November was a pretty standard month form an income and expense point of view.
Income was only the job income. November 15 I was one year at the current company so an update is needed on that front but work has been so insanely busy the last weeks that I really didn’t feel like starting up the old desktop at home. It also explains the lack of posts over the last month. This sloth is tired in the evening.
Didn’t buy a new laser, still want to! I did buy some new graphic novels so the itch to buy something ‘fun’ is satisfied for the time being. The graphic novels came to 88 euro.
We also visited a friend in Brussels, The friend is a big Asia nut so we visited a -cheap- Japanese restaurant. I went to talk about an online side gig idea I have tumbling around in my head for some time now. Turns out the friend is even more skilled than I thought! I tried to nudge him into starting his own thing as he could do all the work himself and he does like to travel Asia for months on end. I wasn’t really successful as he has witnessed in his immediately family the high price that comes with building out a business empire. He is part too smart and part too lazy (there is a reason I get along with him!) to go down that rabbit hole …I would still over to convince him that there is a middle ground. Anyway, the visit did cost me 43 euro but was money well spend.
On a more practical front I also spend 72 for some new underwear and 21 euro on new swimshorts. Both things desperately needed. Well, desperately needed according to the misses, a sloth knows no shame …
On the’ bad’front: also spend some money on sandwiches at work. The diet is still not going that good. I actually even started skipping some of my swimming!! It merits its own post. But I am a stress eater and did I mention that work has been insanely busy? I am recognizing the signs from my time at the back office for the trading floor of the big bank. Luckily management is aware that there is a ‘support-situation’ at the moment. Management also knows that I have been putting the pedal to the metal for the last couple of months. So I have told them that this will only last until after new year. And to not take my current productivity as something to count on long term. I’ll see how it goes.
I do not envy them as some tough decisions will need to be made. I also need to bite the bullet and not only keep up the insane work volume at work but in my free time actually start working on one of those ‘fun-to me’ work projects that needs to be done but nobody at work has the time to do. For once in my life I want to be strategic about it and leverage my current strong position into something that has long term benefits for me. Fortune favors the well prepared…
So I noticed I didn’t post anything about my job situation since August last year. Which is a bit of a shame because a lot changed since then! All for the better. There even is some juice stuff to tell!
Now I wasn’t really exhuming a lot of enthusiasm for that job in this three month recap. Hell, I even ended the post saying I was actually looking for a new job again.
Guess what? My employer at the time noticed it too. And do you know what a company does with a guy working interim that does an ok’ish job but isn’t really motivated? They don’t give him a full time contract!
My contract was up for renewal the end of September and well, that didn’t happen.
We will not extend your contract with us
I saw it coming so when called into my supervisors office it was no surprise. But my supervisor was in for a surprise! You see, she was nervous as hell because:
she was going on holiday for two weeks and I left on holiday the last week of September. So there she was, having to tell a guy in early September that his contract is not going to get renewed but could you please continue to work here for two more weeks? Without any boss being present?
I transferred millions of euro on a weekly basis as part of my job and
the last guy she let go was so pissed at her that he threatened her outside the office and cops actually showed up at our office to take her statement about the whole incident. I think her being nervous is actually an understatement. There were visible tension lines on her face and on the face of the interim office representant (the last one definitely was not present when they ‘terminated’ the last employee).
So what happens when you say to a guy with a sizable stash who really doesn’t like the current job that you will not be renewing his contract?
Well, in my case, said guy is actually pretty fucking happy. I literally could not hold in a big fucking smile when she told me! I was, ‘Oof, yes, I am out of here!!’
I should have filmed their face! It was priceless!
They went from all tensed up to wary: is this guy for real, is he actually happy to be let go?!
