Elegant's journal

Where are you and where are you going?
JohnnyH
Posts: 2005
Joined: Thu Jul 22, 2010 6:00 pm
Location: Rockies

Re: Elegant's journal

Post by JohnnyH »

95% savings rate!... Amazing!

mxlr650
Posts: 165
Joined: Tue Apr 05, 2011 9:33 pm

Re: Elegant's journal

Post by mxlr650 »

Elegant wrote:C. Quit the government and look for a job in the private sector, get a possibly much better pay but lose any pension benefits, employment stability and the legal ability to retire before the age of 67

D. ERE as soon as my contract ends. This thought excites me because I think I could actually do this. I'm trying to prove I can live on less than 20,000 ILS a year (~6000$), and thus far I have saved about 740,000 ILS ($210,000) excluding my fully owned apartment. The 3% rule would work.
How about semi-retire, and get part-time private sector job?

ohcanada
Posts: 41
Joined: Fri Feb 14, 2014 8:22 pm

Re: Elegant's journal

Post by ohcanada »

Do you invest in Israeli index fund? I currently have 10% of my stock investments in the EIS etf and believe your countries' index is quite undervalued relative to the US market.

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

@mxlr650 - yes. given that my expenses are so low I could get a part time job, but as it seems now my internet marketing venture could hopefully save me this trouble!

@ohcanada - yes, I have some exposure to the local market but since Israel is just 0.2% of the global GDP so I only keep it at 5% or so of my portfolio. Specifically I invest in a local ETF that tracks the Tel Aviv-100 index which is the largest index available. I agree the market seems relatively undervalued.

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

February Update

Well, the decision has been made (for the first time in my life).

After 9 years in the same organization I will be leaving in October 2014. I got many other offers from other functions within this organization but turned them all down. I can't handle this environment anymore.

Meanwhile I have continued my application to a whole different organization. I'm really excited and hopeful that it'll work out well.

ERE wise this has been a good month. My online income is growing steadily and for the first time ever it has surpassed my expenditure!!! but I keep accruing it as unpaid earnings, so it is basically pretax income. I have no idea how much tax I'm supposed to pay so I won't treat this as ERE income until I sort all the tax issues.

I should note that my low expenses are a direct result of work perks. I mostly eat lunch at work. My employer pays for gas, car insurance, car maintenance, life insurance and health insurance. I suppose I will have to bring this to consideration once I quit my job.


February Income:
Paycheck (after tax): 10,059 ILS (2,865$)
Online Income (pre-tax): 1214 ILS (346$)
February ERE income: 10059 ILS (2,865$)

Expenditure:
Barber (twice a month): 120 ILS (34$)
Pharmacy (contact lens solution): 70 ILS (20$)
Internet: 100 ILS (28$)
Taxi: 75 ILS (21$)
Postal services: 11 ILS (3$)
Bus: 7 ILS (2$)
Parking fee: 27 ILS (7$)
Cell phone: 67 ILS (19$)
Eating Out: 194.5 ILS (55$)
Groceries: 115 ILS (33$)
Sweets, Snacks and Soda: 72 ILS (20$)
Total Expenses: 858.5 ILS (242$)

Savings Rate
This month: 91.47%
This year: 71.96% (target: 90%)
Total money spent this year: 5639.5 ILS (1606$)
Total money earned this year (after tax): 20108 ILS (5278$)
Money left to spend in 2014 (20,000 ILS challenge): 14,360.5 ILS (71.8% left)

ERE Net Worth Update

Global Stocks - 106,957 ILS (30,559$)
Israeli Government Bonds -26,398 ILS (7,542$)
Israeli Money Market Fund - 412,952 ILS (117,986$)
Checking Account #1 - 1,432 ILS (409$)
Checking Account #2 - 4,519 ILS (1291$)
Checking Account #3 (PayPal) - 1,500 ILS (428$)
Index linked savings account - 41,878 ILS (11,965$)
Tax deferred account #1 - 98,049 ILS (28,014$)
Tax deferred account #2 - 59,025 ILS (16,864$)

None-ERE Net Worth
Long term retirement account - 3,473 ILS (992$)
The apartment where I live - ~950,000 ILS (271,428$)

Total ERE net worth: 751,853 ILS (214,815$)
Total net worth: 1,705,325 ILS (487,235$)
Number of years supported: 37.5 years
Estimated SWR: 2.66%

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Elegant's journal

Post by DutchGirl »

Looking good.

