Episode-766- Jacob Lund Fisker from Early Retirement Extreme

Jacob Lund Fisker is the author of Early Retirement Extreme, he retired at 33 with enough investments to never need to work again.  He is from Denmark but has lived in the US since 2004

In his prior life he was a theoretical astrophysicist, but got tired of the careerism and wasn’t inspired by the prospects of doing the same thing day after day for the rest of his life.

He now self-identifies himself as “a writer”.  When he was in grad school, he discovered peak oil (in 2001, before it was cool) together with anticonsumerism and finance. So he started saving as much as he could to avoid “getting mortgaged” while at the same time prepping for TEOTAWKI.

Later it just became a lifestyle (he considers himself a “recovering doomer”) and somewhere along the way he discovered that he could use the money he had saved to buy his first house in cash to supply himself with a living income for the next, oh say, 300 years. The rest, as they say, is history.

Join us Today as we Discuss…

  • How different generations define “retirement”
    • The GI Generation
    • The Boomers
    • Gen X
  • What is a climax state in nature and how it applies to the modern economy
  • How complex systems break down and need to be rebuilt
  • Why most people should focus more on savings than increasing income
  • How 3% ROI can yield a full retirement with only 5 years of savings
  • Getting out of consumer mentality (problems equal products)
  • Why modern specialists are more replaceable than an “uneducated” farm hand
  • The value of leaning to cook
  • Turning your oven into a grill – you will probably go “DUH!” when you hear this
  • Living a great life below the “poverty level”

Additional Resources for Today’s Show

Remember to comment, chime in and tell us your thoughts, this podcast is one man’s opinion, not a lecture or sermon. Also please enter our listener appreciation contest and help spread the word about our show. Also remember you can call in your questions and comments to 866-65-THINK and you might hear yourself on the air.

28 Responses to Episode-766- Jacob Lund Fisker from Early Retirement Extreme

  1. Pingback: » Podcast: I got interviewed on The Survival Podcast Early Retirement Extreme: — The choice nobody ever told you about

  2. Good show I could have sworn that I have heard it before. Keeping track of what you spend in the % really helps to know where to cut first. For us our biggest expense is food. Meat is the highest % of the food bill. So we are putting more focus on that first vs the garden. Now raising American Guinea Hogs after yesterdays show revisiting the rabbit idea. As food production ramps up we can cut that way down hoping by 50-75%. Paleo eating actually fits better into raising/growing your own food than supermarket shopping I think.

    We use quick books to track all our spending. When you pull up a report or pie chart what an eye opener that can be.

    yes I can honestly say I have built a fire and used my oven rack. Hint don’t make your fire way hot it can warp your rack. Oops we just reheated and wacked with a hammer. All fixed.

  3. If there is any audience that’s ready for the ideas that Jacob is offering, it’s us! Most of us probably already do many of the things he’s advocating.
    I like the RV idea but I went with a mortgage instead. I went with a more modest home and paid it off in 11 years. Now I’m saving well over half my income. Mr Fisker and Karl Denninger from episode 756 have given me a new level of motivation. Carl motivated me out of sheer friggen TERROR (LOL) and Jacob has just given me a new understanding of what’s possible.

    By the way, I’m a Veteran but have no plans to take the discount. The standard MSB membership is a very reasonable price for the value I get in return. So I don’t plan to change it.

  4. “I’m a lawyer and I make $200/hr why should I cook my own food?”

    Because the opportunity cost at that point isn’t $200, it’s closer to zero (i.e. you aren’t making money during that time anyway).

    I see that mistake frequently. Because a person makes “x” at their job they want to apply that value to ALL their time. In fact, that person is only worth that rate when working at that job, not when mowing ones yard or making eggs or whatever.

    • Blueprint, You are spot on-well said! It’s one thing if you are going to work and make the $200 for the same hour you would be doing whatever- but that’s hardly ever the case.
      Steve.

