Financial Statement – August


Euros July August Gain
Mine 41,400 38,950 -2,450
M 24,200 30,800 6,600
M Pension 31,000 31,000 0
My Pension 34,840 34,840 0
House guarantee 4,000 4,000 0
House paid 100,000 100,000 0
Total 235,440 239,590 4,150
Cash 65,600 69,750 4,150

This month and the following will be atypical. My salary is much lower because I am on my parental leave until the end of September. M, on the other hand, got some money back from taxes. So, overall, an increase of 4k is not bad for a low salary month!

We are currently thinking where to invest next.. having 70k in cash is killing me! I feel I am losing money every day for not having it invested. Index funds? Or real estate?


An image worth more than a thousand words

The Eurostoxx 50 and the S&P 500 have historically been fairly correlated. However, since 2009/2010 we clearly see them splitting, as Europe is rather stable and the US presents amazing returns.

Index fund investing as a simple strategy is more complex than what John C. Bogle says. There are too many options to choose from. For investing in Europe I am confident that ishares is the best, do you have any other suggestion?

Naturally many other factors have to be taken into account when deciding what to do in terms of investment, in particular which index funds to buy. But, as we know, there is no point in thinking too much about an investment strategy; even financial experts rarely beat the market. So, would you say there will be a crash soon in the US? Shall we invest in the EuroStoxx? Let me know your views!

Financial Statement – May, June and July

I have been very busy (and a bit lazy) but here is an update on my financial performance over the last three months.

Euros April July Gain
Mine 50,080 41,400 -8,680
M 40,520 24,200 -16,320
M Pension 30,000 31,000 1,000
My Pension 30,490 34,840 4,350
House guarantee 4,000 4,000 0
House paid 55,000 100,000 45,000
Total 210,090 235,440 25,350
Cash 90,600 65,600
Money to be spent in the apartment 44,585
Cash – debt 46,015

I am very happy to say that I have finally paid off my first real estate investment. The apartment is finally built and it is currently being furnished by the company who will manage it afterwards. We will start with short-term rental because currently it is more profitable. Porto is on the top European cities for tourism so my estimation is to have an average of 7% net profit per year. I am so excited to have my first passive income generator 🙂 And praying for the company to hurry up and start in August advertising the house on the online platforms (there are still a few things they have to do before: furniture, pictures, etc.).

Meanwhile, we have to decide what do with the 65k cash that we have. Any suggestions?

A hungry man is not a free man

Most of the people spend all their life driven by others’ expectations or by extrinsic motivation, as Dan Pink very accurately described in his book Drive: The surprising truth about that motivated us. It basically means we spend our lives looking for approval in the society mostly through money and/or recognition at work. However, this only gives us a temporary boost of motivation/satisfaction/happiness. The permanent happiness is found in the intrinsic motivation which, according to Dan Pink, relies on three principles: Autonomy, Purpose and Mastery.

My personal journey to financial freedom is actually part of a bigger journey to autonomy, to finding purpose and to having time to master all the issues I have always been interested in. However, I have to admit that the short-term focus is extrinsic, that currently I am focused on making money, not for the purpose of consumption, which is used by mostly for people as a way to fell that they belong to a certain social status, but for the purpose of saving, of being free from every-day bills. As Adlai Stevenson very wisely said A hungry man is not a free man. Therefore, only when free from obligation we can be free to enjoy life at its fullest.

Financial Statement – April

To all those people who think having a kid is very expensive.. it is just not true (in Europe)! Yes, there are a few things which are expensive and you need to spend money on (stroller, crib, baby monitor, etc) but apart from that there are so many cheap and cute options for baby clothes! I also use cloth diapers so basically I have spend 250 Euros initially and that is it! Also, the truth is you end up going out much less, which means less money spent on dinners/cinema/etc + gifts from family and friends + not falling into the trap of thinking you need to buy everything baby related = savings

Euros March April Gain
Mine 47,080 50,080 3,000
M 36,770 40,520 3,750
M Pension 30,000 30,000 0
My Pension 29,050 30,490 1,440
House guarantee 4,000 4,000 0
House paid 55,000 55,000 0
Total 201,900 210,090 8,190
Cash 83,850 90,600 6,750
Money to be spent in the apartment 44,585 44,585 0
Cash – debt 39,265 46,015 6,750

We have saved almost 65% of our salaries which is actually the number I always had in mind when I started this journey. I am pretty happy about that 🙂

Financial Statement – February and March

Those last months have been crazy! My son was born on the 6 of March and I couldn’t be more happy (and tired!). There was really no time for anything, I could now even separate what I saved in February and March. So, here is the financial statement of both months together:

Our savings in March (including February):

Euros January March Gain
Mine 40,750 47,080 6,330
M 30,770 36,770 6,000
M Pension 30,000 30,000 0
My Pension 26,170 29,050 2,880
House guarantee 4,000 4,000 0
House paid 55,000 55,000 0
Total 186,690 201,900 15,210
Cash 71,520 83,850 12,330
Money to be spent in the apartment 44,585 44,585 0
Cash – debt 26,935 39,265 12,330

Financial Statement – January

Our savings in January:

Euros December January Gain
Mine 38,800 40,750 1,950
M 28,200 30,770 2,570
M Pension 30,000 30,000 0
My Pension 24,750 26,170 1,420
House guarantee 4,000 4,000 0
House paid 55,000 55,000 0
Total 180,750 186,690 5,940
Cash 67,000 71,520 4,520
Money to be spent in the apartment 44,585 44,585 0
Cash – debt 22,415 26,935 4,520

This month we have spent more than usual, in particular taking into account that both our salaries have increased. We have actually saved a bit less than 50% of our salaries, without considering our pensions, which should not have happened.

However, I can partially explain the reasons: we bought some furniture we were still missing for our recent apartment and also some things we needed for the baby (will be born in 4 weeks!), including cloth diapers which will hopefully allow us to save money in the future. So, hopefully, next month we will be able to compensate and have a higher savings rate!

Our portfolio:

  • 1 apartment, which is still not 100% ready, so only from July onwards we will be able to rent it and start cashing-in
  • 31k in cash (excluding the money we will still spend in the apartment: paying the construction company + legal costs + furniture and including the house guarantee in our current apartment)
  • 56k in pension funds