Friday, August 11, 2017

Buy v.s. Rent (1) That good old debate

Buying vs renting a house is a debate topic that has been thoroughly analysed.  The decision is highly personal. Sometimes you may not even have a choice!

I have been paying rent since I left my parents home to go to University. However, I've recently purchased a house. With my experience with both, do I prefer owning or renting? Below are some common pros and cons for each side of the case.

Arguments for rent / against purchase:

  • Higher mobility: Flexibility to move as your living requirements change (family grow, job change, school change). You can try to live in different area or house style with little commitment. 
  • Debt free! No burden and no impact in case of interest rate rise or market crash. You may be equity poor but you are cash rich.
  • Flexibility: You can choose to upgrade / downsize any time. If you earn more, you can move up within a few months.
  • Tax benefit as rental expense is deductible or can be claimed as non-taxable income 
  • Low upfront cost and transaction cost. You can move out from your parents before saving a substantial amount for down payment.
  • Low maintenance cost: Avoid the recurring costs like property tax, insurance, maintenance.
  • Hassle free: Just call the landlord when there is a problem around the house. 
When you live in the Big Apple, renting may seem to be the only option that make sense

Argument for purchase / against rent:

  • A place to call home: Peace of mind for owning your home. Go home everyday knowing it is yours. Knowing you can stay there even after you retired.
  • Equity building: Paying mortgage is equivalent to building your equity, which is an indirect saving in long term. You may be cash poor but you are equity rich.  While paying rent is like throwing money in ocean.
  • Inflation hedge: Mortgage payment is fixed (assume stable market and interest rate) but rent inflats.
  • Tax benefit: mortgage interest and property tax are tax deductible in most countries. 
  • Flexibility on renovation and home improvement project to make it your dream house.
  • Hassle free: You don't have to worry about being kicked out by the landlord and related moving cost.

Who doesn't want to own a detached house with double garage?

There is no right or wrong in this debate. Everyone and every city is different. I personally believe that if you have saved up the down payment, your rent payment can cover the mortgage, property purchase could be a good idea. At the same time (contradicting myself again), renting makes a lot of sense when you just start working, or when rental expense is much lower than mortgage payment on the same house.  What should you consider when deciding between renting or buying? 

Considerations in deciding between buy vs rent:

  • Your income v.s. property price v.s. rent cost: If you can save significant amount even after rental payment; if it cost much less to rent than to own, than you could seriously consider renting before you make the big purchase
  • Stage of life are you in: are you ready to settle? Are you ready for the commitment?
  • Personal preference. For example, I liked a house close to the park and transit while Mister liked detached houses with proper garage. 
  • Your age: Can you afford to wait it out?
    • At this crazy roller coaster market, if you are a fresh grad, you can afford to wait it out and see if the market would cool down. 
    • However, if you are in your mid-30s, almost 40, you may not have much time to wait, or else you may risk having mortgage payment outstanding way into your retirement. 
    • Although! If you are young and green, you have time on your side to start growing equity as possible
  • Your life style: Do you like the idea of mobility and moving to a new country or city every few years? Do you plan to take gap year off travelling every now and then? If so, renting may be your ideal. However, if you enjoy gardening, home improvement projects, and decorating your home, you should seriously consider owning!
  • Can you afford the down payment? This is obvious. Especially if we might be at the brink of a market crash, interest rate hike, you need to put yourself through all sort of stress test to come up with the home purchase budget, and stick to it.
  • Market value: I read about this "price-to-rent ratio" on Fidelity where if the ratio is below 20, buying is a better option. Frankly, I haven't really seen a big city home with a price-to-rent ratio below 20. But this can be a good comparison tool when deciding between a few properties and their "monetary value". 

