Bloggers on FIRE – Frugalisten
In our Bloggers on FIRE series, we interview European FI bloggers to find out what makes them tick. Our aim is to build up a “who’s who” directory for the European FI blogging world. We hope you enjoy the series and discover some new blogs to follow. You can find a full list of our Bloggers on FIRE interviews here.
Please briefly introduce yourself to FIREhub.eu readers
My name is Oliver, I am from Germany and 31 years old. Currently I live in Hanover in Northern Germany, together with my girlfriend Joana and our little baby daughter. I work as a salaried software developer part-time, and run a little side business as an IT freelancer. In addition, I write one of Germany’s largest FIRE blogs – frugalisten.de, which I started in 2015.
What is your backstory?
My FIRE journey began about six years ago, when I was still studying media informatics at university. Back then, I fully enjoyed student life: I could set my own schedule and freely choose the projects I was working on. And I still had plenty of free time left for social contacts, parties, sleeping in, sports and hobbies.
However, I knew that this was going to end once I’d graduate and start my working career. From that moment on, I would have to sit in an office from nine to five each day and do what my boss or client asked me to do. Not that I did not like my potential job as a software engineer – I was in fact curious to finally apply my knowledge in real life. But the idea that my life was pretty much predetermined for the next 40 years, without much space left for adventures and free time, disappointed me.
Then I moved in a new flat share with a friend of mine who had previously stumbled upon an online article about Mr Money Mustache and became totally hooked on his ideas. He talked about MMM almost every day, so one evening I became curious and checked out the blog – just to find out that this was the life philosophy that fit me perfectly.
I had never been a big spender before (I could even save a fair portion of my student budget at the time), but prior to discovering FIRE, I thought that happiness and fulfilment comes from buying the “right” products and services, like nice furniture or the car that best fits my personality.
Reading MMM, I noticed that this was a flawed idea and living a fulfilled live does not require spending much money.
When I started my first job two years later, I saved 70 % of my 2.500 € salary right away and I have basically maintained the student-like lifestyle until today.
Why do you want to reach financial independence?
Even though I am happy with my job as a software developer, I think it is naïve to extrapolate and assume that I will feel the same aged 40 or 50.
When I have enough of my IT career one day, FI gives me the option to do something different, no matter whether it earns me money or not.
I will have the freedom to decide how I spend my day and how much time I allocate to each activity.
Another reason is that Financial Independence appears like relatively low-hanging fruit to me. Saving money does not feel like deprivation for me, but rather natural and more like a side-effect of an efficient, consumption-critical lifestyle.
How much is your “enough”?
Since I like programming and other things that can potentially generate income, I’m pretty sure I will still work on fun projects and earn a bit of money even after becoming FI. That’s why I aim more towards a lean FIRE approach – retiring as early as possible rather than accumulating yet another safety layer, that might turn out to be unnecessary in the end. For this reason, I currently use the 4 % rule to calculate my projected “FI number”, even though it is considered riskier in the FI community.
At the moment, this number is about 420.000 €, which would roughly be enough to cover my own expenses plus my part of the family spendings. The largest uncertainty here are our future expenses, since I do not know how many kids we will have and how much money we’ll spend as a family once our kids are a bit older.
Where are you on the road to Financial Independence?
When I started my FI journey, I created a little spreadsheet with estimates of my future earnings (based on average salaries of software developers) and projected future expenses (that also included rising costs after starting a family). The spreadsheet revealed that I could potentially reach FI around the age of 40.
My current net worth is about 125.000 €, so from a purely mathematical perspective, I have completed approximately 30% of my path to FI.
What do you want to do with your life once you reach Financial Independence?
I do not think that my FI life will be much different from my life today, just with a little more room for spontaneous ideas, hobbies and recreation.
I hope that I can still follow my favourite hobby – skateboarding – at that age. I’d also put more time and effort into my blog – or whatever project or idea I am passionate about in 10 years. As mentioned above, I might also take on the occasional freelance project, if it is fun and if I can learn something valuable from it.
What is your strategy for reaching Financial Independence?
At the moment, I invest in a broadly diversified portfolio of index ETFs, since this offers high expected returns for comparatively little time invested.
Even more important than my investment portfolio, however, is to keep my expenses low and maintain a high savings rate. The lower my expenses, the more I can save and the less money I need to accumulate in order to reach FI. With lower expenses, I also need to pay less taxes and health insurance once I am FI.
What will be your financial strategy after reaching FI?
At the moment, I am aiming for the “traditional” approach of a total return investment portfolio, from which I regularly withdraw money. This will be similar to using the 4% rule, but a bit more complex, e.g. adjusting withdrawals to the current market conditions to lower the sequence-of-return risk.
What was your biggest financial mistake?
So far, I was lucky enough not to experience any major financial mistakes (at least from today’s point of view), like losing a six-figure fortune gambling the stock market or taking out a high-commission insurance.
It has been a happy coincidence that I discovered FIRE as a student, before I could fall prey to lifestyle inflation or make any kind of dumb investment due to a lack of financial education.
What advice would you give to your younger self?
To always pay good attention to what gives me fulfilment in my life and what not – and keep focused on doing more of the former and less of the latter things. And to go skateboarding more often.
What’s your wildest dream?
To live in a caravan or on a sailing yacht for a while. Or going to live in the USA for a year or so.
What is your favourite just-for-fun activity that brings you joy?
That is certainly skateboarding, my favourite hobby. A day where I go skating is usually a good day – and it does not cost much either. 😉