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A postcard from Europe: A mid-journey update on my travels

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Greetings from Prague! I'm just over halfway through my European vacation, so I thought it'd be fun to share some of my adventures and to take a glimpse at the financial side of this journey.

This trip is unusual for me because I'm traveling with a party of six. My cousin Duane has terminal cancer and wanted to see some more of the world while he still can. A few family members decided to join him. We're exploring Christmas markets as a group.

The Roth boys in Vienna

For the most part, Duane's health has been fine over the past two weeks. He tells me that he's felt great lately, and he's hopeful he has more life left in him than the doctors say. (Who knows? Maybe he and I can squeeze in another trip before his time on this Earth expires.) That said, he did have to take a short rest yesterday because he became dizzy and disoriented as we strolled the cobblestone streets of Prague. He's obviously not feeling 100%.

Our group doesn't have a set agenda. We're merely moving from city to city, exploring the Christmas markets and other touristy delights. Often when I travel, I'm a traveler not a tourist. Right now, I'm a tourist. I wouldn't want to do this every trip, but I'm fine with it at the moment.

General Impressions

So far, we've been we've been to Vienna, Budapest, and Prague. I liked Vienna. I loved Budapest. But after 24 hours here, I'm ambivalent about Prague. I didn't like it at first, but the city is growing on me. I think one problem is our location.

In the first two cities, we were a mile or two outside the downtown core. We stayed in residential neighborhoods. (In both cases, we were relatively close to university areas too, but that was pure chance.) We were directly across from metro stations each time, so it was easy to get where we wanted to go.

Here in Prague, however, we're staying in the downtown core, which means we're immersed in the tourists. (Yes, I realize that we ourselves are tourists and thus part of the problem.) There's no escaping the crowds and commercialism because of our location. This is an interesting lesson to learn for the future: Stay close to downtown in popular cities but not in the downtown. If you're close to a transit station, it's plenty convenient to get where you want.

The Christmas markets have been festive and fun. They remind me of Portland's Saturday Market, a craft market held every weekend in my home city. Vendors erect small stalls where they sell either food or wares.

A lot of the stuff being sold at the Christmas markets is the same from stall to stall — ornaments, winter clothing, jewelry, souvenirs — but occasionally there are vendors with unusual items, such as cookie stamps, wooden toys, and hand-forged knives.

Shopping at a Christmas market in Prague

I'm more interested in the food stalls. In each individual city, these “huts” are similar to each other. But the food offered varies from city to city.

  • Vienna food stalls sold wieners (“wiener” literally means “Viennese”), wurst, spaetzle, baked potatoes, toast with cheese, and roasted chestnuts. The drink vendors sold hot punch and glühwein. (Glühwein is mulled wine. It's very popular in Vienna.)
  • Budapest food stalls sold paprika sausages — Hungarians love their paprika! — and pig knuckles and delicious goulash. The drink vendors also sold mulled wine and a variety of punch.
  • Prague food stalls sell chimney cakes, fire-roasted ham, toasted cheese (with jam), and a sort of potato-onion dumpling dish. Here they sell mulled wine too, but they also sell hot mead and cold pilsner. (Pilsner comes from Bavaria, and it's available everywhere. I like the Czech word for beer — “pivo” — and I enjoy asking for it at the market: “Pivo, prosím.”)

A food stall at a Christmas market in Budapest

The one factor our group failed to consider was the cold. Actually, we considered it…but not enough. We prepared for Oregon cold, not central European cold. (It didn't help that Duane emailed us from Paris to say that the weather wasn't as cold as we'd feared.)

We all brought warm clothes, but each of us has had a turn getting chilled to the bone. One night in Vienna, I was the coldest I've ever been in my life. While the rest of the crew enjoyed ice skating, I made a brisk one-mile walk back to the flat so that I could take a hot bath. Everyone else has been equally cold at some point.

I'm a little worried about Switzerland. The forecast low for when Duane and I arrive in St Moritz tomorrow night is -25 celsius (-13 fahrenheit). Holy cats!

J.D. enjoying Christmas market food on a cold day in Prague [Read more…]

Spare change: Awesome articles from elsewhere

The best lifehacks for poor people

A detailed guide to using the cash envelope system for budgeting

"I don't think we owe college to our kids. Does that make me a bad father?"

Fight burnout with both saving and spending

Will divorce devastate your plans for financial freedom? [podcast]

How to decide whether to relocate for a job

How to know if your partner is financially "cheating" in your relationship

Customer service chats are watching you type before you hit "enter"

Are you an imitator or an initiator?

How [real] CEOs manage their time

Find an archive of all past spare change links on Pinboard.

