Financial Freedom Sloth

achieving financial freedom one lazy step at a time

Life after achieving financial freedom

When I think about my ideal life after achieving financial freedom and there is no longer a need to work full time I imagine it to be a lot like my student years.

I am old enough to have done my studies when Belgian universities still used a yearly system. I liked that yearly system!

The university years

From October until April you had classes, May was reserved for studying and preparing for the exams and June was exam month (about 3 exams a week, so plenty of time to get some extra studying done). If you passed all your exams you had a three-month summer holiday period. I always worked one of those three months so I had some extra spending money for the remaining 2 months and during the next university year.

I only had around 20 hours of courses a week during the October – April period which left plenty of time to hang out with friends, smoke some joints (hey, I was a student and the Netherlands were only about 30km away, what can I say?) and spend time with the girlfriend (nudge, nudge, wink, wink). I found most of my classes interesting so I did not mind going to them: overall I found those 7 months very, very agreeable.

All in all I had 3 months of ‘work’ (1 month of studying, one month of exams and 1 month of summer job), 7 months of doing interesting stuff part time (going to classes, keeping notes up to date, some tasks) and 2 months off doing absolutely nothing (well there was the girlfriend and the weed …). Yes, life was nice as a student.

Now due to the social security system we have in Belgium, quitting the system completely is not really the best (or easiest) to do. You would need a bigger stash (a lot bigger, around 600.000 euro for one person) and it would make some stuff more complex. Nevertheless, our social security system does leave quite some wiggle room. Enter plan A and plan B.

Lets start with plan B

Plan B would be to go the full unemployment route. Being full time unemployed, the Belgian government will send me money each month! The first year this would be a decent amount but then it would gradually decline to about 500 euro a month.

Now our government does not like giving money to its citizens. They very much prefer it to be the other way round. So I expect to be contacted by the government agencies to get my lazy ass back to work! 20 years of full time work is apparently not enough for the Belgian government although our elected representatives are eligible for a full –and rather big- pension after only 20 years of ‘service’ in our parliament. Talking to government agencies is not high on my to do list once I have reached financial freedom. Actually, it is low on my to do list now as well. However, going job hunting and sitting at a desk for 40 hours a week is not very high on that list either.

Therefore, I started looking for a sector with a low barrier to enter and that uses lots of temporary contracts. And preferably does not involve to much hard label. Enter the security sector! In Belgium you need a license for this. Getting the license involves a one month course, which is free for the unemployed, but once you have it, it is dead simple to find a job in this field. As a student, I have worked back stage at several festivals and shows. So the plan: unemployment until the agencies start contacting me, and then a three month security contract, preferably in the summer months so I can do the festival circuit in Belgium.

A year would then consist of:

  • 6 months of very relaxed living (more time with friends, more ahum ‘quality’ time with the girlfriend, learn a new skill – might be going back to university for three months and follow a few courses, slow travel)
  • 3 months for a project, which might involve ‘working’: profit or pay would not be the main objective here, more for the experience. If the project involves employment, I would of course skip the security gig below.
  • 3 month ‘summer job’ at the Belgian music festivals: paid work to get myself of the radar of our unemployment agencies

I also think that having a more busy 3 months during the year will let me appreciate the 6 to 9 lazy months during the rest of the year.

I could see myself spending 20 years of my life (until reaching the official retirement age) in the above regime.

How about plan A?

I am kind of working on plan A at the moment so we will see if I succeed or not. However, plan A would eventually involve working for 4 months and three weeks, getting paid 1.000 euro a month and not having to deal with any government agencies at all since I would still be employed.

A year would then consist of:

  • 5 months of working
  • 7 months very relaxed living during which I would then do a project. If the project turns out to be profitable or involve any wages, I could then ask for unpaid leave of absence at the ‘main job’ and reduce ‘working’ for the current or next year even more.

The fun thing of this approach is that it greatly reduces the size of your stash needed (reminder: the goals is to have 1.500 euro/month to live of). By working three to five months in a year a stash that normally would only sustain 1 person can then provide enough passive income for two persons (and avoid any hassle with government unemployment agencies as a bonus!)

plan B   Plan A  
3 months working 1500 euro/month 4500 12 months working 1000/month 12000
9 months unemployed 500/month 4500    
total income 9000 total income 12000
income necessary from stash 9000 income necessary from stash 6000
necessary stash size 225000 necessary stash size 150000


Since my current temporary job contract is done the end of this month I could launch plan B in February but my stash is only just above the amount necessary and we still need to do some renovations at our house (and in the next couple of years, we need to buy a new car as well). Those renovations will cost around 50.000 euro max so I do not have enough money yet. I also would prefer to have a steady paycheck while renovating the house. I would feel a lot better launching plan B only after these big expenses are behind me.

