Category Archives: Lifestyle

The Deception of a Billion Dollar Jackpot

roulette-lottery

I get it.  It sucks you in.  Dreaming of all the ways you would spend a sudden windfall.  The lottery is this amazing chance to live on easy street for the millions that play it every week.  It’s literally a ticket to a better life.  Where else but the Powerball lottery can you invest $2 and turn it into $1.3 billion dollars overnight?

When you come forward, your name is public in most states.  I hope you enjoy being a very popular third cousin once removed to everyone and their brother.  And hey, if you do win, can I borrow some money because I’ve got a really great business idea and I’m willing to let you in as a partner on the ground floor?  I’ll pay you back, I promise.

Let’s visit Jack Whittaker to see how the $315 million he won in 2002 changed his life.  Spoiler alert: it wasn’t for the better.  After winning an absurd amount of money, poor Jack was robbed a dozen times, got divorced, and, at 68, is currently back at work running two businesses that “aren’t doing very good”.  It might be because he spends $600 per week trying to win the lottery again.  Because it worked out so well the first time!

Poor Jack joins hands with his fellow “winners” like these ten people and these nineteen people who won big then lost it all.

Playing the lottery is dangerous, even deadly.  And not just because you’ll get jumped by a gang of ruffians like Poor Jack.  Your odds of dying while driving to the gas station are higher than winning the lottery.

Let me drop some Math on you.  The odds of winning the Powerball jackpot are 1 in 292 million.  Given the national average fatality rate of 1 death per 100 million miles driven, a four mile round trip to the gas station equates to a 1 in 25 million risk of dying in an auto accident.  For a freaking lottery ticket.  The odds are stacked against you.  You are 12 times more likely to die in a car crash while getting the ticket as you are to pick all six Powerball numbers.

Skip the lottery, save $2, save your life.

Even if we get past all the objections to buying a ticket, I ask “what’s different now?”  Is $1.3 billion materially different from $130 million or $13 billion?  Any of those jackpots would put virtually anyone into an entirely different category of wealth compared to where they are today.  Why do we chase a billion so much harder than a measly hundred million?  You would be fabulously filthy rich either way, so why try so hard for the billion?

Maybe it’s because a mere $100 million isn’t such a great jackpot after all, and it takes a billion dollar jackpot to entice us all off our couches and into our (deadly) cars to buy these $2 luck rockets.  I’m talking about the haircut from taking a lump sum and the huge tax bill.

You’ll lose 38% of the pot by taking a lump sum.  Then lose another 40-50% of what’s left when Uncle Sam realizes he, too, has won the lottery.  You’re going straight to the top of the 39.6% federal tax bracket and depending on your state and local taxes, you could face another 10%+ tax burden.  What you are left with is between 31% and 37% of the “jackpot”.  For the current $1.3 billion jackpot, that’s “only” four or five hundred million dollars.  A $100 million jackpot would only leave you with $31 to $37 million.

$31 million is a lot of money, but it’s not going to get you to Filthy Richville.  You couldn’t afford to buy and maintain a private jet with such a small pittance.  You’ll be stuck in first class sipping expensive champagne with all the other decamillionaires.  On a (non-private) public jet.  With Poor Jack Whittaker giving you the stink eye from his middle seat in coach while he contemptuously sips his room temperature can of ginger ale.

Of course, you might not even get $31 million because of the pari-mutuel nature of the lottery.  In pari-mutuel betting, all jackpot winners share the pot.  If anyone else picks “your” lucky numbers, get ready to split the pot with them.  Is $15.1 or $10.3 million still a “jackpot”?  You might be back in coach sharing that flat ginger ale with Poor Jack.

Between taxes, discounting for taking a lump sum, and the nature of the pari-mutuel bet, the $1.3 billion prize won’t be anywhere near $1.3 billion.

Setting aside the financials for a moment, just consider the sinking feeling you get when you realize you’re a loser.  It can’t be healthy to stare at a fist full of wadded up lottery tickets covered in your tears.  That megayacht with a helipad on top isn’t going to happen.  Go ahead and fire the imaginary butlers you’ll never be able to afford.

Let’s face the facts.  You are going to lose the lottery.  You have a 291,999,999 out of 292,000,000 chance that your $2 ticket isn’t going to win you a billion dollars.  Them are long odds.  And even if you win, you will still lose (need I mention the parable of Poor Jack again?).

 

Are there alternatives to losing the lottery?

Fortunately, there are.  One alternative is to light $2 on fire (without burning down your house) and at least enjoy some light and warmth from the fleeting flame.  And for only $2, you can tell your friends how you literally watched money burn instead of wasting it on a lottery ticket.  Instead of growing old and lamenting how you wasted $2 back in 2016 not winning a billion dollars, you can regale the youth with an epic tale of burning $2 just because you could.

But perhaps there’s another way to win the lottery of life.  Like saving the lotto ticket money and investing it responsibly.  Want to win $90,000?  Starting at age 18, forgo the twice weekly $2 tickets all year.  Keep doing that until you’re drawing Social Security at age 68 and all those $2 tickets will grow to $90,000 at a 7% rate of return.  Why play the lottery when you can guarantee a $90,000 jackpot just by buying an index fund and not wasting money on lottery tickets?

 

P.S.: The Powerball folks put out a pretty funny FAQ.  Check it out if you’re bored and/or tempted to waste money on lottery tickets.

 

 

What’s the appropriate amount of money to blow on lottery tickets?  $0, because, well, math.  $2 for entertainment value just to say you played?  $20 so you can boost your odds to 1 in 29.2 million?  If it’s higher than $20 just say $20 so I can feel better, okay?

 

 

September 2015 Financial Update

money-january-2014

September is over and left us a little poorer but in overall great financial shape.  Our net worth dropped by $36,000 in spite of $8,225 in income for the month and a meager $927 in expenses.

The older kids are back in school and we’re settling into the school year routine.  I’m back to my normal weekly early retirement schedule.  We returned home from our 7 week vacation in Mexico two months ago.  Mrs. Root of Good experienced some excitement this month when she submitted her resignation letter to join me in early retirement.  Instead of quitting outright, she’s now working from home four days per week with full time pay.  Pretty sweet deal!

Income

September is dividend season for us since that’s when our mutual funds and ETFs pay out quarterly dividends.   We received $5,038 in dividends in September and around $1,500 so far in October.  A solid bit of investment income, but it’s still a little less than the $7,500 in dividends for the second quarter.

Blog income, shown as “other income” in the chart, is back up to $1,448 after coming in at less than $100 last month.  I started this blog as a hobby without any great expectations to make big money, so it’s pretty amazing watching the blog income cover all of our expenses some months.  Somehow profitable hobbies or side hustles keep finding me in early retirement!

I didn’t make any money from freelance writing during the month (it turns out the check was really in the mail and arrived in October) but I did pick up $55 in consulting fees from my newly launched early retirement lifestyle consulting practice.  I’m not really advertising it or promoting it (other than tossing a page up here on my blog), because I don’t want it to consume all of my time.  So far interest has been strong.  If you’re interested in a one on one consultation to help guide you on your path to early retirement, check it out and give me a shout.

The “deposits” income of $70 comes from cash back from credit card spending plus cash back rebates from the Ebates.com and Mrrebates.com online shopping portals. I’m all about sharing the wealth, so if you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did a while back.  I try to do all of my online shopping through one of these portals and the cash back adds up.  While shopping for cruises at Travelocity, for example, I noticed Ebates pays 7% cash back on cruise purchases whereas Mr. Rebates pays only 4%.  It pays to compare rates between those two online shopping portals because the cash back rates vary.

Rounding out this month’s income is Mrs. Root of Good’s paycheck.  She’s still working but only four days per week from home.  She managed to retain her full time pay, work a little less and skip the 30-45 minute one way commute and the related gas and tolls.

september-2015-income

If you’re interested in tracking your income and expenses like I do, then check out Personal Capital (it’s free!). All of our savings and spending accounts (including checking, money market, and five credit cards) are all linked and updated in real time through Personal Capital. We have accounts all over the place, and Personal Capital makes it really easy to check on everything at one time.

Personal Capital is also a solid tool for investment management. Keeping track of our entire investment portfolio takes two clicks. If you haven’t signed up for the free Personal Capital service, check it out today (review here).

 

Expenses

Now let’s look at September expenses:

september-2015-expenses

We ended the month without breaking the $1,000 spending barrier.  I always feel thrifty whenever we spend less than $1,000 in a month.  $927 is just a third of our targeted budget of $2,700 per month (1/12th of our $32,400 per year early retirement budget).

Just like last month, we spent the most on groceries at $507 for the month.  That’s an expense that’s hard to avoid when you’re feeding five mouths.

The $182 in healthcare expenses includes a doctor’s visit, a prescription medicine, and a tube of prescription toothpaste with really high fluoride content.  Since we have high deductible health insurance through Mrs. RoG’s employer, we pay out of pocket for doctor’s visits other than physicals.  We rarely have more than one or two of these “sick visits” per year so we’re still coming out way ahead versus paying thousands extra for more comprehensive insurance with lower or non-existent deductibles.  And we get to max out our Health Savings Account (which stays fully invested at Fidelity).

Once Mrs. RoG quits working, we’ll be jumping into an exchange health insurance plan and snagging some big Affordable Care Act subsidies.

The prescription toothpaste was recommended by our dentist as a bootleg way of receiving fluoride treatments at a fraction of the cost.  At $1 for a moldable athletic mouthguard and $5 for the 5x strength prescription fluoride toothpaste, it’s a cheap way to prevent tooth decay and rebuild enamel in a problem spot the dentist found at my last routine check up.  Per the dentist, squeeze toothpaste into the mouthguard and wear for at least 30 minutes.  We’ll see how well it works!

