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Around the Internet => Mustachianism Around the Web => Topic started by: SwedenOutdoorFI on February 07, 2019, 04:55:33 AM

Title: New Blog SwedenOutdoorFI
Post by: SwedenOutdoorFI on February 07, 2019, 04:55:33 AM
Hi there Mustachians,

just wanīt to post a link to my blog that started today. Itīs about my journey against FI that started about a year ago and now I am going to write it down in a blog to get a better focus on it and hopefully comments that will help me.
Title: Re: New Blog SwedenOutdoorFI
Post by: FI-King_Awesome on February 09, 2019, 12:43:18 AM
As a Swede, one of your most significant headwinds is the tax rate. Unbelievable income tax brackets (58% marginal rate at not so enormous levels of income) and the 25% sales tax.  Finding ways to minimize tax exposure should be a priority.  It is, in most aspects, a socialist country with a political direction working against individual success (in financial terms). So, that’s the tough part.

The good news is that you happen to live in one of the most beautiful countries in the world. Particularly as you mention you live in a small city. Maybe you’re even lucky enough to live north of Stockholm. Air quality, workplace safety, healthcare systems, food quality are all reasons Sweden is so great.  Socialized medicine means a large part of our later year spend will not impact you to the same extent as for those of us in the US.  The other large expense, college tuition, also doesn’t apply to you, as college is practically free in Sweden.  I’m using the term “free” loosely here, as it’s paid for through taxes.

So, with the rambling out of the way, what suggestions can one offer... 

well, if you’re not already, have a dialogue with your employer about exchanging part of your salary for a higher retirement contribution (löneväxling), as this gives you a tax free vehicle for your otherwise taxable investments.

Talk to a financial planner about a life insurance vehicle for tax deferred investments on the domestic stock market.

Moving abroad once the kids leave the house?  As a Swede, you are not taxed (yet!!) on foreign income while residing outside of Sweden.  As an example, if you and the wife moved to Hong Kong for a couple of years, your total income tax would be capped at 15%, likely less depending on your tax bracket.  Capital gains made on the HK stock exchange would be tax free.
Take a minute to think about what that would mean in terms of accelerated savings... then think about countries where your skills would be in demand, while local cost of living doesn’t eat up your entire income :)

Finally, sweden has agreements with a number of countries in Europe, which means you can retire abroad, and thereby be subject to a lower tax. This doesn’t mean you can’t keep the cabin and go there on vacation during the summer months

Good luck!