Market condition had been a big deterrent for myself. Now that I look back, I feel pretty silly to have waited for so long before making the purchase.   Buy vs. Rent debate has many grey areas for considerations that warrant their own blog posts.  Let's go through them one by one:

  • How much should I spend on my rent?
  • The alternative called "rentvesting" where you  pay rent and receive rent. 
  • Considerations for purchasing my first property.
Are you also debating between buying or renting? What are the questions bothering you? Or is this a no-brainer question for you?  Do share your thoughts!

Thursday, August 10, 2017

Travelling with a toddler without breaking the budget

Greetings from the National Park! Happy 150th Anniversary to Canada!

I love travelling. Since Mochi was born, we have been on 7 flight trips together.  However, travelling with kids could be tiring and pricey if not done right. It may be easy to skip travelling all together or travel without kid. But time spent travelling with kids is such quality memory that would be treasured by the whole family for life. How to continue travelling frequently with kids?  

Here are some money tips on travelling with kids. They are great travel ideas, the saving part is just a "side-effect":

  • AirBnb or equivalent: When we stay a city for longer than 2 days, Airbnb is usually our choice of accommodation.  In our Airbnb search, we usually pick an "entire apartment" with laundry facilities. We add parking if we rented a car. You get all sort of amenities (e.g. kitchen, laundry) that wouldn't be available in a hotel. You can cook simple meals to enjoy local produce you may otherwise miss out if living in a hotel without kitchen. You get a bedroom and separate living area, which is great for enjoying a glass of wine while the kids are sleeping. How else can you get a glimpse of local life without having a close personal friend in town?  
We have had great Airbnb experience so far and hoping one day I can contribute back to that community!

  • Picnic: Picnic is a fabulous idea when travelling with kids. Just grab and picnic blanket, a few plates or boxes, some fresh produce, cheese, bread, wine, you name it. Kids can run freely on the grass while you enjoy in peace. 
Best way to enjoy a country

  • Attractions for kids: There are many attractions that I would not visit if not for Mochi. Like the playgrounds and certain museums. However, not only do toddlers and kids visit for free or discount, those attractions are actually great places for me to experience a new country - like seeing how parents interact with their kids or learning about the history of the city.
Kid friendly attractions

  • Bring your own car seat: Not all destinations is driving-friendly. We used to utilise public transportation on trips pre-Mochi. But Mochi is a napping toddler, and getting heavier by the day. To save precioua travelling time, we rented a car on some trips (like Okinawa, Banff, Naantali of Finland). Car rental companies charge you by day on items like Car seat. At US$10-50 a day, the cost adds up. We bought a light and cheap car seat just for this purpose. If you are travelling with the kid, (most) airlines check-in your car seat for free.  We easily recovered the cost of the car seat after 1 trip. 

Country specific tips

Kid friendly Helsinki, Finland
  • Free lunch in Helsinki: Travelling with Mochi to Helsinki, I learn first-hand that Finland cares about children. During summer break, children get free lunches at Helsinki playgrounds! We happened to be at a playground waiting for a nearby restaurant to open. An Finnish-American mother invited Mochi to join her kids to wait for the free lunch. It is a light but healthy wholesome lunch. 

Free lunch for kids every summer at specific parks in Helsinki
  • Free public transport in Helsinki: Public transport is free for adult travelling with a 0-6 year-old kid with a stroller/pram. 
  • Free rides at amusement park: At Linnamaki in Helsinki, some rides are free of charge regardless of age (although some has height limit). Mochi was exhausted before we even finished all the free rides. We all had a blast!
Seoul, South Korea
  • Seoul Children's Grand Park also has some free rides for kids under certain age / height. However, there are more restrictions. We didn't get to enjoy it as much.

Do you have some favourite kid trip destinations or saving tips for travelling with kids? 

Uhoh! I purchased at the peak of the housing market

From my "About me", you know that I recently purchased two houses. The two houses are in Canada where the housing market, volume and price, are both falling.  Did I purchased at the peak of the housing market?  A few friends also recently upgraded their houses. So what should you do if you purchased at the peak of the property market. Should I be worried? How could I calm myself and stop worrying? What should I do if I need to buy a house in this market?

