Rube's journal

Where are you and where are you going?
DutchGirl
Posts: 1038
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Rube's journal

Post by DutchGirl » Mon Aug 25, 2014 1:46 pm

Yeah, I figured it would still be a while. However, the first 100k is definitely harder and most often takes longer than the final 100k needed to get to the finish line.

By the way: as a fellow Dutch person: you probably also have a pension plan, or a retirement plan. Do you take that into account when calculating how much money you'll need? Personally I do, sort of: I assume that when I reach retirement age, my social security and my retirement money will be a nice supplement to the money I can take out of my non-retirement accounts. So I am aiming for a minimum amount to keep me going until retirement age (I guess 70 years) and I count on a bit of retirement money to help me pay for my golden years. I am guessing that it'll be easier for me to work for some extra income (if needed) when I'm 50 than when I'm 70+...

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Mon Aug 25, 2014 2:43 pm

It is very much true, the last years NW is growing much faster as it was before.

Untill now, I have not included the retirement fund, simply because it can't be touched till 67-69 orso and it was only of a little value. However, the value is now close to 30 K, so it is getting more substantial and it is growing with a rate of around 7K a year. So I might add it in some FI scenarios in the future.

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sat Aug 30, 2014 3:23 am

Rereading my Journal

While doing this I noticed that some things happened and changed, but many things haven't. That's okay for many things, but these are not within my own values:
  1. the exercising (biking) I did for a very short while is completely out of the system. While I do think it is important to exercise and maintain your own body and do all you can to stay healthy, I have a hard time to apply this to myself.
  2. Related to the previous point: when I started this journal I stopped my snacking (mainly chips) at night habit for a couple of months. But it is completely back again. I want to change this again, maybe I only allow myself to do this on Friday - Saturday orso.
  3. I haven't read hardly any non-fiction (only finished "how I found freedom in an unfree world" during the holiday). Although I read a lot online, I want to read more real books.
So I need to start working (again) on these points.

Timeframe ERE
I have made several predictions in this journal when we would hit FI based on the expenses, savings % etc. but no real plan, no real date was included.
I think I will change this and will work on a date (age) and include this in my calculations (graphics) in the near future. It will help me to see the progress more clearly and any changes along the way to FI / ERE.

Family and FI/ERE
I guess DW didn't believe (realize) FI/ERE would be possible when I started telling her about it around 2 years ago. Perhaps also because she didn't understand the why (it is normal that people work till like 60 orso, right?). And she is still not as interested in it as I am, but she seems to see it is getting possibly.

She probably wouldn't spend a lot more on monthly basis when I wouldn't be around and I probably would not spend a lot less when she would not have been around. I guess we are both okay with that and don't need to "sacrifice" for each other. However, on our future housing situation I changed my mind gradually and don't want to spend on it as much as I earlier thought would be okay. I mean, I am still okay with a small increase but not to double it or more at this moment where as before I would have been okay with this. She didn't changed with me in this regard, so there were some different expectations between the two of us and we talked about during the holiday. It caused some disappointment but (I hope) also some understanding of the why: I prefer "freedom" above "improving" our housing situation now, and I am okay to defer this for a couple of years.

I guess it would be good for both of us, to make the "time-frame" as explained above and to discuss the details and expectations and review it together like every quarter or so.

DutchGirl
Posts: 1038
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Rube's journal

Post by DutchGirl » Sat Aug 30, 2014 1:14 pm

I think indeed talking about this is important. You probably are slowly making your point / showing that it can actually be done... Perhaps together you can go from there and discuss what direction to take. And perhaps sometimes you need to compromise.

I like how my boyfriend is slowly getting used to having a bit of money. I have some money (almost 58k now!), but he does too, he has some investments for his retirement and he has some money in his business and also in his personal investments. He slowly understands that he can be out of a project for a few months and that that won't devestate his finances. As his stash keeps growing, maybe one day he also reaches financial independence and I can ask him how that feels :-)

PS. I'm also calculating the moment when both of our stashes combined can support one of us - at that point, if one of us loses their job or doesn't get a new project, we could still continue without trouble; that will be a nice moment, too.

PS2. Good luck getting back on track with the biking and with eating less snacks!

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Aug 31, 2014 3:48 pm

100% true, we discussed it some more today. It seems we're getting together again in expectations and the general direction and timeline. At the same time, we need to be able to adjust our selves without too much disappointment or "pain" if the situation around us will change, since a lot can happen in 5-10 years.

