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How to Know if You’re Being Too Cheap

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Personal finance is personal – one person can choose vacations over a nice house whereas another person would rather keep her creature comforts (and herself) at home. One decision isn’t better than another so it might seem that one person’s “cheap” is just another person’s “frugal.” I think though that both the people listed above are prioritizing what they want – which is good and not cheap. Cheap is a whole different other animal.

A Story of Cheapness

I got free tickets to a baseball game and invited my friend. He asked if he could bring his own food into the stadium. When we got to the game, my friend brought out a bunch of little snacks. And then he told me he had already eaten.

I was a little confused. If you were going to eat beforehand, you don’t need to eat at the game, which was at 7. My friend is someone who eats 3 meals a day. He doesn’t eat snacks or dessert regularly.

And then it dawned on me – he wasn’t bringing in food to save money – he was bringing in food to see what he could get away with.

Why Being Cheap is Different Than Saving Money

Personally, I’ve never understood people who sneak in snacks to the movies. I mean, I realize that movie snacks are expensive but movies are generally 2 hours long. They’re not so long that you’re going to need food or water. I can understand that other people just have the habit of eating during movies, so maybe that part is about saving money. But for me, sneaking food in would not be about saving money because I never wanted food to begin with.

I think part of the fun, though, is feeling like you’re subverting the system. It’s about what you can get away with, even if you didn’t want to do the deed in the first place.  It’s like my friend – he didn’t need or necessarily want to eat at the baseball game but he wanted to feel like he one-upped the game (which he didn’t even pay for). I’ve also brought him to a hockey game where he got a free meal. He had already eaten, but that didn’t stop him from loading up on the buffet because it was free. If it weren’t free, he wouldn’t have bought anything. Because it was free, he ate it all.

In my mind, being cheap is doing stuff with the primary motivation is money.

The Problem with Being Cheap

I understand there are times when people need to feast and famine. If you don’t know where your next meal is coming from, then it probably makes sense to feast while you can. It might make sense to carry snacks with you in case you do get hungry because you can’t afford to buy a meal out.

My friend is not one of these people. He has a well-paying job, no debt, and few expenses.  He could have bought something if he needed it. Also, and most importantly, he wasn’t hungry.

The problem with being cheap is that you let money dictate your decisions.

And I’m not here to judge. I think we are all a little guilty of this. For example when:

  • You buy something because it’s being sold at a deep discount even though you don’t really want or need it.
  • You pick the cheapest options even when better options in terms of time or convenience might be just a few dollars more.
  • You eat free food that you don’t want or need and that might not even taste very good.
  • You automatically forgo expensive activities because they’re expensive, no matter how they might benefit you in the future or how much enjoyment you would receive out of them.

Again, when money is tight, it makes sense that money is your chief consideration. But once you have some money saved, it makes sense to allow some other criteria into the mix, such as one’s own desires or needs, others’ desires or needs, or any long-term implications.

Don’t Let Money Be Your Dictator

I’m starting to become more mindful of my money decisions, but it’s a struggle. I’ve spent so much of my life scrimping and saving, it’s weird to think, oh hey, I can choose things that work better for me even if they cost more. Or, hey, maybe there are things more important to me than money. When I see my options laid out for me, it’s like pulling teeth to consider criteria besides money, but it makes sense to.

A lot of social activities will say that consumer purchasing has a lot of power in sending a message to companies as to what consumers want or value. I also think that your purchasing power sends powerful messages to yourself and others. For instance:

  • When you scrimp on food or health, you’re telling yourself, wealth before health.
  • When you are stingy with your friends and family irrespective of their desires, you’re saying, I value money more than our relationships.
  • When you pick the cheapest option for your work or career instead of the one that works best for you, you’re sending signals to yourself that you don’t deserve it, that you don’t believe in yourself.

Again, sometimes we have to worry about every last cent, and sometimes we don’t. I hope that when we get a little more wiggle room, or when we have hotels filled wiggle rooms, that we then start to learn to dictate money to do our bidding instead of the other way around.

 

Why College is Often Not Worth the Cost

why student loans are often not worth the cost

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Most of the articles that tackle the question of whether college is worth the cost inexplicably conclude “of course!” But just thinking broadly about student loans, it’s a recipe for disaster. We’re telling kids their whole lives that they need to go to college, any college, in order to succeed. Then when they’re 18, colleges push them towards tens or hundreds of thousands of debt. Students go to questionable institutions and obtain degrees in majors that aren’t applicable to jobs in the workforce.  Furthermore, many entry-level wages aren’t high enough to comfortably cover the costs of big-city life and  student loans. How can anyone think this is an unequivocally good idea?

Why I Doubt The Statistics About College

The common refrain is that a college graduate will make $1M more than a high school graduate over a lifetime. Other studies show that high school graduates end up with a higher net worth than college students over a lifetime, even if the high school graduate works as a janitor. Another analysis states that the $1M figure fails to take into account graduates who take longer than 4 years to graduate, progressive taxes, present value dollars or those that make high incomes based on graduate school (lawyers, doctors, CEOs) and not college. Even a college proponent argues that the figure is closer to $400,000 and with college tuition topping $160k at 7% interest rates at many institutions, that might mean college proponents are saying the best case scenario is a break-even. Further complicating the matter is that these studies and estimates are from college students who graduated decades ago, and what was true for them is not necessarily true for students today.

Figuring out whether college is worth it is confounded by the fact that people who go to college tend to be fundamentally different people than those that don’t go. For instance, most people who graduate college are from the upper or upper middle classes. 77% of the bachelor’s degrees awarded are from people who grew up in the top half of the income distribution, and 50% from the top quarter. As the New York Times provocatively wrote, some colleges have more students from the 1% than the bottom 60%. So when the statistics talk about better outcomes for people who go to college, there’s a correlation – wealthier people go to college and wealthier people tend to have better outcomes. Bright, conscientious people tend to go to college and bright, conscientious people have better outcomes. College is irrelevant.

Why Student Loans are Not “Good Debt”

When people say that student loans are “good debt,” they are basing this off the faulty premise that the loans will be easily paid off because college is obviously a good investment.
But I don’t think the evidence is there that college is a good investment for everyone. It may be a good investment for the majority of people who graduate from college – who tend to be wealthy. The problem is, we have to remember that most of the people weighing the benefits of college are not wealthy (i.e. if you are wealthy, you pretty much assume you go to college but if you’re not, you weigh the options). When we are talking about people who are doing well with college degrees, most of these people come from wealthy backgrounds and have a lot of advantages besides a college degree. These are people who likely have well-off parents, who can help with loans.  If things don’t work out well, these kids can stay at their parents’ house while they pay down debt.

I think we are misleading a lot of people who don’t have these advantages. Saying college is a sure thing and saying college loans are “good debt” is not a victimless crime. With hundreds of thousands in student loans being given out like candy to people who will be unable to pay them back – mindless college cheerleading can set people back in their finances in an irreversible way that even a stupid decision like buying a sportscar cannot.

I wanted to give a more in-depth look into whether student loans are worth it. I will admit that some of this math is fuzzy because it comes from different years and different surveys and most of the statistics are several years old. I’m also conflating the idea of going to college with the idea of taking student loans, to a certain extent, because they are intertwined in the type of analysis I’m trying to provide. This is all to get a general picture, not write a thesis.

Why Student Loans are Often Not a Good Idea

Let’s talk about why student loans tend to be a bad idea. Let’s look at which students benefited from taking on student loan debt. In 2012, 71 percent of students graduating from four-year colleges had student loan debt (The site states that 71% represents 1.3M people, and thus, that must mean approximately 1.8M people graduated in 2012).

So this means 29% of graduates did not have student loan debt. And I think we can agree that those people did not benefit from taking on debt (because they didn’t take on debt) and would not have benefited from taking on debt. You could say, it doesn’t make sense to take on debt when you have cash – but that’s not true. Even though the rich may have cash, the rich take on multi-million dollar mortgages because the interest rates are so low and they can make more money by investing it. In contrast, rich people aren’t taking on student loan debt if they have the money because  student loan rates are quite high. If you have the cash, you can take on the debt if it makes sense to you – as the rich do with mortgages. The rich are not taking on student loan debt needlessly though. 

Anyway, back to the 29%. Whether they were on scholarship or their parents paid for it, this 29% of people will be included in the group of people where college pays off for them, and it’s likely that these people will do very well. They are either rich or smart/talented enough to go to college for free.  While these people will be counted in the statistics for “college is a great idea!” they are likely people who would have done well without college. Anyway, I will count them in a group of people for whom student loans did not benefit. So this is 550,000 people.

Note also that the 71% statistic of students covers only those who are “graduating.” Only 41% of students graduate from a 4-year college within 4 years. If approximately 1.8M people graduated college in 2012, representing 41% of the people who entered college around 2008, that means 4.4M people were enrolled, and 2.6M did NOT graduate. Most of the non-graduates cite money as the reason for not being able to graduate. And if those nongraduates have debt, you couldn’t say that debt would have been good for them. (And if they didn’t have debt, again, taking out debt would not have benefited them). You might point to outliers like Bill Gates or Mark Zuckerberg as dropouts who come from the wealthy classes, but yeah, those people also did not benefit from student loans. Non-graduates don’t benefit from loans.