The $75 in gifts represents cash we gave to our middle child for her birthday.  We gave her a few small toys too, but the cash is her main source of spending money throughout the year.  Whenever she asks if she can have something, our normal response is to say “sure, if you want to spend your money”.  The kids are getting really good at spending their money wisely and maximizing value.  And we never get nagged to buy them the latest gadget.

Another month of low restaurant spending at $54.  Two thirds of that figure went toward large quantities of pizza (about once per week roughly – thanks crazy good Papa John’s deal!) and one third to Chinese take out from Mrs. RoG’s favorite spot near her work (incredible marinated tofu).  Since she’s telecommuting, she won’t be visiting that restaurant very often since it’s on the other side of town from our house.

Gas and tolls at $45 are much lower than previous months when Mrs. RoG was commuting full time.  Since she’s no longer driving to work, we haven’t needed more than one car at a time during September, so I’m thinking we could drop to one car if we want to.

Rounding out the other expenses are $34 for internet (“cable”), $16 for entertainment (two roller skating trips for two kids to the neighborhood skating rink), and $9 in “other income” (a blog-related expense for web site hosting at Hostgator).

 

Year to date expenses

september-2015-ytd-expenses

At $17,467 year to date spending, we are almost seven thousand dollars under the $24,300 budgeted for the first nine months of 2015.  Considering we spent $5,100 for a seven week trip to Mexico, our 2015 living expenses are ridiculously low for a family of five!

We are on track to significantly under spend our $32,400 annual budget as long as no major unexpected expenses pop up later in the year. With an almost $7,000 budget surplus, we can cover a lot of unexpected mishaps in the last few months of the year and still do okay overall.  We’re starting to get cruise fever again, so that might be a fun way to spend another couple thousand bucks before the year is over.

Monthly spending for 2015 to date:

 

Net Worth: $1,434,000 (-$36,000)

Another month with a big drop in net worth!  After losing $74,000 in August, our net worth dropped another $36,000 in September, bringing our two month total loss to $110,000.

After spending five months of 2015 in the $1.5 Millionaire club, we are sadly no longer qualified to hang out and breath that group’s rarefied air.  Otherwise, the drop in net worth hasn’t change a lot in our daily lives.  We’re still spending (or not spending) the same as we always do.

We have close to a year’s worth of living expenses sitting in cash even after dropping $15,000 into my solo 401k to shield most of my online income from taxation for 2015 (part of our strategy to keep our taxes near zero). Eventually, we’ll use the Roth IRA Conversion Ladder to unwind these tax-deferred contributions and convert them into spendable assets.

Emotionally, it feels good to know we won’t have to sell any investments to fund our living expenses for the next year or so even if:

  1. Mrs. Root of Good quits working for good,
  2. Root of Good blog income and my freelancing/consulting income drops to zero, and
  3. all of our investments stop paying dividends.

Odds are that those sources of income won’t disappear completely in the next year or two (though Mrs. RoG’s income probably will!).  I’m pretty confident we won’t run out of money any time soon.

september-2015-net-worth

The chart tells the whole story – it was a bumpy month of ups and downs (with a little more down than up).  In the middle of the month we were actually in the positive before losing the gains and closing out the month on a down note.  However the first few days of October have erased most of September’s losses.

Our net worth at the end of September is still higher than it was during most of 2014, so in relative terms we’re still feeling pretty wealthy.  We have more than enough to cover our spending needs for the foreseeable future and a steady stream of income from multiple sources.

Life is good.

 

 

How did you do in September?  Another ugly month or a month of opportunities?

 

 

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Going on a Cruise Part 1 – Overview

Pool deck on the cruise

In the past year, the Root of Good family went on two cruises in the Caribbean.  I wrote about the first cruise in my September 2014 financial update, and a few people wanted to learn more about cruises.

I think cruising gets unfairly painted with a broad brush.  My advice is to discard any preconceived notions you have about cruising such as “it’s for old people”, “it’s boring”, “I don’t want to be stuck on a ship with 3,000 other people”, or “no thanks, not interested in plastic wrapped vacations”.

Just think of a cruise as a floating resort hotel with free food and free transportation to a few sunny and sandy destinations.  With free entertainment for kids and adults, 360 degree oceanfront views, and maybe some sea spray if it’s windy.

We probably don’t fit the stereotype of the typical cruise customer.  We’re big on slow travel.  We spent seven and a half weeks bumming around Mexico this past summer and set out on a five week road trip to Canada last year (though we returned home half way through the five weeks).  Travel is so important to us that we devote about a sixth of our overall early retirement budget to it.  Now that I’ve established my independent traveler street credibility, let’s talk cruises.

 

Cruise Basics

Cruises come in many shapes and sizes.  Big boats, small boats.  Except don’t call it a boat, it’s a ship.  The smallest ships carry as few as a couple hundred passengers while the largest ships carry 5,000 or more passengers.  Most of the ships from the big brands like Carnival, Royal Caribbean, and Norwegian Cruise Line carry around 2,000 to 4,000 passengers.  Add that to another 1,000 crew members, and you have a lot of people on a big hunk of floating metal.

How long is a typical cruise?  Seven nights is the standard cruise length (if there is a standard) and what I would recommend for a first time cruiser.  There are plenty of three and four night cruises, and also many cruises of two weeks or longer.  The three or four night cruises are very affordable but won’t permit a lot of time to relax and enjoy the time on board since three nights aboard equates to only two full days aboard.  Cruises of two weeks or more can be nice, but if it’s your first cruise I wouldn’t commit to more than a week in case you really don’t like it.

If you’re in the US, most cruises visit the Caribbean or Mexico and depart from ports on the east coast (mostly in Florida) or from the west coast (Los Angeles).  There are other ports of departure with limited sailing dates up and down the east coast, the gulf coast, and the west coast.  You can also visit Europe, Central America, South America, Asia or really almost anywhere in the world.  Sometimes these more distant destinations are part of a multi-week cruise departing from the US, but just as often you will depart from a port near the continent you will be cruising around.  Cruise ships only cover about 500-600 miles per day so it can take a week or two to cross the Atlantic or Pacific ocean or skirt the shores of a continent.

Are cruises cheap?  They can be very inexpensive.  The cruise we booked last September was $650 per two person cabin including taxes for a seven night cruise.  I can’t find a land based all-inclusive resort for that amount, and certainly not one within driving distance of North Carolina.  A three night cruise from Florida to the Bahamas can be under $300 per cabin.  Cruises can also be expensive.  A 32 night cruise from Florida to Chile (by way of Cape Horn at the tip of South America) can set you back $8,000 per cabin.  Some luxury cruises last a month or two and approach $100,000 for the cheapest cabin (which I bet isn’t too shabby).

The advertised cruise fare can be misleading.  The cruise we booked in September was advertised as $199.  That’s per person and doesn’t include taxes.  A cabin is what you are actually booking, which means two or more people.  On our cruise, taxes of $125 per person increase the advertised price by more than 50%.  That’s usually the case for the least expensive cruises.  The advertised price is often for the cheapest cabin on board, and if you want to upgrade to something luxurious, you’ll pay more.

 

What the cruise fare covers (and doesn’t)

What do you get for the $650 cruise fare (or whatever you pay)?

  • Food.  Five star dining every night.  Or all you can eat buffets, burgers, pizzas and ice cream.  We enjoyed fifteen different restaurants on our last cruise including a fish and chips counter, a fresh burrito joint, and the formal dining room with favorites like lobster, filet mignon, and crab cakes.
  • Some drinks.  Juices, coffee, hot chocolate, tea, and tap water are pretty standard.
  • Entertainment.  Broadway stage shows, dance clubs, live music, DJ’s, comedy clubs, magicians, game shows, and outdoor movies
  • Port visits.  What you do while visiting the port is up to you.  We visited Mexico, Honduras, and Belize on our last cruise.
  • Kids club.  Free childcare for kids.  Our kids love it.  Those still in diapers may not qualify for the kids club, and some cruises charge extra for childcare on port days.
  • Fitness and recreation.  Gym with treadmills, weight sets, and stepping machines are standard.  Table tennis, basketball courts, volleyball courts, mini golf, rock climbing, zip lines, water slides, swimming pools.
Mexican food from our cruise to Mexico. Almost as good as the real deal in Mexico.

Mexican food from our cruise to Mexico. Almost as good as the real deal in Mexico.

What the fare doesn’t cover:

  • Excursions while in port
  • Internet
  • Alcohol and sodas
  • Premium restaurants on board
  • Gratuities

In our experience, cruises are pretty good value propositions.  You pay a lump sum price for the entire vacation and as long as you don’t overindulge on extras, cruises can be a rather inexpensive way to vacation and experience a taste of luxury.

 

Life on board

While you’re on a cruise your day can be jammed packed with activities or laid back and filled with nothing more than seaside lounging with a good book with occasional breaks to dine at the seemingly endless assortment of restaurants and dining spots on board.

