Categories
Lifestyle

Escape to Portugal

Why one freedom seeker escaped to Portugal

By Steve W

When it comes to escaping the rat race there are worse spots you could end up in than Central Portugal. That was one of the main appeals when Bolton native Owen Lloyd Martin relocated with his then-wife to the beautiful warmth of a country that spawned Port wine, Piri Piri Chicken and Cristiano Ronaldo.

Rising in the morning to capture the floating, etheral mists on the hillside or observe the wildlife moving around freely in its natural habitat, this truly sounds like an idyllic location. Martin lives near a reservoir, in the Pedrogão Pequeno region on Arrochela Farm.

Speaking to Carl Munson on Good Morning Portugal, Martin explained the joys of living near the water: “I was with a friend the other day and she was telling the story of sitting in a pontoon eating sandwiches with the children and the bread fell in. All of a sudden there was a multitude of carp all around her. She decided to get in the lake and swim with the carp,” he said.

Martin’s off grid set-up helps sustain his remote lifestyle. Solar panels add power. A limited quantity of mobile internet data keeps him connected with the outside world, while a homesteading mentality allows for fruit and vegetable growing.

Summer temperature highs hit as much as 42 degrees, although the average is a slightly cooler 36. When the rain falls, it falls, as four seasons often swing by in one day. When the cold weather comes, chimneys around the village can be spotted blazing.

“I chop wood for a fire late in the day,” Owen explains. “I’m nice and warm then. I’m asleep by the time it heats up so why expend the energy chopping wood all day?”

The dry days allow Martin to grab his wellington boots and sow seeds for food supplies. Portuguese weather does not always allow for winter gardening, despite what you might think.

Martin grows lemons, various orange types for freshly squeezed juice in the mornings, pomegranates, limes and grapefruits. Peanut plants are the latest vegetables being tested in the sunny climes.

Martin recalls the first time he realised that a tropical, distant life in Portugal was exactly for him.

“Getting up at 5 o’clock in the morning, walking down to the lake with my fishing rod and my headphones, I cast a line, saw some buzzards and an eagle, watched the carp swimming around.”

The neighbours’ home brew is also a weekly hit for this relocated Englishman. Not proficient in the language, Owen enjoys the hospitality, kindness and generosity of the Portuguese people who appreciate his attempts to communicate in the local dialect.

Sunday is market day, a time for mingling with people of all ages across the community; many engaging in religious practices. Martin concludes by explaining how his decision to leave the UK for Portugal was strongly based around freedom and personal liberation. Two core ideas that can motivate many escapers to follow their own dreams.

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Finance Lifestyle

The F.I.R.E Movement: Too hot to handle?

Written by Monica C

The FIRE Movement: Free Yourself To Secure Your Future

The FIRE movement is a popular mantra among millennials. FIRE is an acronym for either of these two: Financial Independence Retirement Early or Financial Independence Retirement Extreme.

The goal of the movement is to allow an individual to retire early and live the rest of his/her life in financial security. To achieve such goal, the individual must aggressively save money.

Retirement Talks

The best age to retire is 67. That is the time when you can take the full benefits of social security. However, did you know that the average life span of Americans is around 78 years? With that said, the possibility of living your retirement days and pension in only 10 years is high.

Besides, there is no complete guarantee that you will be in good health. By the time you retire, you might be already on your way to a nursing home. Note that most people get admitted to a nursing home at the age of 65 to 67.

On a different note, say that you graduated when you were 23 or 24 years old. If you took a job after you finished college, you have to work for 43 to 44 years before you reach retirement. That’s an awful long time.

You can, however, retire when you are 62 since you can start getting benefits at that time. But still, you only get to slash five years off of that wait time. You also have the option to withdraw from your IRA (Individual Retirement Account) sans the penalty at the age of 59. Even then, the wait is too long.

The traditional image of retirement

Overwork Issues

America is one of the countries in the world with the longest working hours. It is by default that you need to render eight hours a day, forty hours a week. On average, factoring in part-time workers, Americans work 34 hours a week.

You might be surprised to know that Americans work as long as the Japanese, who have been stereotyped as overworked people. On average, the Japanese render 33 hours a week.

