Journal of MDFIRE2024

Where are you and where are you going?
wolf
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Re: Journal of MDFIRE2024

Post by wolf » Wed Jul 12, 2017 12:11 am

jj89 wrote:
Tue Jul 11, 2017 12:21 pm
My savings rate (~60%) is much lower, mostly due to my rent.
Compared to the average SR (in Europe around 13%) your SR is pretty high, I would say! ;-)
jj89 wrote:
Tue Jul 11, 2017 12:21 pm
How do you plan to deal with healthcare when you retire?
Either I have to pay it full for myself at a minimum rate or I will be employed part-time and my employer will support it. For now I plan with a FI-budget with full healthcare costs included.
jj89 wrote:
Tue Jul 11, 2017 12:21 pm
In which part of Germany are you, if I may ask?
I live in the south of Germany.

Part-time work is always an option. When I get near my FI-goals, I will think about part-time work. Work is something that not only supplies me with money but also satisfies some other needs, e.g. structure, community, colleagues, purpose. Some days more than others. I guess, I will do some trial-runs and I try to negotiate a part-time contract. What I learned so far from other FIRE-persons is, that you have to manage the transistion from being employed or being selfemployed to being "retired". There are several possibilities to do that and you have to find the best way that suits you. Well, right now I don't think too much about that, because there are still some years (7) to go. Many things could happen till then. So I stay flexible, develop skills, competence, try to enjoy life and work.

@jj89 I saw that you are a member since last year. This was your third post. You also plan to write a journal or introduce yourself. If you are in a similar situation, we could exchange experiences and a common goal.

jj89
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Re: Journal of MDFIRE2024

Post by jj89 » Wed Jul 12, 2017 1:04 am

MDFIRE2024 wrote: Compared to the average SR (in Europe around 13%) your SR is pretty high, I would say! ;-)
Yup, sure :) I'm happy with it, but I would prefer yours :lol: Just joking.
MDFIRE2024 wrote: Either I have to pay it full for myself at a minimum rate or I will be employed part-time and my employer will support it. For now I plan with a FI-budget with full healthcare costs included.
I feel like this is a very positive thing for pursuing FI in Germany if you have kids. You can just work a few days and get your whole family covered. Are you planning for kids?
MDFIRE2024 wrote: I live in the south of Germany.
I'm living in the west, but I like the south much more. I have been to the area around Füssen for a few times and it is just amazing. I'd really like to have some mountains in my area, for hiking and biking :)
MDFIRE2024 wrote: Part-time work is always an option. When I get near my FI-goals, I will think about part-time work. Work is something that not only supplies me with money but also satisfies some other needs, e.g. structure, community, colleagues, purpose. Some days more than others. I guess, I will do some trial-runs and I try to negotiate a part-time contract. What I learned so far from other FIRE-persons is, that you have to manage the transistion from being employed or being selfemployed to being "retired". There are several possibilities to do that and you have to find the best way that suits you. Well, right now I don't think too much about that, because there are still some years (7) to go. Many things could happen till then. So I stay flexible, develop skills, competence, try to enjoy life and work.
That's pretty much the way I feel. I'm also pondering taking a sabbatical (6-12 month) to get a feeling for ERE while keeping all the benefits and a secure pay check. This may also happen way before FI because I could easily afford it. I think I'm going to work a few more years and do one to "recover". After that recharging, I may continue working full-time for a few years or switch to part-time if my finances allow for it. It will slow the path to ERE but I guess "der Weg ist das Ziel" (the route is the goal) and I don't have to rush it :) I also think I will have children in the next few years, which are relatively cheap in Germany, thankfully. This: "flexible, develop skills, competence, try to enjoy life and work." is a key component for me! I think ERE is a concept for people like us who don't really care about money but more about competence and free-time for our own pursuits.
MDFIRE2024 wrote: @jj89 I saw that you are a member since last year. This was your third post. You also plan to write a journal or introduce yourself. If you are in a similar situation, we could exchange experiences and a common goal.
Yeah and this is my second account as my first one was pruned in Jacobs' cleansing of older 0-Post accounts ;-). I'm close to finishing my third year on this path and I think I will do what you said when the first three years are checked off :)

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Wed Jul 12, 2017 9:07 am

I'd like to visualize my monthly progress.
My KPI's are:
- Saving Rate (12 month rolling average)
- Withdrawal Rate (12 month rolling average) with Margin of Safety of 100%
- %FI = accumulated FI-money compared to FI-goal

Here we go:
Image
Last edited by wolf on Thu Jul 13, 2017 12:25 am, edited 1 time in total.

