After we came back from our holiday in Belgium, I decided on the drive back that I needed to get my a$$ moving. I used to be reasonably fit, but since we got Miss CF it has slipped quite a bit. Time for a change, time for a challenge! It’s time of the Cheesy Finance Exercise Challenge 🙂

The Plan

Let me know if this sounds familiar: I cannot do things in moderation! If I go for something, I tend to go full throttle. The applies to life, candy, work, FIRE and workouts. There is a major downside to this, once I take a break the project/goal usually falls apart. See previous attempts as a running challenge here, here and here with Amber Tree leaves (albeit he, actually had a good reason).

The plan for this challenge will therefore be a bit more “modest”. The exercise challenge is as follows:

  • Exercise every day for a month (starting on May 1);
  • Workouts need to be frugal (running, cycling, home workouts, etc.), not going to spend any extra money on this (the Cheap Athlete should be proud!);
  • Speed, distance, durations, etc., don’t matter! Just get moving;
  • Don’t get injured (duh…);
  • Eat as healthy as possible (to improve recovery); and,
  • Keep a record (using my Garmin GPS watch for this – no affiliate link, but I do love this thing and it has served me well).

The Initial Results

These are actually rather good. I’ve been able to exercise every day. Started slow with running a ~2.5km loop (to avoid my knee playing up) and I’m up to about 20km so far. But I also cycled to work 3 times in the last 2 weeks. This was about 163km of cycling with amazing morning views:

https://twitter.com/CheesyFinance/status/861831485892022272

https://twitter.com/CheesyFinance/status/862184166212947969

Please note that I did not ran for about a year. Cycling to work was restricted as I was working on location for the whole Q1 of 2017. This was limiting my transport options to the car unfortunately. A slow start, in terms of pace at least, is therefore critical!

See the overview below with the exercise details:

May 2017 Cheesy Finance Exercise Challenge

May 2017 Exercise Challenge – First results

Going forward I’ll keep running and hope to be able to cycle to work twice (perhaps 3) times per week. Will try to do a weekly update, but work is busy and I might not have sufficient time.

Observations and Random Notes

Couple observations of the past 11 days (wrote this post last Thursday):

  • Man, I’m out of shape!
  • Why am I doing this…….
  • Cycling is great fun, especially early in the morning when it is fairly quite
  • This GPS watch and it’s data is so much fun to play with 🙂
  • You get really tired legs when working out every day
  • Did I mention I’m out of shape?
  • I sleep better
  • Working out does make you feel better, happier and more productive
  • I eat tons more, but this did not start until May 8th
  • I’m getting more motivated to do an olympic distance triathlon (goal for next year)
  • Wow, I’m really out of shape 😉
  • Hoping my six pack will eventually return too… has been a few years 🙁
  • Curious if this is going to attract a lot of people to this blog again (total pageviews of the running challenge with Amber Tree Leaves was about 3500+ times to date…..)
  • Heck yeah, I’m going to finish this thing strong!

How about you, want to join in?

Monthly Dividend Update

April was a great month, primarily because of one company Ahold (AMS.AD). This yearly paying dividend stock provided about a third of the total dividend income!

We also added a few shares last month, to be precise:

  • 200 AH (could not resist the dip right before the ex-dividend date)
  • 200 RDS (of which 100 due to an option contract)

We also have tons of DRIP shares including AAR.UN, CJR.B, DRG.UN, PLZ.UN, CIX, SJR.B and a few more.

Furthermore we also sold a few shares, primarily because of tax reasons. BP.UN was causing us some tax headaches with the US, so we sold this stock to prevent further issues. We even sold for a profit! Now just need to find a spot to put this cash.

Oh, and keep your eye on the Dividend Diplomats and the Predictable Snowball for great DGI income summaries from various other bloggers.

March Dividends

When we added up all the deposits into the bank accounts (and corrected for exchange rates), we received over €730. Nice! That is an amazing 114.2% YOY increase. Thank you Ahold :-).

April 2017 Dividend Update - Dividend Income

April 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. We are now creeping up to be half way the 2016 by the end of May.

The “Dutch” dividend income (AH, 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).

April 2017 Dividend Update - Yearly Dividend Overview

April 2017 Dividend Update – Yearly Dividend Overview

Dividend Stock Overview

Our dividend portfolio still contains 44 companies with a total of 11.071 shares and looks like this (up 2.754 shares from a year ago):

April 2017 Dividend Update - Share Overview

April 2017 Dividend Update – Share Overview

Dividend Sector Breakdown

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

April 2017 Dividend Update - Sector Allocation

April 2017 Dividend Update – Sector Allocation

How was your April? Happy with the amount of “free” money that you received?

Savings Rate Update

I’m happy to report no calculation errors this time around for the savings rate 😉 That being said, we did have another pretty good month on the savings side. We are therefore very happy to present to you the April 2017 Savings Rate.

April Finances

For April 2017 we ended the month at a savings rate of 62.4%, pretty satisfied with this result (as we should be!). A financial overview of the month:

  • We received our regular incomes and there were no major expense claim deposits;
  • The crowdfunding was normal with just €200 in deposits (that being said, two more project appear to be in trouble and missed payments are starting to go up!);
  • Living and healthcare spending was relatively high this month due sewage fees (€301). May is going to really painful as property taxes are due, and we are expecting the bill for the renovation works done on the windows (see below). But that last bill is one that I’ll be happy to see, as the result is a newly placed and well insulated window unit;
  • The transport costs were below average about €136. Main reason is that I only worked half the month, so less fuel consumption. The car is coming up for major service in June or July (mental note, make an appointment….);
  • Grocery costs were way above normal this month with a total of just about €365. The main reason of course is the holiday in Belgium;
  • The kid category was again fairly stable, we paid for day-care fees (net fees are about €953) and some clothing;
  • Travel and Leisure for this month was €57.5. The main bill for the holiday accommodation (€400) was already paid in February. We also had some spare cash we used for the holiday and some other charge shifted into May. Overall a low spend for actually being on holidays; and,
  • The other category was about €139 with some cash withdrawals (which were subsequently used for the holiday), tools for our record player (actual vinyl records), some dining out and bank fees.

