Cutting Costs and Living on a Mustachian Budget in Ecuador

Cuenca, Ecuador
Photo Credit: Emily Barbe

I'm not joining Mr. Money Mustache in Ecuador, but I found someone interesting in the forums today who lives in Cuenca, a popular retirement destination. He goes by CuencaSolo and he's a real retiree from Dallas, Texas who thoughtfully provided his budget. It's much lower than, say, $1800. Ecuador uses US dollars and the cost of living is much cheaper, as is often the case abroad:

As of March 2013 the average Social Security benefit being paid out was $1,155, according to the Social Security Administration. That may not go far in Miami or Manhattan, but in some popular expat locales it could cover monthly expenses very nicely indeed. In Nicaragua and Malaysia, for example, a couple can live comfortably for around $1,000 a month, according to International Living. Food, clothing, transportation and everything else may be cheaper abroad, depending on where you look.

"If you can move somewhere where suddenly everything is 75 percent off, it means your retirement savings will last that much longer."

Right. So you become a frugal not by minimizing your consumption, but going to a place where dollars stretch a lot farther. I remember that in Ecuador we would see people pay for bus rides with 25 pennies - pennies are almost an anachronism and I remember that in Ecuador they had actual worth. It was crazy.

Anyways, his budget:

$280 rent  $63 condo charge (includes central hot water and propane for the stove, both luxuries here)  $39 cleaning ($9 a week for about 90 minutes)  $22 internet (pretty slow, down for hours at least once a week)  $15 purified drinking water (in 20-liter bottles, $2 including a tip when the guard brings it up)  $10 electricity (with a charge for street lighting!)    $4 water, sewer (and maintain public parks!)    $3 landline phone (plus a bit every 3 months to buy minutes for a cell phone)
$436 monthly total.

That sounds like pretty much everything that I would want, besides the Internet. I've been to Cuenca and I think that it's beautiful. I would not mind the entire early retirement community packing up and moving to Cuenca. I actually think that Jacob Lund Fisker would spend a lot less in a place like Cuenca than Chicago.

Yahoo! acquires Tumblr: The Insidious Tumbeasts

Yes, it's true. Yahoo has bought Tumblr. This has generated quite a bit of interest on Quora and business people are perking up their heads and asking what Tumblr is.

Marissa Mayer, as she did with Flickr, made a strategic choice as to what her very first posts were. Also, she has chosen to go by marissamayr, a playful play on Tumblr's fanciful omission of its "e." Trademark law rears its head from the dusty annals of my intellectual property class.

So, for everyone asking what Tumblr is, you can find more in plenty of places, such as CNN or TIME.

The Oatmeal's Tumbeasts
Source: The Oatmeal

I started using Twitter in 2009 and Tumblr in 2010. I remember well how often the Fail Whale used to show up. Tumblr went down it seemed every day or every week. It was awful. 

There was more than one time when I drafted a blog post on there, only to have it lost in the ether as the Tumbeasts ate it.

Sam Spratt's Tumbeast
Source: The Oatmeal

Understandably, this upset me. David Karp has acknowledged that his team was very small in the early years. The reliability of the site slowly got better as time went on. But the Tumbeasts were a very real thing in the first few years.

My fear is that Marissa Mayer will curate out the NSFW content, which is the backbone of the site. It's what drove its early content. There are certainly other things hosted at tumblr, but that's is its core strength, which she acknowledged in her second Tumblr post.

Now I'm still afraid that Tumblrs will be eaten by Tumbeasts, but this time it won't be about David Karp and his team. The real threat is external. I adore Marissa Mayer, but Tumblr's internal integrity is supposed to be respected as of now. That could change, as someone from Blogger (acquired by Marissa Mayer while at Google) pointed out. Yahoo! doesn't have the best track record.

We are already seeing migration to Wordpress, according to founder Matt Mullenweg. We will have to wait and see how it all pans out. 

Planning Ahead: Max Kornblith and the Passion Dilemma

Max Kornblith
Source: Quora

A young Gen Yer, Max Kornblith, sent an email to Tyler Cowen, an economist. He is a well-qualified young generalist and he wants to maximize doing interesting work. He doesn't really have solid goals and he doesn't have any kind of passion.

