Rube's journal

Where are you and where are you going?
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Family father
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Re: Rube's journal

Post by Family father » Sat Apr 01, 2017 5:11 pm

rube wrote:
Fri Mar 03, 2017 1:45 pm

Next month this journal is running 4.5 years. Though my journal might no be as graphical (C40, Cmonkey) or well written (ehm, almost all others haha) I hope it helps/inspire others who are just starting out, especially those with Families as this means in many cases some additional challenges.
It surely does to some...

Thanks for sharing, rube!

rube
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Re: Rube's journal

Post by rube » Sun Apr 02, 2017 1:32 pm

Thanks @Ffn

Quick update: NW 524K. About 5K increase.
Expenses were high (3354) due to buying some things for the kids (bycicle, furniture) and advanced payment for a new bed for us (which was really needed) among some other things expenses. Savings rate of March was still 66%, Feb was 80%. TTM 68%.
We're plugging along....

rube
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Re: Rube's journal

Post by rube » Thu Aug 31, 2017 2:06 pm

Almost 5 months, since my last update. Much longer then I planned.
It's not that I do not read the forums*, because I check it several times a day. But I have some fatigue in posting here. Somehow anything that is not really, really needed (according myself or family) and which takes an attention span of longer then 15 minutes on the computer and is not for work, is getting hard. In general, I do things (see highlights), I do actually quite a lot, but after work in the evenings I feel often tired, apathetic and unless I have a deadline I'm not very productive (read: watching netflix too long, reading blogs on my phone etc.). I am really longing for a time when I don't need to stare at a monitor for 8 hours a day, 5 days a week. So that I can start to find the energy again to get interested in new things and have the energy to actually do them. At least, I hope that having more free time will bring this back to me. I expect so, but you never know till you are there.

All that said, some highlights of these last months:
ERE Meetup in NL in May, was great to see several members again. Same goes for the meet-up in Toronto in June.
Transfer of the 4th apartment, get it ready, rent out. So far this was the rental which required the most work, I mean a LOT of work in a (stressed) time span of about 6 weeks. Several business trips, some overseas, some within Europe. Painted the house interior, started to working on the outside. A great holiday with the family. Some very intensive periods varied with some (more) relaxing week.

Financially, expenses are creeping up (kids getting older, needed to replace certain things) but still acceptable. Income from work is increasing much more. And the free cash flow from the rentals is, now with the 4th included, even about 120%/130% of our average monthly expenses. This is excluding vacancy, management, maintenance of the interior though. Nevertheless, it feels great and we could probably manage if we would stop working now.
But I'm not where I want to be. During the holiday I thought about trying to stay on for another 30 months, but soon after the holiday I decided to go back to my latest previous target of 24 months (summer 2019). Going on longer might provide more buffer and possibilities, but the freedom to do other things is stronger.
It is getting more difficult to give an accurate net worth number because most of it is in real estate now. A rough estimation is at least 545K, but it could be even around 635K if we would be able to sell all well since the market is very hot. Net worth is becoming a bit less important though as I am looking mostly at cashflow now. The fact that we now can live from the rental free cash flow means we save both our salaries and a bit from the rental income. Projected savings are now as high as 100K / year. IT. FEELS. INSANE.

*though I stopped reading all journals. After 5+ years also here some fatique, when new people are starting their journals is often generally more of the same. That is not meant unkind, but often it's the same, just a little different. Therefore getting less interesting to me. I keep on following several journals that are going on for a longer time and several posters (C40, Dutchgirl, J_ , I liked your latest post about the last 20 years a lot, Henk. Bluenote. And Jason (wow, you have a ehm, special way of telling things. I like it). And...also others who I now forget which I shouldn't. But in any case I do no read every new topic/journal anymore as I used to do.

Well, that's it for now. in 2 months this journal is running 5 years already. Speaking about a marathon (Zalo/Olaz/Tophatfox are you reading this!?)

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Sat Oct 07, 2017 3:14 pm

:-)

Glad to read something from you, and glad that you're doing okay.