So far, of the 4.4M people who attended college, over 3.1M (550,000+2.6M) did not benefit from student loans because they didn’t use them or didn’t get a degree. That’s already 70%. What about the last 1.3M? Here are some statistics to chew on.
  • 17% of those with student loans owe more than $50k (5% over $100k). Those people seem unlikely to do well, so encumbered by debt.
  • 43% of college graduates are underemployed in their first job, meaning they work at jobs they have don’t require a bachelor’s degree. Of course, there is something to be said for if you have a college degree, you’re probably taking that janitorial job away from someone without one. However, it’s also possible that someone without a college degree was doing a great job as a janitor and would keep you from  that job.
  • In 2012, 44% of borrowers in 2007-08 took an undesirable job or job outside their field due to education cost.
  • Based on projections, nearly 40% of borrowers may default on their student loans by 2023. Currently, 1 in 8 student loans is in default.
  • At 15% of 4-year private and public nonprofit schools, 15 percent of students earn less than $25,000 per year, even a decade after they first enrolled.  The data is worse for 2-year and for profit schools.
  • Approximately 37% of college graduates obtain graduate degrees. Granted, one can only go to graduate school after obtaining a bachelor’s degree but I want to figure out the value of a college degree, not a graduate degree. Doctors and lawyers and MBAs are going to lift the median earnings for college graduates. Furthermore, many people likely went to graduate school because they did not think their college degree was sufficiently competitive in the marketplace.
Some think it’s way worse: Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School, lays out a guide for families in making this so-called ROI calculation in his new book, Will College Pay Off?: A Guide to the Most Important Financial Decision You’ll Ever Make:
Looking at the actual return on the costs of attending college, careful analyses suggest that the payoff from many college programs — as much as one in four — is actually negative. Incredibly, the schools seem to add nothing to the market value of the students.
So let’s say with 44% of borrowers taking undesirable or out of field jobs, 40% of borrowers set to default and 43% under- or unemployed, 37% went to graduate school and all the other statistics mentioned above – I have no way of knowing where these statistics overlap but let’s say on the low-end and for ease, that there is near 100% overlap of these data points and that approximately half of people who took out loans for college are not getting their money’s worth. (For instance, someone with over $50,000 in debt who is underemployed is also likely to default). That’s 650,000.

What about that last 650,000?

So I’m going to say that this is the group of people who didn’t take out too much debt and have been steadily employed at above-average paying jobs. What does it mean to take on average debt? I don’t know how to vet this last 650,000 for success.
But remember that approximately 4.4M go to college and 650,000 are doing well even after taking out loans (I assume this number of people is doing very well in order to balance out the people who are not doing well in terms of income or jobs). That’s 15%. You have to ask yourself, are you going to be in that top 15%? It seems a little bit crazy to go so far into debt for an outcome that is only worth it for 15% or fewer of the people. At this rate, maybe you’d be better off starting your own company. The risk levels seem similar.
Student loans from college are hardly a sure pathway to success. If you still don’t believe me, you can read one of the 8 million hits for “student loan horror stories.”

Should you to go to college?

I started college almost 20 years ago. I went to a well-regarded public school in-state and my parents were able to afford my tuition and expenses because they had high-paying jobs and the tuition was more affordable. Today, the tuition and rents at the same school in the same town have quadrupled – but pay has not. Though it made total sense for me to go to college 20 years ago, it might not make sense for me to make the same choices today. A lot changes in 20 years. Beware of people who look back at their own lives as evidence that college is a good investment today. Past performance is not indicative of future performance and that person isn’t you.

Even if you’re not in a financial position to go to college (given the cost and your family’s finances), it seems like you still don’t have a lot of options. A lot of companies are holding students hostage by requiring college degrees for positions that never used to require them.

I think if you can afford to go to a top college without accruing a lot of debt, it will likely be a good choice. For those eyeing massive student loan debts in order to chase one’s college dreams, I hope you would consider that, college and student loans are a calculated risk. It might pay off, but it could very well be a huge mistake.  One should consider every opportunity to save money such as :

  • Taking many AP courses in high school to qualify for college credit
  • Attending community college for the first two years and/or taking classes at the community college in high school or over the summer to save on credits at a more expensive school
  • Applying for many scholarships and financial aid
  • Delaying college until you know what you want to study and working in-between
  • Working part-time in college (I knew a few people who worked full-time while maintaining a full course load, as well)
  • Graduating early

College can be a wonderful asset to your career and a fun and rewarding four years – but don’t get blinded by the fantasy and ignore the finances.

5 Reasons My Parents Escaped the Lower Class (and No, it’s NOT Hard Work)

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It’s ingrained in the national psyche that “all you need” to achieve the American Dream is to “work hard.” But there are far more people willing to work hard than people are willing to acknowledge. There are plenty of day laborers and people toiling away at minimum- or low-wage jobs who will never get ahead. Hard workers are not hard to come by, but hard work is not enough now and has never been enough in the past. Truth is, America has never cared that much about hard work. Why do we keep perpetuating this myth?

Why We Don’t Care About Hard Work

America is a nation that loves effortlessness, or at least its appearance. Do you know how many hipsters we have? Haven’t we popularized athleisure? Didn’t we give the world the Kardashians? These icons of our culture (they’re iconic in that they’re well-known) do not signify hard work and yet we exalt them. In fact, we detest people who look like they’re trying too hard. America prefers overnight effortless successes. America loves the idea of being thin without starving or craving. America hates the idea that it takes a lot of work to be at the top of one’s game.
So if hard work doesn’t get us ahead, what does? In Great at Work, Morten Hansen tells an anecdote about when he noticed that, though he killed himself working grueling hours, he still wasn’t getting the results of his colleague who worked far fewer hours. She was far less stressed and got better results. Do you think their employer thought he was better for working hard? Nope!
No one prefers the guy who works hard over the girl who works efficiently and gives better results. You may say, she worked hard to be so efficient- but the author admits that he has always put 100% effort into everything he does. He has always worked hard, but hadn’t learned to work smart.
The point of the book is that you have to focus your hard work on the important, specific small things in order to succeed. Too often, people focus on tons of unnecessary things. Like hard work. People work hard, but they never get ahead.

How My Parents Got Ahead

My parents came to this country with very little and are very comfortable now. My parents didn’t work that hard. And by that, I mean to say, they weren’t toiling in the fields, doing back-breaking labor. They weren’t working crazy hours hustling. They worked hard on a few finite items that I believe led to their ultimate success.

1. My Parents Made Safe Bets.

According to Thinking in Bets, we can’t know for sure what the best decisions are because we have imperfect and incomplete information. The best we can do in life is to make decisions that have a high probability of success.
My dad became an accountant and my mother studied math. These were and still are in-demand fields of study. I don’t know too many hardworking unemployed accountants or mathematicians (some but not a lot).
My dad told me that he used to do accounting for starving artists. They would sell their guitar in order to make rent and when they came into money, they would buy it back. He warned me about this. I mean, I’m certainly not so artistic that I would have pursued a career in the arts. But Asian Americans always want their kids to be able to support themselves. There’s always a push towards “safe jobs.” They want their kids to struggle less than they did. They do this by ensuring that their kids know a trade that is marketable.
In addition to learning a pliable trade, my parents learned other useful skills – like English.

Once, I met this woman in China who told me that she traveled to the country for months at a time every year for 10 years. Then she turns around to the DVD vendor and says in loud English “FIVE!” and spreads her hand open to indicate the same. This woman, who had spent months and months living in China, didn’t even know the Chinese word for “five.”

Meanwhile, when I was cleaning out my parents’ basement, I stumbled upon my dad’s old English textbook. It’s pretty cute. In the margins, he writes (in his beautiful handwriting) “Study!”
English is my parents’ third and fourth languages. My parents made a concerted effort to learn English, which is the main reason my siblings’ and my Chinese is mediocre. They were constantly practicing and, though their grammar isn’t perfect, their English is far better than the vast majority of immigrants their age. I even remember my dad’s first pun (“I find hostels to be quite hostile.”).
I know people will say people don’t need to learn English to live in America. I mean, you don’t. But it’s going to be difficult for you, just like not knowing Chinese in China is difficult. Granted, if you’re reading this in an English-speaking country, you probably already know the language. But there are other skills you can learn that will be helpful and make you more marketable in your career. If you don’t have a marketable skill (like accounting) and you don’t know the language, employers are more likely to take advantage of you and you won’t know how to get a better job. You don’t necessarily have to use your survival skills, but you’ll be glad to have them if you’re in a pinch.

