Family of Four Taking Flight to Financial Independence

What If Your Life Was Off The (Traditional American) Beaten Path?

 A non-traditional approach to education this day through a Girl Scout opportunity outside of the classroom.


We’ve touched on this / these subjects before ... and in fact our whole blog really is about living life in a non-traditional way.

But as we approach early retirement, I’ve been thinking about it more.  Why not take a different path?

Work until retirement age.  Why not retire early?!

Buy a home ... stay put for 30+ years.  Why not rent?  Travel?  Not be tied down to one location?

Work hard to buy lots of nice things ... !  Nice things can be great and all ... but what if we focused on less material things and more on experiences?

Have a family ... find a great public (and for some private) school system (in fact buy the house near that school / school system).  Why not think outside of the traditional educational approach?

Save up money and vacation days ... take vacations when the children are not in school!  What if we weren’t tied down to a calendar?  Travel whenever you want?  After all, isn’t exploring the world one of the best ways to learn (hands-on!)?

On the one hand I’ve been sitting with some of these ideas for years now ... and within the past year or so in social media groups with like-minded people (lurking and reading about their adventures) so the non-traditional approach almost seems not so out of the box to me.  On the other hand, the traditional approach is what we know so some of that is taking some getting use to.

What if we ... retired early?  Were not tied down to a home?  Had more experiences than things?  Had a more non-traditional approach to education?  Had more flexibility when it comes to travel (or had a life of travel)?  Is a different way of life necessarily a wrong way?

Given that our kids are right in the middle of childhood (9 and 7 years) I’ve thought a lot recently about how these (non-traditional) decisions may affect them now, in the (near) future, and in the more further off future (young adults / college age).  Pushing them (and all of us) out of our comfort zone I think can be a life-long positive experience for all of us.  Why not experience life a different way from a different perspective and culture?

But also I think a big part of childhood for many is “school” so that has been on my mind too (“School” now and in the future).  Even though at this point we plan to continue a more traditional approach to school (we plan to put them in school in Spain to immerse them in the culture and language), I am working to change my perspective on education and tear down those 4 walls of a school.

One thing I do like about the school we plan to put them into in Spain is they will go to school from 9 am - 2 pm (with an optional lunch at 2:00 pm).  This is a much shorter day than we are use to (8 am -  3:15 pm for them now although since I am a teacher it is often much longer).  Although I’ve always felt educational activities and experiences can happen anywhere ... and I try to supplement with my kids (science, history, the arts), I am often unable to do this during the school year because school takes up so much of our time and energy (we are often there 7 amish to maybe 4 pmish many days!).  So I love the idea that they will have a shorter school day.

And at this point we still plan to take a World Schooling approach after maybe 2 years of school in Spain.  But time will tell ....

But what if their educational experience (either when they are in “school” or not) ... involved more (in no particular order):

-Play?  (What about learning from local Spanish kids outside of school.... and other expat kids from around the world?)
-Activity? / Athletics?  (What if “activity” was more than PE every other day ... and recess for 30 min or less a day ... what if we were able to learn about and play sports in a different culture?)
-Nature?  (Need I say more here ... we all benefit from nature!!)
-The Arts?  (Making art in museums?  Learning Flamenco in Spain?)
-Science and History?  (Time to do science at home or outside of home?  Visiting historic sites and supplementing the classroom or books?)
-Hands-On Experiences?  (Learning about money and finances by helping buy groceries at a local market?)
-Real World Experiences?  (I love our “Field Trips” in the summer .... museums, parks, new neighborhoods / local eating ... what if our life wasn’t limited to one Field Trip a year in the school year ... and just when we had time?)
-Travel?  (How about learning about Morocco in Morocco?)
-Learning Experiences on the Internet?  (Outschool anyone?  Maybe the kids can pick up a few French classes online?)
-Less worksheets?  Less or no Standardized Tests?  (Do I even need to elaborate here?)
-Life-Long Skills?  (Cooking anyone?)

