Author

net worth update
Reports,

March 2017 (247344.39€)

My current worth is €247344.39 (36.92% of my first goal – €670K).

net worth march 2017

And after 12 months of steady increases in my net worth, another (minor) decrease this month. And guess what, April will probably suffer even more.

Why another net worth decrease?

Same reason as last month… RP#3 continues to demand cash cash cash!!!! As I’ve been saying, I estimate the bleeding will only stop in May, when the renovation is over. I am confident that this property will yield nice money in the next 10 years, without me to worry much about it.

I still have 2 free units but I am not worried that they will stay vacant for another month or 2. I realized that I’ve been micromanaging this property. When you acquire more wealth, you tend to manage things in a more macro perspective, and that is what I am doing right now.

Rental income

The rental income for April will be €1225, which is the highest I’ve achieved in my lifetime (in May I will move to RP#1, and so the rental income will decrease to €950/mo, unless I rent another unit of RP#3 in the meantime). In September, one of my leasing contracts increases automatically by €50/mo, and so, if nothing changes, the overall rental income would be €1000/mo at that point + whatever I can get from the units that are not rented out yet. If I rent them, I may well hit €1500/mo of rental income. This money will entirely be used to grow the real estate business (in particular, renovate the other units in RP#3) to keep increasing it.

Online income

My online income isn’t yet anywhere I estimated it would be at this point, but I will comment on this in the online income report/income diary.

My Real estate business

My Real Estate business had to be suspended for 2 weeks, as the Real Estate license we were given had some kind of problem. It will be re-issued. Not sure how much money I will make in 2017.

Goals for March

The goals I had for March were clearly missed, not only because I have been sick for two weeks, as I also decided to change my strategy at the beginning of the month. However, I am comfortable with the results I had.

  1. Make at least $300 online and promote the blog. (this will be explained in the online income report)
  2. Read two books. FAIL (as I invested a lot of time re-branding the blog, creating content and working on the SEO)
  3. Complete the renovation of the first part of RP#3DONE! The bleeding will now stop. This is finally over (it took well over 4 months). I will publish a post on this, eventually.

My goals for April (does not include the goals for the blog – those follow in the income diary):

  1. Make at least $500 online and continue to promote the blog aggressively (details in the income diary).
  2. Read two books.
  3. Rent out another unit.

As you know, I was also offered a part-time research position, which fits my current situation very well. I signed the contract last week and I am excited to do this – it will give me the time I need to work on my projects while making some monies and continue to do some research. The contract will last for 12 months.

Ben

roundup top bloggers
Roundups,

Roundup #1 – A brainstorm with Early Retirement and Money experts

roundup with top bloggers

My blog turned one year old this month. I would like to thank you for being part of this project. It has been truly amazing to create and keep this blog. To mark this beautiful date, I promised 3 surprises. The first surprise was the publication of my book: “My strategy to retire early“. The second surprise was the re-brand of the blog, which included a brand new template, which I have been promising for a while. The third surprise was up in the air… until today! So, without further due, here it is…

It is my pleasure to bring you a roundup with top bloggers on Early Retirement, Real Estate, Stocks, Investing in general and Making Money online. This would not have been possible without my guests, who I profusely thank. I was lucky that I was able to gather amazing people, who actually inspired me to start From Cents to Retirement, one year ago. They are:

cody shirkCody Shirk @ www.codyshirk.com – Cody Shirk is an international investor who focuses on a variety of different areas including stocks, private equity, and real estate. He believes that the best opportunities are found where few are willing to look. Through travel, exploring, and extensive research he sources his deals and then writes about them – all for free – at www.codyshirk.com.


Ben Sure DividendBen Reynolds @ www.suredividend.com – Ben Reynolds runs Sure Dividend.  Sure Dividend is a newsletter and site that has everything you need to build your high-quality dividend growth portfolio.  Ben is an advocate of long-term, low-cost investing into great businesses with shareholder friendly managements trading at fair or better prices.  You can access hundreds of free articles on Sure Dividend’s archives page.


juan pablo 100 percent financedJuan Pablo @ www.100percentfinanced.com – Juan Pablo graduated college with no job, no money, and bad credit. However, he had a burning desire to become an investor. Later as a 9-to-5’er, he maximized his spare time to make himself wealthy. He not only improved his finances; but learned and practiced real estate. Today, he is a successful real estate investor & online entrepreneur. He now teaches others how to duplicate his efforts, and too, reach Financial Freedom.


FireCracker Revolution @ – www.millennial-revolution.com is Canada’s youngest retiree. She used toFireCracker Revolution millennial revolution live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC’s On the Money has garnered 4.5 Million views.


mindy jensen bigger pocketsMindy Jensen @ BiggerPockets.com. Mindy Jensen is the Community Manager for BiggerPockets.com, the Real Estate Social Network. She’s flipped more homes than she cares to remember, but is always looking for the next ugly duckling to turn into a swan.


physician on firePoF @ PhysicianOnFIRE.com -The Physician on FIRE is an American anesthesiologist, family man, and supposed outdoors enthusiast who spends way too much time indoors. He reached financial independence at age 39, and is planning to retire early within the next couple years in his early-to-mid forties.


j money budgets are sexy rockstarfinanceJ Money @ BudgetsAreSexy.com and Rockstarfinance.com – J. Money is an award winning blogger, consultant, experimenter, and daddy. With over nine years building communities online, Jay’s projects have reached 20+ million views and are routinely featured in the media. He’s best known for the personal finance blog, BudgetsAreSexy.com, as well as his curation site – RockstarFinance.com. He loves coffee, hip-hop, and collecting coins, and is on a mission to make personal finance UNboring.


michelle makingsenseofcentsMichelle Schroeder-Gardner @ Making Sense of Cents – On her blog, Michelle teaches readers how to save money, how to make extra money, and more. She currently earns over $100,000 a month through her business while traveling full-time in an RV with her husband and two dogs.


