Please enjoy this transcript of my interview with Mr. Money Mustache. Transcripts may contain a few typos—with some episodes lasting 2+ hours, it’s difficult to catch some minor errors. Enjoy!
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Tim Ferriss: Hello, boys and girls. This is Tim Ferriss and welcome to another episode of the Tim Ferriss Show where it is my job to dig around, find world class performers of all sorts of stripes and breeds and species, and deconstruct what they do. How do they make decisions? What do they do first thing in the morning?
What are the habits, routines, details that you can apply to your life? This particular episode was very much an in-demand, requested episode and the guest is Mr. Money Mustache, @MrMoneyMustache; Pete Adeney in real life. He grew up in Canada in a family of mostly eccentric musicians, then graduated from computer engineering in the late 1990s and worked in various tech companies before retiring at age 30.
Pete, his wife, and their now 11-year-old son live near Boulder, Colorado and they have not had real jobs since 2005. This begs the question, of course, how? How did they do that? They accomplished this early retirement by doing a number of things, but in effect optimizing all aspects of their lifestyle for maximal fun at minimal expense. And by using basic index fund investing.
Their annual expense, on average total a mere $25,000 to $27,000 and they do not feel in want of anything. So again, since 2005, all three of them have explored a freeform life of interesting projects, side businesses, and adventures. In 2011, Pete started writing the Mr. Money Mustache blog about his philosophy, which has grown to reach around 23 million different people and 300 million page views cine its inception, since its founding. It has become a worldwide cult phenomenon with a self-organizing community and incredible news coverage.
This episode explores his story, philosophies, and routines. So without further ado, please enjoy my conversation with the one and only Mr. Money Mustache, Pete Adeney.
Pete, welcome to the show.
Pete Adeney: Thanks, Tim. It’s an honor to be on here.
Tim Ferriss: You are, I would say, in the top five most requested guests for this podcast that I see on the internet and beyond.
I had somebody come up to me recently in New York City of all places, and said do you know who you should have on the podcast? And it was you, and so I’m really excited to dig into all sorts of stories and conversations and discussions because I’m thinking through many areas of my life in which I think you are an expert, or certainly have spent more time ruminating on things. I thought we could start with your experience getting groceries. Could you describe for people what your experience looks like getting groceries?
Pete Adeney: Well, it’s kind of varied but I feel strongly about groceries. So in an ideal, utopian grocery day I would throw my bike trailer onto the back of my single-speed bike and roll down to the local, hippie, natural grocery store and then just load up with $150.00 of awesome stuff and then pedal it back up the hill, unload it, and then have people show up to a giant barbecue that night and feast!
Tim Ferriss: If that’s the utopia, what does the compromised utopia look like?
Pete Adeney: It’s usually pretty close to that, but sometimes people don’t come over or sometimes there’s some reason I have to use the car. Maybe I’m taking it past the grocery store so I rush in and get some stuff. I think the thrust of the question is does this guy really get groceries by bicycle, and it’s definitely true. I do everything by bike in Longmont, Colorado. At least 99 percent of my trips away from the house here are human powered, and that’s just the way I’ve figured out makes me happiest to live.
Tim Ferriss: At this point in time you have a household of three, is that right?
Pete Adeney: Yeah, that’s true; one boy, one girl.
Tim Ferriss: Got it. I think this is going to be a core piece of the discussion; what are your average annual family expenses all that stuff, would you say?
Pete Adeney: We’ve been adding this up ever since I started writing a blog; we never really added it up before but it always comes out around $25-27,000 of annual expenditures, with the notable exception that we don’t have any kind of mortgage or debt or anything. So that’s all purely on stuff that we want to buy.
Tim Ferriss: This is going to be memento style, in terms of chronology as a lot of my conversations are; it’s just a quirk of my brain, a bug I’m trying to turn into a feature of this podcast. What was the blog post or the day that you realized Mr. Money Mustache had a cult-like following? And I use that in a complimentary way, by the way. You have some of the most diehard fans I’ve ever encountered.
Was there a particular piece or moment when you realized how strongly and how devoted your fan base was?
Pete Adeney: I think it’s kind of been like one of those frog in hot water situations where it just gradually happens and then occasionally, especially when my friends stop in on a Money Mustache event, they’re like: dude, you’re a cult leader; did you realize that? But it didn’t really happen at any specific time. I would say the first time I was really surprised by the effects of blogging was when I had a guest post on this awesome previous blog called “Early Retirement Extreme,” and a whole bunch of this Jacob blogger’s fans came over to my blog and just flooded it and crawled and red every single article and started putting in all these comments.
It was really a rewarding thing, and I just kept going from there. It’s sort of a self motivating thing. The other incident was probably when we had a party once, a blog-related meet up in Ottawa, Canada which is one of my hometowns.
All these people came, like 200 people and it overflowed into the back yard of this unwitting host’s place and it was a little weird because I didn’t even get to meet anybody. That was the first time I became uncomfortable, like oh, I didn’t want to be one of those people where you don’t even meet everybody who wants to meet you.
Tim Ferriss: So Ottawa, I’ve actually spent a decent amount of time in Ottawa and I had a beaver tail for the first time while ice skating, or planning on ice skating, in Ottawa due to a startup there, which is quite a large company now called Shopify.
Pete Adeney: Shopify, I knew that. And the beaver tail, that’s the right way to do Ottawa; skating and beaver tails.
Tim Ferriss: Beaver tail, I don’t even remember exactly what it is but it’s a pastry, right? What is it, exactly? It’s like a chocolate covered pastry, and for those people who have not been to Ottawa, you can skate for hours.
I guess they lower the water level, or maybe they raise the water level so that you can skate effectively around the entire city, if I’m remembering correctly.
Pete Adeney: Yeah, that’s right. It’s pretty awesome.
Tim Ferriss: To get back to the blog, what are the aspects of your philosophy or writing or persona that have struck such a chord?
Pete Adeney: It’s funny you should ask that, because the first time I ever did a talk, like a big, public talk, it was to a conference of bloggers. It’s called FinCon and I just stopped by because it was in Denver. I’d realized that this blog was behaving like a cult. Then I looked up what are the properties of a cult, and I read some articles and maybe a book or two on cults and I realized man, I’ve accidentally done it. And because that’s my idea of a sense of humor, it turns out if you want to start a cult you need to just have a few key elements, like a recognizable leader.
You need to have a sense of “us versus them,” like oh, we’re an oppressed people and the rest of the world doesn’t understand us, and a couple other things. It helps to feel like you’re virtuous and have some kind of good changing the world and the rest of the world needs your help. If you look at all the cults, including informal ones like Star Trek or Apple, there are always these same kinds of characteristics and I accidentally emulated those, and in retrospect realized that hey, I guess that was a pretty good idea!
Tim Ferriss: For those who are part of the “us” in your case, what’s the belief system? What are the tenets?
Pete Adeney: The belief system, which I jokingly call “mustachianism,” is kind of like a lifestyle and a fake religion. The beliefs are that the United States especially is a ground zero of this consumer insanity that has overtaken all of our minds and is just causing people to behave in an irrational way and sort of sabotage their own ability to have a good life.
For example, they work way more years then they have to because they’re consuming a lot more crap than they have to without actually getting any life benefit from it. The same thing applies to their health, their health and sanity and mental health. Everyone is very inefficiently going about their lives. So the correction through mustachianism is just being a bit more thoughtful about this stuff and seeking efficiency in a way that you spend your money and make sure that you get fun out of it each time you spend something.
And applying this, you just end up a lot healthier and wealthier and able to retire from mandatory work at a much earlier age in your life, which a lot of people are drawn in by the prospect of an extra four decades of freedom that they wouldn’t have otherwise gotten.
Tim Ferriss: Correct me if I’m wrong here, but you retired effectively at age 30, is that right?
Pete Adeney: Right, yeah. This is perfect reverse chronology, just like you planned it.
Now we’re back to the year 2005, and after working about a ten-year career in software engineering, my girlfriend – who is now my wife – and I determined that we had enough money saved up to live off the investment returns forever, so we just quit our regular cubicle jobs and just in time to have our baby boy at the time. That was of course about 11 years ago.
And we didn’t even know this was a weird thing to do. We thought oh yeah, of course, when you get paid as much as we do, it only takes so long until you don’t need to work anymore. It was only after several years of retirement that we noticed that we were kind of oddballs and everybody else who earned the same amount of money was still broke.
Tim Ferriss: Broke in probably more ways than one. I want to dig into some of the numbers related to this.
I always ask guests for potential prompts for topics that could be fun to explore, and one of them was you only need to accumulate 25 times your annual spending to retire forever. Could you elaborate on that and how you arrived at that number? I think this is a useful exercise for people to hear.
Pete Adeney: Yeah, this is a core piece of math that is widely known if you’re a financial independence enthusiast, but it’s almost completely secret to most of the rich world’s population. If you have a handle on your annual spending and you know how much you need to live on, all you need to do is save up 25 times that amount and on the very, very conservative side, let’s say 28 times that much in conservative investments like a giant Vangard index fund. That’s enough to fund you with passive income with a high degree of safety for the rest of your life. Just to keep the numbers simple, if you need $30,000 to live on, multiply that by 25.
