Will's journal

[Will]

Financial update forJuly 2017


A bit late, I just couldn't find the time to write the update earlier.

July was an expensive month, almost entirely due to my hobby cycling. I bought a replacement bike for the bike which I crashed, since I don't dare to ride the carbon frame on high-speed descents anymore. It was a second-hand bike, but it still cost me 720 euro. To be honest, it feels like the bike is much too fancy for me, and I'm considering selling it after my big race in two weeks.
The concussion took much longer to fully heal than I hoped and expected. As recently as last Sunday I still had some concussion-related headache because I had a bad night's sleep, but since then, no problems anymore. Except for my wrist, I seem to be fully healed.
I haven't received any bill from the hospital yet.



Hall of shame for July 2017:

- I paid for parking, which I never want to do. Also it was completely unnecessary since I went to the wrong location (1 euro)
- We got ice cream (1.95 euro)
- I went to the Vosges with some friends to cycle and we spent quite some money on restaurants there. In total probably 100 euro.

100 euro something in July of unnecessary spending, not bad! I am not counting my new bike here though.

Hall of pride for July 2017:

- Our blender broke. Instead of buying a new one, we found the problem (the blades were not moving) and we bought only one component to fix it. This only cost 9,50 instead of >50 euro


Net worth

My net worth went down this month. This was mainly due to two factors:
- eur/usd exchange rate influencing the value of my stocks
- the solar panels which we bought (I did not count them as expense since I see them as investment, and I immediately wrote them off, so I'm not counting them towards my net worth)



There is a major change at my job: the company is considering selling my department or outsourcing a large part of it. Even though they said that nobody would lose their job over this, there is no guarantee at all that it is possible to keep on doing a job you like, let alone the same as we are doing now. I like my job and my colleagues, so I'm also somewhat intimidated by the uncertainty. But on the other hand, if my job will not be nice anymore in the future, I have a good amount of FU money and many opportunities. The market is currently very good for people with my skill and background in the Netherlands. I'm cautiously orientating myself, but I still hope that I can keep my current job.

[Will]

Long overdue update of 2017

A lot has been changing in my situation the last couple of months.
First and foremost: I should write more updates here. The main reason I did not do this was because I started writing for SeekingAlpha at the end of last year and I used up all my inspiration for my articles there.

Goals for 2017
Let's look at my goals for 2017 and see how I did:
- increase net worth to 6 digits --> I first thought this target would be a stretch, but I ended up with a bit more than 120K on the 1st of January 2018, this went much higher than I anticipated! This was partially because of the boom in cryptocurrency, which I sold at the end of the year.
- obtain a savings rate of at least 50% --> 55%, not bad! This was including a beautiful 3 week holiday in Asia last December, a 'new' second hand high end racing bike, a skiing holiday and two cycling holidays.
- cycle at least 7500 km --> I just failed this goal at 7140km, and this was because a second crash in October. After this one I didn't cycle to work and back anymore, since I didn't feel like it and the weather became worse. Not all was bad though: my big cycling target of 2017 in the Pyrenees went REALLY well. But I am planning to cycle less in 2018.
- creating an extra source of income (importing cars?) --> After lots of research into different ways of making money, I tried my hand at writing for SeekingAlpha in September. This went well, and I managed to write multiple articles last year, making a total of more than 1K. Not bad for a start. Though it is hard work and sometimes not easy, I will continue to do this since I like it a lot. Pay depends on factors which are difficult to influence, like pageviews, and will be much less than what I make at my job. (Sorry but I am not posting links to my articles here since I would like to keep my identity here separate from the one on SeekingAlpha)
- declutter our house --> Failed miserably. I mentioned this to my girlfriend a couple of times and did some half-assed attempts, but we completely failed.
- work from home one day per week (both to save time from the commute and to work more efficiently) --> Failed. It is ok to work from home now and then, but only if there's a reason for this (like a visit to a doctor in the middle of the day). It's 'corporate policy'. Bleh.

In total I succeeded in 3 of the 6 goals. With the cycling I just failed, so I will

