retirement

Apache is functioning normally

This weekend, I turn 27. I’m excited for 27, and I think it will be a great year.

This year, I’ve decided to sit down and reflect on the past year, and my whole life. Many things have changed over the years, especially over the past few. Usually I just let my birthday fly by, but doing some self-reflection is always a good idea.

I’ve made mistakes over the years, and I’ve also made good decisions. I’ve learned a lot of valuable life lessons, and now I am happier than ever.

While I am not perfect and don’t have a perfect life, life is good and I am very fortunate. I have great friends, a great family, a happy marriage, wonderful dogs, a business that I love, a life of travel, and more.

Here are 27 life lessons I’ve learned in the first 27 years of my life. While some may seem obvious, others may not, but everything below is what made me who I am today. Plus, you may learn something new or something may just “click” after reading my list. Enjoy!

1. Value your time.

When I was younger, a year seemed like an extremely long time. Now, it seems like years go by very quickly.

Time is important, and you should value it. Instead of spending your time doing something you dislike, you should make a goal to change the negative things in your life to something you enjoy instead of waiting decades.

2. Never compare your beginning to someone else’s middle.

Comparing yourself to others can sometimes give you motivation to work harder, but you also don’t want to be unrealistic or get frustrated.

You should always give yourself time with a new task, and don’t think of yourself as a complete failure just because you’re not at the same point as someone else.

Everything takes time, and practice makes perfect.

One of the great temptations for us as leaders and dreamers is to compare the start of our new adventures to the middle of someone else’s. You work on your first book and pick up Max Lucado’s 14th book and say, ‘Mine isn’t as good.’ You post your first blog post and look at Michael Hyatt’s 100th and think, ‘Mine is nowhere near as great as that.’ You give your first speech and watch Ken Robinson’s 1,000th at TED and think, ‘I’m not great like that.’ – Jon Acuff

3. Create a plan to reach your dreams and goals.

You aren’t going to magically reach your dreams and goals unless you create a plan to reach them.

What do you often dream of? Maybe you want a certain career, you want to travel, or something else.

Whatever you want to do, why not create a plan so you can reach your goal? You might live in regret until that happens! You only live once, so a good first step is creating a plan to achieve your dream.

4. Be positive.

I say this in many of my posts, but I truly believe in it. It’s also something that I think more people need to work on.

Being positive can completely change your life. This means you should laugh more, smile more, be happy with yourself (this is very important!), quit being jealous, complain less, have a better outlook on life, and more.

The power of positive thinking may help you:

  • Find another option or route
  • Feel motivated, so you can keep on pushing
  • Move on from your past mistakes
  • Convince yourself that you can improve your situation (career, financial, family, etc.)
  • Reach for your goals
  • Be happier

Related article: Why I Believe Being Positive Can Change Your Financial Situation And Your Life.

5. Learn something new as often as you can.

Back when I was in school, I hated learning new things. Yes, that’s how most children and students are. However, I still remember one day in college when I was a freshman, a man in his 60’s was in one of my philosophy classes. We all asked him why he was there, because, as young 18 year olds, we all thought school was such a drag. He proceeded to tell us how learning and school were the best things in life and that one day, while maybe not right now, we would realize that.

Well, now I know.

I enjoy learning new things more than ever. I’m constantly reading and learning about new things, whereas before I probably would have laughed at myself.

There is so much to learn in the world, and it is so easy to do so. There are classes, articles, great books, and many more things that are so easily accessible in this day and age.

6. Stop living in regret.

You can’t change the past, so there is no point in dwelling on regret and letting it negatively impact you. Instead, you should learn from your mistakes and move on.

7. Don’t care about what anyone else thinks.

This is one that took me awhile to realize, but thankfully I truly believe it now. You should do things for you and not let other people’s opinion’s rule your life.

Do what is right for you!

8. Live life to the fullest.

No matter who a person is, what they are currently doing, how much money they have in the bank, and so on, everyone can start living life to the fullest.

You just never know what may happen in the future, so taking advantage of the time you have now is very important. No one ever wants their life to flash before their eyes and wonder whether their life was meaningful or not, whether they had a good time, or whether they regret past decisions.

And, yes, you can live a great life on a realistic budget.

9. Cherish moments with loved ones.

Now that we travel full-time, we don’t see family and friends as often as we used to. In fact, we haven’t been “home” in over 6 months.

I’ve always cherished the moments with those that I love, but now I make sure to make each trip even more special.

You should never take a moment for granted with those that you love. This will sound very doom and gloom, but you just never know what may happen to you or them. Plus, spending time with your loved ones is always a great time, so why not just do it more?!

10. Make time for fun.

All work and no play is never good for anyone.

You should always make time for the things that you love, even if it’s just a few hours each week. This can help lift your mood, increase your motivation, and more.

