I am a strong proponent of setting up a permanent portfolio, or something similar, as described in Harry Browne’s book Fail-Safe Investing.  For this post, I am going to focus on PRPFX, the permanent portfolio mutual fund.  I have my criticisms of PRPFX in that it strays a little from the true permanent portfolio, but a look at the mutual fund will serve its purpose for this post.

PRPFX has performed quite poorly over the last couple of years, particularly by its standards.  As of this writing, the fund’s one-year performance is showing a loss of approximately 2.5%.  This is during a time when the stock market has done quite well.

While this may be disappointing for people holding a large portion of the fund (or some kind of a permanent portfolio setup), we have to remember its purpose.  PRPFX is not supposed to mimic the stock market.  So if the stock market goes up and PRPFX doesn’t go up with it, that is acceptable.  We don’t hold the fund for short-term speculation.  It is for longer-term scenarios.

We also must remember that the permanent portfolio’s primary purpose is one of defense.  We are trying to avoid huge losses, such us what pure stock investors experienced in late 2008.  The primary objective of PRPFX is capital preservation.  Growth is secondary.

I think another important thing to remember is that PRPFX has an inflationary bias.  This is not necessarily a bad thing.  Most people will measure their investment returns on a nominal basis.  So someone could brag about earning an 8% return, but if inflation is running at 3%, then the return is really only 5% (before taxes).

The good thing about PRPFX is that it will tend to provide higher nominal returns during times of higher inflation.  This is really how you should want your investments to perform.

Right now, monetary inflation is high, but the demand for money is also high and bank lending is low.  Therefore, even though the Fed is creating a lot of new money out of thin air, consumer price inflation has been relatively low.  So in that respect, we shouldn’t be expecting huge returns out of the permanent portfolio.

The permanent portfolio is going to be unpopular amongst a lot of people right now, especially the “professionals”.  But this doesn’t make it a bad investment.  Just because it has performed poorly in recent times, it doesn’t mean it will continue to be that way.

I think the permanent portfolio is far from perfect, and you can adjust it if the bond portion scares you too much.  But I really haven’t found a better strategy for preserving capital, while also providing some growth.

Murray Rothbard wrote that there were only 2 just wars in American history.  They were “the American Revolution, and the War for Southern Independence.”  Of course, when he wrote the War for Southern Independence, he was referring to what is called the Civil War.  But he was correct that the Civil War is an inappropriate name, because it was not two factions fighting for control over the government or for power.  The southern states simply wanted to secede and be left alone.

Most Americans think that World War II was just, at least on the American side.  But they ignore (probably because they don’t know or don’t think about it) a lot of facts about the war.  They ignore that Japan was provoked into attacking through actions such as oil embargoes.  They ignore that Roosevelt likely knew that an attack on Pearl Harbor was going to happen but did not tell anyone so that he would have an excuse to enter the war.  They ignore that the American government teamed up with Stalin, who likely murdered far more people than Hitler.  They ignore that Hitler likely never would have come into power if the American government had not entered the first world war and imposed harsh reparations on the Germans.  They ignore that millions of innocent Jews were slaughtered, despite American involvement.  They ignore that innocent people were sent back to Stalin’s Russia after the war, only to be murdered.  They ignore that dropping atomic bombs on Japan was completely unnecessary in “winning” the war.  There are a lot more interesting details that are unknown to the vast majority of the American people.

On the American Revolution, it was obviously just for the American colonists to secede.  It is debatable whether more could have been done to avoid violence and outright war.  It can also be pointed out that some of the “Founders” who are thought of as great men perhaps had more than good intentions in supporting independence from the British.  But overall, there is no question that the American side was in the right and the British side was in the wrong.  War is not usually black and white.  It is not like the movies, or even history classes, where one side is good and one side is evil.  But with the American Revolution, one side definitely had a far more just cause than the other.

For the so-called Civil War, things get even more cloudy.  There is no question that the southern states were less at fault than Lincoln and his cronies.  Lincoln turned into something of a brutal dictator.  His main stated purpose of the war was to preserve the union.  It was not to free slaves.  Lincoln had a quest for power.  You can read Thomas DiLorenzo’s book The Real Lincoln for a good history of the brutality of Lincoln.  It is completely ridiculous and evil that someone would start a war, which ultimately killed far more than half a million people, even if his intentions were to free slaves (which is not the case).  If he really had cared about slavery, he would have eliminated the federal Fugitive Slave Laws.  It would have made it difficult for the southern states to hold onto slaves and keep them from escaping.  There were other ways to undermine slavery without resorting to violence.

