Wizards' journal (ERE in Denmark)

[wizards]

@euruka

Thank you.

It might very well be one of the reasons.

For me the transition from full time (+37 + commute) to part time from home has been the right choice. But after doing this 2½ years, it might be time to a change - but still not sure if and when

[BadHorse]

Impressive as always, glad it's going so well!

If you really get nothing but the money out of the part time gig, then it does sound a bit pointless when you don't need the money. Do you think there is any potential value to maintaining some sort of connection with the job market? Like CV or up-to-date skills, if you'd ever want it?

[wizards]

Thank you

Think I wanna do some kind of for/against list for a start.

CV / connection with the job market - there is a value here, but not one that I personally value much..

[abkjaer]

@wizards

Hi wizards,

I am a journalism student from Denmark, and for a radiopodcast I am looking into the whole ERE-movement, which I find exciting. I have been talking to a few others, who follow the same principles, but from your journal here I can see that you are at a point, where you are financially independent. I would love to talk to you about your journey and hear, what striving for ERE has meant for you.

You can contact med via email eajensen@mail.dmjx.dk or on the phone 2989 5489.

First of all the interview is for research and I hope to hear from you.

Kind regards
Emil Abkjær Kristensen

[thedollar]

This is my favorite journal. We need an update soon, Wizards

[wizards]

Hope a short update will do.

Numbers (April 2018)
SWR: 2.91 %
Networth: USD 864,046
Asset allocation: Stocks 53 %, Rentals 30 %, Bonds 11 %, Cash 6%
Spending is still below budget but not much.

The Apartment experiment:
Last month I bought a small apartment on foreclosure/auction. The price including miscellaneous fees, stamps etc. is approx. USD 65,000. There’s need for some work, some I can do myself, and some which I have hired pros to do – I budget this to approx. USD 18,000. I plan to have it finished by the end of this month – estimated value then USD +100,000. It’s the plan to keep it as a rental property like the others I already have.
So far, I have enjoyed the process and doing some manual labour

And one more…
Two weeks after buying the foreclosure I found another interesting opportunity – so this week I closed another deal for a larger apartment, this one has a tenant, so basically no work to do besides moving money, finding finance etc.

Job
Still working part time and still not clarified how long I will keep doing this.

[wizards]

One more year working part time from home has passed.

And yes, still doing part time, but for a change there is now a clearer goal doing this. We are planning for my wife to take a year off starting July this year. As she’s not FI (yet), my income from part time work will pay for this. If this works out fine, we might make it permanent, but for a start one year is agreed.

We plan for at international trip late 2019, first flight with the kids, properly Thailand for 4-6 weeks, this will be the first (hopefully not the last) vacation paid from my family account*

Numbers for 2018:

SWR (budget): 2.70%

Net worth: USD 888,407

Asset allocation: Stocks 49%, Rentals 39%, Bonds 9%, Cash 3%

Did buy one more apartment (50/50 with a friend) late 2018 so the portfolio now holds a total of 8 rental apartments.

Spending 2018 was 97% of budget – getting closer to budget mainly due to increased repayments on our mortgage. Repayments was 21% of total spending – I do not include home equity in my net worth as we intend to stay in this house for years to come.

Current passive income covers 138% of budgeted spending.

Hobby income did again cover all private spending and did only decrease 0.3% - Once again I predict 2019 to be lower but hoping for a surprise.

Children – continue to be cheaper than budgeted, and they are still doing fine.

* Like last year I have allocated 80 % of my part time income to a separate account not included in net worth etc. Again, I have gifted some money to the kids and some for my wife, the rest is intended to “extraordinary” holidays for the family. Contributions to this account will be put on hold once my wife are at home – but that’s a minor/luxury problem.

[wizards]

Time for a new entry.

Numbers are at all-time-high:

SWR (budget): 2.55 % - Net Worth USD 928,605

TTM expenses are at 95 % of budget

But this will soon be changed – Wife gave notice to her employer – last paycheck will arrive end of June.

She has savings and investments, but our agreement is that I will pay all expenses starting July, and we will let her investments accumulate.

As a result, my SWR will no longer be 2.55 % - it will be 5.09 %

How ever I still have my part time income, which should cover her part of the expenses and we agreed to make this a one-year experiment so I’m not too much worried.

Her last day at work will be May 7th – looking forward to spending more time together.

[FBeyer]

Sweet!
I'm glad she had the nerve to hand in 'that' letter after all.

Also: Today, exactly 6 years ago, you joined the forum. So happy forum birthday to you!

[wizards]

Yes, it took som nerves.

Thank you - funny coincidence

[Eureka]

Well done! I wish I'd know more people like you guys. So about how many hours per week do you work at the moment?

[wizards]

Thx.

I guess about 15 hours a week.

[thedollar]

How is everything, Wizards? Kindly requesting an update since this journal is very inspiring.