Each evening you receive a newsletter outlining the next day’s schedule of activities on board as well as the restaurant schedules and food themes.  Glancing back at the daily newsletter from the first day of our cruise, I see the programmed activities started at 7:00 am with a free morning stretching and fitness class at the spa and the day ended with a midnight comedy show in the cabaret lounge at the rear of the ship.  Throughout the day there are dozens of planned activities like:

  • a cooking demo in the ship’s steakhouse
  • sports trivia, music trivia, and entertainment trivia in the lounges
  • karaoke awesome party (they seriously put “awesome” in the name of the party on the schedule)
  • family friendly comedy shows
  • cornhole competition
  • mini golf tournament (did I mention the ship had a full mini golf course?)
  • two different broadway style musicals in the evening.
  • acoustic guitar performance
  • live jazz music
  • hairy chest contest (can’t say I’m sad I missed this one!)
  • ping pong tournament
cruise-newsletter-schedule

The daily schedule

Those are all covered in your basic cruise fare.  There’s also a huge array of organized activities to essentially separate you from your money like the art auction, designer watch seminar, bingo, slots tournament, Texas Hold Em tournament, “free” diamond gemstone consultation, spa tours, and jewelry by the inch sales.

Between eating and lounging, we usually didn’t make it to more than the main broadway stage show each night and a little ping pong, mini golf, and swimming sprinkled throughout the day.

Early Retirement Interview

Eating, swimming, and lounging all day.

On sea days, you’ll have the chance to get off the boat for most of the day until around 4 or 5 pm and explore the day’s destination.  On our cruise, the ship stopped at Cozumel and Costa Maya in Mexico, Roatan Bay in Honduras and Belize City in Belize.

Sabbatical

Who wants to get off the ship and explore when the view from the deck is this nice?

While on board, dress is pretty casual most of the time, but this varies by cruise line.  The only time there is a dress code is in the formal dining room.  During our cruise, the dressiest night in the dining room required “Cruise Elegant” attire (“shorts, t-shirts, jeans, flip flops, bathing suits, sleeveless shirts for men, sportswear, and baseball hats are not allowed in the dining room”).  I translated that to mean khakis and a polo shirt or button up shirt with no tie should be fine if you don’t mind being surrounded by some folks in tuxes and cocktail dresses.  So far we’ve never been tossed from the dining room for dressing inappropriately.

While on the subject of the dining room, it’s worth mentioning the social opportunities aboard ship.  You can choose to dine with your own family or group at a perfectly sized table, or you can choose to sit at a larger table with random strangers (that soon become friends).  We’ve never opted for the “dining with strangers” program, but for the extroverts it should work well.

With the advent of the internet, you can also meet strangers online (sounds like fun!) before your cruise departure date and then meet up in person once on board the ship.  If you’re interested, check out the “roll call” forums at cruisecritic.com (a great resource in general) or search facebook for the ship name and sail date for the facebook group for your sailing.

For those traveling with kids, you are in luck.  Most cruise lines operate some form of kids club which is basically all day babysitting for ages 2 or 3 up to 17.  These kids clubs are generally free though some cruise lines charge for late night service or on days that you are in port.  Our kids love love love the kids clubs because it’s like summer camp with a bunch of other kids.  The adult staff get paid to entertain kids all day.  What do the kids do?  Arts and crafts, music, video and board games, sports, and sometimes on stage performances in front of the whole ship.  On our Costa cruise a few years ago, the kids club ended each evening with a kids’ disco party in the night club complete with a real DJ, flashing lights, and awkward dancing.

And not only can you ditch your own kids in the kids club, you can also get away from all other kids on board in one of the adults only areas of the ship.  On the Carnival cruise line ships, the adults only area is called “Serenity”.  The adults only swimming pool and hot tubs were serene other than the occasional drunk 22 year old stumbling around.

 

Check out all the posts in the Going on a Cruise series:

Going on a Cruise Part 1: Overview (this post)

Going on a Cruise Part 2: Getting the Best Deal

Going on a Cruise Part 3: Save on Board and on Transportation

Going on a Cruise Part 4: The Food!

 

 

 

Ever been on a cruise?  How did you like it?  If you’ve never been, what kind of preconceptions do you have about cruising?

 

 

Mrs. RoG’s First Attempt at Early Retirement

plate-full-of-sushi-featured

She did it.  She finally did it!  On September 1st Mrs. Root of Good formally resigned from her job.

After composing the resignation email at home the previous weekend, she lingered in anguish at her desk on the morning of September 1st with her mouse hovering over the send button.  She was very nervous when it came time to email the official resignation letter to her bosses.  Was it the right choice?  Was it the right time?  Will she regret the decision later?

SEND.  If not now, when?

It is done.

 

The Resignation Letter

“Hi BossRaleigh and BigBossNYC,

I would like to inform you that I will be retiring effective October 15, 2015.

I have enjoyed working for The Company and especially in our team.  I sincerely appreciate the support the team has provided me during my years as part of the company.  Thank you very much for the flexible work hours, generous time off and allowing me to grow professionally.

Time is very precious and I want to spend more time with my family.

I will be happy to provide whatever assistance I can to ensure a smooth transition.

Thank you again,

Mrs. RoG”

 

The Discussion

Mrs. RoG’s bosses knew she was planning on quitting soon because she told them as much on multiple occasions over the last two years.  Her formal resignation couldn’t have been much of a surprise.

An hour after clicking SEND on the resignation letter, Mrs. RoG’s manager asked her to join him in the conference room to discuss her resignation.

During the meeting, Mrs. RoG said “working five days per week just doesn’t work for me.  Saturday is laundry day, and it’s depressing to have just one day off before going back to work on Monday IF you have all day Sunday free.”

The manager asked if there was anything the company could do to get her to stay.  They discussed working from home as an option.  Her manager suggested working three days from home and two days in the office.  That still wouldn’t work.

Next up was a discussion of a part time work from home arrangement.  The downside to this would be a reduction in salary and a loss of some benefits like the generous 401k match, nearly free family health insurance (though we can get it nearly free on our own), and a full allotment of 20 days of vacation on January 1 each year.

 

The Compromise

In the end, they reached a pretty sweet compromise.  Mrs. RoG will work four “ten hour” days and have every Friday off.  “Just work whatever it takes to get the work done”, wink wink, nod nod says the manager (with accompanying waving of arms around the “ten hours per day” part of the discussion).  Mrs. RoG is the one in charge of doling out work to her team of nine, so those ten hour days might be shorter than you would think.

Mrs. RoG enjoying her first day off.

Mrs. RoG enjoying her first Friday off of work.

She’ll still be a full time employee with her full salary.  She will keep her fat 401k match, nearly free health insurance, heavily subsidized dental, incredible HSA at Fidelity, and a full 20 days per year of vacation time.  Other than possibly a few days per month, she’ll be ditching the hour or two round trip commute that costs over $10 in gas and tolls each day.  Her new commute is 21 steps from bedroom to office.  Her new schedule includes a three day weekend every week while still getting paid full time.

The benefits of staying on full time don’t stop there.  By continuing to work, Mrs. RoG has a chance to get laid off and receive around 9 months of severance pay plus another $7,000 in state unemployment (if she decides to pursue new employment after a lay off).  If, in some unimaginably bad stroke of investing luck we see a huge 50%+ prolonged downturn in our investment portfolio, the job serves as an instant back up plan to provide income during difficult times (not that I think we’ll need it).

father-and-son

Adventure time on a weekday?!!?

In any big move it’s great to hold on to as much flexibility as possible.  Mrs. RoG retains the possibility of going part time at a later date or quitting altogether whenever she wants to.  This will happen some day, but probably not as soon as October 15!

Can you tell she's happy?

Can you tell she’s happy?

 

Tilting the Scales

Overall, this is a really good compromise that tilts the work/life balance very far toward “life”.  It’s not quite early retirement but it’s also not quite full time work.  We could fancy it up and call it “semi-retirement” or something like that if we really had to find a label.

Here’s a snapshot of the first day of the new working from home schedule:

  • Show up to work at 7:00 am
  • Walk to school to drop the kids off 7:45-8:15 am
  • A few minutes off around 11:00 am to make a salad and eat lunch with me while continuing to work and chat
  • Break for (home) gym time at 12:00 to 1:30 pm.
  • Return to work at 1:30 pm
  • Walk to school to pick up the kids 2:45-3:15
  • Work till 4:30-ish

That’s pretty close to ten hours if you round up.  Her daily schedule will undoubtedly vary as the workload ebbs and flows throughout the month.  The rest of her first week working from home followed a very similar schedule.  So far it’s working very well.

big-rocks-kid

The best part of the new schedule is that by Tuesday afternoon, Mrs. RoG is halfway through the work week.

Her schedule is getting closer to my weekly early retirement schedule since she joins me on the morning and afternoon walks and takes a long mid-day break.  And since she is working from home most of the time, we are one step closer to being able to drop from two cars to one.

Having Friday off means more time for fun and adventure during the weekdays.  On her first Friday off we spent the morning picnicking and hiking through a new (to us) urban park where we spotted fish, frogs, and a snake(!).  Our three year old loved jumping from rock to rock in the creek bed.  After picking up the older kids from school we spent the afternoon at the city’s indoor water park and swimming pool (it’s deserted during the weekdays because everyone is at work).

tree-roots-or-rocks

We found this confusing bit of nature while out exploring.  Tree roots or rocks?

Mrs. RoG’s bold move to working from home status motivated another coworker to grab some work-life flexibility by getting a partial work from home schedule that lets her leave the office by 3 pm and finish the day at home.  Mrs. RoG is now a work/life balance trendsetter!

It’s worth mentioning that you gain a lot of negotiating power to name your terms once you reach financial independence.  If Mrs. RoG really needed the job for subsistence and survival (like the paycheck to paycheck big spenders), there’s no way she would have asked for a three month paid sabbatical and another extra five weeks of paid time off.  And she wouldn’t have actually resigned and received the current work from home flexible schedule.

