Extreme Retirement Is Fool’s Gold!

by Krantcents · 73 comments

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The usual definition for extreme includes words like serious, hazardous, dangerous, highest degree, exceptional, severe, physical or mental risk or hardship.  I realize that retirement as a goal may be worthwhile enough to take risks, but extreme may be too far.  Fool’s gold is anything that turns out to be worthless!  Have you gone to extremes for retirement savings?  Is it working for you? 

Extreme Actions

In practical terms, extreme retirement is giving up everything now for a retirement.  I am not referring to just giving up dining out or taking big risks in the stock market.  Extreme retirement is savings rates in excess of 60-70%.  It means giving up a great deal for your goal.  Taking it to the extreme reminds me of those liquid diets.  You know, you drink a shake for two (2) meals a day and have a lite meal for dinner.  You will definitely lose weight, but at what cost?

Maybe you have tried to lose weight for years and nothing worked!  You figure, you can do one of these extreme diets and lose the weight.  If you are desperate, you can endure anything for a short period of time.  It sounds like a good way to jump start a diet!  Unfortunately, there are people who think you can endure this until you lose fifty (50) pounds.  What usually happens is you start and have some success, but stop because it is too rigid or restrictive.

You go into it with the best of intentions and you fail.  This is one of the reasons there are so many diets.  There are quite a number of fad diets too!  They are extreme such as the shake for two meals day or juice for five days or fast for twenty four hours.  Stay away from anything extreme, it is unhealthy and generally does not work.  You have to find the one that works for you!  Unless you change your habits, you will fail.  Unfortunately, you will gain back the weight after you go off of it.

Extreme savings rates or giving up everything for retirement savings is too rigid and restrictive.  Similar to the fad diets!  Life is more than just saving for retirement!  You are supposed to enjoy life.  Do you work to live or live to work?  When you achieve your goal, you will feel deprived just like a person on a diet and gain the weight back.  If you give up everything, will you feel deprived?  It reminds me of those “no spend” months! I can easily hold off spending for a month, but it means I will spend it next month.

In the same way, extreme retirement savings is so restrictive you will want to break it.  Extreme savings rates of 60-70% means you cannot do much.  How long could you maintain this savings rate?  What would your living space be like?  I suppose multiple roommates, second hand furniture or living at home.  What would you eat?  Rice and beans?  Isn’t eating a pleasurable experience? I am willing to give up a lot, but not everything.

Could you afford a car?  Would you just go to work and come home?  I am in favor of free entertainment, but that has its limits too.  How would you date or  have a family?  It is pretty extreme to maintain this lifestyle for an extended period.  I can see doing this for a short period to save for a down payment for a house or pay off debt.  I think your tolerance for this sacrifice has its limits, probably a few years.

Extreme Retirement

Ten (10) or twenty (20) years of extreme sacrifice helped you achieve retirement!  Now what?  You had the discipline or determination to to give up a great deal to reach retirement.  I think it is wonderful that you sacrificed so much , but when do you enjoy your life?  Will your retirement be extreme too?  You will live in a small apartment and live on practically nothing.  You are used to the lifestyle so it is no longer a sacrifice, but was it worth it?

Once in retirement, you still give up everything to live a simple life.  I can see how this may sound attractive if you hate your job or career.  In fact I can see why some people will sacrifice a great deal for early retirement.  I know I sacrificed some things to achieve financial freedom at an early (38 years old ) age.  I sacrificed the things that I felt were unimportant.  I did not give up vacations or my children’s private school.  My wife and I lived in a very nice house some would say was grandiose!

You cannot maintain an extreme anything for long periods of time.  Life is supposed to be enjoyed and experienced.  It is much easier to do something like this by yourself, so relationships are hard to maintain.  Most of life’s pleasures are enjoying things and experiences with other people.  I have often heard people who sacrificed ask when does the fun stuff occur?  I think you need a balance in life.  Certain things are worthwhile to sacrifice for your goals, but not everything.  What do you think?

I know you can live in a four hundred (400) square foot apartment, spend very little on food and save 60-70% of your earnings.  My question is for how long?  Can you marry and have a family?  If you did give up everything to reach this goal, what is the pay off?  Is it a frugal (extreme) retirement?  I suppose I could still travel, but it would be extreme too such as $5 per day and I camp out.

