Working towards FI in Austria

[Flurry]

Hey.
I really like the journals here, especially as there seems to be no common rule for keeping a journal and everything seems to be very creative.
So here's my journal, I hope to motivate myself by sharing my personal successes and failures with you.

Stats: 30yo male living in Vienna, Austria together with his 27yo wife and 2 cats. We both work in the software industry.

Financial independence goals: It's much more important to me to quit working as a full time software engineer than to my wife. As we have shared finances the goal is to achieve twice my monthly expenditures in passive income together, so it's her personal decision if she wants to spend and work more or not. The Austrian social system is so well developed that it is worth staying a part of it, i.e. doing some wage work. (That saves me hundreds of € per month in health insurance alone) As we want to have a kid soon, my first step will be reducing my working hours from full time to part time first, working 3 days per week should be more than enough.

What I want to log here:

• What I spend money on and how it affected my savings rate
• Projects I want to do, for example repair and sell an old bicycle from my basement
• Progress on my passive income
• Everything else I find particularly interesting right now

[Flurry]

October results:

Spendings & Earnings & Savings: Earned 2766€, no additional income, spent 1285€ which results in a savings rate of 53,5%. A pretty "bad" month for me in terms of my savings rate as I had to renew my public transport ticket (365€ per year), bought new climbing shoes (70€, not really optional if you are into climbing) and paid for a few train tickets to the nearby mountains for climbing. But that will be easily compensated by my Christmas bonus next month.

Passive Income: 55€ net interest income (from P2P lending platforms, minus some interest I had to pay for stocks I bought on margin) + 687€ net dividends -> 371€ net passive income for me or ~29% of my spendings covered by passive income.

New investments: Bought BAE Systems for a cheap 400GBX price per share with the goal of getting 180€ net dividends per year out of it. I am not really sure if I want to be invested into a company selling war material so maybe I'll sell this stock with a profit again.

Lifestyle: October was a stressful month, I worked out way too much because I expected the gyms to close again due to Covid (they are already closed right now), didn't get enough sleep and compensated a lot of stress with shitty food (I have unlimited access to sweets at work but I shouldn't eat them alone because I try to eat vegan and most of them contain milk). But maybe I should consider the high number of workouts as a success. I am happy that I managed to deadlift 200kg/440lbs for a higher repetition count again.

Goals for November:

• Spend less than 1000€
• Keep working out a lot, even if the gyms are closed
• Do without sweets, do more high quality cooking like vegetable lentil soups.
• Keep on learning Russian
• Repair and sell that old bike in my basement
• Clean and sell my NAS I don't use anymore

[ertyu]

[*] Do without sweets, do more high quality cooking like vegetable lentil soups.

may the force be with you brother

[Flurry]

may the force be with you brother

Thanks. But I already failed on this. I have to try not to be perfectionist and try it every day anew. They problem is really the seemingly endless supply of sweets at work (I don't have any at home because I just don't buy them) and that I find my job boring so I start eating for entertainment. One of the reason I want to quit full time work. It's much easier to eat clean the first few days of the work week but it gets harder every day, probably because of accumulated stress and lack of sleep. I don't think that eating sweets is a huge problem for me (I work out a lot and I am pretty muscular/lean) but junk food is something I don't want in my life.

[fiby41]

If sweets are free they don't count according to viewtopic.php?t=4407&start=40

[Flurry]

I think it's more useful for myself to keep this Journal not as a personal one but respect the shared finances I have with my wife. The high saving rates of many users here have are very inspiring so it's a nice experiment of tought to subtract her expenses/income to boost my own numbers but I really don't plan anything without her so it makes no sense in reality. I don't think we have to be ashamed about a 55-60% savings rate even if it seems to be more moderate than extreme here.

If sweets are free they don't count according to viewtopic.php?t=4407&start=40

Ooops, didn't see your reply until now - for some reason all threads here are constantly marked as "unread", weird.
Yes, you are right from a financial perspective - but I personally think that these industrial, highly-processed sweets are destructive and I really want to be a person who doesn't "need" them. I prefer to eat self made sweets (like cookies, cakes, ...) or something more "special".

