Immigrant Finances #4: Frugal Latino
Being an immigrant has its own challenges, and I was curious to know from other immigrants how they were dealing with their finances. I wanted to find out the unique challenges they were facing and how they dealt with them.
Today I am excited to present our 4th guest in the series an anonymous reader that goes with the twitter handle @frugallatino. He chose to be anonymous for this interview and hence we haven’t revealed his real identity.
I hope you enjoy this interview as much as I did.
1. Can you tell us about yourself? Please include any details you feel comfortable sharing about how long you’ve been in the US, what you do for a living and your income range.
I’m a 39-year-old male from Latin America. I have been in the US since 2004 when I came to grad school. I’ve worked as a safety consultant for about 11 years altogether. In my first job back in 2007, I made $36K a year. That job only lasted a few months because the organization could not sponsor a working visa for me.
I had a second job for a few months in 2008, but the housing bubble and economic recession hit the company hard, so I was out of work again. In late 2008, I started my current and most stable job so far, although it has had its obstacles, especially with all the conditions that immigration requires from both employee and employer. I started making about $45K to $50K a year there and remained within that range for about six years.
I currently make $65K a year, but the bulk of the increase occurred when the immigration lawyers indicated that I needed a higher compensation to qualify for extending my working visas, so my employer complied. My wife and I had to pay around $9K for all the legal paperwork related to our green cards.
2. What was your relationship with money during the early days of your life? How did it influence your finances?
My dad called me the “family’s banker” because I liked to save and had a children’s savings account that my grandfather opened for me. I remember going to the bank with him to make small deposits. At the time, they would hand you a small paper notebook where they would write with a typewriter to track deposits and withdrawals. I listened closely to my dad’s advice on money, which was a subject that always intrigued me. While we were not poor, my parents had their share of personal unemployment and financial difficulties.
3. Do you discuss money with your friends, family or colleagues? How do they react when you bring up the topic of money? Is this a taboo subject?
Not entirely taboo, but not everybody thinks as I do about money. My wife and I handle separate finances, and I try to give her my best advice on what to do with her money, which she gladly accepts.
4. What are some money mistakes you have committed? What lessons did you learn from it?
I did not start a SIMPLE IRA account at work in 2008 and did not have one for several years, which would have given me a lot of room to grow because shares were cheap due to the recession. I’ve learned to be much more mindful about money.
5. What is your view on debt? Do you carry any form of debt? Has it ever been a source of stress in your life?
I use debt to my advantage for cash back, miles, and other perks, and while I have carried excess debt and paid interest on it, I’ve never had a late payment. I currently carry about $6K of credit card debt mostly because they offered me a 2% APR for 9 months. I know I can pay it back before the promotion ends and the normal APR kicks in again, so I see it as a low-interest loan while I can invest that money elsewhere for a higher return. I don’t have car debt.
6. How is your money invested? Does being an immigrant have any influence on your investment decisions?
I started a ROTH IRA a couple of years ago, and a SIMPLE IRA (both Vanguard) at work about 6 years ago. I put the ROTH on the back burner as I focused on paying the debt and helping out my family back home. The SIMPLE IRA is on autopilot as my employer contributes up to 3% of my contributions, so I maxed it at 3%.
These days I’m starting to get better control of my money and I have also some in a Betterment account, but the largest amount went to a house I purchased and had renovated in the midwest when my wife got a job there a couple of years back. We don’t live there anymore, and I now rent that house out. It is at least paying for itself and putting some extra money in my pocket.
According to my spreadsheet calculations, my total net worth today is $98K.
7. Do you have any specific money situation as an immigrant (e.g. supporting an aging parent or family overseas) that influences your finances?
I supported my parents for about 8 years at a rate of $10K per year, and while I am glad I could do it, it definitely had an impact on my finances as that was $80K that set me back. These days my parents have modest pensions, so I don’t send that much and try to focus on growing my net worth instead.
Also, because of delays with my green card processing and a government shutdown, my green card did not come out on time right after my H1 visa expired, so I endured 1 year of unemployment while that straightened out. When I bought the house in the midwest, I lived on the East Coast for company reasons, but my job involves a lot of travel, and I could go home to my wife about one week per month. Given that I spend about 40% of my time traveling for work anyway, I made a bold decision at the time and went “home free” the other 60% of the time. I decided I wanted to cut back on housing expenses, so I slept in my office and my car for two years in the East Coast, which helped me with the house downpayment and debt repayments.
8. Are you aware of the FI or FIRE movement? If yes, where did you hear about it? Are you pursuing (or have you reached) financial independence?
Yes, I am very aware, and while I think I may be late to the party and may not achieve FI anytime soon, I always try to act as if I were aiming to “retire by 35”. I started following Get Rich Slowly, reading articles online, and one thing led to another.
Now I’m waiting for the release of Playing With Fire and follow various bloggers on social media. I gave my wife a copy of The Simple Path to Wealth, too.
9. What are some of the apps or tools you use to manage your finances?
Budgeting – Mint, Personal Capital,
Investing – Betterment, Vanguard.
10. Are there any specific books, blogs or podcasts on personal finance that you’d recommend to others?
If You Can by William Bernstein; The Simple Path to Wealth by JL Collins; Set For Life by Scott Trench; ChooseFI podcast.
11. What money advice do you have for new immigrants who arrive in the US?
Earn, save and invest as soon as you can, as often as you can. Don’t fall for the trap of consumerism, live below your means.
12. How can people connect with you on social media?
Are you a first-generation immigrant in the US? If yes, would you like to be part of this interview series? This series will focus on personal finance for first-generation immigrants and the unique challenges they face.
You can check out my page Immigrant Finances – Interview Series for more details on how to participate in this series.