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I only started my journey in 2020. As of end of July my investments made me only 1.60% of the salary I need to achieve financial independence (€48,000 a year). So, still a long way to go but I keep faith and keep growing my investments each month.
It's still ok, it was the best option a few years ago when I started, but we have better options with less compromises (no share lending, no exchange connectivity fees etc.) now. Degiro also screwed over investors from a lot of European countries by how they implemented the new KIID rules this year. That's why I recommend options like IBKR, Trade Republic and Scalable Capital now instead.
A Financial Planner told me Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $3M over time?
I stopped listening and taking financial advise from these TH-camrs, because at the end of the day, I end up with a bunch of confusing stocks without knowing when to take profit, In reality, all I needed was professional advice.
“Sonya Lee Mitchell” is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
About 61% of Americans are living paycheck to paycheck. Disposable income is NOT common in the US either. Putting in effort an priorities and you will get there.
@@twd949people live paycheck to paycheck in America because of consumerism. Also, it’s a lot easier to find good paying jobs for white collar workers in the US. I’ve seen similar jobs going for 140k pounds in London vs 285k dollars in New York.
FIRE is nice if you don't want to travel a lot when you actually have the time to. I reached my partial goal 3 years ago and was able to exit the 9 to 5 grind. But it was also at this point that i started to follow my hobbies more, doing more sports and generally travelling more. All in all this had quite a big impact of about 8% on my yearly expenses and would put me behind my partial goal again. I already made my choice and will stick to it. It only sets me back about 3-4 years on my initial plan but its something everyone that wants to retire early should consider. Your Lifestyle might change when you finally have more time to actually live your life
Hey! Interesting topic and very well explained. I am a mathematician and a financial advisor myself, helping europeans achieve FIRE. I would suggest looking into 3 things: 1 - I have two kids and the expenses have skyrocket since they started to do extracurricular activities and some autonomy. I would aim to at least a 10% increase cost increase for child taking as a base layer your current expenses (you may need a bigger house two cars or a thousand other things you can even think about) 2 - When doing simulations try to simulate the 4% rule with the 2-5 worst years at the very beginning, this of course has a huge impact if you withdraw money right after a market crash (and typically it is not that easy to avoid the initial withdrawals since you are used to live with certain amount of money 3 - I do not think we can take the last 100 years (the data used for the 4% rule ) as a base case for the next 100 years. The US stock market has experienced and insane performance. Given that it makes around 60% of equity portfolios, any disruption to that market could change the final result dramatically. I consider the US the best bet to achieve good performance, but still it seems to me that this concentration has to be thought through. Great job I have subscribe to your channel. Cheers
I don’t think you would be screwed, given how much thought you seem to put into all this planning I am sure you will have plan B, C and D. However, since you are trying to do some sort of financial planning I think you could benefit from a more exhaustive plan. I would suggest doing some research on the aforementioned costs: - Children: hardly anyone gets them right, things like holidays became increasingly expensive when kids grow up, but also clothing they can rarely use same clothes for more than a year, extracurricular activities - Housing: another one rarely well estimated and closely related to children. Be aware most people change their needs and wants quite a lot on housing - Markets not behaving as expected, if you are planning to retire before 50 I would advise to use 3% rule instead of 4% - Healthcare: I understand that you are in Europe so that should not be that big of a deal, however, some people need 24h care at home and this is not always covered by public healthcare programs (I am sure you know this better than me for your specific country) Other than that I think you are doing a great job and I am following your channel because you are producing very good and honest content. Congrats and thank you
Very nice video. Thank you Angelo. I think the most important lesson here is having a partner who is 'on the same page' as you with regard to financial independence. There are financial and non-financial reasons why this 'alignment' with your partner is a very good thing. If you are a single person or if your partner does not share your FIRE goals, then it is much more difficult IMHO. Thanks again!
Ohhhhhhhhhh so refreshing and wholesome to see a business channel with a healthy relationship with money - using them to give space for meaningful things in life instead of hustle culture and growing your capital at all costs
I’m not based in Europe but been working on my FI for 5 years now. I’m very close to my goal number wise but I wasn’t confident enough whether I should declare FI atm, especially with some negative lookout worldwide. Your video helped me stabilize my mind and gave me some courage. Thanks! and looking forward to more stuff from you :)
Depending on your age, and health. when you reach what you consider the total amount you need to live on, why not do a trial year. The trial year you live off your investment income , BUT STILL WORK not funny not a joke, you save all of your income from employment after deducting your employment expenses therefore you will save possibly 90% of your net income that year. This way you can actually see if your number crunch on income will actually work in reality. this one year of income forms your new revenue reserve fund , this revenue reserve fund is kept in cash broken down in 3 = 6= and 1 year interest producing savings accounts and not invested, but alway in cash. incase or when one of your investments fails to pay out for whatever reason and your projected income falls short which it will do through various reasons ( profit warnings cancelled dividend or government dictate a virus) then when your dividends/ income reverts to normal you then ease some money back into your revenue reserve fund to top it back up. a second point which i think you must look at is how your income comes in, in my case some months income are nearly double to the previous month but i require a set amount each month hence i want to retire on a high months earning above the amount i draw out so i have cash in hand to cover the lower income months. i fully understand you being cautious, i was it is like stepping out of a plane with a parachute you never know if the parachute will open, and giving up a job/ employment is stepping out of the plane, be guided by your gut as none can advise you when to retire only you.
I like how you’re so open and sharing about this personal topic. It really helps people aspiring to get to similar circumstances to achieve their financial goals. Keep it up!
Me and my wife are both 35. We have a bit over twice your current savings at the moment (in Spain). We are still halfway towards the money I think we need to retired (a bit over 1M or owning a flat and 600-700k liquid). I consider myself relatively frugal but I couldn't imagine spending as little as you do right now (we are based in Barcelona and we spend around 1400 eur/month EACH, rent being 1355 already, and we don't even live near the city center) I also consider your expected 7% expected anual returns to be extremely optimistic, I'm counting on a 3.3%. But in the end none of us can see the future so who knows whose prediction is more accurate. I wish you the best of luck getting to FI!
Wow, that's quite an achievement at 35! 🥂 I'm optimistic by nature. Either way, the 4% rule already assumes I won't earn a single extra euro once retired. There's no way it's going to be that way in reality. Thanks for sharing!
I genuinely don't understand how do people of that age (30-35) can have these incredible sums in savings. Can anyone explain some scenarios?is this achieved via high paying jobs over the course of your 20s and early 30s or is it generated from business, Inheritances... else?
Hey Angelo, I've been watching you since you started the channel, always happy to see your honest and transparent video. With this one, I have to just say the reality. Monthly costs of 1700 euro for family of 3 is not something you will be able to sustain long term. No freaking way. Just the factor that your kid will grow and so will the amount spent for the kid, there's simply no way it will stay at that monthly amount. Also in your monthly expenses, there was no medical care, no unexpected costs, no family events etc (yes, even these costs matter when you show stuff such as 17 euro phone plan in your monthly costs) transportation will be way more expensive as your kid will grow, you'll need a car etc. On top of it - prices of everything are going up constantly. I am really cheering for you man, as you're really one of the most transparent creators, but just wanted to write this for people here that might think "OH! I don't need a lot of money to retire! I can live like this!" -> As soon as you have a kid, no you can't. It wil lbecome your sole responsibility, meaning of life, you just won't cut the costs on your kids. Besides this, you will still need to keep adding your investments + you will need to "time" your retirement in economic uptrend, not downtrend.
@@innerpeacecalm369 I live in Europe. Yes, you have to pay for medicines you take at home but most people don't have insurance and almost every doctor is free.
Great video. It's always nice to hear a fellow EU citizen talk about FI(RE) goals in such an open and inspiring manner. Thank you very much for all this and keep up the good work, Angelo! I'm at nearly 25% of my Lean FI number with consistent monthly dividend payments after two years of aggressively saving and investing over 60% of my income. I'm going to keep doing the same for a few more years and then ease off a little bit. A total value of 500-600k€ will be more than enough for me to reach full FI using the 4% rule.
Love all the points you raised! Don’t forget that your living expenses will go up with inflation, so you need to calculate your FI number based on future living expenses, not just current!
