How Diane and Neal Saved 2 Years Income, Quit Their Jobs and Moved to France

Greetings from Rio de Janeiro!

I’m writing this from an apartment in Brazil, where I’m in the middle of a whirlwind 10-day trip with around a half-dozen friends. I’d love it if you follow the adventure on Instagram.

Today on Afford Anything, though, I want to share a reader story I find inspiring:

Neal and Diane were a mid-career couple who had grown bored with their jobs. In Diane’s own words:
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The Essential 4-Step Guide to Escaping the Ordinary

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escape the ordinaryYou want to escape the ordinary …

But you also want a practical plan.

You’re as pragmatic as you are adventurous. You’re a rebel with a retirement plan.

How do you start?

****

After last week’s post, several Afford Anything Rebels asked me how to prepare for a massive leap into the unknown.

Some want to travel. Others want to start their own business. Some just want to ditch the cubicle and see what happens next.

In response, I’ve created The Essential 4-Step Guide to Escaping the Ordinary. The steps have an easy acronym: the ABCD Game Plan.

We’ll tackle the steps in reverse order: DCBA.

The “D” Step: Dive into the Details

(And Set a Damn Deadline!)

What do you want to do?

Travel the world? Launch a business? Become a real estate tycoon?

Whatever your goal, you might have some false assumptions about how to get there.

To shatter those assumptions, delve into the subculture of people who are doing the same thing you’re trying to do. Read books, browse Internet forums, and don’t be afraid to ask silly questions.

  • World travel isn’t done through organized tour groups, all-inclusive resorts and Priceline hotel deals. There’s a whole subculture of travel hacks that you should explore.
  • Launching your own business isn’t done by printing fancy business cards, renting a nice office and wearing an impressive suit. You need to dig some trenches.
  • Real estate investing isn’t confined to the neighborhoods where you yourself would live. There are probably plenty of areas within a 50-mile radius of your home that you’ve never driven through, but that are ripe with profitable opportunity.

Once you take this step, you’ll discover new information that will change for plans — for the better.

  • You wouldn’t (shouldn’t) open a boutique just because you “love clothes!” You’d check out the demand. Figure out the overhead. Look at the local industry growth.
  • You wouldn’t (shouldn’t) buy stock in Coca-Cola because you love the flavor. You’d check it’s price-to-earnings ratio, it’s book value, and its ticker trends.
  • You wouldn’t (shouldn’t) launch a podcast just because you love to talk. There’s a ton more that happens behind-the-scenes. Dig a little deeper. Do some homework. Delve in.

Let’s take travel as an example:

At this early stage in planning, you might be thinking: “I love the beach. Maybe I should go to Aruba.”

But as you dive deeper into the long-term traveler subculture, you’ll begin to understand that your experience in a particular place is created not just by the photogenic attractions, but also by the average prices, infrastructure and amenities.

If you want the privacy of a spacious villa for less than $10 per day, for example, Southeast Asia might be ideal. But if you prefer a jam-packed hipster party hostel, Europe is your zone.

There’s one more essential component to the “D” Step: Set a Damn Deadline. If you don’t, you’ll never make the leap.

The “C” Step: Bust Your “Commitment Cant’s”

This is the most critical step.

Most people who don’t take a dramatic leap into the unknown cite commitments as their reason.

  • “But I have a mortgage!”
  • “What about my job?”
  • “Who’s going to take care of Fido?”
  • “My lease doesn’t end until March.”
  • “My car payment runs for another three years.”
  • “But I just joined this dance troupe …”
  • “My boyfriend / girlfriend / spouse isn’t interested in joining me.”
  • “Who’s going to water my plants?”

Here’s the hard truth: Most people enter into commitments without thinking of the long-term consequences on their future flexibility and freedom.

(Hence why so many people are in debt.)

You need to do two things: Break the commitments that you can ethically sever, and renegotiate the ones that you can’t.

This is the most crucial step. I repeat: MOST crucial.

Here’s how this would look:

  • Mortgage: Find a renter. Or sell the house. If you’re traveling, you won’t be living in the house anyway; why leave it vacant?
  • Rent: Ask your landlord if you can replace yourself with a sub-letter. If you can’t, then you know your Damn Deadline – you’ll quit your job at the same time your lease expires. (That’s what I did!) Speaking of which …
  • Job: Negotiate to work remotely and part-time. This will give you the freedom to launch a business, travel, or focus on other more interesting pursuits. If your boss says no, fire your boss.
  • Pets and Plants: Find a trusted long-term petsitter/plant-sitter, like a close friend or family member.
  • Sports Teams, Dance Troupes, etc: If you can ethically leave the team mid-season, do so. Otherwise, you know your Damn Deadline: when the season ends.