Plan A will take some time to get off the ground. Since it would at the very least involve 2 to 3 years of working full time before I could reduce the work time to less than 5 months/year this is something I can lay the groundwork for now! During those years of full time work at a decent wage, the stash can grow bigger and I can finish renovating our house.

With some luck, I will land that full time job in February and have it evolve into plan A after 4 years. Fingers crossed, as I apparently suck very much at this whole ‘interviewing for a job’ process.

In 4 years’ time, the stash should be big enough that the girlfriend would also be able to reduce her work time to half AND even continue to grow (be it very slowly). A few more years later, she might choose a modified version of plan B for herself and me remaining in plan A, further reducing the time she needs to work.

If you are interested in the gritty details of plan A and B, I will combine this post + my financial freedom in Belgium post into one big presentation I will give at the next Belgian Dutch blog meeting in Antwerp on 4 February. The meet up is organized by cheezy finance and Amber tree leaves. I will probably post most of the presentation on line afterwards but not everything. And a few other bloggers will also give a presentation.

Cutting your own hair: Running the numbers

In one of his earlier post Mr Money moustache sang the virtues cutting your own hair with the help of a hair trimmer or multigroom kit. Here in Belgium, we usually use the French word tondeuse which does have a nicer ring to it than grooming kit.

ceci n’est pas une tondeuse

Now he makes the bold claim of it saving over 30.000 usd but actually never runs the numbers in detail. If you do that, it is easy to see why he was so excited over such a simple device and an equally simple change in one’s habits.

Going to a barbershop every month would set me back about 300 euro a year.

Paying for this means, I need to amass a stash of 300 x 25 = 7.500 euro.
Replacing it by a device that costs around 50 euro eliminates this need completely! Right of the bat, I have just made a size-able reduction in the amount I need to retire!
However, it gets even better! Factoring 10 euro a year to replace the tondeuse every 5 years I only need a stash of 250 euro to pay for it. Buying it, means that even in the first year I can make a big enough savings to pay for a replacement for the rest of my life! Yeah, that is indeed something to be excited over! I know of very few other things that are such a powerful help in achieving financial freedom. It is unfortunate that this does not scale to other parts of life. If this were possible to do for food, transport, housing, clothes and such everybody would be able to retire after only one year of working!
It off course does not stop with the reduction of 7.250 euro in necessary stash.
If we say you need to work about 20 years in Belgium this will also add another 5.700 euro in savings (19 x 300 if we do not count the first year, as those savings will finance the purchase of a new grooming kit for all eternity).
Savings you can invest and accumulate over the years. So that one time purchase of 50 euro has a value of at least 12.950 euro, not counting any investment gains you will make on your savings…
It might be basics for the more frugally inclined people but with those kind of numbers I found it justified to bring this powerful financial freedom tool one’s more to the forefront! Want to retire early? Cut your own hair! Small things do add up over time.

Needs versus wants

A need is something that you have to have. A want is something you would like to have.

A lot of people will say that needs are different from person to person and that the distinction between the two is not always easy to make. I am not one of those persons. After seeing a documentary about shaolin monks in Nepal more than 25 years ago I came to the realization that the bare basics needs of a human being are: a brick (which is used as a pillow to rest one’s head on when sleeping), 1 piece of clothing and some food. Anything above this is a want. End of discussion.

Two legs! We don’t need that kind of luxury to stand!

Everything above this is comfort and luxury. Now I am a lazy slob so yes I have more than two bricks, one piece of clothing and a bowl of rice (anybody who has seen me will attest that I definitely have more than a bowl of rice a day). And I sometimes have been known to really, really want a completely ridiculous item (like a 1.000 euro DJI phantom 2, and then hardly flying it). But now and then I remind myself that we all live in a totally ridiculous amount of wealth. And it has made us soft.

How much swarovski kristals does it take to be happy? one?, A thousand? A million?