mr 1500 1500 daysMr. 1500 @ 1500days.com – Mr. 1500 writes about frugal living, investing, early retirement and dinosaurs on his blog, 1500 Days. When not wedged behind the screen of his MacBook, he can be found enjoying the mountains of Colorado with his family and friends.


and myself, Benjamin Davis @ From cents to retirement – Ben Davis started to work towards his logo fearly retirement in 2013, when he was diagnosed with the Chronic Fatigue Syndrome (CFS/ME). He didn’t let the disease beat him, and he started to work on his financial IQ, reading over 100 books on investment and personal finance. He later developed a particular interest in Real Estate. In 4 years, he grew his portfolio to a quarter of a million dollars, composed of 10 rental units, stocks, and a few other investments. Recently, he published his book “My strategy to retire early”, which details his strategy to retire by the time he turns 33.


This roundup is mainly about Early Retirement, and the fundamental questions underpinning it. I wanted to identify the main challenges and difficulties some early retirees have faced throughout their journey. At the same time, I wanted this roundup to be a starting reference for those who are just about to start their journey and are looking for answers to fundamental questions about retiring early. The answers ended up covering many aspects of investing and making money, which I find extremely valuable.

I started the roundup by asking Cody from Cody Shirk.com three fundamental questions pertaining to retiring early:


1 – What do you think is the most common reason for people to want to retire early?


“Freedom. That’s why people want to retire early.

Think about it… why do people want to retire early? Is it because they want to sit on the couch all day long and watch TV?

No.

People want to retire so they can achieve freedom from whatever job is shackling their life.

We’ve all been in that situation where we have this obligation to just go through the motions. Whether it’s school or a job, we have to show up and do things we don’t want to do. We do this because we know we are working toward a goal – retirement.

But, that’s just the story we’ve been given: Go to school, work hard, and then someday you might get released to pursue what you actually want to do. Some day you’ll get freedom.

So, we equate the word “retire” as freedom. That’s why so many people want early retirement.

Think about that. Seems crazy.

On one hand, it’s amazing that we are living in a world where freedom is obtainable. It’s like no other time in history. We are very lucky.

But, on the other hand, we’ve made this story up of how we actually achieve freedom. Do a bunch of stuff (school and/or work) that we don’t like, then we’ll eventually be rewarded with retirement – also known as freedom.

What if we could do things that we actually like AND have freedom? That’s what early retirement is.


2 – Why do you think that only a small fraction of people end up trying to retire early… or even accomplishing it?


“Fear. That’s why only a small fraction of people actually end up achieving early retirement (freedom).

You see, the whole retirement game plan is pretty straight forward. Get a job, stash money away every month like a squirrel preparing for winter… then after thirty or forty years, you can break into your stash and live the life you’ve always wanted.

That process seems safe and comfortable. That’s what most people do, and there’s comfort in the crowd.

Heck, that’s what we’re taught in school. Our governments even set up specific tax incentive programs to support this process. There are all kinds of savings plans (401k, IRA, deferred compensation, etc.) that encourage this retirement strategy.

In fact, there is an implied penalty if you do not play along with this game. (The penalty being that your money is not treated favorably in regards to taxes if you do not save through a retirement program.)

So, the idea of retiring early and going against the crowd seems scary. People are fearful to go against what everyone else is doing.

Humans are pack animals. We tend to follow one another, for better or worse. We are easily influenced by the thoughts and emotions of others.

If you look at any successful business person, investor, or really anyone who has achieved success, then you’ll find that they took a unique path. They did not follow the crowd. They pursued a goal on a lonely road and didn’t get much support along the way.

That’s scary.”


3 – When did you become financially independent and what were, in your view, the determinant factors for that?


“Probably around the age of 28. And the only reason why I got there was because of extreme frugality, discipline, and consistency.

I got an actual job, worked as much as I could, saved as much money as I could, and invested as much as I could.

However, I don’t like the term ‘financially independent.’ Yes, it’s true that I don’t have to worry about going in and punching the clock at a job anymore… but it’s not like I just kick back all day long and drink beers.

I’m probably working harder now than I ever have. It’s within my personality to always be working on something.

I’m motivated to create and achieve new goals every day. I have long term dreams that I would like to accomplish and I always keep those ideas on my radar.

If you were to look at anyone who has been significantly successful, you’ll find someone who is highly motivated. It’s not like once you reach a certain “number” you just kick back and relax. You stay at it. You want it. You crave it.

Cody’s answers make total sense to me. I second his words on the desire of freedom being the number one reason for people to want to retire early, and fear being the main reason why most people do not retire early. And as I’ve said many times on my blog, I envision my “early retirement” as a full-time job, just like it is for Cody. Every time I interacted with Cody we seemed to agree on most topics, even the most controversial ones.  

I then asked Ben from Sure Dividend, who I regard as a guru of stock investing, the following questions, which pertain to the role of stocks in early retirement strategies.


4 – Stocks seem to be a popular investment tool among those who retired early. What core principles should prospective early retirees know about stock investing?


“Above all, potential early retirees should think of investing in the stock market as buying pieces of real businesses (because that’s what it is), not a form of speculation or gambling.  Having a ‘business owner mindset’ helps to reduce the likelihood of selling just because the price declines.  If you are able to hold great businesses for the long run, you will very likely generate strong total returns and compound your money.”


5 – What would be, in your opinion, the best advantage of stock investing in comparison to other investments?


“The stock market is a unique wealth building tool. If you look at the long-term average return from home price appreciation, it’s around 1% or 2% a year. Gold is even less. Bonds aren’t much better. Investing in the S&P 500  has compounded wealth at around 9% a year over the long run. The phenomenal wealth building potential of stock investing – without the use of dangerous leverage – helps it stand out from other asset classes.”


