Letsdothis's journal

[letsdothis]

Hey there good people,

Bumped into Jacob's book via Kindle by accident. Read it, got hooked. Other personal finance books with a 'spend-less' focus never impacted me like ERE. Not even close. And I've read a bunch of them. Unfortunately, they only fed my 'get rich', 'make more' frenzy, and I've always been greedy. Not that I've even been hungry or wanted to buy expensive cars or anything like that... I don't really want any of those. I just love money. But I obviously don't value it enough to work on keeping it.

I've been trying to save money ever since I've started to make money. And that's about 10 years now. No success what so ever. Everything I've earned I spent. I'd explain, but those would only be excuses. I kind of feel like in a AA support group writing this here

Anyway, I'm 28 now, happily married to my high-school sweetheart, and we've got two girls, a 2-year old toddler an a 1-month old. Very happy with them. And feel like I have to live more responsibly. Pass on some good values on them, so they don't act the same way as I do. Actually, it seems like everything in life's working in my favor, except saving money. It's a major problem for me. Possibly my only real problem (since 'stress' and the like have not manifested on my health yet, got lucky with resilient genes. it's ridiculous how much my body cane 'take' without falling apart.)

I belive it's also the reason why I keep reaching a ceiling in terms of income. I never saved to invest, and always overpay everything because of terrible cashflow management, or non-management.

I feel stupid to complain about a 'problem' that most people would love to have — I started making money online when I was 18. I won't bother you with the whole story now, but I basically quickly began making a ton of money for my age. I never worked a 'real job'. I never had a job. Read 'Rich Dad Poor Dad' when I was about 13 years old and instantly decided I'll start my own business. I loved selling, still do. I can sell anything. I have sold things people couldn't believe other people would buy. I guess this gave me an unreal confidence that there's always more money on the way. And it kept coming. So it kept going, since the next payment was just 4-5 days away (weekly deposits).

And how could I know any better? Both of my parents were and still are (young folks) hard-working, high-earning professionals, super independent. I had a good example, on that end. But both of them also have zero money for retirement. Of course, I'm grateful they invested in me, not just money, but lot's of time, love and all sorts of help. Still, their behavior and attitudes towards money shaped my (wrong) way of thinking. I always knew it was wrong, deep-down. But had a hard time to change.

And I tried. Just not hard enough.

When I turned 19, for a short period my parents went broke (during the financial crises), I was alone abroad (went to uni), and was hustling to make some cash online, but wasn't enough for me to pay for everything by myself. I had a period of 6 months in my life where, for the first time, I was really broke, and felt it on my skin. After getting rejected in like 40 bars, figured I'll have to figure this make-money thing faster. It prompted me that within a year, I was making like 2,500 euros/month. Felt like a king. Didn't see a reason why I should continue my bachelor's degree when I'm already earning now (working for myself) what I'd make at a full-time job as a 'wage-slave'. Didn't like it (at the time) where I was living anyway. So I dropped out. Moved to China. Lived there 4 years like a king. Spent every dime I made. 4-5,000 euros or more per month just kept going so easily that it never seemed enough. Most of it I just ate, going out, buying 'stuff' never thinking much about the real value or the real cost or the real need for it. Traveled a bunch, too. I was just pretty neglectful. Everything seemed so easily replacable. Sure, I did work a lot, but then again I could choose my days, nights.

Had a ton of setbacks that prompted me to start new ventures (since I could easily do them with almost no capital) whenever I needed more money since one business earned less due to factors out of my control. I invested a lot every month in new businesses until they were brining in profits too. But I never allowed them to grow since I 'ate the fruit' immediately instead of letting it grow bigger. I ended up with multiple income streams (which is great), but few ever got to their full potential because of lack of focus, energy, resources. I completely mixed up what's 'company' vs. 'personal' money, just merged the two and 'ate' all the profits in order to support a spending lifestyle I was so used to.

I changed apartments so many times, moved from here to there, never settling something. Having this income made everything seem possible, so I always kept looking where the grass seemed greener instead of focusing on the here and now and nurturing what I already had. All of this consumed not only so much money, but time, energy.

I never view money that... whatever I don't spend, is money I don't have to earn again. I was raised to have a negative view of people who were 'stingy', in such a negative view, that this fear of seeing 'stingy' made me spend so much in excess, unnecessarily. The worst - I have nothing to show for it. Except the knowledge to sell, which I spent a lot to learn. Other than that... no expensive cars, no real-estate, dropped out of college 2-3 times never completed - which was a waste anyway, from this perspective. I spent a ridulous amount of money on Mandarin classes, which, by now, I have completely forgotten and gotten zero utility or ROI out of. So I made all the mistakes.

