Managing Your Money

I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too. –Steve Martin

 

 

 

Tackling this topic is not very smart. I’m certain some of my readers will disagree with some of the points I will make. Again, my thoughts are all subjective. I share them only to give you a starting-off point or an example of one way to go. People worry about money for all different reasons and most of the time, those worries are valid. I’m often asked how I was able to retire when I was 58 years old.

The average retirement age in the United States among currently living retirees was 59.88 years old. The median living retiree left work at 62 years old, and the most common age to retire was 62 years old. 18.7% of retirees retired at age 62, and a whopping 63.1% retired between the ages of 57 and 66Feb 27, 2019
Average Retirement Age in the United States – DQYDJ – DQYDJ.com

With the average age at 59.88 years old, there are people retiring a lot older and a lot younger than I was. I was fortunate to retire earlier than the median age of 62. This is how I did it:

Your Retirement Fund — When you’re in your 20s the last thing you’re thinking about is retirement. You’re wondering how you’re going to pay off your college loans, whether or not you’ll have rent money, where you’ll get the money to fix the car — you get my point. But honestly, if you want to retire at an earlier age, you have to put some money into a retirement account as soon as possible. It almost has to be like a car payment or rent. It takes discipline. I understand that for some people, this isn’t even a remote possibility. Whenever I received a pay increase, I raised the amount my employer took out of my salary for my 401K (I was fortunate to have employer contribution matching for 20 years of my career, I understand that it’s rare for employers to match these days). Because they deduct the money pre-tax, you pay less taxes on your income. You are not taxed on the money until you retire, at which point you will theoretically be drawing less annually and therefore, you will be in a lower tax bracket. Let’s just say that if you are single and you are not responsible for others, you might be able to do this.

Side note:  financial advisors told me that upon retirement I needed to be able to draw two-thirds of my annual salary in order to maintain my lifestyle. I always thought that was a crock and that they told you that so that they (and their companies) would earn more money. Most financial firms charge you an annual percentage of your savings; the more you have put away, the better they do. I guess you can’t blame them for that. I have found that my needs and desires have changed as I’ve gotten older. It doesn’t hurt that I now live in a country that is far less expensive than just about anywhere in the States. Also, I caution you to do extensive research on financial institutions. There are a lot of bad players out there and the last thing you want is to see the money you worked so hard to save, disappear.

Borrowing — When big life decisions come up, like buying a car or a house, you cannot take the money out of your retirement account. I learned this lesson the hard way. The government will penalize you in two ways:  first, you’ll have to pay a ten percent penalty for early withdrawal, and then you’ll have to pay tax on the money as if you’ve earned it — it can turn out to be thousands of dollars that you do not have. When you’re young, it’s easy to tell yourself that you can use your retirement savings and worry about it later — it’s a bad call. An alternative is a retirement fund that allow you to borrow from them (research your fund). In essence, it’s like you are the bank and you are loaning yourself money. When you pay back the loan, you are paying interest to yourself. So you are paying for the loan, but at least the payback money is going in your pocket. Keep in mind that the amount you’re borrowing has no earning power while you are paying the money back. Some whole life insurance policies offer you the same benefit. It’s better to avoid this option altogether if you can. And by the way, do not get suckered into a whole life policy as a way to save for the future. Term life is a cheaper and better security blanket for your family. And if your employer offers life insurance as a benefit, don’t count on that policy to take care of your family. If you lose your job, you lose that insurance. Therefore, you should either have money in savings to protect your family or term life insurance (if you’re young and healthy, it’s fairly inexpensive).

Saving — Save for the things you want to buy. Buying on credit is expensive and debt piles up quickly. There are guidelines about percentages of your salary that might be helpful, but we all know that you can only save money if you have money to save.

Saving Tips

54 Ways to Save

Budgeting — Budgeting is a big deal. It allows you monitor the funds coming in and going out. You’ll know what to put aside for the essentials and you’ll hopefully know what will be left at the end of your pay period. I always overestimated my utilities. I knew that my electricity bill would be high during the summer months because I hate heat. I knew my AC would be cranked and frankly, I’d pay for AC before I would buy new clothes or take a trip. Your budget should be adjusted whenever you have a major financial change (pay increase, rent increase, mortgage, etc.). Spending within your means is essential. People end up under water because they spend more than they earn.

