The Origami Life: The Story So Far
 
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Ivan here. 

That was a modern update by the Chromatics of an old song called ‘Blue Moon,’ a song that's been covered by the likes of Frank Sinatra, Elvis Presley, Nat King Cole, and the always wonderful Billie Holiday.

I like the opening notes. Reminds me of the tune that plays over the intercom in old department stores before every announcement. 

This is appropriate, as Jennie and I have a couple of announcements to make of our own. 


What is The Origami Life?


It’s been a little over a year since this blog went live, with little to no explanation from Jennie and I on what this is, why we’re here, and what we stand for. 

Part of this is because we’re more into showing than telling, but I think the more honest answer would be that we were still trying to figure it out.

Here what we know so far. The Origami Life is:  

  • A record of Jennie and Ivan’s marriage and life together
  • A way of keeping ourselves accountable to our financial and travel goals
  • A place that celebrates the process over the result, the journey over the destination
  • A place to convey stories and observations in a personal, interesting and useful manner
  • A place to connect with like-minded people

Subscribe To Our Monthly Origami Letter!


Our first letter went out to subscribers on September 16th, you can read it here to see if it’s worth your time and space in your inbox. 

The next letter goes out Sunday (October 8th), where we’ll be giving an update on a trip we’ve been planning for the past five months. 



 
 

What Is The Daily Origami?


Daily Origami is a weekly series we publish based on an experimental theme, where we try to strike a balance between the personal, interesting and useful. 

Needless to say, we don’t always succeed. 

But more importantly, it’s a creative exercise that gets Jennie and I used to the cadence of posting five times a week when we’re on our round the world trip. 

I think travel writing is one of the hardest genres to do well. Not because there’s a lack of interesting, exotic destinations to write about, but because it’s hard to make people:

a. Give a shit about you
b. Ground stories in ways that are relatable to a reader's everyday life

We have at least 50 more Daily Origami entries planned after this weeklong hiatus, and we'd appreciate any feedback you might have at origamilifeblog@gmail.com.

In case you missed a few posts, here is everything we’ve written to date: 

See all the latest Daily Origami here.



September 2017 Money Diary: Puerto Rico & Donor Fatigue
 
 
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Ivan here. 

When Jennie and I set aside $1,000 in 2017 for charity, our strategy was twofold: 

  • We would donate money to international causes (and time to domestic ones) due to the strong purchasing power of the dollar
  • We would NOT be basing our charitable decisions on the most recent headline

We managed to stick to this rule through Hurricane Harvey and Irma, storms which caused an untold amount of damage to parts of Texas and Florida. 

However, the fact remains that these are two of the wealthiest states in America, with economies that dwarf entire countries. What's more, both money and politics are deeply invested in these regions’ recovery. 

None of the above applies to Puerto Rico and the Caribbean.


5 Reasons We Donated To

UNICEF's Relief Efforts For Puerto Rico


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We chose UNICEF USA for this quarter’s $250 charitable contribution for the following reasons: 

  1. Public ignorance on Puerto Rico’s status as a U.S. territory
  2. Tougher logistics in providing disaster relief to islands
  3. Potential racial bias among donor class
  4. Lack of political and economic incentives to aid debtor nations/regions
  5. Donor fatigue after a string of related disasters

UNICEF USA focuses on providing emergency relief for children. And since our knowledge of local non-profits is non-existent, going through an international organization with a focused mission seemed like the least bad option. UNICEF USA was given an ‘A’ rating by CharityWatch. 


Why You Shouldn’t Donate Money to the American Red Cross


ProPublica, in collaboration with NPR, published a series of investigative pieces on the American Red Cross. Here are some relevant headlines dating back to 2014: 

It is important to note that this is NOT an indictment of the Red Cross's blood donation program, though chronic understaffing and cost cuts have led to safety violations and a FDA fine back in 2012. It might also be worth pointing out that this was an organization that banned black Americans from giving blood in the 1940s. 
 



Daily Origami 50: Financial Priorities - An Origami Blueprint

Ivan here. 

This is what the average person’s life looks like:

Always playing catch up, always reacting to one situation after another. Never realizing what was truly important.  

I look at this trajectory and ask myself: did these people ever make any real choices at all? Or did they just end up accepting the choices that had already been made for them? 


An Origami Blueprint


This gets at one of the core tenets of this blog: our refusal to accept the results that most people get. It’s about setting priorities and making sacrifices in order to live deliberately, to create a life we can look back on that’s truly our own. 

If we had to design our own origami life, what would it look like? Obviously, a lot of it would be dependent on choices we haven’t made yet. 