    • I had a colleague who would do nothing for himself because he claimed his time was worth too much (based on his hourly rate at work) but he spent an awful lot of his spare time playing World of Warcraft! By his logic that’s a very expensive hobby!

  5. Great interview! My views are somewhat similar and even if I didn’t think others thought like me, I’d still do the same thing. However, it’s nice to know there are people with a similar point of view.

  6. Great Show! I have been doing this most of my life, because I always wanted to be able to say F you to “the man”. That being a boss, government or society, I want to be able to say “I choose not to play your game”.

  7. I like how retirement does not mean sitting around doing nothing. I don’t know anyone in my family that ever stopped working. My great grandfather was still helping with milking and hay at 99, my grandfather still helps with the milking and hay at 97, my dad still helps a bit with the farm (now my uncles) but alot with the local Red Cross disaster shelter team at 69. I expect to keep on working too.

    Oh, sure, none of us work as hard or as fast as we use to but we are sure that we would be dead in a year if we did stop and just walked on a beach etc. the trick is to find something you like doing and get paid to do it and tell them that you will do it for half.

  8. I agree with most of the points made today. But I have to say there is something very familiar about this podcast, Jack have we heard this show before? Cause I am having Da Ja Vu.

  9. Here’s an insightful quote from Henry Ford –
    “It is well the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

  10. I think a problem with retirement could be that if you later decide you need more money. If you have been retired for several years, maybe it would be hard to get a job.

    I also think the idea of going to a job interview and answering the question “What have you been doing for the past year?” with “I am semi retired” could also be not the best answer. So then, could there be something like “guerrilla retirement” ? Because whenever you go to a job interview, you don’t exactly lie, but people are prone to exaggerate a bit or put their best foot forward. I was trained by my dad on how to interview, but they ask more questions these days that we never covered and answering the question above with something like “well, I have been growing mushrooms, cutting wood, and learning about permaculture” feels awkward when the hat you are supposed to be wearing says “software engineer” etc ..

  11. String Larson

    I’ve got a big problem with his thinking. First, I assume he rec’d his education in the EU system of schools. Wherein out-of-pocket expenses where probably minimal and hence covered by the society (correct me if I’m wrong here). If you go to school and get a high level education, on someone else’s dime, you are doing so with the (implicit) idea that your education will be used to benefit the society that paid for said education. He was not given a free ride just to work for a couple of years and the go sod off to his own private Idaho. This is the ugly side of acting in ones own self-interest. What has happened is that he took what was given and did not reciprocate appropriately. That is a form of theft. At best, he took up space that could have been used by someone who would have continued to be an asset to society.

    • Modern Survival

      @String Larson, spoken like a true socialist and a bitter human being. What gives you or anyone the right to tell anyone else how they ought to live their lives? I am sure if he had his way Jacob would be the last one to create the very type of government he has at least attempted to leave behind.

      • String Larson

        You missed my point entirely. I’m an entrepreneur and left-libertarian working within the structures of (what is left of) our capitalist system. I paid for my education at a top engineering school thru hard work, grit and determination. I could drop out a live like Jacob if I wished – essentially, ‘in a van down by the river’. I didn’t leach an education off of the state. I’ve never leached anything off of the state nor do I intend to. Where I depart with the (right)Libertarian thinking is that the whole ‘acting in ones self interest’ turns quickly into the clusterfsck we have today. I find that it is my self-interest to attempt to build a business (create jobs) and help my community thru education/etc. Not everyone is gifted or fortunate and ignoring that fact is a sure way to create a divided broken society of isolated alienated individuals. I find your ‘socialist’ comment to be pretty out of line but a common knee-jerk reaction, sadly.

        • Modern Survival

          @string larson, socialist is as socialist does. Your assertions that any man should live in conflict with his dreams, (when those dreams harm no one) is about as socialist an ideal as one could expose.

