Business Idea: On-Demand Garage Rental + DIY Car Repair Lessons

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The NY Times has a new article They Supply the Garage, You Bring the Elbow Grease where you rent space hourly or daily for DIY car repairs. The article referenced GarageTime as a place to search for a residential or commercial garage space in your area. Most commercial spaces include lifts, while others are essentially listing their large driveway with an electrical connection and perhaps an air compressor. Be prepared to sign a liability waiver.

My related business idea is to use the space to teach people basic car repair skills like how to change your oil, replace brake pads, replace headlights, repair dents, or perform common after-market modifications like LED headlight swaps. YouTube has tons of how-to content, but I think there is still a market for someone to be walked through the process the first time. For example, someone could list their space and also upcharge for some lessons. The next time, the customer could just do it themselves.

I’m a bit surprised at the timing of this article, as isn’t the stereotypical Millennial is supposed to just stare at their phones and not do anything dirty with their hands? I also keep hearing that cars are becoming more and more like computers on wheels. I suppose it’s a nice little reminder that DIY is still alive, and some people still like to save a few bucks and do things for themselves.

You don’t even need a garage for many basic maintenance tasks that can save you money. For example, here’s a Youtube video I found the other day that shows you how easy it is to change both the engine air filter and cabin air filter on my 2015 Toyota Sienna. Your dealership shop will charge you at least $100 an hour for this knowledge. You’ll also probably be charged more than the $12 for the cabin air filter and $11 for the engine air filter that Amazon is asking. (These seem to have good reviews, but OEM parts are also available online.)

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The Power of Being Open-Minded About Cutting Your Household Expenses

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Here’s the short version of this depressing WSJ article Families Go Deep in Debt to Stay in the Middle Class (paywall?). Household incomes have gone nowhere. Meanwhile, housing prices are up, healthcare costs are up, and college tuition has skyrocketed. Ouch. However, you can’t control that things are worse for you than if you lived in another time period. You can only control your response, and that is why I try to focus on actionable ideas instead of dwelling on “the way it should be”.

“Make more money” advice is hard to pin down. Of course I want everyone to have a high income. I like the idea of spending money on improving your marketable skills, “investing in your yourself”. However, everyone has a different combination of what they are good at, what they enjoy, and what others will pay them to do:

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Meanwhile, I find that spending advice applies much more broadly. My most general spending advice is that you need to expand what you think is an option. Most people hang out with people around their own income level, look around, and then spend the same money on the same things. The trick is that net worth shoots up when you earn a good income, but spend like someone who earns about 1/2 or 2/3rds of what you make. It may not feel natural, but you have to trick yourself into picking from a wider menu of options. Here are some quick examples.

  • Housing. You could buy a 4,000 sf house with a 3-car garage. A family of four could live in a 1,000 sf apartment (mine did). You could share an apartment with roommates. You could rent a room inside a large house. You could buy a duplex and live in one side, rent the other. You could buy a 4-plex and live in one unit and rent out the rest.
  • Transportation. You could lease a $60,000 SUV and pay about $8,000 year in lease payments – after 3 years and $24,000, you’d have to start all over again. Alternatively, you could buy an entire car for $8,000 and own it for another 10 years. You could downsize from a 2-car to a 1-car household. Many urban residents don’t own a car at all.
  • Food. A single person could eat out at every meal, never touch their stove, and easily spend $1,000 or more per month on food and alcohol. A family of four can cook all meals at home and spend under $600 a month. These days, food has become the ultimate convenience item, but it’ll cost you.

I can be hard to stay open-minded about your expenses. In fact, many quickly become defensive. You’ll often hear a straw-man argument like “I don’t want to sit around sorting coupons, eating lentils every meal, or living in poverty”. I wonder if they have seriously considered all of the options above.

You don’t have to pick the cheapest option in every category. You probably know someone in an expensive house but drives a 20-year-old Toyota. I know someone who makes over $250,000 a year but rents a cheap, single room in a large house (while eating out every night). I know someone who owns a beautiful beachfront house, but AirBNBs the majority of it.

I’ve been looking for over 15 years, and there is no single path to financial independence or early retirement. Even if you don’t want to embrace frugality as the cure for everything, the cold reality is that it’s hard to live at life true to yourself unless you first reach at least $10,000 in savings to ride out the bumps.

