Bloggers on FIRE – Route 2 FI
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
Hello, FIREhub readers! I’m a 31-year-old guy from Norway. I live with my fiancee in an apartment we bought together last year.
I’ve studied a lot through the years, including economics, nutrition physiology, chemistry, engineering and project management. Why all these studies you may ask?
I see myself as a lifelong learner, and find almost all topics in the universe exciting as long as I can dig into depth of them (a typical trait for my introvert personality).
It was really hard for me to choose what field to work in, and I also enjoyed studying so much that I actually didn’t want to settle down for permanent work.
I was 28 years old when I first started to work full time. I’m working as a project manager for infrastructure projects during the day. In the evenings I dream about FIRE and all the possibilities a more flexible lifestyle would give me.
What’s your backstory?
I’ve always been an avid saver, and my whole life I’ve thought about why people spend so much on things. I used to save a lot in my savings accounts and was motivated by paying down my mortgage as fast as possible. Then my brother told me about his friend making huge money in index funds, so I decided to read more about the subject.
I remember I googled something like: “What is index funds?” and this led me into the world of FI bloggers.
I read absolutely everything on the blogs of Mr. Money Mustache, Early Retirement Extreme and Mad Fientist, and I remember I sat there with a thought like “Why haven’t anybody told me this before?” and “Why isn’t everybody doing this?”.
For me FI was like a new meaning of life. After I read about it I knew this was going to be my new lifestyle, I mean, isn’t it genius? Saving your ass off for about 8-10 years, then design your perfect life and be your own boss. The ultimate freedom!
I started reading books, blogs and listening to FI podcasts every day, it was like a religion to me. I learned so much about myself and about financial independence. I was completely hooked!
Because of my INFJ personality I am really future-oriented. I am seldom content with reality as it is. The best possible future is what I want, and, as a result, I am often unhappy with my present circumstances. FI is really motivating to me, because it allows me to reach new goals and milestones every month.
Why do you want to reach Financial Independence?
My biggest financial goal in life is to be financially independent. The reason for this is so I can take back the control over my time.
It doesn’t feel right to live the rest of my life working in a corporate job. I want to work on my own projects, have more time with my spouse, family and friends. To feel like that the work I do, I do for myself and not for someone else.
I work 9-5 as most people do. The problem (as I see it) is that my job drains my creative energy, so when I come home from work I don’t have any more energy to work on what I actually want to do. My leftover energy is spent on my spouse, weight training, making dinner/meeting friends and then prepare for the next day. When the weekend arrives, I’m normally so exhausted by work that I don’t have the spark to do something creative.
It feels like I’m trapped in a hamster wheel. Often I ask myself if this is it? Work, eat, sleep, repeat.
It feels like there’s never enough time to do things I like, for example reading all the books I’ve delayed, writing more, watch more films, spend more time in nature and play board games with family and friends.
I am sure that to retire early is not the answer for me. I love to work, but maybe not at my day job.
I must admit that I’m kind of afraid of failure. And one of the other reasons I seek FI is because I can try out different business options / fund raising projects without the fear of failure (since I got enough money to support myself).
It’s getting clearer and clearer for me for every day, that my destiny is to become a writer. And the reason I pursue FI, is so I can write full time. I am not an experienced writer. Actually I didn’t start to write before I committed to share this blog online. For a long time I was really afraid that others might not like what I had to share. And I still am.
Lastly I want to inspire and help others. I want to do this through my writing and by fundraising money to greater causes. I have a passion for well drilling, and really want to realize some projects in some years where I can help people who need clean and safe drinking water.
How much is your “enough“?
My net worth goal is $600,000. If I use the 4% SWR this means I can withdraw $24,000 every year. This is about my annual spending pt. And, I don’t think I never will earn any money from regular work again, so I’m not afraid of “pulling the plug” too early.
I don’t know if I want to quit my job completely when I hit $600,000 though. I love to work, but I want control over my time. Maybe I can live my dream life with a 3-day job week? I’m not done thinking through this, and there will be more posts on my blog about this subject in the future. Check out my post about it: Why Do I Have To Be Financial Independent To Live My Dream Life?
Where are you on the road to Financial Independence?
My goal is $600,000, and right now my net worth is $170,000, which means I’m 28.3% down my road to FI. I have invested $155,000 in index funds. You can see my plot in the figure under.
It feels like I just started this journey, and I’m already at 170k so the snowball has really started rolling!
Hopefully I’ll reach FI in 7-8 years, but life is dynamic, and things happen down the road. Maybe I consider barista FIRE or coast FIRE. I don’t know yet. The only thing I know for sure is that I try to save as much as possible (60 % is the goal for 2019), earn as much as possible and invest in index funds.
