Will's journal

Where are you and where are you going?
Post Reply
Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Will's journal

Post by Will » Sat Dec 31, 2016 5:58 am

Hi all,

I'm quite new to this forum, but have been living frugally since multiple years and have plans to get FI early since two. I have been tracking my expenses ever since.
The reason I am starting this journal is to motivate myself, and it's always good to get some feedback if I experience difficulty with following my plan. Also, it's part of my new year's resolution of 2017 to start and maintain an journal here, so let's start!

Who am I:
- I am a guy of 31 who lives in one of the bigger cities in the Netherlands
- I have a good job in a technology company (only a half year contract, but I hope it will get extended)
- I live together with my girlfriend and a cat about 45 minutes from work, I usually travel by train, sometimes by bike
- Cycling is my hobby, I am planning to do some big tours this year (I do try to keep the costs in check, which usually works relatively well)

What is my plan:
- Become FI before I turn 40
- I will do this by saving at least €1500 per month and investing a big part of it. I currently have a net worth of around €80k of which about 50k is invested in a buy and hold stock portfolio.
- Maybe continue working/working very part-time (one or two days per week), I don't know yet

What could derail or change my plan:
- My girlfriend is convinced she wants to become pregnant quite soon (I'm willing to get children too, though I have the feeling I'm not yet ready for it) Even though I know it is well possible to spend a limited amount of money on children, especially if they're still young, this is going to be a big factor. First of all, this will either require daycare or one of us staying home. I'm guessing the most likely situation is that we would both stay home one day per week (she has a good job as well). I might be able to work from home but for her this would be a bit more difficult. Three days of daycare is still a lot though. Another good option would be to find another couple which also have a baby with which we could take turns in staying at home. In this way it would be possible to reduce the number of daycare days to only one. Anyway, getting a child would certainly impact my plan in any case.
- We might want to buy a house. This should in theory not impact my plans, but it could since buying a house would likely increase our monthly costs (we're now paying a monthly rent of about €700, which is quite ok for a big city in the Netherlands)
- My girlfriend is relatively frugal. I have been trying to get her fully on board for FI, but she has been doubting. On the one hand, she is a natural saver and supportive. On the other hand, she thinks I'm too extreme, and sometimes spends money on shopping too much in my opinion. In discussions, she sometimes confuses me not wanting to spend money (especially on material things) with greed. I guess I need to work on the way I'm communicating with her on this topic. At the moment, we kept our finances completely separated, though we do have a shared bank account for rent/groceries.

My stats:
I have been tracking my net worth since februari this year.
For now, I'm considering to be FI as soon as I reach 250k. This number will mean that I have saved 20 times my yearly spending. I know those metrics are not considered very safe, but I am not planning on completely quitting work when I turn FI. Also, in the Netherlands there are some benefits for retired people, like a state pension after you turn 67, and very good and cheap healthcare insurance which will require less of a buffer than most people from the US need.

I will post some images of my net worth and income/spending of 2016 in a next post. For now I hope to keep myself motivated with my journal. I welcome any advice!
Last edited by Will on Sun Feb 05, 2017 2:48 pm, edited 1 time in total.

User avatar
Forskaren
Posts: 103
Joined: Sat Nov 07, 2015 4:04 pm

Re: Will's journal

Post by Forskaren » Sat Dec 31, 2016 6:32 am

Welcome and good luck!

If you haven't already done it, I would recommend you to read some of the books recommended in this forum. Keeping detailed track of spending and income is a good start.

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Mon Jan 09, 2017 2:43 pm

Thanks for the recommendation Forskaren! I went out and read a couple of books; rich dad poor dad and your money or your life being the most interesting ones in my opinion.

