Henk's journey thru life

Where are you and where are you going?
reepicheep
Posts: 383
Joined: Mon Dec 29, 2014 7:45 am

Re: Henk's journey thru life

Post by reepicheep »

Henk,

Perhaps you would consider joining us at the ERE meetup in the Netherlands in June? I think it would be inspirational to have someone who has succeeded present.

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

Re: Henk's journey thru life

Post by DutchGirl »

It sounds great, Henk. I really hope that you will enjoy it. Finding cheaper areas is a smart way to help a person have a good life with a bit less money :-)

steveo73
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Joined: Sat Jul 06, 2013 6:52 pm

Re: Henk's journey thru life

Post by steveo73 »

Hankaroundtheworld wrote:As many people have discussed on the forums, it does not really mean "no job anymore", but freedom to choose what I want to do, and I will explore, but first I will focus on renovating my vineyard in Hungary and feel free, think and read, enjoy life, make some trips in Europe, and who knows, I might discover a new journey (in creation of something new). We feel blessed (not religious), both healthy, relative young (49) and happy altogether.
Sounds freaken fantastic.

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

reepicheep wrote:Henk,

Perhaps you would consider joining us at the ERE meetup in the Netherlands in June? I think it would be inspirational to have someone who has succeeded present.
I would love to, but I am not based in the Netherlands, and I only visit it once per year. But good initiative, by the way, where is this communicated, I did not see this announced somewhere?

I also feel that I am not a "pure" ERE evangelist. I am just lucky that my wife and I were reasonable frugal, and that I was able to work abroad, and that has forced us to build up our own Pension strategy and budget (no Company pension and no AOW - Social Security for us). Working abroad also helped not to get into a habit of buying bigger houses or bigger/fancy cars, etc... in other words, we became free of debt quite quickly. If we would have stayed in the Netherlands, I wonder if I would have reached ER by now.

However, would love to share my story and the pro's can con's of my path to freedom along the way, but I am just honest that I have not fulfilled the full promise of an ERE strategy. I am basically still learning. This move to Hungary is part of the plan, and I still have to expand my skill-set to do more myself, create multiple income streams (instead of a job), etc...

Quadalupe
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Joined: Fri Jan 23, 2015 4:56 am
Location: the Netherlands

Re: Henk's journey thru life

Post by Quadalupe »

Hi Henk,

I've just read to your journal from the beginning and it was a very interesting and inspiring read! It sounds as if you are in a good place right now, both location-wise and mentally.

The meeting was discussed at viewtopic.php?f=5&t=6213. If you change your mind, I don't think it would be a problem if you'd tag along after all.

And don't worry to much about it, I think everyone implements the ERE strategy in a different way. It's very instructive (for me at least) to learn about different implementations.

reepicheep
Posts: 383
Joined: Mon Dec 29, 2014 7:45 am

Re: Henk's journey thru life

Post by reepicheep »

@Henk,

Meetup is here: viewtopic.php?f=5&t=6213

There wasn't an official announcement, per se. We'd love to have you, but I understand that the logistics may be too much. :-)

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

Quadalupe wrote: And don't worry to much about it, I think everyone implements the ERE strategy in a different way. It's very instructive (for me at least) to learn about different implementations.
Agreed, and that made me think again about what ERE means for me: I also looked at the different forum discussions, and what I like is (close to my feeling):
* The mental part of ERE = "Being free to live the life that you want", which goes together with being "permanently independent". It sounds simple, but it is actually not easy (at least not to me, and I guess, the same for many). Typically, an engineering approach is to split a complex goal into sub-goals that can be reached more easily, like (a) being free "money-wise" by solving the spending and income part balance, and save enough for FU-Money (b) enhance your skill set - permanent learning, etc... but still in the end, it all comes down to "to feel free and live the life that you want".

Looking at my journal, it seems I have focused more on becoming FI than focusing on this ERE goal as described above, and this is not without reason. It is easier to achieve FI than to reach "living the life that you want". Also, "reaching FI" is something you can easily share with others (as a strategy how to reach it), while "living the life that you want" is very personal.

I always have struggled with the goal of "the life that you want". In the end, I think like myself, many people just do their best and follow a life path that is kind of acceptable in the society that they were born, and how they were raised. "Being free" seems more a "born" feature, like how your mind is structured, than that you can learn to feel that way (of course, you can take many courses, mindfulness, yoga, you name it, but that is also not an easy route and with guarantees). Besides the "free mind", you can also have a strong passion, and that gives purpose in life, which itself makes you feel "you are living the life that you want". However, looking around me, I do not see many people with a strong passion (and how they get into the "flow" that it brings you infinite energy when you follow your passion).