When I was younger (and single) I was a lot more hardcore. Saving was something you did until it hurt. And then you saved some more.

I just found all this stuff to be, cumbersome. I also did not have a car so dragging stuff to my place (or getting rid of it again) WAS cumbersome.

I did not have chairs in my place: I had a sofa I could sit in when eating or relaxing. Chairs just seemed decadent to me. I had a hard time explaining this to people. They just could not wrap their head around this fact.

For all of you thinking this is too crazy: this guy now sleeps in a van with even less stuff then I had. My youthful life was decadent compared to his.

So the bare basic needs in our western society are a place to sleep, some clothes, food and a bike. Everything above this is a want. Understanding this is the first step.

Really, really understanding this will help you limit your wants. Material possessions will not make you happy. I was perfectly happy with not owning chairs, I am not happier owning 6 of them now (if anything they annoy me when I have to move them – again- while cleaning). And somewhere in San Francisco is a guy sleeping in a van who is perfectly happy.

Step two is trying to fill in your (limited) wants in a frugal way. Being frugal does not equal being cheap.

A cheap person will always go for the cheapest. A frugal person will try to get the best value for his money. This can be the cheapest product or service but sometimes it can be expensive. Some products that will last a lifetime are worth it to spend some decent money on them. What these products are will be different for each person but even different for the faze of your life you are in.

If you only go camping once or every 5 years a cheap little tent is all you need. When camping is going to be your main travel style for the next twenty years it is best to pay for quality camping gear It off course might be interesting to search the internet for secondhand material from people who bought quality camping gear and then discovered they do not really use it and decide to get rid of it. Buying quality does not always mean paying full retail price either…

So one frugal person will spend 20 euro on a tent and another person might spend 200 euro on a tent. And both will have made a frugal purchase.

Those two persons might actually be the same person, but just at a different point in his life!

When young, a cheap tent might be the best purchase because it is only used two or three nights at a festival. But if 10 years later the same person goes on regular two week camping trips it will definitely be better to get some quality gear.

Frugal means looking at your want, then determine what is necessary for that want and then try to get it at the best possible price.

If you ever find yourself lusting about something, remember your true needs are: a brick, a piece of clothing and a some food. Everything else is a want. How much of your limited time on this earth are you willing to sacrifice for this something you want?

Monthly expense report: december

As mentioned previously, achieving financial freedom is not all that hard. Keep your expenses low, work, save a lot, invest wisely and then after X number of years: Boom! You have enough investments to retire on!

It really is THAT simple.

If you have bothered to click the link you will get a nice graph that shows you how long you need to do this. It is pretty compelling stuff. The only thing I do not agree with is the assumption of a 5% market return. This should be higher in my opinion but since he is more of an index investor and beating the index, although possible as a retail investor, does takes work.

This approach also means keeping track of your income and expenses and trying to get that savings rate as high as possible. Being lazy, I never really budgeted. If I would make a wild guess, based on my savings, I would guess I have save around 35% to 40% of my income over the years. According to his graph it would then take me about 22 years to achieve financial freedom. Add in a return that is on average a bit higher than his assumption of 5% and that would put me on track for financial freedom after 20 years of working. More or less what I am aiming for! As I said before, it really is not all that difficult (I mean, if I can figure it out …).

Since I am approaching the final years of stash building a more detailed view on my expenses is necessary. When choosing early retirement, ‘guessing’ is better replaced by: ‘knowing for damn sure’.

Hence the monthly expense report.

Without shame I ‘borrowed’ No more waffles budget sheet.

It only needed a few tweaks to also work in google sheets so now I can immediately fill in every expense I make via my smartphone (because remembering to do it later is hard!). December is a bit of a base line, although naturally frugal I never really did a disciplined effort in tracking my expenses and trying to lower them. During 2017 I will be making this effort and sharing the results with you guys. I am genuinely curious what the result will be off this more focused approach.

I will only be looking at income from work (all investment gains are excluded).

Personal account:

Income: 2 092,86

Expenses: 1 339,40

Savings: 753,46 or 36%

But the biggest part of my expenses is the 1 100 euro we each contribute to our joint bank account. This money is used to pay for the mortgage, utilities, grocery shopping and such.

