Frugal Bachelor

Thank you setting me straight

2009-07-10T21:20:00.000-05:00

Well most of you all told me to stay put, for 6 months (a time period which I like), so I will do that. I'm thinking about moving into Extended stay hotel, that way I can have week-to-week rental agreement and sell all of my furniture, plus get internet, cable, electricity, water all included in the rent.

I'll be perfectly honest, I'm a little bit disappointed, and I was hoping you all would tell me to pack up and leave. I can't find a good excuse as long as I have paycheck coming in, but I sure as hell am looking for one.

Honestly, India would not work, anyways, I found out there was no direct flight, and it's not as close as I thought. Maybe some place like Malaysia. Honestly this seems like best option to me, it would put me 2-3 hours away, I could easily visit, and move there w/o making bigger commitment.

No, I don't have any type of paternity test, I researched this and the only trustworthy method is to go to Cebu, but that is not frugal. There is a whole industry I discovered dedicated to investigation and background check of your girlfriend in the Philippines. Also I do have visa for India (which is one of the reasons it is attractive to me), but not for the other countries. And, no, she is not the first woman I have fallen in love with, but the first in about 4 years, also she is different from the other girls. This is my thinking, if not now, when; if not her, who? And the same questions go for seeing the world.

Thank you for the advice, I will follow it, you all gave me a lot to chew on. I am fortunate there are honest folks who I can turn to ask for advice and who tell it to me like it is, and not lie to me like the rest of the world does, everybody else just tells people what they want to hear instead of the truth. Many of you told me to go for it (even ballot stuffers!), I appreciate your encouragement, but I must save a little more money. Trust me, soon I will, and I will revisit the subject in January of the upcoming year.

My favorite blogger Hobo Traveler is in Manila right now, and he is tearing the city to pieces. Every word he writes is 100% true, resonates with me, and perfectly captures the spirit of the places he visits, unlike most other travel blogs which are too eco-touristy and politically correct; I live vicariously through his blog.

Holy Shit - I can't believe what I did

2009-07-05T22:54:00.002-05:00

My apartment lease ends 8/31, and I gave notice to vacate to the leasing company. I do not have another place lined up to live, I do not know where I will be living in 6 weeks.

The last few weeks have been very difficult, I am truly at crossroads. I am facing a large number of difficulties right now, all coming at once. None of which has to do with money! I am under an unbelievable amount of stress, I feel very strong desire to run away from everything and start over.

I have not been thinking straight lately. Possibly I will leave the country on 8/31, either to Philippines, India, or Colombia. That gives me plenty of time to sell my car and get the rest of my life squared away.

I can move anywhere on the planet for about USD$2000, right now I have a little bit more than two bucks US. All of these different countries have pros and cons which I have discussed in detail already, if for any country these are not clear please let me know and I will clarify.

In the event that I leave I do not know what I will do with my job, I may resign or go on leave of absence, I still have a month or so to decide.

I am a bad decision maker, so I will let my readers choose for me. I view my commenters as volunteer therapists, putting my problems on my blog is much easier and cheaper than telling them to my therapist who then afterward asks for money.

Move to the Philippines - go on 20 year honeymoon to Boracay with Christina
Move to India - get corporate job, visit Christina on weekends.
Move to Colombia - whenever I go outside at night like I just recently did, I hear Spanish-language music on the radio, which makes me feels like I am Colombia, riding in taxi during a long night.
Stay in Texas - bring Christina here, or live solo.

You could also vote 'none of the above'. Whatever gets the most votes I will do! At the end of the week I will tally up the votes left in the comments.

Everything I thought I knew is Wrong

2009-06-28T17:19:00.000-05:00

I went to Mexico this weekend, again, and I got raped by the police, again. This time for the offense of being rich foreigner walking down the street of dirt poor third world country, police decided to search me and rifled through my wallet, stole 800 pesos before my eyes and told me to have a nice day. I am very upset and angry. Mexico is probably the most dangerous country on the planet right now, the police are these 20 year-old hoodlums who speak worse Spanish than me but carry M16's and have the right to do whatever the hell they want. There is no law in that country, and I am never going to go back there again.

On the other hand, Mexico is the foreign country which I understand the most, if I cannot survive there for one weekend, how could I possibly aspire to living in places which I don't understand at all for longer period. This incident is the final straw, I'm sick of third world countries, and subjecting myself to needless danger & bullshit, I want to stay in America where everything is perfect. I also realized last month in Bangkok that chasing women no longer is interesting or exciting to me, and no longer brings me joy. Everything I do is with the intention of avoiding commitment, my life is completely reckless and has no direction.

The state I spent the first quarter century of my life is now a foreign country to me, when I go there, I do not fit in, I am an outsider. People dress different, talk different, they are of a totally demeanor. TX is now home, when I travel I am always relieved to come home. While I thought I wanted the traveler lifestyle and have nothing, I now realize this is not at all what I want. I am very happy here, I could not imagine living anywhere else, this is where I belong. Now it's time to become serious about establishing a base.

I think about purchasing an engagement ring and boarding the 9:35 AM flight tomorrow to Manila and knocking on Christina's door, and proposing to her. I don't know how much she likes surprises, but we could apply for her fiancée visa and we could live together here. And purchase an 1800 square foot house in a cul-de-sac and have children. I asked her if she would like to live here, she said yes.

The mind boggles ....

Your House in 2039

2009-06-25T20:19:00.000-05:00

If you purchase a new house, and take a 30 year mortgage, you will be in debt until sometime in 2039. A house is something which you hope will hold its value over three decades, we live a world where change and progress are not constant, but accelerating exponentially. The same world where a century ago, salt was a precious commodity which started wars, now salt is passed out for free. In less than thirty years we went from vinyl LP's to having every performance of every piece of music ever created available in your pocket no matter where on the planet you are, one ten-thousandth the time taken between the discovery of fire, to a method to start one.

The housing industry is stagnant, has made no significant breakthrough in centuries, and needs a gigantic kick in the ass. In 2039, houses will be built by machines - technology to enable this is in development today (do search for 'Behrokh Khoshnevis')

The implications of this are profound and world-changing. Combine this type of innovation with revolutions in materials engineering and atomic scale manufacturing, and the world is a completely different place.

By 2039 the following industries may be eliminated:

Housing construction
Real estate agents (house appraisers, land surveyors, etc.)
All Banking & Finance operations related to mortgages
Home maintenance (plumbers, roofers, electricians, etc.)
Insurance
Home-Improvement industry

If your bathroom sink springs a leak, it will be cheaper to recycle the whole house, and reconstruct the entire thing from scratch, than to call a plumber, or even go to the supply cabinet to get your wrench. No longer will you rearrange furniture or paint a new room to create a new look, you will select a new housing design on a computer display and your house will be converted to it minutes. Have children, become an empty-nester, or maybe just throwing a party on the weekend, you can reconfigure your house all instantaneously. Remodeling projects will go the way of acoustic coupled modems, and real estate agents will go the way of encyclopedia salesmen.

Tens of millions of American workers who currently dedicate themselves to the housing industry will be freed up to work on more important and creative endeavors. The economy will zoom at an accelerating pace like has never been witnessed before in the history of humanity.

Western style accommodations will be built out around the world, and available for everybody, causing housing prices to plummet globally. The newly constructed houses will be better, cheaper, and more efficient than all houses currently standing. Everybody in the world will be able to afford a nice house, they will no longer be limited to the planet's elite. A billion plus people who live in shacks in urban slums, a billion plus people who live in housing made out of mud and sticks will now be on the same level as people in the richest countries. Natural disasters are no longer a problem, because people can relocate everything instantaneously. People no longer need to stick around in rotting cities (such as Detroit, Cleveland, Pittsburgh, etc. are today) just because that's where their house is located, they can pick up and relocate to the boom cities, and let the old cities die overnight.