I wanted to give a shout out to the Mad Fientist who also managed to wrangle a pretty sweet deal out of his employer when he decided to quit and retire early.  He’s still working but had no problem taking a few months off to travel the globe a bit and negotiated a permanent work-from-anywhere-in-the-world arrangement.

Grocery shopping at noon on Friday

Grocery shopping at noon on Friday

 

The Future

Last month as I celebrated my two year anniversary in early retirement, I mentioned Mrs. RoG would be joining me in early retirement in “a few more months”.  Her plan to resign was foiled by an unbeatable counteroffer persuasive enough to keep her at it for “a few more months” and possibly longer.

Her employer bent over backwards and touched their toes with their flexibility and willingness to keep her on board.  Eventually she’ll want to leave and enter the next phase of her life, but the timing is really uncertain at this point.  The next few weeks will be an adjustment period to the new schedule and flexibility, but everyone is settling into the new normal very well so far!

Celebratory homemade sushi for lunch

Celebratory homemade sushi for lunch

Financially we are doing just fine.  My blog income varies wildly month to month but so far this year it has more than covered our living expenses (including the seven week vacation in Mexico).  Our dividend income also roughly covers our $32,400 per year retirement budget.  Mrs. RoG’s net annual income covers our annual expenses two times over again.  We’re in a weird predicament of being financially independent with enough income to cover our expenses four times over.  We’re either making too much or not spending enough, and we’ll have to address one of those “problems” eventually.

The extra money we’re pulling in will go toward a few items:

  1. Additional margin of safety – more money in the portfolio means we have a much greater chance of successfully living off our portfolio for 5-6 decades
  2. Potential for significant future spending increases – we don’t currently have plans to ramp up spending but that’s always an option if our wants or needs change
  3. More to pass on to our kids sooner and later – we always planned on helping with college, and with more money comes more ability to help
  4. Charity – we don’t really give much away right now, but this could change in the future if we have way more than “enough”

It’s a great position to be in both in terms of finances and lifestyle, and we’re both peepee our pants giddy with excitement over what the future holds.

This summarizes how happy we are :)

This is how happy we are 🙂

 

 

What would you do in Mrs. RoG’s shoes?  Quit completely?  Stick around a while longer?

 

 

Celebrating Two Years of Early Retirement

two-years-early-retirement-mexico

Wow, two years into early retirement.  What have I accomplished?  Everything and nothing.

When I entered early retirement by ditching the working world, I was still focused on keeping busy.  Productivity, accountability, setting goals.  All stuff you have to do when you’re on an annual performance review cycle.  I shared my early retirement to do list in my “First Month of Early Retirement” post almost two years ago:

  1. Ebay a bunch of stuff
  2. Learn a foreign language or 3
  3. Investigate starting a blog and/or a Youtube channel
  4. Get more exercise
  5. Cook even more than I already have been, and perfect some new dishes
  6. Hang out with more people more often
  7. Play more video games
  8. Read more books

I’ve completed all of these action items (except that Youtube channel!), so I get a gold star for entering early retirement correctly, right?

That list is a pretty good summary of typical things I’ve done these last two years.  I pulled together a weekly schedule that shows how I routinely spend my time, although I don’t strictly follow any schedule day to day.  That weekly schedule includes blogging, reading, playing video games, socializing, and spending time with the kids plus a little housework that has to get done.

early-retirement-daily-schedule

It took about six months before I really got into the early retirement groove and started relaxing.  I ditched any notion of having to accomplish something concrete in early retirement.  So far, I’m doing a great job of “doing nothing”.

 

Retiring early to travel the world

On top of all these routine pastimes that keep me busy and entertained on a daily basis, I’ve also fulfilled another early retirement goal by taking a few major trips abroad.  Last year we set out on a five week road trip from North Carolina to Canada.  It turns out that traveling with a two year old can be exhausting, so we returned home about half way through the trip.

Here’s a summary of the blog posts from the Canada trip:

A year later, a year wiser, and with a toddler a year older, we set out on another grand adventure.  This year we spent seven weeks in Mexico.  Join us on the journey:

 

Just a bug or The Most Interesting Thing In The World to a little kid?

Now that we’re official battle-hardened family travel veterans, we can share a few things we learned about traveling with young children:

  • Slow travel is the name of the game.  Take it slow and easy.
  • Plan plenty of “do nothing” days in between the more hectic days of touring, sightseeing, and traveling between cities.
  • If the kids want to take a detour, go for it.
  • Take breaks for water and snacks frequently.
  • Remember the reason you took the trip – relaxation and fun for the whole family

 

 

Keeping finances on track

After two years, we are $235,000 wealthier than when I left my job.  Around $120,000 of that net worth boost came from Mrs. Root of Good’s salary since she continued working even after we reached financial independence (more on that decision below).

The other $100,000+ of net worth growth came from investment gains in excess of our annual spending.  In other words, even if Mrs. RoG didn’t work at all these past two years, we would still be $100,000 richer today than when I quit working.  That’s the true test of how well our early retirement financial plan worked these past two years.

As I write this, we just suffered through one of the worst weeks in recent stock market history.  Our net worth dropped almost $100,000 over the past two weeks.  Are we worried?  Not yet.  I don’t think we will run out of money in early retirement, so these fluctuations, while volatile, aren’t that scary.

net-worth-two-years

In 2 years: Net worth +$235,000 to $1,462,000.

We’ve managed our expenses incredibly well.  Better than I ever expected.  For the first seven months of 2015, for example, we only spent $14,883 which is $4,000 under budget compared to where we should be based on our $32,400 early retirement annual budget.  And that’s after spending almost $4,500 on a seven week vacation in Mexico!

july-2015-ytd-expenses

In 2014, we came in just $2,400 over budget in spite of spending $8,700 on major renovations to our house including new siding, new windows, and a major roof repair.  We’ll undoubtedly have repairs to our home and auto over the next several decades of early retirement, but those repairs won’t typically be as expensive as the 2014 repair bill.

cat-food

No need to raid our cat’s pantry just yet.

Something surprising happened after I retired.  I used to check our finances and investments almost daily.  Knowing how we were doing kept me motivated toward our early retirement goal.  Every $10,000 or $100,000 of growth meant we were getting closer to the goal.

Now that I’m retired and the victory flag is firmly planted, I let the investments do their job of growing long term and don’t routinely check the account balances.  Curiosity still gets the better of me occasionally and I’ll log in to Personal Capital to see where the totals are.  But I rarely make any changes to our portfolio.

In almost eight months of 2015, for example, I sold one investment to fund our mortgage pay off and I rebalanced the portfolio once near the beginning of the year to get us back to our asset allocation.

I figured I would worry about finances more in early retirement, when the opposite actually happened.  Maybe it’s because the net worth keeps growing?  I might feel different if we were sitting on a few hundred thousand dollars less than what I started with two years ago.

What’s next?

One thing is certain – I don’t miss work.  From September through May, I still have to wake up with an alarm clock so I can walk the kids to school, but I don’t mind that at all.  I’m working for me and my family and not for The Man.

But if I ever do get bored, I can always polish the resume and dust off my interviewing attire.  Boredom = unlikely.

Mrs. RoG still works full time right now.  The plan was for her to work “a few more months” after I quit working.  Then she received another month block of vacation time.  Then it was bonus season.  And she got a raise.  Then she negotiated an additional five weeks paid time off on top of her regular vacation time and holidays.  After working four day weeks and burning up most of her vacation days last fall, her tentative plans to walk away from work fell through again.

Eventually it was the start of a new year and with that another month allotment of vacation time.  Then bonus and raise time again.  As if her employer wasn’t generous enough, she requested and received a paid three month sabbatical for May-August of this year.  We traveled the world and Mrs. RoG learned to swim.  Very successful sabbatical if you ask me!

Today we arrive back at the crossroad where “quitting work” intersects “easy money and lots of time off”.  It’s not an easy choice to walk away from great benefits and pay at a job that has flexible hours, allows telecommuting, and comes with mostly reasonable coworkers and managers and a 40 hour work week.

When is Mrs. RoG going to quit for real?  In “a few more months”.

In the meantime, I’m holding down the fort at home until she hangs it up for good.  A combination of stay at home dad, travel agent, chef, handyman, and chauffeur.  Which is probably how I’ll spend the next decade even if Mrs. RoG quits tomorrow.

I wish I could tell you what I’ll be up to in five or ten years, but I can’t realistically forecast that beyond a year or two out.  In two years, our youngest child will be in kindergarten, our oldest two kids will be in middle school.  Mrs. RoG will almost definitely be done working.  We’ll probably go on at least one extended international trip in the next two years (Germany? Spain? Argentina?) and a few smaller vacations.  If I had to guess, we’ll still be living in our same house in Raleigh.

 

 

What do you envision for your first two years of early retirement or regular retirement?  

 

 

Should Our Family Drop From Two Cars To One?

This is the Montevideo version of an environmentally friendly recycling program.  These guys go around in their horse drawn cart and pick recyclables out of the garbage.

As Mrs. Root of Good’s retirement date comes closer, we have to revisit the question of whether we should get rid of one of our cars and become a single vehicle family.

First, let’s ponder the significance of the auto.  Cars are an oxymoron.  They are an incredibly convenient way to travel from point A to point B very quickly.  However, owning and maintaining a car isn’t convenient at all.  I’m approaching the question of whether we should drop to one car from this vantage point: convenience versus inconvenience and cost.

 

The Ultimate in Convenience…

This is America.  Cars are cheap, gas is cheap, the open road beckons.  Land use planning leaves much of America spread out and poorly accessible by foot or by bike, at least where I choose to live a few miles from downtown Raleigh.  The car is the default choice of transportation for anyone who can afford one, and many who can’t.