With that said, both sides were really evil on this.  The southern states, while also unhappy with tariffs and other things, did use slavery as one of the principle reasons for seceding.  In addition, even aside from the issue of slavery, the south was far from some libertarian paradise.  They had their own taxation, their own funny money, their own draconian laws, and forced people off to war.  On top of that, the morons stood in a line in an open field and fought battles.  They did not learn from their American ancestors to fight a guerrilla style war.  They seemed to care more about “honor” than about actual freedom.  And they sure didn’t care about freedom for slaves.

In most wars, it takes two to tango, or perhaps we should say tangle.  There is usually evil on both sides.  The American Revolution is a rare war where one side was clearly more justified than the other. The so-called Civil War is not as clear, although the southern states should have been allowed to secede peacefully.  While the southern states were evil, Lincoln and his army were far more evil.  I can’t think of any other wars in American history where American fighting and involvement was justified.

While I am a long-term optimist, I am quite pessimistic in the short run.  It is not that I want to be pessimistic.  It is just that I am a realist and I can only conclude that there are some rough times ahead.  I’m not sure if it will become evident this year, next year, or a few years from now.  I can’t imagine that 5 years from now we will have avoided economic turmoil much worse than what we have now.

I like to look at the adjusted monetary base and the excess reserves held by commercial banks.  It gives us a good picture of what the Fed is doing (massive monetary inflation) and what the banks are doing with the vast new money being created (not lending it out).  The monetary base indicates that we should have massive price inflation, but the huge increase in excess reserves indicates just the opposite.

But these are not the 2 statistics that I am referring to in this post.  I think 2 statistics that can give us a good warning shot are the Consumer Price Index (CPI) and the 10-year yield on U.S. treasuries.

I understand that many people do not like the CPI.  It is a government measure and its calculation has been changed in the past.  I agree that it does not give us a really accurate measure of price inflation.  However, I do think it gives us a good enough picture of the trend of consumer prices.  And if consumer prices are rising, then the Fed may worry that it has to stop its monetary inflation.

The 10-year yield is important in a lot of ways.  If interest rates rise, then the government will have to pay higher interest for newly issued government debt.  In addition, mortgage rates are highly correlated with the 10-year yield.  A third possible factor is that the value of the Fed’s holdings will actually go down as interest rates rise.

And to tie the two statistics together, if the CPI starts rising rapidly, then this could cause interest rates to rise rapidly.  There is not much of an inflation premium for U.S. bonds right now, but this will change if investors perceive rising prices as a major threat.

It is hard to say what the Fed will do in such a situation of a rising CPI and rising rates.  It has not had to worry too much about this yet.  But if it does happen, it will have to decide whether to keep the monetary inflation going and risk even higher price inflation or to stop the monetary inflation and risk a depression.

Either way, there is going to be trouble ahead.  It is not that I want it to happen or that I think it will happen because of future policies.  It is already baked into the cake.  We cannot avoid the consequences of previous bad policies.  We can try to minimize the damage by getting policies right going forward, which would include ending monetary inflation and massively cutting government spending.

The Fed is happy right now.  It is getting a free ride in a way.  It is creating huge monetary inflation, bailing out the banks, and we have had relatively low consumer price inflation.  This cannot last forever.  The pain can only be delayed for so long.  So when you see the CPI rise significantly and you see rising rates with it, then that is your warning that you should hunker down and get ready for some rough weather ahead.

In today’s economy, some people will point out that the younger generation of today may actually be worse off than their parents.  This would be the first generation since at least the Great Depression era where this could be said, and even the Depression era is arguable.

Today’s world is bizarre in many ways.  There is some truth that we are actually poorer, at least in a sense.  When it comes to things like housing, medical insurance, and education, we really are poorer.  Wages have not kept pace with the costs of many of our basic needs.

On the other hand, today’s young people enjoy technology that was not possible just a couple of decades ago.  The internet did not take off until the 1990’s, and even in the late 90’s it was just a fraction of what it is now.

I think one of the most important investments you can make, if you are in the minority of middle class Americans who does not already own one, is to have a smartphone.  I believe in frugality up to a certain point and I know that hardcore savers (like Mr. Money Mustache) will say that you can have a pre-paid cell phone or something equivalent for just a few dollars per month.  If you own a smartphone and have a plan that allows internet usage, you may pay something close to $100 per month.  You may be able to get a little discount for a family plan.

