Second FIRE meet-up Amsterdam with JL Collins as a podcast

Hello FIRE-friends!

And here’s the second FIRE meet-up Amsterdam with JL Collins in the form of a podcast.

https://anchor.fm/econowiser/episodes/Second-FIRE-meet-up-Amsterdam-with-JL-Collins-e4tojn

Happy listening!

Love,

Mrs EconoWiser

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First FIRE meet-up Amsterdam with JL Collins as a podcast

Hi FIRE-friends!

Just a quickie today. Jelle of Growthinkers motivated me to turn the recordings of the FIRE meet-ups with JL Collins into a podcast as well. So here’s the first one as a podcast:

https://anchor.fm/econowiser/episodes/First-FIRE-meet-up-Amsterdam-with-JL-Collins-e4toha

Happy listening!

Love,

Mrs EconoWiser

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.

June & July 2019 numbers

July 2019
Mortgage: 47.99% (+ 0.23% almost half our house is actually ours! We are now focusing on investing, instead of paying off the mortgage)
Emergency fund: 119% (that needs to come back to 100%, so let’s invest the 19%!)
Stash (= EF + stocks): 47.10% ( + 0.83%, even though we bought solar panels for the house, almost halfway to reaching FIRE!)
Savings rate this month: under construction
Savings rate this year: under construction

June 2019
Mortgage: 47.76% (almost half our house is actually ours!)
Emergency fund: 117% (that needs to come back to 100%, so let’s invest the 17%!)
Stash (= EF + stocks): 46.27% (almost halfway to reaching FIRE!)
Savings rate this month: under construction
Savings rate this year: under construction

***I stopped blogging at the beginning of 2016 and decided to take it up again in July 2019 after being encouraged by The Godfather of FIRE JL Collins***

December Numbers

December 2015
Mortgage: 34.72% (+0.23)
Emergency fund: 100.02% (the 0.02% is interest received)
Stash (=EF + stocks): 20.09% (+0.13% YEAH! We passed the 20% mark!!! Multiply this amount by five and we’re FI)
Savings rate this month: 30% (Yikes, however…our mortgage payment for January was already collected this month, so we had two mortgage payments in December. It should relieve January 2016 off monetary pressure)
Savings rate this year: 40% (So, 40% it is!)

How did your 2015 fare?

Love,

Mrs EconoWiser