Debt and relationships are two types of commitments that get special attention, due to their gravity.

Let’s Tackle Debt:

Freakin’ pay it off already!! OMG people, is this really a question?

Okay, if you have a mortgage, I get it. There’s no rush to pay down your mortgage before an epic round-the-world journey. Stick a renter in your house while you’re traipsing across the globe, and if you bought correctly, that renter should be covering every dime plus extra.

(If you didn’t buy correctly, sell the house. It’s a chain that’s preventing you from traveling and experiencing the life you love.)

If you have a student loan at some stupidly-low interest rate, like 2 percent (less than inflation), and some token monthly payment, like $40 per month, you also get a pass. There’s no massive rush to pay that off.

But if you have any debt that’s higher than 6 percent interest, start living on ramen noodles and stop making excuses. Decimate that beast.

Next, Relationships:

I hear from a lot of people that they want to do X (become their own boss, spend a year in Italy) but their significant other isn’t on-board.

Now, I’m not a relationship counselor. But I see this as a massive problem in your compatibility. You two have a serious divergence of values and priorities, and those need to get aligned.

Before I began dating Will, I ended a relationship with someone purely based on the fact that I was going to travel for two years. This other guy had a thriving career as a magazine editor and wanted to stay stateside. He had zero interest in traipsing the globe.

I’m proud of him. But we’re not compatible. In my world, “I never want to travel” is a deal-breaker.

So our relationship ended, and I prepared to travel solo. And at the last minute, along came Will. He had recently sold his business and was looking for his next adventure.

Whatever. I impatiently jetted off without him. Paula waits for no man.

Will surprised me by popping up unexpectedly in Thailand, where he asked if I’d become his girlfriend.

The rest is history.

(… Wait, where was I going with this?)

Oh yeah, relationships. So the moral of the story is:

  • If your partner supports the concept, but can’t participate, then you’ll have to negotiate the freedom to embark on this adventure solo.
  • If your partner doesn’t even support the concept, well, you’ve got mismatched values.

The “B” Step: Budget

This step is pretty straightforward.

Now that you’ve delved into the details (i.e. you’ve done your homework), you have a rough idea of how much your undertaking will cost. And you know your Damn Deadline.

Divide cost by time.

Easiest. Step. Ever.

For example:

“I want to spend 12 months traveling Southeast Asia. I know I can live comfortably on $35 per day. Multiplied by 365 days, that’s $12,775.

“That sounds like a lot, until you consider that it’s WAY cheaper than my cost-of-living here at home.

“Okay, now let’s add a 10 percent buffer to that estimate. This brings us to $14,052. My Deadline is one year from now. This means I’ll need to start saving $270 per week.

“Hmm. My freelance / consulting / teaching side hustle brings in $200 per week. If I cancel my cable, cook from scratch and stop getting plastered at bars, I bet I could save another $70 per week.”

Boom! That’s how it’s done.

Let’s try it for aspiring entrepreneurs:

“I’ve been working this awesome side hustle in the evenings and weekends for the past year. It’s already bringing in $475 every week, or $1,900 per month. And I only work at it 10 hours a week.

“I really think that if I ditched my crummy cubicle job, I could make this a full-time gig.

“Let’s think through this. My cost-of-living is $3,000 per month. I want to save enough to support myself in full for six months.

“That’s $18,000. If I save all the money that I make through this side hustle, I could build those reserves in a little over 9 months. I’ll use cash from my regular day job to pay my estimated taxes during that time.

“Those 9 months will also give me time to seriously ramp up my efforts – to 15 or 20 hours a week – and see if that extra effort yields more income and opportunity.

“Of course, I probably won’t need to tap that $18,000 reserve. After all, when I ditch the cubicle, I’ll already be pulling in almost $2,000 per month or more. Still, I’ll sleep easier knowing that it’s there.”

The “A” Step: Be Ready to Act Alone

This is going to seem like the scariest step. But it’s crucial.

You can’t waste your life waiting for someone in your existing network to join you on your adventure. Your current friends are not necessarily the most reliable, qualified or desirable people to accompany you (or to partner with you) on your travel or business idea.

