Wizards' journal (ERE in Denmark)

Where are you and where are you going?
wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Resignation notice was handed over today, and as expected I was asked to come up with terms for a part time (working from home) position.

We will talk again later this week and I believe I will be able to land an attractive deal – You gotta love the power of FU money.

@ Andystkilda – still two more months of 9-5 – but getting close :)

Interesting journal you have as well – and congratulations on your son.

1Vikinggirl
Posts: 40
Joined: Fri Dec 03, 2010 11:38 pm
Location: Europe

Re: Wizards' journal (ERE in Denmark)

Post by 1Vikinggirl »

Tillykke og lycka till i framtiden.

The wonderful power of FU, I mean FI-money (financial independence) is fantastic. I am so glad that you seem to be doing exactly what you want to do, in the way that you want to do it. And get a chance to keep a paid job on the side as a hobby (and a place for intellectual validation).
This, good people, is why we save so hard!

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Deal is now agreed, and I got it just as I requested.

New salary will be around 40 % of my current, but I will only be spending approximately 25% of the hours compared to today. (It’s a combination of a fixed monthly fee + variable fees based upon actual hours working).

I will keep all my current benefits; paid phone (mobile + landline), internet and a health care insurance (this is basically a first-in-line insurance - most health care is free / paid by taxes).

Last day at the office will be July 3rd - can't wait!

@Vikinggirl

Mange tak - og de bedste ønsker for dig også :)

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Update on spending.

In my update from the 2nd of May I mentioned our spending after having our son has been a positive experience – meaning the spending has been way lover than expected.

Here’s a comparison of 2013 and 2014

(Please notice the 2013 numbers don’t match my earlier post, this is due to change in the USD/DKK exchange rate – now using 6.65 instead of 5.45)

2013 | 2014 | 2014 Index
Interest Mortgage: | 4,452 | 4,284 | 96.2
Interest savings for Mortgage repayment: | -1,003 | -1,397 | 139.2
Savings for Mortgage: | 10,707 | 7,418 | 69.3
Property Taxes: | 2,291 | 2,291 | 100
Property Insurance: | 565 | 576 | 101.9
Utilities: | 4,351 | 4,152 | 95.4
Property Maintenance: | 0 | 236 | n/a
Auto, gas | 3,123 | 1,423 | 45.5
Auto, taxes | 497| 496 | 99.9
Auto, insurance | 538 | 266 | 49.3
Auto, Maintenance: | 1,374 | 1,885 | 137.1
Public transportation: | 3,215 | 2,666 | 82.9
Household (food etc.) | 5,489 | 5,263 | 95.9
Insurance (disability): | 506 | 503 | 99.2
Insurance (household, travel & legal): | 409 | 277 | 67.7
Media taxes | 366 | 367 | 100.2
Vacations: | 3,573 | 707 | 18.8
Misc. new purchases etc. | -543 | 2,519 | n/a
Child | 0 | 1,605 | n/a
Child benefits: | 0 | -662 | n/a
Total shared spending: | 40,092 | 34,875 | 87.0

My part (50%) | 20,046 | 17,438 | 87.0
Private spending (notice entry #2) | -2,712 | -1,312 | n/a
Total spending: | 17,334 | 16,125 | 93.0

A 7% drop in spending and 13 % in shared spending is pretty nice. There has been a significant drop in transportation costs and spending on vacations – due to us being more at home. The “misc. new purchases” includes cost associated to our wedding and isolation of our annex. Spending related to our soon (born in July) has been only approx. 35 % of what we budgeted for. We managed to keep the household/food cost a bit lower than 2013 despite spending money for diapers etc.

2015 looks to be fine as well – some post I already know will be changing:

Our Mortgage – we started making repayments last month and rates are now lower.
Household/food – I think we will see a minor increase.
Transportation – will stay low due to me working from home.
Child/Child Benefits – will increase as the 2014 number are only six months.

Feel free to ask any question or give advice.

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Last day at the office is getting closer – only 18 more working days. Next week I will have two days of – traveling to Riga with some friends (Thursday – Sunday).

I’m now at a 3.56 % WR and net worth of USD 619,748.

