Nick Halden's Journal

Where are you and where are you going?
vraxxos
Posts: 40
Joined: Tue Mar 24, 2015 8:36 am
Location: UK

Re: Nick Halden's Journal

Post by vraxxos »

0-15k in a year is very good going, especially with two kids and living in Holland.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

Thanks for the kind words Vraxxos & Rube.

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For anyone interested: this is my conservative prognosis for the next few years and the first 100k. I will be 30 years old by that time. Seems quite slow, but I guess it is better than any other option.

rube
Posts: 883
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Nick Halden's Journal

Post by rube »

I expect you'll reach it earlier. You mentioned that you are making 20% more then your peers. But realize that you are young and many older people are making a lot more. You will be able to make much more too if you make the right decisions. I am speaking from experience. I am making twice as compared to 6 years ago and probably about double compared to my peers (same study and age, not my current expertise).

The first 100K will take the longest, it will go much faster thereafter!

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

Good news!

Today I got confirmation that I will be promoted to a strategic C-level position, starting 1-1-2017.

To me this proves that even more than hard work it is extremely important to plan ahead, say the right things at the right time, know your office politics and know how to influence people. In fact most of the things I have been doing for the last 6 months have been planting seeds for this moment. I have no idea how this is going to affect my ERE path, as salary has not yet been discussed. To be completely honest I do not care much about the money, I need the experience and the ability to work directly with the CEO and other board members much more than the money.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

November update

Income (3700 €)
Spending(2500 €)
Savings Rate (30%)
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Net Worth (+1,150 €)
Total NW: 14,4k

Net Worth graph
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Nothing special, had a few bills incoming related to the home renovation that are one time only. Next month is probably going to be similar to this one, but we should hit the 15k mark easily this year.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

December 2016 Update

We reached our 15k goal this year! Also my forecast turned out to be very accurate (dotted line in graph below). Since this is our first ERE-year I am quite proud of that.

Net Worth: € 15,874
Increase since last month € +1,400

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Summary 2016
Average monthly income: €4250
Average monthly spending: €2950
Average monthly savings amount: €1275
Average savings rate: 30%
Annual Investment results: +7.5%

Well this was an exciting year, our first full year in our new house, the birth of our second daughter and a new c-level job that is starting right now.

Forecast 2017
We are going to save a little more cash to increase our reserves a bit. Our cash reserves have always been quite low because our house and appliances are state of the art and are not expected to break anytime soon. But I do feel we need a bigger reserve in case something truly unexpected happens. Also the In Law-Family is making wrong financial decisions and I expect them to turn to us for money sooner or later. Even though I advised against most of their decisions we do want to be able to help them when they really have no other way out. Also a bigger reserve allows us to jump into ad hoc investment opportunities that probably come along.

Financially I am looking to improve our savings rate to 40% for 2017. It is nothing special in this forum, I realise that, but I feel we currently have a nice balance between living comfortably and still saving enough to be quite sure of early retirement, so most of the increase should come from increased income that comes with the new job. Net worth should be ~35k by the end of 2017.

Forecasted Retirement year: 2030
Forecasted Age when retired: 40

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

January 2017 update
First month of 2017

Not too great in terms of saving, mainly because our daughters went on a paid trial day care in December (in order for my wife to prepare for work again this month), which is not covered by our governmental allowance. This is just a temporary thing, starting next month we will get about 70% of our day care costs reimbursed by the government.
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After talking to my employer I got a 12% salary increase this year, starting next month. It consists of a 10% raise in base salary and a 2% one off bonus to be paid in March. Also my wife was paying too much tax (for the dutchies she never submitted her 'loonheffingskorting' form :o ) so in addition to a ~300€ higher net income she will also get the tax back that she paid over the last 5 or 6 months (probably about 1500 euro). Which she would also have gotten if she would not have realised this, but this was a nice surprise to me. I guess you would ask why we did not realise earlier, but this has to do with the fact that her employer failed to give her her official paycheck (since she was with maternity leave for like 6 months).


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Anyways, I realise things are not looking good this month, but they soon will be better than ever.

New Opportunity
Also a new opportunity arose; we are looking to buy a family owned property (7500m2 or 80,000 sqft) which contains one family house, and several rental houses and existing tenants. There are still a lot of hurdles in terms of local governmental permits, since the rental homes and the tenants are technically illegal (but this situation has been like this for 3 decades and it has been unofficially tolerated ever since). Also we have some challenges financially, because traditional mortgages here will not allow rental of parts of your property. Will keep you posted.

