Rube's journal

Where are you and where are you going?
rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Thu Jul 04, 2019 12:08 pm

52 weeks - 362 days - target
On my way to home now after a long day: leaving home at 6 AM, back home around 8 PM, about 5 hours in the train and sitting in at a 7 hour long meeting. We were discussing various things which are perhaps going to happen in 1+ years. So I was frequently thinking that this might not "affect" me anymore. As a result I was easily distracted by my private email and so on. I have only about 5 of this specific type of meeting left.

Still a bit annoyed by the difficulties with the contractor and the additional money it will probably cost me. Though kind of accepted it and am prepared to pay the extra money when I arrange (fix) it later myself, without getting to stressed about it. But still trying to get him do it first. I also received the energy label result of the building and what I should do to improve. I need to improve this, as with the current level I can't decide my own rent and I am bounded by the "social housing" rents. Which is (obviously) not sufficient to have a decent yield. Something to look into the comming days/weeks.

Very recently I had my first guitar lesson. I felt like a small child learning to walk or bicycle. Clumsy and slow. People are telling me it is just practicing.....I am dreaming of being able to play the guitar very well. I will decide soon after these "trial" lessons if/when/how I will
continue. But if I enjoy, this might be one the hobbies I am going to pursue when quitting my job.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Fri Jul 05, 2019 1:42 pm

52 weeks - 361 days - target
This was the first workweek of the last year. It passed by...well, quickly.
Today, as usual on Fridays, I worked from home. Nothing really special today, glad it is weekend now. I need to look into some things for one of the new apartments and take care of some other things this weekend. But first, relax on Friday evening.

Quadalupe
Posts: 99
Joined: Fri Jan 23, 2015 4:56 am
Location: the Netherlands

Re: Rube's journal

Post by Quadalupe » Sat Jul 06, 2019 1:49 am

Just wanted to let you know I’m following your daily posts with great interest! Good luck with the final miles.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sat Jul 06, 2019 4:41 am

52 weeks - 360 days - target
Thank you @Quadalupe. Final miles to what looks a first when you start this will be the finish but after some time you realize it is not a finish line, it is not a new start, it is just a milestone. Only afterwards we can conclude how important that milestone was for our live later on.

In the last couple of months attended a couple of meetups for Real Estate, FI and met some like-minded people. It was interesting to notice that some people were of the opinion you had to have a plan laid out what to to after the RE from FIRE. What you wanted to do and achieve. One person who was kind of FI and did RE said he was bored, didn't know what to do. And then we met a few weeks ago with some ERE persons and while listening and chatting with J_, I am not too worried about myself I do not have a fixed plan. On purpose I do not want to have a complete fixed plan, I want to have the freedom to decide what I want to do at any given day. At least for a while. I will need to decompress from a 20 year "carreer" and the last about 10 years "corporate" life. I do have some ideas what I want to do and I am open for "projects later on.
And many thanks @J_ (and @Figmenter), it was a great day when we met.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Jul 07, 2019 1:58 pm

52 weeks - 359 days - target
Sunday evening, end of this weekend. I took care of all kind of things on my "to-do" list, largely administrative tasks. Went out for a bike ride with DW, watched the soccer final (The Netherlands lost from the USA, congrats to the USA) and made soup from scratch with vegetables only.
Relaxing, but the weekends in general and also this weekend, went by (too) fast. Tomorrow a new workweek will starts and....52 weeks will become 51 weeks.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Mon Jul 08, 2019 11:31 am

51 weeks - 358 days - target
Another Monday in the office. Not too much special, no high urgent things, just another day:
Commute 1h15min to the office. Work (staring at a screen typing numbers and letters on a keyboard) for about 8 hours. Well, during the 8 hours there was some water cooler talk about the weekend, I handled a few personal emails, messages, had lunch with a few persons. And commuted back for about 1h.15min.
It was okay, but there are better ways to fill a day. On the bright side though, this will add another 250 euro net to our stash and another day less to the count down.

steveo73
Posts: 1137
Joined: Sat Jul 06, 2013 6:52 pm

Re: Rube's journal

Post by steveo73 » Mon Jul 08, 2019 7:03 pm

rube wrote:
Mon Jul 08, 2019 11:31 am
It was okay, but there are better ways to fill a day. On the bright side though, this will add another 250 euro net to our stash and another day less to the count down.
I like a lot of the people at my job and the work doesn't really suck too bad. The point to me is that I'd rather do other stuff. It sounds like you are nearly done though. Well done.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Tue Jul 09, 2019 6:09 am

51 weeks - 357 days - target
@steveo73 hear hear and thank you. You seem to be not in a bad situation yourself.
For me, some parts of the work are actually very nice, I like to help people, to investigate certain things and It is nice to travel now and then. On top of that I am very independent, I speak with my manager only about once a week for a short time, some emails and I don't have specific fixed time or location I always need to work and it pays well. But there is still the the part of a lot of other work to do which is not really inspiring/interesting/fulfilling and the pressure I feel to always be "on". This takes a lot of time and energy which I then cannot devote to do other things. Now, after this (long) lunch break in which I also practiced guitar, wrote this update, I have to get back to work!