I’m in no way knocking their current and past teachers.  In fact ... if anything, I wouldn’t be sitting here today preparing for a move to Spain (our kids have benefited greatly from the Dual Language program in our public school) if it wasn’t for them.  I also don’t think our kids would be as prepared for more independent learning if it wasn’t for the teachers, and I am talking about their pre-school teachers all the way to their current teachers.  But now that we have that educational foundation ... why not begin to take a more non-traditional approach?

There are some of my thoughts on the non-traditional approach to life.  What do you think?  If you could FIRE or when you FIRE, could you or would you take a leap outside of your comfort zone?  What do you think about the non-traditional approach?  What path might you take?

-Tara

How Much Cash Is Under Your Mattress?



I read an article recently that stated, “69% of Americans have less than $1000 in their savings accounts.”  What a scary figure!  That basically means that roughly 70% of the people in this country are living pay check to pay check.  What’s even more frustrating is that (some of) the same people are probably driving around in new cars, wearing fancy shoes, and grabbing a cup of fancy coffee every day as well.  It’s enough to drive me crazy!

The article got me thinking though.  What is the “right” amount of money to keep laying around in savings accounts? 
One thing that I can’t stand is idle cash.  I like to have as much of our hard earned money as possible working in the stock market.  That said, bills still need to be paid and unexpected expenses tend to pop up so there is a need to have some cash in a regular bank account.  The question is... how much?
The answer to this question is going to be different for everyone.  What I’d really like to gauge from this post is the amount that you (the readers) need to have on hand to be comfortable. 
I also think that the amount should be different for working years versus retired years, so I will break that down as well. 
How much do we currently keep liquid?

We like to keep enough to cover our fixed monthly expenses which is about $3,200.  Then I like to have another $2,000 for vacations and unplanned expenses.  For our family I would say a good round number of $5,000 is what we keep liquid from month to month. 
What about emergencies?

In the case of an emergency, where we need a large amount of money, we would simply use our credit cards. This would buy us time between the time we charge the card and the time the bill is due, to pull the necessary funds from our taxable Vanguard account in order to pay off the credit card bill.  Note, we have been living by this philosophy for over 2 years now, and I have not had to implement this yet.
What about in retirement?

The above numbers show how we handle cash during our working years.  However, I anticipate this strategy to change once we reach financial independence. During our FIRE (financial independence retire early) years we will have a cash stash as part of our safety margins.  Being overly conservative when it comes to money, our plan is to have 3 - 4 years worth of living expenses in cash.  The reason being is that most recessions last between 2 - 4 years, so this money would be used if / when the next one comes along so we aren’t touching our investments in a down market.  We may also be working part-time so there may be no need to touch the cash stash, but it will still be nice to have.  Like we discussed in our Year 1 Withdrawal Strategywe will have around $100,000 in cash when we enter ER (early retirement).  $22,500 of which will be earmarked for emergencies

So that’s it!  We keep about $5,000 laying around during our working years and plan to keep about $100,000 during our retired years. 
How much is in your bank account?  Will that amount change when you retire?

-Erik

Non-Lucrative Visa: How Do You Live In Spain For More Than 90 Days?



One of the biggest perks of FIRE (financial independence retire early) is availability and flexibility.  We will be available and flexible to travel, move elsewhere, and travel to spend time with family (and not be tied down to full-time jobs).

So why not Spain?  Why not Spain for more than 90 days?  On an American passport (I am not sure about others) you can only stay for 90 days so we plan to obtain Non-Lucrative Visas.  So what does that mean?  That means we need to prove we have the financial ability (among other things!) to live in Spain on our own without taking a job from a Spaniard.

So what does the process of obtaining a Non-Lucrative Visa for Spain involve?  To be honest, a lot.  I am a bit overwhelmed by the process, but the good news is there is quite a cohort of American expats that are willing to help if I have any questions including some Texans that have obtained them recently out of the Houston consulate.

