At the request of @Joris, here&#x27;s a post that could illustrate my path to financial freedom and retirement at 40.

1Yr

@Xagoo why are you two so negative

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Stefan@Asgard19

1Yr

@bibisinvestments lebendserfahrung

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Roberto H.@Misswirtschaft

1Yr

@Asgard19 probably only negative

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1Yr

@bibisinvestments there are highs and lows in life - that's completely normal

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Nel@El-Roddy

1Yr

@Asgard19 I really mean it sincerely and I don't begrudge you it!
Let me put it this way, don't plan so far into the future, because a lot of things in life don't go according to plan. But that doesn't mean that things have to go badly, they just turn out differently than expected. I'm now 37, have a two-year-old daughter and we're very happy 😀 We've just started building and it took us three years just to get started!!! The plan was to move in in summer 2021... long story! Five years ago, I would never have thought that I would be building 😀😅🙈
I met my girlfriend (we're not married yet) about seven years ago and had no interest at all, so really zero. Ten years ago, I didn't "plan" it that way.
What I want to tell you is that situations come up in life that you don't expect and you're surprised.
I hope I haven't annoyed you too much with my life story 😅
Good luck to you anyway and let life surprise you a little and planning too much also means a lot of stress if things don't go according to plan! Greetings from Upper Bavaria 😀

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Leon N.@Finanzeon

1Yr

Classic Flo Pharrell copier

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Investfamily@Investfamily

1Yr

@Finanzeon never change a running system and I like to be compared with one of the most successful ones

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1Yr

@Finanzeon That's exactly what I was thinking.

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Leon N.@Finanzeon

1Yr

@bibisinvestments simply stupid if you copy someone

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1Yr

@Finanzeon In what way am I copying him? Because maybe 5 positions out of 26 are also in flo's portfolio?

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sodium@TomCOR

1Yr

@Finanzeon Don't talk if you don't know your way around. Envy is ugly btw

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1Yr

The plan sounds pretty good at first and not completely unrealistic. You'll see whether the wife, children and house wildcards work out, but where there's no plan, there's no way. Expect to adjust the plan from time to time. 20 years is a lot of time.

But there's one thing I don't understand: assuming your plan works and you manage the 7%pa. Then why would you want to change a profitable, working strategy to a suboptimal, untested 4%pa strategy? Then why not simply continue to collect 7% pa and relax 4%pa. It would definitely be better from a tax point of view than paying several 100k in tax on your 40th birthday just to switch to a strategy where you don't determine the payout amount yourself?

And another thing: why do you set 40 as your limit? Why not a certain amount of capital? If you've reached the 1 million at 35, why work for another 5 years?

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1Yr

@Epi that all sounds much more sensible and yes, I'm aware that this is all wishful thinking and I'm a spontaneous person who likes to make a few adjustments in the future. If things go badly, my employer will no longer exist in 10 years' time😂😞

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1Yr

@Epi Regarding the topic of age instead of height (for me, 40 is also the goal "can instead of must"), I can say of myself: I still feel "too young" to stop. It's fun, my colleagues are great, the work doesn't limit me at the moment. I also plan to continue working (probably reduced) when I have reached my goal. But if I had another annoying job change ahead of me (in my case from Hildesheim to Wuppertal to Bonn to Saarbrücken), I could say "no" and just stop, without stress. Although I would like to "gently slip away" with a 4-day and later a 3-day week.

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1Yr

@KevinC if you could plan it (the TC thing) I would do it much sooner 😅 I could well imagine 4 days now and maybe "having" to work 2-3 years longer would be perfectly okay. But in my current temporary position in an environment with more than enough work, it's still too risky for me.

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1Yr

@KevinC Slipping out seems to me to be the best and most realistic option. Very few people think about what I would call "existential path dependency" when making their exit plans. You've spent a lifetime doing something meaningful and you're supposed to stop overnight? From important and popular colleague to social fat-eye with no meaning? Nah... 😅

The beauty of financial freedom is not that you no longer work, but that you no longer have to work for money. In other words, you can choose who you work for, who you work for and for how long. There are people who only really started to "work" when they reached FF. THAT makes sense.

