Posted by Robert on June 14, 2010
I mentioned in a previous post that I plan to move my family to Hong Kong. The natural question that arises is: Why? The answer has little to do with personal finance. In fact, there are two ways to make decisions that involve money. First, we could ask, “how does this decision affect my money?” This is the perspective of personal finance. Or, we could ask, “how does money affect this decision?” I believe most “real-life” decisions are made from the latter perspective.
My wife and I have made many of our decisions, as outlined previously, based on their impact on our finances. But there are many decisions where money is secondary. Some examples are: programs for our children, including pre-school and swimming, family vacations and outings, food and activity and community involvement. What do all of these things have in common? I would call it “quality of life,” but it’s difficult to be precise with such an abstract idea. These are decisions that affect our health, either physical, mental or social.
At the (still young) age of 33, I don’t yet have the answers to the big questions in life. One such question is how to be happy. (It may be a secret.) I suspect that the answer is not the same for everyone, which works out well, since there are seven billion of us, all trying to be happy. People wiser than I have suggested that happiness comes from finding meaning in life. Randy Pausch suggests that happiness is found in fulfilling your childhood dreams, and in helping others fulfill their dreams. It may be that we each have a purpose, or calling, in life. It may be that when we live in alignment with our purpose, our life has meaning and we are happy, despite life’s daily struggles.
After getting a taste for living and working abroad, in France and Switzerland, it has been my dream to continue living overseas. When I lived with my wife in Taiwan for two years, we were happy. I had no revelation that this was my purpose in life, but I certainly enjoyed learning the language and the culture and being involved in the education of young children. In moving overseas again, why choose Hong Kong? My wife’s mother is from Hong Kong and she still has family there. What makes it even more appealing is that Hong Kong (in my mind) is like a blend of East and West. While it is exotic and Chinese, it is accessible to English speakers and offers some familiar culture and opportunities in the large ex-pat community.
Moving to Hong Kong also fits with my goals for raising my children. I want my children to be exposed to how others live. I want them to identify with our family, and with Canadians, but I also want them to see all human beings as valuable and worthy of respect. So when we were casting about for how to create meaning in our lives, my wife and I settled on becoming teachers (which takes care of the money) and moving to Hong Kong.
I can’t explain clearly why I believe that becoming a teacher in Hong Kong will make me happy. I suspect that it coincides with my calling in life and I know that, so far, working toward this goal is satisfying. What one goal, big or small, would improve your quality of life? Have you found your purpose and, if so, how did you recognize it?
Posted by Canadian Dream on June 11, 2010
Perhaps one of the most difficult things to deal with when you look at personal finance is the habit of judging others. We see a big SUV drive by and assume “Sucker, you got to be hating the car payment, gas and insurance on that monster.” Little do you know isn’t their SUV at all, they are just driving it across town for a friend who drank a bit too much last night. Or perhaps you are in line at the grocery store watching a person get a rather big bill for a small pile of prefab food. Little do you realize that their mother just died and they are being lazy for a week while they deal with their grief.
Like it or not we all judge each other’s spending habits all the time, but often we lack any sense of context about their spending. We don’t know if they are the millionaire next door out at their one annual expensive meal a year that they have for their birthday. We don’t know if people were dealt bad childhood, a disabled sibling or parents who never taught them a thing about money. Yet we assume things about people to help us feel better about our choices (I didn’t buy a coffee today, but I notice Jim’s got his usual) or make up stories to justify our own spending habits (oh, but this is going to be so useful for me).
I would assume this is why personal finance blogs are interesting to people, because if you fellow them for a while you get some context into their lives and why they spend they way they do. For example, if you have been reading this blog for a while you might know I don’t spend a lot of money on food each month. Perhaps about $300 to feed a family of four. You might assume that I’m cheap and eat a lot of beans and rice. When in reality it is partly how I prefer to eat (I don’t like large servings of meat and I do make a meatless meal once a week) and I’m good at shopping for most of our basic food on sale ( I don’t think I’ve paid full price for a can of soup in years now). It also helps when you have a wife who works out of the house and can usually have supper started before I walk in the door each night. With out the context what I spend on food each month can be hard to understand when compared to your life.
Thus people are sort of islands of spending unto themselves. Unless you have a map of it or spend some time there it is hard to understand how they can make things work, especially if their lifestyle is significantly different than your own. We wonder how people can cut their own kids hair (and their own) yet turn around and gladly spend $300 on a new electronic gadget. We wonder how people can buy second hand clothes yet still eat off of good china with crystal glasses every Sunday night.
The reality of it is we will never understand another human being entirely and thus will never get their spending habits either. Each of us is unique. So snap judgements often cuts short your opportunity to learn from others and grow. This is the price of judgement of other people’s spending habits.
Despite knowing this I still do it to others all the time, it’s a hard habit to break. For example, I’ve never really got why people eat out a lot, it seems like such a waste of money to me. Then in the last two weeks just by how things worked out I ate out for just about every other lunch or supper (I didn’t pay for half of them). Now after that I’ve felt more sluggish than normal and I’ve had a stronger craving for sweets than normal. Yet I can understand the illusion of when you are busy eating out seems like it is faster than cooking. So now I actually feel a bit of sympathy towards people who eat out a lot since they don’t likely know what is feels like to have my usual energy or know that cooking from scratch doesn’t have to take much longer than eating out (when you factor in travel time or waiting in line).
In the end I think I might always judge others to some degree. It’s a deeply embedded habit. Yet rather than feel superior to others I’m going to try more to feel sympathy and compassion. It will be hard to do, but I think I will learn more from others this way and perhaps a few things about myself.
So do you judge others? If so, do you remember a time when you got it wrong? If so, please share the story. If you don’t judge others, please share how you manage not to do it.
Posted by Canadian Dream on June 10, 2010
I’m often amazed how some people feel they aren’t saving much of anything. Then I ask them about how much are they paying off in debt. That is often a big number, so I point out that debt repayment and saving both increase your net worth. So in some regards debt repayment is the same as savings.
For example, I’m focused on paying off my mortgage right now. I’m currently doing my regular payments plus lump sum payments just about every month. Does that mean I’m not saving anything in a month? I personally feel its the same, since having no mortgage is just as critical to my plan as having a good size pool of money invested. Yet on the other hand, are you really saving if you are just making the minimum payments on your credit card bill? In this case the increase of your net worth is minimal so you could potentially argue that it isn’t like saving.
Thus we can be into a interesting paradox where some debt repayment could be like savings, while other debt repayment may not be. So what debt repayment is like savings? At this point it might be easier to take a step back and determine one of the core tenets of personal finance: are you spending less than you earn? Yes? Good. Now are you still spending less than you earn if you consider interest payments as spending? Yes, good job. No, then you are not saving overall. In the end if your interest payments shove you over what you make in a month you are in a debt spiral. Your debt will continue to grow regardless of your ‘savings’. So you would need to take drastic action to free up enough cash flow until you are spending less than you earn.
In the end, paying out debt might be like savings but in general I would say that only really applies if you are making significant payments towards the principle. Otherwise if 95% of your payment goes towards interest, calling it savings is deluding yourself. But what if it is tax deductible debt? The math gets more complicated to determine what you are paying in interest on a net basis, but ultimately the same idea applies.
So would you call debt repayment the same as savings? Also does it matter where the debt came from?