But here’s a rough sketch: 

The Origami Life Blueprint. The plan so far.


Our 20s - Asking the Right Questions


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1. Build a Fuck off Fund

It’s not enough to simply pay off our debts to society (i.e. student loans). We need to build a fuck-off fund to ensure that society will always owe us

With a 6-12 month fuck-off fund, employers owe us better compensation, banks and credit card companies owe us better bonuses. Basically, we need financial leverage over everyone who might otherwise have leverage over us. This means that before we spend a single dime on anything that’s not essential to our survival, we first buy the option to tell someone to fuck off. 

2. Be Done With Retirement

Retirement sounds like a terrible idea. Hanging out by the beach, sipping mai-tais, with no purpose or meaning besides “enjoying your old age” is not our idea of a good time. Who wants to wait around to die? 

This is an advantage Jennie and I have over most people because it makes our retirement number far more attainable: we simply need to make sure we have “enough” by the time we’re too old and decrepit to work (not by some arbitrary age of 65). 

Our minimum number happens to be $700,000. Working backwards, assuming a 6% annual return for the next 35 years, this means we need to have $90,000 ($45k each) invested by age 30. After 30, even if we don’t invest another dollar, the magic of compound returns will ensure that we’ll have at least $700,000 by age 65. 

This is why we lived in shitty basement apartments in Toronto and a room the size of a closet in Boston - to make this minimum number happen. 

3. Build a Travel Fund

This is where readers find us today, as we track our progress through our Money Diary. Keep in mind that this came after a considerable amount of pain moving through steps 1 and 2. But what better time is there to take our lumps than in our 20s? 


Our 30s - Finding Answers


1. Insure Ourselves Against Loss

At age 30, we’ll be purchasing 30 year term life and disability insurance to protect ourselves against catastrophe (i.e. protecting our downside). Also, the younger you are, the cheaper the premiums are. 

2. Build Our Own Freelance Business & Pursue Creative Projects

Start traveling and take some major creative and professional risks. 

3. Have Kids (maybe)

We're still on the fence about this. See our blog posts on the subject. 


Our 40s - Expansion Phase


1. Grow Our Business & Creative Projects

It's too early to say how this will play out. 

2. Save for Child’s Education

Taking a cue from Ivan's parents, no expense will be spared for their education. After that? They're on their own. 

3. Support Our Families

At the end of the day, family's still family. No matter how terrible their life choices were.


Our 50s - Consolidation Phase


1. Continue to Grow Our Business and Creative Projects

Again, too early to say. 

2. Invest in Other People  

We'd like to eventually be in a position to employ other people or help them start their own projects

3. Pay for a House With Cash

We covered our rationale for this in The Hidden Cost Of Home Buying. 


Our 60s and Beyond


1. Never retire

Retirement is basically tacit acknowledgement that you can no longer add any economic value to the world. 

2. Give 90% of our wealth away

We'll leave our potential offspring with the remaining 10% and hope they don't squander it. The rest goes back into society. The only things Jennie and I hope to leave behind are a few ideas, not a burdensome estate that our beneficiaries never earned. 



Daily Origami 49: Financial Priorities - When to Take Risks vs. When to Play it Safe

Daily Origami is a way for us to record our off the cuff thoughts, feelings and observations about the world around us. Published every weekday, Monday through Friday.


Challenges and risks
 
Investing is the one sphere of life where victory, security, and success is always to the minority and never to the majority. If everyone agreed about its merit, the investment is inevitably too dear and therefore unattractive.
— John Maynard Keynes
 

Ivan here. 

Here’s a list of things most people find risky: 

  • Asking for a raise ("What if my manager says no?")
  • Talking to a stranger ("What if it gets awkward?")
  • Moving across the country ("What about my family and friends?")
  • Moving abroad ("What if I get homesick?")
  • Starting a business ("What if I fail?")
  • Joining a startup ("What if it doesn't work out?")

And here’s a list of things most people find safe: 

  • Buying a new designer bag or pair of shoes ("It's an investment in myself")
  • Taking a vacation abroad ("It's a once in a lifetime experience")
  • A $26,720 wedding and $5,978 engagement ring ("It's for the rest of my life")
  • Financing a new home with credit ("Every grown-up has a mortgage")
  • Financing a new car with credit ("I've had my old car for ages")
  • Pre-spending your paycheck with credit cards ("I can always pay it off")

This is just my way of illustrating the obvious: most people seek comfort and social acceptance and avoid discomfort and rejection. 


What Safety and Risk Mean


‘Safety’ is code for what most people think. ‘Risk’ is code for what most people aren’t willing or able to do. Aspiring to be like most people is to accept the results that most people get.