You must be prepared to start this journey alone.

Yeah … alone.

Scary, right?

BOO!

But don’t worry. You’ll never truly be alone.

Once you start along your adventure – whether that’s entrepreneurship, investing, travel, or any other escapade – you’ll meet be plenty of people who will befriend you and help you along the way.

By definition, you’ll meet people who are journeying the same route.

Some of these people will become mentors. Leaders. Trusted friends. You’re on the cusp of bonding with some of the most brilliant, interesting people that you’ll ever encounter.

You just haven’t met them yet.

And you’ll never meet them if you keep wallowing in your living room.

Your success, in fact, will hinge on your connections with this new rockstar network. In business, this is self-evident. But you’ll discover that this is true in non-professional pursuits, such as travel, as well.

In travel, your adventure will be characterized by the people you encounter, not the postcard-gracing attractions you see. Your fondest memories won’t be visiting the Pyramids. Instead, at the end of it all, you’ll remember that time that you got into a water-balloon fight with those goofy twins in the Czech Republic, after which you all went out for banana toffee cake and a cup of lemon tea.

Doesn’t it sound awesome? I can’t wait to enjoy a slice of banana toffee cake with new friends I haven’t met yet.

Or to start that business that I haven’t imagined yet.

Or buy the rental property I haven’t seen yet.

A-B-C-D.

Or, if you’re a contrarian like me, D-C-B-A.

That’s the key to getting started.

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How to Create Sustainable Wealth and Avoid Death-by-Cubicle!

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how to avoid wasting your life in a cubicleThe last time I went to a tropical island, the showers only ran for 4 hours per day. If you missed that window, you had to wait 20 hours.

If you wanted to “flush” the toilet, you’d have to carry a bucket of ocean water to your bathroom.

This was a necessity. Freshwater was delivered by boat, and it needed to get strictly rationed. If you wanted enough for drinking and cooking, you needed to budget.

People elsewhere in the world, though, have become accustomed to luxuries like unfettered access to showers and toilets. They’ll demand this luxury at any cost, even if their wallets and the environment can’t support it.

Until recently, that was the case in Aruba.

To satisfy demand, Aruba coverts saltwater into drinking water. The process is called “desalination,” and this 70-square-mile island (about the size of Washington, D.C.) is home to the world’s second-largest desalination plant.

But desalination requires a ton of energy. And that’s just the tip of the iceberg when it comes to Aruba’s energy consumption.

Teriyaki potato chips

To keep people happy, Aruba imports cheddar cheese, Oreo cookies and some curious flavors of potato chips. (Teriyaki-flavored potato chips? Really?) It keeps its roadways well-maintained, offers strong public transportation, and spends a substantial amount of its GDP educating its local children.

(Aruba also imports designer clothes and handbags, which baffles me. Why ship that stuff down to the Caribbean, just so tourists can carry it back to Europe and the U.S.?)

Fortunately, Aruban officials recognized how energy-intensive the island’s lifestyle has become. But they also recognized a concurrent reality: People don’t want to pare back on their lifestyle. People love Oreo cookies and curiously-flavored potato chips.

So instead of sacrificing its quality of life, Aruba decided to make that lifestyle sustainable. In the midst of the last recession, Aruba unveiled an ambitious plan to become the world’s first economy to run entirely on sustainable energy.

In 2009, Aruba built a wind farm that generates about 20 percent of its total energy. It’s on-track to run 100 percent on renewable energy by the year 2020.

Protect Your Most Precious Limited Resource: Time

Sustainability isn’t just a national issue, it’s a personal one. A country’s leaders can tackle waste at the macro-level. But what about waste within our own lives?

How can you create a sustainable life?

I’m not (just) talking about recycling your beer cans. I’m talking about creating multiple self-renewing sources of income.

It doesn’t make sense to ship coal and freshwater to a remote island. That requires too much ongoing effort. It’s much more sensible to build a sustainable solution.

protect your time

Similarly, it doesn’t make sense to wake up to a beeping alarm, drink stale coffee, battle rush-hour traffic, sit in a grey cubicle under flickering florescent lighting, and then battle even worse traffic back home.

It’s downright ludicrous to endure this agony year after year, until your eyes strain from the computer screen, your back hurts from your corporate-issued chair, and your face gets etched with frown lines.

Sustainable wealth is much more sensible.

