Author Topic: Reader Case Study - ER in Denmark, Europe  (Read 1350 times)

hoejer

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Reader Case Study - ER in Denmark, Europe
« on: October 21, 2014, 04:21:55 AM »
Income per year: $80,000
Dad: $50,000 (after tax and pension payment $11,000)
Mom: $30,000 (after tax and pension payment $6,500)

Current expenses per year: $54,000

Home: $25,605
Mortgage: $16,200
Home insurance: $580
Property tax: $1,280
Electricity: $825 (aprx. 2,000 kWh)
Water: $470 (aprx. 2,100 cu. ft.)
Natural gas: $2,250 (aprx. 56,000 cu. ft.)
Renovation and maintenance: $4,000

Cars: $8,165
Family car insurance: $410
Family car tax: $560
Family car fuel: $1,060
Commuter car insurance: $515
Commuter car tax: $100
Commuter car fuel: $3,500
Trailer tax: $20
Service & maintenance: $2,000

Misc: $20,280
Unemployment insurance and union: $3,110
Life insurance: $625
Media tax: $420
Health insurance - extended coverage: $300
Day care: $5,000
Accident insurance: $580
Dentist: $200
Cell phone: $400
Internet access: $600
Grocery: $6,500
Clothes: $350
Travel and leasure: $2,000
Sports: $195

Assets:
Pension like 401k: $43,000
Stocks: $3,400
Savings account: $13,700
Home equity: $260,000

Liabilities:
Mortgage: Balance $150,000 - Maturity 10 years - Current rate 0,78% (amended once a year)
No credit card debt
No car loans
No student loans


We are a family of 3 (dad 28, mom 27, daughter 1) dreaming of ER in Denmark, Europe. We started cutting debts and living frugally 5 years ago. We believe that we live well below our means, own everything we need and are happy.
Our plan is to pay off our mortgage, I know the current rate is extremely low, but the wife hates debt (happy wife = happy life). We use our yearly savings of aprx. $26,000 as an extra mortgage payment, and plan on making the last payment on December 2017. Afterwards we plan on investing the yearly savings and mortgage payments in mutual trust funds.
When we reach ER, several budget posts have gone: Mortgage, commuter car, unemployment insurance, life insurance, day care and renovations on the house has diminished. Leaving a FI-budget of aprx.: $21,000.
We have gone over our budget several times to trim insurances, utility consumption and so forth. We do most of our misc. shopping at flea markets and second hand shops, groceries are bought on sale or at discount stores. We do all home and almost all car maintenance ourselves. We bought our dream home, we donít plan on moving closer to my work, although it is a 42 miles commute each way 5 days a week. If I got a job closer to home the income would drop by aprx. -$20,000. I drive the commuter car, a brand new car, bought the cheapest and most economic one I could find. Registration tax is insane in Denmark, which makes it very attractive to buy brand new small cars. The car does 50 mpg.

Do you have some suggestions on where we could improve further, we would love to hear them?

Best regards
The family from Northern Jutland, Denmark
« Last Edit: October 21, 2014, 06:50:04 AM by hoejer »

Kronkl

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Re: Reader Case Study - ER in Denmark, Europe
« Reply #1 on: October 21, 2014, 08:00:40 AM »
About your mortgage, i would pay the intrest only and invest the principal. Even a low-risk bond-fund-investment will generate a better return then the 0.78% you pay now. Review the next time the intrest is amended if you would like to throw that money into paying off your mortgage or continuing investing.

Have you considered solar panels to generate your 2000kwh usage? 9 or 10 250wp panels would suffice. Invest once, and it should generate your electricity for the next 25 years.