Third World ERE - FI Achieved!

[Ian]

December 2013

Overall a month of new experiences. I got selected for a tour promoting the province, so I got an all-expenses-paid trip through a ski resort, five star hotel, and a bunch of fancy restaurants. I appreciated some of the luxury, but mostly as a change of pace. Some things (especially the beds) were clearly superior, but it generally struck me as just lifestyle inflation.

There were two mandatory trips, which necessitated more travel expenses. I also chose to go out drinking with other expat teachers - I suppose I value the experience and networking but it isn't something I'd want to do on a regular basis.

Net: $2356.11
Food: $101.26
Phone: $9.09
Gas: $86.88
Electricity: $6.05
Transport: $20.55
Gifts: $21.95
Saved: $2110.83

This month I kept the heater on the lowest setting that keeps pipes from freezing and my bill still cost this much. It's somewhat comforting that I wasn't going crazy with the heat before, but this month was cold and I'm probably willing to spend to raise the temperature a bit.

I'm eating through my staples faster than I expected, so I had to purchase more and thus still didn't break under $100 this month. I may have to accept that my average will be somewhat high for the choices I've made.

Also, I received a lot of gifts this week. Lots of food and even some useful clothes. It's good that my coworkers seem to like me, but that doesn't necessarily translate into job security. Not sure what monetary impact this will have on January.

Upcoming:
1) I've remitted money to my primary bank account for the first time (via KEB) but it hasn't shown up yet. It's only been two business days, but I'm still a little nervous waiting for it to show up.
2) Because that is unknown, I won't reflect on my net worth or the year until after the holidays.
3) Work expectations over winter break continue to be very vague, but I'm hoping that it will be a good time for side projects. Some of them may be relevant to this forum.

[Ian]

It might be too early to declare victory, but I think I finally got the TV charge removed from my electricity bill. It was only 2500 won, but it felt senseless to pay it when the TV is unplugged and gathering dust in a corner. When they did a bunch of work changing the apartment building's TV antenna, I took the opportunity to inquire politely. I didn't get a clear answer but lo and behold, this month there's no TV item on my bill. Fingers crossed that it stays off, because that's savings for zero lifestyle change or work.

In more mixed news, I've found a shop that sells decent bread for good prices. This could very easily become a vice for me, since I eat bread faster than I eat other staples, so I'll have to think carefully about what the ideal balance might be.

I've been enjoying a period of high productivity, but next week I return to work with very unclear objectives and guidelines. If what I've planned is unobjectionable, the next two weeks should be low stress, but if not I'll be doing a lot of lesson planning.

[Ian]

I neglected to post this earlier even though I had the numbers:

Net Worth 2013
Korean Bank: $370
USA Bank: $110
Emergency Fund: $3375
Family Loan: $2000
Tanzanian Pension: $2735
Korean Pension: $194
Vanguard: $22 750
Net Worth: $31 534

Details
- The family loan is 0% interest and will definitely be paid back eventually. Bad investment in monetary terms, but family is family.
- My Tanzanian pension can only be withdrawn if I'm sure I'm not going back, but it seems to be making reasonable gains and has very low costs, so I'm leaving it there.
- The Korean pension is higher than that, but this was the amount they listed in the first letter I received.
- My first overseas remittance got a rate of 1075 won to the dollar (after fees). That means that my estimates are indeed slightly conservative, as I'd hoped.

Thoughts
I'm experiencing some cognitive dissonance at the moment. This is not very much money by the standards of this forum, but it would be a staggering amount to any of my peers in Tanzania. I suppose it's the first step. We'll see where I am in 2014.

[Ian]

January 2014
Net Income: $2038
Food: $85.89
Phone: $9.09
Gas: $116.29
Electricity: $3.49
Transport: 0
Household: $0.91
Misc: $10.91
Saved: $1811.42

Happy about my zero transportation budget. My coworkers are all shocked I didn't go anywhere during January, but by my standards I have been traveling way too much lately. The down time was welcome, especially since I'll be doing a little traveling with friends in February.

The miscellaneous category is not unknown spending; now that I'm giving fewer gifts, I decided it's worth spending some money for the sake of new experiences, since that's part of the point of traveling. This category doesn't include when I splurge on a meal or otherwise take a more luxurious route on normal life. It covers purely unnecessary things, both so I know how much I'm choosing to spend and so I know what luxuries I could unquestionably drop from my budget if necessary.