What should I be worried about?

Negative equity: Meaning when you sell your house, the selling price cannot even cover outstanding mortgage. You may need to fork out the difference to close the sale. You need the consult the bank on how to settle the difference before selling. If you were hoping to cash out buy selling, it may no longer be an option. It may also be difficult to switch bank on a negative equity mortgage. So you should consider your alternatives before you sell.

Bank call loan: If the original mortgage require a minimum loan-to-value ("LTV") ratio, would the bank require you to reduce your loan to meet the LTV? That is usually not required as long as you keep up with your mortgage payment.

What you don't have to worry?

Value loss: If the house is your principle residence that you are living in, as long as you are able to afford the mortgage payment, there is little to worry. The value of living in the house and the saving in rental expense are value to you that should not be impacted by the market trend. As long as the property is a long term investment, you cannot worry too much. After all, you do not realise any gain or loss until you actually sell your property.

Sell at a loss: Some people may have purchased a beginner home hoping to upgrade in the future when they build a family or when heir income increase. With market crash and value drop, they make a smaller profit to upgrade to a new house. However, that newer bigger house is also becoming more affordable! However, if you really cannot deal with the idea of selling at a loss, then why not just keep the house? Rent it out!  Save up to snatch another beginner house when price is low!  You are still owning a house, although not the one you live in.

Wait out the market: You may be thinking that if the property market is calm and normal, you could have purchased a bigger house at the same price. Should I wait it out? Should I wait for the market to cool down? I could time it perfectly and purchase in the cheapest market condition.

Of course there are lucky investors who took the right bet at the right time and make loads. BUT, have you been waiting for the bubble to burst since 2008 or 9 years ago? It would turned out to be a wrong bet as the market had been rising for 9 years straight (2017).  You could have paid $75k on a $400k house in those 9 years.
Source: The Economist

Many people who try to identify the bottom of the market end up wishing "the lowest is yet to come". They think "I know it when I see it" when it comes to a cheap market. However, the market never seems low enough. What is the "bottom"? 10% drop? 20% drop? 30% drop? Market fell briefly in 2009, but it came back up before anyone could react. When the property market really take a plunge by 30%, would the employment market still keep up? Are banks willing to lend you money as easily? Would you be worried the market would tank so you wait further?

"Wait it out" is good for investors who already own a few properties. "Wait it out" is good for young lucky people. For me who wanted to own a home, has sufficient saving, and can afford the mortgage, "wait it out" is a costly mentality.

Riding on the market: In long run, even after a drop value go up again eventually. Even if the value does not go back to to your purchase value, you accumulate equity as you pay down your mortgage. For example, you would have paid $75k on a $400k property at 3% interest rate, 25 years term. Your alternative is to pay rental expense.  When I felt the market is prohibitively expensive, I purchased a smaller unit just to ride on the market. I hedged my risk of not owning a property.

With stock market, you are buying the performance and value of one (or many) companies. Companies may go bankrupt or go out of business. Company value depends on the market condition, consumer demand, government policy, amongst many other factors. Property is not like stock. By buying a house, you are buying into the prospect of the city and the country. You are buying into the population growth and people needing a place to stay.
Stock is risky, but still trend up eventually.

What to keep in mind when purchasing at the peak of market? 

Interest rate hike: One of the scarier part is that property price is high while interest rate is at the bottom. So let's put ourselves through stringent stress test. If the bank want you to go through a 6% interest rate stress test, you put yourself through a 10% interest rate test! If the bank want to ensure your mortgage payment is no more than 60% of your income, you put yourself through a 50% income test! Don't forget to put aside money for the rainy day. Then you are ready for any market condition.

We are in it for the long haul: If you don't want to sell your house at a loss in the future, don't even plan about selling! You can live small, you can rent it out. Just hold it out and the market will turn around.

Check your finance: Can I really afford that 2 garage detached? I want to be in the market, but I don't want to stretch myself. How about I buy a semi with front pad parking instead?

