We are not perfect, will Mrs. CF is of course (yup, I’m in need of brownie points), but I’m certainly not. Ignoring (many) mistakes on a personal level, which mostly don’t involve financial issues, financial mistakes were definitely made too. How did I screw up, why and what are the lessons learned? Here are my investment mistakes!

My Investment Mistakes

We were having a chat in the FIRENL slack group (which is surprisingly addictive and popular; all in Dutch) about investment mistakes. It was good to read that I was not the only one, but it made me realize I had my fair share of financial screwups. Most of them due to being arrogant and misinformed. Most of them also because of a short term vision. But also some because they don’t match my psychological profile. Let’s have a laugh (& cry) here shall we?!

My investment mistakes

My investment mistakes

Sprinters

Back in 2009, when we had moved abroad, I still had some money in a savings account. Because we didn’t need this money at the time, I decided to play around with this money on the stockmarket. This was mistake 1. I bought and sold some shares, which worked out okay but did not make much money. I got arrogant thinking that when I could make a little bit of money, I could also make more! This was arrogant mistake 2. I started trading with leveraged products (ING Sprinters). At the beginning I lost some, won some, lost more, won a little, and lost a lot!

Total damage: ~€9.000. I didn’t return to the stockmarket for about 6 years!

Moral of the story, don’t daytrade and definitely not with leveraged products. The chances of losing money are a lot bigger than making money in the longer term. Buy-and-hold rules! See also the graph below, and I was way worse!

High Dividend Yield

At the beginning of developing our dividend portfolio (2015-2016), I still needed to learn a lot. Based on the above I had somewhat learned to look at a longer period to invest (and not use leverage). But what I didn’t learn yet was to remain critical and not chase dividend yield. I had already seen several stories about dividend growth and it’s longer term return on investment “miracles”. So somewhat wisely I did pick the majority of our shares with a chowder rule of >12%, low(er) PE ratios and acceptable payout ratios.

However, when companies pay a very juicy +7% I did get tempted…….. and I got burned. The companies I bought were often cyclical in nature but well established. However, their business models were under attack due to changing market conditions, their debts were high and their earnings per share under pressure. The yields, as appealing as they seemed, were not sustainable. I’m talking here about NewAlta (NAL), Liquor Stores (LIQ) and Corus Media (CJR.B). So, I took my (our?) losses and moved on to other actual dividend growth shares.

Total damage: ~€5.000

Moral of the story, do not chase yield. It will lead to financial losses in 9 out of 10 times. Look for the companies that grow, have a solid business model and have lower payout ratios (so they can continue to keep paying your dividends).

My investment mistakes

My investment mistakes: I’m a loser sometimes! Pun intended 🙂

Options Trading

During a FIRE meetup in Antwerp I was introduced to options trading. The supplementing investment strategy that I found interesting was writing put options and collecting the premiums. Owning some dividend shares during a bull market, this seems like a good idea for some extra yield.

Wisely I started small to get a feel for how this option trading works. You can still find some of the option trading update posts under the “options trading” category in the side bar. However, I made and lost some money on the options again. Sometimes due to share price fluctuations but mostly due to the desire for (high) yield. I started to take more risks to recover losses I made. After a substantial market correction for some shares (which today have actually recovered!), I ended up losing my shirt.

Don’t get me wrong, you can make very good money with trading options, but you have to be consistent and stay calm under pressure. My psychology simply does not allow for that. I keep staring at that screen with red numbers and don’t feel well. I also don’t like the pressure of the unknowns that affect these option prices and movements in time. It’s not an investment method that works with who I am and how I work mentally. I simply felt very uncomfortable with this investment method. So I did what financially was not a smart decision, but psychologically was the best; I sold everything and moved on.

Total damage: ~€4.000

Moral of the story, do try different investment methods to find what works for you. But start small and as soon as you see that you get carried away, stop! Limit your losses and move on to an investment type that works better with your psychological profile. It will ultimately make you a better investor and a happier person.

Conclusions

I’m one of those people that has to try different things, to fail, get up and move on. I could have avoided many costly investment mistakes if I would just be true to myself and would have listened to others. I’ve been too arrogant and thought that I could chase yield and get away with it.

In contrast, Mrs CF is far more sensible and has not made any of these investment mistakes. She was the one that liked the real estate and initiated the first two property purchases, which have only made us money to date.