Tyler Cowen ends with telling Max to go into consulting (citing Robin Hanson), which rewards his Ivy League degree and other credentials while still keeping the field open.

NPR's coverage of Max's lack of specific passion was pretty interesting. Tyler Cowen, Bryan Caplan, and Garett Jones, all economists, took Max to lunch.

How much are you willing to suffer in the short run to get a better future?

Have you ever considered working in Asia?

How important will it be to spend X number of hours with your kids? And what is that X?

How well do you understand your own defects?

What does 50-year-old Max want?

Can your community be a cyber community, or do you need to have a face-to-face community?

The NPR reporter concluded:

 But they did all agree that Max's lack of a passion could work to his advantage. Pursuing a passion — especially if it's a popular passion — often doesn't pay very well.

 I found that finding very interesting, especially considering that Mark Cuban says not to follow your passion. He says to look into something that you put a lot of effort into.

My Own Response

I recently graduated with my bachelor's degrees from Indiana University. I thought that I'd take a crack at those answers, with healthy skepticism.

Willingness to Suffer in the Short Run

I am of course willing to suffer in the short run to get a better future. Ramit Sethi calls this front-loading.

Ramit: I want to be clear about something: I’m sincerely interested in doing less and less work as I go through my life. That’s why I’m always puzzled when I meet people on a career path that will have them working more, not less. That’s like being a real-life Mario Brother, where every progressive level you beat means your life gets harder. Why would you do it?

Willingness to Work in Asia

I have indeed considered working in Asia, especially since I am of Asian heritage and I've traveled to China. The most serious considerations are teaching English somewhere like Malaysia, but I've not been very serious about those because the options are not lucrative and you often pay to volunteer.

X Hours With Kids

This is actually one of the most important things, because it ties in directly to quality of life. X is where I get to eat dinner with my kids, go to soccer games and other extracurriculars like plays, and still have enough time to do meaningful and important work. I'm fine with doing my 8 hours from 7-3 (mothers' hours), picking up conference calls etc. from the road, and doing other work at night once the kids are in bed. Ideally, I'll be in a situation when I have children to have flexible hours, where I'm still actually working 8-10+ hours a day, but I'm flexible around the times when I would like to be with my kids. (I got this idea from someone else.)

Understanding Own Defects

I like to think that I understand my own defects. Some of them are generational, like Gen Y likes to do things in teams and fear of conflict. Others are more specific to me, like being overly conscientious.

What does a 50-year-old want?

I saw the very clear echoes of Bryan Caplan's Selfish Reasons to Have More Kids. It's a fabulous book which says that parents should think about how many kids and grandkids they would like to have at age 60 and 90 when deciding to have children. I know that a lot of people have looked back and wished that they hadn't worked so much.

Jennifer Robison at Gallup wrote an article entitled "Happiness is Love -- and $75,000." Your happiness doesn't increase over that level and the marginal utility of earning more money diminishes. People always ask about living in New York and the authors, Angus Deaton and Daniel Kahneman, say that $75,000 is sufficient no matter where you are. The other number that Daniel Kahneman has thrown around is $40,000, but I think that that numbers works in places like the Midwest and doesn't hold up in more expensive areas such as New York.

Wired quotes Daniel Kahneman's most famous line. 

Daniel Kahneman summarizes decades of happiness research this way: “It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you.”

So when you know that the most important thing to you when you are age 50 or 90 is going to be family and love, you should make decisions that enable you to have the time to spend with your kids. It's the best investment in your long-term happiness.

Cyber Community

Community, family, and love - it's all about relationships. That's why it was really interesting to me to see that the Mustachian readers self-select and are almost all INTJs or something close to it. INTJ people abound in online forums, because it's the easiest way for them to communicate. I also like the stability of the communication, because it is location independent.

Spending time with your family might be something that is primarily location-based, but it doesn't have to be. With the innovation of FaceTime and Google Hangouts, you can hang out with your family, friends, and connections no matter where you are. 

