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  • eurfi 9:58 on 2017-03-24 Permalink | Reply  

    To Sprint or not to Sprint 

    At the end of December I talked about my last free day (I was working part time then). I also outlined my plan about a “sprint to the finish line”. With “conservative” numbers I ended at my target net worth number (600k) in mid 2020. Now, “conservative” meant around 1 % return per month. I’m selling options, so 1 % is certainly achievable, but no given.

    Also, to quit my job earlier I wanted to build a second income stream. I had this plan for a very long time now (years), but still have almost nothing to show.

    A few weeks ago I had an epiphany: Could I already live like in FIRE, while still working? (My work is very relaxed.) And what would it look like if I had no stock market income at all?

    So I calculated with (almost) no stock market income (just around 2 % per year) and reached 600k end of 2022 – only 2.5 years more! (With around 4 % per year I get there end of 2021.)

    I also made a list of things I would like to do when FIRE (spending time in nature, spending time with my kids, programming on private projects, eating healthy, sleeping enough, not stressing about money). And a lot of them are at least somewhat possible even now.

    So I decided to not (aggressively) pursue my second income stream goal. I will still program on my side project, but mainly use it for my own.

     
    • Financial Independence 11:47 on 2017-05-03 Permalink | Reply

      Looking at you I always comparing fat vs. thin. Thin is easier to move, jump around and need less weight to carry around. Although I could not imagine myself living on 2K a months (not with mortgage and kids) but glad that you could do it.
      I did calculate it recently and will be quite lucky if we could retire in 30 years time at the current progress :-)))

      Like

    • eurfi 14:28 on 2017-05-04 Permalink | Reply

      Yes, we have lots of common things. Similar net worth, kids, etc.
      The 2k are when the mortgage is gone. Also, it might be more like 2.5k (because of our damn pension contracts). It also does not include buying a new car (which we would like to do once I retire) – a camper van.
      But on the positive side, being retired for me just means quitting my day job. I would continue to earn money with my side job and by selling options (which hopefully achieve more than 4 % p. a.) And my wife would continue working. That is the reason I keep my target number at 600k and do not increase it to 750k (4 % for 2.5k per month). Heck, I could even quit now, but my wife is not comfortable with that thought…

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  • eurfi 10:49 on 2017-01-21 Permalink | Reply  

    Answering questions about my part-time work 

    Whenever I feel a little bit bored and sitting in front of my computer I browse the “Ultimate List of Blogger Net Worth” for new entries. And so I stumbled upon http://retireinprogress.com/. I commented on his post about working 80 %. He starts working 4 days a week in January 2017, for me it ends.

    After some back and forth he asked some very interesting questions, that warrant a longer answer:

    Do you consider your part-time experience a failure for your entrepreneur endeavor or for your overall life quality?
    What I read is that you ended up being lazy in the 20-40% time you got back compared to a 100% position. What makes you think that when fully FI you won’t be lazy? What makes you feel that when fully FI you won’t fill your life with small chores, errands and meaningless activities?

    The answer is not easy or straight-forward for me. Let me explain my current situation a little bit: I’m feeling very stressed. Time is too limited between multiple jobs (“main job”, side job, side hustle, active investing) and family and house. We prioritise the kids very high, so besides working almost everything else is neglected (e. g. house is dirty, chores get done on the last minute). I see this with worries. My wife not so much – she thinks everything is “fine”.

    I would like to escape this stress by quitting my main job. This would give me plenty of time for all the neglected stuff and also for my interests. After talking with my wife about this, there are two ways for me to achieve this: net worth over 600k or having a “business” with at least 1,000 Euros profit a month. If all goes like planned, we might have a net worth of 600k mid 2020. This would mean 3.5 more years to endure. So, the business option could be a short-cut time-wise. I’m still working on it, but time is more limited than last year.

    Now, with the stage set, let’s answer those questions:

    Do you consider your part-time experience a failure for your entrepreneur endeavor or for your overall life quality?

    Yes, it is clearly a failure for my entrepreneur endeavors. My overall life quality was better. But having the goal to work on your business and in the end not doing it, gives you guilty conscience. So I did not fully enjoy the leisure days.

