Nope, we are not dead yet! Albeit we are now over halfway our lives (statistically speaking), we are not planning to call it quits just yet. Life has been good but busy. Financially we are making steps forward once again too. Working really does miracles! Only major downside is that you have a lot less time to do fun stuff. Me no likey.
Quick summary, we bought a house that was too big, too expensive and needed a shitload of work. We call that a money pit. Said money pit is slowly improving, albeit not completely finished yet. For finishing you need time and money. Our cash reserves were completely depleted (we had less cash in June 2023 than we had in the past 15 years or so, I know, hellishly scary). So one needs to work to got get more cash. This was successfully started back in July of this year.
Cash is now pouring in once again, which is nice. But now I lack the time and energy to finish said money pit. Balancing life seems rather difficult for some reason. It’s either one or the other 🤷♂️. So the plan is to finish the contract I’m on by next year, either in April, before the summer or even the late fall. The jury is still out on this one. And then take the time again to finish the money pit (amongst other things).
Mrs CF is still happily plugging away at her work, and just received a “vast contract” (after having 3 yearly contracts). She is still liking her work, and still has challenges she likes to conquer, but does not see herself doing this for another 20 years. So, the FIRE plan is still going strong. Although we do need to make an update.
They say the first €100.000 is the hardest. For us that took about 3 years to achieve (back in early 2009), which is fast all things considered. Now, we had a good start, no debts, good (international) jobs and we were very frugal (but not cheap). This obviously helps a lot.
Fast forwards about 14 years. The 13th €100.000 only took about 6 months 😮. We were almost out of cash by mid June after paying well over €120.000 in bills to contractors (but we now have a warm house and a new roof).
Fast forwards to this december and we are now planning how to bring our cash reserve back to a normal level. As we were again at well over €100.000 in cash (we were not paying a lot of attention, I know, bad move and so not FIRE minded). Money really makes more money, and it does it fast too once you get going!
Anyhow, here is the plan:
- We opened a new pension account (“third pillar”) to increase my pension as an independent contractor. As we needed to save up cash for the move to the money pit. We didn’t fill the yearly budget we had available for my pension. The plan is to play catch up and dump about €24.000 into it. I already have on a Brand New Day, but opened a new one at Meesman (slightly lower fees overall). Might consolidate and move the BND funds over to Meesman (although the fees might not be worth it…)
- We opened a Raisin account (and will do another for Mrs. CF too at some point) and will dump about €30.000 into it. This as the interest on the mortgage (now at 1.31%) is far lower than what we can get a a term deposit via Raisin (around 4%). Even when taking the Box 3 tax on savings into consideration, it’s way smarter to save than it is to pay off the mortgage. Please note that we have a 10 year mortgage, which needs refinancing in about 8,5 years and has a huge refinancing risk attached to it. Hence, as much as possible needs to be paid down at time of refinancing.
- Investing another €20.000 into our Meesman account. But will wait with this until January. Otherwise we will pay effectively about 1,97% Box 3 tax (6,17 * 32%) on this amount (which has not had the time to make any return on investment yet) instead of about 0,01% on savings for the 2024 tax year.
- We are still sleeping on our beds from during our studies, so we plan to finally upgrade the bed and matrasses to something a bit better/comfortable. Albeit we still sleep well on our existing bed, it is time to replace the matrasses. Now that we do, we can also increase the size of the bed a bit. Budget is about €6.000 for the set.
That leaves about €25.000 in cash in our (savings) accounts. Which is still a lot of money, but we feel more comfortable with some cash at hand. Especially as we still have real estate that we rent out, for which we keep a cash reserve for emergencies and replacement/maintenance items. Plus, there are more expenses coming up including a 4 year delayed 6-week summer vacation, a heat pump for the new house, new roof for the shed and some final expenses to finish the money pit.
How are your finances holding up?