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Author : Elske

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Investing

Rising inflation, time to panic sell!

This week, I lost 15% of my investment gains in a week due to the news on rising inflation. HELP ME! SLEEPLESS NIGHTS!

Heyday

Last March, during the corona dip, the stock exchange fell by at least 25%. After that, investors have been celebrating heydays since last summer. Almost all sectors are on the rise and the economy seems to be gaining momentum. This week that all changed. Due to the expected inflation of 2.1% in America, the stock markets have dipped considerably this week. This is because higher inflation often results in higher interest rates. Fewer people and companies take out loans because you pay more interest on them. That slows down economic growth.

So much has happened in the past months that this dip that the newspapers are now full of is actually not that important at all. If there is news that has an impact on investments, you will always see it enlarged in the figures. When the news is good, the figures shoot into the green and when the news is bad, the figures fall sharply.

I just lost 15%

Since March 2019 I have been investing in index funds with degiro. In the more than two years that I have invested there, I have been able to achieve good results. Of the profit I have made in the past two years, at least 15% has evaporated in a few days. I’m not worried about it. Since the beginning of this year I in fact gained on 60% profit.

I do not worry about this because I know that the balance will be restored and that I am not at a loss. AlsoI invest for the long term and well diversified. So I don’t have sleepless nights and sweaty bouts with this kind of dip. If a company, sector or country goes down, the other investments in the index will absorb the dip. In the long term of about 20 years, such a dip is faded easily.

don't panic sell over rising inflation!
Just fly high over the dip

Don’t lose a night of sleep

Do you want to achieve a good return but no sleepless nights? Then I can wholeheartedly recommend that you invest a fixed amount in an index fund every month. By investing every month you sometimes buy your shares expensive, other times cheaply. Ultimately, you buy at the average price. This principle is called dollar cost averaging. Do this every month, preferably automatically. After a few years you have a considerable return and after 20 years there is a good chance that you have built up a lot of capital. Make sure you only do this with money that you really don’t need in the first years, otherwise you will still have sleepless nights. Do not panic sell!

If you invest 100 euros every month and on average you have a return of about 8% (which is historically average) then that could be worth about 65,000 euros after 20 years. Your deposit 24,000 of your earned euros, and for the remaining 41,000 you don’t have to do anything other then set and forget. Just 100 euros every month. So get rich while sleeping, instead of sleepless nights. Ha!

Do you want to know what my portfolio looks like? Then read the post about my investment strategy.

Are you nervous about a dip in the market? How do you deal with this? Let me know!

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.

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Investing, Lifestyle

Retirement is not an age!

Retirement, there are people who don’t look forward to it, who prefer to work well beyond this age. Yet almost everyone I know dreams of retirement. Nobody wants to be old, but the freedom to decide for yourself what you do because you are retired, that seems amazing to almost everyone!

The problem with retirement

There are two problems with retirement. The retirement age is constantly shifting and there are regular reports that (possibly) less pension is being paid out. That’s because life expectancy keeps getting higher and higher. So people receive money from the pension pot for longer. There is also an aging population, so the pension pot is replenished less quickly than is paid out. I do not blindly assume that the pension that I am accruing now will actually be available when I reach the respectable retirement age.

Then there is the General Old Age Pensions Act. This law entitles every Dutch citizen to a basic pension from the state at retirement age. Due to the increasing life expectancy, the state pension costs more and more money. I cannot look into the future and assume that in 40-45 years the state pension will still exist or that this is enough to live off of.

Freedom

I think it would be great to have freedom of not having to work for money anymore a lot earlier then the prescribed retirement age. Don’t wait until I’m 72 (or whatever the state retirement age may be around that time). Hopefully at 72 I will still be healthy and fit to do what I feel like, but is that worth the gamble?

Time to take matters into your own hands. What are the conditions for retiring? It’s just that you need enough money to live the rest of your life. It would be nice to also leave something to children or other loved ones. So pension is not an age, but an amount! Let’s calculate what that amount is.

The safe withdrawal rate

This calculation will be different for everyone and it is also different in every country. Taxes on equity and savings are different in every country.

To calculate the amount we need, we can turn to the FIRE movement (Financial independence, retire early). People who support this movement save for their pension themselves in order to be able to retire early, sometimes decades before the retirement age. A rule of thumb from the FIRE movement here is to save 25 times your annual costs. That way, you can then spend 4% of your assets every year without losing your assets. This is the Safe Withdrawal rate.

This 4% has been calculated in the so-called Trinity study. On average, Stocks and other investments such as real estate grow about 8% per year. Remove an inflation rate of 1.5% and you are left with 6.5%. So if you were to spend 4% of your assets every year, your assets are still growing every year! In the Netherlands, however, you pay tax on your savings above 50.000 euros. Some people think 3.5% is safer. I can agree with that, but we must not forget that with 4% of your assets to be spent, the chance that your assets will become more valuable is still quite high.