We are now entering the time period where we need to work on this.  (Note, many Americans often lament about how these requirements vary not only by Spanish Consulate location, but they also may very depending on the person at your appointment, etc.)

Step 1?  Schedule a Visa appointment with the Consulate of Spain in Houston.  The Non-Lucrative Visa falls under a Resident Visa.  It looks like appointments are only available on Wednesdays and Fridays for Resident Visas.

You have to gather all your information and documents prior and schedule an in-person appointment per person (so we will need 4 appointments).  It seems like you can only schedule the appointments on-line, and it looks like the week we are looking at opens up this week to book appointments (we are looking to schedule the appointments in early June because of timing and a few other reasons).  We were told by the Consulate of Spain in Houston to not schedule an appointment earlier than 90 days before when we want to travel (so their example was if you want to travel in July 2020 schedule in May 2020 ... we plan to travel in August 2020 so we will schedule in June 2020).

The good news for us is we don’t have to go far to go to a Spanish Consulate since we have one right here in Houston.  Not everyone has that luxury ... in fact some people have to drive or fly to their appointment depending on where they live.

Where is the Consulate of Spain in Houston located?  It is located in the Tanglewood / Galleria area of Houston.

1800 Bering Drive
#660
Houston, TX 77057

Update: Earlier this week (week of Feb 10th 2020) on Tuesday at midnight I went on the Spanish Consulate Houston website and scheduled four Non-Lucrative Visa appointments for early June.  Why midnight?  I was tracking their website for several days, and my guess (based on the evidence before me) was they would release the date I wanted at midnight that night.  I wasn’t sure ...but I assumed it was an automatic release at midnight or later that morning.  The good news was ... I was right!  Setting my alarm for shortly before midnight worked.  I wasn’t sure how “competitive” it would be to get an appointment since they only offer those appointments on Wednesdays and Fridays.  I wasn’t taking any chances.  It was much smoother than say ...trying to book dining reservations at the castle in Walt Disney World!  Step 1 - check!

So what’s next?  What is required at the Visa appointment?

Step 2:  Gather all necessary documents for the Visa appointment within a specific 90 day time period (Part I).

The Consulate of Spain in Houston lists the following on their website:

Bring the following to the Visa appointment:
-2020 Visa Fees (Exact Cash or Money Order ONLY)

For the Non-Lucrative Visa the fees are: $140 Per Person which would equal $560 for our family of four.

It also lists authorization for residence fee $12 which I will need to ask about, but I assume we will also pay that per person which would equal $48.

So ... as of right now looking at $608 total for the Visas.

Update: As of the week of Feb 10th the Spanish Consulate confirmed that the above fees are correct.  $140 per applicant plus the $12 per applicant.

-Two Visa Application Forms Filled Out Completely (Yes, I think you have to fill out two copies unless I am not understanding this correctly).  This form (I assume) is per person so we will have 8 filled out total.

-All remaining documentation needed for the Non-Lucrative Visa.  This is a big one here ... and so we bring you, Step 3.

Step 3: Gather all remaining documents.  (Original copy and photo copy of EACH document below).  See the link for all details.

1. Visa application form filled out (see above).
2. Passport (Valid for at least a year with at least two blank pages for the Visa.  The Passport will remain at the Consulate while the Non-Lucrative Visa is being processed).
3. ID (Such as a US Driver’s License.  I assume the kids do not need an ID in addition to the Passport, but that may be something I need to make sure about!).
4. Two recent passport sized photos.  (White background, 2 x 2 inches, glued into applications).
5. Letter explaining why we are requesting a Visa (including purpose, place and length of stay, and any other reasons we need to explain).  I didn’t see anything about this needing to be in both English and Spanish, but I may ask about that.
6. House property / leasing or renting contract.  We already secured Airbnb housing for beginning of September 2020 through end of June 2021.  We were told by the Spanish consulate: The minimum required for an Airbnb reservation is 6 months (counting from the day of intended entry into Spain).  So fingers crossed this will work (this various again, by Consulate).