In this update I would like to share my 2016 income/spending stats and my net worth stats, here we go:

Income + spending for 2016:
Image

As you can see, 2016 has been a bumpy ride with regard to the income and especially the spending. (green is income, blue is spending, I do not include investment income in these stats)
I switched jobs in mid October, as you can see clearly from the increase in income starting that month. December also had some nice additional income.
With regard to spending,during October I had to pay a one-time education fee to my previous employer. I will get this back over the course of one year from my new employer, some I was somewhat hesitant to include it here. Also, in november my girlfriend and I bought a car! It was a good second hand Toyota Yaris from Germany (cars are MUCH cheaper there than in the Netherlands if you know how to deal with the taxes and regulations), so quite clean, efficient and safe. But still I am not 100% comfortable with owning a car, since we only 'need' it once or twice a month. On the other hand, because of the purchase of the car, I now learned how to import cars from Germany to the Netherlands, and I'm thinking about trying to make some money by buying cars there and selling them in the Netherlands. That is, if I find the time and the courage.
With regard to the spending, during a month with only few real 'luxuries', I would probably spend about 1000 euro. The higher spending in february, april and june were because of a couple of holidays and the almost complete rebuilding of my racing bike.

One of the things I'm planning to do is to create a better overview of my expenses with multiple categories, so I can rate them according to the YMOYL guidelines. I don't thing that I can cut my spending by a huge amount, but it's worth the try. In the past I've been quite effective with cutting some of my spendings, such as cancelling tv service and appealing to a government agency in order to pay a lower rent (yes you can do that in the Netherlands, if you have a landlord who does not stick to the rules!)

This is the development of my net worth since last February:
Image

As you can see my net worth graph is heavily influenced by the eductional expenses and the car. Also the stock market had some influence, as you can see particularly by the huge increase in december.

My goals for 2017:
- increase net worth to 6 digits
- obtain a savings rate of at least 50%
- cycle at least 7500 km
- creating an extra source of income (importing cars?)
- declutter our house
- work from home one day per week (both to save time from the commute and to work more efficiently)

MDFIRE2024
Posts: 154
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Will's journal

Post by MDFIRE2024 » Tue Jan 10, 2017 12:25 pm

Hi Will. Good to see that you are trying to achieve ER. I think it was, financially spoken, very good that you switched your job. More income means more savings when your expenses stay the same. Stay motivated and then you will achieve your 2017 goals!

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Thu Feb 02, 2017 3:56 pm

Update for January 2017

Savings
Image

January was an expensive month, in which I only achieved a savings rate of 25%. Income was as expected, but expenses were much higher than usual. This was mainly due to a small number of high expenses, as can be easily seen in the next graph.

Expenses
Image

First of all, the highest expense was the yearly contribution to the health insurance. This will thus be the only costs which I will have for health insurance during whole 2017, unless I need healthcare. In that case, I will have to pay a maximum of 885 euro additionally. Sounds like a good deal, now I should only make sure to stay healthy!
I decided to count all the expenses in the month that I pay for them, and to not spread them out over all months. I have no particular reason for this, it just makes book keeping a bit easier. If I correct january for the healthcare costs which I actually already paid for the remaining months, I end up at a savings rate of 52%. Now that looks much better!

Some other extraordinary costs were a holiday home which we booked for a skiing trip in March, and winter tires for our car including the changing of the wheels (which I will do myself in the future, but the first time they needed to be balanced). This is why the car expenses are so high.

I expect that 'normal' months will also include extraordinary costs, since I will probably still go on holiday, and there will be other unexpected expenses. But nevertheless January was an expensive month. Oh, February will bring some high yearly taxes of the municipality to pay for waste service and some other stuff, so there we go again with the extraordinary costs :?

Oh and by the way, I'm receiving the expenses for public transport back from my employer (tax free!). Every day I travel to work by bike, I make a profit of 10 euro on this. So that's some good motivation.

Net worth
Image

With regard to my net worth, steady as she goes. No big changes in the stock markets, no surprises elsewhere.

My girlfriend and I applied for a municipality garden one street from our house. It's a big garden with about 100 slices of land of 15m2 which you can use for a year to grow food or plant flowers (but who does that when you can grow your own food there? ;)) So we will get one piece of 15m2 to grow as much vegetables as possible, for a very small fee, from March until October. Too bad we can only use it for one year, so we are probably mostly confined to growing vegetables and no fruits. I expect that this garden will be a major improvement in our happiness, since we will spend much more time outside this spring and summer. We will need to develop a plan to harvest as much food as possible from this garden. In the future I would love to own a house with a huge garden, but this is a good first step.