    What makes you think that when fully FI you won’t be lazy?

    Isn’t that the point of being FI? Joke aside, I have a lot of interests, that are parked now, because I don’t have the time. I’m quite certain I would work on them. And I would spend more time during the week with my kids.

    What makes you feel that when fully FI you won’t fill your life with small chores, errands and meaningless activities?

    I guess a big part (at least in the beginning) would actually be small chores and errands. There is so much neglected. Every room I enter I see stuff that should be done. 2017 I would like to work more on these things, because some of them can be done while working full time. It is a matter of organisation (and goal-setting).

    Sorry, this was a lengthy post and in the end I’m just hoping. Nobody knows how it is really going to be. I accept the critic that my free days 2016 showed a more lazy future. I counter that with a need for decompression. After that period I will be productive again.

     
    • Mr. RIP 11:34 on 2017-01-21 Permalink | Reply

      Thanks for your answers EurFI, the picture is clear now 🙂
      I can see that with just a single extra day available per week you’d just do urgent but not important stuff and will reach your long term goal later, which is not good for now.

      Like

    • Team CF 15:58 on 2017-01-26 Permalink | Reply

      Same as you, I’ve too many things I would like to do and feel that when FI I would finally have the time to do those. I have absolutely no worries that I can fill my time (and then some). You would also have the ability to schedule all these things the way you want, this gives the feeling of freedom which is something I also look forward to in FI.
      What will likely happen is that Mrs. CF will continue to work (because she loves it), while I persue other opportunities. Might already happen in 2018….well before FI!

      Like

      • eurfi 18:53 on 2017-01-26 Permalink | Reply

        Already in 2018 – congratulations.
        I have (theoretically) this possibility as well. But I need another income stream with about 1 – 1.5k per month. Then my wife would let me leave my jobs and pursue the business. Currently at zero, unfortunately.

        Like

    • Financial independence 3:26 on 2017-02-01 Permalink | Reply

      First of all – many thanks for sharing. i would perceive 600k a risky scenario , as it does not seems to cover higher/cumulative inflation over time, potential loss and fact that it is much more difficult to get a job once you have been out of it for a significant period of time.

      as we have similar situation st home in regards to chores , i think it is matter of priorities and something will always take precedence, as they are already low on priority list. this needs to be sorted in the current constrains, if considered important.

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      • eurfi 21:40 on 2017-02-01 Permalink | Reply

        I agree with the 600k. Especially after I now realised, that our FIRE spending won’t be 2.1k (as originally expected), but more like 2.6k. On the other hand, leaving my job will open new income opportunities. And as software developer (who intends to continue programming) I will find a job again. I’m convinced I could make a killing as freelancer (if I wanted to work full time).

        So, I consider 600k as a starting point for discussion, where I could (and probably would) leave my job. My wife wants to stay – even better for the math.

        Like

  • eurfi 23:15 on 2017-01-09 Permalink | Reply  

    2016 – Yearly Expenses 

    While 2015 was financially spectacular, I did not achieve similar results in 2016. In the beginning of the year I bet on a rallye (didn’t happen) and in the final month on the year I bet on a decline (also didn’t happen). So I lost needlessly money. In between were some good months, so in the end all was okay (but not spectacular).

    2012 – 2016 in comparison

    But in this post we talk about the expenses, so let’s compare the years:

    • 2012 – 42k
    • 2013 – 44k
    • 2014 – 33k
    • 2015 – 34k
    • 2016 – 35k

    I was expecting rising expenses and wanted to stay below 36k (stretch goal was to stay below 2015’s level). For 2017 I’m expecting slightly lower expenses (around 100 Euros each month).

    Expenses by Category

    • pension payments – 18 %
    • children – 16 %
    • housing – 15 %
    • groceries – 13 %
    • car – 7 %
    • travel – 5 %
    • clothes – 5 %

    Children related expenses jump from the 4th place last year (13 % back then) to the second place this year. We did more vacations than 2015 (or at least paid more for it) and my wife bought a lot of clothes (for our standards).

    Goals for 2017

    • yearly expenses below 2016 level
    • net worth of 450k

    I have not really thought about other goals. So maybe I will add some during the year.

