Author Topic: How do you set your goals? I'm a bit lost on mine!  (Read 3624 times)

farmstache

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How do you set your goals? I'm a bit lost on mine!
« on: May 24, 2013, 10:32:33 PM »
Hi, guys!

So, husband and I have been following MMM for no more than a few weeks, and we've started working on our thrift spendings. We've calculated how much we make each year, how much we spend on most things, how to reduce a few leaks... the usual process. I might post it all later for your scrutiny, but here's another question for you.

Our goal isn't as set as "I want to retire as early as possible, how long 'till we get there?"
Even this is a bit hard to calculate, since we don't have the same investment options (living in Sao Paulo, Brazil), but we've been running numbers with the 4% rate averaged by MMM. We think we can get that much.

So, what do we want?

Well, I'm 28 (hub is 29). I was hoping to have kids by 30, but we've decided to delay to 32. We think we might be around a R$200.000,00 stash by then. We just started saving last year, unfortunately, because that's when we really went into the job market. 

That's US$100.000,00, but let's say living costs are pretty similar here, before conversion (we spend R$35 with water, R$75 electrical bill, R$145 gym - on the way to being cut out), so I'll use R$ and you just imagine the same amount in dollars. We think we can live quite well with R$36.000,00 a year. Actually, even less, I hope. Mostly it depends on how good a rent deal we get.

Thing is: as per my username, I'm hoping to eventually move out to a larger lot, and actually farm as my main activity, with the odd job or two on the side (I'm an architect and advertisement copywriter). I've been driving myself hard the last few years to figure out how to *not* wait for traditional retirement to do this, specially because I want to be with my kids as much as possible. So, that's our goal: to be free enough to go live this life.

So what's up: we're hoping to move out of Sao Paulo this year (husband is just waiting to be moved to this new position), which will cut back some expenses, but create new ones (we're still on my parent's health insurance, mother-in-law sends us fruits from her cousin's farm every week, my mother sends vegetables from my uncle's business, etc), and we'll try to rent a place with lots of space from the start, to start filling my farming need. The farm itself will probably cost about R$100.000 to R$200.000, as opposed to R$500.000 for a town house. So, we're really questioning ourselves about our options after 2016:

1. Should we wait for the stash to get to full retirement amount before moving out of the city?
2. Should we keep the city jobs for a few more years to increase the stash further and delay the farm idea?
3. Should we only purchase the land then or purchase sooner so we can start working on it even while we're not living on it?
4. What if at least one of us start to phase out in 2017, reducing our income but spending more time with the kid? I suppose that'd be me, because the husband is still quite weirded out by the idea of non-conventional jobs. I could do topography with two kids in tow. But how would this delay the farm plan?

After writing the list, I realize it's not an option for both of us to quit regular jobs and live in a farm by the end of 4 years, since the farm itself will cost half to most of our stash (though we could finance it through several years if the interest is quite low). It's likely that the farm won't be close enough for a daily commute (unless you want to commute an hour into the city, or unless we get jobs in an even smaller town).

Well, so, how the hell do you guys make your plans? Do you all go for full early retirement or some of you go for a part-time thing (where the stash funds part of your expense, but you still work part-time or one of the spouses still go full time). If only the husband keeps the job, I think we can still pay all of our bills, but we'll nearly stop adding to the stash (especially considering the kid).

I won't even go into the matter of how much the farm keeping itself would cost, because this would be a topic for a post of its own... :)

gooki

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Re: How do you set your goals? I'm a bit lost on mine!
« Reply #1 on: May 25, 2013, 12:44:19 AM »
Where to start... Some advice. Make a plan, but don't follow it blindly. If you find it's not working for you/your family, refocus and make a new plan.

A few questions.

Is your husband excited about being a farmer?

What is his after tax income assuming you drop to one income at some stage?

Are farms appreciating in value?

What would your living expenses be if you owned a farm?

What type of farming do you want to do? Raise cattle? Grow crops?

Peter

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Re: How do you set your goals? I'm a bit lost on mine!
« Reply #2 on: May 25, 2013, 07:21:21 AM »
I find that long term savings goals where "targets" and "steps" and "when will I retire" are part of a process that just stresses me out.

