Pete Adeney, more commonly known as Mr. Money Mustache, retired at 30 after working as a software engineer for about ten years.

He blogs at MrMoneyMustache.com about how he saved money, where he invested it, and how he achieved “financial freedom through badassity”. He’s also one of our most requested podcast guests on HN and Twitter.

You can apply to the W18 batch of YC here – ycombinator.com/apply



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Transcript

Craig Cannon [00:00] – Hey this is Craig Cannon and you’re listening to Y Combinator’s podcast. Today’s guest is Pete Adeney, also know as Mr. Money Mustache. He started blogging about it at mrmoneymustache.com where he’d write about his saving strategy, where he invested the money, and how he thought about life. His blog because super popular, especially among engineers, so he’s been one of the most requested guests for the podcast. I met up with Pete in Longmont, Colorado at the newly constructed Mr. Money Mustache headquarters and had a blast talking with him. I hope you enjoy this one. And before we get started, just want to let you know that the winter 2018 application is open. If you’d like to apply to YC the link is ycombinator.com/apply. Alright here we go. The first question I had for you, not on the paper, is if I want to start a cult, like Mustachians, what are your pro tips?

Pete Adeney [00:52] – Man, that’s a good question, and, if I had prepared, I would have brought my little talk that I gave a few years ago at a blogger conference that was called “Don’t Start a Blog, Start a Cult,” but, anyway, I think the pro tips are you need to have the identifiable philosophy that’s, maybe, a bit different than what the normal world is into, because your people, your cult members, are going to organize around this cult. You maybe want just a little bit of a feeling of us versus them, and, like, “Oh, we are, you know, we got these values and they’re noble, but the outside world doesn’t quite support us. We’re a little bit oppressed.” Then you have the sense of identity, and then this is all stuff I stumbled on accidentally, because, really, I was just saying here’s a good idea for living

Craig Cannon [01:38] – Yeah.

Pete Adeney [01:39] – And then other people were like, “Yeah, I like that idea too, but nobody agrees with me.” hat’s why I accidentally had the slightly cult thing going on, and other things that are useful, you know, a couple more pro tips would include use of terminology and silly words, and that’s true with whether you’re the cult of Star Trek or iPhone or the various religions. They all have these sort of special terminology, and it helps to have an identifiable leader too. A cult in which…

Craig Cannon [02:09] – For better or worse.

Pete Adeney [02:10] – I actually became, yeah. You got Steve Jobs or Captain Kirk or the leaders of the religions or the gods. All this stuff is handy for creating a cult. People think of a cult as a bad thing, because they’re thinking of Waco, Texas and Kool-aid, but, really, it’s just a social organization structure which is a basic built-in thing to human beings, and it’s what allows us to live together and cooperate. If you can make your brand or your company or your blog have these cult-like properties, then that’s probably a good thing for making it last and having a real audience.

Craig Cannon [02:48] – How do you feel about the cult of Elon Musk?

Pete Adeney [02:51] – Well, I’m part of it, so I think that I’m going to have a biased answer, but it certainly fits the description that we were saying, that I was just saying now about what a cult is, and he’s definitely an identifiable leader. He’s definitely got unusual ideas, but the reason I am so much in this cult is that, everything that guy says or writes, I just agree with it almost fully, and I really like the way he explains stuff. It’s like finally someone is running a company and instead of just spewing this corporate bullshit, like, “We are considering the needs of our customers and we will get back,” he’s always like, “No, I think there’s a bug in, like, the 3,0 software. We’ll get a re-release out next week.” It’s proper. He speaks a combination of an engineer but with a much bigger perspective on everything, and he has these clear goals. That’s why I’m so favor, and so far he’s done very little evil, you know. Maybe he has personal issues in the sense that he’s so driven that it’s hard to relate to Elon Musk if you work directly for him, but his overall goals seem to be absolutely spot-on for a good person. That’s the kind of cult I want to be on.

Craig Cannon [04:08] – I was curious if the cult leader needs to be somewhat maniacal in their pursuit. They have to be polarizing to a certain extent.

Pete Adeney [04:18] – Probably, a little bit, or they at least have to be so convinced that their way is the way or a viable way that they’re going to get some disagreement from some people. My personal views for example, have become more hardcore over the last year that cars are just like the biggest stupid inefficiency that we have in the United States, and we need to just cut that whole shit down by at least 90%, and, because 99% of people are completely car-dependent, that makes me a polarizing figure. They’re like, “What is this crazy bicycle sandals man trying to tell me to do?” It’s just so different from anything I could imagine. In that way, that might be actually enhancing my status as an imaginary cult leader.

Craig Cannon [05:03] – Well, are you excited about self-driving cars? I get the sense sometimes that they’re just going to encourage mega-commutes.

Pete Adeney [05:11] – Oh yeah, that’s a good question, even though it’s a slight jump. I guess you were thinking Elon Musk and then you thought self-driving cars. I think they’re a tool but not the only tool. Right now, the only place I disagree with the Elon Musk vision is that a car should be thought of as a luxury racing wheelchair. There’s times in your life you want a luxury racing wheelchair. For example, when you’re with your friends, and you’re all going up into the mountains in high altitude, in a blizzard, and you want to have some beers, and your snowboards are in the back… perfect time for a car. But if you just want to go to work four miles, or even 40 miles, there’s better ways to design your life. Don’t go 40 miles to work. If we can keep the self-driving cars around so that they can reduce our crash rate and they can make our cities not be filled with inefficient parking lots, then that’s a win, but if you’re just doing a mega-commute from Pleasanton over to San Fransisco or something, that’s a loss. You’re still wasting all this land to make giant roads, and the cars themselves take way too much space, because they’re bigger than one person, so I would hope that we can go both ways, like denser cities, bike-friendly, and then self-driving cars to eliminate the dumb stuff we do with cars now. We’ll see.