No longer will the world be limited to the cycle of the 30 year mortgage - it will move to the rhythm of the 20 minutes it takes to build out a totally new city. This will profoundly impact how humans live, and will dramatically accelerate the pace of business, industry, and human well-being, and will make everybody's life better in unprecedented ways. The world in 2039 be unrecognizable and a very beautiful and very rich place which we will all savor.

Wealth & the Cheapening of Society

2009-06-23T19:49:00.000-05:00

I used to understand wealth as people moving up, now I understand wealth as goods/services moving down, becoming cheaper, and more accessible to the masses. The distribution of wealth, and the rise of the 21'st century global middle class centers around making everything more economical. The reason countries like America have moved up so much is not because there was a discovery of a precious commodity such as Gold within the land, it is because everything has become dramatically cheaper for us.

You can look at something like shoes. One hundred years ago, the only type of shoe you could buy was handmade leather-soled shoes. You either had to buy expensive shoes, or you had no shoes at all, which was the norm for plenty of people, even in rich countries. In the past century, everything in the world has completely changed. Now you can buy plastic sandals for $1.00, or cheap shoes made of synthetic materials for $15.00, and witness the result, almost everybody in the world who wants shoes now has them. Hand-made shoes are now only worn by the very wealthy; fewer people have them than they did 100 years ago, but yet we are a much wealthier society! If shoes never became cheap, then only the wealthy would have shoes.

Some folks denounce the cheapening of society, and yearn for the ways of yesteryear. This is true not just for goods, but for services also, which are becoming more automated. When you call your insurance company, the phone is answered by a computer instead a person. You almost never get anything repaired, you just throw it out buy a new one. Everything is disposable. But the cool thing is that whenever something gets cheaper, not only does it open up that good or service to a greater customer based, but usually the wealthy (who were able to afford to original more expensive product), also switch to the cheaper product. The end result is that product takes up a smaller percentage of their budget and becomes less of a problem, so they build more wealth. You can look at a household budget from 100 years ago, and most of the expenditures wouldn't make sense any more.

"They don't make them like they used to" - indeed, but look at the result! Whenever a product is cheapened, it should be a cause for celebration and rejoice, because it just means the world becomes a little bit wealthier. Whenever a Wal-Mart is built, whenever a factory is shuttered and moved to China, or whenever a call center is closed down and farmed out to Indian workers, but best of all when these jobs are replaced by machines, it should be a reason to be very happy.

This trend of cheapening can only accelerate. Housing is an example of something which hasn't changed much in the past few hundred years, but is very hungry for a fundamental overhaul. Healthcare is another. I am sure that the automobile can never be adopted by more than a few percent of the world (due to scarcity of roads & fuel), but maybe something like a self-driving hydrogen-powered flying personal transporter can, and is better than a car! The challenge for 21'st century business is to make everything they create accessible to the world, not just the rich. This is the natural ebb & flow of business. The way to impact the world and promote world wealth (though not necessarily the way to make money yourself) is to focus on the masses. This will create the global middle class of the 21'st century and beyond.

Matters of Life

2009-06-21T22:15:00.000-05:00

My opinion is that the planet we live on is a truly amazing place, you can step back and look at the life you are leading, and see how fundamentally it has changed just over the past couple of months, and it is just truly amazing, radical, and profound in every aspect, life is like a bright shining supernova. The world is very, very good. I look in the sky and see thousands of stars and wonder which ones harbor planets with advanced life, but there can be no question which one has the prettiest girls. My opinion is that evolution favors individuals who celebrate and embrace change, and folks who resist change are evolutionary dead ends, they are slow, and they are terrified of change, and they will go extinct within a couple of years and will leave no legacy, they are inconsequential to the future of the universe. They are not tough enough to tolerate life's turbulence; the world will unforgivingly march forward without them, and they will be left behind in the dust.

I fell in love with girl (rarely a money-saving proposition). Last Tuesday she contacted me and told me she is three weeks late, and thinks she is pregnant. Her name is Christina G., she is 23 y/o, she has exact same birthday as me (precisely one decade later), she is smart (far more intelligent than me), spunky, sexy as hell, she wears glasses, she is bursting with energy, she drinks red Wine, and eats chicken fingers with ketchup, she lives in Manila, and is studying to be nurse, she looks like Asian version of Sarah Palin, she is a beautiful goddess and a gorgeous princess and I truly adore her with all of my heart, and I want to spend every waking moment of my life with her, but how? Does anybody know trustworthy paternity test center? I have no idea how the logistics would work, one wonders if it would even be necessary if the baby is light-skinned, tall, thin, with blue-green eyes and arrives in the world singing the praises of emerging market index funds.

We live on an incredible planet, where such matters of life happen every day and are routine, we live in the Wild, Wild West of the Milky Way, where there are no laws and you can do anything you want, you are just living your life and suddenly everything changes in a flash. Short time with person thousands of kilometers away suddenly creates a whole new human lineage. The world is profound and every action you take is unprecedented, nobody can predict what will happen next. My opinion is people like Christina are the future of the planet, she is smart, she is fast, she is demanding, she is assertive, her people will rule the planet within a decade or two, her world is unquestionably the power center of the planet over the next few decades, for the foreseeable future of humanity. It makes me proud to procreate with Asian girl instead of spoiled white girl who lives in rich country, this is my contribution to evolution. I view my relationship with Christina as a fuck you to white girls worldwide.

Before anyone gets too excited, she is not even confirmed pregnant, but I'm speculating what could be next step. I believe the most frugal course of action would be to send money to Christina every month, it would be far more frugal to have her raise child there, outsourced and off-shored, instead of me here; the baby would turn out less spoiled than if it were raised in America. It is not an option for me to move in with her since I don't have visa, likewise she doesn't have visa to move here and anyways she wouldn't want to live in a dying country with bad weather. Restrictive international immigration laws, artificial boundaries which politicians put on land, mess up everything and destroy relationships. Maybe I could visit two times a year or so, for short time only since I don't have visa to stay long time. It is my desire to spend the rest of my life with Christina, and give her a giant hug and make out with her all night long and tell her what a wonderful human being she is, but international immigration laws dictate otherwise. Immigration should be free, open, and total; anybody should be able to go anywhere they want whenever they want. International borders are an obsolete concept and they should all be torn down.

Earning income from your money

2009-06-19T06:53:00.001-05:00

This is a question.

I can go to annuity calculator (do search, I do not link to commercial sites), and find that for $300,000 I can get $1,500+/month until I bite the dust.

That is 6% which is very good, much higher than the conventionally quoted 4% withdrawal rate.

So I figure they must make a profit, so maybe them skim a couple percent off the top. Is it possible to earn 7%, 8% on your money? Can I do it myself?

You can't get anything close to that from the bank, bonds only pay around 3%, stock dividends only pay a few percent. So how do you earn 6%-8%? I don't want to mess with real estate.

Tuesday Travel Tale

2009-06-16T08:03:00.000-05:00

There is a great motorcycle travel site I have been devouring. Guys post their photo of trips, and I live vicariously through reading about their adventures in South America, Africa, and in South Asia. When I get bored, this is the site which I turn to and I can explore for hours and get fueled with passion, it gives me all sorts of inspiration and ideas for trips I want to take, motivating me to push me harder to reach my financial goals. This to me is what money is all about. This is why I'm saving up money, to go on trips like these.