And in addition, you will still receive the General Old Age Pension and probably accrued pension when you hit retirement age. When you retire early, this also means that when you retire, you probably also have a paid-off house, so you will have fewer monthly costs. You also spend less and less with age. So I think that the 4% safe withdrawal rate is safe enough.

How much do you need?

It now depends entirely on how much money you need, how high the pension amount is for you. Are you highly motivated to retire and do you think you can live below the poverty line, for example on 1000 euros per month? Then you need 12,000 * 25 = 300,000 euros. Do you need 2000 euros per month? Then you already need 24,000 * 25 = 600,000. Double!

retirement
Monnies!

This is the reason that people working with FIRE are not only focused on gaining as much income as possible but also keeping expenditure as low as possible. It is quite different whether you try to rake 300,000 or 600,000! And living on 1000 euros is very difficult, but if you have a paid-for house and have enough time to do the maintenance, the garden and the cleaning, then it is already a lot cheaper than if you outsource those kinds of things and you still pay monthly rent or mortgage.

There is a chance that you will still earn something during your “retirement”. The idea is not to do nothing but sit in a rocking chair all day. The idea is that you are passionate about working on something that does not necessarily generate money, but where your heart lies. It may of course be the case that it generates money. After your retirement age, the pension will also be credited to your account. That is why you may be able to retire at 200,000, for example. You may spend more than the 4% for a number of years on your saved capital, but you still have enough left to supplement it with the general pension and any accrued pension.

Start early and stick with it

The amounts I mention are of course astronomically high and difficult to achieve. That’s why I encourage you to start early, take full advantage of the interest-on-interest effect, and take advantage of the snowball effect. If you live like everyone else, you will get the same outcomes as everyone else. Spending and saving like everyone else ensures that you retire at the same age as everyone else. Set your own course and set your own goals. I will encourage you along the way!

Until next time,

Elske

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Investing, Lifestyle, Minimalism, Money

Economic growth is good for the environment

Economic growth is at odds with preserving the environment and limiting climate change. Being green costs a lot of money. Responsible, organic and environmentally friendly products are only for the “rich”. Striving for a better climate is always at the expense of monetary prosperity. I don’t believe in this. It hurts to even type this.

Let’s take a look at things that increase prosperity while being environmentally friendly.

Subsidies

Doing green and growing economically at the same time, for both yourself and the government, can go together. The government is already doing a few things about this. For example, subsidies are paid if you have two or more sustainable measures supplied to your home (in the Netherlands). Because the subsidy makes it cheaper to make your home more sustainable, your return of investment is usually six to eight years. That is the same return of investment as the average index fund investment. This not only stimulates your wallet, but also creates employment.

Invest in ‘green’ investments.

If you are going to invest, you can, for example, invest in companies in sectors that deal with renewable energy. You can also look up the ESG score of a company or index (environmental, social, governance). This score indicates the extent of the impact on the environment and society and whether the company ensures that no conflict of interest is possible. With DeGiro core selection you can filter on this score. You know that you are invested in an index fund with companies that are working hard on this. In the meantime, your portfolio is widespread.

Green banks

You can also take out a green mortgage or switch to a green bank. The money in your savings account and current account is also not used there for, for example, the weapon industry, the tobacco industry and the oil industry. Such a nice feeling! The best-known “green” banks in the Netherlands are Triodos and ASN bank. Here you can also invest green in index funds.

Buy second-hand

You can do a lot yourself on a small scale! This way you can buy second-hand items instead of new ones. By buying secondhand or exchanging things you ensure that things get a second life. Think about it. In fact, your house is just one step between the store and the landfill for most of the stuff in it. By buying as little as possible new, you delay the moment to the landfill as long as possible and contribute much less to the constant production of new goods. This applies to everything from clothing to furniture and toys.

Minimalism

Less stuff means less maintenance, less spending on your stuff and more left to go for quality. If you have five shirts instead of fourty, you can go for quality shirts that last a long time and which, for example, are made of organic cotton and where the seamstresses who make the shirts have received a decent wage. Another example is choosing a new gadget every time your telephone contract has ended. A new phone every two years is very hip but really not necessary for anything. It is good for your wallet and for the environment to last until it dies. Don’t turn shopping into a hobby, but instead go for a nice walk or picnic. You come home with less stuff and with a nice breath of fresh air and a clear mind.

Car

There is also nothing wrong with a second-hand car. A car that is brand new and super economical is of course fantastic. But the production, transport and pollution that comes with it are not always good for the environment. For example, the pressure on raw materials such as copper and cobalt mining is very high. The innovation of new, efficient and electric cars is certainly important, but do not exchange your car until it is finished. Good for your wallet! How about carpooling to and from work. Saves a lot of gas, less traffic jams if we all do it and finding a parking spot is easier. And it is fun too. Oh and  by the way, driving less is of course great. Go by bicycle or public transport more often.

Living smaller

By living smaller, you save space, electricity and you don’t have to heat as much in winter. You don’t have to fill space that you don’t have with things you don’t need. In addition, you do not have to clean and maintain as much. This mainly saves time but also money. I only see benefits.