April 2017 Savings Rate 

The savings rate for the month of April was thus 62.4%. The overall savings rates for 2017 is now 64.5%. That being said, expect a plunge in both the monthly and overall savings rate in May. Main reason, as also mentioned above, is several pending bills and stable income (perhaps except for the May vacation money payment for me).

April 2017 Savings Rate - Overview

April 2017 Savings Rate – Overview

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

April 2017 Expenses Overview

April 2017 Expenses Overview

How was your Savings Rate? Was it all pretty basic for you too, or did you have some interesting items?

Flag of Belgium

I probably should be writing the savings rate post for April, but I’m still too much into the whole holiday thing. Despite already being at work for three days….sigh. So instead of pretty graphs with good savings rates, you can take a look at some of the things we have seen last week. Without further delay, here is a short summary of our holiday in Belgium.

Day 1: Beach, Travel and Arrival in Belgium

Before we actually drove to Belgium, we met with friends at the beach in Noordwijk (the Netherlands). This was one of the more spontaneous actions we have done in a while. Great prelude to the holiday actually! After lunch we started to drive towards Belgium. Once we crossed the border, the holiday feeling really kicked in.

I believed it was a good idea to take local roads, rather than the highway, to have a prettier drive. Pretty it was, but boy was it a wrong decision! Forgot how poor the Belgium secondary road system is. In the Netherlands we are blessed with near perfect roads, driving abroad always reminds me of this. Apparently Miss CF agreed that the roads were poor (and winding), unfortunately her stomach did not agree! Never knew that we would be so happy to have rubber boots in the car….. But she was a good girl and aimed very well, no spills 😉 Poor kid, motion sickness is no fun!

Day 2: Alden Biesen (Belgium)

Alden Biesen is a castle located just outside the town  of the Bilzen. It’s freely accessible and it’s an nice place to roam around for a couple of hours. But once we got there, there was a story telling fair for kids. We explored the various dungeons and rooms where these story telling events were about to happen and found one that had spaces left. Fortunately Miss CF could freely join in, but got bored after about 20min and wanted to run outside again. This was fine with us, so we walked through the massive gardens and enjoyed the sunshine. We also enjoyed some packed lunch in the gardens.

Holiday in Belgium: Alden Biesen - The Church

Holiday in Belgium: Alden Biesen – The Church

Holiday in Belgium: Alden Biesen - The Main Castle

Holiday in Belgium: Alden Biesen – The Main Castle

Day 3: Tongeren and Bilzen (Belgium)

We were told by the owners of the vacation rental that the city of Tongeren was very nice to visit. We therefore got out the trusty GPS and drive down to a free parking area and went to explore the city. It’s not very big, but it does have lots of character and many very old buildings and a medieval wall (well sections of it anyways).

Holiday in Belgium: Tongeren - Main Church

Holiday in Belgium: Tongeren – Main Church

We got lucky and were able to enter the Moerenpoort (a old tower at the city gate) and climb all the way to the top for a great view of the city of Tongeren.

 

Holiday in Belgium: Tongeren - Moerenpoort

Holiday in Belgium: Tongeren – Moerenpoort

Holiday in Belgium: Tongeren - City View

Holiday in Belgium: Tongeren – City View

 

After leaving Tongeren we decided to also check out the city centre of Bilzen, another old town not far from Tongeren. But there was not that much to see and do. We therefore ended up doing grocery shopping and went home for diner (and to play with the animals in the yard of the vacation rental).

Day 4: Play Day at Edenhof, near Bilzen (Belgium)

After two days of cultural sightseeing, we decided to have a bit of frugal family fun with Miss CF. We had found a free play park called “Edenhof” near the town of Bilzen. It boosted about 30 different units including swings, zipline, climbing towers and more. Needless to say that Miss CF did not want to leave, not even after nearly 2 hours of running around! We eventually persuaded here with food (we were starving too and needed a hot cup of tea to warm up). Who ever said you need to go to a amusement park to have fun?

https://twitter.com/CheesyFinance/status/857222130911596544

Day 5: Kings Day in Maastricht (the Netherlands)

We have friends that live in Maastricht. We already visited them and the city a couple of times and really like the place. It’s a very pretty city! But this day it was also Kingsday! In short, major outdoors flea markets, concerts and lots more. If you even visit the Netherlands, make sure it’s around this time, the country goes mad and orange (including me).

https://twitter.com/CheesyFinance/status/857486628369117184

We first explored the flea market and met with friends whom where selling their stuff. Next we visited the St. Pieters Berg (free parking!), before heading over the our friends place for diner and more fun.

Holiday in the Netherlands: Maastricht - Pietersberg

Holiday in the Netherlands: Maastricht – Pietersberg

Holiday in the Netherlands: Maastricht - Old Mining Area

Holiday in the Netherlands: Maastricht – Old Mining Area

Day 6: National Park Hoge Kempen (Belgium)

Due to the long and tiring day for Miss CF in Maastricht, we decided to take it easy in the morning. Which was a smart idea, as Miss CF crashed again just after lunch. About 3 hours later we still had some time for a walk in the National Park Hoge Kempen.

Day 7: Gaia Zoo in Kerkrade (the Netherlands)

We don’t have one specific supermarket where we shop for groceries. But when we found out the Jumbo was having a savings program that could provide discounts on zoo’s, amusement parks and more. This was potentially useful for a day trip, so we decided to have a look. Turned out that the program was pretty lucrative! For every €10 shopping we received a coupon for €2.5 discount on entrance fees.

In short, we did some major grocery shopping before the holidays. Stocking up on stuff we would have bought anyways. We ended up with €30 off the zoo entrance fees, which meant we only paid €27.5 to get in (over 50% discount!). This is not a lot of money for a whole day of fun. We were at the zoo when it opened at 10 and left about 6 hours later. We obviously brought our own lunch and drinks to keep costs further in reign. It was a great day and Miss CF crashed before we got to the car to drive back.

