Financial Independence Traveling

Free Things to do in the Adirondacks?

This weekend, we joined some friends in the Adirondacks mountains up in New York State. After a little drive, we were in the middle of nature, in the cold, cold, nature.

We walked the beautiful trails for over 3 hours and it got me thinking about the true importance of financial independence in my life. Exploring what makes people happy and how to survive this consumeristic life.

I will try to share my thoughts in a readable fashion, hopefully, you can find some value in my observations.

First off, nature is beautiful. I find it so relaxing and hiking is such a great hobby to have. When you think about low-cost activities, there is not much that can beat hiking. Apart from a small up-front cost for proper clothing and footwear, hiking can be done for free or a small park entry fee.


living below your means


The importance of having cheap hobbies

Having expensive activities can be a huge drag on your financial freedom. I think that it is super important to follow your passions and hobbies but find the best way to do them.

Of course, everyone has some costly activities. For us, it is snowboarding and skiing. A single day can cost anywhere from $0 to hundreds of dollars. Some rent mountainside cottages or hotels for the night. Eat and drink at the restaurant and go to the biggest hills in the county. However, it is not the only way to enjoy yourself. Once you figure out how to be happy with less, then you can do more!

We go skiing at local hills for under $50 a day and usually use coupons and promotion to save on the lift tickets. Another great way to practice this sport is to ski uphill or walk up and then ski down which is generally free to do. I highly recommend you shop for gear off-season when the promotions will be greater or look into used gear.

When we go hiking, we generally keep expenses to zero. I think it is important to have a list of free activities you enjoy. The American way of spending to have fun is unsustainable. There is no formula that says that spending more with equal more fun and happiness. Here is a simple graph to show exactly how money spent correlates with happiness:



A simple chart to show how money spent correlates with happiness.


How to be happy with less

As you can see above, free does not mean boring and expensive does not mean fun. Find what you like to do and then find a cheap way to do that. Having this ability will not only increase your saving rate but also lower your future expenses.

If your goal is to retire one day, doing so while enjoying the many luxuries this world has to offer will probably cost you dearly. Either you will need to work much longer before retiring, or you will run out of money.

In the chart below, I looked at the 116 possible, 30 year periods in the available data. Starting with a portfolio of $1,000,000 and spending $40,000 each year thereafter. This would be a healthy spending amount, in my opinion, that should let you enjoy a middle-class lifestyle without running out of funds.

For those of you that never tried this tool, FIREcalc is a retirement calculator that uses Monte Carlo simulations to see how your portfolio would have withstood the different periods of time throughout history. If your retirement strategy would have withstood the worst ravages of inflation, the Great Depression, and every other financial calamity the US has seen since 1871, then it is likely to withstand whatever might happen between now and the day you no longer have any need for your retirement funds. It assumes a 75% stock portfolio with an average expense ratio of 0.18% ad an inflation rate of 3% starting in 1900 and counting 30 years of retirement in 116 rolling periods.

In this scenario, the lowest and highest portfolio balance at the end of your retirement went from $-400,986 to $5,679,475, with an average at the end of $1,845,488. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 94.8% which I would be comfortable within my own retirement. Failures, in this case, would happen if one retired just before a large drop in the market such as in 1929 or in 2000. To visualize the chart below, FIRECalc advises to not follow any individual line but to look at the mass of lines. You can get a clear visual representation of how frequently your strategy would have failed (dropped below zero) or succeed.

The objective of presenting the information this way is to allow you to get a “big picture” sense of the way your strategy would have performed historically.

Withdrawing $40,000 per year (with inflation) out of a $1,000,000 portfolio historically had a 94.8% success rate. Use it for yourself to see how your scenario plays out. Source: FIRECalc


What makes people happy?

Now in contrast, if you wish to own a jet-ski, have an ATV, and drink cocktails every night to entertain yourself, you might end up spending a little more than $40,000/year. To calculate this very basic example, let’s say you have a loan to pay for a $13,899 jet-ski, your monthly payments would be around  $268.71 (assuming 6% APR for 5 years).

On top of that, you would finance a $16,599 ATV with a monthly payment of  $320.91 and would spend $10 a day on a cocktail. You quickly see how this all adds up. On top of that, you would need to pay insurance, gas, maintenance, storage fees… Now, let’s just assume your lifestyle costs now $20,000 more than our simple middle-class example. Do you think you would ever run out of funds?