In some instances, the cost of not taking risks can be greater than taking risks, just as the cost of doing a ‘safe’ thing can be higher than the price we pay for safety. 

There are those who prefer not to live with so much uncertainty. Those who may be content with their lot in life, surrounded by family and friends, doing ordinary things that most people do and living safe, ordinary lives. This is totally fine. 

But what if the safety we’ve come to rely on is no longer safe going forward? What if safety is a more expensive illusion than we ever imagined? 

The coal miners in West Virginia thought they were safe. Just five years ago, accountants, pharmacists, lawyers, journalists, and taxi drivers felt like safer professions than they do today. 

In a market system, the more people there are seeking safety, the harder it is to come by. The fewer people there are seeking risk, the more cheaply it can be acquired. 

Safety is always expensive. Risk is always on sale. 


When Should We Take Risks?

and

When Should We Play it Safe?


Jennie and my position on this question has always been:

We should never hesitate to take risks so long as we ‘safely’ plan around those risks, focusing 75% of our energy on upside and growth, while using the last 25% to protect our downside. 

To summarize: 

  1. We should be taking risks in areas where most people aren’t willing or able to take risks. 
  2. We should be safe in areas where most people have been taught to be reckless. 

 


Daily Origami 48: Financial Priorities - Should You Earn More Or Spend Less?

Daily Origami is a way for us to record our off the cuff thoughts, feelings and observations about the world around us. Published every weekday, Monday through Friday.


Stocks

Ivan here. 

This dude makes $600,000 gross salary with $2M in assets, but the prospect of a market correction “scares the shit out of me.” 

 
I wish I could just sit back and enjoy being the top 1 percent, but not a day goes by without me worrying about something bad happening to my family, my job, my savings, or my country.
— Mr. Anonymous, The Billfold
 

I’m not trying to single out Mr. Anonymous here or judge him. This is simply his experience and what he feels. 

But it does raise some interesting questions: if this guy still worries about his financial future, where does it leave the rest of us? If a $600,000 salary can’t buy you security and a life free from worry, then what number is sufficient? Will any number ever be “enough”?

At some point in his career, Mr. Anonymous was part of the bottom 99%. Back then, he probably never imagined that he'd become this guy.  But I guess in his hunt for more, he never arrived at a point where he felt like he’d “made it.” Or if he did, it was a feeling that never lasted. 

The thing about want is that you always find yourself wanting. 


When Is It Okay to Stop Worrying About the Future

and Start Living in the Moment?


I happen to know that Mr. Anonymous isn’t an isolated case. 

I know this because I attended a private high school in Taipei, a school that educated the children of some of the wealthiest and most privileged families in Taiwan. 

And I know for a fact that the richer you are, the more you feel you have to lose, so you never stop worrying. Ever. A lot of these families are frickin’ miserable. I’d go so far as to say that the level of misery among the top 1% is probably higher than the rest of the population. 

Which leads me to ask: If that’s what rich is, what’s the point? 


What We Sacrifice Chasing a Future That Never Arrives


money
  1. Time spent worrying about money 
  2. Time away from family and friends
  3. Time spent commuting
  4. Years (or decades) working jobs we actively hate in order to “retire” or “retire early” 
  5. Time spent recovering in the evenings and on weekends from said job
  6. Time spent reacting to whichever meaningless task pops up first
  7. Time spent chasing the “next” thing and not being present in our own lives

A Rhetorical Question:

Should I Prioritize Earning More or Spending Less?


There are only two paths to financial freedom: 

  1. Earn more
    OR
  2. Want less

Frugality gets a bad rep because change is painful, but if “earning more”, above and beyond our most essential priorities means that we’ll never feel secure again - then what other option do we have left? 



Daily Origami 47: Financial Priorities - Should Millennials Value Experiences over Things?

Daily Origami is a way for us to record our off the cuff thoughts, feelings and observations about the world around us. Published every weekday, Monday through Friday.


Experiences...

Experiences...

...or things?


Ivan here.

I’m always glad whenever the internet figures out the secret to happiness. I mean, whew! What a load off my mind. One less thing off the old checklist to worry about - right beneath fame, wealth and success. 

Now if only I could attract any woman I want by projecting confidence, making her laugh, making her win ME over, creating an emotional attachment while simultaneously being completely unattached to the outcome, then by golly, like Hershey meets Kisses, my life would be complete. 


The Secret to Millennial Happiness:
Buy Experiences, Not Things


There’s a kernel of truth to this statement, as is the case with every over-generalized piece of bullshit that loses any real meaning in its conveyance. Sure, travel may broaden the mind. Jennie and I would be hypocrites to suggest otherwise.

