- How Has Covid-19 Affected Your FIRE Journey? Part 2 - May 29, 2020
- All the Ways Travel Screws You Up - May 25, 2020
- How Has Covid-19 Affected Your FIRE Journey? Part 1 - May 11, 2020
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.
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|
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:
|Book Promotion Related Expenses||$8,628||$6,637|
|Blog Related Expenses||$5,043||$3,879|
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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