Jason

Re: Nick Halden's Journal

Post by Jason »

The US has the same restrictions with regard to mortgages.

rube
Posts: 883
Joined: Tue Oct 02, 2012 7:54 pm
Location: Europe (NL)

Re: Nick Halden's Journal

Post by rube »

Interesting opportunity! 7500m2?! Sounds like a lot

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

yes Rube, it is a lot. It is basically 150m long and 50m wide property.

There are two routes that I am currently exploring in terms of financing it. I might just buy the entire property as is with a traditional mortgage and just make sure I am never late with payments so the bank will never investigate and find out about the tenants. Also it is not visible from the nearest access road. Even if local government finds out there is a pretty good chance they have to leave it as it is since it has been like this for a long time. In addition to the mortgage I would just lend 100k or so from family to finance the renovations. If they would ever find out I probably have paid back most of my loans and mortgages because of the rental income.

Another route would be to try and make it legal by officially splitting the property into several pieces, with me privately owning the main house, and start a real estate company to buy the other lots. The splitting part is legally quite tricky however, and when I would ask for permits it might raise questions about the current situation.

Meeting with two financial advisors tomorrow, will keep you guys posted.

halfmoon
Posts: 697
Joined: Mon Nov 07, 2016 10:19 pm

Re: Nick Halden's Journal

Post by halfmoon »

I can only comment with a US perspective, but I would be concerned about your potential insurance coverage. If the buildings aren't permitted and/or the rentals are illegal, your insurer can possibly refuse to pay in case of loss or liability claims. Liability is the one that can break you. Examples: tenant claims health damage from mold; utility or delivery worker is attacked by tenant's dog; pretty much anyone slips on ice and breaks bones; roofer working on repairs falls and is severely injured or killed; tenant's child is strangled by window blinds (yes, this happens); etc.

I know this sounds alarmist, but it's absolutely common. There's also the question of whether the property taxes reflect actual current use. It may have gotten by with a wink and a nod, but that can change any time based on neighbor complaints, bureaucratic turnover, funding initiatives, ad infinitum.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

halfmoon wrote:I can only comment with a US perspective, but I would be concerned about your potential insurance coverage. If the buildings aren't permitted and/or the rentals are illegal, your insurer can possibly refuse to pay in case of loss or liability claims. Liability is the one that can break you. Examples: tenant claims health damage from mold; utility or delivery worker is attacked by tenant's dog; pretty much anyone slips on ice and breaks bones; roofer working on repairs falls and is severely injured or killed; tenant's child is strangled by window blinds (yes, this happens); etc.

I know this sounds alarmist, but it's absolutely common. There's also the question of whether the property taxes reflect actual current use. It may have gotten by with a wink and a nod, but that can change any time based on neighbor complaints, bureaucratic turnover, funding initiatives, ad infinitum.
This is certainly an interesting perspective, thanks. Especially the insurance bit; will look into it.

Last night I received the updated property tax info and it says the property holds 5 persons and 2 households. The number of persons is correct, but technically there are 3 households. So it does tell me that they are aware of at least one extra permanent household - which is good. So you are absolutely right that it does not reflect it 100%, but we are getting there. Probably going to hire a local expert in building permits to see what we can do.

This morning I met with some financial advisors and the good thing is that they confirmed that we can buy the entire property as is based on our current income. Also they have sent out some e-mails to banks asking for permission to rent out a part of the property. Expect answers on this question in a day or two.

message
Posts: 35
Joined: Thu Apr 09, 2015 5:57 am
Location: The Netherlands

Re: Nick Halden's Journal

Post by message »

Hi Nick,

perhaps a bit late... But you can also try NIBC...
https://www.vastgoedhypotheek.nl/

Also, what I have heard.. Nationale Nederlanden is also going to be giving out mortgage loans for rental houses.
It never hurts to call them to ask some details. It might surprise you what is possible...

Good luck with your endeavor!

Oh, and please keep going with that chart porn... Beautiful!

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

There is one bank willing to allow 3 additional households. The catch is that they only want to loan 60% of the appraised value of the property. Now that is quite an issue, because that would mean I would have to get like 150.000 euro upfront from somewhere else. But I do know some appraisers who can be very creative with appraisals, so if I can get the property appraised far above what I actually have to pay for it I might be able to cover most of the costs. And if there still is a gap I might be able to fill it with another interest-free loan from family.
message wrote:Hi Nick,

perhaps a bit late... But you can also try NIBC...
https://www.vastgoedhypotheek.nl/

Also, what I have heard.. Nationale Nederlanden is also going to be giving out mortgage loans for rental houses.
It never hurts to call them to ask some details. It might surprise you what is possible...

