RISP
Recycles dryer sheets
- Joined
- Jul 18, 2012
- Messages
- 407
Hello.
Long-time lurker, hit a milestone today and decided to celebrate by finally joining the forums. The bank transfer for my July salary arrived early, and it pushed my portfolio balance over the 100,000 Euro mark for the first time ever.
About me: I’m 30 years old, German, and have been living with the same girl for 11 years. We have a two-year-old daughter and a second child on the way. Not married yet, but that’s probably somewhere in our future. Huge baseball fan. My apologies for any grammatical errors or odd expressions, but English is not my first language.
I have a job at a megacorp that pays quite decently, and they treat me well. I can ride my bike to work, and there’s not too much business travel. The hours are usually reasonable. I have my own office and keep the meetings to a minimum. Coffee and water are free. My manager sits in another location.
Actually, 95+% of all people, especially at my age, would probably kill for this position. Still, I knew early on that I do not want to do this for the next 37 years (the regular retirement age in Germany is 67). And of course there’s no guarantee that things stay this rosy for the rest of my career. In fact, I would be surprised if that happened.
At this point in time, I believe I can achieve FI somewhere in my forties. My planning spreadsheet has best- and worst case-projections, as well as the “standard run” (I call it “Der Plan”
), and the FI age varies between 41 and 48. Maybe “worst case” is not actually the right word, as even this scenario assumes positive real investment returns on average, and doesn’t account for unemployment. If things turn out even worse over the next two decades, I guess I will just have to work longer to make it happen.
My main goal at the moment is to keep all my options open. I believe part-time work may be somewhere in my professional future, though this is still very uncommon for employees in managerial positions. Maybe that will change over time, as the supply of skilled labour will probably decline here in Germany because of the low birth rates since the 1960s. That should put me in a better position to negotiate.
Even if my plans do pan out, I don’t think I will actually retire in my forties, at least not completely. Most probably, I will wait at least until the kids are out of the house. And it wouldn’t do any harm to pad the stash a little more to ensure a healthy safety margin, and a WR significantly <4%.
The one thing I want to avoid is finding myself in a spot where I’m laid off at 50 because they deem me too old or too expensive by then, and facing a horrible job market for “older” people. If that should ever happen, I want to be able to grin broadly, take the severance package, and walk away.
About my investment philosophy, I’m with most of you guys here. I manage my finances myself and use low cost ETFs for the equity portion of my portfolio. I have read most of the books recommended here, and I hold a Master’s degree in Finance, so I understand quite well why index buy and hold investing is superior to actively managed funds. I’m still grateful to the professor who introduced us to “A random walk down Wall Street”. That was probably the most useful class I ever attended.
My target allocation is 60/40, but I include both my cash holdings and emergency fund in the 40% fixed income. At the moment I’m focussing mainly on accumulating more cash, because we plan to buy a house at some time in the next 1-5 years. Here in Germany, I can still get 1.75-2.25% interest on a cash account with funds that I can access daily, so I’m at least not losing ground against inflation (well, maybe a little after taxes, but I’m fine with that as long is the money is available when we stumble across the house we want).
We own the apartment we live in and are paying down the mortgage as quickly as possible – it will be gone in about 4 years. (In case you are wondering why we don’t just pay it off right now, loan contracts don’t work that way in Germany. We are allowed one additional annual payment of 5% of the initial balance towards the principal and have always maxed it out. Simply paying back the entire loan right away would result in penalties.)
Please let me express my gratitude for all the wonderful information shared here. Before finding this place (and also The Retire Early Homepage, and Early Retirement Extreme), I was just trotting along with the rest of the herd. I had always been a saver, but before learning about FIRE, I never really knew WHY. It just seemed like the right thing to stash away a big chunk of every paycheck, but now I have seen the light.
That being said, I’m sometimes missing a European, especially German, perspective. I understand that almost all of the forum members are US citizens, but if there was the odd German around here, too, I would be very interested to discuss some topics. Or maybe one or two of you have lived in Germany for some time?
For example, I understand that an IRA in the US may be a reasonable vehicle to save for retirement under certain conditions. That’s nice to know, but we don’t have these in Germany. So, is a ‘Riester-Rente’ a good tool for me, or should I rather consider maxing out my ‘Betriebliche Altersvorsorge’? Of course I have an opinion on that, but it would be nice to exchange thoughts with like-minded people.
