Early Retirement Extreme Forums

Just some numbers to keep track progress.
Liabilities: 270,754
Assets: 288,826
Net: 18,075

People around here love dull numbers. Throw in a lentil recipe and something about permanent portfolio and you'll have a popular journal!

I love number since i started school at 6.
At the age 6 a was able to calculate to 100 ..... old story.
Math was my favourite subject....
You people have so compounded numbers in your diaries.
My (local currency) numbers translate into:
2261 day to FIRE, or
pay off my mortgage (the only debt) and live 1 year from savings - pretty small , or
8,5 years living of savings with current expenses (including mortgage).
Low interest rates time - weird sytuation;
ARM margin 0,3%. Why should I pay my mortgage off right now?

fog_tree wrote:I love number since i started school at 6.
At the age 6 a was able to calculate to 100 ..... old story.
Math was my favourite subject....
You people have so compounded numbers in your diaries.
My (local currency) numbers translate into:
2261 day to FIRE, or
pay off my mortgage (the only debt) and live 1 year from savings - pretty small , or
8,5 years living of savings with current expenses (including mortgage).
Low interest rates time - weird sytuation;
ARM margin 0,3%. Why should I pay my mortgage off right now?

It's an interesting question but no one can really answer it definitively.
The rate is historically low right now... Stocks are valued higher than ever. This means we are in for either a very long period with low growth or a single big equities crash / rate crash. Scenarios:

1) The rate could increase quickly and stocks could plummet leaving you in a worse situation without the ability to pay off the mortgage and much higher monthly payments.
2) Hopefully the rates will only increase with economic growth in the economy keeping the value of equities at the current "fully priced" levels. This will leave you with same assets and the possibility to pay off your loan but with a much higher payment.

So it only "gets worse" from here on for people with an AMR loan. There are no reasons not to pay out your loan if you have the ability. There are only reasons against keeping it (risk).

I agree with you @bestintentions in general. Risk management is very important and I should change my liability/asset ratio.But here, in europe, stock market is not so bullish. We have may difficulties and problems "in prices". My local market is still 20% below 2014's and 50% below 2008's because of many political issue, Brexit, fears about EU disintegration.
I think, I should start with directing all "new" money to flow towards mortgage as opposed to what I did in past.
My former goal was to create "stack of money" to keep my finanse more job-lost-resist.

What I really hate is unexpected expenses. It's not possible to avoid them so i decided to establish financial buffer to cover them (that was 1 y.a.). Buffer is now about 1 month earnings and growing of "extra" money e.g. tax deduction, children benefit and some payment's ending e.g 55,12 euro. As a matter of fact when I get paid i devide my money into many "pockets". Mortgage pocketd, fuel + bus pass pocked, grocery pocket, utilities pocket. There are easy to predict spendings. Of course, the biggest pocket is/was labelled "sawings". So when I get hit by of extra expense I withdrawal money from my "buffer" pocket without interfering my saving or any other pocket.

The last decade of december is a perfect time to summarize a year. I started with negative NW and credit card fully utilized. Somewhen in february I run across MMM blog. This caused a big change in my money approach.
I spend 2 months reading MMM post, sometimes 2 times, 3 times one. My eyes were widely open. Soon after I started to dig the internent searching similar blogs. That's way I went here to see so many FI/ ERE follower. Your stories induce me to organize my 'ad hoc' money attitufe in more organized way. Thanks for everyone

The end of december journal updates:
liabilities: 269,352
assets: 294.295 (except house)
NW: 24.943
emergency found: 3,300 (not included)
Goals for 2017 year are simple: increase NW to 100,000 (PLN) and decrease liabilities by 20%.
I think the money targets won't be a problem, but the rest ....
I need to consider WHAT i'm goimg to do when I reach FI/ERE.

Nothing really important happened to me this month. I did double mortgage payment and started my 'reduce the mortgage' target. I noticed that having reported spending helps me to reduce my spending.
liabilities: 267,200
assets: 299,100
NW: 31,900
emergency found: 3,800
Saving ratio : 4800/8500 ~ 56%
I updated my stocks portfolio values this gave me ~ 2,000 gains, but I don't want to do this every month because I want to avoid 'swing' portfolio value. It can only mess up my numbers.

