How about a November 2017 Dividend Update? Not really a month that stands out, but we still have quite a few monthly payers that even make this month interesting.

Monthly Dividend Update

We had a sell order in place for UFS (Domtar Corp) that triggered on the last day of the month. It’s not a bad company, but we found that our position (in terms of value) was a bit too high for our likings. If the price would come down again, we might pick it back up. In the mean time we will spread some of the proceeds around to other companies that have more growth potential (both in value as well as in dividend growth).

One monthly dividend payer (temporarily?) stopped paying, being LIQ (liquor stores). They are not doing well and have already cut their dividend big time a while back. They are also restructuring and have been selling their US assets. We have previously unloaded some of these shares and are considering to now sell the remaining shares.  Perhaps it’s time to take our losses and move on? We are considering to wait a while to see if the restructuring causes share price increase.

We continued to DRIP as many shares as possible (no fees and some share price discounts!). These include the usual monthly dividend payers such as (and a few quarterly payers too such as BMO, RBC, FTT and EMA):

  • AAR.UN (REIT);
  • CJR.B (Communication Services);
  • CIX (Finance);
  • DRG.UN (REIT);
  • SJR.B (Communication Services);
  • HR.UN (REIT); and,
  • PLZ.UN (REIT).

Don’t forget to check out the community updates at the Dividend Diplomats and Easy Dividend.

November Dividends

All the dividend deposits received into the bank accounts (correct for exchange rates) sum up to a total dividend income of about €422. This is an decrease of about 2.8% compared to last year. Wait, what? A decrease? Yes, but this is only driven by the exchange rate, in CAD terms we actually saw an increase of 4.8% in YoY dividend increases. We are not worried yet 😉

The stats for last month:

November 2017 Dividend Update - Dividend Income

November 2017 Dividend Update – Dividend Income

The graph below is showing the yearly dividend totals for 2015 and 2016, and a year-to-date dividend total for 2017. It’s starting to really look pretty, doesn’t it? We should crack that €7.000 barrier by the end of the year. However, because we sold RDSA before the dividend record date, the December dividend income will be significantly lower than last year.

November 2017 Dividend Update - Yearly Dividend Overview

November 2017 Dividend Update – Yearly Dividend Overview

The “Dutch” dividend income (AH and UNA) are all after taxes (15%). The rest are held in RRSP’s and are not taxed (we will pay withholding tax when we withdraw from the account, but the dividends are not taxed themselves).

Dividend Stock Overview

Our dividend portfolio contains 42 companies with a total of 11.208 shares (up 986 shares from a year ago).

It looks like this:

November 2017 Dividend Update - Dividend Overview

November 2017 Dividend Update – Dividend Overview

Dividend Sector Breakdown

When you breakdown the previously shown dividend stock overview by sector, it looks as follows:

November 2017 Dividend Update - Sector Allocation

November 2017 Dividend Update – Sector Allocation

How was your October dividend income, any good surprises for you too?

Let’s have a drink! No, this post is not about buying your favorite liquor (will, maybe it is, it’s up to you 🙂 ). As the next BENL FIRE meetup is proposed for later February or Early March, we wanted to do something in between. So we devised a simple plan…..let’s have a drink!

The Plan?

The plan is rather simple actually, we name a location and venue(s) and you show up. How simple is that? No presentations or formal program for the day, no fees, just fun discussion and something to drink and eat. All at your own discretion of course (i.e. everyone pays for their own food and consumptions). We make no reservations anywhere, so be prepared to be flexible.

Obviously, similar to the meetups, the locations have to be easy to access by public transport, car and/or bicycle. But since we are lazy, we are currently planning to stick to cities in South-Holland so we keep our travel limited.

For this first drink we are proposing the beautiful city Gouda. Yes, from the Cheese (appropriate, isn’t it? You’d almost think we did this on purpose!). Potentially followed by places like Leiden, Haarlem, Delft, the Hague, Rotterdam, etc., if it’s a success (it’s up to you, no pressure).

Let's have a drink! - Gouda

Let’s have a drink! – Gouda
Source: https://www.holland.com/be_nl/toerisme/bestemmingen/provincies/zuid-holland/gouda.htm

Why?

We love meeting with people that are interested in personal finance, investing and FIRE. Same as you we struggle to find people in our daily lives to chat with, we hope that these informal meetings will help.

When?

Saturday December 30, 2017.

Location(s)?

The plan is to start after lunch at around 14:00 and meet at the “Siroopwafels & Banketbakkerij-Tearoom Van den Berg” in Gouda. For details have a look here: http://vd-berg.nl/contact-1

Let's have a drink - Stroopwafels

Let’s have a drink – Stroopwafels
Source: https://www.tripadvisor.nl/Restaurant_Review-g188628-d10302255-Reviews-Het_Stroopwafelwinkeltje-Gouda_South_Holland_Province.html

Between 17:00-19:00 we will just walk to the town square to get some dinner or a quick snack. If you want to join, make sure you are at the Tearoom before 17:00.

From about 19:00 onwards we will be at beer café “De Goudse Eend”. For details see here: http://www.cafedegoudseeend.nl/

Alternatives?

If you want to organize something yourself too, please do! But do let us know, we would love to come.

 

See you soon!

 

 

Cool, another month with “just above normal” savings rates. Not entirely expected, but we will take it! Here is the November 2017 Savings Rate.

November Finances

November was another very good month. But also for an less fortunate reason. We wanted to have some work done on our house/roof. But could not due to the crappy weather. We have moved the appointment twice already as it needs to be dry. Dry and November don’t go well together! Go figure…. In short, the €1200 maintenance bill is postponed until further notice (just need dry weather AND availability of the roofing contractor, how hard can that be in December?!).

