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I Just Gave Up $4000 Per Month to Keep My Freedom of Speech (mrmoneymustache.com)
271 points by ryancarson on June 21, 2012 | hide | past | favorite | 128 comments

Freedom of speech doesn't mean no one can ask you to change what you say, or that you never change your words to please anyone.

It's a very specific concept from the United States Constitution that relates to the government forcing you to refrain from saying things that you want to say. Freedom of speech is the kind of thing that comes up when a government agency puts warning labels on record albums, news media are prevented from reporting on government activities, or butthurt lawyers (cough cough Charles Carreon) try to use the courts to prevent people from criticizing their clients.

The blogger in question felt that the word "badassity" was an essential element of his brand, and that to change his header would dilute his brand in some way. He made a calculated decision that appeasing Chase would negatively affect his brand, perhaps even resulting in a reduction to his overall income in the long run, either directly or indirectly. A post like this one reinforces his brand as a blog with "integrity," and an attitude, and is sure to help offset whatever immediate loss he sees from Chase withdrawing their support.

While he's clearly a skilled and savvy blogger, I really don't see this as a free speech issue. A more accurate title would be "I Just Gave Up $4000 Per Month to Preserve My Brand Integrity."

> It's a very specific concept from the United States Constitution

This is completely incorrect, and it's a little insulting to the users here who aren't American.

Freedom of speech is a value with broad applicability. The United States Constitution enshrines a right to free speech as a limitation of government power, fine, but they don't have a monopoly on the idea. Relative freedom of speech is a characteristic of every forum in which speech and the suppression of speech are possible.

Banning users of a forum limits freedom of speech, removing commentary that goes off-topic limits freedom of speech. Forums are often quite free to set their own rules about who is allowed to say what, and users are often free to choose the forums they frequent, but that's mostly beside the point - speech within any particular forum is free to a given extent, and some people (be they owners, operators, users, whatever) believe that this freedom is intrinsically valuable.

(I don't really see this one as a free speech issue myself - to me, this one is about the credit card company preserving their brand integrity.)

Those words were indeed ill-considered; the concept dates at least into the English Bill of Rights about a century before the US one -- and of course it was also a value in the French revolution.

However, the point of the comment you're replying to still stands. If I merely say "We will only maintain a business relationship if you stop saying X, Y, and Z," then turning down that business relationship is not a free-speech issue. My sending you money to change the way you speak is not an abridgement of your freedom of speech, because accepting it is purely voluntary. It might be a matter of "selling out" but it's not a matter of "freedom of speech."

Cf. the FunnyJunk/Oatmeal debacle happening right now, where there was a tangible legal threat: "Take down your blog post or I will sue the crap out of you. Oh, and pay me thousands of dollars."

> If I merely say "We will only maintain a business relationship if you stop saying X, Y, and Z," then turning down that business relationship is not a free-speech issue.

I think if there's any problem here it was with the way it was put. I don't think anyone would have had a problem if Chase had said, "We're terminating our relationship with you because of your blog's content," but the idea of them suggesting he change to maintain the relationship seems to have struck a chord. Perhaps it would have been better to leave that possibility implicit, but... The more I think about it, the more I think this blogger is drumming the issue up to generate traffic to make up for his loss of revenue.

I'm not disagreeing with your statement about credit card companies, but to me it is hilarious that American credit card companies and banks still honestly believe that the customers think of them as brands which represent the epitome of honesty, integrity, and family values.

We know that, and they know that, but its still crucial to keep up the mechanisms of being honest,etc.

Consider the jewellery chain in the UK that sold cheap junk. Customers knew it, and the company knew, but everything was profitable until the CEO explicitly said the wares were junk. Then the sales went into free-fall.

I sort of view them like politicians: grab bags of stinky stuff, and some bits of professed policy which I might find useful in narrow contexts. In that regard, they can be value-ranked, and value-rankings within demographic groups can be brand managed.

It's not necessarily that they believe that. It's that they desperately need their marketing material to represent that. Quite probably because they realize it's a potential weakness in their image.

The blog post is from an American blog, so noting that specific concept of freedom of speech from an American point of view is perfectly fine in this case. And in the American concept, freedom of speech is a constitutional concept regulating what the government can do to individuals.

Even in America, we have a concept of freedom of speech that extends beyond the First Amendment. Obviously his Constitutional rights have not been abridged, but that doesn't mean that it's not a free speech issue.

No, it isn't a freedom of speech issue, not in any sense of the term, and conflating this situation with it devalues the concept greatly. He has all of the freedom of speech he desires. One's freedom's do not extend to coercing others.

He was not forced to do anything - he was given a choice: either we continue to pay you, and you abridge one line that we don't like being associated with our product, or you keep on saying whatever you wish and we have no requirement to pay you.