And congratulations on your decision to leave your current job. You still have a lot of time left before you will leave. I assume that they know you'll be leaving - so you give them plenty of time to find someone else (and if they don't, that's their fault, not yours). And you've given yourself a lot of time to find something new as well. In all cases, even if you don't have a new job in October, I'm sure you'll survive, financially.

I'm not sure whether you'll need to find new life insurance. If you would die, you would already leave behind a sizeable heritage. Adding say another 1 million ILS to that from a life insurance - what would that do for anyone?

Anyway, I hope March will be another success for you. Good luck!

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

Re: Elegant's journal

Post by wizards »

Congratulations on the decision, reading your journal I think this is a wise move.

You definately have the financial muscle to cope with this change.

Best of luck!

And second DutchGirl regarding life insurance, no need for this when you have a substantial fortune.

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

Just found out my application for the other government organization has been turned down.

I'm shocked. My ego is shattered.

My dream of retiring at 30 years old is coming true... but somehow I'm worried.

I wonder why that is?

Is it because I'm so used to living in boxes? So used to pleasing others? So addicted to the comfort of a regular, global paycheck?

Maybe its because the "retirement" is being forced upon me in a sense?

I reread jacob's post about the requirements for early retirement. I think I meet the basic requirements.

1. I have no debt. My ERE net worth is nearing 250k USD which is an absolutely HUGE sum for a young person in my country. I have zero housing costs as I own my flat. a I sit mostly on cash and am slowly DCA'ing to a 50/50 stock/bond portfolio.

2. I can live on very little money. My 20,000 shekels experiment (6000$ per year) is coming on nicely. I believe I'm gonna make it on even less than that by the end of 2014.

3. I have no desire to ever work again.

My dream is coming true - and I am well prepared for it.

So why am I so worried?

As ever I would appreciate your kind support. I dont know any of you guys personally but I feel I can trust this community more than anyone else.

steveo73
Posts: 1733
Joined: Sat Jul 06, 2013 6:52 pm

Re: Elegant's journal

Post by steveo73 »

^^^

Great post. Well done.

As for feeling down my advice is to let it pass because it will. I would be focussing on the positives rather than the negatives. I am dying to get into your situation and its not happening any time soon.

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Elegant's journal

Post by DutchGirl »

Hi Elegant,

I know that Henk (viewtopic.php?f=9&t=4891) is also progressing from the working-for-money stage to the not HAVING to work stage. Maybe you and he can also share some fears and challenges? Maybe you recognize something from his story, and the other way around?

Maybe (looking back) this other organization refusing your application is the best thing that could ever happen to you.

Financially, you are ready for this. You are spending less than 3% of your assets every year. And who knows, the next few months or years you might create a new income for yourself, maybe enough to cover your expenses, or even just enough to cover half of them (in which case your withdrawal rate would go down to a ridiculously low 1-1.5%).

I would try to see it as an adventure. But I can definitely understand that it's scary, too! I'm nowhere near where you are (perhaps I can l live five years off of my savings, but definitely not more, so I'll need to save some more before I can call myself FI). Probably when I'm close I will also start agonizing over "will I continue or stop" and "but what else is there to do in life?". But my strong suspicion is that life does continue after reaching FI and after quitting your job - and that we humans should try to look beyond what is 'normal'. If you look at all things happening in nature, how the hell did we end up in 9 to 5 jobs for 50 or so years of our lives?

Hankaroundtheworld
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Elegant's journal

Post by Hankaroundtheworld »

Hi,
30 years old !! Man, you got a whole life in front of you. Why do you not try to step out for a year, travel around the world, and experience the ERE feeling, and if you feel after a year that you want to create some new business, you have all the freedom, even if you want a wage-slave job, you are young enough to get back in the game. I would say, this is a low-risk adventure, go for it !!!
cheers, Henk

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

@steveo73 Thanks. Your perspective is interesting. I guess I should be more grateful for what I have.

@DG Yes, I share some of henk's concerns and can relate to them, although I'm 18 years younger than him which of course affects this in a way.

Regarding my failed application and that being the best thing ever happening to me, I think you're right. The more I think about it the clearer it becomes that "this was not meant to be", as if someone is trying to push me out of the rat race by force.

What scared me after I got rejected were my initial thoughts.

I thought: F**k, what have I done? Why did I announce my resignation from the current work place? What am I doing to myself? I have such a comfortable life, good steady paycheck, car and food paid for by the work place ... am I really going to throw all that away because of some blogs and books written by Americans miles away, who don't know me, my lifestyle or the social norms in my country?