The planet is such an amazingly beautiful place, all of the people and different cultures, and I think this is the most amazing thing a person can do, to go out and explore, meet them in person, eat their typical food and maybe learn to make it also, shake hands with them, be a special guest in their home for a few nights, listen to their dreams and tell them yours. We live in an amazing time, where epic adventures which were impossible just a few years ago are now easily in reach. We are all very lucky to be alive right now, there has never been a more interesting or exciting period in history. If you are in good health, you have it all; you are truly blessed and can do anything, the entire globe is your backyard and you playground.

I have been reading this web site for most of the last few days, and I found this picture, taken by a South African adventurer, biking through sub-Saharan Africa, just one picture from Tanzania in a longer ride report:

His description of the picture: Most people in Africa have less in terms of worldly possessions than most people reading this can imagine, but many of these proud people consider themselves wealthy for whatever they have, be it one or more good wife, a few cattle, a bicycle etc etc. Despite being destitutely poor this man had a bungalow in Pariis with a make believe satellite dish and various cables running into his shack to suggest it had electricity. This made him incredibly wealthy and he was a happy man.

Wealthier than Sam Walton on US$300/month

2009-06-15T18:07:00.000-05:00

It is a cliché to say that your average 21'st century Joe is wealthier than the 19'th century robber baron, due to all of the lavish comforts we now have, but it bears repeating everyday because it is true, and I will go one step further and say even our brothers and sisters who eke out a meager existence have it better off than even the fat cats of last decade. Sam Walton was one of the wealthiest Americans who ever lived, however, I don't envy anything about him and wouldn't wish his life on my worst enemy.

Here are three steps almost anybody in the world can take to be wealthier than Sam Walton and not have to earn a lot:

1. Live in a beautiful place

Funny thing about the planet is most places where you can earn money have bad weather or are in some other way flawed, and most beautiful places on the planet don't offer much business opportunity. Sam Walton spent his life in Arkansas, one of the bleakest, most hopeless, and miserable pits of human existence (outside of Omaha), where the weather is cold, everything is grey, ugly, flat, and bleak. You couldn't pay me a billion dollars to live there.

Living in a beautiful place is wealth, you can compare property prices in Hawaii to Minnesota for proof of this. If you live in a place which is green, colorful, and has nice weather, you are much better off than Sam Walton.

Here are some examples of places which are very beautiful (all much more beautiful than Hawaii) which anybody can afford to live in:

Gondar, Ethiopia
Manizales, Colombia
Mt. Hagan, Papua New Guinea

Maybe Sam Walton used his wealth to visit beautiful places such as these during his life but only during a vacation, for a few weeks out of the year. You can go on a permanent vacation, so to speak, by moving to a beautiful place, and never have to put up with the bad weather which you pretend you like or find yourself bored again. You can look outside and see real life more beautiful than you can imagine, you don't need costly artificial climate control because the temperature is naturally perfect.

2. Embrace Technology

Like most rich folks, Sam Walton probably had a humongous shelf full of books, a library of CD's and movies, maybe a collection of manuscripts, first editions, and original pressings. Probably he had walls full of priceless art. Maybe he published a newsletter which his employees read. He had a huge personal network and could find out anything. He could place a phone call to Siberia and had so much money the bill was inconsequential.

The world is totally different now, and we are much better off for it. No longer are those things scare and hidden behind walls only accessible to the rich, they are free and total for everyone. Now you can put all of that into your pocket and with the internet you can now get anything for free, communicate with everyone for free. You can have your own platform and have your voice be heard, or be quiet and just consume. It's up to you. The internet has completed changed wealth, and has fundamentally democratized and equalized power across the human race.

The penetration of the cell phone has now reached more than 50% of the human population, now literally anybody living literally anywhere can communicate with anybody. Most people who live in rich countries do not understand how revolutionary the cell phone is, they view it just as a fancy version of the landline phone, if anything an annoyance, which causes too much noise at the worst possible times. Thing is, poor countries never had landline phones, because it is too expensive to run cable between every house in the world, but cell phone service is very cheap. The cell phone has fundamentally altered the course of human civilization, and has brought communication to the whole planet, not just rich people.

Now a person sitting at a computer anywhere, even in the furthest reaches of rural Africa or rural Asia, in a village which could never afford books before but now has a satellite dish, has access to more information, has more creative tools at his fingertips, has more of a platform to better himself and educate himself, and the ability to reach out to more people, than the most advanced technologists of a decade ago. Technology is the fundamental globalizing and democratizing force on the planet, the more technology we embrace, the further the barriers between rich and poor collapse, and the whole world gets uplifted together. Technology makes all of us richer, not as measured in dollars, but as measured in knowledge, capabilities, opportunities, and power.

3. Stop working so hard, and enjoy life

Sam Walton didn't really appear to have much of a life outside of Wal-Mart, his children, family, and church. You don't need Sam Walton's fortune to lead a much more exciting life than that. Also could you imagine the stresses of managing billions of dollars of wealth plus huge corporation. What a nightmare!!

Instead, try this: quit your job, live off of your savings, go off and have a great life. A few ideas: go skydiving, ride a motorbike through sub-Saharan Africa, climb Mt. Kilimanjaro, log on to YouTube and start a video blog, learn to sail, ride a dugout canoe through the Amazon (and create a film about it), go to the pub on the corner and meet people, move to Ethiopia and do some volunteer work. Leisure is wealth, if you do nothing but work, your money is meaningless.

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Anyways, you can have most all of these things on US$300/month (which is far less than the US poverty line, and is median global earning wage), so I make the claim that practically everybody living today has the capability to have much more real wealth than Sam Walton.

The $300/Month Budget

2009-06-14T08:47:00.001-05:00

The median standard of living on our planet is around US$300/month for an individual. That is $10/day. There are around 4 billion folks who live on our planet with this order of income. This is not poverty, this is international standard of middle class, for around 2/3'rds of our brother and sisters who we share the planet with.

Could you live well on that? I will take a few stabs at it:

My budget now is $1800 a month, including rent which is $800. I live alone in a 650 square foot apartment, I feel it is wasteful for me to have so much space for myself. The other $1000 is for everything else which is a lavish amount of money to be able to spend. The poverty line for a single in the USA is US$933/month; my spending is less than double that. In rural India the poverty line is 356.35 Rupees (US$7.50) /month.

For $200 I could rent a nice 2 bedroom (in south America, including utilities), and get a roommate. So the cost would be $100 from me. This can be done in the USA (which has arguably the lowest cost of living in world), by renting e.g. a 2 bedroom apartment and getting 5 roommates (in practice, family).

Tack an extra $100 for food, and that's a very comfortable amount of food, although you'd have to cook yourself a lot. You'd have to increase it by 50%-100% to be eating out.

Still have $100 left. I could just create a miscellaneous category and pump everything into it. All you really need is internet connection, and then you will be leading a life of greater real wealth than the planet's richest kings just a decade ago. Yeah, I think I could thrive on $300/month, but until I put my money where my mouth is, it's all just talk.

Here is another take of similar budget but living in tropical beach paradise.

I'd be interested in gathering folks who are willing to attempt living on $300 for a month, maybe make some sort of blog challenge?

In the long run, labor is worthless

2009-06-13T08:57:00.001-05:00

You see a lot about how the purchasing power of working American families has decreased, since it peaked sometime in the 1960's. This is good for the world, bad for Americans, and is just part of a bigger trend which suggests that over the long run, human labor is becoming less valuable as more work is performed by machines.

I am convinced that all professionals will become obsolete over the next 10 - 20 years, probably sooner. First, they will be off-shored to India. Then, they will be replaced by machines.

