The Wall Street Journal recently reported that household debt, including mortgages, car loans, and credit card debt, has risen all over the world. Shockingly, Switzerland leads the pack, with household debt at 127.5% of Gross Domestic Product (that means, for every $100,000 of GDP a household produces, they hold $127,500 in debt!).
The average citizen in Switzerland, which has traditionally been an extremely wealthy country, has substantial assets underpinning this debt, or at least four times more assets than the average American.
Even so, Switzerland, as well as nine other economies including Canada, Finland, and Australia, have debt levels that are high and rising quickly, at a pace that mirrors that of the US right before the housing bubble. Continue reading “How to Help Your Economy”
Have you ever made a change in your life–maybe a huge one, like getting out of debt, or maybe a small one, like deciding not to buy takeout coffee–that in turn, caused benefits that you never imagined?
Maybe getting out of debt made you realize that your house was too big, so you decided to move into something smaller. Maybe not buying takeout coffee helped you realize you could save in other small areas, and after a few months, you ended up with enough to go on a trip to Florida.
This is the financial domino effect, and it happened to me.
Like a chain of dominoes, where one tile makes the whole line fall down, one seemingly small change in your life creates scenarios that make it more likely you’ll create other small changes.
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 all kinds of people who all have slightly different takes on location independence or living internationally. Posts include Steve from Think, Save, Retire, Pete of Do You Even Blog?, and Mrs. Adventure Rich.
Guest posters will be sharing how they became (or will become!!) 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.
Today, I’m thrilled to introduce Jim from Route to Retire. I reached out to Jim when I heard him share his plans to retire to Panama. Jim discovered the idea of FIRE (financial independence/early retirement) a handful of years ago. On regular salaries, he and his wife (Mrs. R2R) worked hard to reach a $1 million net worth in 2017. They’re now slated to retire at the end of 2019 (Jim will be 44 years old). They plan to move to Panama (along with their daughter, of course) in 2020 as part of their retirement strategy.
Can you tell us a little bit about your background? Where you’re from, how long married, degrees, kids, ages, etc.
I’m 42, my wife is 40, and we’re both from Ohio. I graduated with a degree in Computer Information Systems and my wife with a degree in Child and Family Development.
We met right after I graduated from college – at a bar of all places! It’s a little more innocent than it sounds, though. We were both there with mutual friends that introduced us. We hit it off and have been together ever since and we’ve been married now for over 11 years.
There’s nothing worse than that creeping dread–anxiety–that steals in and leeches all the joy and excitement from life. Mr. ThreeYear suffers from anxiety, and so do several more of my family members, including both my sons. So we have lots of practice in how to overcome anxiety.
Anxiety is genetic, and I’ve learned that the anxiety gene is powerful. It got passed down to both of my kids, even though I have little-to-no anxiety myself. But once you’re aware of it, it becomes very clear who in your family suffers from it. It took me awhile to figure out why Mr. ThreeYear was always so wigged out when we took the boys for a walk around the block. “Careful!” he would yell to the boys as a car rolled by at 15 mph 500 yards from us. “They’re on the side of the road and we’re surrounding them,” I would say. “Even if that car managed to light on fire and fly through the air past us, it would still miss the kids.” Somehow those types of comments didn’t help. And my own feelings about taking a walk soon changed–it was no longer fun, it was torture.
One of the best articles I’ve ever read on how to overcome anxiety (or just live with it) is written by Scott Stossel in The Atlantic. It’s a long read, but is an excellent primer on what it feels like to live with debilitating anxiety.
Over the years, we’ve experimented with lots of different ways to overcome the anxiety and overarching fear, the low-level worry that eats away at your ability to focus and find joy in any activity. Some worked and some didn’t. Here are our five proven hacks to combat anxiety in our family. They’re tried. They’re true. They work.
Without a doubt, exercising is the number one way to overcome or at least ease anxiety. We have seen it over and over again at our house. Unfortunately, according to the American Psychological Association, psychologists have been slow to study the mental health benefits of exercise. There are scant studies showing the effects of regular exercise on anxiety disorders or OCD. However, one study done by Princeton University and reported by the New York Times sheds light on how our body adapts to stress, after long-term training, by creating new neurons that produce GABA, a neurotransmitter which inhibits brain activity. The study found that the active mice felt just as much anxiety initially as non-running mice, when exposed to stress, but were soon calmed by their new neurons, designed to quiet the brain. It turns out that when we’re able to turn down our monkey brains, we can turn down our screaming anxiety, too, creating a calmer, less tense mental space for ourselves.
But how in the world to get to the gym when your anxiety is sky high? It’s the last thing you want to do.
What would your life look like with no more payments? No more car payments. No more credit card payments. No more student loan payments. How much extra money would that give you? Imagine the freedom to travel, to build your dream house, to finally retire. It’s a new year. And a chance to finally, once and for all, get out of debt. But what if you’ve tried before, and nothing’s worked? Or you’ve gotten out of debt only to get back into debt?
If you’re reading this, you may have an overwhelming amount of debt to tackle. Or you may be a personal finance guru, and need this advice like you need an extra helping of pasta with dinner.