[saving-10-years]

I enjoy reading your journal and look forward to more news of exploits that would lead to 'shocked coworkers' should you decide to tell them. The how open to be with others about what you are up to seems to be a theme in these forums this month.

I am imagining that your co-workers think that they are already very 'frugal' based on the low wage in your type of employment by Western standards and that they could not do more?

[Ian]

I enjoy reading your journal and look forward to more news of exploits that would lead to 'shocked coworkers' should you decide to tell them. The how open to be with others about what you are up to seems to be a theme in these forums this month.

Thanks. I don't have too many good stories, but one of my coworkers who visited my apartment told me, "You should own more things." And two different people who have seen my phone responded, "You should own a more expensive phone." Language barriers tend to cut down to the core of what people believe.

They seem to think I'm some kind of crazy ascetic. Fortunately, I seem to be able to get away with it since foreigners are expected to be strange.

I am imagining that your co-workers think that they are already very 'frugal' based on the low wage in your type of employment by Western standards and that they could not do more?

Though I can't speak for the majority of them, I'd bet not. For one, even though South Korea is a first world country, Western pay standards don't quite apply. Teachers have some of the highest paying jobs in the country (though the average is higher than my salary because they get regular raises throughout their usually long careers) so I think the common sentiment among my coworkers is that they have it made.

From what I've seen so far, South Korea has enthusiastically taken consumerism as part of its identity. Those coworkers I've spoken to about money seem to believe that money earned is equal to money spent. I suspect based on offhand comments that some of the younger teachers are living on credit, since "keeping up with the Kims" is a relatively expensive lifestyle.

[saving-10-years]

Ian

Reading your response makes me think of relatives who live in Hong Kong. Now _that_ is a heck of a disposable consumerist culture. All things shiny and new.

Being a foreigner is helpful so I hope that this sterotype gives you a smoother ride. It must be pretty isolated there to be a foreigner with such 'foreign' habits. Hats off to your persistence and inventiveness.

[LonerMatt]

Absolutely fascinating read.

[Ian]

Glad you find it interesting. I intend to keep doing monthly analyses for at least a year, then I may transition to broader changes in my financial life.

Being a foreigner is helpful so I hope that this sterotype gives you a smoother ride. It must be pretty isolated there to be a foreigner with such 'foreign' habits. Hats off to your persistence and inventiveness.

Thanks. This wouldn't be a very healthy position for an extrovert or someone especially bothered by this kind of thing, but I think it's a pretty good fit for me.

[akratic]

This thread is badass. I love how efficient you're being, and how you have a different perspective.

At the end of March I'm going to be moving from Thailand to Tawain, South Korea, or Vietnam. If we end up in South Korea, I'm going to attempt to hunt you down and take you out to lunch.

[Ian]

Thanks. What are you considering that you might end up one of three different countries?

I live way in the south of the country. There's not a lot here unless you like mountains and shrines, in which case we have tons of them.

[akratic]

What are you considering that you might end up one of three different countries?

In Vietnam we have the most friends.

In Taiwan I can live a dream I have where I wake up, go surfing, then go back to my laptop.

South Korea has the most interesting culture for us.

If I had to guess, we'll pick Vietnam to live in, and then swing by South Korea for a shorter trip on our way out of Asia. It's not really clear to us which place would be best to live for a few months, and we don't have enough constraints that would make the decision easier.

[LonerMatt]

Not to go too off topic, but everything in Taiwan is great: it's cheap, friendly, interesting, not inundated with tourists, and beautiful.

[Ian]

February 2014
Net Income: $2001.22
Food: $151.21
Phone: $9.09
Gas: $96.91
Electricity: $5.83
Transport: $19.27
Household: $0.91
Misc: $18.18
Saved: $1699.82

February some of my favorite local foods went out of season and I had to buy a number of different bulk items, so I decided to experiment with a number of things I've avoided due to the price (the idea being restricting the high expenses to a single month). I've discovered a few new things I'll incorporate into my normal diet, so I'm glad I did, but I actually found myself missing my usual staples.

Since February represents the high end for my food expenses, for March I'll be doing the opposite. We'll see how low I can get my food expenses without doing anything crazy (stealing food from work) or abnormal (fasting a lot, running down supplies). I shouldn't have to buy any bulk foods or do anything unusual, so I think I have a good chance of breaking my record if I stick to a spartan diet.

