Retire early by ditching the middle-class mindset.

1. THE MIDDLE CLASS
MINDSET
Avoid at all costs!

2. STUPID RULE #1
“Buy as much house as you can afford.”

3. WHY THIS ADVICE STINKS
Having a bigger home does not mean living a happier life.
• It means having to spend more time cleaning and
maintaining.
• It means taking years away from the possibility of early
retirement because of bigger mortgage payments.
• It means more space between you and your loved ones.
• It means spending more on heating and cooling.

4. A BETTER RULE OF THUMB
“Buy as much house as you need,
and nothing more.”

5. STUPID RULE #2
“Now that you’ve gotten a raise, it’s time to upgrade.”

6. WHY THIS ADVICE STINKS
Of course, some people might genuinely need to
upgrade certain things, but on the whole, this might be
the most insidious part of the middle class mindset.
 It is the very definition of the hedonic treadmill:
More is always better.
 It discounts any previous happiness you’ve
experienced as less than you could possibly have now.
 It ignores tons of research showing that “up-grading”
has a short-term effect at best.

7. A BETTER RULE OF THUMB
“Now that you’ve gotten a raise, your early
retirement can start even sooner.”

8. STUPID RULE #3
“Save 10% of your income”

9. WHY THIS ADVICE STINKS
Of course, saving 10% of your salary isn’t a bad thing. In fact, it
puts you ahead of the average American. But once you know
what “enough” is for you, why not save as much as you can
beyond that?
 Save 20% of your salary, and you can retire in 30 years.
 Save 40% of your salary, and you can retire in 20 years.
 Save 65% of your salary, and you can retire in 10 years.

10. A BETTER RULE OF THUMB
“Save everything beyond what your
‘enough’ level is.”

11. STUPID RULE #4
“Commuting is just a part of modern life.”

12. WHY THIS ADVICE STINKS
We chronically underestimate the true costs of commuting.
 The government estimates that it costs us $0.56 to drive one mile.
 The average commute is 32 miles and 52 minutes, round-trip.
 That equates to $4,500 and 215 hours of time lost per year.

13. A BETTER RULE OF THUMB
“Commuting is an activity with high financial, emotional,
and social costs.”

14. STUPID RULE #5
“We’ll make huge sacrifices so our kids can go to
the college of their choice.”

15. WHY THIS ADVICE STINKS
There’s little debate about the financial value of a college
education, but the price of the education varies wildly.
 Four years of private school averages about $180,000
 Four years of public school averages about $90,000
 Four years following the Morgan Housel college plan
(read more here) averages about $25,000.

16. A BETTER RULE OF THUMB
“We’ll contribute what we can so our child can go
to a school that makes reasonable sense for his/her
life situation.”

17. DON’T FORGET ABOUT SOCIAL
SECURITY
Though you won’t be able to draw benefits right
away in early retirement, it’s important to figure out
what role it will play. To help you get a head start,
check out the Motley Fool’s special free report:
How to Get Even More Income During
Retirement