    Savings Rates for 2014 – 2016

    Reader Niterainbow asked about my savings rate. I could not answer it, because I never calculated it. I was very interested in this as well:

    • 2014 – 38 %
    • 2015 – 41 %
    • 2016 – 41 %

    For 2017 I predict over 50 %. As I’m now working full-time again we will earn more. Above 50 % is a nice number!

    What is even more interesting (at least to me), is that in all 3 years our expenses would have been covered without my salary. I calculated it like this: yearly net worth gain – my net salary. This number was positive even in 2014 (were the net worth gain was only 33.4k).

     
    • MustardSeedMoney 4:49 on 2017-01-11 Permalink | Reply

      Wow that’s incredible that you have been able to keep your expenses trending down and keeping your savings rate so high. Awesome job and I can’t wait to you hit your 50% savings rate!!!

      Like

    • eurfi 0:11 on 2017-01-12 Permalink | Reply

      Thanks. The drop from 2013 to 2014 is about our move into our house and a change in health insurance. So when we ignore these “other” years. The expenses are going up from 2014 to 2016. 😦
      But this is okay, because I believe 2017 can be cheaper than 2016.

      Like

    • Team CF 15:53 on 2017-01-26 Permalink | Reply

      Pretty impressive 2016 and cool to see the developments of the last few years. Good luck jacking up the savings rate to over 50%.
      Oh, and stop timing the marget 😉

      Like

      • eurfi 18:56 on 2017-01-26 Permalink | Reply

        Thanks.
        Why should I stop my active investing (I’m mostly selling options)? My 2015 result catapulted our finances to a new level. I will put even more effort in it. There is a lot of room for improvement (and potential).

        Like

  • eurfi 11:27 on 2016-12-09 Permalink | Reply  

    My last free day – how did I spent it? 

    Today is my last free day. From next year on, I will go back to full-time work. This year I was working some months only 3 days a week and most months 4 days a week.

    And today is my last free day (with at least a few unplanned hours) – how did I spent it? Inspired by a reader comment I started looking at my yearly income minus my yearly expenses. I will post more details about this in the beginning of 2017, when the final numbers for 2016 are in. But there were some interesting insights already: In the last three years (2014 – 2016) we would have covered all our expenses without my salary. So I could have already retired 😀

    I earn around double what my wife earns, so I didn’t expect that. Also, 2015 was a spectacular year for us, so no surprise here. But it also worked in 2014. In 2015 and 2015 our non-salary income would have been enough to cover our expenses. So, theoretically, my wife could have retired as well.

    But our current net worth (355k) is too low to really quit. My target number is 600k, which would give us 24k a year with a SWR of 4%. This is more or less our planned expenses in (full) retirement.

    My wife (currently) does not want to retire, so the numbers look quite okay for me leaving the corporate world. I still have to convince my wife, though. This is by far the hardest part. My current plan involves a “sprint to the finish line”. Next year I go back to full-time employment. Earning more will lead to saving more. The “conservative plan” has a target retirement date of mid 2020 (we will have our 600k by then).

    But I’m not sure if I can sustain working until then. I would rather quit in 2018 already. So, I try to generate an extra income of around 1k each month. With that I hope to convince my wife to let me retire earlier. I can do it!

     
    • Financial Independence 12:01 on 2016-12-26 Permalink | Reply

      Hi EurFI, welcome to the FTE (Full Time Employees) circle. I am still truly amazed that you can cover all your expenses with not being FTE and yet, focusing on the full time job.
      If you could cover our expenses I would likely to build on that success or even better – start doing it for the other people and got my fair share from the results.
      With my $387K portfolio I managed to get $8K a year in dividends (all beit around $50 is cash and some precious metals).

      The choice is yours and I am looking forward to your posts in 2017!

      Like

      • eurfi 0:11 on 2016-12-27 Permalink | Reply

        This (covering our expenses) was only possible because of investment returns. And if I hadn’t made some mistakes in 2016, it would have been a very boring, but constantly growing year. This is one of my goals for 2017 – less volatility.
        I also have some dividend stocks (mostly REITs) – 3.3k dividend out of 50k invested (around 6.8 %). I bought OHI (9 %) for very high yield and also have CCP, quite concentrated sector risk. But your portfolio is similar (albeit concentrated in a different sector).