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1Yr

@Epi That's exactly what I mean! :)

I can already imagine various things that you could consider. You might even be able to earn another euro or two with new jobs, a little self-employment - or you could simply stay with your colleagues, but only for 4-6 hours a day, or take a few more weeks' vacation (even unpaid would no longer be a problem).

Bumming around at home would be hell for me. Being able to plan more time for friends and family, on the other hand, is important to me. That's why >80% of the overtime payments also go into the depot. Every now and then I get weak and "treat myself" but the prospect of a little more time is also good motivation.

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1Yr

@KevinC Yes, Gönnjamin should not move out completely. There is also an existential path dependency here. If you have lived frugally all your life (in order to splurge in old age), you will continue to do what you are good at in old age: live frugally. In the end, you have spent your life like a beggar and inherit millions. Which the heirs then carry through because they never learned to live like beggars. That doesn't make sense either.

Incidentally, very few financial planners take this factor into account. Even Finanzfluss systematically makes the mistake here: €3000 income, €1500 savings rate. Target: €3000 pension. Wrong! Target: €1500 pension! Incidentally, the author of the article also makes the same mistake.

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1Yr

@Epi Do you think so? I consume everything at least as much as my group of friends. I don't have to cut back in any way to achieve my goals, as my salary is above average.

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1Yr

@bibisinvestments I think you have another miscalculation.

You're planning a portfolio value of a good million euros at 40. Let's assume that's right (the calculation is roughly correct). But if you then cash out and go into dividend stocks or ETFs, you will first have to pay taxes on the accumulated profits. This can quickly result in 100-200k in taxes being "lost". So I would advise you to either go into dividend (growth) shares from the outset or to sell your growth shares bit by bit, because you will then benefit much more from the tax deferral.

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1Yr

@bibisinvestments You write that you have an income of €3400 per month and a savings rate of €2000. This means you need €1400 to live on. But you're planning €3500 for your pension. There is no reason for this and it is also completely unrealistic (assuming your calculation is based on current purchasing power). This is the mistake I'm talking about. And it's big and widespread.

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1Yr

@KevinC That's why he prefers to make monthly savings when he reaches the 1 million with 7% pa. But he'll get around to it when the time comes and the state has to finance the demographic crisis and access its citizens' savings. 😁

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Pezi@Pezi

1Yr

Of course, you should have plans when you're young. But without knowing you, I would say that it is completely unrealistic, as you only consider the positive aspects.

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DerMartin@DerMartin

1Yr

All in all, a great plan.
And thanks to dad. I would have liked to make it possible for my children too, but unfortunately it was never possible.

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Krush82@Krush82

1Yr

I don't want to disappoint you, but dream girl remains "dream girl". The sentence with Flo Pharrell doesn't make you any more likeable right now and your plan sounds a bit superficial to me - but good luck with it

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1Yr

@Krush82 My dream woman doesn't have to be a dream woman for everyone. Just because you go through life bitter doesn't mean you have to talk my dreams down to me.

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Krush82@Krush82

1Yr

@bibisinvestments That has nothing to do with being bitter, I'm not bitter at all. If you believe that it's realistic to meet your dream woman in your early 20s and that she'll stay by your side for the rest of your life, that has more to do with "dreaming" than reality. Of course, the probability increases if you have accumulated a lot of money by then ;-) By your early/mid-30s, you will have really arrived in life and understand what the old men told you back then :-)

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Tobi60@Tobi60

1Yr

Good plan, but unfortunately it never turns out the way it was planned. Otherwise it would be boring. But it's better to have one than to run around without a plan.
PS: 40 seems to be the new retirement age? That's why I find it so difficult to find good employees for my company. 😂

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Peterperformance@Peterperformance

1Yr

@Tobi60 Good employees make provisions and are therefore no longer on the market after 40😂😉

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Simon@burlwater

1Yr

@Tobi60 Yes, this goal is absurd. I'm now 41 and just starting out. However, it's good to have a nice cushion so as not to be dependent.

