We live here now.

We recently spent three months living in Mazatlán Mexico as an experiment in living away from home. We’ve previously written about our goals, the cost of living, and running our businesses from a remote office, and even how to maintain a house from 4600 km away, but what would it take for you to do it, too?

If you have now caught the bug of living remotely, then let us share with you a few tips to help your experiment have a better chance to succeed.

• Find out how to move money from any account to any other account without walking into a branch. This could require more work than you think. In Canada, learn how to use Interac Email Money Transfers.
• Automate all bill payments. We have set up preauthorized payment to a credit card for as many vendors as we can, with preauthorized debit from a chequing account for the rest. We pay bills from a line of credit account in order to avoid overdraft fees. This means maintaining a credit balance in a line of credit account, but considering that chequing accounts offer virtually no interest, this costs us a few dollars per year.
• Go paperless at home and at the office. Scan all incoming mail and file it electronically. Buy either a graphics tablet or an older tablet PC so that you can sign documents without printing them. Subscribe to a fax-to-email service, like myfax.com. I found a Motion Computing M1400 on e-bay for USD 250 and spent CAD 200 upgrading it. Sarah owns a Nokia N810 internet tablet device and an entourage eDGe, both of which fit the bill.
• Avoid having to use the phone while roaming. Especially in Canada, roaming costs remain high. In Mexico, using the phone would have cost us CAD 3/minute. Subscribe to a voicemail-to-email service and don’t answer your phone. Train people to SMS you when they need to talk to you, so that you can call them back over the internet. Direct most communication to email and don’t answer too quickly, or people will expect that level of service all the time. Set a vacation autoresponder on your email account and don’t answer email for 3 weeks. Direct people to SMS you if your failure to respond costs you a significant amount of money. (I put CAD 1000 in my autoresponder. Your number will vary.) Consider directing people to call a Skype Online Number or Grasshopper number instead.
• Outsource any day-to-day business operations that have to happen back home to a trustee. We have a property manager in Dauphin MB who takes care of our rental properties and our housesitter scans all incoming mail and emails it to us a few times per week.
• Write a comprehensive document about how to live in your house so that other people can do it. We have specific instructions like “please minimize electricity use, because it costs more here” and “check the basement twice per week for water” and “here’s how you reboot our router”. If you have any gadgets that require specialized knowledge, then explain how to use them. If you do things differently from others, then don’t assume others will know how to live in your house. In particular, if your house does things that you’ve got used to, but that might trouble someone else, mention it. Put Post-It notes around the house to remind people about any tricky things.
• Find a maintenance man in your area. Let him mow your lawn or do some light maintenance while you’re at home. If you trust him, then make him the point man when things go wrong with the house. Find someone who feels very comfortable communicating by email and doesn’t expect to speak on the phone.
• Hire a general contractor to do some work on your house while you’re there. It can be something small, but it has to be a big enough job to give you confidence that he will do good work when you’re not there.
• Learn how to buy anything and send it back home. This can range from having household goods delivered from a local grocery store or online drug store to making arrangements with your local pet supply shop to keep your credit card on file and deliver cat litter to your house in response to an email. Remember that delivery fees cost less than flying home.
• Only use delivery services that allow anyone to receive and, if necessary, pick up packages. Canada Post wouldn’t let our housesitter pick up a package on our behalf, but UPS or DHL would.
• Consider a service like myus.com as a clearing house for incoming packages so that you can route them to wherever you are in the world.
• Let your bank know that someone will be depositing cash on your behalf, or arrange to have deposits sent in by mail. While ING Direct, for example, routinely accepts deposits by mail, they also routinely impose standing clearing periods that your local bank would likely waive for you. If you have someone local to deposit your cheques, and your bank gets to know that someone, then you’ll find you have access to your money sooner.
• Make sure someone cleans your house on a regular basis. This not only keeps the place clean, but ensures that someone runs water through the pipes and even helps fulfil your insurance policy’s requirements for not leaving the property vacant for more than 48 or 72 hours in a row.

We could probably identify more, but we think we provides a great start.

This experiment in living remotely has meant that a whole new class of opportunities has opened up to us. For example, if a lucrative contract to work for six months in Europe, we can take it without hesitation. We don’t have to worry about bad timing or having too many constraints to stop us from going. Once we have a housesitter in place, we can go.