Frivolous Spending — Small extravagances are dangerous. I remember working with people who stopped at Starbucks on the way to work everyday. They spent $10 a day at a coffee shop everyday and that was breakfast 10 years ago. That adds up to $200 dollars a month for coffee and a breakfast sandwich. I always made coffee and had oatmeal or cereal at home; saved me thousands over the years. That’s just one expense — think about all of the others you can avoid or live without.

I have used frivolous spending as a reward I dangled in front of myself if and when I achieved long and short-term goals. If I had a great meeting at work, I’d treat myself to a morning cappuccino. It makes for a sweet reward and a little private celebration. If I achieved a big goal (like my Ph.D.or a big promotion at The French Culinary Institute), I’d treat myself to a nice vacation or I would upgrade my car. I’ve never really cared for fancy resorts. I was once treated to a few days at a Ritz Carlton Resort in Arizona. I ordered a cocktail poolside and it was $25; I thought to myself, I could have bought myself a new shirt for that much money.

Credit Cards — Credit card debt is the worst debt you can have. Well not true, if you borrowed money from my mother’s friend Vinnie in Brooklyn and had to pay him back twice what you borrowed, that was pretty bad. The problem with credit cards is that they allow you to pay back a minimum amount each month and before you know it, your debt is greater than your monthly income. I once gave all of my credit cards to a friend and I told him to never give them up, even if I begged. Spending can become an unwanted addiction. Keep one or two low interest cards to have for travel and emergencies. There are also cards that draw from your checking or savings; even better.

Mileage programs — Credit card companies and airlines have become very greedy (I know, they always were). There was a time when your miles meant something. Now there are enormous fees that come along with “free” tickets or hotel rooms. I personally like hotels.com; you get a free room after you’ve booked ten nights using their service. The fees and taxes you pay for your free room are nominal — I’m wondering how long this program will last.

Going Out — Going to bars will set you back. A night at the bar could be outrageously expensive. If the point is to hang out with your friends, you should consider taking turns hosting. Beer in the supermarket is a lot cheaper and a bottle of vodka can go a long way. Don’t do take out — way too expensive. Some sandwiches or snack foods will save you lots of money. It’s not being cheap, it’s being smart (just to make you jealous:  a beer at a bar or cafe in Faro is one euro or 1.50 euro; a mixed drink is usually 3 euros and sometimes even less. Crazy huh?

I was at a bar with friends in New York City last year and I decided that since they all came to see me, I should buy a round. I looked at the check to see what I should tip and the check was over $100 — sticker shock!

Eating in Restaurants — I love eating out; as does most of the world. Letting someone else cook and do the dishes is quite a treat. I know people who never cook or eat in and I have to say I’m a little jealous. Similar to drinking in bars, eating out can cut into your savings or add to your monthly budget. If you’re trying to save for a house or a college education, you might consider either cooking more or eating at less expensive restaurants. I love my own cooking so this isn’t too much of an issue for me. When I lived in New York and Maine it was difficult to avoid eating out a lot. When I was at the French Culinary Institute I had to eat out to keep up with our alumni and current food trends. Then of course, most of my friends are big time foodies and most of our social activities centered around food and eating out. Every once in a while I would suggest taking a long walk or eating in just to mixed things up a bit and save some cash. Keep track of what you’re spending at restaurants. When you look at the amount, it may help you cut back.

 

Vacations — I love Airbnbs because I can cook some of my own meals. So many benefits if you like to cook:  you know the ingredients are fresh and you can save lots of money. I also do a lot of research on off-season bargains, etc. It’s so important to get away; it’s a great way to gain perspective and escape from your worries for a bit. For me it’s always been a good excuse for allowing myself to shut down. It’s also a great opportunity to spend leisure time with friends. I also get extra satisfaction from having snagged a bargain.

Generosity — If you’re from a big family, there are lots of weddings, showers, birthdays, anniversaries and different ways to celebrate. And then there’s Christmas, Hanukkah, bar mitzvahs, oy vey. Being generous and buying expensive gifts is great if you have a load of cash, but let’s face it, few of us do. Gift giving should be more about showing someone you care with a token gesture, but it’s become competitive and sometimes the expectations are unfair and unrealistic. For example, if you don’t spend a lot of money on a unique Valentines gift, it means you don’t love your partner. Sometimes a discussion about limits and expectations is warranted in order to keep things reasonable. More communication is always better. I think it’s great to be generous, but also prudent to live within your means.