Oh, darn; I’m giving myself a tricky math question. I’m thinking that’s like $750,000 you’d need saved up or something like that to quit forever. That’s a lot less than most people think. Most people, at least in my age group, they’re shooting for the tens of millions type of range if they were to ever quit work early, and they haven’t done the math on how easy it really is.
Tim Ferriss: Are there any assumptions embedded in that, in terms of percentage annual yield and so on? Whether historically based or otherwise, are there any other assumptions embedded in that?
Pete Adeney: There are, yeah. It’s kind of based on a really long term study of the stock market dating back to the 1920s or something like that, or maybe even earlier. The idea is it goes up some years, it goes down some years, consistently pays dividends and in the worst case scenario, and you want to still not want to run out of money. That’s where the 4 percent comes from.
It would have gotten you through a lot of the worst case scenarios. There are some situations where you could have spent up to 5 to 7 percent of your portfolio every year and still not run out, if you happened to retire just before a big stock market boom that went on for a long time. But most people don’t like taking a huge amount of risk so the 4 percent or 3.5, if you want to be extra conservative with today’s stock market valuations, that’s more of a safety net.
It’s really just a mental crutch because what I find is that when people retire early, almost everybody, like over 95 percent of people, still have a lot of interests and passions and they’re pretty good at making money if they managed to save up that much in the first place, so they still make money in their – quote – retirement. They just have a lot more fun doing it and that next egg that’s pumping out dividends and returns just adds extra confidence so they can have more fun in the process.
Tim Ferriss: I’ve read two different definitions of retirement, or maybe they’re characteristics. One was attributed to you, one was written by you’; both of which I thought were very helpful as an orientation for thinking about the subject. The first is retirement or financial independence simply means that you have your living expenses covered by non-work income; part one. Part two is definition of a modern retirement; the activities you pursue once you are done searching for money. I think that’s a very useful framework particularly considering an early retirement at, say, the age of 30, 40, 50; whatever it might be.
How do, let’s say media – not to cast dispersions on everyone who is part of the media since I suppose that’s what I am right now at this moment, but you’ve been covered a fair amount.
And I know, like everyone who’s been covered a fair amount, you get misquoted or people get the message wrong or they just take snarky cheap shots, occasionally. It doesn’t happen all the time. You’ve actually had some of the most complimentary profiles I’ve ever read. But where do they get it wrong? Where do people get you, your message, your principles, philosophies wrong?
Pete Adeney: The misconceptions are sort of two different things. From the media side, the ones that aren’t complimentary, they assume hey, there’s this crazy guy and he’s just a lifestyle guru, just like another junior Tim Ferriss trying to get everybody excited about his crazy ideas and he’s not really retired. Or, they say yeah, he made so much money but that doesn’t apply to the regular person when they’re trying to make it on a $50,000 a year salary. Or, what about people with more kids? So the media don’t understand.
They often assume some kind of extreme frugality that would be undesirable to live under, and that’s really inaccurate and I work pretty hard to fight it. I don’t have my spending set up for the minimal level; I have it set up or the maximum amount that I can possibly spend and get value out of it. Because it’s easy to make money. So I set my spending at the maximum happiness level, and then stop spending when I stop getting more happiness. That’s really the fundamental mistake.
And then as for the non media world, they’re a little bit more suspicious. They just think I’m making everything up and I never did any of this stuff that I say I did in the first place. So then it’s more of a conspiracy theory, if you’re reading the comment section of MSN, which you should never do.
Tim Ferriss: You do have, and I think this is part of the reason I wanted to bring it up very early, by most standards in the United States a low household annual expense, right?
Pete Adeney: Right.
Tim Ferriss: It might be helpful here to talk about it because I asked during our sound check what you had for breakfast. Could you repeat your answer, please?
Pete Adeney: My breakfast was a fancy black espresso with foamed milk and coconut oil foamed into there too, and then some dark chocolate, like 90 percent dark chocolate and some nuts, almonds and cashews and stuff. It’s not exactly related to low expenditure, but…
Tim Ferriss: It’s indirectly related. I’m going to come back to it. Since I love particulars, what type of coffee, what type of chocolate? Do you recall?
Pete Adeney: Right now, my coffee is some kind of organic, fair trade thing but bought in large quantity from Costco, which is obviously a lot cheaper than getting a Starbuck’s equivalent every morning.
The nuts are from Costco as well, now that you mention it.
Tim Ferriss: The reason I bring it up is that I think Stumbling on Happiness by Daniel Gilbert is a good exploration of this. Oftentimes what we think will make us happy does not make us happy. We should dig into what happiness is for you, because I think it can be a dangerously nebulous term. The point being that to have a functional car, and then to have what society tells you is the optimal car, say some type of sports car; there’s a massive delta in price and you pay some severe penalties for that. To go from a good chocolate to an excellent chocolate to world class chocolate, it might only be the difference of $10 or $12.00.
There are places where you can optimize without being obnoxiously frugal to a disabling extent and derive maximal pleasure. That’s the point I was trying to make. What I would love to hear from you is for those people out there who are spending far more, multiples more than you are per year and who don’t know where to start, are there any easy optimizations that could have a dramatic impact on their ability to get closer to optimizing for happiness as opposed to succumbing to internal or external pressures to remain on this treadmill of overconsumption?
Pete Adeney: Right, and this might actually be a better answer for your earlier question, too. As an engineer, like I was kind of born at least part engineer, and for me optimization is really, really, fun. It’s beautiful. And when something is not optimized and when something is inefficient, I actually find it offensive and ugly.
I get a lot of joy from looking at each of my life spending decisions and comparing it, like okay, if I get this car it would probably make me about this happy, and this car would make me this amount of happy, whereas if I ride my bike it does this other thing. You apply that to food, housing, transportation, clothing, travel, exercise and all these categories can become super efficient where you end up getting incredible happiness out of them. And the cost can sometimes be not only low, but sometimes you’ll get paid for doing stuff that other people spend tens of thousands of dollars to do.
So if you’re a beginner at the sport of optimization, you can just start with the stuff that costs you a lot of money. My favorite one, to be a bit repetitive, is the car because the average middle income American spends about $12,000 per household, which is just driving around in these gas-powered racing wheelchairs, and that’s more than they even invest in their future. That’s more than they’re spending on their freedom.
So step one, don’t have a car that’s worth more than about $10,000 at the most, unless you’re at least like a single millionaire; preferably multi-millionaire because you can get a perfectly great car that will be trouble-free for ten-plus years for under $5,000. The reasonable ceiling would be $10,000 and that’s already going to be a pretty giant thing for people. And then No. 2 is don’t use that car a lot. Everybody assumes that a short drive to work is anything under an hour, whereas I encourage people to take a really, really hard line approach on that because it’s a giant factor in life happiness and fitness and money.
My rule is you should never get a job, unless you’re at gunpoint, that requires you to drive to it. Either find a new job, find a place to live near that job, even if it requires moving to a new city or a new country in the long run; you’ve just got to keep that nagging thing n your mind.
Like okay, I drive to work now but this is not optimal in the long run; I will optimize away car dependence. And yeah, just start with that one and then you can move on. You can read stuff on my blog and figure out how to cut your grocery costs down, and your housing, and everything like that, too. But I really like the mobility because there’s fitness involved too. And there’s happiness of forcing yourself out into the fresh air every morning as soon as you give up the cage of the car. It’s such a huge thing, and it’s such an overlooked thing in our country.
Tim Ferriss: I couldn’t agree more. It forces you to make other decisions, like you pointed out. I haven’t had a car for close to three years, I want to say. That does not mean I don’t spend time in cars; I do. I tend to use whether it’s a get-around for trips to Tahoe or things that are further way that require some travel, or Uber.
But I tend to walk more than I bike, for whatever reason but that’s typical 70 to 80 percent of my locomotion is walking.
Pete Adeney: That sounds great!
Tim Ferriss: It’s helped me to make other decisions to optimize for, say, having people come to me as opposed to having to constantly bounce around a city or travel around the environs and think about how I can better use the capital I have for types of leverage that don’t require or replace the need for bouncing around continuously and wasting that time in transit. Also, I’ve found for me at least, very slow or very fast in terms of transportation work well. It’s in the middle that I get very frustrated.
Because if it’s very slow, I can also batch phone calls, I can listen to podcasts, I can listen to audio books; I can take time for that type of enrichment in the process of moving from point A to point B.
Pete Adeney: So true. Walking is so powerful and so underrated. Your brain just goes into overdrive. All of your problems sort of start to solve themselves in the background. And for people who don’t do it regularly, like an hour a day of walking to genuinely go somewhere, they just discount it because they haven’t even experienced this incredible power. So I’m glad we’re both on that train, or in that shoe.
Tim Ferriss: Exactly. What are some of the books, and this could be two different lists, but some of the books that have had the biggest impact on you, or books that you most frequently recommend to your readership?
Pete Adeney: I’m not the ultimate book connoisseur. I don’t burn through as many books as some people. But in recent months, three books that have had a pretty big impact on me that I’m about to recommend to people, and it really depends on who you’re talking to. If you’re into changing the world for the better, one book that spectacularly opened up my mind is this one called Happy City, by an author called Charles Montgomery.
