RTW Trip Planning Update

An update on the round-the-world trip. Mostly about savings, actually. I know it's not polite to talk about money in public, but I don't really care. I just wrote a post about the world's daily volume of pee for chrissakes, why should money be off-limits? We all have money and bills, what difference does it make? And besides, this is about saving for a year off from working. It's a good thing. Maybe others with similar plans will take an idea or two away from this. I know I was looking for posts like this when we first started talking about the trip (and still am) so maybe someone else will find it helpful.

We begin 2008 with a hair over $2000 in our travel account and have finally devised a specific plan for reaching our target sum for the trip. Right now we're putting $200 a month into our ING savings account which, despite recent interest rate drops, is still fetching 4.1%. It's not a lot, but it helps. I created a spreadsheet to forecast our balance out over the years and if we can manage to increase the monthly deposit by $50 every 6 months and not spend any of the money in the account, we'll have more than enough to take the trip in September, 2013. Which, coincidentally, is when we were thinking of doing it, barring any personal factors that arise.

Our plan also requires us to continuously lock away the bulk of the money in the account in a 6- or 9-month CD each year (currently getting 4.7% at ING) and for us to also put half of any tax refunds we get into the account -- when/if we get them -- as well as the money from our "keep the change" account through Bank of America (another couple hundred a year). I know there are other, higher yielding ways to invest money but I'm a big fan of convenience and pretty conservative when it comes to investing. With our goal being just 5 years out, I'm not about to subject this money to any risk. I can live with 4.0 to 4.7% interest and no risk.

So, all of this together, gets us to about $42,000 by September of 2013. Factor in the money we'll get from the sale of our cars and a bunch of personal belongings (not everything can fit in storage) and we should have at least $55,000 which breaks down to a year on the road at $150 per day. That will be tough for two people to get by on while in North America and Western Europe, but I expect things to balance out in Eastern Europe, Africa, and Asia. Also, we don't plan on spending much time in the costlier areas. That said, we know organized excurisions or adventure tours, especially in remote places can cost thousands so it's better to have a bit more than we might need. To that extent, we haven't ruled out doing a good bit of camping along the way so this may be plenty.

But regarding camping, although we enjoy it and aren't opposed to sleeping out of doors for extended periods of time, one needs to carry a lot more gear with them if they're going to be building a shelter every night and, frankly, being over-encumbered physically may present more of a hassle than the financial savings are worth.

Of course, we've also been talking about what to do with the house, whether we want to get English-teaching certfied before going and look for jobs in Asia, or even whether or not we want to look into working in a US Consulate or Embassy overseas. Fortunately, we have years to continue discussing this, but the one thing I think we really settled on is that we'll sell the house.

And I must say that the fact that I haven't been able to sleep 3 nights this week on account of the wind is not an insignificant factor. It happens every winter and, frankly, I'm sick of it. I know it sounds rather absurd, but we wouldn't be the first people to leave this neighborhood on account of the wind -- which, by the way, has our house sort of swaying as I type this. I'm practically getting seasick at my monitor. Anyway, we'll likely move into a condo in Bellevue or Seattle when we eventually return home and won't need to worry about paying mortgages and/or renting the house out while we're gone. I know there are agencies we can use to manage our house or rental properties and that sort of thing, but I know me. It would be in the back of my mind all the time and, again, it's just not worth the worry. If we're going to really do this RTW trip, I want to go into it without a care in the world. I'd rather sell the house, pay off every last stitch of debt we have, and just toss all the money left over (which will hopefully be close to $200,000) into a safe, interest-bearing account or CD and have the interest each month transferred directly to our travel account or other savings. And that extra $500 to $700 a month in interest could go a long way towards supplementing an English-teaching job. Especially in Asia or South America.

So that's where we're at now. We transferred the two grand we had into a CD the other day to get a bit more interest out of it (and, again, to make sure we don't spend it) and should have roughly double that sum in 9 months when it expires to dump into a new one and we'll just continue on with that pattern for the next five and one-half years. Or for however long it takes to make this dream happen.

And speaking of dreams, Joe Friel may have been talking about athletic performance when he wrote, "A goal without a plan is just a wish" but I think it's a pretty universal statement that can even apply here. I've been reciting it to myself a lot recently as I look over the national race calendars and begin to daydream about races in the southwest and New England areas of the country.

Short-term sacrifice for long-term joy...


Criscipline said...

If you sell your house and pay off every stitch of debt you have, I don't think you guys will come back or at least for a few more years than planned.

Doug Walsh said...

That's possible, but one thing I want to clarify is that the money left over from the house sale will definitely NOT be spent. Not a penny of it after taking care of any outstanding debt. We might try to "live off" the interest as much as that would be possible, but that money would be for a future home purchase and towards retirement one day. Not to mention to make sure we had something left to live off when we came back and began job hunting.

And who knows... we might get very homesick. Anything is possible.

Thanks for reading!

Brad Gallaway said...

Sounds like you have it down to a science there... i got nothing to add except to just scrimp and save where you can and just put away more a month. it sounds retardedly rudimentary, but barely anyone i know really does it and Gina and I struggle to do it every month, mostly a factor of willpower. 2013 is a pretty generous timeline, so i'm sure you guys will have no troubles at all.

BTW, our link with the overseas embassy work looks to be continued for another few years. Gina's dad just got a *big* promotion, so he's now going to be the Moscow bigshot. when you gys start looking for more info about living abroad, LMK.