Keeping Your Eye on the Prize — If early retirement or retirement in a beautiful place is your goal, keep it dangling in front of you at all times. What will it take to get there? How much do you need to put away annually? Where can you cut back in order to get there faster? Entice yourself with photographs and journal entries describing what it will be like.

What I Might Have Done Differently

Regrets are a waste of time and it turned out pretty well for me despite the mistakes I made, but for your benefit, the following are some things I might have done differently:

  • I should have started savings earlier.
  • I spent a lot of money on a Whole Life insurance policy thinking it would grow over time and benefit me in retirement. It was a waste of money and I eventually cashed it in.
  • I spent a lot of money on silly gadgets (i.e. kitchen tools, TVs, electronic equipment) throughout my life. I wish I had been a bit more prudent.
  • I spent way too much money on “the other guy” in relationships; oh well.
  • I had a little country house in Pennsylvania for ten years. If I could do it over, I’d rent. Buying a second home is great for entertaining and bragging rights, but it is very expensive and a lot of work. I spent most weekends doing repairs and taking care of the yard; hardly a place to relax and unwind (although I did enjoy some good times there).
  • Sometimes I forget to check to see what I have in the refrigerator or pantry. I end up buying too much of something and end up having to throw away food that is no longer fresh.
  • I’ve always enjoyed casinos and I’ll leave it at that.

Note:  My brother and his wife are visiting from the States. I told my brother I was writing this blog and this was his reaction:

“Chris, you don’t understand, the only person you have to take care of is yourself. I have a wife, children and grandchildren to care for. It’s a lot harder for me bro.”

This is the reaction I feared. I’m hoping my readers can find something helpful here. If I missed anything, please chime in.

 

I see the moon over Faro (left) in the morning (back view) and the sunset over the Ria Formosa in the evening (right, terrace view) and it makes all the sacrifices I had to make to get here worthwhile.

 

 

 

 

Traveling as an American Expat

My New Backyard (Europe and Africa)

 

 

Happy New Year! It’s nice to be back after a couple of weeks of celebrating and traveling.

If you prefer a travel blogger who provides the easiest way to get there and all the places to go, stay and eat; that’s not me. I’ll give you a glimpse of what I experienced and then some thoughts on culture, value, ease, etc. I may occasionally plug an exceptional restaurant and/or hotel. I want this to be fun and it won’t be if I have to chronicle my trips from start to finish.

I titled this piece “Traveling as an American Expat” because I noticed that each time I have left Portugal it has been very easy to exit and even easier to re-enter. I’m not stating that every American has the same experience that I have, but I have admittedly been pleasantly surprised. I have left Portugal a dozen times and I have only had to show my resident visa once and that was in Edinburgh and it took all of three seconds. I look around at border patrol/customs and I notice others do not have it as easy; this is especially true for middle easterners and that makes me sad. I won’t go into political implications and biases, but suffice it to say that I am ashamed of how many in this world are treated because of their residence or religion.

Allow me to come clean about a few things before I begin:

  1. I am extremely fussy. I like things a certain way and I’m rarely if ever completely satisfied; ask my friends.
  2. I often learn as I go. Because I sometimes make impulsive or rash decisions, I usually make a mistake and then try not to repeat it.
  3. I don’t take pictures of everything and I don’t go on social media every time I have an experience. I’m trying to be more present and that means less time on my cell phone.
  4. I don’t rely on TripAdvisor or sites where people share their opinions. I find that the average person’s standards are not up to snuff. I’m feeling somewhat hypocritical because I have been known to share my dining critiques on social media. Some people will write nice things because they can never say anything bad. Some people will always be nasty because they have no idea how else to be. Some people will write about food:  quality, taste, value, and so on and they know nothing about food.
  5. I truly love traveling off-season. The deals are hard to beat and there are so few tourists, you get a true sense of what it’s like for the locals. You may discover that some places are closed off-season or hours might be curtailed; a minor inconvenience I am willing to put up with. Be sure to research the weather if that is a factor for you. I prefer to travel to places where temperatures are mild in winter.