Holiday in the Netherlands: Gaia Zoo Kerkrade - Ducks/Ibis

Holiday in the Netherlands: Gaia Zoo Kerkrade – Ducks/Ibis

Holiday in the Netherlands: Gaia Zoo Kerkrade - Wild Pig

Holiday in the Netherlands: Gaia Zoo Kerkrade – Wild Pig

Holiday in the Netherlands: Gaia Zoo Kerkrade - Lioness

Holiday in the Netherlands: Gaia Zoo Kerkrade – Lioness

Holiday in the Netherlands: Gaia Zoo Kerkrade - Rhino

Holiday in the Netherlands: Gaia Zoo Kerkrade – Rhino

Day 8: Driving home and the Swimming Pool!

No personal pictures here, but we ended up on this pool: http://www.sr-dommelslag.be/ For anyone passing nearby Overpelt (Belgium, close to the Dutch border) with kids, this is a great pool. Pretty new, got something fun for everyone and is relatively cheap.

We wanted to brake up the drive back by stopping by a swimming pool along the way. We initially looked for tropical swimming pools/water parks in holiday parks like Landal Green Parks and Centre Parks. These places charge around €11-15pp depending on your age. For us this would have been nearly €40 for a couple hour swim. That’s mad! The pool in Overpelt was only €9.50pp and kids under 4 were free! At €19 total, it was a lot more affordable.

The Holiday Cost

This is a financial blog, so we do have to review the costs for the holiday of course! Normally we don’t include food, fuel or kids items, as this goes into separate categories in our budget. Reasoning is that we would have spend most of this money anyways, regardless of going on holidays. But for sake of completeness we added them below in the holiday overview.

The holiday costs included:

  • Vacation rental (7 nights): €400
  • Zoo entrance: €27.5
  • Swimming Pool: €19
  • Fuel: €40
  • Costs food / going out to dinner / cash: €138.5

The total holiday would come in at about €625. Not bad, especially considering we were aiming at between €700 and 900!

How was your last holiday? Where did you go? Did you stick to your budget?

We are back! We had a great holiday in Belgium over the last week. More details are to follow in the coming week(s) when we review our Savings Rate for April. But first, here is the Real Estate Report – April 2017.

Rental Income

No surprises here, same tenants, same income, all on time again! There is a raise coming for one tenant in July, the others will remain stable for now.

Real Estate Income - April 2017

Real Estate Income – April 2017

Rental Expenses

As you can see below our expenses were quite low for the month, this was as expected.

The expenses for the month include:

  • Insurance (for buildings and liability);
  • Interest costs (mortgage and loan); and,
  • Property management costs.

We were able to complete the installation of the second mechanical ventilation unit. Went in pretty smooth and only took a couple of hours. Unfortunately, due to various circumstances, the moisture barrier could not be installed. This is delayed, but not sure till when. We still like to complete these works in May, if possible.

Real Estate Expenses - April 2017

Real Estate Expenses – April 2017

Real Estate Report – Overview and Forecast

We made a total of €2.264 in net rental income for the month of April (before taxes). The net cash-flow will come in around €1900, which is superb! Our total YTD rental income for 2017 is €7.680 (before taxes).

Real Estate Overview - April 2017

Real Estate Overview – April 2017

May will have way more pain than April as the bill for the second mechanical ventilation will likely come in. We are also scheduled to pay various taxes (a major one this time). Not sure how June and July are going to look, depends on when the moisture barrier will be installed and if we still need to do the outer walls of two units.

The latter is however up in the air, for a good reason. We might sell these two units to expand the number of properties. We are considering the sale and, in combination with an investment mortgage, buy 3-5 units back. This will aid our return on investment and cash-flow (at least in the long term). Working on the details, but we seem to have two interested parties to buy the properties (read: both tenants).

How about you?? Good stories to share on the Real Estate front?

When you read this we will be on holidays in the southern part of the Netherlands/northern part of Belgium. After working hard on the house replacing windows and installing mechanical ventilation in the rental unit, we are ready to relax!

When we do a holiday, it usually is a computer/table/phone holiday too. Preferably we don’t ready any emails, watch news or check stock markets to really relax worry free. Perhaps a bit of an ostrich approach, but it works miracles! We will also tune down the activity on the blog for the coming week. It will take a bit longer before we respond to your comments, but we certainly will.

Holiday Ostrich Method

Holiday Ostrich Method
Source: https://www.vn.nl/struisvogel-in-ruste/

Going Abroad

This may sound strange, but as soon as we cross the Dutch-Belgium border the holiday feeling really kicks in. It’s primarily due to the different building styles, stores and road signs. We will actually be staying in Belgium for most of the time (got to support out fiends Belgian ATL, FFS and WDYR with some taxes ;-), but will travel to the Netherlands on occasion. For example on Kings Day we will be going back to the Netherlands, Maastricht to be exact. I’ll be wearing my orange suit for sure (really? you have an orange dress suit?…..Absolutely!).

Considering we are somewhat limited by our 3,5 year old little girl, the holiday destinations will also revolve heavily around swimming pools, zoo visit and other kids related day trips. We hope to squeeze in the odd cultural and nature side-tracks. But for some reason a 3.5 year old does not find this very entertaining. Shocking, right?

Holiday Belgium-Netherlands

Holiday Belgium-Netherlands. Pointer is NOT where we are going. Courtesy of Google

Finances

We have booked ourselves a nice AirBnB (well at least we hope it is nice) for €400 for a whole week! Pretty good deal if you’d ask us. There will also be some fuel costs for driving around, expenses for foods, drink and activities. Considering we eat and drink at home too (go figure), these costs are not included in the  holiday expenses. Same goes the expenses for the car, it’s got it’s own “transportation” budget and expenses will be covered here.

However, any “holiday” activities will be tracked under the “leisure and travel” component of our budget. In this case going out for breakfast/lunch/finer will be included. Not having planned out all activities (depends on how Miss CF is feeling…) we have no clear idea of the total expected spend. But it will likely come in around €700-900, excluding fuel and food/drinks. More to follow in the savings rate post next month.

Holiday Destination Maastricht

Holiday Destination: Maastricht
Source: http://www.vvvlimburg.nl/regio-vvvs/maastricht/

How about you? Any trips planned, or did you already go?