[wizards]

An update – sure no problem

Numbers from last month:

SWR (budget): 2.42 % (or 4.83 % including my wife’s part of our expenses)

Net worth: USD 956,238 (new all-time high)

TTM expenses are at 93% of budget, despite August was an expensive month; car needed major repair, we were on holiday and prepaid skiing holiday for next year (TTM was at 86 % end July).

Asset allocation: Rentals 39 %, Stocks 50 %, Bonds 9 %, Cash 2%

Wife at home

We have finally come to a period where we have a relatively normal everyday life – first four months have been holidays on/off. We now have two months with no major plans before catching a plane to Thailand in November.

But it’s nice having her at home, she now has more time for the kids and have finished some home improvement projects I didn’t have the time to do, so clearly a win

Finances

Bought one more apartment last month (50/50 with a friend) and we are in the process of fixing/painting etc. and finding tenants, should work out fine but there are some hours spend on this now.

Bonds are now ridiculous valued, effective interest rate are getting close to zero, but need to find an alternative, as this holding is in my entrepreneur savings account. So, looking for property to flip – or other options. No bonds seem interesting.

Stocks are generally doing fine, how ever richly priced, but I’m happy with my current holdings. Might take some chips of the table if we see further market gains.

Cash are low, primarily due to buying more property, but interest on cash is not much, so guess it’s ok.

Questions – let me know

[wizards]

2019 update

SWR (budget): 2.34%. For 2020 our budget will increase and the new SWR (budget) will be 2.43%

Net worth: USD 999,374 (getting really close to 7-figures)

Asset allocation: Stocks 50%, Rentals 37%, Bonds 9% and Cash 4%
Sold some stocks in the last months of 2019 (to reduce risk and up my cash position), will properly sell some more this month.
One new apartment bought in 2019 (50/50 with a friend) so the portfolio holds a total of 9 rental apartments.

Spending in 2019 was 91% of budget, lower than last year. But as we have a specific amount dedicated to holidays/travels and this category is up, we have agreed to increase our budget. Repayment of loans is still a significant portion of our spending, 23% of 2019 spending to be more precise. Home equity is not included in net worth as we intend to stay in this house for years to come.

Current passive income covers 143% of budgeted 2020 spending.

Hobby income finally took a hit down almost 60% from 2018 – did still cover all my private/personal spending, so still better than a poke in the eye…

Children – as last year – they continue to be cheaper than budgeted, and they are doing fine.

Wife – has been at home since she quit her job in May. Now I pay her spending as well, so you could argue that my SWR for next year isn’t 2.43% but 4.86% instead. How ever this is paid for by my part time job, so not too much worried about this “little” issue.

“Family account” / holidays – Up until my wife quit, I allocated 80% of my after-tax earnings from my part time job to this “account” (not actually a real account, just some excel magic). From this account we paid our 1-month vacation to Thailand and I gifted our children some money as well. No big plans for next year as much will depend on my wife to choose if she would like to continue to stay at home.

Job – still doing part time…

[herp]

Thanks for the update, wizards. Looks like excellent progress!

[Egg]

You are totally smashing it (as if that wasn't obvious). Congrats!

[wizards]

2020 update

SWR (budget): 2.27%. 2021 budget unchanged.

Net worth: USD 1,180,681, up 7,1% compared to last year in my local currency (DKK), more in USD as the dollar has weakened.

Asset allocation: Stocks 45%, Rentals 41%, Bonds 8% and Cash 6%
I have been a net seller of stocks this year.
One new apartment bought in 2020 (50/50 with a friend) so the portfolio holds a total of 10 rental apartments.
Still haven’t decided what to do for 2021 – might use cash to repay one of the property loans, even though this isn’t the mathematical correct solution, but wouldn´t mind bringing down my risk.

Spending in 2020 was 79% of budget, lower than last year. Didn’t do much travel due to that covid-thing...Repayment of loans is still a significant portion of our spending, 26% of 2020 spending to be more precise. Home equity is not included in net worth as we intend to stay in this house for years to come.

Current passive income covers 144% of budgeted 2021 spending, did see some dividend cuts and freezes.

Hobby income bounced back up 119% from 2019 – so covers all my private/personal spending, and some.

Children – as last year – they continue to be cheaper than budgeted, and they are doing fine.

Wife – Late summer she was offered a part time job on terms she requested, so since September she has been working again, so these days we have plenty of income...

“Family account” – I’m still allocating 80% of my after-tax earnings from my part time job to this “account”. This account paid my wife being at home the first 8 month of 2020, and I gifted some money to our children. No big plans for next year, guess we will not be traveling much, and wife seems happy with her current jo situation (3 normal days, 1 day from home, and one day off)

Job – still doing part time…

[FBeyer]

Besides the sexual connotations in this song, it seems to be apt background music for your life right now: https://www.youtube.com/watch?v=jh0rMJOFSy4

Glad you're doing well W.

[Eureka]

Congratulations becoming a millionaire!
Glad to know you are all doing fine.
How do you assess the value of your rentals when calculating your assests?