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2019 marks the 4th year of our retirement. This means we’ve been out of the workforce for the same amount of time it took us to get our engineering degrees!
And for the first time since we’ve been sans-paycheque, our net worth went up by 24% in just 1 year! We made MORE money this year than our highest combined income year as engineers. Say what?
Did we go nuts and throw a buttload of money into bitcoin? Secretively buy a bunch of rental estate? Pimp Wanderer out as a man-whore?
Nope, nope, and…well, that’s a story for a different article. But the real question is, how the Heck did that happen?
Let’s find out.
2019 Expenses
Once you become a millionaire, the first rule of STAYING a millionaire is to tell lifestyle inflation to suck it.
Because no matter how much money you make, if you can’t control your expenses, you’re just one paycheque away from having to star in whatever the Hell financial genius Nicolas Cage is being forced to star in.
Let’s see how we did, shall we? Here’s the breakdown.
| Region | Duration | % of year | Cost (CAD) | Cost (USD) |
|---|---|---|---|---|
| Southeast Asia (Thailand) | 4.5 months | 38% | $3183 + $3040 + $2545 + $2352 + $1871= $12,991 | $9,993 |
| North America (Canada, US) | 3 months | 25% | $4303 + $3148 + $1452 = $8903 | $6849 |
| Europe (Portugal, Spain, Italy) | 2 months | 17% | $3102 + $3623 = $6725 | $5173 |
| Asia (Taiwan) | 1 month | 8% | $3533 | $2718 |
| UK (Ireland, England) | 1 month | 8% | $4977 | $3828 |
| Scandinavia (Norway, Sweden) | 0.5 months | 4% | $3056 | $2351 |
| Total | 12 months | 100% | $40,185 | $30,912 |
The trick, apparently, was spending almost half of the year in Asia and the rest split between North America and Europe. By doing this, our base living expenses were $40,185 CAD or $30,912 USD between the 2 of us. Add our IMGlobal expat medical insurance of $2243.34 CAD/$1700 USD for the two of us, and that brings our expenses up to: $42,428 CAD/year or $32,612 USD/year per couple.
We also spent an extra $624.41 CAD or $473 USD in medical and dental expenses this year. Since we lost our gold-plated Canadian healthcare from having been out of the country too long, we paid for a medical checkup out of pocket ($133 CAD), renewed Wanderer’s contact lenses ($125 CAD), got our teeth cleaned ($50 USD) and two fillings done ($60 USD) in Thailand, and stocked up on some vitamins and prescription meds.
This brings our total, including medical costs, up to $43,052.75 CAD or $33,085 USD/year for the two of us.
So why did our medical insurance triple in cost compared to last year’s much more reasonable $781 CAD/$601 USD per year per couple?
Two words: Book Promotion.
Here’s the thing about medical insurance. As soon as you select “US” in the list of countries covered, the costs triple. This is because nowhere else in the world are medical costs as expensive as the U.S. Normally, we’d only go into the US for a week or two to visit family, friends, or attend a conference. But this year, since our publisher, Penguin Random House, is American, we had to spend a significant amount of time in the US for book promotion, so we had no choice but to include U.S in the list of countries covered.
Now that book promotion is done, next year our medical insurance will revert back to our more reasonable $600 USD/year.
We also incurred business expenses, not included in the table above, like an increase in blogging costs, flights to NY, London, and Ireland for book promotion, audiobook recording, new phone, FB ads, book advertising etc.
As we mentioned on this blog before, for transparency, we’ve split up our net worth into two portfolios:
- Portfolio A: The original portfolio that we retired on.
- Portfolio B: Our second portfolio consisting of our post-retirement earnings.
We continue to live off the passive income from Portfolio A, while Portfolio B is used only for business expenses, gift/donations, and education.
This year Portfolio B got quite the workout. Not only did we have to move to a dedicated web server (increase in traffic! YAY!), our mailing list grew, and our cell phone costs skyrocketed. Instead of buying cheap local SIMs, we’ve moved to Google FI in order to have a stable phone number and connection for media interviews, and book promotion forced us to spend more time living in expensive places like New York, Toronto, Ireland, and London. We also had to pay for flights to those cities out of pocket.
