Frenchgirl's Journal

[FrenchGirl]

#6 - I've come a long way!

I have been reading a few blog post lately on personal finance blogs where the bloggers were sharing their journey to paying back their debts (student loans and other). That made me realize that for the few years I've been working, I didn't pay close attention to that. I was well aware of my spendings and what I was saving but I just never thought of it in terms of net worth and being fully aware of how much I owed until I found MMM and Jacob.

Also, I am aiming this year toward +14K€ in net worth and I realized that beside feeling like I have been spending like a crazy rabbit this year, I don't have real hard numbers from the past for comparison.

So with that in mind, I wend back to my records to figure things out.

I entered the work force full time in mid 2011 but everything was so confusing for the first 6 month, I decided to start "recording" in Jan 2012.

Here it is


Since I didn't bother get the monthly details for 2011, 2012 and 2013, it reflects the end of year numbers. Also, the last 4 month of 2014 are my projection. (I finally moved some money around to pay off the remainder of my debt in september)

End of 2011
Debt = -27000€
Net worth = -19335€ (OMG! I never truly realized that I had a negative net worth at some point!)

Net worth progression
2011 : -19335€
2012 : -7104,8€ (+12230€)
2013 : +10426€ (+17530€)
2014 : ??? (+14000€ ??)

It seems that in the past I was not saving as much as I thought I was which is good to acknowledge I guess. When I think about it, I only considered the money I was putting away every month, but never what I took back from savings to pay for travels or taxes for example (I spent about 8000€ on travels during that 3 years span, and paid about 9K€ in taxes). Now that I follow everything steadily I will be way more careful.

Overall, I am aiming to a net worth progression of +43K€ (ish) in 3 years. It's not phenomenal, but I'll take it. And in a few month I will get my severance money (yes, months, another specificity of the departure contract I signed) which hopefully should be a good boost.

[DutchGirl]

Good luck on building your business and on studying. Maybe when you have an established business, you can say something like "I work at a small company called Frenchgirl Inc", and then people don't need to know that you also own Frenchgirl Inc...

[FrenchGirl]

Good luck on building your business and on studying. Maybe when you have an established business, you can say something like "I work at a small company called Frenchgirl Inc", and then people don't need to know that you also own Frenchgirl Inc...

Thank you DutchGirl! very thoughtful of you.
Actually, I do hope that once my business is up and going, I will be proud to say it's mine. The issue is for the fews months between now and then. Though you might be right, I could start saying right now "I work for small startup Frenchgirl Inc". I doubt anyone will go check that up. Thanks for the tip!

[FrenchGirl]

#7 - August Update

Time for this month financial update.



This month I bought a very expensive dress for one of my best friend's wedding (200€).
Between my student loans (got 2) monthly payments and my savings I bumped my net worth by more than 1500€ this month !!! Finally a good month (even if my saving ratio was only 37%).

Plus, it is the last month where I pay for everything by myself so YAY!! My monthly expenses should be much lower. As one big life goal of mine is to live with about 1000€ or 12000€ a year, I'm very pleased.

**Need vs Luxury***
I also started to split my expenses in "Needs" and "Luxuries". It will be fun to see in which I spend the most over the months/years.
I consider "luxury" grocery shopping beyond 200€/month/person


BIG NEWS!
Today I paid off my biggest student loan!!!!!! I just checked my bank account and notice that they banked the check! I am mortified to see my saving account with so much less money but I know the bigger picture is awesome!
Later this month I will try to send the check for the other one (only something like 270€). I say "try" because I'm a sucker for administrative stuff
My september review is going to look amazing!!

[Chris]

BIG NEWS!
Today I paid off my biggest student loan!!!!!! I just checked my bank account and notice that they banked the check! I am mortified to see my saving account with so much less money but I know the bigger picture is awesome!

Well done! Trading net worth for increased monthly cashflow is a good trade in my book.

[FrenchGirl]

BIG NEWS!
Today I paid off my biggest student loan!!!!!! I just checked my bank account and notice that they banked the check! I am mortified to see my saving account with so much less money but I know the bigger picture is awesome!

Well done! Trading net worth for increased monthly cashflow is a good trade in my book.

Thanks!
Actually it's going to be good for my net worth since I'm going to save about 400-500€ in interests. But you made think about cash flow! That's 115€/month for this first chunk, and once I kill the second one it's another 95€. I'm lovin' this!

[GandK]

Congratulations!

[FrenchGirl]

Congratulations!

Thanks!

[FrenchGirl]

#8 - My relationship with money - How I don't want more money but do want a pile of it -

Lately I have been very tourmented by my relationship with money.
I have been obsessing about my net worth, my saving rate and my investments for the past few weeks/months (by obsessing I mean spending most of my leisure time reading this forum, MMM's forum and "how to invest" material) and I wonder if it's not somehow eating my soul.