Craig Cannon [06:36] – One of the questions I was wondering is that you have a lot of software engineer cult members or followers, entry level cult members.

Pete Adeney [06:44] – We’ll just call them readers. No. We’re done with scaring people off with the cult label.

Craig Cannon [06:51] – One of the questions I was curious about is, for people who are interested in retiring early or saving more of their money, if you’re living in a big city, and say you’re making like 30 grand, what is your advice for people like that, ’cause I know it’s easier when you’re making 150 to save more of the money.

Pete Adeney [07:11] – Yeah, well, it’s good to figure out why you’re in that city in the first place, because you can make $30,000 anywhere, including really affordable places, or even working from home in the location of your choice in other countries. That’s the first thing, are you willing to pay the premium to live in that city if you’re actually going to make that wage that you could make just working as a manager at a fast food place or something, and then the second choice is, or the second answer is, if that answer is yes, or regardless of the answer, what are you going to do with that money? Because there’s always hacks you can do to get your living to be cheap or to get your food to be cheap. There’s a lot of people who live in San Francisco for little to no rent, just through special arrangements, like they’re friends with somebody who has a space, or they’re trading services for rent, or they own a place and then Airbnb out the rest of it or whatever. The less you earn in your regular job, the more valuable your time becomes in these frugality hacks of cutting down your expenses and figuring out how to get around for free and where to get the food that is good for you but not super expensive.

Craig Cannon [08:23] – Did you have a special arrangement, because you moved to Colorado from Canada when you were just out of school?

Pete Adeney [08:29] – No, I worked a few years in Canada first. I did do a few things, even back then. Instead of seeking out my own apartment, I was always splitting these nicer, bigger houses. I would go on to the equivalent of Craigslist back then, the usenet groups, find stuff for rent, go there in my best clothes and say, “Yeah, I would like to rent this place. There are several professionals young professionals that would like to use the bedrooms,” and then the owners are like, “Okay, guess we’ll lend you our fancy house,” and then all the boys would move in and they were my coworkers as engineers that were friends. We’d split a four bedroom place among four guys, for example, and then we would each pay $300 a month at the time when an apartment by yourself might be 700. It was a win-win, ’cause we would have a much nicer place with a huge kitchen and nice back yard but for less cost than you’d pay for a junky beige apartment on the 13th floor. I did that from the beginning, and then, when I moved to the U.S., even back at the time I was probably making, in today’s dollars, close to $100,000. I still went straight to Craigslist and got a roommate situation for the first year, because I had to save up a down payment and eventually I bought a house, and then I’ve chosen to live in houses that I owned since then, but it’s not necessary. I could still do rentals. We just spend more on our housing, because we find it to be a nice luxury. It’s one of our many indulgences.

Craig Cannon [10:00] – Now that you’re at that point to afford it, I suppose.

Pete Adeney [10:02] – Yeah, and even earlier, long before retirement, we still chose to live in a house, my girlfriend and I, now wife. We knew that it was just something that was worth it to us and because I like working on houses, it kind of paid for it as well, ’cause I was increasing the value in my hobby time, which makes it easier to sell your house for more later.

Craig Cannon [10:23] – And, throughout this process, when you were just starting to work, did you just happen to have… you weren’t spending the money, so you were just looking for ways to take advantage of it as you were saving it? Why did you start connecting the dots and realize… what caused you to realize it, that you could retire early?

Pete Adeney [10:43] – It probably started fairly early, ’cause I was a kid. I used to iron my dollar bills when I was a kid and put them in a photo album, like $5 for cutting the grass. I’d iron that five and stick it in. I liked money as a concept even when I was young and then as I earned more money throughout my minimum wage jobs, I would not spend it all and, although I did tend to blow it at the time, ’cause I didn’t know about investment. I would save up a bunch, and then I’d buy a dirt bike or motorcycle, and then I’d save up for another year and then buy a really expensive stereo system or whatever, but then eventually one of those things was paying for my education. I saved up for the first year of tuition, so it was getting a bit more reasonable, but then at around 19 someone handed me, I think it was like a wealthy acquaintance of one of my sisters handed me this book on investing and wealth building, and I burned through that whole thing in one day and then I thought, “Ooh, investing is good.” Then, I kept reading books like that, and then I realized something else you could do with money. By the time I was in my 20s, it made sense that the surplus money would just go into investments, and then, at the time, to me, that just meant stock investments, and then I didn’t do anything especially smart with them, but after reading more books over the years, I started to do less dumb things, and then that’s why I settled on this index fund to model for stock investing nowadays.

Craig Cannon [12:05] – And in that process of learning how to invest and getting going and then actually saving, what, 50%, 60, 70% of your income, something like that?

Pete Adeney [12:15] – Yeah, that’s what it was. Towards the end, we got over into the 60s, ’cause our income was going up, but our household spending wasn’t going up.

Craig Cannon [12:23] – Yeah, what did that feel like socializing, ’cause we posted this to Twitter before we did the interview, and a lot of people were really curious about the social implications of you’re trying to put away 50% while your friends, your coworkers, make the same amount of money roughly. What was that like?