How much would your life improve if you could take advantage of opportunities like that?

We recently spent three months living in Mazatlán Mexico as an experiment in living away from home. We’ve previously written about our goals, the cost of living, and running our businesses from a remote office, but what happens when something goes wrong back home?

A little roof problem damages the ceiling

Our housesitter sent us this photo of our second-storey ceiling crumbling as a result of a roof leak. Fortunately, this didn’t present a serious problem, but a few emails back and forth sufficed to fix the problem. Our housesitter coordinated with our handyman to diagnose the severity of the problem, and concluded it wasn’t serious. We asked the contractor who worked on our roof to coordinate with our housesitter to fix the underlying roof problem, and he did so free of charge, since his previous roof work created the problem. Finally, our housesitter told us that the roof no longer leaks, and relayed from the contractor that we needn’t bother fixing the ceiling hole until we decide to renovate the entire ceiling. All this required no more than about 15 minutes of our time and energy. For a small problem like this, we didn’t have to worry much, but what about a more serious problem?

Making our basement more flood-resistant

Fortunately—in a strange way—the Universe tested us on this, too. Not long after we left, our basement flooded quite vigorously. We had 30-40 cm of water in the basement as a result of an old sump pump, highly saturated ground, and thawing snow. Once again, we managed to coordinate everything from the road: our handyman coordinated with a plumber to install a new sump pump, confirm that they drained the basement effectively, and even raised our basement appliances 20 cm off the floor to avoid damage from any similar flooding in the future. All this required less than an hour of our time, and while it put a little more stress on us, our housesitter sent us photos of the work to satisfy us that the plumber had done the job well. Even something as annoying as a disintegrating mailbox only required a few emails and 10 minutes of our time to resolve. We managed to do this with a combination of email, Skype, headphones, a trustworthy housesitter, a good handyman and local contractors. I think that as long as none of our important records suffer from flooding, leaks, or other damage, that virtually nothing that could happen at home would prompt us to return. We do still need to spend several hours finding housesitters, but the more people we engage, the easier time we have of finding the next one. Sarah still feels considerable stress finding housesitters, but the Universe has so far always found a way to send us someone we can trust.

When we returned home and could inspect the damage for ourselves, we found no further problems with the leaky ceiling on the second floor, a sump pump that actually works well, a dry basement floor, and a general appreciation for coming home to a house in slightly better repair than when we left it.

We recently spent three months living in Mazatlán Mexico as an experiment in living away from home. We’ve previously written about our goals and the cost of living, but we could never leave Canada if we couldn’t keep our businesses running.

Diaspar Software Services, Mexico office

We’ve written before about our impressions of Tim Ferriss’ The Four-Hour Work Week. In this book, Ferriss extols the virtues of first eliminating as much administrative work as possible, then automating the rest. For example, I have eliminated a majority of email communication by training others not to expect quick responses from me. Only the most expensive-to-ignore emails get through, and this system has given me significant peace of mind. We have automated almost all our bill payments. We have outsourced managing our rental properties. I estimate that we spend less than two hours per month on recurring administrative issues, and we can do better. For example, we have too many bank accounts, including chequing, savings, and credit. This requires moving money around each month. This summer, we will eliminate as much of the confusion as we can. I bring up elimination and automation because these two activities make it easier for us to live away from home. We have outsourced much of our administrative work to housesitters, handymen, book-keepers and accountants, but we needed to know whether we’d outsourced and automated enough to move ourselves off all critical paths. What could possibly happen at home that would require our physical presence? It turns out that we managed to handle a number of things remotely, with a combination of the internet, a tablet PC, Skype, headphones, a scanner, and MXN 10 per page for printing costs at the nearby internet cafe.

• We filed an annual return of information for our company by fax.
• We filed both corporate and personal tax returns.
• We collected significant revenue from clients by wire transfer and direct deposit.
• We invoiced a client entirely electronically, including an expense report complete with receipts.
• We even sent a tax treaty document by post to the US!

