pic of tom

Introduction   tested

You hear people saying they cannot live on what they are making; they are unable to save anything. In the U.S. that is seldom the case. What they are saying is that the have chosen to spend more than they make. I have put these pages together so I can refer this to others, my two sons included, when I see their eyes start to glaze over when I start my standard spiel. Now I can give them the URL to these pages, and they can just ignore it, and I can feel like I did my part. The following is per one person. If you are married or have a significant other, just follow this process for two. If you want to factor in kids, just go through the same process, and you will find most of the expense for children is very optional. They don't eat much but make sure they have no contact with their spoilt peers.

How to retire in 10 years starting from 0.

(on Minimum wage and no government assistance)

You may or may not be interested in retiring, but the process I will outline for you in the next few pages will be useful in looking at what is important to you and what is not. It may give you a feeling you might have some control over things that many feel they have no control over. Even if you have no interest in retiring from your job, knowing you can step away from it at any time will give you a sense of freedom and make your job much more fulfilling.

There are also some important issues of health care and insurance that pop up as I go through this. You may have wondered at how Mexicans can pay a coyote $2000 to cross the border, and work in this country at minimum wage, yet still send home money to their families; enough to make a significant contribution to their country's GDP.

You are selling your time:

My uncle, a senior vice president of a major bank chain, asked me what I thought money was. I gave him answer from an economic text about it being a medium of exchange. He told me I was wrong. Money was power, the power of individuals and organizations to control your time. Those with the most money have the most power and power over you. They can buy your most precious possession, time. If you have money you have power, but most of us have to quickly turn it over to others as they purchase the time of others. When you pay the mortgage, you pay a multitude of people and organizations who have traded you for your time. The builder, the banker, the state (through taxes), the insurance company, and an endless list of others. Now you are not only a slave to you boss, but you are also an indentured servant to all those to whom you owe money. If you feel you can't live without your TV, cell phone, Starbucks coffee, your car, you now have given them control over that portion of your life. The only power you keep is the money and assets that are free and clear after all the debts are paid: the money in the Bank. The junk in the garage counts but only at garage sale prices.

Is your job worth your time:

Hopefully, you have a job you like and enjoy the time you give to it. Often people have mixed feelings about their work. Industrial Psychologist look at employee motivation through a lens the might be useful in looking at your job and if it is worth giving a major part of your life to it.

Two different components motivates one in their work:

  1. Hygienic effects are those which will keep you on the job but have almost nothing to do with how happy you will be in the work:
    • Pay: You will stay on a job you hate if the pay is enough better than other available jobs.
    • Benefits: With health insurance so high, this keeps many on jobs.
    • Security: This includes retirement programs, tenure, union protection of seniority, more and more critical health insurance.
    • Safe working conditions: Often people are in denial about safety, but if bad enough you will leave.
    • Expectation of raise or promotion: For a brief time after actually getting a raise or promotion acts as a motivator because it is a form of recognition.
  2. Motivators are those which make one enjoy the time spent on the job and include such things as:
    • Your boss: The boss ties into recognition, personal autonomy, teaching and other motivators available, but supervision is usually a hygienic item
    • The work itself: The actual content of the job and its positive or negative effect upon the employee whether the job is characterized as interesting or boring, varied or routine, creative , to easy or too challenging.
    • Feelings of accomplishment in the job: This and many other items in this list are from the upper portion of Maslow's Hierarchy of Needs
    • Recognition for your work: Raises and promotions count here but only for the short time when they confirm recognition.

      For more on this dichotomy see Herzberg's Motivation-Hygiene Theory

Note: The Hygienic Effects, those that can keep you in an unhappy job forever, are those usually promoted by Unions. Not because the Union is bad, but because Hygienic Effects are more easily measured.

Zero Base Budgeting

Zero Base Budgeting is a concept from business. It asks managers to start from scratch with their budgeting process instead of using history for their budget data.

