DutchGirl's journal

Where are you and where are you going?
inchicago
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Re: DutchGirl's journal

Post by inchicago » Tue Jan 19, 2016 6:33 pm

That sure sounds like a nice birthday-to have only four more years of work!

steveo73
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Re: DutchGirl's journal

Post by steveo73 » Tue Jan 19, 2016 8:03 pm

Dutchgirl - happy birthday.

I'm in a similar situation in that I think I have 3-5 years hard work and then 3-5 years part time work until I can retire. I'm 42 now though. I just read Jacob's blog post on time and I think it's really relevant. I'm on holidays right now and just being able to do whatever I want to do within reason (I still have to do the shopping and fix the backyard) is how I want to be able to live my life all the time.

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jennypenny
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Re: DutchGirl's journal

Post by jennypenny » Tue Jan 19, 2016 10:42 pm

Happy Birthday DutchGirl!

NickHalden
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Re: DutchGirl's journal

Post by NickHalden » Wed Jan 20, 2016 3:44 am

Gefeliciteerd!

Impressive to be able to retire at 45 in The Netherlands. If all goes to plan of course, but reading through your journal I have full confidence you will reach that goal or at least be very close.

Arno_dutch
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Re: DutchGirl's journal

Post by Arno_dutch » Wed Jan 20, 2016 6:41 am

I have been lurking for a while now and I really like your journal. Since you are close to FIRE (closer than me anyway) how are you accounting for the pension funds that start around age 65 - 67?

And ofcourse congratulations on your birthday
Last edited by Arno_dutch on Wed Jan 20, 2016 6:57 am, edited 1 time in total.

rube
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Re: DutchGirl's journal

Post by rube » Wed Jan 20, 2016 6:43 am

Happy birthday Dutch girl.
My aim is also around 45 ;-)
Let's go for it!

DutchGirl
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Re: DutchGirl's journal

Post by DutchGirl » Thu Jan 21, 2016 11:00 am

Hi, Arno.

I actually see my retirement in two phases: one phase before official retirement age, when these benefits aren't yet available to me (so in my case, probably up until age 70), and the second phase, after official retirement age (70+).

I've been building my social security benefits and my pension plans since I started working, as is automatic and obligatory in the Netherlands. By now, I have enough rights to cover my actual needs from age 70 two times over. (And unfortunately, I still am not allowed to stop contributing as long as I work, sigh). So I consider myself set for age 70 and beyond.

So I only need to work on the first phase, I need to support myself from age 45-ish to age 70. If I use a 4% withdrawal rate in that period, which is considered pretty safe, there is also a big chance that after 25 years I still have (a lot of) money left, which can then still be used in phase 2 to make my life more comfortable (and/or to give money away to my relatives or to charities, whatever...).

So I've calculated how much money I need to get myself from age 45 to age 70, and that's the amount I'll hopefully have by age 45; maybe a year sooner or so, but we'll see.

radamfi
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Re: DutchGirl's journal

Post by radamfi » Sat Jan 23, 2016 2:09 pm

DutchGirl, do you think you will stay in the Netherlands after you turn 45? Are you worried about the 1.2% wealth tax?

DutchGirl
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Re: DutchGirl's journal

Post by DutchGirl » Sun Jan 24, 2016 6:44 am

Yes, I think I will stay in the Netherlands. I want to experience living in other countries too, but say 6 months in Spain (during a winter) and six months or a year in the UK (just because of all the culture and castle ruins and nature and stuff). But mostly, the Netherlands.

I am not worried about the wealth tax, but of course I have to take it into account with my plans.

Hankaroundtheworld
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Re: DutchGirl's journal

Post by Hankaroundtheworld » Sun Jan 24, 2016 7:32 am

Happy (belated) birthday as well, and it looks like you are on track, 45 is a nice age to be FI/RE. What popped up in my mind, are you still going to get kids, or decided to be without? That could have an impact of course. I know, I should not ask that question, many people around us ask the same (as we have no kids, and they all want to know why...), but I meant it more from a FI planning perspective.

DutchGirl
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Re: DutchGirl's journal

Post by DutchGirl » Sun Jan 24, 2016 12:40 pm

Hey Hank, thank you :-) . No, I'm not going to have kids. Not having kids was a decision I made even before deciding to take the FI/RE road. It was a decision I made when I was still single, and luckily I found a great guy who had the same wish. I'm the proud aunt of four nephews/nieces, but I'm always glad to hand them back over to my siblings after a few hours.