It kind of just pulls back the curtain on how we’re wasting most of our resources and our human and money resources on building up the country into a spectacularly inefficient asphalt jungle. That’s for urban planning nerds and fixing the world nerds. But for people who feel like they’re personally wondering why they’re such a weirdo, I’m a big fan on the book on Elon Musk by the author Ashley Vance. I think it’s called Elon Musk and the Quest for Fantastic Future. That book I read, and it talks about Elon as a little kid and growing up, and I’m like, that’s exactly how I was as a kid!
And I thought I was the only one. He has this feeling where the world is incredibly illogical and no one’s listening, and he just wants to just fucking change it; like I’m just gonna do everything myself, then! Everything except for the fact that he actually does it and I don’t, I can relate completely to the feeling of that book.
And finally, a really, really old fashioned book if someone just wants to wake themselves up and start turning into more of a positive, less depressed person is this 1950s classic called The Magic of Thinking Big. I’ve recommended that to so many friends, because I stumbled across it when I was like 15 years old, and it was really, really old even then. It’s like this 1950s cheesy, stereotypical man’s world; has some flaws in that way but that just makes it more funny. And it’s a great way to just remind yourself like oh, when you think big and act confident and sparkly, it’s amazing how much stuff actually goes better for you! So those are my three.
Tim Ferriss: I can’t comment on the first two, but I have to comment on The Magic of Thinking Big. I have my original copy of The Magic of Thinking Big about 15 feet to the side of me right now in my living room.
It is one of the books that has traveled with me, and it’s face out so I see it every day when I’m sitting on my couch. Along with a handful of others; Tribe from Sebastian Junger; Dune, Frank Herbert, that’s a bit of a long story; Gratitude, Oliver Sachs; I’m looking at them right now. Bird by Bird, by Anne Lamott; Zorba the Greek, and Less Is More, which is an anthology of writing on minimalism, and The Magic of Thinking Big, by David Schwartz. This book, despite the title, which like you said, it screams cheesy at you.
Pete Adeney: That’s why it’s good. It is cheesy. It’s like gorgeously, delightfully cheesy and you’re like yes, I’m a powerful 1950s man as well! I’m going to conduct some business!
Tim Ferriss: Exactly. It was introduced to me by a man named Stephen Key. Stephen Key, fascinating guy, he lives I I think Turlock, California, the middle of nowhere.
He’s built this fantastic career for himself developing products, a lot of toys, and licensing them to gigantic companies whether it’s Disney, Nestle, Coca Cola, you name it. He makes these incredibly simple prototypes out of construction paper, oftentimes, and then will license these ideas for I’m assuming hundreds of thousands, millions of dollars over time. He was given The Magic of Thinking Big at one point by I believe it was a Fortune 500 CEO.
So the lineage, at least, or the path that the book took to me was fascinating in and of itself. I read it, I would say, around 2003, 2004 which was just before I took my walkabout and did all the experimentation with my business at the time to either redesign the business or shut it down. That was the journey that then precipitated the writing of The Four Hour Workweek.
So The Magic of Thinking Big, I’ve been meaning to reread it and I’d be curious to get your opinion. I read it so long ago and I have such a high opinion of it that I’m worried I will read it now and it will not age well when I read it a second time. Have you read it recently?
Pete Adeney: Last time was probably about five years ago, and I found it was just as good. I just love the overly simple examples. Like, “Imagine that there’s two little gentlemen in your head. There’s Mr. Success and Mr. Defeat. Mr. Defeat always wants to throw some oil and sand into your crank case of your mind.” Maybe this is my engineer’s brain handicap again, but I really get annoyed by overly flowery language, like Harper’s magazine, Atlantic stuff where people just go on for eight pages to cover something that could have fit in a couple of sentences. And Dr. Schwartz doesn’t do any of that shit.
In fact, his writing style really inspired me. When I write as Mr. Money Mustache, I’m channeling David J. Schwartz. And he always starts off every story with this little anecdote that makes him sound casual and powerful. He’s like, “I was relaxing in my lounge one day when a few of my employees came in for questions.” You’ve got to read it again. I’m going to read it again.
Tim Ferriss: Alright. It’s been on my to-do list for January. We’re doing this interview in January, 2017 and I’ve set aside the first two weeks minimum to simply consider options. Because I’ve in the past fallen prey to over calendaring myself, and for fun things in many cases but nonetheless over calendaring so I don’t have as much slack in the system, empty space, as I would like.
I’ve been meaning to, as part of my self imposed curriculum, re-read The Magic of Thinking Big, so I will jump into that. How are you different from Mr. Money Mustache, if at all?
Pete Adeney: The lines are pretty fine. I don’t know if there’s a really formal difference but he’s probably a bit more perfect than me. Like I’ll complain occasionally and if I don’t catch myself, and I don’t actually complain on the blog about wah, wah, the world is being mean to me. But in general, because I read The Magic of Thinking Big so long ago and internalized it so much, and I kind of ran my work career and my international adventures of moving to the U.S. and everything under those assumptions, I feel like I’m fairly Mr. Money Mustache. I’m more sensitive. Here’s the thing.
I don’t lecture people in real life. I don’t actually smash my fist through the driver’s window of pickup trucks and honk the horns with their four heads and tell them they shouldn’t be going through the drive through with this stupid, off road diesel thing. But I think it and I write it. So yeah, Mr. Money Mustache is a little more violent and confrontational in his writing, and I enjoy that because it helps me remain more calm in my real life.
Because nobody wants to be lectured in real life. Even if you have some ideas you want to share with them, you have to wait for them to come to you. And when you’re writing a blog, they have come to you by definition, which means they’re a lot more open to having their faces punched in a literary sense.
Tim Ferriss: Right, to get prose mugged while you’re shaping their behavior. The question of the U.S., so I’ve spent a little bit of time in China.
Even as an American who is somewhat desensitized to consumption, I think that China appears to be ten times more materialistic and driven towards over consumption. But I don’t want to lead us necessarily into a conversation about China. The question I was going to ask, and this might have a very simple answer; why did you decide to stay in the U.S.?
Pete Adeney: I just love it here. It’s kind of like the furnace of the world. Many of the problems in the U.S. that stem from under regulation are also its strengths in the sense that you can just start stuff up, and nobody even notices that you’re doing it and you can have a giant company before anyone’s even noticed. It’s just the entrepreneurial and the optimism and the lack of rules goes along with my personality because I hate rules.
I’m really in favor of people self regulating in the sense of don’t be a jerk to your neighbor and don’t pollute the world, and everything like that which is the part that annoys me about some of the U.S. business culture. But in general, I just love it here. I love the giant range of geographies, too, compared to Canada which is kind of just a string of cities along the border. In the U.S., you have a grid of cities and islands that range from arctic tundra to tropical islands and coconut shell tops and everything like that. It’s just a lot more variety and excitement here.
Tim Ferriss: There is a lot of variety here, and I’ve actually decided that this year will be my year of exploration in the domestic United States. I’ve realized that my default, and the default of many people I think, when they have their designated time for travel or vacation is oftentimes to fantasize about the trips overseas.
I’ve realized I’ve neglected to explore so much diversity in the United States itself, so I’m planning on somehow transporting me and my pooch around the country, which I am very excited to do. Next thing I’d like to do is read something and get your comments on it. This is from a profile of yours in the New Yorker, which, congratulations; it’s one of the top 16, is it, most read profile of the year, something along those lines?
Pete Adeney: Oh yeah, I saw that, thanks to you I think, on Twitter.
Tim Ferriss: I might have driven some traffic there, which I was happy to do and also hesitant to do because I am sure there are things that are at the best incomplete and may be completely off base at worst, but that’s just the nature of the beast when you’re dealing with these types of profiles.
Pete Adeney: Yeah, I did a snarky responses section for that, complete on that Genius.IT website.
Tim Ferriss: You’re inline responses?
Pete Adeney: Yeah, that way the writer can add his story and I can add my stuff right on the side, and that kind of corrects for the one-sidedness of normal New Yorker journalism.
Tim Ferriss: Yeah, I might have to do that myself, although I’m not sure I want to reopen the wound. I was misquoted, even after correcting fact checkers, I was misquoted and number of people were misquoted probably half a dozen times in the piece I had in the New Yorker, which really rankled me. Because of course it sits at the top of Google with page rank. But, water under the bridge for now; I’ll put that aside. The piece I wanted to read, though, I don’t think is going to push those buttons. Let me start with the following.
“So being an engineer, he runs the numbers. One after his bike was apparently stolen, he ruminated on the wisdom of locking one’s bike.” This is then to your writing. “This was the first theft in many, many years of very carefree living. The Craigslist replacement value of that bike was probably around $500.00. what value do I place on the decade of fearless freedom of leaving shit happily unlocked and not worrying about it? How about the value of my time saved in not spending my life fumbling with an enormous key chain? 90 seconds a day for ten years is 91 hours, or at least $4,500 of my time at $50.00 an hour. I was still coming out way ahead.”
