Financial Freedom Sloth

achieving financial freedom one lazy step at a time

How I keep up with the news

Well that is simple. I don’t really. I have got the log in from a friend for the gopress database and once a week I catch up with De Tijd (the Belgian financial newspaper). Reading it with a delay reduces the time necessary to be caught up significantely. Because, when you read a weeks old newspaper you quickly realize how much is utter drivel not worth your time to read at all.

I am not alone in this. Mr money moustasche has a great post about it. He calls it the low information diet. The magazine Humo had an article about it a few weeks back. My parents still have a subscription on it. They keep them and when I visit I take a bunch of them with me. The girlfriend reads them. Since there is always one lying about at the toilet I might leaf through it when I didn’t remember to bring my smartphone with me.

The reason I do this is not to save money but purely to improve my quality of life.

The news is hardly news anymore. It is a lot of speculation about what might happen or what might be the consequences of what just happened combined with a lot of opinions about what happened, or why it happened. At best, reading this is just a waste of time. At worst it will annoy you and sour your mood for a few hours or even a few days (some Belgian politicians have developed an unique talent to deliver in 5 second soundbites such complete and utter ridiculous proposals that any sane person needs a week to just barely regain some of his mental capabilities).

Since the news hardly contains any worthwhile information. It wastes a lot of my time with other stuff that is not news and in most cases delivered information that had no impact on my life or I couldn’t change even when it does impact my life (short of leading an armed revolt to topple the EU leadership and found the Republic of the Sloth, all hail the sloth!). And on top of that it annoyed me more often than not! So I stopped reading newspapers, magazines, watching the news …

This doesn’t mean I do not read or get new information. But now this is on my terms and for subjects I find interesting or will improve my life. Informative sites or blogs about finance and technology mostly. Some fun things on boredpanda or a fun/absurd thread on reddit. Basically I want to either be informed or entertained and the internet can provide both of these in spades at no cost. The classic media offers very little of either and then has the guts to charge money for it! One wonders why they are in trouble …

It’s personal

Last Saturday was the third meet up of belgian/dutch people who strive for financial freedom.

It was the second I attended (missed Antwerp due to illness) and very glad I could make it. Always great to meet like mined people. contrary to my girlfriend some of those attending do not fall asleep when I am talking about options!

I also gave a presentation. I’ll make it available to download here.

Financial freedom in Belgium2

It is part a condensation and part an elaboration of ideas and numbers in these three posts on my blog:

The really short version is that instead of aiming for full financial freedom I only aim for partial financial freedom. Some work will still be necessary. My practical side limited that work to the tax free amount of 7.400 euro since that is the easiest money to earn by working. My stash will cover the remaining 12.000 euro I am going to need to live a full year.

What I did not do fully elaborate on is the reasons why I chose this path.

Some are practical:

  • it’s more tax efficient, swapping work that is taxed at 50% for work that is taxed at 0%

some are personal:

  • my age, I will already be 47 when I achieve this for both me and my partner; achieving full financial freedom would take 7 more years. I would then be 54!

But the main reason is that for me this whole financial freedom is about happiness. Trying to live life on your own terms. Having the freedom to pursue personal interests and projects.

When working full time I simply do not have enough time to do this. Hell, I should do a lot more sport to get my weight down and my general fitness up. But that would mean almost no time to relax in the evening. And I like relaxing in the evening!

But working only 3 months a year or 1.5 days a week will give me the time I need. Not only to do more sports but also to pursue my interest and passions. Having even more free time than those 9 months will not add a lot more happiness to my life. But getting those 9 months years earlier than the in the fully financial freedom scenario will.

The way I see it, is that financial freedom should not cover everything. It should only cover the basics. For the rest you can still work, put in some effort. With some luck, you might even be able to earn some money pursuing your passion thus eliminating the need to work for an employer completely.