The thing is, my ultimate goal regarding money is to detach myself from it. I don't want to want more money. I want to have enough skills and wisdom to be able to live my life seeking joy/blessings/hapiness/pride completely outside of any economical frame. I want to be a "non-consumer". Not like someone who never buys anything (I know I don't want to completely remove myself from society and be completely self-sufficient) but maybe someone very much like Jacob (Himself!).

I don't believe in any "God" (in the way monotheist religions describe it) but I do have/seek spirituality. And I feel like consumerism is like a very low ceiling preventing me (and everyone, really) from growing. From becoming a more valuable/better person.

This being said, I do have an obsession with safety. I do have an hypnotic obsession with savings. (Like my boyfriend says, I just love watching money pile-up). It started when I was a teenager. We had a lot of money issues, and it became a habit of mine to try to save as much as I could (off bus-money, lunch-money, any money that came through my hands). More often than not, I would have to give it all to my mom for bills and such. But then I just started over and over building my pile of money. I felt like I had to. To this day, I am still struggling with that.

Of course I know it's healthy to save. But, I don't know.. I feel like it should not be a priority in my life. Especially since I don't think I will ever want to retire. I just want to find a job that makes me happy and fulfilled and that also provides for me and my family. So really my goal is to build money streams more than saving enough to retire.

Buuut I also want enough of a cushion to feel safe. Buuuuut I also don't think the cushion will ever feel big enough. *sight*

I guess I want to be like one of those guys who has enough skills and self-confidence to just pick up any kind of job whenever he runs out of money to buy food and shelter. Then lives off of that paycheck until it ends and does it all over again.

But I am not at that level yet. I am still scared. And let's face it, I am still and little caught up in the social competition of "I have more money than you, I win". (Although it's weird because I don't display that money)

Anyone out there with similar struggle ?
How do you balance living a very frugal life (detached from money) but still tracking net worth and watching money pile up? How do you make money a priority, but not a priority? (If that makes any sense)

[slsdly]

Remember, there is plenty of time to learn how to relax before retirement comes . For me, the easiest way to achieve that is to make the things I obsess about routine and boring as possible.

For example, the first year and a half I was definitely obsessing over the investment side a lot. There was a big drop when I decided I would invest most of the money 2-4 times a year, came up with a plan on how I would make decisions at those times (evolving over time of course) and defined what the defaults are. If something catches my eye, I may buy outside of the schedule, but the bulk of the investment activity happens in January, April, July and October. I just remind myself there are many opportunities in the market and I don't need to catch all of them or even the best ones.

Other ways I have tried to calm my own fears were establishing new sources of income (e.g. I do software consulting, small contracts in the academic world for areas less into computers), running my own simulations off of stock market data (S&P TSX Composite Index + CPI data from Statistics Canada) to see if I could really rely on dividends instead of having faith in Firecalc, finding projects that I could use to keep my primary wage earning skills sharp post-retirement in the open source community, etc. Just start isolating the individuals fears and hunting them down ruthlessly.

[Chris]

Anyone out there with similar struggle ?
How do you balance living a very frugal life (detached from money) but still tracking net worth and watching money pile up?

Of course. I think for the type of person that ERE often appeals to is the same type of person who wants to throw all of their energy toward that goal. And tracking progress toward any goal is thrilling.

For myself, and others around here, discovering Jacob's blog was quite a revelation. I spent two weeks reading from the beginning. I read the book. I read most of this forum. I would make new spreadsheets and tweak old ones. I moved apartments to save money. I changed my cooking and driving habits. I eliminated a lot of waste. I had a goal and wanted to make as much progress toward that as possible.

And then one day, while reviewing the spreadsheets, I realized:

• For my current situation, my expenses are about as low as they will be
• My brain is now wired to make good spending choices, without having to actively think about it
• The short-term (month-to-month) changes in net worth aren't meaningful
• As long as I'm employed, I will make progress toward FI at a steady pace, regardless of how many times I check NW fluctuations and MMM forum posts

Now, I still do spreadsheet updates monthly. I like seeing my progress over the years. But once the system is in place, progress will just happen. You followed the map to the last turn, and now the road is straight to the destination; no need to keep checking the map with each step. Enjoy the scenery!

So really my goal is to build money streams more than saving enough to retire....
Buuut I also want enough of a cushion to feel safe. Buuuuut I also don't think the cushion will ever feel big enough.

Defining a specific number as a goal will help. "Enough" will never be enough unless you convert it into something meaningful.

If your goal was to never work again, then the goal is easy: unearned income = expenses. But you don't think you will ever want to retire. That makes goal reaching easier but goal setting harder (-:
What does never retiring mean? Will you always work for someone else? Will you be engaged in part-time employment? Seasonal employment? Or maybe you are interested in an occupation that pays a salary too low for you.