Final Thoughts

I am not saying that you should not give everything a 110% effort, but think about how long you can do that?  What is the outcome you are trying to achieve?  Is the effort worth it?  What kind of life do you want to have?  My most enjoyable experiences were with friends and family.  The cost was modest or free, but to save 60-70% of my income would mean saying “no” to many of those experiences!   I certainly could not afford to send my children to private school or live in a nice home.  I These are things that are important to me and I am not willing to compromise my what I find is important.  I saved and invested, but not extreme savings!

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Y and T’s Weekend Ramblings at Young and Thrifty.ca
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Carnival of Retirement at PF Carny

I saved and invested, but not extreme savings!


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My Financial Independence Journey April 25, 2013 at 2:54 am

This is one of those topics near and dear to my heart. I save in excess of 50% of my income (I would love to hit 60%) with the hope of hitting financial independence inside of 10 years. Maybe I’ll retire, maybe I won’t. That hasn’t been decided yet. I definitely give up a lot in order to do it. I do make a lot of money so I suppose that my lifestyle isn’t that “extreme” but there are still plenty of missed opportunities. I actually spend a lot of my time agonizing between saving and spending money.

Krantcents April 25, 2013 at 7:27 am

Although the best time for either retirement or financial freedom is when you are young enough to enjoy it. you should not go overboard saving. You don’t want to get there and ask yourself the question, was it worth it? I think any extreme measure is not sustainable!

Mrs. Pop @ Planting Our Pennies April 25, 2013 at 3:56 am

The way we look at it, it’s really just been a matter of limiting lifestyle inflation. We are about 50/25/25 with savings/taxes/spending, but it doesn’t feel restrictive since we spend the same that we did a few years ago when our income was lower. Our happiness isn’t diminished because of that and I think part of that is because we focus a decent amount of our spending on experiences over stuff.

Krantcents April 25, 2013 at 7:28 am

Good, a balance is necessary to keep you working on your goal.

Money Beagle April 25, 2013 at 4:32 am

I think it’s also dependent on your income. If you settle in to an enjoyable lifestyle with a 10% savings rate, then get raises or such and apply all of that toward savings, you aren’t necessarily holding yourself back or limiting your lifestyle during that time.

Krantcents April 25, 2013 at 7:29 am

I agree, but when savings is around 50, 60 or 70%, it is questionable. I guess if you are earning high six figures, it is very doable!

Michelle April 25, 2013 at 5:20 am

I figure I am young now and want to enjoy my life. We are still saving around 50% of our income (some months much more, some months less). I enjoy traveling, new experiences, trying new food, hanging out with friends and so on, and don’t want to give that up so that I can retire in one year.

Krantcents April 25, 2013 at 7:38 am

I agree! I see no reason to give up everything for 10-20 years to retire early. Besides, time is a more important aspect of retirement planning vs. the amount of contribution.

Barbara Friedberg April 25, 2013 at 8:01 am

k- I totally agree with you. I’m a bit scared of retirement, I like to work! Moderation is the way to go.

Krantcents April 25, 2013 at 9:36 am

Definitely! I think extreme anything is something you can only maintain for a short time or you will go back to your old ways.

John S @ Frugal Rules April 25, 2013 at 8:19 am

“You cannot maintain an extreme anything for long periods of time. Life is supposed to be enjoyed and experienced.” I could not agree more sir! I think saving and having balance is vital. Sure, you might be able to be “extreme” over a short term but for the long term it’s just too much. I like my warm showers too much to give them up so I could retire early. Not to mention the fact that I enjoy to work and like to enjoy life which is what helps us keep a decent balance.

Krantcents April 25, 2013 at 9:38 am

Very true, things like a no spend month, liquid diets or anything extreme works just for the time you are doing it and it is difficult, 0perhaps impossible to maintain. I can enjoy life and still have a reasonable amount of savings too.

Jenny @ Frugal Guru Guide April 25, 2013 at 8:20 am

Percents mean nothing without figures and the cost of living of the area. If you are puling down $1 mil per year and you live on 20% of your gross, you’ll have a really, really nice life. If you’re living on 10% of net, you’ll still have a life in the upper 10%.

