Re my post about Etherium and cryptocurrencies

This post is about the cryptocurrency flu that seems to have caught up the whole world for the past year.

I previously wrote about it being strange that bitcoin rushed completely off the charts while Etherium did not show the same progress.

Little did I know Etherium was just a slow starter. It is now doing the same rush bitcoin did before the holidays and going steadily (well, for a cryptocurrency) upwards.

Other cryptocurrencies I am keeping an eye on right now:

  • Ripple
  • ADA

Why not Ethereum?

Apologies for MIA in the past few days. I must admit that, as any bad habit, once you start filling your calendar with other things and the blogging time slowly gets pushed until later and later in the evening until the inevitable “i’ll just do it tomorrow instead” which then turns into a slowly instantiated habit. Not got! Luckily I am absolutely horrible at habits so this was easily broken.

 

I have two thoughts here this Wednesday evening:

  1. Ethereum – What is happening with the insane bitcoin rush these past few weeks is not happening with Ethereum. Sure, its less stable, newer etcetera but still! The bitcoin rush is, in my read, largely created by money-spending newbies like you and me who heard the “next new thing in crypto is” booming right now and wants a share. Why not the same rush for Ethereum? It’s not like bitcoin is incredibly stable, so the risk averse argument rings a bit false to my ears. I am clearly missing something here. What do you think?
  2. Should there not be some compensatory re-action in stable resource based  indicies such as gold, silver, gas or other heavy metals? And when is that happening in such case you think? Or is the compensation-ripple effect something that is just making sense in my mind?

Cheers guys!

The Holidays are coming up: 3 steps to save money during this time

We have set up a strategy with 3 simple steps to save money during the holidays

Mr Viking and I have had a tendency to head off to the most exotic location we can think of during the holidays. This tended to cost a lot of money, as you may understand and doesn’t rhyme well with our 7 year goal to Financial Independence.  This year we have worked out a strategy to avoid this period being the cost-peak of the year. The goal is to save as much money as every other month of the year. This way we will stay on point, and continue to work towards making the leprechaun happy, even if it is christmas 🙂

3 steps to save money during the holidays:

  1. Stay at home over the holidays (i.e. no travel abroad). No expensive resort or impossible flight connections that costs a fortune. Staying where you are with friends and family is in itself not a radical thing to do. But for us, it is going to be a massive saver right there.
  2. We have made a deal with our closest friends and family. They are not giving us any gifts for christmas this year, and vice versa. Everyone we spoke to about this was very happy. This means that they don’t have to go through the shopping frenzy of buying yet another kitchen-device that will never be used while receiving something similarly unnecessary same.  Saving money not having to buy (or receive!) unnecessary gifts never to be used seems reasonable.
  3. Planning. Last minute maniacs as we are, we normally stumble into the closest bar we can find when the clock approaches midnight. Christmas ham is being bought last minute at the local delicates store -read 10x more expensive than buying it in time  at the larger store 5 km away. This year, it will be all set. We have a meticulously planned list over where and what we are going to do. In all honesty, we will probably never go through this insane planning process again. However, it will work as a very good benchmark for us. We will know how much time and money can be spent when doing this. Which will hopefully incentivize us to do it at least half-way in the years to come.

What do you think?

 

Stocks or funds?

Stocks or Funds? I strongly prefer one over the other when it comes to investing my money

Stocks or funds? In this post I’ll talk about my self-professed finance-nerdiness, and why I prefer branch specific index funds over stocks.

I have to admit, I am a huge finance junkie. The same way some people go in and check facebook or instagram multiple (I really don’t want to give an estimate here for embarrassing reasons) times a day, I go in and check the stock market. I am perfectly content with peeking in without buying, the satisfaction comes from feeling up to date and “checking in”. As it is not hurting anyone, I have not tried to regulate this and thus let myself engulf freely in this little guilty pleasure.

A few posts ago, I talked about my investment strategy and mentioned both index funds and stocks as different investment options. As the above self-professed stock-market junkie I am, you would think that I am all about the stocks, options, warrants and all sorts of speedy hedgefund-y ways there are to up your capital out there.

In reality, this is not true. I am very much a vanilla-investor. I observe, and look, and wait, and maaaybe I’ll put in a little bit, just to check how it feels. And then some more. But I seldom buy stocks (relatively seldom, of course it happens).  I have a very realistic expectation of what I know and don’t know, and when it comes to stocks I just know too little about most underlying companies to make a potential investment more than a gamble. In addition, since the price of the stock is not really about the price of the company (just look at H&M nowdays) but what the market thinks of the price, I know even less.

Why I prefer index funds

What I do know, however, is the general status of the world. Almost as much as I like checking in on SP500 et alia I am constantly hooked in on the world news. And because of this, I prefer branch specific index funds. A fund, essentially a bundle of stocks with a common denominator like geographic area, industry (or a combination of them) is by this definition spreading the individual risk of each company out over many similar ones. I don’t have to know much about each individual company, but I do need to know about the collective status of their respective industry, for example.

love reading up on current events, and have been tracking world news since I was a kid (again, clearly one of the very cool ones growing up) so this suits me perfectly. There is a certain satisfaction in seeing the market in a specific industry unravel before you after a few indicative events. That is my medium. It also works really well because it is easy to hedge myself even more and step one macro level further out and go from very branch-specific to more global funds, and in this way  spread the risk even more, if I want to.

