During fall of 2012, just months after I finished a very expensive graduate degree, I took the plunge and moved to Shanghai, with nothing but negative $120k of net worth. It didn’t matter that I was coming without a job, the goal was to be rid of that massive student debt. My plan was to pay it off by my 30th birthday. Along the way, I’ve changed my strategy a bit. This month, just before turning 30, my net worth is positive for the first time since my 18th birthday, when I started college.
I’ve been fortunate. I’ve received a world-class education, and had seized every opportunity presented to see the world. But those things came at a hefty price tag that my immigrant family could not provide. For all the negative views of student loans, I could not have afforded my experiences without it. Yet, loans needed to be repaid, and I needed to think outside of the box.
China, was my outside-of-the-box solution. My language skill is my comparative advantage, and I knew given my educational background, I could make decent money simply teaching. That was the fallback plan. My first year in Shanghai was spent doing a variety of odd jobs – teaching, tutoring, market researching, translating, and of course, full-time job searching. Even after starting a full-time job in year two, I still tutored and taught on the side for another year until responsibilities at work became too much to juggle.
Instead of paying off my debt immediately, I maximize my employer’s pension contribution and benefits. But to curb interest, I refinanced the student loan with my parents’ home equity. At 3.25% interest rate a year, it was more worthwhile to invest in index funds that average 6-7% return. My strategy has changed to growing the nest egg equally aggressively as paying down the debt. If you don’t have parents’ home equity as an option to refinance your loan, explore these refinancing options on Student Loan Hero.
Each month, as my paycheck came in, I kept roughly the amount needed for monthly expenses and divested the rest 50/50 toward debt repayment and investment. In some ways, I was living “paycheck-to-paycheck”, always waiting for the next month’s check and being mindful of my expenses.
The other reason China’s is my out-of-the-box solution is that Shanghai, relatively speaking, is an affordable city that offers the comforts of any major cosmopolitan metropolis. There is no U.S. city where I could afford to travel as much as I do, visit the spa on the regular, and holds a yoga studio membership. And forget about my coffee addiction. There is no way I could afford this life elsewhere and still pay off debt. Work hard and work smart! Strategically choosing where to live matters as much as how much money to make.
Besides moving to Shanghai, I also capitalized on my skills. I came to China eager to discover the social investment scene, only to realize the sector was still nascent. I identified my strengths, and went for a job I didn’t think I wanted, counting beans for a tech giant. I’ve learned a great deal along the way, but I am eager to apply my learnings in the social sector. In the spring, I was offered a position with a social enterprise start-up, based in Amsterdam. I was incredibly excited by the opportunity, but in the end turned down the offer due to finances.
This triggered something within me. The next life goal is to one day have the financial freedom to stop trading time for money, and to fuel my wanderlust nature and creative pursuits. I’ve been hugely inspired by Go Curry Cracker, a story of Jeremy and Winnie (who happens to also be Taiwanese), who have achieved this dream and are slow-traveling across the world! Until then, it’s back to the corporate grind, turbo-charge the savings, and probably fewer visits to Starbucks…