Financial Overview

Here is a short financial overview:

  • Due to receiving 4 weekly wage payments for Mr CF, you always have one month per year with 2 payments! November was it 🙂 . So we received a lot of money in November. No expense claims though or other extra income. We thus had a well above normal month from in income perspective;
  • The crowdfunding income was below normal with €184 in deposits (combined interest and principle), some payments were received already last month (bank error);
  • Living and healthcare category was high at about €1.016 in total. This includes costs for mortgage interest, home insurance, healthcare premiums, utilities and some minor home maintenance. We also bought 9 “wind participations” through our energy supplier (€440). This is a one-off charge (they use the proceeds to build a new windturbine) that provides a discount to energy consumption for the next 5 years. Call it a prepayment for green electricity use; 
  • The transport costs were way above average with €791 spent. The €500 deductible for the second windscreen this year really hurt (first one was free, but changed he policy earlier this year. Because how big is the chance of having two windows cracked/broken in one year……right?!);
  • Grocery costs were again well below normal this month with just €281;
  • The kid category was above the “new” normal with about €617, which is consisting of after school care (4 days per week, including benefits) and a one-off school fee;
  • Travel and Leisure was €0. No money spent at all? Really?! Strange thing was that is was quite busy on the social front, but all free! How about that; and,
  • The other category was about €170. Money was spend on some cloths, gifts and the gym for Mrs CF.

November 2017 Savings Rate 

The savings rate for November was a very good 71.7%. The year-to-date savings rate is now up to 64,5%. We are definitely not going to make platinum for 2017, but the badass gold saver category “winner” is in the bag! 

Here are the stats:

November 2017 Savings Rate - Overview

November 2017 Savings Rate – Overview

If you breakdown our expenses for the month, the distribution looks like this:

November 2017 Savings Rate - Expenses

November 2017 Savings Rate – Expenses

 

How was your November from a savings perspective?

After figuring out that the journey to FIRE is horrible and all the talk about FIRE and ethics, its time to look at the cold hard cash we received. It’s time to take a look at the Real Estate Report – November 2017 edition.

Real Estate Report – November 2017

Rental Income

Our rental income for November remains well above the €3.000 mark. There are (unfortunately) no new developments to report. Still looking at ways to expand our portfolio, one way or the other (yes, we are picky, so it takes time). If you want an example of how this works, this comes to mind:

The monthly income overview is provided below:

Real Estate Update - November 2017 Income

Real Estate Update – November 2017 Income

Rental Expenses

The expense for November were quite low again. The expenses consisted of the usual:

  • Mortgage and loan payments,
  • Management fees; and,
  • Maintenance on the heating systems of two units (the other 3 are done in December).

The expenses for the month are as follows:

Real Estate Update - November 2017 Expenses

Real Estate Update – November 2017 Expenses

Real Estate Report – Overview

We made a total of almost €2.281 in net rental income for the month of November (before taxes).  The net cash-flow will come in at around €1.800 for this month.

Our total YTD net rental income for 2017 is now about €21.129 (before taxes), the associated net cashflow is around €17.000.

Real Estate Update - November 2017 Overview

Real Estate Update – November 2017 Overview

Real Estate Report – Forecast

One of our relatives who is renting one of our units has decided to buy the place. This is good news for us as it give us the opportunity to cash in on some of the capital gains made. This also gives us the ability to invest into higher yielding RE investments. It is one of our first investment properties, albeit not a bad investment, there are better options out there (even now).

We now need to start the process of mortgage assessments, pricing, any land registry items and some outstanding maintenance works. Don’t believe there will be any issues as we made clear deals with our family member how to proceed. Not sure how long this is all going to take, but we should have quite a bit of money next year to play with. Perhaps the investment loan as noted in last month’s real estate report will be a good option. Still to write a post about it, perhaps I can find some time in December.

 

What’s up with you? Any cool stuff to share?

The journey to FIRE is horrible, no really! All the choices, things you have to discover and find out. it takes an enormous amount of time and what do you get in return, money. Lovely….

The Journey to FIRE is Horrible

I remember it as if it was yesterday, the day I discovered the principles of FIRE. Thank you ERE, and that guy with a Mustache, for making my life overly complicated and difficult. Ever since that one day in the summer of 2014 our lives have revolved around the journey to FIRE, and it has been a emotional disaster.

The journey to FIRE is horrible - Horrible Day

The journey to FIRE is horrible – Horrible Day
Source: https://dreamersjourneytolife.wordpress.com/2015/12/20/day-282-a-hell-of-a-day/

Research

When you first find one of those so-called FIRE blogs your brain starts to process this new information. In most cases one of these light bulbs turns on and you become enlightened, whatever that might be. Suddenly you find yourself craving for more of these blogs, and books, and podcasts, heck even meeting up with others who have the same interest. It’s all just such a waste of time, time you could be spending on spending money! Or watching TV or any other way of not making yourself useful. Think of all the reductions in wasting time, it’s horrible.

Savings

Apparently the major thing you need to do on the road to FIRE is spent as little as possible. Something to do with a high savings rate and the ability to shorten this horrible journey. OK, so no more sports cars, exotic all-inclusive 5 star holidays and no new fancy label cloths. Where’s the fun in that? You only live once! Why on earth do you want more money? An empty wallet is just so much less confusing, no opportunities to spend money at all! Now that is a stress free life if you’d ask me.