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Aug 31, 2014 4:07 pm

August Finances
Lowest!! savings rate since starting this journal, 24% :?

Special expenses: Holiday 1626, Medical of which 550 for new glasses and a new phone of 100. These made up 54% of the total expenses.

August last year was also a very low month, but each month of Q4 2013 was 65% or above. I hope this year will be similar to make up for this very low month.

Despite the low savings this month of 1313, the net worth went up 5076 in total due to great market. Funny to see that the long-term bonds are up about 22% since January this year, I would never had expected that.

Image

Hankaroundtheworld
Posts: 464
Joined: Mon Feb 24, 2014 4:50 am

Re: Rube's journal

Post by Hankaroundtheworld » Sun Aug 31, 2014 4:48 pm

interesting to see this Net-worth going in a nice linear way up, as if it is completely predictable :-) I had the same the last 2 years, and sometimes it looks too good to be true if you predict the next 12 months from it !

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Aug 31, 2014 4:51 pm

@HATW, yes, sometimes I think the same. But since almost all are still coming from savings from us, it seems to pretty predictable so far (apart from job-loss etc.). I hope it is a bit predictable, because my next piece is based on it :D


FI / (E)RE FORECAST
I had this already long in my mind, but the comment of DG and the discussions with DW, triggered to make this more detailed scenario FI / (E)RE scenario.

MORTGAGE "ELIMINATED" SCENARIO
Our mortgage is currently actually not paid off, but for the scenario I have deducted the remaining mortgage of the total net worth and I deducted the monthly interest payments of the expenses to determine the FI expenses. We even might decided to pay it off, despite the penalty we will get it will save us money. We'll determine that in the next comming months.

FI DEFINITION
I keep a range of 25-30 the yearly expenses, e.g. a 3.3% - 4% SWR.

Basic FI is based on actual ttm expenses minus childcare, commuting and some other minor things, no holiday expenses and some savings on transport. I am not really aiming at that, but I see this like a first milestone.

FI is based on the "basic FI" but includes also holiday and some more travel expenses.

FI + dream-house + College includes the estimated additional amount we would need to build our dreamhouse and save for kids education. When we're getting close, I am likely more then okay to work another 3 years for those things.

NET WORTH
The predicted net worth is based on actual ttm increase with a 4% yield. This is the most insecure part as the market has done well lately. But most is still coming from savings so as long as our income keeps steady it won't change too much.

SAFETY OF MARGIN
In this scenario we will be around 45 years when we do have a paid off house + 25-30 years of living expenses. Although I do not count on it, there will likely be some social security and I will have some small pension that we can use when we're around 70 years old (if we even make that..). And we will likely do once in while some (free-lance) work that give some additional income.

TIME FRAME
There is a milestone roughly every 2.5 years. These are steps that I can oversee. It would be great if we could achieve this when we're around 45. Let's see!

Image
Last edited by rube on Sun Aug 31, 2014 4:54 pm, edited 1 time in total.

fips
Posts: 170
Joined: Thu May 30, 2013 9:54 pm
Contact:

Re: Rube's journal

Post by fips » Sun Aug 31, 2014 4:53 pm

If you really look closely, you can even see a little curve in that net worth chart - it's exponential growth :D

I'm wondering if bonds and gold can make up for the next crash in stocks though ... :|

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Aug 31, 2014 5:02 pm

Haha, yes you can see it is indeed exponential growth.

Stocks make only up about 12% of our total Net worth. Even if it would half, we would "only" loose 6%. I am pretty sure even that will be partly made up somewhere else and gives us a good opportunity to buy some good stocks! I would love to buy stocks and get a 6% dividend yield on KO, PG, WMT etc.

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Tue Oct 07, 2014 2:08 am

September update
Wow, September went very quickly (again). I spend 12 days away from home on 2 business trips around Europe. Most weekends were full of social activities.