Which matters more for building wealth: your saving rate or your investment returns?

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My name is Zach, and I write at Four Pillar Freedom, where I tend to tackle financial topics through data visualization. While J.D. is on vacation, I offered to explore one of his favorite topics: the effects of saving rate versus investment returns.

Albert Einstein supposedly once said that compound interest is the eighth wonder of the world. But does data actually support this claim?

In this post, I explore the nature of compound interest, how long it takes to become an important factor in wealth accumulation, and whether or not it actually matters much for people who hope to achieve financial independence in a relatively short time.

What matters more: your saving rate or your investment returns?

Accumulating Wealth in the Early Years

Suppose your goal is to achieve a net worth of $1 million. If you invest $10,000 every year and earn a 7% annual return on your investments — which is a reasonable assumption for long-term stock market returns — you'll accumulate $1 million in about 30.7 years.

The chart below shows exactly how long it would take to reach every $100,000 net worth milestone, using the assumptions of a $10,000 annual investment earning a 7% annual return:

Notice how each $100,000 net worth milestone takes less time to reach than the last. In fact, it's mind-boggling to see that it will take you longer to go from $0 to $100,000 than it will to go from $600,000 to $1 million:

The first $100,000 takes the longest to save because you don't receive much help from investment returns early on. The time it takes you to go from $0 to $100,000 is mostly dependent on the gap between your income and your spending. [Read more…]

The perfect gift is cheap and easy

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If you're panicked because you still haven't thought of the perfect gift for the people on your Nice List, you'll be relieved to know you don't need to spend as much time as you might think looking for something thoughtful. You also don't need to run up your credit card bill.

Why? Because neither of these things is likely to be appreciated by the gift getter.

In fact, a 2008 study from Stanford University researchers found that spending a lot of time and money to select a gift doesn't make a bit of difference to the recipient. According to Francis J. Flynn, an organizational psychologist at Stanford, the price of a gift is more important to the giver than the getter. (Plus, most recipients actually prefer cash or something from a gift registry, such as their Amazon wish list.)

The perfect gift

Price Matters More to the Giver

Flynn says that people recall the most expensive gifts they've given, but price didn't play much of a role when it came to recalling gifts received. The givers of expensive gifts also expected more appreciation.

In one experiment, for instance, people were asked to imagine giving or getting a graduation gift. Those who gave an iPod had higher expectations than those who gave a single compact disc. [This study is from 2008, remember.] The recipients were equally grateful for either gift.

Dr. Flynn and his colleague, Gabrielle Adams, believe this is because the givers are more focused on their shopping experience, the “egocentric bias” of picking something more expensive over less expensive options or taking a long time to find the right gift.

Here's the thing: Recipients don't know how long you shopped or that that you considered less-expensive options. In certain cases, your idea of the perfect gift may actually strike them the other person as just plain wrong, especially if their frame of reference includes options that you ignored (or didn't know about), such as items from a wish list.

The Pros and Cons of Wish Lists

Wish lists are tricky. They're a point of contention for many. Some love them because they know their gift will be appreciated and used. Some find them impersonal or tacky.

Whatever your feelings, Dr. Flynn's research reveals something interesting. When a person is giving a gift, they believe that choosing something that's not on the list will be perceived as more thoughtful and considerate. However, the opposite is often true.

In one study, people were given money to buy gifts for somebody else via Amazon. The gifts chosen from a person's wish list were more appreciated than those selected independently by the giver.

My own experience bears this out. When I'm a giver, I enjoy spending time and money to select gifts thoughtfully. It makes the gift more meaningful to me. But when I'm the recipient of a gift, I prefer something from a wish list or a registry.

But just because a gift from a wish list is what the recipient wants, that doesn't mean the person giving the gift should be left out of the equation. It's an exchange between two people, after all.

Miss Manners Does Not Approve

In an interview with NPR's All Things Considered, Judith Martin, author of the Miss Manners column, shared her thoughts about gift lists and registries:

“There is no way to make blatant greed polite. The gift registry thing is never a good idea and has gotten hideous in that people are constantly telling other people to buy them things: ‘Give me this,' the trading of shopping lists, ‘I want this,' and ‘This wasn't what I asked for and you take it back and get me something better' and ‘I prefer cash'. All of that stuff is just rude, rude, rude and it makes present exchanging meaningless, the whole custom meaningless.

Here's where I get frustrated with Miss Manners, though. I tried to follow her advice about registries when I was getting married. But with two bridal showers thrown by generous loved ones and coworkers, I broke down. I must've had 20 people ask me where I was registered, and when I said I wasn't, some got really frustrated. I gave in and registered.