However, the Japanese still beat most countries of the world if you add in the unpaid overwork time they do and the time they spend to appease their companies and co-workers — something that’s forced upon them by Japan’s workplace socialization culture.

In contast, the Germans, French, and Swedes only spend 26 to 31 hours a week on work. The Chinese, on the other hand, spend 38 to 42 hours a week. And the Bangladeshis often work for 19 hours a day.

Modern lifestyles can result in burnout

Life Balance

In addition to your work hours, you should include your commute time. Every day, on average, Americans spend 50 to 60 minutes a day commuting. Also, you have an additional 30 minutes to spend in your work for your breaks.

Another time-consuming process you might undergo is unpaid work. Unpaid work consists of things you do that you can pay other people to do for you. Examples of unpaid work are domestic chores such as cleaning, cooking, and laundry. On average, Americans spend 3 hours and 27 minutes doing unpaid work.

If you add the time you spend for work, breaks, commute, and unpaid work, you will get 13 hours. In those 13 hours, you are completely devoting your time to work, both paid and unpaid. Typically, your body requires you to have 8 hours of sleep. Adding those two, you will get 21 hours.

Subtract those 21 hours to a day, and you will have 3 whole hours for yourself. You might even spend those remaining hours eating and socializing. And what’s left? Almost a few minutes to an hour for you to spend on things that you really want to do.

That sounds like a boring life. And the only respite you have is those weekends that seem to quickly come and go. You will be lucky to dodge overtimes and get some holidays off.

With a boring life that comes with work and the uncertainty of how long people will live after they reach retirement (or if they will even make it to retirement age), it’s no wonder that early retirement sounds good to everyone.

This is where the FIRE movement comes in.

How It Works

The FIRE movement encourages people to set their retirement lower than the norm. It could be in your 40s or 30s. At first glance, it seems it’s impossible to retire at that age. Sure, you can, but you will still be swimming in debt.

Remember that student loans are just too unrealistic. The usual loan expects students to pay it off after 10 years. If you graduate when you are 24, you might finish this debt when you are 34. Yet the average student loan amounts to $40,000. Every month for 10 years, you will need to pay $333 (interest not yet included, loan type not considered, and state is not defined).

The average monthly salary for people age 24 to 34 is around $3,100. That means the amount you need to pay your student loan is more than 10% of your income.

If you are single and earning the average annual income of $40,350, you will be immediately under the 22% tax bracket. If you still live in 2017, it should have been 15% only. But since it was updated, the average salary is $2,000 than the 12% margin, which automatically landed you to 22%.

With loan repayment and tax alone, 32% of your income is lost. There are other deductions for sure and other complexities in the tax system, but this is just an overview and this section’s goal is to let you see the big picture.

Living in one of the 15 major cities in the United States can easily make your monthly living expenses range from $2,500 to $5,500. If you add that up to the tax and loan, working your butt off basically means keeping yourself barely alive and accumulating debt. And car loans and mortgage are not yet included in these calculations.

And with these little factoids, retirement in your 30s and 40s has just become a pipe dream. So, how exactly does the FIRE movement allow you to reach that promised early retirement?

F.I.R.E. enthusiasts work the numbers

First Stage: Financial Independence

It seems that the FIRE movement’s goal is pure fantasy. It’s not. And it’s not even that complicated to achieve. It is simple, but not easy, unfortunately.

FIRE is all about creating a gap between your income and expenses. The bigger the gap, the faster you can achieve financial independence. It is all a balancing act.

To widen income and expense gap, one must focus on three elements: expense, time, and income. First, one must lower expenses. Second, time must be spared. And third, income should be raised.

You might be thinking, why is time even included here? Isn’t this all about financial freedom? Yes, that’s true. For now, read through this section and you’ll eventually understand why time is part of the equation.

The difficulty of achieving the goal for the three elements depends on your current situation. The three of them affect each other and, more often than not, you might be forced to tackle each element in a specific order.

The element that you have more control over is your expenses. It is a good starting point to lower it first. Reducing your expenses does not mean that you should live frugally. You can begin by just eliminating unnecessary purchases.

