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My Diary Of June 2021

Hurray!

food for the guests
Food for the guestst

It was my birthday in June! I celebrated my birthday spread over a whole week. It was super fun and I really felt like it was my birthday. Advantage of the party scattered on multiple days: eating a lot of pie! Haha and of course that I better have a conversation with everyone who was there. Super nice!

Expenses

beers!
Oops, am I greedy?

In terms of groceries, I really got food and drinks for a complete thirsy soccerteam. Well, the visitors also deserve a nice snack and drink don’t you agree? There is still a lot left, so the budget for drinks can be reduced in the coming months 😉 The rest was not that crazy. For July I made a budget plan in advance. Curious? Read it here!

Stairs

This month the loft ladder has finally been replaced by a real staircase! This makes the attic usable at once. Previously this was only to be used as storage, little fit through the stairwell and the stairs were really annoying to climb. Now the washing machine and dryer are there. A few months ago I already had a tiny window replaced with a full-fledged one. Now only finishing touches and I have an extra bedroom, laundry room and storage space. Not bad!

A little investment adventure

At the same time as gamestop, somewhere in January I also bought some shares of AMC. About 10 pieces for 10 euros. That was really gambling for me. I didn’t expect to get anything out of it. Gamestop was so volatile, it went up, down hard again, then up a little bit and when I was fairly level I sold it again. That memestock trading is not for me (yet).

I digress, so AMC. This one stayed in the red so I left it and had actually kind of forgotten about it. When I logged into DEGIRO, I saw that the shares were at around $38 per share. Then I sold for around 30 euros each. Still made 300 euros from 100 euros. Not like you sometimes see on Reddit in a day or in a week, but just in half a year. Still not bad if I say so myself!

Books

This month I have read and listened again a lot.

Learn how to invest like Warren Buffet

About how Warren Buffet got so filthy rich. He finds out per company what the value of a company is, how the owners and executives run the company, for what value shares of the company are for sale, when it is best to buy. And above all. If you buy stocks, never sell them again. Buy and hold! His success did not come in one day. He has been investing for almost 80 years. And as we know from the compound interest effect, that’s what makes you rich. Many people stop investing when they are 65 and then retire. Then you partly get your return from your investments and then your capital will not necessarily decrease, but it will not grow as fast. Warren Buffet has happily carried on past his 65th birthday.

Your age as a gold mine

It is also pointed out here, even in the title, that you benefit from starting early. Make sure you start young and then the chance that you will build up a large capital, provided you persevere, of course, is a lot bigger. Martien van Winden also writes about risk avoiding instead of spreading and thus painfully explains why index investing (what I do) is mainly about spreading risk and not avoiding risk.

Later in the book, he lists a number of listed companies that score well on his list of suitable companies to invest in. A select group of carefully chosen investments of companies that have been listed on the stock exchange for at least 50 years, pay out dividends every year for the same amount of time and have a very large market share are solid companies. Examples: pepsico and givaudan. He also explains why the Dutch pension system is not that bad. In almost all neighboring countries, those who are now working pay the pensions of those who are now retired. In the Netherlands you build up your own pension, so the problem of fewer working people and more and more seniors is largely no problem for us, but for our neighboring countries it is.


Think and grow rich

All about your mindset. If you don’t believe 100% that you’re going to be very rich, it won’t happen. On the one hand, this is a book about manifestation. You have to believe that you will become rich, then the money will flow your way. On the other hand, it becomes clear that you have to work hard, find the right company to work with the CEO of the company and that the right connections and leadership skills are the most important. The book takes you through a step-by-step plan on how to do this. At the same time, the step-by-step plan is very unspecific. This makes it applicable to everyone, but also to no one in particular. I don’t really know what to make of it. I don’t understand why anyone who has anything to do with personal finances finds this book so great.

Start living lighter today

I thought this book was going to be about minimalism, living lighter with less stuff. Haha! Boy was I wrong there! Actually, it is a spiritual book. About enlightened living, faith, life energy, reincarnation, meditation, etc. The road to Real happiness, not the fleeting thing that is elusive and can disappear every time you experience it. Not really my genre but really very interesting! He makes a bridge with think and grow rich, which is striking, because the author of this book locked himself up in a monastery for weeks on end to meditate. Becoming rich, in money or happiness, has a lot to do with how you look at life. The similarity between the two books is that you will never succeed in becoming rich or happy if you don’t really believe in it.