Rental properties create sustainable wealth. So do stock dividends, interest, royalties, and businesses that someone else manages.

In short: Investing creates sustainability.

Investing is our ONLY antidote to the hamster wheel. It’s our ticket out.

Learn as much about investing as you can. Hustle, earn more, and apply all that extra money towards your investments. Buy some index funds. Put a down payment on a rental property. Build a small online business, then hire a VA to manage it.

Make just $10 in passive income per year. C’mon, just $10 per year. Anyone can do that.

Done? Okay, great. Now double it.

And double it again.

And again.

You see where I’m going with this …

This is sustainability at the personal level. This is freedom from paycheck dependence. This is how you can maintain an awesome lifestyle without polluting your most valuable (and limited) resource: your time.

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P.S. The island in my introduction (with the 4-hour showering window and the ocean-bucket toilets) is Seraya Island, off the coast of Flores, Indonesia. It’s one of my favorite places on earth.

P.P.S. I should take a moment to mention that Aruba does a LOT of things right. Their crime rate is close to zero. They have fewer than 30 traffic fatalities a year. They have 96 percent literacy, 94 percent employment, and many Arubans speak four languages: Dutch, Spanish, English and Papiamento. There’s a lot we can learn from their example.

The Lost Art of Escape

 

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The Lost Art of EscapeI’ve just emerged from more than a week without any connectivity: no Internet, no cell phone, no running water, electricity or buildings.

I practice this form of escape for a minimum of one week each year, though in the past I’ve cut myself away from civilization for upwards of one month or more.

Digital mobility – the art of traipsing the globe while working from your laptop – is an amazing lifestyle. It showers you with indescribable freedom. But it carries one drawback: if you can work from anywhere, you do. You never broadcast an “away” message. You never disconnect.

That’s a serious problem. A true vacation demands that you vacate. It requires you to escape, unplug, and smash your addiction to email. This is the Lost Art of Escape, and it’s a critical skill. Yes, vacationing is a skill, and it’s one that most people don’t practice enough.

Don’t Multi-Task the Sunset

True escape is the only way to declutter your mind, re-assess your priorities, and create a vision for the year ahead. Without this, you might waste years down the wrong path, simply because you haven’t taken the time to quiet your mind.

Unfortunately, most people don’t practice true escape. Most people bring smartphones and laptops into their personal zones. They “check in” with their colleagues or clients. They jump on email “just for five minutes.” They upload photos to Facebook instead of watching the sunset. (Worse, they’ll upload a photo while watching the sunset. People, please. Sunset is not meant to be multi-tasked.)

As a result, most people never leave their old paradigms behind. They never enjoy solitude and reflection. They’re too distracted by Twitter.

Nature = Rehab for Digital Addicts

If you suffer from email addiction, voyaging into the wilderness is like checking into rehab. You literally, physically can’t check your Inbox, no matter how much you’d like to do so.

Like any recovering addict, you might break into a cold sweat for the first few days. But by Day 6 or 7, your mind will have adapted to its new reality, and you’ll have the mental freedom to reassess your budget, your career, and your five-year plan. More importantly, you’ll feel free, happy, simple.

What if the wilderness doesn’t appeal to you? For some of you, there’s “glamping,” a glamorized version of car camping. Same nature, more amenities.

The rest of you, though – the cityslickers who won’t even try glamping — have a tough battle ahead. You’re faced with the monumental task of trying to disconnect while remaining in the wired world. I’m cheering for you, but I have to warn you that the road ahead is rough.

Severing yourself from email and phone while you’re in the “real world” is like breaking a coffee addiction while you’re at Starbucks.

It is possible? Yes. Is it easy? Nope. That’s why I recommend radically changing your environment. Go somewhere where checking your email defies the laws of physics.

Just try it. You might discover a new clarity.

Here are some of the things I discovered during my time disconnected:

  • Outcome Agnostic  — I’m not going to tie my stomach in knots about the quality of my blog posts. I’m not going to obsessively review each line before I hit “publish.” Either you’ll like it, or you won’t. The outcome isn’t up to me, so I’m not going to project any wild expectations of comments or likes or new subscribers.

 

  • Hamster Wheel — Here’s the definition of running on a hamster wheel: Wasting every hour of your precious life earning money. Then wasting that money, so that you can feel better about the fact that you spend so much time earning it. This is a ludicrous practice. It’s far better to use your money to buy time — by outsourcing and by creating passive income streams.