The journey to FIRE is horrible - AAAAHHHH

The journey to FIRE is horrible – AAAAHHHH

Investments

Since you suddenly have money to spare, there seems to be this thing about making money with money. Right, as if money can duplicate itself? Ever seen mating euros or dollars? Thought so.

But you start looking at investments anyways (despite knowing better), and then you find out that there are so many! First there are these things called stocks, that seem to just go up over time, albeit with the occasional hiccup. But there are so many, it’s like trying to figure out which candy is the best? Just buy the bloody candy store!

Then there are those wooden and concrete boxes that you live in. There are entire movements of people spending money on these and then not live in them? What’s the point? No, they let other people live in those boxes, who even pay for this! Strange world.

Then there are those companies that pay you money regularly, just for being an owner of the place. Shouldn’t they just spend that money on Christmas bonuses for their worker bees? But no, that would make too much sense, wouldn’t it.

Just the sheer volume of options gives me stress. Heck, Options give me stress. Investments, they are really bad for you health, seriously!

Personal Development

Once you have finally overcome the many doses of Prozac and other stress mitigating drugs, there is this thing called personal development. For Pete’s sake, does this FIRE journey never end? Now I suddenly have to figure out what I’m going to do with all this money, sorry, I mean time. Time is money, so money must mean time? I’m confused.

Ok, so you suddenly have time. Since you apparently are no longer allowed to waste time (or was it money?),  you have to think of ways to make  yourself useful. Right, so I’m finally of the Prozac and I again get too many options what to do with my life. This thing just never ends, does it? It’s just one long and tiring emotional rollercoaster, without seatbelts and many loops. The journey to FIRE is horrible, period! Don’t recommend doing any of this nonsense.

 

End Rant 😉

 

This is a bit of a bonus post and something that I don’t do often. Actually, I’ve never done this before! Today a quick book review: financial freedom, conversations with people how don’t have to work anymore.

Book Review: Financial Freedom

For those people who know me, I don’t read books. I’m too much a millennial with focusing issues. I can read articles and short pieces (blog posts included), but I get bored when I read a book. I don’t seem to be able to sit still long enough to focus. Going to University was a challenge from this perspective :-).

So to be brutally honest, I did not completely read this book either, but I did read several of the chapters and scanned through most of the rest (all 122 pages of it).

Book Review - Financial Freedom

Book Review – Financial Freedom: conversations with people who don’t have to work anymore

The book consists of two “parts”. The first half is related to some of the practical and emotional aspects of FIRE. Including the more philosophical questions of the drivers behind FIRE. It’s definitely NOT a self-help book in “how to get invest to get to FIRE”. However, it does provide the basics in terms of savings and investing.

The second part of the book is showcasing several different interviews with people who are FIRE. How they got there, why they did it and how they are doing. Due to the variety it’s really quite interesting. I’ve actually enjoyed this part of the book the most. It’s been inspiring and given some nice insights into others that are bit ahead of us in terms of this “I don’t need to work anymore” thing.

Where and how much?

More details about the author (Gisela Enders) and the book can be found here:

http://www.financial-free.eu/?lang=en

On this page you can also find the link to where you can order the book. But please pay attention, the book should be available for the reduced price of €2.99 (regular price is €14.99) between November 24 – 26, 2017.

The book was translated into English for free and all the proceeds of the English version of the book will be donated to a children’s home in Romania. That’s a clear win-win if you ask me!

 

Full disclaimer: I don’t get AHY money or other rewards/reimbursements for this and nor do I want any. This really just has been a “pay if forward” effort.

 

How do Ethics and FIRE mingle? This appears to be a topic that a lot of people struggle with, at least that is the feedback that we received after the last Meetup in Eindhoven. For the next meet up we will likely add a discussion on this topic. This development also caused us to rethink various question(s). What do we think and why? How does it affect our investment decisions? Today we look at Part 2.

Ethics and FIRE

For sake of clarity I’d split the Ethics and FIRE discussion into two main components:

  • Ethics of FIRE itself (i.e. “living off the system”, while paying relatively little taxes and social security premiums), as discussed earlier this week; and,
  • Investment ethics (e.g. investment in oil, weapons, energy, real estate, cigarettes, etc.).

Today I’ll focus on the second part: Ethics of Investments.

The Ethics of Investments

This one is bound to really stir up some opinions 🙂 Please don’t hold back! Let’s have a look at a few of the industries/sectors and discuss, shall we?

Cigarettes

Stating the obvious here: smoking is really bad for you, period. But it is one’s own decision to start smoking, so is to quit smoking. It’s a personal responsibility. From a health perspective I don’t mind that it is discouraged via taxation. Heck, if it was me the taxes would go way up, or better abolish smoking by law. There are simply no positives about smoking.

Ethics of Investments - Cigarettes

Ethics of Investments – Cigarettes

That being said, investing in cigarette companies appears to be very lucrative. Companies such as Phillip Morris have proved to be a very good investment decision over the past decades. They are great dividend stocks. But would buying it be unethical? Would you stimulate smoking by owning shares in a company that produces cigarettes? I personally don’t believe so. Yet we don’t invest into this sector either. I don’t want my money to facilitate a habit that is so disgusting. Perhaps we are loosing some ROI and diversification in the process, but we are OK with this.

Weapons

I’m going to group small guns and all the way to army weapon systems into one sector here for sake of convenience. Contrary to cigarettes (where you make the choice), it’s the government that has the biggest impact on this industry (or lack thereof due to influential lobbying).