Both parties are free to set any terms (as allowed by law) on the deal which both will agree to. If both don't agree to the terms, you have a standard failure to negotiate a deal. If one does something in the future which causes distress to the other party, the other party can certainly demand redress. If the party which caused the issue refuses this, why should they be forced to submit to his whims with no freedom of their own? And what does that have to do with freedom of speech? He's still saying what he wanted to say, is he not?

>He was not forced to do anything

By that standard, nothing short of cutting your tongue off would be an infringement of your freedom of speech. Under the Sedition Act of 1918, nobody was "forced" to do anything; they were just imprisoned if they said bad things about the government.

This sort of hyperbolic conflation is exactly why it's stupid to relate a business transaction to "free speech." There is exactly zero relationship between what I said and putting people in jail for speech. (FYI: putting people in jail for saying things that you don't want is equivalent to forcing people to say what you do want.)

I was tempted to not reply since the comment was being downvoted, but clearly you've garnered some support for your argument giving the people the running the credit card company the right to choose whom they pay for what services and why is equivalent to incarcerating people for speaking their minds.

The argument you're making here, is that every company must -pay- people for exercising their free speech, even when it harms the company. By your argument, it's a violation of a person's free speech for a company to fire its spokesman after they go off on a racist rant on-air, and that marketing firms should be paid by their clients even if they chose to make an ad which disparages them?

Since when does your right to free speech take away my right to association?

Not only do I entirely agree with this, but the title of the blog post makes it seems like he was acting less out of a concern for free speech and more out of a desire for attention. "Hey guys, look at me! I'm giving up money for free speech!"

actually, he's Canadian, now living in America w/ Citizenship

American citzens are often called.... Americans.

There is definitely a brand integrity aspect to this but you are making light of what I think is the more significant aspect. What he claims is that this is a test of his own personal financial independence at work. A challenge to the value of being financially independent and the sacrifices required to attain the goal. In his words, "this is really a test of what financial independence is all about." That seems accurate. If he champions himself as financial independent, it would be personally dishonest to then do something undesirable for the sole purpose of further financial gain.

There is brand integrity there, but I think there is also personal integrity and resolve.

As others have mentioned, the idea that "freedom of speech" is a concept originating from and specific to the US Constitution is staggeringly ignorant, and the idea that freedom of speech can only be infringed by the government is too.

Freedom is about what the less powerful can do even when opposed by the more powerful. Money is one of the rawest forms of power in the modern world, and so if someone threatens to decrease your income significantly unless you change what you say, they are unambiguously flexing their power at you and impinging on your freedom of speech.

Any previous customer of mine that doesn't continue to buy and wear my T-shirts filled with "obscenities" are denying me my freedom of speech by threatening my income (since I've set myself up as a T-shirt merchant); they are built into my forecast projections as repeatable sales, and they are not allowed to not deal with me.

Two points:

1. There is a difference between not buying and demanding change. If I demand that you stop selling obscene t-shirts, or threaten to stop buying any of your t-shirts, I'm infringing your freedom of speech.

2. I don't see where anybody said that Citi shouldn't be allowed to do what they did. But that doesn't change it from being a form of censorship.

There is no difference if the consequence of failing to meet the demand is the demander not buying, or not doing business anymore. It is just stating the conditions for continued relationship ahead of time, and providing an alternative course of action. How harshly would the bank be judged if they simply dissociated and gave the blogger no option to adjust?

The fact that the blogger is continuing to blog as he sees fit counters any objectively verifiable assertion that censorship was involved.

I believe the term censorship is best left for those situation when a state agency (which one might be able to argue many large banks are anymore) demands changes or cessation of communication under pain (or threat) of fine, imprisonment, or death.

Thank you. He wrote a blog post about turning down a profitable offer in order to keep his semi-profitable current scheme as well as choices he made on how to represent himself.

We are reading about this here on hacker news because he's being promoted here to compensate for that lost money.

That's wonderful. Whoever posted this, thanks for wasting my time. If it was the author, you truly need to get a degree in management because you're adept at wasting technical people's time.

The author is doing a great job of promoting himself and his blog business. The failure is on the HN side of the fence.

It's not just essential brand securing. Making the changes according to the requests would open up the way for referral agents to manipulate him in any way they like. It's basically telling them "yeah, I'm for sale. Give me money I will say whatever shit you like"

Maybe a more accurate term for what the blogger values--instead of "freedom of speech"--would be "artistic freedom" or "editorial independence". The blogger values the ability to write whatever he wants without bowing down to an advertiser's opinions. Every post is a "director's cut" edition (to throw in movie metaphors), rather than a bland studio-appeasing release.

At the same time, the fundamental concept in "freedom of speech", "artistic freedom", and "editorial independence" seems to be the same: the ability to express what you want to express without pressure from an external authority. Of course, coercion from a government creates much greater pressure than insistence from a boss or an advertiser.

It's certainly an interesting attitude.

But what if he had decided to change the banner, and give the money away to a charity instead?

Money is a tool you can use for good. If you are blessed with the kind of extra money he was suddenly given, you can use it to do good with.

