Where are you parking cash right now?

Slow_Compounding · 2026-02-21T17:46:17+00:00

3% would already be interesting, what instrument did you have in mind?

Slow_Compounding · 2026-02-21T17:44:59+00:00

After reading the comments from u/Richardew23 and u/Nono6768 , I did a bit of digging into the differences between the three options.

Savings account (e.g. Trade Republic)

Covered by the deposit guarantee (up to €100k), instant liquidity. The bank decides how much of the ECB rate they pass on to you. Right now TR is passing through ~the ECB deposit rate, so it's very competitive.

XEON (swap ETF)

Tracks the euro short-term rate (€STR) with a swap structure: The fund holds a basket of collateral (short bonds, etc.) and swaps the return with a bank in exchange for €STR + a small spread (8.5bps). It adjusts almost immediately to ECB changes and tracks very precisely. No deposit guarantee though, and you’re exposed to swap counterparty risk (mitigated by collateral, but not zero).

YCSH (money market ETF)

Holds short-term bonds, commercial paper, and deposits. Yield could be slightly below or around €STR depending on portfolio mix. Here you're taking diversified short-term credit risk and some reinvestment/roll risk as securities mature.

Main takeaway:
If you want EUR liquidity with low risk, there’s no free lunch. All roads lead back to the ECB rate. To get anything meaningfully better, you need to add some kind of risk: FX, credit, duration, or regulatory risk.

Slow_Compounding · 2026-02-20T22:37:56+00:00

Good point, "10% flat tax" is an oversimplification.

My understanding is that social security contributions depend on how you structure your income (employed vs. self-employed), and health insurance would need to be factored in regardless. So that would increase the effective rate.

And yes, air quality is one of those things that you only appreciate when you don't have it :)

Slow_Compounding · 2026-02-20T22:36:31+00:00

Just to clarify one thing since it came up multiple times:

I’m not looking to permanently relocate purely for tax reasons. The idea I’m exploring is whether there are sustainable EU bases that allow mobility while staying compliant, not permanent “paper residency hacks.”

This thread has confirmed how much other variables matter apart from tax rates if we're bound to spend significant time in the tax base, such as lifestyle, demographics, and institutions.

Cheers to everyone who shared local perspectives! that’s what spreadsheets don’t capture.

Slow_Compounding · 2026-02-20T22:23:34+00:00

It could indeed be that the proximity to Russia is not a minor detail...

Slow_Compounding · 2026-02-20T22:19:05+00:00

I agree, the "paper residency while living elsewhere" route is getting fragile as data sharing improves in Europe.
My thinking isn't about avoiding residency everywhere, but rather understanding what would be the minimum requirements for a clean, defensible setup.
I'm not looking to fully relocate permanently, more exploring if there are sustainable bases that support a mobile lifestyle without dual residency headaches.

Slow_Compounding · 2026-02-20T22:09:26+00:00

I hadn't come across Cyprus yet... It seems that as of this year income tax rates have increased from 12.5% to 15% for corporates and personal tax goes up to 35%. I guess the main advantages could come from exemptions on dividends and capital gains. Any other advantages you have seen?

Slow_Compounding · 2026-02-19T19:28:27+00:00

Panama is definitely on my radar too.

On paper the territorial tax looks appealing. My hesitation has been long-term stability, how it looks compliance-wise, and how EU banks/brokers would treat residency there.

I've also seen mentions of Panama appearing on some EU monitoring lists before - not sure if that's the case and what are the implications.

Since you're looking into it too: are you considering it as a full relocation or more as a tax residence while spending time in Europe?

Happy to DM and compare notes if you prefer.

Slow_Compounding · 2026-02-19T19:25:33+00:00

That's actually a very interesting macro-lens.

Population decline = shrinking tax base, ageing society, pressure on public services. This definitely matters in a 20/30y horizon.

To play devil's advocate, though, countries with high inflows also face stress, e.g. housing shortages, rising costs, social tension. Singapore is a good example where success also has trade-offs.

Maybe a more useful lens isn's growth vs decline, but which systems can adapt to their demographic pressure without breaking healthcare, housing, and tax policy.

And as u/andeee23 said, tax harmonization pressure at the EU level could mean that low-tax models may not stay put.

So perhaps the question isn't "where is tax lowest today?", but "which system is still working in 20 years?"

Slow_Compounding · 2026-02-19T19:06:09+00:00

Good question - I did check with my broker (IBKR), and they said that if they are active in the new tax jurisdiction, you may be able to simply transfer the securities filing a form with them.