Luckily, our book and blog income covered those costs and our higher cost of living was offset by spending more time in SE Asia. I’ll be writing about our income in part 2, so stay tuned!
Here’s how much we spent from Portfolio B:
| Category | CAD | USD |
|---|---|---|
| Book Promotion Related Expenses | $8,628 | $6,637 |
| Blog Related Expenses | $5,043 | $3,879 |
| Gifts/Donations | $1,250 | $962 |
| Total | $14,921 | $11,478 |
We’re now in our fifth year of retirement, and what I’ve learned is that the longer you travel, the richer you get. Especially if you spend a lot of it in Asia. Thailand now feels more like home than Canada, and we’ve actually had more friends come to visit in Asia than back in Toronto. Go figure!
And remember that European/Schengen bingo game we played last year, trying to visit all 26 European countries in the Schengen zone? (Yeah, there’s no prize, I’m just crazy).
Well, I’m happy to report, we managed to check off all the Scandinavian countries this year, so all that are left are Slovenia, Luxembourg, and Liechtenstein! We’ll probably check them off next year—though I suspect Luxembourg and Liechtenstein will be a tap-in-tap-out kinda situation. Australia and New Zealand are also on the list.
But spending is just one part of the story. To find out how we did on our earnings, and how our portfolio did, stayed tuned for part 2 next week!
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That’s amazing! Your spending is so low and you guys have a great lifestyle. Someday, I’ll spend half time in SE Asia too. It’s such a great hack. Good luck in 2020!
Thanks, Joe! It was great spending time with you guys in Thailand.
Wow. Congrats.
How do you fly so much and keep your costs so low? Could you please tell us which airlines you use and how you manage to keep it so low?
Do you do travel hacking with credit cards? (if so, how can you take that far? I feel like I never have enough points to fly where I need)
They talk about some of the tricks they use for flights here: https://www.millennial-revolution.com/freedom/plan-nomadic-life-flights/ and here: https://www.millennial-revolution.com/freedom/how-to-fly-for-free-using-aeroplan-miles/
Thanks, APL!
Hi April,
As Canadians, we don’t have as many options for frequent flyer miles as Americans. So if you’re American, you’re set. As for other non-Americans, you can still rely on airlines like Norwegian, Ryanair and Easyjet within Europe, and Scoot (Singaporean Airline that started flights from Athens to Singapore recently). We were able to get flights from Stockholm to Bangkok (10+ flight) for only $260 USD each in Nov, so yeah Norwegian is your friend. In addition to travel hacking (via the links reader “A Purple Life” mentions above), use google.com/flights to find the price dips.
(1) So in Table 1 above, no airfare expenses are included at all?
(2) “IMGlobal expat medical insurance of $2243.34 CAD/$1700 USD for the two of us”
I would love to know more about the terms of that insurance policy. Is it available to regular Americans residing in the US for let’s say 90% of the time? What are the co-pays, deductibles, out-of-pocket maximums? Is dental/vision included? What exactly is covered?
I googled the insurance out of curiousity. Here is the link.
https://www.imglobal.com/expat-insurance
They include flights and transit costs within each country’s total (see an example of how they break out costs here: https://www.millennial-revolution.com/freedom/travel-series/lets-go-exploring-galapagos-sharks/).
1) airfare expenses are included (except for the flights we had to buy for book promotion). For example, in the months we spent in South East Asia, the first month was $3183, which is inflated for Thailand (which is normally $2500 or less) because it includes the $278 Euro/person flights we took to get there from Europe.