Look for undervalued house: Are there even under-valued house these days? There are!
- House hunt over a long weekend
- Get an inspection done on an "as-is" house where less buyers are interested
- Look into areas under gentrification, especially if you don't have kids yet. Like the areas right outside cabbage town.

Buy a solid house: Alternatively buy a solid good house. I know I'm contradicting myself, but these solid houses are those where value stands strong even in the toughest market. You may be paying more now, but you will also be selling for more in any market. What is a solid house?
- Good location - neighbourhood, school catchment, walk score, proximity to park
- Good bone - structure, footprint, lot size, detached/semi/row
- Good curb appeal
- Parking

What should you do if you own a house and you can afford the mortgage?   Plan it through different scenario. Then, just sit back, tune out, and enjoy your house!

Friday, August 4, 2017

Three Things I’ll Spend Money On (and Three I Won’t)

I read the captioned post by Mr. 1500 on BudgetAreSexy and feel inspired to write on the same topic. I'm going to share my 2 cents.
To most of us, money is a limited resources, so what a person is willing to spend money on tells you a lot about a person priority in life.

Three things I'll spend money on

Here are three things I would spend money on:
  1. Taxi rides: It takes me over an hour to get home from work by bus or subway at less than US$1. While the taxi ride takes 15 minute max, and less than US$8.  It costs 8 times more to ride a cab but I still cab. I only do it one way. If I take the $7 difference multiply by 20 days, it costs $160 a month. It is more than worth it when the extra 45 minutes is 100% spent with Mochi. 
  2. Quality shoes: I own a few pairs of Roger Vivier, Salvatore Ferragamo, Tod's and the like. They cost over $500 a pair compared to $100 or less for a pair of Nine West for other brands. However, the RV and SF are of high quality. They last 10 times longer than my other shoes. Not to say they are more elegant. I'd rather own less shoes but all quality shoes. 

  3. To each their own

  4. Ice cream maker: Ice cream is my favourite food! After contemplating the purchase for close to 10 years, I decided to splurge on a compressor ice cream maker after such a long time! When it is something you wanted even after 10 years, you have done your research and think through it, you just have to get it.

Three Things I won't spend money on:

  1. Car: Public transport and taxi costs me $200- $500 a month even if I cab everywhere. I just don't see how can I justify getting a car when parking itself would set me back $500 a month.  Most cars also only depreciate in value. Of course the math would be different depends where you live. But I always choose to live downtown close to public transport. Unless my job gets moved to the suburb, I hope I would not need a car.
  2. Books: My home is 5 minute walk from the flagship library in the city. Unless it is a book I loved so much or a book I cannot find in the library, I decided to stop buying books. I also donated all the books I won't reread. No point of owning another piece of dust collector.
  3. Designer bags: You may want to ask, why would I purchase designer shoes but not designer bags? True that I have a few designer bags. I have had many bags from many brands Miu Miu, YSL, Marc Jacob's, Balenciaga, Tod's, Marc by MJ, Kate Spade etc. (Just typing the names make me feel excited). But I learnt from the lesson. Bag is not my passion or interest. I have had a few bags turned mouldy due to humidity and poor maintenance. I now own 3 designer bags and use them for different occasions. Some people pursue new style and sell them after a few months of use. If you love and maintain your bags well, you deserve to own them. But for me, leaving expensive bags turn mouldy... The bags deserve better owners! LOL. 

So these are my priorities and choices. To each their own. What you would and would not spend money on reflects on your passion and priorities in life. How about you? What are the things you would and would not spend money on?

Sunday, July 30, 2017

Teaching kids about money

As a kid, I did not get much finance/money education at home. I was not given an investment account at young age. Nor was I being lectured on budgeting or the importance of money. However, actions speak louder than words.