How to live a happy live in frugality #Frugal #Retirement


Here is how your portfolio would have fared in each of the 116 cycles. The lowest and highest portfolio balance at the end of your retirement was $-3,316,154 to $3,868,324, with an average at the end of $210,483. FIRECalc found that 57 cycles failed, for a success rate of only 50.9%. It would basically be a flip of a coin.

how to retire early

Withdrawing $60,000 per year (with inflation) out of a $1,000,000 portfolio historically had a 50.9% success rate. Use it for yourself to see how your scenario plays out. Source: FIRECalc


Having flexibility is key

As shown above, your withdrawal rate can greatly change the likelihood of your retirement. Discovering and developing low-cost hobbies will allow you to live on less, increase your savings rate, and ultimately, live on less in retirement. Having the flexibility in your budget is a huge advantage, not only in retirement but throughout your whole life.

Hiking was just my activity for the weekend but there is a ton of things to do at a very low cost. Here is a list of hobbies and activities for you to try:

1. Learn New Things (free online or with friends)

2. Gardening (a few cheap packets of seeds, and a bit of dirt. You can even learn gardening online)

3. Camping (tent, snacks, drinks, maybe a small park entry fee)

4. Board Games (buy secondhand board games or lookout for sales)

5. Free Community Events

6. Yoga (use videos on Youtube to learn and master some yoga positions, no need for any membership)

7. Writing (from blogging to writing a book, there are lots of different ways to enjoy writing. You might even earn a few bucks!)

8. Learn To Dance (use Youtube videos and tutorials to teach yourself new dance moves)

9. Reading (great way to exercise your mind. Checkout your local library or keep reading blogs for free)

10. Explore Where You Live (every street, tunnels, and bridges in the area you live in, can be fascinating)

11. Visit Local Museums (museums usually offers free entry on certain days)

12. Listen To Podcasts (funny podcasts, educational podcasts, podcasts with celebrities, even financial independence podcasts!)

13. Cycling (If you don’t have a bike yet, borrow one or find a used one for half the price of new models)

14. Play a Ball Sport (sports like soccer, baseball, or tennis are all really cheap to play and you can find used equipment easily)

15. Geocaching (geocaching is a fascinating and exciting hobby that costs very little, all you need is a GPS capable device, they’re free apps for your phone and plenty of adventures to go on)


Find what you like to do and find a cheap way to enjoy it. You will live a long, low-cost, lifestyle full of excitement and savings. 🙂




travelling cheaply



Financial Independence Traveling

Family Trip to Guatemala Living with the Locals

Back in 2014, I went on a 1 month-long trip to Guatemala with my family. This trip really changed my views on life and on the meaning of happiness in general. Seeing and learning about this amazing culture helped me realize how little we need. I was strolling through life without knowing how to be happy but the answer was right in front of me all along.

It is possible to live on a lower budget while living a fulfilling, happy, life. Their culture and beliefs were an eye-opener and a true pleasure to discover.

Travel on a budget

Experiences over things

The main takeaway from my travels was to value experiences over materialistic things. This has its limitations but for most things, the total happiness derived from an experience will be greater and last longer than from materialistic things.

Of course, this statement has certain limitations. I am sure that a minimum-wage earner would prefer having a roof over his head than spending on travels. Technically, as long as all our basic needs are covered, this usually holds.

For my example, let’s use a new study from Princeton University’s Woodrow Wilson School that states that happiness increases with higher wages up to about $75,000 a year (TIME). I have experienced the same results when saving 50% of my income, the extra happiness that spending more could bring me is minimal since I can still live a plentiful life on half of what I make.


Sometimes more is less

With this in mind, we can now compare common middle-class expenses such as spending $20,000 on a brand new car versus spending $10,000 on a used car and spending the extra $10,000 on an amazing trip with your family. The new knowledge, memories, and bonding you will get from a family trip will greatly outlast the new car smell. That will wear off after a few months anyway. Vacations and travels are a great source of experiences but there is plenty of activities you can do locally like sports, shows, museums, foods.

It is also important to discover the things that can bring great experiences in life. For example, buying a camera, a new bike, or new skis are materialistic purchases but can provide great experiences. You should especially focus on your hobbies and plan them in your budget even if they might be expensive. You can always find great stuff on Craigslist or Kijiji at a fraction of the original price.


How to be happy?

Traveling to lower-income countries really opened my eyes to the relativity of standard of living. Some might think it is impossible to be happy without having 350+ channels on your TV but do you think everyone in the world needs HBO to be happy? I don’t. Your happiness level is something you can control.