Even when the outside world insisted on receiving physical paper, we managed to make that happen with little effort: a few minutes’ walk, a USB drive, a few pesos, and a stamp. I conclude from this experience that we have made our office paperless enough to travel anywhere with an internet cafe or a printing service. We have one major annoyance to eliminate this summer: TD Canada Trust’s Euro account requires the accountholder to sign a piece of paper in a branch in Canada to transfer funds out of the account. It also does not allow withdrawing cash in Euro. We intend to try out the Euro account with HSBC bank to see whether it indeed solves those problems. With this, we’ll have provided for the vast majority of our day-to-day needs, and for the rare item that requires an unusual amount of our attention, we will have saved up more than enough energy to deal with it.

Summerside PE offers quite a low cost of living, and for the time being, any other place we try to live will need to compare favorably on basic living expenses. For our purposes, “basic living expenses” includes housing, taxes, insurance, food, electricity, heating or cooling, and communications. Put differently, we need to be warm, dry, fed, in contact with the world around us, and mildly entertained. We evaluated the financial aspect of our experiment on this basis.

Villa Serena, Mazatlán, México

On the advice of relatives, we chose to experiment with living at Villa Serena, located in Mazatlán’s old downtown. We found a one-bedroom apartment for USD 653 per month. This price included MXN 300 worth of electricity per month, and access to the amenities, although we did have to pay an additional MXN 150 per month to use the laundry facilities and MXN 25 per 19-litre bottle of water. We ended up spending a total of CAD 1129 + MXN 13942, or approximately CAD 2280 on housing costs for three months. That makes CAD 760 per month for rent, cooling, water, cable TV, and internet. The corresponding items cost us CAD 782 per month in Summerside. That makes it possible to live in Mazatlán quite inexpensively. We love that.

Cooking with my youngest sister-in-law, Mary

We ate quite well, mostly cooking, but occasionally eating out. We certainly enjoyed a lot of Hector’s bread at Molika Bakery, which we mentioned in a previous article. We spent about CAD 2280 on food for three months, or CAD 760 per month, which makes for a telling coincidence: we value food. We spent about CAD 183 on our Molika Bakery habit, CAD 32 on coffee beans, CAD 934 on shopping at the big grocery store, CAD 156 at the local market , CAD 216 on pizza, and the rest (about CAD 759) on eating out. After we returned home, we computed what we spent on food in June unrelated to travel, and it came to just under CAD 1000.

Traveling in style with our good friend, Jen

We love how little transportation costs at home, and in Mazatán, the taxis and pulmonías didn’t disappoint. We spent CAD 136 on transportation, excluding the trips to and from the airport, which totaled an additional CAD 53. Given the flat rate of CAD 6 or 7.50 per trip in Summerside, CAD 136 would buy about 17 trips, or 8 round trips, at home. We probably use about 4 rounds trips per month at home, which costs around CAD 180-200 over three months, depending on where we need to go. While we encountered some trouble flagging down a pulmonía in Mazatlán, we found the service overall both efficient and pleasant to use. I also owe the taxistas a debt of gratitude for letting me practise Spanish with them.

I think I can make a strong case that Mazatlán offers us an excellent place to live, with a cost of living very similar to Summerside. We consider our experiment a financial success, at least on the surface. We couldn’t resist looking at some real estate listings, and while houses cost considerably more there than at home, we had to double-take at the property taxes those listings quoted. As a single data point, a house listed at USD 250k carried property taxes of USD 200 per year. This compares favorably to the CAD 1250 per year we pay in Summerside. Although we would need a cash infusion to move there, it appears that we could live in Mazatlán spending under our arbitrary limit of CAD 2000 per month for basic living expenses.

…Molika Bakery. I had intended to write an in-depth review, but I found a good one and decided not to duplicate it. I’ll add this: go there around 11:00 to buy bread, because by 12:00 Hector prepares for lunch service. We enjoyed Molika Bakery immensely during our three months in Mazatlán, and we think you would, too.

At iwillteachyoutoberich.com, Ramit Sethi asked this recently:

It seems like 98% of personal-finance material (blogs, magazines, books) focus on spending LESS — keeping a budget, saying “no, no, no” to lattes, jeans, and vacations.

Why?

Why don’t they cover earning more, or negotiating, or increasing your responsibilities at work, or understanding the psychology of your own behavior, or all the other things besides cutting down on spending?

