I’ve written a number of time about “Economy Birding” in the Philippines, similar to the idea of “Snowbirding in the Philippines” but focusing on the economics of things. I also wrote a recent article that addressed moving to the Philippines to improve your standard of living called Can Moving to the Philippines Improve Your Bottom Line?
In many cases these are just “voice in the wilderness” sort of articles, only a few seem to read them, especially because only a few of my readers are of retirement age. But I came across a very interesting article by Michael Manville about “Mini Retirements” that I thought was very interesting in today’s economy … even for those of you “too young” for retirement, and particularly of interest to those of you who “Don’t Have Enough Money” to retire.
I recommend you read Michael’s article … especially if you are one of the thousands and thousands of folks unemployed or “under-employed” and most particularly if you are facing foreclosure or struggling fruitlessly with an upside down mortgage in the USA. (you might also enjoy my “Jingle Mail” article if you are in that leaky boat.
Then be sure to come back, because while Michael’s points are good, the misses the boat completely with some of his cost figures. It’s way better in the Philippines than Michael’s estimates
Economy Birding Philippines — A Retirement Plan?.
While some people plan to “retire” after decades of hard work at age 65 so they can “live the good life”, a growing number of us like the idea of living the good life now.
This article shows how your mini-retirement can not only save you money, but how you can create a new stream of income that might just turn into the money-making venture of a lifetime.
Exactly my point, Michael. I’ve been trying to teach this for some years now. I’m a retiree. I am blessed with a generous pension … so
generous you can’t get one like mine today, no matter how many years you work. (I put in over 38 of service to earn mine, but Congress changed the law since I started mine. Screw the employees, we have to cut costs somewhere ….).
Even with this blessing and advantage, my income from entitlements is going nowhere but down. 2008 was my highest year, it’s been lower each year since, and there’s certainly little chance that anyone’s “Entitlement” payments are going UP any time soon. Down would be the most likely trend … especially if some of the “do away with Social Security” candidates reach office.
My advice to everyone reading this, whether you are 18 or 88, is, today is the day you need to take action to start empowering your life … especially your retirement, however many years away that may be.
And if your in grave financial difficulty right now, it’s even more imperative you get a grip and start empowering your life. No candidate running in 2012 is going to do anything for you .. hell, none of them, of either party even gives a crap about you. They might bail out Wall Street blunders, they sure as hell aren’t going to bail out John Q. American…. mere “flyover people”.
OK, I hear you saying, I’m listening, but Philly, there’s just no way I could afford a time out in the Philippines. That’s crazy.
Well, maybe not as crazy as it seems. Follow me through here …
‘How Can You Afford It?’
How could “retirement” abroad – even semi-permanently – be cheaper than staying home?
People often assume that any kind of travel expense must be incurred in addition to all of the normal expenses of life. So, for them, to take a few months away would be nearly impossible to afford. They are stuck in the mentality that to travel is “expensive”.
Part of the reason for this is lost income. Most people cannot take their jobs with them – so even though they may be able to live in a place like Argentina, Ecuador, or Thailand for 50% less than living at home – the lost income makes it impossible for them to afford.
Also submitted for consideration are to factors many folks haven’t considered.
- It may well be possible to “take your job with you”, at least temporarily. How much of what you do today, at work could be done online .. especially on a reduced or part-time basis?
- A job costs money as well as paying it. How much would you save by not commuting, not dressing for work, not having the second car you need for work, (or even the first car, that you won’t need in the Philippines) not paying into a retirement fund, union dues, licensing fees, state and local employment and income taxes and other incidentals. When I was a Federal employee, for example, I found it took more than 15% of my salary just to “work”, so the “cost” of not working may be lower than you think.
- And this article is aimed specifically at those who have lost their jobs or know the end is coming. You can’t lose what you no longer have…
‘Five Star Travel’
Another big reason people find travel abroad expensive is because they like to stay in five star hotels and plush resorts while overseas instead of simply renting a home or apartment comparable to the one they normally live in. If you ignore the idea of staying in a hotel and simply rent a place comparable to the one you live in now, the potential savings is enormous. Staying in your new found home for 3-6 months will often be more affordable on a daily basis then staying for two weeks at a five star resort.
This is a “biggte” I notice with people coming to the Philippines for visits. They spend like crazy (one of the reasons the country promotes tourism so heavily). I chuckle at the number of folks over the years who have asked me questions about tourist destinations here in the Philippines … like Boracay as one frequent example.
I have no idea. I don’t go to tourist destinations and don’t spend money at places like that. I don’t stay in hotels in Metro Manila and ride taxis, either. The difference between an 8 Pesos Jeepney fare and the average taxi ride is huge.