Future Healthcare Costs

To pick up where we left of last week, this week we will look at the historical cost. But we will also quickly look at the potential development of future healthcare costs. We have been digging in historical data to see how healthcare costs developed over the past 30 years. Both in absolute terms and in relation with inflation. We hope this gives you and us a bit of an idea what to expect during FIRE in the coming years.

Rising Healthcare Costs

Healthcare costs are rising in pretty much every country around the world. Looking at the healthcare cost per citizen for various countries, you can see the immense burden on the governments (which we fund). But also on ourselves in the form insurance premiums, deductibles and other indirect healthcare cost. Let’s have a look at both.

Overall Healthcare Costs

The US is particularly high up when looking at healthcare costs per capita, but unfortunately the Netherlands is not that great either. Dutch healthcare costs have been increasing rapidly over the last years. The graph below shows the growth of healthcare cost over the period from 1980 to 2009 (EOCD health data). The Netherlands started out at about $850/year in 1980 and increased to $5.056/year in 2010 (second image).

Historical Healthcare Costs

Historical Healthcare Costs

Healthcare Cost Per Capita in 2010

Healthcare Cost Per Capita in 2010

Based on an calculated average of 2.58% inflation in this same period (derived from the graph below), the healthcare cost should have been around $1.823/year in 2010 (instead of $5.056!). The actual average healthcare cost inflation was thus a staggering 6.1%. Almost two and a half times the average inflation, that’s high. On a positive note, investment returns (in the US at least) during the same period outpaced this increase in healthcare costs 🙂

Dutch Inflation 1980-2016

Dutch Inflation 1980-2016

Direct Healthcare Cost

Let’s look at how overall healthcare costs are broken down. Based on this report (prepared by the Dutch bureau of statics – text in Dutch), the breakdown is as follows:

The light blue is insurance premiums (mandatory insurance), the dark blue is deductibles, the purple is extra healthcare insurance (voluntary insurance). The two (yellow) green’s and orange are covered by taxes and social premiums (some taken from your paycheck/paid by your employer). We thus pay about a third of the overall healthcare costs directly via insurance premiums and deductibles. The remainder of the overall healthcare costs is paid indirectly via various taxes and social premiums.

Since the mandatory insurance commenced in 2006, premiums have increased from about €1027 per person per year (no deductible at that time) to €1541 per person per year (based on €98/month rate + deductible) in 2017. That is an 50% increase in 11 years, or 3.75% per year. For comparison purposes, the inflation between 2006-2017 was only 1.69%.

Future Costs?

As noted in last week’s post, healthcare insurance is mandatory in the Netherland. Current (2017) costs range between about €77 and €150 per month per person (subject to the coverage and deductible you want). That’s already a lot of money. If you are unlucky enough to land in a hospital, you can shelve out the deductible too as a bonus expense.

It should also be noted that insurance companies are currently not making much money on healthcare insurance (they are about at cost, sometimes even below). In short, it is not unlikely that premiums will rapidly rise in the coming years to remain profitable (or at least keep up with rising healthcare costs).

So, what are healthcare costs going to do? If per capita healthcare cost for the period between 1980 and 2010 are an indication, we could count on about 6% per year. Direct costs on the other hand increased by “only” 3.75% in the period from 2006 to 2014.  Not as bad as the overall per capita healthcare costs, but still well above inflation.

We think it is fair to say that healthcare costs will most likely outpace inflation with a significant margin. This is something to consider in your FI calculations. We are counting on our healthcare costs (premiums + out-of-pocket expenses) to go up with 5%/year going forward. We assume that overall healthcare cost increases will be limited by the current low inflation. But we also assume that premiums will go up rapidly in the coming years. Therefore a 5% increase seems reasonable, but time will tell….

Why Are Healthcare Costs Rising?

What is causing this rapid increase in healthcare cost? This will be a combination of many variables including an aging population, inefficiencies within the healthcare system and increasingly expensive medication.

But there is one component that appears to have a far larger impact than any other: lifestyle choices. We as humans have become so detached from nature that we have also stepped away from an active and healthy lifestyle. Have a look at the following two short videos (reference data to the used research is also provided):

http://nutritionfacts.org/video/nations-diet-in-crisis/

http://nutritionfacts.org/video/what-percent-of-americans-lead-healthy-lifestyles/

Human nature

It’s becoming clearer through science that we ourselves are to blame for most of our chronic diseases (obesity, coronary heart disease (CHD), high blood pressure, cancer, inflammation, etc.). Simply by literally poisoning ourselves through diet and lack of exercise. Fact is that only a small minority of these chronic diseases actually have a genetic component to it. Albeit most people like to believe otherwise (so they can keep up destroying their lives by not changing the way they live).

Fortunately many chronic diseases actually can be prevented, arrested or even reversed through diet and lifestyle choices. The human body is actually able to selfheal under proper conditions, which has been confirmed by many scientific studies on for example diabetes (type 2) and CHD.

Unfortunately, it’s in the human nature to limit energy consumption in everything we do. We are particularly bad at getting off our asses when it comes to something important as our own health. Humans are also really good at putting a bandage on something. Rather than solving the underlying root cause of the problem. For example high blood pressure. Let ‘s take a pill, rather than change the poor diet with too much salt and too little exercise/veggies. Sigh….

It’s Primarily Us!

In conclusion, one of the main reasons why healthcare costs are becoming so expensive is us. It’s also only us that can regain an affordable healthcare system, simply by improving our lifestyles. Literally one step or one bite at a time. Food for thought? 😉

It is that time of the month when all income is in, all numbers are added and we can now officially present to you the March 2017 Cheesy Index!

March 2017 Cheesy Index

This month we are very pleased to report yet another increase, and it is even bigger one than last month! We are up to 61%, that’s 1.5% for the month, an absolutely ridiculous MOM increase! We are now actually on track to hit the original 65% target already halfway this year. Unless there is a catastrophic market meltdown (wrong pun with North Korea at the moment…), we have a good chance to really get ahead this year.

Besides the usually contributors like the real estate, dividend income and our good savings rate, there is another reason why we shot up again this month. We finally (almost 9 month later than planned) got our Canadian taxes back from 2015! Well at least a portion of it….

