Reader Profile – Pauline from Reach Financial Independence

1. Please tell everyone a little bit about yourself (background, education, family situation, etc).

My name is Pauline. I am 32 and was born in Paris, France. I graduated 10 years ago with a Masters in Business, and wanted to try a different approach to life after spending the last two years of college working part time for a big firm. I knew the cubicle life was not for me and wanted an early exit.

I backpacked my way around the world for a year, then worked in Guatemala, Spain, and the UK for six years, holding in each country jobs that had to do with my college skills. From a law firm to an IT software company, my goal was to save as much as possible to avoid setting foot in an office ever again. I thought it would take me until 40, but I was able to ”retire” from the corporate world at 29.

Since I left my last job, I have lived in Morocco for a year, traveled across North America and Europe for a year, and lived in Guatemala for a year.

I have now settled in Guatemala where I bought a lakefront property three months ago, and have started to fix up a house I hope to turn into a guest house. I am working on this project with my boyfriend. We have no kids.

2. Describe your current financial situation (who works in your family, how your income is, your expenses, etc.).

My boyfriend is a retired lawyer. He owns a cattle ranch and has one of Guatemala’s most extensive art and coins collection from which he makes an occasional profit. Most of his income comes from selling cattle at the moment, and he is also an expert in flipping things, buying low and selling higher.

My income comes mainly from several investments. I own a three bed flat in the UK that has positive cash flow, and just sold a flat in Paris that used to generate rental as well. Instead of keeping that money in a savings account to live off it for a while, I chose to reinvest the money in my Guatemalan property to force myself to generate more income from it. I also own a coconut farm, some cattle heads, and a few other investments that one would qualify as unusual, that produce a solid passive income. I like tangible investment and would rather see a calf or a coconut than imagine a virtual share of an online company.

On top of that, I make a little bit of active income, writing articles for travel French and Spanish websites, and my blog is also generating a nice income, but I’d rather not count the hours! A few clients from my old jobs occasionally contact me for translation jobs and other virtual tasks. I get paid in Euros, British Pounds, Dollars, and spend in Guatemalan Quetzales, so sometimes I make a bit of money trading currencies.

I have brought in six figures in 2012 and hope for an even better 2013! A great part of 2013’s income will hopefully come from the development of 90 acres of land that came with the house into residential properties.

My expenses are:

Shared Expenses– We split everything in half for the house. All the rest, each of us decides how to spend their  money.

• Mortgage – $0. We were able to buy the property in cash but are putting a lot of money into repairs, with over $10K in the past three months.
• Food – $300. Trying to lower that to $200 this year. This is very high for Guatemala, but we like to eat and rarely go out. Includes alcohol and expensive things such as cheese or bacon that come at a premium here.
• Gas – $100. Weekly trips to the supermarket and to buy building materials cost $20, plus the occasional visit somewhere. We use my boyfriend’s car, so I occasionally pay for half of the repairs.
• Utilities – $50. $10 for gas, $40 for electricity. No heat or AC but we have an electric water pump to pump water from the lake and with the works around the house, lots of drill and other electric usage. Otherwise, just a fridge, blender, deep freezer, and a couple of laptops and phones. The shower also has an electric heater, but we rarely use it.
• Handyman – $200. I don’t want to have a maid, but this guy does all the heavy lifting, gardening, maintenance… and will stay once the works are over.
• Animals/garden – $20. We have 9 hens and a rooster, and couldn’t find the courage to butcher our Christmas turkey, so he is around too. They eat corn and bird food at the end of the day to come back to the cage. I started a small garden, more for entertainment than saving on the grocery bill since vegetables are ridiculously cheap here.
• Property taxes – $30. I don’t know exactly how much that will be. The lakefront plot is leasehold from the state, and there is property tax on the 90 acres piece of land that came with it.
• Accountant – $20. We pay an accountant since we bought the property together through a company, of which we each hold 50% of shares. We don’t have other assets in common.

• Internet – $50. Bad provider, slow connection but in the middle of the jungle, you can’t hope for much. BF has a smart phone plan. this is just for my laptop USB modem.
• Fun money – $50. I don’t really know what goes there lately since we moved to a remote place, but this is usually treats and expenses for when I am alone.
• Travel – $250 or $3K yearly. For a trip back to France for a month and another trip somewhere.

Total $710. That should be my budget once the works on the house are over. For the moment, it is more like WAY much I don’t want to know! haha. I am not including the costs of my UK flat since they are covered by the rents. I just add the surplus to my monthly income. I also pay taxes in four countries. that amount changes every year, and it is quite the headache.

3. What are the current financial challenges you are facing (saving, paying off debt, student loans, merging finances after recently being married, etc.)?

I have a goal to repay over $25K of debt this year, on top of my usual $1,000+ UK mortgage and loans payments. I have already paid $9,500 thanks to the windfall of my French property sale and hope to repay a 0% credit card of $10K before the deal runs out in June.

Investing in the 90 acres land development is the second goal this year, and I hope to sell a few plots as we go in order to avoid selling other investments to keep going. Repaying that $9,500 of debt was a decision to push me to speed up the development instead of relying on that cash and take things easy. I usually prefer to keep the ”good debt” and invest my cash, but I was tired of never seeing the end of my loans, so 2013 is the year I will crush my debt.

My other challenge is to keep my boyfriend on a budget, a word he doesn’t know, especially for groceries and treats, as well as saving energy. He says we only live once and money is meant to be spend, but I prefer to be careful and keep investing. I try to pick my battles, but sometime,s we strongly disagree. I would have preferred to make our house live-able and invest the rest in the development, but he insisted on building a third room first that will set us back $10K when finished. He won!

4. What are your plans for the future (retire early; build your career, etc.)?

My plan for the future is to keep building wealth by doing things I enjoy. I want to convert the two guest rooms in my house into a small B&B, and if business picks, up maybe add some extra rooms to the lakefront plot, develop the 90 acres piece of land, and maybe invest in a couple more rental properties.

I would like to enjoy a simple life here in Guatemala and have the freedom to travel a couple of months per year to visit friends, family, or discover another part of the world.

I also hope to start a family someday and spend as much time as I want with them without having to worry about money.

5. What’s your best piece(s) of financial advice and/or your general philosophy on personal finances?

My philosophy and advice is to be happy. You can’t measure yourself against anyone else but the person you want to be. If you aren’t your best self, there is some room for improvement, but don’t base that improvement on others, namely the ‘Joneses.’ I am content with my little house, having no car, and very little personal possessions. I don’t need more, and you probably don’t need many things in your life. Trimming the fat will help you reach your goals faster and see more clearly what you really want out of life.