Detour to Financial Freedom: Live, Save, Retire and Enjoy

By Ludy Baldoza Cabanas

This is a story of an ordinary employee with an ambition to retire comfortably with $1 million.

At first, it seems impossible as Ludy Baldoza Cabanas and her husband had accumulated an enormous amount of debt as a result of traveling, living beyond their means, and making bad choices. In this book, she shares how they changed course and plotted a new path. Learn how to:
• build wealth in an individual retirement account or through a 401(k) plan;
• invest in real estate in solid neighborhoods;
• pursue passive income strategies to live comfortably.

The author also shares her experience as a network marketer, and how her time in the insurance industry helped her build relationships with others. In her networking experience, she applied in her dealings what she learned from the books she read such as Stephen Covey’s 7 Habits of Highly Effective People, Napoleon Hill’s Think and Grow Rich, Robert Kiyosaki’s Rich Dad Poor Dad, Thomas J. Stanley’s The Millionaire Mind and The Millionaire Next Door, and Dale Carnegie’s How to Win Friends and Influence People. Join the author as she shares how retirement went from being a daunting prospect to something she could look forward to in Detour to Financial Freedom.

• Language: English
• Publisher: Archway Publishing
• Release date: Jan 18, 2023
• ISBN: 9781665727860

Ludy Baldoza Cabanas

Ludy Baldoza Cabanas was born in the Bicol Region of the Philippines. After graduating from the University of Nueva Caceres, Naga City, she became chief accountant of an international American company that was the largest exporter and importer of Virginia leaf tobacco in 1970s. She then pursued further studies and enrolled in the College of Law of the University of the East in Manila. She was admitted to the Philippine Bar in 1981 and moved to the United States with her family after political strife in the Philippines.

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ISBN: 978-1-6657-2785-3 (sc)

ISBN: 978-1-6657-2784-6 (hc)

ISBN: 978-1-6657-2786-0 (e)

Library of Congress Control Number: 2022914121

Archway Publishing rev. date: 02/13/2023

Dedication

To My Grandchildren:

Anais Lourdes Cabanas

Felix Monk Werden

Raphael Paul Cabanas

Uma Sparrow Werden

Contents

Dedication

Acknowledgments

Foreword

Chapter 1:     My Retirement Predicament

Chapter 2:     Credit Cards and Debts All Over

Chapter 3:     American Dreams

Chapter 4:     Social Lifestyle: The Price of …

Chapter 5:     Wrong Choices (But Rewarding Lessons)

Chapter 6:     The First Glimpses of Europe and the United States

Chapter 7:     The Travel Bug Bites Hard

Chapter 8:     Credit Card–Facilitated Extravagance (Justified by Gained Experiences Rich in History and Culture)

Chapter 9:     Reawakening and Shaking Things Up

Chapter 10:   Sophisticated Auction Industry

Chapter 11:   Project Tax Break: Second Purchase

Chapter 12:   Strategy: Stay Clear from Debts

Chapter 13:   A Grand Family Reunion in the Philippines

Chapter 14:   The Travel Buff in Me and Tony

Chapter 15:   Victoria and Mercedes

Chapter 16:   Our Son’s Marriage to a French Neuroscientist

Chapter 17:   A Crash Course in Financial Education

Chapter 18:   Good Breaks and Good Decisions

Chapter 19:   Project Retirement Income Source: Third Purchase

Chapter 20:   A Critical Time: Is It?

Chapter 21:   Three Years to Go: 2013—a Year of Birth, Death, and a River Cruise

Chapter 22:   Our Daughter’s Wedding to a Jewish Sound Engineer

Chapter 23:   Project Repositioning for Retirement: Fourth Purchase

Chapter 24:   Strategic Realignment of Assets

Chapter 25:   The Die Is Cast: Time Is Up

Chapter 26:   Retirement, Travel, and Have Fun

Chapter 27:   Mission Accomplished: In the Year We Never Prepared for, We Were Prepared

Acknowledgments

Zarah Cabanas for suggesting this project and to all her assistance in making this a reality

Tony Cabanas for being my sounding board and tough critic

Reme-Antonia Grefalda for being there in my struggles in the beginning and for her continued support

Paz R. Nolasco, Esq. who in spite of a very tight schedule as she was flying home to the Philippines, was able to find time to write the Foreword.

The various lectures, webinars and online training from Author Learning Center, Jerry Jenkins, Steve Harrison, Paper Raven Books, and Alison Wearing, among others.

Greg Castilla as an inspiration

Diwata Midel Cahapay and Cynthia Brawner, my high school classmates, who both listened to my complaints

Henjie Jensen, Concierge Archway Publishing from Simon and Schuster, who was so patient with and understanding of me, and always soft spoken and well mannered.

Foreword

Detour to Financial Freedom Live, Save, Retire and Enjoy is an interesting book for legal immigrants like me specifically the chapter on starting from scratch. Like Ludy Cabanas, the author, I migrated to America with just my law degree and experience. I worked with a publishing company dealing with taxes for thirty years.

Ludy Cabanas, is a determined person. Reading the book leads the reader to that conclusion. I met Ludy through her husband Antonio. He and I worked together as lawyers of a financial company in Makati, Philippines.

Detour to Financial Freedom deals with her struggles to financial freedom and a happy and stable retirement. The book definitely helps the reader overcome similar struggles the author went through. She and Antonio worked hard to meet their goals of a comfortable retirement, travels, and fun. Ludy was epitome of determination in achieving their goals. She left a comfortable life in the Philippines to spearhead their plan to achieve those goals. She met obstacles along the way but her determination didn’t deter her from achieving their goals. She overcame immigration problems, acquired legal status, and was able to bring the family to the United States of America.

