He's being glib throughout (and the content obviously provides no direct commentary about startups), but I've spent serious thought on the question of "buying one's freedom", as I phrase it. The ultimate goal of working really should be either 1) The pure enjoyment of work itself, or 2) Not working, and so getting your life back. There are various elective methods:
1) Having a successful business, and cashing out young enough to enjoy life.
2) Gambling and winning.
3) Saving enough money to live on the interest.
The latter is the only sure-thing available to people. When you really do the math, however, you see that "saving" isn't really the heart of it. A rough calculation suggests that for every 50 dollars of expense per month you have, you need 10000 dollars in a typical safe bond fund. (This is optimistic, actually.)
So, if your total expenses are 1000 dollars a month, you need 200,000 dollars invested. The typical person is lucky to save 10,000 a year. Thus (not including interest on the money) it takes 20 years to save up that much. With interest, it might take about half as much.
The point is: For every 50 dollars of expense that you require while not working you will need to work an additional .5 through 1.0 years, depending on interest earnings. Thus: If you re-work the numbers and say,
"Well, in my retirement, I can discard cable (at 50/month)"
...that one small concession allows you to retire up to a year earlier, on average. If you can live a Thoreau-esque lifestyle, you can retire many, many years earlier than otherwise. This is not so unreasonable when you consider that humans aren't biologically intended to live amidst luxury.
The real trick is doing something you enjoy to make that money, and then doing a bit of work during your 'retirement' since you enjoy it.
So, I would suggest you only need 100k in your scenario if you plan on working on and off with some contracting/consulting. If you are adequately motivated you could do that in 3-5 years on your average salary.
I think I fall into the category of people who can't just cruise in a 'normal' job. I just get too bored and can't deal with wasting the majority of my time just putting in time. Long story short, I was only a year out of university when I figured that out and left my easy job with great pay and leading a team of 5 to go into the startup game.
So while I can identify with some of the concepts in this article - I really don't tackle the issue with the same approach.
The real trick to early retirement is making money and not spending it.
Let's say you save 1/3 of what you make and your your investments pay 7% over inflation it should take 21 years to retire. So starting at 21 you could retire at around 42.
If you save 1/2 of that (17%) it's going to take around 28 years so your 21 + 28 = 49.
At 10% your looking at around 34 years or 21 + 34 = 55. But at 50% your talking about 10 years or 21 to 31.
PS: Taxes take a big bite out of this so it's almost not reasonable for most people to really save more than 1/3 of what they make. And plenty of people don't start at 21 which changes things.
As with most websites, the comments are even better reading than the article (which is excellent). One that stuck out:
This guy is going to be in legal trouble. He certified every 2 weeks he was looking for work and admitted he wasn't. I work for the state unemployment office. This is going to be investigated. Jail time!
My favorite part of the comments is the hate on how he is essentially stealing from the system.
In Canada:
The cumulative EI surplus stood at $54.4 billion at March 31, 2007, about three times as high as necessary (annual payouts are ~16B). They recently increased the length of time you need to be employed before receiving and reduced the time you can be on EI.
The system is essentially taking more money out of everyone's pockets than it needs to. Who is doing the stealing?
If you enjoyed this, I can also recommend a book called "A Working Stiff's Manifesto: A Memoir of Thirty Jobs I Quit, Nine That Fired Me, and Three I Can't Remember" -- really quite a riot and makes you thankful for loving and enjoying being in front of a computer creating stuff. At least, that's what it did for me.
[+] [-] mynameishere|18 years ago|reply
1) Having a successful business, and cashing out young enough to enjoy life.
2) Gambling and winning.
3) Saving enough money to live on the interest.
The latter is the only sure-thing available to people. When you really do the math, however, you see that "saving" isn't really the heart of it. A rough calculation suggests that for every 50 dollars of expense per month you have, you need 10000 dollars in a typical safe bond fund. (This is optimistic, actually.)
So, if your total expenses are 1000 dollars a month, you need 200,000 dollars invested. The typical person is lucky to save 10,000 a year. Thus (not including interest on the money) it takes 20 years to save up that much. With interest, it might take about half as much.
The point is: For every 50 dollars of expense that you require while not working you will need to work an additional .5 through 1.0 years, depending on interest earnings. Thus: If you re-work the numbers and say,
"Well, in my retirement, I can discard cable (at 50/month)"
...that one small concession allows you to retire up to a year earlier, on average. If you can live a Thoreau-esque lifestyle, you can retire many, many years earlier than otherwise. This is not so unreasonable when you consider that humans aren't biologically intended to live amidst luxury.
[+] [-] mrtron|18 years ago|reply
So, I would suggest you only need 100k in your scenario if you plan on working on and off with some contracting/consulting. If you are adequately motivated you could do that in 3-5 years on your average salary.
I think I fall into the category of people who can't just cruise in a 'normal' job. I just get too bored and can't deal with wasting the majority of my time just putting in time. Long story short, I was only a year out of university when I figured that out and left my easy job with great pay and leading a team of 5 to go into the startup game.
So while I can identify with some of the concepts in this article - I really don't tackle the issue with the same approach.
[+] [-] Retric|18 years ago|reply
Let's say you save 1/3 of what you make and your your investments pay 7% over inflation it should take 21 years to retire. So starting at 21 you could retire at around 42.
If you save 1/2 of that (17%) it's going to take around 28 years so your 21 + 28 = 49.
At 10% your looking at around 34 years or 21 + 34 = 55. But at 50% your talking about 10 years or 21 to 31.
PS: Taxes take a big bite out of this so it's almost not reasonable for most people to really save more than 1/3 of what they make. And plenty of people don't start at 21 which changes things.
[+] [-] suboptimal|18 years ago|reply
Or to own a grocery store, apparently.
[+] [-] jrockway|18 years ago|reply
This guy is going to be in legal trouble. He certified every 2 weeks he was looking for work and admitted he wasn't. I work for the state unemployment office. This is going to be investigated. Jail time!
Wow, dude... lighten up :)
[+] [-] artaak|18 years ago|reply
It reminds me this cartoon: http://imgs.xkcd.com/comics/duty_calls.png
[+] [-] mrtron|18 years ago|reply
In Canada:
The cumulative EI surplus stood at $54.4 billion at March 31, 2007, about three times as high as necessary (annual payouts are ~16B). They recently increased the length of time you need to be employed before receiving and reduced the time you can be on EI.
The system is essentially taking more money out of everyone's pockets than it needs to. Who is doing the stealing?
[+] [-] rantfoil|18 years ago|reply
[+] [-] unknown|18 years ago|reply
[deleted]
[+] [-] johnm|18 years ago|reply
[+] [-] be_evil|18 years ago|reply
[deleted]