frosti85 ERE journal.

Where are you and where are you going?
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Frosti85
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Joined: Thu May 11, 2017 3:27 am

frosti85 ERE journal.

Post by Frosti85 » Thu May 18, 2017 6:14 am

Hello.

Short introduction:

I'm a 32 year old male living in Austria (Vienna), and I'm a software engineer.

Was living a heavy consumerist lifestyle until end of 2015. Was very depressed & alone.

Met my now-girlfriend end of 2015, she introduced me to the concept of ERE.

Realized how stupid I was, and all of that flushing money down the toilet didn't make me happy at all.

Realized my real interest are science & reading, not mindless consumerism.


Now here is my ERE plan:

Current net worth is 20000€
I can get my expenses down to 1000€/month (to get it lower I would have to move, but I will consider this)
My income is 36000€ / year (after taxes)

So I can save ~24000€ per year.

My target is that I can live from passive income when I become 40. (might have to cut expenses even more to achieve this)

If that fails I will try to get a 10-20 hour job.

I want to go to university and study physics (or chemistry) (university is free in austria), and not depend on a job.
I'm strongly convinced that scientific progress is the best way to save the world, and I want to contribute to it.

In Austria we have a government guaranteed pension, and also a very good social security net, but I dont want to include that in my ERE plan.
(but I might be more aggresive with my investments)

Jason
Posts: 417
Joined: Mon Jan 30, 2017 8:37 am

Re: frosti85 ERE journal.

Post by Jason » Thu May 18, 2017 3:53 pm

Your post got me thinking of something.

In Christianity, you have the notion of conversation which consists of mortification (death to sin) and vivification (new life in Christ). Its a literal turning from death to life. You literally stop going in one direction, and turn around and go in another direction.

I think I need to apply that to ERE. Like you said, you were going in one direction (consumerism) and then you met an ERE chick and she turned you around and now you are going in another direction (reading, studying, saving the world etc.)

Its the same principal. It involves a radical conversion which implies not only a death and new life but a change in direction. Today I received an envelope and I said I can re-use this envelope. I would never thought that before. Although I just dropped 5k on shiny appliances so that kind of refutes everything I'm saying and sucks the life out of my credibility, not that I really have any around here to begin with. But you hopefully get my point.

Anyways, good luck.

MDFIRE2024
Posts: 254
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: frosti85 ERE journal.

Post by MDFIRE2024 » Thu May 18, 2017 11:13 pm

Hi Frosti.

I guess some weeks ago another Austrian from Vienna started a Journal. Also nice to have you here.
Looking forward to hear from your steps towards ERE.
I live in Germany and have a similar story and background. Have you already thought about cutting expenses even more?
What I have learned after the first year of extreme ERE is balance. Balance between favourit lifestyle, ERE and financial goals.

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Mon May 22, 2017 2:47 am

First ERE mission: get rid of the car.

I live in a suburb of Vienna, right now my route to work is:

10 minutes car ride to train station
15 minute train
10 minute subway

The car costs ~ 80€ per month with gas costs included.
so there is huge saving potential here.

I should be able to sell it for 3000-4000€

then I have the option of either taking the bus or walking / cycling to the train station.

After reading "your money or your life" I was thinking about the walking option in a completely new way:

- bus costs 30€/month and is 15 minutes in one direction.
(+5-10 minutes of idle time waiting for it)

- walking costs nothing, and is 25 minutes, and has health benefits as well.

This will be the first week with me only using the walking option :)

Riding a bike is also a good option, but I dont really trust myself when I'm tired in the morning not to kill myself (had a car accident once because of me driving tired and losing concentration)... so I'm not sure about that.

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Mon May 22, 2017 2:48 am

MDFIRE2024 wrote:
Thu May 18, 2017 11:13 pm
Hi Frosti.

I guess some weeks ago another Austrian from Vienna started a Journal. Also nice to have you here.
Looking forward to hear from your steps towards ERE.
I live in Germany and have a similar story and background. Have you already thought about cutting expenses even more?
What I have learned after the first year of extreme ERE is balance. Balance between favourit lifestyle, ERE and financial goals.
The first major cut will be getting rid of my car (see post above)

Then the next step I will do in 1-2 years is move closer to work and save ~100-200€ on rent / month.