We went hiking up the mountains of Guatemala and saw farmers work in the mountains, on a terrain so steep that we found challenging after a single day.  They were working with the land that was available to them, every day, all year long. The conditions are less than perfect. Yet, those farmers are only earning an average annual income of $1,619 US dollars (World Bank) and they seemed happier than some stressed-out Americans making that amount per week!


Once the basics are covered, we don’t need much more

As Maslow’s Hierarchy of Needs states that your physiological needs such as food, clothing, shelter are the most important. The second tier is safety; this includes insurance, utilities, and so on. Anything after those can be reduced, cut, or accepted as guilt-free spending.

Once you attain this mindset and choose your luxuries, you will enjoy them even more. In terms of happiness, I think that one can choose to be happy in life once his needs are covered and anything above a livable wage will not change happiness levels much.


Money cannot buy happiness


money happinessNominal GDP Per Capital. Source: U.N. World Happiness Report


does money equal happinessNational Happiness Rankings according to respondents. Source: The Washington Post


Above is an overlay of the world’s nominal GDP per capita followed by the world’s happiness rankings (U.N. World Happiness Report) (The Washington Post). Looking at both overlays, it is interesting to see how lower happiness levels seem to correlate with nominal GDP under $6,000 per capita.

Coming back to my concept that happiness level will not be greatly affected once basic needs are met. We can see that most of the Americas are happy even if there are income discrepancies. In ranking, the US ranks 17th of the 156 ranked countries, behind Mexico (16) and Panama (15) even if the US comes ahead in GDP and average income.


Happiness also correlates to things like life expectancy and GDP per capita, though perhaps not quite how you’d expect. While longer lives and more money do correlate to national happiness, they’re not nearly as important as social support, which researchers define as “having someone to count on in times of trouble.” The report also found that perceptions of corruption and generosity (the latter measured by donations to charity in the past month) are better indicators than GDP per capita.  – The Washington Post


I can relate to this quote, “having someone to count on in times of trouble”. It is a great factor in happiness levels. I can clearly see this on my path to financial independence. Having an emergency fund and building a strong nest egg brings great security to my finances and that makes me happy. I can sleep at night knowing that the bills will be paid and I will not lose my house if I lose my job.


Traveling to Guatemala

In Guatemala, we stayed a week with hosting families to learn Spanish. It was an immersion program where you would get Spanish lessons every day from 9 a.m. to 4 p.m. and then stayed with a host family every night for a week. You were given a room and meals throughout your day by your host family as part of the school’s package. What I liked about this program is that it was from a non-profit that gave back a lot back to the community. They do projects in the region to help the farmers, children, and families in need. It is nice to know that the host families would get fair compensation for their work and hospitality.

Living with the locals helps you learn their culture and really see how they live their daily lives. As a guest, we did not choose which family we stayed with nor did they have enough room for all of us with one single host family. My sister, for example, was placed in little bungalow/shack with a tiny room. She was served a variation of rice and beans every day.

Me, on the other hand, was placed with my mom and my other sister in a large, two-story house where three of us had a whole floor as living quarters. We were served different meals every day and even had hot water showers!


how to spend your moneyTypical Guatemalan Multi-Generational Houses


Not much but enough

It was still clear that my host family was struggling. The house was slowly breaking down since its construction in 1954 and they could not afford to maintain it. They had inherited it from their grandfather who was a wealthy dentist back in the 50s. However, the outside of the house still looked clean and the grass well trimmed. They ate very simple meals but always had enough.

Comparing the two host families from the outside, one might think they lived completely different lifestyles. One was struggling while the other was well off.

However, getting to know these families, it was clear that they were both on tight budgets. Both still living happy lives. Once you realize that at least 80% of humankind lives on less than $10 a day and experience it for yourself in your travels, you will change your views on consumption.


how to lower consumption


The American Consumerist Dream

Most of the world’s private consumption is consumed by the wealthier countries but do we really need all this stuff? The world’s richest 20% consume over 76% of the world’s private consumption and, for the most part, we waste it! All that stuff that we accumulate, throw away and buy again makes you think about the real priorities in life.

To come back to my travels, I was fortunate enough to stay with the local community and learn about their culture and way of life. Contributing and helping in that community was a great way to give back a little to the world.


how to lower consumption


We are lucky to live where we live. Always remember that happiness is not about money but is about your choices. I will continue to talk about my travels in future posts, stay tuned. Be happy, Xyz.