For example, you can kick your fancy coffee drinking habit. If you drink one Venti Starbucks every day, you are adding $133.50 to your expenses every month. Remove that from your system and you instantly have a $133.50 surplus or income/expense gap.

This simple decision can have a butterfly effect in balancing your time, expense, and income.

The second element that you can manage is time. It is easier to manage time once you have lowered your expenses and start having surpluses. And it is easier to generate more income once you have the time.

There are many methods in freeing up time by adding a bit to your expenses. For example, you can hire someone to do your unpaid work, which are household chores. This alone can free up at least three hours of your time.

A weekly cleaner costs $25 to $50 an hour. With the surplus you generated from dropping your Starbucks fix, you get to save at least 2 to 5 hours of your time every month.

Also, not going to Starbucks to get your coffee will save you time by not going to the store to buy it or linger over your coffee there. If it takes you 30 minutes every day to get your caffeine fix in Starbucks, it means you are going to save 15 hours a month.

With that decision alone, you have saved, optimistically, 17 hours.

The third element, income, can be managed if you have done the previous two. Unless you are the ideal employee that can ask your boss give you a raise monthly, you have limited control over your income at the start.

However, once you have dealt with your expenses and time, you will be able to open up opportunities to raise your income. For example, you can use the time you spared to work online. An hour working as a freelance writer can let you earn $25 to $75.

If you have saved 17 hours and use that spare time to work as a freelance writer online, you can add $425 up to $1,275 every month. And that is a huge change in your income/expense gap. To think that you just started with merely dropping your Starbucks habit.

Once you get to this point, you can start looking for other opportunities that can let you tweak your expense, time, and income balance. After that, save all the surplus money you gained; rinse and repeat.

Everything sounds easy, right? But it’s not. Joining the FIRE movement basically means that you will sacrifice a lot.

Do you think you can give up drinking coffee in a snap? Can you give up the small luxuries that you enjoy just to reduce your expenses? Can you utilize the free time you spared and work on another job that easily?

This is just the beginning.

However, take comfort in the fact that it will only be a short and painful journey compared to waiting until you need to start wearing adult diapers.

Second Stage: Retire Early

At some point, you will reach the extremes of your expense, time, and income.

You will be at a point when you are living a simple but a seemingly frugal life. The only things you spend for are things you only need to live and be content. Your income has reached its ceiling point. Your time and schedule are configured to get as much money as you can. Every minute in your life is accounted for in order to maximize income.

You already have spare money in your bank account and it is just there.

You either feel miserable or happy with your lifestyle. If you feel the former, it is truly understandable. You are sacrificing the present for the future after all. Congratulations for reaching this far.

At this point, you should proceed to the second stage.

In the previous section, the importance of time was lightly touched upon. FIRE basically means financial independence and retire early. Managing your expenses and income to the point wherein you receive a surplus and do not have any debt already means that you are financially independent.

The only thing left now is to retire early.

However, you don’t need to be jobless and stop earning money. Early, complete retirement is discouraged by the FIRE movement. You cannot just stop working and earning and then spend all of what you have saved in this day and age.

Decades ago (particularly during the 1990s), that method worked because of the 4% rule of thumb. Unfortunately, the interest rates of bank savings cannot sustain people withdrawing 4% of their money each year anymore unless they put a bit of money back to the account.

Withdrawing 3% of savings every year will work, but that means lesser cash on hand.

So, no, retiring completely is out of the equation. This is especially true if your income ceiling is just average.

Now, the “retire early” part means that you should stop working but continue earning. Retiring early and the second stage are all about freeing up all the time you are using for work.

To accomplish such feat, there is only one way: investment.

Before, retirees could just rely on the bank to invest their savings and pay them back through interests. Now, banks pay less, which means that you should do some of the investing yourself.

You have multiple avenues to take when it comes to investments. Some people have done it through establishing and funding businesses. Some people invest their money on stocks and other financial instruments. And a few invest them on physical commodities.

You can choose where to invest your money. There is no hard and fast rule for this part. The important thing here is that you need to place your money where it will not be lost. To do that, you must know the 4Ms of investing.