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The Status Spending Test: Two Simple Questions About Your Car and Home

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I feel like I’ve been reading a lot of backlash against the “latte factor”. I agree buying a Starbucks latte every day will not directly lead to poverty, and forgoing it will not make you independently wealthy. However, sometimes a concrete example is more powerful than a vague position like “just prioritize your spending” (which I believe, but sort of like “spend less than you earn”).

Instead of the small stuff, I prefer to start with the biggest expenses and work down from there. You may consider your mortgage and car payments to be a “fixed” expense, but that doesn’t mean they can’t be reduced. Tom Welsh of Humble Dollar has a post Pay to Play which includes a very simple test to see if you are spending an excessive amount on your social status, possibly at the expense of your future basic needs. No calculator required. No budgets.

How can we tell if we’re engaging in heavy social spending? Two simple tests can help you analyze your own degree of social spending.

Test No. 1: Did you pay $57,000 or more for your car – a 50%-plus premium to the average $38,000 new car price?

Test No. 2: How many rooms in your home are used by people every single day? Divide that number by the total number of rooms in your home. Is it 50% or less?

My current vehicle is a 2015 Toyota Sienna, bought used for well under even the average number. It creates zero excitement and is little more than a reliable appliance, but I have come to love it (and its sweet sliding doors) for what it is. We are a family of 5 inside a 2,000 sf house, and every single room is definitely used every single day, often by multiple people at the same time. We prioritized room, safety, and reliability in the car. We prioritized location with the house, with minimal commute time, while also trying to make it smaller (and cheaper) but still allowing for a home office.

Now, a luxury car and a big house may be your prioritized expenses and well within your means. Which is great. But if it isn’t, you may have found something to cut back on that is much more powerful than skipping the Starbucks. Moving is a huge pain, but it’s a one-time change to which you quickly adjust, while potentially improving your overall financial picture for the rest of your life.

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Which Households Spend More, Less, or Exactly What They Earn? Breakdown by Income Level

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In the post How Well Do Americans Balance Income and Spending? by the St. Louis Fed, they examine the breakdown of household spending as compared to income.

In terms of the big picture, 55% of US households were net savers (earned more than they spent), 30% broke even, and 15% ran an income deficit (earned less than they spent). However, that’s everyone across all income levels, and thanksfully they looked deeper in the 2016 Survey of Consumer Finances and broke it down further by income quartile.

It is not surprising that lower income households overall have a harder time spending less than they earn. Instead, I would consider these two observations:

Out of the households in the bottom income quartile earning less than $27,000 per year, roughly 75% of them manage to break even and/or save money each year. This is not to say that households that are earning close to the poverty line ($26k for a family of four) are not struggling. However, I think a family that is “just getting by” on a $100,000 income would appreciate their situation more if they know that so many $26k income families are breaking even at this level, with a third of them even managing a surplus.

Out of the households in the top income quartile earning over $98,000 per year, roughly 25% manage to save nothing or go into debt at the end of each year. Yes, most households with a six-figure income are saving some money. But a quarter of them aren’t saving anything!

I have always been struck by the huge variation in spending by the same number of humans in the same city. The family earning $50,000 finds a way to spend $50,000. The family earning $250,000 finds a way to spend $250,000. If you have a relatively high income, that is a huge opportunity. Don’t waste it. If you create a budget surplus and invest it in productive assets, one day those assets will do the “work” to make money instead of you.

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Which Airline Miles Are Easiest To Redeem For Economy Awards? 2019

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Cashing in your frequent flier miles for a free flight can be hit or miss, especially around a holiday. Which airlines are the most generous with making seats available? Each year, consulting firm IdeaWorks tries to run a fair comparison of all the major airlines to keep them honest. This WSJ article (paywall?) discusses their process:

In March, IdeaWorks searched for two award seats together on various travel dates between June and October on each airline’s busiest routes. Seats have to be available at the airline’s lowest everyday price—typically 25,000 miles round trip for a domestic coach ticket. The company made nearly 4,000 queries.

Below are the rankings of the 6 major US airlines. It is important to remember that this ranking focuses on domestic economy tickets only (no business class or international flights). The article does also rank international airlines on availability from a related metric.

For 2019, the most improved airline is United Airlines, while the worst decline goes to Delta. Not surprisingly, United claims this was totally on purpose because that’s what customers want and they are all about that… Meanwhile Delta suggested that the change was simply a result of more demand because their program is so popular. Shrug.

