Posts tagged personal finance
Our Manifesto: One-Upping Mr. Money Mustache

 

The Next Level of Frugality

Ivan here. 

I love Mr. Money Mustache. He’s been a hero of mine ever since I stumbled upon his blog in late 2012, as I was starting my first full-time job following graduation. Because of him, I was able to save 60% of my income in my first three working years and avoid the status seeking impulse which inflicts most people my age. Without MMM, I wouldn’t have a two year fuck-off fund. I wouldn’t have maxed out my 401k every year. And I definitely wouldn’t have the luxury of writing full time today. 

We share a lot of the same values: the importance of constantly exercising our frugality muscle and letting your money work for you through passive indexing. I also laid out a similar philosophy in my article, A Millennial’s Guide to Money and Long Term Investing

So what I’m about to say is with all due respect to the huge impact he’s had on our lives. But it needs to be said:

The world has changed. We all got a healthy dose of this when we witnessed the last inauguration. With this change comes new return expectations and new ideas on what financial freedom really means. And the idea that our generation, millennials, can follow the same Mustachian prescription and get the same results is the very definition of complacency. 

When something moves into the mainstream and becomes conventional thinking, it’s time to think again. Last year was a record year for passive indexing. True rewards can only enjoyed by those who dare to think different. Frugality is great (and still a useful tool for a majority of over-consumers), but there’s also a new frontier out there. 

The hard truth is that this frontier no longer lies in America, where comfort has become the expectation and not the enemy. 

Escape from Debt and Rising Cost of Living

As inhabitants of the wealthiest country on Earth, the faster we realize that America is only a jumping off point, the more clearly we’ll be able to see our own future. 

Why are we crowding into large expensive cities in search of diminishing opportunities and stagnant wages?

Why must we lock ourselves into 30 year mortgages to buy cramped homes we can’t afford to make the hour long commute to some anthill of late stage capitalism? 
 

The big picture doesn’t look so hot either. With a looming multi-trillion dollar federal deficit and wealth disappearing into the Cayman Islands, what’s the one asset that can’t escape future tax increases to pay for all of this? 

Oh right, property. Real estate owners are about to become the bagholders of the 21st century. 

While we think it’s great that Mr. Money Mustache can live in Colorado for under $2,500 a month, you know what sounds even better? Living in Bangkok for $1,333 a month. Ho Chi Minh City for $975 a month. Rio de Janeiro for $1,592. Here, see for yourself. 

Sure, all of this sounds “risky” and “dangerous.” But how do we grow without risk? In 2017, comfort is the true enemy and change is the only constant. Nature rewards those who learn to adapt to their surroundings. 

So keep your overvalued coastal properties. We're not interested. It's time to find out what the rest of the world has to offer us. 

Global Mobility is the New Frontier

You might be asking yourself: what happens when it’s time to settle down and start a family? Don’t we all eventually have to return to the rat race? Better to stay put, keep your head down and work your way to the much coveted six-figure salary than to leave everything behind and not make “progress.” 

Right? 

Wrong. Why take a six figure salary in a city you can't afford when it’s possible to work digitally for at least $30,000? 

A studio in New York costs half a million dollars, but a two bedroom in a city like Phoenix costs $100,000. With a dual remote income and a frugal lifestyle, we could pay this off in cash within five years. Our only requirement would be that this house be located near an airport. North America would be a home base to us, somewhere to stay rent free when we want to take a breather. 

The world on the other hand, will be our playground. 

That's the dream of The Origami Life. True simplicity, maximum flexibility. The ability to work, live and play anywhere in the world. A life completely without restrictions.

We, as millennials, don’t even know how good life could be if we dared to think a little different. We live in the wealthiest nation on the planet and there’s an arbitrage opportunity staring us right in the face. Something that will enhance both our financial and life experience banks. A life that’s self sufficient and semi-nomadic. A life where the choices you make actually belong to you. 

There’s a reason why Genghis Khan and the Mongols conquered the world. So if any of our mad ravings make any sense to you, it’s time to saddle your horses.