6 – As of February 2017, is it a good time to invest in the stock market or can you see a crash coming?


No one can predict the future.  We have been in a bull market since 2009. Interest rates are near all time lows. Will there be another recession/market correction? Absolutely. Will it be in 3 months, or 5 years? I have no idea. The stock market is not a monolithic block. It is made up of thousands of individual businesses. Some of these businesses have strong competitive advantages, shareholder friendly managements, and trade at fair or better prices – regardless of the overall market price. I believe it makes sense to buy great businesses when they trade at fair or better prices regardless of where the overall market is. You can do that now.

I can see a lot “of Warren Buffet” in Ben’s words, especially in the last questions when he says that it makes sense to buy great businesses at fair prices. Thanks for sharing your knowledge Ben!

As a Real Estate investor, I had to bring in Real Estate experts, because I really wanted to know what they had to say about Real Estate in the context of early retirement, as REI is perhaps less popular than stocks. I asked Juan Pablo from 100percentfinanced.com the following: 


7 – You retired from the corporate world. Would you still go the Real Estate route if you started your Early Retirement journey all over again?


“Absolutely.  Real estate investing, especially multifamily real estate investing, is the fastest way to financial freedom.  Leverage is the name of the game.  If a bank (mortgage company) is willing to lend me 80% of the money to buy a property that’ll put money in my pocket, then that’ll be a great way for me to retire from a corporate job.  Plus, you can use business funding to fund the remaining 20%.  As long as these wonderful people called tenants continue to pay their rent, then I’ll continue to buy a property 100 Percent Financed being that they’ll be paying off the debt, the property expenses, vacancy and maintenance reserves, as well as my personal living expenses.  Real estate investing taught me so much about business, personal finances, using leverage, as well as how to use creative financing.  Real estate investing not only helped me quit my 9 to 5 at the ripe age of 30 years old, it also opened the door to other opportunities, such as speaking engagements, books, eBooks, and online business.  Sure, real estate may have it’s downsides (tenants not paying rents, toilets breaking, and taxes increasing), but just like everything in life, it definitely has its upsides (income, depreciation expense, growing equity, appreciation, and the ability to use leverage.)”


8 – To those thinking about going through the Real Estate route, what are the most important things and tools they should know of?


“Getting started in real estate investing is similar to embarking on a road trip.  You pull out your GPS and you enter your starting point, your ending point, and then the GPS will calculate three routes for you to take (shortest route, fastest route, and cheapest route).  Before you started your engines, you know exactly where you are, where you need to go, and how to get there.  You should take the same approach with real estate investing.  Complete your Personal Financial Statement (PFS) to find your own starting point (financially speaking), then determine your final destination (how many rentals you need to hold in your portfolio).  Last, determine who quickly or cheaply you want to get to financial freedom.  If you need a PFS or a roadmap to help get you where you want to go, then visit my blog www.100percentfinanced.com.”

I definitely agree with Juan Pablo that leverage is the name of the game, and what it makes REI so attractive in comparison to other types of investments. Next up was Mr. 1500, who is on the verge or retirement.


9 – What is, in your view, the most crucial factor in retiring early: earn, save or invest?


“Earn. Earn! EARN!!! Live a frugal life and always keep your spending at the same level regardless of what your bonus is, but hustle like crazy to maximize your investment accounts. If you’re a young professional, come in early and leave late. Figure out creative solutions to problems. Volunteer for the hard work. Keep notes of your achievements and remind your boss of your hard work when it’s time for your annual review. If your job doesn’t have room for advancement, seek side hustles. Drive for Uber on your downtime. Rent a spare room in your home. Buy a duplex, rent out half and get a roommate. And save all of that surplus money!”


10 – Rent or own a home? Why?


“I like owning, but only if I know I can make money from the home. My favorite strategy is to buy the ugliest home in the best neighborhood that I can afford. I then fix it up while I live in the home. This is referred to as a live-in flip. If you live in the home for two years, you probably won’t incur any capital gains. I used this strategy to get my nest egg rolling.”

I absolutely second Mr. 1500 on the side hustles and maximizing your earnings, to retire early! I too think it makes more sense to focus our time on getting a few extra hundred bucks and putting them to work, whenever we can.

I then asked another already retired fellow, FireCracker Revolution from Millennial Revolution, a few other questions which could help those trying to retire early.


11 – What is your preferred type of investment? Why?


Not a damned house, that’s for sure.

A big part of our site Millennial-Revolution is about pushing back on the idea beaten into most Millennials that a house is the best investment ever because housing is supposedly “safe” and housing only ever goes up, up, up.

Here’s why housing doesn’t work when it comes to retiring early. At best, housing is a wealth trap. What most Millennials do is get themselves up to their necks in debt, buy the most expensive house they can afford, and then spend 25 years shoveling money into paying off that mortgage while convincing themselves that they’re getting richer because their house value is going up. But then, when it comes time to sell and cash out, they just buy an even more expensive house. So money goes into housing, but then it never comes back out.

And that’s the best case scenario. Worst case, houses become a money pit. Everyone who talks about how great housing is always includes the line “excluding taxes, maintenance, and other costs for simplicity.” This is what I call real-estate math, which can magically make shitty investment sound awesome. But when you actually peel back the curtain on those costs, you realize that all the real estate commissions, property taxes, maintenance, utilities, and all that stuff actually eat up most of your gains. We did an analysis on our blog (http://www.millennial-revolution.com/rent/leverage-friend-enemy/) where we actually broke down how much it costs to own a house and were flabbergasted to realize that even in a house that increased in value by almost $125k over 3 years, 95% of the gain got eaten up by these hidden costs. Houses do make money. Just not for you.

Instead, the investments that do work are low-cost Index ETFs. These are Exchange Traded Funds that, rather than own 1 or 2 companies, own every company within the entire stock market. As a result, Index ETFs can never effectively go to zero (since that would involve ALL companies going bankrupt at once), and over time track the long-term performance of Indexes like the S&P 500, which over 10-15 year periods have never lost money and have averaged over 10% annualized gain.

