Update after 1 year to post: https://www.reddit.com/r/EuropeFIRE/comments/ekbuwj/belgian_35_years_old_single_civil_engineer_for_a/?utm_source=share&utm_medium=web2x&context=3
For a number of years I have been following the messages on this subreddit. Especially the realistic testimonials provide me perspective and make me excited to continue along the FIRE path. The time has come to contribute, hence my testimonial.
TLDR: progress from 944k euro net value at the start of 2020 to 1,189k euro at the end of the year. 2020 was a special year, but I got a girlfriend, better control of my health and financially remained on track.
Open to suggestions.
Intro
Belgian, 35 36 years old, single girlfriend, civil engineer for a multinational, gross salary 100k 115k euro. Savingsrate with own house: 80%, savingsrate without own house: 47%.
Status 29th of December 2020
Net value: 944k 1,189k euro
- 1% 1% Emergency fund
- 10% 22% Bitcoin (no additional buying, limited amounts sold)
- 11% 11% Pension (individual + employer, all share based)
- 23% 19% Stock market (Funds managed through my bank and individual), all additional buys into VWCE, percentage for stocks goes down, but absolute value is up by 13k
- 55% 47% real estate (32% generating income, 15% own house)
Budget potentially growing = no own house, no emergency fund = 1,000k euro
Property 1: rented out: value 220k euro remaining capital on loan: 35k 23k euro
Loan 10 year fixed (3.4%), 1111 euro per month, rental income 950 euro per month
--> renogotiating the loan is not usefull as the remaining capital is too low, had a tenant leave, but a new one is already in
Property 2: not rented out since the start of Covid: value 160k euro remaining capital on loan: 42k euro
Loan 10 year fixed (1.9%), 914 euro per month, rental income 813 euro per month, hotels in the neighborhood are going bankrupt (Brussels city centre), so my studio is not attractive neither. For now I plan to sit it out…
Property 3: (own house): value 300k euro remaining capital on loan: 128k euro
Loan 10 year fixed (1.6%), 1948 euro per month
Property 4: rented out: value 240k euro remaining capital on loan: 170k euro
Loan 20 year fixed (1.4%), 860 euro per month, rental income 800 euro per month
Reflections
I promoted a level in my company and was able to save the full salary increase.
Covid was a major event. One of my properties is in the hart of Brussels and with all companies/EU organizations sending expats home, the studio is empty. I do expect this will continue for a while. On the short term I will just keep paying the monthly mortgage and hope the vaccine results in people returning to Brussels by mid 2021.
I had one change of tenants in a property, but all went fine. Real estate is not truly passive income, but this transition went well. I have not made any changes to loans, have not sold or bought any properties.
Bitcoin is very volatile and some suggestions were made to reduce it. In hindsight my hesitance to liquidate is for now turning out positive. The value of Bitcoin went up by over 300% and now makes 22% of my net value.
My initial investment has been recovered multiple times over and I understand there is a chance the Bitcoin value goes to zero. Risk to reward, I still believe my exposure is ok.
I started DCA’ing into VWCE, buying every single month through Binck. All new stock investments go through low cost VWCE, I have not acquired further bank managed funds (but I have not liquidated any neither).
Plans for 2021
Make sure all properties are rented out.
Continue DCA’ing into VWCE.
Limit maximum exposure to Bitcoin to 25%. This is a big difference versus the start of the year, but the mantra is “let your profits run”, so I am trying to avoid to sell too early.
Keep my improved health on track and enjoy life with my girlfriend!
Any suggestions?
