Andy Hough

September Income – $35.32

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Here is a breakdown of my income for September.

Interest $7.30
Amazon FBA ($0.62)
Job $0
Cash Back $13.19
Dividends $7.92
Online Income $7.53
Total $35.32

September’s income was terrible. It wasn’t unexpected since I was in SE Asia all month and did not have a job. My non-job sources of income didn’t add up to much. I actually lost a little bit on Amazon FBA due to a couple of refunds.

This month’s income will be higher since I’ve already received more income this month than in September. It will still be a very small amount though. Until I get back to the States and resume my tax job my income will likely remain pretty meager. I am trying to build up my online income, but it will likely be months before I see any results.

I don’t like having such a small income for the month. I did save plenty of money to cover my expenses while I’m here in Thailand so the lack of income will not be a problem.

September Expenses – $3981.96

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Here is a breakdown of my expenses for September.

Household $33.29
Rent $307
Entertainment $220.04
Transportation $279.69
Food $154.85
Travel $67.41
Phone $16.8
Health $1302.88
Student Loan $1600
Total $3981.96

My September Expenses were very high due to a couple of large expenditures in the health and student loan categories. Removing those two expenses my expenses were pretty close to my usual $1000 target.

My household expense was for paper towels, toilet paper, a towel and washcloth, soap, detergent and cleaning supplies. This was stuff I needed for my apartment in Chiang Mai. Back home I would have already had this stuff or been able to get it for free. For me, Chiang Mai is more expensive than the U.S. in this category.

Rent was for my apartment in Chiang Mai. This was a fair amount of savings compared to my $435 rent in Kansas City. The difference in rent isn’t all savings since I have to pay for water and electric here in CM whereas it was included in my KC rent. My CM apartment is nicer than my KC apartment and also includes access to a pool and fitness center so this isn’t an apples to apples comparison. I could have saved more on rent if I were renting for a longer term and/or rented a more basic apartment.

Entertainment was quite a bit higher than normal. Almost half of the total was for movies. I went to the movies 7 times during the month and I took my GF with me 6 of those times. The admission fees added up. Since I’ve been using MoviePass or AMC A-List for the past year back in the States, I actually paid more in Chiang Mai for admission than I would have back home. Also, the theater I go to is nice and modern but the seats are uncomfortable. I don’t think they were designed to hold a 220 pound man. I splurged for deluxe seats and a couch seat a couple of times to see if they were more comfortable. They weren’t so going forward I will just be getting the cheap seats.

I also spent quite a bit on concessions. They are cheaper here, but they aren’t cheap. I’ll cut back a little on concessions in October.

The other entertainment expenses included various local outings with my girlfriend. I also put some of our meals together in the entertainment category when we ate somewhere a little more expensive that I probably wouldn’t have eaten at by myself. The big expense in this category was $60 for an NFL Game Pass. This expense was worth it since I can keep up on all of the NFL games and see how my Chiefs are doing. (They are doing great so far, but they started 6-0 last year and that didn’t end well so I’m not getting my hopes up too much yet.)

Transportation was for 6 months of auto insurance.  I put taxi and local transportation expenses in the travel category. I shouldn’t have any transportation expense in October.

Food consisted of $44.82 spent on groceries and $110.03 spent on fast food/restaurants. This was a bit higher than the previous month. It isn’t surprising since there was travel during the month and I’m now living in an apartment where I don’t have the equipment to prepare meals.  If I eat more Thai meals this month and cut back on the Western meals that should reduce this expense a bit. I’ve also found better prices on some items over the course of the month. As I keep finding better deals that should also reduce my food expense.

Travel was for local transportation, an admission fee, and an airport hotel in Bangkok for the night before my return to the U.S.  My flight from Bangkok leaves at 7 a.m. I decided it was wise to cancel my room in the city center and get a hotel closer to the airport in order to get a little more sleep. This expense should go down this month.

Phone was about $16.80 for local Thai phone service. My Google Fi service is supposed to work in Thailand, but I was unable to get the data to work. That was disappointing and unexpected since it did work when I was in Europe last year. It worked out ok since I was able to get a local number cheap and pause my Google Fi service resulting in a slightly lower phone expense for the month. This month should be the same.

Health included $1233.30 for a dental bridge, $15.42 for a prescription refill, and $54.16 for my monthly fitness center fee and the annual fitness center fee. I was hoping the dental bridge would be cheaper. I shopped around online and what I paid was a normal price for a bridge for two missing teeth. The dental school in Kansas City where I usually get my dental work done, quoted me a price of about $1200 for a dental bridge so I paid about the same here in Chiang Mai as I would have in KC. Compared to a normal U.S. dentist price though this was a significant savings. Here in CM I was able to get the entire procedure done over the course of 3 short visits in one week. At the dental school I probably would have had several hours long appointments over months to get the procedure done. Getting it done in CM saved me a lot of time. When you consider that I probably would have had to take off work for at least some of the appointments back in KC I saved a little money as well. I had a little over $1200 saved up in my HSA to cover this expense. My HSA is now wiped out so I don’t plan any dental or medical work this month.