This includes even untouchable professions such as neurosurgeons. Very soon doctors in India, who are willing to work for 1/50'th the salary of American doctors, will be able to perform brain surgery remotely through robotics. This is an international economic necessity due to the aging baby boomers in America (and Europe/Japan) who require lots of costly medical attention, and India which is a very youthful, ambitious, and energetic population which is bursting at the seams with very inexpensive labor. You can go to India, and put job listing saying, "You need not apply unless you have an IQ of 140, are willing to work 18 hour days for forty years straight without a vacation, and earn 50,000 rupees a month", and you will have two hundred thousand overqualified applicants pounding on your door the next morning.

Indians are tough to beat, but computers will be able to perform this work faster, more accurately, and cheaper than even the most talented professionals in India. Engineers, actuaries, scientists, surgeons, writers, lawyers, accountants, even creative work such as music production and movie making - all of this work will be able to be performed better, faster, and cheaper by computers than by humans. Within a few decades, everyone will be wearing computer systems which are more intelligent and have more mental capacity than all humans who have ever existed combined. Education will be worthless because the total sum of human knowledge will be able to be uploaded to inexpensive, mass-produced intelligent machines in picoseconds.

Worthless labor implies human utopia. You can witness the democratization of human knowledge over the evolution of information transmission from stone tablet, to papyrus, to Gutenberg, to the digital age. Today billions have access to information which was once the exclusive domain of only the world's very most privileged and elite. The revolution in progress in truly unprecedented, and flies right over the head of Supersized Americans (Europeans, Japanese etc.), who are too big, too slow, and too comfortable to compete with third world nationals, let alone with machines. The cost of professional services will plummet approaching zero. No longer will expensive services be the exclusive luxury of the super powerful, but will be free and total for everybody.

Since the advent of mankind, one's financial position has been mostly tied to how much he worked, and one could always work harder to improve their situation in life. Once labor is worthless, this will no longer be the case. I believe this implies perfect human equality worldwide; no longer will wealth be a problem but all of us will be free to pursue whatever leisure we desire. There will be no poor, everyone will be equally rich. Money will become sort of like food has become; no longer an issue for humans.

My opinion is that within a couple of decades, at most three, money will be irrelevant and all humans will be equal and will be thriving in harmonious happiness. We are living in the midst of an unprecedented global redistribution of wealth.

Investment Plan - Rest of Year

2009-06-12T07:05:00.000-05:00

A little bit of investment/saving news. It took me a long time, but I finally saved up the minimum $20K US to get in on the Indian Rupee. I put in my order for Indian Rupee CD, now I have around 10 lakh Rupees sitting in a CD paying a piddly 2% APY (I have more to say about this topic, but in a separate post). OK actually more like 9.4 lakhs since I got a crappy exchange rate, although I've been planning to get in for a long time, I didn't save enough to get into the Rupee until after it started zooming big time.

As I declared last year, I am no longer saving dollars. I put in USD$10K last September into Chinese yuan which has gone exactly nowhere (fine with me). Yeah I should have been in Brazil (which I was totally wrong about), Australia, or South Africa - funny about how all of the best currencies have been in the southern hemisphere.

I think I will bank around $30,000 US through the end of the year, I'm thinking of allocating it to be as follows -

$10K - India stock ETF
$10K - China stocks
$5K - China currency
$5K - Africa or Frontier ETF ?? (just for fun)

All of this will be taxable accounts since I maxed out all of the others ones. I might sneak an extra $5K-$10K or so into something like VEIEX.

I have learned that transaction fees start biting if you dollar cost average once out of retirement account. If I am putting around $3K a month into an ETF, I must pay ~$10 in transaction fees each time I put money in where as if I save up total I will put into that ETF (e.g. $10K) then I only pay one transaction fees instead of 6 if I dollar cost average.

Most of my holdings are either stock or foreign currency. I am worried about inflation. Lots of talk about a currency crisis out there, and it seems inevitable since the US government is printing so much money. Gold is still less than a grand, it seems foolish for me not to own any. 99% of bloggers make fun of gold as an investment, which I think is funny, probably because their only exposure of it comes from late night infomercials. Gold has one clear investment objective, that is to preserve capital. $1.00 invested in gold 200 years ago is worth something like exactly $1.00 (inflation adjusted) today. Which is exactly what you want if you're looking to preserve capital. Or should I go with TIPS? I don't understand how TIPS would be impacted if the US dollar tanks, gold seems more stable since it is not tied to the dollar.

Buying Made in the USA = Perpetuating Lavish Lifestyles of Excess

2009-06-11T07:48:00.005-05:00

People complain that by choosing products which are manufactured in China where the workers are paid $5 US per day, that I am holding them in poverty. My simple trip to Bed, Bath, & Beyond makes me the big, bad, rich man keeping the rest of the world down in poverty, and perpetuating their misery.

Let's spin this around for a second. If buying stuff made in third world countries perpetuates poverty, what lifestyle are you supporting if you buy local? If you purchase a product made in the USA, you are supporting the lavish American lifestyle, you are pumping more and more money into a lifestyle which is based on overconsumption, negative savings rate, loads of debt, and purchasing more and more stuff, and displaying wealth as conspicuously as possible.

Is this the lifestyle which you want to support? Most every American - including even factory workers - enjoy lavish lifestyles of excess, which the developing world envies, such as:

Personal vehicle ownership, including all of the energy consumption and environmental mess that goes with it
Humongous, energy inefficient houses, most likely backed by a lengthy debt/mortgage repayment term
Getting out of a debt is a bigger problem than getting a loan
Air-conditioning
So much food that obesity is a bigger problem than malnutrition
Endless gadgets, big screen TV's, satellite packages and fancy iPods
Pensions & Retirement packages which start age 50 or even sooner

We can talk about personal vehicle ownership as a starter. Only 13% of the human population owns their own vehicle; personal vehicle ownership is the exclusive domain of the world's über-wealthy. The Chinese factory worker will never be able to afford their own car, but neither will the overwhelming vast majority of the population. Lack of car ownership is normal by global standards, it is not poverty. Is that my problem as a consumer? Will choosing the American-made product over the Chinese-one help bank roll the Chinese worker's car? According to my calculations, such a choice would take away exactly what is standing in the way of car ownership for the Chinese worker. The extra income going to the American worker now means he can buy a few extra gallons of gasoline (a finite natural resource), shrinking the world supply of gasoline by that much, and making it that much more difficult for the Chinese worker ever to achieve that dream.

Should every human being be entitled to own a car? 25% of the world's oil is consumed in the USA even though we are only 5% of the earth's population. Oil fields are operating at full capacity all over the world, and tanker ships are headed to American coastlines night and day to fulfill America's insatiable appetite for more oil to fuel their vehicles. I can do the math and see that if the whole world lived like an American we would need 4x as much oil as the world currently produces, and my guess is that if we produced and consumed that much, it would cause the planet would burn into a humongous fireball.

Is this a good thing?

Look, I am no financial saint. By global standards, my lifestyle is extremely lavish, though by the standards of my country I live like a pauper (I'm exaggerating, but not by much). Yes, I own a car. Yes, I keep talking about buying a pair of shoes which costs as much as my average brother on the planet earns in a month, while some of them don't have any shoes at all. Plenty of people all over the world work much harder than me and will unlikely enjoy the comforts which I have been handed ever since I won the ovarian lottery. I don't make any apologies for this, nor feel guilty about this, and neither should you; the rest of the countries are playing hardball, catching up fast, and don't need our help outside our ability to consume their stuff.