For now, I stick to my active obsessive stalking of the financial markets, and my branch specific index funds, and we will see how this works out for now. 

What is your take on this?

 

Freddie

How to save over 200 USD a month with 3 golden tips

How to save over 200 this month with these three tips

It is not always easy to cut down your costs  and save money when you have routines that you have had for years, perhaps since you were a child. However, these small routines are sometimes where you will find the easiest ways to cut down on your spending and save money. This month I have done 5 things that has cut down my costs significantly.

3 things I have done to cut down my costs and save money  over 200 dollar this month!

  1. I have biked everywhere. I normally bike every now and then but this month I have made a point of bringing the bike with me all the time. Great exercise!!!
  2. Mr Viking and I have dutifully implemented the One Simle Purchase Rule
  3. White month! As the Viking I am, I tend to drink alcohol every now and then, and Mr Viking and I very much enjoy a glass of red after a long day of work. Cut off alcohol completely this month and noticed two things: a) I am saving more money than I thought! A good bottle of wine pays up to ca 20 USD so lets say we have saved at least 40 bucks on this. b) My skin looks great! I want to continue with this.

These are things that has made me save in total more than 200 USD. 

In one year this is adding up to 2400 dollars. Insane. Tips: Write down right now what you would do if you were given 2400 dollars out of the blue right now. Keep this as a motivational note.

It is not on par with MrMoneyMustache  but everyone has to start somewhere and these are definitely three tips that anyone can follow. If you try it one single month, you will still save a lot of money.

Bitcoin, Ethereum and other cryptocurrencies

Crypto currencies bitcoin ethereum are they here to stay

Bitcoin and the legacy of cryptocurrencies

Five years ago I was convinced that Bitcoin, bearing the legacy of all cryptocurrencies, had reached its peak.  From here on it would silently fall into oblivion, sort of like those horrific 5-second snippets of music people used as their ringtone back in the 90s just because technology allowed for it. I will never be able to hear the first tones of Sugarbabes ’round round’ without a stressed peak in adrenaline, and a nervous glance at my phone. Anyway, I was convinced it was a done deal.

As we can see, these are clearly one of those wonderful far-sighted things I was completely on point with (please hear the Scandinavian irony here).

bitcoin price cryptocurrency development
Price of bitcoin in the past five years, picture from www.bitcoin.com

Bitcoin has rushed like nothing else in the past few months, and there are a few forerunners along with it like Ethereum that are making its way up too.

As a newbie-bitcoiner and a borderline-news-junkie  I am torn between what to think of these. This is definitely the high-risk part of The Leprechaun .

Yes side

Yes, I see the future of finance, the internet finally seeing its legacy being instantiated into something tangible and useful, outmaneuvering the big, bad, corporate banks and so on. Sure. 

No side

But I also see the fragility, the marketplace made for people that have reasons to want to not be traced (human traffickers, illegal exporters etc.) and heaps and heaps of sites with semi-legit (read fraudulent) dealers, shadow-sides that mirror real online markets where people send their money somewhere where they will never see them again.  All without the slightest legal chance of getting them back.

But still

Still, I am ending up on the yes side. I think that as the years are starting to add up, it speaks for the probability of cryptocurrencies being here to stay. As more and more people are using it, the legitimacy as well as its liquidity increases tenfold. In addition, I am a firm believer that technology capabilities like this (music ringtones being the exception) cannot every be banned, it will only increase its attraction. We are making this a “good” force to be reckoned with, but only as long as the masses keep latching on to it. This is mainly because the technology behind blockchain is genius and unprecedented in its its usability as a financial mechanism.

What do you think?

 

— Note that I am only expressing my own opinion and not speak in any professional capacity nor giving any financial advice.

My first monthly income and expense report!

Ok! It is time for my first monthly income expense report and you guys will see the crushing numbers behind the machinery. I have converted them to USD, and will add explanations for the different posts (you will see that they in some ways differ from a person living in the U.K for example. My monthly income is ca 8200 (USD). After taxes, I get out ca 5k. This is a good salary for someone my age in Scandinavia, but as you can see, a lot of it ends up in the tax bucket. If you wonder why I am taking my monthly income expense report by months please take a look at my Nordic debunking of By Month!.

Monthly income expense report

Monthly Income Expense Report November:

+ Income after tax: 5000 USD (Salary)

– Expenses: 

Mortgage (incl. interest rate): 900 (we are paying it off as fast as we can)

Student loan: 100 USD

Phone bill: 24 USD

House insurance: 20 USD

Travel: 378 USD

Transportation: 30 USD

Blog setup: 95 USD

Gym: 40 USD

Food, Groceries: 220 USD

The couch: 200 USD

Shopping: 50 USD

Net savings: 2900 USD

Goals for next month:

Other income streams than just my salary! (It looks horrible just having one single income stream and so many lines of expenses. Many of these posts are things I should be able to cut down on, especially since Mr Viking has a similar setup with his budget.

