Review “Early Retirement Extreme”

It was around 8 years ago that I read the book “Early Retirement Extreme” by Jacob Lund Fisker. It really struck a chord with me at the time.  I recently stumbled upon it again, and have just re-read it. I now realize that it had a deeper impact on my behavior and lifestyle since I initially read it.  The effect that this book had on me was so strong, that it motivated me to share my experience from reading this book which I hope can be useful to others also.  I now realize that this book was one of a number of key trigger factors that helped me transform my lifestyle, and move towards building a new way of living.

Who is Jacob Lunk Fisker ?

Jacob Lund Fisker was born in 1975 in Denmark and now lives in the United States. He is highly educated with a Ph.D. in theoretical physics.  Early on in life, Jacob Lund Fisker started challenging the world around him. One of his interesting approaches was to apply aspects of his education, more specifically, systems theory to personal finance.  This approach enabled him to find a solution to work for only 5 years before becoming financially independent (at the age of 33), hence the title for his book, first published in 2010, “Early Retirement Extreme”.

Jacob Lund Fisker has been credited to be one of the precursors sparking the FIRE movement (Financial Independence – Retire Early ). He predicted that there would be a new generation of people looking to break out of the Ratrace and live differently. That movement now exists. These people now striving for FIRE or having already achieved FIRE status are evidence of the accuracy of Jacob Lund Fisker’s prediction. It’s for this reason that I find it interesting and valuable to go back and look at the key elements that sparked the movement he predicted.

If you wish to, you can find out more about the author, by clicking here. You can also find Jacob Lund Fisker’s website and blog here.

It’s not just another personal finance book!

One of the things I appreciated very much about this book (and probably why it had such a big influence on me) was the way the book was written.  Jacob Lund Fisker sets out to avoid writing a “How to” Guide book. He wanted at all costs to steer away from the checklist approach.  It’s all too easy to build a set of tasks such as:
  • 25 ways to reduce your expenses
  • 25 ways to boost your income
  • 25 ways to invest your money
  • etc
He uses the analogy of drawing a map.  If he could help people see the world around them, and where they are situated on that map, it will be much more powerful for them to identify where they want to go, and determine which direction to head in.  If their situation changes (and life changes all the time) then it will be much more valuable for his readers to have the map in mind to be able to re-adjust the direction if needed rather than to have a set of outdated lists. 

Describing the world around us

Rapidly, during the first pages, Fiskers users some powerful imagery and phrases to describe the way he sees the world, and more importantly question the status quo.  He describes the notion of a “Wage Slave” – someone who is stuck in the cycle overspending and locking themselves in the situation to keep earning more and more to support their lifestyle.
To help us see his vision of the world around us he asks some very blatant questions about the world around us, such as:

“Were we born just to die leaving a huge pile of discarded consumer goods ? “

He also makes some very strong statements, which are obvious but not so natural or easy to accept, such as:

“The career track selects people that are willing to give up their lives for the sake of work.”


“Nobody with a conventional frame of mind would spend one hour walking every day when they could drive. Yet people don’t stop to reconsider spending 10 weeks each year working full-time to pay for that car (and spending the same hour in traffic) just to avoid the inconvenience of a daily hour of “laborious” walking and fresh air.”

Jacob Lund Fisker does an excellent job to grab your attention and to lure you into the heart of the subject of how to manage your personal finances and enable to escape this ‘norm’ that society expects from its citizens.

3 key factors to be financial independent

I simplify greatly, but for me, Jacob Lund Fisker describes 3 main factors that need to be understood and subsequently acted upon to achieve financial independence.

1: Striving for independence

Jacob Lund Fisker states that to be able to achieve a status of financial independence, then you must first strive to be independent in a number of key areas in life.

  • Physiologically (healthwise)
  • Intellectually (ability to learn)
  • Economic competencies
  • Emotional awareness
  • Social skills
  • Technical / Technology understanding
  • Ecological awareness

The author’s key point is that we need to develop at least some level of independence (and ultimately strive to hone our skills in all of these areas over time). The idea is so that we can avoid having to rely on other ‘experts’ to support us to resolve life’s daily problems. The more autonomous we can be in these areas, the less we’ll have to pay (the author uses the words – “outsourcing our lives” ) to others and the more we’ll be able to manage our lives by avoiding to fall into the trap of ‘just buying a solution’ to life’s problems. The word independence is very important here. The more independent we can be in these 7 areas, the better the preparation to live in a situation of financial independence subsequently. The author provides a number of inspirational suggestions and examples that anyone could use to improve their independence situation in the above 7 areas, which for me was the real value in this section.

2: Change the way you think about acquiring ‘stuff’

Jacob Lund Fisker proposes that we need to think about our ‘stuff’ (the things we buy) with a very different mindset. Firstly, the cost of ownership is not only the purchase price. The cost of storage (do you have additional space in your house that is full of things that you use rarely?) should be taken into account. It’s also important to think about the frequency and lifetime of use for the ‘thing’ you might want to buy (or have bought). If you use it often, then, of course, its cost per use will drop dramatically for example.  The author also talks about the idea of resale value. If you can see the item when you are finished with it with a good resale value, then the cost to you during your ownership period is substantially reduced.  He even states that everything he owns is for sale and prompts us to just ask him. 😁

If you think (and consequentially act) in the way proposed by the author, it can have a significant impact on the cost of living, but also increase the quality of life. If you are focussed on the quality and lifetime durability of the things you buy and ensuring you keep thing in good condition for optimum resale value, then you will get more value and enjoyment out of your ‘stuff’. One of the key reasons is that you will ultimately have less ‘stuff’, but the ‘stuff’ you do have will be of better quality and better use to you.
This is very different from the common mindset in the consumption society we live in.  Buying to bring pleasure, or because we think we need the ‘things’, only to end up throwing them out, is ecologically unresponsible, and if not for ourselves, but for the planet, the motivation for change is obvious.