Green energy company

When making the next yearly switch, pay attention to the energy company you are signing up for. Look up where the electricity comes from at the company where you want to buy your electricity. Is it green electricity or gray? Does it come from your country or are the certificates obtained from abroad? Does the energy company burn biomass? In biomass combustion, trees are cut down and shredded and then burned. This is green energy because new trees can be planted. I myself make sure that I do not buy this form of “green” energy. I think it is important that I do not support these kinds of “green” initiatives. Dutch green electricity is not at all (much) more expensive than gray electricity. Especially if you use little power or have solar panels, it does not matter in terms of costs. It does in terms of sustainability.

Plant based diet

If you are aware of your impact on the environment, you cannot ignore it than the cheap meats and the battery cage eggs. Switching to organic variants is a lot more expensive. The switch to vegetarian or vegetable is even more expensive. At least, that’s what a lot of people think. This is a big misconception! Imagine that half a kilo of organic minced meat, good for four people, quickly exceeds 5 euros. A block of tofu for four people costs about one euro. I always add an onion, some ginger, garlic and soy sauce to flavor it. This still remains well below 5 euros for four people. And a kilo of organic cheese quickly costs 15 euros. How many sandwiches with hummus with slices of tomato and cucumber can you spread with that? No less tasty with a pinch of pepper.

Vegetable garden

This tip is partly good for your wallet. It is certainly good for the environment. Create your own vegetable garden! I understand that not everyone has the time and space for this. But believe me, I really have a post stamp sized garden and you will be surprised what kind of production can be made there. It can be expensive to set up. For example, you need seeds and soil and possibly pots. The benefits for the environment are certainly there. This saves transport, packaging and pesticides if you grow your own fruit and vegetables. If you include your own labor costs it is not so profitable anymore but this hobby will teach you a lot about plants, nature and where your food comes from. Additional advantage: Your own food is much tastier anyway!

Swiss chard is good for the environment
Swiss Chard for the win!

You can keep an eye on my dear diary series for updates on my vegetable garden. There is an update of the garden every month.

Do you have any more examples of things that are good for your wallet and the environment? Please share them!

Until next time!

Elske

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Lifestyle

Dear diary – What i did in april

April 2021

This april i was walking to some pigs, I stared out the window sad because of the bad weather. Also I maximized the sunny times in the garden and I read and listened to some books. Oh and monopoly..!

A fun game of monopoly 🙂

Books

The intelligent investor by Benjamin Graham.

The original is from 1949. Super old! It is still considered a classic for investing. I listened to the 1973 version which is the last revision he made before he passed away.

The lessons I learned: Be patient, form your own opinion and do your own research. Learn new stuff and keep your emotions under control. Don’t invest for the short term, do it for the long term.

Choose a risk profile that suits you. If you decide to be an active investor, be prepared to spend a lot of time investigating companies and the market. With passive investing not so much. Passive investing is known for being less risky. Chances of a super high yield are small but so are the changes of losing a lot. About 50% in bonds an 50% in individual stocks is a good portfolio. When you decide to invest passively it makes sense to dollar cost average your money. Meaning you buy for the same amount of money every month, quarter or year no matter the price. You will buy the stocks for the average price.

Random pig on a random walk. Hi!

Human kind, a hopefully history.

In this book Rutger Bregman debunks a lot of presumed things. Civilization is generally thought to be paper thin. Humans have a layer of civilization, but as soon as you disrupt public order, we all become aggressive savages. Bregman shows that science is pointing in the other direction. It is in our nature to help each other and to want to do the right thing. He cites many examples. Soldiers on the front line either do not fire at all or intentionally miss while under attack. They even become friends with the enemy. In natural disasters people help each other. Many people who have lost everything in a natural disaster find the feeling of community and helping each other a fantastic feeling, which makes them feel less bad about the disaster. Everyone is helping each other!

Similarly, Bregman highlights the Stanford experiment in which students are divided into two groups, guards and inmates. The guards become cruel and the prisoners humiliated in this famous experiment. This turns out to be a rather disturbed experiment in which the researcher has to constantly incite the guards to be mean. Actually, they prefer to sit and play cards with the “prisoners”. This is what happened in Norwegian prisons. The guards become friends with the prisoners and a community is formed. The chance of returning to prison is much smaller due to good guidance back into society. Prisoners always become someone’s neighbor when released. Then you better ensure that they are properly guided on their return.

We also all know the Easter Island story. A population of humans live on Easter Island. There are many trees. The islanders cut down all the trees to transport large statues of heads and because there are no trees after that, they all die. In fact, it turns out to have been a rat plague that made the trees disappear. It also turned out that the Easter Islanders were doing fine without trees. There was more room for agriculture and the Easter Islanders were well fed and had plenty of free time to linger.

What ultimately proved fatal is the large number of islanders who have been sold into slavery and the returning islanders have brought with them diseases that have caused the rest of the population to die. In short, the Easter Islanders weren’t selfish tree cutters who were destructive. It was the Western slave traders who threw a spanner in the works.