The trick with ETF investing is that because there are so many ETFs out there, investing seems scary and complicated compared to buying a house. But the truth is, investing is actually pretty simple. Which is why we run a weekly Workshop on our blog where we actually walk people through the process of constructing an Indexed portfolio using real money in the real stock market.

The cost to follow along is free, and you can find it here. (http://www.millennial-revolution.com/investworkshop/)”


12 – What was the most determinant factor for you to retire early?


I read a study the other day that 70% of Americans hate their jobs while the other 30% are filthy liars.

I was firmly in the 70% camp.

I used to work in a cubicle farm, doing the 9-to-5 thing. Sure it was stressful, but that’s what being an adult is supposed to be like, right? So I figured I should keep my head down, work hard, and hopefully everything would work out. I even started looking for a house because I thought “that’s what everyone else does.” But that all changed when my co-worker nearly died at his desk. 

He collapsed out of the blue one day unable to breathe. Someone called 911 and he was wheeled out on a gurney, and I later found out that he had to go into emergency surgery. His doctor told him that he had arrived just half an hour later, he wouldn’t have made it. And yet a week later he was back at that same desk, stressing out and continuing to work the same massive overtime that had nearly killed him to begin with.

Why? He had to pay off his mortgage so he had no choice.

And that’s when something clicked in my head.

Why are people literally killing themselves to pay off a mortgage? Sacrificing your life for a house you can’t enjoy after you die? It didn’t make any sense, yet everyone was blindly doing it because that’s what all their friends and family were doing. 

So that’s when I took all the savings I had piled up for my down-payment and invested it instead in a portfolio of low-cost Index ETF’s. Three years later, those investments (along with my continued savings from not buying a house) had grown from $500k to $1M, and I realized that because 4% of my portfolio equaled my living expenses, I no longer had to work anymore.

Now I spend my days traveling the world, working and volunteering on projects that I’m passionate about (like my blog), and just enjoying life. It was the best decision I ever made.

Interestingly enough, I interviewed two early retirees who love and hate Real Estate as an investment. This backs up my theory that there are many ways to retire early and there is no universally better way to do that. You really have a myriad of options, but you have to find the option that suits you the most. Keep in mind that Juan Pablo is based in the US and FireCracker is based in Canada. I am not even suggesting that you can only do it in the US, and not in Canada, I am simply saying that one’s personal context is highly relevant. Now this also proves the point that you can take the road that suits you the better because Juan and FireCracker retired early though two very different ways. 

I had to get more questions answered on Real Estate, because that is what the majority of my readers are interested in, so I asked Mindy Jensen from BiggerPockets a few other things about Real Estate:


13 – What are the key elements of good Real Estate investments?


“The key elements of a good real estate investment are cash flow and appreciation, however they rarely are found together. You either have a property that produces cash flow – with little chance for appreciation, or you find a property that has an enormous appreciation potential but will produce little monthly cash flow. Finding one that offers both is the unicorn of real estate.

But here’s the kicker, you can calculate cash flow before you purchase a property – based on the current or market rents, and your estimated expenses. You can take an educated guess at the value of a property you plan to improve – or force the appreciation – based on comparable properties that are selling in the area. But actual, natural appreciation cannot be predicted, which is why you hear from so many investors not to count on appreciation.

You can’t know how much the market is going to go up in the next 6 months or even if it will go up at all. Which brings us back to our original question, what are the key elements of a good real estate investment? Ultimately, one that makes money.”


14 – What would make more sense for most people? A REIT or an active RE investment?


“When I think of real estate investment, I think of either a buy and hold property or a fix and flip property. While there are so many more ways to invest in real estate, these are the two most popular methods. A REIT or Real Estate Investment Trust is a far better option for just about anyone looking to invest in real estate today. As a landlord, you are responsible for getting tenants into the property and keeping the property in top condition. Tenant Screening is an art, and making a mistake and allowing the wrong tenant into your property can have disastrous consequences. Keeping the property in top condition can mean taking midnight phone calls about overflowing toilets or worse.

With the Fix and Flip model, you either need to know how to make repairs and rehab a house, or find someone to do the work for you. Hands down, the most difficult part of a rehab project is finding a great contractor. There is no shortage of bad contractors out there, and pretty much every single flipper I know has worked with at least one.

Compare this to the REIT, where the basic model is to hand over an amount of money, then collect the monthly payments from the management company, leaving any issues to be dealt with by someone who has far more experience than you. Yes, you are collecting less profit, but doing almost zero work for that profit.”

Absolutely agree that the unicorn of REI is cash flow + appreciation altogether! Great points by Mindy!

Next up was J Money, from Rockstarfinance.com. I tried to take advantage of his broad knowledge and vast experience online and the numerous early retirement stories he came across, through his platforms.


15 – Do you think everyone can retire early (say, in their forties)?


 “I think anyone *can*, but you have to really WANT IT BAD enough to make it happen. As well as get lucky, don’t have anything major happen to you or your family like catastrophes, and you stick to it from start to end 🙂 So I guess no – not everyone WILL be able to retire early – but if you commit to it and hustle hard for a good stretch of years there you’ll def. have a great shot at it. And even if you miss the 40’s, retiring in your 50s and 60s is still great too! It’s only a major problem if you end up never being able to retire which unfortunately is the case or many :(“


16 – What would you do differently, financially-wise, if you could go back to your 20s?


“The only thing I really wish I did back then was to start practicing minimalism more. It took me until my early 30s to finally catch on, and it’s been SUCH a blessing since. I’ve cut down on most random spending, decluttered almost all my possessions, and now just really have a great peace of mind when it comes to “stuff.” If I had gotten into it sooner not only would I have saved some extra cash, but I would have avoided some pretty boneheaded moves too like buying a house when I shouldn’t have, as well as focused on travel an *lifestyle* more than just trying to hustle hard 24/7. I’m all about making that money and trying to retire earlier, but I also think we suck as a society in trying to enjoy the here and now too. And minimalism helps out a lot with that.”