The last thing I want is for Mochi to think that money is good, poor is bad, or to judge people based on money. I don't want her to value life just in money terms like going to a big house and just think the person is rich.  I do not want her to make decision solely based on money.  I don't want her to become a penny scraper for the sake of it.  I want her to know the use of money, to appreciate money but not controlled by it, to spend wisely. I will try to educate her on value and passion  by setting examples.

Good (non-finance) habits

My parents are careful about money. They value the use of money. They have habits that are not only good for your wallet, but mainly motivated by health. They never really mentioned money directly but there are some good habits I got from them.
  • Dine at home: Just like all people from "back then", we always dine at home. Only on rare occasions we would dine out. Even so, it would usually be the same few restaurants we go. It was probably the norm back in the days when parents can get off work early enough to cook a meal (and when we had helper at home).
  • Love the nature: When we are older, sometimes the normal weekend activities are "shopping, dining out and watching movie". When I was young, we spend most weekends outdoor hiking, swimming, picnicking and flying a kite on a peak, or playing at a beach. These activities give me lots of fond memories. I still love to do them with Mister and Mochi. 
  • Travel habit: Although I heard many travel stories from my dad, we rarely travel by plane when I was young. We were a family of five, which makes things challenging. It might be because of this, I treasured every trip I go on.  This is a bit difficult these days when almost everyone spend every vacation day aboard. 
  • Love an old house: We have always stayed in old buildings (actually the 10-storey building was built by a construction company owned by my grand-dad). As a result, I set a somewhat lower expectation in some aspects for my home (e.g. an old elevator, older stove).  I love old neighbourhoods and old buildings where each building has its own unique characters. I cannot imagine living in cookie-cutter new-built (high rise or houses) where there are 100 of same units / house in the same area or complex.  (Of course there are custom built houses.)
  • Library: We had huge bookshelves at home packed with books for my parents. But to us kids, we used to frequent the library.  We own a few books too, but most of them are from the library. We get to enjoy new books every few weeks.  I have been doing this with Mochi as well. Reading is a great hobby that cost little and can keep you busy and entertained even when you are all alone. 
Frequent the library since before she could walk

Value things we own

A friend told me once that she just booked a short trip for the next long weekend because her school age daughter said casually "I want to take the plane".  Next day my friend asked her daughter about the flight.  Her daughter replied "I don't want to fly anymore".   How often we tried to satisfy our kids fantasy and desire because we think we can provide, because we don't want to upset? 

Truth is, kids don't need everything they ask for. Kids can be satisfied easily.  
  • Value your belongings: In the older days (not THAT old...), consumerism was not really a "thing". People/government didn't seem to be so concerned about growth by increasing spending. We use things until they are broken and need to be replaced, not because the company came up with a new style or new product. 
  • Think before you buy: I don't think we "cheap out". My dad owned different cars (Jaguar, a car that looked like a limousine, but mostly Benz). My mom also loved shopping for brands. Her Dior shades are vintage now. She used her well-maintained LV bag for years. They choose what to splurge on. And whatever luxury they purchased, they take good care of them.   Yesterday, Mochi saw a bunny headband she liked. I told her to keep that thought. We could consider it for her birthday or Christmas. She happily repeated what I said and left the bunny headband alone. 
  • You don't need them all:  I try to teach Mochi that "something gotta give". If her library card only allows for 8 books, she has to pick 8 books out of the 10 she wanted.  Mommy has 20 days of vacation. She has to decide if she wants me to stay home and play with her or keep the annual leaves for longer trips together.  Mochi is given abundant opportunities to make decision and prioritise. She knows we cannot always get what we want (immediately or ever). 
  • Good things come to those who wait - That Marshmallow experiment: I haven't tried that Marshmallow experiment with Mochi. However, from delaying enjoyment of a snack, to waiting for the homemade ice cream to be churned and hardened, Mochi learns to wait from the very beginning.  Of course there are times she would throw a tantrum but usually it is when she felt we ignored her request.  I'm not sure if it is easier or more difficult with a 2.5 years old. Let's see if she can keep this up as she grows up! Do you have similar experience you could share? 