I have seen a lot of people on the moustache forums falling prey to the ‘one more year’ syndrome. People with a big stash who still keep working ‘one more year’ because they are afraid the stash will not cover every imaginable future cost. Planning to do some work eliminates this fear. Then your buffer is not an ever larger stash but just working a bit more when unexpected costs appear. For instance: my calculations use the tax free amount of 7.400 euro a year. But due to my mortgage deduction I can actually earn 9.600 euro tax free a year. That 2.000 euro I can earn extra every year would mean 50.000 in stash I do not need to earn before ‘pulling the plug’.

A lot of people on the forums also earn money once ‘retired’. Just look at Mr. money moustaches wife making enough with her Etsy shop to cover both their basic spending. Off course this income was not predictable. But the fact that you will have SOME income is predictable. Even if you do not yet know how you will earn that income. Mr. money moustache had his carpentry skills to fall back to if some additional income was necessary.

In Belgium 7.400 euro is the easiest money you can earn. Since this will only take around 3 months to earn and thus leaves me plenty of time to pursue my own interest it is the basis for my calculations.

This basis will probably be different for everybody. Just like not everybody will plan on spending only 18.000 a year. some will be ok with only 6 months of not having to work, others will want to spend 24.000 euro a year (or more). That is what makes it personal finance. But do take some future income into account in your calculations. If done right you will still be relative young when the basics are covered by the stash. You will want to do SOMETHING. Wasting extra years at a job you do not like or postponing projects, passions until the stash is big enough to cover every imaginable and even unimaginable future expense is in my book foolish. The alternative: to plan some work after ‘retirement’ is a lot better since it will allow you to pull the plug on the full time job years earlier and will give you the flexibility to handle unexpected costs if those should ever arise.

Why I do not like money

It might come as a big surprise from somebody aiming for financial freedom and being a very active investor for the last 17 years of my life but I do not like money.

A lot of money gets you nowhere

Now money is a pretty nifty human invention and excellent as a medium for exchange. Very practical indeed. But as a store of value it is useless. Amassing a lot of money will get you nowhere.
The reason is pretty simple. The value of our money is the future strength of the underlying economy (or at least this is the case since we have abandoned the gold standard). This why the euro, usd is worth something and the Zimbabwe dollar or Venezuelan bolivar not. Those last two countries barely have an economy left with no future change expected. As a consequence the value of their currency has evaporated.

Having your currency backed by the whole of your economy is not a bad thing (it is a hell of a lot better than it being backed by gold) but the thing is that it is by default backed by your ENTIRE economy. All of the great companies in your country, but also all of the bad, money losing companies. And a huge amount of non-profit (either by design, or involuntary) entities. Which means that if amassing a lot of money is your goal you are going to remain squarely in the middle of the pack. I do not do packs very well.

What I like is to own shares in excellent international companies, preferably with a big moat so they will remain an excellent company for a long time and with pricing power. Pricing power means that inflation is something you do not need to worry about. And international so that even if the government of your country thinks that a Venezuela or Zimbabwe policy is something worth following, the company will be fine.

Simply put, if you were a Venezuelan who had little to no bolivar but instead had your wealth in shares of Coca-Cola, life would still be good (due to rampant crime you would probably have moved some years ago, but at least you would have had the means to do so).

Even simpler put: money is the equivalent of a photo of a beautiful woman. It’s the woman you should be chasing, not the photo. I mean, Draghi is printing 60 billion new photo’s every month. But he is creating 0 excellent companies … have a guess what is going to happen with the value of that excellent company?

That is why I am fully invested at all times. It is why I do not own any bonds and will never own any. It is also why I want to amass as much shares as possible. And it will be with great pain when I will need to extract some cash from them when I stop working. The two years of cash I will hold when pulling the plug is solely due to the volatility that is unavoidable when you have a system based on fiat money.

