Book Review – Retire Early and Live Well by Gillette Edmunds

This book could be classified as one of the earliest FIRE books I have seen. Written in 1999 (right before the dot com crash), the author details how he retired from financial journalism in 1981 at the age of 29, with a wife, two kids, and $500K in investments. In his first year, he suffered through a serious market downturn, and then the “flash crash” of 1987. Still he and his family were able to survive and prosper, and then participate in the great investment boom of the 80’s and 90’s. When he wrote the book in 1999, he had managed to triple his investments while living off them.


The first part of the book covers how to determine if you can retire today. He goes through the process of determining your current living standard, tax multipliers, future spending and debt. He provides a chapter on the issues that might pop up with an early retirement (emotional issues, fee based investment advisors, life expectancy, etc.) In the end, he provides a formula for determining whether you can retire now, or how much more you need to save before you can, including suggestions on speeding up the process. It’s a good first start.


The second part of the book assumes you are ready to retire early, and works on how to set up your investments to supply you with the funds you need for the long term. He doesn’t assume a “4% rule” (it may not have been completely accepted in 1999) so his process is more along the lines of:

  • You need $60,000/yr. to live, including taxes
  • You have $1,000,000 in investments
  • You assume a 3% inflation rate
  • Thus you need investments that make 9% return historically (6% for your $60,000/yr. plus 3% to offset inflation)
  • Design your asset mix to make an average of 9%


This is a key plus for this book versus many other investment manuals. Most information available concentrates on the “accumulation” phase of life, where you are building your wealth. Very few cover what to do once you have achieved financial independence and just want to live off it.


Mr. Edmunds then takes the time to explain each of the asset classes, their strengths and weaknesses, and how they fit in with a retirement portfolio. One of the more interesting points he has in when talking about real estate. For most folks, they think of getting real estate with no money down or with 20% down payment at most – using leverage to maximize gains. What the book points out, though, is that you are now retired and don’t need to increase wealth; you need to generate cash flow. Thus, Mr. Edmunds suggests purchasing real estate with 50% down and 50% leverage, so that the property generates a good 10%+ case flow from day 1 (instead of waiting years). This fly’s in the face of current real estate planning, but it does have merit!


Edmund suggests you figure out the investment return you need, and then create a portfolio of 3-5 different asset classes that don’t move in sync with each other (ex. US Bonds and foreign stocks often vary year to year in returns). He provided what the average returns were for each of these asset classes are, based on the longest studies he had available at that time (1999). He does caution not to use the returns from 1984-1999 as he recognized they were an anomaly.


In the final part of the book, Edmunds helps you design your retirement portfolio. Here is his chart and a corresponding list of Vanguard Index funds and their returns over the last ten years (in case you want to do comparisons). You will note to start that his returns are higher for most items vs the last ten years (especially for bonds):

No Description Book Return 10yr return Vanguard
1 Emerging Markets 14% 2.42% VEMAX
2 US Small Company 12% 8.01% VSMAX
3 US Large Company 10% 7.30% VLCAX
4 Foreign Company 10% 5.68% VTIAX 5 year
5 US Real Estate 10% 5.00% VGSLX
6 US Oil & Gas 8% 1.26% VGENX
7 Corporate Bond 7% 5.75% VICSX As of 3/2010
8 Foreign Bond 7% 4.50% VTIAX as of 11/2010
9 Treasury Bond 6% 6.79% VLGSX as of 3/2010
10 Municipal Bond 5% 2.59% VTEAX as of 8/2015
11 Money Market/CDs 4% 0.76% VMMXX
12 Treasury Bills 3% 0.68% VMFXX
13 Gold 3% -5.62% VGPMX



Using his format, if you wanted to get a 9% return for the situation above, you could go with:

  • 40% Large Company stocks @10% return = 4%
  • 35% Foreign Company stocks @10% return = 3.5%
  • 25% Treasury Bonds @6% return = 1.5%
  • Total of 9% return, on average


I think the process has merit, but I’d like to see more studies post-1999 on long-term returns.


The epilogue of the book is possibly the most useful part for those of us retiring early. In it, Mr. Edmunds details his story and “How to live through a crash without putting a bullet through your head.” He had many ups and downs, made some mistakes, but eventually came out alright (even today, he is doing well, 35 years after retiring at 29). He talks about steps to take when the market is crashing, life planning for after retirement, and what lessons he has learned. If nothing else, look at it for this chapter.


Overall, I think it is an excellent book, though some of the percentages might be dated. Grade 4 stars out of 5


Mr. 39 months

Book Review – Complete Retirement Guidebook by Wall Street Journal

This is a pretty good book for those people who are preparing to retire or achieve financial independence in the next 5 years. Written in 2007, it doesn’t have as many charts and equations as many “retirement” books, but it does include a great number of web links, and great advice on the social side of preparing for and moving into retirement.

One of the things I liked about it was that, instead of going through the numbers, the book first emphasizes creating the lifestyle you want to retire to. It is here in the first quarter of the book where it really shines out versus other books I’ve reviewed.

It first asks what I think is a key question you need to consider when pursuing financial independence. How do I want to spend my time in retirement? From there is goes on to offer advice on working (or not), volunteering, relocation and fitness/health. In each of these areas, the book provides a lot of useful links and places to seek additional guidance, while covering (in broad strokes) many of the key issues you need to consider. Just reading this first part will definitely leave you with a lot of questions you will need to answer before you can proceed.

The second part of the book covers “Money Mechanics” and provides much of the same information that many retirement books provide (saving for retirement, budgeting, social security, estate planning, etc.). Again, each chapter provides plenty of links and useful information, as well as charts and forms to fill out to determine the optimum way to handle your finances.

Finally, the book ends with some excellent success stories of recent retirees – how they set themselves up for success and what their new lives are like. It’s a great way to end the book with some motivation.

Overall, I think its an excellent book that should be part of anyone’s study who is thinking of moving on shortly. Grade 4 stars out of 5


Mr. 39 months








Book Review: $100 Startup by Chris Guillebeau

Chris is an entrepreneur and author, who spends the majority of his time traveling the world, interviewing other entrepreneurs, and hosting the World Domination Summit (a gathering of creative people).

 The book was published in 2012, and contains stories from over 50 different entrepreneurs, as we learn their startup lessons. The key lesson that Chris tries to get across is that you don’t need large sums of money to get started and you don’t need to turn your startup into a giant, multi-billion dollar enterprise. Most of the people in the book are satisfied with smaller operations (often 1-person), which fulfills their needs and allows them to pursue the work and lifestyle which they want.

 The first part of the book covers basic stories of people who became entrepreneurs. It covers how individuals got their ideas, how they worked to make get the business off the ground, and some of the ways they found to succeed. One of the key points that Chris emphasizes in the book is the idea of value – how you need to provide value to potential clients in order to succeed.

 The second part of the book goes into more details of how to start and succeed in your small business. It talks about simple, one-page business plans, startup/launches, and using everything possible to self-promote the business. It also has some interesting ideas on how to fundraise (including the story of how one business got started with a car loan when the owners couldn’t get a business loan).

 The final part of the book covers some steps you can take in order to grow your business and take it to the next level. He talks about leverage, how to franchise, and getting as big as you want (but no bigger). He finishes up with a chapter on “what happens if you fail” in which he talks about several entrepreneurs who failed their first and even second time before finally making it. The key is to persevere.

 A lot of the items covered have been dealt with before, and his writing tends to gloss over many of the details the reader might wish were covered in more depth. Overall, I’d give the book 3 stars out of 5