And you concluded, “If you can’t afford to lose it, you can’t afford to buy it yet. Otherwise, the object owns you rather than vice versa.” There are plenty of folks out there who think we are more opposed than I think we are. Because the type of math that you did here, and I’d love to get your thoughts on it, but these are the types of things that I think about constantly.
How many of these rote decisions, common decisions, are burning up the nonrenewable resource of time in the interest of some marginal utility, perceived marginal utility in terms of dollars and cents? I’d love to hear any thoughts or elaborations that you have on this, because I love this example.
Pete Adeney: It is the math sometimes explicit like that, and sometimes more implicit that drives most of my decisions, and that’s why I’m surprised. Anybody who says that Mr. Money Mustache and Tim Ferriss are opposites in any kind of way, I think they’re not really understanding the picture because it’s really just an optimization process. I’m not opposed to spending money. My only limitations on spending money are, 1) it has to make me happy; and 2) a factor in my personal happiness is resource consumption because I know the numbers behind all the costs to other people, like into the earth on everything I buy.
So that kind of rules out certain types of spending that other non-science, non-environmentalist people might feel okay about. But if you push that bit aside, it’s all just about having the maximum amount of fun. And if you have limited money, then having to go to work for a longer time is a genuine source of non fun, and thus spending less money is going to give you more of something that’s more fun, which is time, and then you’re all set. So that’s a win.
And then now, in this post work world where I’ve stumbled into more money than I could have imagined having, my spending hasn’t changed. That’s just a sign that I got some of the decisions approximately right to begin with. And if I had started buying more stuff afterwards, that might have been a sign that I didn’t really do the math right to begin with.
Tim Ferriss: I apologize if this is a simplistic question, but what do you do with the money that you have as a surplus in this post work life? What happens if the expenses aren’t going up, or nominally go up and down by a few thousand dollars a year, how do you allocate the surplus?
Pete Adeney: That’s another thing that has to be optimized because I feel that money is such a valuable resource. So I’m still working on it. I’ve been doing small donations, like paying for more stuff when other people I know can’t afford it. Then I did a medium-sized donation under the Effective Altruism movement, that I know you covered at one point in your Tools of Titans book.
Tim Ferriss: Yeah, I had Will MacAskill on the podcast, the cofounder of that movement.
Pete Adeney: Yeah, and I think one of those two founders sent me an email after I sent my donation to them, and they seemed like really, really sharp people.
So that’s one useful thing to do with surplus money. The only reason I have some of it still sitting in my investment accounts, and it’s still rolling in of course because I still have this unexpected blog income, is I feel like I can leverage the attention of all these people for something good that would be bigger than just donating like a million dollars per whatever period to standard causes.
I think I would like to create kind of like one of those tipping point effects in the U.S. that might, for example, tip us more towards bike-based transportation instead of car based and potentially save billions or trillions of dollars of society’s wealth and have it go somewhere better if the whole society got more excited about a different way of living. So that’s why I haven’t just given away all the money yet.
Because I feel like, for example, what if I could start a little, mini town where we do things really awesomely? And this of course sounds a bit like a cult, like oh yeah, we have to start a commune.
Tim Ferriss: It also sounds like Singapore, right, in a sense.
Pete Adeney: Right, a town within a town based on the ideas of co-housing or something like that. So these ideas are still swimming around in my head. I haven’t solved the problem of how to deal with surplus money efficiently, but once I do, then I will start having some fun with it. And then I’ll probably also start trying to make more money, like have the blog make more money because then I’ll have a use for it.
Tim Ferriss: I’d love to hear more about your decision making process, or thought process, or internal dialog when you are considering buying something. What are the questions you ask yourself? And if it’s related to happiness, I want to define that. Maybe a way to do that is how do you know when you’re happy or unhappy?
I’d love to just maybe take those in either order, really, but what’s the thought process like, or the internal monolog/dialog when you’re considering buying something?
Pete Adeney: Usually I try to start with no, you weenie, what do you think? What kind of consumer are you? Just a little bit of mental beat down to shut off the easiest things. That’s what keeps me from buying a Tesla Model S or something like that. Because even though I think it’s a great car and I support it, I know for sure that wouldn’t make me any happier because I don’t even have anything to do with it. I don’t drive, really. So obvious stuff gets shut off.
But then when you get into things you’re pretty sure you want, then you just think about it for longer, procrastinate a little bit; see if the desire goes away a bit. And the consider how much space that thing is going to take up in my limited space of my studio, for example. And then imagine how I would feel if it broke, because a lot of stuff does break, even if you have high quality gear and it’s really annoying to deal with things that break and if you have to warranty fix it.
And finally, I ask myself is this removing a negative in my life? Because it’s pretty well studied that happiness is not very much affected by adding positives to your life. Especially in a rich world environment like we live, it’s mostly accomplished by removing things that are a strong negative to every day. So getting myself a remote control photography drone is unlikely to make me happier because my life doesn’t currently suck due to the absence of a photography drone, quad copter thingies.
Whereas if there’s something that every day I’m like, dammit, I just wish I didn’t always trip over this broken dishwasher or whatever. Then replacing your dishwasher is probably going to be a happiness boosting proposition.
Tim Ferriss: What purchase or productions, for that matter; I know you make a lot of things, but just to stick with one category, what purchases that come to mind have most improved your happiness by removing negatives?
Pete Adeney: That’s a perfect follow up question because I’m talking to you right now in this studio building that I made over the process of the last year. It’s kind of thrifty, like a 400 square food, modernist thing with a lot of windows and overlooking this nice forested park behind my house. I had a consistent problem after I moved in 2013 to this current house we live in.
It’s a bit too small for our style of living, so I was genuinely tripping over stuff a bit and always having to move things around. I ha some of my equipment out in the back, like my table saw would have to live under a tarp during the rare Colorado precipitation events. I realized more space would actually solve this problem.
I’d always wanted to have a detached studio anyway to play music in because I don’t want to have to drown out my family’s ears when I’m playing bad rock music with my friends. So I built the studio, and I did it all myself because I know from experience that this manual labor and solving physical problems is one of the happiest things I can possibly do. Just like hundreds of hours of lifting and sweating and digging; all these amazing useful outdoor things with friends.
Now I’m in it. I’m recording a Tim Ferriss podcast in my studio surrounded by drums and bass and guitar, watching the trees sway outside. So this has been a really, genuine happiness boosting expenditure of money and it’s brought me happiness pretty much from the day I broke ground on this piece of dirt. So no regrets there, even though that was a lot more than a few dinners out that I spent on this thing.
Tim Ferriss: I’ve been hoping and wishing and fantasizing about building my own structure at some point. I have not done this, and I’ve thought about it ever since I had Kevin Kelly on the podcast, founding editor of Wired magazine. Incredible guy, really the real life world’s most interesting man in so many ways. An impeccable technology futurist who has an Amish beard and spends time with the Amish so people can listen to the episode; it’s a long story.
But I asked him what every person should do at least once in their lifetime, and he said build a home, build a house. This is a lesson I need to relearn over and over again. Every time I use my hands in that capacity, that manual labor reward, like you said, it’s just unbelievable. Even yesterday I was purging, donating a bunch of stuff think about I just don’t need. I was getting rid of a bunch of stuff.
The simple visual reward of the before and after, using my hands to move a bunch of stuff around and have that before and after was so much more rewarding than some of the biggest things I’ve done on a laptop or on the web in the last few months. I felt ashamed in some ways that such a menial, mundane set of tasks was so rewarding.
Pete Adeney: Kevin Kelly is right. And this is why, as a fellow lifestyle guru, admittedly a junior lifestyle guru, I spend most of my time doing manual labor even though I can make infinite money typing shit into the computer and publishing it to the cult following; I hardly do that at all. Because it doesn’t work for everybody, but certain people get incredible satisfaction out of building because it’s the Zen aspect of it. there’s physical and mental and problem solving; it’s like what a human was made to do. So Kevin is right. In fact, the house I live in, I also built before I built the studio.
Built is a slight exaggeration because there was a bit of a shell. I tore it down to a brick shell and then rebuilt it to a different shape. And every time, every night, especially in the winter here when it snows, I look up at the trees and the snow falling on the roof that I made, and the fireplace that I put in there, and the heating system I designed pumping water under my floors and heating up my feet; I’m like this is the most satisfying thing I could possibly experience.
So yeah, you should figure out a way to build something, at least like a shed quarters or a man cave type thing in your back yard. I have this thing called carpenteurism where I go out to people to need and fund stuff with them and teach them how to build. So if you ever want to do a teamwork Tim Ferriss studio, then I’m making this offer now. It would make quite an interesting story.
Tim Ferriss: I could be like an operating room assistant of sorts. You’d be like: hammer, hammer. Screwdriver, screwdriver.
I think I would be more of a liability, otherwise.
Pete Adeney: That’s how you learn, though. I’ll give you the nail gun and then you’ll make some mistakes, and we’ll bring a welder and you’ll explode some stuff. But later, you’ll be making fine welding lines and yeah.
Tim Ferriss: You know, I might take you up on that. I love Colorado. I’ve been spending more and more time in Colorado.
Pete Adeney: I was assuming we would build something in your pieces of the world where you need a structure.
Tim Ferriss: Oh, I see.
Pete Adeney: Because you don’t need to build stuff for me.