I’m trying to formulate 3 crisp answers.

So, what do you think? Why is the vast majority of personal-finance material focused on cutting down on spending?

I answered in his comments, but I wanted to repeat that answer here. I hope you find it useful.

I learned from Your Money or Your Life that for most people, most of the time, spending less is easier than earning more. I found that to work for us, and it was a key step in retiring at 34 instead of in our 50s. Unfortunately, most people conclude that they must limit spending to a predefined budget, and find that difficult to make work. I don’t set budgets.

Budgets don’t work because there’s no such thing as a typical month. I also learned that from Your Money or Your Life. For this reason, we never budgeted, but instead, tracked our expenses, looked for wasteful expenses, then eliminated them. We asked ourselves the question, “Do I value this expenditure?” When we answered “No”, we stopped spending that expenditure. We made a quantum leap when we decided that we didn’t value living in an expensive city like Toronto any more.

Now, fortunately for us, when we reduced our expenses, we had an active profit each month, which we turned into passive income generating assets, and the compounding effect took care of the rest. Some families can’t do this. Even after eliminating expenditures they don’t value, they still run on an active deficit each month. These families need help to start earning more money, which usually demands an investment they already can’t afford.

At the same time, Rich Dad, Poor Dad has pointed our attention to the tendency of families to spend more as they earn more. As a result, earning more does not translate to increased active monthly profit (nor reduced active monthly deficit), meaning that it does not lead to increased passive income and more financial freedom.

I would conclude from all this that first focusing on spending less leads to better results than first focusing on earning more.

Take control of your recordings with Beyond TV

The bad news came when we ordered a new computer to serve as our home-brew digital video recorder (DVR). We had happily used an old Windows XP machine to do the job, but I wanted a faster machine, better capable of handling the demands of up to four shows recording at once, better capable of compressing GBs of video. I bought an Acer Q6600 and loaded it with 4 GB RAM since, as we all know, more RAM matters more than more CPU speed for most home computer users. Sadly, our TV tuners had a different idea.

After several hours of trial and error and a bit of reading, I discovered that the Hauppauge PVR-150 TV tuners we had used for years wouldn’t work on a 64-bit system with 4 GB RAM installed. Worse, rather than simply refuse to work, the tuners would randomly drop frames and freeze at random instants, making it difficult for me to isolate the problem. It took over six hours.

At that time, I worked around the problem by removing 2 GB RAM from the computer. Bear in mind that I had specifically asked for the RAM upgrade for this computer, and so I had essentially sunk some multiple of $100 into useless RAM and the wasted day getting things to work.

That was over a year ago. My, how times have changed.

Not long ago, I came across a short article that described a potential remedy for the problem. It suggested I configure Windows Vista to voluntarily boot with less RAM. It would never in a million years have occurred to me that Windows would do such a thing. I’d never used an operating system capable of voluntarily using less RAM than available. Before encountering the confluence of 64 bits, Vista and the PVR-150 tuner, it never occurred to me to want or need such a thing. With trepidation and excitement, I tried it.

1. Install the RAM and make sure Windows Vista booted fine. Don’t expect the TV tuners to work.
2. Configure Windows Vista to voluntarily boot to 3712 MB (3-5/8 GB) RAM. Run ‘msconfig’ from the Command Prompt, then choose the Boot tab, then choose Advanced Options…. You’ll find a “Maximum Memory” option you can enable and set the RAM Windows will boot with.
3. Reboot. Even though System Properties reported 4.00 GB RAM, I ran Beyond TV and it worked.

I include this, hoping that it will help you out there. I can’t believe I had to give up 384 MB RAM to make this work. My first five computers could run on 384 MB combined.

Convert voicemail to email

Earlier I wrote about my unfortunate experience trying to try out (yes) PhoneTag.com, a service that transcribes voicemail and forwards it as email and SMS messages. I came across PhoneTag.com in my reading of The Four Hour Workweek, and I really like the idea of reducing the number of inboxes I need to monitor. After my initial trouble setting the service up, PhoneTag.com’s CEO, Thomas Lesnick, offered me a 30-day free trial of the service, which I couldn’t pass up. I wish I could call the experience entirely smooth, but I also want to make sure PhoneTag.com gets a fair reputation for the good points they’ve earned, so I’ll describe my experience as evenly as I can here.

