S&P 500 At Record Height

What have I been up to these past days? Well, I worked on a lot of chores around the house, updated stuff for my side business and watched the first season of Game of Thrones. We have already seen the entire season, but we wanted to watch seasons one and two again before season three starts…which is this weekend! Yeah!

Anyways, today we’ll continue our investigation on index investing in The Netherlands. We are in no rush to make any decisions since the S&P 500 closed at record height yesterday. Congratulations to those who bought these stocks in 2008 when they were on sale! Then, we didn’t know anything about investing. Next time there is such a bear market (no doubt about it, I just don’t know when) we will know what to do: buy a shitload of stocks!

Will you do the same?

Love,

Mrs EconoWiser

Index Investing Options In The Netherlands: The Intermediate Results

The results of my research up till now:

THE WINNERS:

Meesman 0,3%-0,6% (bonds, both global 0,6% and European 0,3%) 0,5% (stocks, both global and European) 0,65% (emerging market stocks) per year, only deals with Vanguard and follows the MSCI-index. Oh, and the membership fee is €25 a year. Super cheap and super easy, you allow them to automatically withdraw a certain amount every month. Downside is that they only offer 5 Vanguard funds (they recently added one, so there’s hope for more!). They’re trading in euros, so the whole dollar/euro-thing is off the table. They reinvest automatically for you so you only need to work on your asset allocation once a year. This is the broker I’ve been with for almost two years now and I am very satisfied with their level of service. Whenever I phone them or send them an email I feel I am taken seriously although I hardly know anything about investing. Also: Mr. Meesman himself answers the phone and the emails. Small broker, has about 40 million euros in its care and doesn’t waste any money on fancy business things like expensive buildings, advertisements (they don’t advertise, spread the word people), expensive furniture and what not. I hereby declare Meesman THE Mustachian Dutch Broker! His business partner wrote the first Dutch book about index investing. Cool guys!

AND (It’s still a maybe)

SNS Fundcoach €59 membership fee per year, 0,29% depository fees per year for Vanguard funds traded in euros, up to 0,5% depository fees per year for Vanguard funds traded in dollars, Vanguard transaction fees 0,5%, in case the funds are not sold in euros 0,15% will be added to these fees totaling 0,65%. This is the DIY version. I am going to shoot Mr. Collins an email some time next week and present the different options I have with this company and compare that with Meesman. Meesman still sounds like the better deal.

One of my favourite Dutch PF bloggers also recommends Meesman and SNS Fundcoach. The article states that Vanguard set TER for the Dutch at 0,5%. So it is up to the broker how much they charge in extra fees.

THE DARK HORSE IN THE RACE:

Rabobank…still waiting for your phone call, ’cause I can’t grasp your tariff Sudoku. Vanguard told me Rabobank is the biggest broker for their products in The Netherlands. However, your fees do not look very promising…

THE LOSERS:

Binck €6,50 + 0,1% (min. €10 max. €150) per transaction, no other fees, offers lots of Vanguard funds (ETFs). However, this is only interesting if you’re throwing in a lot of money in one go.

Index People 0,5% per year excluding tax and depository fees (0,16%), not the Vanguard funds I’m after. This is a no for me.

Ohpen 0,5% per year PLUS 0,5% transaction fees. That’s TOO expensive!

Brand New Day 0,5% per year PLUS 0,59% depository fees. Argh!

Alex €7,50 per transaction + 0,15%, more expensive than Binck, so you’re dismissed!

MoneYou only follows the AEX and uses a weird system. No thanks.

THE ABSOLUTE LOSER:

Saxobank will cost €12 +0,1% per transaction, yikes!

Love,

Mrs EconoWiser

Spending Confessions

This has been a spendy week. We had a sushi dinner date with a former colleague of mine who has become a friend, but I don’t see very often. It was a very fun evening and it cost us €40 per person (the husband very much enjoyed the evening as well).

On my day off (Monday) I went on a sauna date with a friend of mine. We do this once or twice a year. We spent the whole day in the sauna and enjoyed the good food and some drinks there as well. This time it cost me €60 in total.

I spent €100 (and the husband €40) in one week on fun stuff. This is certainly not the amount we would spend in a “normal week” on fun stuff. But hey, what’s normal?

During Easter we will go to a music festival. We already paid for these tickets (€85 each) but drinks and food won’t come cheap. We’ve already been a couple of times and it’s great fun. Friday night, all Saturday and the whole Sunday filled with music and fun. Some friends are coming as well. Yup, another “not so normal spending week” coming up.

Anyhow, this is all guilt-free spending since we enjoy it so much. I have discovered that we do like to spend our money on fun experiences instead of stuff. That’s a major change compared to the person I was five years ago. We’ll still be able to make a nice extra mortgage payment by the end of this month…so I guess we’re still in line with our goals and enjoying life while we’re at it.

Which experiences do you spend money guilt-free on?

Love,

Mrs EconoWiser

Stocks: You Can’t Dance In And Out Of ‘Em

My goal for today is to find out how much fees one would pay with which broker when it comes to investing in Vanguard index funds in The Netherlands.

Love,

Mrs EconoWiser

Another Mr. Money Mustache Interview

Another fun interview with Mr. Money Mustache that I found on YouTube:

Nice!

Love,

Mrs EconoWiser

Investing: Did We Start Too Freakin’ Late??