3: Optimizing your wealth

Everyone knows that having money allows to be able to generate money (via interest, dividends, etc) but Jacob Lund Fisker admits that it wasn’t until he was 25 years old that he even considered that an income derived from one’s investments, could be sufficient to live off.  Once he had locked onto this idea he was able to quickly understand the following concepts about building an amount of money to be able to generate this ‘automatic’ income.
The example he used is the following one:


If you save 10% of your income towards your retirement (meaning that your expenses are 90% of it), then it means that you would need to work 9 years to have enough money to pay for one year of expenses if you gave up work.

Now if you saved 25% of your income (meaning you spend 75% of it in expenses), then you would need to work for 3 years before being able to take a year off.

Going even further, if you saved 50% of your income, then you would need to work only 1 year before you could take a year off.

Now taking the idea to an extreme (the book is called Early Retirement Extreme after all) where we imagine that you could save 80% of your income. This means that your expenses are only 20% of this value, which also means for each one year worked, you would have enough money saved so that you could stop working for 4 years.


In Jacob Lund Fisker’s case, he was able to quit his salaried job after just 5 years of saving.  This is, of course, an ‘extreme’ case, but does prove that it’s not only possible but also credible to strive for.

The math is simple, as is the idea. The bigger the gap you can achieve between how much you earn and how much you spend, the bigger the impact on the time required to acquire a sufficient amount of money saved, to be able to generate an income in a financially independent manner. As you save money along the way towards your financial independence, you can generate a source of income from the money that you accumulate. Eventually, the money you save and invest (ideally to generate multiple sources of passive income) will be sufficient to allow you to stop working in a salaried job altogether.
How much you need to save and invest depends wholly on your situation. In this book, Jacob Lund Fisker provides the necessary models and his point of view on the appropriate parameters in the model to allow you to calculate the size of the ‘nest egg’ that you need to acquire to be able also to live in financial independence.  Jacob Lund Fisker also goes as far so to allow you to calculate the impact of spending that extra dollar (The Latte factor) on the targeted savings goal. A powerful tool if you have a problem of discipline in your spending habits 👍.
The ideas behind the models presented a very simple, but the parameters you take for your case (estimated interest/income %, inflation rates etc) can make a big difference in the result. As such I personally preferred to take the models as a base target, and then run my own longer-term simulations (which is why I built EFILYM) to allow me to gain confidence over the long term that I would be sufficiently protected, no matter what the world decides to throw at me in the coming years.  By doing this, I was able to define a target that I was comfortable would give me the flexibility and protection to finally give up my 9-5 job.
In his book, Jacob Lund Fisker provides many many ideas on who to reduce costs, and boost income.  Some of these will not be suitable for you, but many will be things that you can easily put in place with a little determination and discipline. If nothing else, it’s certainly a mine of inspiration allowing you to build your own plan towards financial independence, and ultimately YOUR early retirement at the pace that suits YOU.

Final Comments

On page 163 the author states clearly that his objective was to ‘dedicate 90% of the book to the development a coherent philosophy’ around financial independence. For me, he more than succeeded, and I find his approach extremely powerful. I’m more than convinced that this is the main reason why it had such a strong impact on my subsequent behaviors after reading it. This is why I finally was able to build my plan to reach financial independence myself.  I could never say that my ‘early retirement’ will be as extreme as the author’s, but I am living proof that by understanding the philosophy described by Jacob Lund Fisker and adapting your behavior and core values, that it’s possible to live differently and independently.
Personally I find Jacob Lund Fisker a true inspiration. He someone who has applied his education (it’s amazing how many areas he has educated himself in) to define a way of living to avoid the shackles of a traditional 40 hour (often many many more) working week.  In this book he is very direct in explaining his principles, but also uses a good sprinkling of sense of humor, making it a true pleasure to read. You can agree or not with his ‘extreme’ approach to living, but I can guarantee you that you will not be able to falter the logic behind each of his methods. I have absolutely no hesitation in recommending this book, “Early Retirement Extreme”, as an excellent starting place for anyone looking to ‘break out’ of their current traditional (9-5 salaried) lifestyle to live a more independent, autonomous manner. This book had a profound impact on me, and I hope that it can bring others the inspiration that they need to take their first steps to a new lifestyle.
Between ‘doing nothing’ and driving for an ‘extreme’ early retirement, there is lots of scope for you to put in place your plan for financial independence. Everyone’s lives and tolerance levels for change are different. It’s possible for everyone to build a lifestyle change plan to enable getting to a financially independent situation. Jacob Lund Fisker opens our eyes to the possibility and gives us the map to allow us to get there.

Now it’s up to you!

Are you capable to live an Extreme early retirement?
Have you already read this book?
If so, I’d love to get your point of view on it also.
Was it as powerful for you as it was for me?

Perhaps you have another book that inspired you?
I’d love to get your comments, don’t hesitate to leave them below!

Credit Photo: Photo by Kourosh Qaffari on Unsplash

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12 thoughts on “Review “Early Retirement Extreme”

  1. Your style is so unique compared to other folks I’ve read stuff from.
    Thank you for posting when you’ve got the opportunity,
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  2. Awesome blog you have here but I was curious about if you knew
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    talked about here? I’d really love to be a part of community where I
    can get suggestions from other knowledgeable people that
    share the same interest. If you have any suggestions, please let me
    know. Bless you!

    1. Hi Georgiana,
      Yes, there are many discussion boards available. The main ones I follow and participate in are on Twitter (under #FIRE (Financial Independence, Retire Early) or on Reddit (sub-reddit group, FIRE or Financial Independence, or Lean FIRE).

      Hope that helps,

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