wolf's journal

Where are you and where are you going?
wolf
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Location: Germany

Re: wolf's journal

Post by wolf » Sat Nov 24, 2018 2:50 am

Last year I defined a goal, in order to save energy.
Since then, I only used less than 300 kwh (for a one-person-household in my apartment)
What I did was to try to use only maximum two electronic appliances* (loads) at the same time.
*such as: light, pc, TV, Smartphone, stove, Internet.
This is especially challenging, if it's dark outside. But it worked so far pretty good. I came up with ideas how to make it work.
I wanted to find out about the minimum, what I need energy-wise.
The goal of using maximum two electronic appliances at the same time was a challenge in the first place, but nowadays it is just normal for me.
And I am really happy with it, because I think, that I use energy very efficiently and wisely.
So, if you'd like to save energy: Try to use only maximum two electronical appliances (per person) at the same time in your apartment.
Although, I don't know if the goal has to be higher for a house.

Seppia
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Location: Italy

Re: wolf's journal

Post by Seppia » Sat Nov 24, 2018 3:10 am

That's a great idea wolf, we should look into it as well.
Electricity consumption is one of those things I don't look too much into, because we already spend slightly less than half what people with a comparably sized apartment spend (meaning less than a third of what our peers spend since we have a smaller place).
So it's one of those areas where I hit my personal "good enough" ceiling.

But we should never stop to try improving

FBeyer
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Joined: Tue Oct 27, 2015 3:25 am

Re: wolf's journal

Post by FBeyer » Sat Nov 24, 2018 4:21 am

wolf wrote:
Sat Nov 24, 2018 2:50 am
Last year I defined a goal, in order to save energy.
Since then, I only used less than 300 kwh (for a one-person-household in my apartment)
What I did was to try to use only maximum two electronic appliances* (loads) at the same time.
*such as: light, pc, TV, Smartphone, stove, Internet.
This is especially challenging, if it's dark outside. But it worked so far pretty good. I came up with ideas how to make it work.
I wanted to find out about the minimum, what I need energy-wise.
The goal of using maximum two electronic appliances at the same time was a challenge in the first place, but nowadays it is just normal for me.
And I am really happy with it, because I think, that I use energy very efficiently and wisely.
So, if you'd like to save energy: Try to use only maximum two electronical appliances (per person) at the same time in your apartment.
Although, I don't know if the goal has to be higher for a house.
We -family of three- use a bit less than 350 KWh per year for a 90m2 house. We basically only use two appliances at the same time, although it was never a concious choice; just a natural result of living in a smaller house.

wolf
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Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: wolf's journal

Post by wolf » Sat Nov 24, 2018 1:29 pm

@FBeyer: that's great. Wow, such a low energy consumption per person!

It started as a challenge for me. Since discovering ERE I started many such challenges in my life. And reducing my energy consumption in my apartment was one of them. It makes you aware of inefficiencies energy-wise, e.g. when I visit my parents at their house I see many such energy waste. Then I am the one who switch off the lights and other things :-)

Seppia
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Location: Italy

Re: wolf's journal

Post by Seppia » Sat Nov 24, 2018 1:37 pm

FBeyer wrote:
Sat Nov 24, 2018 4:21 am
We -family of three- use a bit less than 350 KWh per year for a 90m2 house.
I just looked up our consumption and holy shit is that low!

Since we moved we are using about 70KWh per month (2 person household), and again in terms of energy we spend significantly less than our peers.
We do have induction cooking, which is thirsty for electricity, but still...

wolf
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Location: Germany

November 2018 Financial Progress

Post by wolf » Fri Nov 30, 2018 6:56 am

Savings Rate = 89% (12 months rolling average)
Yearly Expenses = 4973€ (12 months rolling average) *
Withdrawal Rate = 6,5%(actual yearly expenses + margin of safety + health insurance)
Withdrawal Rate = 2,6% (based on actual yearly expenses without any margin of safety) *
Milestone = 89% (accumulated money compared to milestone of 210k€ by end of 2019) **
Investment Ratio = 70% (invested money in equity/bond/commodity market, rest of it in cash)
Passive Income = 63% (dividends and bond yields covering my actual yearly expenses)
Investment Rate= 3500€ (this month)
JAFI = 0.97 (assuming I had to pay health insurance like I were RE)

* without health insurance
** After achieving the milestone, I'd like to evaluate possibilities of coasting deliberately to FI and semi-ERE

edited:
Withdrawal Rate is now based on actual yearly expenses, without any margin of safety
Last edited by wolf on Sun Dec 02, 2018 3:14 am, edited 1 time in total.

classical_Liberal
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Re: wolf's journal

Post by classical_Liberal » Sat Dec 01, 2018 12:26 am

The progress continues. Excellent work wolf!