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Wed Jul 10, 2019 4:38 pm

51 weeks - 356 days - target
Busy from 7:00 AM till 11:30 PM: inspection of future rental apartment, work, family obligations, follow up on details for future rental apartment. Almost non-stop busy today. Transfer of apartment less then 2 weeks from now.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Thu Jul 11, 2019 1:43 pm

51 weeks - 355 days - target
There are a couple of highlights/milestones in the next 51 weeks for us. Some personal, some related to work and some financial of nature. Especially for the financial side I have a good overview in excel for our current status and how I expect it will develop over the next 12 months. In the next days/weeks I will probably post a bit more about the plans and milestones.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Fri Jul 12, 2019 1:32 pm

51 weeks - 354 days - target
Friday evening, end of the workweek again. The 2nd workweek since I started this daily journal. Only 26 more of these periods to go (according target).
This weekend I think and post some more about the plan and planning for for the next 12 months.

abn
Posts: 3
Joined: Mon Jul 16, 2018 5:38 pm

Re: Rube's journal

Post by abn » Fri Jul 12, 2019 6:56 pm

Hi Rube,

Hoping to start my journey in the new year (graduation in february) and has just read through your journal since the beginning. Really hoping to follow the same path as you, even though it seems a bit overwhelming to start out. I like the way you managed to go one step at the time and read how you transitioned from "small" savings to buying rentals etc.

Wish you the best for the last 51 weeks. Will follow you posts regularly :)

If you have time, please write something about how you managed to balance the FIRE plan with your wife's lifestyle and having kids etc. It must have developed over time and become easier to do, as NW was increasing quite nicely (?)

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sat Jul 13, 2019 3:26 am

51 weeks - 353 days - target
@abn, I can only recommended to start a journal. No need to wait till 2020, because your journey has already started the moment you became aware of ERE/FIRE, though perhaps you have not realized it.

To your question: our balance of the FIRE plan as a family is, to me, actually pretty straight forward. Our expenses are roughly about the same as the median income for households with kids in the Netherlands. That means, many, many people are spending about the same amount or less then we do. Our expenses have averaged over a 12 month period in the last 7 years between 2500 and 3700 euro a month. Currently we're at 3200 euro/month. So we're not very special on the expense side. And if so many people can live while spending a similar amount or less, then I don't see a reason why we wouldn't be able to do so. You just should not fall for the trap of increasing your spending (too much) when your income is increasing.
A major part of this though is of course my wife is frugal by nature. And so am I. Money have never left our pocket unconscionably. When we spend, even at sometimes "unnecessary", it is deliberate. At some times DW spend money on "unnecessary" things in my view, like presents when we visit people, but I do the same in her view on some other things. And sometimes it is "unnecessary" but we both want it. So this is perhaps not full ERE style, at least not 100% of the time, but this how we manage to make it work for us.
And the other part of the equation is the income. Ours is way higher then the median income for households. It was already good when I started this journal in 2012, but it has only increased further. For me due to promotion, for my DW by switching jobs and the last years we receive a very substantial income from our rentals. All this together makes is that it is impossible for us to not get to a high savings rate.

I assume you don't have a family yet, so no need to worry about that and just realize it is not impossible with a family to reach FI(RE) also. Read the journals and you'll see that each person has their own way. It's literally a journey and along the way you will discover new insights and you'll find out what work and what doesn't work for you.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sat Jul 13, 2019 4:32 am

Financials, in Euro's (and roundest to nearest 1000 on balance sheet).
Currently:
Assets
House 240,000
Rental 1 150,000
Rental 2 150,000
Rental 3 155,000
Rental 4 185,000
Investments (PP) 40,000
Investments (as part of the mortgage) 27,000
Bank and saving accounts 150,000
Other 6,000
Totaal 1,103,000

Liabilities
Mortgage 168,000

Net worth 935,000

Cashflow
Rental income (net cashflow) 3,841
3% from liquid investments and cash 543
Total income 4,483

Expenses (TTM) 3,224
Cashflow margin 1,159


Current forecast July 2020
Main changes planned/expected:
-buying 2 rentals this month with a mortgage. More assets and liabilities. Net more cashflow.
-Changing current mortgage on our own home. Higher liability, more liquid assets, about same net expenses (due to lower interest).
-Saving another 12 months about 75% of rental and w2 income.

