Danish Money Tango

Where are you and where are you going?
knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Danish Money Tango

Post by knap82 »

Hi, All

So, here I am after a bit of tip toeing in the Forum for a few months digging myself deeper into the ERE-philosophy. My thought with this journal is to keep track on my progress publicly to keep up my motivation.

I am from Denmark and was blown away by an article on ERE in the Danish newspaper Berlingske during of the dark months of winter - I had never imagined it was possible to become FI without lots of millions on the bank account.

The article also hit me in a time where I was feeling a bit shitty and it gave me a dream to say adios to the heavy stuff and sail away into the sunset with focus on a life in tranquility and passion. Now the thought has transformed from an escape route to a personal choice of where I want to invest my time and energy – and it’s not building a career in a company working my ass off for other people.

ERE has most of all been a bonus in terms of a direction in my already quite frugal lifestyle and my beginning investments. Suddenly it made much more sense to look at my spendings and dig deeper into the world of investing.

I love the thought of stepping out of the daily wheel and fill my life with stuff I choose and love – it does not necessarily means I want to skip work completely and I can easily see myself work part time with some freelancing or on a small business project. For me independence is the key – also to travel and relax with my family.

Well, enough on the background. Here are some facts.

Me
I am 34 (male), living in Copenhagen, Denmark, and I have a master in Journalism but have since moved to the dark side of corporate communication and PR. My current job is in the Danish department of a global company doing all sorts of hardware and software to control and monitor power and energy in a variety of segments.

I make quite a nice salary which gives me a great opportunity for savings.

Accommodation
I currently live in a condo with my girlfriend and soon our firstborn who can make his entry any time now. Exciting! We have no dept in the condo and the rent is very cheap – but it’s a bit small. We can easily live here at least the next 3-5 years – but you never know if we suddenly are drawn to a house with a garden when the little is crawling all over the walls.
But for now it can’t get any cheaper in the heart of Copenhagen.

Income
My income is basically my monthly salary on ~ $3750 (after tax) so there’s no passive income (yet) except a bit of AirBnB when we have been out of town.

Expenses
One of the wonders of my ERE-enlightenment is that I have started to track all my spendings in a very neat and big spreadsheet which also includes my girlfriends finances and our household economy. I get a huge amount of satisfaction in using it to cut down expenses and update savings and investment. The wonders of spreadsheets are certainly growing on me.

My personal expenses will rise over the next 12 months because my girlfriend is on maternity leave with only the financial support of the government – this means I cover a bigger part of the household and I also happily cover 50% of the pension payments she is missing out on.
In the spring I will have 3 months of leave myself where my salary will drop quite a lot It’s a price I am more than happy to pay – once in a life time investment.

When I am on leave my girlfriend will hopefully have found a job – and then she will cover the payment I’ll miss on my pension.

According to my wonderful spread sheet my monthly expenses is ~ $2600

This leaves me with ~ $1100 for my savings with a savings rate on 30 %. This is way too low and I believe it will be higher most months. We’ll see.

Investment
I have a portfolio with some stocks I bought without any bigger thoughts – but it’s been part of my live education in the stock market. I have recently started a monthly stock saving where I buy a Global Stock Index and a Index Fund for the Danish C20 Index (In Denmark ETF’s is most suitable for pension because of the tax rules)

My thought is to let the savings grow while I read myself deeper in to a more sustainable strategy. I have decided to keep building my investment and adjust the strategy as I learn.

Goal
My overall goal is to be FI before I am 50 so I can choose to do whatever I want. Until then, it’s all saving and investing without being too cheap.
I hope to give you a monthly update on the progress, numbers and other stuff – but a soon-to-come son is about to disrupt my life so my free time might be quite challenged in the near future.

That's all for now.

Next stop freedom and financial independence.
/knap

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

2016: August Update

Post by knap82 »

Hi, all

First monthly update.

It's the first month with a full overview of expenses and income which is giving a pretty good overview of where I can find some more savings.