The 240 euro above that is what I spend on buying food personally (which actually equals snacking at work. Bad, bad! Especially since I really need to lose some weight.), my personal cell phone bill (which was 16 euro last month) and some random fun items (it was December after all).

The main savings will be made in the joint account (since the main expenses happen there). But no more snacking and cutting my own hair should be able to shave another 60 euro of my personal spending.

The results of the joint bank account are:

Income: 2 299 (1 100 euro each and some meal tickets)

Expenses: 1 729,49

Savings 569,51 euro, half of which would be mine. Adding this half to my savings amount and my savings rate for the month of December was 49,6%. I am pretty pleased by this.

Biggest expenses in the joint account are:

– mortgage: 935 euro (at 2.7% fixed rate not a lot can be done to improve this at the moment, we

already refinanced this down from a 3,6% rate in 2016)

-groceries: 381 euro (we should be able to lower this by shopping more at the Lidl and Aldi)

– car: 142 euro (we didn’t spend that much on gas but did have a small repair bill of 50 euro)

– gas & electric: 219 euro

– internet and television: 44 euro

December was a pretty frugal month (although we did go to the cinema together). But since it was the first time we were closely tracking our expenses it actually felt like we were spending a lot!

Here is hoping for another frugal January!


The stash – an origin story

In this post I determined that to be to be financially free in Belgium you need an investment between 325.000 and 525.000. I will now tell you how, at age 42 I am well on my way to reach this.

In the beginning there was nothing.

Save, invest, the two strongest financial superpowers known to man!

Well, actually lets scratch that: In the beginning there was nothing. My parents had, as most parents do, saved some money for me. Around 8.000 euro which 24 years ago (and 18 year old, me being able to make around 1.000 euro at a summer job), was a decent amount of change.

I had played a bit in the stock market as a student. But not really knowing what I did, this was more or less a wash.

Raised by pretty frugal parents I was never a spendypants.

In the year 2000 I entered the work force but continued the cheap ass lifestyle of a student: cheap housing, no car. I was saving a lot of my pay check (estimates are somewhere between 35% a 40%) without really knowing why.

The job was boring and crap but paid reasonably well, although below the average net wage of Belgium. Only for about 5 years out of my, at this moment, 16 year old career I would be making the average wage. Most years I was a little under it (being a sloth does have its consequences …). But at that first job I could get my 8 hours work done in about 6 hours, which left 2 hours a work day to muck around on the internet.

During one of those,” let’s see if there is anything interesting to read on the internet”-moments I stumbled upon Warren Buffett’s letters to the shareholders. I had finally found a decent foundation upon which to build my own investment approach! I have always been an all or nothing kinda guy (with a strong preference towards nothing) so the more I read about value investing the more confident I felt to go all in. Not being a complete idiot (there are many, many people who are more than willing to testify – with extensive proof – that I actually am a complete idiot in many, many area’s, luckily money is not one of those area’s!) I decided to hedge my investment. I went all in, but half of my money I invested in Berkshire Hathaway. The other half I would invest myself according to the value investing principles (O, the arrogance of youth!).

Up until 2005 I remained my frugal self: biking everywhere, not going on holidays (current amount of holidays: 9, two of which when I was a student, and involved driving a cheap old mobile home through France and the U.K with 5 friends) and basically living like I did when I was a student.

Around 2005 I moved in with my girlfriend and even though my housing costs went down I starting living a somewhat less frugal life. Still no car for myself but she had one, she also dragged me on holidays to foreign countries (the horror!) or wanted to go eat at a restaurant sometimes (the restaurant thing never really worked: I still find the experience unpleasant). Savings rate must have dropped but I never really budgeted so no numbers to back up this feeling.

In 2006 my employer decided that they were really overpaying us for the type of work we did so they moved about 20 of us to an even more crap department. They either hoped we would find another department in the company (hopefully with a job content more aligned with the pay we received) or leave the company altogether.  But one provision of this restructuring was that if we did not like the new department and did not find another job within the company, after 6 months we could ask to be terminated with full benefits. Using the power of FU-money for the first time I took this way out. Less than 2 months later (November 2006) I had a better paying job and could put about 13.000 euro of my severance pay in investments.