I am more and more planning to have some income during retirement. Unrealistic to think I'd never earn a cent again. More likely that I'd earn a couple of thousand euros every year. Side income, projects as a contractor, stuff like that. I'm thinking the same is probably true for you?

rube
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Re: Rube's journal

Post by rube » Sun Oct 22, 2017 4:07 am

Hi DG, yes very likely the same for us. It seems to be in my DNA to always see if there is an opportunity to monetize something. I remember when I was around 10 years I already bought old bicycles, repaired them and sold them. And in one way or another I have always done this besides my main/traditional work. I would prefer though to have the option to be able to choose anything to do, even if it would not make a dime. I am wondering if I can do this.

rube
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Re: Rube's journal

Post by rube » Sun Oct 22, 2017 5:01 am

My journal is today........5 years and 1 day :D.
165 posts and 32356 views since the start.

Some highlights from the post 5 years ago compared to our current status and progress:

We got all 5 years older (luckily, and all in good health so far). Went from small kids to young teenagers :geek:
Still living at the same place
Combined we’re working a few more hours due change of job of DW
Net worth went from 245K to around 560-600K (conservative estimation based on today’s hot real estate market)
Our savings rations went from around 60% to 70% (this includes income from our NW, i.e. rentals).
Our income went from about 6300 to 12000 per month (projected 12 months income, includes income from NW, i.e. rentals)
Yearly savings went from about 45K to 100K (projected 12 months)
FI estimation 5 years ago was 9.5 years based on 4% WR. At this moment the rental income is covering currently our expenses. Based on expenses and NW we’re currently around 6.5% WR.
Our current target is 22.5 months before we declare ourselves fully FI with a NW of 800K and we will very likely start to "pursue other interests". As you can see, we're counting down and up.....

Will a NW 800K be enough for a family of 4, where 2 kids will likely go to university in about 6-8 years, we have a dream to build our own house etc.?
Nobody knows for 100%, but I am fairly confident we can make it work. One way or another, without going back to work FT / long term. By then (43 y/o) it will be simply time to do something else, time and life it too precious to keep on chasing an ever increasing higher security.

We have by far not fully implemented all the principles of ERE, but we have several and make mostly deliberate choices when we don't follow the ERE principles (don't ask me exactly what they are, we have another thread for that). But compared to others (especially in the same income situation) we're probably in the absolute top of being effective / ERE a-like.

Now my last serious issue, according the statistics (as Jacob once said) it turned out that people become FI after around 250 posts. That means I still have about 90 posts to go, which is about 1 every week for the next 90 weeks to make my cowntdown work. This is far more then the rate of 16 posts over the last year in my journal :o.
Oh, well statistics. I fairly sure the standard deviation is very high so 22.5 months still work out with the current posting rate :D

Thanks all for reading and even more so for posting many of the interesting updates in journals and various other topics.
Last edited by rube on Mon Oct 23, 2017 12:22 am, edited 1 time in total.

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Mon Oct 23, 2017 12:05 am

Given how I'm already beyond 250 posts and nowhere near FI, please, Rube, help me keep the average intact :-D

You're doing well and that's great!

Hankaroundtheworld
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Re: Rube's journal

Post by Hankaroundtheworld » Tue Nov 07, 2017 5:13 am

@rube : great progress! Question, how do you deal with the (virtual) capital gain tax in the Netherlands? Are there any constructions to lower the impact?

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Tyler9000
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Re: Rube's journal

Post by Tyler9000 » Tue Nov 07, 2017 11:02 am

rube wrote:
Sun Oct 22, 2017 5:01 am
Now my last serious issue, according the statistics (as Jacob once said) it turned out that people become FI after around 250 posts. That means I still have about 90 posts to go, which is about 1 every week for the next 90 weeks to make my cowntdown work. This is far more then the rate of 16 posts over the last year in my journal :o.
Oh, well statistics. I fairly sure the standard deviation is very high so 22.5 months still work out with the current posting rate :D
Why wait so long? Just make 90 posts in 90 days and retire by February! :D

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Re: Rube's journal

Post by jacob » Tue Nov 07, 2017 1:10 pm

I think the number was 500. There's still time.

rube
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Re: Rube's journal

Post by rube » Sun Dec 24, 2017 8:34 am

@DG: Good news: according Jacob it was 500 posts! And I have waited on purpose with this post till the end of the year so the average is not increasing too much ;-). Hope all is going okay with you, your BF and the new house etc.