Indeed, we can’t foresee catastrophes and those can be the deal breaker for many trying to retire early. Absolutely agree with minimalism and on the magical stress relief it brings! I am pretty sure that enjoying the road is hard for many of use. I can relate. I focus on making money and I can’t really appreciate the journey. I need to work on that myself!

The next participant, PoF, is someone with a very different background because he is a physician. I really wanted him to join the roundup, as I think his background with resonate with some of my readers. And of course, I had to ask him stuff related to the fact that he his a physician…


17 – You want to retire early, so you won’t capitalize much on your (presumably) large salary, as a physician. Do you regret having become one?


“Believe me, I have contemplated this one, but I never have to dwell long on it, because I quickly reach the same conclusion every time. I don’t regret becoming a physician one bit.

You’re right about the salary – I have done quite well, having earned a gross salary exceeding four million dollars in a little more than ten years. Even after paying over $1.6 million in taxes over that timeframe, I’m left with a healthy sum. By living relatively frugally, I still have every penny I’ve earned and then some. Fortunately, the market’s returns have been generous, and enough to support our lifestyle as we grew from an engaged couple to a family of four over the course of a decade-long career.

It’s also true that I may not enjoy this salary for that much longer. If I follow through with plans to retire early as soon as next summer, I will have had a 12-year career that matches the length of my education and training.

That doesn’t bother me. To insist that I keep working if it doesn’t feel like the right move for my family would be to invoke the sunk cost fallacy. I like to make decisions with our future in mind rather than my past.

While I may have had a separate but equally amazing experience if I had chosen an alternate career path, I likely would not have experienced the following:

  • Meeting my wife. I may have met a different future wife, but I’m super happy with the one I found, and I can’t imagine we would have met if I hadn’t matched into a particular residency program and moved to a specific city. Similarly, I have met hundreds of great people I consider friends and I only know them because of my chosen career path.
  • Being part of a life-saving team. You don’t have to be a doctor to do this, but if you’re not in healthcare, you’re much less likely to be part of a hands-on team that literally prevents people from dying. Engineering life-saving devices or pharmaceuticals can have the effect of improving and saving lives, but that can’t compare to performing manual chest compressions or placing the breathing tube in the right spot after others have failed.
  • Reaching my full potential. I’m not saying I have met my full potential, and it’s a rather nebulous outcome to try to measure, but if I had chosen a different path, in the back of my mind I might always wonder what might have been if I had chosen to become a doctor. Now, I’ll never have to wonder.

While there are certainly quicker paths to FIRE that require less hardship, I don’t regret choosing medicine or choosing to retire early from it. I’m not even sure I chose an early retirement; sometimes it feels like early retirement chose me.”


18 – What is the most clever thing you have learned with an Early Retirement blog?


“This is a tough one. I’ve learned so much since starting my very own FIRE blog 14 months ago.

Of course, I’ve learned the technical aspects of blogging. I’ve learned that successful blogging takes a great deal of time and a certain level of dedication. I’ve learned that there is a wonderful amount of cooperation and collaboration among bloggers, as you are witnessing in this monster of a blog post today.

I’ve also learned a fair amount about personal finance. When I do research for a blog post or field a question via the comments or an e-mail, I’m forced to learn some of the finer points of our tax code, different retirement accounts, or how exactly to perform a Backdoor Roth with Vanguard

Blogging requires a fair amount of time not only writing, but also thinking and reflecting on one’s own situation. Hence, I have learned quite a bit about myself. If you’re going to write about life, liberty, and the pursuit of happiness, you’ve got to figure out what you want from life, what happiness means to you, and how liberty can help you achieve those goals. That’s pretty clever, and without a blog, I doubt I’d spend near as much time answering those deeper questions.

The most clever thing I’ve learned from blogging? If I could choose just one thing to call the most clever, it would have to be the most unexpected outcome from all of this. Blogging is a great way to make new friends with all kinds of remarkable people. I don’t think there’s a state in the union where a reader or fellow blogger wouldn’t be happy to buy me a beer (or let me buy them one — after all, I’m the rich doctor 😉 ). I’ve already met a handful of awesome people in real life that I never would have met if I hadn’t started a website.

With a blog, you can easily connect with people who have similar ideals, goals, and mindsets. People from around the nation and around the world. People like you, Ben, and a couple others who contributed to this post with whom I’ve had the pleasure of enjoying a couple meals and beers with along the shores of Lake Michigan. When I started writing, I had no idea what a rewarding social endeavor it would be.”

Absolutely. Blogging about Early retirement can definitely make you question the most fundamental questions in life, I can relate!

Man, I agree with you so much on the second one. There is such a beautiful torrent of cooperation among bloggers that it was actually overwhelming for me, at first. After I realized it I felt like approaching everyone out there :-). Now I simply enjoy it when opportunities pop up. Last week, I closed a deal with one of my readers. My blog has certainly rewarded me in ways I didn’t expect when I started it. I am glad you feel the same!  

Inspired by some bloggers who retired early, I recently discovered the potential of online income and I started to believe that this type of income could be an important tool for me to retire early. Michelle from Making Sense of Cents has released truly inspiring income reports, which grew consistently over time. In January 2017, she made almost $140.000! I figured she would be the most competent person to answer the following questions:


19 – What is the number one advice you would give to those willing to make significant money online?


My top piece of advice for those who want to earn money online is to find something that you are interested in or that you have a skill in and see how that can translate to a way to earn money online. Or, you could take a course in a specific way to make money online and learn how to make money in that form by taking the course! So, you don’t necessarily need to already have the skills that are needed in order to run a successful online business – there are plenty of courses that exist that can help you learn how to make money in the hundreds and even thousands of ways that are possible. 