Jason
Posts: 241
Joined: Mon Jan 30, 2017 8:37 am

Re: Will's journal

Post by Jason » Thu Feb 02, 2017 4:10 pm

Good luck. FI at $250K and you are 33% there.

Just a question - You said your girlfriend wants to "get" a child, is that a reference to adoption or just some Netherlands to English translation thing? We looked into adopting a Chinese girl. At that time, the cost of International adoption was like buying a new Volvo,except you could finance the car and the dealership didn't ask about your drug history. That's why we ended up with the Volvo. Which made it 225K miles so I think we made the right decision.

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Fri Feb 03, 2017 2:10 am

Jason wrote: Just a question - You said your girlfriend wants to "get" a child, is that a reference to adoption or just some Netherlands to English translation thing?
Yes, you're right, it was just a clumsy translation :oops:
She want to get pregnant in one year or so. On the other hand, in my opinion it's much better for the world to adopt children (overpopulation, providing chances to very disadvantaged children). I did not know it was so expensive.
My girlfriend has 3 adopted siblings, and she's the oldest (about 8 years older than the oldest adopted child), so she has quite some first hand experience with adopted children. One of the interesting things is that it is really clear to see big differences between her 'real' siblings and her adopted siblings (nature vs. nurture discussion, there is some of both in every person). She is not saying she will never adopt a child, but she wants the first one to be her own. (to which I usually respond that one child should be more than enough.. ;) )

Jason
Posts: 241
Joined: Mon Jan 30, 2017 8:37 am

Re: Will's journal

Post by Jason » Fri Feb 03, 2017 5:58 am

Will wrote:
Jason wrote: Just a question - You said your girlfriend wants to "get" a child, is that a reference to adoption or just some Netherlands to English translation thing?
Yes, you're right, it was just a clumsy translation :oops:
She want to get pregnant in one year or so. On the other hand, in my opinion it's much better for the world to adopt children (overpopulation, providing chances to very disadvantaged children). I did not know it was so expensive.
My girlfriend has 3 adopted siblings, and she's the oldest (about 8 years older than the oldest adopted child), so she has quite some first hand experience with adopted children. One of the interesting things is that it is really clear to see big differences between her 'real' siblings and her adopted siblings (nature vs. nurture discussion, there is some of both in every person). She is not saying she will never adopt a child, but she wants the first one to be her own. (to which I usually respond that one child should be more than enough.. ;) )
This is what I learned about adoption:

(1) Certain cultures do not like seeing children from their culture with parents from another culture;
(2) Cultures value different qualities in parents. Latin Americans prefer younger parents. Eastern Europe older parents. So you add the spouses ages together to get the number;
(3) International adoption is time consuming and expensive;

MY take on the whole parent thing - its better to be too young than to be too old. My brother in law is in his mid-50's with two young kids and he wishes he did it earlier. It makes me tired just thinking about it.

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Sun Feb 05, 2017 3:08 pm

Some notes about SWR

In my opening post, I announced that I would consider myself to be FI once I reached a net worth of 250k euro, which corresponds with a SWR of 5%. After reading a lot and calculating some future scenarios, I have come to the conclusion that 250k might be too agressive.
First of all, a SWR of 5% is not safe enough to consider myself FI. Second of all, it is not fair to set a fixed number as my target for FI, mainly because my spending will also rise because of inflation and spending might increase when my life situation changes (children, buy a house).
Also, the 5% SWR and 250k target means I can live on 12,5k of spending per year. this should be possible, but when I look at my spending data, I spent 16k last year. Even though I think my spending will decrease when I quit working, I would like to stick to the facts. These facts mean that with an agressive 5% SWR, I would need 16/0,05=320k instead of 250. When using a 4% SWR, this would increase to 400k. This is a huge difference. And I'm not even including inflation in this calculation!