Ethics of Investments - Weapons

Ethics of Investments – Weapons

It’s an industry that is driven only in a small part by private consumers, the majority of the buyers are governments (especially on the “commercial” side of things). In short, my wallet does have little to no impact on this sector (but my voting rights may!).

This is also why we don’t own any shares in companies that produce weapons. It’s the only way to have an impact (if any). Again, we will lack some diversification and yield as a result. But that is a trade-off that we happily live with. At least our money is not used to destroy each other.

Energy

Again, for sake of convenience, I’m going to combine both oil & gas and utility companies together. Both are sectors that concern energy production, distribution and usage. Whether this be for your car, your holiday flights or the heating of your house.

As noted earlier, I don’t think I have much impact as an investor. But I do have a “major” impact as a consumer. When I use less fuel, electricity or gas, I directly affect the core business of these companies. If I actively purchase “green” energy, companies will see new business opportunities and modify their business models to capture this “new” market. Prices go down and we have a global win-win.

Ethics and Investments - Oil & Gas

Ethics and Investments – Oil & Gas Source: http://www.ampcapital.com.au/site-assets/articles/market-watch/2014/august/natural-gas-extraction-whats-the-fracking-problem

Furthermore, these companies operate under environmental licenses (or lack thereof) issued by governments. So if I really want to have an impact, my voting should do the trick. By voting green parties you could have some impact on legislation, which in return could affect how these companies do their business.

Mining

For mining companies the same applies as for the Energy sector. By consuming less “stuff”, you need fewer resources, this less demand on products thus fewer unethical practices. You vote with you wallet! Same as with the energy industry, governments and legislation (and verifying that legislation is followed!) also have a direct major impact. If you want change, you have to vote.

Sure, there is something to be said that you don’t wan to support companies that are knowingly not adhering to environmental and ethical standards and policies. Some of this misconduct finds it’s way out in the open via the main stream media. In that case you can make the decision not to invest into that specific company.

In short, we invest in the mining (and energy and utility) sectors, we have no (major) ethical issues with it as we do try to affect their business model via different routes. We do try to select companies that have a reasonable track record from an environmental stand point.

Ethics and Investments - Oilsands Mining

Ethics and Investments – Oilsands Mining

Airlines

We actually own shares in airlines. It was part of a diversification strategy to include this sector as well. However, the airline industry is one of the most heavily subsidized industries on the planet (after the agricultural sector). Which makes sense once you realize that a flight within Europe can be cheaper than driving with your car. With “normal” economics that should never be possible. This is obviously driving major growth in this sector (and associated sectors like tourism and trade). The downside is a significant environmental impact, considering flying is the most polluting form of transport.

Ethics and Investments - Airlines

Ethics and Investments – Airlines
Source: https://www.westjet.com/en-ca/about-us/fleet/767-aircraft

Is it therefore unethical to invest into this industry? In my opinion it is not. Ultimately the responsibility of whether to fly lies with you. You might be able to drive, bus, train, boat, cycle or even walk to your holiday destination. It might not go as fast, but it is often a possibility (notable exception is if you need to cross the big ponds, a boat will take a while). Same with business meetings, a telecon might work just as well.

If the government starts to get real on conservation and sustainability, the subsidies will be reduced and the sector might become less profitable. By that time we will have moved away from this investment sector and deploy the cash elsewhere. In the mean time, we try to limit our travel by air and offset some of the damage where possible.

Real Estate

Ethics of Investment - Real Estate

Ethics of Investment – Real Estate

As you are likely aware we are real estate investors. Is this ethical? I would say yes, assuming you are sticking to applicable laws and regulations. In fact we are providing housing solutions to people that need a temporary place to live (before buying their own or moving in with someone else).

We do make a good profit at the end of the day on these investments. But we also accept the risk and obligations that come with this investment form. The latter is the reason why we also think this is an ethical investment, it’s not a free for all. It’s also a voluntary decision by the tenant to sign the binding contract to use your (living/working) space.

Agricultural

There are obviously many more industries that have ethical aspects to it. The agricultural sector also springs to mind, specifically the livestock production. When ranking environmentally damaging industries, this one comes in close to the top. Especially when combining the effects of methane, CO2, air & water & soil pollution, antibiotics and animal cruelty.

But as mentioned before, we as consumers have the biggest impact. Just eat less or no meat and you will be doing yourself and mother nature a big favor. But is investing in this industry unethical? I would again say no, but there is one company we will never invest in, which is Monsanto. Their way of lobbying and doing business (treatment of (organic) farmers) is just too unethical for my taste.

Ethics and Investments - Lifestock Agriculture

Ethics and Investments – Life stock Agriculture
Source: https://summitcountyvoice.com/2011/07/20/study-pinpoints-greenhouse-gas-emissions-from-livestock/

Pharmaceutical/Medical

Another interesting sector is the pharmaceutical industry (in combination with the medical profession). I would love to make it my personal mission to spend little to no money here by living healthy. There are obviously many products they provide that are either convenient (think painkillers, cold medication, etc.) or very useful (cancer treatments, medical equipment, vaccinations, etc.).

However, the pharmaceutical lobby is very powerful and has a major impact on government politics (and doctors!). They are very good at selling their products. To be brutally honest, they don’t benefit from a healthy population! It’s actually best for them to just have you be slightly ill (read chronically ill) so they can keep selling your medication (think diabetes type 2, high blood pressure, blood thinners, cholesterol lowering, etc.). Simple fact is that you can get avoid or eliminate most of these with dietary changes (it takes an hour, but it’s worth watching this video).

