucking up a lot of my time, and I was earning a fair amount of money, so hey, let’s use this money to buy some freedom to get more free time. But the results have been spectacular.
It turns out that when you have kids, that’s a lot of work, and they really compete with your career. You have to make massive compromises if you're trying to do both. And if you're not trying to run a career during the time with the kids, then you can give your whole heart to your job as a parent. It has felt really, really good to just never have to say “no” to anything child-raising related, unless it’s “no” for your own good or for the kids’ own good.
I prefer not focusing on too many things, which goes along with the Thoreau quote. It’s better for my social life too, because I can say “yes” to my friends.
There was a big debate on social media a while ago about whether millennials are spending too much money on small items like coffee and avocado toast. One side of the debate says, “Cut back on those expenses, because they’re all non-essentials” whereas the other side says, “No, life is too short. Just go ahead and enjoy your avocado toast.” What are your thoughts on that debate?
I wonder how true that is that millennials are spendy on those items. We would have to see some real numbers. But if we just assume it’s true, I would say most people probably should be exercising some self-discipline and not give themselves too many treats throughout the day. It’s very easy to make an awesome cup of coffee and throw it in your thermos. And yes, you should bring your lunch to work. Maybe you can go out with your coworkers on Friday, but not every day.
The avocado toast debate circles around millennials. Do you think that millennials have more challenges than older generations when it comes to financial independence?
I sure don’t think so. I could be naïve about this, because I don’t study the generation and the employment statistics all that well. But I do know that in general we have the lowest unemployment in U.S. history right now and it has been really low for a long time. In certain very big sectors, the pay rate is really high. As long people in these younger generation have had relatively good experiences— like not abusive childhoods—and they got an education that at least allows them to function as an adult, they're pretty qualified for a lot of these jobs. So there’s nothing systematic that’s oppressing millennials as far as I've ever read, although I could be wrong about it.
You’ve described this before in your writing as excuseitis.
Yeah, excuseitis—the failure disease. It’s a great old 1950s expression that I got from this hilarious self-help book called The Magic of Thinking Big. It’s amazing how that disease carries on through the generations. It’s very common for people to love making excuses for things. And then it spreads, too, just like a disease. If you hear your friends making excuses, you will do the same thing.
The trick is to catch yourself and instead own everything, like, “I didn't ride my bike to work today because I'm a wussypants and don’t get a little bit of water on my jeans.” Do that instead of saying “I’m busy” or “I have this important thing after work.” Just admit your faults and be comfortable with them.
On this topic of excuses and attitude: You’ve written before that optimism has immense practical benefits. Why is that?
Optimism is almost the flip side of the coin of excuseitis, and it’s rarely practiced. The few of us who dare to practice it get these disproportional advantages. First of all, it fools you into trying stuff. Being an optimist makes you try things that you would otherwise not have the guts to try. In some of those things you might succeed.
It’s a cliché, but a lot of people are afraid to fail. Really, failure is not that bad. What it boils down to when you fail something is some numbers on your computer screen might go down. It might decrement your money a little bit. You might have to go to the office or straighten some stuff out. And then you’ve learned a whole bunch and can use that to do stuff much better in the future. The real-life consequences of a failure are usually a lot less than what you think. So just go out and try things. Assume they're going to work.
The other reason optimism is amazing is because it’s very persuasive. When you tell people that you're going to do something, they just generally tend to listen. They're like, “Holy shit, this person’s got something that I don’t know. I better just follow along and do what they say.” You end up getting these teams of allied, excited people working with you and for you.
My website, my blog, is a good example. Something close to 40 million people have passed through, and a lot of them have stuck around as regular readers. I didn't even do anything magic. I just presented some good news in an optimistic fashion and got people to try out this financial independence thing. And I really credit the optimism for a lot of that.
I like this point you’re raising about the persuasive power of optimism. Going back to Thoreau, some people say he was a pessimist or a misanthrope—because when he lived at Walden pond, he was trying to get away from people. But others make the argument, and I think it’s a good one, that Thoreau was essentially this major humanist who was seeking to live this transcendental life—and that his experiment at Walden pond required a good deal of optimism. You mentioned that one of the tell-tale signs of optimism is its long-term persuasive power. On that point: we’re still talking about Thoreau, and quoting him here.