The good... no loans. No studend debt. No mortgage (since I never had a real job, so they never offered me a credit card thank god I guess).

Also, I was always kind of skeptical about being thrifty and frugal. Since I felt that all the time-energy I'd invest in those efforts is time I could have put into 'making more', so I felt I'm actually losing money by thinking about saving. Well, the results (or lack of them) speak for themselves. I make like 7-8,000 euros per month yet always feel broke.

I now virtually nothing about the stock market. Where I'm from (Eastern Europe), it's not popular at all. We barely have a stock market. Since I hate bureaucracy, I never wanted to go through the trouble of paperwork to even open a broker account. Actually, I'm terrible with numbers, unless it's basic operations +,-, %,x... I've seen some of your journals with complicated Excel calculations and I'm like --- intimidated. To be honest, my finances are a lot better now than they were, since I hired a guy that worked in a bank and is a pro at finances who put my business books in order and controls when I get paid. I tried learning this, but never had the discipline. I've seen what you say in terms of SWR etc. but understand very few of it. Maybe there's a glossary of terms somewhere in the forums (couldn't find it)...

The whole idea about stocks kind of scares me. From what I understood, the person making the cash is the one who invests at the start - not in the stocks (end of the food chain) for the masses. It also seems totally out of my control, and I don't know if it makes sense to invest in something I know nothing about, or if learning is worth it... when I can invest the same in my own business which I understand, and may be able to sell as an asset. Real estate seems more tangible and something I could envision as a passive income source at some point.

Anway... here's my goal. I'd like to learn how to live a good life at about 3,000 euros per month. I have virtually no skills what so ever. Can barely change a light bulb, or boil an egg (ok, bit more than that). Now, if I could buy, for example, 2 properties at about 600,000, that make a 6% yield. I guess that's about 36,000/year or 3,000/month and could cover a good lifestyle at that budget. I just want to learn how to live a much better quality life with a lot less money than what I earn/spend now without nearly as much satisfaction than I should get. I believe I could save 5,000 euros per month, but need a 'lifestyle redesign' rather than 'hacks' to cut here and there. In 5 years, that would be about 300,000. But if I earn more and then increase the saving rate accordingly, I might even reach the goal.

Btw, I lived in Germany for a year, and will be back in March/April next year for good. Settled there. I feel like it's the perfect city to be smart about money. Everyone on bikes and being frugal/smart about their money.

My idea is to first, redesign my lifestyle in the next 3-4-5 months... and change my way of thinking about money. Stop trying to solve everything with money, almost like a reflex. Start thinking about buying used instead of brand new, think about utility. Think about the real cost of stuff, by the money/revenue I'm losing from not investing that same cash that was spent. Sell things instead of trowing them away. Do things myself instead of paying others. Learn some useful skills, like cooking really well. Cut down fixed expenses. Think about thins in yearly costs. Analyse expenses and cut subscriptions. Religiously track expenses. I manage to do this for 2-3 months, then stop whenever things get slightly better and I'm not 'in the red' with cash near zero.

Sorry for the long letter. I guess writing this out in the open (while still kind of remaining as private as possible) will put some 'accountability' on me and, having a journal, force me to think more actively about this. I have to take this whole thing seriously for once and not 'on-and-off' every 6 months.
If I had a dollar every time I told myself I'll never allow to be near zero again... then always get back to it. Make, spend, make spend. To be honest, right now I managed "somehow" to save up about 5-6,000 euros with a little extra effort, tracking and goals together with my better half. So at least I'm not under stress, yet this is precisely when I 'relax' and start spending super easily again and going back to my default behavior.

Thanks for reading. Suggestions are welcome hope i'll stick to this and get to ERE and a lifestyle worth living instead of this rat race. Sure it helps that I work for myself, but it doesn't change the fact much that i'm still a rat in the race. Gotta work on values and mindset shift.

thanks,
Letsdothis

[prognastat]

Hi Letsdothis, welcome to the forums.

It sounds like the book really smacked you over the head and will change your life moving forward. There's definitely a lot fo people with good advice and ideas here.

Since you are looking to radically redesign your life it works out that your are expecting to move soon. This is because housing and travel are some of the highest costs for most. Since you are moving make sure you are moving to a place that just has what you need and not more. Also closer to your work and grocery location is better too. If you can get them close enough to where you can walk or take the bicycle to them that's even better as you can get both a workout in and save money.

For other expenses I would definitely recommend tracking your expenses either using a tool/website that does this for your or by manually tracking your expenses using something like an excel sheet. This will help you determine where your money is going and where you can cut. A common change would be eating out less often and optimising your grocery shopping. Buying items in bulk while they are on sale and storing them for longer term such as getting meat in value size containers when on sale and freezing it in portion sizes you can take out the day before a meal.