Because we’re taking no prisoners. 

The Origami Life's 2018 Goals

If you're new to The Origami Life, we figured that we would sum up the big goals and what we're about. Every deliberate and conscious step that we make is for the sake our big life goals.

If you're new to The Origami Life, we figured that we would sum up the big goals and what we're about. Every deliberate and conscious step that we make is for the sake our big life goals.



On the Lives We Could've Led

Most people go through life using up half their energy trying to protect a dignity they never had.
— Raymond Chandler

 
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The most important decision of my life

Ivan here.

When I was 17, my parents sat me down and laid all their cards on the table. 

At the time I was trying to decide between attending college in Canada (where I could pay domestic rates) or the US where tuition was 3-4 times the price. I had gotten accepted into some pretty good schools in the States.  Chicago. Berkeley. Columbia. Dream schools. 

That’s when my parents broke the news: they couldn’t afford to send me to the States. They opened up about everything: how much savings they had in the bank, how much debt they were carrying, how much they still needed to save for my brother, and how much they could realistically afford for my education. 

Then they gave me a choice: I could stay in Canada and have the majority of my education paid for (after scholarships) or I could go to the US and take out loans to make up the difference. More importantly, they broke down the consequences of each choiceIn the first scenario, I would come out of college with zero debt. In the second, I would be like most of my peers, struggling under the burden of debt after graduation. It would be a decade or more of indentured servitude. 

They asked me what price I would put on my own freedom. What was the next decade of my life worth to me? 

Was I devastated by what they told me? You bet. I was furious. Who turns down Columbia? Are you fucking kidding me? But the two paths my parents laid out for me were clear. I couldn’t deny the logic. 

Getting past the shame of talking about money

Looking back on it now, that level of transparency was the best thing they could’ve done for me. It couldn’t have been easy for my parents to share their financial struggles with me. Imagine the shame they must’ve felt to tell their kid they couldn’t afford to send them to their dream school. But you know what was more important to them than their own ego? Their son knowing exactly what his options were. 

How can we as millennials ever learn to make good money decisions if nobody’s ever told us what our options were? 

Five years later, I ended graduating from a top Canadian school with zero debt and was lucky enough to get a well paying job straight out of college. Since I knew the financial strain my parents were under, I paid for the last two years of my brother’s education so that they could start putting more towards retirement. 

Isn’t that what a family is for? No secrets, no shame, and a willingness to face our problems together. To share in the burden of life. 

Maybe I’m being too much of an idealist. Maybe I’m imagining a perfect world where every family can get together to sing kumbaya around the open communication campfire. 

The cycle of financial dependence

Sometimes I imagine the life I could’ve had. What if I had gone down the path that most millennials were forced down? I would still be in debt today. I would’ve taken the first job offered instead of holding out for the one I wanted (or thought I wanted). I wouldn’t have quit my corporate job to pursue writing full time. I wouldn’t have been able to build my two year fuck off fund. Worse, my brother would've followed me to the U.S. and gotten into a similar amount of debt. My parents wouldn’t have enough for retirement. My brother and I wouldn’t have enough to take care of them. 

And on and on goes the cycle. 

It's only a shame that it's a secret

I read articles like The Secret Shame of Middle Class Americans and wonder what if. What if the writer had told his daughter he would have to clean out his 401k to pay for her wedding? Would his daughter have let him do that to the family? Her family. 

More so than knowledge, I think the lack of communication around money is one of the core issues facing lower to middle class families today. And it seems like the more trouble a family has, the less inclined they are to talk about them. 

But how do we learn anything if everyone’s afraid to address the problem? To move past the shame towards something more constructive? The problem doesn’t go away. We’re just kicking the can further down the road. 

Instead, why not take the first step and start with something we can control? 

In the coming days and weeks of the new year, sit down with your families or significant other and share everything you’ve been afraid to tell them about your finances:  

  1. What am I struggling with? 
  2. What worries me about the future? 
  3. What steps am I taking to address these issues?