With an emphasis on "safety", maybe your goal will be to seek income replacement for rent, utilities, and groceries. Your working income can cover the other categories. Then you can safely switch jobs as you desire, even if it means having large gaps of time in between.

But I am not at that level yet. I am still scared. And let's face it, I am still and little caught up in the social competition of "I have more money than you, I win".

In terms of social competition, "I have more freedom than you" always beats "I have more money than you."

[FrenchGirl]

Remember, there is plenty of time to learn how to relax before retirement comes . For me, the easiest way to achieve that is to make the things I obsess about routine and boring as possible.

For example, the first year and a half I was definitely obsessing over the investment side a lot. There was a big drop when I decided I would invest most of the money 2-4 times a year, came up with a plan on how I would make decisions at those times (evolving over time of course) and defined what the defaults are. If something catches my eye, I may buy outside of the schedule, but the bulk of the investment activity happens in January, April, July and October. I just remind myself there are many opportunities in the market and I don't need to catch all of them or even the best ones.

Other ways I have tried to calm my own fears were establishing new sources of income (e.g. I do software consulting, small contracts in the academic world for areas less into computers), running my own simulations off of stock market data (S&P TSX Composite Index + CPI data from Statistics Canada) to see if I could really rely on dividends instead of having faith in Firecalc, finding projects that I could use to keep my primary wage earning skills sharp post-retirement in the open source community, etc. Just start isolating the individuals fears and hunting them down ruthlessly.

Thanks for your insight. I do try to remember that I am still young and there is a long way to go. It's a journey, and the relationship I want with money will eventually become a reality.

So really my goal is to build money streams more than saving enough to retire....
Buuut I also want enough of a cushion to feel safe. Buuuuut I also don't think the cushion will ever feel big enough.

Defining a specific number as a goal will help. "Enough" will never be enough unless you convert it into something meaningful.

If your goal was to never work again, then the goal is easy: unearned income = expenses. But you don't think you will ever want to retire. That makes goal reaching easier but goal setting harder (-:
What does never retiring mean? Will you always work for someone else? Will you be engaged in part-time employment? Seasonal employment? Or maybe you are interested in an occupation that pays a salary too low for you.

With an emphasis on "safety", maybe your goal will be to seek income replacement for rent, utilities, and groceries. Your working income can cover the other categories. Then you can safely switch jobs as you desire, even if it means having large gaps of time in between.

But I am not at that level yet. I am still scared. And let's face it, I am still and little caught up in the social competition of "I have more money than you, I win".

In terms of social competition, "I have more freedom than you" always beats "I have more money than you."

Well actually I never ever want to be employed again. I just recently quit my job to build my own little startup (and study graphic design on the side). When I say I never want to retire, it means that I want to keep creating, building, striving on new projects and make a living doing so.
Adopting the ERE lifestyle is a way for me to be able to afford that : I quit my job because I knew I could live with less than half the salary I made. And the less I spend, the more time I have to make my business off the ground. Not being a consumer is really all about the freedom (like you said), a freedom that allows me to grow as a human being.
This is my first big project and I don't know if it will suceed or fail, but I do know I want to keep doing it over and over. The money I want to pile earns me the freedom to keep going.

Well this is it I guess! Wow thanks very much @Chris!!! writing this got me to realize : my pile of money is important because as long as my experiences (and skills) are so little, I don't have much to fall back on in case of failure. I will eventually grow, I will learn and I will become more skilled (and be able to make money when needed, as needed) and it will be built on hardship/failure/downfalls. Therefore having a good cushion will allow to rise again and again and keep going. A pile of money to *literally* not break upon my first fall !!!

YES YES YEEEESSS!! *you just experienced a great "AHAH!" moment*
I just love this forum Thank you very much guys (yes, all of you)

Now, time for a concrete plan for how much of a cushion I will (need to) build.

[FrenchGirl]

#9 - A plan

After a lot of thinking, I think I finally designed a plan that I am confortable with regarding money management.
First of all, I realized that even if I don't think I will ever want to "retire" it would still be nice to put my money to work and achieve FI at some point. This will give me flexibility and freedom to work on projects that may need a lot of time and effort before being able to make money. In this case, having my FI income will be golden.

I set goals :
- Spend no more than 12-15000€/year
- Create a 1 year emergency fund with 15000€ in "easy to reach" saving account
- Invest all remainder
- Earn 10% return per year from my money and automatically reinvest

I created a spreadsheet with yearly goal (with hard numbers) for the next 5 years. (until I turn 30)
In the coming months I should receive my severance money which should be anywhere between 50-60K€. That's a very nice headstart.