In figure 2 below you can see how I keep track of my FI goal. When the blue line and the red line crosses, it means I’m FI. The red line is currently at $503.50 per month. This means that if I quit working today, the index funds would pay me over $500 every month for the rest of my life (assuming the 4 % rule and that I never earn a dollar again in my life).
I try to keep the blue line (my expenses) under $2000 a month. And that’s why I need $600,000, because 600k/25 = 24k/year aka. $2000/month.
What do you want to do with your life once you reach Financial Independence?
When I hit my FI mark I will still do some kind of work, but this will be work for myself. I want to write more, read more and start some business projects.
My partner and I have a business idea about making an online shop. We plan selling a product that doesn’t exist in Europe yet. We can buy the product from Alibaba.com for a really good price, and sell it for potentially 10 times as much. I can’t tell what it is unfortunately, but it is something everybody needs in their home ?
I also dream about reading my favorite Haruki Murakami novels over and over again, drink tea while I sit at a cafe and watch people fly around and enjoy more time with my family and friends.
What is your strategy for reaching Financial Independence?
I only invest in index funds. I use a rather “unnormal” method in the FI community: stock leverage. Stock leverage means that I loan money from my brokerage account (Nordnet) and invest the money in index funds.
I plan to invest approx. $3000 – 5000 every month, which some of the money is leveraged.
Right now I have $155,000 invested in my index funds, but $39,000 is leveraged. In other words $116,000 is mine, the rest is a loan (2.19% interest rate).
You may wonder why I do this?
I expect the stock market to raise by 7% annually in the long
run, and as long as the interest rate for my stock loan is lower, I consider
this a good option.
Let me show you the difference:
- $155,000 x 1.07 = $165,850 ($10,850 more after 1 year)
- $116,000 x 1.07 = $124,120 ($8120 more after 1 year)
Since I use leverage of $39,000 at 2.19% interest rate, I have to pay $854 in interest for this year. So the difference is actually: (10,850 – 8120 – 854) = $1876 more by using leverage.
You may think that $1876 more isn’t a big difference, but it is actually the same as if you got 8.6% interest rate instead of 7%. Everybody that understands compound interest knows that this is a huge difference!
- If you invest $155,000 right now (using $39,000 as leverage), and don’t put in anything else, you would end up with $1,258,000 after 30 years.
- If you instead invested $116,000 using no leverage you would end up with $941,000 after 30 years.
- Subtracting leverage we get: 1,258,000 – 941,000 – 75,000 (leverage over 30 years) = $242,000. A big difference if you want to become FI!
This may seem advanced, but it’s easier to understand if you read my post about it here: How I plan using 1,25 : 1 leverage to my stock portfolio to reach financial independence faster!
However, this strategy increases the risk. So it’s not for everybody. I’ll explain a lot more about this in my blog post above.
I also plan to raise my salary as much as I can in my corporate day job. I plan to do this by changing jobs relatively often and ask for more responsibility in the job that I have in the moment.
What will be your financial strategy after reaching FI?
I plan to live of my index funds investments (using the 4% rule). As I mentioned earlier I don’t know if I want to quit working completely. I think my field is exciting, so if there is a possibility that I can work 2-3 days a week, then maybe I can use my salary from the corporate job to pay my bills. Then the index funds will continue to raise further.
There is also a chance I’ll get into real estate investing after a while. Or maybe house flipping. My fiancee loves interior design, and has a good eye for houses that has huge potential to become really beautiful with some improvements.
What was your biggest financial mistake?
My biggest financial mistake is that I didn’t start to invest earlier on. What if I started when I was 20? I think I would be way ahead my current progress to FI if I had opened a stock account at that time!
What advice you would give to your younger self?
- Start investing early.
- Read more books. There’s a ton of wisdom in them. Think about this: An author has used big parts of his life getting the ideas and wisdom to write a book. In 6-12 hours you can finish a book and get all that life wisdom. No doubt you’ll get smarter by reading a lot.
- The hardest part of any task is just starting it, every task becomes easier after the first few steps.
- Persistence and patience is the key, so keep trying and never quit too early.
- Don’t fear making mistakes, because mistakes are the only way to learn new things.
- Get a mentor. You need advice from persons in your life that has done things you want to do.
What’s your wildest dream?
My wildest dream right now is to live in a tiny house in the woods with few things. To enjoy nature and to teach more people about the FIRE community. To give you a picture of what I would enjoy, look below!
What’s your favourite just-for-fun activity that brings you joy?
- Read books from my favorite author, Haruki Murakami
- Write texts, notes, quotes, novels etc.
- Tennis, squash, cycling and cross country skiing
- Watch soccer