2. My parents lived within their means.

Well, obviously my parents had to be thrifty. They’re immigrants. My parents drove their cars to the ground and kept the same furniture for decades. We rarely got gifts (you have everything you need! my mom said) and we drove all up and down the east coast for vacations. Not spending all their money helped them to build wealth.
When I’ve talked about “safe bets” above, there’s no such thing as complete safety. Part of making the “safe” bet on engineering, is giving yourself room in case your plan fails. A lot of people get in trouble by making big bets that they don’t think are risky. Like spending $200,000 on a college education. Buying a $1M house. People think, oh education and housing are solid investments. But even with high-paying jobs, these are risky bets. You could still end up hating your engineering job, and then having to work at it for years to pay for your outlandish college bill. You end up needing to sell your “great investment” house because you need to move. Any investment of a large sum of money is risky. It often pays to cut these very large expenses as much as possible.

My parents went to state schools and my siblings and I also went to state schools. Living within our means for education and housing expenses has given all of us more flexibility in pursuing our careers.

3. My parents were entitled.

I don’t mean this to say that my parents thought things would be handed to them, but that they understood their own value and demanded nothing less. They hustled. And in my mind, they had a certain middle-class mindset – it was optimism.
My circle of friends includes a few people who grew up in the lower class. These people are generally better at everything than I was/am – there’s a reason they were able to climb social ranks after all. They’re super smart, with amazing willpower, talented, charismatic, good-looking. They basically rose through the ranks based on merit and not tricks. So I’ve noticed that they still have a tell-tale sign that they didn’t grow up middle-class.
For my ex, B, he always assumed that you only get what you are offered. You can’t ask for help or if you do, people won’t give it to you. (Studies show that people who grow up in lower income areas trust people less than people who grew up in more affluent ones). He had seen his mom make do with a lemon of a car, because that’s the only kind of car they would offer to someone with bad credit. They lived in whatever apartment that could fit their rent. Because this is what he saw, he learned to take what he was given and he didn’t ask for more.
My parents, on the other hand, would never settle for less. They taught me to call up the bank to get my fees waived. They always checked for and contested incorrect charges. They haggled. I remember a childhood of scolding them for being too aggressive. (“Guys, this isn’t China. Stop yelling.”) I’m a little more genteel than my parents, but the entitlement is straight up from watching their example. My parents weren’t necessarily persuasive, but they were persistent, and they believed in themselves and they believed that doors would open. This optimism transferred to me.
I remember I was traveling with B, and we were running very late at LAX. The check-in kiosk wasn’t working so we were waiting in a very long line to see an agent to get our boarding passes. The minutes were ticking by, and B had resigned himself to missing the flight. But not me.
A new attendant appeared behind the customer service desk, but she was clearly working on something besides assisting customers. I bypassed the line under the velvet ropes and presented my tickets to her, saying we couldn’t check in at the kiosks. She quickly resolved the issue and we ran up the escalators to the long security line. I heard our names called on the intercom for last boarding call. I then asked every single person in front of me if they would let us cut in line or we would miss our flight. They all said yes. Then we ran through the terminal and caught our flight just before it left (gate attendants love telling you how close you are to missing a flight).
Following my example, on our flight, B asked the man sitting next to him if he would switch seats with me so we could sit together. He never would have thought to do that without following my example. For B, he would have just sucked up the missed flight or the mismatched seats as fate and paid for another ticket, and whatever other costs were associated with that, and sat separately.
I assume people are willing to help, and that’s something I learned from my parents.
I think how I act is very normal for a middle-class person. Lower-class people never expect anything good and upper-class people may have never felt the need to haggle. But the middle-class, we are all about that hustle. And the more you ask, the more you get. Sure, you get turned down, but people are ultimately willing to help others out. And the middle class requires some help from others – maybe less than the poor, but definitely more than the rich. The ability to ask for more is a key component in moving up, in my opinion.

Hustling saves money but it also gives you a certain bit of confidence. I don’t believe in “The Secret” but I do believe that optimism can lead to good results. If you believe something good might happen, you’re more likely to try new things, which is more likely to get you somewhere good than sitting on your butt. That optimism is very middle-class, very American.

4. My parents chased the jobs.

My parents were unafraid of switching jobs when it suited their needs. My mother actually moved to Virginia by herself when I was 9 (my siblings were older) to follow a new job. She rented a room and visited us on the weekends, while my dad took care of us in New Jersey. (It was around this time that I learned my dad was actually a very good cook; he just didn’t care enough about cooking to make anything besides spaghetti for us. But one time he whips out a shrimp with lobster sauce and I thought, who are you?? Why have you been feeding us vienna sausages all these years!).
My parents uprooted their kids from New Jersey to Virginia because of their jobs. Now I know some parents would judge them harshly for this. They should have thought of their children! For me, I think it was rough changing schools but it was ultimately one of the best things that happened to me. The kids from my small hometown in New Jersey would hang out at the local grocery store parking lot for fun. Northern Virginia, on the other hand, has some of the best public schools in the country. Instead of parking lot friends, my peers are teachers, doctors, lawyers, and engineers. Further, the DC metro area is prosperous and well-educated and my entire family lives in the area to this day. I think it would be pretty unlikely that we would all be within a half hour drive of each other in our little town in New Jersey. I’m just going to say here that sometimes you have to move to get a better job and kids are pretty resilient.

5. My parents were equals.

I note something else significant about our move to Virginia: I don’t know too many couples where a man has followed a woman for HER job. I don’t know too many couples where a man takes care of three kids and the house by himself while his wife is away, and also does so without complaining. I don’t know too many couples where the wife will move away from her kids to pursue her career. (And by the way, my dad has always made slightly more than my mother, so it wasn’t an obvious economic choice).

Personally, I think this was pretty badass all around. When I look at my parents’ careers, my dad always took the route that would make it easier for my mom to stay at her job. We moved houses so she could be closer to work, even though it made his commute longer. My parents were long-distance for a year and we ultimately moved to Virginia because of my mom’s job. My dad has never ever mentioned this; it’s just something I’ve noted from looking back. I don’t think he thinks it’s notable.

I realize it sounds like a small thing – my dad was not a complete obstacle to my mother’s career. He moved to make her job easier. But I have seen the reverse pretty frequently, even in subtle ways. It occurred to me recently that a lot of men will block their wives from advancing in their careers and, those who don’t actively impede are still unlikely to do much to support their wives, particularly when such support is to their own detriment, and if the wife is not earning as much.

Like my parents’ story, my very favorite political story (and this is a category without a lot of contenders) is a weird and controversial one. It’s about Ted Cruz buying 100 cans of soup. It didn’t resonate with most people because they don’t live in the same bubble as I do (and because so many people dislike Ted Cruz). I know so many hetero couples where, even though the woman is poised for an excellent career, the man still expects her to have domestic duties. This story was that rare opposite – it was Cruz making a gesture that he expected his wife to pursue her own career and that he was perfectly happy to take care of himself. (Also, I’m impressed with how spare his life is eating canned soup every day. PF blogger in the making right there!).

My mom is an all-around superhuman. I mean, she moved out by herself for a new job in her 40s leaving her 3 kids and husband behind and commuted between Virginia and New Jersey for a year. Before and after that, she worked full-time and cooked us dinner every night, which we ate sometimes as late as 9pm. Not to mention she moved across the world to a country where she had no connections, little money, and didn’t speak the language. (Same for my dad). So yeah, my mom is amazing. But my dad played a significant role in helping my mom’s career, something I think is notable and rare. Having two income earners really helped their/our financial stability.

Closing thoughts.

My parents’ route is not the only way to success. Obviously a lot of immigrants start businesses (i.e. they take riskier routes instead of making safe bets). This is just my parents’ story. Of course there’s a fair amount of luck involved. My parents are still married. None of their kids had health problems. They didn’t get sick or disabled. They weren’t unemployed for long stints.

But the point I’m trying to make is, it’s not all about hard work. I mean, my parents worked, but they focused on the right skills, rather than focusing on working round the clock. People in America don’t really get ahead by working hard at their jobs (but they do need to work at least hard enough not to get fired before finding a new job).
Do I feel bad that other people work harder than me and get paid less? No, it makes me feel good because it means none of us have to kill ourselves to get ahead. You need results, not exhaustion. Work smarter, not harder. Stay optimistic. And hey, always remember to ask.

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How This Woman Saves 98% of Her Income and Plans to Retire at 32

expat dating on the path to fire

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I talked with Stephanie, an expat living in Brazil, about dating while pursuing financial independence. This interview is part of a series about dating and money. Read the previous installment here. [This conversation has been edited for clarity.]

1. Tell us where you learned about money.

I learned from my parents more what not to do with money than what to do with money.  My mom was an accountant but had her own business. My dad also owned his own business and I saw a lot of the struggles there.  There’s so much variability in entrepreneurship. If your company doesn’t do well, it can be a strain, not having steady projects. It’s influenced me not to be an entrepreneur.

I was 1 of 4 children. My sister had a project, how much can a family live off of per meal. My family came up with $1 per person per meal. She went to a private school and her teacher said that’s not possible. And we said, yeah we’ve been doing that all the time. Because I couldn’t ask my mom and dad for money, I learned that I didn’t truly need extra things.