Good luck with your endeavor!

Oh, and please keep going with that chart porn... Beautiful!
Thanks message, I will keep those in mind although based on the information on their website it is not possible to both rent it out and live on the same property yourself.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

February 2017 update

Net Worth: 18340 € ( +1940 €)

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Not a bad ERE-month, and close to catching up with our original forecast for this year (dotted line). No real ERE sins, other than paying a large electricity/gas bill because we did not pay enough last year. I consider it an interest free loan.

The transparent area in the graph is the updated forecast. You can see that somewhere around May we should make a fairly large jump in Net Worth due to both me and my wife getting a holiday allowance (8% of yearly income). And in addition to that I expect to get back most of the income tax that my wife paid over the last 6 months (main reason that we are now underperforming on the forecast). If all goes well we should easily exceed our original forecast line by several thousand euro's this year - but who knows what happens.

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Income was much higher because we did get some reimbursement for our kids daycare. Now that they are spending more time there the costs are higher, but also the governmental allowance that comes with it.

No news on the acquisition of the family owned property. Meeting with family this saturday to figure out how to proceed, currently not looking too good. Financially we are definitely capable of buying the property and exploiting it, but since the current situation is illegal and family is not too keen on trying to get permits (because they fear it might cause more harm than good if it gets denied). Keep you posted.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

March 2017 update

Net Worth: 19.1k (+1580€)
Savings Rate: 32%

There was a discrepancy between my accounting and my actual bank accounts so I corrected that, also historical figures. Not too much of a difference, but just in case someone really takes a calculator to my graphs.

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Income vs Expenses
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Quite happy about it. Overspent on a present for our daughters birthday (230% of alloc budget), and we had to pay some property/waste taxes (5% of our savings rate down the drain, altough we knew about this in advance so no real problem).

One more month like this hopefully and then the big money should come in May. The grey area in the nw-graph represents cash, so that should be the moment the emergency cash buffer is filled with about 14k. Which is more than enough to replace anything we own at the same time, or enough to survive for 6-12 months in case one of us loses our job and cannot find something new. Which is extremely unlikely. So after May I am going to shift focus to investments (blue area on top).

Current Investment results
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Red line is overall CAGR. Blue lines are different funds.

Allocation in case you are interested
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NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

Hi all,

I don't have much time to write as I am about to leave for a business trip to the US soon. Wanted to post a journal entry earlier but the forum seemed down?

Anyways last month was not great. Did not hit the 20k NW as planned. We had to bring our kids to daycare a lot the month before, we paid for a holiday, spent almost 60% more on groceries, payed a lot of taxes and the bi-annual bill for the newspaper was also this month. Ended up saving only 6%...

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This month is going to be great tho, yesterday we already received over 3k in taxmoney that we overpaid last year and our holiday allowance will come in later this month.

Jason

Re: Nick Halden's Journal

Post by Jason »

Bi-annual bill for the Newspaper?

That seems a bit anachronistic, especially for a guy your age who can rock the psychedelic savings charts.

Is it a specialty newspaper related to your work or just the normal type that you take to the bathroom to peruse while taking a dump?

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

It does conflict with my financial goals but I consider it a work related investment, like a good suit. It is the local equivalent of the financial Times, but it comes with a lot of extra magazines and papers that are essential for me to gain insights for my work. I was recently promoted to a c-level position and I need all the info I can get to fit in at that level. E.g. I often share tech articles with other board members that are relevant to our industry. I am also responsible for our marketing efforts at our company so I also want to be able to see what our competition does as well. So it fits multiple purposes and mainly just enables me to talk like a thought leader, even though I am indeed only 26.

NickHalden
Posts: 67
Joined: Wed Nov 04, 2015 3:48 am

Re: Nick Halden's Journal

Post by NickHalden »

It does conflict with my financial goals but I consider it a work related investment, like a good suit. It is the local equivalent of the financial Times, but it comes with a lot of extra magazines and papers that are essential for me to gain insights for my work. I was recently promoted to a c-level position and I need all the info I can get to fit in at that level. E.g. I often share tech articles with other board members that are relevant to our industry. I am also responsible for our marketing efforts at our company so I also want to be able to see what our competition does as well. So it fits multiple purposes and mainly just enables me to talk like a thought leader, even though I am indeed only 26.

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