Hello from Romania

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nmirela
Posts: 13
Joined: Fri Aug 28, 2015 5:34 pm
Location: Romania

Hello from Romania

Post by nmirela »

Hello everybody!

My name is Mirela and I am 39.

I first stumbled upon YMOYL about 5 or 6 years ago. It struck a deep chord and I could not stop thinking about it ever since. I have read it at least 4 times, every time promising myself to "follow the plan". BUT.... something always happened, and I failed. The worst part was tracking every penny. I never got further than that step.

I hope this time will be different. What I missed mostly was a community of like-minded people... a sort of "support group", and I hope to find it here.

Another issue I have with all the wonderful books and blogs out there on Financial independence or Early Retirement is that some of the situations don't apply to Romania. I have most trouble with the investing part for example, but other problems are equally daunting.

I hoped I'd find other Romanians here, but the only topic I found was this one viewtopic.php?f=1&t=1554&hilit=romania, and it looks like it hasn't been updated in a while, and possibly the OP no longer lives my "Romanian reality".

Speaking of that post, my view of the "ERE country" as Daniel put it, is quite different, although I understand his point of view.

Basically he said that most people in Romania already live the ERE lifestyle - frugality, sharing resources, not too much debt, accumulating life skills, a lot even owning their "shelter" - which means, as an ERE-er you'd look less "weird" around here. And to some degree this is true. The problem is that most people must do this in order to survive. It is not a means to gain financial independence. You live as frugally as possible in order to get to the next paycheck.

Daniel's view was a bit different because he happened to be among the lucky ones with a good job and a great paycheck. He worked in IT, so he could afford saving a good chunk of his monthly income.

If you're curious, here's a site that has some numbers related to the cost of living in Bucharest (where I work) http://www.numbeo.com/cost-of-living/ci ... rrency=USD

The interesting thing is they list the average salary around 530 USD - which is true. Only it's true because in the big cities - but mostly in Bucharest - there are people who can earn a lot of money, working mainly in IT or for the multinational companies.

But, although that number of jobs is limited, it boosts the average salary. The truth is the vast majority of Romanians NEVER reach that "average" salary. Just two examples: a specialist doctor, after 12 years of medical school (6 in the University of Medicine and another 6 as resident in a hospital) earns 450 USD. And a teacher, at the end of his career, after more than 40 years of experience, with all the possible qualifications, reaches the "fabulous" amount of... 450 USD.

So... let's think about two teachers... they fall in love and get married :D. They're in their late 20's/ early 30's - so they probably make about 250 USD each. Average rent for a 1 br apartment (in a modest neighborhood!) would be exactly one of their salaries - 250. But they'd have to pay utilities as well, that can get as high as 100 USD (or more) in the winter months. Transport to the jobs? Groceries? Cable/Internet/Phone? Clothing? it all needs to fit in the 150 USD left - which is, most obviously, impossible! [mind you, I said nothing about eating out/ sports or other leisure/ professional books/ magazine subscriptions/ hobbies/ pets or vacations - these don't even cross their minds - they'd be too busy looking for the last penny in their pocket to buy a loaf of bread]

And that's why you'll actually find the "happy couple" living in - and sharing the costs and the 650 sq feet 2 br. matchbox apartment - with their own parents. And when the first child appears, the grandparents move to the living room, the young parents move to their parents' bedroom, and their old bedroom becomes the nursery. The sad thing is, that even in this "crazy" arrangement you can't save much (or at all).

BTW... I am a teacher. That's why I know this story all too well. (Not married to another teacher, although the average income of DH isn't much higher than mine). And our first child is on the way.

So.... here I laid my worries. Hope to find some support from you guys, especially if you live in an ex-communist country or somewhere with the same crazy cost of living vs actual income proportion. How do people in similar situations still make their way to FI? And how long does it actually take?

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: Hello from Romania

Post by Dragline »

Hello. I have spent some time in unusual corners of Romania like Resita and Fagaras, but it was for work, and I saw that life was difficult there for many. Not like living there full time.

I don't have any particular answers for you, other than the people I saw doing well (or at least better) in countries like yours had some entrepreneurial bent. I think others might have better advice.

But welcome. Glad you are here.

ether
Posts: 263
Joined: Sat Nov 17, 2012 1:50 am
Location: Jacksonville, FL
Contact:

Re: Hello from Romania

Post by ether »

Alo nmirela,
Welcome to the forums!