And then they relaxed and started smiling themselves (probably thinking: this is going SO MUCH BETTER!). I think we were the happiest people to ever leave a meeting like that. We all left with smiles on our faxes and everybody visibly relaxed. Half the meeting was my boss saying to the interim representant that she was happy with the quality of my work and the interim representant almost apologizing to me for finding me a job that did not meet my expectations. And assuring me that they would find a better job after this one ended …
Time to party
Honestly, I was looking forward to some quality time at home. Did I say I really enjoy relaxing at home?! Alas I wasn’t that lucky …
I had already starting looking for work beforehand and one of those applications was successful. And they wanted me to start as soon as possible. I did manage to push back my start date a bit but alas, on 15 November I was back at work. Only 1,5 months of being a lazy bum. Sigh, I guess you can’t have everything in life.
Scoring a hatrick
In that 3 month recap I posted what I was looking for in a new job:
1) Closer to home (30 min by Vespa of 1 hour by decent e-bike). Basically Leuven.
2) About the same wage as my current wage
3) In a field that actually interests me (finance, IT, entertainment)
4) Hopefully also a job I could transform into ‘less than part time’ once I have achieved financial freedom and I only need to earn the tax free sum of 7.400 euro.
So how did I do?
The job is near Leuven. Check!
My net wage is a bit higher than before (long live the Belgian Bicycle to work compensation! Tax free compensation is the best kind of compensation!). Check!
I now work in the Fintech sector, combining Finance and IT. Check!
Not possible in my current job. But things are moving and changing fast here so who knows in a few more years?
And then the most important part: do I like the new job?
Big check there!
The company is in the scale up phase at the moment. So insanely busy on all accounts. Part of me doing less posts here is because I am tired in the evening folks. And I really do not want to sit any more time behind the PC in the evening. But it is a good kind of tired. And the atmosphere is very much still start up rock and roll.
I knew I would be a good fit when the CTO during my interview showed up and his wardrobe was even worse then mine is. I had dressed up but he showed up to the interview dressed as a street bum. I knew I was going to like this place immediately!
It wasn’t a typical interview either.
Some of the questions and my answers.
Q: How much importance do you attach to your job title?
Q: What do you do when there is an insane amount of work to be done?
A: I work like a crazy person
Q: What do you do when there is no work to be done?
A: I get lazy. I work best under pressure. His reply: good, we’ve got heaps of pressure here.
Q: do you find it important to get credit for improving stuff
A: If it makes my work easier I don’t care who gets the credit. I have even in the past made sure my Boss got the credit so I could finally get my hands on that shiny new application that made my day to day work a lot easier!
Those answers got me hired! Which really shows the culture of this place. Also, the CTO left a month ago without any new job lined up. His plan: bum around in Portugal for a few months and then see what he feels like doing. I guess I got hired by a Moustachian!
Also, our CEO is transitioning into a new position at the big finance company that bought us and is on holiday now. So we are flying without a CEO or CTO at the moment. Rock and roll, baby!
It probably won’t last because, as a big finance corporation bought us. Some corporate stuff is already starting to seep in! But that is a gradual process. So by the time our atmosphere gets all corporate and stuffy I won’t be needing a job anymore … But for the time being, I do not mind working all that much!
I just got a phone call from the temp agency that placed me at my current job to ask how everything went. The classic ‘how is it going?’, ‘you like it?’ blablabla.
You could see it as a nice gesture or them checking that the temporary placement will lead to a fix contract which means a few more months of making a profit on me and then getting a bonus from my employer for finding such a good match without them having to do any additional work (but that might just be my cynical side).
I saw it as a sign to write this three month recap.
So the job. What can I say. Well, it’s work. And a steady paycheck that has done wonders for my cash position on my checking and savings account. I was down to 900 euro available cash when I started this job (another limit I tested).
I start to know enough so it isn’t as boring as the first month when I could only do the most simple tasks. But it’s still pretty boring work (long live podcasts!). Then again, I find most things pretty boring after a couple of months.
The co-workers are also pretty boring. Perhaps it is the job. I can imagine that doing this job for years and years on end could crush anybody’s spirit. It could be me. I like investing and options, reading weird stuff on line and classic trance (although dark wave horror synth and old school goa aren’t bad either) and I have got two pet pigs. It’s not easy to build a report with people if you have to lie about what you did on your three day weekend (Friday 21 st July was a holiday in Belgium). I mean, that Friday I did some day trading and sold a put on AB Inbev, earning about one month in wages in three hours. I am NOT going to say THAT to any of my co-workers! And I am not even going to start about Saturday … Basically, I am a weird dude. And my co-workers aren’t.