I was a bit less busy with the financial part of ERE and enjoyed most of my time. Especially the weekend in Southern Europe, exploring the city I was and all paid by my company. And the birthday party of DD of course. It did remind me even more though I would gladly welcome more free time ;)

Journals
Not sure if it is me but the amount of new journals started here looks more then it was a while ago. But I am also missing some updates on the older journals (like MBGI?), I am wondering if some of them have abandoned ERE or just mastered it and moved on to new interests. I must admit, I gave up to read all updates and new journals myself, though I still read many. Specifically the ones of people that are (just) "retired" like Akratic, Spoonman, Tyler9000's, Elegant's, Hankaroundtheworld are getting more interesting (to me). We're still far away from that point but it might help to prepare ourselves what to expect and making timely adjustments. One of things is that we might need to start thinking more seriously about what the "running to" is, instead of only focusing on the "running away from". I've got several ideas, but most are still vague and it might be a good idea to get some more focus/clarity on possible activities, projects etc. I think it will help our motivation (specifically for dw), we can start preparations ahead, it will improve the chance we choose the things that will really improves our lives.

Traveling-holiday's
I have written about holidays' & traveling before. The comment from J_ in Feb this year is still echoing in my head:
I took a 6 week period to travel with my wife and daughter of thirteen to see a big part of Australia, and the next year I traveled with them 6 weeks through the east of Canada (ere style youth-hostels etc). The impact of these holidays is still (30 years later) great. So make it yourself not too difficult to do things you long for, is only what I want to say.
I think DW and I both agree that we like traveling and think it is important to our family. So yes, we'll probably will do some longer and further trips with the family in the future. Even if we do it ERE style, it will costs us quite some more money then the current "usual" holidays. But I won't see this traveling as a recurring cost for the rest of our lives, rather a certain amount of euro's per trip multiplied by a certain number of travels.

FINANCIAL HIGHLIGHTS
Expenses 2115
Income 5985 (5422 regular income, 436 Interest, 64 Dividend, 63 sales)
Savings ratio 65% (ttm 62%). After three low(er) months, finally again on 65%.


Special expenses
Spend an "obscene" amount of 500 euro on gifts this month (24% of our total expenses). No regret though, one part consisted of a practical gift and the other part was given with pleasure (as asked by the receiver a money gift for a specific goal). But we were also reimbursed by employer for 560 for several expenses past couple of months, so I deducted this from the total expenses.
In the end, the net expenses were again (finally) more in line with the average and the goal: € 2115.

Income
The income from regular work is very steady. No real further news on this side.

Net worth
Investments were down a very little, net worth increased with 3635 euro to 346K. I hope to reach 350K next end of this month, but otherwise it will November (unless investments go down).
Net worth increased with 99.5K since starting this journal 23 months ago..

Graphics
Image

Thanks for reading :D

DutchGirl
Posts: 1038
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Rube's journal

Post by DutchGirl » Wed Oct 08, 2014 1:43 am

Nice :-) . Almost at 350k euros net worth... It's always nice to reach a milestone.

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Fri Nov 28, 2014 3:11 pm

Ok, so I haven't made an October update, that means I will make a combined October and November update in one of the following days.

Two main highlights:
As I mentioned in the last update, we were planning to spend some more on traveling/holidays with the family. And so we did. Last weekend we bought tickets for our summer holiday next year. We we'll be going to S.E. Asia. It's still 10 months, but I am looking forward to it.

And, I can already tell that we did indeed hit the 350K in October and are now around 357K for November. That is despite the almost 3K we spend on the tickets. Yes, the market was exceptionally well the last 6 weeks.

More details in a few days.

DutchGirl
Posts: 1038
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Rube's journal

Post by DutchGirl » Fri Nov 28, 2014 3:28 pm

Looking forward to the update. And yes, the markets were kind these last few weeks.

Hankaroundtheworld
Posts: 464
Joined: Mon Feb 24, 2014 4:50 am

Re: Rube's journal

Post by Hankaroundtheworld » Fri Nov 28, 2014 3:31 pm

Rube, I was wondering, as you seem more an exception from Dutch system point of view. Most people in the Netherlands have their pension build-up by (a) social security by 69 or so and (b) company pension plan. As a consequence, most people only save a bit next to this, but not excessive. This is for sure changing, but you seem to be ahead of it. What bothered me for those that want to build up their own pension in the Netherlands, is that the government is treating this "pension" wealth as personal wealth, and will tax it (the 1.2 % in box-3), unless of course, you shield it in a tax-deferred personal pension scheme (and then pay tax on it once you let is pay out during retirement). Anyway, I was just curious how you were able to avoid the wealth tax in all of this. I feel the Netherlands system is not really promoting saving a lot, too much tax penalties...

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Fri Nov 28, 2014 3:47 pm

Thanks both.