 

  • Simplicity is King. — Yes, it might be “technically” better to stack coupons on top of double-discount deals on top of rewards cards. But guess what? I don’t want to add that level of complexity to my life. Sometimes, I just want to buy a freakin’ loaf of bread, and I don’t want it to be so complicated. That’s not sloth; that’s ruthlessly guarding your most valuable asset: your mental space.

 

  • Limit Your Hours — There’s no heroism in working yourself to the bone. You can’t work 168 hours per week, and you can’t justify an out-of-balance life by patting yourself on the back about your high income. If your “business model” consists of 80-hour workweeks, something’s wrong. Remember: Parkinson’s Law states that work expands to fill the time that you give it. Limit your working hours, and you’ll automatically become more efficient. And then you can spend more time disconnected.





“I Don’t Want to Be Ordinary” — Can This Woman Escape the Ordinary?

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A Reader Says: I Don't Want to Be OrdinaryHere’s a recent reader question that grabbed my heart. One reader said:

“I am a single woman with children who believes I can live a great life traveling and making life grand, in spite of the statistics out there. Do you think its possible? Can you offer some saving/investing tips?”

I’m so glad you wrote to me. YES, I think it’s possible to live any life that you desire. I absolutely, completely, 100 percent believe that.

Ignore the statistics. You’re not a stat. You’re an outlier. The upper end of the bell curve. You’re unique.

How do I know that? Because you dared to ask. You wrote to me — a complete stranger — for advice. Most people wouldn’t do that. Most people would sit on the couch watching American Idol reruns.

Most people — regardless of their age, income, family or financial situation — don’t have the courage to dream big. Most people spend the whole day saying self-defeating things like:

  • “I’ll never be rich.”
  • “I could never afford that.”
  • “People like me don’t get to do things like that.”
  • “Good for her, she gets to galavant and have fun, but I have to (fill-in-the-blank with crummy obligation).”

And you know what? Whether you think you can, or think you can’t — either way, you’re right. Life is completely what you make it. Especially if you live in a free, first-world country. Then there’s really nothing stopping you.

Regarding the second half of your question — do I have any saving or investing advice? Of course I do. But I won’t tell you to clip coupons (ugghh) or invest in index funds (though I love ’em!), because those are tactics, and tactical maneuvers are secondary.

The best advice I can give anyone is to align your spending with your values and priorities.

Almost every financial stress that I see is the result of people spending in a way that’s misaligned with their priorities. It leads to staggering debt, bankrupt college funds, meager retirements, and — perhaps most terrifying of all — cubicle jobs. Eek!

But when you can kick back and say, “The most critical thing is food, water, medicine and safety. Let me make sure I can pay for that, not just today but years into the future. And after that, my real dream is …”

That’s the moment when driving an old car no longer feels like a sacrifice. Would you rather drive an Audi or quit your crummy cubicle job? Would you rather have granite countertops, or the flexibility to take a major career risk?

(By the way, I realize I might sound like I’m anti-luxury items. I’m not. I’m pro-anything that’s a conscious priority. And I’m anti-anything that’s not.)

In my own experience:

When I was 22, I wanted to travel more than anything else in the world. I wanted it so badly I could taste it. I thought about it constantly. And I aligned my spending with this top value.

That meant that I lived incredibly frugally. I lived in a tiny, tiny studio apartment (I could reach the kitchen sink from the bed — I’m not kidding.) I drove a car that was older than me. I wore thrift-store clothes. And I saved almost $30,000, which allowed me to travel the world nonstop for more than two years.

But another example:

Right now, my priorities have shifted. I don’t want to do a two-year round-the-world trip anymore. I want to build streams of passive income — so that my money can buy time. I want to live in a comfortable home, work on a MacBook, and enjoy a gym membership — even if it comes at the expense of travel. So my spending has shifted to align with my new priorities.

That’s what it’s really all about. All the details that financial bloggers talk about — insurance premiums, coupons, the price of gas — those are all just details. That’s minutia.

Step back and take the big-picture view: is your money flowing in the same direction as your values and priorities? If so, you’re in the right place. If not, make a change.

It’s as simple as that.





One TERRIBLE Piece of Financial Advice You Should Never, Ever Listen To

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Bad Financial AdviceLaunch into any money-related conversation and you’ll inevitably hear the following bad financial advice:

“But it worked for me!”