Do you want to read more books? I have a blog post with tips on how to read more books.

Garden

Well about the garden. I have a real slug infestation. They have the sole purpose of eating EVERYTHING. It is now July and I have not eaten a single lettuce leaf myself. The tomatoes are doing well and so are the potato, strawberry and raspberry. The rest just sucks. For example, the onions did very well, until the tops of ALL onions were chewed in half in 1 night. I can’t fight that!

Towards the end of the month and early July I have happily re-sowed, so hopefully in about 6 weeks I will have more to eat than just strawberry, raspberry, potato and tomato. Though nothing is wrong with those 😉

What have you done in the past month? And do you have any tips against the snails?

Until next time!

Elske

Pay yourself first at the beginning of each month

Until now, I’ve always had the strategy of saving what’s left at the end of the month. This works fine for me, there is usually some money left over. Frugal living pays off, I have already saved a nice amount. However, I do it differently than a lot of advice I read. A lot of financial advice is to pay yourself first. For example from the book Rich dad, poor dad and also The richest man in Babylon. Even Warren Buffett gives this as advice. The people who say this know what they are talking about. They are all millionaires who are very good with money. In the FIRE community there are a lot of people who also pay themselves first. So we can’t get around that.

Not paying rent this month…

Investing immediately after your salary has been received and only spending what is left is also called pay yourself first. Some things are not open to negotiation. It is not optional whether you pay your rent or mortgage this month or whether you do or don’t pay your electricity bill. You just do it because otherwise you will get into very annoying problems very quickly. There is no room for negotiation. The pay yourself first principle states that investing every month is also non-negotiable. You do this every month, preferably a fixed amount.

By doing this at the beginning of the (financial) month, you live frugally. You see how much is still in your bank account and it is easier to decide not to make a purchase if your account is almost empty. I want to implement this, pay myself first and I will start on July 1. I have to pay close attention, because my bills are only debited at the end of the financial month. If I can’t manage my budget, then there isn’t enough to write off the direct debits from the fixed costs.

Resolutions to pay yourself first

From the coming month on, I will think in advance what I will need in the coming month, on what things I expect to spend money. Then I calculate what comes in. I will use the difference according to my investment strategy.

To me, that’s what it looks like for July 2021.

Mortgage595Same every month
Electricity and heating65Low because of the solarpanels
Phone/spotify/netflix/internet59I share Netflix and don’t have a tv
Groceries200On the higher end (especially since i’ve stocked up) but I like some room here.
Car (Taxes, insurance and gas)300I commute to and from work 4 times a week and it’s about a 120km per day drive. With the gasprices rising it’s a lot. I get compensated more than half of this by my boss.
Eating out100The past couple of months (one and a half year) I barely went out to eat or for drinks, but now that we can, I will not cut back.
Miscellaneous300All the other stuff, like going away for a weekend, a laser treatment and birthday gifts.
Total1619
pay yourself first
Waiting for the bridge to close with 30C. Luckily the windows open!

I round to 1700 and anything above that in income goes towards my investment strategy. If I have more left over because I broadly calculated, the remaining money will go to the investment account with next months round.

Planning a big purchase

I’m thinking about buying a camera. I allow myself flexibility in that. If I want to buy it, I take the money from the savings account. I top up the emergency fund the next month to the minimum of 3 months in expenses. If my emergency fund contains a little less than 3 months of expenses for a week or two, I won’t lose any sleep over it. After all, I still have the investments to back me up when shit hits the fan. The money from the investments can be put into my bank account within a day or two if there is an emergency.

I am very curious if budgeting in this way at the beginning of the month will help me to organize my finances even more tightly. That’s why I’m going to try to keep it up for a few months, not just one month. This forces me to start thinking about what I’m going to spend in the next month and then stay within budget. A good exercise in planning and thinking ahead.

How are you doing it, are you paying yourself first?

Do you also plan your finances at the beginning of the month? And can you stick to it? Let me know, I’m curious about your experience.

Until next time!

Elske

I am not a financial advisor, and therefore not your financial advisor. I am not a financial professional. This blog is for entertainment purposes only.

