Monday, August 13, 2012

Early Retirement Extreme: Book Review

For awhile now, I've been an avid reader of Jacob Fisker's blog called Early Retirement Extreme  (ERE for   short), and subsequently became enchanted with the idea of reading his book by the same name.  The concept of early retirement is not anything new; in fact people have been living off their savings, the land, or any other "retired" means for as long as humanity, however Fisker is of a new breed of modern pioneers striving to spread the gospel and question the status quo.  
Upon opening up the book, you are immediately prefaced with some caveats on the academic nature of this book.  Make no mistakes, this is no "xx tips to a debt free you", but instead Fisker focuses on the philosophical, theoretical, and mathematical concepts behind seeking early retirement.  Through his visions, he offers a philosophical path to find your own early retirement while also giving some practical insights that question your current level of spending.

The beginning of the book and subsequent first few chapters were rather depressing yet spoke true to the mores and ideals of today's consumer society.  Fisker questions such basic concepts of working a 40 hour work week, buying new appliances, or even the traditional concept of a house.  His goal here is to open your eyes and become what he calls a "Renaissance Man/Woman".  This I thought was a very important concept in that I too am currently striving for this goal, but what does it mean.  He comments on how in today's world, everyone has become so specialized that finding a new career or source of income once you loose your current job often becomes very strenuous.  Imagine a graph with the x-axis being the array of human skills and the y-axis being the depth of knowledge.  Today's modern day experts study one field and so are visualized as a vertical spike on said chart. If technology or society were to change so that the need for knowledge shifts, the expert will find themselves without a beneficial impact to society.  Instead, he suggests that everyone should strive for a breadth of knowledge visualized as a gradual hill along the x-axis (imagine a flat bell curve).  Technology changing or society's views shifting has very little impact to the Renaissance man, and so he can adapt and find future forms of employment.

Fisker doesn't just stop there.  Drawing on concepts derived from such philosophers as Marcus Aurelius's Meditations and Plato's Allegory of the Cave, Fisker finds a way to tie this all together into a completely different frame of mind.  As one gradually reads through his "Manifesto", you will slowly move away from the philosophical and towards the practical.  He questions all things and makes suggestions such as living in a trailer or mobile home (even a boat) instead of a brick and mortar home.  Having a PhD in Theoretical Physics, he can't help himself in touching upon the mathematics of personal finance and investment theory.

I learned much from this book, but I do challenge some of his theories.  One problem he poses is related to the 40 hour work week.  He correctly concludes that the world has become twice as productive as it was in the 1950's, so why don't we work half as much?  I answer this for two reasons; one in relation to competition, and the other for always seeking self-improvement.  First, if you were a company and only let your employees work 20 hours per week, I'll come along and make my folks were 40 and thereby price you out of the market through improved efficiency.  The second revolves around the human desire for always wanting more.  I can survive on 20 hours per week of work, but I can thrive on 40 hours per week.

All in all, I highly recommend this book as a way to completely change your mindset on the world.  As someone who was already the proverbial choir to his preacher, I can say I am already on board, however I may want to live more than the bare minimum when I retire.  Take the time and request your library borrow or purchase this book, which is how I came across it.

Wonderful Moment of the Day: Surviving the day on 3 hours of sleep due to a late flight the night before.


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  2. Your argument in favor of wiping out competition by forcing people to work 40 hours a week instead of 20 is a slippery slope. Why not 60? How about 80 hours a week? It also shows a certain amount of hubris: workers aren't slaves. You can't "make them" do anything they don't want to. All you can do is motivate and fire.

    I've worked in excess of 100 hours a week building my business. I've also experimented with having employees work 20 to 30 hour weeks. Have you? You might be surprised by the results in both cases.