Social networks are something else that keep you in touch with family. You can see family pictures online and comment on how big little Jillie is getting. Google Plus hasn't bridged this gap for me yet, but astonishingly I see more activity from my French family on Google Plus than on Facebook. I think that it might be related to all the other noise that I get on Facebook. Facebook is where I have almost all of my contacts, whereas Google Plus has been slowly adopted and therefore really I use it to learn more about SpaceX and Tesla, because strangely those pop up a lot.

I think that being able to connect digitally to your friends and family helps you keep up your happiness, even when you are living very far away. I will test this hypothesis when I live in Wisconsin, which is a few hours away from the Indianapolis area, where my family is based.

Post Script:

At least I have a 10-15 minute commute to work.

Why is traffic so unpleasant? One reason is that it’s a painful ritual we never get used to – the flow of traffic is inherently unpredictable. As a result, we don’t habituate to the suffering of rush hour. (Ironically, if traffic was always bad, and not just usually bad, it would be easier to deal with. So the commutes that really kill us are those rare days when the highways are clear.) As the Harvard psychologist Daniel Gilbert notes, “Driving in traffic is a different kind of hell every day.

Pebble Smartwatch Review: Red Smartwatch

The Pebble E-Paper Watch set the record for the biggest Kickstarter project, raising over $10 million dollars. The response totally blew away the makers and Pebble is now a major, major smartwatch maker. They have even opened for third-party apps and it's ultra-futuristic to have one.

Mine came in the mail today.

I gleefully opened it.

I wasn't in the first wave of people to get the Pebble. I chose a red one, as pictured above, and I had to wait until they produced them. Happily, they chose to do the red watches first out of the color watches and that's why I have it.

They actually shipped it on May 15 and it came today, which was a great feeling.

As you might notice in the second picture, they direct you to go.getpebble.com and you choose your phone's operating system: iOS or Android.That takes you through the steps to set it up. I would also like to point out the minimalist packaging and the extreme ease of use, which means that they care about the user experience.

They showed me in the app how to set stuff up so that my Pebble could function. It was super simple and very intuitive.

I updated my firmware.

And now my phone functions beautifully and easily. I very easily got one of the extra watchfaces (Simplicity) and have implemented it. I've sent a ping from my phone to my watch. I've started, stopped, etc. my music through my watch. It detects SMS messages and sends them to my wrist. I am already in love with it and I've had the open box for maybe 30 minutes.

We Are All Writers

Alaric Cole
Source: @alariccole

I was reading this post, "You're Never Going to Write That Novel."

We all have stories to tell, and we should tell them. But we’re not all writers.

I felt that was so untrue. Penelope Trunk particularly talks about stories. We all tell stories and those are the most important parts of our careers.

If you can tell a story, then you can be a writer. I think that what the author of the blog post meant to say that we were not all novelists. I personally write little short stories and I'm more or less good at writing little vignettes about my life. 

Our Immediate Future: Software Development

Everyone is excited about Facebook paying a billion dollars for the Israeli startup Waze. I've had it on my phone for about a year now and I love it. It keeps track of where the cops are.

When I did more research into the matter, I found out that there are even more Israeli startups in my daily life that I have never considered. Fiverr is like Mechanical Turk for specialized uses, especially voice acting. You get micro-gigs. It is enabling the free agent nation for quick tasks - similar to Task Rabbit but only online. Another one is Outbrain, which is used my major news outlets, like TIME and CNN. It's like LinkWithin, but LinkWithout. It's simple and easy and it tracks the data for the site owner.

I think that we are going to see a proliferation of Israeli startups. Professor Hayford told us about the way that the Israelis were just as developed as Silicon Valley but had to devote their resources to war. Israel is rich with technology talent. I have a friend, Ori, who is getting a degree in computer science. He just finished his first year and he's already written his first full program. If they just had a clear shot, then they would rival Silicon Valley.

That means that what happened in 2011 to Amit Aharoni, co-founder of CruiseWise (now apparently partnered with or acquired by Cruise Critic) is exactly what would push the US behind. USCIS wanted to push Amit Aharoni, part creator of 9 American jobs, out. He was living in Vancouver and the day after Diane Sawyer broke the story, USCIS reversed its position. Immigration is vital to the development of our economy, especially in the software sector. I know that Mark Zuckerberg's FWD.us has fallen short, but we have the opportunity to drive our own and global growth with the continued development of software.