11. Excuses are just that – excuses.

Many people make excuses for why things aren’t going their way. Yes, sometimes you may find yourself in a bad situation, but it doesn’t mean that you’re not in control of your own destiny.

Don’t let excuses hold you back. Instead, take action in your life and overcome the obstacles in your path.

12. Do what YOU want to do.

What makes you happy, excited, joyful, and motivated? That’s what you should be doing with your life (as long as it’s legal)!

If you want to live a life of adventure – Go for it.

If you want to start a family – Start planning one.

If you want a better job – Get one.

If you want to change the world – Do it.

13. Less is more.

The idea that less is more is something I think about nearly every day.

When we recently got rid of the majority of our belongings to move into our RV full-time, I truly realized how less is more. We had so much junk that we had never touched, and it wasn’t contributing to the improvement of our lives in any way.

Having less stuff is great for many reasons:

  • Less clutter
  • We can give more attention to what truly matters
  • Less money spent on things that don’t matter

14. Laughter is the best form of medicine.

Laughter and happiness can pretty much cure anything. Next time you’re feeling down, try to find a way to laugh. It will help!

15. Help others as much as you can.

Helping others can completely change your life and change other lives as well. Whether you do something big or small, do something! The smallest gesture can make someone’s day and completely change how they feel.

Here are a few ways to help others:

  • Smile and say hello to everyone you cross paths with
  • Donate items from your home
  • Donate blood
  • Encourage someone who is struggling
  • Foster an animal
  • Become a Big Brother or a Big Sister
  • Volunteer

Read more at 58 Random Acts Of Kindness.

16. Sometimes you just have to go for it.

You’ll never know what the outcome is if you don’t just go for it. Instead of constantly thinking “what if,” you may just want to take the leap and finally try it out.

17. Dogs are awesome.

Here’s proof.

18. Gain control of your financial situation.

Money is not everything, but being in a good financial situation may make your life easier.

You should pay off your debt, earn more money than you spend, stop keeping up with the Joneses, save for retirement, and so on.

Gaining control of your financial situation is important because you won’t feel as stuck when it comes to money. And then, you may be able to do more because you won’t be held back by monetary problems.

This may help you to reach your dreams, such as traveling more, following your passion, be less stressed, and more.

19. You can say no.

You don’t have to say yes to every single request. Saying yes can be great if you have the time, but saying yes to everything can also cause a lot of stress and lead to people taking advantage of you.

Sometimes you have to evaluate your options and possibly say no.

20. Gossip stinks.

Gossipping doesn’t help anyone.

If you don’t like someone or you don’t like what they’re doing, why should you spend your time thinking about them or talking about them to others? That is just a waste of time!

21. Don’t let life pass you by.

It can be really easy to let life pass you by. Before you know it, years or even decades may be gone.

Too many people have the mindset of “Oh, in 10 years life will be so much better because of this and that.” And then they just let their lives go by without ever thinking about the present.

Well, what about now?! 10 years is a long time! Reaching a goal is great, but during the present you should try to fit in some happiness as well (on a budget, of course).

22. See the beauty in everything.

There are beautiful things all around us. Instead of seeing the bad in things, try to see the good.

23. Kill them with kindness.

Being kind to others is always important, even when a person is being negative, hurtful, or difficult.

Whenever someone is being difficult in my life, I almost always attempt to kill them with kindness.

And, I’ve found that it works 99% of the time.

24. Be open to new things and tackle your fears.

When was the last time you did something new? So many people live inside their comfort zone when they actually need to branch out every now and then.

Yes, stepping outside of your box can be tough, but what if it completely opened your eyes and changed your whole outlook on life? Wouldn’t that be amazing?

Related: 10 Daily Challenges To Improve Your Life

25. Balance is important.

You can’t do everything 24/7. You need some sort of balance to stay sane.

26. Be confident.

Being confident can help you succeed in life. If you don’t believe in yourself, then who will?

27. Money is just money.

Too many people let money take over their life in ways that don’t bring them any joy. Yes, you need money in order to pay bills and to survive, but it is just money.

Instead of letting money take over your life, you should use it as a tool to help improve your life. Instead of thinking about money in a negative way, think about it in a positive way and take actions to improve your financial situation.

What life lessons do you think are important?

Related Posts

<!–

–>

Source: makingsenseofcents.com

Apache is functioning normally

Do you feel like you are stuck in a never-ending debt cycle?

Perhaps you keep getting out of debt, only to fall back into it shortly after. That is what a debt cycle is, and many people fall into this cycle and can’t seem to get out.

Falling into debt over and over again can lead to insane amounts of stress, unhappiness, sadness, and feelings of hopelessness. No one wants to experience these feelings.

But, I want to tell you that it IS possible to get out of the debt cycle.

