The May Numbers Are In

Hi there!

Just a short post with last month’s numbers.

May 2020

Mortgage: 50.32% (+ 0.25% I still can’t get over the fact that we own half of our home!)
Emergency fund: 150% (a huge chunk will be invested on June 2nd into VWRL)
Stash (= net worth): 50.35% (+1.19% wooohoooooooohhhhhhh, we’re 50% FIRE again! We expect to receive a huge tax fund at the beginning of June….60% FIRE here we come!)

Stay safe & strong.

Love,

Mrs EconoWiser

The Numbers Are In: We Own 50% Of Our Home!

Oh, hi there! So, I discovered a teeny tiny (ahem, huge) mistake in my Excel sheet. Anyway, I updated the numbers from January up until now.

April 2020

Mortgage: 50.07% (+ 0.24% wooooooooohooooooooooooooohhhhhh, we actually own 50% of our home!!! -> as long as we keep paying our mortgage that is…because as y’all know what happens if you don’t…)
Emergency fund: 136% (Due to Labour Day our mortgage hasn’t been collected by the bank yet….I expect they’ll collect it on 4th May…still there’s a lot of excess money that we can throw into VWRL, which we will)
Stash (= net worth): 49.16% (+3.39% uhm….I really don’t understand why the market is doing what it’s doing….whatever, just keep throwing money into VWRL)

March 2020

Mortgage: 49.83% (+ 0.23% we can smell that 50% mark, here we come!)
Emergency fund: 121% (We bought some toys for the kids as their birthdays came and went…without a party due to COVID-19)
Stash (= net worth): 45.77% (-3.43% fasten your seatbelts…..and stay the course!)

Februari 2020

Mortgage: 49.60% (+ 0.20% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 137% (We didn’t spend too much on our ski trip)
Stash (= net worth): 49.20% (- 1.87% oh dear…down it goes…and not being halfway there anymore sure hurts…)

Januari 2020
Mortgage: 49.38% (+ 0.24% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 131% (Mortgage is due tomorrow since the first of Februari was on a Saturday…that and we’re going on a skitrip at the end of this month so cash will come in handy)
Stash (= net worth): 51.07% (found a mistake in my Excel sheet, December should’ve been something like 52% or so…but still: halfway there!)

FIRE friends

Luckily for you I have some cool FIRE friends (who don’t suffer from writer’s block like I do… 😉 ) to refer you to.

Friends who blog in English:

Cheesy Finance: A Dutch couple with a kid who are already at the barista FIRE stage and intend to become fat FIRE within the next couple of years. They invest in real estate, hold a sensible investment portfolio and kick ass in the FIRE lifestyle departement. You can follow their progress through their “cheesy index”.

Fire the boss: a smart guy in his twenties who’s good with numbers, knows his way around investing and is eager to reach financial independence. However, he is determined to live life to the fullest on his path to FIRE. Oh, and obviously fire his boss. 😉

If Dutch doesn’t sound gibberish to you, I’d encourage you to check out:

Financieel Onanfhankelijk Blog: this guy’s the real deal, he retired early at the age of 49. That in and of itself is a huge achievement, but reaching FIRE in The Netherlands with our not-so-FIRE-friendly tax system is outstanding. The quality of his posts are excellent and this blog is a must-read for all you Dutch FIRE enthusiasts.

Thinking Big: now that’s the spirit! He likes to slash his mortgage and invest mainly in index funds. He dreams of owning rental properties in the future and since he’s dreaming big…he might just inspire you to do so as well. He also shares some numbers for all you lurkers out there.

Niet tot 71: a couple who don’t want to do mandatory work until their official retirement age of 71 but aim for 55 instead. This means that they’re working on their FIRE plan which they view as a marathon instead of a sprint and enjoy life to the fullest while they’re at it. For example: they bought a motor home (which is always a plus in my book) that will take them on many adventures to come. Meanwhile, you as a reader can enjoy their updates on net worth and their thought process on the decisions they make.