Acquiring Financial Independence For Feeling Free In 2021

I am a huge proponent of financial independence. If you have built up reserves, you have more choice in how you shape your life. When you’re in debt or spend your entire paycheck every month, you’re dependent on your paycheck or your business. If you make less profit for a month with your company or the company you are employed for goes bankrupt or you are fired, you will immediately be in trouble. But even if these things don’t happen to you and you’re unhappy with your job or your business, you still have a problem. You are 100% dependent on your income if you spend everything. That is why I think it is super important to get your finances in order and to ensure that you get a lot of freedom back.

Never work again

It is very difficult to save up for so much freedom (money) that you never have to work again. My personal goal is exactly that, and I write about that here. Then you are completely free to organize your time as you wish. But one step before that is that you are free to quit your job if you are unhappy about it. Then you can take a job that earns less without getting into trouble. Or if due to circumstances (for example a pandemic) you can get by for a few months with a lot less income. Or that you can stand on your own two feet if you live together and decide to separate.

Shared household

Many couples arrange their finances, especially if it concerns a family with children. By running a household together you can save a lot. So you only have the rent or mortgage once and groceries together is relatively cheaper than for one person. Municipal tax, water, gas, etc. are also relatively cheaper if you live together.

Girl Boss!

To maintain your own freedom, it is extra important that you do not lean on your partner. Even if you are super in love, you never know what the future will bring. Make sure you can stand on your own two feet, even if you may not be doing that right now. When shit hits the fan, it is important that you can stand on your own two feet and leave if necessary. For example, make sure you have your own emergency fund that you (alone) can access or that you can quickly work more hours at your job so that you can support yourself if necessary. Nothing is more oppressive than staying together out of financial need.

Free as a bird!

No partner? Then it is at least as important, if not even more important, that you do not wait Mr. Perfect to come and rescue you. Save, invest and plan your financial future so that you don’t have to depend on a partner (or a job!). Someone who is financially independent and actively planning his/her own future is super sexy! Is your partner intimidated by your independence? Afraid that if you’re not dependent, you might just run away? Then that might not be the right candidate… You’re not together for the money, are you?! If you want to read more about financial independence for woman, buy this book!

Financial independence

In the Netherlands and other western countries it is perfectly possible to become financially independent. At least independent enough that it is possible to provide for one’s own livelihood. The woman in the Netherlands earn more or less the same as the man and should therefore also be able to be financially independent from her partner. That is different in some countries. In some countries, women’s wages are so low that it barely covers the commute. Of course, this will not make it possible to build up independence. Fortunately, women here earn enough to build up financial independence. So do that too, our grandmothers fought hard for that privilage.

In short: Build your own financial independence and thereby increase your freedom.

How can you best do that? By focusing on three things:

– Get more income from your job or other sources.

– Spend less than you earn.

– Investing the difference so that that money also works for you.

This way you build up a freedom buffer.

Simply put, not so easily done but you can do it! I believe in you!!

Untill next time,

Elske

I am not a Financial advisor nor am I your financial advisor. I am not a trained financial professional. This blog is for entertainment purposes only.

Benefits of minimalism


Minimalism is only keeping the things in your life that add value to you. The term is usually used for stuff. Get rid of clothes you don’t wear, only hang wall art that you enjoy looking at. Do not put down furniture just to fill the space and keep your cupboards in the kitchen as empty as possible so that everything is clear and easily accessible. Minimalism also refers to things that are not materialistic such as friendships, how you organize your time and what projects you work on. If you are a minimalist you think about this very consciously and you only choose those things that you really value and that you find important.

Stark white walls with a hint of pastel


Search minimalism on pinterest and you will see all white with beige and soft colors very empty and tidy houses. Usually with a plant in the corner. Minimalism doesn’t have to be that, of course. The things, people and projects in your life can give life a lot more color than white with a pastel tint. What I want you to think about today are some of the benefits that minimalism brings.