It’s not uncommon for the pharmaceutical industry to produce research (highly recommend watching this video, very good) that confirms the “need” for their products. This is obviously far from ethical behavior! Unfortunately, the only way to control this industry is by government regulation, which is nearly non-existing due to strong lobbying. A catch 22….

Discussion and Conclusions

As mentioned in the previous post, ethics will mean a different thing to everyone, which makes for interesting discussions and decisions. Same as “personal” finance, ethics is very much personal too. Ultimately you have to do what feels right to you. That being said, it might not be such a bad thing to also look at how your decisions impact others, directly and indirectly.

I believe it is the governments responsibility to limit sectors that have a negative impact on humanity and stimulate sectors that have a positive impact. I also believe that we as consumers can have a far larger impact with our wallets than with our investments. By not buying certain products, or buying less of them, we affect the business models of many companies. Thereby we stimulate change in certain sectors.

That being said, you as a shareholder have “some” impact on a company. You have voting rights. But considering most people and institutions invest to make money, very few will use their right to make businesses noticeably more sustainable or force them to change their core business model. But it does occasionally happen (think Shell).

Personally, I rather keep voting with my wallet and change our investment strategy depending on how businesses are doing, rather than what they are doing (with a few notable exceptions). It is also key to make sure your investments make good yields or capital gains, especially is you want to become and remain FI. Finding the right investments that combine this trait, but still adhere to your ethics can be a challenge indeed.

 

What’s your strategy to combine ethics with investing?

How do Ethics and FIRE mingle? This appears to be a topic that a lot of people struggle with, at least that is the feedback that we received after the last Meetup in Eindhoven. For the next meet up we will likely add a discussion on this topic. This development also caused us to rethink various question(s). What do we think and why? How does it affect our investment decisions? This poat could easily turninto an PhD thesis, so I’m going to try to keep it limited 🙂 Or better, a two post series! Today we start with part 1, will do part 2 later this week.

Ethics and FIRE

For sake of clarity I’m going to split the Ethics and FIRE discussion into two main components:

  • Ethics of FIRE itself (i.e. “living off the system”, while paying relatively little taxes and social security premiums); and,
  • Investment ethics (e.g. investment in oil, weapons, energy, real estate, cigarettes, etc.).

Today we look at Part 1: Ethics and FIRE.

The Ethics of FIRE

I have mentioned once to a colleague that I was planning to become Financially Independent and Retire Early (FIRE). Her first response was that it was unethical because I would not longer pay any taxes (funny note, most people first ask “how” to become FIRE).

Now, for the Netherlands this is far from true, as we are taxed on an assumed ROI of our wealth (the latter is defined as “assets minus liabilities” in tax Box 3). It is however true that we will be paying a lot less taxes and no more social security premiums when we stop working when we are FI. Obviously, we will continue paying taxes on our properties and fees for local water management and for garbage removal.

However, we recon that our overall tax burden (including social premiums) would drop by about a factor 7-8 once we are FIRE-d. But we will still be using public roads, the medical system, police and fire services, and perhaps even qualify for certain benefits and/or subsidies (albeit very few).

Taxation

Taxation

Ethics Discussion

This begs the question is this ethical? Paying less into the system, but still using it (both directly and indirectly). From a pure social perspective, it is not. However, we would have a lot of time to volunteer (and will likely do so). Albeit this does not directly mean anything in financial terms for the government. It does have a positive social and perhaps even economic impact. Would it offset the loss in taxes, I’m not sure, but it does make me feel better.

Does it feel selfish to FIRE? To a degree is does. Is it going to stop us, eh, nope. By the time we reach FIRE we would have worked about 40-50% of our “normal” working life. Due to our above average education and associated income, we pay well above average amounts of taxes. Does this make it right, probably not, but it does make it feel more acceptable.

Plus, we will continue to pay taxes, as mentioned earlier, on our investments. This amount will likely be more than some people pay with little to no income (ignoring people on benefits here too). There is the caveat that we are not contributing to the social system (we would not pay social premiums when FIRE), but are not allowed to use the system either (due to our wealth), with the exception of old age security (AOW) and the medical system.

Conclusions

Ethics will mean a different thing to everyone, which makes for interesting discussions and decisions. Same as “personal” finance, ethics is very much personal too. Ultimately you have to do what feels right to you. That being said, it might not be such a bad thing to also look at how your decisions impact others, directly and indirectly.

Is striving and becoming FIRE ethical? Depending on your opinions, country where you live, the local tax system and what you are going to be doing once you are FI, the answer may be different. There certainly is a selfish component to becoming FI and RE, but to say it is unethical is a bit much for my taste. As long as you stick to the rules of the system, “legally” there is nothing “wrong” with becoming FIRE.

 

What’s your strategy to combine ethics and FIRE?

We have a reader question for your for today. We are doing pretty good on the savings rate side of things at the moment, but that is about to change next year. We are planning for a 9 week holiday in 2018. The plan is to go road tripping through southern Europe. But this also means 2 months of unpaid leave for Mr. CF. Mrs. CF is going to have 2 months of paid leave instead of her cash bonus (sweet deal!). In short, the savings rate is going to be far from stellar in 2018. Furthermore, Mr. CF is likely to also quite his job in the second half of 2018 (about a 1 year delay). We therefore have the following Reader Question: Shall we do a Christmas Holiday Trip?

A Christmas Holiday Trip?