A little side note about the gold standard

A lot of people do not like money because it is fiat money backed by nothing tangible like gold. They think a return to the gold standard would solve most of our problems.
It would solve one problem: volatility (and even then, volatility also happened when the gold standard was in place, countries too can be stupid in the capital creation department). Because the value of your money is backed by the future strength of your economy as a whole and this future strength is uncertain you do get some volatility in the value of your money. Most of the time this volatility is pretty low (since it is the whole of the economy) but in times of crisis this volatility will experience a big uptick. It is then that the proponents of the gold standard (or goldbugs) make their appearance.
Unfortunately, it would create a lot of other problems (like a lower growth but also a lot lower progress and innovation of society as a whole). You see, it is a good thing that we have fiat money. It is a very good thing that there are institutions (mostly banks) that can create new money based on nothing more than a future repayment promise. Without this a wealthy elite would most definitely control the world and the return they would demand for investing in a smart idea or business opportunity would be a hell of a lot higher than the current interest rates. If they would want to invest at all …. Since they are already very rich, backing a young ambitious person is not a very attractive proposition (it just creates more competition for a limited amount of capital), the exception being off course if the young ambitious person is family (or willing to marry into the family). Though luck for all those smart people not born in the right family….

As a society you will advance a hell of a lot faster when there are several commercial entities capable of backing future aspirations of smart, young ambitious people by ‘creating’ the necessary capital. The downside is volatility and financial crisis now and then. The root cause of these is that to much money is created which does not create an equal or bigger value than the capital employed. For instance the dot com crisis. Here too much capital was poured into companies who failed to achieve the necessary cash flow to justify all of the capital they had consumed. Or the 2008 financial crisis, where the promise for future repayments on mortgage loans turned out to be a whole lot lower than anticipated. The 2008 financial crisis was big enough to have an impact on the whole economy, so it had an impact on the tax revenue of countries. Which then actually translated in a second crisis. A sovereign debt crisis: countries who had borrowed too much and whose future repayment capacity was not big enough to service all their debt. Greece, Spain, Portugal, Italy (France, Belgium) … The thing is, a crisis that is limited to the private sector is pretty easy to solve: you let a whole lot of companies go bankrupt. Investors loose the capital they so foolishly deployed and the world can continue turning. Applying the same recipe to countries as a whole is a lot more painful. So you lower interest, you prolong the duration of the loans and you start printing a whole lot of extra money to replace the money that is now tied up in non-performing loans to countries that will never be able to repay that debt. This way, you can pretend that the money is not actually lost. The net result of this is that everybody who holds that money (euro’s in this case) will, in some way, absorb some of the losses of those non-performing loans. No idea if a better solution exists, but it does make me want to have as little as possible money and as much as possible shares in excellent companies.

Why I do not like dividends

Since the dutch-belgian meet-up is upon us tomorrow I thought it a good time to throw a stick in the chicken coop (this is actually a litteral translation of the dutch saying: ‘een knuppel in een hoenderhok gooien’, the English equivalent would be ‘to stir the pot’).

You see, contrary to a lot of other finance bloggers I do not like dividends. I would even go as far as to say I hate dividends and have been trying to avoid them as best as possible for my entire investing time.

There are two reasons for this. The first is taxes.

The taxman cometh

Tax on dividends in Belgium is currently 30% and if you happen to own foreign shares you will most probably be taxed twice: once in the country where the company has it’s headquarter and once more in Belgium! So for me dividends of Royal dutch shell will be taxed 15% in the Netherlands (that is after I fill in some paperwork to lower it! Ugh, paperwork!) and then what is left will be taxed at 30% in Belgium! So a dividend of 100 euro gross will end up being only 59,5 euro by the time it hits my account. That is a 40% total tax level. I prefer my companies to keep this money and invest it themselves thus avoiding all this tax nonsense

Laziness

The second reason is laziness. Finding good companies at an attractive price is not easy. Shortly after the 2008 – 2009 financial crisis you had your pick of top quality companies at bargain prices. But over the years prices have risen. Once more, you need to look at a lot of coal to find a diamond. That is a lot of work. And my name is not financialfreedomSLOTH because I like working! I find it much more pleasant if the company I invest in would do this in my place. They are usually a lot better placed to do it.