Those insidious five little words have been used to justify all types of terrible ideas, from buying lottery tickets to over-leveraging your investments to investing every last dime into Apple stock.

Let’s try this one on for size:

Common Sense: “Even if you find an awesome investment, spread your risk by picking a few other investments, as well. Rental properties are awesome, but even if you could make 20 percent cap rates, you should still keep a solid chunk of money in stock market index funds.”

Retort: “But I put 150 percent of my savings in gold in the year 2007 and it totally worked for me. Put every dime in gold! Nothing else! Why bother diversifying when you get the best returns in this arena?!”

Common Sense: “Hold on, you invested 150 percent of your savings?”

Retort: “Yeah, I can take a cash advance from my credit card at 14.9 percent and invest it for 170 percent gold returns! I’d be stupid NOT to!”

Common Sense: “Uh, don’t you think that’s a bit risky?”

Retort: “Hey scardey-cat, if you’re so terrified of risk, why don’t you sew your money into a mattress and leave REAL investing for us tough guys?”

Uh-huh. Right.

Tip: When your opponent has to justify their investing strategy with ad hominem attacks, they’re grasping for straws.

Alright, that was an easy example. Afford Anything readers are an intelligent group. I don’t need to explain this example. You can see why it’s an insane argument.

But let’s look at a subtler example of the “it worked for me” phenomenon. Let’s check out an example in which the counter is uncommon sense.

“But I Sold my Home for $20,000 More Than I Paid!”

UnCommon Sense: “Don’t tie up a huge chunk of your net worth in your home. Your home is NOT an income-producing asset. It won’t stick cash in your pocket each month.

Your money should make money. So live in a cheap home while you deploy your cash into rental properties, stock index funds or other income-producing investments. Reinvest. Lather, rinse, repeat.

“Better yet, buy a small apartment building (like a duplex, triplex, 4-plex) as your first home. Live in one unit and rent out the others. If your neighborhood doesn’t have multi-units, live with roommates until you either have a baby or your mortgage is paid off.”

Retort: “But I sold my home for $20,000 more than I paid for it! So my house IS an investment! It worked for me!”

This is precisely the type of argument you’ll hear from someone who hasn’t crunched the numbers. The people who say it often conflate gross gains with net gains.

The average person doesn’t make very strong net gains on their home value, after adjusting for insurance, taxes, loan interest, repairs, maintenance, Realtor commissions and closing costs. If they’re lucky, most of their net gains can be explained as “inflation plus 2 percent.”

Most people would be better off living in tight quarters and putting the excess money into stocks.

Are there exceptions? Sure. Just ask the people who bought houses in Southern California in the 1970s. But this is the tail end of the bell curve. People have also made millions winning the lottery.

Furthermore, most of the people who happened to buy in 1970’s Southern California shot themselves in the foot by “trading up” continually until the market burst. Many people thought they were different, that they were the exception to the rule, but then they became scared that they’d be “priced out in five years.” So they bought a big home, then lost all their gains.

The best antidote to getting “priced out in five years” isn’t to pay an overinflated price today. It’s to create more wealth. Build your net worth at a rate that’s faster than housing growth. It’s not that tough.

Let’s try another example.

College is Good, Grad School is Better

UnCommon Sense: “You’re not a zombie. So don’t blindly repeat the mantra that college is good and graduate school is better.

“Do the friggin’ math.”

“If you want to be a neurologist, awesome. Take out a six-figure student loan to go to medical school, because you’ll have a rare, high-demand skill that will command you a $225,000+ income.

“But if you want to be a social worker earning $30,000 a year with a master’s degree, think twice before burying yourself with debt.”

Retort: “But I did it and it wasn’t so bad! My student loan payments are only $180 a month. That’s nothing. That’s less than my car payment! And I think the government will forgive my loan in 20 years, anyway.

Plus, I got this job that pays $42,000 a year, and there’s a chance I could get enough in bonuses to make as much as $50,000. There’s no way I could have gotten that without my master’s degree.”

Ouch. This is one of the most common “it worked for me” arguments that I hear. And what’s befuddling is that the underlying message is that it really didn’t work.

$180 per month for 20 years is $43,200. That’s a decent chunk of cash, but it’s not horrifying. People have lost more by buying a house at the wrong price.

What’s worse is the missed opportunity. $180 invested monthly over 20 years is $106,730. That’s a horrifying amount.