A third reason people find travel expensive is because most of their ongoing expenses back home continue to accrue amid their absence. For example, when most people travel, they don’t cancel their cable bill, they don’t rent out their place to cover their mortgage (or cancel their lease), and they don’t suspend their car insurance, etc.
Exactly, Michael. When I look at what the average American family is shelling out every month just to “keep the lights turned on” it amazes me. One lady wrote me once time and told me her family had no less than 55 medical providers that she juggled appointments, transportation, payments and reimbursements with. She was concerned with how she could find an equivalent cohort of medical practitioners here in the Philippines.
I immediately jumped to the conclusion there must be a number of family members with special needs or rare medical conditions … but no, indeed, the mother’s own estimation they were a family of 5 with what the mom considered, totally normal medical requirements. 55 providers? Eleven providers for each family member … and no special health concerns?
My only careful and considered assessment of that situation is, YGBSM! (Google is your friend if you don’t understand).
Netflix, cell phone plans, auto insurance, house insurance, car insurance, medical insurance, life insurance, disability insurance, pet insurance, errors and omissions insurance, professional malpractice insurance,OMG the list just goes on and on and on. Are any of you folks back there in the USA living your own life, or are you all on a treadmill slaving away for 50 or more doctors and 20-od insurance companies?
How much would you have each month if you DIDN”T have to pay all those leaches?
This, of course, doesn’t even take into consideration the outrageous, government-sanctioned robbery that some mortgages have become, local property taxes and then all the service plans and other insurance-related costs of owning that home that you are going to lose anyway.
And now that you’ve read those thoughts, close your eyes and think about what you are paying for now that you wouldn’t have to pay for in the Philippines.
‘Recipe For A Mini-Retirement’
So the three most important components for actualizing a mini-retirement are:
1. Find a way to earn income while abroad
2. Rent a home or apartment in a local neighborhood instead of staying in a hotel
3. Cut most or all of your ongoing expenses back home
Economy Birding Philippines — Prove It!
Here’s a quick example of the approximate expenses of staying home vs. taking a “min-retirement” abroad for six months:
- Rent or mortgage payment in a major North American city, including utilities: $1500/month x 6 months = $9000.
- Grocery/food bill: $500/month x 6 months = $3000
- Car insurance, gas, repairs and maintenance: $250/month x 6 months = $1500
Six Months Basic Expenses = $13,500
- Rent in a comparable home or apartment in an interesting and exciting place like Cuenca, Ecuador; Buenos Aires Argentina; Hanoi, Vietnam; or Las Tablas, Panama: $500/month x 6 months = $3000
- Grocery/food bill: $200/month x 6 months = $1200
- Taxi/transport (no car necessary): $50/month = $300
- Round trip flight to get there: $1500
Six Months Basic Expenses = $6000
That’s a savings of $7,500 over six months or $1250/month.
So you can see, by leaving home, you are already “earning” $1250 per month. Stated differently, you only need to earn $1000 per month to live comfortably abroad whereas you need to earn $2250/month to get by back home.
Of course, there are many other potential expenses apart from the basic expenses outlined above (health care, entertainment, cell phone, just to mention a few), all of which are likely to be higher back home. Notice that this example includes a fairly expensive $1500 round trip flight – many locations would be much cheaper to reach.
The point is, you can look at a mini-retirement abroad not as an expense, but as a savings.
Actually, based on the info I get from a lot of readers, and based on my own expenses living in the Philippines (for 5 years now) in the greater metro Manila area, I think Michael’s figure are way conservative. Here’s my thumbnail budget:
- Rent in a comparable home or apartment in an interesting and decent (but non-touristy area) in the greater Metro Area: $200 USD per month = $1200
- Grocery/food bill: $200/month x 6 months = $1200
- Taxi/transport (no car necessary): $50/month = $300
- Round trip flight to get there: $1500 (you can typically do better on this, look at some of my preferred providers like Ed Mabunga or Manny Paez, who are specialists in travel to and from the Philippines. But I’ll leave the $1500 figure there as it stands just to stay conservative)
Six Months Basic Expenses = $4200 … about a $1550 a month savings, at least, for simply leaving the US and making a life here in the Philippines.
Economy Birding Philippines — But How Can I Earn Enough To Do This?
You absolutely can, if you want to. But I just looked at the old word counter on the wall and I see that I am way up over 1800 words already … and sad to say, you can track the popularity of my posts … as in how many people read them .. by the length. people just don’t won’t or even can’t read long posts, no matter how important the subject might be to them, so Part 2 of Economy Birding Philippines will follow along RSN (Real Soon Now).