2. Tell us about becoming an expat and your FI journey.  

I’ve always wanted to live overseas. I studied abroad in college in Sweden but it was only for 4 months so it didn’t satisfy my wanderlust. I did a 2-year rotational program with my company. At the end of it, I ended up finding a department in my company hiring quality engineers to live and work abroad.

I had an offer to move to Siberia Russia to do almost the exact same job that I currently do. Even though I want to work overseas, the location wasn’t going to work for me. But the offer of Brazil came in after someone else backed out. My initial contract was 2 years. I got it extended for 3 years.

Someone had already given me the idea of “live like you’re still in college and save the rest.” Even after I graduated from college, I only lived on 50% of my income. And then I was a little lost; my next financial milestone was retirement when I was 65.

My roommate told me about Mr. Money Moustache and I read the entire blog. Financial independence means I’ll have enough life savings that I don’t have to work if I don’t have to. I plan to be financially independent when I’m 32.

Being an expat for my company means, I get my normal salary plus several perks like my car and rent paid for. Being in Brazil means I get one meal daily paid for. My biggest expenses are travel, groceries, gas, and shopping. Being an expat allows me to save a lot of money.

3.  Do you have any tips on saving money?

I save somewhere around like 98% of my income. Even before I moved to Brazil I saved 50% of my income.

But it can be difficult to save. There’s still temptation: “Oh I’m making more money. I can go on extravagant trips.” And I won’t tell you I don’t go on extravagant trips. But I know which things don’t matter to me. It’s not like I have X budget to go on a trip but instead I think, how can I do this in a cheap but comfortable way? Let me look for a hotel that looks nice but is of good value. This is what sounds like the coolest experience and here is how I can still save money in the process.

At some point, I would like to motivate people not to bite off more than they can chew at a younger age. I’ve heard horror stories of people getting out of college with $100,000 of debt. It’s important to make smart decisions early since it will impact your future self. Student loan payments can translate to $500/month, which is the same as I was paying for rent after college. That’s like paying double rent for 30 years.

The difference between what my sister makes having gone to an Ivy League college and what I make [going in-state] can be offset with good internships and negotiating your salary.

4. What was the most surprising thing you learned about living as an expat?

The biggest frustration is the feeling that everything you think is normal is not normal and could totally be something different. The first time I drove into São Paulo for the weekend I went to an area of town that seemed a bit rundown by my standards and to park my car, without being able to communicate in Portuguese, I gave someone my cars, they handed me a little slip of paper and I just had to hope that my car would be there when I came back. For the first several months everything you do kind of feels wrong and still after two years I still have situations that feel wrong.

The other thing is, as you start to learn other languages, it’s a learning process and funny when you translate things back into your native language for example I went to the dentist and said Dentista! and walked upstairs. But in America, you wouldn’t walk in and say Dentist! and then just walk to where you needed to go.

5. What was your worst FI dating experience?

I went to an all-you-can-eat soup and pizza place. I picked up the pizza with my hands and people in Brazil don’t touch their food with their hands the look on his face was priceless. I also tried to pay for myself on that one too.

6. Who picks up the check?

Sometimes when I get into situations where I know that I don’t like them, I’m going to offer to pay and do things to show that you’re not interested.

Brazil is a masculine society and it would be expected for a man to pay the bill however I tend to make significantly more than my dates, so I still offer to split the bill.

My ex-boyfriend was on the same financial independence path that I was on. But where I’m at right now I want him to be financially independent. I would love to find someone with the mindset but I’m not holding out for that because I don’t think that’s a possibility here [in Brazil].

7. Best piece of advice for dating and money

You need to give people a chance. Even if they don’t click all of your boxes at the beginning is not a reason to dismiss them. Finding people who have lived abroad gives them something more in common with me. And they’ll hopefully start to understand that people are different. Otherwise it’ll be hard for them to understand about my daily challenges and experiences about living in a foreign culture.

I’m looking for someone that wants a relationship. That doesn’t seem so common. Perhaps because I’m looking on Tinder.

A lot of people have said that financial independence is not achievable on 20-30k. But I’ve always had the mentality that if I’m 32, I will still do something else with my time since I’m not going to sit on a beach for the rest of my life.

Also what’s the harm of me being financially independent? I’ve run into some people who have a very skeptical opinion or disbelief of being able to accomplish financial independence so young. But I try to let go of the negative thoughts and do what’s best for me.

One of the other struggles I’ve really gone through with planning to be financially independent at 32: I have no real constraints with location or money. I don’t have a family or kids. I don’t have anything that’s pulling me into one of the things. It’s leaving me in the middle of figuring what I want to do. I know I’m going to want to do something else with my life. I have a life coach to figure out what I want to do after financial independence.

I’m definitely planning to take some time off and travel but the big unknown is what happens after that.  It’s a little exciting when you take out the constraints, but also a challenge. It leaves me able to think about the bigger view of the world and try to do something that leaves the world in a better place than I started.

Why All Financial Advice is Flawed

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The internet is a strange and fascinating place. You can get a lot of information here, but not all of it is stuff you should follow. Generally, you should be wary of everyone and anyone because the internet is a crazy unregulated place. Lots of people are just writing content in order to sell you stuff. And some others are just idiots.

You should even be wary of advice from good-hearted intelligent people. Most people are speaking from their own experience and everyone’s experience is their own. The decisions they made were “good decisions” because they worked out  – but that doesn’t mean you can or should make the same decisions. As much as personal finance bloggers like to say that the path to riches is simple and straightforward, there’s a fair amount of luck involved.

How I Got Lucky

My high income is directly tied to attending law school. So I could write an article about how everyone and anyone could go to law school to get a high-paying job, right? But I would feel that that was disingenuous. I know enough about my journey to know that the path was not guaranteed.

The timing of my law school graduation was fortuitous. I started law school four years after I graduated from college. If I had graduated law school in 2008-2009, I probably would have been fine for two years, but if I had tried looking for another job after that, I likely would have been stuck due to the recession. If I had graduated in 2010-2011, I would have graduated into an unexpected recession in the legal field, where many graduates were unable to find any legal employment, let alone high-paying jobs. There is some research that shows that the graduates from those years are still lagging behind financially compared to graduates from other years before and after the recession.

Instead, I graduated in 2012, which wasn’t the best of years, but showed vast improvements in job prospects over the 2010-2011 graduates. Furthermore, we all already knew that the job market was difficult and were going in eyes wide open (I started law school in 2009).

Still, I was also lucky to be hired. Interviewing is still a bit of a black box to me. People just like certain people more than others. (Perhaps you could be cynical and say it’s all white men hiring other white men, but I’m not white or a man, so that’s likely not how I got my job.)

There are certainly bad candidates, but we interview dozens of candidates from good schools with good grades and most are perfectly fine. I don’t have a real understanding for why I was picked. And I feel lucky that I was. I know someone who graduated near the top of my class who couldn’t get a job at any law firm and was still meandering years later.

Then there were the people who got fancy jobs but hated them. I know someone who decided to quit even before starting his job. I know more than a few people who rage quit after a few years. They did everything right, but, for these people, the legal field just wasn’t for them. (They could have switched to different legal jobs, but the people I’m thinking of just got out of the legal field altogether). Some people might think that they could have researched more about the legal field before going to law school but working at a law firm as a secretary or paralegal, as many college graduates do before pursuing law school, is not really a good indication of what it’s like to be a lawyer. Like most things, you have to do it, to really know what it’s like. And I was lucky that I was largely happy with my job.

The Trouble With Following Other People’s Paths  

Pre-recession, law was seen as a very safe and prestigious job. Post-recession, there have been a lot more horror stories.

The main trouble with any kind of big investment like law school is that you don’t really know how it’s going to turn out. There are all these forces outside your control that will determine whether you view your decision as a good or bad one. If someone graduates into the recession and can’t find a job, then the decision seems like a “bad” one. If the person gets a lucrative job, then it’s a “good” decision.

But each person started the decision with the same information. It’s a poor way to judge the thought process of a decision by its outcome when it was external forces that changed the ending. (For more on this topic, I would highly recommend Annie Duke’s Thinking in Bets.) You can make perfectly good decisions that go awry for reasons outside your control. It doesn’t mean the decision is a good or bad one. It just means that luck was involved.

We Don’t Definitively Know What Decisions Led to Any Person’s Success

If you were running an experiment to determine cause and effect, it’d have to have controls and be double blind. Real life is not like that. Most people don’t have an identical twin who was making the same decisions at the same time and chose the opposite path – and then continued to make identical choices keeping that one decision the only variable.

What most people think is, well I became rich. How did I do this? And they retrace their steps. But they aren’t considering what would have happened in the alternate reality if they had pursued other jobs, other careers, other spouses, other lifestyles and how the timing affected how those decisions turned out. And truly, even if they did consider this, they would all be guesses.

We Can’t Even Trace Our Own Decisions to Success

I made a spreadsheet for myself of when I would break even for law school. I assumed I would continue working for the job I had at the time and save the same amount.My break-even point was only a few years ago, even though my salary out of law school was 4x my original salary.