As a gift-giver, I understood why they wanted a registry. It's just easier. They didn't know what I already owned or what color of tablecloth I might like in my dining room. They wanted to give me something I'd enjoy. They didn't want to waste their money on a gift I wouldn't use.

The Bottom Line

These studies (and my own experiences) have led me to believe the following about giving and receiving gifts:

  • If you want to take a lot of time and spend a chunk of change on a gift, go for it. It's your gift to give. You make the rules.
  • If you don't know what to give and you think a solicited gift, or cash, is a cop-out, rest assured that your recipient will greatly appreciate either.
  • As for registries, I agree with Miss Manners. But my own experience is that some gift-givers want wish lists and registries. That said, I'd only give out the information if I was asked for it.

What about re-gifting? What if you give something that you didn't pay for, but actually once received as a gift yourself?

In a New York Times write-up of Dr. Flynn's work, he says: “People assume it would be incredibly offensive for them to re-gift, but this may be another case where givers don't understand how recipients would feel.” Plus, if you don't tell the recipient that you've re-gifted, how will they ever know?

How we used geographic arbitrage to pursue our dreams (and enrich our lives)

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Howdy. My name is Michael Robinson. While J.D. is visiting Europe with his cousins, I volunteered to share how my wife and I have leveraged the power of geographic arbitrage to pursue our dreams — and to build our wealth.

Geographic arbitrage means taking advantage of the differences in prices between various locations. You earn money in a stronger economy (San Francisco, maybe, or the U.S. in general) and spend it in a weaker economy (South Dakota or Ecuador, for instance).

Geographic arbitrage is a powerful tactic worth considering if you want to increase your saving rate so that you can better pursue your financial goals. Several times over the course of our lives together so far, my wife and I have managed to unwittingly stumble upon the benefits of geographic arbitrage.

If you've ever chosen your vacation destination based on how strong the country's currency is — opting to visit England when the pound was weak, maybe — then you've practiced geographic arbitrage.

Today, I'm going to share three examples of how the concept has impacted our lives and helped us to achieve financial independence at 33. I hope these examples will spark some ideas for how you might be able to leverage geographic arbitrage along your financial journey as well.

About Us

I met my wife Ellen in Cuernavaca, Mexico in 2004. We were both studying Spanish at the same language school.

I was there to earn the last few credits I needed to complete a minor in Spanish. Ellen hoped the months of Spanish immersion would help her land a job as a bilingual elementary teacher in the Pacific Northwest.

Despite Ellen’s intention to avoid befriending any native English-speaking gringos like me, we hit it off right away and quickly became close friends.

As our months together in Mexico wound down, Ellen’s efforts paid off and she was hired by a bilingual elementary school in Shelton, Washington. I graduated and was offered a position as an international sales manager.

Ellen and I started a long-distance relationship that summer and I moved out to Washington to join her as soon as I could.

Michael and Ellen, hiking

Losing One Income Without Noticing It

Our first experience with geographic arbitrage was unintentional. We didn't even realize what we were doing at the time.

After Ellen’s first two years as a bilingual teacher, she asked her principal for a one-year leave of absence so she could return to Mexico and further improve her Spanish proficiency. Her principal agreed and we packed up and headed to Guadalajara for the 2007-2008 school year.

Although we lost Ellen’s annual $30,000 salary, we didn’t feel it much because our cost of living was considerably lower during that year in Mexico.

Our apartments in Washington had each cost us $800-$900 per month. In Mexico, we were able to find a suitable apartment to share for around $400 per month. Groceries and other goods and services were all also considerably cheaper.

Geographic arbitrage allowed us to maintain our standard of living in Mexico despite the loss of one income.

Taking Advantage of Taxes

During all of our highest-earning years, Ellen and I happened to live in Nevada, Washington, and Texas — all locations without state income tax.

While avoiding state income tax is obviously appealing, these states make up for that lost revenue by increasing taxes in other areas.

  • Nevada: There is no personal or corporate income tax because the state collects billions of dollars each year in the form of gambling taxes and fees. While we lived there, I gambled with exactly $0 of my money, avoiding this tax altogether.
  • Washington: Here we had one of the highest sales tax rates in the country (8.88%) and high gas prices on account of higher gasoline taxes. While we lived there, we didn’t consume a lot compared to most households, which lowered our sales tax burden. I also worked from a home office and Ellen taught at a nearby school so we didn’t really use inordinate amounts of gasoline either.
  • Texas: Here we also had a high sales tax rate (8.25%) and lived in the state with the fourth-highest property tax rate in the country — incredibly, we owed over 2% of our home’s value every year in property taxes! In Texas, we maintained our relatively frugal lifestyle, again reducing our exposure to the higher sales tax burden. And although we were pre-approved for an inexplicably high $750,000 mortgage in 2007 (on our two five-figure incomes no less!), we chose to instead take on a $100,000 mortgage and buy a starter home less than a mile from the office where we knew I’d be working.