@@AngeloColomboFiI'm still wondering what the actual plan is! So let's say you hit that 500k-ish mark as planned in 3,5 years. Then what? That's supposed to be your financial independence sum, because..... You'll be getting at least 4% on that 500k each and every year, which you can withdraw and cover your expenses, while keeping that 500k invested bringing more of that "4%" in each and every year thereafter? I doubt anyone will actually do precisely that, without looking for any kind of additional income sources. 4% over 100 years of history, taking inflation into account? Yeah, that's still not that promising to me. If you're 35 and live to be 85 that's 50 years still to come, for which you'd have to be covered and what's now an attractive investment, there's absolutely zero guarantee it still will be in 20-30-40 years. Plus no work = no insurance, who pays for for it? (so more costs there) and if your beautiful child(ren) decide they want to study abroad, or in another city, then what? I'd love to be able to do whatever the heck I want every day, all day long, but guess what: That's also something, that's going to be raising my monthly expenses by a lot! And I don't mean "flexing" stuff, I mean going out for a coffee, going to the beach, going skiing, etc. "simple" stuff. And then where's my (financial) freedom to go on a month-long holiday to a tropical paradise? Your (yeah, your very own!) 500k is easily over 1 million!
Thank you Angelo, I am so happy to have come across this channel. You radiate good energy, have clear explanations and I am aligned with your thinking. Many thanks and please keep it up!
Hi there! I have recently moved to Vienna from the Netherlands after finishing my study to live with my partner, and it's wonderful to hear advice from someone who has the same 'rules' applying to them. I might also have a look into Genossenschaft to reduce costs :) All in all, thank you for your insights, I hope to see you achieve FI soon!
Minimalism is an interesting thing, but you have to be careful not to be obsessed with saving and things, that is not healthy too, and not good to enjoy life sometimes. Freedom is also not thinking always the cost of the things and enjoy, so perhaps at a certain point enjoy the dividend for all the bullshit and stay relaxed. Amazing content👌🏻…
True, you have to make sure you don't cheap out on things/activities that would make your life more enjoyable. It's a learning experience and as we accumulate more wealth we also get more relaxed about smaller expenses, while still ensuring we don't waste our money on stuff we don't need. Thank you!
One thing people also forget as it gets pretty dark. If in the worst case scenario something happens to you and your wife, you are also setting your daughter up for a life with so much more security. Or even if some major medical issue hits, you have a pot you can drop into.
Major medical issues are covered by universal healthcare in Europe. Open heart surgery, cancer treatments, severe accidents = zero costs, all covered. Only if you wanna include some "alternative" treatment options such as Chinese Medicine you might have to reach into your own pocket.
You should really cover this possibility with a life insurance policy that covers at least 10 years of expenses, ideally more. Mine covers 10 years of my income
Really liked the video. I am not pursuing a full-FIRE but kind of a Barista FIRE instead. I work two different jobs now and in a near future I hope to just work in 1 of them (the one I enjoy) for 25h/week :)
Omg i just started in the journey of investments and you have been a master that I look up to. I'm 33y too, and I live very minimalistic too... But this video not only taught me but made me emotional about the real choices and reason for us to be in the life, love and enjoy the company of the people we care for!!! Thank you so very much 💖 success in your journey
The more I try to draw the retirement nearer, the harder I have to work, the less I start liking my job. So what I'm trying to do is actually focus more on live/balance and making the work enjoyable, while investing whatever I have leftover, without actively thinking about the retirement.
Makes sense to me! As I mentioned, it's even better if you can find a way to work on things you enjoy (and make money from them) already before retiring :)
@@AngeloColomboFi my grandpa was an inspiration to me. He taught as a professor in a university until his dying day at 88 y.o! I just realised that while chasing financial independence, I started to lose passion for work, and now I'm actively re-thinking my approach to work. I'm still well paid and can save about half of the income, so I realised nothing bad will happen if I don't push so hard for those extra dollars.
Hello, congratulations for this video! Yes, it is possible also in Europe, the sum of course is different from country to country. Greetings from Romania!
Thank you! True, luckily it's also pretty easy to relocate within Europe to another country. Nice, we actually went to our first financial independence meetup in Timisoara in 2017. We definitely need to see more of Romania!
@@AngeloColomboFi Absolutely :) Could be a little struggle in some countries, whereas a move to other EU country could lead you faster to financial independence. Super interesting fact about Timisoara and I would say that I would have loved to know more about FI in 2017 :D If you will come some day in Cluj area, let me know :) All the best for you & family and big thanks for your videos!
Thanks for sharing your experience. Based in NL, a mom of a 5 months old, I started to invest in ETF last year and came across your channel. Very insightful as always. Early retirement is a myth. The most important thing is to spend time on things you enjoy. A lot of retired people in NL are keeping on working by choice anyway.
It's amazing how you seem so happy in a non-latin way! I live in Portugal and I think I wouldn't have the same conditions as Austrians have, but having a comfortable FI before your 40s is amazing!
Thanks for sharing real number, I’m starting my investing journey and it’s been very helpful. Though I still can’t understand how to make financial planing in case of buying a house and having a kid, the housing is growing every year and it feels like all invested money will be spent on the house and kid rather than early retirement
Thank you for this insight. In the end , it is not the FI (Finanacial Independence) but TI (Time independence) we are looking for. So that we can spend quality time with our loved ones.
Thank you for the Inspiration. Even though I’ve started to work towards financial independence about 2,5 years ago, I‘ve lost track of my financial goals during the last couple of months due to personal reasons. I‘ve been spending a lot of money on really unnecessary and stupid stuff. I‘ve seen 2 of your videos and even though the information was not entirely new to me, you really gave me the kick I needed to get my act together and start working on my goals again. Thanks a lot!
Thank you, hearing that means a lot! It happens, don't be too hard on yourself. The fact that you're thinking about and working towards FI already means you're way ahead of the vast majority of people! 🙏
depends on the country you live & work. For example in poor countries such as Greece or Romania, your wage is 1200 euros in average & you need 600-700 for rent of a 2 bedroom apartment.
You are young, rather make it your life goal to work doing something you really love, than retiring on a skimpy budget being miserable and old with health steadily decreasing. People that have find this never want to retire = success! Plus if you're life unexpectedly ends earlier you have at least lived a life that you enjoyed. We are not made for sitting at home!
I couldn't be more grateful for how my life turned out and for how and with whom I get to spend my time, plus the freedom I have thanks to the choices I've made. But hey, you should definitely do what makes you happiest!
Hi Angelo, I made a spreadsheet to calculate my FI number, which at your rate of spending i'd reach it about 42 but I think 20000 euros is pretty low for me. I was aiming for around 40000 euros spending which would be at 49. I need to get a handle on my spending, I'm definitely haven't mastered minimalism like you both have. It's inspiring and this will help me improve on some areas! As always, thank you for the video!
Hi Tommy, retiring at 49 sounds pretty great to me - especially as a European and with 3,3k to spend/month! Thank you for sharing that. As always, my pleasure!
The Balkan countries are also very low cost of living. As long as you dont have to work for a living and have income as little as $1,500 monthly. Married couple can easily retire and remain very close geographically to EU.
Hello, Angelo! This is the first time I am seeing a video from you and you have won a new subscriber in the first minute of the video! I will definitely watch more of your videos and would like to watch your progress towards achieving financial independence. I wish to get there some day and I am ready to educate myself towards reaching this goal. Thank you for this video and keep it up with many more!
Hello Angelo, I couldn't agree more, I invest large amounts of my salary each month in the pursuit of financial freedom, but I wouldn't stop working either. I would just work for the pleasure, maybe cutting the parts I don't like in my job, having more liberty to do so. Beautiful project you have here ! Cheers !
Great video, I'm glad I just discovered your channel! An Austrian too here, I'm close to FIRE and moving to Switzerland a couple of years ago generating a substantially higher disposable income speeded up the process a lot. FIRE is much more difficult to attain in Switzerland due to considerably higher costs of living, but it has become realistic and within reach in Austria. I only have to figure out to what extent taxation will hit me in Austria in case I fully rely on my passive income from ETF dividends without having any further income from a job. I guess it will be 27.5% KESt. and nothing more. So great to see that FIRE is also achievable for us Europeans. I simply can't imagine working until 60 or beyond, I'm in my mid 40ies now and in a heavy burnout. FIRE has also become a medical necessity in my case.