I think for many people, they would be fools not to have a smartphone, especially if their time is valuable to them.  Of course, every individual has a unique situation.  If you are unemployed with little income, then it is probably a good idea to cut your monthly expenses to the bone, which would include not having an expensive plan for a smartphone.

I know some people criticize smartphones.  They like the good old days.  They think they are anti-social.  On this point, they may be right to a certain extent.  If you are having dinner with friends or family, put down the phone unless it is an emergency.  But this is just a matter of being courteous.  You have to use good judgement in your life.  However, it also doesn’t mean that smartphones are a bad thing just because some people may be rude.

I think the biggest point that needs to be reinforced is that your time is worth something.  Some people’s time is worth more than others.  This doesn’t mean that one person is more important than another.  It just means that some people’s time is more valuable.  A heart surgeon’s time is more valuable than a guy sitting at home who can’t find a job.  One guy is short on time and long on money and the other is short on money and long on time.  Sometimes it is important to put a price tag on your time.

For this reason, smartphones are amazing.  You can convert what was previously unproductive time into productive time, even if the productive time is for entertainment purposes.  I tend to read more about the latest news in the world or the financial markets.  Other people may just look at their Facebook account and what their “friends” are up to.  But even the person using their phone for Facebook and other entertainment is far better off if the alternative is just sitting there and looking at a wall.

I think about this in certain settings.  For example, think about waiting in a waiting room for the doctor. Before,  it would really annoy me if I had to wait a long time.  It might still annoy me if I had somewhere to be, but having a smartphone makes the situation a lot more tolerable.  I can visit some of the websites that I like to visit on a daily basis.  I can also check email.

This could apply to almost anywhere that you can get cell service.  If you find yourself sitting there waiting, you can convert that into productive time.  If I read a few articles while I am in the waiting room, then that will free up my time to do other things later on.  Or maybe I will have read something that I otherwise wouldn’t have seen.  In the past (and smartphones have only been around for a few years), you would have been stuck reading some magazine that you probably didn’t care about.

Also, consider your commute to work.  If you have a commute to work, you can convert this into productive time.  Some people spend over an hour a day in the car.  You can use your smartphone (or an iPod) and listen to podcasts or speeches.  (I would recommend listening to it through your car stereo if you have the capability.  I actually have an old school tape deck in my car that I can use to listen to my iPhone through the car stereo.)  Even if you like to listen to music, you can mix it up between podcasts and music.  And even with music, technology has made us much better off, allowing us to listen to songs we like instead of waiting for something on a radio station, or doing endless searches on the radio.

In conclusion, if you have some money to spare and you value your time, I think a smartphone is a great investment.  You can convert waiting time (unproductive time) into something productive and enjoyable.  In this way, we are much better off than past generations.

The latest FOMC statement was released on July 31, 2013.  You can compare it to the June statement.  As usual, there was very little change in the overall statement.  Other than a few changes in wording, there were really only two differences between this statement and the last.

The first difference comes in the first paragraph.  There was an acknowledgement that “mortgage rates have risen somewhat”.  However, there was no change in policy because of this or even any further detail provided on this subject.

The second difference was in the second paragraph.  It is in regards to inflation, which is really referring to price inflation and not monetary inflation.

In the FOMC’s June statement, it said: “The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

In the FOMC’s latest July statement, it said: “The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.”

So there you have it.  I wonder if this change was inserted by Professor Bernanke, the student of the Great Depression.  The Fed is worried that inflation below 2 percent could pose risks to economic performance.  Yes, if only I could pay 5 or 10 percent more at the grocery store, instead of a mere 1%, economic performance would be so much better.  With the stagnant or falling wage rates, we must hope that Professor Bernanke can make life more expensive for us in order to help the economy (end sarcasm here).

Other than that, there was essentially no change.  The most important piece stayed the same where it says the following: “the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.”

So the Fed will keep its policy of expanding the monetary base by approximately $85 billion every month.  This comes out to an annual expansion of about $1 trillion.  In 2013 alone, the Fed will have created more new money than what was done from 1914 to 2008.  We must not forget that the adjusted monetary base was only just above $800 billion in 2008.  It is now over 4 times that, with the Fed continuing to press on the accelerator.