2) You can read about the details about the plan here: https://www.imglobal.com/img-insurance-plans
Congrats on a great year
financially and travel wise mine was too
Questrade account is very healthy
i am retired and FI … i have been reducing my Fixed income amount and increasing my ETF’s like XAW over the year . which was a great move
with more experience i see 60/40 is not needed
(i am safe like you from a crash .. )
i am going to move from Vancouver area back to UK this year after many years .. . UK is so cheap to live in , in comparison
.. accom and food …. ( not London area of course) … i can travel from there and have a base in UK … i am a Brit so its easy
Canada too expensive now … and too far away
and its way greener to live in UK …. yay ride my bike and the trains … goodbye driving licence ..
i love SE asia but can’t live there full time .. i prefer moderate climate anyway
Awesome. Congrats on being FI and retired.
Ha ha. I laughed at this ” Vancouver area back to UK this year after many years .. . UK is so cheap to live in , in comparison”.
Yeah, there are less expensive places in UK that we’ve visited (like Bristol). Though it’s a bit hard to compare a whole country with one city 😀 But I love that a Brit thinks Canada is too expensive. 🙂
ha ha . yes i was too general …as regards housing …
however i found food costs , phone , internet , travel , free galleries etc .. all amazing deals countrywide ..
so i will retire in UK . i never imagined doing that years ago . i always found UK one of the most expensive in the world ..
(most people only see London and the expensive Airbnb receipt .. )
Absolutely love your blog and your articles! Thanks so much for sharing this and the advice you give for travelling. Excited to be going nomadic with you this year!
So excited for our upcoming nomadic adventures! Miss you guys!
Wow what an inspiration – just converted your expenditure to pound sterling,
nearly dropped my
cup of test and immediately shouted my partner over to have a look – you story could help me convert him to FIRE
I meant to type cup of tea – I am English after all!
Ha ha. Now, you’re making all nostalgic for afternoon tea.
Hope you can get your partner onboard! Cost of living goes down dramatically once you can become location independent 🙂 I feel your pain of UK prices—ever time we go from UK to Thailand, it feels like everything’s free!
ha . generalising again
eating out in Thailand is way cheaper than UK ,agreed .. there again i don’t like eating out for every meal on and on .. but food costs in supermarkets are very cheap in UK
accomodation can be expensive in Thailand , depends where ..again
i can buy or rent very cheaply in UK in the north .. and i get free medical .. free transit pass for the region … and no dengue .. and no sleazy sex tourists on every corner ..
Thanks for the inspiration and the breakdown of your 2019 expenses. However, I wonder, how much would I have to sacrifice to keep the expenses so low. For example, is the AirBnb (or equivalent) small and not so clean? Do you eat at restaurants or street food? How much do you cook at home? Your Canadian expense is low for 3 months, how are you able to do that? Also, you didn’t mention if you have taken medical shots before visiting all these countries?
Thanks
All good questions.
We travel the world with just 2 backpacks, a laptop bag and a purse, so lots of space is not required. I think the key for us is that we look for Airbnbs that are a bit farther from the city center and take public transportation. Since we have ample time and we hate crowds, this works for us. It terms of cleaniness, Airbnb has great customer services so if we ever encounter a problem with that (and we did in Malta), I simply contact them and they help us find a new place.
For people who are picky and don’t want to cook at all, then travelling is probably not a good fit for them.
In terms of eating out, we eat out everyday when we’re in Thailand because food is cheap. When we’re in more expensive countries we usually only eat out for lunch 2-3 times a week. The rest of the time we cook.
As for Canadian expenses, we cooked most of the time and spent a few weeks staying with family so that helped us drop rental costs.
We got all our shots paid for by work before we quit our jobs in 2015. Some of the shots protect you for life (Hep A & B, I think, for example). Other times of protection like malaria, yellow fever, typhoid, etc, we got the shots/pills for the first year, then didn’t bother after that because we don’t go into the jungle and out of the way places that would require it.
Did you pay taxes in each country for residing there for longer than 1 month?
You don’t become a tax resident in a country after just one month. In most places, the threshold is six months (180 days).
What Val said. We don’t stay in any one country180 days or more so our tax residency is still in Canada. We pay taxes to the Canadian government.