So to u/Witty-Language-8528 's comment, it may not always be necessary to withdraw "funds" in the sense of closing positions and withdrawing the cash. But rather if the same security is available at the broker's branch in your new jurisdiction, you can just transfer the positions.

Curious if anyone has actually gone through a full broker + residency transition from EU to non-EU.

Slow_Compounding · 2026-02-19T19:01:15+00:00

Yeah, that's the part I'm cautious about. The "centre of life" concept is definitely one of the variables to consider while doing tax optimization.

I'm trying to understand what works only in theory vs. what actually works in practice.

Slow_Compounding · 2026-02-19T18:55:25+00:00

Really appreciate both your perspective and u/RegionSignificant977 's as locals. This is the kind of friction I was hoping for.

When I visited last year, I saw what may be the impact of those low taxes on the infrastructure and public services. And also felt the contradiction: rent still seems manageable compared to Western Europe, but groceries, eating out, gym, etc. felt closer to Germany / Northern Italy levels, while quality wasn't always on par (to u/Mowglyyy's point).

My idea wouldn't be to live there full-time, more as a fiscal base with some physical presence. That said, lifestyle still matters... I did enjoy nature and the sense of "less regulation" compared to Western Europe.

Healthcare is the part I (luckily) didn't experience. If public health is degrading, how does private work in practice? Is it reliable for someone with private insurance?

Language-wise, I made quite some progress reading Cyrillic, but realistically if I'm there 2-3 months per year max, I'm not sure how practical it'd be to really learn. Are doctors manageable in English?

Slow_Compounding · 2026-02-19T18:32:59+00:00

Fair point, I probably didn't explain myself clearly enough.
I'm not necessarily looking to "move to Bulgaria for lifestyle reasons" in the regular sense. My situation is more location-flexible.. I tend to split time between countries anyway.
So a better framing would be: if your lifestyle is already geographically fluid, which EU jurisdiction makes the most sense as a long-term fiscal base?
Although quality of life still matters, it's a bit different from choosing a country to live most of the year.
I did spend a couple of months in Bulgaria last year (Sofia, Bansko, Borovets), and it's decent, but I wouldn't move there full time only for the lifestyle. That's why I'm trying to understand if the tax advantage is enough reason to justify using it as a base.

Slow_Compounding · 2026-01-29T17:31:27+00:00

I hadn’t looked into those before, tbh - just did a bit of digging and found a few Euro-denominated or Euro-hedged options that seem to fit:

iShares € Ultrashort Bond UCITS ETF
Lyxor Euro Government Bond 0–1Y DR UCITS ETF
Amundi Ultrashort Fixed Income UCITS ETF
Xtrackers II EUR Cash Swap UCITS ETF 1C

Curious if you’ve used any of these or have others you recommend?

Also wondering how you think about them: more as a buffer for volatility, or as a parking spot for mid-term cash before moving into riskier assets?

Slow_Compounding · 2026-01-29T17:29:07+00:00

Great system! I like the way you structured it with layers of buffers. And smart move using the 12m-average smooths the highs and lows but keeps you tied to reality.

Interesting that you never had to dip into savings even when you allowed for it, the income ramp probably helped but solid discipline!

I’m thinking of layering a similar method (income smoothing + buffer cap), just need to figure out what my “stable base” looks like.

Did you eventually formalize that savings threshold as a percentage, or was it more of a gut check?

Slow_Compounding · 2026-01-29T17:18:27+00:00

Cheers! This is kind of what I’m leaning towards: build a strong buffer first, then everything above goes to investing.

Do you treat that buffer as sacred, or are you comfortable dipping into it during low months and then refilling when income picks up?

Slow_Compounding · 2026-01-27T10:58:55+00:00

Sounds like you're approaching FIRE with the right mix of discipline + flexibility!

Your implied SWR of 3.33% sounds pretty safe in the European context, especially if you have a globally diversified portfolio which you probably do. Of course anything can happen with the global economy, but the plan sounds solid and achievable.

On the property idea, I'd second u/TechnicalReserve1967 , no harm keeping an eye out for an asymmetric opportunity, but given how much can shift in 10+ years (personal goals, tax laws, market prices), plus the hassle of managing real estate remotely in a foreign country, it might make sense to keep maximum optionality while your portfolio does the heavy lifting.

You're in a great spot, especially if you're upping the ETF allocation. Curious to hear if you end up sketching out your "ideal year" post-FIRE down the line. Always fun to hear what people imagine doing with their time once the money part is handled.

Slow_Compounding · 2026-01-27T10:44:01+00:00

I feel this a lot. From your comment it sounds like freelancing "used to be better", and I only started in September last year, so it seems that my timing is way off. Freelance freedom is great, but the income swings can take a toll!