          Also you have NO IDEA what exactly this mad did in return for his education. You have no idea what contributions he made to society during his working years. Who are you to claim he leached an education from society? Or that he owes it to anyone to live a life incongruant with who he is? Further how do you know he would do more for society by continuing as a physicist, rather than blogging and writing his book? To me the world needs the lesson Jacob is teaching right now a lot more than a book on dark matter or some such thing. I would lay 1000 to 1 odds Jacobs work during “retirement” has helped more people than his work as a physicist.

          Frankly the attitude that you owe something to society that requires you to stay in a profession or place in life is a big part of the cluster fuck as you call it that we currently have in our society. How many people stay in jobs they hate due to such nonsense?

          You describe yourself as “left”, well left is the direction of socialism and your comments belay that even more.

      • String Larson

        You’re still missing the point.
        That being that he took an education from the gov’t(people) that was provided with the implicit contract that they were investing in their future. Unlike me, he didn’t pay for his education out of his own pocket. (or in the case of Switzerland, paid very little). I don’t advocate anyone staying in a job they hate. You’re putting words in my mouth. I just firmly believe that when one is gifted enough to become a physicist or whatever, that there are certain responsibilities that come with that. If you think writing a little pamphlet and a blog about frugality is living up to that expectation, fine. I don’t. As far as I can tell, his choice is to be a poverty level consumer who is not living up to his potential. Other than leaching a free education, I would NEVER advocate for a gov’t/socialist control over what someone does. However, if one takes from society (be it education or welfare or whatever) one owes that society for their investment in return. I’m just holding him to the same standard I set for myself. With my talent and skills, it is important for myself and my community to work to create jobs and help those without my ability. That’s the way I look at ‘left’. Its not about greed or pure self-interest or material accumulation or any of that. It’s about a rising tide lifts all boats. I know you understand this point.

        • Modern Survival

          @string, no I am not missing the point, I understand your point, to be blunt I just think your point makes you full of shit. Secondly again you don’t have a damn clue about the terms or how this man ended up in college. Following your logic if I get a scholarship to go to school for science but later determine I like to farm I should stay in science because someone funded my education with a scholarship. That’s bullshit and what you are arguing for here is also bullshit.

          I am sorry you think anyone is entitled to tell anyone else how to live but rest assured I get your point, I just think it is a socialists point of view.

        • String Larson

          “… to be blunt I just think your point makes you full of shit.”
          Yep. That was blunt among other things.

          “Secondly again you don’t have a damn clue about the terms or how this man ended up in college.”

          Working on the assumption that being Finnish and going to grad-school in Swit. the education was paid for by the gov’t – ie. the people of those countries. Did they get a good deal on their investment?

          “Following your logic if I get a scholarship to go to school for science but later determine I like to farm I should stay in science because someone funded my education with a scholarship. That’s bullshit and what you are arguing for here is also bullshit.”

          I never said scholarship (assuming a scolarship is a private arrangement or some endowment, etc.)
          I’m talking about a gov’t sponsored education here. A socialist system that he was a part of.

          “I am sorry you think anyone is entitled to tell anyone else how to live but rest assured I get your point, I just think it is a socialists point of view.”

          I’m not saying anyone is entitled to tell anyone else what to do. However, what I’m saying (maybe poorly) is that taking an education from the gov’t and then bailing out on what I consider to be an implicit obligation is not respectable or even moral.
          With that kind of intellectual capacity I just expect more both from myself and others. To me it is a character issue. This seems to be a common issue with the libertarian right. There is a tendency to not understand the difference between overt-harm and sins of omission. There is never really a holistic view of the world. But, rather, a narrow gauge of how things ought to work.

        • Modern Survival

          @string, the more you talk the more you prove my points for me.

    • Suggesting that those who retire, at any age “no longer contribute to society” Is HIGHLY presumptive of you. Have you noticed that MOST museums, non-profits, homeless shelters, parks, volunteer police, fire, historical sites, on and on and on, are staffed by the retired, who often work for free?
      I couldn’t begin to count all the “retired” people I’ve met who contribute greatly to society, usually for zero personal gain. In fact, it would be easier to count the exceptions.
      Check yourself.