Ydobon
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Re: DutchGirl's journal

Post by Ydobon » Tue Jan 26, 2016 4:51 am

I never understood those comments that grandparents and friends made about 'handing them back' until we had our own child, totally get it now :D

I wouldn't swap my life with a child for one without, but my resolve wavers when feeding her at 02:00!

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archi
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Re: DutchGirl's journal

Post by archi » Tue Jan 26, 2016 8:08 am

Hello DutchGirl,

I just read the beginning of your journal when you explain the taxes for employees in the Netherlands, social security, mandatory contribution to retirement and so on... The situation is extremely similar in Belgium and I think I will read your entire journal, which will be a nice experience as it's now covering more than 5 years !

As I live in a similar country (from social security and tax perspective), I have a question for you: once you stop working, what would be your "social status". What I mean is: you will not be an employee, you will not be a freelancer, you will not be a "job seeker", you will not depend on social money... so what is the status of "rentiers" in our wellfare countries ? e.g. do you still have the mandatory contributions to state pension and medical cares ?

(Not sure if my question is very clear... That's not completely clear in my mind either...)

DutchGirl
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Re: DutchGirl's journal

Post by DutchGirl » Tue Jan 26, 2016 3:48 pm

Hi archi,

In the Netherlands, I know that when you don't work, you don't have to contribute to the state pension (AOW), you just have to live in the Netherlands to receive that. (You build up roughly 2% of the full rights for every year that you live in the NL, starting at age 20 or so) . I will not be building my work pension anymore after I quit working. As for medical stuff, when you work, a small % of your salary goes to pay medical care, but if you don't work, you don't have to contribute that. In the Netherlands, everybody is also obligated to get health insurance for roughly 1000 euros premium per year; I would still need to pay that when retired to be covered.

So, I really don't know whether Belgium is that similar. Can you find out, who is eligible for the Belgian state pension? And whether you need to live in the country for that, or work, or ...? And also our health care/health insurance system is probably different enough that there will be different rules for early retirees...

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archi
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Re: DutchGirl's journal

Post by archi » Wed Jan 27, 2016 10:17 am

Thanks for the answer DutchGirl. I need indeed to do some more digging... The info is not easy to find because that's kind of a "weird" status for a Belgian: not employee, not freelancer, not retired, not looking for a job, not depending of social aid ... ;)

DutchGirl
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Re: DutchGirl's journal

Post by DutchGirl » Tue Feb 02, 2016 9:09 am

Here's my January report :)

I switched to using YNAB for tracking my expenses. I bought version 4 more than a year ago, and now I have started using it. I'm not using it completely as I should use it.

For one, so far every month it tells me that I'm budgeting with money that I don't have (because I get paid around the 25th of the month, most expenses are planned at the end of the month, but still plan ahead starting on the first of the month; and because I made most of my investment accounts (which hold a lot of money) off-budget). As I earn more income every month than I spend, I slowly am "overspending" less per month, and I hope to reach the situation by March that YNAB is happy with me, because by them my end-of February income will hopefully also cover all of March's expenses, even when I know I won't have to pay most before the salary at the end of March has been paid.

Secondly, I definitely have some irregular expenses. One month I pay the annual contribution to a charity, the next I won't, but I will need to pay a magazine subscription. Stuff like that. At the beginning of the year I've made an annual budget, and have divided each annual budget by twelve to get a monthly budget. This has also led to some red angry marks in YNAB, because I've overstepped the budget for January, for example for my insurances, which are paid quarterly. I guess by the time I get to April it won't be red anymore and then it'll become red yet again as I pay the quarterly fee in April.

Finally, YNAB thinks investing is spending. If I put money away from budgeted accounts (my bank account) to off-budget accounts (like my investment accounts), it believes I'm spending. Luckily at least in the summary I can say that I don't want to take those kind of "expenses" into account when it calculates total spending for the month.

So while YNAB is giving me all kinds of unhappy faces about overspending, actually think I did pretty okay in January. The only category where I really went over was "fun/extra spending", and I went over by 50 euros which I can and will make up for in February. The plan is to spend roughly 1500 euros/month in 2016, when all is said and done. So far, so (almost) good.

