From Perpetual Saturdays to Everyday is Work Day

Coming home after nine months of travel has been a mixed bag of happy and sad events, stress and relief, and hard work. We arrived home to three foot tall weeds in our front yard, a front door covered in cobwebs, and grass in the back as high as an elephant’s eye (Rodgers and Hammerstein fans??)!

We have now been home one week and have knocked out walls and ceilings in the basement to expose the plumbing under the bathroom upstairs. But instead of fixing the leaky shower, we have decided renovating the basement suite was our priority because it will provide a source of income right away. Unfortunately, there is a bit of a housing boom going on here right now so it is hard to get contractors – so what we might have accomplished in the two months we planned on being home, will likely take us the better part of the fall to complete. Needless to say, we have decided to cancel our winter accommodations down south and work hard to get the suite ready for next summer’s vacation rental season.

Renovating is stressful, and stress is hard on relationships. We have come off a nine month high of tropical bliss and no responsibility to working 10 hour days dragging construction materials up and down stairs. The older I get the harder this gets – something to think about moving forward…

It is three o’clock in the morning as I write this. I awoke after an hour of sleep with the horrifying thought that I had screwed something up with my basement reno plan – and the contractor arrives at eight tomorrow. So, out of bed I got and down into the basement to re-measure and sort through another mind-bending problem. I sorted it out, and in fact, came up with a superior plan that will actually save me time and money, however, now two hours later and I cannot sleep.

Sleep has evaded us both since coming home. My mind is on renovation challenges and design details, and Steph’s is on Utila. He misses his beach and the sound of the waves. He is a bit depressed. Real-life has slapped him in the face and it is certainly not as relaxing and fun as “every day is Saturday!” Now, every day is hard work day, and he does not seem too happy about it.

We are also both going through a bit of sticker shock. Things as so expensive here! We went to buy groceries for just two days of meals and the bill was over $100…a week’s worth of groceries in Mexico. Within three days of being home we have had to insure and register the car, get gas, buy groceries, pay utilities, buy a phone plan, hook up the internet, buy garden tools, a clothes rack, etc., etc. We have spent more than in the past two months. Stephane is wishing we could just sell all and go back south, so I had to remind him that our house went up significantly in value while we were snorkeling and gallivanting around Central America so our net worth actually went up – despite having limited income and a few major expenses. Not to mention this house will be a source of income for us, so selling it is probably not the best idea – at least not yet. I still have to complete phase one (the basement suite), phase two (the yard and pool), phase three (the upstairs kitchen and bathrooms), and phase four (the exterior and windows)…

…and while my head swims with the details of it all, Steph is swimming in his head in the warm waters of a not long forgotten tropical paradise listening to the sound of waves on a white noise machine.

Where is home?

We head home tomorrow with mixed feelings. On the one hand we are excited to see our family and friends, and on the other, we wonder if “home” will still feel like home. We have never lived in the house we are going back to. For us it holds no memories, and until it is renovated, it won’t really feel like ours, and it will never enjoy a view as beautiful as the one we had in Conchas Chinas.

When I came home from my first trip around the world, I got a bit depressed. It is a common thing after long periods of travel – particularly in the developing world. At the time, upon coming home, I saw such a drastic difference culturally in how people treat each other. I had been in Africa and India for extended periods of time, and had experienced genuine care and hospitality. When people there asked how I was, I felt like they genuinely wanted to know. In the developing world people are not in a hurry. They have time for you. Hospitality is about sharing and caring - it is not a competition. It felt different when I came home. People were busy with their lives, and the pace of life was so fast compared to where I had been that in a way I felt left behind.

I do not expect that response upon returning this time. The culture shock of coming home is not new to me, and in fact, this time it is almost the opposite. For 9 months we have lived with wonderful tropical weather, pools and beautiful beaches, lovely homes and gorgeous vistas, and I am going home to a dated 1980's house with mint green paint and no pool. Ick.

We will have two months before we leave again, so we will use that time to fix the shower that leaked while we were gone, and prune the trees, try to revive the dead grass, and get some gardens ready for next spring. We have house sitters coming the end of September when we will head back to Mexico for one last hurrah before getting serious about renovating the house and making it our own.

Often on this trip, as we were walking down the the pristine white sand beach of Utila, or on the cobblestone streets in Ajijic or Conchas Chinas, drinking in the luscious views around us, we caught ourselves musing about just selling our properties back home and moving down here. I wonder, will we feel that way once we get home? Will we really BE home? Is home where you own property? Or is home where you have friends? Is home where your children live and where you can eat and cook together with them?

I don’t know the answer to that question anymore.