I was surprised to see real estate prices were similar to the USA in Romania.
Now I can understand your dilemma.

Going off the entrepreneur idea, have you considered teaching English on the side?
Or maybe taking advantage of immigration policy of the EU?

nmirela
Posts: 13
Joined: Fri Aug 28, 2015 5:34 pm
Location: Romania

Re: Hello from Romania

Post by nmirela »

@Dragline Thanks for the welcome :).

I've been to Resita too, we have some good friends there. Beautiful place (the surrounding area, not exactly the grey-building communist city itself). The trouble with places like Resita or Fagaras for that matter is that they were built around some industrial features, most artificially created during the communist time and collapsed right after the fall of the regime. But not all were created during the communist time. Resita for example was a booming industrial center long before the communists came. The Metal Works there started as early as 1771 (btw, steel produced at Reșița was sent to France to be used in building the Eiffel Tower https://en.wikipedia.org/wiki/Re%C8%99i%C8%9Ba_works). Some of the first European train steam engines were also built there (1872 - first Resita locomotive). But, managed by the communists and with the chaos that followed the fall of the Iron Curtain... it just went down. Now imagine all those people that almost over night became unemployed. And this happened all over the country. Whole cities of jobless people. It's difficult to recover from that.

Regarding your entrepreneurship suggestion - we figured that could be a solution. So, we did try something some years ago, but we ended up losing all our savings in the process - about 12,000 USD (the equivalent of my teacher salary for 4 whole years at the time). But you know what they say: for every business that succeeds there are thousands that fail - we were among the ones who failed. Now, if gathering starting capital were not such a big problem, maybe we'd try again, but for some reason we're a bit reluctant right now.

@ether Thanks for the welcome! :)

As for side teaching... I already do teach both my main subject (piano) and English. But that's what every single teacher in Romania does to get by. So the market is over saturated, and even in big cities like Bucharest it's difficult to find kids to tutor. And besides, everybody here teaches English :), not only people with an English teacher degree - prices are very low and to get students you usually have to travel the whole city. For example, for one hour of teaching one student, you spend 2 or more in traffic getting there and traveling to the next destination, and unfortunately the number of hours in a day cannot be stretched. As for teaching piano, even if there may seem to be less piano teachers on the market [there are actually waaaaaay tooo many, at least in Bucharest] , the demand is very low. In an economy were every penny spent matters, very few parents opt for the luxury of piano lessons, especially as they don't see any monetary gain in the future for their children. People here spend very little on hobbies - if you spend money, you must see a profit from it somewhere down the line.

Emigration...... That's another Romanian Saga. Every single family in Romania has relatives that left. That's how most of the jobless people in those cities I was talking about coped with the situation. They simply left to seek work in Western Europe. First the fathers left, and then the mothers and the children were left behind, to be raised by old grandparents or aunts or sometimes just old family friends who were too old to leave for work. It's so sad to see so many broken families.
Finding a good job in a new country is not always an easy task, especially if you do not know the language and do not have the family support network you are used to from Romania. Unless you are trained in a profession that is in demand in the country you immigrate to, things are really tough. [Doctors do well for example in France, Belgium and Germany. Some engineers do well. Teachers.... not so well. Most teachers I know who left work as housekeepers if they're lucky, or take care of old people who cannot move from the bed]. So my prospects aren't so rosy there either :)

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: Hello from Romania

Post by Dragline »

My work in Resita involved the mill and I spent a lot of time there. It was like an industrial museum. They forged Napoleon's cannons there. But the only other non-Romanians in that town were Germans hiking in the nearby hills. And there were still people working with horse-drawn carts.

Now I'm having flashbacks of eating lots of ciorba and listening to O-Zone: https://www.youtube.com/watch?v=YnopHCL1Jk8

The funny thing about Romanian pop music then (early/mid-2000s) is that it was almost exactly derivative of the new wave music of England and the US in the 1980s.

I loved the hot peppers and always wondered if a hot sauce could be created from them, similar to the Tabasco we have in the US.

bradley
Posts: 167
Joined: Sun Jan 11, 2015 8:45 am
Location: NYC Metro

Re: Hello from Romania

Post by bradley »

Welcome Mirela! This is definitely a community that you can find support and new ideas in.

