What is your FI number? :) 🇪🇺Interactive Brokers: angelo.fi/ibkr 🇪🇺Trade Republic (4% interest): angelo.fi/trep 👉Compare ETFs & Stocks: angelo.fi/comp ⚡My Investments in P2P and Crypto: angelo.fi 📈I track my ETFs here: angelo.fi/getquin 🇩🇪🇦🇹 Easiest broker for DE & AT: angelo.fi/etfs
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.
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
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.
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 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!
8:30 Great advice! I'm not full into FIRE but I apply good principles like living below your means and investing. I sometimes think I could save more and try FIRE, if I wouldn't travel as much, for example. But then, what would be the point? Travelling would probably be what I do when retired and the reason why I'd join FIRE. But, why wait? I'm young now and can do more things in my trips. And if that means more time working in the long term, I'm cool with that. Plus, who knows where we'll be at that moment? I appreciated hearing this and in general that your videos address the money-life balance
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.
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!
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.
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!
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!
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
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
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.
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!
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.
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 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! 🙏
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!
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.
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
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.
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!
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.
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?
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?
Great video! A point I usually see people overlook is moving out of the city if you’re able to work remotely or 3 days a week home office. It obviously depends on where you live, your earnings, preferences, etc but for us in Germany it allowed us to move 1 hr train to the office, buy a house costing ~25% of the city value with almost no mortgage and both work 50% at 35 with a large chunk still going on savings. The area is beautiful with a train station and with 2 small children I now truly enjoy all my time both during and outside work. Kind of feels like FIRE already.
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!
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.
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?
@@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.
Angelo why do you suggest we buy the FTSE ALL WORLD ETF ? Is this safe ? This etf contains only equities. Wouldn't it be safer to invest in an eft for equities and another one for bonds ? For diversification ? Thank you
I don't give financial advice, I'm just sharing what we're doing :) I always try to mention that you should have a time horizon of at least 5 years, ideally 10 years or more when investing into ETFs, since corrections and crashes are a normal part of the journey. Of course you also need to decide how much of your money you don't want to expose to risk/volatility, which you could then either hold in cash (earning 4% on Trade Republic right now) or bonds: th-cam.com/video/kjof8klveqc/w-d-xo.html
@@AngeloColomboFi I see. So do you know of any US equivalents to these? I have seen other videos of people who have portfolios that imply they can invest any amount they want. With Roth IRA's you have a max amount you can contribute
Tax is missing, 25% chop away a huge part, and 1700€ for a fam of 3 in europe? Will be tight, very tight in most countries. Why would you do that if you can simply earn more money?
It's not an issue for Austria, I talk about it in this video :) th-cam.com/video/b_TXq9H8prQ/w-d-xo.html Most likely we'll have a much bigger portfolio once we retire or we'll still be working on fun projects anyway, which most likely will earn us a bit of extra income. Plus we're very young still, so we can always go back to working (part-time) for a while if we feel we need an extra buffer.
@@AngeloColomboFi thanks a ton... I've been living with a very different strategy all this while of 'live for today, and tomorrow will take care of itself" guess I totally missed out on the big picture of something called 'savings'. I've been binge-watching and making my notes to get started. Love all of your content.
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
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 :)
Do you know what you’ll do once retired? I happened to take a year off at age 32 and having all the time in the world turns out to be not as good as expected. At least for me
Now I saw that you mentioned it’s important to think about that which is nice to see as most of the times fire videos are not talking about it. And still I think those who make fire videos should talk about it more. Mostly they say side projects but it will good to hear about specifics❤
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!
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?)
So what happens once you finally decide that the time is right for retirement? Do you switch your accumulating ETFs to distribution so that you get dividends or how will you get the necessary income from your investments?
Greetings! I was wondering if you could do a video about investing for older relatives. Probably it wouldn't be a 100% equities portfolio. I have a relative looking at the vanguard lifestrategy 60/40 etf - what would your thoughts be on this or would you look more at just bonds?