We must provide proof of the Airbnb contract along with a copy of the Landlord’s ID and copy of title deed of property or property certificate.  We were a little concerned with getting this information from our Airbnb owner, but she’s already sent us what we need!  Here’s hoping what she sent works.

7. Proof of sufficient funds.  You must provide last three months of bank statements of checking and savings accounts.

How much is needed?  26,333 Euros plus 6,583 Euros for each additional family member.  For us this would equal about 46,082 Euros.  This was a big reason why we sold the house in plenty of time (and now we have just what we need in checking / savings without moving around any investments).

8. Background check issued by the U.S. Department of Justice - FBI Again, this can’t be older than 3 months (that old 90 day time period!).  It must be legalized with the Apostille of The Hague.  Both documents must be translated by a certified translator (this is not for minors under 18 years old).

Wait, what?

It looks like the Consulate of Spain in Houston wants us to use this link with the FBI.

The Apostille of The Hague?  The Consulate sent me to this link which is located in Austin (our Capital).  I’ll have to research this process more.

Per their website: ”an Apostille is a form that legalized the document it is attached to.  Its function is to certify that the document it is attached to is legitimate and authentic.  The Apostille can be used in the countries that have signed The Hague Apostille Convention (such as Spain).

Certified translator?  You can only use certified / sworn translators from Spain.  I found this 2019 document on their Consulate website, and I found at least one in the Houston area that I plan to contact soon.

9. Medical Certificate: “A doctor’s recent statement (within 90 day time period) signed by a M.D. with a doctor’s or medical center’s letterhead.  It must indicate the following - “the interested does not suffer from any of the diseases that may have serious public health repercussions in accordance with the provisions of the 2005 International Health Regulations.”  This also needs certified translation into Spanish (and includes adults and minors).

10. Proof of International Medical Insurance (travel insurance will not be accepted).  This must include a letter from the health insurance company providing proof it can operate in Spain.  It must include the following coverage:  “Emergency medical coverage, sickness and accident, hospital in-outpatient, general practitioners & specialists, prescript medicine and repatriation.”

11. Authorization form M790 C052-  ̈AutorizaciĆ³n de residencia ̈. Only available in Spanish.  Instructions to fill this out are found here.

12. Form EX-01-  ̈Solicitud de autorizaciĆ³n administrativa ̈: Signed and filled out in print. Only available in Spanish.  Instructions to fill this out are found here.

13. For Spouse: Marriage certificate (not older than 3 months) authenticated with the Apostille of The Hague. Both documents must be translated by a certified translator.  (Also everything listed above).

14: For Minors: Birth certificate (not older than 3 months) authenticated with the Apostille of The Hague. Both documents must be translated by a certified translator.  (Also everything listed above except minors do not need background checks).

So wait ... what?  Where to begin?  So I spoke with my American expat on-line friend (that is also from Texas) who recently (January!) moved her family to Granada, Spain ...and she went through this exact process also (and we have at least one mutual real life friend, so there’s that).  She said obtain documents first.  Then do the Apostille of The Hague.  THEN do the certified translations because the Apostille of The Hague ALSO needs to be translated.  Oh, and do not take out any staples or the documents will NOT be valid.

I think I plan to make TWO copies of everything first or two copies of everything total so I will have the original and copy for the Consulate and one copy for us.

Step 4: Bring all documents (and all family members ...so all four of us) to the Visa appointment.

Step 5: (Fingers crossed) ... Obtain Visas!

Is there a Step 6?  Of course.  Step 6 is what we need to do once we arrive in Spain, but I will save that for another post.

Whew.  So that is our first snap shot of what it takes to obtain a Non-Lucrative Visa.  This will definitely be an on-going work in progress with some updates and adjustments made as we learn more.  Total cost?  To be determined at this point.  (Note, all of this information is based on the Consulate of Spain in Houston during this time period (early 2020)).