Today, I will help you finally escape the debt cycle so that you can live the life you want.

Face your problem

Before we continue, you need to realize why you keep falling into a debt cycle. You should think about the answers to the questions below:

  • Do you feel like you deserve everything you buy?
  • Are you trying to keep up with the Joneses?
  • Do you have an emotional spending problem?
  • Are you afraid to face how much debt you have?
  • Do you feel like debt makes things seem more affordable?
  • Are you unprepared for emergencies?
  • Do you truly understand how debt and interest rates work?
  • Are you living paycheck to paycheck?
  • Do you live beyond your means?
  • Do you have credit card spending problems?

To get out of a debt cycle, you need to realize why you keep falling into debt. By understanding why you are falling into debt, you can begin to prevent yourself from falling back into a debt cycle.

However, until you dig deep and realize this, the debt cycle will never end.

Side note: I highly recommend that you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com but 100 times better. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. And, it is FREE.

Add up your total debt

This is related to facing your problem, as adding up your total amount of debt will help you realize how to gain control of your debt. This will help you to truly understand how much debt you are dealing with.

Plus, most people have no idea how much debt they have. By adding it up, you will have a more realistic view of your debt problem.

Create a budget

Most people have student loans, credit card debt, a mortgage, car loans, and sometimes many other forms of debt. However, not many people have a budget.

According to a survey done by Gallup, 68% of households in the U.S. do not have a budget.

Budgeting can help you take control of your financial situation so that you can stop the revolving debt cycle.

Read more at The Complete Budgeting Guide: How To Create A Budget That Works.

Pay off debt

In order to get out of the debt cycle, you’ll have to pay off your debt!

No surprise there.

Paying off your debt can lessen your stress levels, allow you to have more money to put towards something else (such as retirement), stop paying interest fees, and more.

Read more at How To Eliminate Your Debt.

Create a vision board

Having your financial goal displayed in front of you can make it that much more real, plus it’s nice to have a constant reminder of what you’re working towards.

Various ways to make your financial goal visual include:

  • Create a graphic that demonstrates your financial goal. I did some research and found a blog post on A Cultivated Nest about many creative ways to do this.
  • Keep a picture of your goal on hand. You could even go all out and create a vision board on Pinterest, or you can create a poster board of all of the things that debt freedom will allow you to do.
  • Write down what debt free life will be like for you.

Start an emergency fund

An emergency fund is something that everyone should have. However, according to a report by Bankrate.com, 26% of Americans have no emergency fund whatsoever. This same report found that only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the recommended six months worth of savings.

This is scary to me, as having an emergency fund can greatly help you get through hard and unexpected situations that may arise.

An emergency fund can help if you:

  • Lose your job
  • Have your hours cut back
  • When your car breaks down
  • If you have a medical expense, and so on.

Plus, an emergency fund can help you get out of the revolving debt cycle. This is because if an emergency does arise, you won’t be forced to rely on debt in order to solve your situation. Instead, you’ll have your emergency fund to bail you out!

Read more at Everything You Need To Know About Emergency Funds.

Spend less than you earn

Too many people live paycheck to paycheck. This can lead to credit card debt, high interest rates, and more.

You should always be spending less than you earn. If you aren’t, then you need to find ways to cut your budget and/or increase the amount of money you earn.

Save more money

Finding ways to save more money may allow you to pay off your debt a little faster, improve your financial habits, help you reach your dream sooner, and more.

Read more at 30+ Ways To Save Money Each Month.

Make extra money

I believe that earning extra income can completely change your life in a positive way. You can stop living paycheck to paycheck, pay off your debt, and more, all by earning extra money.

In fact, because of extra income and my blog, I was able to pay off $38,000 in student loans within 7 months, leave my day job in order to pursue my passion, travel full-time, and more!

Making extra money can do something similar for you as well. It can help you break out of the debt cycle as you’ll be able to put more money towards your debt, and you will be able to spend less than you earn.

Related articles:

Try using just cash

If your problem with debt is that you don’t know how to correctly use credit cards, or credit cards or too tempting for you, then you may want to get rid of your credit cards and try using cash.

A cash budget is when you pay for the majority of your purchases in cash. Of course, there are certain expenses, like a mortgage payment, that you may not be able to do that for or that you may not want to do that for. For the most part, any and almost all spending is done with cash when a person is taking part in a cash budget.

A cash budget can help because:

  • It forces you to think about where your money is going
  • It can prevent impulse shopping and clutter
  • Spending actual cash “hurts” more than spending money with a credit card

Don’t keep up with the Joneses

Whether you are a young child and want that new toy everyone is playing with, or if you are a parent and are feeling the need to upgrade your house, car, etc., everyone has experienced wanting to keep up with someone else.