Since I'm not a financial advisor I don't feel qualified to give advice on that, all I can do is share my perspective based on my own age and situation in life :) 60/40 could be a good idea, depending on their risk tolerance. To avoid fluctuations in the bond portion, the 40% could be allocated to some of these options: th-cam.com/video/L7uQrC243jc/w-d-xo.html
How you will finance it- sell all FTEs? as you cant get income otherwise- just selling stock and than you have again a lot of cash that would go under inflation
I am new here Angelo. I know rents are quite affordable in Vienna, but have you considered moving to cheaper country to maximise your purchasing power? Or is it a nicht nicht because of access to good education for your kid?
Considered yes, but we value being close to friends and family and having great & inexpensive access to private daycare in Vienna. And our inexpensive rent is hard to beat in other countries as well. But who knows, we might change our opinion in a few years.
You can find both the reinvested dividend yield and the total expense ratio in its factsheet: api.fundinfo.com/document/3267baa452701156fe3b027c4c13f5b8_416321/MR_AT_en_IE00BK5BQT80_RES_2023-07-31.pdf
It depends, as far as I know you have a yearly "Freibetrag" and you might also have certain amounts you could realize in gains tax-free once retired: www.weltsparen.de/steuer/kapitalertragsteuer Also, keep in mind that the shares you sell are never 100% capital gains, only the profit needs to be taxed.
Hello, which broker are you using for buying VWCE as European? is it IBKR? and does this worry you that they don't cover your assets a lot, some do 20K, others do 100K etc
I’m curious, why did you not account for taxes? If you need 1700 per month, wouldn’t you need to earn more than that to have 1700 left over after capital gains tax and income tax are levied on you?
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?
Fire means how soon I can stop working and be able to survive? But some experiences in life cost money and you will miss out of the long haul travelling and visiting new culture and sampling new continents. So at 40 you may call yourself retired and the freedom you will have is to take a midday swim and go for a walk at 10 am? Very restrictive life and not for me. I still plan to retire in my late 50s which is still earlier than normal but I will have a comfortable and fulfilling lifestyle.
That's only the first part of it - not having to work anymore to be able to cover everyday expenses, which already adds a lot of freedom as it takes a heavy weight off your shoulder. That doesn't mean we won't be working on something else we love, which ends up earning us extra money. We love traveling as well, so we're definitely not planning on cutting that part short :) And we do spend money on anything we want, so I don't feel like we're ever restricting ourselves. But either way, everyone has their own priorities in life and what they find most valuable
@@AngeloColomboFi ok so financial independence is about be part time employed instead of full time? You said you will do what you enjoy but now you don’t enjoy your job?
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.
My pleasure! Of course, historically it has been more than possible on average over longer periods. You can do some backtests here yourself: curvo.eu/backtest
Thank you for sharing your experience an knowledge. And also the remark what to do if you reached FI, this is very important, I think. About the 4% withdrawal rate. What are your thoughts about the rate, if you are working until 55 and have buildup a decent pension already, that you will receive after “normal” retirement?
My pleasure! If you get extra income from a pension you can count on, you need to withdraw less from your investments at that point. Meaning you could theoretically withdraw more than 4% until you get to that date if that means you need to withdraw less afterwards to supplement your pension and pay for your ideal lifestyle.
80/20 Stocks Bonds 40 yo, November was good, struggle to put away 4% these days because of so many mid-life bills. I now make around 120k a year, My aim to make dividend returns as i work to retire early, but how do i achieve this?
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!
Probably depends on the country, but in Austria it's definitely a bad idea as the pension system is unsustainable and you can't invest in stocks/ETFs yourself
Very useful information, hope you achieve your goals as family! My question is what amount of money do you have as savings? Or do you consider part of your investment portfolio as savings?
It depends of each person necessities. At my job there a 58 or 59 yr old guy. He got his house pay off long time ago and has about 500k in a retirement acc. He recently had a stroke and recover and came back to work. and my cousin asked him why he doesn’t retire already, that he could do it… he could be home taking easy. And he says hes scare and afraid to losse the health insurance that the company provides. So whats the point im starting to think?. You never knows whats going to happen to you.. its just a gamble. Most ppl are paying mortgage and cant afford to max out this investment accs…
That sucks, sounds like a US problem though. Most European countries have affordable health care that's not tied to your employment. Thanks for sharing that (somewhat sad) story though!