Bregman comes up with many, many anecdotes that prove that most people are good and that it is time for a more positive image of humanity. For the most part, the book leaves you feeling good about humanity. Although the feeling crept up to me he attracted the science that suited him and his story and left behind the science that didn’t. All in all a nice book to listen to. Inadvertently it gives me a brighter picture of humanity. I think I have to agree with Bregman that most people at least don’t mean it all that badly.

Blondjes beleggen beter (Blondes are better investors)

This book was written by Janneke Willemse. She shows various options such as active investing and passive. And what your exit strategy should be if you need the invested money again. Many others don’t show that side. She also explains in easy language how short works. Now I understand it much better! This is highly recommended. She also has a website. (in dutch) https://www.blondjesbeleggenbeter.nl/

Waarom vuilnismannen beter verdienen dan bankiers (Why garbage collectors earn more than bankers)

Rutger Bregman and Jesse Frederik write about the income inequality between different professions and how this is clearly disproportionate to professions of social importance.

When garbage collectors in New York went on strike for better pay, the city was a nasty letdown within 6 days. When bankers in Ireland went on strike for better wages (they froze all accounts and you couldn’t withdraw money anymore) the economy just moved on with alternative, self-printed money. The bar owner became the new banker and it took no less than 6 months before the banks reopened. Nothing really bad had happened in the meantime. This shows that some jobs such as garbage collector are of great social importance and others, such as banker less so. The income is not correctly distributed in that regard.

Philosophy for an incomparable life. (Filosofie voor een weergaloos leven)

Lammert Kamphuis writes a number of essays in themes to think about. For example, he sheds light on death from different sides and gives our society of numbers advantages and disadvantages. Life has no dress rehearsal. You only have one chance to get it right.

Expenses

In Living without money I stated that I did not want to make any unnecessary expenses in April. Only the fixed costs and necessary things. I did that very well, if I say so myself. Besides the fixed costs and the groceries I hardly spent anything. Twice a present and some loose things such as a day cream and a garlic press that needed to be replaced. And an ice cream on King’s Day. Nothing to complain about!

In the garden

April does what he wants. Here in the Netherlands we all know this statement and this month we all know that it is correct. It was warm (very occasionally), it was cold (often and certainly at night). It was dry for a long time and then pouring rain and hail again. Oh well. In mid-April I put a lot of seeds in the ground and the first seedlings started to show up in a week or two.

The first plants of March are already starting to grow large. My beautiful Japanese cherry is at its best towards the end of April. I can really enjoy that! This year I am going to grow more flowers between the vegetables and the fruit. Earlier years I had nasturtiums and marigolds among the vegetables. This year, a whole arsenal will be added, such as climbing bindweed, amaranth, valerian and lavatera. I’m curious how it’s going to turn out and will keep you updated!

What did you do in April?

Until next time!

Elske

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Lifestyle, Money

17 daily habits of millionairs.

17 Habits of Millionaires

If you weren’t born rich but still want to get rich, you’re not alone. Who doesn’t dream of becoming a millionaire! Thomas C. Corley spent five years researching self-made millionaires. He concluded that most millionaires had these 17 habits. He wrote this book about that. If you do these 17 daily habits, you might also become a millionaire! Let’s look at his list.

1. Read every day.

88% of the millionaires surveyed read for at least 30 minutes a day. We are not talking about a novel or a gossip magazine of course. They mostly read informational books, self-help books, biographies of successful people and history.

2. Sports.

We all know that exercise is healthy. 76% of millionaires exercise for at least 30 minutes a day. This mainly concerns cardio training and less about strength. Examples are jogging, running, cycling or walking.

3. Be around other successful people.

You become who you surround yourself with. Hang out with successful people who have a positive outlook on life to help you move forward. Better still is to associate with people who are pursuing big goals, are enthusiastic and passionate about their work. What really works against you is negative people who bring you down,  who criticize and do not believe in you.

4. Volunteer.

This is important to build a network of people with the same mindset. It is also important to give before you can take. People who are willing to work hard and also volunteer understand that you can’t just consume. You have to do something in return.

5. Dream setting.

More than half of millionaires dream. They write down their dream life, think of what they have to do to achieve the dreams. Then they set goals to make these dreams come true and then take the action. Repeat this for every dream on the dream list.

6. Pursue your own dreams.

And especially not someone else’s. Rich people follow their own path. If you do what others do, you will get the same results as other people. Pursue your own dreams and you will achieve your own result.

7. Get enough sleep.

Almost all millionaires sleep at least 7 hours a night. These days it seems cool to sleep as little as possible. People boast about that. It is increasingly clear how important a good night’s sleep and a regular routine are. This makes you sharper and less tired during the day. This allows you to concentrate better.

8. Get up early.

About half of the millionaires get up about 3 hours before the start. In those three hours they can work undisturbed on the things that are important. Before the start of the workday, there is no meeting  that took longer than expected or traffic jam that suddenly makes you run out of time.

9. Multiple Sources of Income.

Almost all millionaires have at least three different sources of income and many have more. This includes rental income, dividends and profit from investments, income from your job or profit from your own business.