The problem with this is that keeping up with the Joneses can make you broke and fall into a revolving debt cycle.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to, in a pretend world, “afford” things. You might even buy things you don’t really care about. The problems can go on and on.

This can then lead to a lot of debt and potentially set your financial goals back years, if not decades.

You should stop caring about what other people are buying, and, instead, only do what makes you happy.

Are you stuck in the revolving debt cycle? What are you doing so that you can get out?

Related Posts

<!–

–>

Source: makingsenseofcents.com

Apache is functioning normally

When it comes to retirement planning, the term “pension” is becoming almost archaic.  According to the Office of National Statistics (ONS) only 35% of workers in the private sector paid into a company pension fund last year.  Most employers have adopted 401k plans and put the responsibility on the employee’s shoulders to take care of funding their own retirement.  While having control can be a blessing, it can also be a double-edged sword.  Especially, for those that don’t take the time to fully understand all of their investment options.  For those people, there just might be a solution.  It’s called the DB(k) pension plan and here are the rules on how it works.

401(k) Match + Pension Plan = DB(k)

What exactly is a DB(k) pension plan?   Essentially, it combines the benefits of an income stream of a pension with the matching of a 401(k) plan. Many boomers that still have pensions, love them because they know they have an income stream that they can depend on.  The DB(k) offers the luxury of that stable income with a matching contribution to boot.  Might be the closest example of having your cake and eating it too when it comes to retirement planning.

DB(k)s  Could Be Popular to Employees

Many small businesses will bypass a Simple IRA or a SEP IRA and go straight to the 401(k) plan purely because of name recognition.  Employees like perks and a potential employer with a 401(k) plan with a match sounds much more attractive that a SEP IRA.  The DB(k) has the potential to be the next household name of retirement plans.  Most workers that I come across that have 401(k)’s don’t really understand them.   Having a  pension-style income like the one Mom and Dad had, may be a safer and less complicated solution.

Are DB(k) Plans Expensive for Employers?

It’s tough to say.  With the recent adoption of these plans, it doesn’t seem that employers are rushing off to get these started.   I’m sure the slumping economy is the largest barrier.  For those companies that do start these, they most likely have a very good cash reserve.  However, it isn’t as if a business is funding two retirement plans at once. In fact, any businesses that offer both defined benefit plans and 401(k) plans may unite them in this new option.

Less Paperwork Makes Everybody a Happy Camper

Companies with 2-500 employees are eligible to have DB(k)s pension plans.  Where 401(k) plans must meet certain “testing requirements” for top-heavy rules, the DB(k) is exempt and with a plan document and one simple form 5500, your business is ready to rock and roll DB(k) style.

These plans are exempt from “top-heavy” rules, and a company can put one in place with just one Form 5500 and one plan document.  The cost of the overall plan is the question.  Being new plans, it’s hard to say, but based on most reports I’ve read the cost should be cheaper compared to having both a 401(k) and a pension plan.

Employee Benefits from DB(k) Plans

An income stream, an employer match and a really neat tool to save for retirement. In brief, the DB(k) has four compelling attributes:

  • Monthly Paycheck for Life. The income stream won’t replace an employee’s end salary, but it certainly will help. Employees that have worked for the company for a longer period of time are rewarded: the pension income equals either

a) 1% of final average pay times the number of years of service, or

b) 20% of that worker’s average salary during his or her five consecutive highest-earning years.

  • Automatic Enrollment for 401k. That employees save for the future by default. (They can choose to opt out.)
  • The company automatically directs 4% of a worker’s salary into his or her 401(k) account. The company also has to match 50% of that amount, which is vested upon the match. (Employees do have the choice to alter the contribution level up or down from 4%.)
  • It only takes three years for an employee to become fully vested in a DB(k) pension plan. So even if they leave the company, the money is theirs.

Is the DB(k) the Retirement Savior?

For now, it’s too tough to say.  The strongest benefits I see is the ability to offer more to your key employees.  If you’re able to offer a sweet retirement package, it may help retain and gather more productive and easier to manage staff.

Source: goodfinancialcents.com

Apache is functioning normally

My monthly Extraordinary Lives series is something that I really enjoying doing. First up was JP Livingston, who retired with a net worth over $2,000,000 at the age of 28. Today’s interview is with Jeremy, Winnie, and Julian, also known as the family behind Go Curry Cracker.

With the goal of traveling around the world, Jeremy and Winnie were in their 30s when they retired around six years ago. Their 3-year-old son travels with them and has already been to 29 countries as well!

They were able to do this by saving intensively – over 70% of their after-tax income.

In this interview, you’ll learn:

  • How they retired in their 30s.
  • What made them want to retire early.
  • How they live comfortably, rent houses with private pools, fly business class, and travel a ton – as opposed to the myth that early retirees are boring and just eat beans and rice to survive.
  • How they decided on the amount they needed to retire.
  • What they do about health insurance in early retirement.

