Dutch Journal berninger

[Berninger]

Income from july.

A savingsrate from 21%.
We had some high expenses, like anual car repair at the dealer (750,-) and vacation.
Elektricity/gas is about 60-80 euros (we have solor panels). 140 is not correct. So we will get some money back from that at the end of the year.


Now we have 28k in the bank. We want to have a buffer of15-20k.

We are going to expand our garden in a few months with 4x6 meters. That is going to cost total about 6000,-. Every month i put half of what we save in our mortage. This month 400,- is going into the mortage.

I also want to start investing. With this is could use some help.
Any suggestions in what to invest. Because i am new to this. I prefer putting money in the mortage, because that seems saver then investing. However with investing we (should) get more interest.

note:
-we have a house of 298k (bought in 2017). Mortage atm is 121k. If we de no extra payments , after 29 years time the mortage is 0. On top of that we put extra savings in our motage each month (when we can). So we will pay off our mortage earlier.

[Berninger]

Result August.



Notes
-Not a high saving rate. This is due to investment in E-Bike (about 1k). I got frustrated by high car bills ( Gas & maintenance ). Decided to buy a good bike to use to travel to work (about 22km from my home). This takes me 40/45 minutes. Calculated this will save about 70 euro/month.

Question:
Our income was about 4k. We saved +-600 euros.After that we paid of 200 for our mortgage, and 200 went to investments. What is our savings; 600 euro's or 200 euro's?

[J_]

Welcome to this forum, your savings are 600.

[Bankai]

So your 'core' expenses (housing & food) are about 1050-1100/m... not bad at all for a family of 3 with a mortgage!

Looks like the last 2 months you just had few large 'one-offs' (car, holiday, bike) and in a more typical month, you could easily go below 2k expenses allowing for 50% or better SR.

Are you going to sell the car?

[DutchGirl]

Bankai, keep in mind that there will always be irregular expenses. If you have a car, if you have a house, if you have a family ... at some point they will need repairs, maintenance, care ... Holidays you can completely skip, but not a lot of people go that hardcore for all of their lives.

So it's good to try and get an idea on what the average amount is on these irregular expenses. And then budget for them every month. And if you don't use it that month, set it aside in a savings account, because somewhere in the next months/years you're going to need it.

[Bankai]

Agree. I assumed you only buy a bike every few/several years and massive car bill doesn't happen more often than maybe once a year. There are other big one-offs, but there are not that many other than car & holiday (big family events, healthcare and home maintenance maybe?). I'd certainly be concerned if there were 1k one-offs every month.

With a couple of years worth of data, it's possible to give fairly accurate average numbers for irregular expenses.

[Berninger]

Thanks for your replies. The core expenses are indeed low, but not as low as it seems. We decided to pay a few things 1 time per year. This saved about 30-50 euros/year.

-Health insurance is about 2400 year (we pay this in jan)
-Some property taxes is about 700 euro (we pay this in jan/feb )

I always seem to have irregular expenses. And i always think, next month will be better, but like dutchgirl said, a lot of months there is something that needs to fixed or bought. We try to be creative and keep it as low as possible though. Like i always try to fix broken things myself. When we need something new, we buy it from 'marktplaats' (kind of like ebay) etc.

We are not going to sell the car. We use the car for holidays, or when we do things with the family.
But i am determent to use the car less, which will (hopefully) save not only gas but also in maintenance.

[Berninger]

Update September:

Highlight:
-We had a second kid (we have two sons now) in september ! Wife and kid doing very well. I am free for 3 weeks. Very happy to spent all my time with wife and kid. Makes me realize how badly i want to be FI. I love spending time with my family. And besides the fact that i want to feel 100% freedom, this motivates me to reach FI asap.

I am quite new to FIRE. I could use some help with a realistic calculation in which year we can reach FI.
-I just started investing. I hope to get 4%. I am investing in BrandNewDay, world index fonds.
I made some calculations for the investment. Does this mean we can reach FI in 2040? I think we will be FI when we have +- 25k/year.


Some factors are difficult. How do i factor in AOW & Pension in my FIRE plan?
For example:
-In holland when you are +-67 everybody gets AOW. (General Elderly Law). That is +- 1.5k/ month (me and wife combined). But i am not 100% sure that law still exists by then. So i guess i don't want to depend on that
-I can get my pension earlier, when i am 55. Basically i will get 900/month until my 67th. After that i will get 800 aow (or not). My wife has no pension and will also get 800aow after she is +- 67


3 Questions.
1. Is FI in 2040 a reasonable? For me that is a long long way to go. I am now 33, and wish to reach FI before i am 40.
2. How do i factor in AOW?
3. How do i factor in my pension?

Note. We want to be FI, and also make sure there is more then enough left for my kids when we pass away (500k+).

Result September
-Last month i bought an electric bike to use to go to my work (instead of using car). I bought it from someone who deals in bikes for a good price. It was working great, but after two weeks the engine broke . He is going to try to fix it in oktober (for free). I hope he can. Untill then, it's back to the car for work.
-Food is high. This is also due to second kid being born (bought lot's of diapers).
-Stopped drinking soda. Was kind of addicted to cola. Didn't drink it for four weeks now. Will save us about 15 euro's month.
-Next month electricity bill will be lower the next few months.
-My parents want to give us money they don't need. To avoid paying taxes when they pass away. So they give 3k each year.

[DutchGirl]

1. How much money will you need when you're retired AND have paid off your house? You currently aim for 2000 euros/month, but you have a mortgage that currently costs you 475 euros/month. If you can live on 18k/year instead (plus paid-off house), then you'll reach FI status sooner.
2. When you retire, you might also consider selling this 300k house, moving to a cheaper part of the Netherlands and buy a 150k house there - that's 150k that you do not need to save up in the investment account.

By now, you'd already be able to retire in the year 2032, because you only need to have 300k in investments, plus 150k from the sale of the house, and then you'll have 450k in investments giving you 18k/year.

Unfortunately, that's as far as I can get you. I think living more frugally now (and thus being able to put more money in investments every year) can help to reach FI status sooner, plus it's possible that the average stock market return will be higher than 4% per year over the next decade, but there are no guarantees for that.


As for taking the pension & AOW into account: I plan my retirement in two stages: before and after official retirement age. I'm fully set after official retirement age with my AOW and pension, and thus I "only" need to save up enough money to last me until official retirement age. Thus, I will have a higher withdrawal rate, which will/may lead to a slow depletion of my portfolio, but that doesn't matter because it only has to last me until age 70 or so.
www.firecalc.com can help with your calculations. On one of their tabs, fill in that you'll get a stream of income starting in say 2045, and it will take that into account and give you a success rate including that income stream.

[Wishmaster]

I also live in the Netherlands.

I think i will also save only enought to last till official retirement age.
(I already get enought pensioen and aow)

I think there will always be something like aow, because if not then what is the alternative? let all does people die?
But i do think that aow will depend on how much money/assets you have, so if you save to much, you will get less or no aow. (means tested)

I have no intention to keep working so that Iget no aow, whill others that spend everything will get it.
I believe that people that save for their future are already punished enough, with things like the wealt tax.