Summing it up, I’m quite happy about where I am today, and looking forward to the journey ahead. Thanks for reading.
Long-time lurker, hit a milestone today and decided to celebrate by finally joining the forums. The bank transfer for my July salary arrived early, and it pushed my portfolio balance over the 100,000 Euro mark for the first time ever.
About me: I’m 30 years old, German, and have been living with the same girl for 11 years. We have a two-year-old daughter and a second child on the way. Not married yet, but that’s probably somewhere in our future. Huge baseball fan. My apologies for any grammatical errors or odd expressions, but English is not my first language.
I have a job at a megacorp that pays quite decently, and they treat me well. I can ride my bike to work, and there’s not too much business travel. The hours are usually reasonable. I have my own office and keep the meetings to a minimum. Coffee and water are free. My manager sits in another location.
Actually, 95+% of all people, especially at my age, would probably kill for this position. Still, I knew early on that I do not want to do this for the next 37 years (the regular retirement age in Germany is 67). And of course there’s no guarantee that things stay this rosy for the rest of my career. In fact, I would be surprised if that happened.
At this point in time, I believe I can achieve FI somewhere in my forties. My planning spreadsheet has best- and worst case-projections, as well as the “standard run” (I call it “Der Plan”
), and the FI age varies between 41 and 48. Maybe “worst case” is not actually the right word, as even this scenario assumes positive real investment returns on average, and doesn’t account for unemployment. If things turn out even worse over the next two decades, I guess I will just have to work longer to make it happen.My main goal at the moment is to keep all my options open. I believe part-time work may be somewhere in my professional future, though this is still very uncommon for employees in managerial positions. Maybe that will change over time, as the supply of skilled labour will probably decline here in Germany because of the low birth rates since the 1960s. That should put me in a better position to negotiate.
Even if my plans do pan out, I don’t think I will actually retire in my forties, at least not completely. Most probably, I will wait at least until the kids are out of the house. And it wouldn’t do any harm to pad the stash a little more to ensure a healthy safety margin, and a WR significantly <4%.
The one thing I want to avoid is finding myself in a spot where I’m laid off at 50 because they deem me too old or too expensive by then, and facing a horrible job market for “older” people. If that should ever happen, I want to be able to grin broadly, take the severance package, and walk away.
About my investment philosophy, I’m with most of you guys here. I manage my finances myself and use low cost ETFs for the equity portion of my portfolio. I have read most of the books recommended here, and I hold a Master’s degree in Finance, so I understand quite well why index buy and hold investing is superior to actively managed funds. I’m still grateful to the professor who introduced us to “A random walk down Wall Street”. That was probably the most useful class I ever attended.
My target allocation is 60/40, but I include both my cash holdings and emergency fund in the 40% fixed income. At the moment I’m focussing mainly on accumulating more cash, because we plan to buy a house at some time in the next 1-5 years. Here in Germany, I can still get 1.75-2.25% interest on a cash account with funds that I can access daily, so I’m at least not losing ground against inflation (well, maybe a little after taxes, but I’m fine with that as long is the money is available when we stumble across the house we want).
We own the apartment we live in and are paying down the mortgage as quickly as possible – it will be gone in about 4 years. (In case you are wondering why we don’t just pay it off right now, loan contracts don’t work that way in Germany. We are allowed one additional annual payment of 5% of the initial balance towards the principal and have always maxed it out. Simply paying back the entire loan right away would result in penalties.)
Please let me express my gratitude for all the wonderful information shared here. Before finding this place (and also The Retire Early Homepage, and Early Retirement Extreme), I was just trotting along with the rest of the herd. I had always been a saver, but before learning about FIRE, I never really knew WHY. It just seemed like the right thing to stash away a big chunk of every paycheck, but now I have seen the light.
That being said, I’m sometimes missing a European, especially German, perspective. I understand that almost all of the forum members are US citizens, but if there was the odd German around here, too, I would be very interested to discuss some topics. Or maybe one or two of you have lived in Germany for some time?
For example, I understand that an IRA in the US may be a reasonable vehicle to save for retirement under certain conditions. That’s nice to know, but we don’t have these in Germany. So, is a ‘Riester-Rente’ a good tool for me, or should I rather consider maxing out my ‘Betriebliche Altersvorsorge’? Of course I have an opinion on that, but it would be nice to exchange thoughts with like-minded people.
Summing it up, I’m quite happy about where I am today, and looking forward to the journey ahead. Thanks for reading.