He had a long-lasting effect. I don’t know how fun Thoreau was to have at a party or whatever—but that’s almost a different axis. There are your real-life friends and then there’s your long-term impact on society. And his was pretty high.
Thoreau was an American author and my sense is that he was challenging this American idea of consumption and undue waste. But Pete, you grew up in a small town in Canada before moving to the United States at age 24. So I’m interested in your perspective: Do you think Americans struggle more with financial independence and excessive spending than people from other countries?
That’s definitely true. There’s a difference between countries in our values and our thriftiness. Americans have a stereotype of being these splashy Las Vegas and cruise ship and wasteful people—and in general, that’s true. On average, we spend and consume more per person and we have a lower savings rate than most of the other rich countries, especially Nordic countries. The statistics back that up in terms of their health levels and the public infrastructure, which allows them to be active and bike around. They consume less fossil fuels. They’re just way ahead of us—like decades.
But the part of Canada that I grew up, in the era of the ‘70s and ‘80s, was much more low key. The fanciest thing in my town was this Mercury Cougar. So there wasn’t a lot of wealth to set the example. As a result, I didn't pick up these ideals of flashy spending. Then when I came to the U.S. and started making a lot of money, I kept my childhood ideals, and I was really, really excited by anything I bought. I bought a thousand-dollar mountain bike in 2004, and I thought, “Wow, this is incredible!” I had never had such a fancy bike with full suspension and everything. And then, a couple years later, on the mountain bike trails, people were like, “Wow, that’s an old school bike. Why are you riding this hard of a trail on such a simple bike?” And I just couldn't even understand! Because they all had like these $10,000 carbon-fiber mountain bikes.
In one of your blog posts you proposed an idea that reminds me of this quote. You said imagine that you are getting paid zero dollars for your work, and that everything you buy costs zero dollars. Then imagine how that framework would affect your decision making.
That’s a little exercise that I encourage my other early retired friends to try—especially people who retired with a pretty big surplus of money. We tend to keep our habits the same as when we were younger. So people get really mad if they get a bad deal on groceries or something that’s not on sale. Or if an offer from their old employer comes back into their inbox to do some unpleasant work in exchange for a really high pay rate, they're like, “Well, I’ve gotta do this. That’s just a crazy amount of money!” So I remind people, “Well, would you do it if the pay rate was zero?” And they say, “No, of course not.” And then I say, “Well, then, you shouldn't do it. Because this extra money is going to make zero difference in your life. You already have enough. Anything more than enough is zero use to you.” In general, it’s good training for people who are too stingy, just to relax and pretend that money isn’t even in existence anymore.
You mentioned that the zero-dollar framework was for people who were beginning retirement and already had a large sum of money saved up. What about people on the opposite end of the wealth spectrum? For example, someone working a minimum wage position or juggling multiple jobs. What advice would you have for them?
It’s totally different advice. In that situation, you do want to build up as much of a surplus and a cushion as you can, but you should still not wreck your life to do so. It’s better to work forever in a minimum-wage job – just to use that example – that is enjoyable, than to work half your life in a horrible job and then have the second half of your life off. Because in the first situation, hypothetically, you've enjoyed your entire life!
Don’t sacrifice your happiness just for money, but I always suggest that you look for win-wins. Cut out the things that are really expensive and you can’t afford. If you're making anything less than $200,000, you should not be buying $30,000 cars, which is actually less than the average price of a new car in the U.S. People are way out of whack on their spending in proportion to their incomes.
People should also shop around and switch jobs a little more often than they do, and negotiate a little bit better, and just tilt those balances of income and spending. Surpluses can happen way more easily than people think. That’s because this is actually a very wealthy country with extremely cheap necessities like food. So you can get ahead more than most people assume.
Thoreau’s writing is often associated with the conservation or environmental movement. I was doing some research before and saw that the rock star Don Henley started a nonprofit organization back in 1990 called The Walden Woods Project to save and protect the forest around Walden Pond. He was a big fan of Thoreau’s writing. Pete, I was wondering, do you connect your Mr. Money Mustache philosophy with environmental issues? I’ve noticed you’ve mentioned cars a few times.
