dull numbers journal

Where are you and where are you going?
10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

It's so strange ones can get used to a war in a neighboring country. When first shock passed, life is going almost like before Feb 24. Work, life, shopping etc. There is a little mess in economy. Stocks became fragile, interest rates went up. I still continue to overpay my mortgage.

NW: 422,800
Assets: 636,000
debts: 213,200
debts/assets ration : 33,52%

A different metrics I wanted to track:
How many years can I life off my saving considering current cost of life, so I divide NW by my 'average cost of living'. Housing, food, bills, necessities, etc. 1 month cost of living is ~ 3,000
NW/cost of living = 140 months, or 11,7 years.
This gives me peace of mind.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

May went so fast, I had a lot to do in my workplace and later went for a leave.
NW: 432,280
debts/assets ratio : 31,95%
1 month cost of living is ~ 3,020 (adjusted with inflation)
NW/cost of living = 143 months, or 11,9 years.

guitarplayer
Posts: 1303
Joined: Thu Feb 27, 2020 6:43 pm
Location: Scotland

Re: dull numbers journal

Post by guitarplayer »

Hi @10cents, I have read your journal a while back, it is impressive how you carrying on despite the tumultuous stock market. Well done and keep on going!

3020 = 690USD / month for a family of four if I remember well? This is impressive! Do you count mortgage installments into it / do you own your dwelling outright?

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Hi @guitarplayer, my calculations are very conservative. NW equals = All Assets - mortgage, so NW is just as name suggest net worth (no debts).
My early retirement is made of savings and frugality + 3 x RE (reduce/ reuse/ recycle), so to live a fulfilled month I only need ~3000 pln.
Cost of food = 2100 (30 days x 70 pln) +
water, gas(heating), electricity, local tax, internet, cell phones = 400 pln +
fuel = 100 ( I only drive ~7,000 km a year and I'm on the simple way to get rid of car), commute tickets = 100 pln (both me and my wife work mostly remote), kids needs (clouth, books, pocket money) = 200 pln, unexpected expenses = 100 pln. This is all basic needs and we life mostly according to it.
There are of course some shifts each month, sometimes kids needs are higher but cost of food can be lower. We cook all our meals from raw ingredients, no packed food and home-cooking meals are not so expensive. Must have for me is a soup every day, and most of them cam be cooked for less than 6 pln for 4 people (sour soup, tomato soup, cabbage soup , bean soup, etc). Second plate can also be both cheap, caloric and healthy like Letcho, Spaghetti, potatoes with sour milk etc - no need to eat meat everyday. So i keep my budget still and i'm able to manage this.
There are of course some 'extras' both every month + holidays, but those extrass are also frugal one, like cyclikng holidays, or living on a campsite in a tent. For now, it makes me fun. You can go on a 2 week holidays for a 3-4 people family for 4,000 pl for everything, holidays are essential for my life but are not necessary and not included in 3020 pln monthly cost of living.
Yes, right.
Car repairs, home improvement, dental service - not included, so, I think I need to increase my monthly budget by 10% to 3.300 to include this.
So from the next month I will calculate with this higher amount.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

there are also some assumptions: my home I live in is a small one ( 105 square meters), and well isolated, so cost of heating is very small ~2.000 pln a year (for natural bas with current high prices), furthermore I benefit from solar energy , my photovoltaic installation provides me 85% of annual outgo, so my electricity bill is as small as 30 pln a month; I dont have expensive mobile plans, I use pay as you go cell phones with monthly expenses as low as 5 pln or 1,2 USD !!! In every aspect of my life I search for frugal but NOT BAD solutions, and I don't accept cheap solutions when it comes toward safety of quality of dental services. I go regularly once a year to dentist to keep my teeth in top condition.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

