Ted Howard

I have spent the last few months with no job, but not unemployed. To qualify as unemployed, you have to be actively searching for work. I like to say that I’ve been taking “early retirement.” Many people are amazed by and jealous of my ability to do this. My secret is incredibly simple: I don’t eat the marshmallow.

Rule number one is simply “Always live below your means.”

I lived in Seattle for 8 years. During that time, my friends were graduate students, medical students, or both. Graduate students earn just enough to live on and medical students have to borrow money just to eat. I didn’t go out for $50 dinners with my friends. We ate $10 dinners, maybe $30 if we were splashing out a bit.

During some of that time, I was on unemployment but still earned more than a graduate student. Most of the time, I had the salary of a yuppie but lived like a student. The net result was huge savings. I maxed out my 401(k) when I had one, and I did it as a Roth when I could.

Corollary to rule number one is “Enjoy simple pleasures.”

Many of my coworkers seem to spend all of their money as soon as they get it. They buy electronics, stay at fancy resorts, and go out to the finest restaurants. I suspect that they save almost nothing for retirement or unexpected hard times. By comparison, I am content with a TV that I inherited, the free cell phone option, the free Xbox 360 and games I got from Microsoft, and rent/mortgage that a graduate student can afford. A good time for me is a day hike in the mountains, making dinner with friends, and rolling around on the floor with my 2-4 year old friends. Simple pleasures just happen to be cheap.

I can’t even think of another rule. It’s just that easy.

Live below your means. Always.