Pete Adeney [12:42] – Well, at our level, it was pretty easy, to be honest. It’s kind of privilege when you have two tech salaries. You don’t really have to give up any visible stuff. You can still go out to dinner. You can still have a ski pass and go skiing and everything. It was more the hidden stuff that we cut out. For example, we would keep the same bike instead of upgrading our bikes all the time, and we would eat lunch at our workplaces instead of going out to work, driving around all the time and waiting an hour just so you could spend $20 for lunch. Those kind of things don’t cost you anything in social fun, but they’re just more efficient and similar with cars. We would keep our used cars and our friends would buy new cars. Your friends don’t care what kind of car you have. You’re not getting any social cost by keeping your Honda Civic when your friends have a brand new, top of the line BMW. There’s basically no pain.

Craig Cannon [13:38] – I think this addresses the issue or rather the reason why so many people like your blog. It just feels much more relatable than many of the other early retirement blogs, which are like “Live in your van, eat ramen noodles forever.” Were those around as you started to save money, and you just found it inaccessible, or did you not even realize that that was a thing?

Pete Adeney [13:59] – Right, I didn’t even know other blogs existed, to be honest, and there weren’t really many blogs until the mid 2000s, maybe, and that’s when I retired, so I just did everything according to my own strange values and then retired just before I turned 31. That’s why I still claim I retired at 30, and then lived that way for about six years before even thinking of writing this down in the form of a blog, and then when I did, eventually, I went to the search engine, and I typed early retirement frugality, and then there was this blog called Early Retirement Extreme by this super great, frugal guy named Jacob, and it’s like, “Crap, I can’t start a blog. This is already covered,” so total, I’m not going to waste my time duplicating it, but then I read his whole blog, and I’d already written a bunch of articles in advance, just stuff that I wanted to tell people and turned out that we have different takes, significantly enough that I thought it was still worth publishing, and then Jacob and I ended up communicating quite a bit since then over the years. I’m glad I published, but there weren’t nearly as many financial and retirement blogs even when I started in 2011 than there are now. I feel like now we have thousands of them.

Craig Cannon [15:17] – Who were you looking up to at the time?

Pete Adeney [15:19] – I don’t know if I really operate on a role model basis like that. I’m kind of more of a strange floating around by myself in the ideas sphere. I read books. I was interested in the ideas in, for example investing books, but I didn’t really have any personal lifestyle role models, ’cause I didn’t read any blogs. It was just I’m just an independent guy. I had local friends, family, and I still don’t really have any role models I clearly identify with and copy. I’m just interested, if people are good at stuff they’re doing, like the Elon Musk example we used before, then I follow their progress, and I think, “Oh yeah, that’s a good idea,” but it’s so different from the quest that I’m on that I don’t really have any role models exactly in how to be Mr. Money Mustache, for example.

Craig Cannon [16:13] – And there wasn’t even someone who you found was kind of blazing their own trail, and you’re like, “Oh,” even family members were like, “Oh, they kind of got it figured out. They’re doing their own thing.”

Pete Adeney [16:23] – No, I think that’s maybe one of my advantages and disadvantages in life is that I don’t even really look around to see what other people are doing. I just have these opinions, and sometimes they’re considered quite crazy. Other times, people find use in what I do, but I am kind of this, maybe, I’m like a first principles person where I just look at something, and I’m like, “Well, that’s bullshit. I’m not going to do that,” and other times I look at other things and I follow it. I’m a misfit in society because of this, like finding stuff to buy people exactly on their birthday, for example. I don’t understand that tradition, so I don’t do it, and then other people who expect that, they’re like, “Well, that guy’s not very thoughtful if he didn’t get me anything on my birthday.”

Craig Cannon [17:08] – Kind of a dick, yeah.

Pete Adeney [17:10] – But I’ll do stuff for people when I think of something they need or some service or help they need. I’ll do it whenever. I don’t align it with the calendar stuff. That’s one example. I never understood fancy weddings is another one. I think marriage is a fine thing, and parties are a great thing, so having a party for your marriage is great, but the whole thing with special flowers and arrangements and table stuff that seemed like nonsense to me and wedding rings…

Craig Cannon [17:39] – Yeah, you’re not wearing a wedding ring, yeah.

Pete Adeney [17:41] – Yeah, that’s true. I’m not against wedding rings, but what I was thinking is the engagement ring, the whole tradition with diamonds and expenses. I came across that later in life, and I was like, “Man, that is total, total nonsense.” Where’d this tradition come from? I just totally rejected it. Luckily, my girlfriend at the time also was a rejecter of that so it didn’t cost me a…

Craig Cannon [18:05] – This is a super common question. People are like, “You know, I’m following Mr. Money Mustache or anyone,” or I’m just person like you, like I’m just on my own, interested in retiring early, interested in saving money. How do I get a partner on board? Do you have thoughts there?

Pete Adeney [18:20] – Oh yeah. Well, it helps to pick that person in advance. There’s two strategies, you are already committed to somebody who has certain values, and then that can go either way. They may flexible. They may be diametrically opposed to you on this stuff, and you got to figure that out separately, but if you’re still looking for a person or are in the circulating, dating stage, finding someone who has these similar lifestyle values is awesome, and I’ve met so many couples now that are of that style and they get along well. That’s why inter-Mustachian dating is really a good thing. When I have these events now, and I see people getting together, or even on the forum through my website…

Craig Cannon [19:08] – The whole section, right?

Pete Adeney [19:08] – Who are getting together. Yeah, and, actually, there is an app coming out made by Money Mustache readers, and the joke is that it’s going to include a Mustachian Tinder feature.

Craig Cannon [19:21] – That’s great.