Obviously it's all his choice, but making a big show of "freedom of speech" feels a little disingenuous. No government is trying to censor him; nobody is taking away his freedom; this is just a business negotiation. At no point was his freedom of speech ever threatened in the slightest.

Freedom of speech has many facets. I don't see this as being disingenuous at all as it literally did impinge on his choice of speech if he wanted to remain in the business relationship. This situation would be similar in nature to Microsoft forcing businesses to disavow Linux to remain in partnership with them. Censorship can be legal and doesn't have to come from a government for it to still be censorship.

The charity argument is unfair -- most people and businesses could give more money to charity if they live "comfortably". The manner in which he gives back to the community is purely for him to decide. In this situation it's not a free trade either as he needs to give up something quite important to him (censorship) to receive the money. He'd be endorsing a product or service that he doesn't believe in and changing the content of his product or site to fit with it.

> In this situation it's not a free trade either as he needs to give up something quite important to him (censorship) to receive the money.

Of course it's a free trade. He would be trading his banner for the money Chase would pay him. He's free to do that, or free to not change his banner and not take any more money, which he did. That's the whole definition of "free" in "free trade" -- he gets to choose. And that's why there's no censorship here, because there's no coercion.

It's no different from advertisers pulling ads (rightly) from Rush Limbaugh's show after he says something offensive. I never heard anybody calling that censorship. It wouldn't be even if they warned him in advance (which is what Chase did).

> making a big show of "freedom of speech" feels a little disingenuous

Maybe not disingenuous (which implies some degree of pretense), but certainly inaccurate. People like to use the phrase "freedom of speech" because it has propaganda value in most Western cultures. To paraphrase one legal scholar, the first lawyer to yell "freedom of speech!" in a crowded courtroom wins.

Say you were already rich and someone offered you a boat-load of money to appear in a TV commercial and promote a product you don't believe in.

Would you accept the offer? It wouldn't take much effort and you could donate the money to charity, after all.

True. You should actually read through his full blog, though. He already gives away a lot.

The "Freedom of Speech" thing comes from several other posts. The remaining context gives you a lot of info. He's 'free' to say whatever he wants because he lives within what his investments are producing. It's a higher form of freedom to be able to turn down $4000/mo.

I agree.

Great to see MMM on HN. If you haven't read at least his first 5 articles, you might enjoy doing that before finalizing your opinion on this recent one. Most of the naysaying comments here seem due to a lack of context.

MMM is semi-retired. Reaching and keeping that situation takes commitment, diligent work and cooperation. His site exists to share his methods for succeeding. That includes using existing financial tools to meet individual financial goals.

Credit cards are a great utility for many people, a life-saver for some during brief periods of need, and an enabler of long-term bad decision making habits for many others. MMM is squarely in the first cohort. Furthermore he advocates for and educates people in the prudent selection and use of credit cards. His list of offers was ranked by his review of the credit cards, not their referral deals. There is nothing untoward about that.

Uhm, he kept the links on a "recommends" page. And when Chase pulled the referrals, he removed them from that page which "After stripping out all the Chase stuff, my credit cards page is looking a little bare these days".

What does it tell us about his impenetrable integrity when his recommendations are predicated on the recommended product paying him? Surely Chase can't keep him from recommending the card - that would indeed be a free speech issue.

And no, it's not a principled stand against Chase: "We’ll see if we can find a less fearful company (or Chase rep) to step back up to the plate eventually."

It looks like the customers can only get the cash rewards when they sign up using the referral links. This is actually sort of price discrimination because the people who directly sign up with Chase usually don't apply because of the rewards. Without the benefits there will be no point to recommend that credit card any more.

You clearly haven't read much of his other writing!

Well, I am happy that $4000 is so inconsequential to Mr. Money Mustache that he can just say 'fuck you' to it. Not everyone is so lucky. I am sure there are plenty of families or individuals who would sacrificed their 'integrity' or 'freedom of speech' on their blog for that kind money to feed their families, pay for their home or get a medical procedure done. It doesn't sound like any of these issues are a concern to him as he can just whimsically reject that kind of money.

Also, is this really an issue of freedom of speech? Seems a little melodramatic to me.

"Also, is this really an issue of freedom of speech? Seems a little melodramatic to me."

I had the same thought. It seemed to me like the author was trying to make his position far more noble than what it really is. The whole thing boils down to "Look at me, I just turned down $50K so that I could still say 'fuck'".

I swear like a sailor. I try to keep it down to a dull roar online. If I could make $4k/month by removing a single swear word from my site, I would be a total sellout in a heart beat. Fuck "integrity" of that sort.

Mz bookmarks article to try to figure out if she can sell her soul for $4k/month at some future date.

> If I could make $4k/month..., I would be a total sellout

That's certainly a valid choice; some people prioritize "integrity of that sort" over money.