And the job is in Brussels. So that is a long commute. Leave home at 7:15, only back at 18:15 except when I go swimming. Those days I am only home at 20h. Which means that a lot of practical stuff needs to be crammed into the weekend. So you have to live a much more planned life. When can you do practical stuff A, B and C, When do you have time to see a friend or visit family? Do they have time in their schedule to see you … I don’t really care for having my life dictated by google calendar…
I should actually exercise more if I ever want a change of actually losing some weight (almost 5 months of swimming, 3 x 2 km a week and net result is I gained two kilo, hoping it’s muscles …). I should also put more time in meal planning AND preparing. Both things that would be a lot easier to do without the current job.
I don’t want this post to turn into a complain post. Truth is I am pretty happy with the job. The pay is decent and as far as the work goes, I have worked under much harsh conditions for many years in the past. The boss is pretty relaxed and does not micro-manage (I hate micromanagement). A decent job was also the final puzzle piece missing for my last five years leading to financial freedom. But even if I could transform this job in a ‘less than part time’ job 5 years from now, I would not want to keep doing this job.
Truth be told, I found live to be a whole lot more pleasant when I didn’t need to work or even when I did the temp job near Leuven (and that job and co-workers also were boring). The closer location saved me 2 hours in commute. Only one hour when I went with the bike, but I liked biking to work a lot. I found it to be pretty relaxing. I just had a lot more hours in the week where I had control over as where now my time from 7:15 till 18:15 is pretty much outside of my control.
So the plan is to stick with the current job, hoping the work from home option becomes available as soon as I have a fix contract. And that I can stretch it to 2 days a week. If working two days from home is not possible I’ll work full time for the first year of my fix contract and then ask for a 4/5th contract. This should give me an extra free day every week. If I go to Brussels via e-bike the remaining three days, my take home pay should stay the same as now. I can see me doing that arrangement for the remaining years I need to achieve financial freedom.
In the meantime I will start looking for a good job closer to home. This is going to take a lot of time. I will be looking for a job that is:
1) Closer to home (30 min by Vespa of 1 hour by decent e-bike). Basically Leuven.
2) about the same wage as my current wage
3) in a field that actually interests me (finance, IT, entertainment)
4) hopefully also a job I could transform into ‘less than part time’ once I have achieved financial freedom and I only need to earn the tax free sum of 7.400 euro.
I’ll settle for 1 + 2 + 3. But getting 4 would be nice.
Off course, this means that job hunting is one more practical thing I need to put in my google calendar …
This short post had some people thinking the new job was horrible. Which it isn’t. Like I explained in the comments, it’s more like returning from a blue sky, 25 degrees (Celsius, for the Fahrenheit using people) vacation in October. Even if the weather in Belgium is ok-ish, it’s going to be gray and rainy. And even if you know the weather is actually ok-ish your brain is going to be saying: well this sucks. Because, during those first days it will suck. Not because of how the weather actually is but to what you are comparing it: a near idyllic, paradise situation. And compared to that, almost everything sucks. There is a valuable lesson here: a lot of the time we do not see the things as they are but how they compare to something else. Change your base of reference and all of a sudden things look or actually are something completely different!
It was a bit the same for me, I really enjoyed the three months at home. Really, really enjoyed it. So those first days adjusting to the work life were, ahum, ‘challenging’. The fact that google has been going higher and higher doesn’t help as I know I would have made more by day trading a few hours a day than working 8 hours like I have to do now. I really need to stop thinking that way. Or grow the balls to call it quits now and go the early retirement route/day trading route. Which I am not going to do, so brain: stop thinking this way!
So a little overview of the positive and negative sides of the job might be in order.
And a nice paycheck at that. I am right back at making the average wage for Belgium. It’s more than the interim I worked at for 9 months, but that one did pay out an untaxed bicycle allowance. So in regards to net wages the difference will not be big.