      The reason you give for providing free education is essentially indentured servitude, in fact, its worse as indentured servitude is a mutually agreed upon contract.
      It is immoral to offer someone something for free then turn around and demand that they spend their lives working to pay back a “Debt” that you imagine they incurred, and that they never agreed to taking.

      But anyway, your reason for why public education is offered is a false one. The reason we offer public education is not to promote the specific welfare, it is to promote the general welfare. It is because it is more expensive (through higher crime rates, decreased economic viability, etc) not to.

      “what I consider to be an implicit obligation is not respectable or even moral.”

      And that is the fundamental flaw with your argument. The “obligation” exists only in your head. I could decide that you are obligated to give your entire net worth to society, or to have some sort of Brave New World attitude about your reproductive activities, or any preposterous thing I could care to dream up, but unless you explicitly agreed to it, its not your obligation, its merely my opinion.

  12. Dug it. I thought he was just fine; no real drifting off track any more than some other guests. (Re: disclaimer.)

    The subject itself is a more complex question. Is the economy (in total) reaching some kind of equilibrium climax state. My answer is absolutely not. In fact, “we’re” on the cusp of many radical advances which may completely alter our existence as much or more than the industrial revolution. Economic activity could advance wonderfully from where we are today. The potential work of the world, useful work, IS INFINITE.

    The principle question of saving vs. making has as much to do with individual personality as anything else. For most, saving is probably the way to go. It’s easier to understand and less risky. However, there is only so much you can save and continu to exist at any decent level. On the flip side, sky is the limit; though talent and drive are required, not just following repeatable patterns.

    • Modern Survival

      @Vettezuki, while I agree with your vision of the future I don’t see it as the immediate future. I agree with Jacob we are in a climax stage, a good old fashion forest fire is about to hit before any “green shoots” emerge. There is to much damage to go forward with out a system collapse first. The other side is a very exciting prospect but if anyone thinks the collapse will last any less then a full decade (perhaps two) they are sadly misleading themselves. The US alone has a 110 trillion dollar economic hole in unfunded obligations, the reality will soon set it that they will never be funded, EVER. Once that happens the burn is going to come. It won’t be pretty and don’t be overly optimistic about how soon a real recovery and economic shift will begin.

  13. I wanted to compliment Mr Fisker on his English ability. Except for a little bit of accent (which could have been regional) and a few small pronunciation clues pointing to dictionary learning, I would have assumed him to be a native speaker.

    If he wants to get a job again someday, explaining the situation to a potential employer shouldn’t be a problem. Just talk up the skills gained from being a personal finance writer and all those hands-on hobbies. As long as he’s actually qualified for the job, it should make him more memorable than the other boring applicants.

    One minor gripe: The DIY grill plan. Not so useful if you’re in the middle of the annual burn ban! Alternative: Look around for a broken gas grill. Repair it and pocket the difference. Takes more time and effort, but it’s less likely to burn down the neighborhood. Need to grill RIGHT NOW? Adapt the recipe for cooking in an indoor oven. Sure it won’t be quite the same, but that’s better than running out and buying a grill at full retail.

    Stealing an education: If you wanted out of a career for whatever reason, would you want to be forced to stay in because someone else paid for your training? That’s called slavery. Not good. Not a great incentive for high quality work either. Better to let him leave and replace him with someone who actually wants to be there.

    If policy makers are worried about someone taking a free education and skipping town, then they need to write a repayment clause into the deal up front. I don’t see any reason to complain if what he did is allowed under the rules where he studied.

    Reading the sample chapter from Amazon… It’s good so far.

  14. The objection that I owe a lifetime of work to the system in exchange for my free education sometimes comes up. Let’s just say that the system/society wasn’t and isn’t exactly forthright about this social contract. The real world doesn’t work as advertised and had I known what I know today (if only somebody had been out there to tell me) I would never ever have gotten the degrees I did. People usually discover the truth about halfway into grad school, sometimes later.

