Mae's Musings

Where are you and where are you going?
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Mae
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Location: Western Europe

Mae's Musings

Post by Mae » Sun May 06, 2018 4:09 am

Where to start? Perhaps it is better to drop you readers in medias res.

I am 27 years old. Unlike most people here, I don't have a permanent job. I earn money as a (temporary) project manager in a sector that doesn't generally pay much. I do enjoy a good salary at the moment. With a bit of luck, I can stay on as a permanent employee, but I won't know this for sure until the end of the year.

I am reading Your Money or Your Life and it has helped me expand my views on money, work, etc. So far, I've been digging the notion of 'life energy', spending in alignment with your core values, and the divide between work and paid employment. At this point, I should probably mention that I live a vegan lifestyle for ethical reasons and am also quite concerned with the rate at which people are consuming earth's finite resources. It surprises me how little awareness and/or care there is surrounding these issues.

It was FrugalPatat, also a member here, who introduced me to the concept of FI. We are currently engaged and I'm willing to bet he has his own opinion on my posts and our progress in general. Prepare yourselves for a guest post or two :D

We've both come to the conclusion that the road to FI in the US vs Europe (or just our country, idk) is approached in vastly different ways. (Do most Americans really not cook their own dinner?) We live in a country that taxes pretty much everything, which proves very frustrating. Especially when thinking of investing.

I don't want to spend too much time writing this introductory post, so I'll end it here.

Have a sunny Sunday!
Last edited by Mae on Sun May 06, 2018 6:31 am, edited 1 time in total.

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Mae
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Re: Mae's Musings

Post by Mae » Sun May 06, 2018 5:02 am

My partner and I filed our taxes yesterday. Predicted tax returns are about € 2350, combined. (I'll humbly leave out what part of that is mine :lol:) We'll receive this in the latter half of the year.

Interestingly enough, we expected the sum to be lower. Not complaining though.

IlliniDave
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Re: Mae's Musings

Post by IlliniDave » Sun May 06, 2018 6:07 am

Welcome. Maybe I'm answering a rhetorical question here: I don't know the statistics but among people I know most probably cook their own dinner most of the time, but in the US people in general do dine out or carry out frequently. Among the same people, only a minority prepare their lunch at home. I rarely eat out, but I do opt for convenience items in the grocery store more than I should (both for health reasons and cost reasons). My "excuse" is that being single and living alone makes the effort of cooking often feel not worth the trouble (a lame excuse).

YMOYL was influential to me during a time I was undergoing a a substantial philosophical shift. Specifically the idea you mentioned (consciously/deliberately working to align spending with contentment and values) was key. I only wish I'd read the book when I was your age!

Good luck to you both.

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Mae
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Re: Mae's Musings

Post by Mae » Sun May 06, 2018 6:45 am

I know a lot of people who do take away for lunch, but the cost doesn't justify the convenience, in my opinion. Also: so much packaging!

You could consider cooking a skill you'd like to develop, and cook in batches to reduce costs even more? Meal prep and freeze the meals ... I also like knowing which ingredients are in my meal and improving recipes for better health. Cooking dinner is kind of meditative, helps unwinding during weekdays.
IlliniDave wrote:
Sun May 06, 2018 6:07 am
YMOYL was influential to me during a time I was undergoing a a substantial philosophical shift.
That's exactly how it feels to me. I wonder how much of the book I can internalize and implement in daily life. Can't wait to finish it :)

IlliniDave
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Re: Mae's Musings

Post by IlliniDave » Sun May 06, 2018 9:30 am

Mae wrote:
Sun May 06, 2018 6:45 am
You could consider cooking a skill you'd like to develop, and cook in batches to reduce costs even more? Meal prep and freeze the meals ... I also like knowing which ingredients are in my meal and improving recipes for better health. Cooking dinner is kind of meditative, helps unwinding during weekdays.
I do think about that quite regularly and do a decent job cooking simple things, but for the most part I've deferred any serious attempt at that until I'm done working and settled in my next phase of life (approx. 1-2 years from now). A few years back I got enthusiastic about paring down possessions and removing clutter and I pared down my kitchen to the minimum which makes me ill-equipped to cook in bulk. My rule was:if I can do the job with something smaller, it goes. Once I get resettled I intend to do a mindful restocking of my kitchen, including lessons learned about being too minimalist.