Tim Ferriss: No, not for you. I was thinking about the people in need. But maybe they don’t want some horrible, atrocious, Picasso painting of a table where they’re like, I didn’t really want some abstract, weird thing, Ferriss. If you could use parallel lines next time, please.
Pete Adeney: In this case, you were the person in need because you’re this accomplished guy who has yet a hole in your life where you haven’t actually built a house yet. So I felt sorry for you, that’s all.
Tim Ferriss: Alright, I will put a bookmark in that. I may take you up on it. Here are a few questions related to consumption, because I do think about consumption a fair amount. Living in San Francisco on some level helps because you can’t walk five or ten feet without having someone talk to you about it or seeing billboards or announcements and so on related to some type of conservation or curbing consumption. But here a few questions for you.
The first is related to kids. I don’t have kids. One of the considerations has been a concern for consumption. So how do you reconcile kids with consumption, or do you not see them as dramatically increasing the consumptive burden?
Pete Adeney: Yeah, kids are definitely a huge form of consumption.
If you’re a rich world resident and you have a kid, that’s another 100 years of rich world lifestyle going on there. But I’m not a pure person. I strategically indulge in fun stuff and my wife and I knew we wanted to have kids. We just happened to feel that one was the right number for us, and I’m not judgmental against other people. But I thin it’s one of the things to throw into your equation of child raising; should I have one or maybe 13?
If consumption of natural resources is a factor, you might not have 13 but if it’s not a factor, no judgment from me. So we had one. You can have probably a 400 percent difference in the amount of consumption you do on behalf of your child just depending on how you raise them, depending on what activities they’re into, and what kind of stuff you buy them and how you train them, as well.
If you train them like hey, we’re rich, and rich people get to buy whatever they want, then you’re going to raise a super consumer and more, the richer you are. whereas if you teach them that there’s a balance and give them a little bit of biology and science in their upbringing, then they’re going to have a value system that prevents them from being nearly as destructive and they’ll probably have more fun in the world, as well.
Tim Ferriss: Is it true that you paid your son per mile ridden on his bike at one point?
Pete Adeney: Yeah, we still do that.
Tim Ferriss: I like this, by the way. This is not in any way a criticism.
Pete Adeney: Every parent, or many of them, like to find excuses to give their kids money in order for them to figure out how to manage it at a young age. I didn’t want to just hand over money, like here, money comes from nowhere. So I thought bicycling would be kind of a little income system for him.
He has an odometer on his bike so it automatically tracks the miles, and I just give him ten cents a mile which adds up pretty fast if you’re an all-bicycle family. Then I just give him little payouts and we have a spreadsheet where we keep track of his money. He’s 11 years old, by the way. And that earns interest so he has a comparison of if I keep my money in the bank of Dad, then I’m going to earn interest. Whereas if I spend it, my capital decreases and then that interest bearing piece of my little green employees are gone forever. He still spends his money of course, but he just knows everything’s a tradeoff which makes it more thoughtful.
Tim Ferriss: You are an engineer and it seems like you have a strong engineer genetic through-line in your family. Has your son tried to Ferris Bueller the odometer at any point, of course doing the opposite? Has he figured out how to tinker with his odometer? Or is he so good that perhaps you wouldn’t have noticed?
Pete Adeney: Yeah, you never know; he might be hooking it up to a cordless drill and spinning that front wheel. But no, that’s not in his personality. He’s not into really cheating on anything. Plus, it’s kind of an abundance. He has more money than he can spend. The little dude has like a thousand bucks in his spreadsheet now.
Tim Ferriss: That’s a lot.
Pete Adeney: The only thing he really wants to buy is the odd video game, which might be like $20 or $30 once every few months. So he’s pretty much retired already because the passive income that he’s earning is close to funding his video game needs.
Tim Ferriss: Either that or he’s got the best long con in history. He’s been conning you with his good behavior for 11 years just to tinker with this odometer, which I don’t think is the case. But for those people who are listening, and I’m sure you’re asked this all the time, but books on investing or personal finance; are there any go-to recommendations?
They don’t have to be books, they could be resources but for people who want to self educate. It could certainly be one of your top one or two blog posts as well. But if you were to pick from potentially your own stuff but also from other work that’s out there, where would you direct people?
Pete Adeney: It depends on how interested in investing you are. One of the nice things about the world, especially the U.S. financial system, is that you don’t have to know much to be a very good investor. You could be a top 10 percent investor by just buying one Vangard fund and leaving your money, putting all your extra money in there forever. If that’s your idea of good enough, which it should be for most people, then you can just read any book by John Bogle, the founder of Vangard is one good example.
A friend of mine who is a blogger named Jim Collins wrote this book called The Simple Path to Wealth, which is just sort of like an even simpler, more story-based, enjoyable, old man’s tales explanation of why you should invest in index funds. So that’s another idea. But much more important than how to invest, as long as you don’t screw up your investing, like leave your money in a checking account or buy a shifty whole life insurance program, the things that swindle people out of their money, you’re going to be fine in the investing side.
The other side of that equation is a book. I really want to write a book myself so I can just recommend my own but for now, there’s a really great one called Your Money or Your Life, that everybody’s heard of. If you just get whatever the latest edition of that book is, it really teaches you a philosophy that’s pretty similar to mine, which is that consumption is not really what’s making you happy; buying yourself treats. It’s quite easy to become financially independent as soon as you modify your spending in that way.
So a huge surplus of money on a weekly or monthly basis is the real solution to your financial problems, rather than becoming a super kickass investor.
Tim Ferriss: There’s a book that I read. I don’t know if you’ve ever read this book. It does primarily focus on low cost index funds, if I remember it correctly. It’s by Daniel Solin, The Smartest Investment Book You’ll Ever Read.
Pete Adeney: I’ve heard of it.
Tim Ferriss: I quite enjoyed that book. It was a little more nuanced. Certainly anything by Bogle is fantastic. For people who want to dig deeper, are there any additional books that you would recommend or that you’ve enjoyed yourself?
Pete Adeney: Yeah. If you want to get deeper, like for example more into the Warren Buffet side of things where you’re an active investor, one really interesting book that I read a few years ago is called The Little Book that Beats the Market.
It’s really a lesson on value investing fundamentals; how to understand if a company actually is a good deal to buy. That helps put a regular, silver shell around investing instead of the ridiculous speculation, like technical chart investing I think has universally proved to be bunk but people are still doing it. Like oh yeah, the Bollinger bands are wild this week! I see a support level at 53.5 and unless something happens… All that stuff keeps being proven wrong and people keep doing it, so don’t do that.
If you’re going to be an active investor, then get really good at understanding companies rather than technical fluctuations and that’s why Warren Buffet makes a lot of money above the market returns because he’s a savant in understanding business. Some people genuinely are that. It would probably be less than one in a thousand people who could do that.
Tim Ferriss: He’s also a savant in emotional detachment. I’d love to talk to you about Stoesz [inaudible] at some point. But he’s utterly unaffected by what he would call Mr. Market, the ups and downs of any given company that he may have bought in the form of shares or outright, if he acquired the entire company. That type of emotional detachment is also exceptionally, exceptionally rare.
Pete Adeney: Yeah, and that goes without saying. To me, that’s a prerequisite.
Tim Ferriss: I don’t have that at all, in the sense that if I’m going to be active, it is very hard for me to be an active investor in publicly traded equities. For whatever reason, I can do highly speculative startups, and that’s a disturbingly high percentage of my portfolio because I can’t balance a portfolio with illiquid assets; it’s very challenging, certainly.
But with publicly traded equities, if I’m trying to be active in any capacity, I do very poorly emotionally with those fluctuations and I make bad decisions. But, if we’re talking about something like an index, then I’m fine. If it’s entirely hands off and I have other people are in some type of, say, automated fashion whether it’s a wealth front or something else, then I don’t have any trouble with it.
Pete Adeney: Okay. Since I don’t do active stuff anymore, then I am totally in agreement with you on that.
Tim Ferriss: The book you mentioned, was that by Joel Greenblatt, The Little Book that Beats the Market?
Pete Adeney: Yeah, that’s right. It was really interesting, and it was a little book which is perfect for my short book attention span.
Tim Ferriss: Joel is a exceptionally smart guy. He has a fascinating track record because he can teach and he has taught in classrooms in New York, at universities.
He can write an he’s also very well respected as not only a value investor but also what you would call an event-based investor. His first book is perhaps the most sophisticated of them all, which is where people can make the most mistakes. I think The Little Book that Beats the Market makes more sense as a first read, or maybe his later book, The Big Secret for the Small Investor.
A book with a title that is sort of blessed and cursed in the same way that the Four Hour Workweek just sounds so schlocky, as if it’s going to appear at 3 in the morning on an infomercial but it’s highly memorable so it’s been helpful and punishing at the same time; he has a book called You Can Be a Stock Market Genius, which is actually really sophisticated. I’ve met some of the most successful hedge fund managers, and most hedge fund managers, by the way, are not successful. But the handful I’ve met who have been exceptionally successful, this book which was intended for novices, effectively, is one of their favorite books.
So lots of interesting stuff out there.
