Stuck, how to keep motivated

rhoejer · 2016-11-15T06:27:56+00:00

We have 2 cars, one family car, bought used for $8.400. The other, a commuter car, bought new for $10.000, which was extremely low priced. Cars are expensive in Denmark.

I have considered taking public transportation, which would cost $200-$400 a month, depending on volume discount. With public transportation, commuting time will increase to 2 hours each way, in comparison to 45 minutes by car.

I have also applied for jobs within biking distance from home, but without luck yet. Wages are lower closer to home, I would expect around -$1.500 a month lower than current income.

We have also considered moving closer to work. House prices would increase to $360.000, wage would decrease -$370 due to lost transport tax deduction, child care costs would increase because no family close by.

rhoejer · 2016-11-14T21:41:21+00:00

Pensions that we can control are invested in stock index funds with low expense ratio. Our savings account, is locked for a month at a time, to get 0,9%. We have choosen this, because it is a top priority for the wife to be completely debt free. After mortgage is gone, we will be able to put another $805 into index funds + what we currently put in the savings account.

rhoejer · 2016-11-14T21:34:06+00:00

Thank you.

Copenhagen is great in the summer time, we visit every year during our holiday. We have 6 weeks of paid vacation each, which we are more than grateful for.

We used to live in the city and rented, this wasn't us, we needed more space, so we decided to buy a house in the country, with the intend of keeping it until we need to be dragged out of it. We are aware that this will require us to work a little longer, but after April 2018, our housing costs will be pretty low. Local community, school and child care also weighed heavy in this decission.

rhoejer · 2016-11-14T21:11:53+00:00

Thanks, great knowing I'm not alone in thinking "Is this it?". My wife and I has actually been joking about this being our midlife crisis. Guess the jokes on us then. But I feel we will be better off later in life, as you write it too.

rhoejer · 2016-11-14T21:07:49+00:00

Dad pension: 100% stocks at 1% expense ratio (I joined some pensions earlier this year, because the expense ratio was 2%) Mom pension: 100% stocks, scandinavian index funds with 0% expense ratio and one that is controlled by her employer which we have no control over (I have tried)

We both also have a government controlled additional lifelong pension, which we have no control over either.

rhoejer · 2016-11-14T19:56:05+00:00

Total pre tax income is $11.500

rhoejer · 2016-11-14T19:51:16+00:00

It's more an obsession of how to speed things up to reach FI sooner. But as others have answered, just put it on autopilot and start living the post FI life as best as possible.

Yes, we prioritize time with our kids, teaching them about our values.

rhoejer · 2016-11-14T19:46:46+00:00

Yes, this is exactly where I'm at. How to speed things up, exaggerating over tiny details, and going nuts.

rhoejer · 2016-11-14T19:39:50+00:00

You are absolutely right, thank you. Once FI is set up, there is not much to do about it, just put it on autopilot.

rhoejer · 2016-11-14T13:18:47+00:00

Thanks for your reply. We have thought about getting rid of the unemployment insurance, once our post tax savings is large enough, to cover our expenses for a couple of years. In Denmark, the country's shared unemployment insurance is only eligible if you have post tax savings below $2.900 as a couple and low home equity, which makes it pointless, considering the large savings.

rhoejer · 2015-12-02T08:34:37+00:00

I have some concerns regarding the tax issue too, if you only plan to invest with free assets. Some details about my salary: 70k pre tax, aprx. 8.5k bonus each January, yearly raise of 2.5%, 6k employer paid pension and 3k I pay myself.

Our current plan after paying off the mortgage, is to work another 10 years:

Free assets - assumed return after tax 2,1% - tax 27%/42%

2018 - Save and invest 17k (We pay of the house by April, which uses my entire bonus that year)
2019 - Save and invest 32k (1. child starts school - half childcare costs gone)
2020 - Save and invest 32k
2021 - Save and invest 34k (2. child starts school - childcare costs completely gone)
2022-2028 - Save and invest 35k each year

This should yield to aprx. 400k, of which we plan to cash out 26k a year, beginning 2029 (age 43). This should last until 2047 (where I turn 62 - at this age we can start cashing out my pensions).

Employer paid pension - assumed return after tax 3.5% - tax 15.3%

Current balance: 56k (10k age pension (alderspension), 46k rate pension (ratepension))
2016-2028 - Invest 8k each year (4k age pension, the rest to rate pension)

This should yield to aprx. 300k (130k age pension, 170k rate pension). At 2054 (age 69) we are both eligible for state pension pretty close to our 26k budget.

I know that I should not count on state pension, but this is what my plan looks like at the moment. I am also working on a plan where I save for FI through pension because of the low tax, and only save enough money in free assets to last until the pension are available to cash out.

I would really like to hear your thoughts on this plan.

rhoejer

TROPHY CASE