1.   Management: Know how the person or entity will use the money you will invest. Also, this is a continuous process. People change. And the people in business entities come and go.

2.   Meaning: You should not just invest in a company or person in an instant. You should at least be interested in them and what they do. You should not find reading news about them a chore.

3.   Moat: This means that the company or entity has the capability to keep competitors at bay and maintain its position on the industry’s top.

4.   Margin of Safety: An entity’s stock or security has two values: market price and intrinsic value. The difference between the two is the margin of safety. If market price is low and intrinsic value is high, invest. If market price is high and intrinsic value is low, let go.

Significant People

For the past few years, the FIRE movement has become popular among millennials. But it is not exactly new. Before its current popularity, people of the previous generation were already doing it — and they were just realizing now that what they were doing has a name. A few of them, on the other hand, have become advocates and are now teaching other people to join the movement.

Here are some notable people you would want to follow to get a more in-depth look at the FIRE movement.

Mr. Money Mustache

Mr. Money Mustache is Peter Adeney’s blogging pseudonym. He is one of the popular advocates of the FIRE movement. He retired from his software engineering job when he was 30. He is now 45 years old.

His common and primary talking points are that people should own as little as possible, leave little to no environmental footprint, and enjoy financial freedom as a result. He has been featured a lot of times in mainstream media.

Here are some of the few things he likes to talk about the FIRE movement.

1.   There are no downsides in FIRE; however, doing everything to the extreme will give it one.

2.   The amount of money you initially earn does not matter much. The goal after all is to raise it eventually.

3.   FIRE is not all about early retirement. It is mostly about being financially independent and securing your future.

4.   The amount you spend does not matter much and you do not need to lead a frugal life. You can be happy as long as you can spend.

5.   The success of FIRE does not depend on a soaring stock market or a booming economy. It depends on how and where you invest your money.

6.   The bills you have to pay are just small obstacles. They will not be a problem anymore when you start raising your income and eliminating unnecessary expenses.

7.   There is nothing to fear except for fear. Again, there is no downside as long as you do it right.

8.   Focus on things where you can have an advantage. Do not put yourself in a more difficult situation. Joining the FIRE movement is hard enough as it is.

Mr Mustache starred in the documentary Playing with Fire.

Barney Whiter

Barney Whiter had a taste of the FIRE movement at an early age. When he was in high school, his parents bought a house and then the recession hit them. The mortgage payments were crippling them financially, so his parents immediately responded to it by doing massive cutbacks on spending.

Those years traumatized Whiter and he realized early how difficult it was to be in debt, especially to a bank.

He took a degree in economics and became a chartered accountant. He worked in the finance industry for two decades. Ever since he started working, he has saved half of his salary every month. All the bonuses he received went directly to his savings, too.

He lived a simple life despite his salary. He commuted to work by cycling. He rarely went out to minimize his “socializing” expenses.

By the age of 43, he decided to call it quits. His savings are now sustaining his retiree days. He never realized that he was with the FIRE movement.

Paula Pant

Her story started with her husband Will. When she was 27, she started saving up by moving to a single-bedroom apartment that cost $400 a month. They shared the room with three other roommates. After a year, they moved out.

They moved to the apartment in front of where they were staying. After a year of saving, they provided a down payment of around $220,000. Paula and her husband did not live alone. They moved again with flatmates.

Their flatmates paid their share of the rent, and since they were the ones who provided the down payment, they did not share and lived in the apartment virtually free of charge. They continued moving until they bought a home for themselves while keeping all the apartments they bought and then leased.

Their properties became a passive source of income.

Moving in and out in a continuous succession in a span of seven years while keeping the old properties cannot be done without major modifications in their finances and lifestyle.

The couple lived frugally. They drove a 15-year-old car and only replaced it just recently. They never subscribed to cable. And Paula never bought new, or rather expensive, clothes.

It was also an advantage that they moved in and out in Atlanta. Mortgage costs in that city are around 10% to 15% lower compared to other areas. Also, they themselves did the repairs to the bargain properties they bought.

Paula Pant transitioned from journalist to financial guru.