I'm finding as I approach my coast to FI/semi-ERE financial goal, I'm starting to creat ea variety of mental excuses regarding how it's not good enough. Are you experiencing any similar thoughts?

How is work for you? You don't seem to mention it that much, so I assume it's not consuming too much of your mental energy, or maybe it just doesn't play too much of a role in life satisfaction/dissatisfaction for you.

wolf
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Location: Germany

Re: wolf's journal

Post by wolf » Sat Dec 01, 2018 3:18 am

Thanks!

Recently I am thinking more about semi-ERE. I ask myself, when is enough enough. Given my already low WR (actual expenses vs. NW), I am not sure anymore what "number" I'd like to achieve. In the last two years I created many excel spreadsheets with many KPI's, goals, milestones, ratios, controlling data, etc. And then I defined the absolute number of 420k as my ultimate financial freedom goal. But I am not sure anymore, if that's the right approach. Part of the reasons why I doubt it, is that I was able to reduce my expenses. That had some positive influence on my WR and it made me think about the absolute (not relative!) goal.

So, one part in me wants to aim for semi-ERE within the next 2 years. And the other part tries to go "hardcore" (earning, saving) till I reach my ultimate goal. And yes, I also create some mental excuses. I think about all the risks in life, what could happen, and what could threaten the semi-ERE-approach. In that context it is also not beneficial, that I am riskaverse and conservative (financially). I am experiencing similar thoughts. So, when is enough enough? I gotta figure that out within the next two years, because I really like to semi-ERE.

Regarding my work: It is ok. I am content with it. Pay is good and many other things as well. It is not consuming too much of my mental energy, because I "only" work less than 40 hours per week. I've got flexible work hours, homework, many vacation days, and great collegues. Unluckily the company I am working for wants to reorganize work. So I cannot plan for the next few years. There will be (dramatical) changes and they will also influence me. Maybe I gotta change jobs/company/work place, etc. So many things are uncertain for me. If I had about 100k more I really would consider semi-ERE now, but I don't have it. Therefore I take the chance proactively and adapt accordingly, which means I make the best out of it. And who knows maybe the changes will have a positive impact on my plans. Luckily I work in IT and I live in Bavaria/Germany, where work conditions are very good now.

In conclusion, I aim to achieve the following in the next 12 months:
- adapt to the changes at work (maybe change jobs/company, etc.)
- save as best as I could in order to achieve my already defined milestone of 210k
- think more about semi-ERE and what it means for me (when is enough enough?)

Jean
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Re: wolf's journal

Post by Jean » Sat Dec 01, 2018 4:25 am

You could take avantage of your salary to buy Real estate, rent most of it, and then just work part Time to pay off wathewer smallish mortgage you got.

Sabaka
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Re: wolf's journal

Post by Sabaka » Sat Dec 01, 2018 3:25 pm

Awesome work Wolf, you're smashing it!

I've been having a lot of the same thoughts recently. Not about semi-FIRE exactly, but just about what I want to achieve from FIRE in general. I understand the benefits of taking a really analytical approach to FIRE and planning it to a tee, but from my (admittedly limited :lol: ) experience of life so far, the one truth that consistently reaffirms itself is that life rarely goes to plan. "A plan never survives first contact" :lol: .

So, currently, one of my main focuses is learning to enjoy the process. To get to that good balance between planning for the future and living for the present :) .

wolf
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Location: Germany

Re: wolf's journal

Post by wolf » Sun Dec 02, 2018 3:24 am

Due to the discussions and thoughts about semi-ERE I changed the calculation for my Withdrawal Rate, which I post monthly (see above).
Till now I posted a WR which included a Margin of Safety of 100% and with health insurance (it is covered directly from work income).
I don't want to trick myself and chase a number, just because of the number. I want to show the numbers as they are. So therefore my reported WR will be based purely on my actual expenses. I hope that this is a step in the right direction toward semi-ERE. I think this change will give me more clarity, when I think (and decide) about semi-ERE. And of course I hope that questions from you about the actual WR help me to understand the transition phase from fulltime work to semi-ERE better. I really do appreciate the discussions with you. Thank you for that!

classical_Liberal
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Re: wolf's journal

Post by classical_Liberal » Fri Dec 07, 2018 4:30 am

@wolf
I like the concept of using ERE numbers in a strategic/psychological manner. I think I may steal it with a twist. Since expenses are an issue for me, I think I will begin reporting at what level of annual spending I could be FI. ie I'd be FI if monthly/annual spending was $X.