As a less extreme example, when we had only one kid, we lived on about $36k a year, and with that, we got a new house, a new car (which was paid off in 6 months), new furniture (because we had none), etc., etc. We saved about $20k per year easily. We also lived in a MUCH lower cost of living area. Where we live now, rent for a decent two-bedroom apartment starts at $1,700, which was more than our previous mortgage, and even food is 150% the cost. Living on $36k (now with 2 going on 3 kids) would mean a MUCH more spartan existence.

Many of the “extreme early retirement” folks are living on less than $15-20k. Even in a cheap location, that wouldn’t cut the mustard for me. Double that with a kid? Yeah, but ONLY IF there’s still healthcare. See, healthcare is the HUGE problem that most of these folks won’t really acknowledge. You can find a place where $150k gets you a pretty nice duplex with 3 bedrooms and 1.5 bath per unit and rent out the other unit to cover the mortgage. You can find a place where most living expenses like food and clothing and the like are about 80% of average in the US. You can drive that beater of a car and spend practically nothing on insurance. But you can’t cover yourself against sickness on just $15,000 per year.

You are far worse off than minimum wage because people on minimum wage are usually just starting out or are supplementing retirement income. In the first case, they are at the healthiest time in their lives. They can often find an employer who will give health benefits, and if they can’t and something bad happens, they have no wealth, so they are quickly eligible for Medicaid. Then they get over their illness and go back to work and eventually get another job making more with better benefits. Or, if they are elderly, they are already on Medicare.

Or extreme retiree must self-insure, and if that insurance proves inadequate, he’ll have to burn through his entire principal before he can qualify for Medicaid. His “safety net” is his wealth that he’s planning on living on forever. Bad things don’t happen all the time, but they happen often enough to make the plan of living on $15,000 a year very, very shortsighted.

Krantcents April 25, 2013 at 9:45 am

Extreme anything is not sustainable! When I started out (40+ years ago), I lived on less and saved, but I never felt deprived. I achieved financial freedom in southern California, despite the high cost of living. I started very early and used opportunities to leverage my money. It helped that I avoided debt, except for mortgages.

Jan April 27, 2013 at 2:10 pm

$36,000 -20,000 = 16,000
16,000 \ 12 = 1300 a month. House…maybe $600. Car- $5000/6= 800 ish. Furniture, insuance, food? Sorry, the story does add.

Janice @ Whiz Silver April 25, 2013 at 8:46 am

I don’t believe in extreme savings too. If everyone starts doing that, our market would be in a bad bad shape. I enjoy spending in some ways because I know that I’m helping to boost the economy in a way by being a consumer. I also enjoy saving because I’m a thrifty person. Well, it’s a dilemma isn’t it? =)

Krantcents April 25, 2013 at 9:48 am

I am a thrifty person too, but I spend where I get the most value. Right now, there is an awful lot of cash on the sidelines out of the stock market. The market is increasing anyway! When the consumer stops buying, our GDP takes a dive.

writing2reality April 25, 2013 at 8:58 am

While I completely agree and understand the broader statement you are making about “extreme” living, I believe that there is in fact a space for those who do save 60-80% of their income. As Jenny mentioned, there is plenty of room for flexibility when you aren’t using actual dollars or adjusting for location.

That being said, I think there is a healthy balance to be had with saving/investing for early retirement, and each person has to find it. Personally, I see no need to elect not to live my life fully, while honoring my desire to save and invest for the future.

Lastly, there is plenty of room on the early retirement bus, and most of us would like a seat, so who cares if it happens at 35/45/55? To each their own.

Krantcents April 25, 2013 at 9:51 am

Extreme anything is not sustainable! I think it is a matter of goals. When I was 31 years old, I started my quest for financial freedom. NO extreme savings, but smart investing in income property. In 7 years, I made it. Along the way, we enjoyed life.

Brian @ Luke1428 April 25, 2013 at 6:41 pm

I love this post! I’ve been wondering the same thing recently and actually wrote today about when to ease up a bit on the monthly budget. I’m all for doing the necessary things to be financially ready for retirement but shouldn’t we be enjoying the journey along the way? I don’t think I could enjoy the journey saving 70%+ of my income. And I know my four kids wouldn’t!

Krantcents April 25, 2013 at 9:20 pm

Itis all about the journey without giving up everything!