Pete Adeney [19:22] – But I was really adamant that that is a valuable thing, because people want to meet each other, and, when they do, when single Mustachians meet each other, which sounds silly ’cause, if you don’t understand the word Mustachian, they’re like well, that’s just silly, but basically what it really means is unusually thoughtful people that have certain personality traits in common, and they’re often, to be honest, quite clever, because they’re drawn from tech workers or well-educated people for whatever reason. That type of person has a hard time finding their same type, especially ones that aren’t blown out completely in consumerism and spending all their money and no concern for environmental or resource stuff. When they meet each other the sparks really fly. You might as well make that easier if you’re in my position. I would love to see…

Craig Cannon [20:11] – That’s great.

Pete Adeney [20:12] – More good relationships like that forming.

Craig Cannon [20:17] – We talked about this a little bit, but why are engineer types, why are these clever types, as you put it, interested in Mr. Money Mustache or interested in early retirement?

Pete Adeney [20:29] – Maybe because they like things to be logical, and they might have the same tunnel vision that I have in the sense that they don’t just follow social norms. They try to evaluate things on a case by case basis like, “Do I like this tradition of society, or do I like this one?” When they see somebody going through that same thought process, it resonates with them, because it’s not the same type of thing you’ll see in CNN News or television shows and stuff.

Craig Cannon [21:01] – Or maybe now with you, but yeah.

Pete Adeney [21:03] – Yeah, if a Mustachians on CNN News, but everything else is very much like let’s take society as it is and then just talk about it whereas Mustachian principles is more like let’s take human nature based on what we understand as a science and adjust our lives so that they work well with our nature. Society’s kind of irrelevant. That’s more like a byproduct that’s just formed through random processes, and you don’t have to follow that. I mean, if your goal is happiness, just understand yourself as a creature. Every podcast always boils down to this concept, but…

Craig Cannon [21:38] – Yeah, which you might as well just get into it right now.

Pete Adeney [21:40] – Yeah, understand yourself as a creature, and what’s your goal? Well, that’s living a happy life. What does that mean? It means having a series of happy days and then figure out how to have the experiences in your life that lead to as many happy days as possible. That’s not going to come from car upgrades or following lame social traditions. It’s more about thinking deeply about what makes you happy and then doing it. It’s not like what makes me happy is different from him or her. We actually have much more overlap in what makes us happy than we would care to admit. That’s where some of these fundamentals really get useful.

Craig Cannon [22:20] – Obviously, you like doing construction. We’re at the HQ, which we should talk about, but with happiness, if more things are in common than we think, what are the things that make you happy, especially in the long… Because eating pizza makes me happy, but that’s not my retirement strategy.

Pete Adeney [22:42] – I’d say eating pizza doesn’t make you happy. Eating pizza makes you have good sensual experiences, like your salt and sugar buds are all nicely tingled, but if you measure what happens in your happiness after increasing your pizza consumption. To do a little experiment on yourself, are you actually happier after a month long of eating more pizza. Because there’s other factors, right? There’s your health, and there’s your activities you gave up in order to eat pizza and foods and everything. The stuff we have in common, though, is we have genuine social needs of a varying degree. We like to be connected with people. We like to smile at people and feel valued. That’s the social side which many people say is the most important. You want to feel like you’re part of a community and that people value you and that you’re contributing to that community. You’re not just taking. It really helps to read books on this stuff. If you can find books on somewhat scientifically-based things for giving happiness, just grab ’em from the library, and read through them, ’cause chances are it’ll blow your mind if you haven’t been studying this. Then, secondly there’s things like your personal health affects your happiness, because it just changes the level of stuff that’s circulating in your brain, like just the plain old dopamine and related chemicals. Walking, eating salads sounds kind of boring, but it genuinely makes you happier, and third on the self-actualization level, like being able to create stuff that you’re proud of, working on something that’s difficult, overcoming challenges and then having something to show for it at the end and then continually doing that, that’s a really big happiness-boosting activity. That’s why TV shows, watching TV is not a life-boosting activity. To a certain extent, it might have a second order effect of boosting happiness, because you might get to talk about TV shows with your friends, so then you’re creating that social bond, but if you throw that away and instead, for example, using the construction example, I solve problems in my little construction projects, and I do a lot of stuff with my physical body which makes me healthier, and then I could bond over those activities with my other friends who are into that, like my carpenter friends, or I have a lot of kind of renaissance man friends who like carpentry, but they also like nerdy science experiments and money and engineering. We can bond over all the stuff we did in our construction projects and how that became a great rental house and how that lead to these neat experiences and then what the neighbors did in response. You get all of that whole happiness project satisfied, pressing all the happiness buttons, and that’s why I keep doing construction. For me, it’s like this super smoothie, power thing that I can chug that makes me happy in so many ways.

Craig Cannon [25:36] – And you kind of compartmentalize it. We were talking earlier, before I recorded, about doing this alone and its similarities to engineering, like the time it takes to get into a flow state. You need a block of time. Do you try and combine this stuff or have you just found it’s much more satisfying to… this is your social check box, this is your hard work, working out, or carpentry, or whatever it might be?

Pete Adeney [26:00] – Yeah.

Craig Cannon [26:00] – Yeah.

Pete Adeney [26:01] – I do try to put it in separate sections and make sure they’re all addressed, because it’s daily routines kind of make things happen automatically. When you don’t have a daily routine, it’s easy to forget stuff that’s important to you. I’ve been in, for at least the last six months since I bought this place, I’ve been in a pretty neat daily routine where I get up, have a healthy breakfast, bike downtown where this building is, and then work for three or four hours, typically early when my family’s still asleep for part of that time. I’m getting all these buttons pressed, like physical health, problem-solving, having time to, and I always listen to really good music while I do this too, so it’s kind of like a nice zen flow state, and then you have something to show for it. At the end of it, you have more of your building done, and you can be like, “I can imagine people are going to enjoy this feature later on when we open it up,” and then I bike back home, and then I do family time where I’m helping with my son and raising him and being a good dad and all that stuff. Then later on in the day, it’ll be you might have friends over or do some stuff to help your friends with their projects.