We moved to Colorado in 2016, the same year we both stopped working full-time. This is the first state we’ve lived in together where we’ve been charged state income tax (a middling 4.63%, the 23rd-lowest in the country). But we have low property taxes and the lowest state sales tax in the country (out of states collecting sales tax).

Although we're now paying state income tax in Colorado, our earned income as early retirees is predictably the lowest it’s been in our fourteen-year relationship.

And although we’ve bought a home that cost us almost three times as much as what we paid for our Texas home, we’re actually paying less each year in property taxes.

Bonus fact for money nerds!

For anyone curious, here’s the complete list of states with no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Note, however, that while New Hampshire currently charges no state income tax on earned income, it does tax investment income.

Also, Tennessee currently charges no state income tax on earned income, but does tax some dividends and interest income. However, Tennessee has announced plans to phase out state income taxes altogether by 2022.

Making Money with Airbnb

Our most recent experience with geographic arbitrage was more deliberate.

When we learned that 31 October 2016 was going to be my last day of full-time work, it didn’t take us long to devise a plan to return to Latin America, this time with our two young children.

In our research, we quickly discovered The Earth Awaits, a useful tool for comparing the crime statistics, pollution levels, and cost of living of various cities around the world. (Get Rich Slowly reviewed The Earth Awaits last year.)

The Earth Awaits

At the time, Cuenca, Ecuador was the only Latin American city in their database that had earned the designations “low crime” and “low pollution”.

Since we were traveling there with a nine-month-old and a two-year-old, those seemed like great characteristics to us! We did some additional research on similar tools and local expat forums, and only became more and more interested in visiting the city.

Here’s a short promo video showcasing Cuenca and the surrounding Andean mountain region.

Shortly after we decided to spend our first winter in Cuenca, I had another ambitious idea.

I felt it would be wasteful for our house to sit empty for three months while we were traveling, so I proposed to Ellen that we experiment with hosting our home on Airbnb while we were away.

She was resistant at first, and rightly so. It was going to take a lot of work to get our home ready and sort out who would manage everything while we were away, among other things.

But she came around to the idea and we gave it a go. We've discussed our Airbnb hosting experience in more detail in the following articles at our website, and we've done a fair amount of Airbnb hosting since.

We were very impressed with the success of our Airbnb experiment. Our home’s first ever booking was $1,890 for 8 nights!

While we choose not to publish our net worth and our monthly expenses in dollars for personal reasons, I’ve prepared the following chart to illustrate the impact Airbnb had on our financial picture while we were traveling.

Robinson income and expenses

Let's look at these numbers:

  • Expenses: Our standard monthly expenses are represented on the chart as 100%. We’ve been tracking our expenses in Mint since 2008 and Personal Capital since 2013. Before that, I tracked another decade of our expenses in desktop budgeting software. So we feel pretty confident in our understanding and control of our monthly expenses.
  • Traveling Expenses: This shows approximately how much our monthly expenses dropped during our 6 months (two winters) in Cuenca.
  • Potential Portfolio Income: This shows our safe monthly spending level should we live solely off of our investment portfolio per the 4% rule.
  • Uncommon Dream Income: Although neither of us work full-time, I enjoy doing a day or two each week of consulting and we earn a small amount of income from our blog.
  • Rental Income: This represents the monthly income we’ve been able to earn through Airbnb while we’re traveling.

In case you missed it, let me draw your attention to an important point: Our monthly expenses while we were living in Cuenca were actually lower than our monthly Airbnb income.

So, if we hadn’t spent over a decade accumulating a portfolio of assets that could cover our living expenses, and if we weren’t continuing to earn any income, our Airbnb rental income alone still could have covered our cost of living abroad!

This actually exceeded my own expectations for our Airbnb experiment.

I also need to point out that we prioritized paying off our first home during the 2008-2009 recession. And we haven’t carried a mortgage since. The potential is certainly magnified by the absence of a mortgage.

But even homeowners with a mortgage or renters may very well be able to cover their housing related bills this way, freeing them up to more affordably slow travel.

If you're interested in becoming an Airbnb host, you can sign up with this link.

Closing Thoughts

When I ask people what they would do if money weren't a factor, traveling abroad often makes the list. While travel is a common desire, everyone’s specific motivations vary.