 

Asilah, Morocco

 

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I took this photograph from the living room  our Airbnb in Asilah

 

I took a day trip to Tangier over 15 years ago. I have always felt that since I had a guide and I only spent eight hours there, that it wasn’t fair to say much about Morocco. The last time I took a ferry from Tarifa, Spain and to be honest, it was more about stepping foot on the African continent. I wanted to travel to Morocco the same way this time; however, the ferry schedule off-season is sporadic and getting to and from Tarifa would have been no easy task. Instead, I took a comfortable and very affordable (34 Euros roundtrip) bus to Seville, Spain and then a flight on RyanAir (120 Euro round trip with checked bag). RyanAir is a no frills airline. Check-in is sometimes chaotic; however, the staff is efficient and travel is a bargain. I had a new airplane on my return flight which was very comfortable. Honestly, the flight is 30 minutes and the best part of that is that if you have to pee, you can hold it in. When you arrive in Tangier, you breeze through passport control because there are no other people at the airport. I don’t believe there are more than 10 flights going in and out of that airport in a 24 hour period; it’s almost eerie it’s so void of people.

My friend Patrick rented a car to get to Asilah and there were no other people at Avis so we got our car in five minutes. Again, we left the airport without seeing very many other people. Take note that if you decide to drive on Moroccan highways (toll roads) you need Dirham because they don’t accept anything else except Moroccan money at the toll booths. The roads are new and easy to drive on; except for the very strong winds that Patrick was forced to navigate.

When we arrived in Asilah we followed our GPS to the house, but it took us to a huge public outdoor bazaar. There were hundreds (maybe thousands) of Moroccans participating in an outdoor festival. When were a little lost looking for our Airbnb. The crowds were walking in the streets and the people did not really seem to notice our car, nor did they care to move for us. It was a strange experience. We had to crawl through the crowds of people. We eventually got hold of our host who told us that we could not park outside of the house which was located inside a walled city — the Medina (not the famous one). The Medina was filled with shops and homes and very narrow streets. We had to park in a paid lot in the middle of the festival and walk to our house. It was only meters away from the parking lot, but prior to setting out to find our place, we had no idea how far we’d have to lug our bags.

 

We found our house, which was not quite like the photos, but isn’t that usually the case. Still, it was a beautiful house with ocean and Medina views. We would all have been happier if it wasn’t so cold in the house. It took us 24 hours to figure out how to make it warm and we only had 48 hours. The best thing about the house was Fatima. Fatima and her husband are caretakers for the house and they truly did take good care of us. We had a terrific breakfast and they made us a fire. Fatima quietly disappeared and made-up my bed during breakfast. I’m nearly 60 years old and I’m not sure anyone has made-up my bed since I was five years old — that was a real treat.

The house was in the Medina (not the one in Saudi Arabia), a walled city in Asilah, (click for more from Lonely Planet).

We had a full day to explore the Medina and the surrounding area. Fortunately, we are all walkers and so we walked. The Medina had narrow streets and pathways and lots of artisan shops (see my big purchase below).

We decided to celebrate New Year’s Eve at a restaurant in Asilah and we stumbled upon:

Port IV (click) Restaurant

This is probably Asilah’s best place to eat right now and we enjoyed it immensely. The service was good and almost all of us were happy with our choices (no photos, sorry). Having a full bar was a bonus and the owner made me a very authentic gin martini. I was one happy fella. Although I was unable to stay up till midnight, I did enjoy being with friends and being in Morocco; it’s a night I won’t soon forget.

 

Tangiers (Tanger for the locals)

 

 

As I mentioned earlier, I visited Tangier years ago. I had only seen a small part of the city and from what I have heard, it has changed quite a bit. I stayed at the Movenpick Hotel and Casino for two reasons:  First I got a great off-season rate for this four star property and second, I was in the mood for some blackjack. Both paid off. My room was spacious and beautifully appointed (some really nice bathroom products as well) and the casino was pleasant and on the second day, I celebrated a small winning streak. I had a nice meal at Miami Restaurant which was nearby. Their French pastries were especially lovely. Most Moroccans speak French and there were French pastries at every turn (you see smatterings of French culture). There was a great deal to enjoy and celebrate. I went home a winner in every sense of the word.

