Money Monday: 4 Years in

It’s been almost 4 years now that we’ve been living the expat life, experiencing life overseas and away from home. Regular readers know that we’ve found this to be a challenging, but generally wonderful period of our lives. We’ve had children, we’ve traveled to corners of the globe we once only day dreamed about, and we’ve mingled with lovely people from all sorts of places we’d have never been blessed to meet otherwise. That said, one of the major stressors in anybody’s life, except maybe the privileged few from the one percent, is finances. Living abroad carries its own stressors, of course, especially after moving to a new location, but we’ve sought and found employment that allows us to significantly allay our financial stresses, and that’s a big deal.

Going rent-free and enjoying the reduced expenses of life in the UAE allowed us to pay off my student loans in 2 years, a task that seemed Herculean, though not impossible, in the USA; the best aspect of working in the UAE was that I, Shon, generated the income (if you subtract taxes) that it took 2 of us to make in the States. The income was one of the redeeming elements of the job, along with the shorter work days.

So where do we stand at this juncture, approaching 4 years into our adventures in ordinary life abroad? How are we faring financially? We are doing alright, I’m glad to say. We’re not wealthy, by any stretch of the imagination, but we’re able to put back a healthy nest egg, a significant portion of which came in the from of the 3 years worth of bonus pay (not really bonus, given that it’s contractually obliged) from working for ADEC; and we’ve been building the savings account nicely.

Besides the savings account, in 2014 we opened a couple of Individual Retirement Accounts and started contributing to them–only to discover that, as we should have known from reading about them, but failed to notice, IRAs are meant to be contributed to from taxable income only, and we would be looking at a significant tax penalty every year we had no USA taxable income (and, of course, one of the main advantages to working in Abu Dhabi was that we weren’t being taxed). So, with the assistance of our Edward Jones financial advisor, we shifted the money into an American Funds mutual fund which Edward Jones manages. That meant no tax penalties, happily. That was about all I could say about it–the mutual fund, called Capital Income Builder, which goes by the ticker CAIBX, had generated a reasonable return for years, and it seemed like a solid enough choice, given that neither of us knew much about investing. Whatever fees we incurred through using a financial advisor was of no consequence, because the advisor was, after all, being paid to help us navigate waters we didn’t know anything about.

However, during the last six months or so, I’ve been learning a great deal about investing, and I’ve discovered that our Edward Jones mutual fund account is probably a financial mistake, since there are plenty of other Electronically Traded Funds (ETFs) which perform better, and cost a lot less to purchase. Not only that, but 2015 turned into a terrible year for CAIBX, and instead of the upper single-digit return it had been generating, it turned -8.5%, making our ongoing investment into that fund seem like a bad choice. Not only that, but taxes on an actively traded mutual fund are higher than a more static ETF, and the fees that it once seemed reasonable to pay Edward Jones (which, by the way, are among the highest of the investment firms, at least according to my research), now don’t seem like such a good idea. After all, the waters of investing are evermore familiar to me at this point. We haven’t yet closed our Edward Jones account, but we will; we’ve reduced what we put into it, however. We will close it, though, and transfer that money into other funds in the near future.

Besides having a savings account and a mutual fund, we’ve also opened up a Scottrade account to manage our own investments with. Scottrade has low brokerage fees and has an excellent program called FRIP, wherein dividend payments are reinvested for free into stocks of your choice. We’ve established a portfolio there with a small number of stocks, and will be expanding it over time, confident that we can do better than -8.5%.

What brought on the interest in investing, you might ask? My friend read The Wealthy English Teacher, penned by a blogger with numerous years spent teaching abroad, and he recommended it to me. I found the book very relatable, and then perused the author’s blog. I’ve also discovered, again, thanks to my friend, blogs like Go Curry CrackerDividend Mantra, and many others, all of which helped show me what’s possible to achieve without much more effort than we were putting into being frugal anyway, and prompted me to get serious about my own investing.

So there you have it. I’m happy to say that we’re doing rather well for ourselves at this point, especially considering where we came from with quite a bit of debt, and we’ve learned a lot about investing our hard-earned cash for ourselves. It’s nice to actually have a net worth these days, and we have every reason to believe that it will continue to expand.

An Ending Continues

Our tenure in Al Ain, in the emirate of Abu Dhabi, has come to an end. I’m not writing from the UAE. No, I’m in a comfortable home that belongs to my relative, with green grass and leafy trees outside the airy, expansive living room. There are clouds in the beautiful blue sky, and it looks like rain is coming. This is definitely not the UAE.

As the ending continues, I’ve received my end of service payment and transferred the money home. It’s a nice nest egg that makes some of the struggles of the last few years a more pleasant memory. I had no unapproved days off, and my term of employment started almost exactly 3 years ago, so the sum was more or less what I was expecting, with the added bonus of the airfare amount being a little higher than we’d hoped for. My extremely helpful friend in Al Ain has yet to hear from ADCP about the housing deposit refund (4,000 AED, no small amount of money), but she will pick up the check and put it in the bank for me ASAP.  After that is done, our last remaining financial ties to the UAE will be cut.

#boylovesairports #dxb Turtle said "good-bye" to Dubai today.

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The last couple of days in Al Ain went like one would expect–trying to reduce possessions to the bare minimum, weeding out things we wanted to keep and things we could do without, packing the suitcases full, soaking up Al Ain life, as well as enjoying hotel’s amenities and saying goodbyes to many good people we may never see again. We flew out in the morning on Saturday, hauling more luggage than we ever have before, and hopefully more than we will again.

“I hope there’s no small child in front of me,” Jenia said, pushing her baggage cart through the airport. She could see in front of her, so I’m not sure what she was worried about. Granted, she did have to crane her neck and peer over a barely balancing toddler car seat perched atop the hulking stack of luggage, but surely she wouldn’t have actually run over any small life forms in her way.

No more #PalmTrees in a week. #AlAin #AbuDhabi #UAE

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At home in the USA for a week now, we’ve been struck by things like polite drivers, the lushness of the southeast, the ease with which we can communicate, the variety of colors and textures of buildings. As Jenia says, the houses and yards offer a sense of personal identity, which contrasts with the UAE’s impersonal but often imposing homes.

Thus, we’re nearly through with our UAE journey. It’s been trying, but rewarding, and I would judge it thoroughly worth doing. The ending continues until the last bit of money comes in…