In 2008 I moved to another company and was finally taking home about the average net wage in Belgium. Still no car. Still living with the girlfriend, so I now had a few ‘real’ vacations under my belt. I found the experience to be OK (more for the not having to work than the holiday itself). In true sloth fashion I was not a big fan of all this moving around a vacation apparently involves …

Around 2010 my girlfriend was really sick of living in a bad part of the city and I started to come round to her viewpoint so we became serious about looking for a house to buy. My iron rule: I refused to sell any of my investments to fund the purchase. Finally bought a car together: the girlfriend had sold her car when she was unemployed and studying again; so we had been a no car couple for a few years. Her studying did keep both off us pretty frugal.

In 2011 we bought our current house. Because of my rule not wanting to sell any investments we had to look intensively for something we liked in our price range (and also 115 km away from friends and family). We finally found an old farmhouse with a decent size garden. Because off our budget, the house needed a lot of work. Despite this, I kinda forced my girlfriend to invest a chunk of her profits from selling her house in the city in stocks (forcing somebody to invest, luckily for me, has never become a punishable offence in Belgium). It is one of the reasons why we are still renovating the place. It forced us to continue to life a somewhat frugal life but now all available cash was thrown into the house and no longer into my investing. Those investments off course kept appreciating as I turned out not to be that bad at finding undervalued stocks and Buffett kept hitting balls out of the park. The girlfriend also was 1 year unemployed. We normally split everything 50/50 but during 6 months of her unemployment I had to compensate a bit to make up her reduced income.

Due to some new laws our government passed (they passed a tax on ‘speculative gains’, not their smartest move and as of 2017 this tax will be terminated again as it was costing them more in losses on another tax) I had to reassess my investment approach. In December 2015 I moved to another broker who offered CfD’s (which provided a way around the new tax). Prior to this move my investments were scattered over different brokers. Putting everything in one place gave me a better view. I had a total of 176.000 euro in investments. But I hadn’t really done any better than Buffett had (better than the index, worse than Buffett). With the new tax in effect and the new tools provided by my new broker I decided to change my approach. Since the new broker made it possible to have a margin account guaranteed by stock, I would keep everything in Berkshire and only rarely do an investment on margin when an opportunity arises. Special circumstance investing I would call it.

I needed not wait very longer. AB Inbev, the world’s largest brewer and a Belgian company I had known for decades (we take our beer very seriously here in Belgium) made a take offer bid on SAB MILLER. They offered 44 GBP but the market had doubts so the SAB MILER stock traded at 40 GBP. I had no doubts. Remember me being an all or nothing kinda guy? Yeah, I bought 200.000 GBP worth of SAB Miller CfD’s on the underlying stock. The brexit vote would force me out of the trade since my broker changed it margin requirements (receiving that mail was a bit of a surprise, unwinding the trade in my account, my parents account and my girlfriends account gave me about 2 small heart attacks). The brexit vote did cost me some profit but in the end I walked away with over 10.000 euro on a trade that was in effect less than 6 months. I decided I liked this special circumstances investing!

In March 2016 I was also terminated at my employer. A restructuring provided a way to leave the company on very favorable terms. From September 2015 till march 2016 I was still paid but only needed to attend some outplacement classes; in March I got full severance. Over 25.000 euro, which went a long way in paying our kitchen and bathroom renovation!

Since I no longer needed to go to work at that moment and my SAB Miller trade was unwound I decided to have some fun and daytrade google when it was beaten down to the 730 USD level. A profitable experience but way too much work (and stress). During that time, I also stumbled upon Mr Money moustache.  I liked what I read!

Since I had decided to squander my severance pay on a new kitchen and a bathroom (the girlfriend did not agree with the ‘hooker and blow’-route) I also needed another job. On May the first I landed a temp job (until January 2017) which has payed the bills until now. But I was once again below the average wage of Belgium. Still I must not complain. To recap 2016: payed by old company until 9 march, severance pay until 9 December. 1st Of May until the end of December paid by temp job. That’s 19 months and 1 week of wages for a grand total of 8 months real work (at the temp job). I could get used to that, but alas will not be able to repeat this in 2017!

Somewhere in June I stumbled upon another special circumstance investing opportunity which has brought in another 10.000+ euro of profits and which I will be able to repeat in January for another 20.000 euro profit (except in the case of global thermonuclear war).