10. Find a mentor.

Many millionaires have one or more mentors. This mentor ensures that they stay on the right track and learn them what to do and what not to do.

11. Help others.

And especially others who also want to be successful. Someone who wants to achieve goals, is optimistic and motivated.

12. Be positive.

This seems to come back in many different forms so this one will be important. Millionaires are positive. If you are aware of what you think for a while, you may find that you often have negative thoughts. Try to be aware of it and have a more positive attitude towards life.

13. Don’t follow the herd.

Corley resolves that the millionaires he interviewed don’t follow the herd. They created their own herd and became leaders.

14. Practice good etiquette.

Examples include sending thank you notes, acknowledge important events such as birthdays, anniversaries and weddings. Also think of good table manners and dress up during social occasions.

 15. Spend time thinking.

Don’t get distracted by your phone or TV or music in the background. Take fifteen minutes to half an hour a day, every day, to think. Think about how you can make more money, whether you are happy with your job, are you satisfied with life as it is, etc.

16. Ask for feedback.

Feedback helps you to understand if you are on the right path. It is crucial to grow. Only ask for feedback from people who give feedback instead of criticism.

17. Don’t give up.

One of the traits of many millionaires is that they don’t give up. They are persistent and when they fail they get up and just try again.

This list contains all kinds of things that can be done on their own, but if you add them together and want to pursue them daily, it is a big list! For example, if I want to get up three hours before my working day, I will no longer get 7 hours of sleep. And if I want to read every day, there is less time for jogging. I think we can therefore conclude that millionaires are very hard workers. They didn’t become millionaires by sitting on the couch watching TV and doing some half-hearted work. They work really hard for it!

What do you think of this list? Are you on the right track?

Until next time!

Elske

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Lifestyle, Minimalism

Start your minimalism journey today

All we ever want is more, more, more. More gadgets, more clothes, more money, more house, more cars. More. More. More.  Not today. Here is a case for minimalism and tranquility.

This is a different post then the usual. And it is at least as important if you want to take control over your finances. If you agree with me and dream of a tranquil world of connection and time for each other as well, read along.

You probably have enough

If you read this, you probably have enough. You have a mobile phone, computer or tablet. You are connected to the internet. Chances are if you have these two things, there is also a roof over your head and enough food on the table. Let’s take some time to appreciate that.  If you are satisfied with who you are and where you are and you realize you have every need met, you start to want to consume less.

There is enough stuff, no need to add more. There are enough clothes, no need to add more. There is enough food on the table, no need to add more. There is enough space in the house, no need to move to a bigger place. There simply is enough. Realizing this hopefully makes you want to consume less. Take control of what you want and you will notice there is enough for everything you need. If you desire a life of less stress and hurry, by spending less, you can work less hours. This way there is more room for what you want most. Time to spend with loved ones and experience traquility for example.

The essence of being financial independent is a stress free, worry free life.

I dream of a world with less stress and hurry and more calm and connection. How nice it would be if we just had a little bit more time to spend together without multitasking in the meantime. Actually taking our time to listen and be there together.

This is the biggest reason I want to be financially free. If I don’t have to worry about my needs being met, I can be my best self. I can take my day off and just spend it as I want. No need to hustle 7 days a week. No need to stress about paying the bills. I often take a complete afternoon or an afternoon and evening to just chill with a loved one and really take the time to be together. This is so valuable, you can’t put a price tag on it.  

Be content with what you have

What if you were satisfied with what you have? Find gratitude in the here and now. I try and practice this every now and then. It gives a lot of tranquility and peace of mind. I am where I should be and that is perfectly fine. It gives me time to actually be here and take a breath. It makes me less stressed and more calm. By no means I am perfect or even good at this, I just practice and am aware of it sometimes.

As I look around me while writing this, the house is a mess. There is cat hair everywhere. Laundry to be folded, mess to be cleaned and food to be prepared. Also I am tired of a long day at work and really want to take a nap. I can label this as ‘not good’ or ‘ I failed’ or ‘this should not be happening’. But all of the mess and tasks I am behind on , it’s OK. I do my best and if I don’t finish doing all today then I’ll do it tomorrow. No need to stress about it. So I label it as it is: OK. Try it, it is relaxing.

Declutter and have less to be even more content

Also by realizing you have enough, try and look at what you have in excess. Declutter your house and car. Get rid of the items that you no longer use and want in the house. If the house is clean and all the stuff in it actually has a place to stay, it is easier and faster to clean and organize. This way, there is more time to spend doing the things you value most.

Minimalism

For me, this being tranquil with the situation is the essence of minimalism. Not decluttering or having as little ‘stuff’ as possible. Not to count your possessions. Be content with what you have and have a more tranquil life with more time for important things. Take control over your life by being deliberate with what you spend your time, resources and money on.

I want you to practice together with me in being content with what you have and try and feel being perfectly fine with everything being not perfect. Try and consume less and make time for the things that are most important to you. Spend time with your family and friends.