March 2017 Cheesy Index

March 2017 Cheesy Index

Canadian Taxes

We still worked a few months in Canada for part of 2015, before emigrating back to the Netherlands. Once we had sold our house, we maxed out the RRSP room available. An RRSP is a Registered Retirement Savings Plan. It’s the Canadian version of a tax sheltered/tax deferred investment account, which we manage ourselves. We both have an account and we keep the majority of our dividend stock here.

When we maxed out the contributions to these accounts, we also created a rather large tax refund for ourselves. However, due to the move and the requirement for special (paper!) forms it took a bit longer to get a tax return. When we did, the refunded amounts did not match with what we had in mind. So we called the CRA (Canadian Revenue Agency) to find out why.

Apparently we had not correctly filled out parts of the tax return, so eligible deductions were not accepted. Keep in mind that these special tax returns (non-resident) are far from easy and can only be done manually (we also did one for the Netherlands for the same year, again with issues). Mrs CF together with the CRA figured out what updates where required. We submitted the updates late last year.

And behold, we are now getting back what we had originally anticipated. The payment for Mr CF came in March. Another one for Mrs CF has already arrived too, but will not show up in the Cheesy Index until next month. So there will be another massive job next month too. We are a bunch of happy campers at the moment.

How did our net worth/index develop in March? Did you also receive a surprise income, bonus or tax return?

The Dividend Growth Investor tweeted us the other day if we had a post on healthcare in the Netherlands. In fact we don’t, we only briefly touched on the subject on this post. Considering that healthcare costs will represent about 10% of our total spend during FI, it’s probably not a bad idea to have a look at these healthcare costs.

Healthcare Insurance

The system today is very simple, you have to mandatorily insure yourself for healthcare costs (when you are a resident of the Netherlands). From that perspective it is probably similar to “Obama care” in the US. Beside you having to mandatorily insure, the insurer has to mandatorily accept your request to insure. You cannot be refused based on your medical condition, which is a great thing to have when you are ill.

The mandatory coverage is required when you become 18 years of age, kids below this age are automatically covered under the insurance of their parents. Further, if you have a low income there are benefits to aid you in paying this mandatory insurance.

Basic Coverage

You have the option to select various package as far as coverage is concerned. The “basic” package for 2017 covers you for visits to a general practitioner (Dutch: “huisarts”), hospitalizations/operations, medication, physiotherapy for kids under 18; dental works for kids under 18, child birth, dietary advice and a few other items.

Additional coverage

There is a volunatry option to increase coverage for, amongst others, adult physiotherapy, alternative medicine, psychology, glasses and lenses, dental and certain specific child birth expenses.

Healthcare Costs

Healthcare Costs
Source: http://www.gs1.org/healthcare

Healthcare Costs

Basic healthcare costs will set you back around €92-100+ per month (subject to the provider and terms & conditions of coverage). This is in combination with a mandatory deductible of €385 per person per year. When you increase this deductible to €885 per person per year costs for basic covers drops to around €77-85 per month.

In principle all actual expenses will come out of the deductible first, with the exception of costs associated with general practitioner visits (but not any meditation of bloodwork following the visit!), dental for kids under 18, child birth costs and a few other items.

Additional coverage

The costs for additional coverage vary significantly depending on what you want. But generally ranges between as little as €5 up to €50 per month.

Dental Coverage

Dental work for adults are covered under additional packages. Depending on the package you choose, you can get coverage of up to about €2.000 per year per person (the rest will generally come out of your own pocket). If you only need minor dental work or just check-ups, coverage to about €250 per person per year is usually sufficient. Orthodontics are covered separately in some cases.

Fees for this range €8-50 per month depending on the coverage amount.

Team Cheesy Coverage

Our coverage is with Anderzorg (a Menzis company, no affiliate link here) as they appeared to have the best value for money for our situation. We pay €181.90 per month for the three of us. We have additional dental coverage for €250 per year for the both of us. Our deductible is at the maximum allowable €885 per person, as you probably figured out already.

In short, with no use of the deductible, we pay almost €2.183 per year. We generally budget for around €2.500, which would be about 10% of our FI budget.

Insurance Conditions

Most insurers don’t make lots of money on the basic healthcare insurance coverage due to the competitive market. This is great for the consumer, as you pay really about cost price for this insurance.

However, insurance companies found ways to make your life difficult. Medical care is sometimes only permitted at designated medical institutions with which the insurer has a contract. It could therefore be that you have to travel for certain medical procedures. When you have opted for coverage with a limited number of medical institutions, you could also run into waiting lists issues for certain procedures. Keep that in mind or pay more premium to have free choice in hospitals. It’ up to you.

Future Healthcare Costs?

Now that the basics of the Dutch healthcare insurance are covered, the next logical thing to do is take a look at the development of costs over the past years. We need this to allow us to make calculated predictions where this is going. This will be covered in a post we have planned for next week. Stay tuned!

Monthly Dividend Update

March is a great month, lot’s of “our” companies are paying dividends. A quick look around in the DGI community shows we are not alone in having a really good dividend income last month! Keep your eye on the Dividend Diplomats and the Predictable Snowball for great DGI summaries.

We did not buy any new shares last month, but we did have tons of DRIP shares including AAR.UN, CJR.B, PLZ.UN, CWB, ET, POW, CIX and a few more.

March Dividends

When we added up all the deposits into the bank accounts (and corrected for exchange rates), we received almost €812, a new record! That is a very respectable 18% YOY increase. The somewhat “limited” increase is because of a special dividend we received last year (~€70) from ET and we have fewer RDSA shares than last year too. However, the trend is upward and that is what really matters. Looking at the graph below, I’m already excited about June. Curious to see if we can break the €850 barrier! April is also poised to see a massive jump as AH (Ahold) will be paying it’s yearly dividend.

March 2017 Monthly Dividend Overview

March 2017 Monthly Dividend Overview

The graph below is showing the yearly dividend totals for 2015 and 2016, and a year-to-date dividend total for 2017. In the third month of 2017 we already received more dividends than for the whole of 2015. Cool 🙂 The “Dutch” dividend income (AH, 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).