The chapter on credit cards and debts is enlightening. It outlines the author’s road to meet her and Antonio’s goals through the use of credit cards to meet their daily needs, Sallie Mae for the education of their kids, and other loans. It lists the pitfalls of using revolving credit, and the strategy to a debt free lifestyle.

Detour to Financial Freedom also has some historical insights that make a reader relate to the author’s stories. It also shares her experiences during her travels. Over all the book is a very good read.

PAZ R. NOLASCO, Esq. Vigan, Ilocos Sur, Philippines

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Chapter 1

My Retirement Predicament

We had just seven years before full retirement. Was it possible to retire with only $32,445.19 saved in my individual retirement account (IRA)? That amount did not even make a dent in our current debts to my creditors.

During all my productive years, I had worked so hard to eliminate debts and achieve financial freedom. But I was wallowing deep in debt. I couldn’t sleep without thinking about why I was in this situation. What had brought me to this horrible financial crisis? How was I going to get out of this hole and achieve my retirement dreams? The money owed to credit card companies and other creditors amounted to more than triple my annual salary. All my dreams were fading away quickly.

I had been married for thirty-two years to Tony, who is fourteen months older than me. He and I had acquired as many credit cards as we could under my name or in his name. Some had been issued to me with him as the extended user; others had been issued to him with me as the extended user. Further, we’d transferred balances from one credit card company to another with offers of an increased line of credit, a lower interest rate and a longer period of due date. This process allowed us to accumulate more in credit card debt. We were good credit cardholders as we were never late in our payments. However, we were capable of paying only the minimum due, and thus, we accumulated an incredible amount of debt with compounding interest.

In addition to our credit card debt, also outstanding was the Sallie Mae account for our daughter’s student loan. This was a good debt. Never had we regretted signing up for this loan. She deserved to study at New York University for a bachelor of fine arts in film and television.

We were living paycheck to paycheck. Basic living expenses were not even covered by our net monthly income. My thinking then was why worry about retirement savings when we were not even sure if we would have enough to live on? Was retirement really attainable under these circumstances? How and why would we even think of retirement?

In 1987, American Express was the first company to grant me a credit card with a revolving credit line of $500. As an immigrant with a credit card, I felt empowered to become part of mainstream America. A credit card revolving line was like a security blanket or a buffer in the event I was laid off. Unemployment benefits were not sufficient to support a family. Before my brief period of unemployment in 1992, I had already secured five credit cards with a total reserved credit line of $100,000. During this unemployment, how could I possibly put food on our table, pay the rent for our two-bedroom apartment, pay for gas and maintenance on my Toyota Celica, pay the monthly premium for health insurance for my family, or pay my children’s school expenses and other living costs? It should be noted that in 1991, Tony was struggling to find employment as he has just joined us in the United States.

According to an article by Thomas A. Durkin as published in the Federal Reserve Bulletin in September 2000, three surveys were conducted in 1970, 1977 and 2000 by the Survey Research Center of the University of Michigan and sponsored by the Credit Research Center. Overall opinion about credit cards was somewhat more negative and polarized in 2000 than it had been a generation ago, especially among holders of bank cards. Opinions among all families that credit card use was good registered a bit higher in 2000 (33 percent) than in 1970 (28 percent) but a bit lower than in 1977 (39 percent). The view that card use was bad was stronger in 2000 than in either of the earlier years. Durkin mentioned that credit cards originated in the 1950s as a convenient way for the relatively well-to-do to settle restaurant and department store purchases without carrying cash. They also serve as a payment device in lieu of cash or checks for millions of routine purchases and for many transactions that would otherwise be inconvenient or impossible to conduct.

Credit cards have also become the primary source of unsecured open-end revolving credit, largely replacing the installment-purchase plans previously used in retail businesses (Credit Cards: Use and Consumer Attitudes, 1970–2000, https://www.federalreserve.gov/pubs/bulletin/2000/0900lead.pdf).

Regardless of the results of these statistics and surveys, I was thankful that we had available credit cards to use for all our needs and wants.

Soon I had regular employment, and fortunately, the company provided health insurance for its employees. It is not mandated for companies to provide health care for their employees. Small businesses can hardly afford to offer this benefit to their employees. An immigrant who was just establishing himself or herself in the US workforce did not have much choice but to accept any employment that was first offered. I did not have many options to seek employment in companies offering the best benefits or terms. I had to take what was available or face the alternative—a possibility of longer unemployment.

I had the potential of landing good employment. But with limited local experience, it would take some time for that potential to kick in. With no one and nothing to bank on but my own limited resources, I worked doubly hard to make ends meet and be self-sufficient.

I aspired for a life that had meaning and quality. I wanted not just to survive but to thrive. The trouble, however, was that I was used to a certain kind of lifestyle, and it was hard to make a downward change. One good thing was certain: alternative resources of credit were readily available to provide those needs and the lifestyle. I took full advantage of it. Further, I opted to take a calculated risk of living the life I wanted for myself and for my family, hoping to make the necessary adjustment as time allowed.

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Chapter 2

Credit Cards and Debts All Over

Our income, like that of average working people, was not enough to cover even the basic requirements of living. Obviously, Tony and I considered saving for retirement a low priority. At the time, our main concern was funding our daily needs. We were in debt, and we could not fathom how we could pay for them. If we did get out of debt, how long could we continue to be debt-free? Would there be a retirement to secure our future? When the time came, would we still have full physical and mental capacities to face accumulating money for retirement? How many of us are in this situation?

Per Statista.com, and published by Raynor de Best on November