I am currently homeless and deeply in debt for valuing my integrity over money. I could have dumped my two adult sons on my ex. He would take them in, though he won't give me one thin dime to help feed them. And because they are legal adults, no shelter will take us as a family. My financial mess is due to the fact that I* have gotten well at my expense. As a former military wife with an incurable genetic disorder, I, instead, could be a lifelong legal drug addict at tax payer expense. But one swear word in the subheader? I would at least A/B test it. Perhaps cleaning up his foul mouth would grow his audience even bigger.

* Really, all three of us have gotten well at my expense.

Exactly. The post could very easily have been titled,

'I just turned down $4k because I dont need it and like to say 4 letter words'

He specifically addressed that

>If this blog were the only thing between my family and a homeless shelter, I’d surely be a banner-changin’, credit-card-hustlin’ fool. Just as the indebted office worker faced with an abusive manager will bow down and do the shitty work, year-in and year-out.

The whole point of his blog is financial freedom. How to make enough money that you don't have to live like that.

I'm not an expert on the site content, but I think it's about how to require little enough money that you don't have to live like that. The focus is on needing less, rather than making more.

It takes both sides to succeed. But yes, in many ways it's easier just to lower personal demands or simply not raise them with rising income rather than be able to accumulate an arbitrarily large pile of money.

Fair enough, but isnt everyone financially free in that way at least partially? If I needed to work a second job to support my family, I would. But I don't, so I am financially free in that respect.

The overall concept and goal of the site is great, financial freedom is an excellent thing. The tone I perceived from this singular post just wasn't as noble as others have received it as. More power to the guy for being able set standards for his content and not let financial incentives affect them.

The purpose of his site is documenting financial freedom by reducing expenses, so I don't understand your criticism at all. Just because he can forgo that money doesn't mean it's not substantial.

Eg, his monthly income is reduced from $6000 to $2000, but he only spends $2000, it may be a reduction of 66% but he can still live with the decision.

Compare that with someone that makes $20k a month and spends $20k a month - $4k a month is a small amount of money, but he can't give it up.

Not being familiar with this guy's work, what's so honest about getting in bed with credit card companies and feeding them more signups? Selling lead generation for credit cards seems a little dishonest to begin with.

Presumably his readers are smart enough to get a deal. He mentions using Google Calander to cancel cards before fees kick in. So I assume he's not selling his readers down the river, but helping them 'hack' the system.

Yeah I would advise against that. Last time I checked, your credit score will plumet if you do that sort of thing.

If you pay off your debts without paying any interest all the time, you're pretty much a terrible person to lend money to.

The credit card companies also rely on the fact that however organised people thing they are going to be, a good amount of them slip up. Once they have credit, maybe they dip into it, then can't repay it all, or they miss the interest free deadline etc.

Please stay away from credit cards everyone :)

You never checked that, because the system is too opaque to check.

Another anecdote: I have three credit cards that I use for various things (recurring payments, real-life purchases, online purchases) and I pay them in full every month. I have a very high credit score. The credit card issuers are making plenty of money off of me; they get 4% of everything I buy.

(Why do I use credit cards? One, convenience. Two, it's an abstraction layer over my own money. If someone mistakenly charges my credit card, they've stolen the bank's money, which the bank will really want to get back. If someone mistakenly debits my checking account, well, so much for paying rent this month...)

Im not american so bare with me on this question. So my credit score is based not on my repayment history or my financial stability but the potential profit of making a loan/credit to me? So if im cancelling credit cards before the interest free period is up this reflects badly on me? Why?

No, a credit score is a measure of how likely you are to repay an debt, as relative to your peers. The higher your score, the more likely you are to repay the debt based on your history. (Not taking into account the size of the debt in this calculation, which cannot be determined by a single factor.) The score is a scale, where the bulk of the population rides at or below the mid-point, and the very few ride at the highest score.

This is differentiated quite effectively from what makes a "profitable" customer. Which, I think has something to do with what the OP was alluding to... Generally, a profitable customer doesn't pay the full balance off every month, and is slightly late once in a while. A profitable customer may have a low likelihood of repaying a debt, and the risk may outweigh any potential profit.

Notably, if you're low-risk, you'll find it much easier to be extended credit up and to certain amounts, even if your behavior does not appear to be particularly profitable.

That being said, when you specifically request that someone offer you credit, you increase the potential risk to the next lender. Which is why most of the credit card arbitrage plans require you to make massive bursts of applications at once, and then back off for a while - gaming the fact that it takes time for each lender to report its data back to the clearing houses.

Nope. Credit score is about the ability to repay in the US. Parent doesn't know what he is talking about.

However credit cart companies do like you better if you are the type to 'slip up', mortgage lenders not so much.

> Nope. Credit score is about the ability to repay in the US. Parent doesn't know what he is talking about.

OR I'm not in the US. Other countries exist. I'd be surprised if credit companies even in the US don't share the information on "low or no profit users" - ones who religiously pay off loans without paying any interest.