But it’s also not entirely fair to ask: do you want to travel the world, expand your horizons, and open yourself up to everything this magical world has to offer you - or buy avocado toast? 

It’s like asking you to choose between a meeting with the Dalai Lama or an iPhone X. Of course we'd all pick the Dalai Lama (right?). 

Here’s a better comparison: you want to be a painter. What should you prioritize: your first paint set or a meeting with the Dalai Lama? 

Again, probably still not fair, but the point is that this is a question of framing. 

Which leads to my larger point. 


What should we prioritize: experiences or things?


In my opinion, we’re asking ourselves the wrong question. The real question should be: what enables us to create and what enables us to consume? 

And we should be prioritizing the experiences and things that enable us to create over the ones that enable us to consume.

 



Daily Origami 46: Financial Priorities - Should I Pay Off Student Loans or Save for Retirement?

Daily Origami is a way for us to record our off the cuff thoughts, feelings and observations about the world around us. Published every weekday, Monday through Friday.


Ivan here. 

Recently, this Oprah quote has been floating around the financial blogosphere: 

 
You can have it all, just not all at once
 

I’m going to do my best to ignore the survivorship bias of a multi-billionaire telling her followers they can (eventually) have everything, and focus on the finer point she’s making about financial priorities. 

Source: xkcd.com/1827/


What Should I Prioritize First:
Debt, Savings or Retirement?


Companies selling retirement products tell you to prioritize retirement. Student loan refinancing companies tell you to prioritize paying off your loans. Mortgage lenders tell you to save for a down payment because real estate values always go up, and nothing we’ve experienced in the past decade would suggest otherwise. 

What I’m telling you is this: run the numbers yourself. 


Here’s What You Can Do Right Now / Are Doing Already: 


But first, nothing in this series is going to make sense until you’ve done the following:

  • Have / Create a budget and are living within your means
  • Make minimum payments on your student loan
  • Have a 2-3 month fuck off fund
  • Ensure you’re paying the lowest possible rate on your loans
  • Contribute to your company 401k up to the employer match (if available)
  • Avoid other high interest loans including: credit cards, personal loans, new car loan

Should You Pay Off Students Loans First Or Save For Retirement? 


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As I’ve covered in my Daily Origami post True Value of Money, the cost of a financial decision is the value of the next best alternative. This is called opportunity cost. 

So the question of “should I pay off my students loans first or save for retirement?” could be rephrased as:

What return am I giving up
when I use my money to pay my student loans first? 

In other words, you weigh the expected return of investing for retirement against the interest you pay on your loan. 

Now before I get into the nitty gritty, I have to make the following assumptions:


Figuring Out the Market Return


Since we already know what interest rate we’re paying on our student loans, our only unknown is the market return we’re giving up. 

But first, a primer: The market is composed of companies. Companies make earnings (or profits). Earnings can either be distributed to shareholders in the form of dividends or reinvested back into the company to grow future earnings. 

Thus, in the long term, say over a decade, the annual return of the market can be boiled down to the following formula: 

Market return =
Dividend yield + Future earnings growth

Since the future obviously hasn’t happened yet, we can only look back on the data available for the last twelve months: 

And when I say valuations, here’s where we are today. 

Source: http://www.multpl.com/shiller-pe/

Source: http://www.multpl.com/shiller-pe/

This is the Shiller cyclically-adjusted price to earnings ratio. Without going into too much detail, the higher the ratio is, the more overvalued US stocks are. The highest point on this chart was during the height of the dot-com bubble in 2000. 

Notice we’ve gone eight years since the 08-09 recession, and valuations have moved past the levels seen in 2007. 

This suggests that future earnings growth over the next decade will be at the low range of 3-5%. Let’s use 3% to be conservative. 

Our estimated market return will be as follow:

Dividend yield (1.89%) + Future earnings growth (3%) = Market Return (4.89% )


Conclusion


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Assuming a $40,000 student loan debt, your answer is pretty clear when you do the math. 

Even if the numbers were roughly equal, debt affects your life today in ways that not saving for retirement right away wouldn’t - especially if you’re still young:

  • Debt severely limits your options and prevents you from taking risks that could grow your future income (e.g. starting your own company or taking that lower paying but bigger upside job). 
  • Paying off debt gets you into the habit of saving, which can only benefit your retirement goals in the long run.

By running your own numbers, we can conclude that in 2017, it’s probably never made more sense in all of financial history to prioritize paying your student loans (and other debt) off as quickly as possible.