        Like

  • eurfi 19:44 on 2016-10-16 Permalink | Reply  

    Goals 2016 – Three Quarter Report 

    My goals for 2016 were:

    • Yearly expenses below 36.000 Euros (average of 3.000 Euros per month).
    • Change in work situation.
    • 100 Euro per month side hustle (project Escape 9 to 5) in December 2016.
    • 24 blog posts (average of 2 per month).
    • Spend 3 nights outdoors with my oldest kid.

    And I recently added:

    • Net worth end of 2016 – 360k Euros.

    Our yearly expenses are running at 37.4k. This is slightly less than 3 months ago. It felt possible to reach, but then we bought Lego toys for over 400 Euros (around 40 kilos). We will see, what the future brings.

    I changed my work agreement to 3 days a week. But I didn’t use my free days to my advantage (e. g. project Escape 9 to 5). At the moment I’m back to 4 days a week and I might be back full time in 2017. It is quite an amount for each day more/less. So, in order to reach financial independence by Summer 2020 I have to use all I can get.

    I abandoned my ambitions to earn money with my side hustle (project Escape 9 to 5). Over the summer I had 2 free days each work and almost never worked on it. I still use my software often, but rarely do I program on it. At the moment I concentrate my energies on the stock market. I think there is the most potential. I will go back to my little software project when I’m FI.

    24 blog posts: 12 posts are set (monthly net worth report) and if I post at least once in between I should be able to make it. But of all my goals it is the least important one.

    I spent 2 nights outdoors (with my wife and all kids). So, while I did not reach 3 nights, I’m very happy that we camped two times! It was fun (and very wet the second time).

    To reach my 360k net worth goal I have to add 4k each remaining month.

     
  • eurfi 23:25 on 2016-10-03 Permalink | Reply  

    September 2016 – net worth and expenses 

    September was a solid month.

    • brokerage accounts 286.7k (+6.1k)
    • ETFs 9.3k (+0.6k)
    • cash 46.1k (-13.6k)
    • alternative investments 34.9k (+15.0k)
    • taxes -28.9k
    • total 348.1k (+6.5k) [+1.9%]

    I have an aggressive goal for the next three years (more on this further below) and the year end figure for 2016 is 360k. As of today only 12k are missing. I expect half of it (2k each month) to come from savings. The other half has to come from the stock market.

    Monthly Expenses

    • January 2.8k
    • February 2.6k
    • March 3.4k
    • April 3.7k
    • May 3.3k
    • June 3.2k
    • July 2.9k
    • August 2.6k
    • September 2.9k

    September seems average, but there are vacation costs (700 Euros) and clothes included (300 Euros). So it actually was a very inexpensive month. My goal for yearly expenses is to stay below 36k. At the moment we are running at 37.4k.

    Camper Van Savings Account

    • July 2.2k (monthly savings 37 Euros)
    • August 2.6k (monthly savings 165 Euros)
    • September 3.0k (monthly savings 165 Euros)

    No changes for the monthly savings (and also no changes expected for the rest of the year).

    FI Date / Aggressive Goal

    My Excel sheet (which is based on increasing the yearly gain by 10k each year) projects us at 600k at the end of 2020. With the 4 % rule we can then withdraw 2k each month, which should cover our (then reduced) expenses. My new goal is to reach this point in June 2020. 360k in 2016, 420k in 2017, 490k in 2018, 570k in 2019 and finally 600k in spring/summer 2020. I will try to reach it in 2019, but 2020 is more realistic. To achieve this, I have to make (on average) between 4k per month in 2017 and 6k in 2019 in the stock market. At the moment I do not know how to achieve this. I have to spend more time learning and researching, that is for sure!

     

     
  • eurfi 10:06 on 2016-09-08 Permalink | Reply  

    Two Years of Blogging – Lessons from Thinking about FI 

    Today is my two year anniversary. I started this blog exactly two years ago. My first post was a few days later. I learned about the concept of early retirement in July 2014: I stumbled upon a book review of Jacob’s book “Early Retirement Extreme”. And from his blog I also found MMM and 1500 Days etc.