And more! This interview is jam packed full of great information!

I asked you, my readers, what questions I should ask them, so below are your questions (and some of mine) about their story and how they accomplished so much. Make sure you’re following me on Facebook so you have the opportunity to submit your own questions for the next interview.

Related content:

 

1. Tell me your story. When did you retire and HOW?!

We are Jeremy, Winnie, and Julian, also known as the family behind Go Curry Cracker!

Winnie and I retired about six years ago with the goal of traveling the world. Traveling more in retirement is a pretty common goal, so I suppose the interesting bits are that we were still in our 30s and our 3-year-old son has now been to 29 countries.

What made our location and financially independent lifestyle possible was a decade of intensive saving – we were literally saving 70%+ of our after-tax income. Instead of buying stuff or experiences, we were investing in our future freedom.

Alas, we had already succumbed to some lifestyle inflation so we sold the house and moved into a small apartment, sold the car and started walking and riding bicycles, and turned our home kitchen into the best restaurant in town.

Unwinding lifestyle inflation is a huge mental challenge, but we both grew up on the edge of poverty so we had some experience with prioritizing purchases and finding solutions that didn’t require money. Nowadays, our investments pay all of our bills, and we could buy a house, buy a car, live a typical life… we just happen to not want those things.

Instead, for the past many years, we’ve basically spent the summer in Europe, autumn in the US, and winter in Asia. It’s not quite a perpetual summer vacation, but close.

2. Was early retirement always something you were striving for? What made you want to retire early?

Prior to 2002, we were both essentially following the normal life script – go to school, get good grades, get a job, etc… Maybe the only unconventional thing is I had student loan payoff as the #1 priority. Every story I heard about debt while growing up had a tragic ending, so I wanted to be debt free ASAP. I even cashed out all of my vacation time for five years or so to get extra pay. We also did crazy things like using 0% interest credit card offers to accelerate student loan payoff. Literally every extra penny went to the student loans.

When I finally got my head above water, I took a vacation, my first as an adult. After three weeks of scuba diving, fresh seafood, and tropical drinks, I looked back at where life in the real world was headed and thought, “This is it? This is the American Dream?”

Within six months the house and car were gone and the early retirement plan was underway.

3. Would you say that you live comfortably?

If by comfortably you mean do we rent houses with private pools, fly business class, and enjoy an occasional Michelin Star restaurant, then yeah, that sounds about right. Combined with 52 weeks of vacation per year and full autonomy, we are probably at an above average comfort level.

That may sound a little smug, for which I apologize, but I think it is important to truly understand the power of deferred consumption. We can only live as we do today because we didn’t live like this yesterday.

By living well beneath our means for just a small part of our total lifetimes (10 years +/-), something many would consider “uncomfortable”, we are now able to live well above the standards of even high-income households – just without the need to consume all of our waking hours with a high-income job.

In summary – yeah, life is good.

4. What career did you have before you retired? Did that career help you to retire earlier?

Winnie was a Program Manager for a large PC company, and I was an Engineer at a large software company.

I do wish we had those insane technology salaries that I sometimes hear about in the news, but our average combined income over our hardcore saving years was only about $135k. I guess I should have studied harder.

I think more than the job, my degree helped us retire early. I basically applied engineering principles to our finances and our lifestyle, trying to optimize for quality of life and low expenses. I then used that same mentality in designing our investment portfolio (100% index funds) and minimizing our taxes ($100k income with $0 income tax.) If I had studied art history or interior design, I probably would have thought about these things from an entirely different perspective, perhaps one that required more expensive furnishings.

5. What advice do you have for the average person that doesn’t make six figures a year who wants to retire early? 

The core principle to follow is living well beneath your means, aiming for at least 50% savings rates. Or in 1950s parlance, live off one income and save the other. This recipe for financial success has worked for much of recorded history.

Of course, this is easier when making $100k than it is when making $10k, all else being equal.

For many average income households, it helps to change perspective:
It isn’t that we can’t afford to save 50%, it is that we can’t afford our current lifestyle.

This is where we were when we got started, and some tough choices are ahead… it is necessary to either earn more, spend less, or wait (much) longer. Or all 3.

For households with incomes well below average, such as our families when we were growing up, it is absolutely necessary to grow income. Public assistance can help for a while (I’ve eaten a fair amount of government cheese), but ultimately skill development and probably even relocation to a job center are necessary.

6. Do you still earn an income in retirement?

We do. With all of this free time, it is fairly difficult to NOT do something that brings in some extra cash.

Last year Winnie published her first book (in Mandarin / Chinese) which was on the bestseller list in Taiwan for a while. About three years ago, Go Curry Cracker accidentally started to earn some affiliate income. I now actually try to run the site as a business, but limit myself to just a few hours per week.