Manage their own money

  • Allowance (space out spending through the month): As a kid, I got a small allowance for snack, stationary, and tram rides. It was a very small allowance of maybe US$20 a month.  I know that's how much I can spend within the month. I learn not to spend it all right away.  I'd probably ask Mochi to come up with her own allowance amount which I have to approve. So she has even better understand and ownership of her money.
  • Education fund / Saving: I plan to start an education fund for Mochi (that's another topic). I will let her participate and be aware that, if she has unused allowance, she can save them to the fund for future use.  I plan to invest the fund in index funds. I will let her be aware that you get a return on a prudent investment. This is a topic I need to further investigate and share with you. 
  • For older kids - Let them own their budget: When I moved overseas to study (high school), my dad would support my finance when I was in school. I had to tell him an amount I needed, including all  calculation. He would challenge me how much a carton of milk costs.  I had no clue about cost of living until then. He usually sent us (my sister and I) money once a year. So I had to come up with an annual budget. After I started working 4-8 months a year on the co-op program at my University, I more or less paid for my own bills.  That really helped me get an understanding of money. Although I didn't care much about saving, I made sure I save some emergency fund just in case.   

Earn their own money

  • Money comes from hard work: This is another point I have been thinking about. I want Mochi to know that she has to contribute to our home. She would not be earning her allowance from helping with the laundry or dusting. However, maybe I can let her make some money mowing a lawn for neighbour, or help cleaning our rental properties.  What is your suggestion on kids earning their allowance? I would love to hear more suggestions and ideas from you!
We are all expected to help out around the house.

Education and passion

  • Learning and passion come hands in hand:  Without basic education, you cannot contribute to the society / earn a living. Without passion, money is meaningless.  Education is important and it is never too late to learn.  My dad is a great example in "life long learning". He got his lawyer license in his 50s and started his own law firm. Before that, he was always learning something. It is not about getting a "degree". It is about the passion to learn something new; the passion in life.  I will let Mochi knows the importance of learning and of passion in life. 

Giving and sharing

Finance is not just about ourselves. It is also about sharing and helping others. 
  • Giving: Although we let Mochi give to charity all the time, but she cannot quite get the meaning at her age. However, we will keep doing that so it becomes a habit.
  • Volunteering: I prefer volunteering my time than my money., especially with kids. They see the benefit immediately.  Mochi joined me to beach cleaning volunteering once. I will continue to bring her out to more volunteering. In the mean time, whenever I go to a beach or hike, Mochi and I help pick up garbage we see in the ocean and on hiking trail.

Mochi is not even 3 yet. So it may be easy for me to say. How do you teach your kids about money? Any ideas you would like to share on kids earning their allowance? 

Friday, July 28, 2017

A bit of my (finance/saving) past

As I write this article, I found that different stages of my life can be categorised by "saving rate". I do have a relatively high saving rate even in all years. One thing for sure is, there is no direct correlation on how much I spend v.s. how happy I am.  

Blank Slate

When I graduated from University, my bank account was literally a blank slate. I had 1 digit balance (or was it 1 digit overdraft?) when I started my first job after school.  While my friends took some time off to travel before they step into the society, I decided to start working immediately to "earn a living".

Work hard save hard

I was still living in student mode the first few years out of school. I don't track my spending religiously. Instead, I track my spending maybe two months a year just to get an idea of my average spending. Looking back at my record, I was actually saving 48% - 60% on my after tax income!

Saving 48% - 60% on my after tax income

I was having fun while at the same time saving lots.  How did I keep spending low? I didn't own a car, which make a huge difference. I also shared a rental apartment (i.e. those with coin laundry in the basement) with my sister. The building comes with an indoor swimming pool with outstanding view of the city.  Being fresh off school earning my own money, I did make some fancy brand purchases. However, I lived like a student in general. Those few years were some of the most carefree years in life.