That being said, these personal lessons learned have gotten us to a mixed portfolio consisting of real estate, dividends shares and index funds. It might not be the best yielding investment portfolio, but I’m now comfortable with these investment, their price fluctuations and risks. I’ve also finally learned to look for the longer term and stop chasing high, unrealistic, yield. Furthermore, I won’t make the same mistakes again either! I’m happy with where I (and we) am (are) today.

 

How about you? What mistakes have you made? What did you learn about yourself and how you invest?

 

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3 months of doing nothing…..sort of. It’s been almost exactly 3 months since I gave up my well paying job and decided to travel and think what I want to do with my life. I’m now only more confused!

3 Months of Doing Nothing

Since I quit my job in April, I first prepared the house to be able to be rented on Airbnb. Next we disappeared for a 9 week road trip (first two posts are here and here). After we came back renovations works stated on some of our real estate, so that took up some time & energy. But this is progressing well and almost finished, should have this all wrapped up in a couple of weeks.

In short, albeit having no work anymore for the past 13 weeks, I have been far from bored and this does not seem to change in the near future. That being said, emotionally it’s been interesting. Still not sure what I want to do! I’m confused?!

3 Months of doing nothing

3 Months of doing nothing
By Johnycanal – Wikitravel: http://wikitravel.org/en/Image:Phuka_beach.jpg, CC BY-SA 1.0, https://commons.wikimedia.org/w/index.php?curid=1060769

The good

Quitting your job (when you have a good financial backup) that you don’t like gives an amazing feeling! Some of the (obvious) observations since I quit:

  • I sleep better / am far less tired
  • No more sitting in traffic jams / getting up insanely early to avoid said traffic jams (yeah!)
  • No more stress/frustrations
  • More time to work out
  • The house is a lot cleaner / dishes don’t pile up anymore
  • We don’t have to rush in the weekend to get stuff done (we both were working fulltime)
  • I’m happy and extremely relaxed, have not felt this good in years!

In short, this was a brilliant move! Should have done it sooner. Being happy and relaxed is very important in life, but you often realize this quite late in the journey.

The bad

Are there any “bad” things, yes, but not what you might expect. It’s also not really “bad”, more “unexpected”.

We are not financially independent just yet. However, there is a large pile of cash available and we have a pretty decent cash-flow income every month. Plus Mrs CF is still working and enjoying it. So financially we are in a good shape, but not done yet…… and this is bothering me. This because I’m farting around, while Mrs CF is still busting her @$$ to get us to FIRE. Albeit I know she is fine with it, it’s still bugging me.

I’m also confused as to what I want to do, I thought I knew when I was still working, but now I’m not so sure. Let me explain with the following two examples.

The side hustle

When I quit my job I was already planning a small side hustle to add some extra income (both passive and active). Because I didn’t like me job I was really motivated to get started, spent quite a bit of time researching and setting up a website/content.

But during the road trip the motivation to get started all but disappeared. Still cannot really figure out why, I still like the idea and the interaction with other people about it. But getting my butt moving forward with it is very hard right now. I rather go outside and play in the garden, cycle/swim, or cook. All great activities, but they cost money rather than add some funds to get to FI.

The blog

Same as with the side hustle idea. I really was looking forward to writing lots of content on this blog. But somehow that motivation has (almost) completely disappeared. I still have tons of ideas, but for some reason I cannot focus and write it all down.

The great summer weather outside and various other fun things that I can do stop me from blogging. Where blogging was a great way to avoid doing “work” at work, now it takes time away from sunshine and relaxation. Heck, it almost feels like “work”. Perhaps this changes in the fall/winter when it gets cold and nasty outside.

I’ve therefore decided to limit blogging to once a week for now (if that). Being outside, not behind a computer, is a much better way tp spend my time (sorry for being very egoistic here)

The Plan

So the plan for now is to just relax, enjoy the summer season and fart around. I’m just going to do things when I feel like it, not because they “have to be done”. Perhaps the motivation returns, perhaps not. Perhaps I might look for another job again to speed up the journey to FIRE, perhaps I’ll stay a stay-at-home dad. Heck, I don’t know it anymore, I’m confused! But at least I’m happy & confused 🙂

 

Thoughts? Ideas? How do you deal with lack of motivation? How do you take a hurdle? 

 

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Where I’m normally trying to be a “regular” blogger (in terms of timing of posts),  the coming months posting will “less structured”! If you are new, you might have missed this and this. If you are a regular reader you will understand 🙂

We can’t come to the blog right now, please leave a comment.

