Hi, new & entering the OMY zone

[Totoro]

Aloha, upgrading myself from lurker to poster

Single, aged (almost) 34, living in NL. Expenses currently 3.7% of my portfolio, probably 3.6% by the end of the year. Asset allocation roughly 40%/60% (bonds / CDs / high yielding savings account), want to move to 85%/15% or so eventually if the market drops or when I definitely maybe will retire.

Quit the high-paying job two years ago, now self-employed with a fellow entrepreneur, earning less but still decent money and much better quality of life. At first marveled at the freedom, now again stressed out because of work obligations and well .. people I guess.

So back to thinking about my first love ever since I left my phd: early retirement! A bit similar to Jacob's line of thought (of ERE fame), only I didn't go for the RV lifestyle

Given my relatively young age and long investment horizon I thus now find myself somewhat in OMY territory: 3.6% is not very safe and the markets are at high levels, so 3% would be better, but of course 2.5% would be really neat .. on the other hand every euro I earn now takes me more time than before, so getting there might take me 10+ years of more working ..

.. so I am now setting myself a target of 190k usd more savings (inflation adjust every year), and then declare myself 'really financial independent'. Maybe travel a year or so to celebrate. In the mean time take it slowish career-wise and try and optimize for fun (going for sailing lessons soon).

But who knows, I may push up my number again once / if I reach it ... there's never really enough is there?

 

[heeyy_joe]

Hurrah for posting! I like the cut of your jib.

 

[sailor]

Welcome to the forums Totoro-sama!
Some good sailing in NL. Do you sail inland or on the sea?
What's would be a single guy's budget in NL to consider ERE style retirement?
You could live on a barge or a sailboat instead of RV

 

[Totoro]

Haven't selected a sail school yet, most probably at sea I think. Any suggestions in how to select or what to pay attention to is most welcome! Living on a sailboat could actually be an option, it's one of the reasons I want to take up lessons! First see if I don't get seasick too much

Regarding the budget, as with any place, you can go as high as you want, and NL is certainly no exception

For myself I am currently burning through +/- 2.100 eur a month, which is mostly rent + utilities (1.200 EUR / 1.680 USD).

That's an insanely high amount for me, so if I would ER(E) I'll initially probably relocate to Belgium to be closer to family (am an Expat), and the rental costs would then drop to a more sane 800 EUR / 1.120 USD. That's what the 3.7% is based on in the calculation above. Then again, if I move onto a sailboat .. how low might one go?

To be most precise: budget 1.800 EUR (21.6k per annum), total current assets 585k, expected to increase to 610k or so by year end.

[Edit] : Just to clarify: my current asset allocation is 40% equities (vanguard mostly) and 60% fixed income yielding 3.4% or so weighted average.

 

[LongPrime]

Change Fixed income to utility div payors. Still investment grade. I am partial to NWN. (can we say this)

 

[Totoro]

Change Fixed income to utility div payors

Appreciate the suggestion, alas: withholding tax of 30% will kill the yield unfortunately, and I'm trying to move away from stock picking in any case, not to mention the currency risk.

I do confess having the mid cap value vanguard ETF, otherwise it's going to be global index for me.

Main motivation is to force myself towards life less about numbers, and more about learning how to sail and enjoying the sunshine

 

[LongPrime]

^ How is a US stock going to have more of a currency risk vs a US based ETF?

 

[Totoro]

^ How is a US stock going to have more of a currency risk vs a US based ETF?

How I see it:

Whether or not the shares are noted in dollars or anything else is irrelevant. What is relevant is the currency of the revenues and costs of the underlying business(es) you are buying into.

Vanguard total world stock (VT) gives you ownership in multinational companies dealing in various currencies across the globe, so it all evens out. Some of these companies actually hedge those risks, and they certainly have (large) treasury departments. Some vanguard funds actually have a EUR noted variant, it doesn't really matter much which one you buy.

Buying just one company operating locally with revenues and costs 100% in USD on the other hand does expose me specifically to a USD currency risk.

Coca-Cola for example does not have a specific currency risk (they operate worldwide). Almost all local banks outside the eurozone (from my perspective) do.

If I'm getting this wrong, please let me know!

 

[sailor]

Haven't selected a sail school yet, most probably at sea I think. Any suggestions in how to select or what to pay attention to is most welcome! Living on a sailboat could actually be an option, it's one of the reasons I want to take up lessons! First see if I don't get seasick too much

Except of visiting few Dutch ports, I'm not that familiar with sailing schools in Netherlands. Seasickness should not be a problem for just living aboard, if you are planning to live in a marina. We spent a week living on a sailboat in Copenhagen two years ago and seen few folks doing it year around, so I'm sure it's also possible in Belgium or Netherlands. Good luck!

That's an insanely high amount for me, so if I would ER(E) I'll initially probably relocate to Belgium to be closer to family (am an Expat), and the rental costs would then drop to a more sane 800 EUR / 1.120 USD. That's what the 3.7% is based on in the calculation above. Then again, if I move onto a sailboat .. how low might one go?

I don't know enough Dutch to help you here, all I can find easily accessible in English are marina visitor rates. In Amsterdam they want 2 euro/m per night for a short term stay. This includes electricity, water and shower usage. Assuming you get an 9m boat, short term stay would be 540 euro per month.
Long term rates should be cheaper (maybe half this price?), same with marinas in smaller towns/cities. Of course you would need to buy a sailboat - anywhere from few thousand euro to few hundred thousand. I would think something in 10000 range be decent enough for a single guy (plus maybe adventurous girlfriend) accommodation. If you are handy, sailboat maintenance is not that expensive.

Houseboats (also called Dutch Barges) will have much more living space for the same length, but they tend to be more expensive and you can't sail them very good

 

[Htown Harry]

Welcome Totoro.

I had to read a few posts down before I was sure where you were living. Here in Texas, when we see a NL sticker on a car we assume the driver is from Monterrey or some other town in Nuevo Leon.

 

[Totoro]

It's the other NL -- land (more of a city to you US citizens) of cheese, fair maidens, high taxes, bicycles and windmills.