A dash of color on the white wall 😉

Benefits

  • By having less stuff, cleaning and keeping tidy is much easier. If your cupboards are full of decorations and knick-knacks, dusting the cupboard is a time-consuming task. If there is nothing or just one thing on it, cleaning will go much faster. This also applies to the wardrobe and kitchen cupboards, where you can find things more easily and keep them neat and organized.
  • If you have less stuff, you take better care of it. If you have a few extra of something, you may be reckless with your stuff. Do you only have one? Then there is a good chance that you will be more economical with your belongings.
  • Because you have an overview, you are less tempted to buy more. You can see at a glance that you have enough of something.
  • You spend less time looking for your stuff. If it is a mess, you are often looking for where you left things. If you have much less stuff, you will notice if something is not in its place and you will find it faster.
  • Your things get their own ‘home’. Every thing in your house should have a fixed place where that thing lives. Then you always know where it is and that nothing else can stand there either. Cleaning up is much faster if you put things back where they belong without having to make up or clear a place for them first.
  • You get more free time because less time is spent on clearing, cleaning, repairing, washing and replacing your stuff.
  • Buying less stuff is good for the environment. To get stuff to your house, raw materials must first be extracted from the environment, it must be made, packed, transported and then you can enjoy the thing. Until you don’t and then it becomes waste. This has to be removed, transported and recycled. Or it has to be transported to the landfill. Less stuff means less environmental impact.
  • By buying less stuff you have money left over, and you can put that money to work for you by investing it. Your money works for you instead of the other way around. So you are freer. Who would not want that.
  • Because you have less stuff and use it economically, you can buy better quality stuff when it needs to be replaced.
  • Because you have less stuff, you don’t need a bigger house or storage. Saves money again! A large house is not only more expensive to rent or purchase. It is also more expensive to maintain, requires more paint, more furniture, more energy, more vacuuming, more dusting, etc. By living less large, you save on all these things.

Freedom

Do you see the connection? All these things will save you more time or more money. Minimalism creates tranquillity. Money buys time and time buys freedom. Because you spend less time searching, tidying up, organizing, cleaning, maintaining and working, you suddenly have much more time for the things that are important to you.

What those things are is very personal. The Minimalists have a weekly podcast on the subject for inspiration. You can think of spending time with yourself, with your loved one, friends and family. You also have more time for hobbies, to learn something you always wanted to learn or to get enough sleep, make healthier meals and exercise, for example. And these last three things make you feel energetic and you have more energy for the things that are important to you. Such as, for example, time with your loved one, friends or family or to learn something new. I only see benefits. The vicious circle is turning in the right direction!
Are you now also motivated to minimize?

Until next time!
Elske

Disadvangates of paying off your mortgage extra fast

The feeling of having a fully paid off house is incredible. But at what cost should you do it as fast as possible? I like to highlight the disadvantages of paying off your mortgage fast. This is a topic that is highly discussed in the financial independent retire early movement. ‘You should pay of your mortgage and only then start investing, mortgage is a debt and therefore it is bad’. Or the opposite: ‘Don’t pay off your mortgage fast, invest the money in stocks’. Which is right?

Well, it depends…

What answer is right depends on your own situation. For example your interest rate. If you pay off your mortgage and your house is paid for in full, you have a lot more money to put in your index funds and other investments, making you more profit by compounding interest after you’ve paid off the house. On the other hand, if your interest rate is low, you can consider just paying of the minimum required and invest the surplus in a low fee index fund or however your investment portfolio suggests. Chances are you can easily make a higher profit on that.

Look at it this way: the interest rate on your mortgage is your guaranteed return of investment if you pay it off. If you have an 8% or more interest rate, you are probably better off paying it off as soon as possible, for the chance of making more on the stock market is a gamble. If your interest rate is low, say 2%, your return of investment is probably higher on the stock market then when you down pay it on the mortgage. I heard of people in the Netherlands that bought a house with just over or even under (!) 1% interest rate these days. It is not that hard to outperform that with investing. Index funds like the S&P500 perform at an average of 8% per year. Please don’t look at this in the terms of one or two years. Look at this more in the 15-30 year range. If you put your money in an index fund, in the long run you will earn about 8% on it. Yes, even if you are at loss right now or the first few years.

Inflation

inflation
Inflation.

Other disadvantages of paying off your mortgage for example are inflation. So if you pay of your house now, you are putting a higher percentage of your income to it. In the future, with inflation, your income will increase and the same amount of mortgage left will be worth less than it is today. So in that sense, it would be better to pay if off as slow as possible. But of course it all depends on the percentage of interest you pay.  

More than 6%.