There are tons of ways to learn how to make extra money, so I’m sure if someone truly wanted to work online that they could find something that would work for them. Seriously, there are plenty of ideas.

For example: A person could work online as a graphic designer, learn how to start a blog, become a virtual assistant for others, manage social media accounts for companies, build websites, and much, much more. As a full-time traveler, I have met countless people who work online and manage to travel full-time, and everyone does something different. Due to this, I absolutely know that it is possible to make money online and from your home or from all over the world!

As you can see, there are ideas for nearly anyone and everyone. You just have to look around, see what you may be interested in, and then look into what it takes to turn that into a money-making business idea.

Personally, my favorite way to make money online is to have a blogging business. To run a blogging business, all I really need is my laptop and an internet connection. It is a very affordable business to start and you can be your own boss, create your own flexible schedule, travel full-time, and more. Plus, I get to help readers each and every single day improve their lives – and emails from them are the best. Blogging allows me to earn over $100,000 per month and it’s a business idea that I am so glad about. It all started as a hobby too!


20 – Do you think it could be done in part-time? Is it sensible to give up a 9-to-5 job to pursue a career online?


“I think making money online can definitely be done part-time. I started my blog on the side of my full-time job as a financial analyst and I was able to grow a successful business this way. I also quit my job to become a full-time blogger, even though I had a great and stable career as an analyst. 

So, I am the exact answer to these two very questions right here, actually 🙂

Like I said above, there are all sorts of ways to make money online, so it all really just depends on what you want to do. There are online careers in which you may only work one hour a week, and then there are others that may require a full team of people who are working on the business in order to make it successful. It all depends on what your business idea is, what you want from it, and more. But, yes, it can definitely be done part-time for the majority of online business ideas – you just may make less money if you decide to do it that way.Now, if you are choosing to keep it part-time, you could outsource tasks to others and hire employees or freelancers, so that you can have more time and a better work-life balance.

Now, if you are choosing to keep it part-time, you could outsource tasks to others and hire employees or freelancers, so that you can have more time and a better work-life balance.

Just a few years ago, I didn’t really even know what a blog was. I started a blog just because I wanted to have a hobby, improve my financial life by publicly talking about it, and so on. I never started my blog with the hopes of earning a living.

After around a year of blogging, I was already earning several thousand dollars a month from my blog. Due to that, I decided to make the leap into self-employment. I left my day job as a financial analyst to pursue a career online, and it’s a choice that I am still very, very happy with. Personally, I cannot see myself going back to work for someone else, or even going into an office. I love being able to work online and it is the best thing ever!”

Michelle is absolutely killing it and she is definitely a source of inspiration for all of us. I am very happy for her success and her freedom. Anyone wanting to retire early may indeed find inspiration in her story and make some bucks online, to accelerate the journey! 

Finally, I decided to answer 2 of the most common questions I get from my readers:


21 – I have some extra cash at the end of the month and I am thinking about working towards my early retirement. What should I do?


I think that this question is predominately common among millennials, who start to generate some extra cash and want to get some return on their savings. I think it is wonderful that they think about saving and investing. At the same time, I understand that due to the lack of financial education in our educational system, their financial IQ is not as developed as they would like it to be. Therefore, my first recommendation is for them to read as much as possible. I have put together a list of books on personal finances and money, which everyone should read. As I am preparing summaries and reviews of these books, you don’t even have to buy them to learn the major ideas behind them.

The main idea is that even though you could have someone allocating your capital every now and then, you should learn how to do it yourself. This will help you optimize your returns and not depend on a third person to invest. Plus, think about it. People spend tens/hundreds of thousands of dollars on a degree at college, but maybe less than $1000 over their lifetime on books. This doesn’t make any sense! Why spending so much money to learn from professors (who learned from other professors), and being reluctant to spend something like 10 bucks to learn directly from millionaires, who are basically giving away their formulas?

Easy ways to start investing include index funds and ETFs, as sggested by FireCracker, P2P lending or even starting a blog. Do not spend the profits of your investments. Instead, reinvest them. Do the math regarding how much you need to retire and work relentlessly towards that goal.  


22 – Won’t I be bored after retirement, if I retire in my 30s?


I don’t know about you, but I won’t. I have personally started to work towards my early retirement because I was diagnosed with CFS. However, even if I were absolutely healthy, I would be going down the very same path, I am sure. You see, my biggest pleasures in life include hitting a nice cafe and drink an expresso, hike in the most beautiful places in the world, find hidden lakes to swim in, like this one:

ben davis roundup

and write content for my blog. Having a job does not give me the freedom to do that. If the weather is awesome on Thursday, I can’t go to the beach because I need to be in the cubicle. Now, you may like working for someone, every day from 9 to 6. I am not saying you shouldn’t. However, even if you like that, it won’t hurt you to work towards financial freedom.

On top of that, you’ll not have to work for money again. You’ll work because you’re passionate about what you do. And I truly believe that we show the worst of our sides when we have to work for money, but the best of ourselves when we work for love.

I think that the whole point of working after financial freedom is the integrity you adopt in everything you do work. If you are not financially free, you’ll have to work regardless you like it or not. If you don’t have to work for money, you can still work on what you love, but everything will come from your heart.

All the best,

Ben

how to save money
Daily life, Planning, Tricks,

How to save money every month: saving tips you can use right now!

The main question I go through with my clients and those I advise is how to save money. If you want to retire early, you must save money. But how? Although this is a simple question, only the right actions will do the trick.

