Financial Statement – September 2016

I will update you with my financial statements, which include mine and my husband’s, every month. I haven’t started investing yet, so we only have cash and pension funds investments.

Euros
Mine 59 065 Result of saving 10/20% during 6 years and around 50% in the last 1.5 years
M 54 000 Similar saving rates
M Pension 27 000 This we can only get when we officially retire, i.e., around 65/67 years
My Pension 20 570 This can actually be withdrawn if I stay less than 5 years in my current workplace
Total 160 635
Cash 113 065 This is the money we have on your current accounts

This month we are moving into a bigger apartment, therefore we will have more expenses than usual, such as the guarantee for the house, the big car we are renting to do the move, and some new furniture. I am expecting at least 7k to be spent on that (the guarantee alone is 5.2k) but I will update my financial statements and include both earnings and expenses at the end of next month.

Rules to follow

1 – Look for a high paying job and save at least 50% of your salary

Yes, you need to work. Especially if you have no money saved. Not only you need a stable influx of money to start saving but also it is important for you to understand how society works; focusing on improving your social and technical skills, which will be highly important once you reach financial independence. Try to find a good compromise between working hours and pay but, honestly, from my point of view, there is no way you can build financial freedom if you do not have a high paying job. Look for a job that pays well, preferably in a city that is not expensive. I had to leave my beautiful low salary country to start my journey to financial freedom in Germany. Even though I was not very excited about moving in to Frankfurt at first, I have actually been positively surprised by the city in many aspects. Not only it was easy for my husband to come here and to also find a high paying job, I have managed to visit many places around Europe and I have learnt how much I love biking.

2 – Do not discuss or try to justify your financial decisions to others

In general, people feel they are taking the best financial decisions that can possibly be taken. However, remember that 99% of those people will work their ass off until they are 65 or more. Everyone is trying to convince you to buy instead of renting your current house? Nobody understands how you are saving/investing money while at the same time renting a house? Do not waste your energy trying to explain because 1) they will not understand and 2) it takes a long time to explain people the hidden costs and the lack of flexibility in owning a house, so you will be wasting your time too. Focus on your plan and accept the fact that, while most of the people would love to be financial independent at the age of 40, nobody wants to think strategically on how to reach it and especially are not willing to make any effort. Yes, you are alone!

3 – Treat yourself and others with compassion

Do not aim for perfection. Have a rational plan and stick to it 90% of the time. If one month due to whatever circumstances you end up not saving what you had expected – or not saving at all – do not blame yourself. Those are sunk costs and, again, do not waste your time or energy with guilt. This lifestyle is like a diet, yes, you will reach your destination sooner or later and yes, cheat days are allowed from time to time.

We, humans, have this natural tendency to compare ourselves with others. Try to be as smart as your neighbor, as interesting as your friend, feeling envy in a positive way, and do not try to strive with material goods. Feel compassion for those who do it. Unless they are Warren Buffet, they will never be 100% fulfilled. All the latest studies on happiness show that wealth is irrelevant so feel compassion for those who feel they can only achieve happiness with material goods.

4 – Make 2 lists: one with all the things that are highly valuable to you and another one with all the things that you would have more time to do more if you didn’t have a full-time job (some overlap of course)

Here are my lists:

Highly valuable/make me happy

  • Biking
  • Spending time with my husband (and, in the very near future, my son)
  • Learning/reading about psychology and economics
  • Writing
  • Being there in important steps of my family/friend’s lives
  • Doing something for others
  • Have an experience on starting a start-up full time
  • Be an example for my son and show him that being free is more important than being super wealthy, that taking care of himself/his health and happiness are more important than working for others
  • Doing yoga and understanding its benefits for the human body
  • Feeling I own my time

This I would love to do more if I wold have time

  • Surprising my husband more often and write about my feelings
  • Cooking
  • Read and write more
  • Learn German
  • Volunteer
  • Do more yoga
  • Be more mindful