So fast June passed away. With every year you get old, time passes faster. I don't like it. I don't like INFLATION too. It's difficult to defeat inflation. Stock prices went down, commodity funds went down. Is recession come in? Last month I converted all my commodity found to bonds found. I left my socks found untouched. This month will be perhaps, the last one with low debts. Why? This is a tough decision, but I decided to buy a second studio to rent. Polish real estate market is in the back when comparing with other countries. Prices are still as low as 5000 pln/sqm (in my area). Rent profit is ~ 7% p.a. Interest rates are highest for 25%, so mortgages are ~9% p.a. Seems unprofitable? No - It's a 'explosive mixture' and I expect high inflation for next years and high rent profit.
My money - my decision. (My decision - my mistake.)
NW: 442,860
debts/assets ratio : 31,11%
1 month cost of living is ~ 3,335 (adjusted with inflation)
NW/cost of living = 132 months, or 11,1 years.

zbigi
Posts: 978
Joined: Fri Oct 30, 2020 2:04 pm

Re: dull numbers journal

Post by zbigi »

Hey, I somehow missed that you're from Poland too!
Regarding the cheap real estate market, it can be a trap. With aging population, most Polish cities will be depopulating in the coming decades (unless something unexpected happens). With supply being constant or even slowly growing (there are new apartments being built even in second tier cities) and demand falling over time, I can see both rent and valuation not being favorable. The exceptions are first-tier cities (Warsaw, Krakow, Tricity, Wroclaw, possibly Poznan) and possibly most attractive (for renters) areas of second-tier cities, such as right next to university etc. But other than that, I suspect real estate will perform poorly - that's why I don't store any money in it.
I could see myself owning flats for rent in Warsaw or Krakow if I lived in these cities, but I don't feel comfortable managing rental properties 100-300 km away from where I live.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Well, housing market is always risky. The same way as a stock market. You cant predict the future. Why I made this decision despite all well known demographics reasons? There are mutually canceling each other out factors. Depopulation on rural areas and domestic migrations. Increasing numbers of people in big cities and moving to suburbs in the era of remote work.
But against many pessimist I can see Poland's future in bright colors.
Poland location was a curse in a past, but will be beneficial in next 50 years. Temperate climate ~ 45° to 55° N of Equator will be salvation. Neighborhood of Germany is (now) beneficial. The ability to produce twice as much as needed foods. We only need our east neighbor weakened . I expect to see 'golden times' for Poland. We need to grow up as a nation, to look wider, and this is happening. The other changes will follow. External immigration will be massive in '30.
The studio I want to buy is in my city ~ 7 km away of my place.
Warsaw is too small to crumble other cities in Poland. Only 5% of population live in Warsaw and it will never be like London or Budapest, where 20-25% of population live in a capital. I expect to see german-style development with 20-30 medium size cities playing an important role.
Of course, I can be wrong. The same way as I can be wrong when selecting and buying stocks. Currently my portfolio is too stocks & bonds- orientated, so I decided to go deeper into rental market.

zbigi
Posts: 978
Joined: Fri Oct 30, 2020 2:04 pm

Re: dull numbers journal

Post by zbigi »

10cents wrote:
Mon Jun 27, 2022 7:46 am
You cant predict the future. Why I made this decision despite all well known demographics reasons? There are mutually canceling each other out factors. Depopulation on rural areas and domestic migrations. Increasing numbers of people in big cities and moving to suburbs in the era of remote work.
Presumably, the people at government's statistics office (GUS) have looked into those factors and included them in their predictions. Of course, they may be wrong, but they may also be wrong in the opposite direction (i.e. reality turns out to be even worse). Anyway, their per-city predictions are publicly available, have you checked how do they look like for your city? If I'm not mistaken, for most cities it's pretty gloom.

In any case, I'm more and more convinced that I should invest in USA. That country has everything going for it - best economy in the world, growing population, hard working and consumption-obsessed society (great for economy), stability and rule of law, dollar being world's main currency, greatest army in the world which guarantees safety as well as ability to grab whatever they need (oil etc.) across the world. Also, no major impending refugee crisis (like Europe). Both the dollar and US stocks are currently pretty expensive, but maybe they're worth it.

chenda
Posts: 3290
Joined: Wed Jun 29, 2011 1:17 pm
Location: Nether Wallop

Re: dull numbers journal

Post by chenda »

zbigi wrote:
Tue Jun 28, 2022 3:02 am
Also, no major impending refugee crisis (like Europe). Both the dollar and US stocks are currently pretty expensive, but maybe they're worth it.
As a counterpoint the US has a growing refugee crisis on its southern boarder, and is becoming more unstable. Its largest states, California, Texas and Florida, are all very vulnerable to climate change. Which is not to say its a bad place to invest. New England would be my preferred choice if I lived there, it ticks most boxes.