In the past months I have saved quite a lot by changing my union/unemployment fund, skipping the membership of the gym and keeping the car parked as much as possible (have one for loan at the moment). The next step is to look into our household budget where we can save a bit more.

The household expenses is xtra high in august due to a bill on some construction work in our apartment.

Regarding my investments I have quite a lot of cash at the moment because my girlfriend has bought half the apartment and I am now slowly investing them in a few index funds at a constant pace to avoid paying to much in an overpriced market.

My plan is to have a cash stash covering ~2 months of pay as back up. And then invest the rest.

The numbers

Income $5670
- had xtra income from mandatory savings at work
- A bit of outlay from a business trip
- Returned from changing unemployment fund to save 50 % / year

Expensens
Household (food, gas, baby stuff etc.): $809 (32% of total exp.)
Rent + Utilities: $322 (13%)
Charity: $27 (1%)
Transportation: $17 (0,5%)
Phone: $30 (1,1%)
Junk-money (close, junk food, beer etc.) $243 (10%)
Unemployment fund: $72 (3%)
Girlfriends Pension:$425 (17%)
Outlay: $562 (22%)

Total expenses: $2507

Savings: $2324

Savings Rate: 41 % - needs more fuel ;)

Investment allocation:
Stocks: ~44 %
Cash: ~47%
Loan to girlfriend: ~7,5 % (working on down payment)

Networth: ~ 7,7 % to FI


Septmeber goals:
- Become a dad
- Bike to work to save the bus ticket
- Cut down on junk money
- Make a graph on my progress
- Keeping baby expenses as low as possible

Thank you for reading - all comments are welcome.

/knap

Noedig
Posts: 191
Joined: Tue Aug 26, 2014 10:15 pm

Re: Danish Money Tango

Post by Noedig »

Knap

Great first post. You seem to have a clear idea, now that ERE has 'clicked', of what to do. Much earlier in life than I managed - well done!

Congratulations on being in Copenhagen - an ideal place for this stage of your life: friendly, great infrastructure, good economy, not too big. Also major congrats on being a (soon) dad. Parenthood is a one-way transformation of your life - what mathematicians call a 'trapdoor function': you are a lucky guy.

I suggest work out, how much you would save if you ditch the car. Insurance, tax, maintenance, petrol - it might send your savings rate way up. Kids cost money, even in Denmark, so you might need that just to maintain the savings rate.

We were in your city this summer, and loved it. My teens spent a lot of time in the Faraos Cigarer shop as they are geeky gamers, despite being girls.

Best of luck, keep tracking and keep us posted

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: Danish Money Tango

Post by knap82 »

Hi, Noedig
Thank you for your reply - and I like the 'trapdoor function' ;o)

And yes Copenhagen is a great city and we won't leave any time soon.

The car actually only cost us the money for gas which in average is around $80 /month. We have been car-sitting for my girlfriend’s dad who is now too ill to drive. He still hopes to get his license back so he has not been ready to sell it yet. He probably will soon and we have agreed to try to manage family life without a car. It will give some additional cost for transportation to family stuff etc. But it won't add up to owning a car.

And I know it's expensive to raise a child - so far we are going on a very low budget and have only spent about $400 on equipment, close, vitamins and antenatal education (what a word) - our baby will be very frugal.

Fortunately my girlfriend is buying in on the frugal lifestyle and she's is getting more and more interested in the ERE-philosophy and investments.
I will keep tracking and get an even better overview as I go along – I hope to have an average Savings Rate on the fun side of 50%.

All the best
/knap

inchicago
Posts: 134
Joined: Wed Jun 10, 2015 12:03 pm

Re: Danish Money Tango

Post by inchicago »

Congratulations to you and your girlfriend, knap82!

I agree with your thought of why waste time and energy "building a career". My co-workers always think I'm a weirdo when I say I don't care about that. I never have.

Good luck with everything!

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: Danish Money Tango

Post by knap82 »

Thank You, inchicago!

It's fantastic, surreal and a bit scary that a little being is soon to disrupt our lives complete. But I am sure it'll be the ride of a life time.