@@AngeloColomboFi well unfortunately yes thats european. Countries only. I know a couple at work thats has close to 500k in a 401k. and have work in this blue collars jobs like me for atleast 30 yrs ans still cant afford to retire. they are in there 60s (im 34 btw) so recently im just giving up on saving money really. i might keep working just to contribute to a retirement but thats all.
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!
To me, the amount sounds a bit low, but that's very subjective. The only significant issue, in my opinion, is the social security. I also live in Austria, and here, self-insurance would cost around 500 euros per month. However, you would only be eligible for the minimum pension at that point.
Sure, it's calculated based off our low expenses right now. As those change, I'll update the number as well. Regarding social security, I mentioned it here: th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
Hi, your videos seem quite nice and i would follow you more. I have one question though, i am not sure i want to start investing to retire early or not, i guess there are several goals you fan set. At the moment, i just want to learn about investing and i want someone from europe to listen to. Your videos apply to investments in general right?
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.
Unless you want to retire in USA, shoudnt you invest in EURO ETFs? I see you invest in the USD World ETF on Trade Republic. Arent you worried ? Im trying to find decent World EUR ETFs on Trade Republic but im not convinced by the small amount that i have found. What`s your opinion on this?
That's the fund currency, which is irrelevant as far as returns are concerned. What matters is that you can trade it directly in EUR, which you can with any of the ETFs on Trade Republic
What is your FI number? :)
🇪🇺Interactive Brokers: angelo.fi/ibkr
🇪🇺Trade Republic (4% interest): angelo.fi/trep
👉Compare ETFs & Stocks: angelo.fi/comp
⚡My Investments in P2P and Crypto: angelo.fi
📈I track my ETFs here: angelo.fi/getquin
🇩🇪🇦🇹 Easiest broker for DE & AT: angelo.fi/etfs
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!
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
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.
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
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!
You are now officially my favourite youtube channel
Thank you, you made my day!
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!
8:30 Great advice! I'm not full into FIRE but I apply good principles like living below your means and investing. I sometimes think I could save more and try FIRE, if I wouldn't travel as much, for example. But then, what would be the point? Travelling would probably be what I do when retired and the reason why I'd join FIRE. But, why wait? I'm young now and can do more things in my trips. And if that means more time working in the long term, I'm cool with that. Plus, who knows where we'll be at that moment? I appreciated hearing this and in general that your videos address the money-life balance
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.
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!
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.
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!
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!😅
This was exactly what I was looking for, an example in Europe. Thank you :D
Happy to hear that!
Greetings from Vienna! Nice to know there's other people with crazy ideas like me.
Nice, we need more like-minded people here!🙏
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
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
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.
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!
What an awesome channel you have! You got yourself a new fan!
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.
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
Feel these videos would be better with chapters. Would be better for youtube/Google algorithms. Great video.
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! 🙏
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
Great video! Simple and effective explanation of the 4% rule
I am living in Vienna and I will follow your channel
Nice, happy to have you 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
Thank you very much for the video and all of the information you shared with us! Your channel is awesome!
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
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.
I believe we're all working harder by design but the anticipation of reaching the goal may create this sense of urgency.
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!
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.
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!
Nice summary of how to FIRE. And some great hands on tips on how to move forward 👍.
Thank you!🙏
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?
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!
Thanks a lot Angelo. You inspire us.
Happy to hear that :)
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?
Great video! A point I usually see people overlook is moving out of the city if you’re able to work remotely or 3 days a week home office.
It obviously depends on where you live, your earnings, preferences, etc but for us in Germany it allowed us to move 1 hr train to the office, buy a house costing ~25% of the city value with almost no mortgage and both work 50% at 35 with a large chunk still going on savings. The area is beautiful with a train station and with 2 small children I now truly enjoy all my time both during and outside work. Kind of feels like FIRE already.