JollyScot
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Joined: Thu Feb 26, 2015 3:44 am

Re: frosti85 ERE journal.

Post by JollyScot » Mon May 22, 2017 5:24 am

Hey Frosti, how is Vienna to live in. I remember back when I was thinking of moving from the UK the first time that I really enjoyed the city. I was only there a few days so not sure if it was just tourist goggles (probably was).

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Mon May 22, 2017 6:39 am

@Jolly: according to mercer there is no better city in the world to live in:
https://en.wikipedia.org/wiki/Mercer_Qu ... ing_Survey

My personal opinion: it's great and also very good for ERE.

crime rate is extremly low. you can walk around at night in the entire city without fear.
public transport is excellent, for 1€ per day you have access to the entire transportation system.
lot of parks and outdoor areas. so you dont need at car which is very helpful for ERE


only disadvantage: rent costs increased a lot in the last 5-10 years. it's still manageable but if you want to do ERE on an average income it's probably a good idea to share an apparment with other people

disadvantage related to austria: we have some of the highest tax rates in the world. 45% of my gross income is taxed.
but health care is free and we have a huge social safety net... so hard to evaluate this.

MDFIRE2024
Posts: 254
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: frosti85 ERE journal.

Post by MDFIRE2024 » Mon May 22, 2017 2:18 pm

Frosti85 wrote:
Mon May 22, 2017 2:47 am
First ERE mission: get rid of the car.

I live in a suburb of Vienna, right now my route to work is:

10 minutes car ride to train station
15 minute train
10 minute subway

The car costs ~ 80€ per month with gas costs included.
Very good idea in my opinion. I've done the same in the last year and it saved me at least 200 € per month. I ride my bicycle to work. Each day 45 Minutes one way. Don't forget to calculate service, bying, repair, tax, insurance ... costs. I didn't regret my decision and so will you, I guess.

JeanPaul
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Joined: Tue Jan 01, 2013 5:15 am

Re: frosti85 ERE journal.

Post by JeanPaul » Tue May 23, 2017 7:44 am

1000 a month is fine on expenses - but it might be worthwhile moving to raise salary, as 36,000 netto seems quite low for a mid-career software engineer, even in Berlin, which is where my personal experience is - certainly in Munich or Frankfurt. And in the US, of course, you'll make at least double that.

Stahlmann
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Re: frosti85 ERE journal.

Post by Stahlmann » Tue May 23, 2017 2:57 pm

I contacted you using PM.
I would really appreciate an answer.
Thanks in advance for a reply.

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Tue May 23, 2017 3:20 pm

@Stahlmann: answered you.

yeah it's really ridicolus with the socialism here in Austria, makes you even more pissed about all the taxes you pay to feed some unproductive parasites of the social system.

Stahlmann
Posts: 255
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Re: frosti85 ERE journal.

Post by Stahlmann » Tue May 23, 2017 4:30 pm

Frosti85 wrote:
Tue May 23, 2017 3:20 pm
@Stahlmann: answered you.

yeah it's really ridicolus with the socialism here in Austria, makes you even more pissed about all the taxes you pay to feed some unproductive parasites of the social system.
I asked you question using PM, because we tend to care about ERE name.
Jacob received many insults as ,,homeless bum without ambition" during his era of being very active about cause.
Most people achieve ERE using ,,normal" methods. Let it keep this way.

Anyway it brings this issue who is ,,exploiting" who in ,,capitalistic/socialistic" state.

Are workers lost in capitalism?
,,Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires."


Are good and ambitious people opressed in socialism?
"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery."