What to do if your mortgage interest rate is higher than 6%? What will happen if you pay it off faster? On the ROI (Return of investment) side, you will get more return on your money (by not handing it over to the bank as interest).Think hard on doing a down payment, once it’s in the mortgage you can’t spend or invest it anymore. This is called the opportunity cost. It’s basically gone until you sell your house, but probably it will be in another house you buy next.

My best bet is check if you can refinance to a lower interest rate. This may cost you a fee right now but calculate it and see if it will be cheaper in the long run.

Between 3-6%.

What if your interest rate is between 3-6%? Try and refinance it as well, call your bank, check how to refinance, shop around at other providers as well. Calculate what you save vs. what the fine of refinancing is. Make your own decision. Same as for the high interest rate, maybe it will be good to do down payments but you will not be able to touch that money for anything else anymore. The opportunity cost is at stake here too.

Under 3%.

If your interest rate is low, let say under 3%, I would not pay it off any faster than required. Put money you are not spending in a low-fee index fund every month and grow your stash that way. The chances of having a higher return of investment are on your side. Especially in the long run. The big benefit here is the money is more liquid, easier to access in case of emergency.

In the netherlands

The taxsystem in the Netherlands makes the disadvantages of paying off your mortgage even bigger. Here in the Netherlands chances are you are getting hypotheek rente aftrek (tax deductionon the interest). This makes the net interest rate even lower. And there is the possibility your paid off house will cost you more in taxes in the future. If your house is currently worth more than the remains of the mortgage, call your bank to ask for a lower interest rate (schuld-marktwaarde verhouding). This only works when you don’t have NHG on it. Chances are the interest rate will be lowered.

But if anything, don’t store surplus money on your savings, as it is zero or close to zero at the moment.

And remember:

I am not a Financial advisor nor am I your financial advisor. I am not a trained financial professional. This blog is for entertainment purposes only.

What’s your thought on this subject?

Untill next time,

Elske

Dear diary, what i did in May 2021

What a month! Welcome to my diary of may 2021. The weather did not improve yet, I was ill for too long, I could not finish a single book and the garden, well the weeds grow better than the vegetable garden unfortunately. In the last weekend I could be found in the countryside for a few days. I also participated in a clean-up campaign to clear up cigarette butts. I also followed an online visibility training. I got a lot of inspiration there about how to present yourself online. Now I have facebook and instagram. Zarayda, who gave the training, also encourages to do more with video, but that’s scary!

deer
Tiny deer

Books

In terms of books, I had started the Donut Economy by Kate Raworth. To be honest, I couldn’t get through this. I understand that there is a very good philosophy behind this. Fortunately, I was also able to find the book as an audiobook in the library’s app. I bet I’m going to listen to this book. That will be vastly better.

Now I started in Think and Get Rich of Napoleon Hill. A true classic. Not finished yet so stay tuned for that…

Audiobooks

Audiobooks went better. This month I listened to Normal People by Salley Rooney. A compelling story about two teenagers who have nothing in common, but who nevertheless develop a very strong bond. About how they influence each other. A book in which nothing happened, but you still want to keep listening for everything to happen. Highly recommended if you like novels.

Miljonair met een gewone baan (Million with a regular job) is a Dutch classic by Oeds-Jan Postma and cannot be missed from the list. Actually, this is exactly what I’m preaching here on my blog. I am going to buy the paper version of this. I can draw inspiration from that to write articles about for a long time to come. Because of the power of repetition, it never gets old to talk about these topics. I myself need a continuous flow of encouragement not to buy new things, for example, but to keep myself under control. That’s why I listen to podcasts from The Minimalists and read blogs about minimalism. Same goed for keeping your finances in check. Keep reading about the same topics for encouragement.

And then…

I was listening to Dave Ramsey’s Total Money Make Over. What a mess is that book. Talking about the 7 steps to getting out of debt but the first half of the book was a sales pitch about how many lives it changed and how great the program was. It took a long time before he came to the actual steps. I’ll spare you the trouble and time and summarize them:

1. Save 1000 euros

2. Pay Off Debt on Your Mortgage Already

3. Save 3-6 months of expenses in an emergency fund

4. Set aside 15% for your pension

5. Save for your children’s studies

6. Pay off your mortgage faster

7. Build wealth and give to charities

So. Now you know what Dave Ramsey thinks about building wealth.