Never fear! This guide is designed to help you get out of debt, but much of this advice will also work for other large, looming goals you’ve set for the year.
But why, you may be asking yourself, should I listen to this random voice on the internet? What does she know about how to get out of debt or how to accomplish my goals?
I have written every detail of how Mr. ThreeYear and I managed to get out of debt in this post and this follow up post, but in case you’re new, here’s a recap.
When Mr. ThreeYear and I got married, we were both debt free. This is something of a miracle when most college graduates finish college with debt. According to Tica, The Insitute for College Access and Success, 76% of graduates from New Hampshire, where we live, have college debt upon graduating as undergraduates, and the average debt burden is $33,410. That’s for undergraduate education!
I was fortunate to have scholarships to college and parents who paid the rest. Mr. ThreeYear was fortunate to live in a country where undergraduate education is more reasonably priced: Chile. When we met (in said country), neither of us had any debt. We spent a few years living like the DINKS we were, but Mr. ThreeYear’s way: we bought everything in cash. If we couldn’t afford to buy it with cash, we couldn’t afford it. I scoffed at Mr. ThreeYear as he saved up to buy a car, in cash. “Why don’t you just take out a car loan?” He looked at me like I was crazy. “I don’t want to take out a car loan! I’ll just wait and buy it when I have enough money.”
Two years later, we moved to the States. We moved to the fast and furious city of Atlanta, where Mr. ThreeYear, and then I, found jobs, and slowly, every-so-slowly, we began to adopt the Atlanta way of life. First, we bought a house. We had been renting a very nice, 1100-square-foot apartment that was 15 minutes away from Mr. ThreeYear’s job (it was literally two miles away from us, but you know, Atlanta traffic). It had tennis courts and a pool, and a low rent (we paid around $850 a month for a two-bedroom in the heart of the city), but we decided we should buy a house, instead. Continue reading “The Average Joe’s Ultimate Guide to Getting Out of Debt”
Our family has been planning to become location independent and move for a while, now. Our dream is to double our net worth by the time I’m 40, and find jobs that will allow us to travel more, split our time between two continents, or live in a foreign country for a few years. Because… we only have one life, right? And the kids will be little for like ten more seconds and then they’ll be grown… but making the decision to sell our house? It’s not easy.
One of the reasons we travel so much is to remind ourselves that there is another way to live than the way we currently do. We are a family of habit, and it’s easy to become so immersed in the routine of our daily lives that we never question our decisions or habits.
But one question that Mr. ThreeYear and I have had nagging at the back of our minds for a while now is… should we sell our house and find a smaller place to rent?As I wrote about in The Best Way to Avoid Lifestyle Creep, keeping your housing costs low is key to financial independence. And we’ve had the unsettling suspicion that our house is a little too big for us for awhile.
After we got back from Chile last week, that suspicion was confirmed. We spent most of our time in Santiago staying in a less-than-600-square-foot (52 sq. meter) apartment. It was small, and with three bedrooms and two bathrooms, was extremely space efficient. Yes, it was a little tight sometimes, and cooking was a bit difficult. But there were definite benefits, as well. One benefit was the shared space. We were able to go downstairs and use the common areas for the Junior ThreeYears to ride their scooter, or swim in the pool. There were tons of other kids playing, too, and while there wasn’t a lot of interaction, because of the language barrier, that would definitely change if the kids had spoken the same language.
While we were in the apartment itself, we didn’t get in each other’s way, surprisingly. The boys each had their own bedrooms, and they’d take their few toys we had packed and go play or read in their rooms. We did homework each morning on the small round breakfast table, then would move the school books to another part of the apartment when it was time for lunch. I even lost Junior ThreeYear in that tiny space at one point! (He was on the balcony, reading, and I didn’t see him because of the curtains).
The thing that was so nice about the small space was that we were together, we were cozy, and we were able to enjoy each other’s presence. Our current house is so big that we can’t see or hear each other when we’re in our rooms, and it can feel lonely. Most of our time is spent in the common area, our dining and living rooms, which are basically one big space (and are larger than the entire apartment in Chile, by the way).
Little ThreeYear has grabbed my hand at several points since we’ve been back and asked me to come with him to some remote part of the house, “because I’m scared to go to the basement alone, Mama.” Our basement, by the way, is not a dark, bare-boned forgotten space in the bottom of the house. It is finished, carpeted, and filled with Little ThreeYear’s toys, as well as a comfy couch and chairs. But after all that togetherness in Chile, Little ThreeYear feels lonely in the vast swath of basement without another person.
But does it make sense to sell our beautiful home, which we bought in a short sale at a very good price, with its spacious backyard, forest hiding-spots, and ample space for visitors, to move to a condo with no garage (a huge negative during New Hampshire winters), much less space, and community fees? Continue reading “To Sell or Not to Sell?”
Happy New Year! As this post is being published, it is now 2018. I hope you’re having a great year so far!