I agree Poland has favourable geography climately. You could certainly see it reversing it's demographic decline and becoming a great long term success. Maybe more Germans will move there ? I think like a lot of Eastern Europe it suffers from an image problem, but that can quickly change.

zbigi
Posts: 978
Joined: Fri Oct 30, 2020 2:04 pm

Re: dull numbers journal

Post by zbigi »

chenda wrote:
Tue Jun 28, 2022 8:37 am

I agree Poland has favourable geography climately. You could certainly see it reversing it's demographic decline and becoming a great long term success. Maybe more Germans will move there ? I think like a lot of Eastern Europe it suffers from an image problem, but that can quickly change.
I think pretty much all developed nations are in decline, and need immigrants to prop up their populations. The US does it best, with constantly taking in huge amount of immigrants and integrating them well. Western Europe takes in less imigrants, and the integration is problematic to say the least.

Poland until recently didn't take in much imigrants (people from Asia or Africa favoured Western Europe due to higher salaries and social benefits), but, over the course of past 5 years around a million Ukrainins started living in Poland, and now there's probably extra 2 millions on top of them, due to war. So, at this point, our best bet for sustaining population size and economy is continuing to deplete the population of our neighbor, which is very unfortunate.

Poland's population projections (i.e. catastrophic ageing of the population by 2050, one of the worst in the world) already took the first million of pre-2022 Ukrainians into account, but the current situation is too new and unstable for anyone to try to predict how it can affect us.

As for Germans (or any Western Europeans for that matter) moving here, I can't see that happening in any significant numbers. So far, I've only known a Sicilian, but the economy there is pretty dire so Poland had much more opportunities for him. I don't think Poland will have that much to offer when compared to Germany, France, Netherlands etc. The biggest advantage I can think of is cheap land, which attracts people who want to start farming, but can't afford land in their own country. Currently, Poland (also Romania) have super low taxes for self-employed people so it's a great place to do remote contracting from, but it can be ended at any time.

chenda
Posts: 3290
Joined: Wed Jun 29, 2011 1:17 pm
Location: Nether Wallop

Re: dull numbers journal

Post by chenda »

@zbigi I could certainly see farmers moving to Poland, especially from southern Europe. I once took a train from Warsaw to Lodz and the countryside was notably empty. And maybe a few western Europeans looking for cheap acerage and privacy.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

July didn't bring any significant changes. No specific decision has been taken. But there are some good offers ..... and there is an inflation.
How to beat an inflation? It's harder month after month to avoid losses. For now, I 'm happy my assets behave better than 'wide market'. Inflation based bonds I bought 2 years ago are super, super beneficial right now (interest coupon ~16%).
NW: 452,300
debts/assets ratio : 30,08%
1 month cost of living is ~ 3,350 (adjusted with inflation)
NW/cost of living = 135 months, or 11,2 years.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

It has happened. I bought a new studio for rent this month. It has a kitchen, bedroom and living room - all around 40 sq. m. This expense made my debts or debts/assets ratio incomparable. Only NW and number of months to live out of my savings are comparable. Now I will go on a small holidays for 2 weeks - because summer is almost over.
NW: 460,022
debts/assets ratio : 44,87%
1 month cost of living is ~ 3,365 (adjusted with inflation)
NW/cost of living = 136 months, or 11,4 years.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