My vision and hope for the future is that the global playing field evens out a little bit. The gap in world wealth right now is just humongous. People like the Chinese factory worker, the Indian farmer, and the African miner deserve just as comfortable lifestyles as the people working just as hard and doing the exact same job in rich countries. But the current lifestyle in rich countries is not sustainable or scalable to the whole planet for environmental as well as economic reasons. The planet would self-destruct if every human being lived the lifestyle of an American factory worker, but it would be humming along great if everybody lived like the Chinese factory worker. So the intuitively obvious conclusion to me is that over the long-term the lifestyle will land somewhere between the two. A lot of wealth will be democratized (particularly technology, which will continue to get cheaper and cheaper, and empower billions and billions of more people), while some things (such as energy, and natural commodities) will have to be divided more equally than they are now.

Shopping List Snowball

2009-06-10T07:21:00.000-05:00

The only thing I purchase (besides food, rent, & utilities) is clothes. I have noticed my shopping habits lately are bad, I make list of 7 things to buy, and I purchase 5 of them. The cheapest 5 things on the list, because I think I would feel better having a bunch of things of my list instead of only a few things, so the big ticket things on my shopping list stay there forever. This is why I don't own a nice pair of shoes, I only buy cheap ones. However, I have a huge rack of shirts because shirts are cheap, I constantly buy more.

My shopping list for the next three months is as follows -

Shoes (casual) - $200
Summer Chinos (white) - $75
Dress Chinos (black) - $75
Shirts - $100 for a few
White shirt - $50
Jeans - $155
Tee-shirts - $45 for a few
Shoes (dress) - $200

My budget usually is around $300/month, usually this would mean this month I would go buy a bunch of shirts and never get anywhere.

I have finally identified this behavior, so now I am going to change my shopping behavior. Buy the biggest ticket items first and leave the cheap ones for later. I guess this is the opposite of the debt snowball, where you put the smallest debt first.

So I will buy:

June:

Shoes (casual), White Chinos

July:

Shoes (dress), Black chinos

August:

Jeans, shirts, white shirt, tee-shirts

P.S. The shoes I have my mind set on now are Allen Edmonds Elwood.

Two problems:
1. I can't find anywhere to buy them. They are sold out at all of the stores both online and off.
2. They are made in the USA. I don't own anything made in the USA, and make lots of effort to avoid purchasing American things so I'm not sure I should make exception here.

There are various Mezlans which are similar, and are made in Spain. They have leather soles although the Allen Edmonds have rubber sole.
One of then is on sale, this is only $185 at Zappo'a. But I'm thinking too forward?

What say you guys? Which of the two should I get?

TV Programs of Interest

2009-06-09T22:25:00.002-05:00

Here is a rather fascinating documentary which I caught on PBS today about the international illicit underground world of all of my favorite topics such as counterfeit everything, illegal narcotics, smuggled immigrants, weapons runners, laundered money, and so on, delves deep into the vast network backing the guy who sold you the fake Swiss watch you buy when in your Bangkok. Shows how technology is used by the bad guys and the free market reforms which have opened since the 90's exploded the black market for everything. Connects pretty much every country in the world, mainly China, also Colombia, Mexico, Russia, Italy, Nigeria, Panama and many others, but really it all goes back to China. Lots of raw footage from everywhere. I find this all intensely fascinating and is basically a commentary of on how powerful money is, the meeting of the first world and third world at international borders and trade routes, the vast disparity of wealth levels around the planet, the production of counterfeit merchandise, and the people behind it. At the end of the day, it's just raw humanity, individuals taking steps which they think will improve their lives.

More interesting than most blogs I have read in the past week or so (except this one), and makes me feel like getting off my ass and joining a smuggling network so I can earn some real money.

Check it out on PBS .. http://www.pbs.org/illicit/

Also coming on tomorrow on CNBC called "Dollars & Danger: Africa, The Final Investing Frontier". "The greatest economic crisis since the Great Depression may be the investment opportunity of a lifetime in one of the world's most dangerous places." You can bet my eyes will be glued all over that one.

Sorry State of Investment Blogs

2009-06-06T14:05:00.000-05:00

I am pretty critical of the PF blogosphere, i.e. blogs about clipping coupons, tips & tricks to stay on course with your budget, refining your credit score so you can get approved for jumbo mortgage and be stuck in debt for the next 30 years, improving your productivity and climbing the corporate ladder, and most of all optimizing your credit card debt snowball. None of the PF blogs do sophisticated investing, at the most putting a few grand worth of S&P 500 index funds or a life stage fund into a 401(k) and leave it at that. An investment blog isn't going to discuss paying off mortgage vs. investing, for example, but instead things such as how to derive income from your assets, how to protect against inflation, what is the right time to cash in your investments. I have so many questions about investing but there is no resource to turn to online.

I thought there was a whole world of investment blogs out there, I could have sworn I have run into these in the past, people who tracked their net worth in the mid-6 digits (which at the time was much more money than I could comprehend), but Google search for 'investing blog' comes up with nothing. Maybe they all went away with the financial crisis? The investment blogosphere as it is now is far less sophisticated than the PF blogosphere.

The investment blogosphere is much worse than PF blogosphere, what Google comes up with is truly pathetic, they make the frugality blogs look like Pulitzer prize winners . The only well-designed blogs are updated infrequently, none of the blogs have a lot of comments, there is no discussion.

If someone can come up with an investment blog, which has as high quality articles about staying ahead of inflation as The Simple Dollar does on saving squares of toilet paper, it would take off, and make much more money than frugality blogs, because people who are investors have money, unlike people who google how to score a free root beer float at Sonic.

Most investment blogs have an "agenda", they are very narrowly focused on some specific theme or premise, I can't find a general investing blog, at least not one which doesn't put me to sleep. Maybe the topic is too big to be covered generally. Maybe bloggers are scared about the legal liability of publishing investment advice, the de facto answer is always "talk to a financial advisor".

I also refuse to read blogs which don't display the full article on the front page, and require you to click through to read the full article, which all of the investment blogs do. I hope JD moves GRS into investing direction since he is the best writer among the big bloggers, and he can't continue blogging about debt reduction techniques forever. In any case, there is humongous opportunity out there for somebody to step up and create good investing blog. If you want to start blog to make money, please create investing blog and send me link.

Frontier Markets - When India & China aren't adventurous enough

2009-06-05T07:55:00.000-05:00

Photo by me; pedestrian bridge across border between Costa Rica & Panama

99% of personal finance blogs recommend to invest in "index funds", this is a meaningless term because there are many, many thousands of index funds all around the planet covering every possible niche and sector, so how do you choose which index fund? In reality when bloggers say this, really they mean to say S&P 500, or sometimes total index world fund.

Most of my investments are in index funds, some S&P 500, but mainly emerging market index funds, mainly China, Brazil, Russia. There are still folks out there who think investing in China is a trend, which I think is a little bit funny; I guess a lot of Brits thought the same thing about the USA in 1909 and kept all of their investments in powdered wig companies and horse-drawn carriage makers. At a certain point emerging markets will develop, and become big, just like USA, Europe, & Japan whose growth have slowed down and become stagnant, so what countries are next?

There is a class of investing known as frontier markets which are markets which are undeveloped. There are several stock indexes dedicated to frontier funds such as S&P Select Frontier Index and MSCI Barra. There is also an ETF for Frontier Markets (do a Google search, I don't want to link to it or mention the name, lest someone will think I have a commercial interest!). These indexes cover such economic hot spots such as Kazakhstan, Papua New Guinea, and Kenya.

This is certainly an interesting place to invest, the web site for this ETF is very informative and compelling, and even has audio presentation in case you are lazy like me and don't like to read. You can see that USA/Europe is the slowest growing region on the planet, so most economic growth will be in the other countries. On the other hand, even if some of these countries really do take off, it will not help the ETF that much since they are so diversified. I'm hesitant to put money into a country I have never even been to. My personal preference probably would be to buy index funds of individual countries which I think are going to take off.