Pete Adeney: I’m going to check that one out for sure, since I like Joel Greenblatt’s writing a lot. I read investment and finance books all the time. I just try not to recommend them too much on my blog because it’s supposed to be about lifestyle and making your life good, and I don’t want it to be all esoteric. But if you do read, Timothy Geithner’s book, Stress Test, I read that 800-page description of the financial crisis and I found it pretty captivating, knowing what really happened in the background. But for the average person, it’s not going to help them get rich and retire early so I don’t talk about it too much.
Tim Ferriss: On top of that, if you want a cautionary tale, for those of you out there who love, love reading, at least if a book is captivating, what you should get at the same time if you decide to get You Can Be a Stock Market Genius by Joel Greenblatt which is exceptional; you should also read a book that will be a cautionary tale.
It’s a cautionary tale because it details the types of people that you are competing against if you choose to be really active in certain respects. It’s a fantastic read. It’s More Money than God, and it’s about the birth of the hedge fund model and a number of the characters and most successful managers I that world. It’s a bit like a Liar’s Poker, but instead of bonds they’re talking about hedge funds.
It will give you a very good idea of who you are competing against when you step onto the metaphorical golf green and you throw your money down as your participation and bet on yourself. The fact that Tiger Woods is probably two holes ahead of you becomes super, super clear.
Tim Ferriss: Also just to reinforce what you said about index funds, I should also say the only time I had a chance to go to the Berkshire Hathaway shareholder meeting in Omaha Nebraska, and I think they’ve stopped doing open Q&A with Warren Buffet and Charlie Munger but it’s insane. It is like a gigantic rock concert for investment nerds. People will camp out overnight to try to get a good seat. I ran in, and I was someone’s guest which was great because I was able to get in a little earlier than the entire stadium full of folks.
I ran in and I found somebody who was volunteering or working there, and I said which microphone is the hardest to get to? Because they had microphones all through this venue, and that’s where you would be able to ask your question if they got to you.
I figured people were going to be long winded, maybe the answers would be long winded, although they very seldom are, especially if Charlie Munger is involved, and I need to find a mike where I can be the first or second person in line. So I ran up, went through this crazy set of staircases and found this mike that was in the middle of nowhere. I asked Warren Buffet: hypothetically, if you were 30 and you had $500,000 to a million dollars in savings – and there were a couple other stipulations, but what would you do with the money?
He said assuming you’re not a professional investor, I would put it into the S&P 500 or in an index fund and get back to work. And that was it. That was the end of the answer. Charlie, do you have anything more to add? Nope. And then on to the next question.
Pete Adeney: It’s good advice, because there’s so much more to work on in your life.
If you’re going to become a really good investor, you’re probably going to compromise in the areas of being a good parent or maintaining good physical fitness. You’re not supposed to optimize for money; you’re supposed to optimize for happiness, which has a lot of dimensions. So you should really take sort of the four hour investor approach and be like: everyone says this is good; I’m just going to do it and I’m going to work on all the other stuff in my life that also needs to be addressed.
Tim Ferriss: Let’s jump into some rapid fire questions, as I call them, but your answers don’t need to be short. I’ll just try to keep my long-winded question asking to a minimum. Outside of your immediate family, when you hear the word “successful,” who’s the first person that comes to mind for you, or who’s a person who comes to mind for you and why?
Pete Adeney: I’ve racked my brain over this question because I know it’s a standard Ferriss podcast question, and I don’t have an answer that anybody would recognize because I can’t judge the success of any celebrities or well-known people.
Because success is such a balanced thing, and it depends on how happy you are at home, and how nice you are to the people who are close to you. So to me, the people in my life that I’ve seen who seem to be very high in the success range are a couple of friends, male friends, who run their own business. They basically own fit into the same description. They run their own business, they’re a little bit older than me, their business is extremely successful but they’ve scaled it right back in order to be a lifestyle business and handed off a lot of responsibility to their employees.
They pay them more because there’s so much surplus anyway. They’re like okay, you deal with all the junk in exchange for you never calling me on the weekends. Both of these friends work pretty minimal, like ten to 20 hours a week, and somehow their businesses keep doing better because of this hands off approach, so they’re making even more money.
But yet, they have a fairly mustachian lifestyle and this is probably because I met these guys through the blog. They both have kids, and they have really, really good relationships with their semi-adult children and their wives, and basically just really good physical shape. they do a lot of adventures. They always say yes if I invite them to do something. They’re like oh yeah, sure, we’ll fly over and meet you in that random spot for some mountain biking or whatever.
So they’ve managed to combine all of these dimensions of what most people want in kind of a carefree way and they’re not overly focused on any one of them, which allows them to be extremely fun people to be around. So that’s my definition of success, and that’s what I kind of hope for for myself by the time I’m 50 years old with a pretty old kid.
Tim Ferriss: On the flipside, we talked about what some of the critics get wrong, what perhaps media sometimes misinterpret. Where do your fans get it wrong?
What are the most common mistakes that your readers make, or misinterpretations? When do they get the message wrong?
Pete Adeney: That’s pretty rare. I write a lot of stuff, so anybody who reads a lot, they’ll see all the nuances and bits and bits and what I try to express as a philosophy. But for those readers who don’t have all the details, a lot of people assume that I would be mad at them if I ever found out that they bought something luxurious, like “Oh, don’t tell Mr. Money Mustache I bought this $2,000 mountain bikes because I really love bikes, but everything else is good!” I don’t judge people to nearly the standards that they think I judge them to.
The other thing is for people who don’t know my real life, they often assume that it’s pretty Spartan and that I’m always penny pinching.
And this goes back to the same answer with the New Yorker article, too. But I’m really in favor of celebrating in decadence and feeling like stuff is luxurious, so I’m really not as minimalist as people think I am. I’m really maximalist in the fun department.
Tim Ferriss: Besides the studio, what are some of those luxuries? Let’s limit it to purchases that have most positively impacted your life, or that you just love because they’re so damn fun for you. What are some of those things?
Pete Adeney: Some of it is vacations. Since retiring from real jobs, my wife and I have had a nice tradition of going somewhere semi tropical every winter for a good, long period, most winters at least. Sometimes the school schedule mess it up a bit. But for a month or more, we’ll often go.
So we spend some money on these vacations, and we’ll rent a nice house on a beach in Florida or Hawaii or Costa Rica or whatever. Most of the money goes to rent, basically, like VRBO type stuff, Airbnb is one example of indulgences that I still have a lot of warm memories from. And I really like knowing that I can do that at any time. So even when I’m not on vacation right now in January, and sometimes when the cold weather blows in I think wow, I could just press a few buttons on this computer and just fly right out to anybody’s VRBO and be there within a day or two.
Just having that freedom is a form of luxury in itself. Then I can go out and shovel some snow and be happy about it. The other purchases, nothing is really expensive. When I built out the main house rather than the studio, I was feeling pretty rich at the time so I went a bit high end on some of the stuff.
Like I have this really gorgeous, high efficiency wood burning woodstove/fireplace thing that brings me pleasure every day, even though it was more expensive than just a basic fireplace. And the windows in my house, for example, are these fancy windows that cost about five times more than it would have cost if I had gone bare bones. So it’s usually stuff related to home, vacation, and food. We’ve been known to go out for sushi a bit more than a person in debt should go out for sushi. So we take advantage of our non debt status. It’s really not too much, though.
Tim Ferriss: Do you have any favorite documentaries or movies?
Pete Adeney: I’ve actually got a huge, huge list of documentaries that I’ve been meaning to watch, many of them collected from the guests in your Tools of Titans book. The one I did watch and enjoy is actually a series rather than a documentary; the remake of Cosmos.
Tim Ferriss: Oh sure, with Neil deGrasse Tyson.
Pete Adeney: Yeah, I love Neil deGrasse Tyson. I love his awkward but scientific way. The topics he covered in those episodes was so stunning, and it was a great education for my son who is very, very into science himself. So that’s the documentary that stands out in my mind, probably the most interesting thing in the last five years, anyway.
Tim Ferriss: It’s a great series. It’s a fantastic series. I’ve been hoping and meaning to have Neil on the podcast. We’ve had some indirect email exchanges so if anybody is good buddies with Neil, give him a poke and let him know that I’d still like to have him on the podcast. If you were to give a TED Talk on something you’re not known for, what would it be on? Any kind of pet obsession, or something you’re lesser known for.
Maybe your diehard fans who have read every single line of everything you’ve ever written would have heard of it, but if you had to give a TED Talk…
Pete Adeney: I do have an answer. If you define the thing I’m known for as the early retirement, Mr. Money Mustache stuff, then the other topic that I’m super passionate about is energy and the world energy balance, and solar power, and how humans consume it and how we can basically fix our energy consumption related to climate change and all this stuff. So I’d probably write one up about that, and explain how we’re at this insanely close tipping point where fossil fuels are just about to be economically unfeasible, even without regulations and stuff.
I think that could make a good TED Talk because you need to popularize the ideas, and right now they’re kind of dry and numbers based. You’re talking about terajoules and kilogram C02 and all this stuff. There’s a lot more fun and emotion in that topic if you package it right so I think that would be a good talk.