Instead of focusing of a certain amount of money to reach FI, I am going to focus on a date. I created a graph which should be a much better representation of reality.

- The top line is the net worth I need to be FI (it increases with inflation)
- The bottom lines are two estimates of my net worth, using the assumptions below

Image

A couple of assumptions:
- FI @ 4% SWR
- I use my current spending (16k per year)
- Average market return: 7% per year
- Average inflation: 3% per year
- Average tax on savings: 1,2% per year (yes this tax is high in the Netherlands, on the other hand we have zero taxes for profits made in the stock market, and we can substract dividend taxes from this tax)
- Average size of emergency fund: 10k, the rest of my net worth will be invested
- Average savings: 1,5k per month
- I created two estimate lines of my net worth, one starting on the lowest point of my net worth in 2015 and one starting from my highest point

This graph does not include the following:
- Increase in salary which leads to increase in savings
- Increase in spending which leads to decrease in savings (hopefully these two will at least compensate for each other, but I think it is likely that future increases in salary outpace increases in spending... my spending should not go up with inflation automatically)
- Pension which I will get when I turn 67 (This is a big omission, since I theoretically only need to bridge the years until I reach 67. But since there is much uncertainty about pensions, I will not count on much income from them)
- More frugality, like growing own food, etc
- Extra income, like renting out a room, a car, etc

What I like about these assumptions is that there is a lot of room for improvement and that I can make my FI date much sooner when doing more effort. What I do not like at all is that this model predicts that I will be FI between September 2031 and January 2032, in about 15 years. Well, at least I have something to work on. I will revise this graph every couple of months, and I hope to see the FI date moving forward.

A question for more experienced readers than me (which is probably almost all of you): how do you calculate your estimated FI date? Do you think my assumptions are realistic?

User avatar
El Duderino
Posts: 151
Joined: Mon Oct 27, 2014 12:24 pm

Re: Will's journal

Post by El Duderino » Mon Feb 06, 2017 3:44 am

Hey Will, interested to hear more about your municipal garden effort. Keep us posted!

On the assumptions, I don't think you're far off. Call me uber-conservative, but I'm shooting for 3.33% SWR (33x annual expenses) and am estimating 6% market return. In your situation, that'd mean a portfolio of 528K. You may also feel safer with a full year of spending in your emergency fund. One thing that may also help you out is that as you skill up on all this ERE stuff, and persuade your GF to get more on board with it, you may actually see that your expenses drop year on year. I've certainly noticed that as I get more serious about this FI stuff, it's becoming increasingly easy to throttle on spending and see opportunities to earn and save more.

When you say that your expenses are 16K, does that include your GF? Is she going to be saving or will this be FI for just you and she's doing her own thing with her own accounts?

Hankaroundtheworld
Posts: 452
Joined: Mon Feb 24, 2014 4:50 am

Re: Will's journal

Post by Hankaroundtheworld » Mon Feb 06, 2017 5:23 am

Hi Will, another Dutchie!

Some reflections on your story (without knowing you, so forgive me if it makes no sense):
(1) Overall impression: what is your motivation to become FI, is this because you do not like your current work, or is it to become free to choose any type of work or other activities, whatever you like?
(2) If you are an engineer, why not consider working abroad? Good opportunities with double net income and benefits (like housing). I must say however, your spending is relative low for the Netherlands. I have seen young families spending a lot more.
(3) Buying a house: probably the right moment with the low mortgage interests (as long as it is not Amsterdam :-) )
(4) A child --> can be expensive if both are working (childcare is expensive in the Netherlands) --> if feels like you work just to pay for childcare. If you combine this with "2" (working abroad), it becomes a total different picture

Anyway, just a few reflections. In general, you are on the right track to become free on such a young age!

User avatar
Chris
Posts: 503
Joined: Thu Jul 22, 2010 2:44 pm

Re: Will's journal

Post by Chris » Mon Feb 06, 2017 8:17 pm

Will wrote: A couple of assumptions:
...
- Average inflation: 3% per year
...