Thank you! Great to see another Austrian on the FIRE journey! It's actually a lot better once you're retired tax-wise. For example in our case, my wife and I could each realize 11.693€/year in capital gains tax-free (based on current tax brackets) if we were to retire right now and not have regular income. Or 19.134€ each per year paying an average of 7,78% in taxes. That's compared to the usual 27,5% capital gains tax, but when your income is lower you can opt-in to have it calculated based on your tax bracket (called Regelbesteuerungsoption).
@@AngeloColomboFi Oh, thank you so much for this information! This is exactly what I wanted to contact a tax accountant for and ask the details. I'm a buy and hold investor, ETFs and high yield individual stocks, so I don't intend to sell stocks or ETFs and realise capital gains, I only wanna get my dividends and here's the question how they will be taxed. Dividend income for 2023 will approach 19-20k, before US withholding tax (15%). If I only have to pay around 8% tax in Austria on this dividend income, then I'm almost there. I need around 2000 EUR a month for a living, no crazy expenses.
So you moved to switzerland earned the money and then you moved to austria for retirement? why wouldn't you go to a bit warmer place then😅, what industry did you work in switzerland? I am starting my career in switzerland and I'm starting planning my financial future
I see you are investing in VWCE. Is there any reason you didn't choose the S&P 500 ETF? From what I can see, the S&P 500 has had better returns historically.
For now I don't really care about the FIRE number. I consider myself FI already but still need to "collect more coins" before considering the RE part. My main goal is to do the best I can to accumulate wealth using the best passive income practices and have a happy life according to my desires, if all goes well I will get to the RE part eventually.
Yeah, it's just a way to track if things are moving in the right direction. You'll probably want to work on something once you RE anyway. Thanks for sharing your point of view!
Hey Angelo, I also work in Vienna and my net worth is close to yours. I agree with you that family is the most valuable and fulfilling thing. Therefore I want to tell you that I have 3 kids and it is amazing. The love and fulfilment I get is just great. I highly recommend you go for more than early retirement and leisure. Invest in your family growth too so later on you have adult kids to be proud of. I would rather work more years than have less kids. Otherwise good luck with your strategy.
Angelo this is probably my favourite video of yours. It is informative, it is encouraging and it passes on wisdom. It really vibrates with me your message on how financial independence is worth striving for, how much it adds to fulfilling a life when you do not need to be in a salaried employment. There is nothing more valuable than keeping a vision alive. Please keep doing this from time to time. Thank you truly.
Thank you Angelo for another great video. My daughter is growing up very fast, in October she will turn 3! I completely understand what you have said about spending more time with the kid. I'm from Europe and have started the similar financial journey as yours 2 years back. Still a long long way to go for me, but I keep hanging.
My pleasure! Great to see another dad of a young girl who feels the same way. To me that confirms I'm setting the right priorities, thank you. Nice, even getting part of the way there will provide you with a lot more freedom ("FU money" to say no to your boss, financial safety net, extra income from investments etc.)!
Truely a wonderful channel, i'm still in my early 20s and this is something i would like to achieve in the long run as well, you are a great place for inspiration and knowledge, thank you! Aside from the book you mentioned by J. L. Collins, are there any book recommendations you could give me to really start understanding the world of finances and investing?
Thank you, hearing that makes me very happy! Ben Felix is another great resource on TH-cam, might answer some of your financial questions: youtube.com/@BenFelixCSI
You have excluded an important part of the equation. Taxes. Which is particularly high in Austria when it comes to investments. Paying approximately third of your profit to the tax office changes the math a lot. GL
Well, probably, I should have created a comment after I inquired a bit more about investing. I feel like I know merely nothing about it in sophistication. I am just 18, but already have self-earned 15k euro, I reside in the Netherlands. I don't have that stable income, unfortunately, since I am on the first year of Applied Physics Bachelor (1/4). Should I think about it know or should I wait a bit? I am trying to understand whether I should spend time figuring that out now, of vise versa - I ought to get down as soon as possible. I came across a bunch of various courses, but everything is so stuffed with marketing (from seller's side) that I could not push myself to finally buy it. And suddenly, I got upon a post on Reddit, where a dude recommended your channel. I am really amazed how open and sincere you are in your videos. I will definitely stick to you for a while)
One thing that I ask myself a lot: How do you incorporate investment tax (25% on return in Germany) and health insurance costs (mandatory to have) into your FI number of 0,5 Million? It seems books and bloggers don’t talk about this. Great video!
I wish the video also went into how much tax you would have to pay once you start using it. Also many countries have wealth tax. Does it affect you? How do you balance your portfolio accordingly?
consider also geo-arbitrage: there is no much sense to live in expensive Europe or extremely expensive USA if you are not working there and are not chained to the office/equipment/small kids anymore. there are plenty of places on this planet with much smaller cost of living and much better climate, for instance, non-touristic places in Philippines or Vietnam where you would need 500-700$/month for quite decent style of living. This reduces number for reaching FI down to 150 - 210k $ which is doable within reasonable amount of time for the majority of people living in the EU.
Very inspiring video! Many thanks. But why you did no consider the taxation of the 20.400 €/year? And do not understimate the cost increase when you daughter will grow up 😅 all the best 💪🏼
Hi Angelo, I really like your videos! Regarding your plans for the future, do you expect serious unforeseen events? I had three healthy children, one developed serious mental illness at age 18 and another had a brain injury in an accident at age 29. My life has completely changed, and everything that was predictable has evaporated.
Hi Angelo, Tiago here from Portugal. I've been trying to invest but never did it with the consistency needed. I'm starting a vwce etf on trade republic with small amounts.. my plan is to put all of the excess money towards that etf. As you might know Portugal has one of the lowest incomes in Europe but still, with the right attitude and discipline I'm sure I'll get there one step at a time.
Hi Tiago, thanks for sharing! 🥂 I think the habit of regularly putting aside and investing money will pay massive dividends long-term, even if the amounts are smaller at the moment.
@@AngeloColomboFi I agree. The reality of living in Portugal is indeed quite different from living in Austria. But my gut feeling tells me that is either invest now or live a miserable retirement.
I've seen that as well, Ben's videos are great. The truth is, nobody knows the exact safe withdrawal rate, since we don't know the future. Just like the last decade was predicted to have horrible stock market returns and yet here we are. Have you looked at the updated trinity study by the poor swiss? thepoorswiss.com/updated-trinity-study I simply use the 4% rule as a guideline for a goal I'm aiming for, it's extremely unlikely I won't earn a single euro once retired (or state pension at a certain age) or even that I'm that inflexible and always need to spend an inflation adjusted 4% of the initial amount, even in a market crash.
Agreed, i personally plan with 3%, however the exact number is not that important imo. I just wanted to state that we should consider the possibility of a withdrawal rate closer to 2% to not get into an uncomfortable situation once we actually plan to retire :)@@AngeloColomboFi
Thanks Angelo! But it seems the 4% rule doesn’t include monetary inflation. Over the years your monthly expenses will become more and more. Will this influence the total amount you need to save?
@StupidIsTheNorm How much are the property taxes in the UK? 8 years ago I used to rent for 11months in east London, back then the city was packed with foreigners. With the rent prices it seemed like some landlords can have a worry-free life, but the salaries to property prices ratio is not the greatest in the UK I think.
@@leoprg5330 it’s impossible for someone on minimum wage to buy a property in London. I buy in Teesside. If you buy through a ltd company, there is no tax for maybe 3.5 years. That’s because the money you loan the company as an individual to buy the property , can be taken out tax free because it’s a repayment of debt, and that is tax deductible
being there are no normal women or affordable homes, i semi retired at age 40 and only do 16 hours part time. this is enough for me as i am frugal. time is everything. in 54 now. its been great. i rent a room and also own a small camper, which i live in 80% of the time. i even have decent savings. i would never work full time in this broken system.
@@AngeloColomboFi women are only amazing in their 20s when they can create a family for you. after say 40, they are just expensive friends. i dont have many friends really. you have to be careful of potential relationship traps.