Tim Ferriss: What I’m curious about, and I know you’ve written about this before, if you were to think of when you were in your best physical shape in the last five years, what did the exercise regimen look like? I saw a photograph of you, I want to say squatting outside at an outdoor squat rack. Am I making that up?
Pete Adeney: Yeah, that was my most recent blog post which is starting to get a little old now, but yeah.
Tim Ferriss: If you think back to when you were in the best shape, and you can define that any way you like, what did your exercise regimen look like?
Pete Adeney: I might be, in some ways, some of the best shape in my life right now. That is just a pretty casual program but with really efficient barbell exercises combined with just a whole bunch of walking and biking construction.
The barbell stuff is just squats, dead lifts, clean and press, a little bit of benching, and stuff with kettle bells and dumbbells, and generally using weights that I can just barely lift five times. The total expenditure per week is only in the order of like an hour or two, so I’m not a gym rat. Right now I’m pretty happy with the way my body is working, especially for a 41-year-old or whatever I am.
But I was slightly stronger when I was in my 20s, and it was basically the same stuff but just going to the gym for a longer period and training. It was really just more hours put in, and that’s when I probably had my record weight lifting and certain exercises.
Tim Ferriss: Do you have a quote or any quotes that you live your life by or think of often?
Pete Adeney: I don’t really think in quotes too often, maybe with the exception of “use it or lose it” seems to come up at least a couple times a day.
Tim Ferriss: I’d say that’s often enough to be a response.
Pete Adeney: It’s so short and thus memorable. You don’t have to be all flowery and poetic to appreciate use it or lose it. I think it’s because in the current stage of my life, being over 40 and having some family members where some people have died in my family and had serious health problems, like in the extended family. It’s really made me more aware of mortality and how stuff doesn’t automatically stay in perfect condition. Even if it does stay in perfect condition, you’re unlikely to live forever unless some really, really big medical stuff changes before I turn 100.
So anyway, use it or lose it is the philosophy; brain, body, skills, friendships, relationships, just do everything that you want to be good at as often as you can and don’t fool yourself that you’re going to keep being able to do this stuff unless you continue doing it regularly.
Tim Ferriss: I don’t know which label to use here, but in the frugality or low cost living world, what is the worst advice or what is bad advice that you hear given often?
Pete Adeney: I think the biggest issue that I have with a lot of this mainstream financial advice is that they make you think of saving as kind of a negative obligation. They’re like: yeah, we know it feels a lot better to buy yourself treats, but come on, if you can just squeeze out 5 percent or even 10 percent, then you’re doing okay. Just do that every week, and make a budget, and all this stuff. So you’re training people to think that saving is bad and you want to minimize it. Whereas I think it’s a win-win, and most of our spending is a sign of weakness.
It’s a bunch of stuff we do to compensate for our weaknesses because we couldn’t solve the problem in a smarter way. As we talked about earlier, it’s possible to walk or bike to work, which is a physical and mental win and just happens to cost a lot less. So I encourage people to radically reshape their entire lifestyle to be optimized in all these dimensions. Sure, you happen to save 50 to 75 percent of your income as a byproduct, but the only reason that’s a win is because your life is better as well.
Normal financial advice doesn’t really address the life stuff. You se a lot of these totally out of shape business guru people trying to sell life insurance at the same time as they’re giving you financial advice, and they’re not really in it for making people’s lives better. I think that’s where it falls flat.
Tim Ferriss: Yeah, for sure. It’s important certainly in almost every area but in the world of financial planning and advice to ensure that the person giving the advice has done what they’re suggesting, or has some practice putting their words into action. Because otherwise, they haven’t stress tested their ideas, or at the very worst they’re a hypocrite and they’re doing the very opposite of them. Are there any failures that come to mind which are favorite failures of yours in the sense that they ended up sowing the seeds of a later success? Does anything like that come to mind for you?
Pete Adeney: I have a pretty serious one. I have an article called Mr. Money Mustache’s Big Mistake.
It’s right after I retired in 2005. I kind of faded into my first dream retirement job which was to start a custom house building company where I was going to make these beautiful, eco friendly houses. I did, actually. We started making these houses. The problem was it was way, way more stressful than what I wanted for a retirement job, and I just had this new baby boy at the same time. Suddenly I had all these obligations and a construction loan to build this thing, and I was doing marketing and working late and wrangling all these cats together like the contractors to help out building the places. It wasn’t really retirement at all.
And on top of that, we did it right in time for the housing crisis. So we sold our first house into the 2006 boom market for housing, but by the time the second one was done, it was 2007 and everything was slowing down and then starting to drop like a rock. And then I was stuck with this beautiful, ready to sell house and nobody wanted to buy it for any kind of reasonable sum.
So that kind of spoiled the fun of my first three years of retirement running this company. At the same time, though, going through hardship was really good for me. I had to do a lot of hard stuff that I wouldn’t have done, and that’s how I learned a lot of my best carpentry stuff, the skills that I’m most proud of. I’ve always messed around with woodworking since I was a little kid. But being forced into production on these expensive, modernist houses where everything has to be perfect, it really trained me a lot and I enjoy those skills now.
So the combination of shittiness and skills, and then we shut this company down and since then I’ve been truly retired and had so much fun looking back. I’m like wow, I’m sure glad I’m not doing that anymore! So it lost a bunch of money. Some of my retirement savings went up in smoke initially.
Then I started to be a bit more worried about money. That was a big part of it. I was like oh, all my hard earned savings! If I could go back and change that, I would probably still do it but I would train myself to be so much more relaxed about it and be like dude, don’t worry; you’re going to have so much fun after this and you’re not going to run out of money so just have a good time with your business, even if it fails.
Tim Ferriss: What was the process like of shutting it down, in the sense that was there a particular dinner or conversation or bike ride or moment when you decided to start the process of shutting it down? What did that look like?
Pete Adeney: It was pretty quick because I had bought these two vacant lots in kind of a premium, new urban neighborhood with my business partner and the company. We started building the first one, and the aforementioned stress was high.
It was like oh shit, what have I gotten myself into? Okay, let’s just get these things done and then be done with it. So I got the first one done, and ooh, that was great, big success! It sold for more than we were even asking for it. And then the second one got more and more stressful and I already knew before I even started that second one that I wanted to shut down the business afterwards. It just got drawn out longer and then we got into renting it out, but then the tenants turned out to be horrible and we had these scam artists move in that we didn’t realize were scam artists.
They were like: oh yeah, we just sent you the rent. It’s in your mailbox. Check your mailbox. Click, and they hang up; all these little tricks. The guy had this fancy, brand-new Corvette that he had bought and he had to hide it in the garage because the repo man would take it back if he ever saw it outside. So all he could do was pull it out, polish it, and rev it and then put it back in the garage. These people were just really messed up and I happened to get tangled in their web for awhile.
We had to use the full-on eviction with the sheriff coming to my door to get them out of my place. So yeah, there was some education in there.
Tim Ferriss: It sounds like a headache. When was it finally done, shut down completely and what did that day feel like?
Pete Adeney: One of the biggest problems with this was that the relationship between my friend and business partner who started it, it just soured and became pretty bad by the end. We had totally different views about work and money and dividing stuff up. We finally got him out of there. I basically had to buy out the company. I had lost all this money and I had to put a final $460,000 into the company to pay off this mortgage that was on the house, just to kick him off the property deed so that I could have control of it. So that day was kind of like we were frowning at each other over the lawyer’s table.
Since then, that lifted the weight off me and then everything was so much better. Then for a while I rented out the house to great tenants and I was just using the rent for grocery money because the house was a fairly big portion of our retirement savings income at the time. Then more recently, less than two years ago, the market in our area here in Colorado started to boom again so I just sold it for a nice, high price and now I’ve been super relaxed. That’s kind of like another wave.
And it really taught me a lot about happiness because this negativity in my life, or at least I was choosing to perceive it negatively, was washed away. Then suddenly I was happier than I could have ever imagined being because I’d gone through this somewhat hellish situation.
Tim Ferriss: And then removed the negative, right?
Pete Adeney: Yeah.
Tim Ferriss: Which is such a valuable question to ask before purchase. That alone will return 100x the effort of scheduling and doing this interview for me; that question. Is this removing a negative from my life? It’s such a powerful reframe because I think that is so true and so incredibly useful. The next question is going to be completely flipping that on its head, and this is not one of my usual questions but I’m so curious to know how you’ll answer this. If you w ere given $100,000 to spend and they said you have to spend this, you have to buy something or some things. You cannot donate it to charity, you cannot stick it into an investment vehicle; you have to spend it.
And it has to be on you, your family, or your close friends but it can’t be charitable in the sense that you’re, say, paying for the college tuition of your friend’s kids; nothing like that. How would you spend that? What would you do with it?
Pete Adeney: That was my answer. You just took my answer.
Tim Ferriss: I knew because I felt like it was coming.
Pete Adeney: Because I could pay off somebody’s mortgage. There’s still one family member in my close family that has a mortgage. But yeah, we want to consume, here. Can I have more than $100,000 or is it limited?
Tim Ferriss: No, it’s not limited. Let’s just say that you took a step into Bizzaro Land where everything was what it wasn’t, and suddenly you are the Anti Mustache. What would you do?