If you have the energy, try and declutter a part of the house and give every item a home, its own place to stay. All items that don’t belong in your home anymore should leave the house. Do this as often as needed. In the beginning, this will be often. As you practice this should become easier over time. For me, I’ve been decluttering a couple of years now and every time I do a round of decluttering, it’s faster and there is less to declutter. This feels good and you deserve it too!

Do you want to read more content like this? Leo Babauta, creator of ZenHabits is a huge inspiration for me. I highly recommend reading his blog.

Are you getting on this journey with me?

Till next time,

Elske

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Lifestyle

How to read more books. My tips.

Do you want to read more books? I don’t know anyone who says: “I wish I had read less”. Or even: “I read enough books”. Most people want to read more than they do. Getting to read more and finding time for it is a different story. I always want to read more books. even though I allready read quite a lot.

Do you want to read more books just like I do? Then read along and use my tips to read more.

Subscribe to the library.

This way you can get all the books that you find interesting. Because you have to return them, you tend to read a little longer and more often (at least I do). After all, the books must be returned on time. This way you also read books that you might not otherwise buy. Your subscription is valid anyway and the amount of books you can borrow is quite high. Sometimes there is a gem that is really beautiful or good, but the book was not promoted or at the top of the best seller list.

Listen to audiobooks.

This way you can listen to a novel but also informative books. More than half of what you see in my dear diary series of audiobooks was listened to on the way to work. I listen to an audiobook every morning on the way to work. Now I have a fairly long commute of about 50 minutes one way, so I get through them pretty fast. The audiobooks that I listen to on the road can all be listened to via the same library subscription.

The library catalog is very extensive, but I also like to listen to English bestsellers. These are often not included as books or audiobooks. During cleaning, I look for one that is available on YouTube. That takes a lot of mobile data if I do it in the car, but at home it is of course no problem via the WiFi. You will be surprised how many audiobooks can be listened to for free on YouTube. You could of course download a special audiobook app. This often involves monthly costs.

Make it a habit to read.

I almost always read a few pages at night before going to sleep. If I am still busy in my head, reading will prevent me from thinking about it. I notice that it makes me sleep well. Win-win! On my days off, I often read half an hour before I get up. When the weather is nice, I also read in the garden. All in all, I have quite a few reading moments.

Read fun and interesting books.

If you don’t enjoy a movie or series, then you stop watching. You might give it one more episode or until the next commercial break. If it still doesn’t work then you go to something else. Strangely enough, this is often different with books. Then you commit yourself to read the book even if it is impossible to get through. Can’t get through? Put it away. A book is made to serve you, not the other way around! If the book doesn’t serve you then you don’t finish it.

Read more than 1 book at a time.

Put a book on the couch, one on the bedside table, one in your bag on the go. Have an audiobook ready on your phone and one on your laptop. Make it easy to read. Alternate different genres. If you read two fiction books, you can easily get confused. For example, read a book about investing, a philosophy book and a novel. You can continue in the book that you are most looking forward to at that moment. When you go through a book slowly but want to read it, you don’t have to read it before you start a new one. You can just read another book in the meantime.

Keep a reading list.

With every book I read, there are usually 2 to 4 books that I also want to read. I keep a list of books I still want to read. This list is getting longer instead of shorter the more books I read. It doesn’t matter. I can go to the library’s online catalog and look up books I would like to read. I make a reservation on the ones available. What I can’t find I look up as an audiobook on Youtube.

Learn to read faster.

Point the line with your finger. Your eyes follow your finger better, which increases your reading speed. Also eliminate the inner voice reading to you. You can read much faster if you don’t use your inner reading voice. This does take practice. More tips here.

Lastly

You probably notice that, despite reading a lot, I spend very money little on books. This has a number of advantages. First, I save a lot of money without reading fewer books. Second, because I borrow a lot of books from the library, I have a fairly empty bookshelf. It remains neat and tidy and clear. I don’t feel guilty if I haven’t read a book. I haven’t paid for it anyway. Third, this is also better for the environment. Fewer books needed because the same book is read for many different people. And lastly it also sponsors the local library.

A disadvantage is that some books cannot be found in the library nor as an audiobook online. If it’s a good book I’ll miss it and it’s a pity. One solution could be to make an exception for such books and buy them anyway, or to ask for books or gift cards for my birthday. Of course you can also buy used books. And then resell again;)

Do you also like to read? And do you have any books that you think I absolutely should have read? Let me know!

Untill next time,

Elske

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Investing

DeGiro Commission free list is new!

Note: I am trading at DeGiro on the Dutch website. On the Dutch website, the commission free ETF list is updated. On the English website, this is not (yet) done. DeGiro is a Dutch broker. I didn’t verify but assume they will roll out the updated version of the Free ETF selection in other countries soon. Back to the article.

Good news. DeGiro Commission free ETF list has been renewed. There are a number of ETFs removed that were not popular and a number of ETFs were added that are popular. There is also a new page where you can easily search and filter through the list.

What is DeGiro Commission free ETF list?

DeGiro offers stocks, ETFs, leveraged products, mutual funds, bonds, options and futures. To trade these you pay transaction costs and service costs. This is normal and happens at every broker and bank where you trade in these products.