If you fly a lot on United, you can get significantly expanded award availability with the Chase United Explorer card. Add in the free checked bag for you and a companion, and the perks can easily offset the annual fee.

Southwest and JetBlue remain on top at close to 100% availability, but that is a bit misleading since both of their points are revenue-linked with no blackout dates. For example, 25,000 Southwest points will buy you basically any “Wanna Get Away” ticket that costs up to about $375. So the results are really just saying that Southwest’s busiest routes almost always have a flight that costs under ~$375. JetBlue is only 98% because some of their flights are just over the price threshold. I wonder if they included flights to Hawaii, now that Southwest flies there?

I have come to appreciate the simplicity of Southwest’s structure, especially now that I primarily shop for multiple economy tickets. For example, you can reliably value their credit card bonuses of 40,000 points = $600 in Wanna Get Away airfare, and 80,000 points = $1,200 of Wanna Get Away airfare. I can buy five seats on the same flight, no problem. Others prefer the traditional, more complex structure because it offered the skilled person the chance to get outsized value, like a $3,000 ticket for 50,000 points.

Airlines make a huge percentage of their revenue from selling these airline miles, which they create out of thin air both for actual flying and specifically for credit card users. This also means they have an incentive to create “miles inflation” such that each mile is worth less and less over time. I like this annual WSJ survey because it shows that someone is paying attention and calling them out publicly, at least on seat availability.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

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Keep Your Hilton Honors Points From Expiring with a $1 Amazon Purchase

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hiltonhonors0Updated with alternative method. My relative lack of travel these days means that I am constantly keeping miles and points from expiring. Here’s the official policy of Hilton Honors point expiration:

Hilton Honors Points do not expire as long as Members remain active in the program. To keep an account active, Members can stay at one of Hilton’s hotels, or earn or redeem Hilton Honors Points within 12 months. [For Hilton Honors credit card holders, Hilton Honors Points will not expire as long as the Member is a cardholder in good standing.]

You need to earn or spend Hilton points every 12 months, which is on the short side. My usual strategy is to use Hilton Honors Dining to earn a few points at my neighborhood burger joint, but I was running short on time. I found that you can redeem Hilton points at Amazon through their Shop with Points program. The redemption ratio is 500 Hilton Honors points = $1 on Amazon.

First, link your Hilton Honors account to Amazon.

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Next simply use as little as 5 Hilton Honors points to offset $0.01 of any purchase. If you were planing on buying something for $25, just pay for $0.01 with Hilton points, and $24.99 on your credit card. You used to be able to simply buy a $1 Amazon gift code for 500 points and call it a day, but that is no longer an option. If you have Amazon Prime and no other needs, you can still buy one of the following items that cost only $1 or less:

Checkout and choose to pay with Hilton Points, where you can specify to only use as little as 5 points ($0.01). You would want to make sure that it is in stock, so they charge you immediately.

Check for the activity to show up in your Hilton.com account the same day as it is shipped:

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Bottom line. If you have Hilton points expiring soon, you can redeem as little as 5 Hilton points for $0.01 off any Amazon purchase and create qualifying activity that posts the same day. If you have Amazon Prime, I share some $1 ideas. Hilton points are more valuable when redeemed for a free hotel night, but in this case it can be worth sacrificing a few to keep the rest alive and active.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

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Nomadland Book: What Really Happens When You Don’t Save Enough For Retirement?

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I’m reading Nomadland: Surviving America in the Twenty-First Century by Jessica Bruder. Essentially, it’s the story what happens to a group of people when their plans for retirement fall apart. Here’s the book blurb:

From the beet fields of North Dakota to the campgrounds of California to Amazon’s CamperForce program in Texas, employers have discovered a new, low-cost labor pool, made up largely of transient older adults. These invisible casualties of the Great Recession have taken to the road by the tens of thousands in RVs and modified vans, forming a growing community of nomads.

You’ll probably retire earlier than you expect. Consider this EBRI chart showing the big difference between when workers expect they will retire (dark blue) and when people actually retired (light blue). One-third (34%) of all workers ended up “retired” by the time they reached 60, but the majority didn’t see it coming (which I assume means it was mostly involuntary).