– By doing this they avoid taxes. As said above: if Royal Dutch shell pays a dividend I could only have 59,5 euro after taxes to invest. Which means their rate of return can be lower than mine and still produce the same value for me!

– They also have economy of scale. Finding a good company to invest in takes a lot of work. But once you have found a good investment opportunity investing 2.000 euro, 200.000 euro or 2.000.000 euro does not take a lot of extra effort. (There is sometimes a little bit of effort to avoid influencing price and illiquid stock can put a limit on the amount that you can invest but this is easy to avoid by only looking at companies of a certain size).

– Private equity investments are also possible for them.

– They have the best knowledge of their own sector. If market size is too big to acquire additional companies within their sector they can always look at their suppliers and clients. Here again they have an information knowledge advantage.

It is the reason I like holding companies and within them absolutely love Berkshire Hathaway!

Other stock I like mostly for option plays. Buy it by writing a put, then sell it with some capital gains by writing a call. All of which is tax free in Belgium! Dividends are then something that sometimes happen by accident (like the time I held Coca-Cola shares just when they happened to pay out a dividend, doh!).

Profitable minority

I know I am in a very small minority with this (and I might change my approach once I achieve financial freedom). But it has been a profitable viewpoint up until this point.

A small anecdote on how being too focused on dividends may cost you money. Years and years ago I noticed that the price of Artwork systems (a small, local software company) would fluctuate. It would go higher when the dividend was near and then reach a low point about 6 months later. This was because it was a very small stock, nobody followed it and liquidity dried up. But the swing in stock prices was more (almost 2x more) than the dividend paid. And liquidity near the dividend date was also higher! So I accumulated a position in the down months. Sometimes being the only one in the market, my bid price became the market price. Ooh, fun times! And then when the dividend approached and liquidity returned I sold it all before the dividend was paid (let somebody else pay those taxes!).

Since the general assembly was in the same city I lived in at the time I even went to it and explained why I would prefer them to keep the dividend and use their profits to turn Artwork systems into a holding company! This was against my direct financial interest but my long term wish to be as lazy as possible won over my wish for short term profits. I mean, all that buying and selling (sometimes 5 or 6 trades In a single year, in a single stock!) was very tiring 😉

The president of the board explained to me (in a somewhat belittling tone) they had no interest becoming a holding and the other shareholders almost skinned me alive (how did I dare to threaten their sweet dividends!!). The next year I visited again, kept my mouth shut and just got very drunk on the excellent champagne they provided for their shareholders. Even smuggled one bottle outside under my coat (there can be other advantages to being a shareholders). It was one of a very few times I was truly and completely drunk!

A year later my very profitable strategy came to an end as artwork systems was bought by Esko, which was at the time owned by Axcel A/S a Danish private equity investment company. This private equity firm used the profits of Artwork systems to build out their graphics group and then sold the complete group to Danaher, which is for all intense and purpose a holding company …

Through all of this, the president of the board stayed on …

Danaher is a public company and pays a dividend. Perhaps I should go and try to explain my viewpoint again? Does anybody know what quality of champagne they serve?

Frugal living with camelot

Housing cost is one of my biggest expenses. Every month I pay 470 euro into our mortgage. And this is actually quite reasonable for what we are getting in return.

Rent for most people is higher.

The tradition approach to lowering this cost is finding roommates so the fix costs can be split over more people. But in Belgium and Holland there is even a better way to do this.

Enter Camelot. Camelot is a company offering property protection by getting people to temporary live in the empty building. That building can be a house but also a factory or an empty office building (kitchen and bathroom are provided).

