Romania - the ERE country

DanielT · Post by **DanielT** » Wed Sep 28, 2011 12:20 pm

Hello,
My name is Daniel, 33 years old with only a few months left until 34 and I was born in Romania where I currently live.
Ever since I read "Rich Dad, Poor Dad" by R Kiyosaki I started dreaming of early retirement and I started working towards this goal basically by reading a lot of books, investing some of my money in the romanian stock exchange. This happend sometime in 2002 or so. Fast forward to 2011, I'm now married and have one beautiful baby girl (she's 18 months) and still working to retire early.
In the last 3 years I have made a lot of progress in terms of paying off debt and save a bit chuck of money which currently can cover up to 6 years of expenses.
I also started reinvesting after I lost all my profit made between 2002 and 2007 because of my stupidity: started trading future in a market which was going down fast and I was hoping it will recover fast

.
We currently live in a house we own with a big garden which is currenlty worked by my grand parents. On the same land, 4 generations are living: my dougther, me and my wife, my parents and my grandparents. For us is really convenient as we get to have some time for ourselfs and my parents or grandparents take care of the baby

What is really interesting is that Romania is a country of "early retirees". We're around 20 milion people in Romania and only about 4 milion are working, the rest are "retired".

Here everybody is (mostly) happy with what they have and most of them are not trying to get above their mens. Until 2005 almost no one had any debts but since 2005 the credit became a lot cheaper and people started buys cars, real estate and plasma TVs like crazy. Now we're back to where it started, but a lot of people now have debt. Also another interesting fact about Romania is that alomost 85% of the population own their houses, because they bought them for cheap after the comunits were thrown out of power.
The think about this is that a lot of people don't have money or cannot go in debt, which means that goods and services are not as abundant as in the US (where by the way I lived for 18 months from 2008 until 2010). Is really interesting to see that most of the people are ERE, most of the things are very expensive (basic food excluded).
I really enjoy this forum where I read a lot of like minded people. Jacob's forum and book (which I got for my Kindle a few months ago) are also very inspiring.
Anyone else from Romania around here?

simplex · Post by **simplex** » Wed Sep 28, 2011 3:41 pm

Hi Daniel,
Not from Romania, but I know it from some visits. I think it is a great country for ere. You can live quite inexpensive, have good basic health care and a beautiful landscape mostly suited for agriculture. For somebody not from Romania (or Eastern Europe) it can be difficult to get accustomed to the culture/language.

Hope you have good progress.

Dragline · Post by **Dragline** » Wed Sep 28, 2011 3:59 pm

Hi, Daniel. I'm in the US, but I've spent a fair amount of time in Romania and in some out-of-the-way places like Resita and Fagaras (in addition to Bucharest and Timosoara). People in the country do tend to live pretty simply. I remember in Resita lots of people had like agricultural operations in their back yards. Some would raise pigs, others chickens, others goats and they would grow different things. I expecially liked those hot peppers they serve with the ciorba.
Romania is also a very "young" country compared with most of Europe (with lots of pretty young women).
What city/town are you in?

DanielT · Post by **DanielT** » Wed Sep 28, 2011 8:09 pm

Dragline, I live in a village 15 miles north of Bucharest... Just a few months back our dirt road has been modernized and it's been covered with bitumen.
You remember correctly, most of the people in the country side have a small farm in the backyard (also the girls are very pretty:) ). Most of the lots in Romania are 1000 square meters. My grandparents maintain about 500 square meters of vegetable garden and they supplement their income by selling lettuce, spring onion, tomatoes, green beans. Most of people live the ERE lifestyle but without the "read a lot of books part" mostly because a lot of them don't have a lot of school, they don't have time or they don't feel like reading.
Another interesting facts: the average wage is around 500 USD / month so almost everyone can live off such a small amount compared to western standards. This being the average a lot of people live on a much smaller income.
What is intriguing is that most of the young people have adopted the western city life: job, car payment, mortgage/rent payment, gadgets, etc and only a few are returning to their home towns / villages to start a farm.
Anyway, I will post my thoughts about my ERE life in Romania in this thread and welcome anyone that knows a bit of Romania to participate.
Another interesting fact about my ERE journey is that as I said currently I have about 6 years of expenses, but my expenses are nowhere near the ERE lifestyle and they can be cut at least in half which would put me at 12 years of expenses. I haven't tracked my expenses lately but this will be my goal for October.

pooablo · Post by **pooablo** » Thu Sep 29, 2011 4:40 am

@bigato. I agree! It definitely sounds like a nice place to live. I'd like to visit Romania someday. It reminds me of my family's village back in Southern China. You could live very comfortably on 500 USD a month there.

AspiringYogini · Post by **AspiringYogini** » Thu Sep 29, 2011 1:35 pm

Hi Daniel,
It is great that your culture and country support the ERE lifestyle which makes me think that your life in Romania will probably be quite sustainable as will be the life of your daughter's generation. I would love to hear of more countries where families or groups of people share resources and are able to do things for each other without the exchange of money.
Would you mind sharing what it is that you do, such that you have 6-12 years of expenses saved? You must have a salary that is many times higher than your parents and grandparents. Where can one receive training for such a job in your country and was it extremely difficult and expensive?
All the best to you, I also loved reading your story and hope you will share more.