Going through the book, here is a rough breakdown of the stages that the people went through:

Plan A: Ideal retirement. You have plenty of savings and income in retirement. I’m all set with a rock-solid pension, Social Security, and a big pile of investments.

Plan B: Make everything more modest. I don’t have as much as I’d hoped. Maybe I don’t need that beach condo? Maybe I’ll move into a smaller primary house. It’ll be easier to clean. I’ll just have to take less vacations. No problem.

Plan C: Work longer. Hmm, not still enough. That’s okay, I’ll just keep my job a little longer. I have lots of valuable work experience. I’m still healthy.

Plan D: Find any job. I’ve been laid off, and now I’ll have to find something that is full-time and offers benefits. The easiest targets are retail: Walmart, Home Depot, McDonald’s.

Plan E: REALLY cut expenses. My house is going into foreclosure. I have to sell all my other assets, including whatever life insurance policies, 401k plans, jewelry, and anything else of value that I have accumulated.

Plan F: Ask for assistance from extended family or friends. I can’t find any steady work that pays the bills (or may no longer be healthy enough to do so). I need to find cheaper living arrangements, immediately. I might crash with my children or other family/friend.

This corresponds well with this EBRI survey that I found afterward:

What happens if none of this works? That’s the common thread through many of the people profiled in this book. Not only did Plan A fail, but their backup plans also failed. Many had a late divorce. Many lost their high-paying jobs in their 50s, when they were planning to work until 70. Others had medical issues that racked up huge bills. They worked retail for a while, but it never added up to a decent full-time income. There just aren’t as many jobs for someone in their 60s and 70s. They lived with their children for while, but their kids are struggling as well.

One solution that some came up with in this book with is to change “homeless” to simply “houseless”. You buy a big van or small RV for well under $10,000 and you live in it. As long as you can find a place to park it, you’ve just cut your housing cost down drastically. People figure out to live on $500 a month. You can also now travel for temporary work – Amazon warehouse picker, campground manager, agricultural farm worker. As more and more people do this, they have formed communities and annual gatherings to support each other.

The book has me switching between two feelings: empathy for what brought them to this place, and curiosity about the mechanics of their day-to-day life as modern-day nomads. For now, one big takeaway is that people can and do fall through the cracks. The folks in this book are still taking action and working to survive and hopefully once again thrive.

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Charlie Munger: Financially Independent at Age 38 in 1962

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Despite the fresh packaging, we should remember that the “FIRE” concept (Financially Independent, Retire Early) is anything but a new concept. Even I can’t help being a little intrigued by the clickbait title “This Secret Trick Let This Couple Retire at 38”. Such an article could have been written about the 95-year-old Charlie Munger before he started investing alongside Warren Buffett:

The first 13 years I practiced law, my income [from practicing law] was $300,000 total. At the end of that 13 years, what did I have? A house. Two cars. And $300,000 of liquid assets. Everyone else’d have spent that slender income, not invested it shrewdly, and so forth.

I just think it was, to me, it was as natural as breathing, and of course I knew how compound interest worked! I knew when I saved $10 I was really saving $100 or $1,000 [because of the future growth of the $10], and it just took a little wait. And when I quit law practice it was because I wanted to work for myself instead of my clients, because I knew I could do better than they did.

Net worth analysis. According to his Wikipedia bio, the 95-year-old Munger graduated from law school in 1948. Let’s say he practiced law from 1949 to 1962. At the end of those 13 years, he states that he had $300,000 in liquid assets, a house, and two cars. The median value for a Los Angeles area house in 1962 was about $15,000. The median cost of a new car in 1962 was about $3,000. Adding this all up means his net worth in 1962 was about $321,000.

That was a significant amount of money in 1962. According this CPI inflation calculator, that is the equivalent of $2.7 million in 2019 dollars. In other words, the Munger household was financially independent when he was 38 years old.

Income analysis. He also states that in those 13 years as a lawyer, he made $300,000 total. For the sake of simplicity, let’s just say he earned the same income every year. That works out to $23,000 per year. This was a relatively high income – $193,000 per year in 2019 dollars. According to this source, the median family income in 1962 was $6,000 per year. That means he was earning about four times the median average household income.

Super-saver, super-investor, or a little of both? Maybe he shared this somewhere else, but I don’t know his saving rate or his investment return. He does boast of both not spending all that “slender” income and also about investing it “shrewdly”. We have his annual income and his final ending net worth, so you can set one and figure out the other using a compound return formula. I’m assuming everything is after-tax for simplicity again.