Now that I’m happily unemployed and we have started with our 9 week road trip, the blogging side of things is going to be a mess in the coming months. There will be no Cheesy Index updates, no Savings Rates, no dividend updates & no Real Estate Reports for the next little while. I’ve got my priorities sorted and they will be with our travels an my family, and not behind a screen. I know, what a concept!

That being said, I will have to catch up during the summer with all the financial stuff and will owe you some updates. So no worries!

We can't come to the blog right now, please leave a comment.

We can’t come to the blog right now, please leave a comment.

Travels

Travels are fun and the experiences are important to remember. So we will try to chronical our travels. I know that a fair amount of you are interested in the road trip, both visually and financially. If we therefore have a “slow” moment I will try to dump some text and photos on this blog.

I might even do a couple of pictures on twitter: https://twitter.com/CheesyFinance. However, since we don’t have data plans on our cellphones, we need to find a Wi-Fi spot first (yes, we are cheap little buggers! Sorry, meant to say frugal). The finances will have to wait until we return.

For now, have yourself a great day,  work week, retirement, etc. Hope to have some pretty pictures and fun stores to share with you in the coming time. I’m out!

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I Quit! No, not with the blog, I quit my job today. I will officially be unemployed as of the beginning of May. You have no idea how good this feels. But what is next? Well, there first will be the 9 week road trip, some home & rental property renovations and then I will start my new business!

I Quit!

Albeit we are getting close(r), we are not yet FI, so cannot RE either. However, we are more “free” than we sometimes realize. Mainly because we do now have a pretty decent cash-flow income from real estate and dividend. Plus we have a nice stash of cash. With all this wealth we are now able to “buy” ourselves some extra freedom. Both literally and figuratively.

The peace of mind you get from have a nice pile of money and investments is amazing! The other benefit is the luxury that you get in making life choices. Where Mrs CF loves her work, I don’t. Now having the ability to say “F-you” to my employer, because I have a safety net, is a luxury position I only now start to grasp.

The interesting thing is, that even with just Mrs CF’s job I could have made this decision sooner. But there is something strange about quitting your job if you always had one. There is this fear of losing that steady paycheck. Even if you technically can easily do without. Emotions are a strange phenomena!

I Quit!

I Quit!

What’s Next?

Beside the fund stuff of travelling and doing renovations. I’m getting really excited about the starting of my own business. The scary part of stepping into the unknown and doing something completely new is very thrilling. I’m loving that feeling! As crazy as that may sound.

I’m not about to reveal my new business plan and business name (yet?). Mainly because I would loose whatever “privacy” I have here at Cheesy Finance. I’m not comfortable with that much exposure, especially as a lot of financial details are available on the blog. Perhaps this changes in the future, but for now I’m going to (try) to keep the two apart.

I Quit! Next I start up

I Quit! Next I start up

As my new business is completely different from what I (still) do in my daily life, I have a very steep learning curve ahead. I’m going to make lots of mistake, but due to the type of business the failures will have a limited financial impact. However, to limit the amount of mistakes I have already reached out to several more experienced people that could help out. All of these folks have their own business, albeit in wildly different fields. Funnily enough, they have very similar tips and tricks, guess there must be something to it? 🙂

Things that are on the “to do list” include:

  • developing a business plan (actually revising it, as we already made one)
  • registering the company, arranging insurance and website (latter is already up and running in basic form)
  • developing of various products
  • marketing
  • getting my first paying gig.

How hard can it be? 😉

In future posts (as of Q3-ish) I will reveal more about how I’m going to start up my company, the mistakes I will make, the things that go well and if I actually will make any money at it. The plan is to make both passive and active income streams, the passive to pay “the bills”. The active because I actually enjoy doing it.

 

Any of you that are freelancers? What are the most important tips you have for me?

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How much would it cost to be living on a boat in the Netherlands? I had no real clue, but expect it to be rather pricy. After we looked at our housing history last week, I found myself on Funda once again (a “house for sale” site). Here a found a “creative living option” that looked rather promising (and quite pretty). So I got out the good old calculator, opened up my internet browser and started having fun. Please tell me I’m not the only one doing this 😉

Living On A Boat

What caught my eye? Well this beauty! Almost 22 meters of old Dutch design (built 1902). Pretty cool, eh?