$962 gifts/donations? You can do better.
Ooh look I didn’t know in addition to retirement police, there’s also the donation police. Hi there officer!
I’m from Toronto, I am thinking of selling my condo and moving to Thailand….just wondering what I would do all day?
Probably a good idea to visit a place and so if it’s a good fit before committing to moving there. There are also visas to consider.
In terms of what to do, there are so many things to do I can’t list it all out in one comment. Feel free to read my posts about Thailand here:
https://www.millennial-revolution.com/freedom/travel-series/lets-go-exploring-land-thousand-smiles-part-1/
Awesome recap! You’re living proof that there is a different (better!) way to live.
With such a nomadic lifestyle, do you still call Canada home? I’m just curious.
Hard to classify what “home” means anymore. Canada is where our family is, Europe & US is where most of our friends are, and Thailand is where my heart is. So I guess I consider multiple countries home now, since home is where your peeps are.
That’s some very cheap living expenses! Congrats! 🙂
We spend like twice that with two kids, a home, and U.S. medical costs!
Well, you do have two kids so you guys are doing well too in the spending department 😉 I appreciate how hands-on you are for fixing things rather than just throwing money at the problem. Kudos.
Great job in 2019, the best is still to come!
Thanks, TM! Hope you have a wonderful 2020!
Long answer short, what are the tax ramifications as Canadian citizens who travel everywhere?
By way of comparison, I’m an American citizen who hasn’t lived in the US in years and a permanent resident of Taiwan, so I have tax filing/paying obligations in both countries (long story extremely short). I work and earn income as a university professor and also teaching in private sector schools sometime (here in Taiwan).
How does your story as Canadian citizens/taxpayers compare to mine?
Dan V
Taipei
Since we haven’t established residency in any one country (staying 180 days or more), our tax residency is still in Canada. So we continue paying taxes to Canada.
Very inspiring post. We are 36 months away from what you are doing. Do you have links to the places you stayed? Keep up the good work.
Wow, congrats on being so close to FI! Feel free to shoot me an e-mail: FIRECracker.revolution@gmail.com and I’ll send you the links to the Airbnbs and hotels we stayed at.
Congrats on another low spending year. You seem to have this $40K CAD spending thing down pat. 🙂 Interesting how your average monthly spend in Thailand was about the same as North America. You’ll definitely have to make it to Slovenia. Probably my favorite place in Europe.
Good eye, Dragon Guy 😉 Yes, our costs for the first few months in Thailand is inflated–over $3000 instead of the more reasonable $2500 or less. This because we had to fly from Europe to Thailand and then later to/from Taiwan.
In North America, we flew to New York for book promotion, so the flights were business expenses covered by book income. After we were done with book promotion, we went back to Toronto and split our time between an Airbnb and staying with family for a few weeks, so that saved us some rent. Normally Thailand is 1/2 or 2/3 of the NA expenses.
I’m definitely looking forward to Slovenia. Have heard a ton of good reviews 🙂
I just wanted to say don’t overlook Luxembourg and just do a day trip on the way to somewhere else. Yes, it’s tiny and can be VERY expensive, but it is worth a few days to see it. Consider staying in Germany or France and travelling in to see it at day and night.
Good to know, Andrew. A reader offered show us around so we might just do that.
Well done Kristy & Bryce! I’m working on our 2019 End Of Year Expenses post and it looks like we have spent a similar level of living expenses than you guys on that same year. Since we also spent the same amount of money on our first year of nomadic travel than you guys [our numbers: https://www.nomadnumbers.com/year-one-nomadic-travel-spending-report/ ] I’m wondering if you are trying to follow you guys lifestyle too closely? 🙂 Joke aside we love the power of geo-arbitrage as it gives us so much control over how much we want to spend.
Question: are you guys trying to stick to a yearly budget by picking specific locations? Or does it just happen that you like SEA so much that you always end up in the same ballpark budget?