Suze Orman

Suze Orman is a renowned financial expert and has been critical of the FIRE movement. Two of her main points against FIRE are:

1.   Disaster happens. You need to make sure that you have enough money to mitigate those events. It is risky to live without a job that provides additional health insurance.

2.   People need a huge amount of savings if they plan to retire early. She estimated that you should at least have $5 million up to $10 million.

Conclusion

Regardless of which path you follow, know that securing your future financially is vital to improving your quality of life. Be frugal with your expenses, be smart with your income and investments, and you’ll have a reliable nest egg in your later years.

Categories
Lifestyle

Escaping the Rat Race

Can we get out of the Rat Race?

Written by Monica C

A lot of people, particularly those who hold 9 to 5 jobs, are often unhappy and bone-tired. Some are even desperate for something new.

Holding a job can become very exhausting. This is especially so if the pay isn’t that great. You work for long hours and yet get very little compensation or recognition for the effort that you put in. This can pile on the frustrations, but you need to continue to work because you need to make a living.

But what if there’s a way to make a change? An escape from the Rat Race?

The Rat Race Concept

The present urban working life is characterized by unpleasant, constant, and grueling competitiveness. It is not surprising that it is referred to as the rat race.

The 9 to 5 work lifestyle that enslaves modern society is a rat race. People are like rats in a maze competing relentlessly with one another to get to the cheese first. The cheese is a miserable recompense and yet rats persist in competing for it.

Holding a job requires you to compete with your co-workers to get a pay raise or a promotion.  You put in long hours. Everybody wants to get ahead, oftentimes at the expense of family life, leisure, and reflection.

The rat race typically involves the lack of work-life balance. You have very little room for independent and creative output. Holding a job usually involves long commutes, high-level stress, and a general dissatisfaction with life.

The Rat Race and Society

Society clearly supports and enforces the concept of the rat race. Almost everybody seems to think that material gain defines success. Every little child is bombarded by the message – from his parents and the school system, that if he wants to be successful in life, he has to study well, join the workforce for a well-paying job, get promoted, and get rich.

Our culture dictates that material success is the be-all and end-all of all our efforts. It is the primary consideration. Relationships, contentment, and personal happiness do not even come close.

It is not far from the truth to say that everybody is enslaved and held hostage to the dollar, pound or currency of choice.

People who are employed have to contend with multiple problems. They have to cope with heavy workloads and hectic schedules. They have to deal with a work environment that is largely competitive, goal-oriented, and coldly impersonal in character. They have to deal with stress and anxiety.

People often feel that they have no control over their lives. They run from one task to another. They handle multiple responsibilities. There is very little room for creativity, a satisfying high-quality home life, and personal satisfaction.

It is not surprising that there is a large percentage of unhappy, desperate people who suffer from emotional fatigue, depression and burnout.

Materialism

Our present-day society seems preoccupied with material possessions and comforts. It attaches great importance to money and the comforts and luxury it can buy. There is very little room for cultural, intellectual, and spiritual values.

Consumer materialism has led people to accumulate debts. There are many individuals for whom work becomes a means for self-preservation rather than an occasion for economic advancement. They accumulate a pile of bills from leading luxurious lifestyles that they can hardly afford. Now they have to spend the rest of their lives working to pay off their debts. Their jobs have become a form of slavery.

A lot of people are sick of it all. They want to break free from the rat race. They are fed up with the long back-breaking work hours. They want to break free from being programmed to purchase things that they don’t really need. They want to be free of debt.

How to Break Free

A good, well run company is responsible for seeing to it that its employees are given the resources to manage their increasingly demanding roles. It has to find ways to enable their staff to meet targets (even demanding and ambitious ones) through the application of reasonable time and effort. It has to provide technical and managerial training to help their staff cope with work demands. Many now provide stress management training like meditation, relaxation techniques, energizing hypnosis, and other similar ones to enable its employees to effectively manage mounting pressure.

That being said, it is your responsibility to acknowledge ownership of your life – and to see to it that you live your life in a fulfilling, joyful, and holistic manner. It is your life – live it.

Here are some suggestions which you may find useful:

Consider your options.