In this model we are going to start with what is absolutely necessary for a healthy life. Everything beyond that we will be defined as entertainment. Entertainment is that which is not necessary, but it makes life easier or more enjoyable. Using this model we can see the choices we have been making without even thinking about them.



We will start with the real basic of food. What do you need for a healthy diet? We will use the USDA requirements rather than the latest food fad diet, and figure what is the cheapest way to get the requirements. As it works out, here in the Bay Area, you can build your healthy diet for about $1.00 a day, thirty dollars a month. Because you probably are a bit skeptical of that, I guess I need to go through it for you.

Using USDA minimum requirements and a nutritional calculator called Nutrition Analysis Tool (NAT) developed at thehttps://www.nal.usda.gov/fnic/dri-calculator/


You might want to use your first saved dollars to entertain yourself with a more varied diet. I am not sure you want to know the cheapest healthy diet.
BEANS,dry weight .25 lb. $.64/lb. $.160 balances rice proteins
ONIONS .14 lb. $.38/lb. $.08 and/or other spices
RICE, dry weight 1 lb. $.37/lb. $.44 Note 2.
CANOLA OIL, or other healthy oil 1 oz . $.04/ oz. $.063
TORTILLAS,flour 1 med $.12 each $.059
EGGS 1 $1.08/doz. $.154 High quality protein
Multi-vitamin 1 $.06/ tab $.07 See note 3. below
Gas for cooking 1.5hr $.10 Takes a long time to cook beans
TOTAL (cost updated 9/8/21 $1.13/day


Note 1: There is no note 1 yet.

Note 2: Rice is the cheapest source of calories to compliment the proteins in the beans (neither have complete set of amino acids, but together they do). These calculations are based on calorie requirements of 2427/day. If you are short and inactive, you will need less and more if you are active and or tall. Moderate bike riding for 160 lb. person uses about 450 calories/hour. For more on the adjustments for activity and weight go to fitwatch.com.

Note 3: MULTI VITAMINS: Typical cheap multi-vitamin: Supplement Facts: Serving Size: One tablet Amount Per Serving - % Daily Value: Vitamin A 2,500 IU - 50%, Vitamin C 60 mg - 100%, Vitamin D 400 IU - 100%, Vitamin E 30 IU - 100%, Thiamin (B1) 1.5 mg - 100%, Riboflavin (B2) 1.7 mg - 100%, Niacin 10 mg - 50%, Vitamin B6 2 mg - 100%, Folic Acid 400 mug - 100%, Vitamin B12 6 mcg - 100%, Pantothenic Acid 5 mg - 50%, Calcium 450 mg - 45%, (there is 800mg of Calcium in the egg shell I gave you) Iron 18 mg - 100%, Magnesium 50 mg - 12%, Zinc 15 mg - 100%.



Go to: Wise Bread

Below is jpg of output of the NATS analysis of the diet. The pink lines indicate a shortage, but the multi-vitamin will cover the deficiency. I would recommend everyone put their diet into this program. It may be eye-opener as to how much over you are on nearly all nutrients. It is a jpg and is a bit small as I downloaded it This site is not longer avalible , but.it would be better to do your diet by going to The Nutrition Analysis Tool (NAT).

Hint on using the NAT: Use a spreadsheet and list all the food you eat in a week by then divide by 7 for your daily intake (if you eat a cup of ice-cream once a week, enter it in NAT as 1/7 cup).


Note: This diet is very green. By eating rice and beans instead of meat, you save the amount of fossil fuels that you would save if you bought a Prius over a large SUV. Meat requires about 10 times the resources that grains do, and even more in water resources that are becoming more scarce all the time.