In conclusion, we are still heading over the falls and Bernanke and company aren’t even trying to slow the boat down.  But Bernanke is going to try to jump out of the boat at the end of January 2014.  He might get out in time, but that doesn’t save the rest of us.  And I sure wouldn’t want to be the next captain taking over.

Bradley Manning was found not guilty of the most serious charge against him of aiding the enemy.  However, he was found guilty on multiple other counts, which means he could still spend the rest of his life in prison.  You can read the story here.

Manning is the whistleblower who released many government secrets and documents to Wikileaks.  Among other things, it exposed war crimes committed by the U.S. military in Iraq.

When Obama was first campaigning for president in 2008 and was elected, he praised whistleblowers and said they needed more protection for exposing waste, fraud, and abuse in government.  This was stated on his change.gov website.  This message about whistleblowers has since been taken down.  Obama liked the idea about protecting whistleblowers until they were blowing the whistle on the criminal acts of him and his administration (see Edward Snowden).

Not surprisingly, the verdict issued for Manning came from a judge and not from a jury.  In that sense, America is turning into a light dictatorship, as the government can arrest you, hold you, and convict you, without being tried before a jury of your peers.

Luckily, in most criminal cases in America, you can still get a jury trial.  It may not always be fair, but at least there is that possibility of being acquitted.  If you ever find yourself on a jury and there are multiple charges against someone, I think it is a good idea not to take the middle road, unless that is truly what the defendant deserves.  I see too many instances where the jury will convict on a lesser charge and the defendant still gets an extremely steep punishment.  If there was no crime committed or the law is unjust, then you should acquit on everything.  You shouldn’t punish someone for the supposed crimes of obstruction of justice, money laundering, or a number of other things if the main crime wasn’t committed or never was a crime.

I have written about jury nullification before.  It is actually a great example where changing the opinions of your fellow Americans can change laws and reduce the size and scope of government, all without having to elect the “right” guy into office.  If people stop convicting for tax evasion, then tax collection becomes almost impossible in some cases.  If people stop convicting for drug use, then drug laws will become meaningless.  The same could be said for any victimless crime.

It would have been interesting to see what would have happened had Bradley Manning had a real trial with a jury.  If it had been a jury of 12, then I think it is likely that at least one person would have refused to convict.  That is at least what I hope.

If you want a good litmus test of whether someone is more of a statist or more of a libertarian, ask them what they think of Bradley Manning and Edward Snowden.  If the person thinks they are traitors, then the person is someone who worships the state.  If the person considers them heroes, then that person has at least a libertarian streak in them.  If the person doesn’t know who they are or simply doesn’t care, then the person isn’t a libertarian, but is probably less prone to evil than the person who wants to execute Manning and Snowden.

While this is not a perfect litmus test for someone’s liberty credentials, it is the closest thing I can find in discovering someone’s general belief about the state in one question.

I hope that one day there is a president who is decent enough to pardon Bradley Manning and let him see some freedom again.

One of my favorite economic articles written by Harry Browne was one that he wrote back in 1992.  He asked the question, “Is America In Trouble for Lack of Manufacturing?”  He pointed out the economic fallacies where people believe that America should be a nation of manufacturing and not a nation of services.

I thought about this article recently when I was reading an article by someone who was discussing productivity.  He alluded that productivity is simply making things.  Like so many people, there is a fallacy that productivity only counts when “stuff” is being made.  In other words, productivity involves making cars, appliances, houses, clothes, etc.  I suppose they would include food too.  For some reason, these same people do not see services as productivity in the same way.

It is not as if I read this one time.  I see this fallacy pop up often.  It really pains me when I see it repeated by someone who claims to be a libertarian or someone with libertarian leanings.  But it is simply wrong to assume that providing services does not count for productivity.

Maybe these same people (I’ll call them service critics) would point out that manufacturing goods is more important because that is meeting our basic human needs, whereas services are more of a luxury.  But even most manufactured goods are not really a necessity.  Food and shelter are a basic necessity for human survival, but there is not much beyond that.  In that view, almost everything is a luxury.

But isn’t a car mechanic just as important as someone who builds a car?  Maybe the “service critics” would still consider the car mechanic to be part of productivity because he is fixing an actual good?

What about teachers?  They are not physically producing anything.  Do they not count for anything?

What about a salesman?  I suppose the “service critics” would say that a salesman is not really producing anything.