Just stay away from women! You doing fine up to now, don't blow it by thinking you need to do exactly what everyone else does!! A place to stay and a camper I can go anywhere in, pretty much when ever I want 🤔🤔🤔 No brainer my friend! Have a fantastic life!!!!!
@@888ssssWomen work these days, and you can adopt kids (or use a surrogate, if/where it's legal) if you want family with kids. But it seems like you're very focused on potential concrete benefits from the relationships instead of companionship and being interested in other people, so in this state of mind it's probably better that you find peace in more solitude life (if you ever want to change your outlook but can't on your own ("just think positively!" is such a bs advice), you might want to check therapy, though you'd need to search for a bit until you'd find a good therapist for such issue - they're usually more experienced in more common problems like depression and anxiety - but if you're fine where you're at that's good too, it's important to find a place in life that's comfortable for you).
My 29 square metre student apartment in Stockholm is 730€ a month 🤣, public transport per month with student price is 65€. Austrias cost of living seems pretty good 😅
my problem with passive income via investments is that in the worst case, all markets are correlated. As we saw in 2021, there is no such thing as a safe haven when it comes to a deflationary shock. Stock market crashes can take up to 13 years to break even. In those times, the income is low, while demand for liquidity is high, this creates selling pressure, eroding the income base.
Thanks for all the informative content Angelo, I love simplicity and honesty in your works. What are your takes on ETF-based private pension plans like Pensionfriend?
My pleasure Ebrahim! I'm not sure they're worth it, since in your example you pay a ton of fees each year, you have a limited selection of ETFs to choose from and I believe you can't touch your investments before a certain age and even then, you only save yourself part of the taxes when withdrawing.
@@AngeloColomboFi thanks for sharing your thoughts. Some of these Etf-based private pension plans (like Pensionfriend) are offering management fee of 0.79% annually, half of your capital gains will be taxable after the age of 62, and you can withdraw anytime before you turn 62 but of course you will miss the tax benefits, do you still think self investing in the low-cost etfs is a better option?
On my way as well! Stay strong! The way to the top is hard but after you reach closer it is becoming less and less stressful and even helps you understand value of time
Nope, health/social insurance payments are income-dependent. Thus, if I have little/no income apart from investments (which are not counted), I wouldn't need to pay more than 145€/month based on where rates currently stand in Austria. Btw, I'm self-employed anyway, so I'm already paying tons of that right now.
@@AngeloColomboFi I don't really know about Austria and I also don't know your industry/experience/salary but I live in Spain and if I were to move to switzerland and get a job in PM i would get 3x salary at 2x cost of living and 0.5x taxes. I guess it depends on where you live and what you do for work. But that is my plan as I have similar goals as you have and here in Spain it is almost impossible to accomplish them.
Very helpful video. I live in Germany and I believe there's a lot I could learn from this. when calculating your financial needs, you mentioned you need €1700/month. Is this pre-tax or post-tax because I assume that when you sell your ETFs, you'll be paying tax on this, right? also how much tax would you have to pay in Austria? will it be a mix of capital and income gains from ETF value increase and dividends? (I also noticed the ETF you selected is accumulative, so I assume the dividends are poured back into the ETF automatically without paying taxes on it until you decide to sell some ETFS, right?)
Thank you for this video Angelo. I really resonate with the conclusion you guys had that even now, during the accumulation phase you can gradually work more on projects of your choosing thanks to the security that the savings + low costs give.
I moved to Romania from the UK. I got to keep my UK job and salary so have been able to save more aggressively due to low living costs here. We too have a 9 month old boy. So far, my monthly savings are: 150 gbp in my 6% savings account with my bank 150 gbp into Indices and dividend stocks 100 gbp into my son's "trust fund" for when he's 18. I've also doubled my work place pension contribution to 300 gbp a month pre tax (due to a recent pay rise that pushed me into a new tax bracket - my entire pay rise went to the tax office so decided to redirect it into my pension instead) I still have quite a bit spare every month and I keep finding myself buying junk instead of investing or saving it which I need to start working on. Doing everything pretty blindly atm
Thank you for sharing! Doesn't seem like you're doing too bad and it looks like you're aware that there's room for improvement (obviously depending on your ideal lifestyle and financial goals). How's life in Romania (which city?) with a young kid?
I can't tell about Romania but in pretty similar Poland (poorer than western countries but still in the EU) living on western wage is a dream come true. We have the same standards, in some areas of life (safety, internet banking, taxes) it's even better than in the west and it's so much cheaper here. If any westerner is reading this, working remotely in Poland will be great, 100% recommend@@AngeloColomboFi
What is your FI number? :)
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I only started my journey in 2020. As of end of July my investments made me only 1.60% of the salary I need to achieve financial independence (€48,000 a year). So, still a long way to go but I keep faith and keep growing my investments each month.
Thank you Angelo! I notice you no longer mention Degiro, it's where I invested also because of your videos, do you no longer think it's good?
It's still ok, it was the best option a few years ago when I started, but we have better options with less compromises (no share lending, no exchange connectivity fees etc.) now. Degiro also screwed over investors from a lot of European countries by how they implemented the new KIID rules this year. That's why I recommend options like IBKR, Trade Republic and Scalable Capital now instead.
@@AngeloColomboFi thank you so much for your reply, you're the best :)
@@AngeloColomboFii m uninstalling!
A Financial Planner told me Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $3M over time?
Just try to diversify your portfolio to other market sectors, that way your investment is balanced and you don’t get to make so much losses.
I stopped listening and taking financial advise from these TH-camrs, because at the end of the day, I end up with a bunch of confusing stocks without knowing when to take profit, In reality, all I needed was professional advice.
That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this fiduciary??
“Sonya Lee Mitchell” is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.
Very useful to see someone living in Europe working towards FIRE. Disposable income is considerably smaller in most EU countries compared to the US
Glad you liked it!🙏
About 61% of Americans are living paycheck to paycheck. Disposable income is NOT common in the US either. Putting in effort an priorities and you will get there.
about 61% of people are not the target of fire, top 10-20% of earners i.e. skilled workers are the the target so your argument doesn't work@@twd949
@@twd949people live paycheck to paycheck in America because of consumerism. Also, it’s a lot easier to find good paying jobs for white collar workers in the US. I’ve seen similar jobs going for 140k pounds in London vs 285k dollars in New York.
FIRE is nice if you don't want to travel a lot when you actually have the time to. I reached my partial goal 3 years ago and was able to exit the 9 to 5 grind. But it was also at this point that i started to follow my hobbies more, doing more sports and generally travelling more. All in all this had quite a big impact of about 8% on my yearly expenses and would put me behind my partial goal again. I already made my choice and will stick to it. It only sets me back about 3-4 years on my initial plan but its something everyone that wants to retire early should consider. Your Lifestyle might change when you finally have more time to actually live your life
Love the cozy feeling that the vids on this channel have. Grounded, down to earth - I've been enjoying lurking on this channel for a while!
Thank you, I'm happy to hear that!
Hey! Interesting topic and very well explained. I am a mathematician and a financial advisor myself, helping europeans achieve FIRE. I would suggest looking into 3 things:
1 - I have two kids and the expenses have skyrocket since they started to do extracurricular activities and some autonomy. I would aim to at least a 10% increase cost increase for child taking as a base layer your current expenses (you may need a bigger house two cars or a thousand other things you can even think about)
2 - When doing simulations try to simulate the 4% rule with the 2-5 worst years at the very beginning, this of course has a huge impact if you withdraw money right after a market crash (and typically it is not that easy to avoid the initial withdrawals since you are used to live with certain amount of money
3 - I do not think we can take the last 100 years (the data used for the 4% rule ) as a base case for the next 100 years. The US stock market has experienced and insane performance. Given that it makes around 60% of equity portfolios, any disruption to that market could change the final result dramatically. I consider the US the best bet to achieve good performance, but still it seems to me that this concentration has to be thought through.
Great job I have subscribe to your channel. Cheers
Thank you, I appreciate your detailed insights, it's clear you put a lot of thought into them!
Indeed
Markets might be crashing a lot more often now than the last 100y
If it crashes and doesn't recover for a few years they might be screwed
Very good point. Predicting the future based on the past rarely works too well...
