It can be very easy and convenient to hide behind not having enough money instead of actively working to find a way forward. Mo had wanted to study abroad in college ten years ago, but understandably finishing school debt free was a bigger priority. Once out of school she was not able to live in pricey California and save for a move abroad. Things changed four years ago when an extended vacation and coming to terms with the financial outlook of her chosen profession made her reconsider moving abroad. Then in 2016 she left the states and has now lived abroad for two years.
Our next installment on the Hero’s Journey shows us how resilient we can all be. A close friend of mine has moved 16 times in her short 30 year life across three countries. As I prepare for my own journey abroad I feel dread at the upcoming changes and hope that I will be able to stick to my own values of frugality as Ai-Chan did. I also really admire her willingness to share with others and her kindness even when things were not going as well as she wished. This Hero’s journey will be a reverse one. I’ll start by bragging about her frugal super powers, the time her super powers couldn’t save her, and how all this moving may have affected her.
Ai-Chan and I met our first year of college as roommates. We hit it off really quickly and proceeded to continue to room together during our four years of undergrad in college. We often split groceries and did laundry together to keep costs low. We bonded over moving around a lot as kids and tubs of ice cream. Saving comes easy to Ai-Chan and she’s never been in consumer debt. In her own words she only has debt for the essentials: her car and student loans. Her student loans are on the ten year repayment plan so she’s due to be done with them very soon. It helps that her main hobby is free once you pay for basic utilities: Ai-Chan is a huge gamer and thinks nothing of spending an entire weekend at home.
Two weeks ago I finished the Certified Financial Planner introductory course to personal taxes and learned about a very attractive benefit of home ownership: Internal Revenue Code Section 121. Sec 121 allows the gain on the sale of a residential home to be excluded from income. The exclusion is up to $250,000 for a single person or up to $500,000 for a married couple filing jointly.
That’s a lot of money that can be excluded from taxes. However, there are some caveats if the residence was used as a rental since 2008. Yes, I know these concepts might bore some, but I was deeply intrigued. As a California native I’ve seen the housing market do amazing things. One day I may get to give someone the good news that they get $250k/$500k of income tax free. Or I may even get to benefit from it myself. The specific requirements to qualify for Sec 121 are below.
Best advice I ever got was an old friend of mine, a black friend, who said you have to go the way your blood beats. If you don’t live the only life you have, you won’t live some other life, you won’t live any life at all. That’s the only advice you can give anybody. And it’s not advice, it’s an observation.
– James Baldwin quote on Brain Pickings
It’s Actually Happening! Update on my Microfinance Volunteer Adventure
James Baldwin’s observation applies perfectly to the next chapter in my life. As I alluded to in my previous post on Microfinance ($2/day) and on the one announcing my career change (aligning your spending) I am making major changes in my life. Part of my inspiration for this definitely comes from Mo, a good friend who moved to Turkey to become an English teacher and who now lives in Japan. She has documented her travels over at Travels of Mo. The other part of my inspiration is listening to my inner curiosity more closely.
How I Found Costa Rica and Agreed to It
I’m planning on quitting my job and potentially being unemployed for a 12 month sabbatical. I lined up a microfinance institution (MFI) volunteer opportunity in Costa Rica through NGOAbroad and am scheduled to start in October, five months from now. When I first found this opportunity it felt too good to be true. Costa Rica is expat heaven, a tourist destination, and has a great medical system. For a moment I wondered whether I would actually have anything to contribute because the country is doing much better than others in South America. Continue reading “12 Month Sabbatical – Update on my Microfinance Adventure”
Our first installment of the Hero’s Journey is Corinna’s reinvention into retirement. Corinna retired as a Secretary seven years ago from City government. Since that time she’s learned a lot about herself and gained a clearer understanding around her relationship with money. Continue reading “Corinna’s Hero’s Journey – Reinventing into Retirement”
Although I’ve never hired a financial planner, I have had to hire an expert to help me do something I could potentially have done myself. Earlier this year I switched gyms and the new one had less exercise classes. After two years of either going to a class or doing cardio I had still not started weight lifting. I always had a reason to skip it. The truth was I didn’t know how. After some half-hearted attempts to learn I realized I was not disciplined enough to learn this skill on my own. The routines online confused me and my motivation barely lasted past five minutes.
Shortly after joining the new gym they offered me an introductory personal trainer session. At first I was an adamant no. At the time my main objections were that it’s expensive and it’s something I should be able to figure out on my on. But then I saw that I could afford it and realized that I was probably not going to learn it on my own. So I took the plunge and signed on for a one year contract. I can now happily say I am comfortable with my weight lifting routine. And a positive side effect is that my butt has never looked better!
So what does my personal trainer have to do with a financial planner? Both professions have experts who motivate you through behavioral changes. They have been trained to quickly spot possible problems. Plus the best coaches, either for fitness or finances, are just as excited about your success as you are. If it’s fear that’s holding you back, take a look at this great article by Michael F Kay from Financial Life Focus. Continue reading “Why Hire a Financial Planner?”
One of my nieces is starting her senior year of high school and is stressed about college. She knows she wants to go to college, but is unsure of what she will study and how she will pay for it. This is very natural, especially for children who are the first ones faced with the luxury/burden of deciding what they will do for money as adults. A few generations ago most people grew up to do what their family did. The children of blacksmiths were blacksmiths. The children of farmers were farmers.
My niece is certain that she wants to attend college because she likes academics. However, college is not the only option. High school graduates can join the military, go to a trade school, start a business or get a job. Most high-paying jobs do require a college degree, especially if you want to move up in a company. But if you go to college just because it’s expected of you, rather than because of your own internal motivation, you may have trouble completing the degree requirements. If academics is not your thing consider trade school; the school requirements are shorter, the cost is lower, and the jobs are unlikely to be outsourced to other countries.
Continue reading “Career Exploration Before Signing on for College Debt”