DeGiro Commission free ETF list is a selection of no less than 200 ETFs (Exchange traded funds) that can be traded once per calendar month without transaction costs. You can therefore buy or sell the products from the list for free on the basis of fair use policy. You only pay the TER (Total Expense Ratio). These costs differ per product and are usually between 0.1% and 1%.

Note: some ETFs are listed on multiple exchanges. You can then, for example, choose to buy the same ETF via Euronext Amterdam or via Xetra. Sometimes the ETF is in the commission free list through one party, but not through the other.

What has changed in DeGiro Commission free ETF list?

A number of ETFs have been added which are popular with DeGiro investors. There are also a couple removed that were no longer popular. Did you regularly buy an ETF from the core selection and does it go off the list? They will remain commission-free until May 14 (in the Netherlands). Use it to your advantage.

So what makes me very happy is the amount of ETFs with a high ESG rating (Environmental, Social and Governance). Previously, I looked for ETFs with a high ESG score, but was unable to find them. That could have been me though. Now there are more and they can be found very easily. The new page where you can easily search and filter through the list, you can also click whether you think such a high score is important. Then the list is shown. Super nice!

What does the new page look like?

In Dutch, will update when available.

For the link to the new list click here.

You can filter on a number of things.

  • The expense ratio is the percentage you pay per year to own this ETF. You can filter on the percentage with this tool.
  • Then you can select the region. For example, if you think that economic growth is mainly in Asia or Europe, you can select it.
  • The ESG rating measures a company’s resilience to long-term, industry material environmental, social and governance risk. These range from leader (AAA, AA), average, (A, BBB, BB) to laggard (B, CCC, etc.)
  • In addition, you can select the stock exchange or search for your desired ETF in the search bar by name, abbreviation or tracking code.

If I click on the AAA and AA for the ESG rating, I get no less than 44 different ETFs that are leaders according to the ESG rating. If I also want to pay less than 0.2% TER, I still have 12 left. Now I no longer have to look this up separately for each ETF, but can filter them out.

Do I want to know more about a particular ETF? Then I just have to click on the link provided. Then a PDF opens with all relevant information about the ETF.

Conclusion

All in all, I think the core selection, especially the selection and the clear ESG rating, offers a much better user experience. This way you can easily select what is important to you. What do you think of the core selection? Do you also invest with the Giro? I wonder if you are also consciously working on this ESG score!

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.

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Money

Leveraged products

Are you new to investing? Read Start investing step 1 and step 2 first.

Turbos, sprinters, speeders are names for leveraged products. They are very similar but are offered at different institutions. For example, ING has the sprinters and ABN Amro has the Turbos. Leveraged products allow you to trade stocks, indices, commodities, currencies or bonds. You trade with leverage. With this you can achieve big gains with a relatively small investment. The risk is therefor also higher. You can lose your entire investment. With leveraged products you can predict whether the price of a stock (or bond etc.) will go up or down. Do you think a product is going down in value? Then you go short. Do you think a product is going up in value? Then you go long.

It works something like this:

Imagine that a share now costs 14 euros. You think it’s going to go up. You place a long bet. The issuing institution (for example the bank or broker) lends you 12 euros per share. You pay interest on that. Your own investment is 2 euros per share. If the share rises from 14 to 15 euros, the profit on the share is normally 7%. In this example, you made 3 euros from 2 euros. The profit on the stock is 7% but your profit is 50%.

You can also be wrong. The share goes down from 14 to 13 euros. Your 2 euros is then only worth 1 euro. You lose 50%. Will the share drop to 12 euros? Then you have lost your entire investment. That’s where the stop loss lies. The share is automatically sold at the stop loss. This way you can never lose more than your initial investment plus the interest on your loan.

The greater the leverage, the greater the profit you can achieve, but also the loss and therefore the risk. The leverage indicates how many percent it changes compared to 1% change on the product. Does your product increase 1% and is your leverage 5? Then your profit increases by 5%.

Benefits of leveraged products include:

– You can make a lot of profit with relatively little investment.

– You have a fixed maximum loss.

– You can bet on both falling and / or rising positions.

Disadvantages of leveraged products include:

– You pay relatively high transaction costs.

– You pay interest.

– The risk of losing your investment is high.

You can imagine that this is not suitable for the beginner investor. Are you reading this for the first time or do you find it difficult? Then don’t do it. This is not suitable for the novice investor! To invest in leveraged products, you need to follow the financial news carefully and predict what a particular product will do. Expect that you will spend a lot of time on this. If you are wrong, you lose a lot. I do not invest in leveraged products myself and do not recommend it. The information on this page is not intended as investment advice.

Do you want to read more? Have a look at the following websites:

– https://www.ingsprinters.nl/videos

– https://www.degiro.nl/leren-beleggen/beleggen-in-hefboomproducten

– https://www.lynx.nl/kennis/artikelen/hefboomproducten-sprinters-turbos-en-speeders/

– https://www.abnamro.nl/nl/prive/beleggen/beleggers-academy/gestructuren-producten.html

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.