Screwed how? We're 33 and 30 years old and planning to retire before 40. What's the worst case scenario here really? We go work part time? 😅
I don’t think you would be screwed, given how much thought you seem to put into all this planning I am sure you will have plan B, C and D. However, since you are trying to do some sort of financial planning I think you could benefit from a more exhaustive plan. I would suggest doing some research on the aforementioned costs:
- Children: hardly anyone gets them right, things like holidays became increasingly expensive when kids grow up, but also clothing they can rarely use same clothes for more than a year, extracurricular activities
- Housing: another one rarely well estimated and closely related to children. Be aware most people change their needs and wants quite a lot on housing
- Markets not behaving as expected, if you are planning to retire before 50 I would advise to use 3% rule instead of 4%
- Healthcare: I understand that you are in Europe so that should not be that big of a deal, however, some people need 24h care at home and this is not always covered by public healthcare programs (I am sure you know this better than me for your specific country)
Other than that I think you are doing a great job and I am following your channel because you are producing very good and honest content. Congrats and thank you
Very nice video. Thank you Angelo. I think the most important lesson here is having a partner who is 'on the same page' as you with regard to financial independence. There are financial and non-financial reasons why this 'alignment' with your partner is a very good thing. If you are a single person or if your partner does not share your FIRE goals, then it is much more difficult IMHO. Thanks again!
I couldn't agree more! Sorry about the late response btw!😅
Ohhhhhhhhhh so refreshing and wholesome to see a business channel with a healthy relationship with money - using them to give space for meaningful things in life instead of hustle culture and growing your capital at all costs
You are now officially my favourite youtube channel
Thank you, you made my day!
Thanks for sharing! You are really one of my favorite finance/investment channels on TH-cam 😄
You made my evening, thank you for saying that!
Following from Portugal. Let's go!
Happy to have you here! Cheers from Vienna!
I’m not based in Europe but been working on my FI for 5 years now. I’m very close to my goal number wise but I wasn’t confident enough whether I should declare FI atm, especially with some negative lookout worldwide. Your video helped me stabilize my mind and gave me some courage. Thanks! and looking forward to more stuff from you :)
Happy to hear that! I'm glad you still found it useful as a non-European :)
Depending on your age, and health. when you reach what you consider the total amount you need to live on, why not do a trial year. The trial year you live off your investment income , BUT STILL WORK not funny not a joke, you save all of your income from employment after deducting your employment expenses therefore you will save possibly 90% of your net income that year. This way you can actually see if your number crunch on income will actually work in reality. this one year of income forms your new revenue reserve fund , this revenue reserve fund is kept in cash broken down in 3 = 6= and 1 year interest producing savings accounts and not invested, but alway in cash. incase or when one of your investments fails to pay out for whatever reason and your projected income falls short which it will do through various reasons ( profit warnings cancelled dividend or government dictate a virus) then when your dividends/ income reverts to normal you then ease some money back into your revenue reserve fund to top it back up.
a second point which i think you must look at is how your income comes in, in my case some months income are nearly double to the previous month but i require a set amount each month hence i want to retire on a high months earning above the amount i draw out so i have cash in hand to cover the lower income months.
i fully understand you being cautious, i was it is like stepping out of a plane with a parachute you never know if the parachute will open, and giving up a job/ employment is stepping out of the plane, be guided by your gut as none can advise you when to retire only you.
I like how you’re so open and sharing about this personal topic. It really helps people aspiring to get to similar circumstances to achieve their financial goals. Keep it up!
Me and my wife are both 35. We have a bit over twice your current savings at the moment (in Spain). We are still halfway towards the money I think we need to retired (a bit over 1M or owning a flat and 600-700k liquid).
I consider myself relatively frugal but I couldn't imagine spending as little as you do right now (we are based in Barcelona and we spend around 1400 eur/month EACH, rent being 1355 already, and we don't even live near the city center)
I also consider your expected 7% expected anual returns to be extremely optimistic, I'm counting on a 3.3%.
But in the end none of us can see the future so who knows whose prediction is more accurate.
I wish you the best of luck getting to FI!
Is Spain a good country to invest in the national ETF index?
@@marcdzik I wouldn't say so. Decent dividends, poor growth prospects.
@@SantoRedentor Thank you for your opinions from the inside
Wow, that's quite an achievement at 35! 🥂
I'm optimistic by nature. Either way, the 4% rule already assumes I won't earn a single extra euro once retired. There's no way it's going to be that way in reality. Thanks for sharing!
I genuinely don't understand how do people of that age (30-35) can have these incredible sums in savings. Can anyone explain some scenarios?is this achieved via high paying jobs over the course of your 20s and early 30s or is it generated from business, Inheritances... else?
Greetings from Vienna! Nice to know there's other people with crazy ideas like me.
Nice, we need more like-minded people here!🙏
Hey Angelo, I've been watching you since you started the channel, always happy to see your honest and transparent video. With this one, I have to just say the reality. Monthly costs of 1700 euro for family of 3 is not something you will be able to sustain long term. No freaking way. Just the factor that your kid will grow and so will the amount spent for the kid, there's simply no way it will stay at that monthly amount. Also in your monthly expenses, there was no medical care, no unexpected costs, no family events etc (yes, even these costs matter when you show stuff such as 17 euro phone plan in your monthly costs) transportation will be way more expensive as your kid will grow, you'll need a car etc. On top of it - prices of everything are going up constantly. I am really cheering for you man, as you're really one of the most transparent creators, but just wanted to write this for people here that might think "OH! I don't need a lot of money to retire! I can live like this!" -> As soon as you have a kid, no you can't. It wil lbecome your sole responsibility, meaning of life, you just won't cut the costs on your kids. Besides this, you will still need to keep adding your investments + you will need to "time" your retirement in economic uptrend, not downtrend.
There are no medical care expenses in Europe
Who told you that??!!! Still have to pay for your medicine, some special dr are not axeepting insurance and just this year rent went up every 6 month.
@@cuter. of course there are, they are just paid in form of a tax
@@innerpeacecalm369 I live in Europe. Yes, you have to pay for medicines you take at home but most people don't have insurance and almost every doctor is free.
@@johnniewalker230 Duh.... But we are talking about budgeting, it's not an expense for insurance like in the us
This was exactly what I was looking for, an example in Europe. Thank you :D
Happy to hear that!
What an awesome channel you have! You got yourself a new fan!
Great video. It's always nice to hear a fellow EU citizen talk about FI(RE) goals in such an open and inspiring manner. Thank you very much for all this and keep up the good work, Angelo!
I'm at nearly 25% of my Lean FI number with consistent monthly dividend payments after two years of aggressively saving and investing over 60% of my income. I'm going to keep doing the same for a few more years and then ease off a little bit. A total value of 500-600k€ will be more than enough for me to reach full FI using the 4% rule.
Thank you! That's amazing progress in such a short amount of time, congrats and thank you for sharing!
Love all the points you raised! Don’t forget that your living expenses will go up with inflation, so you need to calculate your FI number based on future living expenses, not just current!
Happy to hear that Alisha! Of course, as we get closer to FI and our living expenses change, we'll keep the number we need to hit up to date.
@@AngeloColomboFiI'm still wondering what the actual plan is! So let's say you hit that 500k-ish mark as planned in 3,5 years. Then what? That's supposed to be your financial independence sum, because..... You'll be getting at least 4% on that 500k each and every year, which you can withdraw and cover your expenses, while keeping that 500k invested bringing more of that "4%" in each and every year thereafter?
I doubt anyone will actually do precisely that, without looking for any kind of additional income sources. 4% over 100 years of history, taking inflation into account? Yeah, that's still not that promising to me. If you're 35 and live to be 85 that's 50 years still to come, for which you'd have to be covered and what's now an attractive investment, there's absolutely zero guarantee it still will be in 20-30-40 years. Plus no work = no insurance, who pays for for it? (so more costs there) and if your beautiful child(ren) decide they want to study abroad, or in another city, then what?
I'd love to be able to do whatever the heck I want every day, all day long, but guess what: That's also something, that's going to be raising my monthly expenses by a lot! And I don't mean "flexing" stuff, I mean going out for a coffee, going to the beach, going skiing, etc. "simple" stuff.