All this special circumstance investing and the rise in stock price of Berkshire Hathaway has brought the investments up to almost the ¼ million mark: present value (before the opening of the US market) on 30 December 2016: a cool 244.000 euro. A gain of 68.000 euro or 39% in one year. I think it is safe to say I will not be repeating this performance in 2017 (actually I hope not as this would indicate a gigantic bubble run in stocks, stock prices being flat over 2017 would be nice). Fun little fact: the company that terminated me in March 2016? Yes, it was a financial company. Life can be funny that way …

But there you have it. A somewhat frugal person, making below average wage in Belgium and getting a little bit above market returns has over 16 years of working build a stash of 244.000 euro. Do not let the performance of 2016 fool you, all in all I have beat the markets by perhaps 2% or 3% over those 16 years. Ok, it makes a difference. But I could have made more money at work: several co-workers of those early days are being paid quit generously at the moment. I could have been more frugal: I went on 7 holidays in the last 12 years! I have had a car for the last 5 years! I spend a 1.000 euro on a quadcopter I hardly use and decent money on other electronics and whiskey (everybody has his weaknesses).

Honestly, in many aspects I have been a true sloth over the last 10 years, 20 years, all my life! And then I look around me, see people making lots more money than me and have almost no investments. Which has me thinking: am I that smart or are they so stupid? It really is not that hard: save a big part of your paycheck, buy index trackers (or learn a bit about investing yourself), rinse, repeat for around 20 years and boom you are done! Are restaurant visits, expensive clothes or a shiny new cars really worth working an extra 20 to 25 years? Because I do not see the allure of it. I never have.

It’s about the journey, not the packing of your bags

Originally this was going to be a post about my stash. How big it is and how I got there.

And then I read this post by 1500days.

Especially Phase 3 (What am I running to?) and Phase 4 (Figuring the rest out) spoke to me. Because, to my own surprise it has been those parts of the financial independence journey that have appealed to me the most.

I was drawn to the financial independence community because I was naturally frugal and already obsessed with investing for over 15 years, a natural fit. I thought my main interests would be frugal tips and investing ideas (and I do love reading the trading updates of financial velociraptor) but what attracted me the most, to my own surprise was the psychological journey. I especially enjoyed the experiences of the working world Livafi described.

I should not have been surprised. When you go read a travel blog or a friend will tell you about this epic world journey he has done, there will be a few bits about packing his luggage (how to fit the essentials in a back pack) of arranging passports, a place to sleep and stuff like that. But those things will not be the main content because those were not the main goal of the undertaking! They are side effects, consequences of the big travel undertaking. One does not go on a world journey just so he/she can become a bag packing expert. He/she will probably end up a bag packing expert because of the journey but it is not the point of the whole undertaking. The journey, the experience is the point.

not why we travel

And that (to my surprise and luck) is the same with this whole financial independence community. It is actually not about finance or frugal living. Those things are the practical parts. The ‘how do I get everything I need for a 1 year world trip in a backpack under 10 kg’ part. And yes, it is challenging seems challenging (but actually it is not) and I will devote some posts about it. But a Fi blog should be about the journey. And the journey is life itself. How to live and enjoy it without having to sacrifice 40+ hours a week tied to a desk in an office to pay for it.

Financial freedom in Belgium

The financial freedom and early retirement journey is a personal journey. Each person will have his own definition of what financial freedom means to him, the amount he needs and how he wants to achieve it. So the below will be my view on it, but I believe that most people in Belgium will be able to agree with most of it.

First thing we need to determine is how much money does a person in Belgium need to life a comfortable, albeit somewhat frugal life. This means you have enough to pay for your basic needs for food, housing, clothing, transportation and social contact. Driving a Porsche or frequent dining at a Michelin star restaurant will not be part of the package (if you do want those things I am afraid you have come to the wrong site, this site is about freedom to do whatever you want with your time, not the freedom to buy whatever you want).

Again, this number will be different for every person but I believe most people will agree that life can be pretty sweet in Belgium on budget of 1.500 euro per month, especially if you do not have to go work for it 40 hours a week.

The average after tax wage is 2.100 euro and our national lottery has a popular scratch ticket (aptly named ‘win for life’) promising a monthly sum of 2.000 euro a month. Their Deluxe version of it is 3.000 euro. So basic living for 1.500 euro a month? Seems like a safe assumption to me.

In my last post I mentioned this rule of thumb that 25x your annual expenses means you are financially independent.

