What does it mean to “go viking”?

The origin of the word Viking is not, as we may think, one of pale, blonde pirates with big swords who killed his/her way across the continent. Back during what we (in Scandi)  refer to as the “viking age”, -c 700 A.D until 1100 A.D, the word Viking was used as a verb to describe someone who left his/her lands and explored other areas further away from home. The exploration was not necessarily accompanied by the picture we have today of such viking raids. The later imputed violence, robbery and blood-thirstiness is something that has been added to the word in later folklore. Surely, there were Viking expeditions of that precise kind, but the word was just as often used when venturing abroad to trade and sell copper, iron or other goods in a normal, peaceful manner.

To “go on viking” would have its closes resemblance with a combination of words that we today use for “explore”, “travel”, “adventure”, and “abroad”.

I like to think of my FIRE journey as a Viking journey of such.

What is your idea of Viking?

 

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 start of the FIRE Saga

Fire: Is not the least I can do making my wildest dreams come true?

I decided to start working towards financial freedom and FIRE after a three-step-thought process that looked something like this:

1. Mental step –

I was contemplating how fortunate I was being in the position I was; a wonderful job, good savings, having had great (free!!) education, stable home life, amazing Mr Viking,  essentially feeling very grateful. This lead to contemplation about what I should do with this fortunate life I have been thrown into. What should I do? I have always been a goal-setter when it comes to life, but this time it was different.

This time I felt like I owed it to myself to really and fully think about what I wanted to do the most. I had to realize how fortunate I had been to be put down on earth in a position where I actually had leverage to make many things happen. How many other women in the world could say the same? Is not the least I can do then making my wildest, scariest dreams come true?

How few are the countries I would have had to be born in to being given even a realistic percentage of ending up with parents educating me enough to have me probabilistically set myself up for an economically good future?? And then have me coincidentally ending up being clear-headed enough to realize this advantage?

There are always amazing outliers, rising up agains the challenges their backgrounds have brought and winning, but the thing is, I am not one of these outliers. If anyone has had the opportunity to set themselves out to a good start, me and my fellow Scandinavians out there are definitely in that group . Given the poverty, inequality and suffering in the world, it would be a blind lie to say otherwise. 

My financial independence goal will be a real challenge given the heavy taxation in my country, but seriously, have I not been given all the tools I need to handle it? No, as I contemplated further, I owed it to the collective sum of all of these incredibly low probabilities to at least give my financial opportunities a serious thought.

Similar thoughts continued to spiral into an understanding of how important it is for me to feel like I have a choice. I thrive in multi-choice environments and never feel more alive than in the eye of a storm of possibilities. Freedom to have possibilities, and freedom to choose between these ended up being the only constant I could define for myself in the endless list of things I want to do and accomplish in this life. This freedom is what I want.

This is how I came down to the goal of financial independence.

2. Information-gathering step: What is FIRE?

Is this something anyone has done? I mean, don’t you have to be born into ridiculous wealth, or be lucky enough to invent Google to become financially independent?

In Scandinavia, being able to live off of your wealth is just not something you do. And the people that do have left the country a long time ago. So what do you do when you are fairly certain you are among the very few to have though of something few others have? You google it only to realize you are one hundred percent wrong. 

I started reading. And reading. Several weeks of me gathering information about people doing this crazy financial independence “FIRE”-thing. Mr Viking got equally excited. This wasn’t just a small boys club of little rich dudes from Switzerland as I first thought it would be (sorry for the horrific generalizations here). These were people everywhere. From all over. People just like me, who slowly but surely worked out a strategy for accumulated savings aka freedom and not letting anyone stopping them. I was amazed.  I wanted in.

3. If this is going to be a journey, why not invite the rest to come along? -step

I loved to write a few years ago. Now I write code all day, but due to lack of time (read bad prioritization) I barely ever write normal text. After having received so much FIRE-input for so many weeks (see step 2) I felt this big bold blurb of words inside of me. I had things I wanted to say about this. I wanted to share. If I was doing this for sure, trying to reach financial independence as soon as I could, why shouldn’t I let everyone that wanted read my story?