Looking at this we clearly could see the need for either cutting some of our expenses or creating some other source income. This can be done by several steps:

Right now we looked at our expense and unfortunately saw that travel was a big monthly expense which we now will try to cut by travelling at low-priced periods, as well as to try to minimize the cost while travelling. Before we were not really aware of the amount spent when aboard, but when seeing it clear with a monthly income expense report. You get the information straight!

For all my readers, try to get your expenses on paper as clear as day. It is the only way to start keeping the money in check.

This is the first time displaying my monthly income expense report inspired by Michelles business income!!! Thank youuuu

/Freddie

 

How we kept our expenses under control with 1 simple rule

Background:

Mr Viking and I bought an apartment a few months ago (I’ll get into the economics of how it is much more financially sensible to buy rather than rent n Sweden in another post), and apart from the money we are saving not having to pay rent, it has been an incredible demotivating experience from a savings-point of view. We both have fixed numbers we are expecting to put away after all expenses and invest each month (remember, the monthly salary in Sweden? :)) as part of The Leprechaun that will never die.

The problem:

However, ever since we bought this apartment, there has been a number of emergency expenses each months that has left us dumbfounded at the end , wondering what happened.

For example, we didn’t have a carpet for the hallway for the longest time, because we were trying to stay within budget and prioritize. It has started snowing here now, which means that every time someone clamps through our door, there will be a little puddle of water on our white, 100-year old-wooden floor *gasp*  and will soon leave permanent damage = decreasing the value of the apartment *thousand-folded-gasp*. Nonetheless, our sense of priorities shifts very quickly which means that we are not anticipating these costs.

Three months ago we bought bought a couch (did not have anywhere to sit in the living room before) and two bedside tables (I had a pile of books on the floor before that Mr Viking, -J,  kept tripping on). Which meant that we once again went over our budget, and it irritated me. By now we have been living here for so long that our expenses should have fluctuated back to status quo.

one rule that kept our expenses in check:

We came up with one rule that has changed all of this. Now, we meet budget every month and we are forced to anticipate costs and expenses that may come up. It is really very simple, but it has changed everything for us. The rule is:  We can only make one big purchase each month (No fixed upper or lower limit on what we mean with ‘big’, which helps us equate everything that is a real ‘purchase’ with ‘big expense’.

We have this rule set until the end of the year where we put a hard stop on even the one big expense per month and will probably move over to one each quarter. This month it is leaning towards a kitchen table, which we still don’t have. But, because we have this rule, we are now contemplating this purchase carefully before rushing away (weighing it against getting wardrobe doors for example, another thing we are still lacking, that will thus have to way)

Financially Independent Vikings never fare solo

One thing has surprised me since I ventured out into the public space and started blogging about my journey to FIRE, -a life to become financially independent.. First of all, how many of us there are, once you start looking. I very much believed this was not something many people did, this being talking sharing saving hustling our way towards a life of freedom and (in my case) dividends. It gladdens me a lot to see how there are so many of us, and more to it, – of there is not only a sheer number of individuals operating in silos on their way to a common goal, no no no, there is so much sharing and support and so much of a community. 

So this post goes out to all of you fellow FIRE bloggers, thank your for having paved the way for us that are coming after, than you for creating this community, and last, thank each and every one of you for welcoming me in with open arms.

See my first blog post which immediately got way more attention than intended!!

Cheers,

F

The Leprechaun that will never die.

The journey for financial independence and the naming of a pile of money

If our yearly costs and taxes (capital, property tax etc.) is defined as X then X = The sum we need yielded as dividends each year. This is really the definition of financial independence.

For whatever reason we decided to name this pile of money, and for even more unclear reasons we decided to name it The Leprechaun. This is not from some weird fantasy or fairy tale, we just named it out of the blue. This is because we need some named-entity to name the adventure. As having a certain amount of money in an bank account is an end-goal, but the journey and the challenge that comes with it. Just imagining the opportunities when becoming financially independent is scary as well as the choices we have to make their is also part of it.

So, the Leprechaun need to have an expected dividends yield totaling our combined costs and taxes. 

On average, Swedish stocks will return about 4% of share value in dividends each year, so it is fairly realistic to assume the Leprechaun will need to be X/0,04 (plus some semi-horrific tax calculations on top of this). For you whom have already created this leprechaun of joy, why not start living the financial freedom and put the money in some of the companies listed as Swedish companies with best dividends.

This way, the growth of the portfolio (sorry, the Leprechaun) will be able to match/outgrow that of the expected inflation, creating a Leprechaun that will never die, as I triumphantly pointed out after having finished our excel spreadsheet with our strategy on.

This strategy in itself is fairly standard as posted Financial Independence: My investment strategy in 4 easy steps. There is absolutely nothing in it that I would assume not almost every FIRE-advocate follows. The main differentiator for us is that there are quite a few implications related to taxation in here (as well as the benefits of a welfare state and never having to pay for health instance for instance). I will dig in to our specific financials in the posts to come.

/Freddie