Posts tagged Personal Finance
January 2017 Money Diary: A Family Setback
 
 

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Family Happens

Ivan here. We took a $749 charge in January related to a family setback (filed under: Life Happens). This was partially offset by an increase in freelance income and a $500 cash bonus for opening a Chase checking and savings account.

We care less about the dollar amount. What’s frustrating is that not only was this the second time we’ve had to fix the same issue, none of it would’ve been necessary had we known about the problem two weeks earlier. I wish I were joking. 

Jennie has more to say about this in her next blog post. Just a few points on my end:

  • I get it. Life happens. Sometimes we all need a helping hand. 
  • It’s frustrating that a stranger off the street is more likely to be candid about their financial struggles than our own family
  • Shame, ego, and tying your problems to your sense of self-worth is unproductive and makes things more expensive to fix in the long run 

Is it too much to ask that we hear about family problems as soon as they happen, and not eight months later after things have spiraled out of control? 

/end rant

 

How We Handle Setbacks

Jennie is far better equipped when it comes to dealing with setbacks. Part of it is because of her upbringing, the other is probably her naturally sweet and not at all authoritarian disposition. 

I on the other hand, have experienced no hardship worth mentioning in my life. This means when something unexpected happens, there’s always a part of me that wants to act like a petulant child. 

 

 

 

Charitable Giving Update

January was a wash for volunteering (no excuses) but we will be putting volunteer hours in February at the International Rescue Committee in Los Angeles. In our goals for 2017, we pledged at least $1,000 in donations and 1 hour per week to charity. We’re committed to meeting or exceeding that amount. We also want to do this in a thoughtful way.

We strongly disagree with the practice of charitable giving based on the most recent headline. 

Take the ACLU. It’s a great organization fighting for a worthwhile cause. But $24.1 million dollars in a single weekend for legal advocacy? That seems excessive. 

Here's our charitable giving strategy for 2017: 

  • We’ll spend our time on domestic causes.
  • We’ll spend our dollars abroad (at least $250 every quarter). 

Assuming all lives are of equal value, $1 goes the furthest when deployed abroad because of the USD's historically high purchasing power. 

For example, donating to the Deworming Initiative could make a dramatic and immediate difference to the lives of children suffering from anemia, malnourishment, and impaired mental and physical development. Mass deworming also costs around $0.50 per individual treatment, which is two lives changed for every dollar. For some reason, this program is woefully underfunded. Couldn't afford CNN coverage, I guess. 

Faced with that kind of dollar impact, excuse us for not giving a rat's ass about "America First."



December Money Diary: A Financial Year in Review
 
 

Ivan here. Happy New Year! 

One of the most important things when it comes to personal finance is to avoid the temptation to lie to yourself. 

I think the world would be a much fairer place if we all just took a moment to evaluate our own shortcomings in an honest and productive way. As mentioned in our previous money diary, every dollar is not just a dollar. It’s a vote for something. And how we vote collectively determines what we value as a society. 

 
Every day choices.

Every day choices.

 

The future isn’t something that arrives, it’s created. So whatever it is we might complain about, chances are there’s something we can do about it today.


The Data - Financial Year in Review

 
 

With that in mind, let’s take a look at what we spent in 2016:

When you take away a refundable two month security deposit (under Savings, Education, and Investments) and a loan we made to family (under Life Happens), we actually spent $40,000 in 2016. Coincidentally, that’s the amount we want to save before we leave on our year long round the world trip in 2018

So how did we do? Well, when you spend $40k and can still manage to save more than 40% of your income, it seems pretty obvious we lead a very privileged life. This makes me uncomfortable for several reasons: 

  1. The median US household income is around $56,000. This means if we were the median family, on an after-tax basis we would be living paycheck to paycheck right now, despite the fact we have no debt or kids.
  2. Our fixed costs are too high. Rent and bills account for half our expenses when conservative spending calls for a third.
  3. Less than 10% of our spending went back into our community. With $0 and zero hours spent on charitable giving.
 
 

Looking forward to 2017, here’s what we’re committed to doing to improve:

  1. Cut down on big ticket purchases and dining out. We bought a lot of furniture this year when we moved to LA and we dined out more than we needed to.
  2. Buy local produce whenever possible. We were big Costco shoppers in 2016. While there’s nothing wrong with Costco per se (they treat their employees well) there’s something to be said about quality over quantity - especially when it comes to fresh fruits and vegetables. We’ll be cooking more in 2017, and will source our ingredients from family run grocery stores and farmers markets
  3. Move out of our neighborhood. We pay a $200-300 a month premium just to live by the beach and we go there maybe once a week. Talk about waste. Jennie's company is also moving this year so we no longer benefit from the short commute. 
  4. Donate our time and money to charitable causes. A minimum of $1,000 a year and 1 hour a week (each) for charitable work. Organizations we’ve already committed to are Planned Parenthood, Center for Reproductive Rights, and the International Rescue Committee (for humanitarian and legal assistance to refugees). As someone from a finance background, I highly recommend browsing through the top charities on GiveWell.org, which focuses on underfunded charities delivering the highest return on your dollar.
The Origami Life - Looking Ahead at Our Goals for 2017

Happy New Year! Jennie here!