I also met my boss a good week ago, to discuss how many hours I'll work in 2016. We've decided to keep it at 28 hours/week, which is the same as I officially worked in 2015. In reality I worked a bit more hours per week in 2015 (luckily I got paid for them too), which we agreed to NOT do anymore in 2016. 28 hours per week and that's it. If I work more in one week, I have to work less in the next couple of weeks to make up for it. For me, this will hopefully help me balance work and private life more. For me, that's necessary and it's wonderful that it's possible. Meanwhile, in the upcoming year I'll definitely also spend some hours every month helping my boyfriend's business grow and thrive, so it's not like I will get bored :-)

My net worth went up just a little bit in January, due to the stock market going down (and due to me putting in more money, otherwise it would have gone down). I think I have been hovering around 30k in investments in one specific investment account since July now; faithfully putting in more money every month, but seeing it being absorbed by the stock market all the time. Hopefully I'll be rewarded at some point for sticking with it and for continuing to buy more shares (at lower prices, which is nice).

Winter isn't my best season of the year. I notice how I am sometimes down, or very tired. I've been ill, too, it was just a cold but it makes life more of a struggle, even when you still manage to get to work et cetera. Today the sun is shining, and that makes a big difference. So I'm glad that I have the afternoon to myself and can bathe in that sunlight (while inside, because it's still cold out). And I also must remember that life's usually a bit more fun, especially when I'm biking through the rain in the dark battling with the wind...

Finally, I saw an article recently that claimed cars and car transport costs the average Dutch person 600-800 euros/month. I'm generally saving 1000-1400 euros/month; and now I think that a lot of that is due to me NOT owning a car. My train tickets and bike will cost me roughly 140 euros/month, instead. Seems like a good decision, then, to stick with public transport! And luckily it's also possible.

@steveo: nice that we're more or less on the same trajectory. I hope we'll both enjoy it.

belgian
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Re: DutchGirl's journal

Post by belgian » Wed Feb 03, 2016 10:30 am

Hi,

I've been reading and following your posts on regular basis, only now I created an account myself.
Just wondering, why you don't invest in real estate? Property of your own, I assume that also in the Netherlands bank credits are low at the moment.
If you plan to ERE, then you should be able to exclude your monthly rental cost.

I'm living in Antwerp, and my prior is to become debt free, meaning to own at least one property.
And perhaps afterwards buying a second with by renting the first. (If the market allows it)
That way, I would postpone ERE another 15 years, the time needed to cover/pay the second property.

In my opinion paying rent, even the smallest amount, is a waste of money, and time in order to become ERE.

ps: In case you are already owning, then I apologize for not reading your posts more thoroughly :oops:

Kind regards,
Stefan

belgian
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Re: DutchGirl's journal

Post by belgian » Wed Feb 03, 2016 11:02 am

Hi again,

So, I started doubting, and re-read half your journal :-)
I found that you indeed pay rent, to your boyfriend/partner, but rent indeed.

Would it not be a safer choice to become a partial owner of the property, or invest yourself in an apartment that you can rent.
(the rent you can use to pay the mortgage)

This way, when you become ERE, you never become forced in case of 'disaster' (I think you know what I mean) to use your savings to buy at that point... or worse, to pay even more rent someplace else...

I have difficulties to explain my point of view, but I think you get the picture :-)

Rgds

belgian
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Re: DutchGirl's journal

Post by belgian » Wed Feb 03, 2016 11:31 am

last note :-)
Regarding pensions in Belgium, the minimum in order to receive anything at all is 30 active years.
To receive the complete minimum pension you require 45 years.

If for example you have worked 40 years, then they calculate 40/45 x minimum pension.

The complete pension has a maximum and minimum according the average payment you received over your entire career.
And trust me when I say, in order to receive the maximum pension your must have a really high salary :-)

This means, if your quit working before the age of (18+30) 48, you will not receive anything at all.
Until recent, unemployment was calculated as active working years, but from now on it is maximum 3 years.
(finally they start understanding the difference)

Regarding medical costs.
As long you pay a yearly contribution to one of the 3 institution (mutaliteit), they will cover or reimburse the main medical costs (remgeld).
Of course it is advised to pay additionally a private insurance company, so in case of hospitalization all costs are covered.
In case of unemployment, you can request social service to cover the very minimum, but also this is changing as we speak during the asylum-crisis.

Hope the above is clear.

DutchGirl
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Re: DutchGirl's journal

Post by DutchGirl » Wed Feb 03, 2016 12:23 pm

Hi, Belgian, thanks for clarifying the Belgian situation on pensions and medical costs. So, things are rather different from the Netherlands. It's coming from the same idea of socially caring for other people (the elderly, and the sick) by making sure everyone pays into the big pot. However, the organization is quite different from here in the Netherlands.