Jason
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Re: Mae's Musings

Post by Jason » Sun May 06, 2018 9:54 am

Mae wrote:
Sun May 06, 2018 4:09 am

We are currently engaged
I wish you and FrugalPatat the best, but that "currently" doesn't exactly jump out in pantiless, spring dress, arms around the neck, twirling in a foreign field reassurance.

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Mae
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Re: Mae's Musings

Post by Mae » Sun May 06, 2018 11:11 am

@IlliniDave: I get that everything you don't use gets sold/tossed. Especially if you have acquired a lot of clutter throughout life. It is a decision that you made at a given moment. You didn't - at the time - cook in bulk, so it's understandable. Like you said, lessons learned.

@Jason: I showed him your post. His reaction: "I am now a sad panda."

On the topic of marriage: damn people's expectations about weddings. For every person who holds these overly traditional expectations that do no match ours, I want to bang my head against the wall ... Twice.

Jason
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Re: Mae's Musings

Post by Jason » Sun May 06, 2018 12:01 pm

Mae wrote:
Sun May 06, 2018 11:11 am

On the topic of marriage: damn people's expectations about weddings. For every person who holds these overly traditional expectations that do no match ours, I want to bang my head against the wall ... Twice.
Well, in their defense, I can see how receiving invitations that read "have the honor of announcing the possible marriage" could cause some protest.

FrugalPatat
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Re: Mae's Musings

Post by FrugalPatat » Wed May 16, 2018 4:12 am

We openend our first brokerage account.

Now to get over the analyse paralysis to actually do something with it...

Jason
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Re: Mae's Musings

Post by Jason » Wed May 16, 2018 5:53 am

My recommendation is to start learning from your mistakes as soon as possible.

jennypenny
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Re: Mae's Musings

Post by jennypenny » Wed May 16, 2018 8:16 am

Stick to your guns with your wedding planning. DH and I wanted something simple and intimate and got talked into a grand affair that neither of us enjoyed (we literally left the reception early).

Eating out -- like most things -- is just a habit. I have a neighbor who sends his dress shirts out to be pressed because he says he's terrible at ironing. I suggested that if he ironed them himself, the practice would make him good at it in no time. He argued that the shirts would never look as good as when the cleaner presses them. I agreed, but said they would look good enough. I view eating out the same way. Anyone can learn to cook well enough to feed themselves without too much fuss. It just takes practice and slightly lowered expectations (foodies have skewed everyone's expectations).

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Mae
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Re: Mae's Musings

Post by Mae » Sat May 19, 2018 5:44 am

Wedding planning

We are taking it one step at a time. The date is set and (free) digital invites were sent out to our parents and siblings. (Thank you, Canva.com!) Our apartment isn't large enough to host a reception at our place. Or is it? I'm hoping we can create some room, install a table, buy our own drinks and have a semi-decent time. (None of us like the attention or crowdedness. If we invite friends over, it's usually just one or two persons.)

Apartment garden

I am growing some plants, that I (and our pet rabbit) can eat, for two reasons: (1) teaching myself how to garden, (2) reduce food costs. I haven't killed any of my plants yet and do enjoy gardening a lot. I also like the challenge of doing this with as little expenses as possible. E.g. thrifted flowerpots and getting seedlings from acquaintances. We also have a lemon balm plant that seems to be keeping musquitos away and can serve as food for our rabbit.

Other
  • Quickly scanned the web for dumpster diving groups in my area, couldn't find any
  • FrugalPatat got a haircut for € 0 (I cut it)
  • Our brokerage account isn't accessible yet, but should be next week
  • FrugalPatat and I thrifted a very decent dress shirt (€ 4) and very comfy sandals (€ 5)
Last edited by Mae on Sat May 19, 2018 11:02 am, edited 1 time in total.

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Mae
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Re: Mae's Musings

Post by Mae » Sat May 19, 2018 5:45 am

jennypenny wrote:
Wed May 16, 2018 8:16 am
Stick to your guns with your wedding planning. DH and I wanted something simple and intimate and got talked into a grand affair that neither of us enjoyed (we literally left the reception early).
We are easy-going people but very stubborn when it comes to our core values. Grand parties aren't happening :P

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Mae
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Re: Mae's Musings

Post by Mae » Sun May 20, 2018 10:57 am

Awaiting the opening of our brokerage account ...