I'm slowly getting ready for some of my plans – two weeks ago I bought a (used) road bike + helmet, shoes and pants. Still needs to be more secure about the pedals but I am really looking forward to riding this bike.

Despite spending money on the bike – spending year-to-date is still lower than budgeted.

As for the investing / asset allocation I have but most of the money in stocks (Dividend Growth Stocks) – yield in the fixed rate market is still not attractive and I don’t feel like buying more rental properties at the moment if a good deal turn up, I might be ready ;-)
As a result of this my asset allocation has changed quite a bit since I last updated on this.

Image

55 % in stocks is quite high, but I don’t feel uncomfortable – most of these stocks are dividend growth stocks and I don’t plan/rely on selling these – only to harvest the dividends.

15 % in cash – so still a comfortable number – to take advantages of good deals and to buffer any unexpected events.

Rentals 18 % - both rentals are running smoothly – not much work other than empty the rent accounts :)

Bonds 12 % - most of these are in my “Entrepreneur savings” – only bonds and cash allowed, so are holding on to the ones I have, but not buying any new positions at the moments.

thrifty++
Posts: 1171
Joined: Sat May 23, 2015 3:46 pm

Re: Wizards' journal (ERE in Denmark)

Post by thrifty++ »

Hey wizard. Impressive NW you have acquired. Can I ask one question, might seem like a silly question as I have seen this term all over the ERE website but down know what it means. What does SWR mean?

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Hey thrifty,

Thank you.

There is actually a really good wiki on the ERE site:

http://earlyretirementextreme.com/wiki/ ... rawal_rate

It how ever would be more correct if I just typed WR (withdrawel rate)

thrifty++
Posts: 1171
Joined: Sat May 23, 2015 3:46 pm

Re: Wizards' journal (ERE in Denmark)

Post by thrifty++ »

Thanks wizard. It is a bit difficult to understand without an example. I will look into it further

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Quick example.

Ny networth is 619,748
My spending is 22,059

To cover my spending I need to withdraw 3.56 % from my networth (22,059 / 619,748) or you could say I would need a 3.56 % yield on my networth to cover my spending without touching the principal.

thrifty++
Posts: 1171
Joined: Sat May 23, 2015 3:46 pm

Re: Wizards' journal (ERE in Denmark)

Post by thrifty++ »

Ah I get you. Thanks. Your doing very well!
Mine calculates to 53% ! lol I have some catching up to do. Or the way I have been expressing it is years worth of expenses. Currently I have 1.89 years of expenses.

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Short update…

First month this year my net worth decreased. I’m now at USD 624,429 and a SWR of 3.61 %.

Only two days left at the office – have been busy trying to finish as much as possible and preparing to be working from home. The remaining four weeks of July will officially be holiday, but I know for sure there will be some work. For a change I will now be paid for work done in my holiday – another great thing about my “new deal” :D .

DW will start working again Monday after staying at home for a year, she’s not looking forward to this, but hopefully it will be ok.

Spending last month was below budget again. The Riga trip, which was a huge success, was almost without any cost, as it was paid by savings from our card games (we meet op every 1-2 month and play cards – the winnings from the games go to a separate saving account).

chol03ac
Posts: 12
Joined: Mon Apr 11, 2016 8:22 am

Re: Wizards' journal (ERE in Denmark)

Post by chol03ac »

Hello wizard Impressive reading!!
I´m looking on buying some property/apartment to rent out.
I´m living in Copenhagen and here the prices to buy an apartment is high.
Do you have any recommendations/thoughts or input to stuff about renting out. What to look for etc, what to buy
Regards c

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Thank you

Copenhagen is pricy no doubt.

What I’m looking for is:
Start yield +5%
Built no earlier than 1992 (rent control rules)
Low risk of vacancy (cities, good infrastructure etc).

Other strategies will work as well, but I’m sticking to the above.