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Thu Jul 13, 2017 12:09 am

jj89 wrote:
Wed Jul 12, 2017 1:04 am
That's pretty much the way I feel. I'm also pondering taking a sabbatical (6-12 month) to get a feeling for ERE while keeping all the benefits and a secure pay check. This may also happen way before FI because I could easily afford it. I think I'm going to work a few more years and do one to "recover". After that recharging, I may continue working full-time for a few years or switch to part-time if my finances allow for it. It will slow the path to ERE but I guess "der Weg ist das Ziel" (the route is the goal) and I don't have to rush it :)
Taking a sabbatical is in my opinion a great idea. I have already taken a sabbatical several years ago. It was 7 months off work. It was really a good experience. I negiotated it with my employer and we agreed on 7 months unpaid leave. Therefore my employment contract was still in place, but inactive for some months. That gave me security and stability to try things, because I knew that I will return after my leave. I travelled a lot, e.g. Australia, Singapur, Laos, Thailand. And I learned a lot about myself and made great experiences, e.g. surfing on the Australian Gold Coast, meditating in a buddhist temple, jungle trekking etc. I can only recommend you such an experience. I did it, because I never had a break between my career. Therefore I don't regret it at all. It did cost some money, but the experiences were totally worth it.

Yes, a sabbatical will slow your progress to ERE, but on the other side it is also as you said: "der Weg ist das Ziel". You have the mindset (ERE). That will allow you/us during the rest of our lifes to work and earn money, live frugally and save it in order to become FI. I think, if someone has the mindset, it is not a question about if someone reaches FI, but only when someone reaches FI. Therefore "der Weg ist das Ziel" (the route is the goal) makes absolutely sense in my opinion.

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Allagash
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Re: Journal of MDFIRE2024

Post by Allagash » Thu Jul 20, 2017 9:47 pm

MDFIRE2024, thanks for your journal. Did you post a list of your income and expenses? Not sure if I missed it. I find it interesting when people post a detailed list of their income/expenses in their journals so others can learn how they are living so cheap and saving so much and get ideas and motivation.....cmonkey did a great job of this in his journal.

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Fri Jul 21, 2017 4:51 am

Allagash wrote:
Thu Jul 20, 2017 9:47 pm
Did you post a list of your income and expenses?
I have posted some details about it in other threads. Usually I focus on the bigger picture, therefore the diagramm with my main key performance indicators. I also don't do a detailled cost controlling anymore. I track my expenses in the following categories:
-Housing (25%) (living in my own apartement, rent-free)
-Transportation (16%) (carfree life, 80% by bike + 20% public transportation)
-Food etc. (16%) (almost always cooking for myself and bying wholesale)
-Travel/Leisure (25%) (travel hacking, inexpensive hobbies, e.g. walking, biking, ...)
-Others (18%) (recycling, repairing, DIY, minimalism, simple living)

Overall my expenses are between 7k€ - 10k€ p.a. (average of this and last two years) The numbers behind the categories are the relative share of my total expenses. And I wrote behind the numbers, how I tackle them. (my best practices)

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Fri Jul 21, 2017 5:12 am

Two out of three weeks of my FIRE-simulation are over. As I mentioned before I use this three week vacation to simulate an RE life. I want to experience how it feels to be retired. Usually I traveled in my vacation, but this vacation is different.
I started two weeks before. In the first week I thought about my work, but those thoughts have disappeared. Some things went different than expected. I had some problems with my neck, therefore I went to a doctor to have a look at it. I guees, this is also part of being retired. You always have to be prepared about unexpected events. Well, overall I really like it so far. Having all the free time. You could manage your own day as you like. Autonomy is something I strive for. Most of all I totally don't miss my alarm clock in the morning. I did some trips to nearby cities, lake, by bicycle, sailing, helping my parents doing woodwork, reading and writing as always. After two weeks I can say that I don't miss my work so much. Although I'm looking forward to talk to my colleagues and doing some IT stuff, like programming software and so on. I think I can replace structure and purpose very easily when retired. I guess I have bigger issues to replace community from work.
I hope that you (reader of my journal) don't get the expression, that I only focus on the technicalities of FI, e.g. with the numbers and monthly diagram. I also work on and try ERE skills, personal development and growth, personal life satisfaction, etc. FI is only one part of my life, although it is very easy to present it with numbers and diagrams. There are many other parts in my life, which are as important as FI. By reading posts, threads and other journals here in the ERE-Forum I learn a lot about the process. ERE, FIRE or how you call it is a journey not a destination for me. I have read all of My_Brain_Gets_Itchy's Journal and I learned a lot. However, pursuing FI by saving and investing gives me a secure and stable base in my life to try out other things. I admire independency, freedom, autonomy, mastery, purpose, structure, integrity, authenticity. Achieving FI is one way to live by my virtues.
I am an INTJ and I try to break down my missions in life, e.g. ERE and FIRE, therefore I have very specific and concrete goals, e.g. SR, WR, target FI money, FIRE year, ...
Sometimes I wish I could write in my native language, which is German. Then I could express my thoughts more precise.

fingeek
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Re: Journal of MDFIRE2024

Post by fingeek » Fri Jul 21, 2017 6:16 am

That's really great - Glad it's going well for you! Having a bad neck/back/head can be quite common on a vacation from a high-stress job (I often get these, unless I start wrapping up mid-week the week before I leave)... I wonder if it's that?