[Flurry]

I had my medical check for blood plasma donations yesterday. I'll get the results soon so I can start donating blood plasma again next Monday. I like it, donating blood plasma helps other people, I have some rest to read a book and I get 30€ for every donation, sometimes it's even a little bit more. I should compensate the protein loss (45-60g when donating 750ml blood plasma) but even when compensating that with protein powder (100g of my vegan protein blend cost me around 1,40€) it's still a nice extra income between 120€ and 180€ per month.

[Der Leiermann]

Hi Flurry,
Interesting to see someone from a high-tax country take up ERE. How does the social security/pension system factor into your calculations, if at all? I can imagine the high taxation rate and Social Security payments would be quite a drag on your timeline.

[Flurry]

Hi Flurry,
Interesting to see someone from a high-tax country take up ERE. How does the social security/pension system factor into your calculations, if at all? I can imagine the high taxation rate and Social Security payments would be quite a drag on your timeline.

Hey Leiermann.
I thought about that a lot and I think it's just not worth to quit working completely because of all the social system benefits. I could just work a few hours per week to match my expenses with income. Earning 12.000€ per year would be totally tax-free, I could reduce taxes on dividends while still receiving social security benefits like health care (private health insurance would significantly increase my expenses) and social housing. I could grow my portfolio further because I wouldn't have to withdraw from it.
Someone might consider that parasitic but I don't think it is, high income taxes feel like theft and not like a contribution to society.

As a first step I really want to reduce my working hours from full-time (38.5 hours per week) to 4 day part time (32 hours, 4x8h) to see how it feels. I think that would make me feel much better, at least 45 days less wage work per year and I could still maintain a nice savings rate above 50%.
The new Covid-19 measures make me really hate work, everyone's working from home so there is zero fun with colleagues and it's just the grind.

[Der Leiermann]

Makes sense.

Agreed with home office not being a lot of fun. I’ve had a similar experience, doesn’t help with motivation for work!

Good luck with reducing your hours, keep us updated how you go.

[Flurry]

Update: I decided to reduce my hours as soon as 20% of the shared expenses (average trailing 12 months) are covered by investments assuming a 3% withdrawal rate. That should be achieved by spring 2021. I like having a concrete goal in mind and having 20% covered by expenses makes sense when reducing working days by 20% (I'll just ignore that I reduce working hours by only 17%).

My wife is going to reduce her working hours by the same amount by fall 2021 as she wants to study again and studying + full time work is a very stressful combination. So it's a common goal now.

[Flurry]

First month journal update.

Income November 2020: 11.450 €

• Salaries: 11.340 € (I love the christmas bonus)
• Blood Plasma Donations: 110 € (I will keep on doing this once per week, some nice extra money while doing something good)

Expenses November 2020: 2.038 €

• Rent and utilities: 1.147 €
• Food and drinks: 372 € (Ordered a lot of protein powder for the next few months)
• Transportation: 87 € (Reserved a car for the family christmas visits, I don't want to take the croweded train this year due to Covid)
• Internet, phone and online services: 23 €
• Services and entertainment: 229 € (DW's laser hair removal + the gym we can't visit at the moment, thanks Covid)
• Bought items and repairs: 71 € (5 used Xbox games, a used toaster for just 3€, a used jumping rope for just 2€)
• Other expenses: 110 € (Yearly subscription for a stock screener)

Savings rate for November 2020: 82,20%

• Average since April 2020: 62,10%

Net assets end of November 2020: 178.916 €

• Invested: 176.798 €
• Cash: 2.118 €

According to the 4% it should be okay to reduce the working hours now. But we think more and more about starting a family and my ideal for raising a kid is some kind of equally shared parenting (both working only 3 days per week) so it's probably the best idea to keep on working full time so there's more money invested when we reduce the working hours by 40%. The next problem is that I have some fertility issues so that will cost us a few thousand in medical bills, too.