Hi Everyone,
I recently found this site and have to say, I'm excited to find there's a real FIRE community out there. I've had the idea of retiring early in my mind ever since I was about 25 and been slowly working towards it ever since, but it's great to see things like safe withdrawal rate and a bunch of general advice here to actually be able to put some correct numbers on it, it opened my mind!
I'm a 35 year old, married guy living in Belgium and would like some general advice on how I'm doing and how I can do better.
My current assets:
- 1 house, estimated (officially appraised) at 340 000€ worth, mortgage still at 168 000 with 12.5 years to go on it. I bought the house in 2009 for 265000 + taxes and borrowed 265000, paid the taxes cash. Annually adjustable mortgage interest rate of 1.39% right now. This has dropped almost every year to it's current level. I pay off about 1230€/month and get roughly 1790€ in rent (including utilities). After utilities there is roughly 1300 left. I put in an average about 750/year in small and big repairs/replacements. I should mention I probably average about 11 months in actual rent due to bad tenants and vacancy but it's been going great the last 2 years.
I like this investement a lot and initially bought it to get a nice early retirement income after the mortgage finished. In case you wonder why the numbers (time left on mortgage etc) don't add up, I continued paying the same amount in mortgage every month after the interest rate dropped so pay off more capital that way, shortening the total time I still have to pay.
- 1 house I live in and bought with my wife. Bought it for 175 000 2 years ago and pay 783/month with a fixed interest rate of 3.4%. We borrowed 155 000 and paid the rest + taxes cash. Roughly 150 000 and 23 years left on the mortgage. I will try to get this refinanced soon. I like the fact we are not paying rent and essentially building wealth this way. The house is currently appraised at 200 000. I should also mention some of the interest is tax deducable in Belgium.
- 1 small vacation home in Italy, rented out during the spring/summer/autumn season. Recently took a 32k mortgage because it's located in a vacation park on land that was leased from a bank, but that land has now been bought from that bank by the vacation park. Pay off 400/month at 7% interest for that. The house has a value of 105 000 incl the land. I bought it excluding the land for 65000 4 years ago. I get roughly 8500€/year in rent which nets me about 3000 after taxes, repairs, fees for the swimming pool, cleaning etc etc. That means I currently have to put in about 1800€ to be able to pay off the mortgage but off course it's increasing my net worth because it's paying off that land mortgage. Not sure if this is a great investment so any advice or thoughts on that specifically would be much appreciated. It's not very easy to sell due to it's location in Italy (far away for me) but doable. I also should mention I would be fairly reluctant to sell it because my parents enjoy it a lot for 2-3 weeks/year (rent free).
- have about 30k in P2P investing on Mintos, Viainvest, Estateguru, Grupeer etc netting roughly 11% which after taxes (30% witholding tax here) comes to 7.7%. I like this a lot as I try and only invest in loans with a max 75% collateral value and from companies with a good rating and buyback guarantee so the risk of the loans defaulting AND the buyback guarantee not being honoured is low imho. I have 10k in Envestio as well at 21% interest. This last one is high risk IMO.
- have about 170k in personal working capital for my home business which can be liquidated into cash in 2-3 weeks if necessary.
- small retirement fund of 10.5k at a big bank, putting another 980€/year into it, 30% of which is tax deductable (980€ is the max you can put in to be able to deduct the 30% taxes completely).
My income is over 10k/month, most of this stays as working capital in my business except for my salary and the money I put into the P2P investing. We spend about 42k/year on average including vacations etc. My wife also works part time (salary about 1450/month) and goes to school as well to educate herself some more.
I have vague plans to keep saving for another 5 years or so at the current rate and then liquidate the business working capital, right now I try and put another 4k/month into more P2P investing. Have not started out with index funds yet but heave reasearched Vanguard and Ishares funds that reïnvest dividend to avoid the witholding tax in Belgium. Don't really like it (and I know this is wrong) as I kinda want to stop working in roughly 5 years and am afraid the next recession is around the corner which could mean a sharp drop in those indexes (2008 is still kinda fresh in my mind). I am aware of the fact that if I start putting money into an index fund now and keep doing so for years the average buying price will even out and I would be buying an index fund for the long term (S&P index fund), but I guess I'm too afraid and not emotionally "there" to see a 10% drop in value over a month so I like the P2P investing better.
My calculations say I would need to have about 650 000 saved + the first rental house to be "ok" and get about a 4% SWR.
Thoughts, advice, comments greatly appreciated!