With war ongoing and winter coming, situation in Europe seems to be bad. Inflation is high. Cost of energy is high. Next 6 months will be very tought times. This is also not a good time for us - humans. My investemnts were lossy this month. Not as lossy as it could be, but this is not what I expected.
My newly bought flat is rented and mortgage overpayment is a plan for next months.
NW: 463,820
debts/assets ratio : 44,14%
1 month cost of living is ~ 3,380 (adjusted with inflation)
NW/cost of living = 137 months, or 11,4 years.

gettingfired
Posts: 12
Joined: Wed Dec 23, 2020 1:36 pm

Re: dull numbers journal

Post by gettingfired »

Very impressive journal and very cool to see that despite the low turn in the markets and the inflation, you're keeping the per month cost of living stable. I can't say the same even if my spending has been stable. Congrats on the studio! I would love to read the details about price, rent & so on.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

@gettingfired, current times are like 'standing on ones head'. Everything is upside down. First, I must underline, circumstances I describe below are about Poland. And Poland is different from Western Europe countries and even more different from USA. There is massive influx of emigrants from Ukraine and this is crucial factor. Over 2 mln people come to Poland this year. On the other hand, due to inflation, mortages rates went up and also cost of rent went up. From my perspective it looks like this: we have 17% yearly inflation and mortgages are ~9% (exceptionally high). My studio is 40 m2 or 430 ft² and is located in ~130.000 residents city. My mortgage monthly payment for studio is ~1.400 PLN (200 PLN capital and 1.200 PLN interest for bank), and the rent I get from tenant is 1.300 PLN + bills. So it only hardly cover bank interest. Not a good investments? But I have high saving ratio, so I can overpay this studio completly in ~5 years. I dont want to calculate ROE or ROI, because I dont know how to take into account interent for bank. If I would include interest for bank - my investment is not profitable. But what are alternatives? Shares? Bonds? I do have both shares and bonds so, flat for rent is a kind of assets diversification, with no profit right now. I take high profit from 10 years governemnt bonds I bought 2-3 years ago. Theirs coupons are yearly calculated and based on inflation, so I receive 17% interest !!!!. It seens that only one or two of the 3 diffents kind of aseets can be profitable at any moment, and my assets are good diversified (I hope).

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Well, it is not very good period in Poland. Inflation is still high and growing. Winter is comming. War in Ukraine is ongoing and even increasing. Not so good prtediction for next months. Political situation is changing in Poland. My predictions? Next year will by bumpy, but I feel 'the wind of changeges' - like the Scorpions song. I dont do any significant money changes. Still continue to overpay my mortgages, still continue to save on untaxed retirement founds.
NW: 467,860
debts/assets ratio : 43,32%
1 month cost of living is ~ 3,395 (adjusted with inflation)
NW/cost of living = 137 months, or 11,4 years.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

NW: 476,060
1 month cost of living is ~ 3,410 (adjusted with inflation)
NW/cost of living = 139 months, or 11,6 years.
--------
Asset allocations:
real estate : 26,1%
brokerage account : 14,7%
bonds : 19,2%
Investment funds : 25,4% (JOHNSON & JOHNSON,MEDTRONIC PLC,Cisco Systems Inc/Delaware,JPMorgan Chase & Co,Bank of New York Mellon
Corp/The,VERIZON COMMUNICATIONS INC,EXXON MOBIL CORP,Emerson Electric Co,Northern Trust Corp,UNILEVER PLC)
asset management : 14,6%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

I discovered hidden benefit of frugality. Not worrying about inflations. It's a value these times when inflation hits us. Last year my saving ration was ~75%. This year, despite the 20% inflation in Poland it is ~70%. Increase in prices in not so painful when it doesnt affect your daily purchases. It's just that you save less.
It's almost the end of year and I can summarize last 12 months.
First at all - it was terrible time for us as a humans. War. I didnt expect I can face it in my life.
I cant even imagine the pain, fear and anger of Ukrainian people. The first 2 weeks I started every day and ended every day reading new about the war. Tough time for me because I'm so empathetic man.
Well, apart from from war, everything went smoothly this year, both in work and in private life.

NW: 499,440
1 month cost of living is ~ 3,425 (adjusted with inflation)
NW/cost of living = 145 months, or 12,2 years.

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