Regarding taxation: own primary house value is not taxed at the 1.2%. Also some money that is in a business won't be taxed. As well as some other...eh..items of value.
But you are right, we can't really avoid it for the majority of our net worth.
And I don't like it. On the other hand, if the market does well we don't need to pay additional tax. We'll probably pay around 2.4k to 3K this year orso, but Net Worth is increasing with about 60K. So 'the penalty' is not enough to stop the savings :twisted:

But at a certain point it could be worth it, financially, to move to another country.

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Mon Jan 05, 2015 11:21 am

Ok, so the planned update to be posted a few days after end of November turned into about 5 weeks...that makes it a quarterly update.

UPDATE October, November and December
It was October that this journal entered the 2 year mark and, although I still keep track of all finances, we’re moving towards (e)re more or less on auto-pilot. Of course we take certain decisions on purpose and we consider some ideas carefully, but the day to day stuff just goes automatically. Most likely because we simply always have been frugal and it always has felt as a waste to me to spend money on certain things as most people do. We just spend what, in our view, is needed and what we think is worth it. With the (E)RE in mind, we have just optimized it further and gotten more understanding of our goal(s) and how/when we might be able to reach them. As mentioned before, it is like a marathon. Slowly but steady it goes.

January non-financial
I'll leave in a few days for the annual company trip to Hong Kong and planned to meet a ERE forum member in the weekend.
When work is finished, I will spend a few holidays in SE-Asia. Since the company paid the ticket to Hong Kong my cost for these holidays will be very limited. All in all I will be 2 weeks away from home.
I look forward to this, but I also know that at the end of the trip I look forward to go home. Not so much to be "home", but be back with the family and stop traveling.

FINANCIAL HIGHLIGHTS
Calculations
Previously I deducted “kids expenses” with a tax benefit we received for a couple of years. But because that that tax benefit will end now, I decided to change the calculations and treat it as additional income. That way we’re able to compare and check details better. It doesn’t change the amounts we saved, but it did decrease our ttm savings rate with 2%. DW will start working 15% more as of January, so the end of the tax benefit will likely be offset with the higher income and it will likely not affect our future savings rate.

Mortgage
We have paid off another 10% of our mortgage January 1st, yeah! I also checked what the penalty would be if we would pay off the remaining mortgage all at once, but it was way too much to make it worthwhile. So we just will pay 10% each year for now.

Permanent Portfolio and other investments
I moved 20K from some savings to the Permanent Portfolio and also bought for about 5K individual stocks as part of a separate (small) Dividend Growth Portfolio. Not sure if I will continue with that though, too complex for me and I do not think that (at this moment) I do have enough knowledge (and time) to beat a broad index fund.
As of January I am planning to put investments for the Permanent Portfolio more on semi-autopilot, every month the same amount at the same time. This should help me to prevent the monthly savings pile up and actually to decrease the amount in savings and checking accounts.

Expenses – income – savings ratio
Expenses October 2094
Expenses November 1949
Expenses December 2708
Income October 5659 (5518 regular income, 141 dividends)
Income November 7024 (5516 regular income, 1240 interest, 205 dividends, 63 sales)
Income December 6264 (5694 regular income, 418 interest, 87 dividends, 65 sales)

Savings ratio 63%, 72% and 57% (ttm 61%)

Special expenses
Per previous post, we bought plane tickets for the next summer holiday. Costs was almost 2700, more than our average month expenditure….I have included 10% of this in the November and December expenses and will do this for the next 8 months coming.

Furthermore we bought a tablet and some clothing in December and had some more expenses then usual on gifts. Also we donated some charity and had a once a year insurance costs. Expenses seems to be creeping up now and then, but I am still satisfied and just keep an eye on it.

Income
Income from regular work is very steady. Annually Interest in November was from our CD’s, these will run for another 4 years.

Net worth
Net worth went from 345K in September to 357K in November, despite having paid almost 3K for the plane tickets. The market “gave” us almost 5K extra compared to the normal month on month increase. And in December our net worth rose another 4K despite spending more then usual.
We ended the year at 361K. We're happy with that.

Coming months financial
From January on our income will change a bit (wife works a bit more, changes in tax/pension, benefit) and a little in expenses (paid off 10% of the mortgage). But it will probably take a few months before the exact changes are clear.

I Expect around February a (for me) considerable bonus due to a good result of the company. And I hope also to get a small annual raise around then.
If there are no major changes in the Market I expect we should go over 370K in Feb. From that point I might be focusing more on our Net Worth excluding our house which should be then around 200K.