Well. After much thought, the answer is yes. The ideas are universal. Freedom is universal. I can retire. I want to retire. No job perk is worth my time, my freedom and my mental state. No amount of money justifies submitting my soul to the torment of evil, toxic people whose ass I have to kiss. My needs are so small I can live very well on even 10% of my salary. I saved enough money to never need to work again.


@Henk - Actually I'm 29 :) That concept, "low risk adventure", is an insightful way to look at it, thanks! I do appreciate the fact that I'm rich in time. There's a fantastic post by the blogger Monevator that lingers on that specific point. Hell, I'm going to retire before Jacob did! I wish to learn more foreign languages in Europe, so this will probably be my next adventure. I want that year off to clear my head and think about the future.

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Elegant's journal

Post by DutchGirl »

elegant wrote: Well. After much thought, the answer is yes. The ideas are universal. Freedom is universal. I can retire. I want to retire. No job perk is worth my time, my freedom and my mental state. No amount of money justifies submitting my soul to the torment of evil, toxic people whose ass I have to kiss. My needs are so small I can live very well on even 10% of my salary. I saved enough money to never need to work again.
Hurray!!! :D

I am curious how it will all turn out for you.

By the way, do you know of any people living in Israel who have retired at an early age? I know some Dutch ones (for example the couple who wrote the Dutch version of the "Your Money or Your Life" book, plus recently a new book appeared by a journalist who now also promotes financial independence after he first promoted paying off debts and the mortgage). So I do have some examples. (And I'll have Henk :-) ). How about you? Any people who could be an example for you?

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

By the way, do you know of any people living in Israel who have retired at an early age?
Early retirement is uncommon in Israel.

It is also not viewed favorably, unless you're a young hi-tec enterpeneur whose company got bought by google/facebook/etc (we got many of those as the norm here is to go to school-go to the army-go to university-create a start-up-sell the start up).

In other words, retirement is only "allowed" if you acquired millions of $$'s, otherwise you should keep working so you could pay for a mortgaged apartment (private houses in central Israel are so expensive they're out of reach for most) and a car.

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

March 2014 update

In 206 days I will quit my job for good. Excluding weekends, public holidays and my paid vacation days, that leaves me 125 days of office torment.

I hope I can pull this through. As retirement is drawing near, my motivation sinks to negative territory. Every day I show up late and leave as soon as possible. I try to do as little as possible. I'm being hostile towards everyone so they wouldn't want to come near me and give me tasks (which I find a surprisingly effective strategy ;) ).

I realize this could backfire, I just cannot play this fake ass game anymore. I could easily do that when I was younger, more motivated and ambitious. Not anymore. At the ripe age of 29 years old, I see ambition as a vice (thank MikeBOS for this insight) worse than pride. Ambition makes people do horrible things.

Extreme Early Retirement is no longer an amorphous concept. It is the very reality I'm about to experience. I am worried and thankful at the same time - a strange sensation I have never felt before in my life.

Is this what a prisoner feels right before he's being paroled, having served a 30 years long sentence?

Finances

Exchange rate: 1 ILS = 0.29 USD, 1 USD = 3.49 ILS

March Income:
Paycheck: 9962 ILS (2854 USD)

Total Income: 9962 ILS (2854 USD)

March Expenditure:
Building Maintenance: 600 ILS (172 USD)
Electricity: 109 (31 USD)
Water: 38 (11 USD)
Eating Out: 169 (48 USD)
Groceries: 103 (30 USD)
Snacks, Coke, and other forms of sweet poison: 60 (17 USD)
Barber: 60 (17 USD)
Internet: 100 (29 USD)
Gas (*): 100 (29 USD)
Bank Fees: 120 (34 USD)

(*) Usually this is paid for by work, but I got stuck with no fuel in the Jerusalem - Tel Aviv highway and had to call emergency refueling service.