The reason we have so many service jobs in our economy today is because that is what consumers are choosing.  I realize that there is a misallocation due to government taxes and regulations and also monetary inflation.  There wouldn’t be so many lawyers if there weren’t so many laws.  There would not be any tax accountants if there were no taxes to be paid.  But given the hand dealt by government, the market responds.

The “service critics” probably don’t like the fact that people like Tiger Woods and Peyton Manning make millions of dollars playing sports.  But this is market demand.  They are providing entertainment for millions of people.  They are also helping to advertise products through their endorsements.

When I use an example to illustrate an economic theme, I will usually use actual goods for the sake of simplicity and understanding.  In an example of comparative advantage, I might start an example about Al who produces 10 apples per hour and Bob who produces 20 bananas per hour.  These are easy concepts for people to understand.  I might even just discuss “widgets”.  But this isn’t to demean services.  It is just for easy illustration purposes.  I could just as easily point out comparative advantage by saying that Tiger Woods should still play golf even if he were the best hamburger flipper in America.

In conclusion, don’t fall into the economic trap of thinking that only making things counts as productivity.  Doctors, massage therapists, real estate agents, accountants, chauffeurs, actors, athletes, musicians, therapists, and any number of professions make us more wealthy, assuming they are in demand by consumers.  While government has misallocated resources on a grand scale, it is not to say that services would not exist in a free market.  And in a highly civilized society, we should have luxury goods and services that make our lives easier.  When less people are needed to manufacture goods, then it frees up resources to do other things that raise our overall standard of living.

I “subscribe” to DownsizeDC.org.  The organization takes positions that coincide with its name.  It seeks to downsize Washington DC.  It seeks to lessen the size, scope, and burden of the federal government.

If you sign up on the website, you will get emails (typically 3 or 4 per week, but not more than one a day) that take on different issues.  The organization has made it easy to promote its campaigns and to also resist pending legislation that it thinks is bad (which is most legislation coming out of Congress).  Once you sign up once, you can just write a short message and it will be sent to all 3 of your “representatives”.  This includes your House member and the 2 Senate members of your state.

One good thing is that if you disagree with its position on something or if you just don’t feel strongly about it, then you simply don’t have to send a message.  You can send messages for the issues you really care about.  While Downsize DC claims to be non-partisan, there is no question that its philosophy is mostly libertarian and attracts mostly libertarians or those leaning libertarian.

The organization has taken a bit of a turn in the last year.  While it still encourages sending emails to Congress, it has also emphasized education to a much greater degree, including appealing to morality and what it calls heuristics.

I have always thought that the educational side of Downsize DC is its best feature.  If half of the 20,000 plus people who get the emails actually read them, then this is actually a bigger influence in itself than sending letters to Congress.  It may seem like preaching to the choir, but the choir often needs preaching to.  I have always said that if all people who call themselves or identify themselves as libertarians actually understood libertarianism to a great degree and could espouse their position to others, then we would have a much more libertarian society.  I can’t stress enough how many times I see libertarians saying that we need to spread the word and get “active”, when they can’t even defend their own positions and oftentimes don’t even know their own positions.

If you look at the right side of my blog on the home page, I have a button for the “Read the Bills Act” coalition.  This is a proposed bill that has been emphasized from nearly the beginning at Downsize DC.

There are actually three big pieces of legislation that Downsize DC has written and proposed.  They are:

• Read the Bills Act
• Write the Laws Act
• One Subject at a Time Act

They may sound a little gimmicky at first, and perhaps they are to a certain extent.  But I really believe that these three bills would really change the course of business in Washington DC and, at the very least, slow down the growth of government to a large degree.  While there are no guarantees that any of these pieces of legislation would “work” or be followed as written, they certainly can’t do any worse for the system than what we already have.

The proposed acts are somewhat self explanatory.  The Read the Bills Act would require, among other things, that legislation be read by any member of Congress voting in favor of it.  The Write the Laws Act would require that Congress write all of the federal laws and not delegate this power to federal agencies.  The One Subject at a Time Act would require that each piece of legislation address only one issue at a time.

I think these would all be important, but what do you think is the most important one?  I have my own opinion.  I think the Read the Bills Act would be the easiest to get passed because it is easy to understand and it is a reasonable request that people can get behind.  But I think that the Write the Laws Act would actually be the most important with the most long-term impact.