Canadian Budget Binder April 25, 2013 at 7:37 pm

I agree with Jenny when she says it depends on your income and cost of living where you live. As long as we balance our budget, spend less than we earn,enjoy life to the fullest as a couple and save to pay cash for what we do want, then that makes us happy. What makes us happy might not make someone else happy and vice versa,. I don’t think I’ll be retiring any time soon though, I love my job so I’m just taking it easy.

Krantcents April 25, 2013 at 9:24 pm

This is where I may disagree! I do not believe in extreme anything because it is unsustainable no matter what your income. Let’s face it high earners are not saving 50=70% of their income. I achieved financial freedom in one of the highest cost of living locations in the country (southern California). I invested in income property and managed to do it without going to extremes.

Kim@Eyesonthedollar April 25, 2013 at 8:11 pm

I think if you were single and had a huge goal like paying off a big debt or saving up for a house, it’s doable, but you’re right, it isn’t sustainable for very long. I have certainly spent way too much over the years, and am in the other camp now, but life is too short to never indulge from time to time. I do admire people with focused goals, but I don’t know how you’d do that with a family. Are you going to tell your kid they can’t play soccer or take dance lessons so you can retire in 10 years? Seems a bit selfish in that case.

Krantcents April 25, 2013 at 9:29 pm

I agree! The goal has to be reasonable without sacrificing everything just to retire early.

Bobby @ Ban Excuses April 26, 2013 at 3:32 am

Not trying to be condescending here, just looking for clarification.

It appears to me that you had to have a pretty high savings rate to retire in 7 years. The money may not have come from your “job,” but you were still saving the money coming from your rental properties instead of spending it lavishly, am I correct or is there something I missed?

Krantcents April 26, 2013 at 6:53 am

You would be wrong. I reinvested the income to grow the properties. My savings rate stayed the same. The difference is income property grows based on income generated from the properties. It acts like a business.

Bill April 26, 2013 at 10:36 am

Totally agree

Krantcents April 26, 2013 at 12:51 pm


Aja April 26, 2013 at 6:35 pm

Thanks so much for this post. I think extreme saving sets you up to feel guilty for every little thing that you spend. Yes it is important to save, but, and I’ve been guilty of this myself, sometimes I’ve felt bad for enjoying the now because I always needed to be focused on the later. If I’m not going to extremes, its possible for me to be able to enjoy the now and plan for later.

Krantcents April 26, 2013 at 7:06 pm

I think there has to be a balance in order to sustain the sacrifice. I have always been a saver/investor, but I never felt deprived and neither did my wife and family.

Tushar @ Everything Finance April 26, 2013 at 8:29 pm

I would love to retire really early, but I don’t want to give up years of my life just to do so. Who doesn’t want to be able to not work for the rest of their lives? But I want to be able to enjoy my non-working years AND my working years, and I dont’ think being too restrictive will help me with that.

Krantcents April 27, 2013 at 8:32 am

There has to be a balance of what you do in life and what you want to achieve.

Kris @ Everyday Tips April 27, 2013 at 12:19 pm

I couldn’t agree more. I know too many people that sacrificed so much each year so they could retire early. Unfortunately, ill health struck and they didn’t get to enjoy all the money they had saved and travel like they planned.

Life is all about balance. As you said, living at any extreme just cannot be maintained long term, except maybe by the rare individual.

Planning is a great thing, but greatly restricting your life in order to meet a hard to attain goal may not be in your best interests!

Krantcents April 27, 2013 at 2:35 pm

Thanks! Although illness and tragedy is the worst case scenario, you want to enjoy your life. Balancing saving with the rest of your life is important.

maria@moneyprinciple April 27, 2013 at 1:11 pm

Krant, I am so glad you wrote this post – it is selfish. I am glad because you saved me writing it myself (though I probably will have a go at some point but much later when I am ready to develop further my stuff about money in the different stages/seasons of life).

I agree with you for four reasons:
1) Life is for living;
2) Money only makes sense to the extent to which it nourishes our lives;
3) Saving agressively when one is young means they are not investing in themselves; were they to do that, it is possible that they will be able to get the kind of jobs that they wouldn’t want to leave (I don’t want to retire) and they may have yearly positive cahs flow by far exceeding what they have saved in five years when young.
4) Why do people want to ‘retire’ young anyway?