Resolutions.

We all make them, but how many of us keep them? According to a University of Scranton, Journal of Clinical Psychology study, only 8% of those who make resolutions actually achieve their goals.

That said, I’m pretty stubborn and would like to think that the goals we’ve set for ourselves this year are both specific, measurable and realistic. By the end of 2017, I’ll be doing a year in review of our goals and rating how well we did against them.

We've come to the conclusion that we need to work harder at a lot of things in 2017...

We've come to the conclusion that we need to work harder at a lot of things in 2017...

I’ll be covering our goals in the following categories in this post:

  1. Financial goals

  2. Travel goals

  3. Relationship goals

  4. Personal goals

Financial Goals

  • Save at least 50% of our salary. This past year, we managed to save 42%. We believe we can do better. This year, we’re aiming to save 50% of our combined incomes.

  • Move into a cheaper apartment. Currently, we live on the westside of Los Angeles. While it’s beautiful, convenient and close to the beach...it turns out, we don’t really care about the beach and are paying a premium for this luxury. So, we’re looking to move into a new apartment in the springtime that is $200 to $300 cheaper than our current rent. Ideally, we’ll save around $2,400 to $3,600 a year in our next studio.

  • Donate 1-2% of our (post-tax) earnings. After this election year, we thought a lot about how we want to show our support for the causes we care about. We’re putting together a list of potential causes that we’ll be donating to in our December 2016 Money Diary.

Travel Goals

We just finished up with our Death Valley camping trip in December and it’s got us excited about what’s planned for our 2017 travels. Outside of our routine visits to our families in Taiwan and the southwest, we’ve got one big travel goal for 2017!

  • Travel across the country by rail. Awhile back, we were inspired by Derek Lowe’s train adventures across the United States. So, Ivan and I are planning a railroad trip across the United States during the fall. Truthfully, it’ll probably be our last chance to travel domestically once we move abroad. We’re hoping to hit up new cities like Austin, Chicago, Philadelphia, and Washington D.C. And we’re likely going to end up in Boston and see many of our old friends and catch some fall foliage too! I can’t wait!

Bonus: We want to try and get a quick trip to New Orleans in for the food, jazz, and history. Ivan has been wanting to go there for ages!

Relationship Goals

The big thing we noticed this past year was that we were definitely together more often but not spending enough quality time together. Some nights after work, we’d be in the same room but on separate computers -- catching up on reading articles, Youtube clips, or television episodes. We’re going to be the first ones to admit that we could use some more love and effort in our relationship.

holding-hands-1031665_1920.jpg

Instead of spending more time nursing our relationship with black mirrors, we’re looking to improve the following:

  • Power down all electronics by 9pm every day. Turns out, our lives revolve around a computer/mobile device. And it sucks. So, we’ve decided to turn off our computers by 9pm and spend time together or simply just read together.

  • Volunteer together in 2017. I believe this will be a good bonding experience for us but I think it’d be beneficial to also spend some time giving back to our new Los Angeles community where it’s filled with many issues like homelessness.

  • Be kinder to each other. This definitely manifests in different ways for the both of us but here are a few ways we’re looking to improve our relationship...

Ivan'S 2017 RELATIONSHIP GOALS:

Jennie's 2017 Relationship Goals:

I promise to pick up the scattered empty water bottles all over our apartment because Jennie hates this.

I’ll encourage (or make) Jennie go to the gym at least three times a week. Jennie also hates this.

I’ll read to Jennie at least once a week before bed because for some reason my voice puts her to sleep...
— Ivan
I promise to nag Ivan a lot less. I tend to nag but I know I can choose my battles better.

I’ll give Ivan real space for when he is reading or studying...even though I’m a social penguin.
— Jennie

Personal Goals

At the end of the day, we're two individuals with our own goals and ambitions. 

At the end of the day, we're two individuals with our own goals and ambitions. 

There’s a lot we have planned in 2018 but before any of that can happen, we need to prepare for the hard part in 2017. Part of the legwork required is having established savings for our travels and the other is creating habits that lead to stable income during our travels in 2018.

Ivan's Goals:

  1. Write and submit one new (financial or travel) article for publication every week.

  2. Complete the first draft of his novel by June 1, 2017.

  3. Study for the final CFA exam for at least 30 minutes per day.

  4. Run two to three times a week.

  5. Read 52 long novels by the end of this year. For reference, Ivan read 86 novels this past year.

Jennie's Goals:

  1. Practice drawing for at least 30 minutes a day.

  2. Read (a book) for at least 30 minutes a day. Hopefully, by the end of the year, I will have read at least 20 to 25 new books! Note: I'm already one-third of the way finished with my first book for the year!