We could just ignore all our dilemmas and just splurge on our third vacation of 2017. But that’s not us. Here are our dilemmas:

  1. We are off work over the holiday season (mandatory paid time off). We will be off from Friday December 22, 2017 until January 1, 2018; a nice 11 days without having to lift a finger. It would only cost a bit of money to actually travel and spent Christmas somewhere warm for a change;
  2. If we do, how much money would be reasonable for this trip?
  3. If we want to go somewhere warm, we would need to fly. This obviously has a big environmental impact, should be pay some extra and compensate our emissions?
  4. Where do we want to go? Considering Miss CF is not good at sitting still, we want to keep the travel time limited. This pretty much limits our options to places like Portugal, Spain, Greece, Italy, Egypt, Morocco and perhaps even Dubai.
Reader Question - Spain

Reader Question – Spain
Source: https://www.clickstay.com/blog/6-reasons-for-a-friends-holiday-to-spain

Dilemma 1 & 2: Money

Simple fact is that we still have some budget for this year to travel, despite our 2 earlier holidays to Belgium and Germany. MoneyIf we don’t use the available budget, the savings rate just goes up further and we have more breathing room in 2018 for the long road trip. It would basically provide a buffer for next year. Can we miss the money, sure. But would it help us next year, absolutely!

How much money do we have available? Ideally we would want to limit the costs to about €1000 for the 3 of us for 6-7 days (so about €150/day). This might be tough (if even possible?) and won’t be very luxurious, but that fine with us. If we would go “fancy” we could stretch this to €1500.

What would you do?

Dilemma 3: Emissions Compensation

This dilemma ultimately revolves around money again. As compensation of emission from flying can be done by simply spending some more money. The costs of compensation for 3 people flying to Lisbon (Portugal) from Amsterdam, in Economy, would just be about €12 via Greenseats and €24 via Treesforall. Not really shocking amounts! Should be a no brainer, really, to compensate about 2-3t of CO2 from flying.

Reader Question - Emissions Compensation

Reader Question – Emissions Compensation
Source: https://lu.myclimate.org/private-clients/

 

What do you think, any other options/alternatives?

Dilemma 4: Locations!

Now this is a dilemma and a challenge all at the same time! Ideally we want to fly from Amsterdam, Rotterdam or Eindhoven. Those are places we can get to quick quickly via public transport or by cab. We could move out further to Dusseldorf or Brussels, but that would take away precious time travelling without seeing anything, but might have a potential for lower costs.

Let’s assume we limit the costs for travel and accommodation to about €800 and leave about €400 for food, attractions and trips. Based on a quick search we did, Dubai seems to be out of the question (too expensive). Portugal and Spain are good options but we might need to book flights ourselves in combo with AirBnB.

So far I was not able to find deals that fitted the financial criteria. Perhaps I’m aiming too high (or low) for a holiday during a school holiday and the Christmas season? We are also opting to see if you can purchase a last-minute within 1-3 days of travelling, never done something like it before. Could be cool! It also does not fix the destination until the “the last minute”.

Reader Question - Dubai

Reader Question – Dubai
Source: https://www.viatorcom.nl/nl/7381/tours/Dubai/Helicopter-Flight-in-Dubai/d828-6267HELIDUBAI

 

So, our beloved readers, pitch in some ideas! Would love some feedback and ideas. Do keep in mind that we would like to go to a place that is relatively warm and (preferably) dry. Have had enough grey and wet weather for now…..

Good morning (or whatever time of the day you are reading this), we got a pretty juicy October 2017 Dividend Update!

Monthly Dividend Update

It was a bit of a wild month. We had been eyeing several Real Estate opportunities for a while. To be able to know with certainty how much money we would have, we decided to liquidate a portion of the Dutch dividend shares. We sold shares that made a bit of a profit, including ABN, RDSA and BOS. In case of RDSA, we should have kept them a little longer as they skyrocketed the last few weeks. But hindsight is 20-20 and we did not know if the opportunity would materialize quickly! Unfortunately it didn’t, but that’s ok. You win some, you loose some, at least we still have the cash ready to be deployed.

We will likely also sell the UN and AH shares too and transfer into other (higher yielding) cash-flow investments. Once that cash-flow is ongoing, we will like start to re-invest into dividend shares and/or index funds. The jury is still out on this one, it also depends on what the market is doing.

We continued to DRIP as many shares as possible (no fees and some share price discounts!). These include the usual monthly dividend payers such as (and a few quarterly payers too such as BNS, AQN, AGU and GS):

  • AAR.UN (REIT);
  • CJR.B (Communication Services);
  • CIX (Finance);
  • DRG.UN (REIT);
  • LIQ.UN (Consumer Staples);
  • SJR.B (Communication Services);
  • HR.UN (REIT); and,
  • PLZ.UN (REIT).

Don’t forget to check out the community updates at the Dividend Diplomats and Easy Dividend.

October Dividends

All the dividend deposits received into the bank accounts (correct for exchange rates) sum up to a total dividend income of almost €730. This is an increase of about 33.9% compared to last year. This is mainly driven by a special dividend from GS (a Canadian financial institution for high net worth individuals). This added a whopping €181 to the total dividend. We very much approve!

The stats for last month:

October 2017 Dividend Update - Dividend Income

October 2017 Dividend Update – Dividend Income

The graph below is showing the yearly dividend totals for 2015 and 2016, and a year-to-date dividend total for 2017. Yes, we beat our income from 2016, with two more months to go!

October 2017 Dividend Update - Yearly Dividend Overview

October 2017 Dividend Update – Yearly Dividend Overview

The “Dutch” dividend income (AH, ABN, BOS, UNA and RDSA) are all after taxes (15%). The rest are held in RRSP’s and are not taxed (we will pay withholding tax when we withdraw from the account, but the dividends are not taxed themselves).