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Lifestyle, Money

House Flipping

Earlier I wrote this piece about the 4% rule. I received feedback on it, namely the following: ‘If you are alone and want to be able to live on an average salary of about 25,000 euros per year, you have to adjust for inflation of 2% and an estimated return of 4% and 0.1 % for the broker already make 6.1%. That means that you have to get around a capital of 410.000 euros. And even if you manage to set aside 2000 per month, it will take you 205 months or 17 years. Although there is a snowball effect in it which makes it faster in practice, it does indicate that the horizon is too long to comprehend. “Really super extensive and calculated feedback! Thank you!

And I totally agree with this! Saving to retire is not cool, fast, easy or fun at all. It takes a long time and with a normal salary (which I assume in this blog) it takes a very long time. You have to be very frugal for it and you will regularly wonder what you are doing it for.

You can abandon the idea all together, but you can also ask yourself whether it can be done faster or differently. One way to become financially free faster could be to earn more and invest that extra income as well. Another way is to see if your living expenses can be reduced. Most people think about this, the ideas are open doors. Another way, by no means an easy way, is flipping houses.

Graham Stephan talks about it, Robert Kiyosaki (author of Rich dad, poor dad) wrote about it and Peter a.k.a. Mr. Money Mustache loves it. Real estate. Why? Real estate can yield a lot very quickly. In this blog I specifically zoom in on house flipping.

What is house flipping?

House flipping is buying a house, fixing it and then selling it for a profit. This can be a very lucrative activity if you are a handy carpenter.

In the fall of 2020 there was a house for sale that I was interested in. It was a fixer-upper. A number of things had already been done, such as a new kitchen and the living room / kitchen had a new floor, new ceiling and freshly plastered walls. The rest of the house was, well, let’s say, habitable. Water, gas and electricity worked and the house was not yet about to collapse, but everything else had to be done. It was really a fixer-upper for a handyman. It must be added that it is also a large house. Suitable for double occupancy. The garden was even worse. What once must have been a beautiful garden was an abundance of weeds and the entire garden was difficult to pass because the vegetation was everywhere. All and all it looked bad and you had to see through to see the potential.

At the time, I was unable to purchase a fixer-upper. It was probably financially successful with the sale of my current house, it was a real bargain. The house was for sale for 175,000 euros. The highest bidder was about 60.000 above the asking price which is normal in this region at the moment. Someone was the new owner of a potentially beautiful place. Now, about 6 to 8 months later the same house is for sale again. The renovated living room / kitchen is untouched, the rest of the house and the garden has been given a major facelift. New bathrooms, kitchen of the other part, walls, ceilings, floors, doors. Everything has had a beautiful facelift. Everything on the outside has also been beautifully painted and the entire garden has been made bare, with grass and gravel. Not super pretty, but it looks fresh around a newly renovated home.

Now the shocking part: the house is for sale for 595,000 euros. That’s 360,000 more than it was sold for half a year ago. It will probably sell for about 50.000 higher than asking price. Imagine if a renovation of that house cost anywhere from 100,000 to 300,000. Then the house is sold for 635,000. For more than six months of work, you will have made a nice profit on your project between 100,000 and 300,000 euros. If you want to make a lot of money quickly, this is a smart way.

Totally unrelated cat pic <3

I want that too!

Like I said, this is not an easy way. There are many things you have to work hard for. First, you need a mortgage and therefore a mortgage lender. You need the amount for the costs of the buyer yourself and a fixed income so that you can get the mortgage. Alternatively you need the money on hand in cash. Also you have had to work for it pretty hard and long if I’m correct. Then you also need a starting capital for the buyer’s costs. Either you pay for it in cash or you go into debt for it. Both are a risk. Then you need time to renovate (how do you arrange that if you have a job to apply for the mortgage?). Good connections help enormously (people who are handy and who can help, your own construction company so that you have staff who work with you, etc.) To set up something like this it may take you years before even buying your own property, just like a house to live in. However, if you do this trick once a year or once every two years, for example, you can – if you earn between 100,000 and 300,000 each year – live off of the profit. In addition, the skills that you have acquired as a handyman are useful for the rest of your life. The more you are able to do yourself, the better (read why).

Now it is easier to buy a home that requires less work but is cheap, only needs modernization and can then be sold for more. The chances of buying a house that is already fine for a bargain are smaller. The profit that can be made on this is usually also less. How about buying such a fixer-upper, renovating it and then renting it out? You can include the rental income as income for your new mortgage. Before you know it, you will be a slum landlord! (just kidding, don’t milk your tenants).

Once again, I want to emphasize that this is not an easy way to make money. However, it is something to consider or to work towards if you are working towards financial freedom. The road to financial freedom is a boring, slow road with probably sometimes (serious) setbacks. There is some serious risk-taking involved in this. But becoming financially free is a lot faster by working hard on a challenging project like houseflipping, it is worth considering.

Have you ever heard of house flipping? And would you do it yourself?

Until next time,

Elske

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