Graphics
Graphics follow soon (I will really try... :) )

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Tue Jan 06, 2015 3:25 am

The graphics...
Despite the expenses are creeping up (at least, that is what I *feel" and I want to have them down instead) the graphics and savings rate is okay with me:
Image

Note: the 10% paid to the principal of the mortgage was done at the 1st of January and not visible here.
Image

Note that regularly money was (and will be) added to the different components and therefore this is not representative for "the" standard EU PP.
Yield is calculated as (((current value + dividends) - actual investment & costs) / average invested money since the start))
Incredible how much the LT-bonds ETF's have increased in value.
Image

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Fri Mar 20, 2015 11:30 am

I'm late again for the monthly, so it will be a late January and February update combined. I will be including less financial details from now on anymore as I think it is not adding too much information and I don't need it for myself. But I will keep on posting the main graphics and major happenings.

Went to Hong Kong in January on the annual business trip. Met forum member Hong and a friend of him over there. We had a good walk and chat, I liked it. Thanks Hong! Had a short holiday thereafter in SE Asia which I loved, even though I spend too much (again?). Next time I want to do it more ERE style. Also went on a local business trip in Feb. All in all still 3 weeks away from home in 2 months. I like traveling mostly, but I don't mind it will be a but less the the next months.

DW seems to be more and more convinced that (E)RE is feasible and we starting to talk slowly about what we will do when the day is there. Perhaps the graphics and spreadsheet helped :-). The market went up a lot, which is nice but I need to be cautious and prepared for similar or worse decline sooner or later. But we're nearing the 400K mark rapidly. Our monthly expenses are creeping up, but after August I expect we can get them slower a bit lower again.

I am planning to make this month a small raised bed in the front yard to grow some vegetables and fruits according the square feet garden principle. Maybe I will post pictures of it in the other thread when it is a success :-)

Image
Image

Quadalupe
Posts: 59
Joined: Fri Jan 23, 2015 4:56 am
Location: the Netherlands

Re: Rube's journal

Post by Quadalupe » Sat Mar 21, 2015 5:21 am

Good job rube! It looks like you're getting there slow, but steady :) Nice to see that you are close to the 400K, your 'basic FI' level. I have to see, it's very encouraging and inspiring for a young fellow like myself to read how fellow Dutchies like you, J_, Henk and Dutchgirl try to achieve FI, each through their own means and philosophy. Keep it up!

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Mon Mar 23, 2015 11:27 am

Unfortunately, the "basic FI 400K" mark was excluding the housing, while the total net worth posted above was including our house...I wasn't very clear about that :? . So we're probably still about 2.5 years from the "basic FI" probably, but no complaints. We're going slow (compared to some others here) but steady.

Please tell us a bit about yourself if you wish. Maybe we should have a meet-up somewhere in NL in spring, as it seems there are quite some Dutch people now here.

On another note: we're looking into the option to buy a rental. With the high prices compared to the rent it's quite difficult to obtain a good yield overhere, but I think 7% net would be possible. And I know it will come with some work and cons, but I would like the steady flow of income and something more "physical" compared to the PP.

rube
Posts: 434
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Mar 29, 2015 3:58 pm

I have send an email today to terminate our cable.
We still have netflix and the 3 free public channels.

The (direct) saving is only 10 bucks a month, but it should help (mainly me) to avoid watching too mamy useless programs and commercials.

simplex
Posts: 183
Joined: Sun Sep 04, 2011 9:28 pm
Location: NL

Re: Rube's journal

Post by simplex » Mon Mar 30, 2015 2:30 am

@rube A meetup in spring is a great idea. I can provide a place with campfire, free sauna, and basic food/drink. However it's not at a major "verkeersknooppunt". So maybe some place around Utrecht would be a better option?

J_
Posts: 528
Joined: Tue Nov 01, 2011 4:12 pm
Location: Netherlands/Austria

Re: Rube's journal

Post by J_ » Mon Mar 30, 2015 6:02 am

@rube ok I am in for a meeting, can come to simplex place.

reepicheep
Posts: 202
Joined: Mon Dec 29, 2014 7:45 am

Re: Rube's journal

Post by reepicheep » Wed Apr 01, 2015 5:16 am

I'm not Dutch, but I'd try to make it to a meet-up!

Post Reply