Van her naar hot: HOT in this case stand for Happy (Healthy), Opportunity-rich and Time-rich. While FIRE in and of itself is not the goal here, working less and enjoying the ride is. If you’d like some inspiration on how to get to this relaxed state of mind you want to follow this blog.

Geldnerd: works for the Dutch government has so much knowledge about Dutch laws and regulations, it’s uncanny. He excels at Excel 😉 and has created a handy FIRE calculator for the Dutch. He shares experiences and he’s all about handling your money with intention. Yep, this blog is a treasure trove for all you Dutch FIRE enthusiasts out there.

Fireme.nl: is a self-employed techie who experienced an epiphany after the last recession when he realised that he made too little revenue, had no pension worked out for himself, had no cash cushion whatsoever and got himself some bad mortgage deals. Add a health scare to the mix and you’re good to do a 180, which is exactly what he did. He doubled his income, started extra mortgage payments, got himself started on a pension, started investing and got of his butt by getting those muscles into shape. You are welcome to join him during his very inspirational road-to-fire.

Aaaaaaaaaaaand that’s 50% FIRE out the window….

Januari 2020
Mortgage: 49.38% (+ 0.24% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 131% (Mortgage is due tomorrow since the first of Februari was on a Saturday…that and we’re going on a skitrip at the end of this month so cash will come in handy)
Stash (= EF + stocks): 49.75%% (-0.97%…OOOOOPPPPSSSS that’s the stock market for ya…50% FIRE just went bye bye…)
Savings rate this month: under construction
Savings rate this year: under construction

December 2019
Mortgage: 49.14% (+ 0.09% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 128% (VWRL we’re coming at ya!)
Stash (= EF + stocks): 50.72% ( + 0.50% being 50% FIRE feels GOOOOODDDD)
Savings rate this month: under construction
Savings rate this year: under construction

We’re 50% FIRE!

I have updated the my money overview page. I still have some work to do on calculating our savings rate….of the entire year. I am a FIRE sloth… Even though I neglected our savings rate we are now 50%+ FIRE! It will probably drop sometime in the future when the next recession hits…but we’ll enjoy it while it lasts. We are also very close to owning 50% of our home. This all feels really good. It took us about 10 years to reach this number, so I guess we’ll reach FIRE within the next 10 years?

Here are the numbers:

December 2019
Mortgage: 49.14% (+ 0.09% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 128% (VWRL we’re coming at ya!)
Stash (= EF + stocks): 50.72% ( + 0.50% being 50% FIRE feels GOOOOODDDD)
Savings rate this month: under construction
Savings rate this year: under construction

November 2019
Mortgage: 49.05% (+ 0.14% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 126% (we will max out both our pension funds and start throwing extra at our regular stock fund, which is VWRL)
Stash (= EF + stocks): 50.22% ( + 0.94% WE ARE NOW HALFWAY TO FIRE!!!)
Savings rate this month: under construction
Savings rate this year: under construction

October 2019
Mortgage: 48.91% (+ 23% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 109% (excess will be invested in the hubby’s pension fund)
Stash (= EF + stocks): 49.28% ( + 1.31%)
Savings rate this month: under construction
Savings rate this year: under construction

September 2019
Mortgage: 48.68% (+ 0.46% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 128% (excess will be invested in our pension funds this month)
Stash (= EF + stocks): 47.97% ( + 0.77%)
Savings rate this month: under construction
Savings rate this year: under construction

August 2019
Mortgage: 48.22% (+ 0.23% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 127% (we added a lot of money to our retirement account…but still, just after our salaries come at the end of the month our total emergency fund is up)
Stash (= EF + stocks): 47.20% ( + 0.1%, even though we put thousands towards our investments…that’s what the roller coaster ride is all about….)
Savings rate this month: under construction
Savings rate this year: under construction

FIRE meet-up (2) Amsterdam with JL Collins

JL Collins (Jim) enjoyed his FIRE meet-up Amsterdam on the 20th July 2019 so much that he wanted to do another one. Woohooh!

Here’s the recording for you te enjoy: (I don’t have professional equipment and unfortunately there was a lot of background noise this time. Sorry about that, folks!)

