The debut

My history with FIRE dates back to a few years. But even before getting to know the FIRE ideology, as a teen boy, I already had a very clear and immature projection on how my future money situation would be: a very successful entrepreneur counting my money in millions! I began reading books about money pretty early on and that just gave me a false confidence that I knew a lot about money and that it would be easy to be rich. I even discussed those subjects with my friends (with similar interests of course) with such confidence that people believed me as if I had achieved great wealth, even though I had nothing to show for.

Well for my defense, I did make some money before even finishing my diploma (high school) but very far from the amounts I dreamed of. Then after finishing school, I got to know the reality of the labor market. I landed a good job in a very respected company and here too, the awe of the people around me, knowing I got that job made me feel good and confident about my capacity of making money.

But pretty quickly the daily routine of a 9-5 job and the okay salary got the best of me and I entered a weird phase that I can’t really explain clearly. I lost the desire of making more money and achieving goals, I lost that hunger and motivation that I had. I also got in a comfortable place where my salary could provide for me and my soon to be wife. That led to a credit of which I’m not proud of.

Life went on

Soon enough there was a rent to pay, home insurance and all the bills that come from living on your own. That for me was and continues to be totally worth it! I couldn’t imagine giving up my own place, even if that means walking a slower path to FIRE. So for me those were the good expenses, the ones I am happy to pay. But at the time I was not very aware of spending and with each salary raise, came the according lifestyle inflation. We got comfortable with the traveling abroad, eating at restaurant regularly and ordering food regularly.

As long as I had an amount of money as an emergency fund, it looked great. But looking back, that “safety fund” would get me nowhere. It was just enough to get groceries for 2-3 weeks if everything went wrong.

When the pandemic hit, we got lucky and I switched over to working from home without losing one single day of work. And the same amount of money continued to come in but since everything was on lock down there was barely anything going out. This was like a wake up call. For the first time, I saw how much money was going out, without much to show for. So thinking what to do with money and how to spend it more efficiently, began taking up more space in my head.

At the same time we were having some issues with our rented place and I really got tired of dealing with our landlord. So we began looking for another place, ideally to buy if we would find a house we could afford but in the worst case just to move out and rent elsewhere. We also felt that the small apartment we had was getting tight and we would enjoy some more space. After a lot of searching and administrative work we found a great deal. We would pay about 1/3 more than our monthly rent, to buy a house that was 3.5 times larger and with a garden (not so much of a luxury after spending so much time locked in a small closed apartment with no outdoor space).

This sounded like the answer to my “money well spent” search. So I ran calculations for about 80 hours total (yes, I love my spreadsheets) to make sure this was a wise decision and an endeavor worth pursuing. I added every number I could think of, some hypothetical scenarios, some more realistic but I wanted to be sure that I was conscious of the choice I was going to make, the same choice that would lock me in for 30 years of credit.

The mortgage

The mortgage had a powerful effect on me, not only did it change my perception of money but it made me reevaluate my life choices and goals. I began thinking more seriously about the amounts of money that I needed to save in order to be able to pay for the mortgage comfortably. But also thought about the fact that if I had done this earlier, I would have been able to get a better deal on the mortgage and since the house market has been going up for so long, I would have cheaper house prices too.

In the end, it turned out to be an excellent choice and assisted with luck, excellent timing as well. After all my calculations and observing the world state at that moment (during the pandemic), the 30 year fixed rate seemed like a good option, I then signed a 1.73% interest rate mortgage (all fees included) for a total payback of 617'895,59€ (what matters is not how much money you are borrowing but the total money you are going to pay back).

Only a few month after moving to the new house the economic situation got worse. The apartment we were renting, saw 2 increases in half a year and got very close to monthly payment locked for 30 years. Interest rates skyrocketed for a few month and then settled a little bit, but they have not been close to what I got on my mortgage. I am very happy that I seized the opportunity right when a lot of friends and family were worried that I was taking that step at the wrong moment.

FIRE accelerant

All that thinking got me to a place that I am proud of. I thought: before moving and beginning to pay the increase in my monthly housing expense, I had to also put money where it would work for me! So a few months before moving I did what I knew I should have done much earlier. I opened an account in a broker and made my first long term investment. If felt a little bit scary to navigate all the unknowns by my own, but I did it anyway. I also committed to not miss any monthly payment and if for some reason I would miss that payment, it would be like a very high priority bill that I would have to pay as soon as money would come in.