If you optimise cooking you can cook for as much or less time/effort than take out/fast food and definitely for less time than eating out. So it would save you time and a lot of money.(If you eat out frequently of course)

A habit I have that I dislike in some parts of my life, but really helps on spending for me is procrastination. I wouldn't recommend procrastination anywhere else, but procrastinating on spending often leads to me realising I really don't need what i was thinking of buying and instead not spending it.

[fell-like-rain]

Hi, and welcome! Sounds like you had a solid 'come-to-Jesus' moment with regards to your spending, which is always a good place to start. It sounds like you and your spouse are aligned on this (at least in the sense of tracking spending and having savings goals)- have you given them the book to read? If you can both get fired up about these ideas, it'd definitely be a big boost in terms of keeping each other accountable.

[letsdothis]

Hey guys, thanks so much for your replies, I really appreciate your support and tips.

@prognastat,
Yes, I have been reading Jacob's book for days and felt like Neo in the Matrix. Not just in terms of how to get to financial freedom/indepdence, but more about what's real value and what matters to me in life. I felt I always wanted to get rich, but I've only been really seeking control, freedom, and to buy time. I guess because I've never worked an actual 'real job' I didn't value the money I was making or calculated the real cost of stuff. How the money I spend is money I have to work for again, instead of being able to enjoy life. So always on this treadmill of supporting an expensive lifestyle. And that's all it is. Expensive, but not high-quality. This is what bugges me the most. How come I spend so much more than other people, yet don't extract real value out of it. Turns out, the value I've been seeking is more time, and I can do that if I don't have to work so much to earn as much.

Yes, so, I already moved. I currently live between two places (and pay Two apartments!), it's a really complicated story. But I'll get into it when I give an outline of my expenses soon.

The crazy thing is that I have been so lucky with this what you've mentioned. My office where I work is just across from where I live, which is also just across from our kindergarten. Everything within walking distance. No commuting. It has been so most of these years. Yet I still managed to spend everything. The place where I'll live permanently from March has a similar setting. Basically, the only important thing is the apartment, every other distance (office, kindergarten, store) will also be very, very close. I have a car, and no bike (yet). Planning on buying a used one (because I changed my mindset, otherwise I'd automatically buy new and wouldn't even think about it. OR, I wouldn't buy it at all since I'd be near broke and would have more immediate expenses to cover).

Great idea about buying bulk and optimizing. These months I spent about 800 euros per month on food (groceries, restaurants, cantina/lunch in my office, ordering). I tracked it all for 2 months and that's the average. My strategy is to eat more at home and cut that down to about 500 euros maximum. The problem is that I just waste so much, and end up paying 2 times for the same meal. I'd go and buy groceries... then they'd rot in the fridge and I'd end up buying breakfast or lunch outside of the house... so the food from the store got wasted, plus I wasted time going there, plus I have to make money again to replace the meal that was thrown into the garbage. I have to come up with a sort of rule/strategy so that if I'm already buying in the supermarket, it all gets eaten.

About procrastination. Absolutely. The thing is, simply the exercise of tracking expenses has always helped me. I just tend to quit too quickly as soon as things get slightly better! Simply writing it down makes me figure out the timeframe. Because, when I buy something today... 2 weeks later I feel that that purchase from two weeks ago FEELS like it was 2 months ago... so I think "Oh, I haven't spent a lot of money for such a long time, I'll buy this (whatever I think I need at the moment)." But when I track expenses and SEE the purchase 10-20 days ago, then I have PROOF that it was in fact just a few weeks ago. So I feel that simply writing it down each day makes me more conscious about spending and saves me a ton. I just have to drill this habit into my mind as a 'forever' kind of lifestyle, not just something I decide to do whenever I go broke.

The last 4-5 months have been financially quite stressful to be honest. But I cut a lot of fixed expenses down and put things under control and finally managed to save up some money. Just counted it after writing the first post, in total I've got 6,500 euros - which I do not need to spend. So all of my expenses are currently covered, and I've got incoming funds that should cover other fixed expenses in the coming month. Can't remember the last time I had that much which I don't need to spend.

I'm also thinking of like a pocket journal where I'll write down all your money-saving ideas and strategies. I guess just hanging out on this forum instead of reading negative news online will help me reframe my mindset about spending.

@fell-like-rain, thanks for your support! Yep, my spouse is really supportive and actually a lot more conservative/afraid money-wise than me. I'm overconfident / positive and always end up on the edge. I make implus decisions, often irrational. I told her a lot about the book and its ideas, she's completely on board. But now with a newborn (and a toddler) she's also quite busy so I don't think she'll have the energy to read it now. I won't bother her with it for a few months, tough she's the main reason we saved up these 6,500 since she forced me to track our expenses and we made it a common goal to talk about how we can do it on a weekly basis. Using this strategy called OKRs (Objectives and Key Results) that some startups/companies use, and it really kept us focused/motivated. But after the baby arrived of course we went a little soft and stopped tracking... now have to get back on track and keep tracking.