    I was immediately hooked by the concept of saving enough to live from the proceeds. It really changed my thinking. I was tracking my expenses and net worth before, but I was not drawing enough conclusions out of it.

    My biggest lesson in the two years of blogging: Thinking about money pays out.

    I noticed recent yearly net worth gains were around 10k in 2012, 20k in 2013 and 30k in 2014. To recognise the pattern was easy! I made an Excel sheet and projected each year an additional increase of 10k. This would give us 600k end of 2020 and over 1 million in 2024. Our actual savings (from our salaries) were limited, so the additional income had to come from investment gains. At that moment I had around 100k in our brokerage account and about 60k cash in a money market account. There was no way I could achieve those returns with this allocation. So in 2015 I moved the cash into a new brokerage account. And this paid out handsomely. Our net worth gain in 2015 was way above the projected 40k. (There was a lot of luck involved – it just was a fantastic year for my strategies. The same strategies did not work in 2016 at all. Luckily I played it small and later stayed away from them.)

    I’m sure, if I had not made this Excel sheet, I would not have moved the money into brokerage accounts and I would not have had such a spectacular year 2015.

    A big topic for me is onboarding my wife. To achieve the goal of financial independence it is necessary to cut expenses. We spend around 600 Euros each month for pension contracts. This is no longer necessary, if we can live from our investments early. So we have to terminate these contracts. It was a heated topic for a long time. Finally we see some progress there. I hope to do quarterly reviews of our net worth with my wife. (I manage all our finances and investments.)

    This year we started a special savings account were we accrue money for our dream – a camper van. I hope to further reduce our monthly expenses with this account (reducing costs to save more for the van).

    My next area were thinking about money produced results is our dividend portfolio. I aim for a 600k portfolio and 4 % dividend yield. Almost no quality stock has 4 % yield at the moment. So I mostly sell puts with a lower strike price and collect some premiums. I’m already at a yearly return of 16k out of a nominal portfolio size of 235k (average yield 6,8 %). This yield will go down, as new investments will have a much lower yield. Nevertheless the progress is fantastic.

     
    • Financial Independence 12:05 on 2016-12-26 Permalink | Reply

      I keep our financial independence separately from the wife’s pension. More over I actively encourage her to contribute her maximum amount she can at her work pension.
      Pensions are protected from bankruptcy, create her good feeling and allows me to do some real life benchmark. I do not think we will be able to retire any earlier than ordinary people unless something changes dramatically.

      Like

      • eurfi 0:04 on 2016-12-27 Permalink | Reply

        I assume the “dramatic changes” have to occur on the side of the expenses. 66k is quite a bit! But I know: This is easier said than done. (A few days ago I learned that our FI expenses will be at least 300 Euros a month higher – I will blog about it soon.)

        Like

  • eurfi 13:42 on 2016-07-16 Permalink | Reply  

    Will this savings account convince my wife? 

    In a lot of couples pursuing FIRE one is more “on fire” than the partner. This is also the case for us. My wife is not against the idea of early retirement, but she would like to continue working. Her spending is sensible, but to cut certain expenses is a hot topic. From time to time I bring these topics up – constant dripping wears away the stone.

    A few months ago I had an idea. We both want our next car to be a camper van. We almost bought one a few months ago. My idea was to open a separate savings account and transfer each month the amounts of all saved expenses. When we cancelled our sport club membership, we now transfer the exact same sum each month to our new savings account. Also, when we sell something on Ebay (or our local equivalent of Craigslist). Or when one of us earns extra money.

    From the beginning of 2016 we saved already over 2.000 Euros. Saved expenses is just below 40 Euros (one month of sport club membership), but this will hopefully grow. I hope this will motivate my wife to look for (regular) expenses we can cut.

    How did you bring your wife onboard?