So, in the end, I made the decision to ensure I can reach FI, and then stop doing things that I do not like (anymore), so I can create more time/space to try out new routes in life. So, from that angle, I have not reached the full ERE potential yet, but being FI helps me to free myself from the "clutter" in life, and work more towards that goal of "being free to live the life that you want"

A Life of FI
Posts: 123
Joined: Thu Oct 13, 2011 8:55 pm

Re: Henk's journey thru life

Post by A Life of FI »

Good observation Hank - I think a lot people probably take the same path as you, first reach FI and then after this try to reach the full potential of ERE/their full potential. For most/many people maybe its just necessary to first secure some type of ongoing self sustaining financial security before they feel they can turn their attention to focusing on deeper things.

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

Long time, I am a bit in anticipation of starting my ER part of life, which is planned for end of year. I will visit in Hungary in coming Months to verify the 2nd phase of renovations, so that we are ready to move our stuff over there in 1Q of 2016. I feel at ease with the whole situation of ending my job, both financially as mentally. I made so many plans already for ER life, that I have enough to do for the first 5 years :-), and I expect a lot more ideas will come when I am really free. Time has slowed down at the moment, probably because I want to move, and then you start counting the days.

Following the Greek situation, I just read a story of a group of 30ers of which more than half has no real income (job), and they were sitting on a terrace in Athens, having a coffee, nice view, and were discussing their lives before and after the crisis. Many came to the conclusion that having friendships and enjoying a coffee & talks together on a nice terrace, was all to make them feel happy and appreciating life. Some were describing their pre-crisis of life in which they would not even blink their eyes for buying new shoes of 250 USD, or borrowing money to go on a far-away trip, but bottom-line, they did not really need that.

I liked the story, as it shows how people can get lost in consumption-lifestyle, but without realizing that most of it, did not really add value to their lives, and somehow the Greek crisis was needed to open up their eyes. This is typical of human beings, we always need a strong external impulse or stimuli to change our perceptions, regardless what triggered it (could be illness, crisis, death of friend/family, lost job, divorce, accident .... so yes, most of the time, it is a negative impulse that creates the biggest impact). Once eyes are opened, People see better and appreciate better what they really value.

I cannot help to think about the balance of this for our current Economical system. If people would be happy with less, it means the Economy will be impacted (more than 50% is related to consumption, and more and more is based on creating Debt). So, less consumption, is less or no growth, is less jobs, less spending, etc... and you get into a negative spiral. Somehow we need to define a better Economical system that is tuned to this situation (I cannot remember if Jacob has described this in his book). There are also other reasons for this, well known, like scarcity of resources (our planet basically) and the impact we create as humans (our destructive footprint on this earth). But, I like the focus on "value", what makes you happy and how to avoid artificial pitfalls.

Nothing new to the community on this forum, I know, it is more that I like to think about it and see the beauty. Similar for instance to the beauty of Evolution, if you see how it works, then you like to see the beauty of it in more examples (i can never stop reading about it, or see more documentaries about it).

Anyway, as promised, I will write more once I made the step to ER life, and report back how that would unfold in Hungary and all the planned adventures.

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

Some dream-time at work (final last Months), checking my expected "ER Income" from 2016 onwards:

Expected situation January 2016:
(A) Mixed Funds : 50% of total assets : withdraw 2000 / Month
(B) Real-Estate : 25% of total assets : delivers 2100 / Month (net rental income)
(C) Cash assets : 25% of total assets : delivers 400 / Month
TOTAL BUDGET / MONTH 4500 / Month (for couple)

This budget includes everything for a couple: normal living costs, insurances, transport, slow-travel vacations, etc.. The expected rental income is really "net", all maintenance is taken off, including a buffer for loss during vacancies and potential renovations. The "income withdrawal" from Mixed-funds is relative low compared to Rental income, but I expect no miracles in Stock-market in coming 20 years (the world is still adapting to lower Growth). Of course, if Technology breakthroughs deliver unexpected Growth the coming 20 years, this could be a nice buffer, but I see no clear signs yet (unless you believe that the singularity dream comes true).

Do we need 4500 / Month for a couple? Not in Hungary itself, the Rental Income of 2100 / Month would probably be more than enough, at least for the basics in life. As I need a good car over there (living remotely), I am planning a max budget of 2800 / Month for Hungary (all-in), so the rest can be used for "slow travel" around the world (expect 3-4 Months per year as long as we are healthy). Of course, if the Stock Market goes wrong the coming years, then we step back from our planned budget of 4500, and live on 2800 only.

I am curious what reality will be from 2016 onward, and in the end, more related to quality of life than financially.

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

Quick update: bad news for people saving for ERE in the Netherlands, the government has increased wealth-tax above 125k Euro (effectively 1.32% on your net wealth). That might not sound a lot, but you can imagine that it is already hard enough to get some gain on your investment, any % is welcome. Let's assume you saved 1M Euro for ERE (not unreasonable), then you pay around 13k Euro tax on this, every year, regardless if you made gains on it, or not (the government just assumes a fixed gain that you can make). That makes living in Hungary even better, I save 13k Euro every year (in Hungary there is no wealth tax). Okay, everyone has to pay tax, otherwise the system does not work, I agree, but if you want ERE, avoid the Netherlands.

rube
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Re: Henk's journey thru life

Post by rube »

But note that below certain levels the tax % now decreased. Effectively you are better off below (I believe) 240K per person. Above 240K you pay more.
And your own home does not count (yet). For couples incl. your own home, say 200k, the 'break-even' between old vs new tax is then roughly 680K for couples owning their home.