I really feel like in therapy when writing this ) Thanks so much for reading and I appreciate your tips. I'll get a notebook and write them down so I don't forget.

[prognastat]

Yeah building habits around things is the most important part and for the first while it's going to be all will power necessary to drive these behaviours until they become habit.

Tracking needs to be a habit, planning meals and actually using the stuff you buy for those planned meals needs to be a habit etc.

Once you've been tracking for a few months you can really see where you generally spend and where you could cut. Generally it's easier to save on large recurring costs rather than small or irregular costs so start with the big stuff and slowly work your way down the list.

I don't know about Excel, but Numbers for example comes with a budgeting default that can be used to track and classify expenses and set budgets. You could also use automated services like mint or personal capital, but I don't know if those will work outside the US or not.

[Stahlmann]

is the first post some kind introduction for future 99$ (sale from 999$) ebook on "how spendy person found his freedom through few simple tricks"?

3k EUR in most countries in EU? pretty good catch.
in Eastern part? 1%er score (I can't find where you are located atm)

[letsdothis]

@Stahlmann, hehe, let's make it $197 jk.

The crazy thing is that, for example, Germany isn't that much more expensive than the Balkans (where I'm from). If it's OK I wouldn't specify a country (for now) because I don't want to make these posts too public. Like, someone reading this who knows me might be able to figure out who I am But yes, basically, prices for most things are quite similar. Services are cheaper in the Balkans because wages are low, so this makes things like handyman's, nanny's and other services cheaper, but any goods and food are on par with prices in Germany. Rent is also lower, but not as much as you'd imagine. I'd say the average person in Germany makes 5 times as much than in the Balkans while living costs are maybe x 2 (because of rent+services). So yes, it is cheaper, but the standard of living is way worse as well. For me, I'd rather live in a more expensive country (for me) because I have more opportunities to learn, grow, meet likeminded people etc. Also, because things are cheaper (like services) you tend to spend a lot, a lot more than what you actually need and justify yourself the lower cost. So you end up with even less money in the end. At least that's my experience...

[wolf]

Welcome to the Forum! What an interesting story! IMO there are many positives aspects which gives you a solid ground for achieving ERE. e.g. supporting wife, high income, reading Jacob's book...
I am looking forward to read more about it. Thanks for sharing these well explained first journal posts.
Do you mind sharing your personality type?
I live also in Germany and find it also good to live here.
Well, I wish you a good start into the "ERE-universum", with so much to learn and do.

[letsdothis]

@prognastat thanks for the tips!

I like how you guys go deep on tracking/planning more things than just expenses. It's about a change in attitude. Simply, when I go out for a coffee with friends, I regularly over-indulge unnecessarily. Like, I'd order a coffee + mineral water with gas (not free), and then half an hour later another round. While I could have just had 1 coffee and tap water (free) and have the same experience. It's not about saving that 1-2 euros but about the principle of paying for something of little or any real value. I'll be more conscious about that from now on. Still, I'll take your advice and work on chopping the remaining big stuff wherever I see space for quick-wins. I'll also check what you've mentioned about Numbers.

@wolf, thanks for your reply and support!

I've noticed most of you guys (and girls around here too I guess), mention your personality types.

I heard about this concept so I did this quiz on 16personalities about a year ago. Back then it said I'm an "Aventurer", but today I've done it again and it says I'm a "Protagonist" ENFJ, -A/-T. I have no idea what that means to be honest I mean, like, I know my zodiac sign(s) but am not really sure what to do with that information. Is it even possible that my personality type changes over a year? Or depends on my mood when doing the test. I mean, a lot in my life changed within a year or two, so it's quite possible that my personality did in fact shift a bit. Not sure...

How do you guys take advantage of knowing your personality type? I mean, what do you do with that info?

Thanks so much !! really happy that I got some feedback already

[Viktor K]

I use mine as a reminder that deep down I'm a cold-hearted asshole and I should try to be nice to people. And yes, your personality type can fluctuate. Especially if you're results are on the border of one or two values. For example, I'm on the border between E and I and N and S with a slight preference towards EN. But every now and then (and which test makes a difference) I score an S. Also, since I'm pretty antisocial lately, my test results are skewing even more towards I, but I think that is more of a question-making flaw than a true preference.