And then where's my (financial) freedom to go on a month-long holiday to a tropical paradise? Your (yeah, your very own!) 500k is easily over 1 million!
Thank you Angelo, I am so happy to have come across this channel. You radiate good energy, have clear explanations and I am aligned with your thinking. Many thanks and please keep it up!
Hi there!
I have recently moved to Vienna from the Netherlands after finishing my study to live with my partner, and it's wonderful to hear advice from someone who has the same 'rules' applying to them. I might also have a look into Genossenschaft to reduce costs :)
All in all, thank you for your insights, I hope to see you achieve FI soon!
Minimalism is an interesting thing, but you have to be careful not to be obsessed with saving and things, that is not healthy too, and not good to enjoy life sometimes. Freedom is also not thinking always the cost of the things and enjoy, so perhaps at a certain point enjoy the dividend for all the bullshit and stay relaxed. Amazing content👌🏻…
True, you have to make sure you don't cheap out on things/activities that would make your life more enjoyable. It's a learning experience and as we accumulate more wealth we also get more relaxed about smaller expenses, while still ensuring we don't waste our money on stuff we don't need. Thank you!
One thing people also forget as it gets pretty dark. If in the worst case scenario something happens to you and your wife, you are also setting your daughter up for a life with so much more security. Or even if some major medical issue hits, you have a pot you can drop into.
I hope we'll all be around till we're 90 years old and wrinkly, but yes, well said!🙏
Enjoy your 30ies, once you flip over 40 you feel your aging in many parts of the body…
One more reason to aim for early retirement ;)
Major medical issues are covered by universal healthcare in Europe. Open heart surgery, cancer treatments, severe accidents = zero costs, all covered. Only if you wanna include some "alternative" treatment options such as Chinese Medicine you might have to reach into your own pocket.
You should really cover this possibility with a life insurance policy that covers at least 10 years of expenses, ideally more. Mine covers 10 years of my income
Really liked the video.
I am not pursuing a full-FIRE but kind of a Barista FIRE instead.
I work two different jobs now and in a near future I hope to just work in 1 of them (the one I enjoy) for 25h/week :)
Happy to hear that! Nice, I hope it works out! :)
Great video! Simple and effective explanation of the 4% rule
Omg i just started in the journey of investments and you have been a master that I look up to. I'm 33y too, and I live very minimalistic too... But this video not only taught me but made me emotional about the real choices and reason for us to be in the life, love and enjoy the company of the people we care for!!! Thank you so very much 💖 success in your journey
I am living in Vienna and I will follow your channel
Nice, happy to have you here!
Thank you so much for all the information shared. And congratulations for all things you achieved 🎉
You are very welcome! Thank you Sergio!🙏
I can’t believe I found your channel just now, a year after I left Austria! 😅
Where did you end up moving to and are you happy with your decision so far?
One of the best video on FI.. very realistic and good logic and now i can think actually towards this goal.. thank you for this video..🎉
I'm very happy to hear that, thank you!
Amazing video, simple and straightforward.
Thank you! 🙏
The more I try to draw the retirement nearer, the harder I have to work, the less I start liking my job. So what I'm trying to do is actually focus more on live/balance and making the work enjoyable, while investing whatever I have leftover, without actively thinking about the retirement.
Makes sense to me! As I mentioned, it's even better if you can find a way to work on things you enjoy (and make money from them) already before retiring :)
@@AngeloColomboFi my grandpa was an inspiration to me. He taught as a professor in a university until his dying day at 88 y.o!
I just realised that while chasing financial independence, I started to lose passion for work, and now I'm actively re-thinking my approach to work.
I'm still well paid and can save about half of the income, so I realised nothing bad will happen if I don't push so hard for those extra dollars.
Hello, congratulations for this video! Yes, it is possible also in Europe, the sum of course is different from country to country. Greetings from Romania!
Thank you! True, luckily it's also pretty easy to relocate within Europe to another country. Nice, we actually went to our first financial independence meetup in Timisoara in 2017. We definitely need to see more of Romania!
@@AngeloColomboFi Absolutely :) Could be a little struggle in some countries, whereas a move to other EU country could lead you faster to financial independence. Super interesting fact about Timisoara and I would say that I would have loved to know more about FI in 2017 :D If you will come some day in Cluj area, let me know :) All the best for you & family and big thanks for your videos!
Thank you very much for the video and all of the information you shared with us! Your channel is awesome!
Thanks a lot Angelo. You inspire us.
Happy to hear that :)
Thanks for your video! you are such an inspiration!
Always a pleasure, thank you for being here!
Nice summary of how to FIRE. And some great hands on tips on how to move forward 👍.
Thank you!🙏
Phenomenal video, thank you for sharing!
Thank you! 🙏
I've been trying my best lately to make videos that are more useful, not just talk about whatever is happening short-term in markets etc.
Very nice video. Thank you Angelo. Have a nice day!
Thanks for sharing your experience. Based in NL, a mom of a 5 months old, I started to invest in ETF last year and came across your channel. Very insightful as always. Early retirement is a myth. The most important thing is to spend time on things you enjoy. A lot of retired people in NL are keeping on working by choice anyway.
It's amazing how you seem so happy in a non-latin way! I live in Portugal and I think I wouldn't have the same conditions as Austrians have, but having a comfortable FI before your 40s is amazing!
you would have even better conditions with the warmer climate
Thanks for sharing real number, I’m starting my investing journey and it’s been very helpful. Though I still can’t understand how to make financial planing in case of buying a house and having a kid, the housing is growing every year and it feels like all invested money will be spent on the house and kid rather than early retirement
Thank you for this insight. In the end , it is not the FI (Finanacial Independence) but TI (Time independence) we are looking for. So that we can spend quality time with our loved ones.
Well said! 🙏
Nice video. I appreciated you sharing the trade-off between accumulating and living the present in a way you're happy with as well
Thank you Diana!
Thank you for the Inspiration. Even though I’ve started to work towards financial independence about 2,5 years ago, I‘ve lost track of my financial goals during the last couple of months due to personal reasons. I‘ve been spending a lot of money on really unnecessary and stupid stuff. I‘ve seen 2 of your videos and even though the information was not entirely new to me, you really gave me the kick I needed to get my act together and start working on my goals again. Thanks a lot!
Thank you, hearing that means a lot! It happens, don't be too hard on yourself. The fact that you're thinking about and working towards FI already means you're way ahead of the vast majority of people! 🙏
depends on the country you live & work. For example in poor countries such as Greece or Romania, your wage is 1200 euros in average & you need 600-700 for rent of a 2 bedroom apartment.
Congrats on your progress. I love the way you think.
Thank you, I'm happy to hear that!
great video doing this myself started little late as i am 40 now but still going strong . Love the Maneki Neko remake looks cool
Feel these videos would be better with chapters. Would be better for youtube/Google algorithms. Great video.
Congratz on your progress. I've just started so im about 6.5 years behind.😂
Thank you! No worries, I'm pretty sure in a few years you'll be happy you started thinking about these things already now :)
As a young dad of two boys I’d suggest reserving extra budget for kids education and development, this can easily double the necessary FIRE number
You are young, rather make it your life goal to work doing something you really love, than retiring on a skimpy budget being miserable and old with health steadily decreasing. People that have find this never want to retire = success!
Plus if you're life unexpectedly ends earlier you have at least lived a life that you enjoyed. We are not made for sitting at home!
I couldn't be more grateful for how my life turned out and for how and with whom I get to spend my time, plus the freedom I have thanks to the choices I've made. But hey, you should definitely do what makes you happiest!
Hi Angelo, I made a spreadsheet to calculate my FI number, which at your rate of spending i'd reach it about 42 but I think 20000 euros is pretty low for me. I was aiming for around 40000 euros spending which would be at 49. I need to get a handle on my spending, I'm definitely haven't mastered minimalism like you both have. It's inspiring and this will help me improve on some areas! As always, thank you for the video!
Hi Tommy, retiring at 49 sounds pretty great to me - especially as a European and with 3,3k to spend/month! Thank you for sharing that. As always, my pleasure!