The downside is that you only get 1 weeks’ notice when you have to move. You also can’t do any changes to the building. So no real possibility to make it a home like you would be able to do with a long term rental. For people aiming for financial freedom this is off course more of a benefit than a downside as it eliminates any home improvement spending 😉

The set up often involves roommate. But since it sometimes involves really big buildings that roommate’s room can be quite a distance away from you room.

The upside is that your ‘rent’ is only 250 euro a month. And that this ‘temporary’ housing can sometimes be several years.

To be this is something perfect for a young person who is just starting to work and who wants to pile as much as possible into his stash right from the start. And who is also ok that he sometimes will need to move back in with his parents as there is no guarantee that the company will have an empty property available when it is time to move. The entire set up will not only keep your housing costs down but will force you to keep living as a student for a few extra years.

Special circumstance investing – May update

Not a lot happened.

The UVX put is still not sold. Mainly because I just do not feel like logging into my computer when I get home after work (and my broker’s site is blocked at work). But I now am clearly in profit on this position so it will definitely go in June. Profit will be around 10% which is not bad for 4 months. Still not sure if I will do this again or not in the future for the same reasons I mentioned last month.

What did I do?

Like I said, not a lot.

The ABI put expired worthless. So the premium off 786,40 euro is now completely profit and in the pocket. I must repeat I really love my broker as he lets you trade on margin. My previous brokers insisted on having full coverage when writing puts and although I agree with this on principle it always annoyed me when I had to buy back a worthless position before being able to write new puts. just for this reason I would now always choose a broker which allows leverage. At my previous broker I would have need to buy back the ABI position at a cost of 20 euro (and a fee) before I could enter into a new position. Now I could just let the ABI put on the books until expiry thus not having to spend the 20 euro on something I knew was worthless and avoid another trading fee. It is not only that you avoid small costs but also that you gain a lot of flexibility. And having flexibility can mean big profits sometimes.

Also, it’s less work to do. Which lets me be lazy, always a big win in my book!

I am in profit on the UVXY put I bought. I am in profit on the ADM put I sold and I am in profit on the leveraged construction. Life is good.

Day trading grinded to a halt due to work. 1 May I was home due to it being an official holiday in Belgium and I made 95 USD with day trading that day. Then I started working and I only did one more day trade on 16 may. Made 20 USD, exited the trade because my head was not into it and that was it for the month. The girlfriend is going to a music festival in Portugal this week (yes I know, the decadence!) so I hope to get some day trading in on those days. Best laid plans and all of that ..

The girlfriends portfolio

Well, since I did almost nothing in my own portfolio you can guess what I did in the girlfriends portfolio: zero, zip, nothing. She should have received her dividend (around 2.000 euro) from her main position in May, still need to check that! I guess this is the best passive income you can have: just pocketing the dividend and the only thing you need to do is transfer the dividend or re-invest it.

The girlfriend got her current portfolio seven years ago. When we bought our current home together she sold her house in Ghent. She made a very nice profit on that sale but I decided we should borrow 100% of the purchase price of our new house. Part of her profit she wanted to use for renovations (with me putting up the same amount in cash for renovations) on the house but I decided she needed to invest a big part of it as well. She wanted dividends so ended up with a good stock (but not my first choice). After almost 7 years this position is now close to double the original worth (including dividends)! The downside of this was that for the next 7 years all our savings have been going to the house renovations (and we are still not finished). The alternative would have been to not do the investment and use all the money for renovations. And then start saving up to build a stash (in her case, or me to rebuild the stash). Well, after almost 7 years I can say that the profits on her stash are bigger than anything she would have been able to save! And I was a lot less active in her stash than I was in mine (so the difference for me would have been even bigger but not so easy to calculate). The only downside is that we are now still not finished renovating and that for a few years we were living on a construction side (although last year, with the kitchen and bathroom renovation, was the hardest). It just proves there is profit in being able to handle discomfort.

