Living in Germany and trying to achieve FIRE in the year 2024

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MDFIRE2024
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Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Mon Jan 09, 2017 1:16 pm

Hello everybody,

I live in Germany and I work in the IT sector. For the last two years I figured out what I want do next in my life. There were several possibilities, like traveling round the world, sailing, working in another country or for another company. Then in my vacation in Spain I met an American guy from California who was, and still is, very interesting. He was a older than me and we talked a lot about various topics. Currently he is looking for a place to settle down for his retirement. As we spoke about retirement he told me about the concept of “early retirement”. If you want to have a look on his blog you can find it here. https://fourletternerd.wordpress.com/. (If you are interested in the cost of living in Thailand you can find good data there too, because he lives there right now). If I had to pinpoint the exact date, when I got the idea of “Early Retirement”, I would say that it was in this vacation.

However, after I came home, I looked for “early retirement” in the Internet. First I have found ERE and MMM on the net. Then I got used to the concept of FIRE. It wasn’t difficult for me to think about it, because I already live many years by simple life and minimalism. Also, I have been saving since I started to work. Therefore I set myself a FIRE-goal. As you can guess from my username I want to achieve FIRE in the year 2024. Currently I am in my mid 30s. That means I want to be financial independent in my 40s.

Since I defined my FIRE goal I read a lot on ERE. I like Jacob’s thoughts very much. Although I already have thought about selling my car with my FIRE goal on mind I had the courage to do so in the middle of the last year. Since then I live carfree. Six months later I absolutely don’t regret this decision.
Due to my frugal living habits I am able to save between 50% and 80% of my income. I am very happy about that. Also I am very grateful about the many opportunities here in Germany, about the good quality of life, work and economy conditions, family and health. For myself, FIRE and money is important, but it also needs inspiration, creativity and motivation.

I am interested in many different topics. Psychology, sports, outdoors, nature, reading, and so on.

Why did I join the ERE-forum? Well, I want to participate in the forum and hope to contribute wherever I can. Besides that, I want to learn more about other ERE stories and topics. My goal is “only” 8 whole years away and till then I want to have fun on the way.

So, looking forward in reading and writing about FIRE.

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Chris
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Chris » Mon Jan 09, 2017 4:56 pm

Welcome, MD! Nice to see the recent influx of Europeans to the forum.

Have you had to deal with people questioning your current (or future) lifestyle? FIRE seekers are strange in most places, but I get the impression that Germany is more rigid in terms of how people are "expected" to live.

MDFIRE2024
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Tue Jan 10, 2017 12:07 pm

@Chris.
Right now only my inner family circle knows about my goals and they understand what I am trying to achieve. So, I haven't had to deal with many people about my lifestyle so far. For myself, I don't have any problems with what other people think of me. Well, you are right. In Germany it is more rigid and people expect you to work or study or do anything at all. I guess when I reach my goals I will use something I can say to people so they are not confused.

Cornerman
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Cornerman » Thu Jan 19, 2017 3:40 pm

Welcome ! and good luck on your journey. I like Germany a lot, nice people and lots of cool cities. And beautiful nature.

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BRUTE
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by BRUTE » Fri Jan 20, 2017 2:16 am

greetings! when asked what they do after FIRE, some say they're investors. that seems to work well in certain circles in the US. brute is unsure how Germans would react to hearing that MDFIRE2024 is a capitalist fat cat living off the work of the proletariat :D

MDFIRE2024
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Sat Jan 21, 2017 7:28 am

@Cornerman, thanks. Have you been to Germany?

@BRUTE, well I gotta figure out what I tell people. FI is not very common in Germany. Working culture is the norm. What I learned so far from FI bloggers in Germany is, that people don't understand the concept of FI very well. Some bloggers suggest to hide your wealth. The mentality about that is different to the States, isn't it?

whatlifecouldbe
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by whatlifecouldbe » Mon Apr 17, 2017 3:37 pm

Chris wrote:
Mon Jan 09, 2017 4:56 pm
I get the impression that Germany is more rigid in terms of how people are "expected" to live.
I live in Germany for 12 years now (I'm hungarian) and I can confirm that Germans don't really talk about money and have difficulties in general understanding the concept of early retirement.