So 1.500 x 12 = 18.000 a year.

18.000 x 25 = 450.000 euro

So 450.000 euro of investments (let’s call it The stash, because it does have a nice ring to it and thanks to this guy most people in the personal finance community know what is meant by The Stash) will buy you your freedom of work in Belgium. Personally I exclude the house as in most cases this does not provide you with any income to live off. A house is definitely worth something. And once it is paid off that will definitely have an impact on your annual budget (see that this stuff is personal and different for everybody?) and thus on the amount you need to accumulate. But to keep things simple we will ignore it for the time being.

What we will not ignore is the Belgian social system.

Just as taxes will play a big (negative) role in the accumulation of the Stash, the Belgian social system also plays a big (positive) role in the size of The Stash you need.

Our health system is pretty cheap and a reason why I think you can live a comfortable life with 1.500 euro a month.

But we also have unemployment benefits. If you have worked, you qualify and since everybody will have needed to have worked to get a sizeable stash (lottery winnings and inheritance aside) everybody reading this will qualify. And the thing with the Belgian unemployment benefits is that it is not means tested. So you can be a billionaire and still qualify for it. Dividend income, capital gains or option premium income are all compatible with receiving unemployment income. Extra special: there is no time limit on it. You can have it for decades upon decades. It does decrease over time but the bare minimum for a person living together with another person (single people get more) is around 500 euro/month. And although the government is now more persistent in activating the unemployed (a.k.a. getting your lazy ass back to work), 500 euro/month is something you can count on (worst case scenario is you have to go back to work for a few months to avoid losing this benefit: this basically means more money for you). Receiving unemployment benefits does prevent you from going to live abroad but the unemployed also qualify for vacation days. Stretch the rules a little bit, and there is nothing standing in your way to take a month or even two-month travel holiday (basically you have 20 official holidays and officially you need to declare to the government when you ‘take a holiday’, but everything is done on line now and you only need to declare these holidays at the end of a calendar month). It may not be complete freedom, but it is pretty close!

Since the government will give you 500 euro/month for not working, 1.000 euro income from the stash is enough to get to 1.500 euro/month income in total.

1.000 x 12 = 12.000

12.000 x 25 = 300.000 euro

Lets play it on the safe side and add in 25.000 in cash (to cover 2 years of living expenses) and the basic amount needed in Belgium to declare yourself financially independent is: 325.000 euro.

425.000 euro will make life a bit more comfortable (or assure you live on 3% return of your stash, plenty of companies paying out a 3% net dividend).

At 525.000 euro you no longer need to care about unemployment benefits or whatever. Total and complete freedom.


So there we have it. Financial freedom in Belgium is having a passive income between 1.000 euro or 1.500 euro a month from investments (depending on how you feel about pocketing unemployment benefits). This means a Stash between 300.000 euro to 500.000 euro.  Add 2 years of expenses in cash as a buffer and you need 325.000 to 536.000 euro.

What’s up with this financial freedom nonsense?

Changes are you have stumbled upon this blog via other personal finance sites and already known the concepts of financial freedom and early retirement. If this is the case, you can skip this post. For those few who are not familiar with this little sub section of the personal finance space, I will cover the basics below.

Financial independence (I chose to go with financial freedom because financial freedom sloth had a nicer ring to it, it just sounded a little bit better 😉 is the point where your passive income covers your normal expenses. Basically you do no longer need to work. To some this is also the point that some do in fact decide to stop working altogether and decide to retire. Hence the early retirement part of it. Since a lot of people who are drawn to this concept appear to be engineers and they love abbreviations, FI and FIRE where born. With FIRE being Financial Independent Retire Early.

financial freedom sign

So one can say that financial freedom has two parts:

Generating passive income.

Of course passive income is never 100% passive. Even the most passive investment needs you to log in to your investment account now and then and transfer some money around (perhaps even sell or buy something – gasp, the horror!). Some people achieve financial freedom via real estate which does involve some (or even a lot) of work.

But the general consensus here is that you get most or all your income from other sources than having to work full time for somebody else or in your own business. In most cases the passive income comes from investments (either stocks, bonds, real estate) but we live in a strange world and other possibilities are possible (perhaps you own a patent that pays regular royalties, a company pays you well to put some windmills on a plot of land, your grumpy cat achieved internet stardom and brings in the money …). Point is, you are no longer under any obligation to get up early in the morning and go to work every day of the week, for most weeks of the year.