There are also various ETF's tracking Africa stock markets, I'm not sure how interesting this is, OK, it is definitely very interesting, I'm just not sure how great an investment it is, since I'm not sure if Africa will develop a lot during my investment horizon. However if you look at how bad off they are now, there is no place for them to go but up. There is a lot of interesting stuff going on in Africa such as Chinese built factories and of course all sorts of mining.

I also found an incredibly informative and well-written blog about Frontier Market investing called simply "Frontier Markets". I can't even find a similar blog about plain old fashioned EM.

This segment seems worthy of a certain position of my portfolio, not a lot, maybe 5% or so. I don't expect it to take off, however it seems like an interesting place to get a piece of action. I think the world is a little bit amazing that it is so easy for anybody to invest anywhere; even just a few years ago if you wanted to invest in most of these countries it would have been very difficult, you would have to fly to the country, wear suit, and stay in first class hotel, and set up meeting with the business leaders and arrange money transfer. Now you can just sit at home in your sweatpants and purchase ETF. Surely over the long run this will make investing more efficient, and divert more and more money away from the default and lazy choice of keeping money at home. This is a huge advance for human civilization and democratizes the capitalization of business across all nations all around the planet.

20 Years ago Today

2009-06-04T07:56:00.001-05:00

Today is the 20'th anniversary of probably the most significant world political event of the past half-century, the June 4'th Incident, or as it is known popularly in the Western media as the Tienanmen Square protests. Today's date has been on my calendar for a while, I was expecting lots of media coverage but nobody cares, least of all on China, where the government has effectively shut down the internet for a few days in order to ensure social order. No bloggers mention it, no big surprise since most bloggers refuse to acknowledge human existence outside of the greater USA/Canada/Europe metropolitan area.

On June 4th, of last year, I was in Beijing, and went to Tienanmen Square, tried to at least, but the whole thing was closed down that day due to some type of ceremony. Went back the next day, and got my photo taken in front of Chairman Mao's portrait in front of Tienanmen Gate, there were many thousands of Chinese migrants also getting their photo, I was the only white man in sight.

On June 4'th 1989, I was in 7'th grade, it must have been one of the last few days before summer, and I remember our social studies teacher explaining to the incident, and how almost everybody on earth knew what had happened except for most Chinese. At the time I had no idea I would ever really care about China.

The Chinese communist party affirmed its political power, its control over the people that day, but had to give something up big, and had to make people happy. It accelerated its efforts to enact free market reforms, it was forced to because of the face it lost due to killing innocent students.

The result over the past two decades, as everybody knows, is that China has grown faster than any other country has over grown in the history of mankind. Currently it is the third biggest economy in the world, recently surpassing Germany, and its way to eventually surpass Japan and in a couple of decades the USA and return to its thrown as the biggest economy in the world, which is most likely will be for centuries, continuing its economic domination just like it has for 18 of the past 20 centuries.

I am banking on continued success of China big time, China is a key part of my investment portfolio, I hold Chinese cash (which I think is just ridiculously undervalued) which is part of my cash holdings, also Chinese stock makes up big part of my stock holdings.

If you created a stock portfolio on 6/4/1989 probably if anything you would have underweighted China, a fascist regime at the time where you had to get food ration tickets and stand in line to get a bag of rice, look at how much has changed in only two decades, or not even one generation, Ford now sells more cars in China than in the USA, who would have predicted? I don't for sure that China will stay on top forever, but I do know that anything can happen. You do not know what event is happening today or will happen in the next year or next ten years which will fundamentally shake up the world order. Make sure you have all your bases covered, the main thing is don't keep all of your money in any one country, nobody knows what will happen, and what wild and unpredictable turns the universe will take.

Shoe Updates

2009-06-03T22:58:00.000-05:00

I read all your comments on the shoes but I still wanted them, but thanks for the advice, suggestions, and feedback, which made me think and challenged me. I know that makes me a selfish bastard at the end of the exercise. Basically the only thing I have thought about for the past week or so is the shoes, and I upped the ante a bit, and decided I want even more expensive ones, namely these ones:

These ones costs $525, though. My two main concerns about owning these shoes:

1. I would constantly worry about them, such as for example, if I was wearing them and it rained, or if I was wearing them and people stepped on my toes. I don't own anything, and these would be the most expensive thing I own, except for my car. In fact, even though I don't even own them yet I have been waking up late at night having nightmare that they got ruined.

2. They are extra thing to own, an extra thing to lug around. Unlike clothes/shoes I normally buy which are cheap and disposable, which I wear for a year or so, and then donate to Goodwill, I wouldn't get rid of these so easily. So if for example, I move to India next month, or next year, I will have trouble just throwing these out unlike everything else which is junk made in China, but these are hand made in Spain.

However, they are truly bad-ass. As the ad says, "You will make your presence known when you walk in wearing this stunning Genuine Ostrich loafer from Mezlan."

I have also been taking stock of my shoes, and now realize that they all suck, and every shoe I has ever owned has sucked. I am ashamed. Somewhere recently I read that the first thing a woman notices is about a man is his shoes and his watch. I have been scraping the low-end with my Kenneth Coles and my Fossil. At one point I owned around 20 shoes, but they were all cheap. Now I only own about 6 (still all cheap). I see many guys and they wear different shoes every day, but they also all suck and are cheap. For the first time ever in my life now I keep looking at guys shoes. If only we bought two or three pairs of nice shoes for same amount of money. For all my life I have been ruining my outfit by wearing cheap shoes. I am not saying I need to start spending $500 for a pair of shoes, anyways next pairs of everyday shoes I buy will also be nicer, i.e. $200-$300 shoes.

I wasn't ever going to wear these in the United States, or any other country besides Mexico. I want to buy them specifically for an event I will be attending in Mexico. After that I will wear them maybe once every couple of months, only in Mexico and when the weather is warm, there is one specific night club I was planning to wear them in. Seems like too much to spend for something I won't use too much? But if this is so wrong, why does it feel so very right? As it stands I have about $650 cash to spend in June so I have enough money, although then I would only have $125 leftover to spend. Some people spend less time thinking about decision to buy an air-conditioned dream home for hundreds of thousands dollars, so maybe I am overanalyzing this? When I step back and think about it, if I were to splurge on either or a house, it would be far more frugal to splurge on the shoes. Maybe I can place a call to Suze Orman and she can decide if I can afford them.

However, something unexpected happened. Last Thursday, there was a shootout down in Mexico, between the army and some cartel members. One of the cartel members killed was the owner of the place where I wanted to wear the shoes, as well as a personal acquaintance. Now the night club is closed indefinitely. This happened last Thursday although the news didn't reach me until Saturday. So I don't need the shoes anymore since the club won't open any more.

I won't be purchasing the Ostrich shoes for now, thanks in part to your challenges, but I am looking for casual dress shoes which I can wear every day, like $200-$300 range, like everyday business shoes. I will keep in eye on the night club and if they find new owner and re-open it, then I will start the search process again.

Restlessness vs. Vacation vs. Gap Year vs. Retirement

2009-06-02T21:57:00.000-05:00

I found a brave new world of bloggers out there who are talking mainly about sabbaticals and gap years, in terms of taking years off every now and then. Mainly devotees of Tim Ferriss, they all use the term 'lifestyle design', which I think is a very metrosexual word and would like to avoid that term myself, even if it kind of makes sense. This style of blogs is more ambitious than the PF Blogs, instead of struggling to get out of debt they are jetsetting to Mars, maybe I will invade their space. I'm to the point where a vacation isn't enough, but neither is retirement which is too faraway and too final. I like the gap year concept, but my idea of a gap year is probably different from yours. Maybe it means going on a two-year motorbike journey through South America and going back to part time consultation gig for a few months, to fund a similar trip through Southeast Asia. Maybe I have enough cash to do all of these things without touching my retirement, how do I decide if I should?

