Recently, I was listening to an interview by The Mad Fientist of financial planner Michael Kitces, who is the person responsible for a lot of the research done on the 4% withdrawal rule. Kitces has worked with many clients working towards financial independence and/or early retirement.
At the end of the interview, the Mad Fientist asked him for one piece of advice for speeding up one’s journey to FI, and Kitces replied, “avoid lifestyle creep.”
Lifestyle creep, or lifestyle inflation, is the tendency we have to inflate our standard of living as our incomes increase. When we first graduate college and get a “real job,” we’re content to live in an apartment with a roommate, use Goodwill furniture, and drive a beater car. But as we bring in more money, we tend to upgrade our houses, furniture, and cars, and once we trade up for a nicer model, it’s really difficult to downgrade again. Continue reading “The Best Way to Avoid Lifestyle Creep”
I’ve written about our debt payoff before, but today I typed up all the gory particulars for a guest post on High Five Dad.
High Five Dad is a blogger who shares lots of debt payoff stories from people of all walks of life, to show you how different people achieve a similar goal.
Debt is pernicious, but when I first married Mr. ThreeYear, I thought it was normal. We thought we were on the right financial track because we were saving for retirement and investing, even though we had a $10,000 credit card balance and car loans.
Mr. ThreeYear and I started out our lives together debt free, thanks to our generous parents and our savings skills while we lived in Chile (Mr. ThreeYear even bought his first two cars outright with cash). Unfortunately, once we moved to the spendy, show-offy land of Atlanta, we changed our ways for the worse and racked up a lot of debt.
Find out what made us decide to get rid of our debt for good and how we paid if off in 18 months over at High Five Dad. Thanks so much for including our story, High Five Dad!!
If you can leave a comment here or there, letting us know what you think or how your payoff story compares, I would really appreciate it!
And stay tuned for another regularly-scheduled blog post on Friday!
I recently stumbled across this quote in an old journal, “Focus is more important than intelligence.” Is focus more important than intelligence? I certainly believe so, and I think the more I live and navigate smart phones and the beginning of the internet revolution, the more I realize that focus is essential to having a good life and making progress towards your goals. I’m sure I wrote it down because it resonated with me, and I felt it in my bones to be true. Also, focus is a struggle, each and every day, for me. I have two jobs, a husband who travels, kids to take to activities and appointments and help with homework, a Masters course, lesson plans, and this blog. It’s a lot of code switching.
Why is focus so necessary nowadays and what can we do to get more?
Cal Newport, author of Deep Work, argues that focus is intelligence. He states that “focus is the new I.Q. in the knowledge economy, and that individuals who cultivate their ability to concentrate without distraction will thrive,” in his bio. His theory is that workers who will be most sought after in our new economy will be those who can quickly master hard things and those who produce at an elite level. Both of these qualities require focus, he argues.
Newport is an author and professor of Computer Science at Georgetown University, and he’s fairly young, young enough to have had social media around in college. But he’s always been very careful where he puts his attention, shunning social media from the start.
“Efforts to deepen your focus will struggle if you don’t simultaneously wean your mind from a dependence on distraction,” he says. For Newport, standing in line at a supermarket is a chance to practice letting our minds wander, rather than checking our social media accounts. The more we wean ourselves from technology and constant distraction, he argues, the better we’ll eventually get at working at a deeper level. Like anything, he argues, it takes practice, and in today’s highly distractible world, it is not a common commodity to have.
It’s a busy time in the ThreeYear household. School (which is work, for me) has started. We’re on tight schedules, up early, and racing to get ready for our days in the mornings.
In the afternoons, we have swimming, soccer, and homework. My older son has lots of homework this year and a large part of my afternoons are spent managing that (i.e., making sure he’s actually doing it).
Weekends feel impossibly brief, especially since I’m taking a class on Saturday mornings and am gone from 8am-1pm.
It is a transition time, a time when our lives have changed radically from one season to the next. We have to give ourselves time to figure out these new rhythms in our days. I have to remind myself to prioritize sleep over almost everything (I’m so tired that I’m usually ready for sleep by about 8:30, but then again I do get up at 5am).