@@AngeloColomboFi 3.2 k is my salary now and i can ensure that u can enjoy life with no stress with that salary
The Balkan countries are also very low cost of living. As long as you dont have to work for a living and have income as little as $1,500 monthly. Married couple can easily retire and remain very close geographically to EU.
Motivating! Great Video!
Thanks buddy!🙏
Hello, Angelo! This is the first time I am seeing a video from you and you have won a new subscriber in the first minute of the video! I will definitely watch more of your videos and would like to watch your progress towards achieving financial independence. I wish to get there some day and I am ready to educate myself towards reaching this goal. Thank you for this video and keep it up with many more!
Happy to hear that, welcome! 🥂
Inspirational ✨
Thank you Natasha!
Hello Angelo, I couldn't agree more, I invest large amounts of my salary each month in the pursuit of financial freedom, but I wouldn't stop working either. I would just work for the pleasure, maybe cutting the parts I don't like in my job, having more liberty to do so. Beautiful project you have here ! Cheers !
That sounds pretty great! I'm still working on that myself, I'd also love to outsource/cut a few things I don't enjoy working on as much. Thank you!
Great video, I'm glad I just discovered your channel! An Austrian too here, I'm close to FIRE and moving to Switzerland a couple of years ago generating a substantially higher disposable income speeded up the process a lot. FIRE is much more difficult to attain in Switzerland due to considerably higher costs of living, but it has become realistic and within reach in Austria. I only have to figure out to what extent taxation will hit me in Austria in case I fully rely on my passive income from ETF dividends without having any further income from a job. I guess it will be 27.5% KESt. and nothing more. So great to see that FIRE is also achievable for us Europeans. I simply can't imagine working until 60 or beyond, I'm in my mid 40ies now and in a heavy burnout. FIRE has also become a medical necessity in my case.
Thank you! Great to see another Austrian on the FIRE journey! It's actually a lot better once you're retired tax-wise. For example in our case, my wife and I could each realize 11.693€/year in capital gains tax-free (based on current tax brackets) if we were to retire right now and not have regular income. Or 19.134€ each per year paying an average of 7,78% in taxes. That's compared to the usual 27,5% capital gains tax, but when your income is lower you can opt-in to have it calculated based on your tax bracket (called Regelbesteuerungsoption).
@@AngeloColomboFi Oh, thank you so much for this information! This is exactly what I wanted to contact a tax accountant for and ask the details. I'm a buy and hold investor, ETFs and high yield individual stocks, so I don't intend to sell stocks or ETFs and realise capital gains, I only wanna get my dividends and here's the question how they will be taxed. Dividend income for 2023 will approach 19-20k, before US withholding tax (15%). If I only have to pay around 8% tax in Austria on this dividend income, then I'm almost there. I need around 2000 EUR a month for a living, no crazy expenses.
That's fantastic, cheers to you being that close! 🥂
So you moved to switzerland earned the money and then you moved to austria for retirement? why wouldn't you go to a bit warmer place then😅, what industry did you work in switzerland? I am starting my career in switzerland and I'm starting planning my financial future
I see you are investing in VWCE. Is there any reason you didn't choose the S&P 500 ETF? From what I can see, the S&P 500 has had better returns historically.
Thanks very much Angelo 👍👍👍👍.
For now I don't really care about the FIRE number. I consider myself FI already but still need to "collect more coins" before considering the RE part. My main goal is to do the best I can to accumulate wealth using the best passive income practices and have a happy life according to my desires, if all goes well I will get to the RE part eventually.
Yeah, it's just a way to track if things are moving in the right direction. You'll probably want to work on something once you RE anyway. Thanks for sharing your point of view!
Nice goal, but wait till the kids are in school and want ski lessons every winter 😅
Brilliant video
Thank you Owen!
Hey Angelo, I also work in Vienna and my net worth is close to yours. I agree with you that family is the most valuable and fulfilling thing.
Therefore I want to tell you that I have 3 kids and it is amazing. The love and fulfilment I get is just great. I highly recommend you go for more than early retirement and leisure.
Invest in your family growth too so later on you have adult kids to be proud of. I would rather work more years than have less kids.
Otherwise good luck with your strategy.
great video
thanks for your transparency
You're very welcome Richard!
Angelo this is probably my favourite video of yours. It is informative, it is encouraging and it passes on wisdom. It really vibrates with me your message on how financial independence is worth striving for, how much it adds to fulfilling a life when you do not need to be in a salaried employment. There is nothing more valuable than keeping a vision alive. Please keep doing this from time to time. Thank you truly.
Thank you Renato, I'm so happy to hear you say that! Will do! 🙏
i don't wanna retire, i love my job, it pays really well and it gives me plenty of free time
That's great, in your case there is no point in retiring!
Thank you Angelo for another great video. My daughter is growing up very fast, in October she will turn 3! I completely understand what you have said about spending more time with the kid. I'm from Europe and have started the similar financial journey as yours 2 years back. Still a long long way to go for me, but I keep hanging.
My pleasure! Great to see another dad of a young girl who feels the same way. To me that confirms I'm setting the right priorities, thank you. Nice, even getting part of the way there will provide you with a lot more freedom ("FU money" to say no to your boss, financial safety net, extra income from investments etc.)!
Hallo, tolles Video! Ich wohne auch in Wien, ich würde mich sehr freuen dich/euch kennenzulernen! LG Todor
Love your content, thanks for this!
You're very welcome!🙏
Truely a wonderful channel, i'm still in my early 20s and this is something i would like to achieve in the long run as well, you are a great place for inspiration and knowledge, thank you! Aside from the book you mentioned by J. L. Collins, are there any book recommendations you could give me to really start understanding the world of finances and investing?
Thank you, hearing that makes me very happy! Ben Felix is another great resource on TH-cam, might answer some of your financial questions: youtube.com/@BenFelixCSI
Great video. Thank you 😃
My pleasure, Eva!
You have excluded an important part of the equation. Taxes. Which is particularly high in Austria when it comes to investments. Paying approximately third of your profit to the tax office changes the math a lot. GL
Great insights!
Thank you!
Well, probably, I should have created a comment after I inquired a bit more about investing. I feel like I know merely nothing about it in sophistication. I am just 18, but already have self-earned 15k euro, I reside in the Netherlands. I don't have that stable income, unfortunately, since I am on the first year of Applied Physics Bachelor (1/4). Should I think about it know or should I wait a bit? I am trying to understand whether I should spend time figuring that out now, of vise versa - I ought to get down as soon as possible.
I came across a bunch of various courses, but everything is so stuffed with marketing (from seller's side) that I could not push myself to finally buy it. And suddenly, I got upon a post on Reddit, where a dude recommended your channel. I am really amazed how open and sincere you are in your videos. I will definitely stick to you for a while)
Not me living in Munich almost having no money left every month due to extremely high rent prices
One thing that I ask myself a lot: How do you incorporate investment tax (25% on return in Germany) and health insurance costs (mandatory to have) into your FI number of 0,5 Million? It seems books and bloggers don’t talk about this. Great video!
Thank you! I actually talked about that here :)
th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
Mr. Money Mustache is awesome! He has also inspired me to be more financially savvy and be more minimalistic.
I wish the video also went into how much tax you would have to pay once you start using it. Also many countries have wealth tax. Does it affect you? How do you balance your portfolio accordingly?
consider also geo-arbitrage: there is no much sense to live in expensive Europe or extremely expensive USA if you are not working there and are not chained to the office/equipment/small kids anymore. there are plenty of places on this planet with much smaller cost of living and much better climate, for instance, non-touristic places in Philippines or Vietnam where you would need 500-700$/month for quite decent style of living. This reduces number for reaching FI down to 150 - 210k $ which is doable within reasonable amount of time for the majority of people living in the EU.
Very inspiring video! Many thanks. But why you did no consider the taxation of the 20.400 €/year?
And do not understimate the cost increase when you daughter will grow up 😅 all the best 💪🏼
Hi Angelo, I really like your videos! Regarding your plans for the future, do you expect serious unforeseen events? I had three healthy children, one developed serious mental illness at age 18 and another had a brain injury in an accident at age 29. My life has completely changed, and everything that was predictable has evaporated.
