Long time reader, first time poster - Hi! I guess my perspective will be a bit different from all that you see in US/AU/UK. But let me explain the significant differences point by point below.
Life Situation: 27, Single, no kids, living in Central-Eastern Europe.
Gross Salary/Wages: ~70k USD (assuming exchange rate as of today), this is well above average salary in my country (4x) and even more above avg for ppl of my age (5x/6x)
Individual amounts of each Pre-tax deductions: I use all income tax deductions available and I do max all retirement accounts (but, hey, they have pathetic annual limits of ~1.5k USD... however they provide immediate tax benefits of 25% return)
Other Ordinary Income: None
Rental Income, Actual Expenses, and Depreciation: Two apartments; bought without mortgage.
1) Purchase&renovation price: 60k USD; Current value: 90k USD; Net annual income (after tax, repairs, utilities etc.): 6k USD
2) Purchase&renovation price: 110k USD; Current value: 140k USD; Net annual income (after tax, repairs, utilities etc.): 9k USD
Net annual income (incl. rental income): ~60k USD
Current annual expenses: ~14k USD
Lean:
Accommodation: ~1k USD (living alone in a relatively small apt, owned by my family (70%) and myself (30%); no mortgage)
Food: ~1.8k USD
Restaurants: ~1.4k USD (mostly dinners with my girlfriend)
Transportation: ~0,8k USD (uber, public transit)
Education: ~0.5k USD (various certificates, supporting me in achieving above-average salaries)
Health: 0,5k USD (insurance + medicines)
Misc: ~1k USD
Travel: ~4k USD (yeah, I spend ~5weeks on vacations annually; usually include a couple of city breaks and one bigger 15-20days holidays in Asia/Americas)
Gifts: ~3k USD (2k of this is to my family, which I treat it as interest expense, will explain later)
Expected ER expenses:
Lean FIRE: As you can see I would be able to cut down on travel and gifts (they are never expected nor awaited), so theoretically I would be able to survive on ~9-10k USD
Full FIRE: Amount I would feel safely with is however ~40k USD annually, because:
1) Currently my employer cofinances many activities (food; hotels; flights; loyalty miles/points for travel that I use during private trips)
2) Living in my apt is not feasibile in long term (very old building, I do plan on moving out within 1-2 years, which will likely double my accommodation cost)
3) Health insurance for not working ppl is relatively expensive
4) I plan to have a kid (maybe 2) in the long term
Assets:
TOTAL: 260k USD
Rental apt #1: 60k USD (purchase cost as I do not treat recent price increase as sustainable)
Rental apt #2: 110k USD (purchase cost as I do not treat recent price increase as sustainable)
My current apt: 30k USD (30% share; total value ~100k)
High-paying interest accounts/term deposits: 35k USD (@4% annually)
Silver/gold: 15k USD
Mics: 10k USD; incl. 3k USD in retirement accounts
Liabilities:
60k USD family loan @0%, however I give them ~2k gifts annually which I wouldn't otherwise - so the rate is ~3.3% - below mortgage interest in my country; We have a gentlemen agreement to start paying it back as of 2019 year end.
Current credit card liabilities which are always paid down, so I will not include them here
Specific Questions:
1) To readers around my age - how do I stand from your perspective?
2) Should I take a couple of mortgages to purchase next investment properties (I have access to flats paying ~7-8% annually; I can finance it 80-90% with ~4% mortgage but on variable terms - when a crisis hits this may go up significantly)
3) Local stock market is sh*t. Should I go broader and start buying Schwab/Vanguard ETFs on wide range of stocks? I am a bit afraid of currency exchange risk. Historically when US markets go up; local currency depreciates and the other way round... Similarly for other markets. Additionally, I would have to buy it from foreign brokers - paying ~1% fees on the purchase...
4) How risky from your perspective is my allocation in real estate? What would be a safer option?
Thank you!
CEE Investor