For the weeks to come I will read as much book as I can on investment. The first one on my pile is The Intelligent Investor, Benjamin Graham. Then, I don't know I was thinking Security analysis from Warren Buffet, maybe (but it's horribly expansive! 58€!!). Also, despite reading the entire ERE blog (almost) I've never read Jacob's book. It's in my Amazon cart right now.
I was looking for something on dividend growth investment but couldn't find anything. Any advise ?

What have you read to start feeling confident about investing ? Right now almost all my money is in low risk/low return funds and I never really gave it much thoughts since it's not a lot of money (about 20K€).

[Chris]

- Invest all remainder

Does this include investing in personal business ventures as well as publicly-traded assets?

- Earn 10% return per year from my money and automatically reinvest

Wow! 10% is pretty high. What is the origin of this number?

[George the original one]

- Earn 10% return per year from my money and automatically reinvest

Wow! 10% is pretty high. What is the origin of this number?

@Chris - I think it pays to be ambitious... My long term returns are 20% per year since 2007, so 10% is not impossible for Frenchgirl.

[FrenchGirl]

Hi all,
It is meant to be a little challenging. Also, it's a yearly average, so I expect to make less than that in 2015 and 2016 and much more after hoping that my startup starts paying me some dividend.

The startup assumtion makes it very challenging and uncertain because it makes a chunk of my future "portfolio" very risky. (Huge risk of losing 100% of the capital)

But I'm up to challenge and willing to take the risks. Let's see how it turns out

[FrenchGirl]

#10 - September review

September was a very satisfying month financially speaking. It was the first month spliting expenses with my boyfriend in quite a long time. It felt good!
I ended up spending 1540€ despite having to buy a plane ticket to fly home for a friend's wedding. Without the plane ticket, it was 1070€. My all time goal is to spend 1000€/month --> so close!



It was a good month overall but I am not satisfied with my progress regarding school. Graphic design is a far strech from what I used to do (finance) and I find it hard to adjust.
The thing is, I did miss doing anything creative so I'm thrilled to have the opportunity to be back at it but I struggle. Nothing to solve or to understand, just to create.
I am such a rational/solver mind... I found that I need a very specific kind of focus (clear hard, no thoughts at all, not-on-earth sensation) to make something *good*. Not easy at all but I guess it's a process and I am enjoying the hardship!

Next month I will be spending 12 days back home (it's been almost 2 years). I will try to get some work done, but I don't expect october to be a very productive month. I'll still try to complete at least 2 homeworks and stay under 1000€.

Oh and I almost forgot the main financial event of the month : I AM DEBT FREE !!!! In only 3 years after graduation and 4 years ahead of shedule! I am so proud!

[Noedig]

We'll done Frenchgirl. Good luck with the business : you will learn things by trying that others will never know. There will be many difficulties, you will learn from these.

Remarkable thing, being an introvert: "living in your head" for so much of the time. It is hard to pick a career that suits your personality, exploits your intellect *and* which cannot be outsourced to China or India.

Other INTJ careers:- accountant, software programmer, system tester. Some people would say boring but it depends if you can look past the repetition to what is underneath. I wish you great luck with your own chosen path- my sister is a graphic web designer and enjoys the creative aspect of the job (though working in a large organisation has also many frustrations).

You are young and this is the time to take such a chance and invest that effort.

[Gilberto de Piento]

I AM DEBT FREE !!!! In only 3 years after graduation and 4 years ahead of shedule! I am so proud!

Congratulations! This is a great accomplishment!

[FrenchGirl]

#10 - October review



This month I travelled back home for a friend's wedding and to visit my family. I was absolutely amazing! I didn't realized how much I needed some vacation until it happened! I spent a total of 208,79€ over there, which is okay considering that food is so expansive.

I'm also okay with the total I spent this month (1220,44€). My goal is still to spend 1000€/mth + about 3K€/year for one time expenses. Travel is typically what I consider a "yearly" expense so I'm really close to my ideal spending level this month.

My Net worth is now over 21K€ which was one of the goals I've set at the begining of the year. I actually have mixed feelings about that. In 3 years I buit a NW of 21K€ while paying entirely 27K€ of student loans. In the internet financial community, that's okay, but really nothing extraordinary. Whereas in my circle, I am kind of a money wizzard. I guess a lot of ERE/MMM people face the same thing : in real world you're kicking ass, in this world you're a regular joe. I don't know, it feels weird.


In other news, I decided to get out of my contrat with my former company. The initial plan was that I stayed legally bound to them for the whole time of my training as a graphic designer and keep a certain percentage of my salary in exchange. Well, I changed my mind! I ran the numbers and overall, it was financially smarter to get out of it now. Plus, I was still getting company's emails and such and I really wanted to cut the cord already.
Sooooo, It's over! And I received my settlement/severance money that I will account for in my november update. I now have to wait a few months for unemployment to kick-in so I will have to watch my NW shrink for awhile. It's okay though, if I want to be an entrepreneur I have to get used to the rollercoaster.