Total Expenditure: 1459 ILS (418 USD)

Savings Rate
This month: 85.36%
This year: 76.4% (target: 90%)
Total money spent this year: 7098.5 ILS (2033 USD)
Total money earned this year (after tax): 30070 ILS (8616 USD)
Money left to spend in 2014 (20,000 ILS challenge): 12,902 ILS (64.5% left)

ERE Net Worth Update
Global Stocks - 147,762 ILS
Israeli Government Bonds - 66,394
Israeli Money Market Fund - 342,182 ILS
Checking Account #1 - 11,496 ILS
PayPal - 1,302 ILS
Index linked savings account - 41,878 ILS
Tax deferred account #1 - 98,600 ILS
Tax deferred account #2 - 66,330 ILS

None-ERE Net Worth
Long term retirement account - 3,473 ILS
Checking Account #2 - 5406 ILS
The apartment where I live - ~950,000 ILS

Total ERE net worth: 774,487 ILS (221,916 USD)
Total net worth: 1,727,961 ILS (495,117 USD)
Monthly net worth growth: 3.51%

Estimated SWR:
Austere lifestyle (1,000 ILS per month): 1.54%
Current lifestyle (2,000 ILS per month): 3.09%
Above average lifestyle (3,000 ILS per month): 4.64%
Consumerist lifestyle (4,000 ILS per month): 6.19%
Extravagant lifestyle (5,000 ILS per month): 7.74%

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

I have just filed a form stating I will not be extending my service beyond October 2014.

When asked to state the reason, I wrote "personal circumstances".

There's no going back.

I hope this is not the biggest error of my life.

I must overcome my fear of freedom.

Rickardo
Posts: 39
Joined: Tue Nov 19, 2013 6:06 pm

Re: Elegant's journal

Post by Rickardo »

hope all goes well! i'll be very interested to see how your first year goes, looking forward to the updates, both good and bad.

Hankaroundtheworld
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Elegant's journal

Post by Hankaroundtheworld »

Congratulations indeed! you are more brave than I am, and I am also very interested to hear from your experience after October !

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Elegant's journal

Post by DutchGirl »

I believe this is not the biggest error of your life. I believe this is a huge opportunity for you to explore life, or other ways of living it. You will be free. And that is scary, but it is also an invitation to make your life better than what it is now. Plus you'll have some months to prepare for this, too; I think that's good.

I have no experience with this... I'm still working...

But I do have experience with saying goodbye to a job for a new job opportunity; and I can tell you that that is also scary, and that you also wonder whether you made the right choice. That new opportunity was the PhD program, and I'm now struggling with it to finish it. Maybe I did make the wrong choice, back then? But still I can see so many things I learned and experienced only because I dared to give up the old job and try something new. (Of course I don't know what would have happened if I had continued at my old job).

It is scary, and there's risk involved, but there is a high probability that you will create a different life for yourself, and one that you like better than your current one.

(PS. While you may not be able to return to this old job now that you've said goodbye to it; you can ALWAYS find another job that requires you to work for them for 40+ hours per week, and if necessary, you can also give away all of your money so that you feel the "urge" to work again... ).

elegant
Posts: 102
Joined: Sat Apr 13, 2013 2:19 pm
Location: Land of Milk and Honey

Re: Elegant's journal

Post by elegant »

April 2014 update

This month I've had something of a positive black swan. To make a long story short, I've been offered a management position in yet another government organization with a notably higher salary.

Nothing is certain yet and naturally the post will be offered to other candidates, but I believe I can beat them.

Even though I could do with a far smaller income I'd be stupid not to give it a shot. Yes, this is most likely a boring, administrative job where you have to manage about 10 people, but given my young age (29) and the fact that it could cushion my retirement significantly I think I should consider this.

Finances

Exchange rate: 1 USD = 3.4585 ILS

April Income:
Paycheck: 10045 ILS (2904 USD)

Total Income: 10045 ILS (2904 USD)

April Expenses:
-Food: 369.4 ILS
-- Groceries: 65.7 ILS
-- Snacks & Soda: 48.9 ILS
-- Eating Out: 254 ILS
--- Shawarma x 3 - 114 ILS
--- McDonald's x 2 - 85.8 ILS
--- Pizza - 28 ILS
--- Bagels - 27 ILS

Cell Phone bill: 134.52 ILS
Internet: 99.78 ILS
Barber: 60 ILS
Bank Fees: 50.35 ILS
Parking Fees: 13.10 ILS

Total Expenses: 727.15 ILS (210 USD)

Savings Rate
This month: 92.76%
This year: 80.49% (target: 90%)
Total money spent this year: 7825.5 ILS (2262 USD)
Total money earned this year (after tax): 40115 ILS (11599 USD)
Money left to spend in 2014 (20,000 ILS challenge): 12,111.44 ILS (60.5% left)

Net Worth Update

Total ERE net worth: 793,409.71 ILS (229,707.50 USD)
Monthly growth of net worth: 2.13%

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