I am actually building my career at the moment in a huge company which is quite heavy in oldfashioness and internal processes. I have learned the hard way that it does not give me fulfillment - and I have cut down on the extra hours and are now just doing my job and enjoying my freedom.

Two years ago I was all in climbing the company ladder and nearly went emotional bankrupt! Done with that - If I am to build a career it must be place with great people, huge freedom and a nice purpose. If I can get a career driven by passion and purpose - well, then I'll probably start building again. But for now it's all about the family.

Have a great day!
/Knap

BadHorse
Posts: 55
Joined: Sun Jun 05, 2016 4:17 am

Re: Danish Money Tango

Post by BadHorse »

Congrats on the upcoming disruption :)

Sounds like you have a good idea of where you are going. If you want to discuss the journey with fellow Danes, remember we have a new meeting coming up. But of course, you may be too busy being disrupted by then ;)

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: Danish Money Tango

Post by knap82 »

Thank you, BadHorse!

I am well aware of the meet up coming up in the Copenhagen area - and I absolutely plan to join if I can. Would be great to meet for inspiration and discussions on the different paths to FI.

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Danish Money Tango

Post by Eureka »

Congrats with starting a journal! I am looking forward to following your journey.

I fully understand your excitement about the new little being soon to arrive. It really is a very special time so it is good to hear you are not working as much as you did two years ago.

Like BadHorse, I hope you will make it to the next CPH meetup.

FBeyer
Posts: 1069
Joined: Tue Oct 27, 2015 3:25 am

Re: Danish Money Tango

Post by FBeyer »

There are also at least two other Danish EREers with toddlers and/or babies so ask away if you need info, tips, or other.

The MMM forums have a subforum on children and frugality, you might as well check those out too if you haven't already. It's called Mini Mustaches.

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: September 2016

Post by knap82 »

Hi,
Here is a brief update on September for me and the ERE Journey – it’s been quite a month. Most importantly my little son decided to drop by the 9th in a text book birth with no issues what so ever. What a crazy experience – as the dad you’re pretty much sidelined and basically only can get lemonade, cheer and nurse the mother while she is doing quite a job. My girlfriend was just awesome and she made me extremely proud during the 13 hours from the water broke to the first scream of the little guy. I was and still am blown away that nature creates a little human being from a bit of love making. Amazing experience! Now we are just hanging out and getting to know each other – he’s so far quite easy and a little miracle.

Going ERE Mental
I have noticed that I am spending a lot of time thinking about my ERE Journey so it’s almost too much. I put myself under a big pressure to perform and do well in terms of ERE – read more, think more, save more has sometimes been the new mantra – and it not how I want to spend my energy the next 10-16 years. I imagine it’s quite normal for new comers to take the big jump in the ERE pool and want to do everything perfect from day 1. At least I can now see that the journey won’t be all that fun if I’m not enjoying myself. I have even caught myself concerned about how I will manage my financial independence in 16 years – quite a waste of thoughts and energy to worry about a might be future 16 years out according to the numbers.

So now it’s all about one month at a time – and we’ll see how the journey will end. At least the concept of ERE is a great way to save some money and keep track of my spending.

September numbers
I am still struggling to get the right set up with my different accounts and savings so the numbers these first months will probably wary quite a lot.
But it’s been a special month due to the birth of my son and the fact I have been home on leave since the birth. We have had a bit of extra expenses on baby stuff but it’s covered of our household budget.

It’s obvious that I’ll have a hard time getting the Savings Rate much higher than 40 % with the current extra expenses I have for my girlfriends pension (covering her ‘loss’ while on leave). I feel comfort in knowing that my numbers will change dramatically in the middle of 2017 – where I will get more financial freedom for a higher savings rate.

I have had quite a high level of expenses on extra stuff covering final payment for some coaching sessions, a breathing course in free diving (Nov.) and then I was stupid enough to get two parking tickets in September which is just a waste of money. It cost me $153. All in all the extra expenses was as high as $634.