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Joris@Joris

1Yr

Thanks for the explanation. There is of course a lot of wishful thinking, but that's not wrong. The journey is the goal.
Of course, you have to assume that your wife is also financially well positioned.
Is €43,000 gross a year really enough for you? Now you have €60,000-65,000 gross per year.
You have a savings rate of €2,000, but that's only because you live at home.
As you say, paying off the house and especially if you want to have children, there will be unexpected costs.
How much do you calculate for living costs? Do you also want to go on vacation or would you deduct extraordinary things like vacation, broken heating (unlikely with a new one) from the deposit?
I would also take the option as Rmann says, rather save less. First you pay taxes and then you "only" have a 4% dividend deposit. Instead of continuing to take the 7% with you.

I always find such thoughts very interesting. For me (35 years old) such thoughts are unfortunately too late, but my thoughts are circling in my head about possibly retiring a few years earlier.
And not at 70, which is becoming more and more likely.
I also started too late.
But I can tell you that we also save €1500 a month. 500 in a deposit and €1000 in call money. For vacations, repairs, child seats, etc.
My wife only works 28 hours a month, but earns very well. And free time is worth more, we would prefer her to only work 15-20 hours.
With the kind of cushion you're building up, that would also be possible.
Going part-time at 40 and enjoying your free time. Retiring completely would be nicer, of course.

Oh, one more question, what about your state pension? Do you no longer expect it?

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Kai@Dividenden-Sammler

1Yr

Nice plan, unfortunately, as I've already said several times and as you've also written, there are quite a few variables and, above all, the tax problem which is still missing. In my opinion, €1000 for financing the property will also be quite a lot - children also cost (and not a little). You won't manage to become completely independent with 1 million. Part-time, yes. But I also doubt that your plan as it looks now won't work towards the goal of a million. Sorry, I don't want to rob you of your illusion, but I would estimate 2-3 million for your goal.

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1Yr

There are too many variables, e.g. the house is twice as expensive or the wife brings nothing to the marriage (that was the case for me). Children cost a lot of money. My three cost about 1000 per month each (just food, hobbies, clothes, vacations and other things)...

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Peterperformance@Peterperformance

1Yr

@Peterperformance 1000 per child? That would be €216,000 until the age of 18. Will you then earn 6k or how will you finance the whole thing?

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Krush82@Krush82

1Yr

@Peterperformance Yes, children are definitely the biggest capital guzzler. I also have 3 and my monthly expenses are similar.

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1Yr

@bibisinvestments By the way, I have left out costs for car, house and education. If you include that, you're looking at around 500k per child until they're 23/24 years old and finished with their studies. My children are still small, so the costs are lower.
Yes, of course the income has to be sufficient. You can't finance it on credit.

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Joe@Schmiedseppe

1Yr

I live frugally because that's how I was brought up. We used to have little money in the family.
I reached my goal at 25 and could stop working.
I'm still working at 33. I enjoy it, I have a paid apartment that I renovated myself, I work over 40 hours a week and I like it. I don't want to change anything at the moment.
I need less than €1000 to live on per month. I'm happy and like my life as it is. It was important to me not to have to work anymore. I've been fine since I achieved that. I'm happy. An excessive lifestyle doesn't suit me. What do I do with the money? Keep investing at the moment. I don't need it.🤷‍♀️
I still wouldn't buy any disproportionately expensive things without added value. Iphone yes. 30€ steak no.
Money doesn't mean much to me anymore. But I'm happy and proud to have achieved this.
Good luck to you 🙂

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1Yr

@Schmiedseppe at 25? how is that possible?

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Tuerpe@Tuerpe

1Yr

Don't forget to live😊
You have a rough plan and you can be really proud. But it doesn't always work out that way. Don't be too stingy, stay true to your plan, keep your eyes open for opportunities and invest in yourself and not just in the markets.

I like your plan, and I'm happy for you that you're off to a great start with your assets at 21.

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1Yr

@Tuerpe Thanks for the nice comment.

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ddoc@ddoc

1Yr

Would you stop working completely at 40?
I'm also planning to take early retirement at 40 at the latest, but then I think I'll continue to work part-time. Just as I feel like it

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