To elaborate a little based only on my own limited experience as a consumer....

In Canada (home) and the U.S. (current legal alien), there are things called credit reporting agencies (different per country; names like Trans Union, Equifax, Experien). A surprising array of businesses, including e.g. lenders, utilities companies, etc, buy reports from these credit reporting agencies, and also report to them on your behaviour. As far as I know this reporting on you is completely voluntary for these companies (maybe it gets them a price break on the reports they buy, but I think I heard once at an old job that they actually PAY to make reports), but it makes sense in terms of their self-interest, because it disincents their customers from cheating them. Plus, revenge may or may not be game-theoretically advantageous, but you should see how personal accounts-receivable clerks take it when you don't pay.

As mentioned, the reporting agencies will generate reports on you. You can get these for free for yourself (or for a fee if you want convenience). Companies can also request these on you, I believe only with your permission (which of course would be very easy to forge). If you've never seen your own report, you should find the agencies in your jurisdiction, figure out if you're entitled to a free report, and jump through the hoops just to see what it says about you.

The report includes lots of stalkery facts about you, like your residence history, everyone who reported that you paid bills to them, and so on. It'll probably be only mostly-accurate. For example, I've lived in ten places in the last 15 years, and only about half of them are on my credit report. Also, phone numbers I hadn't used in 5 years were still listed as being mine, but being "closed". Weird. It also includes how often, according to each reporter, you were behind on your bills, by how much, as well as the max balance you carried, the average balance you ran, etc. My report says I was once 30 days behind on one of my student loans, which ... <rant about bureaucrats ellided>. You can easily imagine how that sort of summary might be interesting to someone considering lending you money or extending you credit.

Credit bureaus will also generate a single numerical score about you. I dunno what idiot would use this scalar score to make a decision about you, but maybe some businesses do. But businesses certainly aren't restricted to a one-dimensional metric of your desireability as a customer.

Now. As mchanson points out, different lenders may have different goals. Mortgage providers want to see that you're gonna take your debts seriously. Credit card companies might like you better if they know that you do pay in the end, but before doing so you tend to get into enough trouble that you make a lot of interest payments. Whatever. That said, MY credit reports haven't ever had any information on them that could have allowed a prospective lender to notice that I cancelled an annual-fee credit card on month 11, preventing me from paying fees.

It's a blog about how to make (and save) money. I think he was picking out cards that offered $100 to sign up, and were free for the first year kinda thing. With the expectation that the type of people that read his blog would game that to their advantage. Perfectly honest in my view.

I want to agree with you. Could you be specific about what exactly is dishonest here and why?

I am having trouble phrasing it but.... a long time ago I had the opportunity to make lots of money through a popular Facebook game I created. OfferPal was interested in having me sell credit card leads. I didn't like the idea of irresponsible younger people signing up for credit cards and giving their personal information out and accumulating debt just to get more XP in my game so.... I declined. This guy did that but then took the high ground and reversed. Not because he didn't like selling leads but because he valued his freedom of expression more.

I think the key difference here is the audience. Offering credit cards to college kids is very different than offering cards to a more mature audience. Especially when you've been teaching that audience how to use credit cards as what they are, tools.

There's also a significant difference here in that in your situation, you would have been providing the rewards and you would have had power to artificially manipulate the value of those rewards (make it harder to win your game without reward points. Here, the author doesn't provide the rewards he is simply stating what offers the credit card companies themselves are making.

At the end of the day, there is certainly still a moral hazard here but it is also a very different situation than the one you described.

I don't think it's inherently dishonest, but I do think that you have to have enough self-restraint to avoid pushing things that are questionable, but give good lead-gen kickbacks.

It's not 100% obvious where that line lies, admittedly. I run a small side-project site (started as just something for friends/family) that lists checking and savings accounts that are free of "gotchas": free checking w/ no minimum balances, online savings accounts without weird caveats, etc. (http://www.pfstuff.com/checking/ and http://www.pfstuff.com/savings/, fwiw).

But, I also show some AdSense ads alongside some of the pages... which have the bad habit of advertising precisely the accounts that don't fit my criteria, and which I'm trying to steer people away from. Not always, but Google's algorithms rotate in such "bad choice" accounts more often than I'd like. I can ban some of the more egregious "10% guaranteed interest!" type stuff via AdSense's settings, but not everything. Perhaps I should just pull the ads entirely? That'd be the idealist thing to do, but of course would remove the (modest) monetization potential.

No more or less honest than running TV commercials to get you to buy products during a television show. I presume you have some sort of logarithmic honesty scale by which one can measure their dastardliness? If so, please share.

The value of having FU money (which doesn't have to be 7 figures).

Site seems to be really slow, here is the cached version: http://tinyurl.com/c94nnmy

Long url: http://webcache.googleusercontent.com/search?hl=en&biw=1...