@HATW: thanks. Rentals are taxed below the fiscal value (WOZ) because they are supposed to be of less value due to the renters protection. It is depending on the exact situation but I believe in our case it was last year 85%. So in case the rentals have a WOZ value of about 700K, you can calculate with 85% of that and it comes to about 595K NW.

Then, assuming (once) your income from work (box 1) is zero, you can use the "heffingskortingen". See https://eerderstoppenmetwerken.wordpres ... -vermogen/
note that this is from 2016 and not up to date but it gives you an indication that tax is only about 2K.

At this moment WOZ is behind to the actual market value, so market value could even be say 900K, fiscal value is 700K, taxed value is 595K and when no box 1 working income you would pay only 2K taxes on your assets. And no rental income. Of course WOZ value will catch up (or is also lagging in case market value would go down).

I don't think that is too bad. There are still ways to lower this btw, like move your mortgage on your own home to box 3, to lower you assets that are taxed, because your own home will be then taxed with a slightly lower percentage. But this is all very depending on your personal situation etc. And keep in mind that government will always make changes so nothing is forever.

Ofcourse we work at the moment, so we have to pay more. Well, it is what is for now.

@Tyler9000: hahaha, yes, I wish it would be that simple (thanks for your great site btw)

@Jacob: 500?! I thought my memory was always very good, but it seems I overestimated it's quality. I hope I don't overestimate my ERE skills in a similar way :?

rube
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Re: Rube's journal

Post by rube » Sun Dec 24, 2017 8:53 am

20 months out at least, per current target (copied format shameless from M741's journal).

Financial Highlights
NW around 610K (after adjusting estimated value of our RE, still on the low/conservative end at this moment).
Savings ratio 70.7% TTW (that is including net rental cashflow)
Net cash flow from the rentals covered this year exactly ( plus minus a few hundred) our total expenses this year. It means we were able to save both our full incomes.

Next 0-6 months
buy a home where we want to live the next 20+ years. This is challenge with all our wishes and a hot market.
I want to buy now and make use of the extremely low interest rates. After we have quit our jobs, we won't be able to easily get a mortgage anymore.

Next 6-18 months
Buy a few more rentals (leveraged this time). Another challenge in a hot market. If we can't find anything with the yield we require, we need to wait/look for other investments and perhaps work a bit longer to make up for it. I am eager to start active looking already, but for these we would need a commercial mortgage and that might not work with a new mortgage for our own home (at least not with the conditions I want etc.). So first need to find a new house for our selves.

Happy holidays and best wishes for 2018 to all ERE members!

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Sat Jan 13, 2018 4:19 pm

Hi Rube, as for the mortgage, would there for you be a way to:

a. borrow money from your parents or other family members for your home mortgage? (It is called familiebank in Dutch)
b. borrow money from your company (this is also possible - if your company has cash, you can borrow it to pay for the house, as long as you create a contract and pay your company interest, etc).

PS. if you do a or b, the people or business lending the money to you do NOT necessarily need to get a claim on the house (hypotheekrecht). If you want more details, send me a message.

I'm glad to read that things are going well. And yes, this isn't really a good time to buy a house in the Netherlands (or at least, in the Randstad). Hmm, have you thought about moving to a different part of the country? That could be an option, although of course it has its disadvantages too.

rube
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Re: Rube's journal

Post by rube » Fri Mar 30, 2018 7:46 am

Hi DG, re. the home mortgage: no chance on the familiebank and my company did not had any cash (company was dissolved recently).

Update after 3 months:
16 months out per current target*

Financial Highlights
NW around 635K**. +25K since Jan.
Savings ratio 71.0% TTW***. +0.3% since Jan.

Next 0-3 months
Previously: buy a home for the next 20+ years in the next 0-6 months.
Current: We found a house and have reached agreement with the seller. But there is still a reasonable chance the deal will fall through. We will know more between now and the next couple of months.