I really need to try a FIRE-simulation in the coming months now, as preparation and to check it's what I really want.

Are your test, are you still targeting 2024 for FIRE, or will you start earlier (higher WR)?

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Fri Jul 21, 2017 12:08 pm

fingeek wrote:
Fri Jul 21, 2017 6:16 am
Are your test, are you still targeting 2024 for FIRE, or will you start earlier (higher WR)?
I don't know exactly. It is my target and it is valid. But, these days I focus a lot more on the journey and not the destination. I try to connect and integrate my FIRE goals into my overall life concept. I have read a book called "Chop Wood, Carry Water". That does say something about my priorities right now. MDFIRE2024 is very motivational but I do know that not only the goal is important but also process how I achieve it. I hope that answers your question.
By the way: I am very grateful that I decided to to this FIRE-simulation test for three weeks. If you don't know if RE is your thing, I can strongly recommend you trying something like this. Although it is only for three weeks in my case, you get a rough impression/feeling for RE.

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SalutNounou
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Re: kpi

Post by SalutNounou » Fri Jul 21, 2017 12:44 pm

El Duderino wrote:
Fri Jun 30, 2017 7:09 pm
hey MD, nice stats.

can you explain, how do you calculate months to FI?
You can calculate it in the following way :
Let r be your average annual return, Co your initial capital, S your annual savings and C(n) your capital at year n.
You can write :
C(0) = Co
C(n) = (1+r)*C(n-1) + S
because each year you earn interest on capital of previous year, plus the amount of money you saved during the year.
You can prove by recurrence that C(n) can also be written :

C(n) = (1+r)^n * (Co + S/r ) - S/r
Which is much more practical.

Now let's say that you want to know at which year N you will reach a given target capital T, at which you reach FIRE
You will then have C(N) = T
So T = C(N) = (1+r)^N * (Co + S/r ) - S/r

Solving for N, you get

N = ln((T + S/r) / (Co + S/r)) / ln(1+r)

To illustrate, let's say that so far your initial capital is Co = 150 000 USD. Your FIRE target capital is T=700 000 USD.
You manage to save each year S=70k USD, and your investments return annually r=10%

Then you will reach your target FIRE capital in N = 5,24 years :)

If you want to go further, I encourage you to express T and S in function of your saving rate Sr:
T = annual spendings / safe withdrawal rate = Annual Revenue (1-Sr) / SWR
S = Annual Revenue * Sr

You will then find that with such a high saving rate (86%), even if you are starting from scratch,
(1) you should reach FIRE by 2021
(2) at this level of saving rate Sr, your annual investment return r does not matter too much (as long as you don't suffer huge losses...)

wolf
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Re: kpi

Post by wolf » Fri Jul 21, 2017 1:02 pm

SalutNounou wrote:
Fri Jul 21, 2017 12:44 pm
El Duderino wrote:
Fri Jun 30, 2017 7:09 pm
hey MD, nice stats.

can you explain, how do you calculate months to FI?
You will then find that with such a high saving rate (86%), even if you are starting from scratch,
(1) you should reach FIRE by 2021
(2) at this level of saving rate Sr, your annual investment return r does not matter too much (as long as you don't suffer huge losses...)
Thank you for the mathematical explanation. It motivates me and makes me confident at the same time that FI is absolutely realistic within the next 5-7 years. I have to confess that I am a bit risk-averse.

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Sun Jul 23, 2017 12:10 am

Yesterday I thought more about ERE and I spent a good amount of time writing what ERE means for me.
Also I brainstormed ERE skills I want evaluate and in case build competence (+1 or +2 by Jacob's definition).

Here is a list of ERE skills I find useful:
personal finances, home economics, home repair, real estate maintenance, basic health and first aid knowledge, cooking, bycicle repair, efficient grocery shopping, investing, repair of goods and sewing of clothes, various ways of getting things besides buying, tackling the big 3 (housing, transportation, food), pc-/notebook-/home electronics repair, environmental and sustainable lifestyle, woodworking, DIY, learning techniques, gardening, prepping and survivalism, relexation techniques e.g. meditation, fitness and sport without expensive tools and without gym membership, health and immune system, emotional/mental health, efficient use of power/energy/water/heat, optimal use of all domestic appliances, minimizing waste and garbage,

Is there something important missing? What's your opinion/feedback?
Feel free to comment, as always :-)