So what is a habit that can possibly support me this month? Picking going to bed early wouldn’t be super helpful, because I go to bed as soon as I can every night. Luckily, I’ve already developed the habit of keeping my phone and Ipad in another room, so I’m not tempted to scroll through them right before bed. That’s helped me tremendously, because I’m almost never tempted to stay up late (unless I’m reading a really good library book). Continue reading “A Year of Good Habits: Practicing Gratitude”
Sometimes it takes the perspective of time before we’re able to see situations for what they really are.
Recently, I had some insight into my job negotiations last year and I realized why women can have such a hard time negotiating for pay.
Last year, I started a new part-time gig as an ESOL Teacher for a school district in the next town over (an ESOL Teacher is a Teacher for Speakers of Other Languages, also known as an ESL Teacher). I applied for the job because my hours at my first district are quite low, and this district was very close to my house. I suspected the district was fairly desperate for a teacher.
The interview went great, and the superintendent who was interviewing me essentially offered me the job halfway through the interview. Despite this, when it was time to talk dollars, though, I wrestled with myself a bit before telling her my hourly rate.
There were a couple of reasons for this.
One is, I’m new to being paid hourly. As a contractor, my hourly rate is higher than my salaried wage. This is because I’m not fully compensated for all my prep time for my classes. I’m not paid for miles, insurance, retirement, or any other benefits. If a child doesn’t show up for class, I’m not paid. The school district doesn’t have to pay half of my Social Security wages, which is a full 6.2% of my earnings they would pay if I were a W-2 employee. When I started working as an ESOL Teacher, the hourly rate felt high to me and I had no experience in the field, so no one to ask.
But over time, I’ve realized that my hourly rate isn’t as high as I thought. At the end of the year last year (2016), my first full year as a contracted worker, I realized that I made somewhat less per year than I did as a salaried worker. This is because I worked 15 hours per week instead of 25, and didn’t work summers.
Since I’m paid and compensated hourly, it was difficult for me to know exactly how much I’d make as a contractor until the year was up. I often don’t know exactly when I’ll work because of testing, field trips, and holidays. I can estimate, but it’s just that–an estimate.
However, when I was negotiating with this school district, I was still wrestling with the “large amount” of money I made per hour. So when the superintendent looked at me and asked my rate, I had an internal struggle. I don’t know if she could see it on my face. I finally told her my rate, but rounded down to the dollar below.
Something interesting happened after that. She started in on a bit of a verbal tear. “That’s a LOT of money,” she told me. “I don’t know if we can pay you that. I don’t know if my current ESOL Teacher makes that much money. I can’t pay you more than her. I don’t know if we have the budget for that. I just don’t know if that will work.” Continue reading “On Negotiating as a Woman”
We are now in September. School has started, my work has started, and we have weathered the transition pretty well, for being a week and a half in. I’ve focused on making our morning routine for school better, and so far it’s been great. Both our boys have focus medication they take, so I’ve started giving it to them right as they wake up. Then, it has time to kick in and they can actually get their clothes on, come down to eat breakfast, and get their teeth brushed without a zillion reminders, getting distracted with Legos, or staring off into space for half an hour. Better yet, I’m not yelling at them all morning.
That may sound like crazy talk to people who don’t have kids with attention problems, but it’s our reality. I was talking to a teacher this morning, and she (who also has ADHD) said she noticed the kids in her class whose parents yelled in the morning. “Anytime I raise my voice in the slightest,” she said, “they’ll reflectively wince, like they’re hyper-attuned to yelling.” I gulped. I’ve seen my kids do that in the past. Hurts my heart that I was yelling that much. But I’m so grateful that we’ve changed things up, and they’re taking their medicine earlier. They’re able to get dressed, get their breakfast, brush their teeth, and pack their bags, with minimal reminders. And they’re so proud of themselves. With zero yells and lots of “great job this morning!” It feels so awesome. So my fingers are crossed that our mornings keep going so well.
Summer flew by. August was a relaxed month. Each kid had one week of camp, and we spent our days outside, enjoying the summer, inside, putzing around the house, and visiting friends and family. I never wanted the summer to end, but it did, and everyone has reluctantly returned to a steady routine.
Each time summer ends, I’m reminded why location independence is so appealing. While we love routines, and I think we’d enjoy a routine in a new place, having the freedom to explore, visit with family, and plan our days in the moment is a beautiful way to live. Routine weighs us down. Summer lightens us up, gives us travel wings.