2Birds1Stone
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Re: wolf's journal

Post by 2Birds1Stone » Fri Dec 07, 2018 4:50 am

@c_L, it's a fun thought exercise. When you internalize that 4% covers all of your true needs........the rest becomes a game.

wolf
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Location: Germany

Re: wolf's journal

Post by wolf » Fri Dec 07, 2018 10:52 am

Indeed, it's a strategic/psychological mindshift. And it can be used to your advantage.

Like jacob posted in ERE indicator
jacob wrote:
Sat Oct 15, 2016 5:50 pm
We become what we measure.

In the context of semi-ERE I also learned from SustainableHappiness's Journal
SustainableHappiness wrote:
Wed Dec 05, 2018 9:02 am
That is, I would have been stressed out making most of those decisions if I hadn’t changed my mental framework up. So probably 70% mental, 30% situational to toss a number on it.

Therefore I try to think about the mindset, which is required for semi-ERE (or Deliberately Coasting to FI).

First I reported the hypothetical WR, which had a Margin of Safety of 100%. It was about 6,x% the last month. It can motivate you to achieve less than 4%. It's like chasing, till you reach it.

Now I changed the reporting to my actual WR, which is based on my actual expenses. It's less than 4% already. So now it feels a lot more like that:
2Birds1Stone wrote:
Fri Dec 07, 2018 4:50 am
When you internalize that 4% covers all of your true needs........the rest becomes a game.

wolf
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Location: Germany

Re: wolf's journal

Post by wolf » Sun Dec 09, 2018 6:29 am

Just for a reference in the future. In case I review my journal.

The Periodic System of ERE

Jin+Guice
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Re: wolf's journal

Post by Jin+Guice » Fri Dec 14, 2018 11:48 am

I came over here to proselytize, much as I have done in c_L's journal, about the benefits of semi-ERE, as I see you are considering it. If you've read his journal or the part-time work thread you know I am a big fan of this method.

Before getting on my pedestal I reread your journal. Reading your journal is very calming. You are like an ERE monk. You have a high salary, Jacob level spending, an extremely high savings rate, a lot of money saved, you are constantly trying to improve your ERE self (for example, reducing electricity usage) and you have a high level of introspection. Congratulations! This is excellent and you are an inspiration.

Perhaps it is absurd for me to give you advice as you are further along the ERE/FIRE journey than myself on almost any metric. I avidly promote the semi-ERE/ part-time work extreme method only because I think it is a minority voice here and there are many others who caution against it.

You are in a different situation than many considering semi-ERE. You don't mind your job, perhaps you even like it. You are at or very near minimum expenses, unless you were to do something truly drastic (some form of homelessness for example). You have already considered that reaching your savings goal may not be as important as you thought it was when you started.

The benefits of working part-time are numerous. You keep a stream of income. You don't have to draw down (and in most cases you can increase) your savings. Paid employment is an important part of our current society and, working part-time, you still engage in it. Paid employment can be very pleasant if you don't spend that much time doing it. I could go on and on.

Based on your current situation I wouldn't say you are in dire need of part-time work/ semi-ERE. If you are happy with your work I see no reason to quit, you may as well accelerate towards full FI. But if you are really happy with your work why FIRE? The mental game I would play is, if I was FI today would I still work at my job? If not I would semi-ERE.

From reading your journal it looks like you are close to reaching the halfway point to your full number (expenses + insurance + 100% margin of safety), which you've marked as a milestone. It also looks like you'll reach this goal within a year. If this goal is important to you and you don't mind your job you may want to stick it out, if only for the mental benefits of setting a difficult goal and reaching it. I see no practical reason you should reach this goal before semi-retiring. I do worry that those setting semi-ERE goals which are valued in current market assets won't reach their milestones if the markets drop substantially and will be trapped into several more years of work.

You mention that you are very conservative and risk averse. I don't think that full FI is a conservative or risk averse position. Are you being more conservative if you work in one career, learn investment, save enough money to reach a 3% SWR and then fully retire from work or if you have a large savings, learn investment, and continue paid employment in a part-time manner? You are afraid of the risks of running out of money, but what about the risk of dying before you get to experience the freedom of not working a full-time job? What about the stark difference between working as a full-time employee for years and then suddenly being in control of all of your own time?