My questions were the same as last week, plus one funny (at least, I like to think so) extra question in the end. Even if you already listened to the first recording of the FIRE meet-up Amsterdam, I think you’ll still find some nuggets in the second one even though the questions are the same. The questions that I asked Jim:

<01:15> Which personal decision you made has had the biggest impact on your path to FIRE?

<05:55> Which questions should somebody aspiring FIRE ask themselves at the start of and throughout their journey?

<08:40> You advised  your daughter to keep putting her money in the Vanguard Total Stock Market Index Fund VTSAX. This is the fund she already owns and she should just keep adding to it. In which cases or trends would you advise her differently or change course? What signals should she look out for and what would you advise her to be a cross over point to something else? I know we can’t prepare for Black Swan events and flexibility is key.

<13:40> Recently Vanguard has indicated that they expect returns for the stock market over the next decade to be lower compared to the past couple of decades, about 5 percent annualized return instead of 8. What is your view on this statement and would you adjust your investment strategy if the stock market returns would drop considerably?

<17:00> The Dutch have to deal with a different kind of income and wealth tax system compared to Americans. What course of action would you advise the Dutch on their way to FIRE while dealing with things like capital gains tax and wealth tax?

<20:50> What lessons about money did your parents teach you?

<25:00> How do you and Jane talk about money and investing? And what kind of money and investment talk strategy would you advise couples who have just discovered the FIRE movement?

<31:45> Do you expect global trends like climate change to affect the stock market? Should an investor anticipate on these trends and if yes, how?

<34:45> Which topics are a waste of time to think about when pursuing FIRE?

<44:00>You mention Mike Tyson in your book? Has he ever gotten back to you?

From the audience (summarized by me):

<48:05> How do I invest wisely when I don’t like to think about investing all the time? Is it possible to reach FIRE without investing?

<54:30> What is your view on diversifying your investments between stocks, cash and real estate?*
* For the Dutchies around here I refered to the website geenbaanmeer.nl for more information on rental property investing in The Netherlands. You might want to go to one of his workshops.

<1:06:15> How does one meander in an ever evolving world as an early retiree? (Sorry about the blender in the background)**
In this part I mention Kristy Shen’s book, which is a must read: Quit Like a Millionaire

<1:14:45> How do you balance enjoying your money now and invest for your future self?

<1:19:40> How do you deal with the volatility of stocks compared to real estate?
In this part we mention Paula Pant’s blog Afford Anything.

<1:27:15> When and how do you add bonds to your portfolio when thinking about volatility?

<1:34:50> As a self-employed worker I have to keep money aside for taxes and it’s just sitting there earning next to nothing. What should I do?

<1:41:00> When do you know when enough is enough?

<1:46:45> How do you figure out what to retire towards?

How to become a disobedient citizen: create your own basic income.

Universal basic income, citizen’s (basic) income, basic income guarantee, basic living stipend or universal demogrant…fort he sake of simplicity let’s just call it basic income in this article.

You have probably heard about basic income, since the discussion about it has flared up in recent years. With special thanks to fellow Dutchie Rutger Bregman who makes an excellent case  in his TED talk for poverty not being a lack of character, but a lack of money.

Based on many scientific studies he discovered that when people don’t have enough money to cover their basic needs they will suffer from scarcity mentality. This causes a huge amount of stress so that  people to go into survival mode and make inefficient lifestyle decisions. Studies have shown that a basic income makes people happier, smarter and healthier. In his talk Rutger stated that a basic income would be like venture capital for the people.

Venture capital is an investment in a project in which there is an element of risk but is believed to have long-term growth potential. Instead of  the money being invested in a project, a basic income would be invested in people. Now that’s interesting. Investing in people would then be considered risky, but has a long-term growth potential. So this would mean that one could become happy, educated and healthy while taking risk here and there and still have a safe place to live and enough money to get by. Where can I get some of that?