Ha ha. Great minds think a like 😉
No, we’re not actually picking locations specifically. We end up being in Europe repeatedly due to Chautauqua, US due to book promotion, and we love going to SE Asia for the winter because it has the best weather during that time. Also, I think I’m addicted to getting $10 massages, night markets, live acoustic music and I just love the Thai people and their culture. Their buddhist, zen attitude really appeals to me 🙂
Part of me thinks I should probably explore other parts of the world more–like Africa, South America, etc, but I’m just so in love with Thailand, I don’t want to leave. There’s also parts of it that reminds me of my childhood in China and it makes me nostalgic.
I thought you were on World Nomads Travel Insurance. When did you switch to IMGlobal? I assume you got something better out of IMGlobal since you’re on that now. Could you advise what the benefit was in switching? Thanks.
They have explained in different posts that they had to switch from a travel insurance (World Nomad) to an expat insurance (IMGlobal) after spending too long away from Canada and loosing health coverage at home. A travel insurance covers emergencies, and returns you home for treatment if needed. If you are no longer covered by your country’s healthcare system, you need an expat insurance for things like check-ups or ongoing treatment.
Thanks, Val!
Hi, Kristy! Just finished QLaM, really enjoyed it.
Question: I recently inherited some $. With the current investment climate, would you lump sum invest, DCA, or hold it in cash for a while?
Thanks!
(I’m in the USA; I have a 70/30 index portfolio)
Thanks, silvermole. If you enjoyed QLAM, would you consider leaving us an Amazon review? We’d really appreciate it, thanks.
As for your question, if you got a chunk of money and are afraid of throwing it all into the market, I would recommend DCA-ing. That way you won’t freak out and sell everything when there’s a dip. You’ll have “dry powder” for the dips, especially given that this is a volatile election year.
I love these finance breakdowns per month and per country. I’m still a noob and travelling for vacation only, so there’s no way I’d be able to get my costs this low! I think I spent over $1k visiting Rocky Mountain National Park in Colorado this year just for a week!
Looking forward to the breakdown next time.
“I think I spent over $1k visiting Rocky Mountain National Park in Colorado this year just for a week!”
LOL. I haven’t been to Colorado, but I can related. We used to drop more than $1000 a week on expensive packed vacations to the UK, Europe, and Caribbean. It’s way easier to control your travelling expenses once you’re FI. It’s all a learning process 😉
I need to learn more about how to travel on less. By chance do you have specific blogs on this? Thx for your blog!
Can you elaborate on the considerations of not being a Canadian resident anymore?
I know there are some tax implications (but I am not sure what they are). Are there any more considerations in regard to TFSA/RRSP/Non-reg accounts and the taxation of different income streams when the residency status changes?
Thanks!
I think the confusion here is residency versus tax residency. Since we are no longer residents of Ontario, we aren’t eligible for OHIP so that’s why we had to buy expat medical insurance. But from the taxation point of view, since we haven’t established tax residency in any other country (we don’t spend more than 180 days in any one place), Canada still taxes us. We are still tax residents of Canada. Which works out great for Canada, since we pay taxes but don’t use any of their services.
If you wanted to establish residency somewhere else, you could move to a country with a territorial taxation system (like Georgia, for example), where only income earned from Georgian sources would be taxed. By earning online income, you’d be exempt from taxes. But then by declaring yourself a non tax resident of Canada, you’d be hit with taxes on the capital gains in your non-reg accounts. So it’s a trade-off. Here’s a good site that talks about how to optimize taxes by establishing tax residency in other countries: https://nomadcapitalist.com/2016/05/17/pay-less-through-tax-residency-georgia/
I recently followed you, bought your book as well, opened my questrade account even though I don’t know what I was doing 😀 I have 0 idea about investment.I opened TFSA and RRSP at questrade, one is managed by questrade while I read and learn how to handle the other account. I want to learn more, you both gave me that confidence.
Good for you, Margie! We knew nothing about investing either back when we started in 2008, so don’t worry, it’s a learning process.
Glad the blog and book has given you confidence! Thank you for buying our book!
