April 2018 Money Diary: A Different Kind of Life
Twenty two months ago, Jennie and I published our first money diary. Back then, we had some hopes and dreams about what our life and marriage could be, a few ambitious goals, plus zero dollars saved in our round the world travel fund.
Since that publication:
Our cost of living has remained unchanged: We spent $2,787 in July 2016 versus $2,815 in the past month.
Our average monthly spend has decreased: we averaged $3,140 per month in 2016 & 2017 versus $2,800 in 2018.
Our donations to charity have increased: From $0 in 2016 to $1,250 in 2018 (to date).
We’ve hit our $40,000 savings goal for our round the world trip: $0 in 2016 to $40,286 in 2018.
The shift from spending $3,000 a month to $2,800 isn’t about cutting costs or making ourselves miserable. We’ve actually learned to be more efficient with where we spend our dollars, by prioritizing our spending in areas that add value to our life. For example, over the past two years, we’ve significantly cut back on Eating Out and Miscellaneous spending, and moved those savings toward Travel and Charitable Donations.
This goes back to how we value money: it’s not about what you spend, but how you get the maximum return for every dollar you do spend by:
Eliminating waste and mindless spending habits
Setting clear priorities on the things that matter to you
Having met our savings goals, Jennie and I now have some loose ends to tie up - but we’re on track to transition to the next chapter of our lives by September.
Travel On Your Terms versus On a Corporate Expense Account
A week after I returned to Los Angeles after two months in rural Taiwan, I tagged along with Jennie on a work trip to San Francisco. As one half of Origami Partners LLC, I had a few prospective clients up in the Bay Area, and wanted to take advantage of the free accommodations to set up some meetings downtown.
Walking around San Francisco after two months of solitude in rural Taiwan was jarring to say the least.
I don’t have strong feelings about the Bay Area. From certain angles, I guess it’s a beautiful city. On the other hand, it’s also a microcosm for the massive income inequality and skyrocketing rents we see around the world.
San Francisco is by far the most expensive city in the United States. And it’s the kind of city that makes you pay for it in other ways besides money. Personally, I think New York City fits this description as well.
To explain what I mean, I want to share what it’s like to travel on a corporate expense account. The best way to begin is by comparing the cost of two very different lifestyles...
Comparing the Cost of One Month in Rural Taiwan vs.
One Week in San Francisco with an Expense Account
|Cost of One Month in Rural Taiwan
|Cost of One Week in San Francisco
(with expense account subsidy)
|Roundtrip Train Tickets (from Taipei):
Food: $8 x 30 days:
Total out-of-pocket spend:
|Flight/airline tickets to SFO (from LAX):
Hotel (fully expensed):
Uber Rides (partially expensed):
Food (partially expensed):
Total out-of-pocket spend:
Obviously, it shouldn’t be news to anyone that living in San Francisco is more expensive than living out in the Taiwanese countryside. But just how much more expensive, is something that we don’t always appreciate until we see the numbers:
It’s more expensive to live in SF rent free for one week, traveling on your employer’s dime, than it is to spend an entire month living in rural Taiwan.
This would be an okay tradeoff if traveling on an expense account was all it was cracked up to be.
But it isn’t. Maybe it feels amazing at first, but slowly, hedonic adaptation kicks in. Which is to say that when you start getting used to driving Ferraris, anything less than a Mercedes will make you feel like a peasant. And if someone gave you that Ferrari for free, it wouldn’t mean anything to you at all.
Traveling for free on someone else’s dime makes things less rewarding - not more.
My Takeaway from Two Different Ways of Life:
Life in the city versus life in the countryside
If we truly want to treat money as a “vote” for what people and society value, it’s hard not to look at that $2,626 number spent in just one week in SF and realize how absurd it is.
$2,626 says nothing about anyone. It’s just a number that gets moved around faster so people can drink slightly more expensive wine and eat at slightly more expensive restaurants. It could easily have been $5,000 or $10,000. It makes no difference because human beings were barely conscious in the decision making process at all.
$2,626 is just stimulation for the economy - so the poor can get by and the rich can get used to (and grow bored of) slightly better versions of what they already have.
By writing this post, I’m not advocating that everyone retire to the countryside and start living off the land. I would be a completely useless farmer.
The larger point I'm making is that these are two lifestyles on opposite ends of a wide spectrum. And having experienced two starkly different realities back to back, I now have a better idea of which direction I’d like to move towards.