The Resolution: May 2018

Well, folks. The tracking continues. May has passed us by and I continue to chase my elusive goal of spending just $1,250 CAD per month for an entire year. As we come up on the half-way mark of the year, I still haven’t managed to meet my goal once. And, despite hopes coming into the month that May would be different, I fell short once again, although not from far.

Below is a summary of my spending for the month.

May 2018 Spending

As you can see, I spent $1,429 CAD in May, $179 more than my goal of $,1250/month. My average cost of living for the month was $46.10. Although still falling short, this makes it my 2nd best month of the year, next to April. Although it seems a little bit of a step backwards, I am happy that the two most previous months have been my best months and, although I have said this before, next month looks to be even better as I may even run an actual surplus for the first time this year. For 2018, I am now projected to spend $16,895.59,   $1,895.59 more than my goal of $15,000 for the year. Not ideal to be overshooting like that, but as I have said in the past, this year looks to be my least expensive year ever.

Splendidly, this year also is on track to be my ‘best’ year ever in terms of contentedness, satisfaction and personal achievement.  Of course, things can always change very quickly but I’ll take a favorable forecast over a rainy one any day.

chart (3)

Something Good

Well, this may be a bit of an unceremonious way to announce this, but I ‘discovered’ in May that I am effectively debt-free. Allow me to elaborate.

I believe I had mentioned how I had (foolishly) chosen to invest some capital in equities (stocks) late in 2017 and early this year, delaying paying off some of the debt I continued to sit on.*

Well, put simply, at this point the bit of debt I have remaining could be eliminated within a few days by cashing in my current holdings and draining my TFSA (analogous to a ROTH IRA in America from my understanding). I am not going to do that, because I want to keep my positions for the long run, but there is certainly a certain peace of mind to knowing that you are free of your creditors forever more and able to move in the direction of your dreams freely and at your own will. Or, at the very least, it’s nice to know you have a place to stay that is not dependent on continued payments to the bank or the landlord. That the place I stay also provides me with the income I need to cover my basic costs of living is simply a bonus, but a very liberating one indeed.

What this also means, is that I have no excuses. When your day/week/month/life is yours to design as you wish, it means that there are no longer any of the ‘built-in’ excuses that the modern man and woman often use to justify remaining as comfortable as possible. That is, you can no longer blame your demanding job or your over-expecting parents for your inability to live a life that satisfies you. This, of course, is a good thing, but it also demands independence, action and conscientiousness, traits that our well-developed sense of bubble building has often not prepared us well for.

Remember, the idea of ‘early retirement’ is not the same as the classic notion of retirement, in which you kick your feet up and mix a cocktail and stare at the wall wondering what new hobbies one in their 60s might still develop after a life of neglecting their curiosities and, in many cases, their physical and mental well-being.

That will not make you happy. We have all heard of those who retire later in life and struggle immensely afterwards as they have spent so much of their time mindlessly droning along in their jobs that they have never had a chance to find their thing, as it were.

It is even more important for young retirees to continue to move forward with their lives, for their struggle will continue for much longer than that of the classic senior citizen retiree should they allow it to go that way.

Something Bad

I wasted a relatively large amount of money this month, and ultimately failed to meet my spending goal yet again.

I had written last month about my upcoming trip to Peru, which I had been planning for months. Well, that trip was cancelled and I ended up taking a rather expensive day-tour of the Mexico City airport instead. It’s a little difficult to explain and hardly worth revisiting in depth, but basically I do not recommend anyone fly with the Colombian airline Avianca. They made changes to my schedule, and then provided an incredibly frustratingly poor level of customer service over the phone a few weeks before my trip while I tried to make some small changes in response to the changes they had made. This interaction also apparently led to the request of a refund of my ticket (something was clearly lost in translation) which I was not made aware of until I had flown to Mexico City with another airline to get my flight with Avianca to Lima, which they had also overbooked and were actively bumping other people from as well.

I received a refund of $375 USD for my Avianca flights. Ultimately, I had to buy a new flight back to San Jose Del Cabo ($240 CAD) from Mexico City, and had to forfeit the bus ticket I had booked in Peru ($35 CAD). The ticket I have booked for June 2nd from Mexico City to San Jose Del Cabo was already paid for months ago, but was forfeited without any kind of refund or credit (app. $100). I burned some extra gas with all the driving to/from airports and had a heck of a day dragging my surfboards and luggage from terminal to terminal in Mexico City, trying to work the most logical plan I could come up with in this time of confusion. If it weren’t for all of this, I may have met my spending goals for the month even while traveling to an incredible new destination. I did, however, save some money on avoided cleaning costs, as I was able to complete 3 cleanings at my home and rental property that otherwise would have cost me $120 USD altogether.

Something Learned

After running around the airport for a while failing to find any other alternative flights to Lima at a price that I was willing to pay, and having finally found a trip back to San Jose del Cabo later that evening, and sitting down to have my first meal of the day at about 3pm, completely defeated, I met a man in the airport that gave me some much-needed perspective.

The man was from Tijuana, and recognized my surfboard bag and decided to strike up a conversation with me. He used to surf a lot he said, and skateboard. He was a former Motorcycle mechanic that used to live in Baja California Sur as well. He pointed out how he wasn’t able to surf anymore due to a prosthetic leg he was now wearing. Despite breaking his leg many times while adventuring, he ultimately lost it to a cancer in his foot. Having spent the last of his resources on his prosthetic, he was waiting in the airport for his daughters to arrive to help him out.

I didn’t give him any money, nor did he ask, but in retrospect I could have offered him any amount and been getting a bargain, for he had provided me with a strong dose of perspective at a very important time. And timing is everything, as is value-added.

Bonus Lesson

ICE Currency Exchanges in the Aiports are a huge ripoff.  I am not sure why I thought otherwise, but I had heard from a co-worker that they were best for buying pesos, especially if you order in advance.  In all other countries I have travelled, I have always learned to avoid “money changers” that you often see just after passing through immigration in many places.

In any case, I lost about $84 CAD to these guys, or about 20% of the value of my exchange.  I bought 1040 Peruvian Sol (PEN) for $505 CAD, a rate of 2.07 PEN/CAD.  According to google on the same day, the rate was about 2.54 PEN/CAD.  I should have got about PEN 1270 instead of PEN 1040, a loss of PEN 230, or about $84 CAD.

Of course, with my botched trip to Peru, I am now going to carry this currency around with me until I am able to get there again (hopefully later this year or, more likely, sometime in 2019).

C’est la vie? You live you learn?

Apparently so. Especially if you’re on the lookout for the lessons.

*Virtually all of my debt is associated with my home and rental property in Mexico, which are a blend of loans on a line of credit and a personal loan as a traditional mortgage wasn’t an option for purchasing outside of Canada. That said, the debt currently represents about 10% of the value of the home, so I can at least live with the poorer interest rates in the short meantime before paying all debt off completely within a few months from now.  It’s not that I don’t think equity investing is a wise part of a strategy for folks, or that my investments haven’t performed well, it’s just that I should have focused on eliminating debt first.  In my case, I am able to put so much of my income towards eliminating debt that ultimately the effect will not be too detrimental to my future, but I am definitely paying some more interest than I would have been otherwise.  I will have to take a close look as the year progresses to see if my returns on these investments outweigh the costs of interest paid in debt held in the meantime.  Stay tuned for that post, but if you have a lot of debt that is going to take you years to pay off, I would suggest focusing almost all of your efforts on eliminating that before investing in potentially risky assets like equities (especially given the increasing statistical likelihood of stagnation or worst in the short-medium term for this asset class after an epic 9-year run following the 2008 financial crisis.)

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