Dear Mustachians,
Since about a year ago I stumbled upon this website and have since been interested in early retirement.
Let me give you some background on my situation and where I currently stand. I am looking for advice.
Life situationI am 21 yo, from a western European country and have been fortunate enough to inherit a significant amount of money. I've a small idea of what to do, what not to do, etc - but not enough I feel. My goal is to be able to retire at 30 with a reasonable lifestyle.
fyi - I have a girlfriend, but my girlfriend's and my income/expenses are separated - too young to share, she still studies.
My current financial situation:Capital: €502k
(in investment account, yearly ROI 6% - I can not change investment banks for 3 more years - taking out money is limited.)Emergency Fund: €14.000
Study Debt: €12.850 (0,12% interest till 2019)
Income before taxes: €68k/yr ($83k USD - at average conversion rate)
Take-home-pay: €2850/m (after taxes, healthcare, pension fund, unemployment benefit, etc)
Savings-before-expenses: €350/m
My expense budgets are as following:Rent: €600,- (2br apartment in Belgium, sharing with GF)
Utilities: €50,-
Car: €487 (Kia Rio Lease 2015) **
Food/Groceries: €250
Phone / Internet: €100
Extra Insurance: €35
Clothing: €200
Personal Care: €35 (think of haircuts, gel, shaving stuff, etc)
Mountainbiking: €150 (this is my sport/hobby)
Miscellaneous: €250
(This is projected expenses, so misc. is a bit hard to determine)Want to save for:- Wedding (even though I do not want to think about it yet)
- House purchase (see below)
- Having 1 Kid
That gives a
monthly buffer of €315 after savings and expenses.
Because my salary is in USD, this fluctuates a little - above income and buffer is calculated at average conversion rate to EURO. Currently the buffer is €450/mI expect the capital to be worth €810k after taxes when I am 30, after putting €350,- in every month at a 6% ROI
Income from return-on-investment in my country is taxed at 30%. Quite high.
That means at 30-year-old, with a withdrawal rate of 4%, I would nett €2025 monthly, which is too little to maintain a family.
To live a normal middle-class life you will need about €3000/m (€2000/m if you paid a house in cash)
An average house in the sub-urban areas currently goes for about €300.000, city areas about €425.000
My questions:1. How can I improve my chances on a early retirement at 30? - I don't want to stop working at 30 tbh, but I do not want to have to worry about any of the bills when I live a normal lifestyle (middle class).
2. What are the best moves I can make right now financially to increase my chances?
3. Do you see it possible for me to retire at 30 with an income of €3000/month after taxes - purely from return-on-investment?
** Car: I am driving a 2015 Kia Rio, I drive about 15.000km/yr, because I use the car to invest in my personal network - I find building a strong network of talented, high-growth individuals very important. And this will definitely increase my chances of earning more later on. (attending events, conferences, meeting people, visiting family, etc) - Leasing is a significantly cheaper option due to Car Insurance VS buying a new car. Buying an old second hand car saves about €100. See a comparison below (15 year old mazda 323 vs new Kia Rio)