On occasion you find a fascinating article that makes you think or shakes up your personal views. In this case it makes you think about taxes and the associated benefits of living in a relatively social country like the Netherlands. But 100% taxation?

100% Taxation?

Paying taxes is still annoying (especially if you see about 30-35% of your hard earned cash Below Sea Leveldisappear), but there are some benefits including a good logistical infrastructure, dykes to protect you from the ever rising water, good police/fire fighting/medical systems and some (financial) security if life decides to throw you a curve ball (i.e. it is very hard to become severely impoverished in the Netherlands).

We hope you enjoy the following article as much as we did (freely translated by yours truly, for the original Dutch version, see below):

What is Prosperity?

My father has a tree nursery. A noble profession, high CO2 compensation levels and the world looks greener.

There is some good money to be made in this business, so he opted to make his business a legal private company. One day my father sold a particular plant, making him (net of expenses) €100.

My father, righteous as he is, paid the government a 20 percent corporate profit tax. Besides being righteous, my father is also is a very kind man; so he decides to buy a gift for my mother. He pays himself the remaining 80 euros into his private account.

The taxman thinks this is an excellent idea and wants 25 per cent (“special interest” tax in Box 2). My father, a wise man as he is avoids his car and walk righteous, but slightly disappointed, with 60 euros to the store.

Now my mother is fond of brandy, so he decides to buy a bottle of it. The tax is also fond of cognac because it gets about 15 euros in VAT and various alcohol related duties.


100% Taxation

The 45 euro “left over”, my father adds to a donation to his niece. The taxman appreciates the generous gift with a donation tax of 30 percent, or 13.50 euros. The niece, much like her uncle, is thankful and deposits the gift including the remaining 31.50 euros into the bank; where she gets an interest rate of 1.2 percent per year.

The taxman believes that 1.2 percent return on investment is not enough and pretends she gets 4 percent (see here) and after a few years, this 31.50 dwindled to 20 euros. By the time her son inherits this 20 euros, only 18 euros is left over due to 10 percent inheritance tax. By this time her son will be able to just afford to pay the duties on a pack cigarettes, and we can therefore conclude that the entire 100 euros has come into the hands of the state.

The fact that a single euro can be taxed several times in this way, sounds serious. But in reality the situation is even grimmer. We have not even talked about gaming tax, social security, income tax, dividend tax and more.

To show how grim the situation is, we make the following calculation. If you take the Gross National Product (often incorrectly used as an indicator of prosperity) of the Netherlands, and divide this by the total revenue (taxes) of the government, you come to a factor of about 2.4. That means that every euro earned in Netherlands will end up within the state treasury in about two and a half years.

This actually applies to most European countries – except Norway and Sweden, of course, where this is done within a period of only two years. Poland is an exception. In Poland the income flows to government coffers within only 6 to 7 years. Just as in the United States and Canada.

The social welfare in these countries is hard to find, which proves that the ratio of GDP / Income is a more accurate welfare indicator than GDP alone. So if we still have some complain about the tax rate, please know that we really have nothing to complain.


Source: https://www.accountant.nl/opinie/2014/6/wat-is-welvaart/


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It is that time of year again that is feared most by cats and dogs: New Year’s Eve (or “Oudejaarsdag” in Dutch). It is the time of year when the Netherlands goes crazy and vaporises about 65 Million Euros in the name of fun and tradition.


As a frugal family, we should obviously not spend any money on this non-sense. But then again, we have not had the ability to (legally) set off fireworks in the past 8 years (and subject to how the laws change, may not again do so in the future). Mr. CF has a very big soft spot for fireworks (something to do with childhood memories) and as a family we often go to firework shows, competitions, and love watching it in general. Heck, Mr. CF even has been to NYC to watch the 4th of July firework show near the Brooklyn bridge, and it was awesome!

But this year it is a bit of a mixed feeling, since starting on the path of financial independence a lot has changed, we have been more efficient with our funds and invested in many assets. Firework is by far the best way to see hard earned cash go up in smoke (yes, pun intended).


So, this year we opted for a compromise and bought a little bit just for fun. Considering it has been 8 years since we last bought some fireworks (and we are much more frugal now), we have placed an order for the total sum of……€ 22 (beats the €75+ Mr. CF used to spent). This could have bought us a single share of RDSA, but it certainly would not give Mr. CF as much pleasure. Let’s call this a momentary lapse in focus, shall we?

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Cheesy Finance

What to expect?

Welcome to CheesyFinance.nl! If you are wondering about the name, please see our “About Us” section for some details.

So what’s the plan? What to expect? Well, we are going to try to document our journey (past, present and future) to become financially independent (i.e. how we financially retire or FIRE). As many of you probably have been snooping around personal finance blogs and the likes, our goal is much in line with other blogs out there but tailored specifically to the Netherlands.

In short, we will try to obtain sufficient passive income to cover our basic (and some extra) living expenses. We will do this through real estate, stocks/bonds/ETF’s, crowdfunding and personal loans (yes, we like to diversify).

Reader Question - Spain

What to expect – FIRE on the beach?
Source: https://www.clickstay.com/blog/6-reasons-for-a-friends-holiday-to-spain

So what can you expect from us?

  • Monthly and yearly overviews of income, expenses, savings rates and net-worth;
  • Our investment portfolio and associated updates;
  • Reviews of our everyday life expenses and ideas how to manage them efficiently;
  • Reviews on Dutch taxes, as these are a critical component of financial independence (in the Netherlands we are not so lucky as in the US, where tax sheltering/tax deferral is fairly common); and,
  • The fun stuff (e.g. travel and such).

Hope that you will follow us along.

Take care!

Team CF

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