March 2017 Yearly Dividend Overview

March 2017 Yearly Dividend Overview

Dividend Stock Overview

Our dividend portfolio still contains 45 companies with a total of 10.737 shares and looks like this (up 3.739 shares from a year ago):

March 2017 Dividend Portfolio

March 2017 Dividend Portfolio

Dividend Sector Breakdown

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

March 2017 Dividend Sector Breakdown

March 2017 Dividend Sector Breakdown

How was your March from a dividend perspective? Did you have a stellar dividend income too?

No, don’t worry, we have no plans for a frugal funeral any time soon. Nor do we anticipate to have one in the near future for ourselves (and hopefully also not for our family and/or friends). On the contrary, we try to follow a very healthy lifestyle with lots of whole plant-based foods to extent our lives and delay the inevitable for as long as possible.

But I (Mr. CF) did have a conversation with my mom about the topic of caskets. I have absolutely no idea how we got to the topic, but we were probably joking around and arrived at a morbid end (pun intended). That is also when I realized that I have no idea about funeral costs and/or funeral insurances. Is it possible to have a frugal funeral? If so, how much is it? Or is it better to insure or self-insure yourself for this? Time to find out!

Frugal Funeral - Ikea Casket?

Frugal Funeral – Ikea Casket? Source: http://media-cache-ec0.pinimg.com/736x/ab/f3/59/abf3599171d826263d7752394ebd24e4.jpg

Frugal Funeral

Ok, let’s keep this simple for the post: you can either get buried or cremated. Cremation is generally cheaper than burials due to the costs for the crave (you pay the municipality for this) and the tombstone.

But what are the general costs? Here is a list to consider (derived from the website of a national Dutch insurer):

  • Basic fees and administration: €1.800-1.900
  • Moving the body to the funeral home: €300
  • Embalming the body: €200
  • Wake/viewings: €700-1.000
  • Casket: €500-5.000 (or more if you want, check out this link for some interesting ideas)
  • Cremation (you’d really be on FIRE…. Ok, bad pun): €1.350-1.500
  • Burial: €1.350-7.000!! Depends heavily on a municipality and if you want a private/two person grave and for how long you want the grave to remain (prices are usually for 15-20 years).
  • Transport: €300-1.000 (depending on type and people)
  • Ceremony (incl. catering for 50): €250-400
  • Flowers (normal): €185-225
  • Ads in newspaper: €500-700
  • Cards: €160 per 50 cards
  • Urn for ashes: €500

Depending on what you want, you can easily spend between €7.500-10.000. We have actually done our wedding and honeymoon to Hawaii for less! But if you want you can keep it pretty simple, arrange your own casket, transport, ceremony, etc. You probably could get away with anything between about €2.500 and €3.500 for a decent funeral. However, there are even discount funeral arrangements these days. The cheapest I found was just €1.150 for a cremation and €1.750 for a burial! But that is really bare bones!

Frugal Funeral - Budget Casket

Frugal Funeral – Budget Casket Source: http://www.flatpackconstruction.co.uk/wp-content/uploads/2014/01/flatpackcoffin.jpg

Funeral Insurance

As with pretty much everything else in life, you can also insure for funerals. I personally don’t know anyone that has insurance for this. We personally don’t have it either. It’s one of these things we rather self-insure, as we recon is cheaper. But if you would, how much would it be?

For my case, being 36 year of age, I had the following options:

  • Luxury package: €12.62/month – €12.100 coverage
  • Most purchased package: €9.54/month – €8.800 coverage
  • Basis package: €6.46 – €5.500 coverage
  • Frugal option (selected by me): €5.73 – €4.290 coverage

If I would be 30 years older (so 66 year of age), the following rates apply:

  • Luxury package: €56.01/month – €12.100 coverage
  • Most purchased package: €41.43/month – €8.800 coverage
  • Basis package: €26.85 – €5.500 coverage
  • Frugal option (selected by me): €23.40 – €4.290 coverage

If you wonder what’s in the frugal option, only the absolute basics. No reception, flowers, cards, paper ads, special transport, etc. If covers the basic formal/administrative costs and has a simple casket and cremation without an urn.

Frugal Funeral Investments

Let’s assume I’m turning 86 years of age (random selection). In that case the frugal option would set me back €3.438 in fees. Pretty good for the coverage I’m getting. For the 66 year old me, it would be €5.616, so you’re getting screwed. However, for the current me it seem like a good idea, right? Wrong!

If you set aside and invest this €5.73 every month, and you assume net 5% on a yearly basis (to correct for taxes and inflation), over 50 years. You end up with close to €14.400! That is one very luxurious funeral arrangement. However, if you would start at age 66 and have only 20 years, the calculation comes to just over €8.100. Again, much better than the coverage you are getting. You have got to love the effects of compounding interest!

Frugal Funeral - Cool blue casket

Frugal Funeral – Cool blue casket for when the FIRE is out!

Taboo Diner Talks

As with the whole topic of organ donations, talking about your funeral wishes with your partner/family is probably not a bad idea. It may still be far off (hopefully), but unfortunate things do happen. It would be great for your partner/family to have an idea of what you want.

To be brutally honest, we have not had this conversation, but probably should in the near future (together with arranging a will). Just to get is sorted for now (ideas will likely change in the future, but at least you would have a starting point…). Interestingly enough I do now know what to arrange for my mom. She even said she will leave some money for it too (she does not carry insurance).

My dad is also still alive, but there is a very large change that he will pass away before my mom does (he’s significantly older), in which case she will take care of these decisions. That being said, we already have an idea of what my dad would want too (again, no insurance here either).

How about you, ever thought of this? Do you agree it’s better to self-insure? Other considerations?

 

I’m an idiot, as I don’t seem to be able to properly add and subtract numbers. Sigh. What’s happened? Well, I had made an attempt a while back to automate part of our finances for tracking and blogging purposes. Turns out that this was not going entirely perfect. The short version of this story is that charges to the credit card of Mrs CF were not properly transferred into the budget. She uses this credit card primarily for business purposes and gets reimbursed by her employer. So for certain months we over estimated the total income and thus savings rates (we use net income corrected for business expenses).