Just under a year ago, I started writing this blog in earnest. I published a few posts in the fall of 2016, but had done absolutely nothing to promote them. In January of 2017, though, I started commenting under others’ posts and listing my website. Mrs. Frugalwoods, who lives close to me, graciously met with me, and she filled me with inspiration and practical ideas, as she is wont to do. I went home from that meeting with a lot of ideas percolating, one of which was to start blogging about the habits that could help me in achieving our family’s goal of doubling our net worth and becoming location independent in three years, which I dubbed “A Year of Good Habits.”
The idea came in part from Charless Duhigg’s infinitely practical book The Power of Habit: Why We Do What We Do in Life and Business. Duhigg is great at telling stories, and one of the stories he told really stuck with me: there was a young woman named Lisa who was overweight and a smoker. She was in debt and had never held a job for longer than a year. Her husband had just announced he was going to divorce her, so she took a spur-of-the-moment trip to Cairo, because she hadn’t yet maxed out her credit cards and had always wanted to see Egypt. One morning on her trip, after feeling helpless about the life she faced back home, she got in a cab and rode by the Pyramids. She decided, as she saw The Sphinx and the Pyramids of Giza, that the only way to change her life was to set a goal to work toward. So she decided to come back to Egypt in a year and trek the desert.
In order to do that, she knew she would have to quit smoking. So she went back to the US, gave up cigarettes, and started jogging. Replacing that one bad habit with a good one led to a series of new habits that changed how she ate, slept, exercised, worked, and organized her day. She eventually started running half marathons, then marathons, then went back to school to get her masters, bought a house, and got engaged. Continue reading “A Year of Good Habits: End of Year Reflections”
Hello readers! The ThreeYears are currently in Santiago, Chile, for Christmas and New Year’s. It’s summer here, so the weather is hot. Our family of four has been busy visiting family, traveling to the driest desert in the world, and generally enjoying ourselves.
Santiago is a city of about 6 million people, roughly one third of the total population of the country, located in the very center of the long and narrow string bean that is Chile. It’s nestled in a valley between several mountain ranges–the Andes to the east (mountains known as the Precordillera–not quite as tall as the Cordillera of the Andes a few kilometers away) and the Chilean Coastal Range to the west. More mountains, a small range called the Cordón de Chacabuco, which is part of the Andes, are to the north, and to the south, there’s the Angustura de Paine, another thin mountain range that extends toward the coast. So there are giant mountains everywhere you turn. It’s one of the reason people hypothesize that Chileans are want to end so many words in “ito,” the Spanish ending that makes things little, because when you’re constantly staring at giant mountains everywhere you go, you feel smaller.
Santiago is organized into neighborhoods, or comunas. There are 37 official comunas in the city, and some (the best neighborhoods) extend into the foothills of the mountains that surround the city. Those neighborhoods can get to around 1,000 meters in elevation.
Santiago has a thriving economy that leads Latin America–its economy is the second most competitive in the region. The Economist Intelligence Unit ranked Santiago the second best city in which to live in Latin America, after Buenos Aires.
One thing is clear to me as we ride out the end of 2017: if you set great goals for 2018, it will make a huge difference in what you’re able to accomplish next year. The world we live in today is practically designed to distract us from keeping our eyes on our most important goals and work (for example, as I’m typing this, I’m trying to ignore the loud cartoon my kids are watching across the room). So focus is key. And great goals help you keep your focus, all year long.
But how do you figure out the best goals to set for the upcoming year? Maybe you have fifteen burning desires that you’d love to achieve, but you don’t know how to prioritize them. Or maybe life is motoring along just fine, and you know you’d probably like to improve something, but you’re not sure what.
I found myself asking those exact same questions several years ago, and here’s what I’ve figured out really works when it’s time to goal set for the upcoming year.
Get crystal clear on your values
It’s hard to prioritize your goals if you haven’t defined your values. What are your values, though? Values are what you judge to be the most important things in your life–the things that deep down, you care about the most. Given that definition, it seems like it would be easy to figure out your values. But it’s not always.
Sometimes, you want to value something that you actually don’t care about that much. For example, when I was in my 20s, I lived in Santiago, and Mr. ThreeYear and I were figuring out where we should go next. I was offered the opportunity to become part of an MBA program where I’d complete half in Chile and half at a great school in Texas. But I declined, ostensibly because I wanted to get into a top-10 MBA school, like Wharton. In the end, though, we moved back to the US and I didn’t go to an MBA school at all. To the shock of almost everyone in my family, I became a stay-at-home mom for seven-and-a-half years. It turns out that what I thought were my values–getting an MBA and climbing the corporate ladder–weren’t really my values at all. I really valued family, which was the real reason I didn’t stay in Chile to start an MBA, because I missed my family back in the US and wanted to go home. And I really valued motherhood, and making sure my children had a secure start in life.
One of the best ways I’ve found to figure out your real values is the “What do I want?” exercise. It’s fairly simple. You take out a sheet of paper, and at the top, write, “What do I want?” Now, all you do is list the things you want. They can be as small and insignificant, or as large and pie-in-the-sky as you want. Anything that comes to mind goes on the list.