I also employ a pretty aggressive long-term tax minimization strategy, which saves us thousands of dollars every year in taxes. I suppose that can also be thought of as extra income. We’ve actually reported about $100k annual income each of the last five years with income tax bills of $0.

For anybody who is interested, I do publish our full income statements and tax returns (business and personal) every year (linked to above). A lot of people have found those helpful to optimize their own finances.

7. How did you decide how much you needed to retire?

We set a target to have an investment portfolio worth 25x our desired cost of living in Seattle, where we were living at the time, although we were spending much less to turbocharge our savings.

25x is just the standard 4% Rule, which (in oversimplified terms) says you can annually spend an inflation adjusted 4% of your portfolio, probably forever. So, say if you wanted to spend $40k/year, you would need $1 million. That was our minimum.

When we hit that target, Winnie stopped working, and I continued on for about three more years, during which we were just living off dividends, so we were essentially investing 100% of my paycheck.

We also wanted the portfolio to continue to grow so we could leave a bit of a legacy, so even after we stopped working, we wanted to continue living beneath our means. We did this by living large in Mexico and Guatemala rather than Paris or Tokyo. And as luck would have it, the stock market performance over the past five years has been pretty good, so our portfolio just continues to grow, and we can’t spend it fast enough.

8. What sacrifices or hard decisions did you have to make?

This may sound cliché, but I don’t think of anything we did as a sacrifice – we just employed a suggestion my grandmother used to make all the time, “Hey there, you hold onto your britches now young man!” Roughly translated from the original Minnesotan, I think that means “slow down.” In other words, hold off on the lifestyle inflation for a while.

When people rush out to buy their dream house (with rented money) or a new car or a big vacation, they are sacrificing their future for immediate consumption. We just waited a little longer, and along the way we discovered that none of those trappings of success have any real meaning to us.

But of course, when society and advertisers are screaming at you that you need to consume and upgrade, it can be difficult to pause and reconsider. We avoided a lot of that by not owning a television and using the great outdoors for entertainment.

9. What do you do about health insurance in early retirement?

For many years, we were self-insured and just paid cash for any medical needs. We paid $3 for a doctor visit in Mexico, $20 for some dental care in Thailand, $50 for a chest X-ray in Taiwan, and $90 for a visit to the emergency room in Portugal. Medical tourism is your friend. What we weren’t spending on health insurance, we invested in more index funds, building our own healthcare fund.

If we were in the US, we would buy health insurance on the State or Federal Health Exchanges. The US health system is all kinds of messed up, so without insurance you are only one minor incident from total financial devastation.

As of about six months ago, we are now all covered by the Taiwan national health system, which is a single payer universal healthcare provider. We pay about $25/person/month for great coverage, which includes dental. (Hot tip: marry somebody from a country with a good health system.)

10. Will you be planning a place for your child to make long term friendships and connections? Do you plan to continue travel when your child is school age?

We like the idea of homeschooling up to age 10 or 12 or so, but we are still figuring it out. Even so, it probably won’t be all or nothing (Julian is enrolled part time in a Montessori pre-school now.)

The pros/cons of life-in-place vs nomadic living is such an interesting discussion for us, because we are inherently a global family (our nuclear families are spread across 2 countries, 3 States, and 6 cities) and despite our very different backgrounds, we independently concluded that the idea of “home” for us isn’t really a place.

Our thinking comes from our existing communities – Winnie grew up in a big city (Taipei), and she has friends from back in the 3rd grade who all have kids around the same age as Julian. When we are in Taiwan, we all get together and it is like they never missed a beat. It’s a beautiful thing.

I grew up in a small town in Minnesota, and 99% of my childhood / high-school friends and family moved away for college and career. There is literally no one place I can go where all long-term friendships and connections exist, and yet I have them, just spread around the world. It’s also a beautiful thing.

We try to get quality time with all of our family every year, which is much easier now that we don’t have jobs. 2 years ago, we had 4 generations together for a week on a lake, with Grandma, my parents, my sister and 2 brothers and spouses, and their 9 kids. This year we took my Mom and Grandma on an Alaska Cruise, and also spent a couple weeks with all of Julian’s cousins. Next year will be something special again, and we all stay in touch via Skype. We also plan on having more kids, which means sibling connections.

What we do will change and evolve as we learn more and figure things out, but overall, we’ll listen to our kids, make sure we have regular quality time with family, and stay connected with friends and family via Skype. And everywhere we go, we build community with friends, family, and other adventurers. I think it will be the same for the next generation.

11. What hardships come up when traveling with a child and what do you do about it?

The hardships of traveling with a child are largely the same as the hardships of parenting. Kids have needs and wants, and if they aren’t addressed in a timely fashion then chaos ensues. As with most things, an ounce of prevention is worth a pound of cure – and even then, things go awry.