Work hard play hard

Luck stroked. I landed a job in the New York City! The huge pay raise all went towards my rent (solo) right in Manhattan (Gramercy / Union Square area). At a saving rate of approximately 31%, I didn't do much budgeting/planning back then.  Regardless, those were some of the best times in my life. I still miss every single moment of it when I look back. I still keep in touch with other expat friends I made in NYC. I really enjoyed my time in the Big Apple.   

That life style continued for a few years when I transferred back to Hong Kong. Those few years were the dark age in my life from work and family perspective.  I can only say that in Hong Kong, one needs to be more aggressive with ones own career.  Luckily I had a great flatmate which was the silver lining to my life at that stage.  

A job I call a career

After long job search, I joined an investment bank. I got the best boss who not only adjusted my salary to market but also helped me get a well-deserved albeit long-delayed promotion. I work long hours most days but I feel "on track" and that I have "achieved" something.  My saving rate has always been over 45% since I joined the bank. Mister and I traveled wide and far (averaged 5 trips a year?).  Life was promising and we moved on to the next chapter of life together.

Newly wed

Wedding was costly. I was reasonable in some aspects (no fancy engagement photo session, no huge banquet) but went overboard in some (my make-up artist was not worth that price). Some said you save money living as a couple. But since I had a flatmate before getting married, it didn't make a huge difference for me. As we earn roughly similar salary, we don't share our finance. Mister did pay for rent. 

Change for the better

Mister is somewhat an "investor" compared to me. The only thing I invested in so far would be some mutual fund, government bonds, GIC but Mister has invested in stock and properties (like most normal male). He decided we should buy a family home for our future.  I guess it is about time as we welcomed our little one, Mochi, to our lives. 

If not for the crazy bidding wars in the property market, we may have purchased a house or two earlier.  After countless failed bids, we finally each has a detached house under our names. Now we are cash poor but asset rich.

Finance mixed up

Our money kind of all mixed up when we combined our savings for the down payments of the two houses. However, we are still not fully transparent with our finance. We have a joint account mainly for money transfer. Other than that, I don't know exact earnings/spending of Mister. I guess he wanted the freedom and does not want to be judged and commented on his spending.  So now saving rate is a myth for me.  However, assuming we earn the same level of income with Mister earn a bit more, our saving rate is around 45-50% now.
Our currently model is that he pays all family expenses (e.g. the Nanny, tuition, trips) while I am responsible for saving and my personal spending. Based on that, I would say we save roughly 50%. 

Next step

Now we have 2 houses, some investments, some retirement funds (RRSP & ORSO). We need to decide what to do with our money next, and how/when to retire comfortably.  I have some options and ideas in mind. Let's see if we can live our dream as we plan our longer term dreams!

Friday, July 21, 2017

What are your dreams

My blog is about planning and living my dream. So the most important thing is, of course, to know what are my dreams! There are many types of dreams:
- Day dream
- Dream in your sleep
- Big visionary dream
- "If I could be anything" dream
- Dream job / career
- Other people dream
- "All you can eat/travel/play/drink" dream
- and many many more...

So here are some of my different dreams that I could remember.

Dream in My Sleep - The Flying Dream

As a kid, I had the recurring dream of flying. Not flying in a big blue sky, but usually flying between busy streets packed with high rise skyscrapers old and new.  Most of the times, I was stuck under the overhang passageway of the highrise. I suspected that was a dream reflecting my subconscious desire for independence and adventures. Because the recurring flying dream ceased when I left my home country and joined my older sister to study high school abroad. I thrived in the excitement of the new life and new friends in a new country far away from parents and friends.
Overhang passageway