I find myself very restless. I must work another 18 months or so to reach USD$300K savings, the magical amount which would let me withdrawal USD$1,000/month according to 4% withdrawal rate and enjoy a meager level of financial indepedence as long as I stay frugal. But it seems too long. I have begun to very actively begin researching the subjects of getting residential visa in Colombia, also researching night life in India.

I've started making detailed plans about what I will do, I want to move most likely to Bogota, Colombia, in say April 2011, and pack everything I own into one suitcase. Take the CELTA course, which takes about a month (and costs a mysteriously high USD$2000 in Bogota), then head over to central highlands and hang until I get bored, enroll at university to study Spanish, and move on. It is very cheap to live in Colombia.

In Colombia I can live with a roommate in a middle-class condo for around USD$25/week including utilities, it is very informal and there is nothing to arrange. I can also take my CELTA and use it to teach, I doubt I would do this for more than a semester at a time but it gives me something to do and also pays me money to have fun. It is self-evident to me that this lifestyle would be superior than spending USD$200,000 on an air-conditioned dream home which would tie an iron chain around my neck, along with marrying a bossy woman who would become unattractive after 5 years, and also kids who would get bratty after a few years. If I don't like my roommate I can just pack up and leave, and find a new one until somebody clicks, when I get bored with the neighborhood, the town, the country, or the continent, I can move on. Through roommate I would get instant ticket into family & friends all over the world, imagine all of the people I would meet, as opposed to "the American dream" of spending the entire day locked away holed up in your subdivision. In addition to housing my monthly budget for food would be about $150 (eating out two meals per day), maybe $25/month for laundry (sending it out of course), maybe $50 for transportation. That leaves me $600/month for entertainment which not only is more than I spend now but also goes substantially further down there. Health care is very cheap, I can go see medical doctor and the amount paid in cash for a consultation is 1/10'th the cost of my insurance co-payment to see a physician's assistant here, and service is more personal and less rushed.

India is the other country very high on my short list. I read message boards about living in Bangalore and they make me want to get on the airplane right now. It's to the point where I wonder if I am wasting away my years here or even in Colombia when I would be better off in India. This is the type of country where I can get high-powered job and live really well, enough money to jaunt over to Bangkok once a month on the weekends.

It's such an exciting time to be alive right now, the planet is abound with opportunities (as long as you are not tied down by debt, a spouse, or children) - it almost blows my mind out of the water. If I left my job today, I have no idea what I would be doing tomorrow. Not because there is not enough opportunity, but because there are too many choices! The world is an incredible place and you could never get bored here.

And this is why I feel so restless. Like a high school senior who never goes to class, I feel I'm at the home stretch and just need another year and a few months because I can be financially independent. It gets so much harder as you get to the final lap because the temptation is there just to stop short because you're able to convince yourself you saved enough.

I also have been daydreaming about semi-retirement. I visualize it, and here's what comes to mind: the beautiful green mountains of central Colombia shooting through the white clouds, the pride of the yellow, red, and blue flag which is omnipresent, all of the antique artifacts they have inside a typical home, the traditional dress of the highlands area, smiling faces filled with joy, the custom painted buses, and the cool mountain breeze; gardens filled with orchids and all sorts of color; the glittering gold; fresh green everything; the quaint country towns ; in India, women wearing colorful dresses and saris of vibrant silk & gold, lots of cows, constantly honking vehicles of all sorts, and the most wonderful food stands.

It all seems bright, shiny, colorful, and happy. I have been drinking less although I drank a lot in Asia to the point where it got me in a lot of trouble night after night, and again the last few weekends. I dread going to sleep without drinking, but on the other hand, waking up after a night without alcohol feels so great, I want to stop drinking once I reach my meager level of financial independence. Thinking of also starting to work out once I get to Colombia, join a gym and cycling through the mountains and get dental work done there too which is 1/20'th the price it is here. I think my life will really improve and I will be very happy after I move to Colombia. My biggest fear is probably that I would gain weight in Colombia, the food is so delicious, cheap, and plentiful, but on the other hand there is no Golden Corral or Jack in the Box there.

Time to sell stocks?

2009-06-01T18:24:00.002-05:00

Holy mackerel is stock market on an incredible tear. My key holding VEIEX (Vanguard Emerging Markets Stock Index Fund) is up 42.5% YTD (if you are in S&P 500 you are up measly 4.39% YTD), and I maxed out everything with that and other similar funds between November and February . I am seriously considering selling and sitting on the sidelines for a while, it seems like a great time to lock in my gains, and settle for a boring but predictable 5% or whatever the yield is now.

They say to sell in May and go away, I wonder if I should do this. I am in it for the long haul since I think Emerging markets will outperform developed countries for the next several decades, but the current performance seems too good to be true, and not sustainable.

BTW, most blog entries think if you sell you're stocks (from retirement account), it means you're withdrawing from your IRA/401(k). This is false. All you need to do is reallocate your portfolio into money market and you pay no taxes, withdrawal penalties, or fees to do so.

I doubt I will do anything for now, it is against my nature, but I will come back on December 1'st and see if I should have or not.

Frugal Bachelor Was Arrested

2009-05-31T22:26:00.000-05:00

Frugal Bachelor is a dumb ass, this weekend he went to Mexico like he does every weekend, he drove his vehicle across the international border, then found himself in bad part of town and was driving too fast, i.e. around 30 km/h; OK, maybe 40 km/h, too fast for dirt road in Mexico.

Cop was dressed in Khaki uniform, black boots, and standing on foot, he spotted Frugal Bachelor's vehicle and stood in the middle of the road blowing a whistle and signaling him to stop, he told Frugal Bachelor he was driving too fast. Frugal Bachelor asked how fast he was driving, the cop said, "I don't know, but too fast". Frugal Bachelor didn't see any speed limit sign, he didn't know what the speed limit was, the cop said he was driving in front of school and the speed limit was 25 km/h. Another cop came wielding an automatic assault rifle and they took Frugal Bachelor out of his car, put him spread eagle across their truck, patted him down, and then put hand cuffs on. They searched his entire vehicle with fine-toothed comb, and then told Frugal Bachelor he was going to prison, and put him in the back seat of police truck. They took him to the local precinct, meanwhile different cop took Frugal Bachelor's keys and drove his car to the jailhouse.

Cops patted Frugal Bachelor down again at the jailhouse, and he was asked to empty his pockets. He had nothing but a few thousand pesos, a package of condoms, and his driver's license. The cops did not try to plant drugs or weapons on Frugal Bachelor. They put him in jail cell and let him stew for a few hours, Frugal Bachelor stayed in jail cell with some scary looking Mexican guys wearing oversized polo shirts. Frugal Bachelor minded his own business and didn't try to strike up a conversation with them.

It was very sweaty and hot inside, no fans or air-con. Frugal Bachelor was tired so he took a nap on the concrete floor of his new home, then he woke up and asked to speak to the captain. The jail guards let Frugal Bachelor out of the cell and led him to back room in the jailhouse to speak to the captain. He entered back room and met the captain in an office which was basically an empty room with ugly, peeling green paint and an old school heavy-duty grey steel desk, and a Mexican police captain sitting behind it.