On the topic of investing, I know the stock market is probably not very applicable to Romania, but what about other investment opportunities? Other ways to invest are, for example, in real estate or lending (peer-to-peer lending, for instance). These might be applicable.

Hankaroundtheworld
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Hello from Romania

Post by Hankaroundtheworld »

Hi Mirela, welcome and lots of sympathy for your situation. We have many colleagues in Bucharest (my company has set up a Services company there, of course attractive as salaries are low but there is also a good influx of good people from Universities, which is one of the gems of your country). Many of these Romanian colleagues are getting chances inside the Company to work in other Countries, and they enjoy! In general, I like the mentality of them, very open and also inviting me to visit them in Romania (which I did related to work).
But I guess, they are the lucky ones. In Hungary it is a lot similar, also avg Salary is low. What these countries should do is using their strength (like good universities in Bucharest) and turn it into attractive packages, like creating "Medical Tourist" destination (starting to happen in Hungary), and may be for Romania to create international university packages incl. home rental, etc.. Or make it attractive for Pensioners to start living there, also with good medical packages, this all brings good money, etc...
Anyway, these are mid-term strategies, and it will not help you right away....in that case, try to work abroad, English teaching is needed in many parts of the world!

MishainBg
Posts: 11
Joined: Thu Sep 03, 2015 12:19 am

Re: Hello from Romania

Post by MishainBg »

Hey, Mirela!

I'm from Bulgaria!! :)
So I actually very well understand what you mean by not all the advices apply for Romania, neither they do for Bulgaria (we're even poorer than you :lol: ). http://www.numbeo.com/cost-of-living/ci ... city=Sofia And Sofia is the capital and wealthiest city, everywhere else salaries are probably 2-3 times lower. I can't make it show in US dollars, but 1 dollar = 1.80 lv.
Indre wrote:Hello!
So a very similar boat! We should create a club or something - how to be frugal in a country where frugality is the norm.
I can join that club too :)

nmirela
Posts: 13
Joined: Fri Aug 28, 2015 5:34 pm
Location: Romania

Re: Hello from Romania

Post by nmirela »

Wow, so many wonderful responses. Many thanks to all of you who stopped by.

@ bradley & @indre: Regarding the peer-to-peer lending: In Romania it is illegal to lend money with interest, unless you are a bank. There are also a few credit companies, but they must also be registered with the National Bank of Romania, just like the credit divisions of any bank. These credit companies are used only by some people for short term loans, but they are not very popular, as I understand the interest is high. So, mainly the banks lend money here.

@bradley: Real estate is highly expensive - to buy a 450 sq m one bedroom apartment here in a regular/modest neighborhood averages 50,000 $ - for apartments that have not been renovated in many years. Once you buy it, you must invest at least 10,000$ to update the unit to be able to rent it [and the amount is really the minimum possible if you consider the price of appliances and furniture for example - for comparison Ikea prices in Romania are exactly the same as in the US].

Now - that apartment will probably rent at about 250$ per month, but you must pay 22% tax on income from renting. So, really you are left with 195$/ month. That is about 2,340$ per year. Property tax is around 40$, so 2,300$/year. Supposing you already have saved 10,000$ [which, by the way, means saving 100% of a teacher's salary for more than 3 years!], you'd have to borrow 50,000$ from a bank.

At the average interest of 5% for a mortgage here, spanning no less than 30 years, the yearly payment is 3221$.

That means - to finally own the apartment, for 30 years you'd have to pay 921$ every year out of your own pocket (about 30% of the said teacher salary), assuming the unit was rented full time for the whole 30 years and assuming you're lucky enough no pipe will burst, no appliance will get toasted an no piece of furniture will break and you will never have to at least repaint the walls during this time. Highly unrealistic! [but this doesn't stop me from dreaming :) - that's why I keep running these calculations - hoping they might look different some day]
Last edited by nmirela on Fri Sep 04, 2015 11:00 am, edited 2 times in total.

nmirela
Posts: 13
Joined: Fri Aug 28, 2015 5:34 pm
Location: Romania

Re: Hello from Romania

Post by nmirela »

@Hankaroundtheworld - there are a lot of things that could be done in Romania, especially if you had some money, but as you said, unfortunately there's little I can do about it.

The funny thing about teaching English abroad is that is matters much more that your passport implies that you're a native speaker than the actual English skills you posses. And even native speakers need to have certain degrees for the really good jobs out there (mainly in the Asian countries).