Craig Cannon [27:11] – Yeah, ’cause that was a question from Twitter. David Laing (@davidlaing_92), I may be mispronouncing. He’s basically asking prior HQ construction, did you have trouble finding this routine in your nine to five?

Pete Adeney [27:24] – Yeah, right, like the daily routine. When I do have a daily routine, that’s when I am happiest I find, ’cause I’ve been retired for a long time, so I’ve had ups and downs.

Craig Cannon [27:35] – Longer than you were working, right?

Pete Adeney [27:37] – It might be at this point, yeah.

Craig Cannon [27:39] – Full time working.

Pete Adeney [27:40] – In 12 years, yeah, been 12 years since I quit real work, and then my total work career was about nine or 10 years depending how you count for the early years. You’re right. The times that I’ve been most happy have been when I have a routine, like right now. I’m kind of on a really nice high point of my life’s happiness I would say over the last six months and especially this month. I never really have any downs, but I have different levels of up. This is a really high level of up, and I think it’s ’cause the routine has been really solid, just super physical, lots of healthy stuff, not a lot of self-destructive things going on.

Craig Cannon [28:20] – Well, you’re also bringing people together. You just had two weeks of a pop-up business school, helping other people get started. It’s all converging. You’re building a place to socialize.

Pete Adeney [28:30] – Yeah, that’s true. That really takes care of the social side, because I had 85 people that I was hosting here in this building, so lots of talking and seeing other people be happy. That’s, obviously, a pretty big advantage in making you feel like your life is worthwhile if you’re surrounded by wonderful people, and your life’s kind of buzzing with activity. In fact, it got to be too much for a while, and I had to take a whole weekend of just sleeping in and eating salads, ’cause there was no productive personal time, which I find is one of my building blocks is I need to do stuff alone and think and plan and have time for all the thoughts to go together, and that’s ’cause I’m kind of a partial introvert in recovery time, according to the Susan Cain book, Quiet, is I recharge with quiet time whereas other people might recharge from a Denver Broncos game or something like that.

Craig Cannon [29:23] – Yeah, I’m the same way. Do you do much long term planning, brcause obviously, within the next year, this place’ll be mostly completed, right?

Pete Adeney [29:32] – Yeah.

Craig Cannon [29:33] – Do you plan on what happens after that?

Pete Adeney [29:37] – I have a lot of tentative long term plans. I like the idea of, maybe, expanding this place to take over another building so that we can just have a bigger coworking space, and then in the longer term I have a bunch of maybe ideas, like can we start a town that’s founded by on Mustachian principles instead of car principles, but I don’t put dates on these things until I’m really ready. I try to avoid, like, “Oh, next year, do you want to do something huge?” Then I say, “Well, let’s find out. Let’s ask each other next year,” and, if we still like it, then we’ll put it a week into our calendars, a week in the future.

Craig Cannon [30:15] – Okay.

Pete Adeney [30:16] – I get stressed out a little bit with too much stuff on my calendar. That’s the one thing that makes me different than most people I’ve learned is I don’t like planning lunch for next week or three weeks from now. I like planning stuff less than 24 hours in advance, according to a bigger picture, though.

Craig Cannon [30:32] – Well, I appreciate you scheduling this a couple weeks in advance.

Pete Adeney [30:34] – Yeah, this was definitely an exception, but I just figured, because there’s nothing else I have planned this week, then it’s probably okay for Craig to come over and podcast, but it could have gone either way. I could have last night been like, “Shit, I can’t believe I told Craig to come over for the podcast. I can’t do that. I have other stuff to do.”

Craig Cannon [30:51] – I could just take a weird turn right now. A handful of people asked online what is the plan for the coworking space, the Mustachian coworking space? Are you going to expand into other locations, not just literally the building, like other cities?

Pete Adeney [31:07] – Yeah, that’s similar to the question we just talked about which is, in theory, it sounds good. I definitely don’t want to make any fixed plans on it, especially that this is the first Monday the coworking space has even been open and for normal people to just pop in and do some work. If it continues to be fun for at least, maybe six months or something, or three even then we’ll know if it’s worthwhile expanding, and, if it did then I can personally expand this to another building, and then another person asked in the question list, “Can we franchise this,” because they like the idea of one being in their town, and the answer to that is probably, as long as I don’t have to do any of the work for it. If we just come up with principles that work for what we’re now calling Triple M Headquarters, and the principles are really just a place to hang out, and you’re not milking people for as much money as you can by running it sort of cooperatively-based, then yeah, people can open them other places, and I would support them in the sense of making a directory of them so people can share with their community. The biggest obstacle to making this in any town is that you have to reach the people who are interested, and I had this advantage that I could just type some shit into the computer and then people immediately signed up.

Craig Cannon [32:26] – It’s wild.

Pete Adeney [32:27] – And that’s like a blog is a really, really useful thing for creating groups of people and if the other people starting it don’t have their own blog, that means my job would be to use my blog which is collectively helps everybody who reads it to find the places.

Craig Cannon [32:43] – Well, that was kind of related to another question on the expansion of Mustachianism. Lee Marshall asks, “If everyone in the world adopted it, would it help or hurt the U.S.,” but, I mean, I think you can expand that to the whole world.