Speaking of wings, we booked our flights to Santiago this weekend. So we’re officially booked for South America during Christmas and New Year’s. We’re debating whether to AirBnB our house while we’re gone, as a way to earn some extra spending money for the trip.
August brought us a small up-tick in our net worth. Our Personal Capital Net Worth is actually showing higher than our own Excel spreadsheet, since Zillow has decided to increase the value of our house significantly in the last few weeks. I don’t know if it’s the new roof we put on or an increase in the local market (I suspect it’s the latter) but they’ve upped the Zestimate of our house by about 5%. I’m ignoring it, though, as I only update our house and car estimates at the beginning of each year.
Hello! Welcome to “Location Independent, International Jobs,” the Wednesday series where I showcase stories from people who have become location independent, work internationally, and/or continuously travel. I’ve interviewed some fascinating individuals who all have slightly different takes on location independence or living internationally. Recent posts include Mrs. Adventure Rich, Kerri, who owns a top-earning Etsy business, Steve from Think, Save, Retire, and Pete of Do You Even Blog?.
Guest posters will be sharing how they became location independent or how they got jobs abroad, but most importantly, they’ll share how their lifestyle has positively or negatively affected their finances and how they got to the life they’re living now.
The reason for this series is to showcase people who have already achieved what the ThreeYear family is working towards: location independence and/or securing international jobs. Today I’d like to introduce Jonathan, a Belgian financier and blogger who’s lived abroad for the past ten years. His story is really interesting, because he moved to Norway, then moved “abroad” to Paris for a year on a work assignment. Today he tells us why he took on that project and how it’s worked out for him.
Jon and I chatted via Skype and here’s what he had to tell us:
Can you tell us a little bit about your background?
I am from Belgium, and I lived there until I was 25. My background is in finance and business [there’s a unique business engineering degree in Belgium that combines engineering and finance, Joney explained, and he took classes in chemistry, physics, and math first and then eventually finance]. Then after my studies I wanted to start my career with a 6-month internship abroad (with the thought of moving back after the internship) and this led me to Norway. I found an interesting internship and I thought, “okay, let’s do it.” It was a 6-month internship and was the start of my career. I didn’t know much about Norway before going there. The internship became a real job, and then I got another job that sent me to France.
How did you make the decision to move internationally?
The first step to go to Norway was to join AIESEC (pronounced eye-sec), the international student organization. And they give opportunities to students around the world to do internships abroad. I joined that community to find a job abroad [Laurie: they’re one of the largest student organizations in the world that I’d never heard of, and are in the US, too, for those looking for internships abroad]. I didn’t have in mind to move to Norway specifically, but an opportunity came along there and I took it.
Happy Labor Day, US readers! Hope you’re all having a wonderful long weekend. To the rest of you, happy Monday! Hope it’s a great week.
Once in awhile, a line from one of my favorite movies flits through my head. It’s a little embarrassing to admit that I love this movie so much, but there’s the truth. The movie is Forgetting Sarah Marshall. It’s the one where Kristen Bell plays a TV-star who’s just broken up with her boyfriend of five years, played by Jason Segel. He goes to Hawaii to mend his broken heart only to find his ex staying at the same resort with her new boyfriend, played by Russell Brand.
It’s hilarious. In one scene, the one that stays with me, Jason Segel’s character Peter is getting a surf lesson from a stoner (Paul Rudd), and they’re on the beach, where Peter is laying on the surfboard, practicing. Paul Rudd’s character, Kunu, is urging him on. You’re never quite sure if Kunu is full of it or a secret yogi, as you watch.
Our family is on a three year journey to double our net worth and become location independent. So why did I spend so much on a journal?!
Doubling our net worth is a stretch goal, a BHAG, and it means we’ll need to spend the next two and a half years saving as much of our incomes as we can, plus working to earn as much as we can.
That means we need to plan our purchases carefully. This month, inspired by Mr. Tako’s family, we’re not eating out, and I’d like to keep that going.
We also spend very little on clothing, especially for the kids because we get great hand-me-downs. Our cars are used and gas efficient, and our furniture comes mostly from Craigslist (but I promise our house doesn’t look like a college student’s).