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The price for the “floating house” is now €75.000. That is still a lot of money, and you can certainly buy a house or apartment for this. But I doubt the views and character will match. For those interested, you can download the sales brochure here (just in case the ad disappears from Funda in the future ):

Living on a boat – bolhaven 10 Zeewolde

Purchase:

The vessel is for sale for a price of €75.000. Based on the notes in the brochure, there are no transfer taxes applicable (for a house this would be 2% around here). No sales taxes either. You would want to inspect the vessel, that would probably set you back €300-400 (unless you want to take it out of the water). Then there are the notary costs at about €600-800. In short, you should bring a total of about €76.000.

You cannot finance this vessel with a regular mortgage, apparently (see brochure). The ING bank stopped these special “floating house” mortgages in 2016. Only the Rabobank still does them apparently, but not for this boat it seems.  So you would have to get creative! It will be either cash, or crowd fund, take out a personal loan, family loan, or ….(and any combination of the mentioned).

Expenses

What expenses are to be expected for living on a boat. Most will be very “similar” to those for a house, but some will be typical for a boat obviously. From the advertisement/brochure and from browsing around the web, I got to the following monthly expenses:

  • Slip fees (“havengeld”): €275
  • Heating & Electrics: €225
  • Financing (€75.000 @ 4%): €250
  • insurance: €75 (could not get a quote quickly, so I assume it’s much more expensive then a house)
  • Internet/phone connection: €25
  • Maintenance: €500 (costs and reservations)

The total monthly expenses will likely hoover around €1.350 (or about €16.000 per year). That is all-in! Not too bad actually, especially not considering your house is mobile, spacious and you are living on the water.

Some notes:

  • No garbage or property tax apply according to the brochure (likely partially included in slip fees)
  • Water use is assumed covered by the slip fees
  • The maintenance is a rough estimate as I don’t know for sure how well the boat is maintained. Nor do I know all the costs associated with getting it out of the water for maintenance. I do know it won’t be cheap! You will need to paint something on this boat about every year. You will also need to  pull it our of the water to clean, paint and repair the underside every 5-10 6 years (costs are about €3.500-4.000 + repairs). Also the diesel systems need to run and be maintained regularly.
  • Not sure how the gas stove works? Did not see costs for gas use anywhere.

Practical?

Living on a boat is often not very practical, but this is a fairly large boat and the layout seems rather good.

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It might not be ideal for tall people, but I can see this being a very nice place to live. The location where the boat is currently moored is close to the town of Zeewolde in the province of Flevoland. So even groceries, medical care, etc. should not be a problem. Heck, you might have these guys as your “neighbors” (blog in Dutch).

Investment?

Financially savvy as we are, we also need to look at this in terms of it being an investment. Let’s assume that we just buy the boat in cash. Let’s assume the monthly expense noted above are the same (minus the interest). In short, operating expense are around €11.000 per year, excluding cleaning.

Based on some browsing around for other vessel/house boats that are rented out, we found that €100-150 per night is nothing out of the ordinary. We will take €125 per night as average (sleeps 5 max). Let’s assume no one wants to say here during the three winter months. The fall and spring will have 60% vacancy and the summer only 20%. This is a yearly utilization of 40% (144 nights) as a base case. This should provide you with €18.000 gross income.

Now let’s say we have cleaning expenses of €30/cycle. The assumption is 144 days of utilization, with an assumed average stay of 3 days = 48 stays. That is €1.440 in cleaning expenses. This leaves you a net operating income of €16.560 – €11.000 = €5.560/year. On €76.000 that is a yield of 7.3% (before taxes). Not bad! We might just need to get ourselves a boat 🙂

 

 

Have you ever lived or stayed on a boat?

 

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Guess there is a new trend in blogger land (well, at least in the Netherlands). Several of our blogging colleagues have been reviewing their housing history. In short, they told us how they lived in their lives, from the moment they were out of school/University. Including some explanation on why they did what they did, costs, prices and more. They sometimes also noted what their plans are for the future. Guess it’s our turn next 🙂

Housing History

To put it mildly, we did not sit still for very long (or we are getting old, you pick). Over the last 12-13 years we have lived in many different type of properties in two different countries. We owned and we rented, in both countries. The latter was usually the best option if didn’t know how things were going to develop in our careers/lives. It’s also the “mandatory” place to start when you have no money 😉

Housing History - Farm House

Housing History – Farm House

The Start

Our living journey overlaps a bit with our student days. As Mrs. CF was still living in her 20m2 (215sft) student condo during the first 3 years after she graduated. She had a shared kitchen and bathroom and paid about €270-300 per month for the place I believe (including utilities).

