Europeans on FIRE – José
In our Europeans on FIRE series, we interview people living in Europe who don’t blog to find out what makes them tick. Our aim is to give non-bloggers a voice and hear what they have to say. We hope you enjoy hearing from people you’ve never heard of before!
If you’d like to take part in Europeans on FIRE, contact us at hello[at]firehub[dot]eu and we’ll send you the details.
You can find a full list of our Europeans on FIRE interviews here.
Please briefly introduce yourself to FIREhub.eu readers
I am a son of Portuguese immigrants, born in Germany. I live nearby Frankfurt am Main with my wife and my three children.
Currently I am working part time for an international bank in Frankfurt.
What is your backstory?
Since starting to work, I always had a savings rate of 40-50%. This was certainly the influence of my family and their cultural background. (Life in agricultural areas of Portugal’s earlier times is known for being full of deprivation requiring a frugal attitude as a core value).
Additionally, I was always interested in finance themes and economics. For this reason I studied business administration and spent my entire working career within the financial industry.
In 2015, I discovered the FI blogging scene by coincidence. First Finanzwesir [German blogger], then Mr. Money Mustache and Jacob from Early Retirement Extreme and then many, many others. (I would like to highlight Oliver Noelting’s frugalisten.de for the highly practical relevance of his contents.)
These blogs made me realize that without knowing it, I was already on the path to FI. I did not really need to change my financial behaviour. I was already saving in ETFs and real estate before.
But the crucial insights from FI for me were
− the 4% rule which helped me to determine how much I need to be FI
− and the awareness regarding my expenses as a consumer.
Why do you want to reach Financial Independence?
FI for me means to be independent and to have the freedom of choices how I want to live my life – without being directed or pressed by others.
The funny thing is that I realized that reaching FI can be helpful to live an independent and free life, but it is not a mandatory precondition!
More important is the right attitude: to trust yourself and your decisions – to develop the necessary self-confidence and simply act. (Some people say “Live FI before FI”).
The path to FI taught me that it is not about the money itself but rather to define answers to the question: What life do I want to live?
For example, I also realized that one important value for me is to help other people: to be there for my family, my friends, and even strangers needing support. I do not need to be rich to act according to this value.
How much is your “enough”?
I defined a 4% withdrawal rate, resulting in 3,000 EUR per month as my personal “enough”. A lean FI is fine for me.
Where are you on the road to Financial Independence?
I just came back from a great seminar “Wieviel ist genug?” [how much is enough?] organized by the fantastic FM Rommert. There I actually realized that I already reached my once defined FI level, now with 44 years and probably some 6 years earlier than previously suspected.
What do you want to do with your life once you reach Financial Independence?
To be honest, I still have to adjust some things. But I already reduced my working hours from full time to part-time, i.e. 20 hours per week. So I will continue to benefit from employer contributions to health insurance for me and my family.
The idea is to have more time for my kids (so my wife has more time for her business project), and more time to give myself a try on some projects (becoming a yoga teacher? Trying self employment).
What is your strategy for reaching FI?
- High savings rate
- Investing regularly in ETFs in a “Gerd Kommer” style:
70% Developed World / 30% Emerging Markets. This is actually what I still do for my kids via Vanguard funds.
- Real estate. Buying and renting out apartment buildings was the real booster to reach FI due to the leverage effect and ONLY due to the mercy of lucky market timing. Currently I do not see any opportunity for this kind of investments in my region.
What will be your financial strategy after reaching FI?
My income sources are my sharply reduced salary, the rental income and dividends. As long as it isn’t necessary I will not withdraw 4% from my portfolio. Selling some real estate and investing the proceeds in the ETFs could be an option. But also new loans on the existing real estate to invest in the ETF portfolio are currently an arbitrage opportunity due to the low interest rates.
What was your biggest financial mistake?
Buying Neue Markt stocks during the dotcom bubble 1999 – being driven by naïve greed.
Not buying earlier and more real estate ten years ago – being hampered by fear.
What advice would you give to your younger self?
Trust yourself, be patient, accept yourself as you are, just do it, don’t be shy and talk to other people, stand up for your rights, speak louder, ask for help when you need it.
What’s your wildest dream?
My wildest dreams are parental advisory themes, which I cannot explain here, but which were actually realized.
Hence, as a softer version I would say that my wildest dream is actually my current life.
What is your favourite just-for-fun activity that brings you joy?
Listening to other people’s life stories, laughing with friends, learning to play the piano, yoga and meditation, reading interesting books, bike and motorbike riding, forest walks, appreciating natural landscapes.