Monthly expense report: May

Things start to smooth out again. One full month off working again under the belt. Interim at the moment and the weekly payments are a bit annoying for the budgeting (there is some  delay). But this should sort itself out over time. And I still have around 2.000 euro in day trading profits to smooth things out.

Personal account:

Income: 2 090,59 euro
Expenses: 1 145,99 euro
Savings: 944,60 euro or 45,2%

Since my contract started on 2 may (1 may being an official holiday) I got 52.86 euro of unemployment. This will be the last payment and as of next week I will be officially full time employed in the eyes of the government.
Day trading was almost non existing as I just do not feel like it after work. Just did it one evening for a grand total of 20 USD! More on that in my special circumstance investing post.
The high savings rate is because payments to the joint bank account were low: only 750 euro this month so the last of the big tax refund is used up. I did spend 60 euro to go swimming, 58 euro on a really, really heavy duty lock for the Vespa (using the to go the train station now and do not want it to get stolen. The lock will probably survive me and any of your grandchildren as it is top quality) and 20 euro on a diet/eath healthy eating book as I am feeling motivated to tackle my weight. The girlfriend is going to a music festival in Portugal this week so dieting will start after that (I really need to do a health post). All other spending was pretty normal.

The joint bank account

Income: 1 500 euro

Expenses: 2 344 euro

Savings: – 844 euro

As stated above, we only contributed 750 euro each so the last of the big tax refund was used up in May. As of next month contributions will return to their normal 1.100 a 1.200 euro level.

Expenses are pretty normal. We did get our water bill which lands only every three months (143 euro), there was the vet visit for our cat and the insurance for the Vespa. 93 euro for a full year of insurance is pretty cheap. So I had no financial reason whatsoever to drive around on the Vespa uninsured for almost 2 months, just me being lazy …

Anyway, subtracting my half of this overspending in the joint bank account form my savings and I end up with a savings rate of 25%. Not bad!

This is also the first month I could transfer money from my checking account to my savings account. Victory! You see, I used to feel comfortable having 2.000 euro in my checking account and 10.000 euro in the savings account. I managed to keep those numbers for most of our home renovations and then we did the kitchen and bathroom renovation last year and when all was said and done I was left with only 300 euro in cash on my checking account and 0 on the savings account (talk about being asset rich and cash poor). I was close to transferring something to the savings account when I decided to buy the Vespa. So I am glad I could transfer 500 euro this month and that I am back around the 2.000 euro mark on the checking account! I would like to get to 5.000 euro on the savings account (mainly because our car is old) and then we start renovating again …

Exit strategy

For some months now I have come to the conclusion that for me financial freedom in Belgium will always entail some work
The reason for this is very simple: taxes and our social system
Due to our social system we have high taxes in Belgium which means you will be building your initial stash by earning money that is taxed at 50%!

Taxbracket   Income                                             Tax level
Schijf 1           € 0 tot €10 860                            25% (yes dear American readers, our taxes start at 25%!)
Schijf 2           € 10 860,01 t/m € 12 470     30%
Schijf 3           € 12 470,01 t/m € 20 780     40%
Schijf 4           € 20 780,01 t/m € 38 080     45%
Schijf 5          above 38 080,01 euro             50% (Yep, they go all the way to 50%! Did I mention the 21% sales tax?)

Dropping out completely will add costs to your retirement (since you no longer qualify for any of the social systems you paid into for many years) AND which will add to the amount you need to save, savings that you will need to get by working and being taxed at 50%!

The setup of our social system is such that you will have very little choice than to stay in it. But staying in the system means you either need to be an employee, independent or unemployed. You, per example need to be any of those three for 30 years to qualify for a pension.
Now I know this might be a bit of a bummer to some of you but it shouldn’t be!

The big benefits of working a little bit

A big plus is the tax free amount one can earn and currently sits at 7.130 euro (a mortgage will add to that, children as well, full table below). An extra is that for those earning less than 26.510 euro a year that tax free amount is pushed up to 7.420 euro!