Thank you! That sounds like a wonderful life, cheers to that!🥂
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! 🥂
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
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.
Thanks for your video! you are such an inspiration!
Always a pleasure, thank you for being here!
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!
Congrats on your progress. I love the way you think.
Thank you, I'm happy to hear that!
Very nice video. Thank you Angelo. Have a nice day!
Thank you so much for all the information shared. And congratulations for all things you achieved 🎉
You are very welcome! Thank you Sergio!🙏
Nice insights and encouragement for those who are on the path. Thank you.
My pleasure! 🙏
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?
hey, can you make a more detailed video on flatex and taxes in Austria
This one should help: th-cam.com/video/s_UK3n1PVHs/w-d-xo.html
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?
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.
Angelo why do you suggest we buy the FTSE ALL WORLD ETF ? Is this safe ? This etf contains only equities. Wouldn't it be safer to invest in an eft for equities and another one for bonds ? For diversification ? Thank you
I don't give financial advice, I'm just sharing what we're doing :)
I always try to mention that you should have a time horizon of at least 5 years, ideally 10 years or more when investing into ETFs, since corrections and crashes are a normal part of the journey. Of course you also need to decide how much of your money you don't want to expose to risk/volatility, which you could then either hold in cash (earning 4% on Trade Republic right now) or bonds: th-cam.com/video/kjof8klveqc/w-d-xo.html
@3:20 so how do these work? This isn't a roth IRA right? So you can contribute as much as you want?
That's simply an ETF domiciled in Europe, which we invest in with after-tax money. We don't have Roth IRAs like in the US.
@@AngeloColomboFi I see. So do you know of any US equivalents to these? I have seen other videos of people who have portfolios that imply they can invest any amount they want. With Roth IRA's you have a max amount you can contribute
Tax is missing, 25% chop away a huge part, and 1700€ for a fam of 3 in europe? Will be tight, very tight in most countries.
Why would you do that if you can simply earn more money?
It's not an issue for Austria, I talk about it in this video :)
th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
Most likely we'll have a much bigger portfolio once we retire or we'll still be working on fun projects anyway, which most likely will earn us a bit of extra income. Plus we're very young still, so we can always go back to working (part-time) for a while if we feel we need an extra buffer.
loved this video, thanks Angelo ... can you share a copy of the Excel sheet at 7:01, if possible.
Happy to hear that! I forgot to put it in the description, sorry! Here's the link: networthify.com/calculator/earlyretirement
@@AngeloColomboFi thanks a ton... I've been living with a very different strategy all this while of 'live for today, and tomorrow will take care of itself" guess I totally missed out on the big picture of something called 'savings'. I've been binge-watching and making my notes to get started. Love all of your content.
No need to regret anything, most people live like that. Thank you, I'm happy to hear that!
Thanks very much Angelo 👍👍👍👍.
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
Angelo how can i choose between all s&p500 trackers only in italy is available in euro is there any difference between italys deutch and uks?
Why FI = 25 x yearly expenses?
Is it explained in books or the FIRE concept somewhere?
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! :)
Do you know what you’ll do once retired? I happened to take a year off at age 32 and having all the time in the world turns out to be not as good as expected. At least for me
Now I saw that you mentioned it’s important to think about that which is nice to see as most of the times fire videos are not talking about it. And still I think those who make fire videos should talk about it more. Mostly they say side projects but it will good to hear about specifics❤
Yes, I would want to be doing this right here in my spare time - TH-cam videos about things I'm interested in myself :)
great video doing this myself started little late as i am 40 now but still going strong . Love the Maneki Neko remake looks cool
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!
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.
I always looking for the cost of health insurance which are missing and which will be raised year by year. How do you handle this topic?
Already made a video about it, not an issue at least in Austria: th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
So what happens once you finally decide that the time is right for retirement? Do you switch your accumulating ETFs to distribution so that you get dividends or how will you get the necessary income from your investments?
