Hi to all the fellow savers,
I found out about The Way of the Mustache about a month ago and since then read through almost all the articles. Very inspiring! It was a real eye opener for me. I always thought to myself that there had to be another way than working for 40+ years of your life. The answer was quite obvious once I read through some of the articles of MMM and I have to admit I felt a bit dumb not noticing it by myself. I am 26 now and living in southern Germany (Augsburg for those who know it).
I started my professional life about 2 years ago after finishing my business degree. No debts going out of university thanks to the low tuition in Germany and working throughout my college years. The salary of my first job was decent enough to afford a very unmustachian sports car and since I was living in hotels due to the job, my other expenses were quite low. But the car sucked most of the spare money out of my account. It is baffling to me how I didn’t notice what was going wrong at that point.
Changed jobs last year with a nice raise of almost 25% and I thought to myself “that shiny car is now even more affordable since I earn more” and I started eating out with friends a lot, since I didn’t have to travel during the weeks anymore. Spending most of my take-home pay on useless crap, I lived on and thought about the next 40 years of my life. Working 5 days a week for another 2000 weeks? Getting up, work, get home, eat, sleep, rinse and repeat? That didn’t sound quite right to me. Thankfully, MMM opened my eyes for the alternative route.
Anyways, I turned around my spending habits and started to think like a mustachian. I recognize the patterns that would have kept me working my whole life everyday now. Decided to sell the expensive sports car about a week after that and sold it just last week. Since I noticed the true money-sucking nature of that fine piece of machinery it felt more like a burden than a privilege to own that thing. It really felt like a heavy weight was lifted from my shoulders once the contract with the new buyer was signed and I held the cash in my hand. I still feel a little sad from time to time when I see similar sports cars on the road. But I just remind myself that those things will keep me in the office for countless years instead of enjoying life and nature as a free person. As you can see, my transformation to a true mustachian isn’t at all complete. But recognizing my habits helps a huge deal in controlling my the urges until it becomes second nature to be frugal and not be aroused by shiny metal curves and screaming engines.
Additionally, I drastically cut down my eating out spending. I can already feel that my urge to buy new gadgets gets less every day. My old thinking "I have the cash for it, I'll just buy it" now seems ridiculous to me.
I was fortunate enough that I was brought up by two fairly frugal parents (except for the obsession with sports cars of my Dad, which I unfortunately inherited) so I have no debt. I started to save aggressively now and I am currently at a 50% savings rate from my take-home pay. Right now I can’t make the bike-for-car exchange since I am working 50 miles from home. Moving closer to work is not an option right now, since my girlfriend is currently in the process of finishing her PhD in the city we live in. After that is finished, we will both look for jobs in the same town. But rest assured, the commuting car is a 9 year old reliable diesel car that consumes about 4,7l/100km (58.81 mpg for our imperialistic friends) and so far requires minimum maintenance. It’s not the perfect situation for early retirement but in a couple of years this issue should be resolved.
I am currently in the process of convincing my (soon-to-be) fiancée to jump on the same train and the goal is a 70-75% savings rate. But I think I will need one or two raises in salary to achieve this. The taxes in Germany make it hard to achieve high savings rates, but the healthcare system allows for cheaper insurance once I quit my job.
I am also looking into real estate investments but the market is ridiculous right now. Apartment prices are at about 27 times the yearly rent in Augsburg (where I live). I am guessing that in the next 5-7 years the prices will drop significantly. Interest rates will go up (I mean, they can’t go down any further) and most buyers here only fix their rates for 10 years. Since this enormous bull market lasted for about 5-8 years now, this 10 year fixing of interest rates will be gone in a couple of years for most owners. When interest rates go up, some of them won’t be able to pay their mortgages and the selling pressure will correct the prices. Or so I hope…until then, my investments will be purely equity/bond mixes.
Thanks for reading and I am looking forward to some great discussions with mustachians around the world!