Dividend Stock Overview

Our dividend portfolio now contains 43 companies with a total of 11.472 shares (up 1.575 shares from a year ago).

It looks like this:

October 2017 Dividend Update - Dividend Overview

October 2017 Dividend Update – Dividend Overview

Big note here as I was not able to record all stock values around month end. The above is a snap shot with the majority of the share values as per close of business on October 16.

Dividend Sector Breakdown

When you breakdown the previously shown dividend stock overview by sector, it looks as follows:

October 2017 Dividend Update - Sector Allocation

October 2017 Dividend Update – Sector Allocation

 

How was your October dividend income, any good surprises for you too?

And we are back to “just above normal” with out October 2017 Savings Rate. After the unreal savings rate of September, we were bound to get off our new record high. But we did surprisingly better than I thought. So let’s look at the month of October form a household finances perspective.

Savings Rate Update

Savings Rate Update

October Finances

October was a very good month. Here is a short financial overview:

  • We received our regular incomes this month, the expense claim up to September was also recieved. We also received the quarterly childcare benefits (~€200). Still, the October income was slightly below the YTD average monthly income;
  • The crowdfunding income was back to normal with €207 in deposits (combined interest and principle);
  • Living and healthcare catogery was about €737 in total. This includes costs for mortgage interest, home insurance, healthcare premiums, utilities and home maintenance. November will be expensive as we have roof improvement work planned (totalling €1200); 
  • The transport costs were about average with €295 spent;
  • Grocery costs were again well above normal this month with a total of about €405. This included some shopping from the holiday in Germany that was booked in October;
  • The kid category is now at the “new” normal with about €570, which is primarily after school care (4 days per week) and some randon items for Miss CF;
  • Travel and Leisure was about €115. This included costs for a hotel we used on the last day of our holiday and a few outings for the remainder of the month; and,
  • The other category was about €260. This was very high due to a €95 restaurant bill (which was so worth it after 4 years of not going out to dinner with the two of us). Other expenses include a gym membership, some cash purchases and shoe repairs.

October 2017 Savings Rate 

The savings rate for October was a very good 68.2%. The year-to-date savings rate is now up to 63,6%. We are not going to make platinum for 2017, but we remain solidly in the badass gold saver catergory. 

Here are the stats:

October 2017 Savings Rate - Overview

October 2017 Savings Rate – Overview

If you breakdown our expenses for the month, the distribution looks like this:

October 2017 Savings Rate - Expenses

October 2017 Savings Rate – Expenses

 

Did you also have a great October? If you did, what made it a success? If not, what went wrong?

It was a rather successful Eindhoven BENL Meetup, if I may say so myself. We had a total of 38 people (and one little person) join last Saturday to talk money and FIRE for the day. As with every event we have organized in the past, we walk away with lots of things to discuss and review. So many new ideas!

Eindhoven BENL Meetup

The group that met was quite diverse (as per usual), both in terms of bloggers and non-bloggers. Some people are FIRE already, other have no desire to become FIRE at all. This makes for great discussions and the ability to explore other viewpoints. We really enjoy this part of the event; random discussions with complete (internet) strangers and new friends.

That being said, we always try to make a program that is diverse in nature. However, due to time restrictions and the difficulty of finding presenters, this is always a challenge. The event in Eindhoven was this time geared towards the investing side of things with presentations on Cryctocurrencies and investing in Holdings (I’m in the process to see if we can make guest posts about the two presentations).

We also hosted the loverly Mr and Mrs W from Whatlifecouldbe. They are already FIRE and are actively working on a European version of the “Rockstar Finance” site: FIREhub.eu.

They also presented and provided information about a European FIRE event that they organize: FIWE. The next one is schedule for the summary of 2018. For more details, see the FIWE link above.

BENL FIRE Meetup Eindhoven

Many Cheese-heads at the BENL FIRE Meetup in Eindhoven

Other Bloggers

Obviously some of the bloggers make a short write up of these meetups, below is a summary of a few of them (mainly in Dutch!) from the Eindhoven edition last weekend:

http://geld-is-tijd.blogspot.nl/2017/11/de-ethiek-van-fire.html

EindhovenCon – FIRE meetup (2)

BENL Meetup Eindhoven

Next Time?

Of course we are going to continue with organizing these events. It is very rewarding and fun. The next event will likely be in February or March of 2018 in Leuven, Belgium. Those that attended the last few events will get an invite to propose their favorite days, from which we will select the final date (or dates, if we make this a weekend long event).

BENL Meetup Leuven Belgium

BENL Meetup Leuven Belgium
Source: http://www.art7d.be/belLeuv1.html

We are obviously already looking for new presentations and discussion topics. Some already proposed include:

  • Preferred Shares
  • Permaculture
  • The ethics of investing
  • Investment loans
  • Estate planning and inheritance
  • Financial Planners, are they worth a visit?

If you have a topic you are interested in, please let us know. If you want to present a topic yourself, you are encouraged to let us know too.

Amber Tree Leaves and us will keep you posted on the developments for the 5th BENL meetup.

 

It is again time for the Real Estate Report – October 2017 edition. Still keeping the posts sort to limit the impact on my arm, but it is going rather well at the moment.

Real Estate Report – October 2017

Rental Income

Our rental income for October now well above the €3.000 mark due to some new developments. We have given out a €15.000 loan to another couple of Real Estate investors. They have used this loan to purchase more property. We get 6% interest on this investment loan, which is paid monthly. In return for this high interest rate the lenders have gotten a flexible repayment plan. Both parties are happy with the end result!