This should result in
-Hardly any change in personal expenses
-more net cashflow from the rentals (higher monthly margin)
-higher amount of liquid investments (more buffer for "in case of")

Assets
House 240,000
Rental 1 150,000
Rental 2 150,000
Rental 3 155,000
Rental 4 185,000
Rental 5 185,000
Rental 6 120,000
Liquid investments and cash 364,000
Totaal 1,549,000

Liabilities
Mortgage 240,000
Mortgage rentals 325,000
Total 565,000

Net worth 984,000

Cashflow
Rental income (net cashflow)* 4,468
3% from liquid investments and cash 910
Total income 5,378

Expenses (TTM)* 3,250
Cashflow margin 2,128

*annuity of mortgages are included as expenses. In reality about 875 / month is going towards paying off the mortgages. So "operational" margin is about 3000. Net income is about 64K / year. And including the annuity it is about 74K / year (7.5% and 8.5% return on own equity, not counting any change in Real Estate value).

Of course it means we have higher liabilities with these higher mortgages. But with interest fixed for 10 and 20 years on the mortgages I believe the risks here are very well manageable and with the higher cashflow margin and the much higher amount of liquid investments it will make us financially more resilient then we are currently.

A few other important details, but more difficult to calculate with, quantify and therefore not included in the figures above:
-In about 25 years we're eligible for social security.
-We also have build up additional pension which we can draw from in about 25 years. The value in 2020 will probably be around 100K.
-when kids to college our expenses will increase a lot for 4-5 years. I have "reserved" about 100K in total to support them. We might manage with the cashflow margin, but perhaps we have to draw some from our savings/investments.
-Perhaps we will work some more now and then as contractor or so, or create another source of income.

Risks: 3% ROI in liquid investments?, sickness, non-paying renters, government changing the rules on rentals-taxes, divorce, major set back on real estate etc. We'll al have to see about this, but with about 1 million in equity next year, 10 and 20 year fixed interest on the mortgages, 364K liquid investments and a planned monthly cashflow margin of about 2K (and operational margin of 3K) I believe this is save enough for us as a family to call ourselves FI and continue with the RE part.

That all said, I am interested to receive comments and thoughts of others if this (margin) would be sufficient for yourself, if you would choose for a different setup of any other advice.

bigato
Posts: 1935
Joined: Sat Mar 05, 2011 12:43 pm

Re: Rube's journal

Post by bigato » Sat Jul 13, 2019 8:01 am

Hey, rube. Nice figures that you have there. What are your thoughts on diversifying investments and also on moving part of it to something more passive than rentals?

abn
Posts: 3
Joined: Mon Jul 16, 2018 5:38 pm

Re: Rube's journal

Post by abn » Sat Jul 13, 2019 3:51 pm

rube wrote:
Sat Jul 13, 2019 3:26 am
51 weeks - 353 days - target
@abn, I can only recommended to start a journal. No need to wait till 2020, because your journey has already started the moment you became aware of ERE/FIRE, though perhaps you have not realized it.

To your question: our balance of the FIRE plan as a family is, to me, actually pretty straight forward. Our expenses are roughly about the same as the median income for households with kids in the Netherlands. That means, many, many people are spending about the same amount or less then we do. Our expenses have averaged over a 12 month period in the last 7 years between 2500 and 3700 euro a month. Currently we're at 3200 euro/month. So we're not very special on the expense side. And if so many people can live while spending a similar amount or less, then I don't see a reason why we wouldn't be able to do so. You just should not fall for the trap of increasing your spending (too much) when your income is increasing.
A major part of this though is of course my wife is frugal by nature. And so am I. Money have never left our pocket unconscionably. When we spend, even at sometimes "unnecessary", it is deliberate. At some times DW spend money on "unnecessary" things in my view, like presents when we visit people, but I do the same in her view on some other things. And sometimes it is "unnecessary" but we both want it. So this is perhaps not full ERE style, at least not 100% of the time, but this how we manage to make it work for us.
And the other part of the equation is the income. Ours is way higher then the median income for households. It was already good when I started this journal in 2012, but it has only increased further. For me due to promotion, for my DW by switching jobs and the last years we receive a very substantial income from our rentals. All this together makes is that it is impossible for us to not get to a high savings rate.

I assume you don't have a family yet, so no need to worry about that and just realize it is not impossible with a family to reach FI(RE) also. Read the journals and you'll see that each person has their own way. It's literally a journey and along the way you will discover new insights and you'll find out what work and what doesn't work for you.
You might very well be right about this. Im graduating in early 2020 and my girlfriend summer 2020. We have been conscious about our spending for quite some time now. At least we have had it in our plans to work in the FIRE direction for at least a year. For me i've been tracking spending for approx. 3 years now, but while studying haven't been investing any. But back to your point: I should start the journal now.