[wolf]

I use mine as a starting point to explore deeper of strengths, weaknesses, growth potential, comfort zone, stretching zone, decision making abilities, learning teachniques, comparision with reality, skills, etc. For me it is a way to learn more about myself. It's about exploration, brainstorming, definition, minimizing possible future regrets, using opportunities, reducing risks, reflecting life choices, as a guidance for options, etc.

[letsdothis]

I've read some of your journals here and figured mine should be better organized. I'll try to list some more accurate goals and more concrete expense issues I'm facing. I have to admit some of your journals are quite scientific-like for me in terms of tracking-levels, what you've saved up and how little you spend per month - especially considering many of you live in first-world countries/economies that aren't cheap. So here's my current situation (it used to be worse).

CURRENT MONTHLY FIXED EXPENSES

- 1,500 euros (the average after 2 months of tracking); on food (includes restaurants, groceries etc.), cosmetics, personal expenses (shopping etc.) and gasoline,
- 200 euros on my car (still have about 2,000 to pay off since I got it on leasing, this includes car insurance),
- 430 euros (apartment and utility bills) / apartment 1,
- 1,500 euros (second apartment with bills) / apartment 2,
- 70 euros on parking fee / garage,
- 80 euros on kindergarten (it's about 250 but the government refunds the majority of it now),
- 100 euros (phone bills, got 4 sim cards for me and my wife since we currently live in-between two cities/countries temporarily),
- 100 euros, accountant for one of my companies,
- 260 euros (business tax I have to pay each month for a local company),
- 622 euros for health insurance in Germany each month, as self-employed,
- 180 euros, a business expense that I currently pay from my private account (I view this as a loss as I'm not utilizing this expense, rather kind of paying 'rent' on a mailing list I own that's not being used yet),
- 300 euros, what I lose on average each month for curreny exchange to convert money into local curreny and use the atm,
- 100 euros, gym membership for me and my wife / contract, cannot cancel it currently as I got locked with a contract,

= 5,442 euros per month... and I didn't even blink. Terrible.

On top if this, almost every month I have some 'unplanned for' expense that just jumps in as 'urgent' for whatever reason. This easily bumps it to about 6,000 euros. Tough it was worse. Since I had an extra 550 euros + 1,000 euros in expenses for one employee and pregnancy bills (which got refunded eventually, but still, had to pay those for 5-6 months).

I know this looks terrible, and I'm not getting much enjoyment out of it either. But in the next post I'll write about how/what I plan to cut this down significantly in the coming 4-5 months.

[letsdothis]

OK folks, I hope I don't bore you from posting too often. I'm still amazed how some of you manage to survive on a fraction of the money I feel like I'm struggling to survive on. I really feel ashamed but I guess it's fixable with enough effort and some time.

So, in the previous post I've listed my fixed expenses (about 5,500-6,000 euros per month / possibly more), at least those I could keep track off. Still, this gives a relatively clear overview.

MY REDUCTION PLAN

I'll start with the biggest and go down.

- 1,500 euros for apartment #1. OK, so I'm sub-letting an apartment. I'm not the main tenant. It's legal, but I'm paying 300 euros more than I should. Since the main tenant had a kitchen done, so they're charging me more than what they're being charged by the owner of the building/apartment complex. It's a really nice apartment. I felt I needed a bigger one (sometime soon) - but after reading ERE and the forums, I now feel it's a huge apartment and there's absolutely no real 'need' to upgrade from it to anything bigger. The location is perfect, area perfect. At some point soon I should be able to become the main tenant (as the person renting to me now purchased their own place and won't be needing it. Long story though). It could take another 4-5 months until that happens, and then my rent should be 1,200 euros / month. That's 300/month saved. I currently don't live in this apartment, but cannot cancel my contract (invested a ton in furnishing the place). So I'm paying for a place in which I don't live, yet I legally cannot sub-sub-sublet it, and risking it simply isn't worth it now. So until March I'm paying 1,500/month for a place I don't live. I know, it's terrible. But there's not much I can do about it. Had to move because of my wife's pregnancy and some complications that forced us to move back to my home country and wait until the baby is like 4-5 months old. Regardless, I'll be saving 300/month from March onwards hopefully.

- 1,500 on groceries, shopping, personal expenses/cosmetics. I think I can cut this down to 750/month with some budgeting, planning and extra effort. Would save 750/month.

- 622 euros, health insurance in Germany. I think I could theoretically lower this by 50 euros/month, but have do to a bunch of health checks to prove we are 100% healthy. Still, can't do much about it until around April. It's a really good insurance package, got it with a broker. Think it's worth the price for me, my wife and two kids now. Seems fair. I have to pay it myself since I'm self-employed. Good thing is that I can deduct it from taxes or count it as an expense, which means I can earn more. Maybe save 50e/month.