Where most families have to balance child rearing with a career and fixed schedules, we have a great deal of flexibility. Seldom are we schedule driven, and when we are (e.g. a flight departure time) we avoid other commitments. We also aren’t doing the quick 1 week vacation thing, with a lot of time getting from A to B and a whirlwind of tours and activities; that’s much too intense and exhausting. We are more so living our normal lives, just in different locations. We play at the park daily, take naps, explore by foot, and enjoy the local delicacies. If we are having too much fun at the park, we can always see the museum tomorrow. Somehow, we usually manage to see the highlights.

Since we aren’t always in one location with a regular schedule, we focus on having routine in the absence of routine. We have regular toys, regular nap time, and a bedtime ritual which involves a bath, songs, and books. Plus we all co-sleep, so we are together 24/7. It’s hard to provide a stronger sense of security than parental presence.

It all seems to be going well; Julian is a happy, healthy, normal kid. He loves being outside exploring, enjoys meeting new people, and is always ready for the next plane, train, or automobile.

12. If you were starting back in the beginning, what would you do differently from the beginning?

We made a lot of mistakes… buying a house, buying a car, spending money without a long-term plan, but I don’t know if I would change any of them. Those mistakes helped us grow and appreciate where we are today. For example, we are Renters for Life, but we probably wouldn’t really appreciate the total joy and financial advantages that come with not owning a deteriorating wooden box.

If I could go back in time and tell my younger self, “Hey, read this Go Curry Cracker blog, you’ll learn a lot!” we could probably have become Financially Independent 3 to 5 years earlier. That’s a lot, considering my entire career was only 16 years, but it’s not that that much in an 80 – 100 year life span.

But, what I would do differently:

  • invest only in index funds from the beginning
  • not waste my time dabbling in rental properties
  • always live within biking distance of work and prioritize biking and walking
  • always rent
  • learn to cook well sooner
  • start travel hacking sooner instead of paying for vacations

13. Lastly, what is your very best tip (or two) that you have for someone who wants to reach the same success as you?

Design your life so that saving a high percentage of income is the natural and ordinary outcome.

Aim for saving 50%+ of after-tax income, and minimize taxes

Do you have goals of retiring early?

Related Posts

<!–

–>

Source: makingsenseofcents.com

Apache is functioning normally

By Steve Harper and Elizabeth Beasley, Apartment Guide contributor

Renting — while never really out of style — is trendy again!

[find-an-apartment]

The National Association of Home Builders predicts that a preference for renting among young people is driving the building of many more new apartment buildings in the next couple of years. The state of the housing market, among other factors, seems to be leading more people to choose renting in the near future.

Are you ready for a reality check on the state of renting?

Urban upswing
Housing trends work hand-in-hand with renting trends, of course. As reported in Forbes, there should be more supply and demand for urban apartments this year. Trulia’s Chief Economist Jed Kolko indicates that, because families are starting to buy homes again, single-family rentals — typically suburban — will be less in demand, accompanied by a rise in rentals in the heart of a city. These urban rentals will be occupied mostly by young adults who are moving out of their parents’ homes, starting careers and renting apartments close to work downtown.

If you are looking for a place in the city, you might run into some competition — or a lot of new friends, depending on how you look at it!

High demand means lower affordability
The good news is that comfortable, convenient apartments in cities are on the rise. The bad news: these apartments are becoming more expensive.

Multifamily Executive cites a Harvard report pointing out that demand for rentals is increasing, allowing prices to go up. Downsized incomes are creating slimmer budget margins for many renters. Currently, the average renter is spending somewhere between 30 and 50 percent of his or her income on rent, the report indicates.

Staying aware of lesser affordability is a good thing, so you can make the most of your housing dollar. Aim for paying 30 percent, or less, of your paycheck, and you’ll be better able to stay in budget as rents increase over time.

Second-tier cities are tops
For years, the top rental markets were the cities that never sleep, like New York, San Francisco, and Washington, D.C. But 2014 real estate trends show that smaller, savvy cities are becoming popular with real estate developers and investors. Think Portland, Dallas, Austin, San Jose and Houston. Wherever you find startups and new industries thriving, you’ll likely find a second-tier rental market that’s booming.

Move over, Millennials
Here’s one of the more surprising projections. Baby Boomers will begin to surpass Millennials in the rental market.

Of course, young adults still account for a large chunk of the renting population. According to renting rates revealed by the 2013 Current Population Survey, 25-34-year-olds will likely make up 31 percent of rental growth over the next ten years. But did you know that renters aged 65 and older might well make up a whopping 52 percent of growth for the same time period?