Krantcents April 27, 2013 at 2:41 pm

I feel money or wealth provides choices in life. I accumulated wealth somewhat early and it provides choices. The goal should always be to have a career you enjoy and the money will follow. The career can be your own business or CEO of a major public company. When I am really old, I do not want to have any regrets. I can honestly say I have done everything I wanted to do, although there is always mre.

Joe April 27, 2013 at 4:16 pm

The problem is extreme means different things to different people. We saved and invested over 50% of our income for many years and we still lived a very comfortable lifestyle. I’m not working for a corporation anymore and we still maintain the same lifestyle, but are saving a lot less. I don’t feel like we are depriving ourselves by not spending a lot of money.
We are not really that extreme though. Our annual budget is around $40k. That’s way more than 15k/year that I have seen.

Krantcents April 28, 2013 at 7:37 am

The percentage of savings and lifestyle is part of extreme, but not all of it. If you are sacrificing everything to retire early, it is unsustainable! In my next retirement scheme, I expect to live on $5-6K per month without any debt. Maybe it is overkill, but I would rather err on the conservative side. This is without withdrawing any IRA funds.

Julie @ The Family CEO April 28, 2013 at 2:23 pm

I’d rather focus on finding enjoyable ways to create income, than focusing on retirement in the traditional sense of the word.

Krantcents April 28, 2013 at 3:40 pm

Amen! I have savings on automatic, but additional earning requires much more of a proactive process.

Alexis Marlons April 28, 2013 at 6:39 pm

I would love to save extremely for retirement and just enjoy and relax when I retire. But unfortunately, I cannot just give up my needs for the present just to go extremely on saving for my retirement.

Krantcents April 29, 2013 at 6:53 am

There has to be a balance or you will feel deprived and cannot stick with it.

KC @ genxfinance April 29, 2013 at 6:46 am

I believe in saving for retirement. But not to the extent that you are depriving yourself today. You should enjoy every moment because life is too short and you never really know what will happen.

Krantcents April 29, 2013 at 6:58 am

Very true! Everyone should find their balance of what is possible because it is much more sustainable.

Holly@ClubThrifty April 29, 2013 at 8:28 am

I like the idea of early retirement but I’m not willing to make extreme sacrifices to get there. Luckily, I like working to a certain extent so I hope to always be bringing an income in….even when I am “retired.”

Krantcents April 29, 2013 at 9:16 am

I agree, it is called the concept of multiple income streams. Financial freedom is much better than early retirement anyway.

Greg@Thriftgenuity April 29, 2013 at 12:58 pm

Certainly life is about experiences and you can never get back time or health, so I try to keep that in mind with my spending practices. As many have mentioned, I am more interested in multiple money streams than retiring completely.

Krantcents April 29, 2013 at 1:14 pm

I agree! It is one of the reasons I blog. When I retire (again), I will have Social Security, pension and brokerage accounts to just name a few. In addition, I will have income generated from blogging and any of the many off shoots I want to involve myself in.

Darwin's Money April 30, 2013 at 1:40 pm

Oh, this one generated so much anger and disagreement when I posted about how it’s a myth. You seem to have a more level-headed crowd. I stand by the notion that, as it’s defined by any reasonable measure, extreme early retirement is unlikely and untenable for the vast majority of Americans.

Krantcents April 30, 2013 at 1:55 pm

Extreme anything is unsustainable! Whether it is a high savings rate or a diet, you can only do it for a relatively short period of time. Perhaps weeks or months, but not years!

Kris Miller@PREtirement May 3, 2013 at 5:18 pm

Retirement, obviously not an idea in people’s minds, will suddenly set off alarm bells upon the realization that time moves very fast. The answer to the question, when is the right time to start saving for retirement, is as early as right now. Avoid extremes and dire measures. If you have not began saving for retirement, a plan should be formulated right away.

Krantcents May 3, 2013 at 8:38 pm

Time is the most important element of investing! It offsets mistakes, asset allocation and stock market volatility,

Paul @ The Frugal Toad May 5, 2013 at 7:00 pm

Like anything in life moderation is the key. Saving for retirement is important but at what expense? Most of us don’t have the resources to save 60-70% let alone 10% of monthly income. If your income is not enough to do both then you better plan on night-school!