Taxation of investments

There are some fixed taxes in my country to take into account when investing. Those that stand out:
  • Dividends income tax is 30%. Yes, 30%. However ...
  • If income from dividends remains under € 640 per year, dividends income tax is 0%. (Gov takes 30% regardless - and you have to reclaim your money via the tax form)
  • Stock exchange tax: 0,35% for every transaction, BUT ...
  • Stock exchange tax for accumulating trackers is different, ranging from 0,12% to 1,32% for every transaction
  • If you have over € 500,000 sitting on a brokerage account, you are taxed for 0,15% of the total amount

RealPerson
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Re: Mae's Musings

Post by RealPerson » Sun May 20, 2018 12:58 pm

On the differences between the US and Western Europe: because the governments in Europe tax so heavily, they essentially take more of the decision power of individuals away and make spending decisions in your place. That makes for less financial room for ERE.

But: from what I have seen, you may consider renting instead of buying your dwelling. I am astonished by the high cost of buying vs the low cost of renting of real estate. And renters are protected by all kinds of laws. Just something to consider.

Plus: I see tons of expensive newer cars on the road in Europe. I believe this has something to do with business vehicles tax benefits, but it still costs a lot. That looks like an obvious place to save.

And: social pressure in Europe. A ton of pressure to fit in with the norm. The US is more individualistic than Europe. It means you have to be more vigilant is choosing your own frugal path vs. compliance with the norm.

Alcohol is everywhere in Europe and is socially very tolerated. A couple of beers in a bar every weekend add up to a lot of money. I have the impression bar or cafe hopping is very popular and very expensive. Easy savings.

The system is different, so ERE requires different tactics. You can still implement the same strategy, just modify the tactics to your situation. The many forum users from Europe are living proof of that.

Best of luck to you and congrats on your engagement!

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Mae
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Re: Mae's Musings

Post by Mae » Sun May 20, 2018 1:55 pm

@RealPerson: thank you for replying and confirming some of my assumptions.

FrugalPatat did buy the apartment. Regulations are thus that he benefits quite a lot from buying it. The mortgage has been paid back almost entirely, except for a part that is tax deductible. Public transport is a 10 minute walk away. Therefore, we don't own a car.

With regards to social pressure: thankfully, we are not led into expensive social outings very easily.

We are working on
- reducing our spendings by cultivating our already frugal mindset and by developing a skill set to avoid paying for services (cutting own hair, gardening for food, repairing stuff ...)
- increasing our income by investing, which is - alas - heavily taxed.

Good luck to you as well & thank you from both of us!

George the original one
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Re: Mae's Musings

Post by George the original one » Mon May 21, 2018 8:28 pm

Mae wrote:
Sun May 20, 2018 10:57 am
If you have over € 500,000 sitting on a brokerage account, you are taxed for 0,15% of the total amount
If you were to have that much invested, is it possible to split it to two different brokerages to avoid the tax?

Income taxes, while annoying, are at least "fair". Wealth taxes like this one are just ugly.

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Mae
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Re: Mae's Musings

Post by Mae » Tue May 22, 2018 10:56 am

George the original one wrote:
Mon May 21, 2018 8:28 pm
If you were to have that much invested, is it possible to split it to two different brokerages to avoid the tax?
Unfortunately, that's considered tax evasion.

On another note: our brokerage account is activated!

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Mae
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Re: Mae's Musings

Post by Mae » Sat Jun 02, 2018 2:30 am

On yet a different note: we are changing brokers.

Savings rate is about 79% for both of us combined in May.

Sabaka
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Re: Mae's Musings

Post by Sabaka » Sat Jun 02, 2018 10:03 am

Expanding on what is written above, an interesting aspect of pursuing FIRE in the U.K is that as a country we're almost a blend of the United States and Western Europe. So we have some areas where our system more represents the European side of things (free healthcare, etc) and others where we are more like the U.S (tax-free investment pots, etc). Overall it produces a system which I think is one of the most suited to FIRE in the world, so no complaining from me :lol:

Welcome Mae :) I'd be interested to know how you go about your vegan lifestyle whilst pursuing FIRE? I only ask because I recently started eating pretty much full vegan, and I've noticed that a vegan diet can either be very expensive (if you use lots of speciality items) or very cheap (if you don't).

Congratulations on the savings rate!

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