There are no hard-and-fast rules about how to make a living.

Nobody dictates that you have to plod your way Monday to Friday on a 9-to-5 work schedule. Nobody says you have to hop straight into a full-time desk job right after you graduate from school. Nobody can do anything if you decide not to suffer through 40 years of full-time work. You can opt to retire even before you reach 60 – and nobody can do anything about it.

Listen to your own drummer.

Do not allow your parents or society to dictate what you should do. If you want to leave the rat race, go right ahead.

Don’t live to keep up with the Joneses or to impress your neighbors.

A lot of people work or get into debt to buy things (which they don’t really need) with money (that they don’t actually have) just to impress their neighbors.

A lot of people fall slave to having to work hard simply because they want to impress other people. They let other people define their sense of worth. They buy things they can’t afford to impress their neighbors. They accumulate huge debts and live paycheck to paycheck.

Are they happy? Being a slave to the dollar will not bring you real happiness. In fact, it steals your joy.

Get rid of the notion that your success is defined by your wealth.

You don’t have to amass possessions simply to send the message that you are successful.

Live simply.

Do you really have to borrow money to finance another car? Do you really need a luxurious 2500 square-foot house for your family? Do you really need a lot of state-of-the-art equipment and appliances? Do you really need all those designer clothes?

If you live simply, you don’t have to put up with a job you don’t like.

Take a look at your spending habits to find out how you can cut expenses. If you have a family, get them on board.

  • Minimize going to expensive restaurants for your meals. Make it a habit to prepare easy, nutritious, and appetizing meals at home.
  • If you are single, you may want to consider moving back to your parents’ home for a while to save money. Or you may want to share an apartment with some friends so you spend less on rent.
  • Look at your subscriptions. It is highly probable that you don’t need all of them. Cut those that you don’t use much.
  • Watch DVDs with your family or friends instead of shelling out money to go to the movies. Prepare some popcorn.
  • Get rid of the cable but maintain the internet.
  • If you have student loans, look at the possibility of having them refinanced.
  • Manage your life.
Happiness by Steve Cutts – outlines the crushing struggles of the Rat Race

Your life is so much more than your job. It is just one aspect. You have to spend time in quiet reflection to think about what is really important to you. If you want to have a rich and fulfilling life, you have to pay attention and spend time on areas other than work. You have to make time for family, friends, and other social relationships. You have to include nutrition, sports, relaxation, and other fitness and well-being concerns. You have to incorporate philosophy, religion, love, fulfillment, and other similar issues.

Maintain a clear personal vision.

You have to determine what is truly important to you. You have to reflect on your values and strengths. You have to have a clear purpose in life. What are your life goals? When you know all these, and incorporate them in your life, you add meaning to your life.

Have the right mindset.

You don’t have to stop working full time right now. But you do have to open your eyes to the possibility of quitting your 9 to 5 job. You have to consider other options like a passive income scheme or a business that incorporates passion (teaching scuba diving, blogging, or doing graphic design) and the opportunity to make money.

Rising Above the Material

A person who can’t break free from the rat race shows certain characteristics. Shee lets other people define his self-worth. She thinks that being successful is defined by the lifestyle he lives and the possessions she accumulates. But is she truly happy?

A person who is truly happy has joyful, enriching, and emotionally-satisfying relationships. They feel whole. They feels at peace with themselves. They have nothing to prove to other people. They do not feel the need or see the value of endlessly pursuing material gain. They live simply in the way they see fit.

Take a close look at the society that tells you that success is defined by material wealth. It is filled with people who are overweight, frustrated, stressed out, unhappy, and in debt. 

Research points out that suicide is the Number 10 leading cause of death in our country. It probably has to do with the fact that a lot of people in this land of milk and honey are depressed from the miserable realization that they live in a dead-end society.

More and more people want to stop being part of a community that is consumer-driven, boring, spiritually empty, hollow, and enslaved to money.

As the great Pink Floyd song once stated: “It doesn’t have to be this way”. There are alternatives. You can break free of consumerism or materialism. You can get out of the rat race.

Thank you for reading. Please feel free to share this article if you found it useful.