Looping back to step 1, it turned into this reasoning about how this was almost the least I could do. So I started. And my fingers started writing by themselves. Self conscious about writing in english I stopped and erased. And started over. And over. Until I realized that it wasn’t about the language, or about the stylesheets or the color themes. The writing had nothing to do with that and everything to do with how light I felt after each post. How happy it made me to write. How incredibly impressed by the thoughtful comments and feedback I have received from the FIRE community since starting.

This is still a tool for me to realize my FIRE goal. But independently of that, it has become a goal in itself, with an intrinsic purposefulness that really has nothing to do with the first goal.

Thank you for following me on this route.

/FV

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.

Financial Independence: My investment strategy in 4 easy steps

See my investment strategy to reach financial independence with 4 easy steps

My Strategy to financial independence

If you read my last post you know how much I was able to save from my last salary. The next implied question then naturally becomes; what do I do with that money in order for it to grow me some financial independence? This post will talk about what i do with the money that I invest into the Leprechaun , i.e. my investment strategy to Financial Independence.

Four easy steps —

Number 1)

Get an income stream, and preferably more than one. You can never save money if you don’t get any money, so this is the most crucial step, even if the actual salary is not that important. I get my salary each month.

Number 2)

I have a set saving goal each month, lets call it X . This sum I need to invest. The biggest mistake you can make is leaving that money passively deprecating itself due to inflation and potential taxes. Long term investments can be put into high-risk funds and stocks without it being that much historical risk associated to it. The market has historically always gone up, even if it regularly will take a stroll downwards into a recession. Note here that I talk about the whole market and not individual stocks and funds. Stocks tank all the time, which is why it will generally be a higher risk for you to invest your money in  one individual stock, than in a larger index.

I invest 80% of X in different index funds. Of these 80%, around 40% are branch-specific, quite risky and narrow indexes while the remaining 60% are large global index funds.

I am looking to leave my riskier branch-specific investments where they are but from now on start putting the whole 80%-chunk into global index funds. Mainly because I am still convinced he recessions is near and not sure which market it will hit first. The remaining 20% I place in stocks of different kinds, mostly larger companies with a good track record of raising their dividends shares each year. I will probably continue to buys socks for a few more months but then slowly shift this chunk over more and more to the global index funds as well. I will explain this more in step 3.

Number 3)

Have a set percentage to play with. This is where my 20% that I buy stocks for each month comes into play. I really like investing in stocks, and reweighing, shifting and shorting my way around the markets. This is not a very good thing if you are looking for a solid investment plan. This is why I have capped my allowance of my savings I can play with to 20%. I will decrease this percentage in the next few months. This as I don’t have enough time to become the next Gordon Gekko and index funds has historically almost always beat individual strategies in the long term anyway.

Number 4)

When the time has come for me to have enough capital for the Leprechaun to become immortal (i.e. enough for me to live off its returns indefinitely) I will sell off the funds and buy high-dividend stocks for these so that I am set up for a monthly income.

Thanks for all the positive feedback from my last post as well!

Cheers!

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

Student Debt

Current student debt: 42909 USD

Yes, I live in a country where university is free. Yes, considering my student debt this number is a bit frightening. Tuition is free, but you have to cover housing, food, transportation etc. meanwhile the government offers wonderful student loans to a very, very reasonable interest rate. 

Interest rate

At this point I could have paid off my debt a while back instead of investing that money. However, the interest rate for all government funded student loans is currently at 0,34%. This means that it is actually better to keep your earned money and invest in the stock-market instead to pay the interest rate of by the dividends; while paying the minimum amount back to the government.

student debt and get Financial Independence!

Every cent of our debt is currently invested in a high-yielding index fund, regenerating its value over and over. If you are interested in our approach; check out my blog postThe Leprechaun that will never die.

This is one of the reasons I love comparing financial strategies across countries. In other countries it would have been daunting to just leave this debt be while having enough funds to pay it off, whereas here, it is definitely better to keep this debt invested for as long as I can. Check out the comparison of the different student debts between US and the rest of the World; CollegeCosts. I am staying in debt and moving our money around in a few quite branch specific index funds, and I am also happily paying in the 0,34% along with the circa 100 bucks a month I am required to pay back.

What is it like where you are from?

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