It is true, my boyfriend owns the house and I pay him "rent". So far, he has paid more costs for this house than he would have, if he had rented a similar place. (I've made the calculations: buying costs, mortgage interest, repairs, homeowner's insurance on one side plus house value depreciation unfortunately, versus rent plus renter's insurance on the other side - he would still be ahead many thousands or euros if he had rented). This is partly because the value of the houses went down. He has been underwater on the mortgage for a long time. Only recently he has become "above water" due to the fact that he is slowly paying the mortgage down. So I think he actually threw money away when he bought the house. He should have stayed a renter, at least until the value of houses came crashing down in 2008-2009.

We may buy a new house at some point (and sell this one). At that point, I will probably become the co-owner. I'm not against home-ownership, but right now the situation is absolutely fine as it is. He is the home owner, meaning he takes on the risk of losing value in the house, and in return also has the profit if the house would ever appreciate in value again.

If the relationship would end, I would probably start by renting for a year or so, and then at some point perhaps buy my own place. If the relationship would end when we co-own the next house, that would cause more trouble, actually. It would mean that one of us would have to buy the other one out, if he or she has enough money to do so, and is allowed by the bank to take on the full remaining mortgage. Or it would mean having to sell the place so that we could go separate ways. There are lots of couples in the Netherlands, by the way, who wanted to divorce, but couldn't sell their shared house because it has been underwater since 2008/9, and who are now forced to stay together in the same house (or one of them rents a room somewhere but is still co-owner of the house with the ex-partner).

So I think a house can be a "blok aan je been", an obstacle. Or it can be a good choice. It totally depends on your own personal situation, and also a bit on the situation around you (economy, safety in your general area, etc).

belgian
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Re: DutchGirl's journal

Post by belgian » Thu Feb 04, 2016 3:18 am

OK. Thanks for the clarification.
Although, I still don't understand that you can become ERE without owning your own house/apartment.
As you are never in control of the property... (maintenance, perhaps the owner sells it, rental price calculated for 2 persons, ...)

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singvestor
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Re: DutchGirl's journal

Post by singvestor » Thu Feb 04, 2016 4:04 am

Owning a house is no requirement for ERE in my opinion. On the contrary, I feel like renting and having a the money in the market generating passive income is much more attractive than having such a large amount of capital tied up in a property. Renting is safer and more diversified in my opinion.

NickHalden
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Re: DutchGirl's journal

Post by NickHalden » Thu Feb 04, 2016 5:04 am

singvestor wrote:Owning a house is no requirement for ERE in my opinion. On the contrary, I feel like renting and having a the money in the market generating passive income is much more attractive than having such a large amount of capital tied up in a property. Renting is safer and more diversified in my opinion.
It might not be a requirement, but I feel ERE represents freedom even more than safety. The inability to modify anything to your house, involuntary yearly raises in rent (in The Netherlands often based on your income), and the dependancy on the land lord when it comes to repairs and complaints etc are very important reasons for me to buy a house instead of renting it. Of course renting a place also comes with the freedom to easily end the contract on short term notice and just leave to another place, but that depends a bit on your style of living. I for one love my house and would hate to switch houses every few years.

belgian
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Re: DutchGirl's journal

Post by belgian » Thu Feb 04, 2016 5:28 am

I'm mostly worried about losing capital. What if you invest in high risks, because a regular saving (deposit) account is not giving more than 0.5% yearly...
If you live off from passive income (interests), and suddenly the passive income is half of what your require to live?

Regular saving accounts changed drastically over the past 3 years in Belgium, and I assume in whole Europe...
4 years ago, you received on a deposit account (saving account) +/- 3% yearly net.
Now, your receive +/- 0.5%

Imagine, you live from the interests, and you have to pay rent... big disadvantage according me :shock:

Therefore, when you are a home owner, you can invest in passive living, solar panels, water recycling, etc...
In case you rent, those investments will not be made by the owner of renter, as the contract can end at all times.
And according to me, it is as exactly those investments that Jacob uses to reduce the monthly costs :idea:

@dutchgirl, are you calculating your ERE deadline with the above?
I've read that you perhaps plan to buy something with your husband, that means using investment money, so less passive income.
(and paying mortgage, so even less passive income to use for daily basis)

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Forskaren
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Re: DutchGirl's journal

Post by Forskaren » Sat Feb 06, 2016 5:36 am

I also rent. A big house can be a big liability when it comes to heating, cleaning, repairs and upkeep.

I am totally unintrested in maintaining a house and garden myself.

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