Documentaries

In addition, I watched Explained Money on Netflix. There are five episodes of 22 minutes each. Unfortunately, there are three episodes about the system in America. Interesting to see how things like student loans, pensions and credit cards are arranged there. That made it clear to me why it is so difficult in the US to get rid of your credit card debt or your student loan. An example was given of someone who had 80,000 in student debt. After paying off 120,000, there was still 78,000 left. The rest was spent on interest. Such a battle cannot be won, it’s rediculous. This situation does explain why it is so important not to get into debt. The compound interest then works in the opposite direction. Sometimes as much as 25% rent is paid per loan!

I also listened to Peter de Ruiter’s audio documentary about investing in bitcoins. He gives a performance in the world of cryptocurrency, various companies and individuals investing in cryptos. Because so much is happening in the world of cryptocurrencies, it is already an outdated documentary. Still, it gives a good explanation of what it is and what you can do with it.

Expenses

May was just like April a great month! A weekend away and some presents were just about the expenses in addition to the fixed costs of the house, car and groceries. And strepsils, lots and lots of strepsils. A very short summary but there is really not much more to say about it. For entertainment, a gamenight is priceless.

game of catan
Catan

The garden

Okay garden then. As I wrote in the introduction, the weeds are in their heyday, but the vegetable garden is left behind. June will be better for the greens I hope.

What have you been up to?

Until next time,

Elske

How to use a cash book for personal finances.

If you read my blog you might think that I am obsessive about money. That I’ve figured out my entire financial route and I’m a star investor. Or just that I’m a cheapskate. Of all these things cheapskate still comes closest haha. But not really. I do keep a cash book and I live frugally, but enjoy life. This way I can easily order a drink on the terrace without having to save on anything else. I can also enjoy a holiday without saving on anything else. As I type this I am sitting among the sheep at my holiday resort enjoying the good life. Or if I don’t feel like cooking, I even order something. The latter doesn’t happen very often, by the way. Getting food delivered is really expensive!

cheap sheep
Sheep in the garden of the hotel 😉

How much time do I actually spend on my finances?

The short answer is about an hour a month. Let’s have a closer look.

On the first of the month (or at least that week) I review my finances. I have been doing this since 2013. Then I log in to all my accounts (bank accounts and brokers) and I put everything I have spent per category in an excel file. My own excel cash book. The greatest benefit of this monthly ritual is insight. I have insight into my income and expenses. In addition, I can easily determine where I can save money or where I have to adjust when things get out of hand. I can also see at a glance whether I will achieve my financial goals.

Note everythink manually

I type in everything by hand. Every transaction i made. So I have to retype manually every subscriptions that I don’t use and other leaks in my expenses every month from my bank statements to my cash book. This makes me want to quickly get rid of expenses and subscriptions I don’t value. It hurts to write it down at the end of the month.

“You must take control over your money or the lack of it will forever control you.”

Dave Ramsey

For me it looks like this:

my cash book
with fictitious numbers but in my actual cashbook.

Investment book

Since this year, I also keep track of my investments once a month. That way I have a better view of my return. That is sometimes a bit difficult to find in the various apps of the investor accounts. I also add up the balances of all accounts and any cash. At the end of the year, I therefore have a monthly overview of how much my net worth was at that time. All in all, keeping the entire household book takes me about half an hour to 45 minutes. Not that long, but enough to have a good overview and to focus on my goals.

Look ahead and look back

At the end of the year, I look back on the past year and look forward to the year ahead. I list all income and expenses and the investment I made (easy since I kept track of that every month) and then I see how I did. For example, this year I aim to pay at least for the entire renovation of the attic without touching my piggy bank and investments. At the end of the year I will know exactly if I hit my goal. For more on my investment strategy click here.

I encourage you to do this too if you want to take (back) control of your money. It will take you an hour to set up and then an hour a month to keep up. Your overview of what and how you spend becomes a lot clearer. Maybe you always thought you spend about 50 euros a month on home delivery, but now you see that it is more around 150. Then you can do something about it!

Take control of your money back and notice that as soon as you no longer have money worries, you experience a lot less stress and anxiety.

Do you keep track of your finances in a cash book? Let me know, I like to learn new insights!

Until next time!

Elske

Invest the money from the #simplechallenge in ETFs.