Nope, we just sell some Acc. ETF shares to cover our expenses: th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
Greetings! I was wondering if you could do a video about investing for older relatives. Probably it wouldn't be a 100% equities portfolio. I have a relative looking at the vanguard lifestrategy 60/40 etf - what would your thoughts be on this or would you look more at just bonds?
Since I'm not a financial advisor I don't feel qualified to give advice on that, all I can do is share my perspective based on my own age and situation in life :)
60/40 could be a good idea, depending on their risk tolerance. To avoid fluctuations in the bond portion, the 40% could be allocated to some of these options: th-cam.com/video/L7uQrC243jc/w-d-xo.html
What is a good High Yield Savings account available in Europe(Malta) because i tried Trade Republic but they are not available in Malta yet
How you will finance it- sell all FTEs? as you cant get income otherwise- just selling stock and than you have again a lot of cash that would go under inflation
I would just sell the amount I need on a yearly basis and keep a bit of a cash buffer :)
I am new here Angelo. I know rents are quite affordable in Vienna, but have you considered moving to cheaper country to maximise your purchasing power? Or is it a nicht nicht because of access to good education for your kid?
Considered yes, but we value being close to friends and family and having great & inexpensive access to private daycare in Vienna. And our inexpensive rent is hard to beat in other countries as well. But who knows, we might change our opinion in a few years.
What is the dividend yield and the costs fo VWCE? When I search online I only get information about VWRL which I assume is another fund.
You can find both the reinvested dividend yield and the total expense ratio in its factsheet: api.fundinfo.com/document/3267baa452701156fe3b027c4c13f5b8_416321/MR_AT_en_IE00BK5BQT80_RES_2023-07-31.pdf
In Germany there is a 25% capital gains tax. So I would have to multiply my demand be 1,3. Correct?
It depends, as far as I know you have a yearly "Freibetrag" and you might also have certain amounts you could realize in gains tax-free once retired: www.weltsparen.de/steuer/kapitalertragsteuer
Also, keep in mind that the shares you sell are never 100% capital gains, only the profit needs to be taxed.
Außerdem hast du noch eine 30%ige Teilfreistellung
Hello, which broker are you using for buying VWCE as European? is it IBKR? and does this worry you that they don't cover your assets a lot, some do 20K, others do 100K etc
I’m curious, why did you not account for taxes? If you need 1700 per month, wouldn’t you need to earn more than that to have 1700 left over after capital gains tax and income tax are levied on you?
Because they're not an issue thanks to how taxes work once we have less work income in Austria once retired: th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
you're using punctuation for numbers wrong
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?
Fire means how soon I can stop working and be able to survive? But some experiences in life cost money and you will miss out of the long haul travelling and visiting new culture and sampling new continents. So at 40 you may call yourself retired and the freedom you will have is to take a midday swim and go for a walk at 10 am? Very restrictive life and not for me. I still plan to retire in my late 50s which is still earlier than normal but I will have a comfortable and fulfilling lifestyle.
That's only the first part of it - not having to work anymore to be able to cover everyday expenses, which already adds a lot of freedom as it takes a heavy weight off your shoulder. That doesn't mean we won't be working on something else we love, which ends up earning us extra money. We love traveling as well, so we're definitely not planning on cutting that part short :) And we do spend money on anything we want, so I don't feel like we're ever restricting ourselves. But either way, everyone has their own priorities in life and what they find most valuable
@@AngeloColomboFi ok so financial independence is about be part time employed instead of full time? You said you will do what you enjoy but now you don’t enjoy your job?
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.
Motivating! Great Video!
Thanks buddy!🙏
Impossible with tax rate in Ireland 😓
Yeah, they're not making it easy for sure. I really hope they'll change how ETFs are taxed for Irish residents soon 🤞
Greetings from Vienna. Thanks for the video! I rather stuck with the question that is it possible to have 7% p.a. profit from your portfolio?
My pleasure! Of course, historically it has been more than possible on average over longer periods. You can do some backtests here yourself: curvo.eu/backtest
Thank you for sharing your experience an knowledge. And also the remark what to do if you reached FI, this is very important, I think.
