Author Topic: Following the right path..  (Read 3016 times)

metro2005

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Following the right path..
« on: October 15, 2013, 05:38:37 AM »
Hello fellow mustachians,

I love this site and the articles and i think im doing pretty good as well considering the circumstances. I recently had to sell my house which got me into a 35.000 euro debt, luckily i had already saved a lot of money myself and i could borrow the rest (17.000)  from family.  I managed to pay off the borrowed money within 8 months (this year to be exact)  and i can now start saving money again.

Because of all this i was living a pretty frugal live and i found out that was a lifestyle i was more than happy with. Because of the economic crisis and lack of better paying jobs ( I only make 25k a year)  i had to cut costs.  I sold my car and ride my bike everywhere instead (22km one way commute.. )  , cut down on powerbills by using energy saving lights, adding powerswitches on appliances that cant be fully turned off, use my laptop for 90% of the time instead of my power hungry desktop pc, wear warm sweaters instead of turning on the heat etc.
I rerevisited my insurances and other montly expenses such as internet, television and so on. I have a prepaid simcard with a bought phone so it will only cost me money when i actually make a phonecall.

And i know it sounds odd but another saving tactic was moving from a 400 euro a month rental appartment to buying a house which costs me 725 euro a month. Sounds illogical? Yes but our government (Netherlands) decided to allow for the raise of rental payments with 4 to 6% a year and since you can get a tax reduction if you buy a house (in my case i get 200 euro a month back) the house only costs me 525 euro a month. Would i have stayed in the rental appartment then it would have become more expensive within 5 years while its half the size of my current home.
Another observation was that housing prices are at an all time low and they dont seem to be getting any lower so i figured now was a good time to buy.

As for spending money on luxery items... i dont anymore. I used to be very materialistic but somewhere along the way a switch was pushed and now i couldnt care less about a new television, smartphone or car. It doesnt improve my life substantially so i dont want it.  I still have tube televisions and they will be there until the day they die :)   If something breaks (for example my smartphone broke a year ago) i find it rather annoying to have to spend money to buy a new one instead of being happy to getting a new phone. 
And no i dont feel poor for one moment! :)  I have everything i need.

I have also embranced minimalism. Everything i dont need or will ever use again i throw away or sell. The result of this is rather shocking: Our new house is pretty empty LOL so should we ever move again we can buy a smaller house.

If i continu to hold this lifestyle i can have the house fully paid off within 11 (!) years.

So in my opinion im doing pretty well but the main problem i have is i cant seem to find a way to retire early.  I will 'only' have 100.000 euros within the next 10 years but i dont see any feasible ways to make that money work for me as some sort of income. Intrest rates are extremely low plus we have to pay taxes on savings so that would be something to figure out.

Anyway, not being materialistic and doing pretty good with a low income means im ahead of 90% of the sheeple in this country and thats a BADASS feeling LOL


:)

« Last Edit: October 15, 2013, 06:10:58 AM by metro2005 »

Silvie

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Re: Following the right path..
« Reply #1 on: October 15, 2013, 06:09:27 AM »
Sounds good! Congrats on the new house.

Maybe you can break down your montly expenses, so we can give you better advice. For instance, I have Tele2 for TV and internet which only costs me 31.50 euro p.m. This is the cheapest option in our country, I believe.

Look into saving accounts (mine is at Nationale Nederlanden, 1.95% interest, the highest at the moment), depositos and stocks or real estate if you have some savings to put away.

I don't know what your job is, or how far you live from work, but I assume you do have a bike and use it a lot. Can you bike to work, or use public transport?

metro2005

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Re: Following the right path..
« Reply #2 on: October 15, 2013, 06:18:40 AM »
These are my expenses:

21 euro water
100 euro gas and electricity
40 euro Internet and television
47 euro housing insurances
98 euro health care
mortgage 725 (after tax reduction 525)
Community taxes : 60 euro

My GF pays for the groceries, usually 200 euros a month

My income is 1600 euro's a month , GF doesnt work full time and pays for her own stuff although she is pretty frugal as well (lucky me !)

I commute to work by bike every day, its 22km one way so it takes a little less than one hour.

1,95% is nice but wont cut it when you want to retire early, especially since the government taxes 1,2% on any savings above 21k

I really think i should invest it into something but real estate is not really a solid investment at the moment in my opinion.


 



« Last Edit: October 15, 2013, 06:22:22 AM by metro2005 »

ozzage

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Re: Following the right path..
« Reply #3 on: October 17, 2013, 02:34:56 PM »
Gefeliciteert :)

I found the Dutch quite naturally frugal when I lived there so if you're frugal in comparison to your country-mates then you're doing well!

Silvie

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Re: Following the right path..
« Reply #4 on: October 18, 2013, 06:16:21 AM »
Yeah the only thing I can think of to cut is maybe your electricity bill and maybe internet/TV. Groceries seem okay, although you can always try to get them cheaper. But other than that, well done!

Zamboni

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Re: Following the right path..
« Reply #5 on: October 18, 2013, 06:36:07 AM »
Well done! 

I remember houses there being outrageously expensive 10 and 20 years ago, so buying now if the prices are low was undoubtedly a good move.

Since you are minimalist, and you have a fairly long commute which is good exercise but probably somewhat inconvenient in winter, can you move to buy something smaller, cheaper, AND closer to work?  Does your girlfriend need to be in your current location for some reason?  Are you in a slightly bigger place than you need at this exact moment because you are planning to start a family very soon?

It also sounds like you should start investing a portion in stocks and bonds.  Your income and savings projections are probably low because you will likely get some increase in salary over the next decade.  Is it likely that your girlfriend will also start earning more money in the future?

 

Wow, a phone plan for fifteen bucks!