But I had to count the opportunity cost. It was 3 years without working and $200,000 tuition. Also, I was quite a little saver before I went to law school, so I think I would have continued that, which would have been particularly beneficial because I would have been saving while the stock market was low. Of course, I also had to assume that I would have been steadily employed throughout this whole time period.

Was going to law school the right decision financially or career-wise? I don’t think I can even answer that question without much more information and until I’m much further along in life. I don’t know the ending to my own story yet, so I certainly can’t tell you if going to law school will be right for you. For right now, the decision is fine. That could change.

We Don’t Even Know If Someone Is/Was Successful

I recently received a comment that detailed a woman’s tumultuous relationship with her husband. The relationship was absolutely fantastic for 10 years. And then it got tougher. They say that hindsight is 20/20, but that’s not really true. Our hindsight in 10 years may be different than our hindsight in 20.

I’ll see people (usually celebrities) touting relationship advice after only dating someone for a few months. Even if they’ve been married for 30 years, we can’t really judge if someone’s relationship advice is sound. We don’t know if they’ll make it 31 years. People get divorced later than that.

People tout skincare advice when they’re in their 20s. The true test is obviously what happens when they’re in their 40s and beyond. People tout career or financial advice when they’re in their 20s or 30s (hey, I’m included in that list!). I will be the first to admit that I have no idea what I’m talking about. I mean, I try not to give advice. I am just telling you my thoughts. I have no extra wisdom for you. (Sorry.)

So someone might have an immediate success right now, but that doesn’t mean they know what got them there. It doesn’t mean that they’ll stay successful. That doesn’t mean that that success was a good thing (because maybe if they had failed, they could have gone a different way that would have led to even greater success somewhere else). We could look at any number of luminaries who were called failures at one point. Steve Jobs was a failure when he got fired from Apple and Abraham Lincoln was a failure when he lost his first campaign. But we would be wrong to have written them off as failures.  The arc of the universe is long.

Be wary of people who are only part of the way along their paths. They don’t know their true ending yet.

Even if We had the Information, We Shouldn’t Judge Decisions by their Outcomes

As much as we all want to say that the difference between the rich and poor is the right decisions, there’s a lot of luck involved. The same decisions that make people rich also can make people destitute.

  • I went to law school, got a high paying job at a law firm and worked for long enough to break even.
  • Others go to law school and graduate with crushing debt and poverty-level jobs.
  • Still others, get the high-paying job and quit to pursue other ventures, still having to pay the hundreds of thousands in debt.
  • It was a great decision for Mark Zuckerberg and Bill Gates to drop out of college to start their own businesses.
  • The failure of other businesses has led some to homelessness. And dropping out of college generally doesn’t work out that well.
  • Some people get married and have a stable job, leading to wealth.
  • For others, the breakup of a marriage and a bad economy can lead to destitution.
  • The breakup of a marriage can lead to financial ruin all by itself.
  • There are likely people who invested in index funds or bought a house in a good area, lost their job or got a health emergency that stretched out longer than expected and had to withdraw money at a loss during a recession.
This is the problem with seeing other people’s outcomes and tracing back to one or two decisions. We don’t know if that person could have done better making another decision. And we can’t know now that making that person’s decisions from 10 years ago would be the right decision for us. We would like to say that the only thing keeping people from riches is making the right choices or hard work, and you definitely need those things, but a lot of decisions that worked for some of us, won’t work for all of us. A lot of people followed good advice and got into a lot of trouble. The path is not as error- and risk-free as we purport it to be.

Why All Financial Advice is Flawed

There was a time when people considered mortgage and student loan debt “good debt” but after the housing bust during the recession and with ballooning and insurmountable student loan debt ever rising, it’s doubtful that people can use that adjective to describe that kind of debt anymore.
I’m not saying you should make bad decisions. Though we don’t know the future, we can still make the best decisions we can given the information at hand, because they still work A LOT of the time. There are certain decisions that we must make, even if we can’t predict perfect outcomes:
  • Living within your means, to the extent it’s feasible.
  • Developing skills that will be profitable to you and others.
  • Surrounding yourself with good influences and a good environment.
  • Investing in index funds.

But many of the other decisions you may make – whether to choose a STEM major, whether to become a lawyer/doctor/plumber, whether to get married or stay single – those routes worked for some people but might not make sense for you. The best we can do is to carefully consider our options and try to make a decision that – if everything falls apart – we hope we can be happy with.

5 ThingsĀ IntrovertsĀ Get Wrong About Extroverts (And Why It Matters)

5 things introverts get wrong about extroverts (and why it matters)

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I have read many off-hand comments by introverts making subtle digs at extroverts like:
  • “I’m an introvert so it’s hard for me to brag about myself” (extroverts don’t have a monopoly on bragging);
  • “I’m an introvert so I don’t like making small talk for hours with strangers at loud parties.” (actually, no one likes this);
  • “I’m an introvert so I lack self-confidence” (those are completely different things).

I think something about introversion and extroversion got lost in translation. It’s great that people are finding out more about themselves and their personality tendencies. It seems that in learning about ourselves, however, we can often incorrectly attribute our own tendencies to all people like us, and assume that the opposite is true of all out-group people.

So an introvert that likes to Netflix and chill may assume that extroverts can’t stand the solitude. (Truth: everyone likes to Netflix and chill). Or an introvert that hates people thinks that all introverts hate people (nope! That’s called misanthropy, not introversion).And so on.

Here, I’d like to clear up some myths that I see all too often.

1. Extroverts vastly outnumber introverts.

 

Most introverts seem to think they’re in the minority and this creates an us vs them mentality. The truth is that there are no hard statistics. Some researchers estimate that 50-75% of the population are extroverts.  Of course, that leaves open the possibility that there are an even or close number of extroverts and introverts (50-50, 60-40). Other research suggests that between one half and two-thirds of the population is ambivert – that is, both introvert and extrovert. So introverts and extroverts BOTH might be in the minority.

And even if most people were extroverts, there’s a wide variety of introverts and extroverts. It’s a spectrum; most people are in the middle of the spectrum. Being a complete extrovert or a complete introvert is rare and honestly, weird. We are all a little bit of both. We are actually much more similar than those personality tests would have you believe.

2. Everything social is easier for extroverts. 

People often confuse introversion for shyness, anxiety, or lack of confidence. Likewise, people confuse extroversion with talking too much, fearlessness and arrogance.  The actual dichotomy is that introvert and extrovert brains function differently in response to dopamine and acetylcholine.  Dopamine rises when we take risks and seek novelty. In contrast, when we read or use our minds, our brains release acetylcholine, which makes us feel relaxed and content

Extroverts lack dopamine and thus need to seek it out via social settings. Extrovert brains also aren’t as sensitive to acetylcholine. Introverts, conversely, have a lot of dopamine already and are sensitive to acetylcholine.  This is why introverts tend to avoid crowded places — introverts can quickly become overwhelmed with dopamine. Also, because of their sensitivity to acetylcholine, they will get quite a lot of contentment from quiet activities. Extroverts and introverts are just responding to the chemicals in their brain that give them the most rewards.

Based on this description, it’s clear that extroverts have no natural advantage in social situations – it just explains why they seek it out more. And again, everyone’s reactions to dopamine and acetylcholine are a little different so it may be true that extroverts seek a little more stimulation than introverts but not necessarily much more.

As I discussed with an introvert friend, he sometimes felt exhausted by the idea of getting ready to go out for a social situation, even though he liked being social.  I, an extrovert, relished the idea of preparing to go out, even if it was not to go to a social situation. It’s not the social aspect, necessarily, but sometimes I need a little more external excitement than an introvert.

3. Extroverts hate silence and being alone.

The optimal balance of chemicals that differentiate introverts from extroverts is different for each person. I’m an ENFP, which is one of the most introverted types of extroverts, so I need time alone. I live by myself and can read for hours with no music or external noise. I work in a very quiet office without much social interaction. This is not something that all or most extroverts, or even introverts, can handle, but I love it and need it.

I know introverts who need to be in the presence of other people but don’t want to interact with them. They like the din of noise that others bring. It would, however, be very stressful to me never to have absolute quiet for some part of the day.  This is all to say that there’s just a wide variety of introversion and extroversion. Somewhere in the middle, there’s quite a bit of mixing – with extroverts appreciating silence and introverts appreciating some fuss. You can’t really assume that one likes or dislikes science based on whether someone is an extrovert or not.

4. Extroverts aren’t shy.

I’m an extrovert and I’m a little shy. Most people are at least a little shy. Whether you’re an extrovert or an introvert, people are afraid of strangers and of rejection. Most people hate networking and few people have mastered the art of small talk (or like it).
My sister and brother are both introverted but they are not really shy. I could point them to a (nonthreatening) stranger and say, go introduce yourself and they would walk straight up to that person and extend their hand. They don’t need the social stimulation of talking to other people but they have less social anxiety than I do. Personally, I’m not sure how my siblings do it, but I know that shyness and extroversion can exist as easily as boldness and introversion.