Pete Adeney [32:58] – Yeah, it depends on your definition of what they’re adopting. Early in the days of the blog, people would say, “Well, if everybody just put all their money in index funds and then quit working, and then never did anything again productive, that would wreck our economy,” and then, in that case, I do agree, because there would be no workers in the system, and the stock values would be inflated, because we would have surplus demand for it, and of course that’s not sustainable, but that’s not really the definition of Mustachianism or not even frugality. What really happens is I’m an anti-waste blog, really. I’m not against spending money, but I’m against wasting money, especially when there’s external effects, like if someone says, “Should I fill up my 40-gallon diesel pickup truck, and then drive up into the mountains to go ATVing all day.” No, that’s a waste in so many ways. You’re burning up these vehicles. You’re burning up the fuel. You’re not getting any physical exercise, and you’re wrecking everybody else’s life on the planet. If less of that type of stuff happened, that doesn’t hurt our economy at all. It just shrinks the fossil fuel section and the recreational motor vehicle section, which I would argue are just drains on human productivity really. Now instead, if we spent our money on things like clean energy systems. Instead of going ATVing, you could figure out solar panels and install them on your garage like I’ve done here. That’s just one kind of overly obvious example, or you could spend your money and time fixing stuff in your town that also brings you a lot of social fun and exercise and things, or you might build trails and anyway when you get a lot of money saved up and invested, that’s just really a psychological springboard to give you the freedom to do what you want to do with your life, but very few people quit being productive at that point. They just quit a job if they don’t like it, and then they typically will start another business doing something they like, or they’ll start volunteering more or start being an interesting, better person in some other way.

Craig Cannon [35:06] – Well, that was actually one of the things that I also was interested in. You were just saving the money while you were working, and I think what’s more common is to start a business. You’re like, “Okay, I have 200k in the bank. I can just go”. I forgot the exact wording of the question. Yeah, I mean, @GreenrPastures asks how do you balance Mustachian frugality with spending to start and grow a business?

Pete Adeney [35:31] – Yeah, that’s a good question, and, if you think about Mustachian principles, in starting a business, you might be more efficient in it. For example, you’d say, “Okay, I have a flower delivery business.” A normal person might be saying, “Okay, I’m going to buy the biggest six-wheel pickup truck that I can and then put one little flower in the truckbed and drive that around, because that’s a business vehicle,” The Mustachian will say, “Well, I’m just going to buy a used Ford Transit Connect,” these little van cars that are efficient and cheap on the used market. They’re both accomplishing the same thing in flower delivery, but one of them’s spending six times more money than the other one. That’s one partial answer to the question, and then the other thing is, if you think about cash flow quickly in your business, instead of years of investment in hopes of finding your first customer, that’s more of a risk to your money, whereas if you think how can I start my business small and go right to sales and then scale up only after I’ve proven it with sales, that reduces your risk, and that’s kind of what the pop-up business school was about as well, and one example that I didn’t follow, and I wish I had is, when I quit working, I immediately started a construction company, ’cause I said, “I love building stuff and designing houses, and I’m going to make some good decisions…”

Craig Cannon [36:51] – I got style, yeah.

Pete Adeney [36:52] – Yeah, so we borrowed money to buy land and then borrowed money to build these big, 3,000 square foot houses, and then they had to sell before you could even get your money back let alone make a profit. A much better design for business would have been just grab your tool belt, and make sure you have good tools with almost no investment, and then find customers to do stylish renovations on their houses, and then watch that cashflow build up, and if you still like it then maybe you expand to building custom houses for existing people where they buy the land, and they hire you as a builder, and then, if you like that then you might choose to expand by buying land and doing the craziest thing, but that would be only once you have so much money saved from it and so much confidence that it’s not a big risk anymore.

Craig Cannon [37:40] – Right, so it’s all about lowering the risk and getting feedback along the way.

Pete Adeney [37:44] – Yeah, right, and I sure didn’t know that when I first, even though I was supposedly kind of wise, enough to have an early retirement, I still blew it when it came to starting my own business, and it was stressful and terrible, and I lost a friend out of it, the business partner, so you don’t automatically know everything.

Craig Cannon [38:02] – Do you get involved on the other side? @scottgtweets that’s just the Twitter handle, asked you what you thought about angel investing. Do you ever get involved in that?

Pete Adeney [38:14] – It sounds neat. I have this guy, a friend named Nords, who has the early retirement for military retirees blog, and he talks about angel investing all the time, and it sounds great, but his stories are the only thing I know about it. Apparently, it’s a good use of, you can think of it as like a business-starting philanthropy if you don’t make money on it, and then you can make money on it, maybe as well, if you’re good at it, but he says you should think of your first $100,000 or more as tuition in angel investing school. I think it’s a good use if you have the money, but I wouldn’t advise people to think of it as a money-making technique unless they are passionate enough about it to be quite good at it.

Craig Cannon [39:00] – Basically, what you do advise people, and another person, Laurent (@laurentdsb), asked, basically, what are the skills that someone ought to build up just at the bottom of that one? Obviously, you’re pro Vanguard index funds, so that’s an investment strategy. You’re pro carpentry, construction skills. What are the other skills you advise someone to learn?

Pete Adeney [39:25] – I would say get good at anything that you, get good at producing anything that you like consuming, especially if it’s expensive. You might not care about getting good at producing lettuce, for example, unless you’re passionate about it, but if you really like having a car, then you should get good at understanding cars and how to buy them and how to maintain them if you drive enough that maintenance is an issue and then that part of your life can become free or even profitable. If you don’t really care about cars and use them very much, then you might skip that skill and, for example, just use bikes or just have a cheap car that you put minimal money into it, and I’m passionate about housing, and I like spaces and having a cool place for people to hang out and to host gatherings. Because of that, my skill at producing housing or buildings and maintaining them is more valuable than it would be for somebody who doesn’t care about it, because I can create these things, and I get houses, effectively, for free, because by finding them cheap, and putting my labor into them, then they can become profitable. Yeah, basic skills. Instead of saying everybody should have the same basic skills, it should really align with what you like to do. I mean, I guess cooking might be kind of a universal one, because everybody eats.