I keep my money goals short term. "How can I save as much money as possible, and earn as much money as possible this week?" that goal does not influence my current living/life decisions.

All life decisions are made with money goals as secondary. Happiness and lifestyle goals comes first. Then once I'm in whatever life situation I've decided upon, it's back to "how can I save as much money as possible?"

Now questions for you!

Are you Brazil natives? If not, how are you enjoying it and where do you come from? Any regrets?  I've only been to South America once for a month, but it was mighty excellent. I'd consider moving there one day..

madgeylou

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Re: How do you set your goals? I'm a bit lost on mine!
« Reply #3 on: May 25, 2013, 07:58:15 AM »
I find that long term savings goals where "targets" and "steps" and "when will I retire" are part of a process that just stresses me out.

I keep my money goals short term. "How can I save as much money as possible, and earn as much money as possible this week?" that goal does not influence my current living/life decisions.

All life decisions are made with money goals as secondary. Happiness and lifestyle goals comes first. Then once I'm in whatever life situation I've decided upon, it's back to "how can I save as much money as possible?"

Peter, I like this way of thinking ... As much as I enjoy playing around with various financial projections, I have to admit that it stresses me out a little bit, too. And also, I feel like instead of getting me fired up to work hard in the here and now, forecasting and planning a lot kind of makes me feel like I've already accomplished something. Interesting ...

At any rate, OP, my husband and I have a plan for the next few years, and goals for beyond that, too. But the plan is somewhat loose, and has already had to change a couple of times as we go through new experiences. That's ok. The planning process and the thinking and talking that goes into it, is even more important than the plan itself.

Also, I am coming to SP in a little more than a week and am very excited!

farmstache

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Re: How do you set your goals? I'm a bit lost on mine!
« Reply #4 on: May 25, 2013, 08:45:47 AM »
Where to start... Some advice. Make a plan, but don't follow it blindly. If you find it's not working for you/your family, refocus and make a new plan.

Thank you! Yes, I'm all for that! But I appreciate the planning process and having a general view of the way ahead (also, it makes me much more fired up to skip the eventual "pleasure" to know what I'm saving for!). I think what worries me the most are the big decisions: when to stop working, when to purchase the land, when to consider the definite move. I have no idea so far, and I'd like to have at least a little bit...

A few questions.

Is your husband excited about being a farmer?

He doesn't really care about the farm. He likes the idea of living in the country, as long as it doesn't drain our resources and it's close to work if he needs to work. He's practical (a bit skeptical, maybe) and wants to take on one thing at a time. What he does want: stability in a life that means we can make a trip every year, raise kids with good education and live comfortably. Luckily the best universities here are govt-funded and totally free, if you can get into them. Basic education is very poor on public schools, though, and we're thinking at least for high school we'll have to pay big bucks on a good school. Even more luckily, after finding MMM we could rethink about what it means to live comfortably. And he's turning away from his previous plans of settling on an 8-17h job on the town hall which he thought might not be fun, but would certainly bring stability on a decent income.

What is his after tax income assuming you drop to one income at some stage?
On the new town it'll be R$50540 after taxes (plus a R$3600 grocery card). I'm the first on the waiting list for the same position, and it's very likely that I'll be on the same income for a while (we just hope we can add the beer, dog food, maybe even clothes and appliances to this grocery card!)

Are farms appreciating in value?
In general, all land is appreciating in value on this state. For the first time ever, the federal govt is offering a low-interest credit line for people to buy their first home, and this gave a bump in prices that isn't likely to ever go away. It's still the most populous state (we have 22% of the country's population and 31% of the wealth), attracting lots of people and businesses. We've considered moving elsewhere, where it might be cheaper, but... let's just say we're not ready for this decision yet. Very connected to our families and friends.

What would your living expenses be if you owned a farm?

What type of farming do you want to do? Raise cattle? Grow crops?
So that's why I started the other topic! :)

farmstache

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Re: How do you set your goals? I'm a bit lost on mine!
« Reply #5 on: May 25, 2013, 08:59:48 AM »
I find that long term savings goals where "targets" and "steps" and "when will I retire" are part of a process that just stresses me out.