Besides, I have another issue with leaving the country. As I said in my first post, here in Romania we rely heavily on family and right now, my elderly mother - even though she's highly independent and still has a full time job at 76! - would suffer a lot if I left her alone.

@indre: YES, definitely we should create a club!!! I was thinking the other day that there are so many resource on how to save (what to shop and where, best time to buy..., couponing, home made detergent recipes and all the other tips and tricks) for the US but for Romania, not a single site does that.

It's like people are afraid to talk about money. Or maybe they're ashamed. Or maybe they just do not have the time and energy to do that. As I was typing I was just thinking - why don't I do that? Well, I have other more important things lined up the queue that have been waiting to be done for a long time, so writing tips and tricks on how to save would be looooong down the list.

@MishainBG - my fellow neighbor :) I guess we are sick and tired of hearing every day in the media how we (RO & BG) are last in all EU statistics. It's such a clichee that I think that we are even assimilated as a unit on some levels. Oh.... RO & BG this, RO & BG that...

On a funnier note you say you're poorer than us... Well, you may have lower wages, but on the whole, numbeo says Local Purchasing Power in Sofia is 13.11% higher than in Bucharest, so actually we are 13.11% poorer than you. Ha ha! [ http://www.numbeo.com/cost-of-living/co ... rrency=USD ]

alojz_neckar
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Joined: Fri Mar 20, 2015 12:54 pm
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Re: Hello from Romania

Post by alojz_neckar »

Hi! Just a few notes. I've never spent longer periods in Romania or Bulgaria, but I live close: in Hungary. That's why I think that these things must apply in the neighbourhood as well.

About 'lucky ones' who work in IT or at other multinational companies. 1: They learned something, in order to get more money. 2: Or, they didn't learn anything special. They just know for example a foreign language and are ready to waste their time in the corporate world. In order to get more money. It's not luck. It's a choice. (I've done the 2nd one here.)

Furgality as a norm. Yes, it is done by many because of a must, and not on purpose. But there is an interesting point: as soon as the avarage guy starts to earn 150-200% of the average loan, he also starts to spend 150-200% more. Instead of saving 50% of it. Spending as much as you can is sometimes also a norm.

About working abroad (I don't think that working in an other EU country as an EU citizen is 'immigration' at all): I always wonder how many Eastern Europeans work abroad and how less of them come home with their savings. From that money, these guys could really found a financially independent lifestyle. Or a small company. Or whatever they want. Some of them do (I think mosty the Poles), but most of them stay there, start to spend more and more and finally they get stuck in the same rat race, just with higher salaries to earn and higher debts to pay.

I think chances for being financially independent are the same as anywhere else in the 'developed world'. Ways are different. Barriers, preconceptions, bad habits are also different but the pattern is the same.

whatlifecouldbe
Posts: 12
Joined: Sat Apr 15, 2017 4:42 pm
Location: Timisoara, RO
Contact:

Re: Hello from Romania

Post by whatlifecouldbe »

Hi Mirela. I'm from Romania (Timisoara area) but I am living for 12 years now in Germany. This is how we managed to become financially independent and now we're moving back to Romania. I fully understand your situation and I can see some advantages linfing in Romania: your costs are relatively low but you can still earn a western income if you set that a goal. It's not easy, but it's doable. You are young and you can learn new things quickly. Things that ou enjoy and you can use to work remotely for western companies. Find that thing! Have a look at freelancer.com or other freelancer portals where you can just pick a project and make money.
I work in the IT / online marketing business. Moving to Romania meands i can keep all my customers but work for the same hourly rate (about 120€). It sounds crazy but what I earn in 3 hours, other romanians earn in a whole month. What I'm trying to say is that you can try something similar. But you have to pick something that meets these criteria:
- you have to enjoy it
- you have to be able to make it remotly
- the hourly rate should be OK

Also, you can go down the road of seplf emplyement, create a website, an online business that targets western countries. Just think about ideas until you find them. You don't need money. Just time.
Its doable! I wish you good luck with it!

Did
Posts: 693
Joined: Mon Apr 01, 2013 7:50 am

Re: Hello from Romania

Post by Did »

hi, quickly:
1) you're in the EU aren't you? Move to Dublin and both get jobs. Or Cork. You'll be able to save.
2) consider online VA style work. You'd surely get US$15 an hour if you looked long and hard enough. That's heaps more than you're getting.

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