Our kids live in three different provinces. My first grand baby probably won’t even speak English. I saw more of some of my Oliver friends in Mexico this winter than I did the preceding summer in Oliver. Where is home?

They say Home is Where the Heart is: but for us, that seems to change from moment to moment.

Variables

Back in my very first blog post in October, I talked about my handy dandy spreadsheet for retirement. You can check out that post here. Well this past week I decided to go back and take a look at it, and lo and behold, I found a mistake! Not a huge one – but one big enough to seriously impact my quality of living between the ages of 80-90. I have been giving this a lot of thought, and realize it is incredibly difficult to plan for those years. I suppose that is why so many people try to save so much more than they really need – just in case.

I do not buy in to the "just in case" philosophy though. There are just SO MANY variables. For example, the picture in those later years looks fine IF my RRSPs return 7% a year (the S&P 500's historical average adjusted for inflation) over the next 20 years. BUT, if the markets only return 4% a year on average (the number I used in my planning), my RRSP will only grow by $134000 between now and when I turn 71, versus growing by $225,000. That is a big difference – especially when you consider that $225,000 will continue to grow from ages 71 – 90.

Then there is the price of houses. We have two homes, and my spreadsheet is counting on a 4% increase in house prices per year (not including gain from renovations). That is a realistic number to use too – because that is the overall historical average of Canadian housing over the past 100 years. On the other hand, I am real good at real estate and know better than the average person when and what to buy, what to do to optimize gain, and when to sell. So, I may be just fine between 80-90.

Another huge variable – maybe the biggest at this point in our two star retirement – is how much we spend each year. Since neither of us have a pension, anything we spend right now that is not offset by rental income, comes right out of our savings. That means if I spend $50,000 this year (which it looks like I will), that is $50,000 that is not growing at 4% a year (which is what I used) to $76963 between now and when I turn 71 and have to start drawing down my RRSPs. In other words, my future net worth goes down by not just $50K a year, but by $77K a year. Yikes. And I haven't even taken that trip to South Africa yet!

Spending is what got me looking at the spreadsheet again. You see, when we left, we had about $2500/month in rental income, and we were only spending about $3000 month, so we were only drawing down about $6000 a year. Then we had issues with tenants not paying, and then the water issues (read about those here and here) and right now our house sits empty, bringing in no income. That means we have been drawing down far more than planned this year. For now, all this means is that IF we want to go south in the winter and not have tenants, we will need to offset that loss of income with some other form of part time income in the summer.

Fortunately all the retirees in Oliver have plenty of opportunities to work in wineries. Pouring wine is a real fun job – I did it the first two years we lived there. I actually made pretty good money. Although the wage was only $15 hour, you get sales incentives too. Turns out I was good at selling wine, so I averaged $50 an hour – AND, I got a 25% discount on all the wine I bought (which was a lot), so for me, taking a part time job doing that again is no hardship.

Backing up, one good year in the housing or stock market, and the rental shortfall this year is inconsequential.

Variables.Variables. Variables.

The point is, none of us can know for sure how much we need, when we will die, or what extenuating circumstances will befall us. All we can do is stick to a plan that makes sense, adjust as necessary, and don’t sweat it. Life is too short to worry about my income when I am ninety. I worked hard, saved money, and I have a plan. Now is the time to enjoy life. I am not willing to give up this adventure for some kind of false guarantee I will be fine in 40 years. Chances are I will be dead in 40 years and if I am not - well then, what a blessing to still be around to spend time with my grandchildren's children! I have three wonderful sons, who I am certain will care for me as I have cared for them. There are no guarantees in life. I will always choose grand experiences over money in the bank.

When the Good Outweighs the Bad

One of the things I love the most about Mexico is its wonderful people. Happy, friendly, and always respectful. People might drive crazy, but they always let you in, wave you forward, or flash their lights to allow you to pass. On more than one occasion I have seen a stalled vehicle stopping traffic, and instead of people sitting in their cars honking, they jump out and help push the car to the side.

People enjoy their community and talk to their neighbours. People greet you on the street. Even people who drive by you on the street will say "hola" out the car window. I also love the parks in Mexico - they are so well done. They have skateboard areas, children's playground, boardwalks, food stalls, water features, statues and public art, BBQ areas and tables and palapas for people to use, and outdoor exercise equipment. All this is free to use, and people come out - especially after work in the evenings and on Sundays, and really use the parks. They bring chairs and boom boxes and coolers of food, and spend hours in the parks. I love to walk the malecon and see all the hundreds of people - mostly families eating and playing together.