On the other hand in Hungary/Romania, everybody is talking about money. Everybody wants to know how much you earn. It's normal and , for us, pretty weird too.

In Germany you simply have to find (not easy) the people from our community. There is a growing community of FIers. I've found that there are 2 kinds:
- the ones that really live the concept of minimalism, DIY, making a change, freedom etc
- the ones that simply want to make money and basically show off with that

Poor Daniel
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Poor Daniel » Thu May 04, 2017 12:38 pm

Hi Mdfire2024,
Servus from Vienna! Congrats on your high savings rate!
May I ask what your expenses (mine: around 8400€/year) are and how you define reaching your goal?
I'm 27 and my current networth is around 13 years worth of annual expenses.

edit: numbers corrected
Last edited by Poor Daniel on Fri May 05, 2017 4:47 am, edited 1 time in total.

whatlifecouldbe
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by whatlifecouldbe » Thu May 04, 2017 12:46 pm

Hey Poor Daniel! Your 7K expenses in Vienna is great! Can you tell us how those break down per cost category?

Poor Daniel
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Poor Daniel » Fri May 05, 2017 4:46 am

Sure. I made a better, more conservative estimate now. (monthly figures) I hope I didn't forget anything.

housing: rent+electricity+heating: 310€+20€+30€= 350€
food & drinks: 150€
health insurance: 60€
internet+smartphone+ laptop/smartphone depreciation: 21€+10€+10€= 41€
transportation (mostly bike): 20€
travelling: 40€
diverse: 40€

sum: around 700€ monthly/ 8400€ per year
Last edited by Poor Daniel on Tue Jul 11, 2017 7:28 am, edited 1 time in total.

whatlifecouldbe
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by whatlifecouldbe » Fri May 05, 2017 5:45 am

thanks! Quite interesting!
What health insurance do you have. It sounds very cheap. Are you a student?
How do you calculate smartphone depreciation?
Do you go on holidays? Do you budget for that? Or 30€/month is all you use for holidays?

Poor Daniel
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Poor Daniel » Fri May 05, 2017 6:09 am

you're very welcome!

yeah, student working part time

my health insurance: Selbstversicherung für geringfügig Beschäftigte:
how much do you pay for health insurance?

purchase price/ months used- linear depreciation..for me around 100€/40 months=2,5€ per month, same for used laptop bought from ebay for 300€/40 months=7,5€/month

holidays is a good question I admit and it was hard for me to budget that ;)
I've been travelling a lot (around 25 countries) throughout my life and lived abroad for a while- but since I'm hooked on FI, I cut back, although I find that sometimes not too easy because it sems to me that travelling is the holy grale of social capital in my age cohort ;)
What is a great compromise I think is going abroad for long periods of time and working there- and reading books in the meantime ^^
How is it for you with travelling?

whatlifecouldbe
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by whatlifecouldbe » Fri May 05, 2017 6:31 am

We're a family with 2 kids. Allready FI but i'm self employed and working on my online business (since it's fun). (btw we blog on http://whatlifecouldbe.eu if you want to read our story).

Traveling is mostly limited to seeing family in Scotland and Romania but I can tell you, flying with 2 kids is expensive. It means buying 4 full flight tickets!

But now we're moving to Romania and we'll do some geographic arbitrage from there. Our cost will drop significantly while our income and happiness level will (probably) rise.

It is a very interesting strategy to live in a cheaper country working remotely for customers in richer countries. (btw: internet in Roomania is waaaay faster than in Germany!).
Traveling doesn't have to be expensive, in times of couchsurfing and hichhiking you could spend less money traveling then staying at home...

What do you work?

Poor Daniel
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Poor Daniel » Fri May 05, 2017 8:04 am

Thanks for your great reply!

Just read a little bit of your blog. Thank you very much for sharing your story! I'm impressed! Congratulations on your achievements and greetings to your family! I'm sure you will live a wonderful life with your setup at/ near Timisoara :)

It seems you invested in the right place at the right time when real estate yields were still good in major german speaking countries. Although the leverage would have scared me a little I guess ;)
Do you see an area with real estate bargains at the moment?

Also impressed by your business initiative. Something I've been looking into for a while.
I'm working a typical student job and also for the family business (technical wholesale). Studying physics/ biomedical engineering.