5. Extroverts are [negative connotation].

I think it’s great that people are talking about introversion and extroversion and learning about themselves. But I think it can be dangerous to use this introversion/extroversion as a lens to understand everyone and everything .

Maybe you meet someone extroverted who is arrogant and loud. Maybe you meet extroverts that are great at parties. These anecdotes are not indicative of all extroverts. Some extroverts are arrogant and some are modest. Some are loud and some are quiet. Some extroverts have natural charisma, some worked very hard to develop those people skills and some are awkward and weird.  The same is true for introverts.
The other side of this coin is that introverts see their own social weaknesses and attribute all introverts as having the same problems. Introverts think that they can’t be good at networking, public speaking or any other “extroverted” endeavors and that couldn’t be further from the truth. These are all skills that need to be learned and practiced.

Why It Matters that When Introverts and Extroverts Don’t Understand Each Other


It wouldn’t necessarily matter that introverts are wrong about extroverts except that often these assumptions cast extroverts in a negative light or fail to empathize the universal problems that all humans have.  Introverts and extroverts all suffer a bit in social settings. It’s only natural now, when our society has moved away from tribes where everyone knew each other to live in huge cities far surrounded by strangers. (I actually heard about this when an author is describing why people are awkward.) Meeting people is hard. Putting yourself out there is hard. Being vulnerable is hard. If I’m good at any of these things, it’s because I forced myself to do them often- it didn’t come naturally from being an extrovert.

Your personality type is not your destiny. Nor is your personality type an excuse to keep you from advancing in your career/life. Everyone is still responsible for improving in areas that don’t come naturally to us, whatever they may be.

While it’s great to learn more about what environments are the most conducive for your own thriving, let’s try to be a little empathetic to people who are different to us, without assuming we know all those differences. We can all try to understand that it’s difficult for any stranger to extend their hand to us, so we can be the first to do so.

How to Stay Motivated when Progress is Slow, Nonexistent or Backwards

How to Stay motivated when progress is slow, nonexistent or backwards

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So you’ve decided to change or improve yourself in some way. Congratulations! Taking the first step is the most important and the hardest. In those beginning stages, it can be surprisingly easy to find motivation. You are buoyed by the excitement of starting something new. The gains are immediate and can be impressive.

But after the initial surge of improvement, you might hit a wall. Your end is still far away, but you aren’t improving at quite the same rate. Before, you could keep yourself going with novelty, adrenaline, and a sense of accomplishment. Once that progress slows down, your motivation also slows. They say that a journey of a thousand miles starts with one step. You can cruise along for awhile, but when you’re on step 400, now you really know how far you have to go and you’re already tired. And it’s going to take ages! And there are obstacles! And there is boredom!

So how do you keep going when the end is still far and you can’t find incremental improvements to keep you going? How do you stay motivated when progress is slow, nonexistent or backwards? Here are some ways to reframe your journey to focus on the journey ahead.

You Struggle is Preparing You to Handle Success

When we picture success, we often imagine it to be instant and easy. We think failure is the slow trudge and struggle of hard work through the beginner courses. This is where many quit because we think success is going through the bunny slopes, but doing it with fanfare and paparazzi while wearing a mink coat and cashing in millions of dollars.

But success isn’t about navigating the beginner stage fast or slow; success isn’t overnight success. And overnight success isn’t really what we expect it to be. Overnight success is like getting pushed down the black diamonds on your first day skiing. There are a lot of pitfalls.  We don’t even understand the pitfalls yet because we’re only at the bunny slopes-level in mentality. If we are still at the bunny slope stage, we should be happy that we aren’t going down the black diamond slopes because we aren’t prepared to have black diamond-level problems yet. We learn how to deal with those problems while working through the bunny slopes.

We see people who achieve success at a young age and then think nothing of watching them crash and burn. We think, we would do better if given the chance. But we have no idea. The problem with lotto winners or pro athletes is not that they’re dumber at finances than the average person with their upbringings; much of the problem is that that they get all the money in one go. The problem with overnight success is that you have all sorts of difficult situations and problems and you never had to figure more basic versions of the problems out when it didn’t matter. You can face a new obstacle on the bunny slopes and trip and fall and learn; it’s much harder to trip and fall on a more treacherous obstacle on the black diamonds with people watching and criticizing your every move.

If you can’t stop yourself from spending when you’re on a low income, it doesn’t become easier when you have money. It may take longer for you to get into trouble, but having more money doesn’t mean you have better control; it just means you have more to lose. This is the reason you need to start start saving before you make a lot.If your brakes don’t work when you’re going slow, they’re not going to work better when you’re going fast.

In this way, you can be happy with your beginner awkward phases because they teach you and prepare you for the big stakes games. You can be happy for your awkward early relationships because they taught you how to be better when you meet your future spouse. You can be grateful for your bad entry-level jobs, because you wouldn’t want to play around when you have the chance to prove yourself at your dream job. You can be thankful for beginner poker games, because when a million dollars is on the line, you will have developed a great poker face from playing for a nickel.

Chances are you will make more money later in life. We can be grateful that we are struggling when we have struggles now, because when we get more successful, we’ll know exactly what to do. When we are trustworthy with less, we can be trusted with more. It just takes time and trial and error.

Your Struggle Teaches You to Love the Journey

I don’t know where I’ve heard it first but I’ve heard it multiple times: you have to love the process. The people that become great musicians, loved learning how to be better musicians. They didn’t love fame. I mean, you can chase fame too and you might still be successful. But many people will flame out first. It’s like someone who loves crossing finish lines but doesn’t love to run. How far is that person going to go?

Recently, I made a joke about another blogger complaining about their page views:
Screen Shot 2018-07-28 at 11.05.12 PM.png

And I got a surprising amount of pushback. Like, people can complain about stuff like this! And of course people can complain about anything they want. But it’s so weird to me to complain about blogging. This is a completely optional activity that for the vast majority of people makes no money. Most people are doing it out of love and with no intention of ever being famous or quitting their jobs over it. It’s like being angry that people aren’t appreciating the way you karaoke or read. Sure you can complain, but why are you doing this in the first place? If you want to make money, there are easier ways. There are probably ways that you would like doing not for the money. Maybe you should try one of those. Because the journey and the obstacles are definitely going to happen – “success” might not. If you hate the journey, will you ever be “successful?”

I think overall, the people who love the journey will go the farthest. Consider this response from Elementum Money.

Screen Shot 2018-07-28 at 11.30.47 PM.pngElementum Money sees the value in the journey. She’s getting better at writing. She’s enjoying the process. And though, according to her, her pageviews are not where they could ultimately be, she knows that she hasn’t devoted the time to marketing. It’s something to work on in the future. And since she enjoys the process, there’s plenty of time in that future.

Make Sure to Celebrate Every Small Win

Similar to my articles on how the rich justify donating less to charity, or why frugality is for the rich there are many ways to look at your financial health. The main ways you can trick yourself, sometimes for the better, is to switch from looking at absolute values to percentages or vice versa. By switching to looking at charitable spending in absolutes instead of percentages, the rich could feel better about their charitable spending while spending less as a percentage than the poor. By looking at percentages, the rich could also spend a middle class salary and still call themselves uber-frugal.

There’s nothing inherently wrong with switching your thinking from absolutes to percentages or vice versa. It’s like looking at a glass as half full or half empty.  Or seeing that dress that no one could agree on as blue or gold. It’s just a different way of characterizing something you see.

If you’re dealing with low level progress, you can shift your thinking to  concentrate on the percentage change. If you look at the absolutes, you might think, oh I only saved $50 this month. That’s not a lot of money. If you look at your percentage, maybe that’s 10% of your discretionary income, and maybe that’s more impressive to you. What could be really motivational though is that maybe last month you saved $50, but this month you saved $100 – that’s a 100% increase in savings. 100% That’s quite a lot. And I’m not saying you should happily fall off the wagon, but if you backslide, think of the percentage increase when you get back on track again!

You need to celebrate the small wins.
Whatever progress you’re making, it’s ok if you celebrate the smallest increments – percentage or absolute. There is no one on high judging you for which you choose. It only matters whatever keeps you motivated to keep moving. Any progress is still good progress. Don’t let declines in progress distract you when they could just as easily motivate you.

What if Progress is Going Backwards?

Ok, so I hope this is encouraging you a little bit for when progress is slow. But what if it’s not just that you’re moving ahead slowly – but you’re actively on the decline. How do you stay motivated when you’re putting one foot in front of the other and you’re moving backwards?

The thing is, progress is not all in one direction. Two steps forward, one step back. Or one step forward, two steps back. It happens.

I heard this great line in a podcast The Art of Manliness by the Author of Make Today Matter: 10 Habits for a Better Life (and World), that the first rule of being a doctor is Do No Harm. So if you’re not having a great day, if you know you’re not making progress, that’s ok. You’ll have days like that. You can’t win them all, you can’t make progress on every day. Some days you’re just fighting not to drown.

