Archives For December 2013

Should Will Buy a New Car?

December 30, 2013 — 11 Comments

I recently received a question from a reader who wants to know if he should buy a new car. Here’s his situation:

I’m 25 currently running a company on week days, and have a part time job on weekends. I am making roughly $60,000 a year (give or take). The last few weeks I have been on the edge of buying a brand new $22,000 car (give or take). After going through this blog many times I am not really not sure if I should do it or not. I totally can see how spending less than 20% of my yearly income on a car is definitely a super smart thing to do.

But for the longest time I want to look a certain way. (I guess on this blog we call that the disillusion of being successful).

Anyhow, I really want to live life a certain way. I want to wear wool suits, driving clean looking cars. By all means the car doesn’t have to be really expensive. My current car is a hand down from my parents. Toyota Yaris, which I have to admit I’m quite embarrassed when my employees and friends see me driving it.

Definitely feels a bit torn right now….

From what Will described, it sounds like he’s doing quite well with his career and he’s aware of the importance of this decision. Here are a few things that came into my head when I started thinking about his situation:

– Warren Buffett bought a house in Omaha, Nebraska in 1957 for $31,500… he still lives in the same house

Sam Walton Truck

Sam Walton in his truck

– Sam Walton drove his old pick up truck and wore clothes from his own discount store even after he became rich

These are obviously extreme examples of very successful entrepreneurs who stayed very humble, but there are many more stories out there. The point is they focused their money and efforts on what was best for the company and they didn’t care what others thought of them.  In fact, many rich people buy much less car than they can afford.

I reached out to one of my entrepreneur friends and asked him to add some input. Here’s what he said:

Your employees will respect you more for being frugal. The fact is, they know you’re making sacrifices to get the business off the ground. Case in point, the part time job…. if they see you buy a new / newer car and yet the business still isn’t producing big dividends then they’ll think you’ve got your priorities out of whack. Cash is king when running a business. The more cash you have, the longer your runway which equates to a greater chance of success. Don’t let a short-term gain/want jeopardize a long-term opportunity.

Here’s a funny story… when I was starting my business I seriously had to make a continuous decision to either “invest” in buying a boat or take $25k and use it to start the business (ie pay my bills and misc business expenses for at least a year). The boat would have been a BLAST and a lot more fun than watching my savings account dwindle away over the next year but I knew if I wanted to escape the corporate world I had to start investing in myself. Thankfully I made the right decision. Three years later I paid cash for a $65k boat and didn’t have to think twice about it!

You need to be comfortable with yourself and not worry what others think you “should” look like. In fact, Will should be proud he’s smart enough to keep his paid for car so he can focus his money on the things that will make more money!

Do you think Will should buy a new car?

Taos Pueblo Christmas Eve

Jocelyn and I standing in front of San Geronimo Chapel in Taos

I’ve always been somewhat interested in the Native American culture, but after our trip around the world, I gained a whole new appreciation for what we have in the US.  We spent our Christmas holiday in Taos, New Mexico and made it to the Taos Pueblo Christmas Eve Celebration to experience an incredibly powerful night.  I’ll add the full explanation below the incredible pictures Jocelyn took. Continue Reading…

Home is Where?

December 23, 2013 — 2 Comments

There aren’t many times in life where you get to make a decision as to what to do next.  While growing up, we always have our parents to make those decisions for us, like if we’ll move or where we’ll live.  If we take the college route, we start to experience some freedom when we decide which college we’ll go to or figure out which college will accept us.  Then it’s easy, we just move to that college town.

Even after college, we’re usually directed where to move by our new employer.  For me, that meant I was moving to Dallas because that’s where I accepted my first job.  Sure, I could’ve moved somewhere and tried to find a job, but this way worked out well so I went with it.

After my wife and I got married, we decided to move to a city where she could get a job since I can work from anywhere that had an airport.  She had job offers in Spokane, Washington and New Orleans.  We chose New Orleans.  Then earlier this year we decided to embark on adventure of a lifetime when we traveled the world for nine months.

Continue Reading…

Know How Much Things Cost

December 19, 2013 — 1 Comment

After traveling for work for ten years and a nine month trip around the world, I’ve collected some strategies for traveling cheaper. I’ll cover them in a ten part series in this order:

A. The flight
How to Book the Cheapest Flight
How to Use Free Flight Stopovers
How to Find Alternatives to Expensive Flights
Finding the Cheapest Airport Transportation
B. The Hotel / Accommodation
How to Book Cheapest Hotel Rooms
How to Find Hotel Alternatives
How to Use Hotel Points
C. Arriving
How to Get Local Currency for Your Trip
Avoid International ATM Fees!
Know How Much Things Cost

Know How Much Things Cost

A little research before your trip can save you a bunch of money.

Know How Much Things Cost

You’re the most vulnerable when you enter a new country and aren’t yet familiar with how much certain items cost.  We got ripped off multiple times by not knowing prices, but we also saved a lot of money when we did do research beforehand.  As long as there are travelers who don’t know how much things cost, there will be people there to happily rip them off!

Although it’s not possible to research the price of every single thing on your trip, you might be surprised at how much information is actually available online.  From how much a driver should cost on a full day trip in Bali, Indonesia to how much you should pay for fake designer jeans in China, the internet is full of great information.  You don’t even need to do all of the research beforehand if you have internet in your hotel or other places while you’re traveling – just look it up as you go.

Continue Reading…

Avoid International ATM Fees!

December 18, 2013 — 4 Comments

After traveling for work for ten years and a nine month trip around the world, I’ve collected some strategies for traveling cheaper. I’ll cover them in a ten part series in this order:

A. The flight
– How to Book the Cheapest Flight
– How to Use Free Flight Stopovers
– How to Find Alternatives to Expensive Flights
– Finding the Cheapest Airport Transportation
B. The Hotel / Accommodation
– How to Book Cheapest Hotel Rooms
– How to Find Hotel Alternatives
– How to Use Hotel Points
C. Arriving
– How to Get Local Currency for Your Trip
Avoid International ATM Fees!
Know How Much Things Cost

Avoid International ATM Fees!

We encountered quite a few scams and rip-off artists around the world, but none of them got more money out of us than our own bank!  Sure, their fee was legal and they provided a reliable service, but we could’ve saved a lot of money if we would’ve done some research in advance and switched to a debit card that didn’t charge fees to avoid international ATM fees.

Instead, we took along our Chase ATM card as our primary cash source.  I did research to make sure they were accepted across the world, but I didn’t pay enough attention to how much we’d get charged to use it!  It turns out that Chase charged us $5 US for each ATM transaction – this was on top of the ATM fee charged by the local bank.  After nine months, 25 countries, and 60 ATM transactions, we ended up paying Chase $300 in international debit card fees!

Continue Reading…