But that’s still not the worst part. The real sad news comes from other missed opportunities. Want to start your own business after a few years? Good luck! The rest of us can move into grandma’s basement, mow lawns on the weekends to pay for groceries, and spend the rest of the week building our own graphic design enterprise. Your extra $180 monthly loan payment means you’ll need to mow many more lawns.

“That’s true of a mortgage, too.”

Yes, but you can sell a house.

That’s not the only hang up. You’ll be far less inclined to change careers if you decide your current path isn’t fulfilling. What would you do – go back for a second master’s degree in a different field, racking up even more debt?

You’ll have a rougher time quitting your job to travel the globe. You’ll lose the flexibility to change jobs and take risks. You’ll probably delay buying your first rental property or maxing out your Roth IRA by a few years.

“It worked for me” isn’t always the best path. At best, it’s an isolated data point. At worst, it’s bad advice.




What the French Taught Me About Texas

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Flaneur - What the French Taught Me About Texas TravelI’ve been in Austin, Texas for a week; I have another week to go. Several people here, upon discovering that I’m a visitor, have asked me the same question:

“So what do you want to do while you’re here?”

I shrug. I’m up for anything. Most days I pick a neighborhood, stroll around, poke into coffee shops and cafes, and strike up conversations with random people.

Apparently this is rare. Many people think they need to travel with an hour-by-hour itinerary of events. They’ve got plans, maps and agendas that guide them from breakfast ‘til dessert.

If you only have 10 vacation days per year, this strategy makes sense. Losing one day through inefficiency – sleeping late, missing the train – equates to losing 10 percent of your annual time off from work. You feel pressured to fill that unscheduled gap between 10 a.m. and 2 p.m. The clock is ticking.

Unfortunately, this harried pace prevents the spontaneity that creates the most amusing chance encounters. I’m referring to the take-a-side-street, say-yes-to-invites, make-new-friends-in-strange-places spontaneity.

There’s a French word that expresses this idea: “flaneur.” This refers to someone who strolls around, without hurry and without haste, drinking the sights and sounds, ready to experience anything.

American actress and author Cornelia Otis Skinner describes a flaneur as “the deliberately aimless pedestrian, unencumbered by any obligation or sense of urgency, who, being French and therefore frugal, wastes nothing, including his time, which he spends with the leisurely discrimination of a gourmet, savoring the multiple flavors of his city.”

What a beautiful way to live. Frugal with time, yet unhurried.

The French have described the way I want to spend my time in the beautiful state of Texas.

Even if you only have 10 vacation days per year, dare yourself to try it. Resist the urge to jam-pack your days as if you were at a business conference. Stroll aimlessly. Talk to strangers.

Better yet, try it today, in your hometown. Take a side-street. Stroll into an art gallery. Meet someone new. You never know what’s around the corner, even those corners in your own backyard.



P.S. I have heard that some parts of French-speaking Canada use the word “flaneur” to refer to loiterers. That’s NOT the kind of aimless strolling I support.

P.P.S. Please don’t turn the comments section into a Texas vs. France debate. This ain’t the place.

Ditch the Laptop

Hi everyone! I’m in Puerto Rico this week, and I’m taking a break from writing posts. I’ll return to normally-scheduled articles next week.

I’m fortunate enough to be able to work remotely from anywhere in the world. This is a freeing lifestyle, but it has its downsides. The good news is that I could stay in Puerto Rico for a month if I wanted to; the bad news is that its tough to disconnect from work and take a true break.

That’s why I left my laptop at home. Ditching the laptop is the only way I could force myself to unplug. :-)

(Of course, here I am checking email on a friend’s laptop. Old habits die hard).

Since I’m not writing this week, let me point you to great writing around the web.

On Riches: Len Penzo wrote a classic post on 19 Things Your Suburban Millionaire Neighbor Won’t Tell You. If you’re like me, you’ll read through the list and think, “Hey, I know that guy!”

On Travel: Niall Doherty is stuck in Tehran. His visa is expiring, so he has to leave the country, but he doesn’t have cash to buy a ticket, and none of the ATMs are working. In other words, Niall is on a real adventure. :-) Niall is a few months deep into his own year-long journey around the world, and his travel stories remind me of my own.

On Values: We say we want local merchants who offer great service, Seth Godin writes, but when push comes to shove, we buy from big-box retailers who compete on price, not quality.