Offtopic: What's the point of using tinyurl outside of twitter? I would understand if you had your own vanity shortener (it would be obnoxius, but at least it would make some kind of sense).

On small screens, sometimes long urls wrap and break? I was first introed to url shorteners to get around breakage, long before I ever heard of twitter.

HN shortens display of long URLs automatically and shorteners are bad long term so please don't use them here.

I don't think I ever have. But thank you for the reminder. I knew that about HN but did not recall it.

Oh come on! Calling yourself a financial hacker! A real financial hacker would:

a) Figure out the IP ranges that the chase hoodlums use. b) Setup an alternate banner (without the word badassity in there) to show for those IP ranges. c) Rinse and repeat for any other unreasonable demands.


Integrity > money

Is this where I point out that this happens all the time, even on HN? And you very rarely hear about it?

One of my submissions got flagged by the mods last night, I'm assuming purely because my project is called "Shithead". (Am I going to change the name? Hell no :) )

You basically have to tell me about this project now, because anything that can give me an excuse to say "Yeah I tried out this thing called 'Shithead'" with a straight face to my friends has to be SOME kind if nifty :)

Here's the submission in question: http://news.ycombinator.com/item?id=4141253

What is the project? Is it the card game Shithead, or something else?

Nope, it's a static site generator, but about an order of magnitude simpler than anything else that I can find online. See my other post for the link, or check my submission history.

The server is starting to be a little too slow for me.

Coralized link:


Neither the original link, nor the above are working for me now... so much for keeping his freedom of speech.

Calling this a free speech issue is like saying that Reddit inhibits free speech by preventing you from posting personal information online. Not every act of asking you to change or not say something is a violation of free speech.

Since when did $4,000 a month become "FU Money." Is that serious? If you make $4K a month after taxes, I'd say you have a pretty small salary to just be honest with you. The article, I suppose, was about more than this but much of it spent so much time talking about how much money this is.

I don't want any of the younger HNers around here to get the wrong idea, as I didn't really know when I was younger, this is not, in any sense, "FU money."

$4k/mo post-tax ~ $6k/mo pre-tax == $72k/yr. There are a lot of programming jobs in the US that don't pay that.

And those jobs are going to want you to work, so a better comparison is to a pile of money that throws off $4k/mo post-tax. If that pile of money is invested in blue chip dividend-paying stocks with an expected return of 5%, you'll need around $1m to generate $4k/mo in passive income. (Obviously tweak your expected return and the corresponding principal required to fit your assumptions of market performance.)

$1m may not be FU money to you, but others will disagree.

I think you are misunderstanding the point. It's not that he was saying 4k a month is FU money (although it could be) its that since he ostensibly already has FU money he can turn down 4k a month so he doesn't have to compromise his principals.

That said if you have zero debt, low expenses and a ton of money in an account that yields 4k a month in interest, 4k a month could be considered FU money.

In this case, how much of the 4k should be re-invested to counter the inflation?

That's a function of both inflation rate and your expected ROI. Using 3% inflation and 6% ROI you need to reinvest ~51.6% of your income to break even. (1-(ROI-((1/(1-inflation rate))-1)))/ ROI = 1-(.06-((1/(1-.03))-1))/.06 = ~51.6% Edit: Ok there must be a simpler way to write that...

((1/(1-inflation))-1) / ROI = ((1/(1-.03))-1)/.06 = 51.6%

PS: Just keeping what left over when you subtract the inflation rate from your ROI is close and you don't actually know the inflation rate or your long term ROI most of the time.

Got it. Thanks!

I think you're missing the point of his blog. The entire premise is that by cutting your expenses, living within your means, and some clever hacking, you can be "free". I can certainly see how 4K would be FU money, say, if I moved to a low cost economy like Thailand, Costa Rica, or even middle America.

the entire blog I mean, not just this post

$48,000/yr is easily enough to count, when it comes on top of whatever income you need to live on. I've seen people end up having to get a job, or take out a loan, or acquire some other millstone round their neck, for want of much less.

It's highly dependent on local costs of living. And if it doesn't require full-time maintenance, allowing one to work (or not) on whatever one chooses while still collecting a comfortable income, that is absolutely FU money.

The point of his blog is to demonstrate how to make the realm of FU money easier to achieve. His major claim is that, since he owns his house and has chosen a relatively low-cost region to live in, his yearly expenses for his entire family are around $27,000. So agreed, for him $4k/month of free money would definitely qualify.

Instinctively I know I must have misread or misunderstood something, but...

"$4000 a month is about twice the amount it takes to pay for my entire family’s living expenses. It’s also enough to pay the mortgage on a $900,000 house, "

How does $48000pa pay for a $900,000 mortgage? Old skool was 3x your income. Pre-crash, 5x was possible. This is 20x (ish).

What blindingly obvious point have I missed?

This: You are using the "what should my income be for banks to give me a mortgage" figure, not the "what does a mortgage cost" figure. At 5% interest, a mortgage on $900,000 costs $45,0000 a year on interest.