This graph does not include the following:
- Increase in salary which leads to increase in savings
Inflation and salary increase are two biggies.

Is 3% the long-term average inflation in your region? This is a commonly-used number (at least in the US), but it might not be accurate for you. I've found that with an adaptable lifestyle, personal inflation can be lower due to seeking cheaper substitutes and continuous optimization. For me, my average spending in the past 5 years is within $100 of where I started in 2011. This has beaten US inflation, which was below 3% each of those years, but never less than zero.

You should demand your salary to at least keep pace with your region's inflation rate (likely outpacing your spending inflation). You can look at one of the online tools to estimate what your salary progression could be over time (associate engineer -> staff engineer -> senior engineer, etc).

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Tue Feb 07, 2017 5:00 pm

Thanks all for your comments! There will be a lot to think about for me.
Here are some responses to them:
El Duderino wrote: When you say that your expenses are 16K, does that include your GF? Is she going to be saving or will this be FI for just you and she's doing her own thing with her own accounts?
No, this 16k does not include the expenses of my GF. We have a shared bank account to which we contribute equally for our shared expenses. So combined we probably spent around 32k in 2016. But included in this 32k was 5,5k for buying our car and about 5k for travel. I think we should be able to spend around 25k in 2017 (or 12,5k per person). But I admit the travel and hobby spending will be particularly hard to cut, since we love to travel. Already planned for 2017: skiing holiday with my GF and some friends, and two cycling trips to the mountains (only me with friends). And then we still want to plan a big holiday with the two of us! I have been looking into cheap options such as homeswapping, but we actually enjoy backpacking a lot, and still would love to do it before it will become difficult with a child.
Hankaroundtheworld wrote: (1) Overall impression: what is your motivation to become FI, is this because you do not like your current work, or is it to become free to choose any type of work or other activities, whatever you like?
I can probably dedicate a couple of pages to the answer for this question, but basically I want to become FI because of two reasons:
- Freedom. I like my job, but doing whatever I want just beats it. I think that if I would be FI right now, I would continue working 2-3 days a week.
- I want to contribute in a big way to sustainability and prevent overconsumption. My job does not contribute to this directly, and when I'm FI I can dedicate myself to this without having to worry about whether my efforts will generate income or not.
... and when I'm 100% honest there is also a third reason which might be a factor as well: I just want to outsmart the system
Hankaroundtheworld wrote: (2) If you are an engineer, why not consider working abroad?
Very, very good question. My GF is German, for us it would be very easy to move to Germany or another German-speaking country and we have been considering it in the past. But at the moment she is doing her phd so we are more or less locked to the Netherlands for the coming 3 years. And we start becoming more and more settled where we're living. On the other hand, when combined with a child there might be some major benefits when moving to Germany: much longer maternity leave and likely closer to both our families (they both live close to the border). I need to give this some serious thoughts and will discuss it with my GF as well.
Hankaroundtheworld wrote: (3) Buying a house: probably the right moment with the low mortgage interests (as long as it is not Amsterdam )
I am not so sure. Mortgage interests will probably start to rise, which also means house prices will likely drop, since this will generate less demand. Also, since we're not sure we want to stay here for the very long term. And we are currently renting a 100m2 (I know, much bigger than we need) apartment for 700 euro per month, which is not expensive for a big city in the Netherlands.
Chris wrote:Is 3% the long-term average inflation in your region?
To be honest, I had no idea what the long-term inflation rate in the Netherlands was when I used the 3%, I just took a value which is often used for it. After some googling, the average inflation in the Netherlands has been closer to 2% than to 3% since the eighties. I also think that our spending will rise slower than inflation, but I view that as a safety net to make sure my estimate will not be overly optimistic.
With regard to salary increases: I am aware that this could change my estimates amazingly quickly. I just calculated: if I account for a yearly salary increase of 5%, and I do not increase my spending, I will be FI 4 years earlier! So there is quite some improvement possible here. I want to be FI before I turn 40 (I just turned 31), I was just not sure whether this target was realistic considering my circumstances. Now I think it should be possible.