I actually answered this question on Quora in December 2016, which ended up getting almost 100k views. This post is the result of a huge compilation of savings tips and tricks to save money that I’ve been using over the years. You may find that some of these tips don’t work for you. That is fine. Simply try to apply those that do. Without further due, let us get to it…

How to save money: 20 saving tips you can use right away to save money

The first thing you have to do when asking yourself how to save money is what is actually how much is realistic to save. In my case, I make about $2400/mo net, so I decided that I had to save at least $1600/mo. I will not say that each and every one of you can do this. Yet, most of these tips are applicable by almost everyone.

1 – Pay yourself first

Again, to start saving money, you must first define what is reasonable to save. You can certainly live off of 30%, as I do, but you will need to be an avid fan of minimalism. On top of that, you need to have a burning desire to save money. In my own case, I want to retire because I have CFS, which may prevent me from working.

If you figured this out, set up a savings account if you don’t have one yet. Then, simply transfer your savings as soon as your salary clears on your account, every month. I often recommend people to set up automatic transfers because they tend to work way better than manual transfers.

Buy assets on credit and try to aggressively pay it back

What really motivated me to save money was to pay back credit. Going to the bank and paying down my mortgages. Paying off the credit card debt I used to advertise my book “My strategy to retire early“.

Maybe you’re hypersensitive to credit. If that is the case, don’t use it.

Also, when the dividends of my stocks clear, I buy more stocks, so I never get to have the chance to spend the dividends.

Note that I do not advise people to use credit unless they really know what they are doing!

2 – Withdraw money from your account for the entire week

It is much easier to use your card to pay for your expenses, so you tend to spend more that way. If you get cash and use it, you tend to stick to it in a much more powerful way than using your cards. I’ve noticed that this greatly helped me. Now, if we’re not talking about great amounts of money, I actually think you should withdraw money for the entire month. Just try it out and see whether you do better.

3 – Record every single transaction you make

You may think this is contradictory with tip #2. It is not! Although it would be easy to record every transaction if you used your cards, you’d tend to spend more. Cash out and use apps for smartphones. Just google up one, there are plenty. Use the one you like the most. The biggest advantage of doing this is that you realize where you spend your money – and maybe change your spending habits for the better!

What happened with me is that I became so disciplined about spending money that I stopped recording where I spent money, with the same results. However, I do understand the value I gained by having done this!

4 – Shop on a budget

I entitle myself to spend a given amount of dollars at the supermarket. In order to do that, I always write down what I need before actually going there. And most importantly, I stick to whatever is on the list!

I follow pretty much the same diet all year long, I know what I need straight away. Plus, I know the prices I normally buy my groceries at, so I can go to a different supermarket and buy only if the price is lower.

5 – I take advantage of the intrinsic value of my money, by buying in bulk

I usually target high expiration date items, that can come in large containers. Rice is one example. I typically buy the best organic rice at a lower price than the average rice brand. This is only possible because I buy 20-50KGs (about 40-200lbs) at a time. Another example of what I buy in bulk is toothpaste.

I also buy in bulk whenever an occasional sale of a product I already use comes up. Note that I didn’t say “whenever a sale comes up”. It must be a sale of a product I already use so I know that I am not buying just because it is cheaper than usual (which can, in fact, mean more expensive than the products I usually use).

6 – Avoid big sales and Black Fridays

Right. Take advantage of sales that feature the products you already use and trust but avoid the big ones. Why? Because in big sales like black Friday you are compelled to buy products you don’t really need. The only back Fridays I take advantage of are stock market black Friday. 🙂

7 – Turn off the television and the computer at night

You will save on the electricity bill. You’ll be less exposed to ads that compel viewers to buy stuff they don’t necessary need. I personally got rid of television for good about 8 years ago. Feeling bored? Read great books instead. Go online and learn new skills. Meditate (Affiliate link).

8 – Read on how to save money

Yes, posts like this very same one. But this is not necessary the end of it. Look for more articles. Read books that will help you even further. Browe the internet for more articles. Learn from people who did it successfully in the past.

If you are self-employed, I definitely recommend you to check this and this sources.

9. Practice minimalism: stop buying and start selling

minimalism how to save money

As I am currently in the process of moving to a new home, I wanted to make sure that I start off with the right foot. To accomplish that, I will write down a list of items I want to have in my home and stick to it. In addition, I will use the 1:1 item rule: to bring home another item, I have to get rid of one I already have.

People don’t realize it, but having many things is a lot of stress. Try to keep the minimum. Get rid of what you don’t need, by selling it online or market fleas. You’ll save money and make money. Win-win.

10 – Buy used, not new

I buy a lot of books (btw, as a 10.1 tip, aim for free books whenever you can!). The vast majority of them are used because I get a huge discount and yet, they tend to be in very good condition. Whatever you can buy used instead of new makes you saving money and help the planet.

Books are only one example. Another example would be a car, which I would never buy new. It depreciates too fast on my balance sheet. 🙂

11 – Negociate your mortgage

Having two mortgages myself, and a third one on the way, I feel competent to talk about this. Go to the bank and negotiate your mortgage! I do that every 4-6 months, or sooner if I feel that I have new arguments to negotiate. For instance, if I rent out another of my units, I try to negotiate my mortgage down. In fact, if you think about it, every month that goes by, the more creditworthy you get (assuming you don’t default)!

Your mortgage is probably your number one expense so you must be addressing it if you want to save money! Don’t be afraid of hearing the bank telling you no. That is for granted.

12 – Quit smoking. Please!

I cringe whenever I hear someone telling me they need to save money while they smoke a cigarette. Please, do me and yourself a favor: stop smoking! This is one of the best ways to start saving money because if you’re a smoker you are certainly spending lots of money on cigarettes. And smoking is SO expensive!

On top of that, it will largely benefit your health. Smoking has been shown to cause major problems to your health.

13 – Be a coupon and gift card savvy grinder

This is really for those who master the science of how to save money. So, coupons are a great way to save money. However, as I said in tip #6, you should not buy something just because it is on sale. Same thing with coupons if you’re really looking how to save money. Search for coupons everywhere and use them wisely. Don’t use coupons for products you don’t buy already. Search for coupons by typing the names of the products you already buy. Ask your favorite grocery whether they have coupons.