I don't think he's talking about an interest-only loan. A $900,000 30-year mortgage with a 3.5% interest rate will cost $4,041 per month.

+ 36k to pay the actual loan?

That depends on the type of mortgage. At least in some countries, you can/could get a mortgage where you do not pay anything back, the idea being that increasing house prices and inflation would, together, lead to a situation where total mortgage debt is much larger than the worth of one's house.

Oops: "larger" should, of course, read "smaller".

You could maybe come close to just paying the mortgage. But you couldn't eat, have kids, cable etc. For example:


Taxes are high on this one, but in most places you're going to pay a lot of taxes on a 900k house.

You are on the money with 3x income being what you can realistically spend on a house without getting yourself in trouble.

A later poster says this is a mistake because it's what banks use, not what you can afford, but the banks historically used that number because it is what a person can reasonably afford. Way back when banks actually had to eat a loss on a bad loan, they knew who to loan to.

That amount of money would pay the mortgage (and nothing else) on a 30-year loan on a $900,000 house in the place where he lives, given a 20% down payment: http://www.zillow.com/homedetails/2012-Coralbells-Ct-Longmon... It wouldn't pay for anything else. He's just giving it as an example of what that amount of money can buy.

What are peoples' experiences with flexoffers? I have a tech related blog with 500 uniques per day. I've been looking to improve on the pittance I'm getting from adsense.

Chase is a terrible company anyways. I'm glad he didn't sell out to them.

I'd wager that your wager is spot-on. Keep it up!

Awesome article. Kudos for sticking to your guns, and I hope your revenues skyrocket, even though credit cards are the worst financial decision anyone could ever make. I'd rather YOU make money on their bad decisions than Chase or Citi.

Saying credit cards are bad financial decisions is like saying getting a drivers license is a bad safety decision.

Beyond the fact that you can use credit cards to your financial benefit, simply getting the card has no consequences whatsoever. (Unless you buy into the 'you must keep a balance to maintain good credit' myth.)

Getting a drivers license is perhaps the worst safety decision a modern human can make. The reality is that your _average_ person, if they have something, will use it. Whether that's a drivers license or a credit card is immaterial.

This, of course, contrasts with something like a condom, where, if you are going to have sex (unlike driving, or purchasing on credit) - you are going to do it, regardless of whether you have the license/plastic (no pun intended) - so you may as well do it safely.

It's very difficult (impossible?) to go into debt to a credit card company, if you don't have a credit card. Likewise the vast, vast majority of people who don't have Drivers Licenses (by choice, as opposed to having them taken away) - tend not to cause fatal accidents.

People get drivers licenses in order to drive, and they get credit cards to take on debt, build their credit, or make payments quicker and easier.

Drivers licenses don't make people drive poorly nor do credit cards make people make poor financial decisions. If you're going to convolute the two through some form of causality, the argument you could make is that people who are apt to make poor financial decisions are more apt to pile up credit cards.

Your claim that getting a drivers license is the "worst safety decision a modern human can make" is pure hyperbole. What about not putting on a seatbelt? What about not checking their tires and brakes regularly? What about failing to adjust their mirrors? Those are the actions that reduce safety, not getting the license, much like buying that HDTV you cannot afford reduces financial standing, not getting the credit card.

I'll stand by my original comment - no other single decision that a modern adult can make, than driving (or riding) in an automobile, will more negatively impact their health, or more likely result in a fatality.

If you take a representative sample of people who do what you suggest (seat belts, mirrors, tires, breaks) versus a sample of people that I offer (people who just don't drive - I.E. Walk) - I guarantee you there will be far fewer fatalities and injuries in my group, particularly in the 15-44 age range.

This ties _directly_ with credit cards - in that if you take a sample of people who do what you suggest (use credit cards properly/responsibly) versus a sample of people who do what I suggest (just don't get a credit card) - I believe my group will be better off financially.

To be truly scientific - we need to do a randomized trial - take a good sized group - and bucked them into two trials for 20 years - one group without cars, one group with. Another group with credit cards, another group without.

I'm confident that the non-car driving, non-credit card using group will experience fewer fatalities and be financially stronger.

I'm not arguing that you _shouldn't_ use a seatbelt, and that it doesn't help you (it does!) - I'm arguing that once you've started driving/riding, you've already increased your chance of fatality in a way that wearing a seatbelt can't reduce.

Assuming you still need to get from point A to point B, driving is far safer than riding a bike in most places in the US. Granted this is mostly because everyone else is in a car...

I'm not sure where bus-riding fits for safety. Anyone got numbers?

If you don't read the details that's not always true. Some people get suckered into cards with annual fees. Also there is always a credit checked performed. If you sign up for a bunch of credit cards for the free incentive money, all those credit checks and 0 balance / high credit limit can have a (temporary) effect on your credit score.

