A girl in conflict...travel versus saving

I came across a recent post about "The Price of Luxury" over at Brave New Life that really struck a cord with me. As an avid traveler who is also trying hard to achieve her goal of early retirement (or financial independence) by age 38, I am often faced with the opposing forces of saving and spending in order to achieve my dreams. Therefore, I often think about what it's really costing me to indulge in trips to far-flung destinations.

On the one hand, I try to be very diligent with my monthly budget and even have a set amount of money that I automatically deduct from my paycheck - roughly $100 per pay period - to go into an ING travel fund. I use this money solely for vacations and mini trips I take throughout the year. This helps alleviate some of the anxiety I might feel when spending money on travel. On the other hand, I realize that by spending this money that could be better utilized padding a savings account or investing in stocks or mutual funds, I am only prolonging my path to retirement. (A $200 per month or $2,400 per year travel bill really translates into a savings cost of $80,000 assuming a conservative 3% return on investment.)* However, there are some things that are good for one's mind, body, and spirit. For me, it's travel.

I've always viewed travel as first and foremost, an adventure. I love to be immersed in new cultures, experiencing exotic tastes, smells, sights and sounds that both transform and transport me. There's no substitute for getting lost in a chaotic bazaar, weaving your way through narrow, unfamiliar streets, making a connection with strangers who don't speak your language, or coming upon a quiet, undisturbed place to take your breath away. Travel holds promise. Travel encourages me to learn from my past, to keenly look towards the future, but to always be aware and firmly present on the path I'm on. That way, I'll always appreciate where I am in life and where I'm going.

As I struggle with some of the guilt I feel about spending the money on travel, I have to remind myself that part of it is the price I pay for living in my hamster wheel. There is no way around it - I work to live, but in order to escape some of the realities of my cubicle nightmare, I use travel as an escape. Until the day that I can break out for good, where travel will be less of a coping mechanism and more of an immersive experience, I can only hold my breath and continue saving.

*In the world of early retirement, instead of trying to calculate how much you'll need in retirement based on a fixed percentage of peak income figures (i.e. I'll need 80% of my current income to live off of for the rest of my life), early retirees tend to calculate how much they'll need in retirement based on their current monthly expenses and aim to live off their investments. In my example, a monthly travel expense of $200 or $2400 per year using an ROI after inflation of 3% means that I'll need 3% of my nest egg to equal $2400.  $2400/.03 = $80,000. So I would need to save $80,000 in order to draw $2400 each year.

I've broken down the gist of the early retiree method in more detail below. Basically, the idea is that to retire early, you need low monthly expenses. If your monthly costs are low, you'll need a lower nest egg in order to retire. Conversely, if you use the conventional "percentage of my current income" method, you'll need a really large nest egg to retire.

Early retiree method:

• Bring monthly costs down as low as possible by doing such things as paying off your mortgage, living frugally, investing and saving early.
• Assuming $2000 in monthly expenses means an early retiree would need about $2000 x 400 or $800,000 to retire early. And by early, I'm talking mid-30s or earlier if you're diligent! The retiree could then withdraw $2000 per month or about 3% of his/her portfolio and expect that it would last the rest of his/her life.

Regular or conventional retirement method:

• Save the "recommended" 10 to 15% of income each year
• Live normally, don't take too many measures to reduce monthly expenses
• Aim to replace roughly 80% of pre-retirement income. Assuming a pre-retirement income of $80,000, a retiree would need $64,000 x 30 years or $1.92 million before retiring. And the retiree isn't leaving the work force early...he or she would need to work until 65 in order to accumulate the $1.92 million.

A girl in Costa Rica - White water rafting

Another item on our "must do" list in Costa Rica was river rafting. We signed up with Wave Expeditions for the tour and highly recommend it. The outfitter has an office conveniently located in La Fortuna.

There were roughly 12 of us in the group total, not including the tour guides so it still felt small and personal. We were picked up from our hotel in a nice, clean van and driven the short 1/2 hour or so to the Bolsa River. Apparently, the white water tour is dependent on when the dam flood gates are opened each day, which was a bit surprising to us, but nonetheless, made for good rafting.

Our group of 12 was split up into 2 and we were all provided with all the necessary safety gear - helmet, floatation vest, paddle - and were also given a thorough run-through of the various safety drills as well as rafting instructions.

It was such a thrill going down the river. We even saw a sloth (our first and only sighting in Costa Rica) while paddling. There are also lots of wild life and flora to gaze at when you're not battling the river and trying not to fall in, of course!

Wave Expeditions was a standout outfitter for several reasons, including:

• Provided us with a tasty, mid-rafting fruit break - fresh pineapple and watermelon taste great after an hour or so of rafting.

• After we finished rafting, we were taken to Casona el Rancho, a preserved farmhouse where husband and wife owners, Milton and Elieth were committing to running the farmhouse the way it had always been run - without electricity and with minimal environmental impact. It was such a great experience to not only learn about their work in safeguarding a piece of Costa Rican tradition but to also enjoy their beautiful property, flush with beautiful birds, plants and trees. We were treated to a very tasty lunch and invited to sample their special homemade wine and molasses. 

They even demonstrated how they use the traditional ox/bull method for squeezing sugar cane, which they then convert into brown sugar/molasses.

This cheeky little goat seemed to really want its picture taken, so I had to oblige.

A girl in Costa Rica - ziplining adventure

After our one-night stay in the Arenal Observatory Lodge, we drove a few miles away to where we'd be spending the next few nights: the Los Lagos resort. What the Los Lagos lacked in terms of seclusion and a sense of being cocooned in nature, which the Arenal Lodge had in spades, it made up for in terms of its convenient proximity to the La Fortuna city, and its own unique appeal.

The property is known for its hot springs, with water corralled from underground into a variety of man-made pools with ranging temperatures to suit your preference. Our room was in a standalone bungalow that houses two separate guest rooms and which backs up to the forest. The room was also halfway up a steep hill which made for a great calf and butt work out after a few days!

Zip lining was a convenient stroll from our room to the on-site zip lining outfitter. While the various zip lining/canopy outfitters claim theirs is the fastest, tallest, etc., it's hard to tell. All I know is the Los Canones zip lining tour was great. There are 8 different platforms with sweeping views of the forest from the top of the canopy. We loved it. Here's a view from the treetops with the zip line extending through the center:

Other highlights of staying at Los Lagos:

• You're surrounded by wildlife. On the property alone, we saw (and heard) howler monkeys in the trees outside our room, were joined for meals by large, skittish lizards and iguanas.

• The property also has a butterfly garden, crocodile farm, ant farm and frog farm. The word "farm" is used loosely to describe the single crocodile pen, small frog enclosure and somewhat sparse ant farm. However, we loved the butterfly garden; it was quite magical to be surrounded by so many butterflies and hummingbirds.

 

• Complimentary breakfast buffet was good; we ate at the restaurant several times during our stay as well and the food was tasty.
• Whether you're traveling with kids or are simply a kid at heart, you should go down the pool slide. There are three, and while the larger one looks tame, it does catch you by surprise. First you're thinking, "eh, no big deal." The next thing you know, you're slipping and sliding around curves and twists through tunnels only to emerge - suddenly - straight into the pool. Remember to hold your breath!