In five to ten minutes I can traverse most of the city, reaching major shopping centers, parks, libraries, hospitals, and downtown cultural attractions.  Parking is almost universally free and plentiful.  Twenty two hours per day the traffic is bearable.  The car is a wonderful modern tool, truly a luxurious way to get around town.

For us, having a second car means Mrs. Root of Good and I can independently go anywhere we want regardless of what the other person is up to.  I might have a volunteering obligation on the other side of town while Mrs. RoG wants to run errands, visit family, or pick the kids up from school.

 

…Comes with Inconvenience…

Cars are stuff.  And stuff always makes demands on your time.  Throughout the year I spend a good bit of time maintaining my car.  I complete most of the routine maintenance and repairs myself or with the help of a shade tree mechanic friend.  It takes time to figure out a repair procedure, procure the right parts and equipment, and complete the actual repair and follow up testing.  Even if I outsource one hundred percent of car maintenance, I’m still on the hook for many hours each year of dropping the car off, waiting at the auto shop, and then driving back home.

 

…And Expenses

Cars cost money.  With two cars, we split our annual mileage across two vehicles.  If we drop to one car, all of our driving will be concentrated on one vehicle.  This means we’ll have to do slightly more maintenance on our only car but won’t have to maintain a second car at all.  As a result, annual maintenance costs will drop.

 

jan-aug-2015-auto-expenses

2015 auto expenses through August. $534 for insurance, $60 for inspections, and $464 for repairs and maintenance.  Incredibly simple way to track auto expenses and all other household expenses: Personal Capital (it’s free!).

 

The annual fixed costs of car ownership should drop roughly in half if we drop to one car.  We would only owe property taxes, registration, and inspection fees for one vehicle.  We currently spend around $1,000 per year on maintenance, taxes, registration, and inspections, or around $500 per vehicle.  Dropping to one vehicle means saving $500 per year on those annual maintenance and operation costs.

Insurance costs might drop, though perhaps not that much since we would still have two licensed drivers on the policy.  I’ll assume insurance will stay the same at around $500 per year.

Depreciation is the biggest car ownership expense for us.  The Honda Civic and Accord we bought fifteen years ago depreciated by $800 to $1,000 per year.  Owning only one car would save us around $1,000 per year in depreciation costs.

Adding the maintenance and depreciation costs together, I find that dropping to one car would save us $1,500 per year.  That’s a pretty steep cost to pay for the added convenience of a second car.

 

Do We NEED a Second Car?  Or WANT one?

We have to face the facts.  We are homebodies by nature.  We really enjoy staying at home and doing fun stuff around the house.  Sometimes we don’t leave the house for multiple days in a row.  When we do, it’s often to destinations not far from home and we walk to get there.

We don’t eat out in restaurants very often.  At night you’ll find us enjoying dinner and a drink at home, sometimes by the lake on our back patio or sometimes in front of the TV engrossed in a thriller on Netflix.  We rarely go to bars or concerts.

Most driving trips are either grocery shopping or seeking fun at local parks, swimming pools, museums, or visiting family and friends.  We are homebodies.

And much of our shopping and recreating doesn’t involve driving at all.  Within a mile of our house we can walk to:

  • parks
  • library
  • community center
  • elementary school
  • major grocery store
  • Asian and Hispanic grocery stores
  • dozens of restaurants (chains and local eateries)
  • dollar store
  • big box discount store

In other words, we can walk to almost everything we need on a routine basis, and sometimes walk for miles just for fun.

I checked out our Walk Score from walkscore.com and our house received a 37 out of 100 which translates to a “car-dependent neighborhood”.  They offer a breakout for different categories of nearby destinations and we actually scored around a 50 (“somewhat walkable”) for groceries, general shopping, dining, drinking, and schools, a 75 for parks “very walkable”), and much lower for errands, culture, and entertainment.  That seems about right.  We lack culture but almost everything else is somewhat walkable.

We also live within easy walking distance of three transit routes (one of which we caught for the five minute ride to the Greyhound bus station to start our seven week vacation in Mexico).  Easy access to transit means we can get to tons of other destinations without a car for about a buck each way.  Walkscore.com gave us a Transit Score of 32 (“some transit”).

Currently neither one of us adults owns a bicycle, but that’s another easy solution to get us past the current mile or two walking radius.  A traditional bike in the $150-300 price range or an electric bike in the $600-1,000 price range would extend our car-less theater of operations to three to ten miles (if we dare brave the busy city streets!).  A pair of e-bikes would set us back about the same $1,500 we spend on car maintenance and depreciation in one year.

Looking at all the angles, we probably don’t need a second car.  Right now, the main reason we want one is because that’s the status quo.  We currently own two cars and it’s easy to keep doing what you’ve been doing for the last 15 years without introducing change.

 

Can We Do It?

With change comes fear of the unknown.  What if one of us is stuck at home when we want to go somewhere?  What if I’m out having fun with our only car while Mrs. RoG unexpectedly needs to pick a kid up from school?  What if our only car breaks down?

Between walking, biking, transit, and the very infrequent Uber ride or rental car, we could probably make do with only one car and save close to $1,500 per year.  It might not always be the most convenient set up.  However, maintaining only one car eliminates some of the auto maintenance tasks (which is convenient).

In general, retiring early gives us a great deal of flexibility in our schedule so that with a little planning we can make sure the car is generally available to whoever needs it for kid-hauling duties, shopping, or recreating around town.

We just enjoyed a thirteen week test run of both of us not working when Mrs. RoG took her sabbatical.  We were on vacation for seven weeks of her sabbatical and didn’t need any cars.  The other six weeks we spent at home and never needed a second car the entire time.  In my routine early retired life, I don’t drive very often, so I feel like the need for a second car is very low.

One way to approach the dilemma of ditching the second car is to simply do it and then evaluate for three to six months to see if we really miss it.

 

Looking Into the Future

Although cars are easy to buy and sell without ridiculous transaction costs, I like to look ahead into the future to forecast our needs.

Our oldest child is going to middle school in one year.  It won’t be walkable and we don’t know for sure whether the school bus will come to our street or whether we will drive our kid to school.  Our transportation needs might be different at that point.  Transit routes take us within a half mile or mile of likely middle schools, so that’s a decent plan B for the occasional ride to school.

Long term I would like to upgrade to a minivan or SUV that holds around seven people for family road trips and for carrying our family of five plus a couple other family or friends.

Five and a half years from now, our oldest child will be able to drive on her own.  We still don’t know what we’ll do about providing a car (hand me down? buy one for her? split the cost?) and auto insurance.  Part of me says keep one of our well-maintained fifteen year old Hondas.  The Civic only has 98,000 miles on it after all!

Even the Governor pimps it in an affordable car

My beautiful green 2000 Honda Civic when it was still nearly new and I still had hair.  I parked in the Governor’s spot just because I could back before he was indicted.

 

Then I realize in five and a half more years it will be a 21 year old Honda Civic that lacks modern safety features and the reliability of a newer car when our oldest would start driving it.

 

The Bigger Picture – Owning and Consuming What’s Optimal

I like to think and analyze what we own and whether it’s the best use of our financial resources.  We can “afford” a second car, but is it the best use of $1,500 per year?  Do we get $1,500 worth of convenience out of a second car?  Could we spend those funds on something more awesome?

I think all of us should view our large expense categories with the same critical eye.

Are we using all of the house we currently own?  Do we need all this space?  How are we using it?  Could we downsize?

Do we get the most value out of our restaurant and grocery purchases?  Can we make small incremental changes to get even better value out of food expenditures without sacrificing nutrition and taste?

Are we getting bang for our buck on vacations?  Should we focus on slow travel more?  Can I stretch my travel dollar by getting free travel from credit card hacking?

For us, housing, transportation, food, and vacations are two thirds of our entire $32,400 per year retirement budget, which is why I emphasize the importance of critically examining those expenses.

 

 

If you didn’t have to work, could you go to a one car family?  Completely car-less? 

 

 

Why Dropping Out Of School Was A Great Choice For Me

House repair billion

Hey look, I tried.  I earned A’s.  I showed up for class.  But it just didn’t work out for me.  It was too much work and not enough reward.

No, I didn’t drop out of high school or abandon my undergraduate studies.  I didn’t even drop out of law school after discovering I didn’t want to practice law.

But I did drop out of the Master’s program in Civil Engineering after finishing half of the coursework.  Only five more classes and I would have earned the Masters degree.  But I quit.

I quit, even though my employer was paying for all of my tuition, fees, and books.  I quit, even though I was able to instantly complete 30% of my master’s program by transferring in three classes from my juris doctor degree.

I was only taking one class per semester in the evening after work.  During the first semester of the master’s program, school kept me busy.  Very busy.  Between class two or three times per week, a heavy dose of homework, and a few major projects, and a full time job, I was slammed.  Add in the birth of our first kid at the very end of the first semester and I didn’t do much other than work, study, and change diapers.

I signed up for course number two in the fall of 2005.  It was an online course, but required just as much time and effort as attending in person.  It was sometime during that second semester that I decided I didn’t value the master’s degree enough to continue.  So I quit.

 

The purpose of education

Why do we value education?

It’s intrinsically valuable.  Smarter people make a better society.  Education enriches lives.  Students of history are less likely to repeat mistakes of the past.  Understanding how our world works makes life less confusing and more satisfying.  All are great reasons to get educated for the sake of knowledge itself.

It’s instrumentally valuable.  More education tends to lead to higher earnings and more advancement in one’s career.  That translates to more money.  More money means more options, more freedom, and more autonomy in your own life.  Or as I’m fond of saying: Money is the Root of Good.