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Mon Jul 24, 2017 10:18 am

While meditation yesterday an idea arose. It was about the combination of ERE, FI and satisfaction of life.
I have looked a long time for the right balance and now I think I have found it. If I balance those three areas in my life, I hope I'll stay happy. :-)
Money is important to me. Satisfaction and quality of life is important to me. And ERE (antifragility, resilience, independence, ...) is also important to me. Neither one of those three areas consists all topics and aspects which I have currently on my mind. Therefore I have to diversify my life and I think I have found the right holistic solution.
I already have established three individual goals and missions:
- MDFIRE2024
- My-ERE-Mission
- PLZ (Persönliche Lebenszufriedenheit, personal satisfaction with life), which is basically a self-assessment
Of course there are interconnections and synergies. Well, I'll see how I'll proceed with this.
On the right side you can see different methods I am using in order to progress and process topics out of these three areas.

Image

Do you also have various important topics in your life or do you cover all topics under ERE?
Last edited by wolf on Mon Jul 24, 2017 2:21 pm, edited 1 time in total.

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onewayfamily
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Re: Journal of MDFIRE2024

Post by onewayfamily » Mon Jul 24, 2017 12:31 pm

I can't seem to view that image mate - looks like it's not set to public or some other issue perhaps.

Tried in Chrome, Chrome Incognito and Microsoft Edge.

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Mon Jul 24, 2017 2:23 pm

Thank you for the hint. Now you should see it. It was indeed a missing parameter. Well, next time I will check double before I post. :-)

Jason
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Re: Journal of MDFIRE2024

Post by Jason » Mon Jul 24, 2017 4:03 pm

I read this blog (and other similar blogs) with its float charts and calculus equations and I feel like Wayne and Garth meeting Alice Cooper i.e. "I am not worthy."

Outside of "I need to stop buying stupid shit" and "Ronald McDonald can go fuck himself" I haven't really come up with any type of formula. I sometimes think its a European thing. People there seem more inclined to methodology and analytics but I'm pretty sure that its just me.

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onewayfamily
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Re: Journal of MDFIRE2024

Post by onewayfamily » Tue Jul 25, 2017 1:43 am

MDFIRE2024 wrote:
Mon Jul 24, 2017 10:18 am
Do you also have various important topics in your life or do you cover all topics under ERE?
I do have a similar 'web of goals' type flowchart/venn diagram which covers my main goals or areas of focus in life.
The 3 main categories (which I consider as applying to my wife and kids as well, not just myself) are Freedom, Happiness and Adventure, with several hangers-on from these like health + fitness, a capital-preserved FIRE stash, wisdom, longevity, contributing to human space flight and going to Mars one day, travel to every country on Earth (I'm at around 50 over the last 12 years), minimalism, simplicity, focus, self-reliance and some others.

We're busy packing now for a trip to south-east Europe but I will try to post the image at some point.

Cheers!

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Wed Jul 26, 2017 11:15 am

Jason wrote:
Mon Jul 24, 2017 4:03 pm
I read this blog (and other similar blogs) with its float charts and calculus equations and I feel like Wayne and Garth meeting Alice Cooper i.e. "I am not worthy."
Outside of "I need to stop buying stupid shit" and "Ronald McDonald can go fuck himself" I haven't really come up with any type of formula. I sometimes think its a European thing. People there seem more inclined to methodology and analytics but I'm pretty sure that its just me.
I also couldn't have made that calculus equation. However, I created those diagram (monthly progress), based on my Excel Sheets. Well, I like numbers, tracking, controlling. Visualization is then just the other part of my brain on top of numbers :-) In reality I also only think about it before buying: "Do I really need it or do I want it? Does it increase my satisfaction?" So..., don't worry. In the end, I guess FIRE depends on just a few success factors, e.g. SR, SWR, Tackling the big 3 (housing, transportation, food). The Big Picture is important, IMO. But also the details count.

wolf
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Re: Journal of MDFIRE2024

Post by wolf » Wed Jul 26, 2017 11:19 am

onewayfamily wrote:
Tue Jul 25, 2017 1:43 am
MDFIRE2024 wrote:
Mon Jul 24, 2017 10:18 am
Do you also have various important topics in your life or do you cover all topics under ERE?
...Freedom, Happiness and Adventure
Great! On the same page here. I have already had a look to your blog. When I saw your travel pictures, I instantly got the feeling of packing and starting to travel by myself. Well done :-) I wish you a good start to your trip to South-East Europe! Take Care. Cheers.

meursault
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Re: Journal of MDFIRE2024

Post by meursault » Sun Jul 30, 2017 12:56 am

Hi MDFIRE2024,

Thanks for your reply at my thread earlier. Your saving rates are super high! Would be interested how you manage to do it.

Also, we are sort of in the same line of work. What are your thoughts about the side-income / part-time contracts work in the IT fields? There are reportedly ageism issue where employers prefer younger candidate regardless of experience / value. Setting up own business is one way out of that problem.

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