The only rule for yourself that day is don’t harm your goals. If you’re trying to mind your anger, and everything is going wrong and you just don’t think you can be a GREAT person today, that’s fine. Just don’t cause any irreparable harm. Don’t yell at your family. Don’t send out mean emails. You don’t have to beat yourself up for not getting ahead; just try to contain the level of harm done.

Or if you get into a car accident while paying down debt – that’s going to slow down your progress and it sucks! But don’t give up the whole game just because you hit a pothole. Ok you’re not going to pay down as much debt this month because of this unexpected expense – but try to keep levelheaded and stay the course as much as possible otherwise. You can be on triage mode and just congratulate yourself for not digging yourself further into a hole. That’s a terrific win, even though it doesn’t feel like it. It’s overcoming these obstacles that will get you to the end. You’re a champion even if it doesn’t feel like it.

How to Stay Motivated when Progress is Slow, Nonexistent or Backwards

In conclusion, you won’t always be improving by leaps or bounds. That’s A-OK. Remember that you’ve made the first step toward your path of self-improvement and that it’s this vast middle area where it really starts to get fun. You learn to overcome obstacles, learn to love your craft and get better prepared for success. As long as you continue to celebrate your wins and keep the big obstacles from deterring you completely, you’re well on your way for your inevitable success.

I’d like to leave you with the following quote I read in Tim Ferriss’ Tribe of Mentors: Short Life Advice from the Best in the World:

I used to resent obstacles along the path, thinking ‘if only that hadn’t happened life would be so good.’ Then I suddenly realized, life is the obstacles. There is no underlying path. – Janna Levin

It can be easy to be caught up in pitying ourselves and the obstacles we go through. We think we would rather have everything handed to us on a silver platter. But we actually don’t. There’s the old joke about the guy who died and in the afterlife, he wins every game, can get any woman he wanted and owns everything. He gets frustrated and asks to see “the other place” thinking that he was in Heaven. Then he’s told, nope, the place where you get everything you want, is a kind of hell.

You are in the middle of your magnificent journey. Why would you want to skip ahead to the end? This is when it’s about to get really good. Good luck!

How Being Single Helped Me Become Rich

being single helped me become rich

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Being single seems like it would be an impediment to gaining wealth. Being a part of a couple means that you can share expenses with someone else (some people even share email addresses….for some reason). Also, if you date or marry someone who makes more than you do, you more than double your salary. A giant jump in salary and reduced expenses? Seems like a recipe for financial success!

For me though, if I had gotten married to any of my exes, I likely would not be in the field I am in now, have the career I do or have as much saved to my name. Here are the reasons being single helped my career and finances and ultimately led to wealth.

1. I Couldn’t Drop Out of the Workforce

I didn’t know any stay-at-home moms growing up. We grew up very middle-class and everyone’s parents seemed to work. I just assumed I would work as well. My adult life was very different – because of the move from middle- to upper-middle class.

I live in a very well-educated area, I’m a lawyer and well, I’m Asian. Most of my peers are lawyers, doctors and engineers. So I tended to date lawyers, doctors and engineers. And many of the women I know did the same. They did well in school, met their husbands, married and had kids, and many quit their jobs because they could. Their husbands made the equivalent of their parents combined salary and more than enough to support the family. The wives they didn’t love their jobs and they wanted to raise their kids. Why have the hassle of a full-time job when you don’t need the money?
My job can be demanding and stressful. The number of times I had thought of quitting – well it was basically every two weeks last year.

What made me keep going? Well, I would like to say that I was taught to Lean In, but futility was probably the most likely culprit. I’m single. You can’t be a housewife, without the wife part. And you still need to pay for that house! But if I had married and had a high-earning husband, it would have made a lot less sense for me to stay at a tough job.

I’m not an ambitious person. I never aspired to a high-paying or powerful job. If I knew I could stay at home and eat bonbons all day, I totally would (I’m not sure anyone would marry me knowing that, but hey, maybe I’d raise their kid as well). But as a single person, I have to earn my own bonbons! The point I’m making is that if I had gotten married, I likely would have married someone who made very good money and I would have had a choice – to continue working or stay at home. And I’m betting there’s a good chance I would have chosen to stay at home.

2. There Was No Reason to Drop to an Easier Job

I dated an attorney when I was 23. I remember him telling me that he worked a lot but he didn’t see any reason to reduce his hours, as a single person. He didn’t have to go home to a wife or kids. I feel the same way today. I work a lot, but I don’t feel guilty. There are no kids waiting for me at home.

The career I’m in is not great for work-life balance or for women with families. Women certainly can succeed in a demanding job while raising their children but those women always seem superhuman. I, however, am decidedly human. And lazy. As stated above, I would have looked for reasons to quit my job if I could have. Having a family at home that I was neglecting? That would have been a good reason. Being single? Well, that’s no reason at all. I could keep working. I could still meet up with friends – after work. Without a family, I felt like I couldn’t justify working fewer hours. And because I continued to work at a job that required a lot of hours, I continued to be paid very well.

3. I Had the Freedom to Follow My Career

My parents were oddballs – my dad always moved for my mom’s job even though he made more. But in “typical” hetero couples, the couple will typically move for the man’s job, not the woman’s. I think I also would have leaned more towards this latter group.

I tended to date men who were very ambitious and had a lot of job opportunities. They also had jobs that would require a fair amount of moving (i.e. doctor) or jobs that wouldn’t offer the best opportunities in the DC area (software engineer, where Silicon Valley would beckon, or corporate lawyer, where New York has the brightest opportunities). I’m fairly certain that I would have followed my hypothetical husband in his career and I don’t know if or when they would have followed mine. That’s how it usually goes.
I went to law school in a small town. Of the married students, the men’s wives followed them there, typically having portable jobs like teacher or nurse. The women’s husbands typically stayed where they were and the couple was long distance for at least 3 years.
I knew a couple – she had finished her first year in law school. He had been accepted to a great program in the same city, among other offers. I assumed he would pick the school in the same city so she could continue her studies. Instead he picked the best ranked school to which he had been accepted and she transferred to a school in that city. After his first year, he transferred to an even better school and she quit law school (people usually don’t transfer their last year of law school and there weren’t other law schools in the area of the final law school). After he graduated, he worked for a firm for one year, and then quit the law altogether.

This is all to say that all around me I saw contemporary examples of women’s careers being put on the backburner. And though everyone likes to think of themselves as the one person who would buck the trend, I don’t think that about myself. I’m very typical. I doubt that I would have kept the flame going for my own job. Again, I never cared that much for a high paying job or any job at all.

I doubt I would have moved to a law school away from my husband or that he would have followed me there. And it just makes sense to put your eggs in the overachiever basket. So I would have stayed working whatever jobs I could find wherever my husband decided was best for his career.

4. I Couldn’t Stick My Head in the Sand About Finances

My mother always warned me not to be dependent on anyone. Well guess what? You can’t be dependent on someone else if there isn’t anyone else.

That link above is to the typical horror story of a wife who got divorced from her highly paid husband. That honestly could have been me. And though my dad is an accountant and I’m clearly interested in personal finances, I know that incentives have a huge role in creating who we become. Most people are content with the easy route. You’re more likely to become a better cook when you have to cook for yourself. You run faster when you’re being chased. You’re forced to put in the reps and when you put in the reps, it’s hard not to get better.

That’s how it was for my finances. If I had married someone who was really good with money (and most of my exes were), it could have been very easy for me to slip into complacency. I could have focused on saving money while running household chores but not investing or earning it. I could have huge gaps in my personal finance knowledge.

I’ve written a little about how I had hoped for being saved by a student loan act of God. But eventually I had to learn to become my own savior. I had to take control of my debt, of my finances and my career. Being single meant that I needed to support myself. There simply wasn’t anyone else to take the reins from me. So I took them for myself.

5. I Could Live a Simpler Lifestyle

The benefit of having a partner is that you would likely save money on rent. But there are a lot of other costs that can come with being a couple. For instance, when I’m in a couple, I eat much fancier meals. I put some extra effort into how I look on a daily basis. I would have to have nicer furniture, probably a nicer apartment and I definitely would have to have a TV and a premium sports package.

There are also some ways to save from being single. For instance, I can crash on my friend’s couch when I visit a city, instead of splitting a hotel room. I don’t have to visit his family or go to his friend’s weddings. My mom, when she was single, would only eat rice and soy sauce. Not falling too far from the tree, left to my own devices, I eat eggs and rice with soy sauce on the regular. This wouldn’t fly with someone else in the picture.

This is not to say that these costs would translate to the savings of shared housing. But there’s often a bit of a disconnect between what people expect in their relationships and what could actually happen. I have a very simple lifestyle because I live by myself and I have very simple desires. It would be difficult to find someone else who would want to live this simply. Being single helped me save money because I didn’t have to impress anyone with my lifestyle. I didn’t have to deal with all the hidden costs of coupledom.