I don’t think many Americans understand that so much of the dictates coming from Washington DC are not laws that were directly passed by Congress.  It is usually tens of thousands of bureaucrats and lawyers working for various agencies of the federal government who write the laws because Congress has delegated (unconstitutionally) its power.  You can see this with Obamacare where many rules have not even been established yet.

Most of the regulatory burden we suffer from is a result of this.  There is no way that Congress could pass tens of thousands of pages of legislation every year.  If every new rule coming from the federal government had to go through the formal legislative procedures in Congress, the growth of government would practically come to a halt.

For this reason, I also think that the Write the Laws Act is the one least likely to get passed.  But I am glad that Downsize DC still promotes it because it draws attention to a major problem.  The people you are supposedly electing to Congress are not even the ones who are writing most of the laws.  They are simply delegating their authority and passing the buck.  This is why we have the massive bureaucracy that we have today.  I encourage everyone to check out Downsize DC and support the organization.

For anyone who frequently reads my blog, you probably know that I am a big fan of Harry Browne.  I am a strong advocate of his permanent portfolio investment strategy that he laid out in his book Fail-Safe Investing.

For today’s post, I am simply pointing out a piece that was adapted from his book Fail-Safe Investing.  It is called “The 16 Golden Rules of Financial Safety“.

Like most of the advice that Harry Browne offered, I think these 16 rules are great to follow, or at least to consider when making financial decisions.

The only thing I would like to add to his commentary is on rule #7, which says “don’t use leverage”.  I am an advocate of investment residential real estate if you are in the right situation.  In this particular case, I think it is acceptable to use some leverage, if used wisely.  For this rule though, I believe Harry Browne was suggesting that you not borrow money for investing in things like stocks or bonds, or even gold.

Enjoy the reading and I hope it helps you in your financial decisions.

There was an article on Yahoo! Finance about Mr. Money Mustache.  If you haven’t heard of him, he is known for having been able to retire at the age of 30.  In the article, it says he had amassed $800,000 in cash and investments by the age of 30.  Mr. Money Mustache now runs a popular blog by the same name.

I wrote a post about these stories of early retirement, or more accurately, very early retirement.  I find them fascinating.  I think we can learn a lot from these stories.  In the case of Mr. Money Mustache, he says he saved about 70% of his income.  I’m not sure if this was after-tax income or not.  I’m also not sure how much he earned, but I’m guessing it was well above average.  It is easy to save 70% of your after-tax income if you are earning a few hundred thousand dollars per year.  I am not saying he was making this much in his 20’s, but I think he was definitely doing better than average.

While his focus is on savings, or perhaps lack of spending, we should consider the investment side.  I think we can learn the most from him and others when it comes to their savings habits.  But, it is important to realize that Mr. Money Mustache must have earned very good returns on his investments to amass this much money in such a short time period.

It is no coincidence that Mr. Money Mustache accumulated his savings and investments during a boom time.  He is 38 now.  He would have been 30 in 2005.  So if he invested in stocks in the 90’s and real estate at the turn of the century, then his timing was pretty good.  It is not like somebody who is 30 now and started investing in 2006 at the peak of the housing boom and just before the stock market tanked.

I have read studies showing that timing does matter.  Bill Gates and Steve Jobs got started in the 1970’s, just before the boom of the 80’s.  While I’m sure these two would have been successful regardless, they may not have ended up billionaires if they had been born during a different time period.

I’m not saying that you should use this as an excuse to not save and not be successful.  I am saying that things are probably more difficult right now.  For a young adult in their early 20’s right now, it would be almost impossible to accumulate $800,000 by the age of 30, unless the person is a great entrepreneur or very lucky.  The average person will not come anywhere close to this amount of money, even following the frugality advice of Mr. Money Mustache.  Someone right out of college is lucky to find a decent paying job.

But again, this shouldn’t be a reason to find excuses.  Someone starting out with almost nothing in their bank account can still have goals and attempt to live frugally.  Maybe someone who is 22 years old can’t get $800,000 by the age of 30, but maybe he can get to $200,000 by the age of 30.  You can set realistic goals for yourself and you can do this at any age.

In conclusion, I think it would be almost impossible to imitate Mr. Money Mustache today.  Life is simply too expensive.  But you should still read his commentary and take his advice where it can help you.  In order to become wealthy, you have to spend less than you earn.  There is no escaping that bit of math.