Well I was super active with the #simplechallenge myself. Not! The past week I was mostly sick in bed in between work. The idea was to go to the market instead of the supermarket, to do a peeling at home instead of the salon and to have a game night instead of going out. Things like that. Read more inspiration for free things to do here. Hopefully you did a better job! I will of course show you how you can buy an ETF from your saved money and which ETFs to buy.

By doing little besides sleeping and working, I haven’t spent much and I’m going to put the money saved in an investor account. Before starting the #simplechallenge, the plan was to open a new investor account. However, I have done some research and comparisons of different brokers. Every time I end up on DeGiro as the cheapest broker. That’s why I decided to show how to buy an ETF from DeGiro. This is not a sponsored post, DeGiro is simply the cheapest. I’ll take you through the proces of buying an ETF step by step.

Do you want to know more about starting to invest? First read step 1 and step 2.

Create an account.

Go to the website of the broker where you want to invest. Create an account. You can do this yourself, the websites always take you step by step through the process.

put money on your account
Transfer money

Transfer money to our account.

Now I log on to DeGiro website. At the top right, I click on money entry and exit. This screen appears. I choose 50 euros and then I just get the same screen from the bank via iDeal as when I buy something on a webshop or when I order food. When I have finished paying, the money is in my free space.

Choose which ETFs to buy

In the post about the degiro free selection I will discuss a number of options. I choose the VWCE (Vanguard FTSE All-World UCITS ETF USD Acc, ISIN: IE00BK5BQT80) from the free selection. Once per calendar month you can invest in ETFs from the free selection without transaction costs. The advantage over the VWRL (Vanguard FTSE All-World UCITS ETF USD Dis, ISIN: IE00B3RBWM25) which I always bought before, is that with the VWCE the dividend that the underlying companies pay out is immediately, automatically reinvested. At VWRL you have to do that yourself.

At the time of writing, the exchange rate of VWCE stands at just over 90 euros. There is still 47 euros in my free space. That’s because you buy per entire ETF, so if I transfer 100 euros to my investor account, for example, and an ETF costs 90, then 10 is left in the free space. A share dividend was recently added. That is why I now deposit 50 euros. Then I can buy a whole ETF from VWCE.

Buy VWCE

Buying an ETF

Now I search VWCE and choose where it says XET. This is the Xtera fair. Here this ETF is in the core selection and not via the other exchange (Milan).

At the limit I enter 90.35 (current bid price) and at amount 1. The total amount is entered automatically. I finalize the order and click confirm. Now the order has been placed and if someone offers the ETF at this price, the purchase will be made.

It’s that simple. Now I have invested in an ETF with no fewer than 3,550 different companies. Talk about a solid spread!

How much have you saved this week (or month)? Where did you put your saved money into? Let me know! I like to hear from you!

Until next time!

Elske

Free activities for free time

To stay in the realms of the #simplechallenge savings challenge, here’s some ideas for free activities to do this weekend.

There are of course many more things you can do which you do not need money for. Be sure to leave in the comments what kind of free activities you like to do! I also learn from that!

Things you can do outside:

  • Take a walk. Bonus: find a dog or cat to cuddle or take pictures of things you come across.
  • Go for a bike ride. For me cycling is more of a mode of transport than a leisure activity. Still worthwhile because it gets you further then a walk.
  • Swimming in a lake or the sea. Including building sandcastles and just chilling on a towel along the waterside. Bring on that summer weather!
  • A picnic. Pack your lunch and eat it outside on a bench or rug.
  • Gardening. Whether you have a garden or a balcony or a window with a windowsill. Start gardening. Gardening is good for you, you learn to understand nature better and the energy you get from the mud on your fingers is indescribable. (Here is a video of why having bare hands and feet in the mud is good for you).
  • Request a waste grabber from the municipality and clean up the waste in your street.
  • Go for a run!
  • Make a campfire and heat up marshmallows.