Big Changes in 2018
- The biggest change in our lives will be coming next July: We are expecting a baby! We are very excited, but also realize that my expected FI goal (250K) for myself might be unrealistic, since I will have to consider the rest of the family as well with these kinds of financial decisions. My girlfriend and I have not integrated our finances yet. Though she is on board with FI she is a couple of years behind me with regard to net worth and a bit less frugal.
- One of the biggest costs for 2018 and beyond will be daycare of the baby. We need to find a good solution for this; our parents both live >200km away from us so we will not be able to count on them. My girlfriend and I will both start working 4 days a week so the baby will only need 3 days of daycare. Tax-wise, this is very efficient: I made an extended calculation and came to the conclusion that by working 4 instead of 5 days a week, my annual net income will drop by only 3K. This is because of our progressive tax system in the Netherlands but also because of daycare subsidies which increase as your income becomes lower. This seriously made me wonder why there still exist parents in the Netherlands who work full time! Daycare will likely cost us 400-500 euro per month, which is a huge expense. I am still playing with the idea of finding other parents and take care of each others' children so we don't need daycare that much. If anyone has advice or experience on this topic, please feel free to enlighten me.
- The above also means that we will retire by 1/5 from the middle of 2018 onwards. Hurray! I'm not planning to ever switch to fulltime again. Also I can always write on SeekingAlpha on days on which I am not working for my day-job. On the other hand, it would be inefficient to make too much money with this, since our taxes and daycare costs would go up accordingly.
- The situation at my job is still very dynamic. My department will likely be sold during the next months. On the one hand, this is leading to much uncertainty among my co-workers. On the other, it also leads to opportunities and it could become a big success eventually. My contract needs to be renewed in a couple of months, but I expect that the current situation does not have influence on it. And if they do not extend, it will not be difficult for me to find a different job.
- With regard to our housing situation we are not planning to change anything the coming year. We are still renting, though this is not very efficient on the long term, the housing market continues to boom in the Netherlands. This makes buying a gamble with increasingly worse odds.
- Investments: I have been toying with the idea of purchasing a rental property, but have not found a good enough deal to take the leap. For now, I will stay with stock investments, which have been doing well in 2017, but the future seems increasingly uncertain. I sold all my cryptocurrency at the end of December after I decided I made more than enough money with it. I like to say that I'm not a market timer, but in the case of cryptocurrency it seems that I got very lucky.
- FI and early retirement planning: I was very excited when I heard that two good friends of mine (a couple) are also aiming to achieve FI. It is always very nice to be able to talk freely about this topic to other people, and we can exchange tips and tricks. One of the things with regard to FI in the Netherlands about which I have been thinking is that it is MUCH easier and more efficient in our country to work part time. With our current expenses, we could probably work 2 days a week (but we would be able to save very little). Maybe it is easiest the reach a certain level of net worth and start working much less so your net worth can continue to compound while we would be able to re-design our lives around FI more gradually. I will run some calculations for this.

New goals for 2018
- Increase net worth to at least 150K
- Achieve a savings rate of at least 55%
- Make at least 6K from writing articles
- Find an efficient solution for daycare
- Continue to do sports at least twice a week (mostly cycling or running)

Of course, I also plan to achieve goals like 'be a good father', or 'support my girlfriend the best I can during her pregnancy'. But I aim to create measurable goals, so that's why there are none of these on the list.

I will try to write an update more often in 2018.

[Will]

Update

Finally a new update. I will discuss things topic-wise this time. Some things have been going really well, other things not so much.

Baby
My GF is very very pregnant at the moment, still about 1,5 month until the birth, and everything is well as far as we can see. We have been doing quite a lot to prepare (mostly mentally). We prepared a baby room with almost only second-hand stuff. A childcare facility went bankrupt in our neighborhood, so I was able to pick up many clothes and other stuff from the container in front of their building. We spend about 1000 euro total on the child until now, of which about 80-90% are healthcare costs.
We found an absolutely perfect solution for the daycare: one of our neighbors is retiring later this year, she never had children herself and is very enthusiastic to take care or our baby a couple of days per week. We will pay her of course, but only a relatively modest sum. Also, this solution is much more flexible, and very close to our own home.

Work and 20% retirement
Many changes coming at work. My department will probably be sold, which will not affect my work location or my activities, but still. Also, I started working 4 days a week, which is a MAJOR improvement. I can call myself 20% retired now. My before-tax income will drop by 20%, of course, but after tax the difference is less big. Since I took the Wednesday off, it feels like a short weekend in the middle of the week. At the moment I am filling my time with going to the market for vegetables and building a room for the baby. The market in my city is extremely cheap, with some crazy deals. For instance: 7 mango's for 1 euro, or 15 leeks for the same. Of course I'm always going there ERE-style, on my bike with a huge backpack. Even the salesmen on the market think I'm a traveler, and when I tell them that the backpack is full of vegetables and fruit even they think I'm crazy. Last week I had 27kg of it, which we struggled to finish. Much of it is going into the blender to create smoothies, so usually we succeed in that.
I have been terribly slacking with writing SeekingAlpha articles though. One of the reasons to work one day less per week is that I could spend a part of this day to write articles and compensate for my loss of salary. I need to start doing this again, since I like it and it usually pays well.

Financial
Financially everything has been going steadily. Savings rate of 2018 is above 50%, net worth is climbing gradually, though the market correction during the beginning of the year slowed everything down a bit. Though some expenses (child, healthcare) have been a bit higher this year, nothing extraordinary.
According to a model which I built, I could be fully FI between February 2027 and April 2028. I would be 42 by then, but this is still unacceptably long in my opinion, so I will work to decrease this time period. A tricky thing here is that I built this model for my own personal situation, and if I include my GF in the equation, we will even need a bit longer.

