By in Automatic Saving, Investing

Machu Picchu; My Summer Vacation

Last summer, El Carino asked if I’d like to go to Peru the following summer. He continued, the World Congress is meeting in Lima, and I’ll submit a presentation if you’re up for it. Without much thought I replied with a resounding, “Of course, why not”.

How was it so easy to commit to an expensive vacation without a second thought?

Build Wealth with a Priceless Memory

Build Wealth with a Priceless Memory

How to Meet Your Savings Goals and Travel Abroad? The Backstory

When El Carino and I were first married, he was in graduate school and I worked full time at San Diego State University (SDSU). I earned $53,000 (inflation adjusted at inflation calculator) and El Carino’s inflation adjusted annual tuition was $20,000. As soon as I began working, I signed up to contribute the maximum, $17,000 (inflation adjusted) to the TIAA CREF 403 (B) plan. (A 403(B) Plan is similar to a 401 (K) where employees of public institutions make contributions into investment accounts. This money is contributed pre-tax and grows tax free until it is withdrawn.)

For those without your calculators handy that meant we had a pre tax income of $36,000, before tuition payments. After we paid his tuition, we had about $16,000 to live on. I admit that we dipped in to prior savings a bit in order to meet our living expenses. Needless to say, money was tight, but we were committed to socking away as much money money as we could into the retirement vehicle in order to reduce our taxable income and let our money compound tax deferred.

In that TIAA CREF account, which has doubled several times since those early days at SDSU we invested 75 percent in the CREF stock mututal fund and 25 percent in the TIAA fixed option (which yielded 7 percent at the time we signed up).

We lived economically the four years El Carino was in graduate school. An evening out was spent at Tio Leo’s happy hour buffet where a discount drink included a complimentary hors d’oeuvre buffet. By the third year, El Carino was earning a bit from his internship placements, and after four years we became a two income family. Although, in the beginning El Carino worked 3 jobs to make ends meet.

When he had the opportunity, El Carino also signed up for a workplace retirement account at one of his placements and also contributed the maximum allowable. And every year since, we saved more than we thought we could afford.

Live Well on a Pittance

Don’t think our lives were dull and horrible. We attended 2 hour time show presentations in exchange for free luggage, shows, dinners out, and various other prizes. We went hiking in the beautiful Torrey Pines Nature Preserve. We went to the beach regularly and for the cost of 2 ice cream cones we window shopped in the swanky town of La Jolla. Each month we enjoyed pot luck parties with our friends and engaged in the occasional competitive beach touch football game. Our lives were awesome!

An Amazing Peru Experience

Flash forward a few decades and we’ve hit our retirement goal, yet continue to work (and save). We choose to spend a lot on what we value today, travel. Other areas, we still conserve. (Who needs to drive a new car anyhow?)

So that’s how a trip to Peru became a no brainer.

Did you think I’d never actually describe the trip?

The ocean view from our hotel in the Lima suburb of Mira Flores was breath taking. While acclimating to the culture, we walked down the main street only to be surrounded by an exciting Independence Day Parade, replete with elaborate costumes and dancing. This dip into the Peruvian culture gave us an afternoon of free entertainment.

We shopped in the Peruvian Inca market where $20 bought a Peruvian hat and a real leather and woven back pack for Jr. Carina.

To avoid the pricey hotel breakfast we hit the local market and stored milk and cheese in the refrigerator. Along with fruit, bread, and cereal, the three of us ate breakfast for three days on less than $20. Every vacation, no matter where, we scout the local supermarket. Not only is it an amazing window into another culture, but an affordable spot for gifts of candy, coffee, and local delicacies. Jr. Carina loved the Inca Cola light, a cross between 7 up and lemon soda. Even while on vacation, buying grocery store snacks is a savvy cost cutting strategy.

After a walk along the ocean front park, a day tour of the sites, including the breath taking San Francisco Cathedral and ancient ruins in the middle of the city, and we were off to Machu Picchu.

Machu Picchu; Priceless

Machu Picchu

Machu Picchu

Words don’t do justice to the breath taking majesty of this tribute to the ancient Inca Culture in the heart of unspeakable natural beauty. We hiked  in the Andes Mountains and climbed in the beautiful Machu Picchu city. We meditated in the grandeur of the distant snow capped mountains and river. The ancient Inca town took 150 years to build. That inspiration alone reminded me of the importance of patience. Any important endeavor takes time.

This is why you build wealth.

Live conservatively and spend on what matters most, to you.

Action Steps

Allow yourself a few minutes alone in nature.

Ponder what gives your life meaning.

Schedule time to spend doing what you love, in order to increase the wealth in your life.

Where do you splurge and where do you scrimp?