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Tue Mar 07, 2017 2:48 pm

Update for February 2017

Savings
Image

Financially, February was a very good month, I achieved a savings rate of 71%! Spending was almost the lowest since the start of my financial documentation.

Expenses
Image

This was almost a bare bones spending, it will not get much lower than this. Of the tax bills which I expected during this month, only one arrived, I guess the other one is later this yeas. So I expect an additional tax spending of about 200 euros in March.

March is going to be more expensive than February because we're going on a skiing holiday at the end of the month.

Net worth
Image

My net worth increased like crazy in February: 6000k more than in January! Most of this gain was because of gains in the stock market. Most notably my biggest holding, Unilever, increased by about 15%. Rationally I know that investing in etf's is the way to go, but I still only invest in specific companies, since I want to select my own investments using my own criteria, of which sustainability is one of the most important ones.
In the stock market, I like slow and steady gains (or sharp declines so I can buy more in the future). As such, I'm not very happy with the quick increases in the stock prices lately. On the other hand, I am investing for the very long term, so I do not mind that much.

Other things

A couple of other important things which happened in February:
- My employer decided to extend my contract with one year! This means that I'll be settled at least until the beginning of 2018. (or more than 10% of my remaining working life, as I like to joke to my girlfriend) I like the job and my colleagues, so I'm happy with it.
- My (last) grandmother died. She had a respectable age of 90, and her passing away wasn't unexpected to say the least, but it was still an emotional goodbye for me. I have had very good contact with her for my entire life. And when I think about it, in many ways she was much more frugal and badass than my parents or myself.
- I told my parents informally that I am considering to 'retire' early, and of course added that I do not consider retirement never doing any paid work anymore. As I expected, their first reaction was: you will never be able to do that. They recently retired themselves, so I can understand their reaction. I am planning to wait some time before showing them my plans and calculations and convincing them it IS possible. To be continued..

MDFIRE2024
Posts: 154
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Will's journal

Post by MDFIRE2024 » Wed Mar 08, 2017 11:04 am

Congratulation to your great saving rate in February and also to your extension of your job contract. Stay focused!

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Thu Apr 06, 2017 7:38 am

Financial update for March 2017

Here my monthly update. I'm not overly enthusiastic to write it, because I have the feeling not much has happened in March financially. Which is actually a good thing, since I had two trips: a skiing holiday and a long weekend at a friend's place in Switzerland (I know that when you live in Switzerland, you make good money, but it keeps amazing me how expensive this country is).

Savings
Image

Despite all the perils with regard to spending during holidays, the savings rate of March was still 67%.

Expenses
Image

So I spent a total of €1065, where did this money go? As always, the rent was my biggest cost, followed by travel costs. To be honest, a big part of the car costs were also part of the holiday spending, and I still need to pay back some friends which will be done in April, but all in all it were two cheap holidays (but I did pay already for the skiing holiday in January, so the total costs were much higher than you see in the overview of March).

During the skiing holiday I realized that when it comes to spending money with friends, I am still struggling. We did make very good arrangements to cook dinner every evening, but during lunch most people went to restaurants with the argument 'we all have jobs now'. Noone of my friends knows about my ere aspirations, but I have been frugal all along. It led to quite some awkward situations where I would eat my pre-made sandwiches while friends were devouring some delicious (but usually unhealthy!) Austrian restaurant meal. How do you guys deal with these situations?

Net worth
Image

I can be short about the net worth graph which shows a healthy increase. The drop of November and December of 2016 seems almost forgotten. I expect to hit the 100K in a couple of months.

Other things

- We are quite active in our garden the last couple of weeks, and we have been planting many different seeds already. The radishes are already doing very well, but our peas are already getting eaten by some bug. Neighboring gardens with peas are having the same problem, so I'm not sure we can do something about it. The rest of the plants are still very tiny and just sprouting. I might post some pictures soon.