I keep my money goals short term. "How can I save as much money as possible, and earn as much money as possible this week?" that goal does not influence my current living/life decisions.

All life decisions are made with money goals as secondary. Happiness and lifestyle goals comes first. Then once I'm in whatever life situation I've decided upon, it's back to "how can I save as much money as possible?"

Now questions for you!

Are you Brazil natives? If not, how are you enjoying it and where do you come from? Any regrets?  I've only been to South America once for a month, but it was mighty excellent. I'd consider moving there one day..

Hahaha, yeah, well, I love the goals. It makes me more motivated, to know where I'm getting to. Like "Let's have a R$80k stash by the end of the year!", or something. I just feel more comfortable knowing that this is going toward a lifestyle goal. After all, 80k could be almost all we need to purchase some land!

We're natives, yes, but I do know quite a few foreigners (my current neighborhood is very trendy and filled with them). In general they love it, but even though the economy is thriving they find it's not always easy to find jobs. Plus, most people only speak portuguese (though if you speak spanish you can get along fairly reasonably). It turns out if you're a native english speaker you can always find a place in a language school or give private lessons. Life is cheaper in many aspects (especially if you convert $ into R$), but São Paulo and Rio de Janeiro are places with expensive rent and entertainment (namely restaurants). Not that mustachians go out that much. We don't have farmer markets where you can actually meet the farmers, but we have really fresh produce and lots of fruit all year round.

farmstache

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Re: How do you set your goals? I'm a bit lost on mine!
« Reply #6 on: May 25, 2013, 09:14:31 AM »
I find that long term savings goals where "targets" and "steps" and "when will I retire" are part of a process that just stresses me out.

I keep my money goals short term. "How can I save as much money as possible, and earn as much money as possible this week?" that goal does not influence my current living/life decisions.

All life decisions are made with money goals as secondary. Happiness and lifestyle goals comes first. Then once I'm in whatever life situation I've decided upon, it's back to "how can I save as much money as possible?"

Peter, I like this way of thinking ... As much as I enjoy playing around with various financial projections, I have to admit that it stresses me out a little bit, too. And also, I feel like instead of getting me fired up to work hard in the here and now, forecasting and planning a lot kind of makes me feel like I've already accomplished something. Interesting ...

At any rate, OP, my husband and I have a plan for the next few years, and goals for beyond that, too. But the plan is somewhat loose, and has already had to change a couple of times as we go through new experiences. That's ok. The planning process and the thinking and talking that goes into it, is even more important than the plan itself.

Also, I am coming to SP in a little more than a week and am very excited!

Thanks! Yes, I think the planning is even more important than the goals. But there's so much I'm still too new to know about. I hadn't even thought of factoring in the real estate inflation (which not always goes hand in hand with regular inflation), or tried to seriously calculate how much would a farmer lifestyle cost and how much of a budget should I give each activity inside the farm. For this, I'm already glad I came here to ask! Still I'm unsure how to factor everything in, it seems like so much. It's like making a good architectural project: you have to deal with so many desires, restrictions and necessities that you crack your head trying to figure out how to make everything work together. Then you find a solution and it seems like it's the only possible solution, until you sleep on it and figures you could change it and tweak it and turn it into something completely different.

Cheers for coming to SP! It's a bit cold right now, so don't bring only shorts, skirts and tshirts, ok? Make sure to come and visit Vila Madalena. Aspicuelta street has lots of cute bars, and Vila Madalena has some really beautiful trendy local design and lots of restaurants (R$60/head expensive too, but I recommend it as a touristic tour). If you like parks, look for Jardim Botânico (R$1 entry), Parque Ibirapuera, Parque VillaLobos, Horto Florestal (all for free). If you like to bike, take the Ciclovia that runs by the river side. And try the local brews! Colorado beer and Cervejaria Nacional (a brewery-pub) are musts, if you're willing to spend a bit on them (R$8 a bottle of Colorado, R$16 a pint of good beer at CN).