Another thing I adore is the great service you get everywhere. Whenever I go purchase a service or product, I feel like I am important, appreciated, and valued. I never get attitude from people like I might back home. People are patient and kind. Today we went to a Dentist because Stephane was having a toothache. We walked into a nearby dental office (without an appointment) and Stephane said, “I have a toothache and wondered if there was a time I could come in and see the Doctor this week?” “Just take a seat,” she said.

10 minutes later – ahead of the other two guests in the office – Steph was in the chair with the Dentist looking at his tooth. A minute or so after that, the Dentist handed Stephane a small raspberry seed that was stuck between his teeth. Sheepishly, Stephane thanked the Dentist and went to the desk to pay. “No," the senora said, "there is no charge.”

Seriously? A Dentist that is not just about money and that values care over commerce? What a concept to invest in future business by not being greedy? Wow. I love Mexico.

That said, one of the things I hate about Mexico - is the people's propensity to set off loud bombs in the middle of the night.

Hammer bombs are used by young men to celebrate – whenever there is an excuse to do so - a birthday party, wedding, or religious festival. They are basically homemade explosives taped onto the end of a sledgehammer which is then hammered down onto a piece of metal. This can throw the man doing the hammering feet into the air, and every year dozens and dozens of people are injured by flying shrapnel. Fun, eh?

Then there are the cohetes (a type of loud rocket) that have been used in Mexico forever to celebrate religious festivals. They begin around 5 a.m. and continue every 15 minutes to call people to Mass – a great way to ensure you do not go back to sleep. Anyone who is unaware of these traditions may visit and mistakenly think there is gunfire or bombs going off. Here is a short video to give you an idea of what these middle of the night bombs sound like

I have written before about the loudness of Mexico: the crickets, the chachalacas, the music, the stray dogs, the competing boom boxes, the karaoke, and the bombs. Add to this list now, thunder. I have never been to Mexico in the rainy season before. I always thought I liked thunder, but when it wakes you up every night, it is less appealing. Indeed, the noise is at times overwhelming. Utila was such an auditory respite from Mexico. Only the sound of the waves…(and maybe the sound of Stephanes earlobe flapping against the fan he had his face pushed up against most nights).

Speaking of waves, the woman who owns the house we are staying in has a white noise machine she encouraged us to use. It has a wave setting. We turn it on loud when we go to bed and it effectively blocks out the sound of the crickets, the birds, the dogs, the rain, and the music. We have been sleeping pretty well with it on. Unfortunately nothing can block the sound of the bombs and the thunder. They are just too earth shattering.

Ajijic: Full Time Favorite

Comparing various potential retirement areas over the past 8 months has been really useful as we have not only learned much about each area, but our stays have helped define what is important for us in a winter home and what would be important in a full time home. The lakeside area where we are currently (Chapala, Ajijic, Jocotepec) in the Mexican state of Jalisco (just 40 minutes south of Guadalajara) reminds me a lot of Maui in Hawaii. It’s lush, dramatic mountains frame the valley full of fragrant and colourful flowers. The large lake at the bottom gives focus from the terraced streets of numerous lakeside developments.

In our opinion, Ajijic is clearly the winner when it comes to attractiveness of lakeside towns. Chapala is bigger and has a lovely central square and malecon, and it is cheaper to buy real estate there, but it is more chaotic, and far less colourful and there are limited vistas as the town is on the flats – not built up the side of the mountain like Ajijic. Jocotepec is larger still, and has an amazing park, but is noisy and lacks any sort of charm. Ajijic is like Banff, Whistler or Mont Tremblant. There are endless shops and delightful restaurants. The streets are full of colourfully painted houses. Even the garbage cans and street poles are works of art. The sidewalks, though often difficult to navigate, are also quite artistic.

It is charming, delightful, and quiet. Ajijic is also much cleaner than anywhere I have been in Mexico, with the exception of Merida.

Best of all (for me) in Ajijic you can purchase an immense variety of fresh, locally grown fruits, herbs, and vegetables. Because of the tropical, yet high elevation climate, you can grow bananas and spinach, broccoli and grapes, blueberries and lemons.

I am so delighted to be where I can find quality produce at exceptionally low prices. Yesterday I bought a HUGE bunch of giant spinach – enough to have an amazing salad every day for a week, and it cost 35 pesos (that’s about $2.25 Canadian). I topped the spinach off with some locally grown blueberries and raspberries, some backyard basil, some locally grown apples, drizzled a homemade dressing made with lemons off the backyard tree, and some feta (imported) and mmmmmmmmmmmmmmmmmmmmm!

Produce is very reasonably priced, and there is even a better supply of fresh fish and seafood here than in Utila which is an island with a fishing industry – go figure! In Ajijic, seafood is driven in from the west coast which is less than a day’s drive away. Last night we ate filet mignon at a cost of $5 CAD per filet. That is twice the price of filet in Utila – but it was more than twice as good. It was aged, tender, juicy, and of far superior quality than what we could buy in Honduras, yet still half the price of in Canada and cheaper than in Bucerias.