I have found a few quick fixes which can generate around $1000 in yearly savings – this is in changing my phone company ($17/month), cutting down on charity ($30/month) and biking even more to work ($78 each month I bike). In total ~ $125 / month if I bike/ stop donating for great causes. I’ll at least change my phone company.

The numbers
I am still struggling to really get my head around the numbers and calculation – It seems I am not consistent in the way I handle them. Looks promising for the journey to FI ;o)

Income $3795

Expenses
Household (food, gas, baby stuff etc.): $676
Rent + Utilities: $322
Charity: $30
Internet (refunded by work): $35
Phone: $30
Girlfriends Pension: $425
Household savings: $300
Transportation: $30
Junk-money (junk food, beer etc.): $5
Clothes, personal hygiene: $23
Unemployment fund: $77
Other expenses: $634

Total expenses: $2527
Savings: 1268$
Savings Rate: ~36%


September Goals:
- Became a dad
- Biked on day to work before becoming a dad
- Reduced junk money dramatically
- Didn’t get around for a fancy graph on the progress
- Have done ok on keeping the baby budget down

October Goals
- Get an overview of economy
- Get the numbers straight
- A graph on the progress
- Change phone company

Yearly goals
I have decided to stop all spending on stuff like clothes, shoes and sports/technical stuff for the rest of the year. Not that I have spent a lot on this – but I have more than enough to meet my needs, so why not stop spending money and thought on getting more stuff.

Take care
Knap

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Danish Money Tango

Post by wizards »

Congrats on becoming a dad - its amazing - and hard work :D

Re ERE mental: yes the journey should be fun, otherwise your heading the wrong direction ;-)

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: September 2016

Post by Eureka »

knap82 wrote: I was and still am blown away that nature creates a little human being from a bit of love making.
+1 and still am after 24 years!

Congratulations with the little new human being in your life. Glad to hear you are fully enjoying it.

Did you read this other thread on semi-retirement where you have some money invested and then for some years just make money enough to break even while your investments are multiplying by themselves? And then one day, once your investments have grown enough, you can switch to live fully of your passive income? Then you would not have to keep on working full time for another decade and a half. Could that be a way for you? From the way you describe your attitude towards paternity leave, it sounds like a possibility ...?

Oh, and a short note on your budget: What about keeping food as a separate post? I suppose you (like almost anybody else) can save a lot of money here, should you want/need to, but in order to monitor this, you must separate it from gas and baby stuff.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Danish Money Tango

Post by LiberateMind »

Congrats on becoming dad!!

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: Danish Money Tango

Post by knap82 »

Hi, all

It's been a while - life suddenly becomes quite busy with a kiddo. But also pretty nice.

Thank you for your questions and comments.

@Wizards - yes, it's amazing and I am now heading in the ERE direction with greater calm - I am not stressing about it anymore. So much more fun. And now girlfriend is being curious and frugal.

@Eureka - Semi-retirement is a great option and I keep in the back of my head. I have no problem working for some years if it makes sense but semi retirement sounds quite nice.

Regarding the budget - all my food is bought on an account I share with my girlfriend. It's also here we have gas, baby stuff etc. so it's a good mix of all sorts of stuff covered in our Household spendings - but you have a point. And in November we are actually saving all receipts from our shopping to see what we buy - and what takes on the biggest part of the budget.

Take care
Knap

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

October Misery

Post by knap82 »

Hi, all

Here is a short October update. Quite a depressing month in terms of spendings sucking my savings dry.

I have had some expenses to:
- Present for girlfriend
- Quarterly Unemployment Fund
- Paid back a personal loan

This has taken the top off my savings.

Well, it's up and down, I guess

I can see that I won't get up to max speed on my savings until second half of 2017 due to the fact that I will be on parental leave for 3-4 months cutting my salary quite heavy. I see it as an investment.

I will also be covering more of our household expenses as well as my GF pensions while she is on leave (Hopefully she'll get a job and pay me my pensino, when I'm on leave).

And we are also looking into flying of to the sunset in April for 4-6 weeks on a island somewhere warm.