(send me E-mail, and I will send you the cheapest healthy diet)

The roof over your head:

A place to live is three problems:

  1. Where you live after retirement?
  2. Where you live while you are working?
  3. Owning a home as and investment?

Where you live after retirement:

You can buy a small place in Wyoming (sagebrush plains… not ski resorts) for about than $14,500 If you don't like Wyoming try small towns in Nebraska, North Dakota, Louisiana, or Detroit, Ohio,   . At the bottom of this page, I have pulled an example from zillow.com. Of course, there are few jobs where there are verylow priced housing , so this is probably your retirement home, but you may be able to get a minimum wage job. You can use this as they base of what is necessary shelter. Lots of good fee entertainment: hiking, scenery, fly fishing. Housing cost/year = $2,500 in interest. Deal with the value of the home as investment to protect you from inflation.

Where you live while you are working ( the first 10 years):

This is much more restrictive and challenging. Higher paid jobs are located where the cost of rent or buying a home is greater. Living away from your work increases your transportation cost. On a bike at a leisurely pace of about 12 miles per hour, you can live only 20 miles from your job if there is no good public transportation. But there is a with this bonus: no gym fees, but you might have to kick up the calories in the diet. I am working on a formula for this. Hint: live uphill from your job. You will be late less.

Owning a home as and investment:

For this analysis owning a small home is and excellent investment because it is a protection against inflation. By getting a home with 3 bedrooms, or convert a family room or living room into 3rd bedroom, you have two bedrooms to rent. The rental income should cover utilities, taxes, upkeep, and probably about half of the interest payments. Now your retirement shelter and utility costs are down to about $1300/year.

Transportation, Clothing, Washing

Here is where we get into ultimate reuse, the gold standard of environmental correctness. Get up early on the first day of your new program and pack your day's food (the $1.00 rice and bean burrito) and walk to the recycling center. They have tons of bikes for not much more than $10.00. If you do not see exactly what you want in a bike, go to their tool sections buy about $10.00 worth of tools and start swapping parts till you get the bike of your dreams, or at least something less than your worst nightmare. Annual cost: $20.00 and let's throw in a few bus rides for $100.00 a year. Total transportation is now $120.00. And no gym fees. You can bike at about 12 mph without working up much of a sweat. If you work within about 20 miles of you home, you can bike there in about an hour and a half and not be too sweaty. What else are you going to do with your time?.. Go to the gym and ride a stationary bike to nowhere for 3 hours? Now you can ride to the local Goodwill store and pick up a suit, a nice shirt, and enough daily wear to fill a washing machine. Suit: $15.00, 8 shirts: $1.00 each = $8.00, 28 pieces of miscellaneous underwear $.50 each for $14.00, 2 pair shoes @ $5.00 = $10.00. Washing, drying, soap 20 times a year at $5.00 a time = $100.00 total.

Select your retirement home:

(from search of zillow.com on 6/30/2008)

home in Ft Wayne

This table shows how much,
by item, it will cost/ yr. after retirement with no entertainment.

Item Cost/yr.

How long will it take to retire?

If you are making a minimum wage of $7.25 per hour , you will make $14,500 a year. Your expenses are $2,072 plus extra rent for being in area where you can work plus working on paying off your retirement home. At minimum wage, additional rent is tough so maybe you could live with your folks or if you are older live with your kids. Your budget has $1,300 a year to help them with the rent and utilities. To pay off the retirement home within the next 10 years you will need another $5000/ yr. Your expenses are now $8,072/ yr. And you are saving $3160 a year, and if you keep this invested, it will accumulate to a total of $29,260.9718 in 7 years. The box at the right shows you have enough to for retirement.

You can move out your parent's/ kid's home early or you have about 3,000 additional for rent in job-rich area. You need to go through and calculate the variables of rent, income, and commute, and select the combination that leaves you with the most money in the bank at the end of the year. If you are lucky, you might be able tofind a job near your retirement home and you will be that much better off. As soon as you get $10,000 for a down payment you should buy the home and rent it out to cover principle, interest, taxes, and upkeep. This strategy helps protect you from inflation.

tom mcquaid 6/16/2017

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