Why did I not spot this sooner? Because the month for which I had set this up originally had no credit card charges, so the totals matched. But I got weary lately due to the series of exceptionally high savings rates. Most are easy to explain due to high incomes/bonusses and no crazy expenses. But I could not explain all of them. Some financial forensic digging this weekend found the issue, and it has now been corrected all the way back to last year August when the problem started.

The effects were not too drastic, but still noticeable. The overall savings rate for 2016 dropped from 61.4% to 60.6% (but we are still a Gold Badass Saver!). Not the end of the world, but still sloppy. The savings rate for January and February of this year also dropped by a about 5% percent each! Our savings rate is still pretty darn good, so we are not worried. The errors also don’t affect the Cheesy Index, as this is a summation of all month end account totals, which I do seem to be able to calculate correctly……

March Finances

Ok, back to the March 2017 savings rate, which is actually (I double checked!) rather spectacular. We ended the month at a savings rate of 74.4%. Almost a record high. A financial overview of the month:

  • We received our regular incomes and a major expenses claim (for which the expense are now properly included in January and February);
  • The crowdfunding was normal with nearly €200 in deposits;
  • Living and healthcare spending was a record low this month due to no major (maintenance) bills, insurance or taxes to be paid (total expenses were about €650). This expense category will go up significantly in April and May due to a series of bills to be paid as well as major maintenance scheduled for late April (window replacement);
  • The transport costs are in line with expectations at about €200. Fuel is by far the largest expense with a total of €172;
  • Grocery costs were back to normal this month with a total of just about €290;
  • The kid category was again stable, we only paid for day-care fees (net fees are about €953!);
  • Travel and Leisure for this month was nil. We had several birthdays and events, but all were paid for by grandparents and/or friends. However as part of the credit card mishap, the €400 bill for our planned holiday in Belgium (April) is now properly entered into February (therefore also the massive drop in the February savings rate); and,
  • The other category included some negative expenses for sales of stuff on Marktplaats (local eBay), but also some expenses for birthday gits and minor items for around the house.

March 2017 Savings Rate 

The savings rate for the month of March thus end up being 74.4%. This is obviously a ridiculous savings rate and won’t happen again for the coming months due to pending expenses. None-the-less, we are very happy to see that our frugal habits are definitely paying off. There does not seem to be much lifestyle inflation despite the growing income in the last year. The correct savings rates for 2017 look like this, note that our year to date savings rate is now 65.1%:

March 2017 Savings Rate

March 2017 Savings Rate

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

March 2017 Expenses Breakdown

March 2017 Expenses Breakdown

How was your Savings Rate for March? Did you have a good month too? Do you incidentally also suffer from momentary lapse in IQ and forget how to add and subtract?

For our real estate March was a busy month as we finally got some of the major outstanding maintenance works out of the way. Unfortunatly we were not able to complete everything we wanted to do. However, we both have two weeks off during the second half of April and a battle plan ready to get a lot of work done on our own home and the rentals! But let’s talk number first, here is our Real Estate Report – March 2017.

Rental Income

It was yet another good month with no vacancies and all rents paid on time. We really cannot complain as we have great tenants all around! This is where careful (and in our case also exensive) selection starts to pay off!

March 2017 Real Estate Income

March 2017 Real Estate Income

Rental Expenses

As you can see below our expenses were really high for the month. The primary reason is the installation of a mechanical ventilation installation system in one of the rental units. We already got the bill this month too, which also includes the purchase of the two mechanical ventilation units. We therefor expect another €400 bill for the installation of the second unit in labour costs and small materials. This bill should come in May.

We were a bit disappointed about the costs as they were a bit higher then expected (expected to be about €100-200 lower).  Mr CF did help out to keep the costs in reign, but this will “only” save about 300-400 euro’s overall. Still, a good savings none-the-less and some valueable lessons learned in DYI skills.

Other expenses for the month are:

  • Property taxes;
  • Interest costs (mortgage and loan); and,
  • Property management costs.
March 2017 Real Estate Expenses

March 2017 Real Estate Expenses

Real Estate Report – Overview and Forecast

We made a total of €1.070 in net rental income for the month of March (before taxes). The net cash-flow will come in around €650, signifianctly lower than last month. However cash-flow is expected to rebound in April (no major bills expected). Our total YTD rental income for 2017 is €5.415 (before taxes).

March 2017 Real Estate Financial Overview

March 2017 Real Estate Financial Overview

The (cash-flow) forecast for May is not very pretty because more property taxes, sewage and garbage removal bills are scheduled for payment. We will likley also see the bill for the moisture barrier installation (also scheduled for installatoin late April) and the second mechanical ventilation unit.

Still need to start work on the renovation of the outside walls for two other properties, but time is limited. This will really be a big bill that will wipe out two months of income easy. Aiming to get this work done around summer time to spread the effects on our cash-flow. In addition, the windows will also need to be painted at that time.

How did you do this month? Did you have any maintenance done on your own house? Or did you DIY lately?

Triggered by an absolutely brilliant post by OurNextLife, we want to talk about our blog income (or lack thereof, actually). The post by ONL is about the income that some big-name financial blogger are generating with their site. ONL states that she thinks the bloggers deserve the blog income, but that they should be more open about it. Her pet peeve is that these bloggers are no longer living FI based on their original premises of investing into assets (which is what made/makes them great blogs to read). Which is fine, but some transparency would be nice. It would also be interesting to see how blogger do that don’t have ads or affiliate marketing income, during FI (i.e. no extra blog income). We both completely agree!

Mr. Money Mustache actually seems to do this to a degree. He still posts his expenses on a yearly basis, which have been quite stable throughout the years. He obviously earns a lot more money via his blog. How much is unknown, but it is fair to say that he would easily cover his living expenses of $25.000/year. What is he doing with all this extra cash? Who knows! But some of it he is donating to charities (he donated $100.000 last year, see link below), which is a great way to spend some of that extra blogging income if you’d ask us.

Notes on Giving Away my First $100,000

Blog Income

So let’s be transparent on our blog too. We have posted about the blog income topic before here and here. To date we only had Google AdSense to generate some income to cover hosting expenses. We started this blog income experiment in November 2015 with the aim to take the ads offline (for the remainder of the year) once we had received sufficient income to cover expenses.