Craig Cannon [40:42] – Most people eat.

Pete Adeney [40:45] – If you’re really shitty at creating food, but you really want to eat expensive food all the time, and you just go to restaurants for it, that’s a fundamental tax on your life unless you’re good at making the money for that, but most people specialize in buying restaurant meals and they don’t have much income. That’s a misalignment so that’s no good.

Craig Cannon [41:06] – And then what about if you have kids? What skills are you focusing on teaching your son?

Pete Adeney [41:12] – That’s a good one. It’s kind of like the last question. Learning about parenting is a good thing if you have kids and not following necessarily the social norms about raising kids, because, at least in wealthy areas of the U.S., there’s this really weird tradition where people like to book up their kids and just have them do stuff all the time, like paid activities, and you have to drive them around town, and that makes no sense at all to me. These kids are learning machines. The reason kids are different than adults, and the reason they like playing and playing with each other and stuff is because that’s how they learn best is they need to be in an environment where there’s stimulating stuff that they can figure out how it works and have new experiences and none of that is part of kid evolutionary history, a forest or this is why LEGO is a good tool, ’cause it recreates a forest. It’s stuff that you can put together to create different experiences. I would say, if you have kids, learn about learning, and don’t fall into the trap of booking up your kid’s life with organized activities because then you’re depriving them of all the real learning that they’re built to do.

Craig Cannon [42:27] – And do you have any force mechanisms to ensure they’re physically active or are you just kind of… you do stuff and he does stuff with you and that’s just how it goes?

Pete Adeney [42:37] – Yeah, I try to make that happen, ’cause my son is very mentally-based. He loves computers, and he loves computers, ’cause he’s 11 now, but we get along really well, so he loves his dad. I try to make myself not available for computer activities with him and if he wants to do stuff with me, it has to be physical. I’m like, “Well, we can go play Frisbee in the park, behind our house, or we can go down and play at the creek,” where we bike down to this natural area and do forest, jungle guy stuff, and that’s how we get physical stuff more in. We encourage friends to do sporty things with him, and, yeah, some kids are naturally drawn to team sports and in that case you should support it, but my son is like me in that he just doesn’t go for it. He’s like, “Well, why would I obey an adult’s rules on how to play a game? That’s lame. I want to invent my own game.” I was always like that as a kid too, so I have to have sympathy for that.

Craig Cannon [43:43] – I’m definitely a solo sport kind of person as well.

Pete Adeney [43:45] – Yeah, he likes biking, and he likes tree climbing, and hopefully he likes being strong. I think that’s the real thing that’ll keep you out of trouble as you grow up is, if you have a desire to be healthy and strong, then that’ll affect your habits through the rest of your teenage years. I was kind of inspired as a kid by Arnold movies and stuff.

Craig Cannon [44:06] – Oh, really?

Pete Adeney [44:06] – Yeah. Because I liked the idea of the tough, confident man as a kid, because I was nerdy. That got me into the whole physical training, bodybuilding stuff and not that I was a bodybuilder, but that was just inspiring to me. I lived that way where I was getting exercise and working on my health and stuff, and that really helped me avoid stuff that happens to people at my age now. If I hadn’t been like that throughout my life…

Craig Cannon [44:36] – Yeah, one pound a year, and it’s a lot from 20 to 60.

Pete Adeney [44:39] – Yeah, right.

Craig Cannon [44:39] – Yeah. And what about his education? Do you have any thoughts on should he go to college? Obviously he’s into computers. Should he be an engineer? Do you guide him in any way there?

Pete Adeney [44:54] – I would say no. We definitely have explained the university model and why it was good for us, the parents, and then it’s up to him to decide if it’s good for him, because the stuff has changed so much, the world of jobs and businesses. The internet has blown it apart to a degree that most people don’t understand, but, as I’ve become more of an internet person myself, and I see all the businesses that exist out there, it turns out almost everything is possible without schooling, formal schooling, you can probably do it better and learn it better yourself. It’s only the most traditional professions now, like medicine and other certain types of law, that require this really formal stuff and if you’re a self-guided person like I think my son is, he might not have the patience or the desire to go into any kind of traditional thing. He’s like, “I want to create what I want to create and sell it to whoever is interested in it.” I don’t mind if he doesn’t go to formal university. If he does, I’ll definitely support him in that way, too, but I would never force him ’cause it’s so easy to make a living in so many different ways that there’s no stress like, “Oh, you got to do this, or you’re going to be in the ditch living.”

Craig Cannon [46:15] – And, by support him, you mean support him not financially? You mean mentally, just like..

Pete Adeney [46:20] – Well, we would certainly pay for whatever needs to be paid for.

Craig Cannon [46:25] – If he wanted to go to a fancy liberal arts, 70,000 or $100,000 a year school by the time he’s 18, you’re like, “All right, I’m in?”