Well, this is a bit of a secret, but my blog is not actually even a personal finance blog. It’s an environmental activism blog disguised as a personal finance blog. Because I figured that the best way to save the human race from destroying itself through overconsumption of its own habitat is to get my fellow rich people excited about consuming less natural resources. The only way to prevent ourselves from driving off a cliff in terms of natural resources and climate change is to not keep accelerating, and in fact to rapidly slam the brakes on. Luckily, you don’t have to compromise much to do that. We could cut our consumption by 75% today and we would live happier lives as we woke up tomorrow morning. We're at least at a 75% complete bullshit waste level.
So yes, my blog is an environmental blog and a finance blog. I wouldn't be writing it if it was just about money because I already got mine taken care of, right? Why do I care about other people’s money? I care about us all getting to live in a better world.
I’m hearing you say that your writing about personal finance is almost like a Trojan Horse for you to sneak in the environmental advocacy.
Yeah. I mean, you have to lead people with a carrot rather than chasing them with a stick. And I learned, after moving to this country, that environmental stuff has been politicized, even though it shouldn’t be. It’s so ridiculous. I’ll say, “Oh, you shouldn't pollute so much” and they're like, “What are you? A liberal?” And I'm like, “No, I'm a fuckin’ human!” I’m trying to allow the planet to live longer for my fellow humans. It has nothing to do with politics.
So I learned not to say that stuff because it turns off 50% of the population. Instead, I focus on something we can all agree on, which is improving our personal lot in life, and getting rich. And that seems to be working so far. As long as this secret doesn't get out!
There’s another Thoreau quote that goes something like, “As you simplify your life, the laws of the universe will be simpler.” What are some practical strategies for people who are finding it difficult to simplify their life?
I think it’s just exercising the power of “no.” You have to start saying “no” when people want you to commit to an appointment that’s in the future, or to sign up for another vacation.
I often encourage people to spend a weekend where you don’t do anything. Don’t go to a restaurant. Don’t leave town or do any shopping. Instead just build up a to-do list of all the other stuff that you should have been doing if you had more time: like finally paint your daughter’s bedroom, or organize the cutlery drawer, or wash the car and clean out the garage. All of that stuff costs you nothing—and it keeps you at home, you end up meeting your neighbors more, and it’s often physically good for you.
This really simplifies your life. It’s the activities that most people plan that are messing them up, I think. If you have a job, that’s already enough activity. You don’t need a bunch of extracurricular stuff on top of that.
That’s very Thoreau-like advice, by the way. This is the same author who said, “The mass of men lead lives of quiet desperation.” And it seems to me that line could apply to many people who are in full-time corporate jobs, where they’re just grinding all of the time.
That was such a forward-looking statement. When I see people who have two kids and two high-powered careers for the two parents. Then all the other activities, and they're in debt on top of everything—houses, cars, monthly payments on all this stuff . . . That really is a kind of quiet desperation. Because you can never stop running on this superfast treadmill, otherwise you're going to get thrown through the window of your expensive Connecticut house.
It’s really easy to start peeling that back and make your life better, but so few people do it. They're always desperate. Then they lose a job or a recession comes, and suddenly they're $10,000 a month in the hole. And it’s all because of the stuff they added unnecessarily to their own life.
But that’s the life they designed, as you said earlier.
It’s not even quite designed. It’s almost designed by default, because the society has a lot of stuff going on around us, and we tend to just say “yes” to it. Like, “Hey, do you want to go to lunch today?” Or, “Do you want to join this club?” Or, “Are you going to throw your kids into the expensive private school that’s 15 miles away?” And people just tend to say “yes” to everything.
It’s almost an anti-design, because if you designed your life, you would say, “Well, I want three hours of free time per day for these self-enriching experiences, and I want to spend zero hours a day commuting back and forth on the same piece of pavement.” That’s what I call a design.
While we’re on this topic of lifestyle design, you told me that now that you're retired, you never schedule more than one thing on any given day. Is that right?
Oh, yeah. I get a little stressed out if I have too many things to hop between. So as a rule of thumb—which I sometimes break—I like to say just one thing per day. Today, it’s this interview.
Well, I’m honored that you would make this the one agenda item for the day!
It was a big deal. When I got the Google calendar alert, I cursed my old self for planning even this one thing, because I was going to play a video game with my son instead. I decided to stick with it and then just remind myself not to plan too many things. But I’ve enjoyed the conversation and I think I still have time to play that game. So maybe I'll sign off and get to it.