Some dream of learning another language while others are drawn to an area’s unique geographical features. Still others seek to experience life in a radically different culture.

For most of us though, money is a factor. But that’s no reason to give up on the dream of traveling abroad. Living costs around the world vary tremendously and many great destinations are quite affordable.

We’ve met a number of people living abroad who fund their overseas lifestyles in creative ways. Some live on personal savings while others rely on income from rental properties back home. Some work remotely while others find local work. A few of our expat friends have even started companies abroad.

If travel is a priority for you, don't let your current financial situation act as a barrier. Get creative. Use tools like The Earth Awaits to discover affordable places to live. Leverage the power of geographic arbitrage to pursue your dreams!

Christmas on a budget: How to save money on Christmas gifts (and still have fun)

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HO HO HO!

Just like that, the holiday season is upon us!

This year, I intend to do most of my Christmas shopping during a three-week tour of Europe with my cousins. We're deliberately visiting as many Christmas markets as possible, so I hope to find a variety of interesting and unusual gifts for my family and friends. (They need to be small, though. I don't have much space to carry things home.)

While I'm buying new (and possibly expensive) gifts this year, that's not normally my style. I'm a fan of keeping Christmas frugal.

Being a frugal shopper doesn't mean you can't give thoughtful gifts though. In fact, my experience has shown that it's often more fun and rewarding to impose limits on gift-giving. These limits breed creativity and inspiration. “Christmas on a budget” doesn't have to mean “Christmas without fun”.

This article contains some smart ways to save money on Christmas gifts while celebrating the season. (These tips are great for Christmas, for Hanukkah, for Kwanzaa, for Festivus, or for whatever feast you celebrate this time of year.)

It's an amazing frugal Christmas savings spectacular!

Frugal Christmas

What Kids Really Want for Christmas

I have this idea in my head that kids become mercenaries at Christmas, demanding the newest, most popular toys. I'm not sure how I've arrived at this notion because that's certainly not how my brothers and I were when we were younger. Sure, we wanted cool stuff, but we never made demands.

In fact, Dad used to tell the story of how ashamed he was one Christmas when he and Mom were going through a particularly rough patch. They were always poor and struggling with money, but this year was especially bad. They couldn't afford Christmas presents for us three boys. Rather than cry about it, we went through the toys we already had, wrapped them up, and gave them to each other.

I have only a dim memory of this myself, but Dad used to talk about it often.

This bit of personal family history reminds me of Unplug the Christmas Machine by Jo Robinson and Jean Coppock Staeheli. This book urges readers to escape the commercialism of the holiday season, to make it a “joyful, stress-free” time for the family. In a chapter entitled “The Four Things Children Really Want for Christmas”, the authors write:

One concern voiced by most parents is that of shielding their children from the excesses of holiday commercialism. While adults can mute the TV when the ads get annoying, children are defenseless against the onslaught of ads. As early as the age of four or five, they can lose the ability to be delighted by the sights and sounds of Christmas, only to gain a two-month-long obsession with brand-name toys. Suddenly, all they seem to care about is how many presents they will be getting and how many days are left until they unwrap them.

Many parents find it a challenge to create a simple value-centered Christmas in the midst of all the commercial pressure. But the task is made much easier when parents keep in mind the four things that children really want for Christmas.

Robinson and Staeheli argue that children don't really want clothes and toys and games. The four things they actually want are:

  • A relaxed and loving time with the family. Children need attention. During the holidays, normal family routines are temporarily set aside for parties, shopping, and special events. It's important to slow down and spend quality time with your kids.
  • Realistic expectations about gifts. Kids enjoy looking forward to gifts and then having their expectations met. The key is to manage their expectations. You might try, for example, to educate your children about advertising in an attempt to mitigate its effects.
  • An evenly paced holiday season. The modern Christmas season starts months before December 25th, when the first store displays go up, then things end with a bang on Christmas day. The authors suggest beginning the season late in the year. Get out the Christmas music on December 15th, then get the tree on the following weekend. Schedule some low-key family events during Christmas week. Stretch the season to New Years Day.
  • Reliable family traditions. When I talk to my friends about what Christmas was like when we were children, it's not the gifts that we remember. We recall the things we did as a family. I remember sleeping next to the tree every Christmas eve, but never being able to catch Santa in the act. I remember seeing the cousins. I remember decorating the trailer house. Your kids will remember the traditions, not the gifts.