Day Dream - The Farm Dream

Before I went abroad, I was studying extremely hard preparing for public examinations. In between classes and tests, my friends and I would talk about dreams. My dream at that time was to be a "farmer" (or to live on a farm, minus the hard work). Other than the fact that Geography was one of my favourite class, I knew nothing about farming.  I considered the part about growing plants, weeding, harvesting. But the picture that entice me the most is where I would sit at a porch overseeing the farm, enjoying the sunset after a day of hard work. My friends would join me to have dinner and tea together while we would chat the evening away.  That might be my escape mechanism for studying too hard. I still have that jam lid with a picture of farm fields which I would stare at when I was bored by the textbooks.
The farm image I have in mind, where I wanted to live

The Travelling Dream

Having worked for so many years, I must admit that in between excel files and in meetings, I may think about my next vacation or weekend getaway. Before kid, I loved travelling to the less travelled countries like Myanmar, Nepal, Cambodia, Vietnam, Hungary, Prague. We have also been to the basic Italy, Sicily, Germany, Switzerland, Austria, France, Spain, UK, Turkey, Belgium, Netherlands, US, Canada, Mexico, Hong Kong, Thailand, Malaysia, China, Singapore. Even with Mochi, we continue to travel the world: Taiwan, Japan, Korea, Australia, Finland, Estonia.  There are over 190 countries in the world and I have only been to / listed less than 30 of them! Would I ever get to visit all of the countries and towns I want to experience?
Bronte infinity pool

Dream Job? or "Society Standard" Dream 

Before I attended the University, I always pictured myself being a successful business woman, living in a metropolitan condo overseeing the Thames River or Central Park or Victoria Harbour, with skyscrapers lighting up the night. I would think to myself "that is what I define as success". Having worked and lived in Manhattan, London, and Hong Kong, with a harbour view unit I call home now, I have reached the checkpoint I set for myself! My job allows me to achieve this humble goal/dream. Now what's next?
Harbour night view

The Humble Dream

I enjoy my work, especially the problem solving, analytics, and people interaction aspects. But I don't enjoy my job as much when the "need" to "earn a living" is looming. Under the daily mundane burden of life, working long hours day after day, sometimes ones dream could be very humble and basic. All I want now is to be home while it is still bright outside. Spend more time with our loved ones at a park, on a beach, at a cafe, or even just at home. Or maybe read a book, cook a meal, sleep in on a weekday, window shopping for hours. etc. etc. etc.

My Real Dream?

I have always wanted to be a travelling author.  My number one hobby is reading. One of my favourite authors travelled the world and wrote about people she met, stories she heard, and things she saw.  Although I'm not sure about writing novels for a living, that should not stop me from writing! I keep a personal journal. I've also had a few blogs before this one. But here I am, starting a new blog, sharing with all of you. You can say I am trying to "live my dream".
Spending time in the nature with my loves

Bring it all together... Next step!

O whoa. I have more dreams than I thought! Now what? What's next? Here are some key points I want to achieve:
- Keep working in my field but with better hours
- Spend more time with my loved ones
- Keep writing!
- Relax and enjoy nature with my loved ones, in my own house (sounds like retirement!)
- Travel and explore the world
- Financial security/independence

I am a risk adverse planner. I cannot just quit my job to travel. I do enjoy my job, just not so much the long hours. I have always been quite a workaholic before Mochi arrived. With Mochi, I just want more work life balance. There must be more to life than my job. I don't want my job to rule my life!

I don't need to be rich to pursue my dreams.  However, I want Financial Independence and Security so I work for reasons other than "earn-a-living" or "provide for my family". "Financial Independence, Retiring Early" FIRE is not what I want in my 30s. At the moment, I enjoy many aspects of my job.  I am proud to tell people where I work and what I do. However, I may want to have that "Early Retirement" option in my late 40s or 50s. As the Chinese saying "earn money to buy flowers" - Meaning you are not earning a living. Instead, you work to make money for own pleasure. Now I have to see how am I going to achieve this!

Are you on my blog because you are also thinking about the very same thing? You are happy where you are, but you want more in life. You are considering FIRE but, just like me, you are not sure if you can do it, not sure if it is meant for you. Welcome to join my journey of self-reflection. =)