Pete Adeney [46:33] – Well, we would talk about that with him. I mean, first of all, I think it’s good for kids to pay for their own education to the most degree that they can, because it’s good to understand the money part of it. Secondly, that sounds like kind of a, you know, that’s beyond, ’cause school kind of has this exponential thing at the top of the cost where you get into ridiculous costs for no reason, like the private ones, whereas you can go to the Harvard, the Ivy League schools for pretty much free. If you’re good enough to get in, then you generally don’t have to pay a huge amount to do it. That would be another thing I’d encourage, but let’s say, hypothetically the only path that will make him have the best life is to pay the super tuition for this thing, and he can’t pay for it himself, then yes, we would pay for it in this situation, because we’ve come into extra money. In our old situation, if I was living off $25,000 a year and just had the one million dollars of savings and had never done anymore work to build it, then we would say, “No, we can’t afford it,” so we’re not going to go into debt to pay for your school. I think that’s a valid thing for parents to do. They should not pretend that they’re multimillionaires just because that’s the American standard. People should buy the schooling that they can afford.

Craig Cannon [47:52] – I think it’s really valuable for a kid to figure out how much it actually costs before you sign the check. This month is my last month of expensive NYU student loan payments and it’s become much clearer how expensive it was, those four years after the fact.

Pete Adeney [48:09] – Yeah, people really, students, don’t really see the dollars. They’re just see it vaguely, yeah…

Craig Cannon [48:14] – It’s just a number.

Pete Adeney [48:15] – Yeah, and I think you should learn that from the beginning. I remember my first year of school which I was paying for mostly myself. I went in with the attitude that you probably did where I was like, “Oh yeah, I guess these are the books I need. I’ll just put ’em on the account or whatever,” and then I was like vaguely, had this vague feeling, “Man, this Physics textbook is $89. That sounds like a lot, but I guess that’s what you do,” but then, by the end of that year, I thought you could just sell them back to the bookstore, but you can’t. The bookstore’s like, “Yeah, we’ll give you five bucks for that one, and this one’s obsolete,” and I was like, “Are you kidding.”

Craig Cannon [48:46] – Or using the next version, yeah. Physics has changed.

Pete Adeney [48:48] – Yeah, I was so mad. You stole my money. Then, from that point on, I would look at it as like, “No, books are five bucks. Like, I’m not going to buy this thing,” and I would share textbooks with multiple friends, and we would photocopy them and have these nice binders of well-printed shared books, ’cause that was my money. I was like, “$89. That takes me nine hours at minimum wage to make that back in high school,” so I’m not going to spend that just to have a giant book that should be on a digital format anyway, ’cause, at that time, digital stuff was already invented, even though it was a long time ago. Why are they even giving us paper books? You got to get mad when things are expensive. Housing, you don’t stay in a dorm room unless it’s competitive with off-campus rentals and sharing with roommates in both the price and quality, and you don’t have a car when you’re a student, because you don’t have any money. Cars are a rich luxury person’s gas-powered racing wheelchair, so why should you have one when you don’t even have enough money to pay the cash for your student, for your courses? That kind of stuff cuts your bills a lot.

Craig Cannon [49:55] – Big time. I think folks who take this gap year between high school and university, if they choose to do it, super valuable for many reasons, and that’s one of them. You see how much work it actually takes to pay for a 50 grand a year education.

Pete Adeney [50:09] – Yeah, if it’s a gap working year, I’ve also heard of taking gap years to travel.

Craig Cannon [50:14] – To go drink beers in Thailand.

Pete Adeney [50:15] – Yeah, with other people’s money, and that’s also something I was against as a kid. This is where my non-privileged upbringing probably turned out to be an advantage, ’cause I was thinking, “Well, how could people go traveling? That costs money, which I don’t have,” so that’s automatically out of the question, and secondly, I need to get to the other side of this hump of the engineering degree, ’cause that’s where the money is. I’m going to start as soon as possible. I don’t want to delay it at all, because, then, I won’t have the money ever.

Craig Cannon [50:44] – That’s a great point. I’m just kind of curious what you think about planning for the future given that you have such an influence now among millions of people? If the, I assume millions of people.

Pete Adeney [50:58] – Yeah, I don’t know if that. I would like to know the real number, but let’s just say, if there is influence, then yeah, what’s the exact question? How do I plan for it?

Craig Cannon [51:07] – Well, because you can kind of be prescriptive to a certain extent. Say climate change happens or maybe the U.S. economy doesn’t necessarily keep up the pace it has been. How do you feel about that? How do you plan for it and how do you recommend other people plan for it?

Pete Adeney [51:26] – Right, you mean if things are not perfect like they have been since the last recession, since we came out of it? Yeah, how do you make your life anti-fragile, I guess you could say, and luckily, the same principles that get you to early retirement in good times are the same ones that make you more crash-proof in bad times, which is not designing a bunch of costs into your life that don’t have to be there and not compromising your health, because that’s just another cost if you get sick or if you’re less productive, because you’re less healthy, all the basic principles of a Mustachian, like building multiple skills so that increases your production, learning to live efficiently so that decreases your consumption, hanging out, building social connections with people of all different sorts so you have a mesh of people to lean on and that you can help. All that stuff is the same things we would do in the event of a zombie apocalypse as well. It works in all times.

Craig Cannon [52:32] – Okay, cool. Well, I think we’re good. Do you have any closing words for Mustachians or people on the road to early retirement?

Pete Adeney [52:41] – Aw man, you just sprung that one on me. No, I don’t have any closing words. I’m just a general words as they go, as life goes on type of person, so the next time I have words, they will appear on the blog.

Craig Cannon [52:54] – All right, thanks man.

Pete Adeney [52:54] – Thank you.

Craig Cannon [52:55] – Alright thanks for listening. As always, the transcript and video are at blog.ycombinator.com. If you’d like to apply to the winter 2018 batch that link is ycombinator.com/apply.