Sports
I haven't been cycling much this year, as a result of having no big target for which to train. As a result I've started running, about 2 times a week. This takes more time, and by slowly increasing the distance from about 3k in the beginning of January, I can now run 15k without problems. Bad news: my wrist is broken, still from the crash almost a year ago. It hasn't healed well and kept on hurting, so eventually I went to the doctor. Today I have an appointment to discuss treatment, which might involve an operation.

Cleaning up
Together with some friends, we started competing in a minimalism challenge: https://www.theminimalists.com/game/
For us, it's not so much about minimalism, but more about throwing away old stuff we should have tossed years ago. It's going really well, and we already got rid of a ridiculous amount of stuff. My wardrobe is less than half the size it was, and some things we just got rid of entirely (dvds, cds, books we don't read). It's really refreshing, and having other friends also participating in this challenge makes it very stimulating. I can recommend it to anyone who has too much stuff.

Well, I guess that was it for this time.

[Will]

Many incremental improvements during the last couple of months, I start to get some skill in changing my own behavior:
- Decluttered a lot, which also led to more efficiency in our daily lives. We still did not completely finish this yet, I need to work on finishing what I started.
- Started taking cold showers, not only because it's cheaper, but also because it's better for my skin. And I like the challenge. It's still hard, it's been two weeks since I started with taking cold showers and it seems to become only marginally easier. The weather is warm so that helps.
- Started doing some strength training with dumbbells. Because of years of cycling my legs are very strong, but I'm basically completely untrained in my upper body. In spite of my broken wrist it goes well, and being a rather skinny person you already notice the difference quite quickly. Wrist needs surgery; it is half-healed in a wrong way so it will need to be broken again. This is not an urgent treatment so I am basically the last one on the waiting list, I expect that it will not be done until the end of this year.
- Started writing on SeekingAlpha again.

But these changes are about to be completely marginalized by the baby. My girlfriend could literally give birth any time now. Though I'm looking forward to it, I'm a bit scared of whether this baby will lead to mental changes of myself. So for the record, I hereby pledge myself to continue to strive for FIRE. If my thoughts about this ever change, I urge my future self to look up this journal and read about all the improvement which it made in my life already. Whatever happens after the birth, my starting position is a good one with net worth well inside the 6 figures, expenses around 1400 euro per month and a relatively healthy lifestyle. I just hope I will be able to stick to this behavior.

[2Birds1Stone]

We are all here to hold you accountable.

Enjoy fatherhood! All my friends who just had kids in the past few years say it's the "best thing to ever happen to them", I wonder if it's all it's cracked up to be, or they just had pretty meaningless lives prior to the baby =D

[Will]

Thanks for your support 2B1S. Our daughter was born one month ago and wow, what a change this has proven to be!
The biggest difference is that I suddenly appreciate how valuable our time is: the baby demands a huge portion of it. I'm writing this on a free day when my GF took the baby out for a stroll with some friends - before I just did not have the time to write. While I'm also taking more days off, the days where I do go to work actually feel less stressful and more relaxing than a full day of taking care of the baby. She's very cute but currently only takes effort - very little feedback yet. At the moment I can have more intelligent interactions with my cat than with my baby. But this will change very soon I think, and I have good hopes that being a father will get much more interesting then.

With regard to the spending and mental changes - nothing happened yet. The birth of a child actually prevents you from spending too much money on traveling, which is good since this was one of the most costly money-sinks for us in the past. But yes, a child brings about many other relatively small costs, but those prove to be very manageable until now. No increase in spending noticed until now - only a shift from the travel category to the baby category.

My father-in-law contacted me to look at the finances of his family to check whether he can retire more early than the age at which his pension kicks in. I'm a bit hesitant with advising family on these topics; partly because I do not feel very comfortable being open about it myself. My parents were very skeptical when I told them my plan to retire early.

My GF and my parents are continuing to pressure me to take a more serious look at buying a house. With prices at record level heights though I am not very enthusiastic for this idea: (link is Dutch only, but the graph is quite obvious)
https://www.cbs.nl/nl-nl/nieuws/2018/25 ... iveau-ooit
At the moment our total monthly housing costs (rent+utilities+tax) are about 800-850 euro per month for the two of us. Houses which we would be interested in (with a garden!) would probably cost around 250-300K, which means that in the cheapest case we would forego 250K*0.05 (I use a 5% SWR) = 12.5K per year of 'income', more than 1K per month. It gets more complicated though since we would probably spend more money on some renovations. But with regard to the taxes it would not be so bad since a house is taxed less than invested money, and there is also an extremely generous homeowner subsidy with regard to mortgage interest. (see https://www.macrobusiness.com.au/2011/0 ... ng-policy/)
Still I'm not completely against the idea, since - as my GF frequently stresses - the quality of our life would likely go up as well. I will start building some Excel sheets to compare the different situations. To be continued..

[prognastat]

Congrats on the birth of your daughter. I don't have kids myself, but have heard the first few months are by far the worst as far as exhaustion/sleep and time are concerned.

Hopefully this is true and after a few months you'll be able to feel a little more relaxed. Also it seems men on average tend to be better with post-toddler stage kids.