Next 3-15 months
Same as before: Buy a 1-2 more rentals (leveraged this time), but only if the numbers are work and the risk is acceptable
New: improve physical health

Health
I got a painful back injury a couple of months ago. It is still not 100%, but recently made great progress after therapy and going to the gym. Proved (once) again that health is so very important. I want to continue my current exercise program, also when the injury is gone. Discipline, discipline...
So far I went 7 times in the last 14 days, I want to keep going at least 3 times a week.

(In)security and when is enough, enough?
If we would stay (no chance!) in our current house, our WR is likely around 4.5% 16 months from now. But if we buy the (or "a") other house, the WR is likely to go up to 6%. And we will need (a lot of) money for remodeling the house and we have 2 kids who probably go to college 6-10 years from now...

On the other hand, net cashflow from the rentals will cover almost all expenses (we have around 8% yield). In less then 25 years we will receive social security (assuming it is still there) and a small pension. We can cut costs and we can earn some.
Even if we see we will be short each month, it is probably fairly easy for us to cut some costs and earn some to get it in balance again. But it might not be as simple to get a good paying job like we have now, especially not if we're out of the field for a couple of years. Or, we stumble on something and start making again a lot of money....

Or, worse come to worst, we loose half of our NW, we need to move back to a a not so nice house, and we can still live easily and happily with some parttime job. But I don't want that, it would feel like a failure to go back at 55 to a low paying part time job.

Based on reading here and other forums, the feedback of others would likely be "no way you can make that work" to "sure, that's more then sufficient".
I guess I have to trust my own calculations, our own specific relevant scenario's and resilience to adjust plans when needed.

In 16 months from now, we might suggest to our employers we work 16-20 hrs a week for a while. I prefer not, but I could see this as an option to slowly move to full ERE (well, full, we are already > 40 y/o...)

One way or another it is very unlikely we'll keep our current jobs much longer then 16 months in its current way.

Thanks for reading this rambling Friday afternoon post :D


*depending on the market and the final house we buy this could be a bit more, but unlikely to increase with more then 9 months.
**NW estimation is based on slightly conservative estimation for our RE.
***incl. rental cashflow
Last edited by rube on Fri Mar 30, 2018 4:41 pm, edited 1 time in total.

J_
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Re: Rube's journal

Post by J_ » Fri Mar 30, 2018 12:54 pm

Things are going well Rube! Wish you good result with your exercises for your back. I start next week with rowing. With a rowing club in our city. First instruction in one with four, later you are allowed to choose other types. Should be good for the back and you are in nature. Something for you too?

rube
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Re: Rube's journal

Post by rube » Thu Apr 19, 2018 2:41 am

Health
@J_ thnx. Back is not completely over but getting better.
Exercise in nature would be better/nicer, but harder to combine with my current work schedule. For now I stick to the gym. I failed to go 3 times last week, partly because I was traveling for work. I still went once at least.

Work
I got promoted and received a nice salary increase of 16%. That, together with some nice business traveling, a slightly different attitude (don't take things always to seriously, see it as a journey) and the nice weather....the job feels actually quite nice. Also with some nice business travels comming up. To be honest, the job is fairly (very?) easy. I am not being pushed to deliver specific results, I just need to do a couple of things, at least that is how it feels to me. It is just it is taking so much time.....

Finances
I got the biggest bonus ever. And ofcourse the salary increase. That combined with the 4th rental income since last July and the salary increase of the wife last year months ago, makes that our income this month will be the highest ever.
Spending kept creeped up last year but seems to be stabilized now.
Savings rate ttw is 70+%

Part-time ERE/ golden handcuffs
I was already being paid well (compared to local peers) and this only became better with the promotion. Realizing how easy the job is and the amount of money I get, it now started to feel like the 'golden handcuffs'.
And seriously, depending on the future housing situation and it's cost, I am playing with the thought to work a bit longer :roll: .
DW would stop though and I would continue for a while, perhaps part-time (3-4 days). We decided to re-evaluate when the time is there as a lot can change in a year and a bit. It is depending how I feel about the job (currently good), we have a better view on the remodelling cost of the potential future hoise and/or the possibility for DW to work remotely part time.

So far this update during my commute.