And let’s face it, the steady pay check is the main reason why I took the job. Emphasis on steady. My day trading did fill the gap between unemployment and the average wage I was used to making. But day trading is fickle. Good months will be followed by bad months. The way I did it, it’s good as a little side hustle to make a bit extra money. The unemployment benefits would also diminish over time (this deserves its own post as the Belgian social security system is neither social nor offers it a lot of security). And after some time the government would start wondering why I was still unemployed and start asking proof that I was still actively looking for work. Dealing with government bureaucracy is not something I particularly enjoy … No, a steady pay check is the final puzzle piece I need for this last leg of my journey to financial freedom!
12 extra holidays
Once my interim period is over I will work 2 hours extra each week which translates into 1 extra holiday per month. I like that. That is two whole weeks I do not have to go to work! The normal amount of holidays is 20, so this is a 60% increase!
Work from home.
Again, once the interim period, is finished I will be able to work from home one day a week. A big win in my book and it should help to keep up with my swimming regime!
The job is in Brussels.
That’s a total commute of three hour each and every day. By train. And the train in Belgium isn’t very punctual. So there are delays, a lot of them, almost every day. The work from home will help with this. It is also the reason why I am really happy with those twelve extra holidays. Those are not only 12 days I do not have to work, but also 12 days I do not have to go to work. It will save me 36 hours of commuting in total. The interim I did before this job was near Leuven, I even went by bicycle most of the days! I loved it! I looked for a new job closer by home, but the bulk of the companies that need somebody with my experience are located in Brussels. My present plan is to stay here for at least 2 years (this will also put the ‘patchy’ part of my Curriculum more in the past, which will help in getting interviews) and then very selectively start looking for a job closer to home.
I also try to look at the train ride in another way. I try to see it as a chance to catch up on some quality series. Believe it or not, but even after three months of being unemployed I still have a huge back log in series I want to watch! I thought I would totally eliminate that back log, but I actually didn’t watch that many series when I was home. There were only a handful of days where I did nothing except watching series. Most days I had other more fun things to do. By the way: Westworld is f*ing brilliant!
My 10 minute walk from the central station to my workplace I try to view as my healthy morning walk. It is through some touristy area of Brussels so people travel thousands of km’s to snap a picture of buildings I walk past every day!
But even with trying to look with a positive attitude to a big part of my commute, the fact remains I leave home at 7:15 in the morning and am back at 18:15, except Tuesday and Thursday when I go swimming: then it is closer to 20:00 when I am back home. Two days of teleworking from home would be ideal. We’ll see if I can arrange that in the future (= extra motivation to do a good job!)
Well, it’s work. It is sitting behind a computer doing stuff for around 8 hours. There is a lot I need to learn but there will be enough variety in my day. Which is good. I like variety, it makes the day go by faster. I actually did spend a lot of time behind my computer when I was home also. I like surfing the net, reading about interesting stuff, figuring stuff out or go on the hunt for classic techno tracks from my youth (spend the bulk of my last weeks at home doing this, still haven’t finished!). The difference is, now I have to do work stuff. Which I find a lot less interesting than all the stuff I did when home. But that is ok. I did it before: usually I build in some rewards during my day. Finish task A, then read a blogpost. Finish task B, then take a little break. Finish task C, time for lunch! … It breaks the work day into 4 blocks or more and makes the day go faster. When I am able to do this system it actually improves my productivity!
Although at 42 I am in a way better position than most of my peers in the ‘having to work’-department the fact remains I am on a course to achieve financial freedom (even with some work once this is achieved) when I am 47 or 48. Although this is 20 years less than the official age I find this pretty, pretty old. Hell, I find 42 pretty old. I now know 35 (or perhaps even 32) should be possible if one starts young enough on this path. The solution for this is part letting go of the fact I did not follow the optimal route and part of the solution is getting in better shape. I know for a fact that improving my physique and losing weight will make me feel younger again (I have a very interesting story about that 5 month window where I lost a lot of weight and experimented with a testosterone booster, it sure made me feel a lot younger!).