I paid $1600 towards my student loan. Although I have one consolidated student loan I am allowed to direct my over payments to two of the four underlying loans that make up the consolidated loan. I did some experimenting with directing my payments this month and actually managed to pay a little of the principal. Usually all of my payments goes to interest.

This month’s expenses should be a lot lower. I’m hoping I don’t have any unusual large expenses this month so I can get a good idea of what my normal monthly living expenses would be if I lived in Chiang Mai.

Why You Should Always Pay in Local Currency When Traveling

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When you are using a credit card in a foreign country and asked whether you would rather pay in dollars (or whatever your home currency is) or the local currency, you should always pay in the local currency.  This is because if you choose to pay in your home currency rather than the local currency you will be overcharged.

This is due to a scam called dynamic currency conversion. This “service” is provided by the credit card payment processor. It is touted as a benefit to the consumer since it is easier for them to understand how much they are paying when the price is paid in their home currency. However, it is obvious to me that this just a way for the merchant and card processor to make actual profit. If it was actually a service the merchant would explain the choices and disclose that there is a fee for using the home currency. In my experience they never disclose that it will cost you more to choose your home currency.

When you use dynamic currency conversion you are charged an extra fee for converting from the local currency and home currency and a much worse exchange rate is also used. This results in you being overcharged for your purchase by several percentage points. Even though this overcharge is just a few percent it can really add up over several purchases or on a large purchase.

I have a couple of examples from my current visit to Thailand. I am having some dental work done that is going to cost me a little over $1200. After my first visit I was asked to pay for half of the cost of the dental work. I was asked whether I wanted to pay in dollars or baht. Since I was aware of the dynamic currency conversion scam I knew to choose to pay in the local currency of baht.

Out of curiosity of how much extra I would have paid for using dollars, I noted the price for the dollar option. By paying in dollars I would have paid $637. By paying in the local currency and letting my credit card company convert the currency from baht to dollars I only paid $616. If I had opted to pay in my home currency I would have been ripped off of $21 by the dynamic currency conversion scam.

Unfortunately, sometimes the merchant doesn’t even ask you if you want to pay in your home currency or the local currency. I had that happen at a Thai pharmacist. He didn’t say anything about paying in dollars or baht. It wasn’t until after I signed the credit card slip that he gave me an additional slip showing that the price was charged in dollars.  The credit card slip I signed showed the price in baht, although it may also have displayed the price in dollars somewhere on the slip. I will be sure to check my credit card slips more carefully from now on and specify that I want to pay in baht even if they don’t ask what currency I want to use. Although I was only overcharged $1 by the pharmacist I will be disputing the purchase amount. I do not want them to profit at all from this scam.

I am hoping that someday merchants will stop using dynamic currency conversion or the credit card companies will not allow the payment processors to add-on dynamic currency conversion charges. For now, all I can do is decline to pay in my home currency and stop frequenting merchants that try to rip me off.

I need to get a dental implant in addition to the dental work I’ve already had done. Since my current dental office tried to rip me off I will not be getting the implant from them. After my current dental work is done and payment is completed I will let them know why I am not getting the implant from them. Perhaps if enough people complain and stop using merchants that employ this deceitful practice it will stop being used.

In addition to always paying in the local currency, you should make sure that you always use a credit card that does not charge a foreign transaction fee. This a fee (usually 3%) that many credit card companies charge you for making a transaction in a foreign currency. There are many credit cards that don’t charge this fee so the fee can be easily avoided. Make sure that any credit cards you bring for international travel do not charge a foreign transaction fee. I brought three credit cards with me for this trip and I made sure none of them charge foreign transaction fees. There is no reason to pay more than you need to.

Were you aware of the dynamic currency conversion scam? Have you ever been victimized by this scam?

Lifetime Earnings – What I’ve Made and What I’ve Got

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After recently reading Budgets are Sexy’s post on lifetime earnings and the wealth ratio I decided to take a look at my own total lifetime earnings and wealth ratio.    According to Social Security’s records I have made a total of $409,128 over 35 years. At the time I looked up my total earnings I had about $57,500 in retirement savings. Dividing my savings by total earnings would give me a wealth ratio of about 14%.