So there you have it (for now).  What do you think?  Have you obtained a Visa before?  What was the process like?

-Tara








Taking Flight: How To Avoid Foreign Transaction Fees and ATM Fees



Before reading this post read our post on credit cards and our philosophy on paying them off in full every month.  If you don’t have the discipline to do this, then stop reading.  Credit cards are not for you!

In our early retirement (and life in general) we don’t plan on ever giving any of our money to banks or credit card companies ever again.  But considering we plan to move abroad, I needed to figure out a way to avoid foreign transaction fees with our credit card and bank ATM fees with our debit card.  

Lucky for us I stumbled across this great post from Millennial Revolution that pointed me in the right direction.

To be clear, we plan to use our credit card as much as possible for our spending because we believe it to be the most secure way to spend and because we will earn points.  That said, we also recognize that we will need easy access to our cash no matter where we are in the world.  In this post we are going to outline our plan on exactly how we are going to do this (with no fees (EVER)).

ZERO Foreign Transaction Fees

Capital One is the answer for this one.  We have personal experience with the cards below, and none of them charge foreign transaction fees.  The main difference for these is that some have an annual fee and some don’t.  Also the rewards structure and the sign-up bonus is different for each. 

        Venture Rewards Card Highlights: (As of 2/20)
1. 2 reward points for every $1 spent.
2. 50,000 bonus points when you spend $3,000 in the first 3 months.
3. $0 annual fee in the first year ($95 after the first year).
4. No Foreign Transaction Fees.

Venture One Card Highlights: (As of 2/20)
1. 1.25 reward points for every $1 spent.
2. 20,000 bonus points when you spend $1,000 in first 3 months.
3. $0 annual fee.
4. No Foreign Transaction Fees.

Savor Rewards Card Highlights: (As of 2/20)
1. 4% rewards on dining/entertainment.  2% at grocery stores.  1% on all other purchases.
2. $300 cash bonus when you spend $3,000 in the first 3 months.
3. $0 annual fee for the first year ($95 after the first year).
4. No Foreign Transaction Fees.

Savor One Rewards Card Highlights: (As of 2/20)
1. 3% rewards on dining/entertainment.  2% at grocery stores.  1% on all other purchases.
2. $150 cash bonus when you spend $500 in the first 3 months.
3. $0 annual fee.
4. No Foreign Transaction Fees.

Which credit card do we plan to use in Spain?

We will use the Venture One Card that is highlighted above.  The $0 annual fee is the main reason we will stick with this card.  Now that we have that sorted out, let’s turn our attention to ATM Fees.

No ATM Fees Anywhere (EVER!)

Is this possible?  Honestly, I didn’t realize that it was until I stumbled across the Charles Schwab High Yield Checking Account that is attached to a Charles Schwab Brokerage Account.  The best part of both of these accounts is that neither one requires a minimum balance or any money at all to open (ours are both currently sitting at $0 and will be until August of this year).  

The way this debit card works is pretty cool.  At the time of use, you will be charged the applicable ATM fee, and at the end of each month, Charles Schwab will automatically reimburse all fees for the month.  In other words, you can use this at any ATM, anywhere in the world that accepts VISA, and your ATM fees will be reimbursed at the end of the month by Charles Schwab.  

Summary

To put all this in perspective, we will have our cash cushion in our Charles Schwab account.  We will move funds over from our Vanguard Investment account to our Schwab account based on our annual withdrawal rate for that year (between 3 - 4% per year), and we will have our Capital One credit card set up to autopay the entire card balance every month out of our Schwab Account.  

There you have it!  Foreign Transaction Fees and ATM fees eliminated from our lives forever.  

So how do you use credit cards?  Do you take advantage of reward programs?  Do you pay them off every month?  Do you use them when you travel?

-Erik