Because I don't have kids, I don't have first-hand experience with their expectations around the holidays. Other folks in the GRS community do, though. A reader named PB, for instance, emailed some similar thoughts. She writes:

We keep our children's expectations realistic by following an old tradition — that Santa fills the stockings and only the stockings — nothing under the tree. This limits the size and quantity of gifts. Plus, because they're all relatively sure what they can and cannot wheedle out of parents for tree presents, their expectations are kept in check.

We buy one new outfit for each, usually a special piece of clothing that they really want, and spent only about $100 per child. I also shop all year long and get some real bargains.

We also emphasize doing a lot of things with our church — food delivery to the elderly, singing at nursing homes, and service to others. Our ongoing tradition is a big Christmas eve dinner with lots of friends and then the midnight service, where we all play an instrument or sing in the choir. This is what the kids talk about — not about what they receive.

It seems that the key to keeping kids happy at Christmas is to manage their expectations. But what about exchanging gifts with other adults? [Read more…]

Your financial family tree: What our parents teach us about money

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Last weekend, Kim and I flew to Utah for a reunion with friends from the 2016 chautauqua in Ecuador. While in Salt Lake City, we met up with Jesse Mecham (the founder of You Need a Budget), visited Utah Olympic Park, and attended a Sunday morning performance of the Mormon Tabernacle Choir.

Our group also spent an entire afternoon at the Mormon Family History Library, where we explored our genealogy. Not everyone was enthused about researching their family tree at first, but eventually even those who thought the exercise would be lame found themselves wrapped in it. It's fun — and enlightening — to unravel the threads of time and discover who your ancestors were and where they came from.

Kim at the Family History Library

Flying home from Salt Lake City, I got to thinking about how our family trees don't just influence our genetics. We inherit more than physical features from those who came before us. We also inherit culture and psychology and values. And yes, we inherit financial habits from our parents and grandparents.

Each of us has a financial family tree.

My Financial Family Tree

I write often about our money blueprints, the set of subconscious “scripts” that define our behaviors and attitudes toward money. Society at large — our friends, co-workers, the mass media — plays a role in writing these scripts, but most of our money blueprints are inherited from our family — especially our parents.

In a way, it's as if our money blueprints are a product of our financial family trees. Our grandparents passed their feelings about money to their children, and these children instilled their habits and attitudes into us.

When I look at my own relationship with money, it's easy to see how my present actions and attitudes — even at nearly fifty years old! — were inherited from my parents. [Read more…]

Upcoming money events that might be of interest to GRS readers

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A lot of things have changed in the world of money since I founded Get Rich Slowly in April 2006. Nowadays, for instance, there are many more opportunities to meet up with like-minded folks in Real Life. From annual retreats like Camp Mustache to monthly meet-ups with Choose FI local groups, it's never been easier to connect with other money bosses!

In fact, today there are almost too many events to keep track! I have a stack of invites and announcements in my inbox. Rather than write about each one individually, I thought I'd take this time to share some of my favorites all at once.

Here are some upcoming money events that might be of interest to GRS readers. (At the end of this page, I'll include my planned public speaking gigs for 2019.)

Financial Freedom Online Course

First up, Douglas Tsoi is presenting another edition of his highly-popular Finance Freedom course starting December 1st.

Tsoi is the founder of Portland Underground Graduate School (or PUGS), a grass-roots alternative education program for everybody. PUGS courses are designed to be both affordable and relevant to everyday life. (Classes include things like Sex Ed for Adults, The Art of Effective Communication, and, yes, Pizza School!)

The PUGS Financial Freedom course is a two-month, self-paced class containing 32 lessons related to the basics of personal finance: budgeting, money blueprints, setting goals, and reducing consumption. Although the class is online-only, you're not going this alone. Each cohort has a private discussion forum. And after the class is over, members often form long-term support groups to help each other achieve their financial goals.

Here's a testimonial from one couple who took the PUGS Financial Freedom course:

Tsoi and I collaborated earlier this year to present a three-hour Financial Freedom workshop here in Portland. I didn't know him before that project, but now I consider him a close ally in the quest to promote financial education. He's both passionate and sincere, and his message is very much aligned with my own.

If you've been looking for some sort of group-based opportunity to improve your own financial skills, check out the PUGS Financial Freedom course. (Tsoi also offers a second Financial Freedom course that covers more advanced topics.)

Lola Financial Retreat for Women

Next, my friend Melanie Lockert (founder of the fantastic Dear Debt blog) is back for her third year hosting the Lola Retreat, a weekend financial forum for women only. She'll host two events in 2019. The first is in Los Angeles from February 15th to 17th.