Rogers: elevating customer service to below the floor

First, I found out that I’d have to drop voicemail from Rogers Canada to use PhoneTag.com’s service. This turns out to reflect Rogers’ service, and so counts as a point against them, rather than against PhoneTag.com. Sadly, Rogers Canada managed to give me false information in my quest to cancel voicemail from my service. When I stopped in to a Rogers Wireless store, I asked someone to tell me how my plan price would change if I dropped voicemail. After a few clarifying questions, they told me my plan would decrease in price by $2/month. I told them a few times, “I just want to make sure the cost won’t increase because I’d go from a bundle to a-la-carte services.” Imagine my annoyance when I spoke to a CSR at Rogers on the phone, who informed me that replacing a bundle with a-la-carte services would increase my monthly costs. I managed to show just the right amount of exasperation, because a moment later, the CSR told me she could “make voicemail not work” without charging me any extra money. While I expected a decrease in price by $2/month, no change in price satisfied me, so I went along. I canceled voicemail.

Next, I forwarded all my unanswered, busy, and unavailable calls to the PhoneTag.com service’s phone number. PhoneTag.com was good enough to secure a 902 area code number for me to use. Now since my Rogers Canada plan includes pay-as-you-go call forwarding, each forwarded call would cost me about $0.20/minute, but I considered that reasonable cost to pay to try PhoneTag.com, so I went ahead. Setting up the service took only a few minutes, and I called myself through SkypeOut to test the transcription.

I first left a message without choosing the correct microphone setting in Skype, which meant no audio recorded in the message. PhoneTag.com helpfully pointed out that it recorded no discernible audio and would not charge me for hang-ups. Good for PhoneTag.com! Once I configured Skype correctly, PhoneTag.com sent me accurately transcribed messages by email, but not by SMS. This troubled me, because I wanted to receive voicemail by SMS while away from an internet connection for days at a time, if only so that my book-keeper could contact me with urgent questions. At this point, PhoneTag.com began losing my respect.

First, their support system doesn’t integrate with their service system, so I had to create a second account especially for their support system. Without this, I couldn’t track trouble tickets. I don’t mean to put this rudely, but my calendar reads “2009″, not “1999″. I find no real excuse for this inconvenience. What’s more, to sign up for a support account involves specifying my mobile phone provider, and while I can choose “Rogers Canada” for my service account, their dropdown list does not include “Rogers Canada” for the support account. Worse, when I emailed PhoneTag.com support about the issue, they couldn’t decipher my comment and I had to send them a screenshot of their own support system signup page for them to understand what I meant. Here, sadly, PhoneTag.com and Rogers Canada have roughly equally effective front-line support workers, and I don’t know whom that maligns more.

Finally, PhoneTag.com informed me that in order to receive transcribed voicemails by SMS, Rogers Canada would charge me extra, because of the gateway PhoneTag.com uses to send transcribed voicemails by SMS.

This really bothered me.

When I signed up at PhoneTag.com for a service account, they knew I used Rogers Canada as a mobile phone provider. They should have disclosed the extra fees to receive transcribed messages by SMS at that point! I wouldn’t mind them blaming Rogers Canada for the extra fees, but I don’t appreciate finding out after I’d already signed up for a PhoneTag.com account. The fact that they extended me a 30-day free trial makes their lack of disclosure cost me less, but it doesn’t erase the time I’ve wasted setting up their service and dealing with Rogers Canada and their inept customer service. I notified PhoneTag.com and Mr. Lesnick about my disappointment, telling them that this makes it less likely that I will continue to use the service past the free trial. Shame, too, because I like their core service so far.

So I like PhoneTag.com’s core service so far, although I find PhoneTag.com’s customer service and fee disclosure policy a little shaky. If you care deeply about receiving your voicemails as SMS, and you’re on Rogers, then you might find PhoneTag.com too expensive. If you really only need voicemails by email, then you’ll find PhoneTag.com more cost effective. I’ll know more when I see my next Rogers Wireless bill. I don’t look forward to seeing how they screwed it up.