The least risky position is having low expenses. I'm not sure what the minimum wage in Germany is, but in the U.S. 1 Jacob is less than working for minimum wage 20 hours a week (JAFI is slightly over this because the minimum wage hasn't been increased since 2009). IMO, once you reach one Jacob of expenses you are free, even if you don't have a dollar saved.

wolf
Posts: 824
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Location: Germany

Re: wolf's journal

Post by wolf » Sat Dec 15, 2018 7:29 am

Thank you very much for the positive feedback Jin+Guice. And I also give positive feedback in return to you: You are an inspiration wrt semi-ERE, not just for me, but for many others as well who consider semi-ERE!

Yes, I have read and follow c_L’s journal with great interest, as I have read also yours and others who consider/do semi-ERE. In the last few hours I read the whole thread: What is your FIRE number? Your expected FIRE expenses? And I follow with great interest all the discussions about part-time for life, limiting your choices, deliberately coasting to FI, etc.

Currently I am learning so many new things about semi-ERE, ERE, Web-of-Goals, etc. In the meantime I spend time reflecting all those new experiences and lessons learned. Well, I even started documenting those very valuable insights. I already collected a few pages of it. In the beginning of my ERE-journey I also started to document all those lessons learned about FIRE and ERE. So now I have already collected a vast amount of content. And one goal for the upcoming vacation from christmas till new-year is to review everything of it.

Regarding my current situation at work: I am happy with it, so far. But there will be changes within the next two years, because the company is restructuring its business model. So, the probability is high, that those changes will impact my job. Luckily I am very well prepared (FI assets and low expenses), in order to wait and see what will happen. If that won’t suit me, I will definitely consider changing my work situation. And the more I think about it, the more it will tend/lead towards semi-ERE.

My “full number” changed from an absolute goal to a long-term “north star” type of goal. I don’t have to reach it anymore before I consider semi-ERE. If you had asked me two years ago, I would have said, that I had to reach it first. My mindset had changed within the last two years since discovering ERE. It is similiar to the experiences 2Birds1Stone has (see here). And a great deal of that change is due to the discussions on this forum, which I really do appreciate. I learned so many new insights and I were able to reduce my expenses drastically, that nowadays I think differently about financial goals. The journey continues and it is leading towards semi-ERE, whatever that will be in my case.

wolf
Posts: 824
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: wolf's journal

Post by wolf » Sun Dec 30, 2018 11:20 am

Savings Rate = 89% (12 months rolling average)
Yearly Expenses = 5029€ (12 months rolling average) *
Withdrawal Rate = 2,7% (based on actual yearly expenses without any margin of safety) *
Milestone = 90% (accumulated money compared to milestone of 210k€ by end of 2019) **
Investment Ratio = 69% (invested money in equity/bond/commodity market, rest of it in cash)
Passive Income = 62% (dividends and bond yields covering my actual yearly expenses)
Investment Rate= 0€ (this month) (decided to wait and increase cash buffer)
JAFI = 0.98 (assuming I had to pay health insurance like I were RE)

* without health insurance
** After achieving the milestone, I'd like to evaluate possibilities of DC2FI (deliberately coasting to FI) and semi-ERE

Overall it was a great year regarding my progress of ERE. All of my KPI's improved. I even created an JAFI KPI, which I'm tracking for a few months now.
In addition to that I defined the next milestone, which I'm aiming to achieve till the end of 2019. In addition to that I have been thinking deeply about DC2FI (deliberately coasting to FI) and semi-ERE (thanks to Jin+Guice, 2Birds1Stone, classical_Liberal, and many others!) I even created a vision of semi-ERE, which is based on part-time work. But first I gotta achieve the next milestone of 210k€ accumulated money (invested and/or cash), then I'll think about the next milestone.
And I have to wait till the decisions at work will be announced. There will be changes and it is likely that they will influence my work place / conditions.
I really appreciate the discussions here. Many thanks to you! I value the deep insights and experiences, which you share.
Last edited by wolf on Sun Dec 30, 2018 2:24 pm, edited 2 times in total.

wolf
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Location: Germany

Re: wolf's journal

Post by wolf » Sun Dec 30, 2018 11:36 am

And, as promised, some long-term charts.
I discoverd ERE in April 2016. In June 2016 I sold my car :-)

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Forskaren
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Re: wolf's journal

Post by Forskaren » Sun Dec 30, 2018 12:49 pm

It looks like that you were very frugal already before giving it a deeper thought.

What happened the year when your savings rate was low? Did you include some big purchase that year, like a car?

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