- 430 euros on a second apartment. This is where I'm living now (in Eastern Europe). It's a nice flat, good enough temporarily. Great location, very convenient etc. The thing is, we want to keep this place as a back-up so we have a place to be whenever in our home country. So we don't have to go to a hotel or to family members. I'm not sure how smart this is now, to even think about keeping this place at this cost. But my idea was to rent it out on AirBnb or for shorter time-spans, like, 3-months or 2-months here and there, at a slightly higher cost than what we are paying. Since I got a good deal on it many years ago. Still, it's something I'd have to discuss with the owner. I just don't want to keep it as an expense, yet somehow keep the apartment, as I also spent a ton of money on furnishing it. I'd be saving 430 euros/month if we manage to cover costs by someone else renting it periodically. Should be doable from March.

- 300 euros I'd save by living in a country where EURO is the currency. Currently just living in a place where isn't (while earning money in EUR/USD) means I lose this money each month on bank fees and the worst exchange rate in the world probably.
- 270 this is my garage/parking fee and my lease payment. If I could pay off the car quickly (2,000 euros or so), and quit the garage by March, that means I'd cut 270 euros in monthly payments.
- 80 euros is our kindergarten currently, but should be free after a couple of months in Germany as the city pays for it. So that's 80 euros saved I guess at some point soon.
- 260 euros is what I'm paying as a business tax in Eastern Europe for another company. It's like a most, you can't get around it when you're a freelancer. What I could do is change the ID of the job description, which could save me around 70 or 80 euros per month. I could also change the location of the company to some house outside the city, which would further lower the fee. I think I could save about 100 euros/month in total. Worth a try I guess. I'll have to ask around.
- 100 euros on phone bills, I could cancel two or bring them to a minimum by changing the contract /monthly fee, that would save about 40 euros per month.
- The rest, can't do much about them because the gym membership is a contract and it's a good deal, just not there to use it now. But I'll get more utility out of it from March hopefully.

That brings me to around 2,280 euros / month that I could save with relatively little effort. I'll organize all of these into a to-do list and begin solving them little by little. Since not everything depends on me though, it'll take 4-5 months to get there.


My goal is to get to 3,000 euros / month though. I wouldn't reach it with this, but I'd be much closer than where I am now.

[prognastat]

Unless you spend a lot of time annually back in your home country there is no way to make a financial case for keeping the apartment there.

If you spend 1 month a year back home after moving to Germany you would be paying 5160 for the privilege of having your own place there, plus I assume unlike if you were renting an AirBnB while there or staying at a hotel etc you are responsible for at least some of the maintenance on it? I would check how much it would generally cost to rent a place or stay in a hotel for the time you tend to spend there and odds are it will likely be much cheaper to do that then rent a place all year long.

Also is staying with family an option on visits back there?

Definitely sounds like you'll be able to cut out a decent bit though so I wish you good luck.

[letsdothis]

@prognastat hi, thanks a lot for your tips.

You are absolutely correct about the aparment. It makes much more sense to rent/be with family when I'm here. Of course, it's a bit less convenient (with two babies basically). It's hard when you invest in something (like I did to furnish the apartment I'm currently in), to let go of it. Just thinking about having to hire a moving company and transport this furniture and stuff, and put things back together the way they were (for the owner, since I changed some things up) is a burden in headspace. I know these are just excuses, but they often drive my actions/behavior so I end up paying more just to 'buy' some covenience. It would definitely be wiser to come up with a plan to exit this apartment for good. I still have 4 months so I'll begin working on a strategy to make it as painless as possible.

Btw, there's SO much space for me to cut expenses. It's ridiculous. I just need time until March/April to put this in motion so I'll be cutting things out one by one whenever certain life circumstances allow.

NOVEMBER PLANS

- I'm working towards the goal of entering December with 12k/euros saved up. I came up with a strategy for it in terms of income/revenue and I think I'll be close.

- In terms of saving (defence)... the idea I came up with is to restrict myself access to money. I've noticed this seems to work very well for me. If I cannot touch the money, it's easier not to spend it for sure. So I have a planned delayed-salary-dividends payment from my company. Since I managed to save up some cash in local currency, it's enough for a full month. Normally, I'd be receiving payments each week. But this way I'm delaying getting it - so I will be unable to spend what I won't have on my account. Then in 1-1.5 months I'll get a bigger payment. I think this should work since then it's a bigger chunk of money and you kind of feel bad to use/spend it rather when it's coming your way often but in smaller amounts.

- The other thing is tracking expenses. I started doing that again and so far so good.

- My final goal for the month is to read 2 books, 1) Walden 2) Your Money or Your Life. I've noticed you mention these often on the forums so my goal is to read these two to toughen my ERE-resolve.