If your coming to Australia (Rural Western Australia) feel free to contact me and I’ll put you up in some free accommodation with us. I can show you around Karijini national park and maybe give you a mine pit tour in the largest iron ore mine in the southern hemisphere. Be good to meet you guys. Just sing out.
Wow, thanks Ben! We will take you up on that offer if we go to Australia! Karijini national park sounds amazing!
That’s amazing, congrats! You guys are such an inspiration 🙂
Thanks, Jenn!
Congrats! You guys are really inspiring. I’m trying to get my partner on board with geographic arbitrage, and your example really helps. I’m sure 2020 will be awesome for you too!
Thanks, AlmostFIRED! *fingers crossed* that you can get your partner onboard! Your homework is to travel more and try to live like a local while you are doing it 😉 That’s how I got Wanderer on board. Got him hooked on travel and the rest is history!
Hi from NZ where I’m on sabbatical!
Slovenia was great. The people there are super hardcore. Also I was only in Liechtenstein for one day but it exceeded expectations. You can go check out the prince’s castle (well, it’s open for one day a year and he hosts visitors; otherwise you can walk around outside) as well as the mountains.
I was never a FIRE fan because of RE, but I always have a healthy respect for Financial Independence enthusiasts.
The most important aspect of a FI journey is the FI target. It is essential that your mate is in sync with the lifestyle of choice resulted from the set FI target.
Relationship is the foundation for success in any life endeavor – FI is one of the worthy among pursuits.
FireCracker is an FI fanatic and her mate is behind her 100% – you must establish the same level of support from your mate with the life style of choice before lighting up the FIRE.
I always used to think that these spending reports from nomadic travelers had to be missing something. After all, how could it cost so little? And then I started my own nomadic travel. My wife and I spent our first 6 months in SE Asia and only spent like $11k. It’s all true!! 🙂
Love those low expenses! We recently ran through our 2019 and costs were way lower than we’d anticipated, and should drop lower now that the mortgage is paid off.
Funny thing is that daycare now accounts for something like a third of our costs: FI is technically here if we just take Baby AF out of daycare. Gives us options.
I wonder if us US folks can buy that insurance plan if we plan on being in the US for the majority of the year, like 10 months out of 12…
Wow that’s amazing how you can keep traveling around the world and have your net worth keep growing all without the stress of the cookie cutter lifestyle – Stressful Job, big houses, fancy car, etc…
Hey there,
You mentioned you’ve lost your Canadian healthcare from having been out of the country too long. Did they actually tracked your absence somehow? Did you tell them yourself? How did this work out?
As you know your book (along with The Simple Path to Wealth) has been the single most influential book in my life, no bullshit. I’m so committed to this path now, and the results are awesome. I don’t just have confidence that I can to thus, I have certainty. Like my dad says, just having a plan makes you happier today! I’m enjoying this ride!
RE the post, it’s marvelous what can be achieved through strategy, discipline, and vision. Bravo! Particularly on sticking to your values amid such success with the book and all.
Just picked up the book right after the new year! Can’t wait to read it. That’s interesting to read about your medical plan and how the USA impacts the cost. It’s a mess here for sure. BIG PROFITS. Anyways, thanks for sharing!
Loved reading this post. Your spending never fails to inspire me. Looking forward to seeing everything you get up to in 2020!
Feel free to come to Luxembourg (where I currently live). I can arrange for cheap accommodation. It would be great to meet you guys and learn from your experience. I am on the FIRE journey myself. Drop me an email!
Geographic arbritrage seems to have served you well in keeping your annual costs low. There is an environmental cost to all of the flying that you do that doesn’t appear to be factored into your expenses. There have been a few different articles I’ve read that mention that even purchasing carbon offsets is not always the best idea; cutting air travel would be the best. Here is one example:
https://www.cbc.ca/news/technology/faq-carbon-offsets-1.5008339
Would you consider at the very least buying carbon offsets for all of the travel you do? Or would you consider flying less?