  • Let’s say he was a super-saver with a 50% saving rate. That means he saved $11,500 every year and invested it for 13 years. That would work out to an 10.5% annual compounded rate of return.
  • Let’s say he was a super-investor with a 20% annual compounded rate of return. That would work out to an annual savings of $5,500 per year, or a 24% savings rate.

I found that the annualized return of the S&P 500 index from January 1949 to January 1962 was about 18% when you include dividends (source). Thus, my guess is that he was somewhere between these two markers: 50% savings rate/10.5% annual investment return and 24% savings rate/20% annual investment return. These stats are definitely admirable and impressive, but also show that he didn’t hit the lottery or anything crazy.

Munger’s example reaffirms that if you have a relatively high income, save a high percentage of that income, AND invest that money into productive assets, your net worth will grow quite quickly.

A criticism of financial independence seekers is that it is pitched to “everyone” but only works for the rich. It is absolutely true that it is the easiest for high-income earners. How could it be any other way? At the same time, there are many households that earn high incomes that spend 95%+ of it every year. If these folks realize they have financial independence within their grasp, and then change their behavior to achieve it, I still view that as a positive thing. It’s always hard to spend less than the people you hang around with.

In our case, we both eventually earned six-figures, but not the entire time. When we earned a combined $60,000 a year, we lived on $30,000. When we earned a combined $100,000, we lived on $50,000 per year. When we earned $200,000, we lived on under $100,000. Would we have been able to maintain the 50% savings rate on a $60,000 income for 15 years? I’ll never know. I know it would have been much more difficult, and I’m glad we didn’t have to try. I’m also glad we started when we were young and without kids.

Managing expenses (frugality) alone will not get you there, but I still believe it is an important factor once you get your income to a certain level. I would argue that a household earning $100,000 and spending $50,000 per year is much better off in the long run than a household earning $150,000 and spending $125,000 or even $100,000 per year. Now, if someone is making minimum wage, it will be hard to have a lot left over to invest. Your efforts would be best focused on the income side of the equation.

Bottom line. Charlie Munger was born in 1924 and reached financial independence at age 38 from his earnings as a lawyer (before he became partners with Warren Buffet). While he is now best known as a billionaire investor, he took a familiar path to financial independence: solid 9-5 income, consistently high saving rate, and prudent investment of the difference. The same formula he started using in 1949 remains available 70 years later to someone starting in 2019.

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MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Spending Diary: The Most Commonly Ignored Personal Finance Advice?

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After finishing The Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen and Harold Pollack, I found it to be a solid all-around personal finance book that joins others like If You Can by William Bernstein and The Richest Man in Babylon by George Clason in the category of “recommended books about money that are short and easily digestible”. All good ideas for gifts for recent graduates.

They don’t shy away from what I think is the most commonly-ignored financial advice: TRACK YOUR SPENDING FOR THREE MONTHS. Even if you don’t track your budget closely after that, this initial spending diary can be eye-opening. Yes, it takes a bit of effort and can be rather uncomfortable psychologically. Here are some book highlights:

Track ALL of your spending…

For three months, keep track of everything you spend money on, no matter how small. That $1.50 bag of Cape Cod Waffle Cut Sea Salt potato chips? It counts, just as much as your four-figure mortgage or health insurance payment.

… for THREE MONTHS.

If you monitor only one month of spending, you won’t gain a full picture of where your money goes. Routine but sporadic expenses such as car repairs, doctor bills, and the emergency trip to the cat’s vet are more likely to occur over a several-month period.

Now, you can pick your “must keep or I’ll wither away” purchases and the things what won’t hurt as much to cut.

You need to determine what day-to-day spending is necessary and unavoidable, what is a luxury but helps you get through the day, and, finally, what is excess. Only then can you avoid falling prey to spending traps.

This allows you to make trade-offs: I’ll take advantage of the office coffee machine, but I’ll use the money I saved to travel to Italy next summer to attend my best friend’s wedding. I’ll drop my landline phone to pay for my gym membership or boost my child’s college savings.

Final tips. You can put everything on a single credit card or debit card, and then go through your purchases line-by-line. If you use cash, take a picture of your receipts and/or purchases on your phone. If you feel comfortable with it, link your account to Mint.com (or similar) and they will help you categorize things automatically. You’ll need to spend a few weeks teaching it (check in every few days), but it gets better over time.