 

Is a master’s degree a worthy pursuit?

It depends.  In some fields, a master’s degree can greatly expand your career options and turbocharge your earnings over the course of a decades-long career.  In other fields, a master’s degree might be required for entry level work.

In my (former) field of Civil Engineering, a masters degree isn’t worth that much.  Most employers don’t require a master’s degree and most don’t offer significantly higher salaries to those with extra education beyond a bachelor’s degree.

I took a peek at Payscale.com for civil engineers with 0-9 years of experience.  Having a master’s degree adds about $4,000 per year to the median salary.  Consider that half or more of those extra earnings are due to people who get master’s degrees being more motivated and higher achievers in general (lazy people don’t tend to further their education as much as highly motivated people).  Let’s say the net impact of a master’s degree after discounting for variable motivation levels is about $2,000 per year.

$2,000 per year isn’t a lot after taxes.  In my case, state and federal taxes took a combined 22% of every extra dollar I earned (even though we paid nearly zero taxes on a $150,000 income) while payroll taxes took another 7.65% bringing my marginal tax rate to roughly 30%.  After taxes, a master’s degree could have earned me another $1,400 per year.

Other benefits to a master’s degree:

  • One extra year of experience toward the four years required to obtain the Professional Engineer (PE) license (though I earned my PE at the same time as I would have graduated with the master’s)
  • Possibility for advancement (however an MBA would help much more)
  • Learn new skills – broaden and deepen knowledge of practice

From my observations, people skills and willingness to enter management had a much more direct bearing on salary and advancement than holding an advanced degree.  A genius at leadership, marketing, networking, or rainmaking is worth a lot more than someone who is technically very proficient (at least in the world of consulting engineering).  A few years in government employment reinforced the notion that those who rise to the top aren’t necessarily the most highly educated or most technically competent (because, wow, there were some real duds at the top).

 

Is it okay to give up?

I think so.  Phrased differently, giving up is simply moving in a different direction and pursuing other interests.

Instead of spending 400+ hours per year for another 2.5 years earning a master’s degree, I was able to work the occasional bit of overtime at work and get the occasional bonus.  But in general, after clocking in my normal 40.0 hours per week, I had plenty of free time to spend with my family and to pursue other fun pastimes such as reading, relaxing, and enjoying the outdoors (like I do now in early retirement).

What can I say?  I prioritized extra free time over more money at a very early point in my career.  

Instead of focusing my efforts on obtaining another degree that would lead to roughly $1,400 per year in additional after tax income, I chose to streamline my finances.  I skipped the money manager and learned how to invest on my own by sticking to my asset allocation.

I started tracking our spending more closely.  Cutting $1,400 of wasteful spending per year was way easier than getting a master’s degree.  Learning to DIY can easily save that much every year.

 

Advice for those NOT aiming for early retirement

For those seeking a very early retirement, small increases in earning potential won’t help very much.  But for those planning to work for a few decades, even a few thousand after-tax dollars per year can add up to a large figure upon reaching a normal retirement age of 60 or 65.

Going back to the salaries from payscale.com, I noticed the master’s degree led to significantly more earnings for engineers with a decade or two of experience. Like $10,000 to $15,000 per year more money.

I knew early on that I wouldn’t have to work more than a decade or two, so I discounted the value of the master’s degree accordingly.  By the time I started seeing the big pay differential for the master’s degree, I’d be nearing early retirement.  In hindsight, I worked just under ten years in engineering, so dropping out didn’t cost me very much in foregone earnings potential.

 

Making the right choice

I’m a big believer in continuing education to keep skills from growing stale.  But it doesn’t always pay off.  The main reason I started the master’s program was because “everyone else was doing it” and my employer offered to pay for all of it.  They also wanted me to take a specific course to lead our firm into a new practice area, but that didn’t pan out (for me or them).

At the end of the day, we should all analyze big life choices like pursuing a master’s degree in the context of what we want out of life and how to get there the best way possible.  In my case, I realized after a year that I learned what I needed to learn and that another 2.5 years of further education wouldn’t benefit me very much.

I dodged the sunk cost fallacy of thinking “Well, I’ve already spent a year working on the master’s degree.  No reason to let that go to waste” and quit when it made sense.  I have absolutely zero regrets about dropping out and don’t miss that fourth diploma not collecting dust next to my other three degrees (wherever they are these days).

Much like my choice to leave the world of full time work at age 33, I got out of the master’s program when it made sense.  Sometimes being a dropout is a good thing.

 

 

Have you ever walked halfway down a path in life and then realized you should go in a different direction?

 

 

My Semi-Retired Summer

kids-by-lake

I’m busy having fun with the family on our seven week vacation in Mexico.  This week we have a guest post from John C who blogs at Action Economics. John was kind enough to share his awesome summer of semi-retired fun.  

 

One of the major advantages to my line of work is that I tend to have the entire summer off. I work as a contractor at nuclear power plants during refueling outages, which normally take place during the spring and fall months, since the plants want to be producing power during the peak usage summer and winter months. Having summers off helps our family save a decent amount of money and headache by reducing our childcare expenses, but it also gives me a sneak peak of what early retirement may be like. Currently I am planning to hit Financial Independence by age 45, which is “only” 16 short years away. Having the summers off has shown me that regardless of whether I have to go back to work in September, I certainly won’t be bored with a surplus of free time.

 

Summer Fun:

We have 4 boys ages 12, 6, 3, and 2 so our summers are filled with a ton of rambunctious energy.  Most of the activities we do in the summer are absolutely free and are much more enjoyable since I don’t have to worry about waiting for the weekend. My wife, Mrs. C., only works a couple days a week during the summer as well so she doesn’t miss out on too much of the fun either. Over the years I have acquired a massive arsenal of original Super Soaker water guns and several times during the summer we have water wars that last for most of the day. I fill up all the guns before we get started and the kids have a blast.  We have 4 different hose spigots across the yard so it is easy for the kids to refill once they run out.  We also go on a lot of nature walks to wear the the kids out.

water-gun-fight

We live about 3 miles from Lake Michigan and go to the beach regularly.  One of the parks around us by the beach has a large fountain for kids to play in and has a nice playground.  There are a few other beaches along the shore that we go to as well and these beaches tend to have a lot fewer people at them than the large beach with the park.

We have several memberships to local organizations that help keep the kids busy as well. Instead of asking for presents for the kids for their birthdays we often ask for memberships for activities instead. We have memberships to our local kids museum, nature center, and zoo. For a family of six these memberships typically pay for themselves if we go twice during a year. One of the nice things about these memberships is that they are reciprocal with many other zoos and museums across the country. When taking a trip we can often stop at a zoo or museum at half the cost of normal admission.

 

Education:

All kids (and adults) need a bit of extra education. I remember during my summer vacations as a kid feeling like my brain was atrophying. I kicked off my summer break with studying for and taking the Certified Associate in Project Management (CAPM) exam in order to help me move up with my employer.  In addition to teaching the kids the basics to prepare them for the next school year I am also taking some extra time to teach them life skills.

Kid 1: Kid 1 who is 12 struggles in school a lot. My parents are kindly paying for some extra math tutoring for him. I will be working with him every day on reading and comprehension as well. Kid 1 is my lazy kid so I am trying to instill a better work ethic in him and will also be teaching him the basics of how to use hand tools, a drill, and some electrical and plumbing repair.

picking-the-right-tool

Kid 2: Kid 2 does a lot better in school, but I still will be challenging him to read more difficult books and to get even better in math.  In addition to having him work with Kid 1 and myself with hand tools, I will also start teaching him some simple meals to prepare. Both kid 1 and kid 2 love the “Survivorman” type shows, so we will do a little bit of wilderness survival in the woods in our backyard this summer.

Kid 3: Kid 3 will turn 4 this summer. He is really smart, but gets emotional very easily and will shut down if he gets upset. We will be working on kindergarten prep over the summer even though it will be another year before he goes to school.  Mostly the basics of ABCs, 123s, being able to write his name and recognize shapes.  Improving his communication when he gets upset will be a major challenge that we need to work on.

Kid 4: Kid 4 just turned 2. He loves to talk and talk and talk.  Teaching him as many new words as possible is the best course of action for him.  Once he gets a little bit better with communication we will embark on potty training.

All 4: All 4 kids are on commission and can earn money based on the work they do. Obviously the older kids are capable of doing more work and thus earning more money.  We generally let the kids decide how much of their money to save and how much to spend.  Our kids are very good at saving money and even the 2 year old will do some very small chores to add to his piggy bank.

 

Home Improvements:

Home improvements are certainly a big part of our summer.  Mrs. C. just acquired several giant boxes approximately 12′ long by 1′ wide by 2′ deep for planters for practically nothing.  Getting these in the right spots, painted, and filled will be very labor intensive and will make our yard look a lot nicer.

In January we acquired 4.5 acres of adjacent land to our home by purchasing the old railroad bed that runs behind our neighborhood.  The land is 60′ wide by approx. a half mile.  There are several trees that are down across the path that I need to clean up and get out of the way. There is also a train bridge going over a creek on this land. My goal is to build a safe foot bridge and clear out a nice fishing spot on the creek.  The old bridge is rotting away and isn’t safe for the little kids to go across on.

home-improvement

A major improvement we are looking at is paving the end of our driveway and putting in a basketball hoop. This one will be a bit costly, but it’s been on our radar for several years. In addition to providing us with another fun activity it will also help with the drainage of our driveway during heavy rainfalls.

