The green gentleman's ride to ERE

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GreenGentleman
Posts: 14
Joined: Fri Oct 23, 2020 2:44 pm

The green gentleman's ride to ERE

Post by GreenGentleman »

Quick introduction:
Did over a decade of education in Biology, during masters participated in a student competetition which made me realize the career options in Biology aren't for me.
Made a switch with a bootcamp to back-end programmer and worked that job for the past 3 years or so.
The job is alright, colleagues are fun, the time invested sucks (at 36h, next year 32h).

The last few years life accelerated, bought a house this year, grown-up job and all that stuff.
Still negative networth from student loans (0% interest so not paying these off in a hurry).
I've been fascinated with FIRE for the past 3 years (fancy that, when I start my real job! Funny coincidence).
Never liked spending (or earning) money, the dream is not thinking about money at all.

Got a moderately sized house.
Looking to have kids in the next year or so.
Decent income.
No car (cycle everywhere)
Moderate food budget, mostly home cooked.
Girlfriend is on board.
I love crossfit (expensive hobby).

BrainDump
The goal is to track our income and expenses in this journal and provide a dumping ground as we align our lives with ERE. This is the first time I'm posting anything on FIRE on any forum. Why here now? First of this is the first year where I feel we're actually moving in the right direction and because this has been the only place that really challenges my beliefs. Other blogs and subreddits are just confirming my current beliefs, which means I can't learn anything from them.
At ERE as a philosophy and way of life clashes with how I view FIRE and life, this is enormously valuable.
I haven't been through all the resources; I've read a few journals and a couple of blog posts.
What I've read so far fires (hah) my brain like nothing else. E-RE vs ERE, web of goals, anti-fragility to name just a few key words I've come across.
Which has cost me some sleep lately, hopefully this journal will help with putting my thoughts out here instead of having them rumble around my headcase.

My viewpoint on FIRE has always been to get out of working quick by focussing on the financial side of the equation. The classic E-RE approach. We've always been natural spendthrifts because we hate thinking about money and dealing with the hassle of buying something. The effort of figuring out all the requirements and matching that with price and convenience is exhausting. So instead I don't buy or my girlfriend finagles something together.

She's good at the skills side of the equation and I'm good at the financial side. She's working on understanding (and supporting me) on the financials and I'm slowly coming around to learning skills around ERE.

Practicalities
I still want (need) to pick up the ERE book but I'm not sure if I want the e-book or the pocket version. The e-book is almost 30 euro's cheaper but I hate looking at graphs on my e-reader. Any idea's? Help me out making a choice hah. :D

I'm working on collecting all our expenses for this past year and compiling them together. We honestly only have a vague idea what our monthly expenses look like. Our expenses are (normally) around 1500-2000 euro for two people we estimate. Thats a gigantic gulf of understanding our expenses which I'm hoping to bridge.
An additional challenge is the (hopefully temporary) lifestyle inflation, where we bought a house late last year. We spend a lot of amount of money on stucco/paint/couch/bed, building out a homegym and installing insulation everywhere (new windows/wall and floor insulation). This represents a big cut into our savings this year. We're doing everything at once for a very nice ~30% rebate from the government. The goal is to get reasonably close to a energy neutral house. We'll see how close we get. For the next 1-3 years we are only planning to install solar panels as a major house expense.
This is not purely a financial choice but also to reduce or impact on the climate.
From my initial inventarisation of our running costs housing is ~22% of our income. Thats more than I expected. We'r getting new deals on internet and gas/electricity which will cut into it a bit.

Since forever I've had this eronious and strange idea in my head that lentils are not that tasty. Last week, we've made some wonderful dishes using lentils and fancy that I love it. Last weekend we also food-prepped 4 dinners and 4 lunches which hopefully drops our food budget a bit and stops us from ordering in (from perceived lack of time/energy for cooking).


Anyway, this post is long enough now, on sunday I'm looking to post my first update with our financial situation as it stands. I expect we'll have plenty of oppertunity to save more. :lol:

rube
Posts: 686
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: The green gentleman's ride to ERE

Post by rube »

The use of euro and 30% rebate gives me an idea which country your located ;-).
Good luck with the ride!