Yesterday the husband and myself were on our way to work and I was talking about investing and how much we should be putting into our investment accounts. I was pretty bummed when I concluded that it will take us decades before reaching a “safe amount” as in the 4% rule. The husband’s reply was: “Ah, so you figured that out as well…”

Hmpf. I’m almost 32 and he’s going to turn 35 this year. I have had an investment account for almost two years now and he’s only had one for less than a year. Plus, my side business has an investment account as well but that’s less than a year old as well. In total, we’re investing €500 a month right now (on top of aggressively paying off our mortgage). If only we figured this investing thing out ten years ago.

But we didn’t, so I shouldn’t be thinking about that. The bottom line is that we’re going to have to throw much more dough into our investment accounts. I’m still figuring out which brokers offer the Vanguard funds we want to invest in.

Did you start investing “on time”?

Love,

Mrs EconoWiser

Cyprus And Their ‘Stash

Oh boy, savings in Cyprus are not safe anymore. The banks are in trouble and the government is about to rule that everybody needs to hand over 10% of their savings in order to save the banks. The whole idea is that very wealthy Russians who stashed lots of cash with these banks will be “helping” the banks out as well. But also the poor buggar who only ‘stashed away €20,000 for example.

Weird, savings up to €100,000 per person per bank are supposed to be safe here in the EU. If a bank goes bankrupt you will still get your money up to that amount back. That’s just the way it is.

I’m glad we recently decided to throw lots of our ‘stash into our mortgage. At least they can’t take that away from us anymore…

Love,

Mrs EconoWiser

Vanguard Fees Outside The U.S.

Now that I’m also a fan of Vanguard which makes me a Boglehead apparently and have decided to pump even more money into their index funds…I’m kinda bummed about the fact  that here in Holland you can’t open an investment account directly with Vanguard. Trust me, I phoned them. The only way to open a private account with them is to throw in a ridiculous amount of money. I sent them an email just now begging them to let me open a private account…pretty please?

Every time I read about Americans being able to open an investment account with Vanguard directly and paying as low as 0,18% in fees I am a bit A LOT jealous. Fuckity fuck! These are the fees we’re paying through an intermediary:

0,3% Global Bond Fund
0,5% European Stock Fund
0,5% Global Stock Fund
0,65% Emerging Markets Stock Fund

These rates aren’t absurd, I get that. However, it does feel like gettin’ swindled and pimped! With this particular intermediairy I can’t invest in REITs either…my ying needs a yang! I just don’t get why Vanguard chose this strategy outside the U.S. Do any of you? Head of International Business Jim Norris (not related to Chuck, I hope 😉 talks about how excited he is about Vanguard operating outside the U.S. Well, Jim, get your ass in gear and make sure EVERYONE can benefit from the low Vanguard fees. Thanks, mate!

Love,

Mrs EconoWiser

The Difference Between F-You Money And Financial Independence

On this podcast (#2) by MadFIentist you can listen to a wonderful interview with Mr. Collins.

You’ll reach F-You money long before reaching financial independence. F-You money will give you the opportunity to feel bold and do something different. I hadn’t really thought about it like that up until now. It’s very true, though. I am in a position in which I feel very confident about my financial status already. I was asked to go on a useless business trip and I bluntly told my boss I wasn’t going. There were no consequences and I wasn’t fired. I was able to do this because of my ever growing ‘stash of F-You money looking back at this situation. Freedom, here I come!

I have also noticed I have sort of shifted paradigms. I now firmly believe Financial Independence is going to happen for us. Maybe I have started thinking like a rich person? It’s unavoidable, really. Especially when I heard J. Collins sum up his ideas at the end of the interview:

1. Avoid debt
2. Spend less than you earn
3. Invest the surplus

And you can’t help getting rich in more ways than you think.

Now those thoughts are epic!

I’m already halfway reading Mr. Collins’ blog and I’ll spend the rest of my weekend reading the other half.

Have you read his blog yet?

Love,

Mrs EconoWiser

Investing Game Plan

I have started to read the jlcollinsnh-blog from the first blog post onwards. This guy will go to South America together with Mr. Money Mustache and J.D. Roth (Get Rich Slowly) for their Chautauqua. I love his writing style and take his recommendations very seriously. Plus, I want me some F-you money! This blog (and I Will Teach You To Be Rich, which I haven’t finished yet) has renewed my motivation for investing. Index investing that is, duh.

See, we won’t be able to pay off our whole mortgage within ten years. Why not? Well, we have two different parts of mortgage. The first part is a savings type of mortgage. One keeps the entire amount of money owed and doesn’t pay that off, because one gets huge tax breaks this way. On the other hand one saves in this special savings account with a fixed interest rate (same rate as the mortgage part) which is capital gains tax-free. The downside is you’ll have to pay a fine if you pay things off too fast under 20 years.

The other part of our mortgage is an interest-only mortgage. We can pay off as much as we want here. We still have a significant amount to go. If we were to pay off the remaining part of this mortgage today 30% of our home would be ours. From then on we wouldn’t be able to get a lot of extra mortgage payments into our savings mortgage account, unless the rules of the game change. I read somewhere that this might happen. See, there is a certain bandwidth you must abide by. One can’t put in more than 10 times the minimum inlay per year into that account. We’ll lose the entire tax break.

This means that by the end of this year we could still own more than 30% of our home (one of my goals for this year), but after this year things will slow down in that department.

What are we to do?

We will invest even more in index funds. Right now we are investing €500 a month and I would like to increase this amount after having paid off the interest-only mortgage. Every personal finance blogger/author that promotes early retirement stresses the importance of investing and make time and money work for you. It’s the best bet to reach financial independence, which is what we’re after.

How do you like our game plan?

Love,

Mrs EconoWiser