Funnily, main topic for essay (for mother tongue) during finals in my country in some year was:
,,The job - is it a duty or a passion?" :lol:

Edit: Sorry for the derail :lol:

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Mon Jul 10, 2017 4:46 am

Update 2017-07-10:

Still own the car.
I could sell it for 1000-2000€ but I decided to just drive it into the ground (but not waste anymore money on repairs) and when it stops working
will go carless.
I might just donate it to my mum because she will need a new car in 1-2 years and I would rather give it to her for free than sell it with a big loss

Also got interested in prepping and survivalism a little bit, which I will start as a hobby (but not buying expensive gadgets of course)

Also decided to focus on increasing my income

Current net worth: ~2,5 years of expenses

I still have a mortgage which I want to pay of until 2018. I just want to be debt free

FI target is still when I will become 40 (2025)

MDFIRE2024
Posts: 254
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: frosti85 ERE journal.

Post by MDFIRE2024 » Wed Jul 12, 2017 12:35 am

Hi Frosti85. Have I missed something? Do you rent or have you bought some real estate? Looks like you wanna pay your morgage till 2018 and getting debt free. Sounds like a very good plan to me.
Off course you have considered the ongoing costs for your car? They could be quite high for older cars.

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Fri Jul 14, 2017 7:10 am

@MDFIRE2024:
In Austria we have a model called "Genossenschaftswohnung".
It's a mixture of rent and owning.

You pay a fixed sum when you move in, and you will get it back when you move out.
But you also pay rent, but the rent is much lower than in rent only appartments.

Another advantage is, these so called "Genossenschaften" are basically forced by law to be non-profit.
So the yearly increase in rent costs is very low or non-existing.
(in the first year my rent was actually decreased by almost 20%)

I paid for this fixed-sum (which was 45000€) with a mortage, and I pay 2% interest on it.
So there is almost zero risk because in the worst case I could just move out of my appartment and immidiatelly liquidate the mortgage.

But I still want to be debt free, and also by paying it off I get a guaranteed 2% risk free return

About the car:
Agree the ongoing costs are still there, insurance and repairs... so yeah I want to get rid of it sooner than later.

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Fri Jul 14, 2017 7:12 am

Another thing:

Under current law in austira, p2p lendings falls under income tax, and not capital-income tax.

Which is very bad for me right now, because I would have to pay almost 40% tax on my p2p income.

But in early retirement it would be good, because on the first ~10k of income, I would not have to pay any tax at all.

MDFIRE2024
Posts: 254
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: frosti85 ERE journal.

Post by MDFIRE2024 » Fri Jul 14, 2017 12:07 pm

Frosti85 wrote:
Fri Jul 14, 2017 7:12 am
But in early retirement it would be good, because on the first ~10k of income, I would not have to pay any tax at all.
I also have looked up the amount of income which is tax-free in Germany. (Grundfreibetrag).
If you also consider other expenses (health costs) which you could reduce from the income (von dem zu versteuerndem Einkommen abziehen), then you could have an income of about 14 thousand Euros, which are tax-free.
I guess Austria and Germany are similiar regarding that.

How much lower is your rent in comparison to the average rent in Wien?

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Tue Jul 18, 2017 4:56 am

MDFIRE2024 wrote:
Fri Jul 14, 2017 12:07 pm
How much lower is your rent in comparison to the average rent in Wien?
I dont live in Vienna but in a suburb that is 5km outside.
So it's hard to compare, but I guess ~50%.
But in the longterm this will increase because normal rents rise faster (my rent almost stayed flat in the last years)

Frosti85
Posts: 43
Joined: Thu May 11, 2017 3:27 am

Re: frosti85 ERE journal.

Post by Frosti85 » Tue Jul 25, 2017 10:12 am

Last weekend I got some survival training :)

Learned how to make a fire, build a shelter, and purify water.
(I dont think I will ever need these skills but I was just interested)

Was very interesting and a complettely new experience for me.

I rediscovered how much I like to be in the nature. 2 days without internet, smartphones, electricity... it was a very peaceful experience.
(also was a good stoic exercise to show how much luxury we have in modern life)

Now I'm playing with the idea, to live in a very small house in the woods, have a garden, and maybe a lake nearby to go fishing.

I think I could get a small house for 100k here in austria, and my expenses would probably be reduced by 50-60%.

So I could live on ~5k per year.

So the plan would be:

save until I have around 200k. That is possible in 6-7 years.

then buy the house, and invest the other 100k in stock market and p2p lending to generate the income.

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