Things you can do indoors:

  • A board game! Super nice and cozy.
  • A photo shoot. Do it alone or do a photo shoot together. Test the different functions of your phone or camera and learn which pose suits you best.
  • Organize a clothes swap. Everyone brings clothes that he or she no longer wears often and see what you can wear from each other. A new wardrobe for free.
  • Host a karaoke night. YouTube is full of karaoke versions of your best sing-alongs. A hilarious evening guaranteed;)
  • Call someone you haven’t spoken to for a long time.
  • Organize a potluck. At a potluck, everyone takes something to eat and you eat it together.
bread baking as free activity
Baking some bread

Things you can do on your own:

  • Create a new (party) playlist on Spotify or wherever you listen to your music.
  • Go watch the explained series on Netflix about money
  • Rearrange your furniture.
  • Clear out a closet or room (and sell what you no longer need).
  • Put on some music and dance!
  • Read a book from the bookshelf or the library.
  • Meditate.
  • Bake your own bread.
  • Prepare a dish with things from the pantry.
  • Aim for inbox zero (archive and delete all your emails until your inbox is empty).
  • Learn something new such as a language or an instrument.
  • Spend an hour with pen and paper and plan your ideal future. Or turn it into a vision board. What can you do this weekend to achieve or get closer to your goals?
  • Start your own blog about something you are good at or find interesting.
  • Spread sweet comments on social media posts.
  • Get lost on Wikipedia. Start on the home page and left click on random page and continue reading and clicking from there.
  • Fix that annoying thing you never get to like that creaking door or stain on the wall.

What free activities are you going to do this weekend?

Until next time!

Elske

How to get rich with compound interest

I want to help you save 25 euros this week because it can yield 65,000 after 20 years with compound interest! Who would not want that!

einstein
Compound interest is the 8th world wonder.

This week I invite you to do a challenge with me. I want to help you with saving and investing the first 25 euros (or more!) and grow your money tree. Do this every week and you will have saved up a wonderful pot of freedom in 20 years. You deserve it! Join the hashtag #simplechallenge and tag me in your post! @simplewithmoney on instagram.

Compound interest

Earlier I wrote about the 8th wonder of the world as Albert Einstein described it. Whether he really said this or not is unclear. That it’s true is certain! If you understand how compound interest works, then you will benefit from it. If you don’t understand it, you pay for it.

Today we are going to calculate with interest. “Ewww, numbers,  I really don’t like that. So difficult! “

Okay, I get it. Still, I ask you to calculate with me. If you invest in a well-spread indexfund, the average return over 20 years is around 8% per year. If you invest 1 euro now, it is worth about € 4.65 in 20 years with 8% growth per year. That doesn’t sound very impressive.

Invest 100 euros.

If you are going to invest 100 euros now, it will be worth 466 euros in 20 years’ time. That sounds like more fun, but it doesn’t make you rich.

1 euro investment
100 euro investment
1200 euro investment

If you invest 100 euros every month this year, that will probably be worth more than € 5500 in 20 years. Sounds better allready. Your investment has then been doubled more than 4.5 times!

I want to challenge you to do this. Deposit 100 euros every month. And if you can do that for a year, just go on and do it for 20 years in a row!

Invest 100 euros every month for the next 20 years gives you a possible return of 65,000 euros!!! You have then deposited 24,000 euros. The profit is therefore € 65,000- € 24,000 = € 41,000. You didn’t have to do anything for that, except put in 100 euros every month. Add another 10 years to this and with an average return of 8% per year you suddenly have doubled, around €159,000 in your investor account! Mindblowing!

24.000 euro investment.

Now you know how compound interest works and you can benefit from it for the rest of your life. This works the other way around as well. If you have a mortgage with 8% interest, you pay compound interest on it too! Let that sink in for a moment.

Hardcore investers

For the high flyers, I will put an example below under what happens if you save 500 per month for 20 years. I also realize that for many normal people with normal incomes this is not possible to set aside 500 euros every month. It may succeed in a season in your life, but with a family expansion, divorce, renovation or loss of income / job, it may not be very realistic to set aside 500 every month for 20 years. I encourage you to live frugally and below your means and if you have a nice salary or team up with your partner to cut living costs in half, you can certainly get very far! And of course keep reading this blog 😉 Therefore, here is the calculation to motivate you.

120.000 euro invested

Join me on this challenge! Take a picture of what you saved with the #simplechallenge and tag me @simplewithmoney.

At the end of the week we are going to deposit the 25 euros in an indexfund.

Until next time!

Elske

I am not a Financial advisor nor am I your financial advisor. I am not a trained financial professional. This blog is for entertainment purposes only.