  3. Exercise (e.g. go running, to the gym, etc.) two to three times a week.

  4. Send more emails/correspondences to my loved ones and friends this coming year.

So, there you have it. Our deepest hopes, ambitions, and desires. Happy new year from us to you!

 

 

One Girl's Journey To Financial Independence

Jennie here. 

As a first generation Vietnamese-American growing up in Albuquerque, New Mexico, I didn’t have a lot of money growing up. Both my parents had to work full-time minimum wage jobs just to support me and my three siblings. Then in the mid-90’s, my dad got laid off from his factory job and my family fell on hard times. We even had to go on welfare just to make ends meet. 

Based on these experiences, I realized from a pretty young age that I was going to have to fend for myself. And if I didn’t figure something out fast, I’d be stuck in the same cycle of poverty and financial dependence for the rest of my life. So at 14 years of age, I applied for a special work permit and got my first job as an ice cream scooper for Cold Stone Creamery.

I remember the company policy at the time required all Coldstone employees to sing for their tips. Ah, isn’t childhood trauma fun?  

 

I can assure you that they're dying on the inside.

 

Looking back on my humble beginnings, there were three pivotal moments in my life that set me on my journey to financial independence: 

1. Paying My Way Through State College (With Zero Debt)

1. Paying My Way Through State College (With Zero Debt)

1. Paying My Way Through State College (With Zero Debt)

Before graduating in 2011, nobody in my family had ever gone to college. And that could have easily been my path. When I was 14, my parents sat me down and told me that they couldn’t afford my education and that I would have to figure something out for myself. 

So for the next four years, I worked my ass off through multiple part-time jobs while attending high school. Unfortunately, by the end of those four years, I still couldn’t afford the $20,000 out of state tuition fees, even though I had good enough marks to get into more ‘prestigious’ schools. 

I had only two real options: go to the state school in New Mexico, or take on student loans to go to a ‘better’ school. If growing up poor had taught me one thing, it was to avoid debt at any cost.

So that was how I came to attend the University of New Mexico. 

Looking back, this turned out to be one of the best decisions I ever made for the following reasons:

  1. I received several state scholarships and financial aid for simply being a resident of New Mexico (and for good grades).
  2. I could commute from home and save on fixed costs
  3. I came out of school not only with zero debt, but with a surplus of cash

I mean, when you really broke it down, how much should students really be paying for a certain ‘brand’ of education? 

 
 

 Outside of maybe Harvard or Stanford, is any school really three times better than your average state school to justify the additional cost? And is any of that worth the financial servitude? 

2. Self Funding my Study Abroad Experiences in Japan (twice!)

2. Self Funding my Study Abroad Experiences in Japan (twice!)

2. Self Funding my Study Abroad Experiences in Japan (twice!)

Studying abroad in Japan had been a lifelong dream of mine since high school, and when I have a dream, I’m damn well going to fight to turn that into a reality. 

I ended up studying abroad in Japan twice.  

The first time I was 16 (and extremely broke). So I started cold calling local businesses and doing my own research on available scholarships. Within six months, I had scraped together enough money and applied for the Youth For Understanding summer program. I didn’t even tell my parents that I got accepted until after I booked my flight out of the country. Where I grew up, people just didn’t see the value in travel the way I did. So I just didn’t bother to ask for permission. 

My second time to Japan was to Kyoto in 2008 on a different scholarship that I had clawed my way into. And that’s where I met Ivan (my husband).

3. Moving to Boston with no money, family, or connections and hustling my way to my first salaried position

3. Moving to Boston with no money, family, or connections and hustling my way to my first salaried position

3. Moving to Boston with no money, family, or connections and hustling my way to my first salaried position

After college, one of the toughest challenges I faced was finding my first full time job. It was made more challenging by the fact that I had moved across the country to Boston, a city where I had no family, few friends, and no professional network. I even had to get a $2,500 loan from Ivan just to stay afloat, while I worked part-time jobs for temp agencies (an underused resource) and Club Monaco (ah, retail). 

In the meantime, I talked to everybody. Customers, co-workers, friends of friends three times removed. I cold-emailed people in industries I wanted to work in and invited them out for coffee. 

Then one day, I was on a flight back from Toronto visiting Ivan and was sitting next to a woman who turned out to be an account executive at a well-known market research firm. We chatted and kept in touch. Next thing I knew, I ended up interviewing for two positions and got offered my first salaried job as a cyber-security researcher! 

So What Have I Learned?

You can only connect the dots looking backwards.
— Steve Jobs

Today, I’m living and working in Los Angeles directly because of that first position in Boston, having followed my mentor to a new cybersecurity start-up based in the West Coast. 