How Being Single Helped Me Become Rich

My life would have been really different had I gotten married to one of my exes. I can’t tell if I’d have a greater net worth based on our theoretical combined net worth, but I’m fairly certain I wouldn’t be as big a contributor to our net worth. My hypothetical net worth would have been primarily his financial contributions divided by two. And in the event of divorce, I’m not sure how I would have fared.

It’s not a better or worse outcome – it’s just a different one. I probably also wouldn’t have started a personal finance blog because many of the stories that I wanted to tell – paying off my law school debt, dating as a rich woman – wouldn’t have made any sense in this alternate reality. Too many things would change given this one change in circumstance.

I should mention that I’m not advocating marriage or singleness. Neither path is a guaranteed path to …. anything. You can be rich or poor in either path. In my blog, I really want to champion singles. It’s easy to find articles about saving money if you’re a couple and it often seems like this is the only path to financial greatness.

But I don’t believe singledom is a worse position from which to achieve financial stability. Too often we see the positives of a relationship, without seeing all the other tradeoffs. We assume we would have a partner who would contribute equally, who won’t impair our own careers or won’t change us. None of those things are guaranteed.

For me, I could see all these societal expectations of being a stay-at-home mom, of supporting my husband’s career, of being content in a passion hobby while my husband earned the big bucks – and I would have given into these expectations. I’m not saying being wealthy is a better goal than any of these other goals – I’m just saying that my singleness affected the choices I had available to me and when I acted on those choices, I came up where I am now – in a very stable financial position.

If I had been married, I would have had more choices and I cannot guarantee that I would be in the same place that I am now. It’s not better or worse; it just is.

Getting married isn’t a sure pathway to wealth and being single doesn’t mean you’re going to end up poor. You can become rich as a single person – for some of us, it might be the only way.

 

How this Man is Pursuing Life and Love on the Beach

who picks up the check in mexico

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In our second interview asking who picks up the check in the lives of singles pursuing financial independence, we talk to Jesse, an expat entrepreneur. Jesse owns his own spa in Ensenada, Mexico. We talk about the difficulties of being FIRE in a small town and dating across cultures. This interview has been edited for clarity and length.

Tell us about your first memories about money. 

When I was 11, my parents divorced. My dad lived nearby. My mom ran the family finances and did all the grocery shopping. She was a big coupon clipper.

I used to play soccer. As a freshman in high school, that was the first time I got real leather shoes. You can get $14 plastic ones from Kmart.

My grandfather was a big saver and investor in the stock market. He liked to read the Wall Street Journal even though he grew up in rural Kentucky and only had a 5th grade education. He was always interested in saving and investing at an early age.

For Christmas we would get gifts, but also twenty individual 1$ bills wadded up in newspaper.  My grandma still gives me a $25 check for my birthday.

What has dating been like for you?

Evangelical and sexually repressed until I was 21. I was studying religion and philosophy at a state school (Wheaton College). I started dating a Catholic girl and I could see that she wanted to stay in Wisconsin and I wanted to go to DC and the relationship ended. Dating for me is about sharing life with someone and making commitments around who you can be emotionally and sexually intimate with.

In DC and San Diego and Guatemala, I was in serial monogomous, and co dependent relationships.  They were normal and just how I thought life was.  When I finished my graduate work in San Diego in economics, and moved to Central America for work, it was after the financial crisis, so there weren’t any jobs. I got used to living in Central America on barely enough to cover my backpacker expenses.

After I graduated with my graduate program, I went to work in Guatemala for two years managing research for one of my professors in San Diego. For 3-4 years I didn’t have a lot of work. I published the paper I was working on and I moved down to Baja to save on rent and to travel. Then I got testicular cancer that was removed. [At the time], there wasn’t any kind of safety net. I had to think about whether I had enough money to take care of emergencies. It wasn’t really until last year that I could see regular income from starting my massage therapy business. I like doing this but I don’t want to be doing this in 10-30 years. I wanted to have options.

[I was basically living in] a retirement community on the ocean. When I got cancer I didn’t want to hang out with retired Americans anymore so I moved to Ensenada and completely integrated into the culture.

In Ensenada, I dated as much as I could. Read as much as I could to understand the social dynamics and manipulation of dating. I’ve pretty much come back full circle but it’s too much hassle to date multiple people. Before, it wasn’t discussed but now people are very clear if we’re dating and if we’re monogamous.

What were your early experiences as an adult with money?

When I lived in DC, I had an ok salary doing consulting. But my feeling when I left was that if I stayed there, I’d have to be making quite a bit more to have enough – to have kids or to get older. It made me miserable to be in an office. I was a nervous wreck. I really needed to have a lifestyle that supported me. And I could only do that when I could control my expenses.

I have my own spa with 3-4 therapists that work under me, working with a lot of tourists.  A lot of people work off the cruise scene. I charge more than average but I also have the ability to speak to tourists.

I was interested in stock investing from my grandfather and in university was president of our finance club during the internet stock boom.  Eventually after studying economics, I took the coursework for CFP and worked with a financial planner as his assistant.  In the end, I am too emotional to do individual stocks (indexing now), and I was not ready to settle down and develop the relationships necessary for financial planning career.  Life sucked for me emotionally at that time, so I had to change.

Where did you learn about dating?

Trial and error. I’ve dated people of many cultures in DC. They were still the same mindset of the working professional.

I was in a relationship with this amazing woman mid-30s veterinarian, but near the end, one of our stopping points was finances. Through a series of conversations I was able to understand exactly what she was looking for – a lifelong partnership where she pays for your clothes and her car but her partner pays for everything else. I did everything to clarify and when I got to clarity I couldn’t’ commit to a serious long-term relationship that would do that.

Two months into it she expected me to pay for the vacation. She wanted me to buy her $100 earrings. 3 days later she breaks up with me because she thought it was awful that I would not pay for the whole thing.

What’s the biggest difference between dating abroad and dating in the U.S.?

In San Diego, my friends are into cuddle parties, which are all about human contact and communication. It’s about [giving and receiving] permission [via] verbal communication about how someone touches you. The same kind of communication skills are taken to the bedroom so people can talk about sexual health or relationship commitments. I got used to being very clear about my expectations and communicating about these things with words.

In Ensenada, people don’t talk about anything – it’s all nonverbal, implied. The women here are not direct at all. It never feels good to be rejected, but you don’t get rejected here – you just get ignored. Or there’s a pretext. I could ask you out for a coffee date tomorrow and you’d stop answering texts two hours before or make up a BS excuse for not doing it. That’s the biggest difference.

In Latin American culture, family is huge. People work Mon-Saturday 2pm. They get Saturday afternoon off and Sunday is hanging out with family. So I pretty much have Saturday night to date someone. Or you spend the time with extended family. With a fairly big family there are frequent birthday party, baptisms, social obligations you have to go do.

I dated a girl who was second generation Mexican in San Diego and I had to manage relationships with her parents, sisters, grandfather. I understand it now but it makes it much more complicated emotionally.

What was your worst date?

When I moved to Ensenada I liked to go to salsa dancing. I invited a woman to go to a flamenco dancing festival. Her parents came. I was at a table with her friends. She went to sit with her parents. She made it clear that I was not allowed to be at the table with her parents. And then she asked to get her bag out of my car and she left with her parents.

Do you think you’ll marry in your new country?

[The main difference of dating in this country] is that this cultural idea of working for the rest of your life is very present. You need a job to be productive and be an upstanding person in society. I’m not opposed to the idea of a long term amazing relationship at all. More and more I see a lot of marriages and people aren’t living happy lives. As I become happier single, that idea of marriage seems less and less attractive. I would like to be the kind of person that supports someone else in whatever they want to do. If they want to be with me, that’s awesome. If not, that’s fine too. Over the decades, your goals change. To feel like it has to be with the same person feels limiting. It doesn’t seem like a reasonable expectation.

But love happens and you just want to be around the same person for as much as you can as long as you can.

Who picks up the check in Mexico?

Pretty much the man picks up the check. I just pick it up. I got into a lot of trouble fighting the culture but these are the rules.

People meet through friends and networks of people. So by the first date you’ve talked 5-6 times and had coffee. The way I do it, I pick things I really want to do so I still have a good time even if the date doesn’t go well.

Recent first dates have been hiking, independent movie theatre/dinner place, steakhouse I wanted to go to, coffee dates for easy exits, beach walking with the dog.

What’s your best piece of advice for dating and money?

Learn to be happy without either. If you’re not needy without anyone else to have someone to watch TV with or cuddle with. Even in my business, when I’m feeling abundant, not needy for another client, I attract higher quality clients and better work. That comes back to personal development whether it comes to spiritual or psychology. The other great thing about here is that I have time to spend time alone, sort through life.

Time is money. FI is the freedom to pursue my own happiness. Getting into a relationship can mean big restrictions on time and money. It’s also control. The relevance of expat dating is that anytime dating involves more restrictions on time and money and options in life that’s exacerbated in cross-cultural situations in outlook of life, demographics in urban/rural.

Anyways I’m going to enjoy the Pacific Ocean, some tacos and an easy life. I like my life. For me, it’s nice to have options.