I'm also into value investing, graham style, cigar butt investing. What you think about that strategy? I've read your post about SWR and index funds and agree about the uncertainty of the 4% SWR, especially now ;)

Geographical arbitrage is super interesting. Love to learn more about eastern european countries. I liked Budapest when I visited- seemed a little like Vienna a couple years ago ;)
Although I gotta admit, Vienna is such a great place to live in+ lots of my friends (and my love ;) are here, it's not that expensive and I like working and studying anyway so I'll stay here- for the moment being.

Agree with cheap travelling. Couchsurfing, hostels and AirBnB are awesome.

happy to hear from you!

whatlifecouldbe
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by whatlifecouldbe » Fri May 05, 2017 8:22 am

Thanks!
"Do you see an area with real estate bargains at the moment?"
Well, I'm pretty sure there are many places where real estate is a good investment. Even if prices are high in the major german cities, the rent is also a lot higher. If you look for a 2-3 room flat in the city centre, while toe purchase price is high, there are so many high income (I talk about 6-7K net income per month) who can afford renting it! So, just because it's expensive, it doesn#t have to be uninteresting. I would look for smaller flats where the ROI is higher.
I don't know much about the value investing strategy, so I can't give you advice here. I went for ETFs and dividend ETFs.
Building up an online business is something I recommend to everybody. Is not rocket science and everything can be learned from youtube. You could be FI in 2-3 years. But it is a lot of work!

Poor Daniel
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Poor Daniel » Fri May 05, 2017 8:36 am

Thank you for your advice!
Right. What counts is the rental yield. I will have an open eye on real estate markets, but just comparing yields from what I've seen, small, cheap stocks offer the best value at the moment in my humble opinion. We'll see.

Very interesting. Would you generously have some recommendation/ books/ links for me to get a good start in the online business area (i know it's practically infinite ;) ?
I've already experimented a little with selling goods online, e-commerce..

MDFIRE2024
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Location: Germany

Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Fri May 05, 2017 11:12 am

Poor Daniel wrote:
Thu May 04, 2017 12:38 pm
Hi Mdfire2024,
Servus from Vienna! Congrats on your high savings rate!
May I ask what your expenses (mine: around 8400€/year) are and how you define reaching your goal?
I'm 27 and my current networth is around 13 years worth of annual expenses.

edit: numbers corrected
Servus Poor Daniel! Nice nickname for an ERE seeker. :-)

My expenses last year were 8300€ with
25% (around 2000€) traveling
26% (around 2200€) housing
16% (around 1300€) mobility (car)
33% (around 2800€) life (groceries, ...)

My estimated expenses for this year are going to be lower, I hope and aim for.

You are doing quite well. Housing for 360€ per month in Vienna is low, isn't it? I don't know but I find it very cheap for such a good city. How do you live?
Do you have any intentions to even reduce your expenses for this year?

MDFIRE2024
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Fri May 05, 2017 11:32 am

Poor Daniel wrote:
Thu May 04, 2017 12:38 pm
and how you define reaching your goal?
I forgot to answer.

My financial goals:
- work till 2024
- average SR 80% of my income
- have minimum 350k€, mostly invested
- Withdrawal rate < 3,5%

@Poor Daniel: What is your goal?

Poor Daniel
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Poor Daniel » Fri May 05, 2017 12:08 pm

Thanks for the info, may I ask a few questions out of curiousity? :)

180€/ month for housing? wow- cheap city/ shared apartment- how do you do it?
108€ for a car- i guess depreciation is not included, right? or how come it's so low :)
(just read you got rid of the car-so it shouldn't matter anymore ;)

Well, (social) housing in Vienna is generally not that expensive. You got to qualify though. A lot of the rents are regulated/ subsidized and indexed with inflation. I'm living in a beautiful 35m^2 renovated altbau flat in a nice area. Super bikeable. Good infrastructure. High quality of living. See more: https://en.wikipedia.org/wiki/Gemeindebau

For the moment I'm focusing more on the income/building a business- part which is largely untapped ;)
Also because I don't see any immediate, meaningful reduction possibilities for the moment- I could be wrong though ^^

I guess if you wanted you could reduce your travelling budget- mobility should be reduced automatically by not having a car, right?

That's a specific goal- great! Without knowing the details, I guess it's certainly achievable with your high savings rate.