It was a really, really, really GREAT month. I've received my annual bonus and it was the biggest bonus in my life. I spend only 3% of it for a whim and 97% put to mortgage payment. I've reduded my debt by 5% so i'm happy with all of it. Also put some money to my emergency found to have this money for vacations. My numbers are as follow:
liabilities: 249,540
assets: 294,890
NW: 45,350
emergency found: 6,000

Great Work. Keep going.

What is the target goal for your emergency fund?

@Chris
There are sometimes unpredictable expenses like dentist services, car repair or house maintenance. I don't want to 'pollute' my monthly expences with 'one time shots'. So I decided to create reserve for such expenses the same way banks create reserves for 'to be lost' assets. I predict some spending and prefer to put some money aside than include this money now and exclude later. I hate to be surprised by one shot expenses.

A word about asset allocation:



It looks like i have to much assets in stocks given my 5-6 years FI/ER targets.
I didn't consider ER since last year so I have to change my asset allocation to more defensive and at the same time reduce my mortgage. I'm not good at investing and it is so hard for me to predict market. I will go 'baby steps' way and spread in time stocks reduction and mortgage overpayment.

Wow, that was another great month with my wife annual bonus and massive mortgage payments.
liabilities: 229,995
assets: 284,959
NW: 54,963
I was going to reduce my stocks portfolio but i had to put some money on non taxable account (in my sytuation it is stock account) - that is why the stock growth.
I didn't put anything on emergency found (still 6,000) due to my wife had tooth resection 1,500 - quite expensive

The power of budgeting and planning surprised me. I was thinking i know my spending, i was thinking i know how much money can I save. But, the last few months showed me that when you establish your target and set your milestones, you can reach the target much faster. Moreover when you track your progress it's easier. Every small step encourage you to next effort. My 2017's goals appear promising so I'd like to set my ultimate goal. FIRE on Feb 2022, it's 58 months ahead. Looking 6 months backward at this time achievements, 14,7 % of time passed away and I reached 13,8 % of my goal, so a bit below estimate. Moreover I need to set 4 goals to picture my future money flow. Goal one - save enough on my taxable (bonds & deposits) account to cover 49-60 y.o. spending, goal two - save enough on my taxfree stock account to cover 60-65 y.o. spending, goal 3 save enough on my co-payment company pension account to survive 65-67 y.o and goal 4 - in parallel pay off my mortgage in 58 months. At the age 65/67 (?) I can benefit from my state pension. Not so ambitious? Is state pension doubtful? State pension is going to be hardly 30% of my earnings? Well, I can live pretty nice on 25% of my earnings, my saving ratio is still 75%, so 30% appears like a rise. Of course, I don't want to return to work when 65+, so I need to make additional reserves but this will be my focus in coming years.

Today is Holy Friday in Christian world. It's a day of fasting, day of mortification, but leaving faith and liturgy away, I noticed no change in my coworkers habits. No one is going to skip expensive office lunch, no one is going to donate on charity money for this day lunch, no one is going to make any sacrifice. In my 25 people team, I'm the only one who commute by tram/bus but my way home is not the shortest. I need to change and I need to walk 3/4 mile. Some guys live only 3 mile away from work and drive by car!!! Today funny conversation shows up. Some guys were complaining on lack of parking space near office. What solution. Public transport? No!!! Guys who work 3 miles away from office, who order everyday lunch at work, deciced to enroll for office-paid parking for 3% of salary. For me it means I can't reveal my frugal spirit. It wont' we recognized. So when I don't want to keep up with the Jonese, I want to keep up with myself. I want to join to 4x FIRE world. That's why I set my Feb 2022 FIRE target. It will be my 49 birthday. Speaking of my personality, I think I'm more INTP than INTJ. Planning is very important for me now.

All I notice today is that most of my co-workers took the day off.

Already fasting for health reasons. I'll skip out to sing "Were You There" in my best Johnny Cash voice a little later.

Poland is considered as ultra Catholic (comparing to other european countries), but both Holy Friday and Christmas Eve are working days. Strange. On the other side Easter Monday and 26th December are holidays. Why? Is it our post communism result, to prevent people from liturgy participation and focusing them on family celebrations?

Hello fog_tree

I too am planning on FIRE in March 2022, right before my 35th Birthday. A big part of those plans involves spending extensive time in Poland (family is from Rzeszow). I am hoping to take a 6-12 month sabbatical in 2020 to test drive the ERE lifestyle before doing it full time.

Where in Poland do you reside?