So even if I did enjoy the 3 month test run of early retirement immensely, the reality of life is that I still have some work to do. Work in the house (finish the home renovations), work on my health (lose weight, build muscles) and work on the stash (it needs to be bigger).
If I am totally honest about it, I bought it because I wanted one. They’re great looking scooters and even driving it around our block I was immediately transported back to my youth. I had some of the best moments of my life being 16, 17 years old. Totally worry free and just cruising the scooter I had back then (a Honda Camino 50cc that legally only could go 45 km/h but i off course had it souped up to around 75 km/h, yes I was that type of guy …). I still remember one summer where Belgium had one of our rare heat waves of + 30 degrees celcius, cruising down the streets of my home town to meet up with some friends and then go swimming in a fishing pond my parents rented. The fact that a few nice looking girls decided to join us for a swim was a fact that made those days all the more enjoyable for my teenage self …
The frugal part
But was it also a frugal purchase? In some ways it was.
I bought it second hand for 2.750 euro and it was very well taken care of, with less than 11.000 km of use. New they cost around 4.300 to 4.800 euro’s.
It’s a 125cc, which means that I can drive it with the my current driver license. When you have a car driver license for over a year you can drive motorcycles up to 125 cc in Belgium (this apparently does not apply for the Netherlands).
Insurance is very cheap since we can add it to our car insurance: it will only cost 93 euro for one year.
The fuel economy is a lot better than our car (we have a Opel Combo) so I will probably save more than the insurance cost on car fuel.
It will avoid us from needing a second car with all the costs that entails while still giving us a lot more mobility options: I am in the centre of Leuven (20 km distance) in about 30 minutes. Going to the swimming pool only takes 10 minutes and no more worrying about parking space.
A friend of mine has the exact same one, he is a trained mechanic and is part of a Vespa Scooter club: maintenance will be cheap.
The not so frugal part
We already own an excellent electric bicycle. I could use that. I did use that bicycle to go to my temp work for about 9 months (distance also around 20 km). But I did also use the car when the girlfriend did not have to work. Not having to go to work with the bicycle every single day was really, really nice. Having to cycle home, after swimming was really, really annoying. I am just not in good enough shape for that!
Continuing to use the electric bicycle would have saved me all of the money.
I could have bought a cheaper model. You can find nice, good running 125 cc scooters for 1.500 euro or even less. Most other Vespa models are even cheaper than this one. I definitely could have saved 1.000 euro on the purchase price and gotten all the same advantages of owning a 125cc scooter I have now. I went for the nicest model.
I know my most hard core frugal days are behind me. I am getting soft in my old age. And there even is a pattern to detect. I didn’t own a bed until I was 38 years old. But when I bought one, I bought a very nice full oak one. It’s fantastic! In the dilemma between buy cheap or buy once for the rest of your life I usually advocate for buying cheap so you can get more of your money working for you. But one some things I appear to fall in the buy once for the rest of your life. I will probably never buy another scooter in my life. And I know for a fact I will never buy another bed in my life time. And I wanted a nice looking, great scooter for the rest of my life!
It is also only around 1% of my stash, so for the young people reading this and still building their stash: use your bicycle or buy a cheap scooter and use it until it falls apart and build your stash! And then buy a nice scooter!!
Ps. For those of you wondering, yes that is my drive way and no, the building in the back is not my house. It’s a barn (which we don’t really use). And yes, to the right there is an old green house (we don’t use that either). I’ll do a post or two about our house in the future. Not buying it would have brought me really close to FI right about now, so the house probably added about 5 years of working. Well worth it in my opinion.
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!)
3 months working 1500 euro/month
12 months working 1000/month
9 months unemployed 500/month
income necessary from stash
income necessary from stash
necessary stash size
necessary stash size
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.
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.
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.
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.
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!
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.
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.
I am not a certified financial advisor and do not hold a license from the FSMA. Everything written on this blog expresses my own personal journey and opinion and is pure entertainment. It is never an advice on what how and where you need to invest. If you need this advice, then please reach out to a financial service expert
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