14 – Don’t change your cell phone

We live in a society which excludes us if we don’t have the latest gadget. Don’t go with that trend. Changing your smartphone every few years is fine, but buying the latest one all the time is certainly not a sustainable idea.

Stick to your gadgets until they don’t work anymore. Remember your excitement (if you were) when you bought them. Remember all the good things you’ve done with them. Change them when they stop working.

15 – Change to LEDs

My father comes from a very humble family. He greatly appreciates what he has right now because his family didn’t even have enough to eat. Yet, he remains super frugal and moderate. He used to float around the house turning lights off and complaining with me and my brother when we were younger. We were not particularly good at turning the lights off, you see. 🙂

Two years ago, I convinced my father to change to LEDs. I knew he was the best guinea pig I had to test whether it worked. It took me one electricity bill to become a devoted fan of LEDs. They truly work, and their price is coming down quickly, as the technology evolves. Do yourself an experiment at your own home!

16 – Pack food for the day

Start saving money is easy if you write down your monthly expenses and address the biggest ones. As I said in tip #11, your mortgage should be addressed first because I am sure it is one of the main expenses you have, if not the biggest! Food comes right after, I am sure. This is especially true if you go out for lunch. Going out for lunch every day of the week for 10 years translates into about $40k, if you spend an average of $15 per lunch.

Seriously, pack your meals. Grab what is left of yesterday’s dinner and take it to work, so you save on lunch. Make a healthy sandwich or salad. Won’t take you much time but will certainly alleviate your wallet!

17 – Downsize

Bigger homes mean more expenses, it is that simple. Downsizing is such a great way to save money! All too often, smaller homes mean also cheaper acquisition costs. If you downsize and you’ve got a mortgage, you’ll pay less for your mortgage. If you paid your home off already, you can take the extra cash and invest it. In general, you’d save on maintenance and utility bills, at the same time you create more income. Win-win!

18 – Write a “how to save money” list

This can be way more effective than it looks like. If you write down the list (and actually read it every now and then) you’ll remember what you should be doing! On the back of the list, write down the prices of your most common groceries. Next time you buy them, you’ll have good comparison terms.

19 – If you do use credit cards, choose those with cash back

This one is pretty self-explanatory. Although it really comes in the first pages of many books on how to save money, not many people do this. Choose credit cards with cash back and benefits, if you really have to use them. A reason to use credit cards is to get lower interest rates on your mortgage, as banks often do that when you get credit cards from them. Use all the benefits of credit cards – call their customer service and have them sending you the entire list of benefits!

20 – Cancel unused memberships and negotiate bank fees

I have made this mistake myself: I went on for a few good months with a club membership I never used. That was $40/mo, so we are not exactly talking about peanuts here. When I first started to think how to save money, this was one of the immediate things I changed. I have no memberships now. I pay for my gym “membership” on a monthly basis (which is 7% more expensive). As I don’t workout in August, it ends up being equally expensive – although I only pay for it if I am really using it!

Bank fees are another major component of how to save money effectively. Have your bank statements scrutinized every month and make sure you have no unknown fees popping up. If you do, question the bank right way – and don’t forget about it!

my sunday best
Daily life, Health,

My Sunday best

my sunday best

If you found this post because of music lyrics, an idiom or any other reason, such as a book, this may disappoint you… this post was written because of a much better reason. You see, I want to retire early (in my 30s), and this post is all about early retirement. Get your espresso, chill out and enjoy the post.

Yesterday was Sunday, and Sundays are super special for me. These are the days when I truly experience freedom. I think of Early retirement and financial freedom as a lotta Sundays in a row, actually. 🙂

So here’s what my typical Sunday involves:

  • A properly cooked breakfast. I typically have a few eggs in the morning, with buttered toast and salad:sunday breakfast
    (this picture is from a hotel breakfast, but you get the idea).
  • I meditate for a long while. I typically meditate for about 5 minutes a day, but on Sundays, I extend that to 15-30 minutes, at least.

meditation

  • I try to watch a movie or a TV show episode (I love Shark Tank, for example).
  • If the weather’s good, I can also hike. 🙂
  • I go out for lunch (I LOVE Italian):

italian food

  • Meet up with friends for an espresso and some chilling:

meet up with friends

  • Look up investments (I typically browse the internet for Real Estate deals and stocks).
  • Write blog posts, which takes a lotta time. Sunday is definitely the best day to write!
  • I have relaxing 30-min showers with essential oils.
  • I go for a run, at the end of the afternoon (if it is still warm), when the sun starts to set.

jog sun sets

  • Lastly, I read. I read a lot. 🙂

Some of these things are things I can only do on Sundays. It is funny that the expression “my Sunday best” which usually pertains to clothing is now becoming obsolete because fewer people go to the church (I am Christian but I usually don’t go to Church).

From April 1st, I will be starting to follow a variant of the Paleo diet, which I already presented before, and a completely new routine. I will post a truly comprehensive post on that soon, and it will be an aggregation of various “my Sunday best” routines, although with extremely fine instructions on what to eat, what to drink, when to sleep and a lot more.

What do you do to enjoy on Sundays? Let me know in the comments down below.

Best,

Ben

Planning,

Doing a PhD vs being wealthy: the economics behind a PhD

phd economics rich

Many people have been asking me how I can capitalize on the fact that I have a PhD. Many think it’s easy because it has been conveyed the message that if you have a PhD, then a well-paying job will be served to you on a golden tray. How large the paycheck will be is simply determined by field you picked, some say. You’ll make so much money you can’t even spend it at the same rate! Well… that is not my experience. Before you proceed, let me tell you that you should read this book (Affiliate link) regardless you are considering doing a PhD, you are doing or you did one.