About Investments

First I'd like to say how I'm still shocked how little some of you folks here spend. I still have so much to go to get to your level. I know I can have a much better quality of life with over half than what I spend now each money. I just have to learn and redesign. I'm really inspired while reading many of your journals and got some good ideas.

The crazy thing for me is that so many of you have 'regular' jobs yet also so much cash accumulated. It's very motivating considering my situation is much easier being self-employed, and profitably.

What's hard for me to 'get' is the Stock market / investment stuff I see many of you write about. I never did that. I felt there's such a lack of control. Also I kind of feel lucky that when you have a business, and work in it, you are working on it... all the while you're at the job, it can grow. The only thing about a business that it's rarely fully 'passive' money... so I'm not sure how to classify it since you still have to continue (kind of, depends) working. It's good if you can sell it of course, too. Just like how people 'flip' houses, my idea is that I can kind of 'flip' businesses by developing websites that make money and work already, and then sell them at x30 the monthly revenue. It seems like a very good way to profit, just takes time to build it up and some money to invest. You can setup a site-business with just like $5,000 and have it earn $1,000/month within 6-7 months, and then sell it for $30,000+. If you have a good system you can do this for several sites simultaneously depending how many freelancers you can hire/manage. Sure it has some risk, but still. To me it's just more logical to invest in what you know, when you have the cash for it of course, and where you have more control.

To me it seems that when you have a regular job, you don't have the time-luxury to also build a business from the money you have, so you have to employ the money through vehicles like the stock market.

In that sense, for diversification purposes, real estate somehow seems more straightforward / easier to control. Buy property, rent it. Seems straightforward. So this is the avenue that I feel I could control.

1) Save as much as possible from current cashflow (not planning to sell) businesses. Core business, long-term.

2) Build up new businesses with the goal / purpose of selling them for bigger cash. This money can then be used for bigger investments/purchases like...

3) Real estate. Buy 2-3 properties that in total generate enough money to cover my soon-new monthly lifestyle of 3,000 euros per month while living great, by using DIY/skills/cooking/being smarter/low fixed expenses. That's ERE then.


These are just some ideas and, of course, might change if I discover some better way of thinking. But this is what currently seems doable.

Therefore I'll have to learn/improve:

- saving rate increase in order to invest in build-to-sell businesses,
- knowledge of managing a team / freelancers who can develop build-to-sell businesses,
- knowledge about real estate investment / renting to others/yields etc.,
- knowledge about skills for building/repairing a house/property to save costs,


The idea being, that a real estate/property is more stable than a website-business. Thus small niche-website businesses should be built and sold quickly. The idea is that you can quickly (6-months), with relatively little investment, build a site that generates $1,000/month. You need to wait another 6 months to stabilize and have a track record. Overall it takes a year. Now, it's easier to build 4-5 of these, than 1 site generating let's say $5k/month, smaller are also easier to sell/find a potential buyer for since it requires less capital so more people can afford it.

[prognastat]

Getting the money somewhere you are less likely to spend it is a good strategy.

Most of my savings for example come from 401k, HSA and stock purchase program withholdings from my paycheque meaning they never actually end up in my bank account. Even if this isn't something you can do some employers allow you to distribute your paycheque to multiple bank accounts. If this is an option it might be worthwhile to set up a separate savings account that you don't have a credit/debit/ATM card to access. Then have it deposit what you want to save there so the only way to access it is to transfer the funds to another account which adds a hurdle to spending it.

As for investing I don't have much I can add as being based in the US almost all my knowledge pertain to the situation in the US. I know taxation, rules and companies differ a lot in Europe and as such what's best in the US might not be the best in Germany.

[Viktor K]

Looking forward to seeing what the expense tracking turns up, if you're planning on sharing. It's always eye-opening for me in my own life. Especially helps with converting monetary value to actual life-impact and affect on happiness/wellbeing. "Dang, I spent $200 US on restaurants last month. And that food was crap! I could spend $50 at the grocery store instead and I'd feel and probably look way better!"

[letsdothis]

Hey there good people. I haven't posted here since last October.

Well, this is a story of SUCCESS.

I managed to lower my fixed expenses from 5,442 euros per month, to a round 3,000 euros.

I basically managed to accomplish all of the goals here in terms of cutting costs and whatnot.

My current fixed expenses look like this:

- 1,550 euros rent,
- 762 euros health insurance for 4 people,
- 65 euros, monthly phone bill,
- 23 euros, kindergarden,
- 10 euros or so, Netflix,
- 100 euros gym membership for 2,
- 500 euros, kitchen (purchased a used kitchen from my landlord),

In total that's 3,010 euros. I will cut this down by another 700 euros as soon as I pay off the kitchen (5,000 euros remaining, I know, it was an expensive kitchen but I had no choice).