Dragline · Post by **Dragline** » Thu Sep 29, 2011 2:22 pm

Yes, I agree it would be informative to hear your perspectives. I think one of the biggest barriers for people in the US (in particular) is that they cannot envision a different lifestyle from what they have known.
A lot of effort is spent "reinventing" what older, more robust rural societies have been doing for a very long time. A tendency towards frugality or at least the avoidance of waste is a common characteristic of most such societies.
fyi, I am using "robust" in the sense that Nassim Taleb uses it in his books and blogs. A robust society is somewhat inefficient by design such that if part of it collapses, the rest can survive. It is "black swan" proof. It contrasts with a fragile society, which is designed for efficiency, but is so interdependent that it is subject to catastrophic collapse when one sector of it fails. International banking/finance is the prime example of that right now.

DanielT · Post by **DanielT** » Fri Sep 30, 2011 11:48 am

@AspiringYogini: I started working in 2000 for about 75 USD / month. I was fresh out of colleage and still living with my parents as I didn't make enough money to support myself.

My career is in IT, a very specific area of IT actually where I do consulting for large companies which are implementing the most performant enterprise management system called SAP. Currently I work for a company outside Romania and I get a good payment for my services (I freelance).

Also I have worked in US for almost 2 years and after we had a baby and my mother came to help us for the first weeks, after she left we felt we needed more support from the family so we left US and settled in Romania.
Even though Romania is nice sometimes can be a little boring, so we want to come back to US where we had a really good time and made a lot of friends not to mention that our daugther has american citizenship. This will not be a good move (ERE wise) because our saving rate will drop a lot. But as Jacob was mentioning in one of his writings, US is at the forefront of the inovation, entrepreneurship and new ways of thinking, always pushing the limits of human life as we know it and we want to be a part of this. So it's a very tough decision.

DanielT · Post by **DanielT** » Tue Oct 04, 2011 9:32 am

I have a rough figure of our monthly expenses in my head but starting this month we're trying to collect all our expensese into a spreadsheet to see where we are.
As a fun fact I just want to post some of the prices here in Romania. My wife just returned from a shopping trip from Carrefour (a hypermarket) and this are some of the items she had purchased:

1 liter of Milk (1.5% fat): 1.28 USD

1 550 ml Icecream box : 4 USD

2 Mangos: 2.38 USD

150 g smoked salmon : 3.8 USD

350 g romanian cheese: 2.75 USD

300 g romanian sour cream: 1.2 USD

200 g rasberries : 1.9 USD

1 KG rice: 2.33 USD

0.8 KG brocoli: 3.13 USD

4 medium avocados 7.72 USD

1 pineapple : 1.9 USD

2,26 KG coliflower: 1.9 USD

1 box powder milk for baby: 9.35 USD

seeker · Post by **seeker** » Tue Oct 04, 2011 9:49 am

Wow, I would have thought the prices were a lot lower over there!
Romania sounds like an interesting place, I'll have to visit it sometimes. Quite a nice climate for ERE too, not so much heating costs i presume?

DanielT · Post by **DanielT** » Tue Oct 04, 2011 10:52 am

Most of what I have listed are products from outside Romania. Romanians pay almost 50% of their wage on food and drinks.

But there are are products which are really cheap, for example my grandmother had sold all summer tomatos from her garden at about 0.15 USD / pound.
Natural gas price is a bit cheaper than most contries as we produce amost 30% of our natural gas consumption. The winter months can be really cold so the hiting costs can be very high in the winter but are zero in the summer, spring and autum. Last year we had payed around 70 USD / month (average) for a 2000 sf house.

George the original one · Tue Oct 04, 2011 5:25 pm

> But there are are products which are really

> cheap, for example my grandmother had sold

> all summer tomatos from her garden at about

> 0.15 USD / pound.
Wow! USA consumers are very happy to pay $2/pound for tomatoes.

prieten · Post by **prieten** » Fri Apr 19, 2013 1:03 pm

Too bad this thread has stopped. I spent some time in the central part of Romania from 1998 to 2003. That was before it became a member of the EU. Everything was very cheap. Bucharest was different. Quite expensive. The Romanian language really wasn't that difficult if you had had some exposure to other Latin languages. The people were very friendly and generous with guests. I liked the way the country folk made their own cheese and wine. But it was a hard life for them. Alcoholism was a big problem in the countryside. I would think Romania would be the ideal retirement haven for people on a tight budget. I kept telling every Romanian who would listen they should get into the retirement business like Costa Rica once did. I think there is a real business opportunity there.

bulgaria · Post by **bulgaria** » Fri Apr 19, 2013 1:05 pm

Since 2 years I live in Bulgaria; next to Romania. Imho even a better ERE country due to lower taxes (10% income tax.. or 10% corporate tax/5% dividend tax). Cost of living is quite low, although I do not have a comparison between Bulgaria and Romania.

prieten · Post by **prieten** » Fri Apr 19, 2013 2:21 pm

I have heard nice things about Bulgaria too. Beautiful countryside, great beaches, great wine. I kind of wondered which of the two countries Romania and Bulgaria would rise the fastest economically since they both joined the EU at the same time. At first I thought Romania was pulling away, but now it's dropping back again. It still looks like Romania and Bulgaria, neck and neck for last place in the EU! I once thought Moldova would have potential as a retirement Mecca, but it has disappointed too. It's like there's a bug going around: the politicians would rather take down the whole country than give up an inch of their power. Oops! Seems to have infected the USA too!