I don’t know whether I’ll get to see a country implement a form of basic income during my lifetime. I think most authorities in different countries would rather not take the plunge and have their obedient citizens work as much as they can and thus pay as much taxes as they possibly can. By that design tax payers are no more than gilded slaves, especially if their lifestyles matches or exceeds their incomes.

The question any normal 38-year-old Dutch woman would ask herself is:  how do I then become a disobedient citizen and take care of that basic income myself?  I am dead set on creating my own basic income by pursuing FIRE, as in Financial Independence Retire Early. Once you have created your basic income, you can do whatever you want and won’t have to wait for any government to distribute basic income. You will have created your own safety net and that is so powerful, it’s going to take your breath away. Not literally I hope, because then all of it would have been for nothing.

So how do you become a disobedient citizen and create your own basic income? The short version goes something like this:

  1. Know where your money is going by keeping track of it
  2. Pay off all debt and/or avoid debt all together
  3. Adopt a wise spending and sensible saving lifestyle, spend way less than you earn and try to increase the gap between spending and saving as much as possible
  4. Build an emergency fund
  5. Learn how to invest in index funds
  6. Make extra investment payments towards your retirement, if at all possible
  7. Create F-You money (which allows you to walk away from unwanted situations)
  8. Become financially independent (and retire early if you want to)

Do you like the idea of creating your own basic income?

FIRE meet-up (1) Amsterdam with JL Collins

Hello FIRE-friends!

On 20th of July 2019 there was a FIRE meet-up in Amsterdam with no one other than JL Collins, author of The Simple Path to Wealth and his blog of which the stock series are the Crown Jewels. Jim is the Godfather of FIRE (Kristy Shen conjured up that title, I hope it’s okay that I borrow it)  and has been FI since 1989. Yep, you want to read his book and his blog.

I had the honour of asking the first couple of questions through an interview which were mostly crowdsourced among the Dutch FIRE community. It was an amazing experience. Again, thank you Jim & Jane. You are amazing people.

Here’s the recording for you to enjoy:

Thanks to Zoku Amsterdam for hosting us.

The questions that I asked Jim:

<02:10> Which personal decision you made has had the biggest impact on your path to FIRE?

<03:50> Which questions should somebody aspiring FIRE ask themselves at the start of and throughout their journey?

<07:40> You advised  your daughter to keep putting her money in the Vanguard Total Stock Market Index Fund VTSAX. This is the fund she already owns and she should just keep adding to it. In which cases or trends would you advise her differently or change course? What signals should she look out for and what would you advise her to be a cross over point to something else? I know we can’t prepare for Black Swan events and flexibility is key.

<14:30> Recently Vanguard has indicated that they expect returns for the stock market over the next decade to be lower compared to the past couple of decades, about 5 percent annualized return instead of 8. What is your view on this statement and would you adjust your investment strategy if the stock market returns would drop considerably?

<17:00> The Dutch have to deal with a different kind of income and wealth tax system compared to Americans. What course of action would you advise the Dutch on their way to FIRE while dealing with things like capital gains tax?

<19:30> What lessons about money did your parents teach you?

<24:30> After discovering index investing, how did you manage to stick to the path since there weren’t a lot of role model index investors back then.

<27:10> How do you and Jane talk about money and investing? And what kind of money and investment talk strategy would you advise couples who have just discovered the FIRE movement?

<31:30> Do you expect global trends like climate change to affect the stock market? Should an investor anticipate on these trends and if yes, how?

<33:50> Which topics are a waste of time to think about when pursuing FIRE?

From the audience (summarized by me):

<36:10> How did you handle college tuition for your daughter?

<40:50> What shouldn’t parents teach their children about money?

<44:30> How do you create a mindset in which you can ride out the storms during bear markets?

<53:20> What is your opinion on value cost averaging?

<56:30> What is your opinion on investing in index funds which also contain companies that one might find unethical?

<1:01:30> You tried to teach your daughter about money throughout her childhood. Is she on board now that she is an adult?

<1:10:50> You don’t have to work for money anymore. What motivates you to work on your current projects?

There was another meet-up on the 27th of July 2019 in Amsterdam. I will publish that recording ASAP.