About the 4% withdrawal rate. What are your thoughts about the rate, if you are working until 55 and have buildup a decent pension already, that you will receive after “normal” retirement?
My pleasure! If you get extra income from a pension you can count on, you need to withdraw less from your investments at that point. Meaning you could theoretically withdraw more than 4% until you get to that date if that means you need to withdraw less afterwards to supplement your pension and pay for your ideal lifestyle.
@@AngeloColomboFi Thanks for your reaction. That make sense 🙂
Hello Angelo. May i ask why did you not choose to do dividend investing over etf investing?
Have you seen his portfolio? He has 75% in a dividend etf, what do you mean?
Hi Angelo, can you make a video about option trading platform in Europe?
80/20 Stocks Bonds 40 yo, November was good, struggle to put away 4% these days because of so many mid-life bills. I now make around 120k a year, My aim to make dividend returns as i work to retire early, but how do i achieve this?
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!
Good video Angelo. What about the local pension is that not a tax efficient way to save?
Probably depends on the country, but in Austria it's definitely a bad idea as the pension system is unsustainable and you can't invest in stocks/ETFs yourself
Very useful information, hope you achieve your goals as family! My question is what amount of money do you have as savings? Or do you consider part of your investment portfolio as savings?
Thank you, wishing the same for you as well! We try to keep around 6-12 months of living expenses in cash (currently earning 4% on Trade Republic)
What happens after you reach it? Do you sell to live of it? never understood that part. Great vid!
We simply sell whatever amount we need to cover our living expenses on an ongoing basis, while keeping the rest invested. Thank you!
@@AngeloColomboFi What about the tax? Because you need to pay tax for your winnings when you sell, have you considered that?
It depends of each person necessities. At my job there a 58 or 59 yr old guy. He got his house pay off long time ago and has about 500k in a retirement acc. He recently had a stroke and recover and came back to work. and my cousin asked him why he doesn’t retire already, that he could do it… he could be home taking easy. And he says hes scare and afraid to losse the health insurance that the company provides. So whats the point im starting to think?. You never knows whats going to happen to you.. its just a gamble. Most ppl are paying mortgage and cant afford to max out this investment accs…
That sucks, sounds like a US problem though. Most European countries have affordable health care that's not tied to your employment. Thanks for sharing that (somewhat sad) story though!
@@AngeloColomboFi well unfortunately yes thats european. Countries only. I know a couple at work thats has close to 500k in a 401k. and have work in this blue collars jobs like me for atleast 30 yrs ans still cant afford to retire. they are in there 60s (im 34 btw) so recently im just giving up on saving money really. i might keep working just to contribute to a retirement but thats all.
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
To me, the amount sounds a bit low, but that's very subjective. The only significant issue, in my opinion, is the social security. I also live in Austria, and here, self-insurance would cost around 500 euros per month. However, you would only be eligible for the minimum pension at that point.
Sure, it's calculated based off our low expenses right now. As those change, I'll update the number as well. Regarding social security, I mentioned it here: th-cam.com/video/b_TXq9H8prQ/w-d-xo.html
Hi, your videos seem quite nice and i would follow you more.
I have one question though, i am not sure i want to start investing to retire early or not, i guess there are several goals you fan set.
At the moment, i just want to learn about investing and i want someone from europe to listen to. Your videos apply to investments in general right?
Yes of course, I make my videos for any investor in Europe
Hallo, tolles Video! Ich wohne auch in Wien, ich würde mich sehr freuen dich/euch kennenzulernen! LG Todor
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.
Unless you want to retire in USA, shoudnt you invest in EURO ETFs? I see you invest in the USD World ETF on Trade Republic. Arent you worried ? Im trying to find decent World EUR ETFs on Trade Republic but im not convinced by the small amount that i have found. What`s your opinion on this?
That's the fund currency, which is irrelevant as far as returns are concerned. What matters is that you can trade it directly in EUR, which you can with any of the ETFs on Trade Republic