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The two official languages are Modern Standard Arabic and Amazigh (Berber). Moroccan Arabic (known as Darija) is the spoken native vernacular. The languages of prestige in Morocco are Arabic in its Classical and Modern Standard Forms and French, the latter of which serves as a second language for many Moroccans.

Languages of Morocco – Wikipedia

 

 

Note:  I walked into the center of the city and if I’m going to be honest, although the city was clean and no one warned me to be careful, I did not feel safe. Beggars follow you and they do not take no for an answer; it can be off-putting and disturbing.

 

Seville, Spain

 

 

I am in love. Seville is a beautiful, culturally rich, culinary mecca, just three hours door-to-door from my place in Faro. I only just returned home, but I have already booked a hotel for the end of February. I now know that Seville will be my home away from home. I am delighted to have rediscovered this breathtaking city.

You will enjoy these two pieces written by my food writer friend Joanna Pruess. She wrote about Seville for Specialty Food Magazine. Joanna primed me for my Seville adventure with her delicious point of view and fabulous recipes:

Tasty Bites of Seville (click for article)

Savoring Seville (click title)

The Seville bus station, train station, and airport are all linked by a four Euro bus that has many stops throughout the city and runs every 20 minutes or so. The bus and train stations are centrally located and easy enough to get to. These days Uber rides are very inexpensive and although I love to walk, you can’t beat a five Euro Uber ride across town. The drivers usually speak English and they are (for the most part) good drivers.

I stayed at very nice Airbnb for 65 Euros a night. It was a two bedroom apartment in a great area — 20 minutes by foot to just about everywhere.

Note:  I have mixed feelings about Airbnb (see one of my earlier blogs). Some hosts are gracious and generous and truly want you to have a great stay. Others, seem to only care about making a buck. Be sure to read reviews and check for amenities. After awhile, you become better at discerning the true intentions of the hosts. They also have a review policy I totally disagree with:  both parties have to complete a review in order for the review to be posted. If you write a warranted poor review and the host does not review you as a guest, the review will not be posted by Airbnb — it seems like a way to ensure only good reviews get posted. I’m not sure how Airbnb gets away with this.

The weather in Seville was great for walking around the city and spending time outdoors. I don’t believe it snows in Seville and when the sky is blue, it is an intense blue.

Shopping

I had one objective as I explored Seville. Paella is one of my favorite dishes to cook and I was determined to bring two ingredients back to Portugal:  Bomba (click) rice and saffron. I’ve tried many different kinds of cooking rice and Bomba is by far the best for paella (https://www.jamieoliver.com/recipes/rice-recipes/chicken-chorizo-paella/ Jamie Oliver’s recipe.

Also  . . . Spanish saffron which is less pricey in Spain. I paid 14 Euros for about an ounce of saffron — it’s fresh and beautiful and I can’t wait to cook with it. I use it when cooking rice with meat dishes as well. I also purchased hand sliced jamon (Spanish cured ham) and some homemade nougat. Purchasing food in other countries is one of the best things about travel and there are many items that you should only purchase in the country where it originated or was made. Note:  if its fresh food and you’re flying, be sure to have it vacuum sealed.

There are many shopping areas throughout the city; small boutique shops are my favorite. I was also impressed with the number of small art galleries. The artwork I looked at was quite beautiful and not outrageously expensive. A plug for El Cortes Inglese, a big chain store where I can spend hours just milling about. It’s like the Harrod’s of Spain. I’m praying one comes to Faro or the Algarve soon; hey we have an IKEA and Zara, so . . . what are you Spaniards waiting for

 

Don’t miss out on Contenedor if you visit Seville. It’s fresh, delicious, quaint, and well priced. Make a reservation (click for website).

I have already booked a hotel for a few days at the end of February and beginning of March. I did not book an Airbnb because I do not plan on cooking and I’d prefer amenities like a gym and indoor pool when I’m doing a quick culinary exploration trip. Yes, I’m spoiled, but after 40 years of busting my ass, I deserve it. I will write more about Seville after that trip.

My big purchase in Morocco:

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I purchased this hand-woven Moroccan runner in Assilah. The merchant said, “I don’t haggle,” but I got the rug for about 80 Euro less than ask. He didn’t know what he was in for when I walked into his shop. I have all the information about where the rug was made and how it was made.