At the same time I was living in a 35m2 (377sft) social housing condo. I was fortunate enough to have my own kitchen and bathroom. For this unit I paid about €350 per month, utilities/taxes came separate. We were living about 40km from each other during these days. Because of where we were working at that time we often used each others condo’s to live in, saved a lot of commuting time!

Fun fact, this first “grown up” condo for Mr. CF was actually huge compared to the previous student room(s) rented prior. That was a mere 11m2 (118sft) divided over two rooms on either end of a hallway (with shared bathroom in between), but it had it’s own “kitchen”! Needless to say that was rather small but with fun house mates.

Moving Up

After we decided that we really liked each other, we moved in together. We found a nice condo that we could rent for about €650 per month and was “huge” compared to what we had been living in prior. The condo had 4 rooms as was 70m2 large (753sft). So we had more space, spend more time together, and we were still paying about the same!

Before we moved into this condo Mrs. CF did look at buying a place of her own, but could never find something affordable at that time on her income. This was also when we discovered we really like house hunting!

Housing History - Condo

Housing History – Condo

Moving Abroad

The next step in our adventure was to dump all our stuff into a sea container and fly to Canada. We were lucky enough to have a fully paid for furnished condo to our disposal when we arrived. This gave us the ability to look around for a rental place so we would be covered for the first year. Obviously we didn’t have the ability to purchase a property yet, nor did we want to. When arriving in a new country you want to be flexible to be able to adapt to your new life.

The place we found was a 130m2 (1400sft) detached house with attached double garage! Coming from the Netherlands, we were so not used to this amount of space. We loved it! And started to fill the garage with one nice car, a motorcycle, bicycles and a BBQ….(oops). We paid about €950 ($1.500) per month for it (based on todays exchange rate).

After about a year we decied that Canada was a very nice place to live and wanted to stay there longer. But renting was out of the options, as it was considered “too expensive”. This was before we realized the amounts for maintenance costs an property taxes! As the house prices had just stabilized from the crisis years, and the interest rates were pretty low already, we made the plunge into home ownership.

The first house we bought was 205m2 (2.200sft) without the basement developed. We did that a couple years later and added another 75m2 (800sft) in living space to it. Getting to a total (and very ridiculous) 280m2 (+3.000sft). The house cost us (including fees, garden and basement development) a total of €315.000 ($500.000). Yes, we used to own a half million dollar house! My fault, lesson learned and won’t do that again, unless it’s a rental property 😉

Housing History - McMansion

Housing History – McMansion

Moving Back

After Miss CF was born we decided to change our housing history once more and move back to the Netherlands. Because we had no jobs we decided to rent a house once again. We found a deal via Mrs CF’s father and landed our butts in an old farm house. As we were ready to downsize, we would have taken anything, but still ended up with whopping 220m2 (2370sft).

We only paid about €800 per month for this place (it’s condition matched the price, in case you were wondering). However, we also had a huge heating bill! The place had virtually no insulation (and mold in the basement). It still was a pretty cool place to live for a while and we enjoyed the place quite a bit. The house had “character”, shall we say.

Second Home Purchase

After we had settled and found jobs again, it was time to buy another property. One that we could potentially modify and rent out in the longer term. We were definitely not looking for a “forever home” this time around. The last time we did it got us 280m2 to clean, heat and maintain! We’ve (more specifically me) learned that “more space” does not equal more happiness.

It took us a few months of browsing, and a couple “near miss” purchases, before we got our hands on our current house. We now own a 125m2 (1345sft) house consisting of two floors. The price for this house was (including fees) €200.000. Our current mortgage payment for this place (interest and principle payments) is about €626 (excluding any tax returns on the interest). It’s still owned for 86% by the bank 🙂

The Future

The next step is to move again! We will split our house into two rental units and move out ourselves. The current plan is to move into one of our current rentals. This unit is “only” 77m2 (828sft) and has no more mortgage associated with it.

We will however take mortgage on the property to have more money to reinvest into other assets. As it’s a nice place and situated in a good area, we probably could get a €150.000 low interest mortgage on it. That gives us a lot to work with!

Anyhow, it’s a nice little semi-detached house and situated near some green spaces and water bodies. It’s a good place to live and it much closer to family. The latter will make Mrs. CF a happy woman, and a happy wife is a happy life, so onwards we go.

Housing History - Tiny House

Housing History – Tiny House?

Other Bloggers

Fellow bloggers that posted about their housing history:

 

How about you? Where did you live and how has your housing history developed over the years?

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