We also did have one unit rented for 1,5 days less due to the now tenant moving. Never knew the property manager could bill the new tenant for half a day! But hey, it works for us (half a day more than expected).

The monthly income overview is provided below:

Real Estate Update - October 2017 Income

Real Estate Update – October 2017 Income

Rental Expenses

The expense for October were high, mainly due to the massive property management costs. These are caused by the new tenant moving in. Expenses are one month rent + 21% sales tax. That hurts, but it’s still worth it for us as we did not have to lift a finger and we get a more favourable tax regiment.

Other costs are the usual mortgage, loan and insurance premiums. No maintenance required this month.

The expenses for the month are as follows:

Real Estate Update - October 2017 Expenses

Real Estate Update – October 2017 Expenses

Real Estate Report – Overview

We made a total of almost €1.425 in net rental income for the month of October (before taxes).  The net cash-flow will come in at around €1.000. Our total YTD net rental income for 2017 is now about €19.043 (before taxes), the associated net cashflow is around €15.000.

Real Estate Update - October 2017 Overview

Real Estate Update – October 2017 Overview

Real Estate Report – Forecast

We have just decided last night to not go for the 4-plex. Too many risks with the exit strategy and financing. Also still no confirmation on the renovations quote either (contractors are super busy right now, really annoying). We still might low-ball with an offer on the property, just to see what happens. Not expecting much.

On the other hand, we have been approved to become private money lenders via a real estate loan platform. The idea is that one party provides a loan to another party to finance (or re-finance) Real Estate. In return you get the first lien right (eerste hypotheek recht), all arranged via a notary public, and one heck of a interest rate (5.5-6.0% net per annum). These investment are for commercial use or to rent out as an investment property only. Personal use of the property is not permitted. 

What is the catch? The lender is allowed to repay as much as he/she likes at any time. In the worst case you get you money back within a year or two. This does not seem to happen in most cases, but it still happens. Minimum investments are €100.000 and a maximum of €500.000. I’ll write a more detailed post about this in the future. However, instead of buying overprices property right now, we are seriously considering expanding to this super passive RE investment opportunity. It almost even beats out the final overall net return on investment (after taxes) for the 4-plex! But with virtually no risks or efforts, very appealing.  

 

How is are you doing with your real estate ideas and leads?

The next BENL Meetup is scheduled for coming Saturday November 4 in Eindhoven. We have had a few last minute cancellations and therefore have a few more spots available. If you still want to join, please leave us a comment! This will be a first come, first serve opportunity so don’t wait too long. We max out at 40 people for this event (due to the FIRE code, how ironic!), so that’s a lot of opinions, ideas and knowledge in one room!

BENL FIRE Meetups - Financial Fun Since 2016

BENL FIRE Meetups – Financial Fun Since 2016

BENL Meetup – Eindhoven Edition – Final Call!

We will be having quite a internaltional group of people again, with folks coming all they way from Romania! It will be an all-day program with lots or interactions, discussions, fun, food and finance. It’s a great way to have an informal discussion on everyting finance, FIRE and personal situations without being looked as if you are nuts.

If you want an impression of what it’s like, check this post.

 

BENL Meetup

BENL Meetup – Eindhoven Edition!

The selected venue is in “downtown” Eindhoven and really easily accessible by public transport. Parking in not too bad, especially not if you don’t mind a short walk. More details will be provided to those that register!

What are we planning?

The program is now available and looks as follows:

  • 10:00-11:00 Doors open and general introductions;
  • 11:00-12:30 Financial speed dating (will make a couple of groups and have people rotate in 5 min sessions to get to know each other);
  • 12:30-14:00 Lunch (Brown Bag);
  • 14:00-17:00 Presentations and discussions. Topics include a new European “Rockstar Finance” site, Crypto Currencies, investing in holdings and FIWE;
  • 17:00-18:30 Drinks and chats;
  • 18:30-19:00 Cleanup of venue & exit; and,
  • 19:00-?? Restaurant/Bars

Hope to see you soon!

Cheers.

Monthly Cheesy Index

The September 2017 Cheesy Index was such a great thing to calculate! This as we already hit the yearly target, and we are only in October!

September 2017 Cheesy Index

Thanks to the low expenses for September and good investment income streams, the Cheesy Index continued its march to new heights! The September 2017 Cheesy Index increased to 65.0%, our target value for the whole of 2017! We are now very curious to see where this year is going to bring us, but it looks to be very good. Unless Mr Market gets very, very angry….

Here are the stats:

September 2017 Cheesy Index

September 2017 Cheesy Index

Cheesy Index Forecast

The forecast for the Cheesy Index is rather good. All units are rented, we are expecting a 13th month payment for Mrs CF and a new sign-on bonus for Mr CF (contract extension). This will help us bring in more money and increase our net worth. How far are we going to get this year? I’m not sure, but it would not surprise me if we actually hit 66% or higher. This is assuming that the market stays high until the end of the year. But only time will tell.

On a different note, the net cashflow from our Real Estate and our dividends for the first 9 months of this year adds up to ~€19.500 (before taxes!). This is about €14.000 for the RE and €5.500. Our “core” expenses YTD (this excludes daycare, but includes holidays) were around €18.000 (which is below our FI target of €18.750). This would mean we would have been FI for the last 9 months! Kind of cool, but as shown above in graph, which does include taxes, we still have a bit more to go. But it is promissing!

How were the developments in your net worth or “index” for September (or October, if you are quick with calculating your finances)?