Krantcents May 6, 2013 at 6:52 am

Early and consistent savings is the key to success! Extreme anything is not sustainable.

Pauline May 6, 2013 at 2:03 am

I couldn’t live with multiple roommates in a one bed or eat beans every day, but have managed to afford a semi retirement thanks to what one could call extreme savings. During those years, I still had meat and wine or beer on a regular basis, spent all my holidays abroad, but didn’t buy many clothes, cycled to work and brought my lunch. It was not painful since the important items like travel were not skimped on.

Krantcents May 6, 2013 at 6:55 am

I think it is what is important to the individual that cannot be cut out. You can save without giving up everything!

JayCeezy May 7, 2013 at 8:38 am

Krantcents, I like the way you think. Really enjoyed this post, and the reasoned and thoughtful way you present the premise. In my youth, I found myself meeting women that were constantly sizing me up; they were seeing if I had the ambition to make their dreams come true.:-) I didn’t like it; it didn’t seem worth it to me, to work a job I was ambivalent about, just so they could drive a car they wanted (always wanting a BMW, this was the ’80s!), live in a neighborhood they could brag about, and stay home with the kid(s) they wanted. Meanwhile, I was sizing them up, and determined that they did not want to work a job they were ambivalent about to make their own dreams come true! Forget it. I actually had a plan for Extreme Retirement, living in a cheap place in a cheap domicile, and doing the things I liked to do in my youth. Fortunately, it didn’t work out.:-) But I do see the appeal, especially for those who are at a certain place in their lives. Continued success to you!

Krantcents May 7, 2013 at 9:09 am

Thanks! Sacrificing everything for a (extreme) goal is never worth it and it is impossible to sustain. There has to be some balance and opportunities to remind you why you are doing it. In other words, some rewards for the sacrifice.

Chris @ rplan May 7, 2013 at 10:09 am

Hi K,

Kudos for this post – I couldn’t agree more. I find it annoying how often people forget about keeping the balance between living and saving for the future. We should start healing the saving obsession!

On the other hand, it’s much better when people are obsessive about saving rather than spending…

Great post!

Chris @ rplan May 7, 2013 at 10:11 am

Oh, btw. Maria’s article brought me here:


You were mentioned in her round-up!

Krantcents May 7, 2013 at 10:53 am

Thanks! I hope you find more article that interest you.

Krantcents May 7, 2013 at 10:55 am

I agree if you will be obsessive, better to save than spend. If you start early enough a 10% savings rate works very well. I save 35% and still travel overseas every other year. As I get older, I realize I won’t be traveling very far or much when I am in my late eighties!

Thomas May 16, 2013 at 11:15 pm

Living a simple life after retirement seems practical and the wisest thing to do but not at a cost of sacrificing everything.Retirement should be well planned and well equipped with. That’s what I’m doing right now :)

Krantcents May 17, 2013 at 7:25 am

Good for you!

Cat May 19, 2013 at 5:56 pm

Extreme sounds great for about 5 minutes. When you think about being 35 and free, or 45 and free! No Work! YAY! and then, all the sacrifices don’t seem worth it. I already have a minimal social life because the cost of saving money and having friends don’t mesh- I can’t imagine what would happen if I went “extreme”.

Krantcents May 19, 2013 at 6:01 pm

Surround yourself with friends who have the same goals and you won’t have any problems. :)

thepotatohead May 24, 2013 at 2:37 pm

Oh man, don’t let Mr. Money Mustache read this post lol. I think there needs to be a balance as well, although I really do think it is entirely dependent on your income level. If your upper middle class and your family is pulling in $100k+ a year, 60% savings rate would still leave you with $40k a year to do stuff on. You can do alot with that especially if your house is paid off. Now for the avg income around $50-60k, 60-70% is probably pretty extreme if you have house payments left. Like I said, it really depends on your income.

Krantcents May 24, 2013 at 2:44 pm

Using your example, take away the income (Fed & State) taxes and Social Security taxes from the remaining $40K and you will have in the mid $20s income. If you own a home, there are property taxes, insurance, maintenance, repairs, etc. You are probably depriving yourself of many things. I view it like a starvation diet. I am not saying you cannot do it, but for how long?

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