- continue working, and learning/reading practically the whole day- no matter wheter I'm FI or not- I love it
"Sloth like rust , consumes faster than labour wears , while the used key is always bright" B.Franklin
- but also continue to pursue FI by achieving a high savings rate (>75%) and building my portfolio in small, value stocks and other opportunities if I can recognize them
- continue to spend time with friends/ family which is the most important for being happy I think

MDFIRE2024
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Sun May 07, 2017 1:00 am

Poor Daniel wrote:
Fri May 05, 2017 12:08 pm
Thanks for the info, may I ask a few questions out of curiousity? :)

180€/ month for housing? wow- cheap city/ shared apartment- how do you do it?

108€ for a car- i guess depreciation is not included, right? or how come it's so low :)
(just read you got rid of the car-so it shouldn't matter anymore ;)

I guess if you wanted you could reduce your travelling budget- mobility should be reduced automatically by not having a car, right?
Yes. Curiousity is good, isn't it? :-)

180€ p.m. for housing is for utilities only. I was quite lucky and circumstances were good and I made a good decision in my 20s to buy a small apartement, which is fully paid. As I said, I was quite lucky because I think with rent I wouldn't have such a high SR.

108€ p.m. for car was for the first 6 months. After that I went carfree :-) And I am still quite happy about that decision.

As you said, I could reduce my travelling budget if I wanted. Well, let's see how I am interested in travelling in 2017. At the moment I don't know, because I travelled quite a lot in the last 15 years or so.

My main goal for 2017 and the following years is to find balance between my financial goals and other important things/people/experiences in my life. I want to get into an "autopilot mode" with my financial system and don't bother to much about the details from day to day.

MDFIRE2024
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Sun May 07, 2017 1:09 am

Poor Daniel wrote:
Fri May 05, 2017 6:09 am
I've been travelling a lot (around 25 countries) throughout my life and lived abroad for a while- but since I'm hooked on FI, I cut back, although I find that sometimes not too easy because it sems to me that travelling is the holy grale of social capital in my age cohort ;)
What is a great compromise I think is going abroad for long periods of time and working there- and reading books in the meantime
I made similiar experiences. Travelled also a lot, but since I think about FIRE it changed. Also due to Jacob who wrote about travelling. Well, I must say it changed me for the better, because I don't think travelling is not that much rewarding if I see the price for it.

What I also can think of are longer periods of time abroad. I gotta check out how I can integrate this into my life.

Where have you lived abroad, Poor Daniel? What experiences have you made?

Stahlmann
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by Stahlmann » Sat Jun 10, 2017 3:07 pm

Do you recommend any blog about FIRE/frugality in Germany?
Or could you provide some info about your country?
I will be heading to it in next 3-6 months with mech-eng diploma.
Thanks for any advice in advance.

MDFIRE2024
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by MDFIRE2024 » Sat Jun 10, 2017 11:35 pm

There are many blogs in Germany about personal finance and FI. If google for "finanzielle Unabhängigkeit blog" or "finanzielle Freiheit blog" you will find many.
Well, but I can't recommend anyone specifically because I don't read them anymore. It is mostly all the same, the basics.
I don't know any specific blog about frugality. Again, if you google for "Sparsamkeit blog" or "Geld sparen blog" you will find some about frugality.
Well, of course I could some info about my country. There is a ton to provide and talk about.
On the whole I like my country and if you believe the internet with the statistics e.g. numbeo it is also a good place to live. That I can assure. Germany is a country with high quality of life and currently the job market is pretty good. It should be not to difficult for you with a mech-eng diploma to find some work.
Hope I have helped you a bit.

whatlifecouldbe
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Re: Living in Germany and trying to achieve FIRE in the year 2024

Post by whatlifecouldbe » Mon Jun 12, 2017 2:06 am

Stahlmann wrote:
Sat Jun 10, 2017 3:07 pm
Do you recommend any blog about FIRE/frugality in Germany?
Or could you provide some info about your country?
Hey! We lived in Germany for 12 years and reahced FI a coupel of years ago with Real Estate and online businesses. We write about some tax issues and generally life in Germany in english on our blog: http://whatlifecouldbe.eu
I hope you can find some useful information over there.
Cheers
Mr W

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