To understand the findings of this research conducted by the National Multi Housing Council, consider that the sheer size of the Boom generation means that there are more people potentially making a life transition from home ownership to renting — many downsizing to seek an adventurous retirement in the city, rather than the suburbs. There are only slightly more Millennials than Baby Boomers in the U.S. today, but there will be more people over the age of 65 who may, if trends hold, become renters over the next ten years.

While it can be argued that living side by side is a great way for the two generations to grow wise and stay youthful together, this represents a potentially significant change in the rental landscape, nonetheless.

For more on renting trends, take a look at these topical posts:

Which Cities Will See the Greatest Rent Increase in 2014?

What’s the Most Expensive Town in the U.S.? The Answer May Surprise You

Americans on the Move: Latest Census Discoveries

Apartment Guide’s Top 9 Decor Trends for 2014

The Rent vs. Buy Debate: Gen Y Weighs In

5 Economic Factors that Favor the Perma-Renter

Photo credit: Shutterstock / arek_malang

Apache is functioning normally

Small business owners have many options when it comes to setting up a retirement plan for their business and employees.  Previously, I had mentioned the SEP IRA as one of the more common choices.  Another option is the the SIMPLE IRA.   But don’t let the name fool you.   When it comes to the rules of the SIMPLE IRA, I actually think it’s one of the most confusing when compared to the rest of the retirement plan options.

SIMPLE IRA stands for Savings Investment Match Plan for Employees.  Often times I’ll refer to it as the “mini-401k” as it’s traditional used for employers with less than a 100 employees.  In addition to that, the administrative cost of a SIMPLE IRA for your employer is considerably much less than what a 401(k) would be.

If you are a business owner, here are some consideration if your interested in opening a Simple IRA for you and your employees.

What You Give to Your Employees is Theirs-Immediately

In 401k plans, you are allowed to put a vesting schedule that requires the employee to work there for a certain number of years before they can take the money if they quit or get fired.   This is not the case with the Simple IRA.  The day that you make a contribution to your employee’s account, the money is immediately theirs.  If they want to cash it out, then they can; although they have to pay a pretty stiff penalty.

Employers Have To Match in a SIMPLE IRA

Each year, the you are required to  make a contribution to your SIMPLE IRA account whether it be in the form of a match or what’s called a non-elected contribution.  Matching contribution states that the employer has to match at least what you match.  So, if you’re matching 3%, the employer has to match 3% as well.  Note that 3% is the most that the employer has to match, which could be considerably different than compared to a 401(k) or SEP IRA.

You do have the option to reduce the matching amount to 1% for two of a five year period.  That means if you do decide to do this,  that you have to match the full 3% for the remaining three of those five years. This aspect makes the Simple IRA a little tricky and not quite that “simple”.

If you don’t want to worry about the match, then you can elect to do a non-elective contribution.  This means that you will have to contribute 2% of your employee’s salary no matter what.

Remember, what you match is based on the employee’s salary, not yours or the businesses.   Business owners often times get this confused.

The Employees Control the Investments

With most 401(k)s, you are limited to the investment options of the 401k provider.  This is considerably different when compared to the SIMPLE IRA.  Being a self employed retirement plan, the SIMPLE IRA gives you the discretion of what exactly you want your money  invested into.  If you want to buy 100 shares of XYZ stock, then you have the capability and freedom to do so.  (Note: you are allowed to do this in a SEP IRA, too)

Employees Can Defer, Too.

Employees, if they choose, can defer up to $11,500 per year into the Simple IRA.  You are currently allowed to contribute up to $11,500 per year in a SIMPLE IRA.  If  they are over the age of 50, then they are allowed a catch-up contribution, which is $2,500.  These are the same contribution limits as the business owner, as well.  Please note that the $11,500 is far less than the $16,500 that you are eligible to contribute to a 401k.

No Borrowing Allowed

Simple IRA’s do not allow you to borrow as a 401k plan may.  If they have to get money, they’ll have to pay tax and penalty, which is higher than most plans-see below.

The SIMPLE IRA Two-year Rule.

This is something that should be definitely noted within the SIMPLE IRA.  Most retirement plans — 401(k)s, regular IRAs, or Roth IRAs, etc. — have the 10% early withdrawal penalty if under the age of 59.5.  But with the SIMPLE IRA, it takes it one step further.  If the SIMPLE IRA that you’ve started is less than two years and you cash that out, instead of the normal 10% penalty, you will be subject to a 25% penalty in addition to ordinary income tax.  That is a huge item to not be overlooked.  Keeping in mind as well too that doesn’t apply to just cashing it out.  If you were attempting to roll over your SIMPLE IRA into a rollover IRA, the 25% penalty would apply as well.  The key point is just to wait the two years before converting into either a regular IRA or cashing it out.

Source: goodfinancialcents.com