If you can manage to track everything for three months to get an honest (if uncomfortable and scary!) view of your finances, you may find a big gap between what you think you spend vs. what you really spend. Where does your money go every month?

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Blue Zones: Financial Lessons From the World’s Oldest People

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While learning about Okinawan centenarians, I also came across the idea of Blue Zones – places where a high concentration of people live past 90 without chronic illnesses. While the eating habits of Blue Zone residents have been mentioned a lot, Richard Eisenberg of NextAvenue wrote a three-part series focusing on the financial aspects of their longevity. Here is Part 1, Part 2, and Part 3.

Rather than focusing on the residents’ diets, he reports on how the oldest people in the Blue Zones make their money last and what Americans and America can learn from this.

Here are my notes:

The Nicoya Peninsula of Costa Rica

  • Close-knit family structure. Rely on immediate and extended family members. Nursing homes and assisted living facilities are rare.
  • Government-run public health care system with minimal out-of-pocket expenses.
  • Small government-run pension systems.
  • Low cost-of-living. Lower spending due to low consumerism. Rarely travel.
  • Rare to find elderly that own stocks or mutual funds.

Okinawa, Japan

  • They form a “moai”, which is a group of about 20 close-knit older friends who look out for each other both financially and emotionally. This acts as a replacement for assistance from blood relatives.
  • Government-run public health care system with minimal out-of-pocket expenses.
  • Low cost-of-living. Low consumerism. Low debt.

Sardinia, Italy

  • Close-knit family structure. Rely on immediate and extended family members. There are no long-term care facilities in Sardinia.
  • Government-run public health care system with minimal out-of-pocket expenses.
  • Low cost-of-living. Low spending due to self-reliant farming culture.

Ikaria, Greece

  • Close-knit family structure. Rely on immediate and extended family members. Nursing homes and assisted living facilities are rare.
  • Government-run public health care system, but no long-term care program.
  • Low cost-of-living. Low consumerism. Low spending due to self-reliant farming culture.

Loma Linda, California, USA

  • Technically, the Blue Zone consists of the members of the Seventh Day Adventist religious community.
  • Close-knit religious group that helps each other out.
  • Has a culture of self-discipline, planning, and preparation.
  • Tend to be wealthier with significant investments.
  • Tend to have frugal spending habits.

Commentary. One common thing that I notice about this list is that many are small, isolated communities, either by geography (islands), ethnicity, or religion. I feel that smaller groups more acutely appreciate the advantages of helping each other out. You can have long-term trust that you will raise your kids when they are young, and they will in turn watch over you when they are adults. When you get into larger cities, people seem to separate and start worrying mostly about themselves.

Of course, a bigger version of this is government-run health care, where everyone pitches in and agrees that nobody will become destitute due to a hospital bill. The American healthcare system is so complex and ingrained with powerful inertia that the idea of efficient, transparent, high-quality healthcare remains a huge puzzle waiting be (even partially) solved.

(I’m not saying we need the same system as Japan or Greece. But even billionaire capitalists Jeff Bezos, Warren Buffett, and Jamie Dimon realize that our bloated healthcare system is hurting our economy. Their new combined venture Haven has a goal of “simplified, high-quality and transparent health care at a reasonable cost.”)

On the smaller front, many familiar concepts still apply. Start saving early and plan ahead. Practice self-discipline in spending and lower your consumeristic appetites. If possible, move to a place where there is a lower cost-of-living. It’s so much easier to spend less when everyone around you spends a lot less! Get yourself involved in a close-knit community, whether based on blood, ethnicity, neighborhood, or religion.

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How Often Should You Cook at Home on Weeknights?

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I subscribe to a NY Times e-mail newsletter called Five Weeknight Dishes, which sends – you guessed it – five weekly “fresh dinner ideas for busy people who want something great to eat”. However, one of the recent newsletters was titled How Often Should You Cook? and you might be surprised at the answer:

One question I’ve gotten a lot since I started writing this newsletter is how many nights I cook dinner during the workweek. The answer is not five.