I had the basic knowledge of FIRE at the moment since I had read blogs about it. But what really pushed me was a part of a book I had read (by Tony Robbins) that said that most people would be better off just investing in S&P500, rather than trying to time the market. So I knew, I had to do it! And as soon as I ran into some struggles, I went looking for an answer on the internet. And this lead me back to the same stuff I had read years before. Only this time, it hit differently!

This was the gasoline to my FIRE. I got obsessed and in the span of a few weeks, I had read all the posts of very well known FIRE blogs. I went through all the episodes of 2 known podcasts on the subject (I prefer not to count the hours 🙂) and began reading books about it too. I was so locked in the subject that I began to have feelings of regret for all the bad money choices done before that moment. I began calculating the money lost, had I followed the investment advice years before… Seeing those numbers hurt the most (still today), but it also cemented the idea of how powerful compound interest really is!

Since then I have been following my commitment strictly. I end up even surpassing each year’s goal with an additional investment that I do at least once a year. But I also experienced (in a small scale) what much of the bloggers/podcaster talk about: the extremism of Fire. Diving so deep in the subject didn’t leave much space to think about other stuff and it lead to changing my mental calculation system, the one that evaluates if something is worth the money or not. And you guessed it… almost nothing was. I went to the point where I didn’t even spend money on stuff that brought me happiness before. And emotionally I could feel that toll.

Luckily my wife and I complement each other very well and she is a huge help when I need to find balance in my life. Her point of view and also seeing how much that drastic cut impacted her, helped me find some balance (I also read a book about it that helped a lot).

Balancing it out

Now, I think I have a much healthier relationship with money. I see it as what it is: a way of exchanging value. And sometimes you get some good value by using it right there and then, sometimes it is better invested for later use and where it can work for you while waiting. With all these experiences, some initiatives came out. that are working out great for me and my family:

  • We each get a monthly allowance to spend how we see fit, without worrying about budgets and better spending. We also don’t judge any of that spending in any way. (I track mine but my wife doesn’t)
  • We have a consequent travel budget since that is the biggest passion we share as a family and where lots of good memories are created. We also feel that we grow with some of our travels. There is something special about seeing other people living their life differently, it opens up horizons. Removing myself from the day-to-day trenches, has gotten me to huge breakthroughs in my personal life. Therefore we gladly spend some good percentage of our income in this category.
  • We are at a very comfortable level in our life where I sometimes feel that added comfort won’t be worth it. I think that comfort can be a bad thing: it makes me lazy and less flexible to move back to previous levels of comfort. At a certain point, the money you need to put in, to increase the comfort notably, gets disproportional, and you need to put larger and larger amounts of money to noticeably increase comfort. That is why for the foreseeable future, we are avoiding any lifestyle inflation. We are doing this by redirecting any increase in salary or decrease in expenses into our investments.

These past experiences also had me forge my own opinion on subjects, where other people disagree. For example, I don’t avoid debt at any cost… For me it is just part of a calculation. If you take a credit to buy something, whatever it is, you then need to calculate the total cost of your credit and not only what you paid your seller. But if that calculation adds up and the amount of pleasure/value you get out of the amount of money you are going to pay, that’s fine by me. Of course, you can’t go around making credits for everything and tying up so much money that you lose freedom but as long as it is a conscious and calculated choice I don’t see a problem.

To explain this very easily, let’s use a very simple and not realistic scenario: let’s say I want to get a camera. I am ready to pay 250€ for that camera. If I need to borrow money for it, as long as the total price of my loan (amount borrowed + interest paid) is not superior to those 250€, it makes sense to borrow for it. Yes, you could get it for cheaper by not paying interest, but at the end of the day, the calculation is in the value that the money spent will get me! And not purely on the cheapest option possible.

Another unpopular opinion: I don’t like to count my house in my net worth. Because I am not planning on moving out and I can’t use the value of the house unless I do. The only moment where I think this would make sense is: if I would sell the house, to move to a much cheaper country. But in that scenario, I would also need a living place and the only amount that would make it to the net worth is the difference once you sell the actual house and get the new living place. Since this is not what I am planning for, I don’t count it in my net worth.

Ongoing journey

This leads us to today. Like the name of the blog suggest, I am still on the road to fire. And per my calculations, I will be on it for quite a while. This is why I got the desire of sharing this journey with fellow readers. I am very grateful of other people opening up the way with such great content and felt inspired to do the same. I hope to be helpful for people located in Europe and maybe even more specifically in Luxembourg, since most material is for the USA.

If you are interested in joining in for this adventure, consider subscribing to the RSS feed or coming back regularly to read the new posts. If you want to reach out, you can send me an email as well.