Because this is a “no boys allowed” event, I asked former attendee Kate Nesi (who hosts the Lifelong Learning Podcast) to share some of her experiences at the Lola Retreat. Here's what she had to say:

Rarely do we open up about our financial situations, and while I try to share with others in person, it’s a clammy subject. The Lola Retreat was a safe space to open up, discuss, ask questions, and really dive into money.

There were two days of sessions. Throughout those talks I learned a great deal about what other ladies in the room may be struggling with, or how I might shape our financial future as a family. The panel discussion was very touching with moments of tears for the situations women have been in due to financial pressure. It was intense and took a lot out of me mentally, but in such a positive way.

Overall, the weekend was wonderfully exhausting with so much good information to pack into such a short time. The information was amazing, insightful, and each woman brought something very different to the table. I would highly recommend going to the Lola Retreat in the future!

There were women I met and have kept in touch with from as far away as California, and to the south in Florida. I look forward to continuing to follow their money journeys and supporting other women on their own financial journey after having been a part of Lola.

I cannot recommend a retreat more than Lola for women to get comfortable sharing and learning about money!

I've talked with several other women who have attended past Lola Retreats. Like Nesi, they all have great things to say about the event. If you've been looking for a chance to meet other women who want to master their money, you should consider the Lola Retreat

Other Upcoming Events for Money Bosses

While these are the two events for which registration is now open, there are lots of others that are still in the planning stages (and/or sold out).

For instance, you've probably heard me mention the annual chautauquas in the past. These intensive week-long events have been held in Ecuador, Greece, and the U.K. I've spoken at both the money-themed chautauqua and the happiness-themed chautauqua.

In early October 2019, I will be presenting on “money and purpose” at a money-themed chautauqua in Portugal. The precise date and location of the event are still to be determined. If you'd like to participate, sign up for the mailing list here so you'll be among the first to hear when the details are announced.

While the chautauquas are awesome, life-changing experiences, not everyone has the time and money required to attend. Fortunately, Camp FI offers an affordable alternative.

Camp FI events are held in a variety of locations around the U.S. They're low-key gatherings at which a few dozen folks come together to talk about money and meaning for a long weekend. Plus, we tend to drink a lot of beer. (And whisky.) I've spoken at four previous Camp FI events, always giving a variation of the following talk:

In mid-October 2019, I'll be speaking at Camp FI: Southwest in Joshua Tree, California. Kim may or may not be with me (we haven't decided yet). Our hound dog may or may not be with us. Tickets have already sold out for half of next year's Camp FI events. I'm not sure how many are left for Joshua Tree. If you'd like to join us, you should book soon!

Last, but not least, here's something that's an event in another sense.

A few years ago, I came up with the idea of opening a “money store”, a place where I could provide down-to-earth financial advice for average people. I never followed through on that. My friend Shannon McLay, however, did follow through on her own vision for something similar.

In 2016, Shannon opened the Financial Gym in New York City. Her goal is to provide top-quality financial advice to everyone, not just folks with half a million dollars to invest. Last week, Shannon and her Financial Gym were featured on the Today show! Take a look:

Congratulations, Shannon! For anyone else who lives in New York City: If you're looking for help in achieving financial fitness, you should drop in and visit the Financial Gym. (Full disclosure: I invested $50,000 of my own personal cash in this business, so I have a vested interested in seeing it succeed.)

Fiology: The online encyclopedia of financial independence

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FiologyFiology is a brand-new site that I believe will interest many Get Rich Slowly readers. It's an attempt to gather in one place related articles about a variety of common topics from the world of financial independence and early retirement.

Here's how Fiology founder David Baughier describes his goals:

My motivations for Fiology are simple – to share the message of Financial Independence while highlighting some of the best and brightest in the Financial Independence community on the internet. At no point will a visitor be charged by me to access the information on the site.

The majority of the material Fiology uses is free and readily available elsewhere on the internet. The value of Fiology is that it takes that information and organizes it into an easy reference that we can share with those interested in the concept of Financial Independence.

It's a simple concept, but it's also brilliant.

Each of the 53 lessons covers one specific topic. These lessons range from the milestones of financial independence to caring for aging parents, from geoarbitrage to retirement account basics, from compound interest to happiness. The lessons contain blog posts, news articles, podcasts, and YouTube videos, plus suggested apps, books, and tools.

Let's use one of my pet subjects as an example. Lesson two at Fiology is called “Why FI”, and it's all about figuring out why you want to retire early. Here's a screenshot of the resources Baughier has pulled together on the subject:

Why FI?

I appreciate that Fiology is uncomplicated and easy to navigate. Because its aim is to be a central resource, it's not bogged down by a lot of baggage. Baughier is able to gather information and present it in an accessible format. I also like that, if you'd like, you can subscribe to a weekly email so that you can consume all of the lessons over the course of a year.