While I think credit cards have great benefits (see stevenwei for an excellent summary), getting the card does have a consequence in my experience: every card I've ever had has an annual maintenance fee (perhaps not the case in the USA?).

In the us, few cards besides AMEX have annual fees. The credit card companies make most of their money on people who fall behind on their payments and end up paying a ton of interest, and i would guess that annual fees aren't attractive to those customers. New college students are a prime example.

While this sucks for the system as a whole, on an individual level it does mean that those of us who have a reliable income (or FU money) can use credit cards very differently. They provide convenience, consumer protection, usually some kind of 'reward' (travel points or such), and yes, a 30 day grace period in which you can do something else with your money though I usually don't think of it that way. In fact, from an individual standpoint the only reason I can think of to use a debit card rather than credit here is a complete lack of financial responsibility/will power.

Your simile doesn't work. One needs a driver's license to drive. One does not need a credit card to make purchases.

And getting card actually can be a bad financial decision as too many cards can negatively affect a credit score.

One needs a driver's license to drive. One does not need a driver's license to travel.

But not having any credit cards can also negatively affect your credit score.

And not having a credit score can be a wonderful way to live life.

Until you want to rent an apartment in a place where there is a lot of competition for apartments, like the Bay Area.

Until you need to borrow money for a car or a house...

If a purchase requires you to borrow money, seriously ask yourself if you need to make the purchase. Could you (the royal you) buy a cheaper car, borrowing less or paying cash? Could you sustain another year in your current living situation?

The problem with debt-financed purchasing is that while it expands short-term options if not managed properly it can severely limit long-term options.

I think most people need to borrow money to buy a property or start a business.

You don't need a credit score if you can pay 50% down, which you may be able to do if you didn't pay all your money to the credit card companies.

My credit card company paid $800 towards the airfare of my recent trip to Oz thanks to reward points.

I pay my card off multiple times per month. They don't get a chance to charge me interest.

(Just checked and I have $300 worth of points waiting to be spent on travel. That's my upcoming Boston trip covered.)

I've never paid a dime to my credit card companies.

One does not need a drivers license to drive. One merely needs a vehicle.

The fact that not having a credit card damages your credit score should be enough to make even semi-intelligent people realize that credit score is not a fair and equitable measure of one's ability to pay on time.

Who cares if it's fair if that's what's used? Sounds like you're a bit hung up on how things should be rather than how things are.

I really don't understand this sentiment.

I prefer carrying around credit cards compared to cash, it's more convenient and I don't have to worry about whether I have enough cash on hand when I need to make a large purchase.

I feel safer using a credit card compared to my ATM card due to the chargeback and fraud protection provided by the credit card company. There's less money "at risk" if someone steals my credit card or skims my cc number (which has happened to me at a restaurant before - I paid with a credit card and the guy wrote down the number while handling my bill. A week later he attempted to use it at Best Buy to buy a laptop, which was caught by my credit card company's fraud department.).

I earn frequent flyer miles by spending with my credit card, which (combined with signup bonuses) earns me several free plane tickets every year. Since I fly semi-frequently this is a major cost savings for me.

I pay off my credit card balance in full every month, never incurring interest. In doing so, I show a consistent payment history and build my credit score. I don't particularly need it right now, but if I ever need to take out a mortgage, finance a car, or take out any other kind of loan, having a high credit score will benefit me in the long run.

I literally cannot think of a reason why this is a bad idea, or why anyone would consider this a bad financial decision.

Credit cards are amazing. I pay my balance in full every month and American Express pays me money. It's bloody fantastic.

Edit: Oh, and I forgot to mention that the law is on my side with charge backs and I'm not liable for fraud.

Yes, and AMEX is just creating money out of thin air in order to pay it to you? No, they just charge the merchant 5% of the transaction, one of the highest in the industry. Guess who raises their prices by 5% everywhere, before you pay by AMEX?

The real problem is that everyone pays this price, and it leads to price inflation even if you pay cash (yes, dealing with cash transactions has a price for the merchant as well, but that one's already built into their costs). The laws should be changed so that merchants are allowed to charge more for CC transactions. I don't understand why the government has allowed the CC industry to forbid that (seems to work for gas stations).

It's a tragedy of the commons no doubt, but I'll be dammed if I'm gonna pay the full 5% increase by paying cash, instead of using my card, getting 1% back, and only paying the 4% increase. C'est la vie.

Your comparison is "world without credit cards" vs "world with credit cards." That's not reality. The reality is "world with credit cards." It's crazy to pass on using a credit card correctly in a world with credit cards.

Ok, so prices go up a little. But on the other hand, we have the convenience of plastic. Convenience is not worthless.

What's that, we all should just use debit cards instead? Hmm, I thought debit cards used the VISA or MasterCard networks?

Better option: Change the banner, give the dough to charity, if you don't need it so much.

There are greater and lesser evils, sometimes it's Ok to suck up a lesser evil to combat a greater one.

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