I typically cook a meal from scratch on two weeknights, maybe three. You don’t need to do more than that! Pick at least one recipe that makes good leftovers, doubling or stretching them with eggs, vegetables, toast or grains if necessary. Or supplement with something else in the fridge or cabinet. Dinner can be a fun, crazy mishmash; photographers will not be showing up to document the meal.

As for the other nights: My partner cooks, or occasionally we order chicken parm or go out (luxuries of urban and suburban life), or eat our preferred brand of freezer pizza with a nice big salad.

There is no single “right” answer to this question, but I still found it reassuring. I used to try to cook close to 4-5 nights per week, but now it is also closer to 2-3 nights per week. Sometimes it feels good to eat something green (or otherwise colorful), fresh, and healthy. It always feels good to share a meal with family and friends. I get the same good, wholesome feeling when I eat something where I know exactly what went into my food. It feels like hitting the reset button, and I always find that it helps keep my weight down. Saving money is secondary, but still a welcome result.

Food delivery apps are making things so convenient now, but it’s usually not very good for my bank account nor my health.

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Forced Retirement: The Time to Prepare is Now

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Here’s a random thing that happened after becoming financially independent. When I caught this opening scene of people getting fired from the movie “Up in the Air” on TV, I felt sympathy but I remember it used to give me stress and anxiety.

Ever since starting out with a negative net worth due to $30,000 in student loans, I’ve saved money every pay period because I worried about what would happen without a job. I wanted my financial life to be a robust fortress. It was a gradual process and not black-and-white, but one day I realized that I longer had to worry about a boss (or worse, a mercenary consultant that looked like George Clooney) firing me ever again.

Barron’s recently had an article So, You’re Retired but Don’t Have Enough Money to Be Retired. Now What? (possible paywall but it worked for me) which is really an excerpt from the book 55, Underemployed, and Faking Normal by Elizabeth White. Essentially, it is about people who had well-paying jobs for a long time, but hit hard times in their 50s and 60s:

I never thought it would happen to me. All my life—working at the World Bank, getting my M.B.A. at Harvard Business School, starting my own retail company—I thought of retirement as golfing in Florida (not that I really wanted to). Even after my business failed—taking most of my savings with it—I bounced back. I reinvented myself as a consultant and earned a six-figure salary. But in my 50s, the Great Recession hit, and the clients were slower and slower to call back. By age 60, it was crickets.

With nothing to speak of coming in, I was running through what was left of my savings. I started to notice friends in the same boat, trying to keep up appearances. A small group of us began to talk. All were 55 and older, well educated, with a history of career choice and good incomes. And then the bottom fell out. None of us expected to be here: in our 50s and 60s, scrimping and scraping or borrowing money from our adult children or 84-year-old mothers.

What is her advice for surviving forced retirement? Well, it sounds a lot like what you would read in an early retirement article.

The key question is not just how to tighten our belts. The real question is: Can we cut way back and still have good quality of life, still find ways to be connected to who and what we love? I believe that the short answer is yes.

A big first step in securing our futures is adopting a live-low-to-the-ground mind-set, which means that we have to drastically cut our expenses to fit our new income realities. But it also means figuring out what matters to you and what your priorities are and then cutting way back on everything else.

Once I get beyond the basics, it’s really about good health, family, and friends for me. I used to eat out a lot, and that’s something I still miss. But the women friends I rely on for sanity are all still here. It turns out we didn’t need fine dining and $12 glasses of Chardonnay to bond us.

You should happily spend money on your priorities, cut back on everything else, and realize that happiness is not about stuff. Sound familiar?

The key difference is that this is presented as a last-ditch solution after your hand has been forced. If you combine aggressively prioritized, lean spending with a solid six-figure career for a while, you have the basic recipe for financial independence. It may be much harder because of our various human tendencies, but it can be done.

We live in a culture that creates need where none existed before and defines quality of life as a metric of income. When you’re making money, all of that mindless consumption goes unchecked. When funds are tight you have to think about it. What do you really need to feel deeply grounded and content? You’ll discover that you actually need very little. It really does not cost much to be happy. I’m spending a tiny fraction of what I used to spend, and the world hasn’t ended.

What if you realized that at age 25 instead of 55?

Bottom line. Forced retirement may make you realize that you can live on a lot less money than you spend now. However, perhaps this book can help those who still have a solid job right now that they can also streamline their spending and thus be better prepared for whatever may happen in the future. I enjoyed the writing style in this excerpt and find it relatable.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.