It's finally getting warm enough that I can leave the heat off sometimes, so those bills should go down. My current average for monthly expenditures is $338 (or $272 if I discard the startup costs of the first month) and I'd be happier if that number was decreasing.

[Ian]

I won't have any time to spend money tomorrow, so I can wrap up...

March 2014
Net Income: $1982.23
Food: $83.30
Phone: $9.09
Gas: $48.45
Electricity: $3.43
Medical: $2.27
Misc: $22.55
Saved: $1813.12

This is closer to the expenses I wanted to see, and my gas bill should drop again next month. I'd planned for this to be a spartan food month, but I failed in that - a back injury and some other time consuming things led me to choose slightly more expensive options. Given that I get two free meals a week and very cheap school meals, I could get it lower than this. I won't beat myself up over this level of expenditures, though.

Money is piling up in my Korean accounts, leading me to return to old questions. I can't invest every month like many people here because the remittance fees would kill me.

I've noticed that the won to dollar exchange rate has hit its lowest point during November-January for every year my bank has data for. One option is to wait until then and send a large sum. Conventional wisdom says that it's better to be in the market longer, but the difference between mid-year and end-of-year exchange rates is 9%. I don't think the stock market can match that and overcome transaction costs.

The means I'd be investing in lump sums - an entire year of income at once. Mildly nervous about that, but I've overcome it once. Since I'm already waiting so long, part of me wants to wait for a market correction to invest the money I've sent back (I'm a buy and hold type). I know this is timing the market, but hopefully it's obvious how that's intuitively appealing. I'm open to input of all kinds.

In other news, I've finished some major projects and gotten into a comfortable rhythm for this school year, so I'll be launching a new project that you'll hear about on this forum. Hopefully it will interest people.

[Ian]

I've started a thread about my new project:
viewtopic.php?f=7&t=4974

This is what I'll be doing over the coming months instead of going out and spending money.

[Ian]

The won spiked in value for some reason, so the exchange rate went beneath the usual low in winter, so I sent another chunk of money to my bank. The additional transaction fees don't hurt much, since there's a $10,000 limit to individual transactions that would have forced me to send multiple transactions at the end of the year anyway.

That again leaves me with the decision of investing. By the end of the month I'll have a $2000 emergency fund in won and about $3500 in my bank - that seems like a sufficient amount to cover emergencies. The logical thing to do would be to invest the extra, in the spirit of not timing the market, but as always I'm tempted to wait for a market correction.

I'd welcome thoughts about this or about an appropriate emergency fund size. The money hasn't finished the wire transfer yet, so I have time to decide.

[Ian]

April 2014
Net Income: $1968.96
Food: $151.98
Phone: $9.09
Gas: $9.69
Electricity: $2.74
Medical: $68.57
Misc: $19.07
Saved: $1696.09

I ate about the same, but this month I had to buy several commodities in bulk again. My food expenses are fairly lumpy, so a monthly average will be more useful than the month to month amounts. In general, I feel like tracking my expenses this way was useful for adapting and choosing priorities, but the yearly numbers will be more meaningful.

The medical expense is because I had to pay for a medical checkup to renew my contract for another year. It will be more than offset by the $1800 bonus I get for renewing, but I don't get that bonus for a while.

[rube]

I am every time amazed by the % you are able to save, 86% this time! Well done.

Instead of calculating the monthly numbers, I also calculate the averages over the last 12 months, as the monthly numbers can indeed fluctuate quite a bit.

Regarding you emergency funds: you seem to be able to get buy on very little. So it seems to be sufficient, though I don't know what cost could hit you in certain emergencies (flight back home? high medical expenses for relatives?)
I have difficulty as well to invest, as everything seems high. But, I am still sitting on a pile of cash which is not generating a lot. So if I don't invest every month our savings now, the pile will only becomes bigger and dollar averaging will only become more difficult. Do you have all in one Vanguard funds? Maybe you can spread to more to spread risks a bit.

[Hankaroundtheworld]

Hi Ian, just want to say that I am really impressed how you find your way in life, and how you structure your spending (to what is real value, and not inflate your lifestyle), a true example for others, the world would be much better with this mentality!
One of my options is to go to Vietnam (Hanoi), and your story (even though more on Korea) is inspiring.
I really wish you good luck in your next steps!