We again have this opportunity. South Korea has done a dramatic transformation of its workforce in only a generation. They trained their people to put together stuff like cell phones and focused on sectors with good margins where they could be disruptive. Right now, computer programming is where it is at. You need to know how to program, and places like Lynda, TreeHouse, and Codecademy are jumping on that market.

Kirk McDonald
Source: iMedia

It's now part of getting hired in the places that have the cash to hire you. Kirk McDonald used to be the president of digital for TIME, Inc. and now he runs PubMatic. He says that he won't hire you unless you have basic programming skills. Mark Cuban says that there are two economies: brick and mortar or digital. The digital companies are hiring. McDonald cites a report that says that there are 40,000 computer science graduates for 120,000 jobs. I read a story about Elizabeth Beigle-Bryant, who used Codecademy to develop skills that lead to a new job at the University of Washington. Obviously, the market for graduates who have basic programming is better than it is for the economy at large.

 It's part of the skills gap that we have unemployed or underemployed graduates and we need to do a better job of educating our children for future jobs. Even though we don't know what they will be doing in 20 years, we can prepare them for 5 years ahead if we just put more programming into college curricula or high school curricula.

Changing Media Consumption: Gen Y and Gen Z

I was reading a Mark Cuban post on media from 5/10/13. In it, he says: 

If you think that the tech your young kids are using today are any reflection on what will be used in the future, even in the near future, you are mistaken.

I think he's mistaken. It's true that we don't go around with a Sony Walkman. Mark Cuban is right that things change dramatically - technology keeps progressing at an exponential rate. It's a wonderful and terrifying thing.  But it's untrue that the technology of today is completely unrelated to the technology of tomorrow. The iPod for example was not the first MP3 player. However, it was the simplest and easiest to use and many people bought it. A lot of the technology of tomorrow already exists but has not been widely adopted.

One example is Patrick Rhone's darling daughter Beatrix:

I say all of this to set up the fact that Beatrix has little idea of how traditional TV works and seeing her first real exposure to it was enlightening to say the least.

The first time came after attempting to walk to a parade a few blocks away and getting caught in one of the area’s famous torrential downpour rainstorms and having to turn back. Wet from head to toe and cold, we figured finding something fun for Beatrix to watch on that great big screen would lessen Beatrix’s disappointment at missing the parade. After scrolling through what seemed like a hundred options in the built-in program guide, I finally found a channel that had something on that would hold her interest — Shrek.

I turn to that, Beatrix approves, and we watch. Then, a few minutes later, a commercial comes on. The volume difference is jarring to say the least. I would safely guess it is fifty percent louder than the show. I hurriedly reach for the remote and turn it down…

“Why did you turn the movie off, Daddy?”, Beatrix worriedly asks, as if she has done something wrong and is being punished by having her entertainment interrupted. She thinks that’s what I was doing by rushing for the remote.

“I didn’t turn it off, honey. This is just a commercial. I was turning the volume down because it was so loud. Shrek will come back on in a few minutes” I say.

“Did it break?”, she asks. It does sometimes happen at home that Flash or Silverlight implode, interrupt her show, and I have to fix it.

“No. It’s just a commercial.”

“What’s a commercial?”, she asks.

”It is like little shows where they tell you about other shows and toys and snacks.”, I explain.

“Why?”

“Well the TV people think you might like to know about this stuff.”

“This is boring! I want to watch Shrek.”

“I know, honey. It will be on in a bit. Just be patient.”

The show eventually comes back on. I reach for the remote to turn the volume back up. We can barely hear it now. The difference in volume between the show and the commercial is shocking and I don’t remember it being this bad when I did watch television regularly. Perhaps it is only like this on kids channels. I wouldn’t know.

Of course, not more than ten minutes later, the movie is once again interrupted by a round of commercials.