If I were to live in Mexico full time, I would absolutely consider Ajijic. The perpetual spring weather is amazing, and even though we are here in the rainy season, we have needed our umbrella only once. That is because it usually only rains at night. Last night around 3 a.m. we awoke to the most spectacular lightening show. It was as though there was a strobe light in the sky: several flashes of lightening per second. It was breathtaking. By morning the rain and clouds are always gone, and it remains sunny and warm until around 5pm when it starts to cloud up again. It is perfect! Not too hot, low humidity, warm enough to swim in the afternoon, and cold enough at night that you need blankets. YEAH! Snuggle time!

Another reason I would choose this as a good full time place to live is because the gardening potential here is endless. Like in Oliver - I could grow so many things here. The real estate is very affordable (both to rent and to purchase), there is a huge pickle ball club, and it is close to world class medical facilities in Guadalajara – something that Utila, sadly, could not offer. Lastly, it is only a three hour drive via the new highway to the west coast tourist hub of Puerto Vallarta where one can enjoy ocean and beaches!

As a winter only destination, however, the verdict is still out on Ajijic: Like Utila, we definitely need to come back during the winter and try it on!

Going Home - to Stay or Not - that is the Question?

Part of our “two star” retirement plan includes growing our net worth by buying and renovating a house or two (or three) over the next 10 years. I have done this many times with good success and know I can usually increase the value of my homes by $60K-$150K after expenses. I am pretty good at design, sourcing affordable and unique materials, knowing what NOT to spend money on, and coordinating various contractors. The hardest part is finding a house in original condition with great potential that also has the potential to generate income. The rental income provides travel money without dipping into our savings. Then, when we are done travelling we can renovate, live in a nice newly renovated house, and when we are ready to travel again, we can sell it and start all over again.

I have three rules I have always followed when buying a house:

1) I have to get the house for a very good – below market value – price
2) I have to be able to make good rental income on it
3) It has to be the ugliest house on a nice street

We lucked out last summer and found a perfect property in a superb, lake view location, that really needed some love. We did some quick renos to it to put in the basement suite, and we found some tenants for up and down before we left in October, with plans to return home at the end of March 2018 to start the big reno. Within three months of being in Mexico though, we decided we wanted to travel longer, so we applied to BC Health Services for the two year away plan they offer. Once every five years BC residents are allowed to go away and live somewhere else or travel for up to two years and maintain their coverage. Upon returning there is no waiting period to be covered at home. The only rule is that you cannot come home during that two years for more than 30 days. So when we come home in two weeks, we either have to leave again within a month, or give up our two year out of town coverage.

We are not sure what to do, as our "plan" has not exactly worked out so well. Our main floor tenants quit paying rent shortly after we left and trashed the place. Then the basement tenant did an exit in the night and avoided her last month’s rent. We decided then to hire a property manager who was pretty good at finding good tenants but shortly after they moved in there was some water problems and both sets of good tenants were moved out. By the time we paid the manager and the disaster clean-up crew, we basically have made no money on the property. All in all the house will have been vacant for five of eight months, the grass is dead, the trees and bushes need pruning, we have to renovate the bathroom when we get home, and I am pretty sure our new neighbours hate us and think we are slum landlords.

We will arrive home on July 22, and if we want to continue our travels, we can only stay until August 22. So in 30 days we have to meet our neighbours and convince them we are not bad people, prune our trees, clean up the yard, fix the master ensuite, and try to find decent tenants we can trust. We are not feeling very confident that we can manage all that. The temptation to just give up and stay home is very strong. However, there is a bit of a glitch to staying home…

We have already bought and paid for September and October at great ocean front places in Puerto Vallarta and we have a deposit down on our pickle ball place in Bucerias for November 01 onward. We can get out of Bucerias as there is a 3 year waiting list to get into that place, but we are not inclined to walk away from the PV accommodations we have already paid for.

As an alternative to longer term renters, we are considering looking for House Sitters to live there just until next spring. The advantage to House sitters is we can have them there short term without having to follow the new BC residential tenancy rules – which are not very landlord friendly. The downside, of course, is that we will be living on our savings instead of on our rental income and I am just not sure we can afford to do that.

Flexibility has become a necessary factor in this two star retirement. Situations arise and plans have to change. (Not to mention we have changed our minds regularly about what it is we want to do next.) All of this is O.K. because we are retired, we are free to do as we please for the most part, and we are loving life - whatever challenges it brings.