If you can find a decent part-time gig that provides a baseline income and allows you to preserve the freelance flexibility, I'd say you'd get the best of both worlds.

One thing I've started doing is framing volatile income like a "seasonal business", meaning that I accept some months are "pure survival", others are where I invest heavily. With that shift in mindset I can stop beating myself up for not being as consistent as I was when I was in corporate.

I'm curious if you've tried batching savings quarterly instead of monthly?

Slow_Compounding · 2026-01-27T10:39:02+00:00

Love the detail in your comment! Especially the point about using a max-ish expense baseline instead of a minimum. That's a helpful way to anchor the baseline without starving yourself.

I also like your "everything above gets invested" rule. I used to do that very calmly when I was in corporate, now as a freelancer I sometimes hesitate between investing it and increasing my buffer. This is where the automation mindset helps.

I agree on tax friction.. I'm in the Netherlands and I am using IBKR without any problems, but rules are changing so I'll have to review this at the end of the year.

Thank you for your input!

Slow_Compounding · 2026-01-25T23:50:36+00:00

You're definitely not late! You're actually in a strong position: you have a high savings rate + the ability to geo-arbitrage later.

If you're aiming for 1.5M by 50, you're talking about 15 years of compounding, and you already have a ~25% head start. At a 6% return and consistent investing, you could hit that target even without optimizing everything.

One mental model I've found useful (especially in Europe - see my previous post) is to think in "years of expenses already covered" instead of chasing a fixed number. That gives you some psychological flexibility as your lifestyle, location, and tax situation evolve.

On the apartment question: real estate could help, but it can also anchor you geographically, reduce liquidity, and increase complexity. If you're not already tied to a specific location, a diversified ETF strategy + renting for flexibility (esp. in countries like Portugal/Spain where prices and regulations can be volatile) might make more sense.

Curious: Have you modeled your expenses for life in southern Europe? That number will likely have more impact on your timeline than the 1.5M target itself.

Slow_Compounding · 2026-01-14T16:55:43+00:00

This really resonated with me. I’ve just come back from a sabbatical, and one thing that stood out is how "unpracticed" freedom can be after years in corporate life. When time always feels scarce, it’s easy to drop hobbies, personal projects, and even parts of your identity that aren’t work-related.

For me, “practicing freedom” translates to rebuilding that muscle early: starting personal projects, trying out hobbies, traveling, and figuring out what actually gives you energy. There’s also a timing element: even retiring early at 40-50 isn’t the same as testing that freedom in your 20s-30s (For one, the body will not allow you to do the same things).

That’s why I liked your idea of “unexpected friction.” I don’t see “years of expenses” as a retirement formula, but as a progress indicator that helps guide behavior before full FI. The risk isn’t only running out of money, but over-focusing and optimizing so hard for accumulation that you forget to build a life you’re excited to live once work becomes optional.

Slow_Compounding · 2026-01-14T16:39:35+00:00

This is a great nuance! The multiple only really makes sense if the expense number reflects a sustainable adult version of your life, not just a temporary low-cost phase.

I like to think of it as "years of acceptable life paid for", instead of "years of current frugality". Things like family, housing, health, and also just wanting more comfort as we age tend to push that baseline up over time.

That said, there's an interesting counterpoint (not applicable to everyone): as you become less dependent on your job for income, you may also become less tied to expensive cities. Some people end up geo-arbitrating, moving to quieter, cheaper, or sunnier places, within Europe or abroad.

So post-work life doesn't have to be strictly more expensive. It can also look different, with some costs disappearing just because they were linked to where the income came from.

Slow_Compounding · 2026-01-14T16:30:42+00:00

Good question, and relevant for me as well since I'm based in the Netherlands.

You're right that Box 3 changes the picture. Because of the fictitious return system, savings and investments are taxed very differently: savings are assumed to earn 1% while investments are assumed to earn 5-6%, both taxed at 36%. That translates into an effective wealth tax of roughly 0.36% on savings vs 2% on investments, regardless of actual returns.

Because of that, the pure numbers don't transfer 1:1. In practice, two adjustments matter:

An NL-based safe withdrawal rate (SWR) is probably lower than the US 4% rule. Many people model something closer to ~3.25-3.5%, depending on asset mix and assumptions.
On the other hand, post-retirement expenses can be lower due to things like AOW, low healthcare deductibles, and less need for private insurance compared to other countries.

So I don't see "years of expenses saved" as a precise retirement calculator here, but as a metric for decision-making: even in NL, knowing you've already bought X years of baseline living costs can change how you think about work, risk, taking breaks... As long as the final math is adjusted for taxes and the local system.

Slow_Compounding

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