“Why did they stop the movie again?” Beatrix, asks. Thus leading to essentially the same conversation as before. She just does not understand why one would want to watch anything this way. It’s boring and frustrating. She makes it through the end of the movie but has little interest in watching more. She’d rather play. The television is never turned on again during our stay.

A few days later and on our way back home, after a long day of driving, we arrive at a hotel. We check in, unpack the car of our essentials, make it to the room, and settle in for the night. There was a television in the room with some select Cable TV stations and Beatrix asked if she could watch a show. Sure, I said, so I turned it on, and flipped it to what appeared to be a kids channel. There was a commercial on.

“Is this a show?”, she asked.

“No. This is a commercial, we have to wait for the show to come on.”

I now realize, in hindsight, that she did not understand that all televisions work this way. She thought it was only the one in my sister’s place that was “broken” and “boring”. In her mind, this was a new TV and thus should work differently.

Then, a commercial for The Secret World of Arrietty comes on.

“This! I want to watch this!”, Beatrix exclaims.

“We can’t honey. It’s not out yet. It’s just a commercial.”, I say. She seems more confused so I try an analogy.

“You know when we go to a movie theater, and they show you previews of movies that are not out yet before the real movie? It’s like that.”

“Oh.”, she resigns. Not sure she gets this but I think the television executives and I have finally worn down her curious resolve.

When the commercials are over, it is some live action teen show. She is not impressed.

“Can I choose?”, Beatrix asks. She’s still confused. She thinks this is like home where one can choose from a selection of things to watch. A well organized list of suggestions and options with clear box cover shots of all of her favorites. I have to explain again that it does not work that way on television. That we have to watch whatever is on and, if there is nothing you want to watch that is on then you just have to turn it off. Which we do.

I then do what I should have simply done in the first place. I hook up the iPad to the free hotel wifi and hand it to her. She fires up the Netflix app, chooses a show, and she is happy.

This, she gets. This makes sense. 

Beatrix understands the future of programming better. When Mark Cuban talks about TV being the path of least resistance, he's right. Watching TV is something easy. But that's true for someone of his generation, not mine. I never owned a TV until my Kinect demanded that I get one.

I wrote about my generation's media usage in 2009. We are really changing the way that things are - we expect things to be personalized for us, because businesses have the capacity to personalize the experience. Now, we are entitled and we expect it. It's not a fancy new thing; it's more of a given.

Cable and Senator McCain

Senator McCain has been trying to push forward a bill for us to be able to choose cable plans a la carte, instead of the huge bundles. I'm trying to move into an apartment in Wisconsin and for some reason my "basic technology package" at one of the complexes that I toured came with 47 channels of cable. My roommate GG and I have never had cable at home. Neither of us watches much TV. So it's nonsensical for us to pay for 47 channels just to get Internet.

Cell Phones and Contracts

We think that we should be able to get a personalized experience when it comes to our cell phones, too. It's absurd that we pay an enormous amount for our cell phones. Jon Evans at TechCrunch says that we should vote with our money and go to carriers that don't lock us into awful contracts and let us go month by month. It's true that in almost every other country, you pay for your usage. When I was living in Spain, I just topped up my saldo when I got low. In Ecuador, I paid Movistar as I went, taking advantage of their $3 for $1 days, where they gave you bonus credit if you gave them at least $6. It makes sense to pay for what you use, but somehow that hasn't happened in America yet. Even though we were joyous about Walmart's Straight Talk or T-Mobile's monthly plans, we haven't even switched to them. Cheaper still are Mr. Money Mustache's $10 per month iPhone plans or Republic Wireless's $19 per month unlimited data, talk, and text plans.

Jon Evans, columnist at TechCrunch
Source: TechCrunch

By the time that my kids are grown up, this landscape will have already changed. Data is precious to my generation and we use it more than the talk minutes or any such nonsense. Gen Z has already expressed preferences different from Gen Y's preferences. Gen Z apparently will choose devices based on battery life as opposed to social status (what drives iPhone usage); Gen Z has watched Gen Y and X struggle with battery life of smartphones. They're already beyond us and they are just kids. So it's true what Mark Cuban says that the kids won't use what exists now. But it's also true that what they use now influences what they will use in the future, if only because future innovations will solve today's problems.