Search for properties: I prefer Oline.dk and boliga.dk

Noedig
Posts: 191
Joined: Tue Aug 26, 2014 10:15 pm

Re: Wizards' journal (ERE in Denmark)

Post by Noedig »

Hello Wizard

Re: rental property. That game ('buy to let') has run its course here in the UK, but Copenhagen may be entering the spiral in the same way as London: excess of demand over supply for the foreseeable future, coupled with quite low interest rates. Pricey now is not the same as too pricey: I have literally thought to myself "Hmm ... these property prices are too high" for the last twenty years and only now realise, that what matters is demand, supply, peoples ability to pay rent (think a young professional couple), and the tax structure for ownership. Not, what you could build it for, or what the same would cost elsewhere.

If those stack up - and obviously you know how to tell when they do - then I would agree, it may be the way for you to go: and having spent some time in your wonderful capital (good infrastructure, beautiful, clean, peaceful, friendly) I can see why people would want to live there.

As for spending more time with your child when he is small : this is the best gift of a father, as a man I am proud of you for arranging to do that and keep working (and keeping those benefits).

Best of luck. I am visiting Copenhagen in November and cannot wait to experience the late night buzz and even the hot dog stands again. But not Fisk - once was enough!

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Wizards' journal (ERE in Denmark)

Post by Eureka »

Hi wizards,

I just found your journal. What a journey! Congratulations with reaching your goal and that you quit your job already last year instead of dragging in out. Very inspiring.

I found this sentence in one of your earlier posts:
Still considering which plan to follow regarding when to quit the 9-5, not an easy one.

This is exactly where I am now.

Looking forward to meeting you in August,

Eureka

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

@Eureka

Thank you - I really hope to be able to attend the meeting.

It has been a while since I updated this journal... even after going part-time there never seems to be enough hours...

Some headlines from the last 11 months:
  • My second son was born 2½ months ago - so DW is back home again :)
    Raising two small boys takes time! (it's rewarding but still :) )
    Currently planing a remodeling of our house
    Net worth USD 677,058
    Budgetted SWR 3.52 % (we still manage to go below budget nearly each month)
    The cost of having kids doesn't have to be astronomical
    Current asset allokation: Stocks: 63 %, Rental 18 %, Bonds 11 %, Cash 8 %
    Would love to have stocks at max. 50 % - but it's hard to find alternatives (just missed two RE deals earlier this year)
    Begining to wonder what to do with further savings when I reach SWR goals (3.33 %)

BadHorse
Posts: 55
Joined: Sun Jun 05, 2016 4:17 am

Re: Wizards' journal (ERE in Denmark)

Post by BadHorse »

Hi wizards,

thanks for sharing your journey. A lot of good information for us newcomers there.
Hope to see you at the meet-up!

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Wizards' journal (ERE in Denmark)

Post by Eureka »

Thanks for the update and congratulations with one more son. I also don't think the costs of having a kid is that bad and absolutely doable for little money. However, now that my son has moved to his own place, there is no doubt that my money lasts longer.

thedollar
Posts: 257
Joined: Tue Feb 21, 2017 4:07 am

Re: Wizards' journal (ERE in Denmark)

Post by thedollar »

Hey Wizards

Really enjoyed reading your journal and journey. Very inspiring. Hope you will update us soon on your progress :)

wizards
Posts: 122
Joined: Sun Mar 31, 2013 8:24 pm
Location: Denmark

Re: Wizards' journal (ERE in Denmark)

Post by wizards »

Nine more months have passed... never enough hours a day ;-)

Headlines:

* Two weeks ago DW started work again, youngest son will start day care next month - same place as his big brother, so at the moment I'm pretty busy with the boys...
* Remodelling of our house is finished
* Attended 3 Danish ERE meetings - nice to meet people with similar interests
* Gave a talk at a local assocation of Danish Stockholders Association about ERE and my investments
* Net worth USD 713,892 (28/2)
* Budgeted SWR 3.10%
* Asset allocation: Stocks 63%, Rental 18%, Bonds 11%, Cash 7%, Wind Turbines 1%
* These numbers will look different next month, as I have just completed a purchase of 3 rental apartments.
* Late 2016 I allocated a small number to: a) a US REIT, b) Local wind turbine coop, and c) Lendino - loans to small businesses.
* Starting this month, 80% of my salary after taxes (from part time job) will be allocated to a "family account" (nothing formal) - yet to be decided what to do with the money...

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