GreenGentleman
Posts: 14
Joined: Fri Oct 23, 2020 2:44 pm

Re: The green gentleman's ride to ERE

Post by GreenGentleman »

rube wrote:
Mon Oct 26, 2020 1:22 pm
The use of euro and 30% rebate gives me an idea which country your located ;-).
Good luck with the ride!
Yeah, considering the amount of Dutch people here (whats up with that anyway?) I'm not surprised. :roll:

Thanks !

jacob
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Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
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Re: The green gentleman's ride to ERE

Post by jacob »

GreenGentleman wrote:
Mon Oct 26, 2020 11:10 am
Practicalities
I still want (need) to pick up the ERE book but I'm not sure if I want the e-book or the pocket version. The e-book is almost 30 euro's cheaper but I hate looking at graphs on my e-reader. Any idea's? Help me out making a choice hah. :D
Looks like the difference is only 10EUR: https://www.amazon.nl/Early-Retirement- ... 45360121X/
Since the book is written for study and cross referencing, I think paper is worth it. Paper also makes it resellable. Kindle graphs are okay, but kindle equations are horrible. The text is the same, but chapter/sector headers in the book has numbers whereas the kindle uses hyperlinks as per the specs. This might be confusing if some paper-reader refers to section 6.3 and you have the kindle as it would not be obvious from the kindle hypertext formatting what 6.3 is.

GreenGentleman
Posts: 14
Joined: Fri Oct 23, 2020 2:44 pm

Re: The green gentleman's ride to ERE

Post by GreenGentleman »

jacob wrote:
Mon Oct 26, 2020 2:07 pm
Looks like the difference is only 10EUR: https://www.amazon.nl/Early-Retirement- ... 45360121X/
Since the book is written for study and cross referencing, I think paper is worth it. Paper also makes it resellable. Kindle graphs are okay, but kindle equations are horrible. The text is the same, but chapter/sector headers in the book has numbers whereas the kindle uses hyperlinks as per the specs. This might be confusing if some paper-reader refers to section 6.3 and you have the kindle as it would not be obvious from the kindle hypertext formatting what 6.3 is.
Ah, I looked at the Dutch Amazon equivalent bol.com for the price, half of which was shipping costs. I'll get the paper version, since I hate cross referencing and studying e-books.
Thanks !

GreenGentleman
Posts: 14
Joined: Fri Oct 23, 2020 2:44 pm

Re: The green gentleman's ride to ERE

Post by GreenGentleman »

Short update:
I've compiled all the expenses up to august this year, we've managed to spend most of our income on home improvement. :oops: :shock: We were both shocked at the amount of money we spend this year, as we spend 50% more than our income was just a few years ago. Most of these additional costs are my girlfriend getting her drivers license and home improvement. We've agreed to consider this year a 'lost' year in terms of investing and see it as the great spending spree of our adult life. We are not repeating this. :x Frankly, we have no idea how to repeat this as the major home improvement expenses are done 2021.

At first glance I saw my dreams of ERE disappear as I couldn't see a easy way of dropping expenses below 2200/month for two.
That was last night which resulted in a fitful sleep and angry murmurs that I refuse to work full time until I'm 50.

This morning I looked at the numbers again in a bit more detail and added a few missing pieces that I guestimated yesterday. I expect that we'll be able to get expenses down to 2k/month painlessly.
We than looked through the expenses and added up what we could, reasonably, reduce. With that we get around 1700/month for two people. This is the salary of my girlfriend so we could save my entire salary. It would represent a savings rate of around 65% and hope to reach that in the next year or so.

I've got to admit that adding up all our expenses this year was very confronting for us both and that its heartening to realize how easily we can reduce this.
The two main uncertainties for the next few years is costs for children and my girlfriends income. Her contract ends in februari and she's trying to figure out what she wants to do in terms of work. These two factors could still derail our goal of being retired in ~12 years.

I hope that I can now let ERE be more of a slow burn as I've been frantically busy in my head these past two weeks which is not sustainable.
In the weekend I'll post a more detailed breakdown of expenses. :)

GreenGentleman
Posts: 14
Joined: Fri Oct 23, 2020 2:44 pm

Re: The green gentleman's ride to ERE

Post by GreenGentleman »

Goals
- Get the early retirement extreme book and work through it
- Stay and keep fit, I have a crossfit homegym -> use it regularly
- Mealprep for the workweek -> to avoid ordering in and/or eating unhealthy
- Decide what I want to do with regards to work
- Finish insulating the house; new windows early december and wall insulation a few days after. Requires a bunch of preparation
- Finish bike shed to clear space in the homegym
- Track expenses
- Don't burnout...