With a starting blog, this was obviously not yet possible. But we are starting to have increased traffic to our site (getting close to beating 40.000 pageviews this month). We have now received our first payment of €70+ (apparently we are not allowed to expose the actual value due to restrictions in the Google Adsense T&C’s). But considering we paid about €150 for the first two years for hosting and domain name, we are far from breaking even at this point. Google AdSense is certainly not going to make us rich 😉

When we started this blog, we had done our research and found a hosting provider (neostrada.nl) that fitted our criteria and had a good promotional rate for the first year (at least for that time). We have since found out that we are overpaying at the moment (it is worth mentioning that the services have been great so far). Once renewal of the contract comes in September, we will have to renegotiate or move to a better (read cheaper) hosting provider (thank Mr FOB for the hint). Once we do this, we also don’t have to keep the ads up for longer than necessary.

That being said, our current intent is still to not make any extra money via this blog. However, this may change in the future as a bit of extra cash is always useful for during (partial) FI. We are not expecting heaps of money and also want to stay true to our (blogging) ethics. However, diversified as we are in our investments, we would happily receive some extra cash from this blog on a monthly basis to cover our living expenses. It’s a bit of a dilemma!

Advertisements and Affiliate Marketing

Advertisements and Affiliate Marketing
Source: https://jaroeducation.files.wordpress.com/

Ads and Affiliate Marketing

Ok, so what have we changed to our blog recently? Google Adsense will remain for now (until the time we break even on overall operating costs). However, we have moved the ads over to the side bar to keep them out of the posts to not annoy you, our beloved readers, too much.

Based on all the talk about affiliate marketing by various bloggers, we decided to give this a go too. But where to start and what to consider?

First off, we do not want to promote things we don’t use ourselves or that does not jive with that our blog is about: wise investing and limiting expenses. We therefore decided against credit cards/air miles/similar products. We also don’t feel much for programs such as Euroclix (Dutch), Klezzer (Dutch)and similar consumer (review) programs. So those our out too.

What we do use ourselves are companies such as Bol.com and Amazon.com. We have used these companies for years and like them too. Full disclosure in the case of Bol.com (the Dutch version of Amazon.com), we actually own Ahold shares which is the mother company. Increased sales at Bol.com will impact our future dividend income, but any potential use of an affiliate link would also provide us direct income (albeit not very much). In short, this would be a win-(small) win.

We have therefore decided to add an Bol.com affiliate program widget to the blog as a trial. If you would use this link, we will get a small commission (which varies per product and ranges up to 8%). It would obviously not affect your sales price, as it’s part of the marketing budget of Ahold/Bol.com.

What do you think? What would you as a reader still find acceptable on Cheesy Finance? We truly value your opinions as our readers! So please, let us know the good, bad and ugly.

P.s. this posts does not contain any affiliate links! 🙂

After Amber Tree Leaves gave a passionate presentation during the BENL FIRE meetup in Antwerp about options trading, I got interested in this trading method. Based on the presentation, we made the decision to only write options in an attempt to either:

  1. purchase additional dividend shares (via put options)
  2. try to earn some extra money (in addition to dividend) on dividend paying shares (via call options)

Options writing

I’m not going to write an entire tutorial here with regards to options, but here are a few useful sites if you are interested.

For the Dutch among you that want to understand the basics:

https://beleggenmetplezier.nl/opties-uitgelegd/

https://www.aex.nl/beleggen/begrippenlijst

For those of you that want to go into a bit more detail (both are in English):

http://www.investopedia.com/articles/active-trading/040915/guide-option-trading-strategies-beginners.asp

http://www.investopedia.com/university/options/

A great blogroll for options trading can be found here:

Blogroll of Options Traders

Short options summary

What’s important to realize is that there are 2 “types” of options. You have “call” and “put” options. The differences are as follows:

Stock Option Process Chart

Stock Option Process Chart. Source: http://investintowealth.com/wp-content/uploads/2015/02/Stock-option-process-chart.jpg

  • Call options: These options give the buyer the right (not the obligation) to purchase the shares of the underlying asset at the predetermined price on or before the specified date.
  • Put options: These options give the seller the right (not the obligation) to sell the shares of the underlying asset at the predetermined price on or before the specified date.

You can buy and sell both call and put options. Giving you 4 ways to trade options. The chart below gives you a visual indication.

The other important thing to consider is that when you write options, you can earn a premium as you take the risk that you have to either buy (put option) or sell (call option) the underlying shares (usually at 100 shares per contract) at a given price (the strike price).

This writing of options and collection of premiums is what we are after.

Initial trades

We bank with the ING and also have our trading account with this bank. This is temporary as we may eventually move to an actual broker such as DeGiro/Binckbank/Lynx/Alex at a later date to keep trading costs in check. DeGiro actually has a nice overview of trading costs of the various Dutch  brokers.

With the ING we are only able to trade options at the AEX (Amsterdam Stock exchange). Here is a list of the options we can trade:

https://www.aex.nl/koersen/aandelenopties

Not a whole lot of choice but because we are just starting to trade, we are more than happy with it.

This week we wrote a total of 8 contracts, 6 puts and 2 calls. The puts were on AH, RDSA and VPK; the calls on UNA. An overview of the options we traded can be found below.

Options Trading Overview

Options Trading Overview March 2017

Potential outcomes

With the above noted options we have a “best case” and “worst case” scenario.

The “best case” scenario is that we earn all of the received premiums (about €577) and our holiday in April is pretty much paid for. This would be nice for an first attempt at trading options 🙂

In the “worst case”, when all contracts are exercised and we have to buy/sell all shares at the various strike prices, we suddenly own about €16.300 in additional shares of AH, RDSA and VPK. But we would get about €9.300 in cash and lose all our UNA shares (making about €2000 in profits along the way due to the UNA share price increase since our purchases).

The final results will be somewhere in the middle. We might sell a few of the option contracts if we are happy with the profits made. And perhaps some will be exercised and we will receive some more dividends in April, May and/or June. These are the upcoming dividends payment dates for VPK, AH and RDSA respectively.

Time will tell! But I’m definitely are having fun trying this new trading method. Just need to get a better feel for the risks, prices and define our buy and sell strategies. Any tips of tricks are more then welcome!