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Fri Apr 20, 2018 9:45 am

rube wrote:
Thu Apr 19, 2018 2:41 am
So far this update during my commute.
I hope you weren't driving a car when you typed all this :lol:

It looks good. Congratulations and well done on the raise. And I'm glad to hear that your back is doing better.

And indeed, you can look at your situation a year from now to decide on how you'll shape your life from then on. I think there is a lot of value in one partner taking care of the household tasks and the cooking while the other one is still working parttime or fulltime. I think it will reduce stress in both of you (as long as neither of the partners hates their share of the tasks).

rube
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Re: Rube's journal

Post by rube » Tue Jul 03, 2018 12:51 am

Haha, no I wasn't driving myself :lol: . I use a shared chauffeur (train). Also this update was typed during travelling to me meeting (using a train)

Health
Pain in back/leg still not gone :-(.
Most weeks still exercising 1-3 times a week (but skipped a few weeks to be honest). If it doesn't get better, I might need therapy again (or something else).

Work
Work is busy. But okay. I don't love it but certain aspects are (very) nice. It is just keeping me from doing other things as it takes so much time (and energy). Since the last update I travelled both overseas (9hr time difference) as a domestically (short flight/drive). And will travel again in September overseas (hopefully with an ERE meetup like the previous (4?!) years.)
Going from no direct reports to 3 in less then a year. Nice to experience and develop myself, but I would not be happy to have to lead a large group for a long time.

Finances
Mostly on auto pilot and not much change in trends from previous updates (spending more, still saving a lot).
Net worth is probably around 700K (with the crazy real estate prices I upped the value again, trying to be still a bit conservative though)
I am not too much looking at NW though, more at free available cash (liquid savings) and net cash flow from the rentals, which is going nicely and is now covering for almost a year all our expenses.
Which means we were able to save our full w2 income. Savings rate ttm is around 71%* and 110k* in absolute terms. We're saving in absolute numbers about 3.6 times as much before we started this journey 6 years ago.
*based on the net/free cashflow from the rentals and both our incomes.

Holiday
We will spend A LOT on our summer holiday this year. Like in 20% of our total annual spending. It is very deliberate though, and we all look very forward to it. I only feel bad for generating so much ghg flying all the way to SEA with our family...

AOB
DW does not hate her job but doesn't like it either. She has regularly difficulty to feel good as she feels she let people down (kids, me, family, coworkers) while trying to juggle all the balls and not giving everybody the attention they need (according her). I think it is mostly the "mother-syndrom", but ofcourse it will become easier when she quits. I told her countdown is started, less then a year to go for her at her job. For me, same a reported before: will evaluate continiously and decide in may-june next year.

As I wrote before, when is it enough? I am so used to save so much, so easily, that it scares me to "throw it away" because when I finally have more time again I might want to do X which is costing Y or C happens which will cost Z. And Y or C now only takes one or a few months to save, but might take one or many more years later on to generate. The OMY syndrome....

Life is good to us though. And I love the summer.

NickHalden
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Re: Rube's journal

Post by NickHalden » Wed Jul 04, 2018 5:01 am

Great you took the time to update again.

The only thing I would like to add is something I heard on a biggerpockets podcast a week ago - you probably do not want the money itself, you want what money can bring you. Like the vacation you mentioned. Of what use is a million euro's if you still work a 100 of hours a week right?

Maybe you could make a list of things you'd really want or want to do when you 'retire', even though they might not be ERE. I for one love woodworking and traveling so that is probably what I would do when I quit my IT-job. And I love cars, so on my list is an expensive BMW M2 (or i8 :lol: ). I am already covering my mortgages with rental income so I am now trying to figure out what I need in passive income to cover additional expenses and above mentioned stuff. Sort of answers the question 'when' enough is enough. Might be somewhat controversial in this forum but just my thoughts.

herp
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Re: Rube's journal

Post by herp » Thu Aug 02, 2018 4:00 am

Hi rube,

I just discovered your journal, and I've only skimmed it so far, but it's been very inspiring to see the rapid progress that you've made.

I hope you continue to make updates in the future, even if they won't be as common as in the past.

Best of luck towards hitting your goal!

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