We're still (slightly) better off and will be for a while, but I keep an eye on these developments and options.

RealPerson
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Re: Henk's journey thru life

Post by RealPerson »

Sorry to hear about the wealth tax. You would think that taxing the revenue is sufficient but ownership taxes exist in many forms. You pay tax to own a car, to own a house, etc. There are places where they tax use of bicycles and even car radios. What is taxed is ownership of things that are on record. To include simple ownership of investments in likely to discourage the savings people lack! It creates the wrong incentive. Between the wealth tax and inflation, you are losing serious money when owning a money market or government bonds. This artificially drives investments to higher yielding but riskier investments such as the stock market. Isn't that how bubbles are created?

Better yet, why not come up with these taxes and apply them worldwide, like the US does. Then you can live anywhere in the world and have to pay these crazy taxes anyway.

The tax level you mention is akin to buying he highest load funds without being able to choose Vanguard. It does fly in the face of early retirement because of the drag it creates. Every tax starts out "low". The rates gradually increase and the exempted amount goes down or it reduced because of inflation. Such a tax can become a real problem as people retire ERE for 50 years or so and the wealth tax keeps creeping up over time. One more risk to take into account.

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

Indeed, I agree, in some countries they are using you as a cow, and milk whatever they can find on you. In the Netherlands there is a specific issue if you save for your own pension. Government or company pensions are not seen as "wealth", but if you build up your own pension amount (for instance, simply buying stocks or index funds), then they suddenly say "this is wealth", so pay you sucker, you do not fit the country profile by using company pension scheme's, so you will suffer for that! :-) Anyway, it was not the main reason to leave the Netherlands (that was already 16 years ago), but for sure it has become one of the reasons *not* to come back! :-)

George the original one
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Re: Henk's journey thru life

Post by George the original one »

How does being a landlord work in a wealth-tax scenario? Are they increasing the real estate taxes or is it just brokerage/bank accounts that are getting the tax increase?

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

George the original one wrote:How does being a landlord work in a wealth-tax scenario? Are they increasing the real estate taxes or is it just brokerage/bank accounts that are getting the tax increase?
If it is not your main living location, but for rent, then they see the value of the rental house as wealth, and tax you in a similar way as the other assets. By the way, this applies to all your belongings worldwide, everything gets taxed with the fixed rates (in brackets). There is a small strange difference, if you are living abroad, the Dutch government does not tax you on your belongings/assets that you have in the Netherlands, except the rental house, somehow you still pay wealth tax on your rental house assets, even if you do not live in the Netherlands....

henrik
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Re: Henk's journey thru life

Post by henrik »

Does this mean you pay wealth tax on the assessed value of the rental house AND income tax on the rent received?

rube
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Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Henk's journey thru life

Post by rube »

No, no income tax on rent received (unless when you have 10 units or more and do all the work yourself, then it will be seen as a business/work and not as an investment and it is a complete different situation with regards to tax).

thrifty++
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Re: Henk's journey thru life

Post by thrifty++ »

I have enjoyed reading your journal. Congratulations on hitting FI. Did you have a date set for retirement? You talked early in your journal about discovering ex pat jobs. What did you mean by ex pat jobs and do you know of a good way to access them?

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

Re: Henk's journey thru life

Post by Hankaroundtheworld »

thrifty++ wrote:I have enjoyed reading your journal. Congratulations on hitting FI. Did you have a date set for retirement? You talked early in your journal about discovering ex pat jobs. What did you mean by ex pat jobs and do you know of a good way to access them?
Hi, great that you enjoyed the journal! :-)
No, i did not really set the ER date as I only very late found out abt this active ER journey planning, but I was lucky to have a good job, and also being reasonable frugal. In all fairness I always had 50 in mind to stop working, but never saw it as a real target, more like an idea, and as it turns out, it has become exactly 50, coincidence?, may be, or mental programming, who knows :-)
Regarding expat job, this is about finding a job abroad, typically in a good company that is willing to host well educated persons in countries that require investment in resources, and where it is not easy to get these resources locally (or not enough). These companies tend to help you with accommodation, insurance, car and sometimes even extra money, and on top of it, even pay the tax for you. This depends on location and how difficult it is to get resources for that location. As you can imagine, this helps saving for ERE, as you only spend money on groceries and vacations, the rest is more or less paid for.
How to get these expat jobs? It is not as easy as it was before, because of globalization, and this impacted availability of well educated persons that are willing to work for lower salaries or less luxurious packages. It all depends on the needs in particular skills, like in Banking, IT, Telecom, etc..I was able to get onto this track by accepting a project abroad for a year, while there I switched company, and used this company to move from one country to another. Not automatically, you need to show results and willingness, and be flexible (not all locations are great).
I hope it inspires, and good luck!!

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