How long would it take me to earn 7.420 with my current job if no taxes would be applied? Around 2 months and 2 weeks! Getting to the 24.000 euro mark will take a full year. So to get my earnings 3.2 times higher I need to work around 5.2 times longer. The difference between those two numbers is due to taxes.

One child will add 1.510 euro to this tax free amount, two children add 3.880 euro in total and three children 8.700 euro.

Our mortgage adds another 2.280 euro to this tax free amount so actually I could earn a total of 9.700 euro tax free! Because this will different for everybody (mortgage reduction in your taxes has become one of the most complex parts of our taxes in Belgium due to lots and lots of changes in the last few years) i will continue to work with the basic amount of 7.420 euro untaxed since this is the same for everybody.
Earning those 7.420 untaxed Euros has a few very powerful consequences.

First off, using the 4% rule it lowers the stash you need by 185 500 euro! With spending 18.000 euro a year, earning 7.400 euro a year by working, your stash only needs to be 265.000 euro. Add in some cash for the down years: 300.000 euro and you are done! You essentially exchange work taxed at 50% before financial freedom by work taxed at 0% after financial freedom. Due to the tax free nature of that last work, total time worked will be shorter than the scenario in which you keep working until the stash is big enough to quit completely. And you will have more free time when you are younger. A big plus in my book!

Second: you will remain in our social system which is always a good thing (extra security and income in the form of a pension later on, health care is also sorted!)

Third: by still working a bit you keep at the very least some employable skills up to date. A lot of people wonder about having enough stash to call it quits. Working three months a year (I’ll assume those short term jobs will pay less than my current one) eliminates this worry. If unexpected expenses do happen you can always work a bit longer until the expenses are covered.

The exit strategy

But all of this means you need a good exit strategy. Just pulling the plug is not going to do it since you will need to transit into some type of paid work. The problem is finding a job that enables this. I doubt my current employer would like the idea of me still working here but taking unpaid holidays for roughly 9 months, each and every year (i might get away with one year by using the ‘big trip in Asia’ as an excuse).
There do exist small jobs, only a few hours a week that might get you the 7.500 euro a year. But most of these are low paid and then you have to work most weeks of the year. I would like to have it done in the least possible time.


Possible solutions:

-security sector: easy to get a short time job. But since these are temporary contracts you would be unemployed for the remainder of the year. While this is free money some people might have ethical problems with this. At the very least there is a big change that after a while you will be hassled by the government agency to go to work again. Especially since the security sector is always looking for people. The extra work would mean extra money, but that isn’t the idea is it?

– find an employer who only needs people for a short duration but will need them every year. Big plus of this is that you do not need to look for a short time job every year. Personally I was thinking of the event industry as I liked working back stage at festivals when I was a student. The rest of the year you would be unemployed again, creating the same problem as with the security sector.

– find an employer who is ok with you taking 9 months unpaid leave every year. Chances for this happening are low.

-find an employer where you can work half time and add two months of unpaid leave to it. This is probably not going to fly either. Most employers apparently want their employees to work all year round. Even if you find an employer that is ok with it, you would most likely need to work half time during at least 8 months and only have 4 months you do not need to work at all. If I could find something near my house I would be ok with this.

– find a side gig now that you can transform into a ‘job’ after FIRE. The side gig would only need to bring in 7.090 euro. You would need to go the independent route for this, which will have an impact on your pension later. But it would avoid any hassle from the government. The issue remains that I would like to be done with the work in three months (untaxed you would only need to be making 2.400 a month gross) and then not have to work the remainder of the year. But to swing this you would need decent skills in a specific area. And since you would need to do this for the following 20 years, you are going to run into the issue of having to keep your skills up to date to stay relevant in your field.

