My brother, Brother Groovy, is a very curious fellow, and lately he’s been on a self-sufficiency kick. He wants to buy land in the country so he can build a little house, grow some food, and raise some chickens. He’s also exploring the feasibility of powering his little country house with solar.
Since the idea of self-sufficiency appeals to me as well, I often pick Brother Groovy’s brain about the topic. And during our last conversation about “prepping,” he shared a very profound observation. Disasters in the United States aren’t cataclysmic. Yes we have our Katrinas and our recessions, but we’re pretty much immune to the real scourges of mankind—famine, pestilence, and civil war. So Brother Groovy isn’t striving for societal-implosion self-sufficiency. That degree of prepping would be clearly excessive. No, his prepping goals are more modest, something along the lines of no-electricity-and-water-for-a-week self-sufficiency or oh-crap-I-just-got-downsized self-sufficiency.
Is the Mustachean Threshold too Lofty?
Now, don’t ask me why, but I began to think of the Mustachean Threshold (25 times your annual expenses in savings) in terms of Brother Groovy’s quest for self-sufficiency. He’s going for partial self-sufficiency because full self-sufficiency doesn’t make sense. Could the same type of analysis be applied to the Mustachean Threshold? In other words, what if the Mustachean Threshold doesn’t make sense for you? What if shooting for half the Mustachean Threshold is more pragmatic?
Consider someone who didn’t get her financial act together until her early 40s. She’s finally debt free, but has no savings. She can do better with her annual expenses, but they come in at a reasonable $35k. And she makes a good salary ($75k). Her company provides a 401(k) with a nice match (4 percent), which she just signed up for.
For her to reach the Mustachean Threshold, she would have to save $875k. Is this doable? Maybe. But she might not hit the Mustachean Threshold until she’s 70. Yikes!
What if, on the other hand, she didn’t shoot for the Mustachean Threshold? What if she shot for the Peach-Fuzz Threshold—twelve and half times her annual expenses. Under this scenario, she would never be financially independent. But once she saved $438k, she could shift to part-time employment.
What would you do if given these choices? Would you work full-time until you were 70-years-old? Or would you prefer to work 20 hours a week starting at age 60?
I know what I would choose. For a good chunk of my adult life, I’ve worked two jobs. In my current job, I work 45-50 hours a week. Working 20 hours a week wouldn’t even feel like work. So in a heartbeat I would take part-time work starting at 60 over full-time work ending at 70.
For a lot of Americans, the Mustachean Threshold isn’t practical. By the time they have the mind-set and the ability to save, the years required to get the job done aren’t there. It’s too late in the game. But for some of these Americans, the Peach-Fuzz Threshold is a good compromise.
So listen up Peach-Fuzzians. All is not lost. If you can switch to part-time work at age 60 that ain’t so bad. In fact, it’s freakin’ groovy.