The numbers
Again. I am still struggling to really get my head around the numbers and calculation – It seems I am not consistent in the way I handle them.

I have now separated my budget account with my cash stash so I get a better view on my spendings.

Income $3795 

Expenses
Household (food, gas, baby stuff etc.): $676
Rent + Utilities: $322
Charity: $30
Internet (refunded by work): $35
Phone: $30
Girlfriends Pension: $425
Household savings: $300
Transportation for work (bus): $76
Junk-money (junk food, beer etc.): $48
Clothes, personal hygiene: $0
Unemployment fund: $225
Other expenses: $717 (Present, Loan, subscription for a magazine)
Outlay: $275

Total expenses: $3159
Savings: $636
Savings Rate: ~17%

% of FI~12,7 %

All the best
Knap82

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Danish Money Tango

Post by DutchGirl »

Parental leave is definitely a good investment. One that Americans don't have. In the Netherlands, fathers have, I believe, 5 days of paid leave, and after that they are entitled to more leave, but unpaid (not feasible for a large percentage of the new fathers).

I think it will help you build a strong family bond, and that's awesome.

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: Danish Money Tango

Post by knap82 »

@DutchGirl - absolutely! In Denmark we have 14 days after the birth with full pay - I took an extra two weeks of vacation so I had one full month when he was born. A Wonderful time. I will keep roughly 50% of my salary when I am on leave so we wont starve. It might be healthy financially.
My girlfriend is really learning how to get by with less now when she's on leave paid by the government.

knap82
Posts: 29
Joined: Mon May 02, 2016 8:56 am

Re: Danish Money Tango

Post by knap82 »

Aloha from the darkness of

It’s time for the November update.

It’s going quite ok – my expenses are down and I keep finding small spot to drag out a few more savings. This means I’ll start the year with a discount on $53 compared to last year due to lower phone costs and a break from some charities. (Good feeling to save - countr-good with charities)

My personal expenses are really low and I have not bought any clothes, shoes or other hobby stuff. I am stuffed with all I need for sports and every-day-life. I suddenly got a bill on another parking ticket in the batch – so now it’s one parking, three days, three tickets - quite annoying. :evil:

As I have mentioned earlier I am looking into a year with some changes in my income due to 3 months of parental leave where I won’t be at my normal level of income. I’ll try to adjust my spending and see it as an investment in life. Probably not a hard job to do.

My girlfriend is becoming a frugal master after she said goodbye to her salary and hello to parental support – but it has made her more interested in ERE and we talk quite a lot about it and the consumerism of the world – and our dreams and possibilities. Could be fun with a joint venture for ERE.

I have some kind of leakage in my precious spread sheet – I am missing about $500 which is lost at the moment. Don’t think it’s hidden expenses but more miscalculation of some kind. Promising for the rest of the journey.

My savings rate was 45 % and a above normal income due to some old debt coming in from my girlfriend and an outlay coming in.

Income $4510 

Expenses
Household (food, gas, baby stuff etc.): $676
Rent + Utilities: $322
Charity: $30
Internet (refunded by work): $38
Phone: $30
Girlfriends Pension: $425
Allowance: $217
Household savings: $300
Transportation for work (bus): $76
Junk-money (junk food, beer etc.): $38
Clothes, personal hygiene: $0
Unemployment fund: $0
Other expenses: $73 (Present, Loan, subscription for a magazine)
Outlay: $0

Total expenses: $2225
Savings: $2016
Savings Rate: ~45%

% of FI~15 %

This gave me a small boost – 15 % is nice and it’s close to 20 which is a big number. I just loved to see the 15%.
Next goal Networth $100.000 then euro100.000 and then we are soon on 30 %.

still working on some cool graphs for you to enjoy - my excel skills are quite limited, I realize.

All the best
Knap82

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Danish Money Tango

Post by Eureka »

Oh no to the parking tickets, but now that you've gotten 3 you might as well leave the car there as 3 is the maximum - and only if they were spaced with at least 24 hours.

http://www.jjm-adv.dk/kan-man-faa-flere ... -parkering

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