    The system essentially amounts to a racket. People (in Denmark where I got my degree) are encouraged to study whatever they’re interested in. This is because the completion percentage is higher than say if people chose their field based on the likelihood of finding work and universities only get paid [by the state] for the students they graduate. Conflict of interest #1.

    The second problem (#2), which we also see in the US, is that businesses and universities talk about shortages in certain fields [like science and engineering], when there in fact is an oversupply of labor. The way it works in research is that each professor trains about 10 people (over a career) to replace him in what amounts to an apprentice model. These are called [grad] students in order for universities to get around labor regulations like health insurance, etc. Later they’re called postdocs in order to have the employees effectively be temp contractors instead of staff. It’s called training, but it has little to do with training. Grad students and postdocs are essentially those who do the real research. It works similarly to private industry. You’re put at a lab bench or in front of a computer, given an assignment to look into some problem. Then you write progress reports (called papers/publications) and after 4 years, you write a big one called a PhD thesis. This was all done on a salary of $20-25k/year putting in 80-100 hour weeks. As a postdoc, you’ll earn 40-45k/year, same hours. The professors essentially act as managers, who job it is to coordinate the research and write grant proposals (sell the research). The 10 people he trained now have to compete with each other, their incentive being that some day, when they’re close to 40 years old, they’ll finally have stable employment. 9 have to go. I do in no way feel morally obligated to contribute to this Ponzi scheme.

    So this has very little to do with education and everything to do with getting cheap researchers at what amounts to below minimum wage. I’m not bitter because the job at the time was very interesting and it felt more like a calling. On the other hand, I feel that I earned every cent I got and I paid back the “free education” in spades in terms of very low compensations and enormous amounts of free overtime compared to what I could have made in industry.

    Was it a waste of talent? That’s tough to say. Three points: 1) There are PLENTY of people competing for research positions. As mentioned above, each professor creates roughly 10 replacements which mean that 9 have to go and find other work. Finding people smart enough to do the science is no problem and advancement in many cases comes down to academic nepotism, politics, or whether your research was deemed interesting enough for Nature (e.g. building a telescope that allows you to see a supernova=not interesting, peeking through said telescope and seeing said supernova=interesting). 2) Intellectual brainpower might be better spent on things more useful than the “Nth resonance level in X nucleus in Thin Plasmas” or making gadgets for WhoCares, Inc. in private industry. It’s hard to decide what “value” really is. In grad school I had a popular homepage on peak oil which drew more traffic than the entire institute combined. I get way more feedback on ERE than I did on my research. Comparably speaking, the number of pageviws ERE gets in one single hour is probably comparable to the number of times my scientific papers (more than 30 publications) have _ever_ been read in a lifetime. Of course, one can argue that Britney Spears get even more pageviews than that. However, in terms of social relevance of my scientific work, let’s just say I wasn’t exactly curing cancer. 3) When I left science, the world didn’t collapse. I wasn’t really missed. On the other hand, there’s less than a handful of people writing about financial independence.

    The last two points were a major factor in me retiring from physics.

    • Modern Survival

      @Jacob, thanks so much for your absolutely awesome reply.

      Now @String Larson as I said earlier, “you don’t have a damn clue about the terms or how this man ended up in college.”

      Your response began with “assuming” well, there you go that is what you get for assuming! Assuming things when you are telling another man how he should live his life to again be blunt is a pretty dumbass thing to do.

    • Yeah, thanks for explaining how Denmark’s university system works. That explains some weird things I saw in college here in the USA. I think the grad / postdoc / publishing pattern is similar everywhere.

      Our universities have mixed sources of funding, none of them based on graduation rates (or any other measurement of results beyond simple GPA). But there’s still a lot of direct state and corporate subsidization. Gotta love how my own alma mater keeps calling me for donations — even while they’re in the most extravagant campus construction boom in 30 years.