Hi Angelo, Tiago here from Portugal. I've been trying to invest but never did it with the consistency needed. I'm starting a vwce etf on trade republic with small amounts.. my plan is to put all of the excess money towards that etf. As you might know Portugal has one of the lowest incomes in Europe but still, with the right attitude and discipline I'm sure I'll get there one step at a time.
Hi Tiago, thanks for sharing! 🥂
I think the habit of regularly putting aside and investing money will pay massive dividends long-term, even if the amounts are smaller at the moment.
@@AngeloColomboFi I agree. The reality of living in Portugal is indeed quite different from living in Austria. But my gut feeling tells me that is either invest now or live a miserable retirement.
Concerning the 4% rule, i highly recommend watching Ben Felix's video about how the true value is closer to 2,7% in reality
I've seen that as well, Ben's videos are great. The truth is, nobody knows the exact safe withdrawal rate, since we don't know the future. Just like the last decade was predicted to have horrible stock market returns and yet here we are. Have you looked at the updated trinity study by the poor swiss? thepoorswiss.com/updated-trinity-study
I simply use the 4% rule as a guideline for a goal I'm aiming for, it's extremely unlikely I won't earn a single euro once retired (or state pension at a certain age) or even that I'm that inflexible and always need to spend an inflation adjusted 4% of the initial amount, even in a market crash.
Agreed, i personally plan with 3%, however the exact number is not that important imo. I just wanted to state that we should consider the possibility of a withdrawal rate closer to 2% to not get into an uncomfortable situation once we actually plan to retire :)@@AngeloColomboFi
Thanks Angelo! But it seems the 4% rule doesn’t include monetary inflation. Over the years your monthly expenses will become more and more. Will this influence the total amount you need to save?
Thanks man good vid!
My pleasure!
I did it in 5 years in the U.K. I used property as the medium and not shares.
Good luck to you both
That's fantastic, cheers to that! 🥂
@@AngeloColomboFi I’ve subscribed Angelo. Thank you
@StupidIsTheNorm How much are the property taxes in the UK? 8 years ago I used to rent for 11months in east London, back then the city was packed with foreigners. With the rent prices it seemed like some landlords can have a worry-free life, but the salaries to property prices ratio is not the greatest in the UK I think.
@@leoprg5330 it’s impossible for someone on minimum wage to buy a property in London. I buy in Teesside.
If you buy through a ltd company, there is no tax for maybe 3.5 years. That’s because the money you loan the company as an individual to buy the property , can be taken out tax free because it’s a repayment of debt, and that is tax deductible
being there are no normal women or affordable homes, i semi retired at age 40 and only do 16 hours part time. this is enough for me as i am frugal. time is everything. in 54 now. its been great. i rent a room and also own a small camper, which i live in 80% of the time. i even have decent savings. i would never work full time in this broken system.
Thank you for sharing! I hope you still meet an amazing woman though. I highly recommend Eastern European women btw based on personal experience :)
@@AngeloColomboFi women are only amazing in their 20s when they can create a family for you. after say 40, they are just expensive friends. i dont have many friends really. you have to be careful of potential relationship traps.
Just stay away from women!
You doing fine up to now, don't blow it by thinking you need to do exactly what everyone else does!!
A place to stay and a camper I can go anywhere in, pretty much when ever I want 🤔🤔🤔
No brainer my friend! Have a fantastic life!!!!!
@@888ssssWomen work these days, and you can adopt kids (or use a surrogate, if/where it's legal) if you want family with kids. But it seems like you're very focused on potential concrete benefits from the relationships instead of companionship and being interested in other people, so in this state of mind it's probably better that you find peace in more solitude life (if you ever want to change your outlook but can't on your own ("just think positively!" is such a bs advice), you might want to check therapy, though you'd need to search for a bit until you'd find a good therapist for such issue - they're usually more experienced in more common problems like depression and anxiety - but if you're fine where you're at that's good too, it's important to find a place in life that's comfortable for you).
@@888ssssah, that cynicism, you should let it go, for your own sake.
My 29 square metre student apartment in Stockholm is 730€ a month 🤣, public transport per month with student price is 65€. Austrias cost of living seems pretty good 😅
Damn, that's a lot! On the other hand median wages are higher as well in Stockholm compared to Vienna, so it's not all bad :)
my problem with passive income via investments is that in the worst case, all markets are correlated. As we saw in 2021, there is no such thing as a safe haven when it comes to a deflationary shock. Stock market crashes can take up to 13 years to break even. In those times, the income is low, while demand for liquidity is high, this creates selling pressure, eroding the income base.
Thanks for all the informative content Angelo, I love simplicity and honesty in your works.
What are your takes on ETF-based private pension plans like Pensionfriend?
My pleasure Ebrahim! I'm not sure they're worth it, since in your example you pay a ton of fees each year, you have a limited selection of ETFs to choose from and I believe you can't touch your investments before a certain age and even then, you only save yourself part of the taxes when withdrawing.
@@AngeloColomboFi thanks for sharing your thoughts. Some of these Etf-based private pension plans (like Pensionfriend) are offering management fee of 0.79% annually, half of your capital gains will be taxable after the age of 62, and you can withdraw anytime before you turn 62 but of course you will miss the tax benefits, do you still think self investing in the low-cost etfs is a better option?
On my way as well! Stay strong! The way to the top is hard but after you reach closer it is becoming less and less stressful and even helps you understand value of time
As soon as you start to quit your job, you have to pay your health insurance for 100%. So you can add another 600-1000€ on top per month.
Nope, health/social insurance payments are income-dependent. Thus, if I have little/no income apart from investments (which are not counted), I wouldn't need to pay more than 145€/month based on where rates currently stand in Austria.
Btw, I'm self-employed anyway, so I'm already paying tons of that right now.
have you considered moving to switzerland? It could really accelerate this process.
I think that depends if I was to work there for a higher salary, otherwise it would only accelerate my expenses 5x 😅
@@AngeloColomboFi I don't really know about Austria and I also don't know your industry/experience/salary but I live in Spain and if I were to move to switzerland and get a job in PM i would get 3x salary at 2x cost of living and 0.5x taxes. I guess it depends on where you live and what you do for work. But that is my plan as I have similar goals as you have and here in Spain it is almost impossible to accomplish them.
Very helpful video. I live in Germany and I believe there's a lot I could learn from this. when calculating your financial needs, you mentioned you need €1700/month. Is this pre-tax or post-tax because I assume that when you sell your ETFs, you'll be paying tax on this, right? also how much tax would you have to pay in Austria? will it be a mix of capital and income gains from ETF value increase and dividends? (I also noticed the ETF you selected is accumulative, so I assume the dividends are poured back into the ETF automatically without paying taxes on it until you decide to sell some ETFS, right?)
depends on the country, many eu countries ask for taxes on etf even if u don't sell them (dk for example)
@@WindsorHornIII yeah, I just realized Germany will start applying this soon as well. Called Vorabpauschale.
Thank you for this video Angelo. I really resonate with the conclusion you guys had that even now, during the accumulation phase you can gradually work more on projects of your choosing thanks to the security that the savings + low costs give.
Happy to hear that you connected with my way of thinking! 🙏
I moved to Romania from the UK. I got to keep my UK job and salary so have been able to save more aggressively due to low living costs here.
We too have a 9 month old boy.
So far, my monthly savings are:
150 gbp in my 6% savings account with my bank
150 gbp into Indices and dividend stocks
100 gbp into my son's "trust fund" for when he's 18.
I've also doubled my work place pension contribution to 300 gbp a month pre tax (due to a recent pay rise that pushed me into a new tax bracket - my entire pay rise went to the tax office so decided to redirect it into my pension instead)
I still have quite a bit spare every month and I keep finding myself buying junk instead of investing or saving it which I need to start working on.
Doing everything pretty blindly atm
Thank you for sharing! Doesn't seem like you're doing too bad and it looks like you're aware that there's room for improvement (obviously depending on your ideal lifestyle and financial goals). How's life in Romania (which city?) with a young kid?
I can't tell about Romania but in pretty similar Poland (poorer than western countries but still in the EU) living on western wage is a dream come true. We have the same standards, in some areas of life (safety, internet banking, taxes) it's even better than in the west and it's so much cheaper here. If any westerner is reading this, working remotely in Poland will be great, 100% recommend@@AngeloColomboFi