Early FI – Find Your Beach

When it comes to early FI, I think the end game for all of us is to find a way to maximize our time on this planet. As everyone well knows, time is finite and thus the ultimate currency in the Game of Life. Over the years, more and more folks are realizing this stark truth, and I think that’s why the concept of FIRE (Financial Independence Retire Early) continues to grow in popularity and more and more peeps are out there attempting it.

I’ve been blogging about my own FIRE journey since 2012, and well, I can honestly say that there’s definitely been a lot of ups and downs along the way… In short, I don’t think we ever really ever have all the answers and a lot of times, it’s kind of figuring out things as we move along…

With that said, of course I realize that a lot of the actions I’ve taken on my own early FI journey won’t appeal to everyone, and I guess not surprisingly, that isn’t ummm a surprise to me at all… Real life is NOT binary (black or white), and that’s why I think at the end of the day, we all need to figure out a way to filter out all the noise so that we can finally figure out just exactly it is that we want…

Most recently, I’ve been kind of away from blogging, but I did notice the following comment, below (which I appreciate because it makes me think about things and of course, I am NOT offended at all!)…

Thanks for the comment!

So, let’s begin…

I guess we can start with Geographic Arbitrage and I can better try and explain what it is exactly that I am trying to accomplish out here in Manila…

For readers who have been following along this blog for awhile now, you’re probably well aware that I own rental properties in the Bay Area, and with the benefit of hindsight, I can pretty much declare that they have been my best investments to date. In short, the property value and cash flow have gone up considerably, and well exceeded even my wildest imaginations… For sure, it’s no secret to anyone that the Bay Area isn’t cheap, and a lot of folks have even left the region, knowing that surviving there isn’t an easy task…

As for myself, even though I had some relative success investing in the Bay Area, I’m not gonna try and pretend that I have what it takes to survive there long-term…

I most certainly do not.

So, for awhile now, I’ve already conceded defeat and realized that in order for me to make early FI work, realistically, I’m just gonna have to settle somewhere else (much cheaper)… Granted, I still have family in the Bay Area, so I probably will still have many good reasons to visit/spend time there, but it’s still a pretty tough uphill battle out there trying to make ends meet… without a nice high six figure salary supporting you…

Also, my own preference is to spend time (especially the winter months) in warmer climate than Northern California, and places like Manila really fit the bill… The heat isn’t for everyone, no doubt, as I’ve even met local Filipinos who hate the weather here and said they would move to Canada in a heartbeat if they were accepted in…

Hey, different strokes for different folks…

With Geographic Arbitrage, what I really meant is that my rental units should (in theory, hopefully) experience annual rent increases (i.e. inflation) at a much more profound clip than my own personal Cost of Living (COL) inflation living in the Philippines (yes, even in the most expensive locations). If my cash flow from my Bay Area rental units continues to outpace my own spending, the idea is that my profit margin should only get fatter as the years go by (making early FI increasingly easier to sustain, long-term).

I mean even $100 goes quite a long ways here in Manila… Just saying…

That’s the plan, anyway…

Anyway, addressing the next bit about “maximizing every last dollar”, I completely agree that if my intent was to take full advantage of Geographic Arbitrage, it would indeed make the most sense for me to settle in a cheaper part of the Philippines (say Pampanga, Laguna, or even Cebu), and invest the rest of my funds into passive income/cash flow yielding instruments…

But as you all know, a personal residence is more a lifestyle decision than an investment one…

No question, if you asked me if my decision to choose and live in Bonifacio Global City (BGC) was a good way to stretch every last dollar and attempt Extreme Early FI, I would say “no way.”

Sure, I like to save money, pinch pennies, and be a total tightwad sometimes when it comes to things like food, clothes, entertainment, etc. but if I’m being real here, I’m not gonna say that’s always the case… I mean, for instance, I very much enjoy flying business/first class, as often as I can…

I’m NOT an Extreme Early FI type of guy… at all…

If I previously gave off that impression, I’m sorry, but I’m not trying to pretend to be something that I’m not… Yes, at times I’ll post pics of cheap eats and stuff like that, but all I’m saying there is that even if we have relative/moderate success with our own investing careers, there’s nothing that says you need to upgrade to fine dine cuisine every meal… Or, that you have to give in to total reckless lifestyle inflation and all that jazz…

Again, life just isn’t black and white… For some things, sure, I don’t mind splurging and “living it up” some, whereas for other stuff, I’m not so keen on doing so…

All I’m really doing now is just trying to find my beach… the version of early FI that I enjoy the most and want to pursue.

And in regards to buying a property in BGC, yes, it’s true I like to speculate and I see huge growth potential in this region of the Philippines, but I mean, first and foremost my decision to want to buy here is because I really enjoy being here… BGC is: clean, safe, modern, shiny…

If that makes me an early FI “sell out” or “snob” then so be it… I’m not gonna bullshit you all here… BGC is pretty damn high-end/upscale/posh, and I like that…

Point blank — I enjoy living here!

With BGC, this isn’t an investment decision I’m making here at all, it’s simply a lifestyle one… and I’m choosing to live damn well!

If I can afford it, why not?

But of course, even with something like a personal residence, I want to consider all factors, and with all things being equal, sure, I don’t see anything wrong with pursuing an area you really like living in that is also showing strong signs of future rent/price appreciation potential…

If it happens, wonderful…

If not, oh well… I still need a place to live!

Further, even though I’ve been a strong proponent of investing in mining stocks over the last 2-3 years or so, I’ve been calling them “ticking time bombs” and Buy and Hold Rentals for the longest time now… I’ve got no agenda, and I do my best to just try and tell it like it is… I’m not being a hater, but my own viewpoint is that mining stocks are just a stepping stone to help you achieve your goals and dreams… For me, it’s a pretty dope possibility and realization that I might be able to take some of the profits from yesteryear and re-deploy it into purchasing my “dream home” straight cash homey.

I don’t see the big deal with that at all…

Ideally, doesn’t everyone want to own their own personal residence free and clear without a loan?

That’s what I’m attempting to do here with profits that I earned from mining stocks by “buying low and selling high.”

Nothing fancy at all going on here…

Using mining stocks as a tool to facilitate purchasing a “dream house” free and clear… I like the sound of that, even if many people think that strategy/technique is stupid and crazy…

Anyway, for myself, yes, BGC is my version of early FI utopia… For some people, it’s absolutely some other destination. To each their own… I mean, I have friends back home in the Bay Area who have made millions of dollars in price appreciation on their own personal residence/investments, but they will never leave… In their minds, they don’t want to live anywhere else in the world besides the Bay Area…

Again, to each their own…

I’m not gonna be a hater, everybody has different goals, desires, gameplans…

But to be clear, BGC for sure isn’t the “cheapest” route for me to pursue… By choosing to live here and purchase an apartment, absolutely I am forgoing investment returns and passive income/cash flow opportunities… It is what it is… But I don’t think what I am doing is remotely all that crazy at all… My buddy and I joke about fresh college graduates who are dropping it like it’s hot, signing up for 30 year loans of over $1 million to purchase Bay Area property… Now that’s a rather bold move, in my own humble opinion!

Alas, nobody gives these young kids any shit for what they’re doing with their own money…

But for whatever reason, if I tell anyone back in the Yay Area that I want to move to the Philippines and buy an apartment unit ALL CASH, they look at me like I’m this total weirdo/psycho…

In any case, it’s all good… I’m just trying to find my own beach, just like everyone else…

Fight On!