DanielT · Post by **DanielT** » Mon Apr 22, 2013 8:21 pm

Hello Prieten ( Prieten is romanian for Friend),
You were lucky to live in Transilvania (Dracula's land) region of Romania which I think is more appealing to foreigners and which I also like a lot.
Sorry I haven't posted too much here, my lifestyle is far from ERE, I just have a very high savings rate because of a very high income and because of the low expenses due to cheap prices for food and services. I did a lot of traveling because my job is in another country and also our daughter needs more attention each day. We were very fortunate to find a lady in our village who has a daughter the same age as ours (3 years) and she started a Montessori kindergarden for which we are paying around 130 USD / month. Lately I have read a lot of Montessori method for education and although it is very expensive in US (I didn't find anything under 10000 USD / year), for someone with an ERE lifestyle can be done at home for much cheaper. There are a few cheap books on Montessori (1 USD) in the amazon Kindle store which are very informative about children education and how it can be done with amazing success.
=== BIG DILEMMA ===
Now I want to share with the group a big dilemma I have at the moment. As I mentioned before we have lived in US for about 2 years (2008 - 2010) and loved it; but we went back to Romania soon after we had our first baby (early 2010). Since then we have paid all our debts, we have a paid off house and car and a big savings and investment account. I also have an offer for one year contract in Europe which would provide big monthly checks but also have another offer and an opportunity to come back to US.
Staying in Romania and working in Europe for an year would probably put me very close to full retirement with about 15 years of living expenses. Would also mean I will be around family and friends.
Coming back to US would mean the expenses would go up a lot (rent, car, kindergarden, food - just to name a few categories which are much expensive than in Romania) and also the income would be less - mostly because of taxation difference and because of the EUR/USD exchange rate.

So would take a lot more than one year to reach retirement. But our kids will live in "the most advance society money can buy" (for me US is where the future is made) and I think I was born american but misplaced by the stork in Romania:).
I will have to make a decision in about one month so any thoughts on how to approach the decision making process would be helpful.

secretwealth · Post by **secretwealth** » Mon Apr 22, 2013 8:43 pm

That's an interesting dilemma. Since the socio-cultural advantages of the U.S. appeal to you the most, I'll have to display my urban snobbery and say that it really depends where you'd be going.
If your job is in, say, NYC, Chicago, or L.A., it would definitely be a profound opportunity for your children to have an experience in a cutting-edge culture. If it's in Kansas, on the other hand, your children will probably be miserable due to the bullying and you'll be disappointed with the backwards and unsophisticated culture you're suddenly in.
I pick on Kansas specifically because yesterday I was just listening to the story of a Korean-American girl who grew up in Kansas and was bullied for being Asian (in the 21st century, wtf?). Kansas is also the place where this happened: http://en.wikipedia.org/wiki/Kansas_evolution_hearings

DanielT · Post by **DanielT** » Mon Apr 22, 2013 8:54 pm

Secretwealth,
Previously we lived in the Seattle,WA area and now will probably move back there if we're lucky or to Austin, TX.

secretwealth · Post by **secretwealth** » Mon Apr 22, 2013 10:48 pm

You'd definitely get what you're looking for in either city, but the big question is whether the financial sacrifice is worth it. I don't think any of us can answer that question for you.

C40 · Post by **C40** » Tue Apr 23, 2013 12:15 am

Bullying? Backward? You weren't kidding about the snobbery

. Some towns in Kansas are a bit honky but I certainly wouldn't label the state like that. (many people in Kansas have a lot of important things figured out well... calling them backwards is kind of like 'normal' people calling ERE backwards). The stupid kids in Kansas drive around in big loud trucks or the criminals maybe sell meth. In the big cities there are stupid people just the same and the crime is more violent.
It doesn't just depend on where he'd be going - it depends on what he wants. I've spent time in Chicago, NYC, and LA. I'd pick Kansas over Chicago or NY (but not LA mainly because of the weather and the ocean & hills nearby)
Of the three big cities I've spent the most time in Chicago. I think It is a mess. In some summer nights there are murders every 20 minutes.. In the winter the city gets filthy. Mud everywhere. Trash and litter and sometimes dead rats out on the sidewalks. People everywhere. Cars everywhere. No room to breath. No good roads to ride a bike on for training. I felt almost claustrophobic there. I had a girlfriend in one of the fancy neighborhoods and it had all of these problems except the murders. The train was nice though.