     
    • Financial Independence 13:27 on 2016-07-29 Permalink | Reply

      I found it difficult to get her interested in transferring money to a dedicated account or keep accurate track of it. I simply do it myself. What we do is to have our expenses track every month and see how our savings grow, if they do.
      the challenge is to agree of what needs to be cut. sometimes she gets quite excited and could quickly cut to achieve the goal sooner. As this is not sustainable we need to negotiate what we want together.
      I keep reminding her that we are still lucky to have option of savings, not everybody can do it. the thing is to stay happy on the way to the goal.

      Liked by 1 person

      • eurfi 20:30 on 2016-07-31 Permalink | Reply

        Has she also the goal to retire? My wife doesn’t want to quit her job. But I assume she would want to if I do it (and have lots of fun with the kids).
        Why not use “good mood” to agree on cutting expenses? I assume you know what the most useless expenses are.

        Like

        • Financial Independence 1:54 on 2016-08-03 Permalink

          Looking at our savings rates (which is likely to slow down this year for the next 4 years) it is unlikely that either of us would be able to retire or achieve financial independence to maintain current life style. Back in 2010 i was dreaming of retiring based on 7% return a year. This has not been the case and math is an awkward thing – I can actually see when I could possibly get there based on the past progress. I will be 65-70 at the time.

          I am also pondering on example for the kids. It is joy to be around them when they a little, but later in life they would like to see a role model. Sitting at home on a modest income is probably difficult to do. I keep saving as much as I can do comfortably and having this nest egg will keep my mind at piece.

          Liked by 1 person

  • eurfi 23:38 on 2016-07-11 Permalink | Reply  

    Goals 2016 – half year report 

    After three months things looked great. All goals seemed achievable, I even added another goal (3 nights outdoors with my oldest kid). What a difference three months can make!

    Let’s recap my goals:

    • Yearly expenses below 36.000 Euros (average of 3.000 Euros per month).
    • Change in work situation.
    • 100 Euro per month side hustle (project Escape 9 to 5) in December 2016.
    • 24 blog posts (average of 2 per month).
    • Spend 3 nights outdoors with my oldest kid.

    Our monthly expenses have been way above 3.000 Euros per month over the last three months. Right now, our yearly expenses point to 37.6k.

    I still work 3 days a week, but so far I did not use my free days fully to my advantage.

    This leads to my next goal (my side hustle). I completely lost my momentum. The number of users increased nicely, but still on a small scale. I have over 30 users now, but only a handful of them are using it regularly.

    Also, my number of posts (usually 2 per month) slowed down. So what once looked easy is now also behind schedule. But from all the goals this is the least important one.

    I still have not spent a single night outdoors. Even camping in our back yard would count – but I just haven’t done it.

     

    But not all is lost, our net worth progressed nicely. And, from this low point things only can improve. 😀

     
  • eurfi 7:10 on 2016-04-23 Permalink | Reply  

    Goals 2016 – status report 

    I have achieved one goal for 2016, so let’s review them all:

    Goals for 2016

    • Yearly expenses below 36.000 Euros (average of 3.000 Euros per month).
    • Change in work situation.
    • 100 Euro per month side hustle (project Escape 9 to 5) in December 2016.
    • 24 blog posts (average of 2 per month).

    So far (3 months) our yearly expenses are below 36k. This looks good, but is not done yet.

    From next month on I will be working only 3 days, having 2 extra days for my family and my side hustle. So this is a “check”.

    Speaking of my side hustle, I really need these free days. Otherwise I have only 1 – 2 hours in the evening to work on my software project. And lately the progress has stalled. Currently I have 6 test users (with only one of them using the software actively). This is my major area for improvement.

    The blog post goal is looking good, but like the yearly expenses it is only done at the end of the year.

    A recent comment from reader niterainbow inspired my to add a fifth goal for 2016:

    • Spend 3 nights outdoors with my oldest kid.

    It will be the first nights in a tent for her/him. I promised it for 2015 already, but didn’t do it. 2016 it has to happen!

     
    • ambertreeleaves 8:53 on 2016-04-23 Permalink | Reply

      Spending a few nights outside with the kids is something that is in the back of my head as well… Great that you make it a formal goal. My plan is to spend a nigh in tent in the garden this summer and then a night on a camping ground close by.

      Like

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