 

Going Forward:

I am certainly thankful that the job I have allows me to be able to spend more time with my kids in the summer when they are out of school. I miss a lot when I am travelling, but having these three months off certainly balances that out.  Now that we have the two little kids having the summers off saves us a lot of money on child care and allows Mrs. C. to maintain her job.

At age 45 all of our kids will be grown, which will take away a good deal of the activities I spend my time on during my summers off currently.  It is entirely possible that by age 45 I will be a grandpa several times over, since my oldest boy will be about the age I am now.  I consistently have more ideas of things I would like to do than time I have to do them, which is a good indicator for the future.  If I go even 2 or 3 days without moving forward on something I get stir crazy. I am capable of figuring out fun, interesting, and productive things to do with my time, which is half the battle with early retirement.

 

 

What would you do this summer if work wasn’t in the way?

 

 

Root of Good comments:  Thanks John!  Great insight into what’s possible when you have large chunks of free time and your finances under control.  I’ll share a few of my posts from the archives that are relevant to what John talks about. 

June 2015 Financial Update

diego-rivera-mural-national-palace

June is over which means we are half way through the year already.  After climbing for most of the year, our net worth reversed course and dropped to $1,519,000 due to fluctuations in the stock market.  Our income outpaced our expenses by a few thousand dollars and spending for the year remains within our budget.  I’d say we are doing pretty well in spite of the drop in net worth.

Right now we are at the midpoint of our seven week vacation in Mexico, so our spending is very different than it normally is while at home in Raleigh.

 

Income

June provided us with $4,833 in investment income.  Our dividend income comes at the end of each quarter since we own mutual funds and ETFs.  We also received another few thousand dollars in the first few days of July, but those will be reflected in next month’s financial update.  About $2,500 of our investment income came from our taxable investment accounts.  That represents about one month’s worth of expenses.

Blog income, shown as “other income” in the chart was lower than normal at $463 for the month.  It would have been a lot higher if I was able to cash the checks that are (hopefully) waiting for me at home.  I expect July or August will have phenomenal blog income once I return home and cash all those checks!

Freelance writing income was fairly steady at $125.

Even though Mrs. Root of Good hasn’t worked since early May, her paycheck still shows up each month since she’s on a paid sabbatical.

The $162 of “insurance” income was a refund of my home and auto policies that I cancelled after obtaining new insurance with more coverage at lower premiums.  Now I’m the proud owner of an umbrella policy!  In general, you should be your own insurance company but in this case the extra liability coverage wasn’t very expensive and will protect me from all but the most expensive lawsuits (should the need arise).  When you have significant assets, it makes sense to protect them if the cost of insurance isn’t ridiculous.

june-2015-income

If you’re interested in tracking your income and expenses like I do, then check out Personal Capital (it’s free!).  All of our savings and spending accounts (including checking, money market, and five credit cards) are all linked and updated in real time through Personal Capital.  We have accounts all over the place, and Personal Capital makes it really easy to check on everything at one time.

Personal Capital is also a solid tool for investment management.  Keeping track of our entire investment portfolio takes two clicks.  If you haven’t signed up for the free Personal Capital service, check it out today (review here).

 

Expenses

Now let’s look at June expenses:

june-2015-expenses

At $3,089 for June, we spent slightly more than our target of $2,700 per month (1/12th of our $32,400 per year early retirement budget).  Almost all of our spending was vacation related or insurance.

Chapultepec Castle, Mexico City

Chapultepec Castle, Mexico City before the hike up

Travel expenses of $1,687 made up our highest category of spending for the month.  This breaks down to $1,100 in cash withdrawals from the ATM and spending on the credit card as follows:

  • $130 at grocery stores here in Mexico
  • $400 on bus tickets for the five of us
  • Under $100 on restaurants

The $1,100 in cash wasn’t fully spent in June but I’ll leave it in the June report for the sake of simplicity.  We carried about $600 of the $1,100 cash into July and it should last us the rest of the trip (or close to it).  I haven’t been keeping track of every dollar (or peso) spent in the cash category since I’m more interested in having fun than being an accountant.  It’s roughly 80% restaurants, snacks and produce at the open air markets, 10% museum admissions and fun stuff, and 10% local transportation (taxis, buses, subway).

Some of the fun stuff: $2 USD for admission to the ropes course and zip line.  Wheeee!

Some of the fun stuff: $2 USD for admission to the ropes course and zip line. Wheeee!

I talked about how cheap it is in Mexico in my first week’s trip update and in the post where I considered whether we could retire to Mexico (or at least spend extended periods of time here).  From $0.30 USD metro tickets to $8 museum admission fees (for a family of 5!), it’s a very affordable place to vacation or spend a longer period of time.  With longer stays we can take advantage of the economics of slow travel.

Pyramid with snakes and monsters, National Anthropology Museum, Mexico City

Pyramid with snakes and monsters, National Museum of Anthropology, Mexico City

Mayan Temple, National Museum of Anthropology, Mexico City

Mayan Temple, National Museum of Anthropology, Mexico City

So far we aren’t spending as much as I planned in our full trip budget.  I budgeted $8/day for local buses, subways, and taxis and we are closer to $3 or less on most days.  Groceries and restaurants have been less expensive than anticipated probably because we are dining at home more than dining in restaurants (some cooking, some take out).

All other categories of our budgeted trip expenses are cheaper than planned except intercity bus travel.  We’ve already spent the budgeted $800 because we decided to take the two hour flight to Cancun instead of the 26 hour bus ride.  We still have to buy round trip bus tickets from Cancun to Tulum, so we’ll come in a little over budget in this category.

Main courtyard of the National Palace, Mexico City

Main courtyard of the National Palace, Mexico City

Our Raleigh based utilities were only $120 for the month.  I prepaid our water bill and electricity bill in previous months to meet our minimum spending requirement on the Chase United Mileageplus Explorer card and the Chase British Airways card.  Those cards gave us over 100,000 airline miles (= how we fly for free).  Check out all of the current credit card deals if you want to cash in on free travel too!

Grocery expenses back home in Raleigh were under $100 since we were only there for a week.  I’m missing the convenience of a well stocked fridge, freezer, and pantry we usually have at home since we’re only able to buy what we can consume within two weeks (we’re moving to a new city every two weeks).

june-2015-ytd-expenses

At $14,384 year to date spending, we are almost two thousand dollars under the $16,200 budgeted for the first half of 2015.  And that’s in spite of spending seven crazy weeks on vacation in Mexico.  Our spending for the year as a whole should be roughly within our budget and possibly below budget as long as no major unexpected expenses pop up later in the year.

Monthly spending for 2015 to date:

 

Net Worth: $1,519,000 (-$31,000)

This is month #4 above the magical $1.5 million mark but we’re dipping dangerously close to the line after a $31,000 loss in June.  $31,000 used to seem like a lot of money, and I guess it still is since that’s about what we spend each year.  But in the game of watching your investment portfolio fluctuate month to month, it’s just noise.  It goes up some months and it goes down other months in an unpredictable fashion over the short term.

june-2015-net-worth

Last month I said:

[Our portfolio growth] won’t continue in a relatively straight line forever, so perhaps June will be that month that looks like a bump in the road a few years from now (but feels pretty ugly as we experience it in real time).

I guess the loss of a year’s worth of expenses should be troublesome.  But I’m not worried about it yet.  We still have plenty of funds to provide our living expenses for this year, next year and many years afterward.  I don’t think we are likely to run out of money any time soon.

We have been so busy exploring San Miguel de Allende, Guanajuato, and Mexico City that I haven’t paid much attention to daily fluctuations in the stock market.  Other than logging in to transfer the thousands of dollars of dividend income to my checking account, I just haven’t had time to dwell on what’s happening each day in the market.  It’s just as well since there will always be some crisis distracting us from the long term approach required to be a successful investor.  Today it’s the Greek financial crisis, tomorrow it will be something else.

 

 

How was your financial June?  

 

 

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Retiring Abroad – Could We Do It?

mexico-city-cathedral

We are in the middle of our seven week adventure in Mexico right now.  Although we traveled to Mexico just for fun, I’m also viewing the trip as an opportunity to explore a few places where we might spend prolonged periods of time in the future.  That might mean spending a year or more living abroad or spending summers or winters chasing nice weather.

Mexico tends to top the lists of places to retire abroad.  I think I know why: inexpensive living, good weather, and close proximity to the US.  But it’s not all rainbows and unicorns south of the border.

Throughout the decade of building my retirement stash, I was always intrigued by the early retirees that chose to live overseas.  Jeremy and Winnie, who blog at Go Curry Cracker retired in their 30’s and have traveled or lived in various locales in Latin America and Asia since then.  Billy and Akaisha Kaderli also retired in their 30’s and have been traveling the world for the past 25 years.  The maybe-retired Jed at Bucking the Trend is living in Granada, Spain at the moment with his wife and two kids.  The folks at Bumfuzzle, though not likely to self-describe as “early retired”, have trotted the globe by van and by boat for around a decade now (and are currently in Mexico not far from us).  They also had a couple of kids along the way.  Others are doing it, so I know it’s not impossible.

Moving to a low cost of living destination overseas that many people visit on vacation sounds exciting.  It’s not currently our Plan A but might be a decent Plan B or Plan C.

Here’s my take on the pros and cons of retiring abroad:

 

The Pros

Living in Mexico is cheap.  Virtually everything is the same price as in the US or less.  Sometimes much less.  Fruits and vegetables are half the price of what we pay in Raleigh.  There are amazing bakeries all over called “panaderias” that serve up hot and fresh breads and pastries for well under a buck each.  Sit down restaurants run roughly 30-50% less than Raleigh, while incredible street food can be 50-75% less than something similar back home.  Check out our $12 USD lunch of steak tacos, soup, fish, and french fries.