The above goals are for the remainder of this year. At the moment we are investing ~20% of our income, the rest is going towards insulation. The goal is to maintain this and focus on dropping our expenses next year and consequently ramping up our investments/savings. At the moment I guestimate we need ~12 years to become FI, this is subject to change as we'r going looking to have kid in the next year or so.
Advice regarding kids and saving is appreciated, we expect that saving will be more difficult and that time and energy will be drained. We'll see how it goes.
Right now life is hectic and busy, filled with new idea's about ERE, working on the house and people coming over to help/socialize. We are not looking forward to the next two months with the holidays coming up as well. So, getting through that and out the other side is our priority right now. It means reminding myself that I don't need to be instantly perfect at ERE, its a journey and slowly changing habits build up over a lifetime.
My head wants to change everything immediately, move into a van by the river, eat lentils everyday and sell possessions.
I realize though that this is a strong hunkering for freedom from finances. That the above is not actually my dream.
So the plan is, incrementally change our life, so we end up with a cheapskates life doing what we love instead of just not buying or doing anything.

My motivation is reducing expenses for environmental reasons and financial freedom. Neither of us likes thinking about money and buying.
Up to ~3 years ago when I got my current job both of us earned minimum wage or less while studying on and off for about a decade.
For 6 of those years I lived on ~900 euro's per month and the last 3 years of my study on ~500 euro's per month. I lived together with my girlfriend in a 12 square meter room and shared kitchen/showers.
So the nice thing is, we know that we can live a cheap life now it also needs to be enjoyable.

Short term
Current investments is around 10k, with ~195k mortgage and 55k student debt. The student debt has very generous terms with a 0% interest rate, we are paying this off as slowly as we can. The first milestone will be when we have as much invested as we have combined student debt, this should be around april 2022.
When we have our student debt covered I want to save and explore taking a 3-6 month sabattical.

Medium term
My current plan is to reevaluate work when we hit ~200k networth (excluding mortgage and house) which I expect will be in around ~6 years so 2026. We'd be about halfway towards FI and our mortgage is covered at that point, I expect that is going to be a huge relief and I'm seriously looking forward to it.

GreenGentleman
Posts: 14
Joined: Fri Oct 23, 2020 2:44 pm

Re: The green gentleman's ride to ERE

Post by GreenGentleman »

Alright back, I've been thinking and I'm somewhat nervous about getting doxed. After deliberation I've decided to share some aspects of the journey but avoid sharing networth and some other numbers for now.

October
I went through all the finances of october and set up a new spreadsheet to track everything. Its a bit of a weird month because a bunch of delayed one time expenses were this month. Thee main cost were drivers lessons (girlfriend is nearly done) and healthcare costs (psychologist during my burnout). If I substract these (hopefully) one-time costs, our savings rate for this month is 50%. With these costs its -20%...

The biggest recurring expenses, also looking back for this year, are shelter and food. We'r working on reducing shelter costs through insulation and renegotiating contracts. Food for two people was total ~400 euro's, so 200 pp which I think is high. Over the coming months we are looking to reduce this to ~300 euro's as a starting point in 2021.
Our first experiment is preparing food for the workweek on sunday (food prep), this hopefully reduces supermarket trips and the corresponding luxury food buys.
We do need to get better at avoiding food waste as last week we we're way over-enthusiastic. This week we'r freezing part of the food and made less. We consider it an experiment so we'r slowly building this skill. So far we'r loving the time savings during the work week, leaves us with more energy to train and do other stuff.

In 2021 we'r going to see if we can reduce it further by looking for bulk items and sales in the supermarket. The plan is to take it slow so habits stick.

Next two months will also be strange in terms of expenses as we'll need to pay for the windows that are getting installed the first week of december. We'd consider doing this ourselves but decided against it. If we do it ourselves we don't get the 30% government subsidy and the costs ended up being close. We will likely insulate the floor ourselves.

Social capital
In other news, we'r cultivating our social network in our street. We've borrowed a couple of tools from neighbours (and they from us). One of our neighbours has a car they rarely use, the plan is, when corona settles down again, to sit down with them and set up some kind of car sharing (they are interested). We don't have a car so this will be nice for (eventually) going to the office or trips to friends/family. Currently we use public transport for longer distances and the bike for everything else.
A different neighbour has experience working with electricity meters, both our meters are old and shitty and need to be updated for solar power. He's planning to redo his own meter and we've got a tacit agreement to see if we he can help us out as well. In return, his son can train in our garage gym or we'll cook them dinner.

edit: I've also bought Jacob's book, will arrive this evening.

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