The captain told him he would be incarcerated until next Monday when he would see a judge to learn his fate, the captain asked him why he was driving so fast. Frugal Bachelor explained that he was in a hurry. The captain asked if he had been drinking, Frugal Bachelor said, "No, I just arrived in Mexico from the United States". Frugal Bachelor asked how much the fine would be, the captain told him it would be 1400 pesos.

Frugal Bachelor reached into his back pocket and pulled out seven 200 peso notes, he was free. The guards took off handcuffs, and gave back car keys, Frugal Bachelor was a free man. The cops forgot to lock the doors of Frugal Bachelor's vehicle while it was waiting in front of the jail house but miraculously nothing was stolen while he was inside.

Frugal Bachelor proceeded to the bars that night and drank about thirty beers, whenever the cops drove by he gave them dirty look, sometimes the middle finger. Some of Frugal Bachelor's friends saw him in the jail and asked him what he did to get arrested, Frugal Bachelor was very ashamed that he was arrested, he hung his head in shame. Frugal Bachelor hates the cops, he was pissed off because he gave them 1400 pesos, if he waited until Monday to see the judge the fine wouldn't have been more than maybe 150 pesos, but he was impatient and didn't want spend the whole weekend in jail.

What Type of Millionaire Are You?

2009-05-26T19:21:00.000-05:00

I've been reading a lot of expat literature lately, which makes heavy use of the term 'dollar millionaire'. The word 'millionaire' is not very meaningful internationally, so you must qualify it with the currency. It some currencies, you cannot buy a bowl of rice if you are a millionaire.

Here are the approximate amounts of American Dollars you would need in order to be a millionaire in different currencies in the world, and yes, I have walked down the streets of Bogota with $1,000,000 pesos in my pocket just to feel rich. Probably Ho Chi Minh city also ...

Vietnamese Dong Millionaire - USD$50
Colombian Peso Millionaire - USD$500
Jamaican Dollar Millionaire - USD$10,000
Indian Rupee Millionaire - USD$20,000
Thai Baht Millionaire - USD$30,000
Czech Koruny Millionaire - USD$50,000
Mexican Peso Millionaire - USD$75,000
Ethiopian Birr Millionaire - USD$100,00
Danish Kroner Millionaire - USD$200,000
Israeli Shekel Millionaire - USD$250,000
Peruvian Sol Millionaire - USD$300,000
Brazilian Real Millionaire - USD$500,000
Euro Millionaire - USD$1,400,000
British Pound Millionaire - USD$1,600,000

Sorry, boring post, for a boring day … As of today, I would be a millionaire if I were fortunate (?) enough to receive my bank statements in Denmark, next up I have Israel in focus. I will never be a dollar millionaire, but someday I sure would love to be a millionaire in Brazil.

Please Talk me Out of this

2009-05-25T00:11:00.000-05:00

I am pretty sure that I never have paid more than $100 for a pair of shoes before. Hey, I'm a cheapskate! Time to get that fixed, and be a man with my shoes.

I've had my heart set on these ones for a while:

They cost $425 and are made in Spain out of ostrich skin. I want to wear them with a white suit, and wearing no socks.

My readers are very good at telling me when I am off the rocker. What are the reasons why I should not purchase these shoes?

I looked for alternative brands (such as Allen Edmonds, Johnston & Murphy, and Cole Haan), but I couldn't quite find something I really like. They don't need to be ostrich but they have to be driving moccasin. What are the other optoons?

I'm also thinking about buying these J. Crew chinos:

Slim-fit lightweight chino pant (white) from J.Crew. They are $75.00.

I also need a shirt to go with the shoes, but that purchase will be longer term. Shirts are something that you can't buy online, you have to go to the store and review the shirt in person.

Fat People are not Frugal

2009-05-23T18:23:00.001-05:00

There are Americans who live in 1,800 square foot houses - which unless you are the Brady Bunch is just way too much house - who save pennies by reusing Zip-Loc bags. This confounds me, why would you spend hundreds of thousands of dollars more than you need to just for a place to hang your hat, so that you have to scrimp and save on everything else. However, I will never be able to convince anybody of this, because Americans have an insatiable appetite for gigantic houses, the real estate industry has suckered America into believing that a humongous air-conditioned castle is a need, and it is everybody's inalienable right to go deep into debt to buy them up just like super-mega-family-pack sized cartons of paper towels from Sam's Club.

In my quest for the meaning of Frugal, the one thing I am sure of, however, is that fat people are not frugal. A person who is Frugal, must be by definition trim and fit. America is full of people who are fat and obese, something like 2/3'rds of America is obese, you cannot walk down a grocery store aisle in America without being blocked by Supersized Americans wearing 'Wide Load' signs on their backs.

Food is the most basic of human needs, it is the foundation of human civilization as well as the economy, it is the only real human need aside from natural resources such as air and freshwater. Being fat means you are unable to control your most primal human desire to consume. If you cannot control that, how could you possibly control your consumption of housing, services, energy, and manufactured goods. I don't know exactly what Frugal means, but if you interpret it to be conscious use of resources, if you are fat it means you are eating too much food, therefore there is no argument to support the idea that being fat is frugal.

When I see somebody who is fat, I imagine that when they are at home they have a gigantic bucket of chocolate pudding, which they eat directly out of the container with a plastic spoon, with their face covered in chocolate, while sitting on their sofa in a stained, dirty, sleeveless, white tee-shirt. This is the impression which fat people send to me, that they are creatures of uncontrollable gluttony and self-indulgence. Of course, this type of behavior is not frugal. When I see the rolls of fat hanging off the waist of an obese individual, I see money. How much money is that guy spending on food to maintain the excess pounds which he is packing.

Sometimes you will hear data which indicates that people who spend less money on food have more weight issues than those who spend a lot of money. Lower income people buy more cheap junk food, but the rich buy healthy whole grain food. You can even look at a country such as Japan which is one of the richest and least frugal countries on the planet, yet does not have obesity issues at all, and Mexico which is an impoverished third world country and has the second biggest obesity epidemic on the planet, but their food is so delicious that maybe it is understandable; I personally also eat too much when I am fortunate enough to find myself in that nation. However, I am skeptical of this connection, generally speaking. You can look at Ethiopia which has arguably the finest and most delectable cuisine on the planet, yet they have no obesity epidemic there, because the citizens have more self-control; Ethiopia is a frugal country.

Even if you eat cheap but unhealthy junk food, all you need to do is eat less of it, which means spending less. Being fat means you are taking in too many calories, so all you have to is take fewer calories to decrease your weight. If your diet consists of pizza, cheeseburgers, and Dr. Pepper (which, incidentally, mine does) all you need to reduce the quantity you eat. Food is the easiest type of consumption to control; there is so much information available about nutrition now that you can determine the precise amount of food which is the right quantity to consume, however, you cannot find any type of equivalent formula to tell you how much house you should buy (aside from a rule of thumb which a real estate agent fabricated in order to earn a higher commission), or when is the optimal time to upgrade your television, or what automobile model is exactly right for you. The funny this is that despite this, somehow the "diet industry" is a multi-billion dollar business at least in America and other rich countries. You pay more money to eat less food? If you can successfully explain this concept to a Filipino national, I will personally take you out for dinner.

There are folks in America who spend $300/month on food. That is as much money as the median human being earns in a month. However, a kilogram of grain is an international commodity which has the same price everywhere, and earthlings regardless of nationality have identical nutritional needs. Americans just buy more food. Not long ago, being poor meant possibility of starving to death. Now food is in such over abundance that obesity is a bigger public health issue than malnutrition. Obtaining enough food to lead a healthy lifestyle is no longer an issue for human beings.