That is way too many french fries for one family to eat.

That is way too many french fries for one family to eat.  In the bags are ketchup, spicy salsa, cilantro and diced onions, sliced onions and peppers, limes, and radishes (free stuff they give you when you order take out).

Beyond the price of food, there’s also the freshness of the fruits and vegetables.  Because the climate allows year round growing seasons, there are lots of somewhat locally grown fresh produce all the time.  Many tropical fruits like mangoes, pineapples, and avocados are hard to find at peak ripeness in Raleigh at any price. But that’s not a problem here where fruit stands are plentiful.

As far as access to US goods, it’s pretty easy to find almost anything you want here.  There are Walmarts, Sam’s Clubs, Costcos, and a variety of other similar warehouse and big box stores offering any grocery product, electronic item, household good, or clothing article you want.  The styles and varieties might be different than what you are used to, but overall it’s not hard to find what you want.

Housing can be cheaper than many parts of the US, though maybe not by much if we were to stay in an expat area or a decent part of Mexico City.  Our current rental apartment of about 700 square feet in Mexico City costs $135,000 USD, similar to our 1,800 square foot house in Raleigh.

Our swank little Mexico City rental.  At nightly airbnb rates it's $350 USD per week furnished including all utilities.

Our swank little Mexico City rental. At nightly airbnb rates it’s $320 USD per week furnished including all utilities.  Monthly rentals would drop the rate quite a bit.

Transportation is about $0.30-0.35 USD (5-6 pesos) for local buses or the subway.  Mostly clean, generally fast, and with a more respectable clientele than what I’ve experienced on public transit in the US.  Taxis are incredibly cheap, with fares starting around $2 USD for a short trip and usually no more than $3-4 for most places around town.  Cheap and convenient buses, subways, and taxis make it easy to skip car ownership, unlike where we live in Raleigh.

Some public areas like parks and playgrounds are very nice but it’s highly variable.

climbing-wall-in-park

Services like housecleaning and repairs are very affordable.  Essentially any labor-intensive service won’t cost a lot compared to US prices.  In Mexico City, 4-5 hours of housekeeping runs about $20 USD (300 pesos).  In San Miguel de Allende, we were asked to pay the maid an extra $2.67 USD (40 pesos) per hour if we have her cook for us or render additional services.

Saving money isn’t the only good thing about Mexico.  The weather is incredible.  This summer the temperatures have been in the 70’s and low 80’s during the day then dipping into the 50’s at night.  Air conditioning isn’t necessary at all at these temps.  Back home in Raleigh it’s been a steady 90-100 degrees almost every day.  Some folks winter in Mexico, but we are tempted to summer in Mexico.  The weather stats I’m throwing out pertain to the central highland area in and around Mexico City.  It’s crazy hot and humid in many coastal locations similar to the southeastern US during summer.

We’re also enjoying the novelty of new parks, museums, food, music, customs, and culture.  A trip to the grocery store or market is an adventure, whereas at home it’s just a chore.  I imagine the novelty would wear off after a certain point though.

 

The Cons

Some costs are higher, such as imported foodstuffs or items that aren’t very common in Mexico.  Spaghetti sauce, for example is $1.50-$2.00 per not very tasty can here (or $3 for a jar of Prego), whereas back home I can get decent pasta sauce for $1.00 per jar or can.  Italian deli meats are crazy expensive and you’re mostly stuck with expensive cooked and pressed ham or uninspired turkey meat if you want sliced meat for a sandwich.  It’s obviously smart to live like the locals when imported goods are expensive.

“Don’t drink the tap water”, they say.  As a result, you have to buy bottled water ($.50 for a small bottle or a few bucks for five gallons) and can’t simply quench your thirst at water fountains scattered around town at parks and in stores and museums.  Brushing teeth and washing produce require extra effort compared to using tap water.

At $2.60 USD (39 pesos), this 750 mL of tequila is cheaper than mouthwash.

At $2.60 USD (39 pesos), this 750 mL of tequila is cheaper than mouthwash.

It’s easy to save money on almost everything down in Mexico, but flying back to the US to visit friends and family would eat into any cost savings (particularly for our family of five).  We could partially offset the flight costs by travel hacking credit cards (which is how we got free flights to Mexico this year!) but I’m not sure if we could get free flights indefinitely through travel hacking.  Eventually the kids would be out of the house and at that point, buying two round trip tickets is much more affordable for the occasional trip back home.

As foreigners not quite fluent in the language, we are occasionally subjected to the “tourist tax”.  Cashiers and shopkeepers sometimes “forget” to give us the correct change.  Taxi drivers know we don’t know exactly what a trip should cost, so we end up paying a little extra.  We have been fairly vigilant about not getting ripped off but it will happen.  No point in getting mad.  It’s just a cost of doing business.  The longer you are here and the more fluency you have in the language, the less likely you are to pay tourist rates for anything.

On the subject of language, it’s a big deal.  Unless you’re staying in an expat area that caters to English-speaking Americans and Canadians, not knowing the local language will make life a lot more difficult.  On the flip side, living here forces you to learn more Spanish since you can’t avoid it.  “Language” could be a positive aspect of life abroad if you are interested in learning the language (which we are).

Culture shock can be challenging.  Clothing choices, for example, vary between the US and Mexico.  No one here wears shorts.  Trash is pretty common on the streets in Mexico, whereas the US does a better job of providing (and emptying) trash receptacles and enforcing litter laws.  Dog poop on the sidewalks is another common sight here, whereas in the US it’s mostly picked up by the dog’s owner.  Otherwise, our societies share a lot of common characteristics given our western European cultural origins.

For long term residents, immigration issues can be an issue.  In Mexico, everyone gets a 180 day tourist visa no questions asked.  Without filing for residency, you’ll have to make a border run every six months to reset the clock on your tourist visa.  I’m not up to date on Mexico’s take on “permanent tourists” that make visa runs every six months, but they might catch on and deny you entry (at least in theory).  And leaving the country every six months could grow tiresome pretty quickly if you just want to relax and enjoy life at home.  Plus it’s not cheap to buy plane tickets for a family of five twice per year (though travel hacking credit cards helps), nor do we enjoy quick weekend trips like making border runs to renew visas since we have young children.

 

The Kids’ Perspective

Since we have three kids between age three and ten, we have to keep them in mind when deciding whether we want to live overseas in retirement.

After three weeks of living in Mexico, the kids have developed a routine.  Plenty of down time, some time at the park, some time on chores (they are the official Root of Good dishwashers!), and some touristy stuff like visiting pyramids and museums.

When I asked the kids what they thought about living in Mexico, they say they don’t want to live here (yet).  The tap water isn’t clean and according to them, “you could die from it”.  I’m not certain you could actually die from ingesting Mexican water, but you can get a stomach ache.

On the upside, the kids realize that their money goes further here in Mexico as measured by ice cream.  Prices range from $0.25 USD for a popsicle up to a buck or two for a large cup or cone of hand made ice cream in tons of different flavors.

pyramid-of-teotihuacan

Our 3 year old keeps asking to go back to the pyramids. Guess he’s a fan!

They are able to keep in touch with family and friends through video chats on Skype and Google Hangouts, so they aren’t socially isolated while we’re on the road.  If we lived here on a more permanent basis, they would eventually make new friends and learn enough of the language to get by.

The final concern with living abroad with kids is schooling.  We could always home school, and incur minimal costs for a curriculum and materials.  If we wanted to go the traditional schooling route, there might be substantial costs for a private school if the public schools near where we live are not adequate (though we are no strangers to less than perfect schools).

A rough estimate of costs for tuition at a private school range from $2,000 to $5,000 USD per year per kid.  If we went the traditional schooling route and wanted an education similar to what we can get in the US, it will be very expensive.  In fact, paying for private education would likely offset any cost of living savings from housing, food, and transportation costs.  Homeschool might be our best option if lowering our cost of living is the primary objective of living in Mexico.

 

Why Retire Abroad?

Why would we want to retire abroad?  Lower cost of living is a prime motivation.  Or phrased a different way, we could stretch our dollars further and live a nicer lifestyle than we can afford in the US on the same budget.

We are able to get by on a retirement budget of about $33,000 per year including a paid off house.  We could rent our house in the US and net $800-900 per month which might be enough to allow us to rent a decent furnished house or apartment in Mexico.  Almost all of our costs would drop, but we would have to use part of our $5,300 vacation budget for visits back to the US.  Food, transportation, and entertainment costs would drop.  Electronics and appliances tend to cost the same or more down here, so we might see an increase in these expense categories.  Overall, I imagine we could live a slightly more luxurious lifestyle on a little less money.

But should we move 2,000 miles away just to save a little money?  That’s the tough part of the equation.  I don’t think it’s necessarily better or worse in Mexico assuming you have adequate funds to live on.   Just different in some aspects.  There’s a vibe here that’s hard to explain.  The parks seem to attract more people having fun.  There’s always a festival or parade or protest going down.  Running errands can be a cultural and language adventure.

So far, we aren’t committed to retiring overseas, but I’m still taking notes on the three cities we are visiting for extended periods of time.  Our next step in pursuing overseas living would be to spend an entire summer in a longer term rental to see how we like it.  Although we miss a few things about home, no one has broken down in tears crying to return to Raleigh just yet.  We’ll see how the next month of travel treats us.

 

 

Could you retire overseas?  What would it take to motivate you to leave your home country and live abroad?

 

 

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