Here’s some Context:
We’re currently 35 and 36, and have one child who is 17 years old (18 next month — WHAT?!). We’re originally from the US and are living overseas, rent-free. We have no debt, but we do use credit cards for travel rewards and pay them in full each month.
Our monthly expenses are <$2,500 and include the following:
- Utilities: electricity, water, internet
- Mobile phones
- Food (groceries + takeout)
- Transportation
- Miscellaneous (clothing, home purchases, gifts, etc.)
Third Quarter Travel:
While there’s most certainly still a global pandemic going on, domestic travel has been encouraged in our current country. In fact, there are even campaigns going on in order to bolster the battered tourism industry. We don’t necessarily agree that that now is the time to be promoting travel on a large scale, even if the numbers are low where we are. But we did feel the need to finally get out of our city (with lots of precautions) and were glad to do our part to stimulate the local economy.
We took one weekend getaway to a nearby (non-hotspot) city at the end of September and felt very safe. We drove instead of taking the trains, we wore masks religiously (even outside), we chose our accommodation VERY carefully based on the precautions they were taking, and were able to socially distance ourselves from others at all times — which wasn’t difficult because it wasn’t busy anywhere. It felt good to have a break from home, and we are lucky that we were able to do it safely. We may slowly start getting out and exploring the country we’re in but are in no way getting back to “normal”.
Here’s What Happened this Quarter:
Our teenager’s International School started in August. They are currently holding classes in-person, but are following a long list of guidelines and are taking precautions. We expect that they will likely close down at some point during the year, but for now we’re feeling lucky that our senior’s final year of secondary school is off to a normal-ish start!
Speaking of having a senior, the college applications have officially begun! It’s an exciting and bittersweet time in our family, and it’s strange to think that at this time next year we’ll be empty-nesters with an adult child living on a separate continent from us. It’s impossible to predict what will happen between now and next fall, but we’re proceeding as if things like getting on airplanes and moving your child into university accommodation might actually be happening by then. Fingers crossed!
Here are some things we did this quarter to in order to reach our goals:
We continued saving cash.
When the pandemic started, our goal was to have at least $100,000 in cash savings. We were able to achieve that last quarter, but being unable to invest in real estate due to not being able to get to a US Embassy to sign paperwork, we are now finding ourselves with too much cash on hand. We will keep our current cash reserves with the expectation that we will be able to buy one more property before the end of the year, but we also need to be looking into additional investment options.
Just a note: We consider our cash reserves our “emergency fund”, even though about 50% is earmarked for future real estate investing. We feel good knowing that we could use it for living expenses in case of emergency. We also have credit cards with high limits (~$30,000 each) in case we need to make any quick emergency purchases like expensive repatriation flights or quarantine accommodation. We’re not planning to go anywhere now or for the foreseeable future, but as expats we need to prepare for the possibility that that could change in an instant.
We’re planning to continue our real estate investing (REI).
Like I mentioned earlier in the year, we are saving >$3,000/month earmarked for this purpose (that we could dip into in an emergency) which is included in the cash number below. It’s still difficult to close on properties overseas, but with the US Embassy recently opening up appointments for non-emergency services this should get easier soon. If all goes well we hope to purchase our third rental property before the end of the year.
Our current properties are still doing well and our tenants have been paying rent each month. Like I mentioned in last quarter’s update, we continue to listen to our tenants and are being flexible with them throughout the pandemic. One of our properties had its annual inspection last week and a few issues turned up as a result, so we will be doing some repairs and will report back once those are done.
We got back in the market
Now that we have our cash reserves built up to nearly $150,000, we resumed investing in the market this quarter. Our strategy has always been to buy shares every month no matter what is happening in the market and after a few months’ hiatus, that’s what we’ll be doing going forward. We’re still a bit baffled that the US markets are steadily growing, albeit not without a few dips along the way. We’re heavily invested in the US stock market, so the upcoming US election will have an effect on our portfolio. Our gut feeling is still that things will get much worse before it gets better, but we know that the best way to see long-term gains is to consistently invest.
A little more about our current situation:
The global economy has suffered, and we’ve seen a lot of uncertainty first-hand in the expat community. We know families who have been separated for months due to travel bans. We know others who have have been stuck in one country after losing their job but at the same time are unable to return to their home countries due to travel bans and/or decreased (or astronomically-priced) flights. Mr. Unsettled’s job is still secure, and we’re incredibly grateful. We are still waiting to hear about the contract extension I mentioned in my previous update, but we are optimistic that it will be approved due to the near-impossible task of finding his replacement and the logistics of moving someone here to take his place. We’re happy to stay put as long as possible.
And because I find this bit super helpful, here’s the change from Q2:
Cash +$26,782
Taxable Investments* +$18,673
Tax-Advantaged Investments +$30,027
Debt: $0
Total Change: +$75,482
*REI – Home value less mortgages, plus savings accounts for each property included in this number, income reflected in cash savings.
Our cash increased due to the fact that we’ve been naturally saving cash because we’re not going out, traveling, etc.
The investment accounts increased as the market continued to climb despite the economic downturn, especially in August. However, we’re already seeing increased volatility which is to be expected with the ongoing pandemic and leading up to the US election. For the record, we’re not super invested in the ups and downs of the market. Pun intended, haha.