Pete Adeney: The thing is, this might actually be somewhat realistic because I still consider every day, is there something I could spend money on that would be worth it? It’s still an open question. You don’t want to be ideological about this stuff. One thing I’ve been interested in maybe buying, and if I was forced to I would do it quickly, is a building.
I kind of want to own a commercial building on our town’s little historic main street. This town I live in, Longmont Colorado is one of these over 100-year-old things where it’s all historic with big trees, and the narrow main street with the tall, brick buildings on it. So I could buy one of those and set up some kind of fun, community space in there where we play music, and we have parties, and we rent it out and do some teaching, too.
Because I like to do a bit of volunteer math and science teaching to kids; kind of advanced stuff that they don’t get in the normal school. So I could have Professor Mustache’s School of Science in our downtown building. That would be kind of a fun use of money.
Tim Ferriss: This is more a metaphorical question, but if you could have one, gigantic billboard anywhere with anything on it, what would it say? A short message or image that you would like to impart to the world.
Pete Adeney: I’m picturing this in a U.S. metropolis because that’s kind of where I’m focusing my efforts right now. I think it would say “Walk,” or maybe it would say “Just walk;” something that people can really understand quickly.
Tim Ferriss: I like “Just walk.”
Pete Adeney: Yeah, back to our original thoughts. It’s the best prescription medication in the world and yet it’s so underdone so far. So that’s my billboard.
Tim Ferriss: We’ve made as a species so many evolutionary tradeoffs to be able to walk with a level head, unlike say a pig that doesn’t have a nuchal ligament so their heads Bob all over the place. We’ve evolved to be able to, as it would seem a survival imperative, walk very long distances. I just feel like humans are generally better humans and less neurotic when they walk a lot. At least that’s true for me; I’ll speak for myself.
I’m like 10 percent less neurotic, which is a win for me.
Pete Adeney: So our billboard could say: “Just walk; you’ve paid a high evolutionary price for this ability and let’s not squander it.”
Tim Ferriss: What are one of your biggest challenges right now, and how do you plan to think about it or face it?
Pete Adeney: I think my biggest challenge is the over satisfied rat in a cage syndrome, where it’s a fine line between being too satisfied with your life and not doing enough so that you feel like a bit of a weenie at the end of the day for squandering one of the few days of your life. Versus overdriving yourself to be like; whoa, I’ve got to accomplish more. I have all these gifts and great situations and I have to make the most of it. Ad taking either of those to extremes can lead to a pretty unsatisfying life.
I can compare myself, actually, because this is a little bit weird but to you as Tim Ferriss, because I’ve read some of your books and I see some of your self reflection in there where you have some of these battles. You’re like well, should I be a perfectionist, or should I relax? I have a lot of these same questions to myself. One of the differences is that I chose to have a kid and I focus a lot of energy on that, which by definition subtracts a lot of the other stuff I could do, like why am I not running my own Tesla-type company or whatever.
So that’s my challenge, is trying to walk the line and at the end of each day be satisfied that I’ve created the right balance of stress and accomplishment versus lazy decadence which is part of the fun of being early retired. Which is you generally can just smoke a bowl, have some fun with your friends on a Wednesday and sleep in, and it does not matter and you still are going to have all the money you need, no matter what.
I still have trouble; I’ve been a little bit on the lazy side for the last couple weeks because of family conditions here at home. So I’m craving to get back to work on something hard.
Tim Ferriss: How do you think you’ll explore that in the coming year, testing that balance or trying different things to try to find it? Or maybe it’s a matter of just oscillating between the poles, and that’s how you achieve balance? It’s not like you’re ever 50/50 for a long period of time; you just oscillate between the poles, I don’t know. But how are you thinking about that? Because I am also thinking about the same thing in 2017.
Pete Adeney: It’s a continuing series of experiments and it’s always changing. I’ve been at this for a long time. It’s been 11 years since I had a real job, and I’ve done a lot of hard stuff and then a medium amount of laziness in this time. So I keep trying stuff to see if I enjoy it.
So last August for example, I wanted to see if I enjoyed the TED talk public speaking and I did a whole bunch of traveling around that as well. And I found it was a bit too much. I enjoyed the actual stuff that I did, but I was craving being at home. That’s made me realize that most of my joy comes when I’m actually creating something, and this is why I am less travel-oriented than other people, because I can’t really create while I’m traveling.
So I need to do a certain amount of nitty-gritty construction and design, and just hanging out and having unplanned, spontaneous people coming over for a party or a barbecue or whatever. So I need this village life. If you imagine a primitive man living in a village where he spends half the time hunting, some of the time building stuff, and some of the time reveling around the fire; that’s kind of my core of happiness.
And when I get too much into lifestyle guru activities, like I’m gonna publish more articles or get this book done quickly, or say yes to all these interviews so I can have more and more fans and page views, and actually that sounds dumb when I say it like that. But when you look at news headlines about yourself, you’re like that’s successful. Or you look at page views or money, you go yeah, that’s success.
But it’s actually kind of the least happy thing that I do; it’s the least satisfaction bringing. So I have to balance that with these much more village-y type of activities. But if I totally neglect the internet world, then I’ll feel like I’m letting the world down because you can actually create good, positive change that way that you could never do just in your own village.
Tim Ferriss: Right. What have you changed your mind on in the last, say, handful of years? Is there anything you’ve done an about-face on in any way, or modified substantially in your thinking?
Pete Adeney: There have been a few little things, like what type of eating is healthy. I switched to the high fat, low carb eating on a whim after reading some books and I’m really, really happy with that. Whereas before when I was a teenager, I was the ultimate low-fat because I read all these body building magazines back then, and they were always telling you that ten grams of fat would be way too much to have, and all this stuff. So that was a change in a little way. The biggest change I’ve had, though, is more in my understanding of happiness. I thought happiness came from maximum achievement and maximum wealth.
And as I got into experimenting with those things, it sounds too much like my other answer but I learned much more about the balance that’s required for happiness so it’s changed my goals for the rest of my life. It’s that there’s a lot more to happiness than just being maxed out in one dimension.
Tim Ferriss: I only have a few questions left.
I’m having a lot of fun and could keep going for many, many hours, but do you have any ask or request of my audience? Any experiment you’d like them to do, exercise, anything. It could really be anything, but any parting thoughts before I ask you where people can find out more about you and so on?
Pete Adeney: Right. Well, if you are new to this stuff that I talk about, and if anything I’m advocating sounds crazy, for example not using a car to get your groceries or not using a car to get to work, then try it and think of the idea of voluntary hardship. Put that phrase into your mind and then see where you can apply it through the day. Like hey, that looks hard; I think I’m going to do it. Instead of that looks hard; I’m going to try to avoid it.
The voluntary hardship is the gateway drug to the rest of mustachianism and thus being able to save 75 percent of your Silicon Valley income while everyone else is still broke. So yeah, find some things that are hard, even if it’s just skipping the elevator and taking the stairs up to the 15th floor or whatever. If the other people are not doing it, then that’s probably a sign that it’s something that you should do and just record your results; see how much better it makes you feel and then just keep pushing yourself a bit further.
Tim Ferriss: I would echo that and spin it slightly differently. These are complementary viewpoints. But for those folks out there listening, if you don’t want to focus on savings, even if that is not the objective per se, voluntary hardship is a fantastic way to short circuit hedonic adaptation, where you need more and more and more, almost like an opiate to satisfy your need for x.
And I would highly recommend everybody read a letter. You can find it in the public domain online. You can also find it in Tools of Titans in a slightly edited fashion. But On Festivals and Fasting, it’s Letter 13 from Seneca to Lucilius; the moral letters to Lucilius “On Festivals and Fasting.” It talks about setting aside a few days a month, let’s say, to experience voluntary hardship in different ways.
It is such a fascinating psychological trick in many respect with all sorts of beneficial side effects, like cutting down on expenses, that I think allows you to realize that it’s possible to recalibrate yourself to experience greater happiness and well being without simply adding more, more, more, whether that’s [inaudible], money, fancy shit you don’t need or otherwise.
I definitely want to second that notion. Pete, where can people find out more about you? You’ve written a lot. Where should they start, also? Where can they find you on social? Where can they say hi? Where can they read your stuff, and where should they start if they’re just opening the doors to your writing?
Pete Adeney: I’m a big fan of old fashioned websites, so there’s always MrMoneyMustache.com, and you’ll see a “start here” button on there that takes you kind of to an introductory article. Then the design of the website to the limited extent that it has a design, is to poke around and follow links to other links. Or you can start at the beginning and read all the 400-plus articles dating back to 2011.
That’s how most people do it, and then you can read it. if you get really into the rabbit hole, then there’s a forum where all these users discuss their intimate problems with each other, and it’s got tens of thousands of members that spend all day on there. Or if we’re keeping it really light, you can just go to Twitter and look up Mr. Money Mustache and say hey, I enjoyed the podcast.
Tim Ferriss: Perfect. Pete, thank you so much for the time. I really appreciate you taking the time. And to everybody listening, as always you can find links to everything we discussed, books and otherwise, at the show notes which is for this episode and every other episode: fourhourworkweek.com/podcast, all spelled out. As always, until next time, thank you for listening.
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