Covering your normal expenses

The more you spend each month, the more passive income you are going to need. Sounds simple enough but you would be surprised how many people are not aware of the link between their day to day spending and their ability to save …

How much do you need to cover your expenses? Well, this guy has a pretty good answer to it. The basis is the trinity study.

Now, if you go poking around on the internet you can find posts on forums where intense debate rages about this study. And as a non USA person you could say: does it apply to my country? But I had never heard about the trinity study and also came more or less to the same conclusions just by observing that even in Belgium we had a handful of companies paying out a net dividend (after taxes) of 3% to 4%. They even continued to pay their dividend during the biggest market storms (anybody remember 2008, or before that 2001?) and in most cases are able to increase their dividends over the years, thus giving some inflation protection. The 25x annual expenses in investments (whatever form those investments may take) is a pretty practical rule of thumb. We’ll go with it for the time being. Once you are close to that number you may want to examine more closely your assumptions, expenses, rates of return and all that stuff.

The same guy also has a pretty good post on how to get there.

Basically: the less you spend, the more you save AND the less you actually need to achieve financial independence. Being frugal is the name of the game (being smart helps).

Two other sites also cover the basics (and much more) of this whole FIRE thingy pretty well

Any questions? Google is your friend (I am the lazy one here, so go click, click the links and read, read …)

In the next post, I will go into the details of how I view what financial freedom in Belgium specifically means.

Luckily for us, achieving freedom no longer involves painting our faces blue, having to listen to Mel Gibson going on and on about something or another and then ride into battle and die horribly. So we have that going for us!

Mission statement

Hello and welcome to yet another personal finance blog dedicated to financial freedom and early retirement.

I am a 42 years old guy living in Belgium (the country with the highest tax rate in the world), making an average wage, who would like to achieve financial freedom by 45. And I hope this blog will help me stay the course.

The ‘living in Belgium’ part is also the reason why I am doing this blog. The personal finance community might have grown quite a bit in the last years in the USA but in Belgium Europe even) personal finance blogs are pretty spars. I also think my perspective will be different than most. And who knows, we might be able to learn a bit from each other!

So goal number one is achieving financial freedom before I turn 46. I will go more in depth in a follow up post what financial freedom means exactly for me. But my investments will have to go up.

Goal number two, but equally important is getting back into shape. Young mr financial freedom sloth was a dashing young man 😉 in excellent shape. Current mr FFsloth is an overweight slob (1m78 height and 105 kilograms, not good by any metric). So the weight will have to go down. Achieving financial freedom without good health would be a shallow victory. Also, getting in shape might actually help becoming financially free as it will give me more energy to explore new money making side hustles.

Goal number three of the blog is to keep me on course. As you will discover in the following posts, I am a bit (ok, a lot) of a slacker: hence the average wage, hence the being fat (I am also brutally honest ;-). Being disciplined over a longer time period isn’t exactly my strongest point. My style is more that of a sloth for long periods, intersected with short bursts of intense activity and then retreat back to sloth. (Little side note: by typing the last sentence I stumbled upon the name for my blog! I was going to go for financialfreedomat45 but financialfreedomsloth is so much better. As a bonus, sloths are cool animals!!)

Being a sloth isn’t necessarily bad as it did get me a university degree. With honors even!! How I loved the old annual university system in Belgium: muck about till the first of May, then one month of intense studying, another month of exams and 1st of July I could be full on sloth till 1st of October. Sigh, the good old days.

It also got me an investment account approaching 240.000 euro. A sloth does not spend much. And value investing can be very sloth like, even Buffett loves a sloth : Lethargy bordering on sloth remains the cornerstone of our investment style.

And I am the proud owner of a charming old farm house approaching a value of 300.000 euro where the mortgage is currently around 130.000 (having a partner helped here, so only half of that is mine).

Yes, this sloth has done a few things right. But it could have been so much more had I been a bit more disciplined and focused!

So this sloth is counting on you dear readers to keep me disciplined and honest. In exchange you will get a brutally honest report on how a lazy, overweight (no it is not the waffles or the beer that got me fat), middle aged Belgian guy goes about achieving financial freedom in a country with one of the highest tax rates in the world. Trust me, it’s going to be a crazy ride.