George the original one
Posts: 4232
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: Will's journal

Post by George the original one » Thu Apr 06, 2017 10:13 am

Will wrote:
Thu Apr 06, 2017 7:38 am
It led to quite some awkward situations where I would eat my pre-made sandwiches while friends were devouring some delicious (but usually unhealthy!) Austrian restaurant meal. How do you guys deal with these situations?
As long as there is no conflict, just keep on doing what you do. It seems your friends are willing to let you have your quirks.

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Wed May 17, 2017 7:03 am

Financial update for April 2017

Finally, I had time to write an update for April! I have been quite busy the last couple of weeks. Due to good weather and social activities we have been spending quite a lot of time outdoors. We are spending a couple of evenings each week in our little vegetable garden, which by the way is looking better and better: (only the first plot of land on the picture is ours, the rest is used by other people)

Image

Also, I have been spending quite some time on my racing bike. I am seriously training for a huge tour in the mountains at the end of August and I'm cyling around 300km per week at the moment.

Savings

Image

April has been a wonderful month both on the income and on the spending level. I made some more money than usual and my spending ended up just below 900 euro, the lowest of 2017! Together these figures combined to obtain a savings rate of 78%, my highest ever!

Hall of shame

Instead of posting a graph of all my spending, I will introduce a hall of shame of all the unnecessary or avoidable spending which I did during the last month.

Hall of shame for April 2017:
- We went to a restaurant with friends to celebrate a birthday (28 euro)
- I purchased a cycling shirt which some of my friends designed (47 euro). I actually tried to opt out of this one, but in the end succumbed to the group pressure
- I purchased a heart rate monitor to use for cycling (25 euro)
- We paid for parking when my family in law was visiting (3 euro). This is not much, but I strive to NEVER pay for parking
- We had beers and takeaway food on King's day (18 euro), even though we also sold a lot of unnecessary stuff during that day
- I went to a snackbar with colleagues once (7 euro)
This all totals to unnecessary expenses of 128 euro. If I would not have made these expenses my savings rate of April would have been 82%. I might even calculate how much earlier I could retire if I hadn't spent this money, extrapolated for monthly expenses. Though I expect that in some months the unnecessary expenses will be much higher than 128 euro.

Net worth

Image

Net worth keeps increasing steadily. I will likely hit 100k in June, barring a stock market crash or a crazy rally the last couple of weeks of May.

May will be a very expensive month, with some additional and some unexpected costs:
- I will pay the tax bill which I expected in March (200 euro)
- I will go on a weekend trip with some old study friends (about 150 euro)
- We will visit a wedding in Germany, which brings about costs for transportation, gifts, sleeping (airbnb) of about 100 euro per person
- Our cat became seriously ill. The blood analysis to determine the cause alone was 200 euro, the medicine which he should take for the rest of his life costs about 25 euro per month. Also because of the illness we should feed him more expensive food (about 25 euro per month instead of 10-15). But the most important thing is that he is recovering now and already acting very healthy at the moment. He lost a lot of weight though and should regain that quickly.
But luckily May will also have some additional income, since here in the Netherlands the 'holiday-paycheck' will be paid together with the salary. I still expect to be able to save around 2000 euro in May, but the savings rate will not be very high.

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Fri Jun 09, 2017 3:37 am

Financial update for May 2017

As I predicted, May was an expensive month. I did not receive the holiday-paycheck this month, but will receive it in June, so June will look a bit better I hope. Still, I was able to squeeze out a savings rate of 46%.