 

Ivan and I are debt-free and are saving at least 45% of our income towards a bigger dream of a sustainable and nomadic life abroad. One of the biggest things I’ve learned so far in this journey is to always bet on yourself and to never stop chasing a bigger dream.

Because that’s what freedom’s all about.

5 Stress-Free Rules that Saved Us Time and Money

Ivan here.

Life’s too short to have to worry about money all the time, and the reason you worry is because you don’t know what you want, and have to settle for either:

  • Blowing your entire paycheck searching for answers, or
  • Hoarding money in your savings accounts like Smaug from the Hobbit. 

Both are desperate cries for help. 

In my experience, frugality can be just as problematic as reckless spending. Oscar Wilde once said a cynic is someone “who knows the price of everything but the value of nothing.” I think of this quote whenever I read financial tips suggesting that I ditch my morning coffees to save a couple hundred extra dollars a year.

No.

I happen to enjoy waking up extra early and walking to my neighborhood coffee shop. Maybe sit in the sun for a half hour with a paperback before heading to work.  Is that experience worth the $400-500 I spend a year? Absolutely.  

Here’s the problem with the micro-budgeting mindset: you become so obsessed with streamlining everything to death, you forget that the one who’s eventually going to die is -- well, everyone. 

Sometimes it’s the small things that make living worthwhile. 

To me, the purpose of personal finance is freedom, and the currency of freedom is options. I base all my important decisions on one simple formula: 

Time > Money > Possessions

Time can be converted into millions of options, money into hundreds of options, and possessions into a couple of options. 

So what's the goal? The goal is to minimize the amount of money and possessions you need and the amount of time you spend worrying about the latter two. You do this by setting rules for yourself that help you hone in on the bigger picture, rules that will help you find and add value to your life whether you’re spending or saving. 

Here are the 5 rules we follow that work for us:

1. Reduce Your Overhead: keep your rent payments under a third of your after-tax paycheck

The 80/20 rule states that 80% of your problems are driven by 20% of the causes. Rent is that 20%. Get it right, and that’s 80% less things for you to worry about. Since you typically only have one chance every year to renegotiate the terms of your lease, it pays to be ruthless. Especially if you’re carrying debt. 


2. Automate Your Money: open your checking, savings, and retirement accounts with different banks

Under no circumstance should you open a checking and savings account with the same bank. 

Your checking account should have no fees or minimums, and your savings and retirement accounts should make it difficult for you to access your own money (a two day wait period for all transfers is ideal). Next, automate your transfers.

Here’s an example of what this should look like when your paycheck hits your checking account: 

  • 5-10%  disappears into your retirement account, never to reappear
  • 20-30% disappears into your savings account, only to reappear in life or death emergencies
  • Remaining 60-75% stays in checking and is the only number you’ll ever see on a day to day basis

Now service your debts and pay the rent and bills. That’s your 80%. And the amount that’s left over isn’t money -- it’s freedom.

3. Commit to One Small Routine: Designate the day after your weekly grocery run as a “no spend” day

We’re flooded with ever more clever ways to save money, which decreases the likelihood that you’ll ever follow through on any of them. Instead, focus on building one recurring routine. 

Dining out is probably the second highest expense after rent and bills, so commit to staying in the day after your weekly grocery run. Better yet, get some Tupperware containers and cook enough to get you through the next 3-4 days. It’ll make you more thoughtful about your grocery purchases as well. 

4. Curb Your Impulses: Designate one or two days out of the year for big ticket/luxury purchases (i.e. nonessential Purchases) 

No amount of caffeine-less days and ramen noodles will save you from those status-seeking luxury purchases charged to your credit card at two in the morning. 

Don’t get me wrong, it’s okay to treat yourself. But you’re not special enough to deserve a treat whenever the impulse strikes you. The reasoning for this rule is simple: you’ll be more reluctant to drop three grand over a day than three hundred over ten days.

If shopping online helps you relieve stress, then go ahead and browse away. Fill up that digital cart. But you only get to pull the trigger once. I’d recommend having that day towards the end of the year because that’s when:

  • The best deals can be found
  • You’ll have actually earned it

5. Invest in Yourself: 5-10% of your savings should be plowed back into your education

Financial independence is great, but it’s more of a prerequisite than your actual major. Your major should be finding ways to add value to your life and the lives of those around you. The best way to do this is to invest in yourself. 

This doesn’t mean you should sink further into debt to get another college degree. Remember, freedom is about options, and debt decreases your options at a compounded annual interest rate. 

Besides, credibility can sometimes be overrated. People think it can be bought (as a ‘resume padder’) rather than earned through the sweat of real world experience. 

In the digital age, there are hundreds of options allowing you to try new things and further your education. This is your chance to test the waters before jumping in with both feet. 

Because that’s what it means to be alive.