I didn't include food/grocery/cosmetic costs here. They used to be around 1,500 euros, but they're significantly less now.

Here's what happened. I moved back to Germany and cut a ton of expenses and organized my life better. I feel great. Though there's still so much to improve. I also paid off my car and some more stuff. Anyway, amazing progress compared to around 9 months ago.

I had ups and downs. I tracked all expenses for 3-4 months and that period I saved up a bunch of money. But then I stopped. Now got back into the habit with my wife, doing it all together. Have been tracking for 2 weeks now and getting better organized.

At the moment I feel that the biggest 'space' to save a ton of money, while increasing quality, is in FOOD/GROCERIES. We spend waay too much in my opinion, and, waste a lot. It needs to be optimized. I also eat lunch outside the house each day, while I could bring it with me to work.

Overall, life has been A LOT less stress-free since cutting so much on fixed expenses.

I feel that now we can save another 400-500 euros / month on groceries/food simply be using the food better, buying a bit smarter etc. Not having coffee outside of the house/office or having lunch at work from food I prepare at home earlier. This could save 400-500/month.

I am trying to think in terms of the YEAR. So, 50 euros per month doesn't seem like much, but it's 600 per year, and I could always use that money so much better/in other ways. So I really want to look at these little expenses/bad habits that add up simply because of lack of planning, preparation, etc.

I feel that most wasted money is simply for lack of planning, budgeting, thinking in advance...

Our real expenses per month are currently 3,000 euros + about 1,500 on food, little shopping stuff, not including the bigger ticket things. The little things just really, really add up so quickly.

I plan to continue tracking religiously, each day. I feel that simply the ACT of tracking AUTOMATICALLY saves us a ton of money because we are more conscious about spending and thus appreciate the value of each euro more. So JUST tracking automatically saves god knows how much.

My plan now is to A) explore some good Turkish shops I've heard of in the area that supposedly have better quality for lower prices B) check out Lidl (never been there) and compare that a bit and C) stop eating lunch at work / at nearby burger joints etc. and instead, make food at home and D) Optimize the fridge. Plan meals and stuff. Seems like that's where the most space is.

Next, I have to pay off a kitchen (5,000 euros left, in 10 monthly installments, though I could do it faster), that'll bump 200 euros off my rent. So that's 700 euros less per month as soon as we pay it off.

I feel that we could then drop our REAL 'fixed' expenses (including food, cosmetics etc.) to 3,000 euros, without feeling like we are actually missing anything. But this means that my Food+Cosmetics monthly spend needs to be around 700 euros. Not sure if that's doable in Germany for a family of 4? Will take some time for sure.

If I could accomplish this, and simultaneously increase my earnings... I'd have a saving rate of above 50-60%. At the moment, my saving rate is quite low. Since the last few months we have used the 'extra' money to buy some 'bigger stuff' that were missing. A good bike, car seats for kids, there were a bunch of bigger, unplanned stuff, airplane tickets, vacation. Still, all of those things would have been stressful and a struggle, had we not cut those fixed expenses down by so much.

I even managed to finally pay of my car (after 5 years). Now I'm thinking what to do with it. I can sell it (since I can't import it to Germany), and buy a used car here in Germany. Or, use the same money to buy a new one (on credit, with a relatively small monthly installment). We feel we 'need' a big/safe car because of the kids, local travel and whatnot. It's just more convenient with kids. But then again, it's not truly necessary and it is a monthly fixed expense, gas, insurance, etc. It surely doesn't make us any money. But, when winter comes, just the thought of cycling to kindergarten scares me.


Anyway, I'm really happy to revisit this forum. I haven't forgotten about it. I was just busy implementing stuff. Now I feel I'm ready for the 'next level', at least, from my current level. Getting ALL real expenses (including food etc.) below 3,000 euros would be a big win.

I don't think that, after this, I'll really have any space to cut more. Unless we move into a smaller apartment in a cheaper neighborhood, which I don't feel would be worth the saving or lifestyle we currently enjoy.

BUYING an apartment might be a saving. Since the current money I pay on rent 'disappears' each month. At least this way, eventually, the flat would be ours and it might increase in value over the years. Though I don't know much about how this works in Germany.

I might be able to save a little on our monthly insurance, but I need to do some tests and prove that we are in perfect health. Which we kind of are, but who is 'perfect' then again. I could cancel my membership (50/month), but I already messed that up and prolonged it for 2 more years. I wish I used it more often, but too busy with work/family.

Thanks for reading this, whoever read it

And a BIG thanks to letting me kind of write this somewhere publicly, giving advice and motivating me to do this. I feel so much better and more in control of life/money and so less stressed about money. Thank you.