These examples show that if you try to get the work done in three months or less you will always run into the same issues. Employers, or your own side gig, probably necessitate work the year round. If you do not do this as an employer you will be unemployed for 9 months, which will result in hassle from the government. If you do not do this at your side gig, you probably will not have a lot of side gig left after a few years …

The solution might be found by getting some location independent work (work you can do from a laptop from anywhere in the world). This might be the best route to go. Twelve hours a week of working but with zero commute and the possibility to travel anywhere anytime I want? Sign me up!


I welcome your input because as off now I have not yet an exit strategy in place. That is ok since I just started working at the new job and I will need to work for another 5 years. On the other hand, if I would identify a location independent side gig now, I could start implementing it as soon as next year. Thus reducing the time I need to work by a year AND have a secure exit strategy in place by the time I will be able to quit.

Bicycle, I want to ride my bicycle

Mr. money mustache pushed the use of a bicycle very hard and with good reason. Cars are expensive and bicycles offer the cheapest substitute while still offering a decent speed.

We Belgians, always had an extra incentive in the form of a bicycle compensation. Use your bicycle to go to work and your work can choose to pay you 0.23 cent per kilometer.

With a normal bike the practical distance to do this for most people is around 10 km. Further than that would take too much time and would in most cases also involve arriving at work pretty tired and sweaty (companies also need to offer shower facilities but most people prefer to shower at home and not at work it seems).

The advent of the electrical bicycle changed this somewhat. Distances up to 25 km become now feasible. I myself biked regularly to my previous interim job which was at 20 km distance of my home. This took about 50 minutes, 15 longer as with a car but I got some healthy exercise and around 160 euro a month extra for my troubles.

Electrical bikes that provide assistance up to 45 km are road legal in Belgium but because the law qualifies them as a motorcycle they are not eligible for the tax free bicycle compensation. Our government has now promised to change this and make the necessary legal changes so these fast electrical bicycles will also qualify!

I cannot stress enough the importance of this for us mustachians!

It means that a distance of 30 km will be now completely feasible to cover by bicycle by everybody! This distance will add almost 300 euro to your net pay. The average net wage in Belgium is around 2.000 euro so this one change will mean a 15% increase.

My current work is 50 km from home and it takes me 1 hour and 30 min to get to work with public transport. With a 45 km/h electric bicycle I should be able to cover this distance in about 1h 15 min. so I will save time, get 2 hours of exercise a day and earn around 500 euro extra per month! That would mean  a 25% pay increase and earning back the investment in a decent e-bike in 3 to 5 months.

The law still needs to be changed and then your company will need to adapt its policy so this is something that will probably only go into effect at the end of the year. The government did say they wuld make it retroactive as of 1st of January of 2017. But I would not bank on that and wait till the law is indeed in effect. For me personally it doesn’t matter as I am at the moment working as an interim and i want my employer to realize he is going to need to pay me an extra 500 euro a month after I got a indeterminate contract 😉

Frugal purchase – washing machine

I will never buy a new washing machine.

The above washing machine was bought for 200 euro and was around 2 years old (and yes, our utility room still needs some work, planned for 2020 as we need to save up enough money first). New it was a 800 euro machine. Although this was a very good find, our previous washing machine also only cost 200 euro (although for an older model and cheaper brand). That one lasted only three years but moving it several times and the dust of the home renovations probably caused it’s early death. But even then, 200 euro for 3 years use means that a new machine at 600 euro should last 9 years. Every month after the 3 years mark on this machine will be a win in my book.
Washing machines are perfect to buy used. It’s a big and heavy appliance everybody has. Which means that when two people move in together they have a spare. And because it is big and bulky and connecting it is a chore, people do not want to keep one as a spare. Something they might do with a microwave or a water cooker. We got the last one so cheap because the guy selling it was moving the next week and he didn’t want to lug it to his girlfriend’s place (which was up one floor) just to have to carry it down again when a buyer showed up there. Win for us!
Same goes for dryers off course.

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