Here is a list of all the lessons from Fiology (along with links to related GRS material, when appropriate):

Fiology is a valuable reference for anyone interested in financial independence and early retirement. It's a site well-worth bookmarking. It's going to become the first place I visit when I'm researching articles and need help.

How to retire early: Early retirement by the numbers

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More and more, I'm meeting people who want to know how to retire early. There's been a lot of buzz in the media lately about early retirement, and that's led folks to wonder how much money they would need to quit their jobs — or if early retirement is even something they should consider.

Why retire early? Well, for most people a job is a necessary evil. We work because we have to. Early retirement gives us the flexibility to choose how we spend our time, whether that entails sitting on the beach drinking margaritas or it leads to new work that provides meaning and fulfillment.

Lots of us dream of leaving the workplace in our forties or fifties instead of sticking it out until age 65 — but we keep working to support the lifestyles to which we've become accustomed. We like our iPhones and Playstations and Priuses, so we surrender to the idea that we'll have fifty-year careers.

Still, there are a surprising number of folks who manage to retire young. In fact, the 2018 EBRI Retirement Confidence Survey found that 35% of retirees left the workforce before they turned 60. (Previous surveys have shown that 18% of people retire by age 55.)

These folks aren't lucky lottery winners, and most didn't have high-paying careers. In general, those who manage to retire early have opted to live with less when they're younger so they can obtain financial freedom before they're too old to enjoy it.

Early retirement is a fantastic goal, but it can be tough to achieve. Three major obstacles stand in your way:

  • You have less time to earn money. If you start working at 20 and retire at 65, you have 45 income-producing years. But if you retire at 45, you only have 25 income-producing years.
  • You spend more time living on your savings. Life expectancy for the average American is nearly 80 years. If you retire at 65, your savings will probably have to last only ten to twenty years; if you retire at 45, your savings may need to support you for thirty or forty years.
  • You don't enjoy traditional retirement benefits. If you retire young, you can't access Social Security or Medicare for several years — or decades. You also face penalties if you choose to access your retirement accounts before you reaching minimum age requirements. (I'm experiencing issues with this gap already!)

In short, early retirees have less time to make money, and that money has to last them longer. Even if you stay healthy and the economy cooperates, that's asking a lot.

That's not to say you shouldn't plan to retire early — it's a laudable goal, one that I encourage here at Get Rich Slowly — but if you're serious about doing so, you need to be diligent. You need to have a plan. And you need to understand the numbers.

Let's take a look at the basics of how to retire early — and why you might want to do so.

How to retire early [Read more…]

Why don’t Americans save?

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A new report from the Center for Financial Services Innovation says that only 28% of Americans are financially healthy. And it reinforces something we already knew: The U.S. saving rate sucks. Americans don't save.

The U.S. Financial Health Pulse divides people into three tiers of financial health.

  • Financially healthy people (28% of the U.S., 70 million people) are “spending saving, borrowing, and planning in a way that will allow them to be resilient and pursue opportunities over time.”
  • Financially coping people (55%, 138 million) are “struggling with some, but not necessarily all, aspects of their financial lives.”
  • Financially vulnerable people (17%, 42 million) are “struggling with all, or nearly all, aspects of their financial lives.”

Financial health of Americans

The full report is huge — it's an 80-page PDF! — and filled with data based on survey responses from 5000 people. The document does a great job of presenting the info, separating it into four major sections (spend, save, borrow, plan), then comparing how people in each financial health tier differ in their approaches.

Here, for instance, are the results for the survey question about saving rate:

Saving rate among Americans

In the nearly thirteen years I've been writing Get Rich Slowly, I've seen reports like this over and over and over again. It's a constant refrain: American's don't save. But why don't they save?

The U.S. Saving Rate

There's a tendency in some circles to blame outside forces for our national inability to save. “People can't save because the economy sucks. Incomes are low and expenses are high.”

I'm not going to say that stagnating wages don't play a part in the problem, but I dont think they're a primary factor. In fact, if you look at a chart of the U.S. saving rate over time, you can see a surprising pattern. (This data comes from the Federal Reserve and the U.S. Bureau of Economic Analysis.)

U.S. Saving Rate Over Time

See those grey shaded areas in the chart above? Those are recessions. When the economy is bad, people tend to save more. When the economy is booming — the mid 1980s, the late 1990s, the mid 2000s, now — people save less. This takes the teeth out of the whole “people can't save because of the economy” argument.

I think the problem with the American saving rate is complex. There are many forces working together to depress saving rates in this country. [Read more…]