However, the wealth ratio is supposed to be calculated by dividing your net worth by your total earnings. I haven’t calculated my net worth for a while but a reasonable guess is that it is about – $70,000.  Using my net worth to calculate the wealth ratio I will obviously have a negative wealth ratio.  That is not a good result.

lifetime earnings

Looking at my earnings record, it is pretty clear why I don’t have a better net worth. My main financial problem is that I have never made very much money. It is only the past few years after obtaining my tax job that I’ve made halfway decent money.  Some of the years in the 90s when I was working as a blackjack dealer in various casinos were also decent earning years. Adjusted for inflation, I was probably making as much back then as a blackjack dealer as I am now as an attorney.  Even though my law degree and passing the bar has resulted in a higher income it hasn’t resulted in anywhere near a higher enough income to be worth the expense of law school. Getting my law degree did not pay off.

Looking at J. Money’s total earnings he has made over twice as much money in about half the number of years. This makes it obvious that a higher income is the key to getting ahead financially. Even though I’ve been very frugal most of my adult years (most of the time I had to be) I have nothing to show for it.

Even if I hadn’t made the huge mistake of going to law school and taking out massive amounts of student loans to pay for it I probably wouldn’t have much. In 2005 before I started law school I had no debt, but I also had very little in the way of assets. I had an old car and $1000 or so in the bank. I’d like to think that without law school I still would have found a way to increase my income a bit. I doubt I’d have the $57,500 of retirement savings that I have now though. On the other hand, considering I’ve paid about $40,000 of interest on my student loan so far maybe I would have that much in savings or even more. It doesn’t really matter since I did go to law school and that can’t be changed now.

Averaging out my lifetime earnings I’ve made a bit over $11,000 a year. Adjusting for the high school years and some income that wasn’t subject to social security I would still only have a little over $12,000 a year average income. When you only make that much money basically all of your money needs to go to living expenses. There isn’t really much if anything left for savings.

A little explanation for some of my low earning years. The first few years out of high school I worked various minimum wage jobs that usually only offered part-time hours. Even though I was employed most of the time the income didn’t add up to much.  In 1990 and 1991 I was employed full-time most of each year and my income was still really low. If I remember correctly, I was making $4.50 an hour and my bi-weekly paycheck was about $350. I was living on my own and barely making more than my living expenses, but I was always able to pay my bills.

The next few years I worked a restaurant delivery job. Since a big portion of my pay was in non-taxable mileage reimbursement my earnings for these years appear a bit smaller than they actually were.

The next few years I worked as a blackjack dealer at various casinos. This is when I should have started to get ahead financially. Unfortunately, I also had a serious gambling problem during these years. Although I was making significantly more money than I previously had my finances were in much worse shape. I went through a bankruptcy during this period and even after that gambled away a lot of money that should have gone to savings.

Eventually I decided I needed to get out of the casino industry so I could break my gambling habit. I moved to Dallas and later Austin, but never managed to find a good paying job. I also started during medical studies during this time. The pay from medical studies isn’t subject to SS tax so this is why my earnings appear so low during most of this time. In 2003 though, I was employed all year as a pizza delivery driver and later providing roadside assistance and I still didn’t make much money. I’m not sure how I got by living on my own that year.

After that I decided to go to law school so I could finally start making good money. If you have been reading the blog for a while then you know how that turned out. That pretty much brings us up to the present.

Going forward, I need to significantly increase my income. I”m not sure how I am going to do that. I can work a little more overtime at my tax job when it is available. I can drive for Uber or do a different side job when I don’t have overtime available. To really increase my income I will need to find a higher-paying job or a high-paying side hustle. I don’t know if I want to leave my tax job since it is the first job that I’ve halfway liked that also paid well, but I may have to. I’m not sure what I would do for a side hustle.

When I get back from Thailand increasing my income will be a priority. Next year needs to be my highest income year ever.

August Income – $3533.90

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Here is a breakdown of my income for August.

Interest $5.27
Amazon FBA $22.17
Job $3153.62
Cash Back $27.05
Dividends $0.22
Uber $2.66
Credit Card Other $175
Online Income $0
Mystery Shopping $0
Selling Stuff $147.91
Total $3533.90

August’s income was pretty good. I got 5 paychecks from my document review job since there were 5 Fridays in August. I was also able to work one weekend making time and a half which increased my pay quite a bit.

My other sources of income only added up to about $380.  When you consider my other sources of income were more than enough to pay for my food, transportation, phone, and entertainment expenses for the month it does make the other sources of income sound more substantial.

I won’t be tracking my savings rate this month since I did a lot of moving money around to different accounts making it difficult to determine my real savings rate. I will track my months of expenses saved instead. I only count the money I have saved in my IRAs and 401ks for this purposes. I have about $60,000 saved in those accounts. If I were able to continue to replicate this month’s expenses of $947.19 that would mean I have 63.34 months of expenses saved.

This month’s income will be down significantly since I will be in SE Asia and not working. I hope I will be able to figure out a way to make some money while I’m over there. If not, I will just make a tiny bit of money from my non-job sources of income.