Image

Tax, weekend trips and the cat seriously ate into our budget this month. Here is the list of unnecessary spending:

Hall of shame for May 2017:
- Payment for expensive weekend with friends in June (100 euro)
- Got some soil for our balcony plant which we might have gotten from our garden instead (3 euro)
- I went by car to a bike tour, which could have been done by train, or with careful planning by bike (35 euro)
- We bought nets for our garden which in hindsight were completely unnecessary (2 euro)
- We paid for parking, which is never necessary (1 euro)
- We bought summer tires for our car, which we could have prevented by getting all-season tires instead of switching between summer and winter tires all the time (50)
- Even worse, we paid a garage to fix them on our car. I need to ALWAYS do this myself in the future (15 euro)
- We visited some restaurants during the weekend with some other good friends (100 euro)

All in all, more than 300 euro of unnecessary spending, more than double the amount of last month. And I'm not even counting the purchase of a lot of bike equipment and our seriously expensive vet. (these both were necessary, but could have been cheaper)


Net worth

Image

Alllllllmoooosssst 100k. In fact, when I made the calculation, I was exactly 52 euro short of 100k. So with a little bit less unnecessary spending, I would have already been there!

But truth is my net worth increased by much more than I would have expected this month, this is mostly because of the crazy increase in value of cryptocurrency. I own a very modest amount of Bitcoin and Ethereum, but even this modest amount more or less doubled in value during May, so it still has impact.

Hobbies

I'm currently cycling so much that I barely have time for other hobbies next to time for my girlfriend and our garden. Luckily the last two can be combined ;-) I often wonder what I could do with the time when I do not 'need' to spend so much time on cycling anymore. In late August, the big tour for which I'm training will take place. Knowing myself, I will likely lose motivation to train hard after that, which will probably mean that I will still cycle to work and back once in a while but that I will get much more free time. I'm already thinking about stuff to do after August which also make sense in an ERE kind of way. Start an upwork account? Import stuff with Alibaba and sell on Amazon? Import cars from Germany?

Will
Posts: 11
Joined: Sun Dec 25, 2016 5:23 am

Re: Will's journal

Post by Will » Fri Jun 30, 2017 10:57 am

Financial update for May 2017

Time for the monthly update again!

First, June was a great month since I received some money back from taxes and got my additional holiday paycheck for the year, which meant that income was at an all-time high! Since spending was average, with 1150 euro, this means a savings rate of 83%, whoohoo!

Now for the bad things: I crashed while riding my racing bike at high speed. I luckily didn't break any bones, but my body is still full of road rash, I needed some stitches and I'm suffering from a concussion. But it could have been worse, much worse. I have been working only a couple of half days during the last week, and I'm happy that my boss is very understanding and wants me to return working full-time when I'm really recovered from the concussion. Which I likely will, next Monday.
That said, next to the physical damage the crash will cost me financially as well: I estimate some 200 euro for bike repair, 50 for a new helmet (completely broken), and somewhere between 200-500 for the own risk of my insurance, since I needed to visit the hospital for the stitches and a checkup to see whether my cheekbone was still intact. So I probably literally crashed down my savings rate for the next month.

But for the rest, things are going well. Me and my girlfriend decided to cooperate with a solar project in our neighborhood. This means a one-time investment of 1500 euro and a reduction of our energy bill by about 150 for the next 25 years. (returns are this high because of tax benefits, this projects server as a proxy for people who cannot put solar panels on their own rooftops, like us).

Image

I will not count the bike-crash expenses as an item for the hall of shame, since I think all of them are either necessary (health expenses), or not too high (I will repair my bike myself, just need to purchase the components)

Hall of shame for June 2017:
- We started out the month with going to a restaurant with friends instead of cooking ourselves (28 euro)
- I took my girlfriend out to a theme park. Actually, It was not extremely expensive and it was her birthday present, but I will list it here anyway since we could have hiked in the dunes for free (66 euro)
- Fuel for a weekend with friends, to which I could have and should have gone by train. This would not have saved in cost but it would have been quicker and more relaxed (40 euro)
- Some restaurants during the weekend with friends (36 euro)
- The bike tour and petrol to drive to it (49 euro)

More than 200 euro of unnecessary spending, I should really get a grip on especially the restaurant and the petrol spending, since they seem to be most easy to avoid.

Net worth

Finally I breached the 6-digit barrier! More than all of the increase was thanks to the savings of this month, since the value of my stocks and investments actually decreased a little. Bye-bye 5 digit net worth, I hope to never see you again!

Image

Post Reply