We have a 2 your old daughter, and hope for another one in the next couple of years, so that explains why i have been extra curious to follow your path. As mentioned, it can seem a bit overwhelming, and my answer (at least in my head) to this has been to be really obsessed with spending. That just has the potentiel to 'ruin the good mood' back home, as it can be at bit too much for my girlfriend at times. She's likes the idea of only spending on what is most necessary, but to me it's not 'extreme' enough. Hence we need to figure out the balance about all this. I like to se how your journey also has changed perspectives through the 'marathon', and that everything can be solved in the beginning. You gotta start somewhere. Your situation with a couple of rentals, mixed with healthy jobs and a good balance with everything is really what im looking for. And im not even planning on quitting my future job. I just like the idea of not being under pressure to work to survive, but to be able to work with other goals in mind, i.e. interests > financial drivers.

Thanks for the advice and good luck. Will make that journal today, and develop it over time :)

edit, 23.48: Thanks for the kick in the butt, viewtopic.php?f=9&t=10759

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Sun Jul 14, 2019 7:07 am

51 weeks - 352 days - target
@Bigato, I like the steady cashflow from real estate and it is higher then the dividend from a widespread ETF. For the next 5-10 years I don't expect to sell any of the rentals. But I will put future savings likely into a portfolio like the permanent portfolio or golden butterfly for diversification. It's true Real Estate is not as passive as other options. But it is really not that much work and if it becomes work work, you can fairly easy outsource.
And actually, under local tax rules you cannot be very active because then it will be taxed as income (currently it is taxed as "wealth", which is much better for us). In any case, I have thought about it and look at it like this: it might be actually nice to have a few hours a month to do something, but if I don't like it and it feels like a burden, I will give more rentals to a property manager. Thank you for you comment, it helps to think about it even more deliberately.

@ABN, ah, you already have a family! Good you started that journal. I will be following you. I'm not sure if you are located in the same region, but there are now and then ERE / FI meetups, perhaps it is good to join these and see if you can find and share information, specifically for a family.

Thoughts about life after June 30 2020
How to spend my time when I will not have my current job is not crystal clear. First I want to decompress for some time and this includes hopefully a long holiday with the family. How long this holiday might be depending if DW decides to quit around the same time or not, she hasn't decided about this. Even if she won't quit, we might be able to arrange a longer then usual holiday. Something we'll need to look into and decide about later.
But after that holiday, the activities I am thinking about to spend (more) time on are:
  • food/cooking (healthy and nice food)
  • sport/gym (health)
  • learning to play guitar (I read this morning in another journal, I forgot which one, it will be a good activity because it will help to create new neural-connections. I like this additional reason, besides I think it would just be cool if I can play a musical instrument)
  • reading books
  • gardening
  • increase family activities during the weekend (being able to take care of errands during the week should enable us to spend more time together on the weekends, although the question is how much they still want to do with us, now they are both teenagers.
I can imagine this could already fill up on average half of my day (that is, my "previous" work-day). The remaining time can allocated to what I call "projects". I.e. a small/short business project, renovating/building something in house or elsewhere, some free lance projects, perhaps something to do with the environment, or nothing. Just actually anything I like at that moment.

What I should do less (or at least control):
  • screen time (especially phone, netflix)
  • probably other things...TBD
I don't want to have to do things, or at least not making any major/long commitments which could feel like "work". But it is probably better for myself if I make some kind of schedule to do "things" like I listed above. For example, if I really don't want to work-out on Wednesday morning as scheduled, that is fine, but it would at least help me to make that decision deliberately and consider if I just do it later that same day or the next day or cancel the activity completely. That will help me to not doing it because ehm, well it was not listed and I was busy with "other" things.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Mon Jul 15, 2019 11:16 am

50 weeks - 351 days - target
Another day in the office, just an average day.
I am bit stressed if the transfer next week for the 2 new apartments will go as planned. Communication and timing with different parties are not going very smoothly. And most of this is outside my control, which I don't like.
I try to just breath and tell myself it will be okay, even with some hiccups and additional money. I just hope it won't become too bad. Will know more in a little over a week.

rube
Posts: 495
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Rube's journal

Post by rube » Tue Jul 16, 2019 4:11 pm

50 weeks - 350 days - target
Today: woke up, got up, worked from home, end afternoon family came by for special occasion, which was great. It just ended around 11.00 PM. Day went by fast.

Will
Posts: 44
Joined: Sun Dec 25, 2016 5:23 am

Re: Rube's journal

Post by Will » Wed Jul 17, 2019 12:56 am

Hi Rube,
I'm loving your countdown!
One question: how did you find all your rentals? Do you have a contractor for this or did you do a lot of groundwork yourself? We are considering getting a rental as well, but it seems difficult in today's housing market of the Netherlands.
Cheers, Will

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