With the end of the year 2018 and my 21st birthday, my journey to “Financial Independence, Retire Early”, which I had announced on this blog, has started about a year ago.
My goal is to change my lifestyle in such a way that within the coming 9 years I can announce to my family and friends that I “retire” at my 30th birthday party. After extensive research I decided to start my journey by putting it on the following 3 fundamental pillars below:
1 – reduce my lifestyle expenses
2 – sell the stuff I don’t use and need in my life
3 – doing things myself
These are the concrete steps that I took to start my journey into financial independence to retire early.
Change of residence
Last year when I decided to take the frugalist path I gave notice to my landlord and on December 31st I had to be out of my Parisian apartment that cost me 5k a month.
I decided to move to the country-side where tenements are much more affordable. In the process, I also recovered my security deposit.
Luckily enough I found a small cottage, for only 20% of the rent I had to pay for the apartment, including some adjoining land. In contrast to the city lease customs, at the country-side leasors don’t ask for guarantees, as they are more than pleased to find a tenant for their property.
Throw off the unnecessary encumbrance
With the city lifestyle, I was used to and as the interior fittings of my city accommodation won’t fit in the country cottage, I decided without further ado to get rid of my furniture and interior design. Which also allowed me to save the money for a costly move.
So, I decided to make a kind of garage sale French-style to sell it all. For this, I scheduled 3 weekends to open my apartment to the public to sell cash at hand and to my surprise in just one week I was able to empty my apartment from all encumbrance.
Which left me with just a mattress on the floor to sleep for the last couple of weeks till my lease contract came to term, so I decided to take a part of the proceeds from the garage sale to treat myself to a two weeks luxury vacation trip to Sardinia.
At my return from my trip to the country I decided to sell my car too, a “Series 5 BMW Coupe” I bought early last year.
Overall, I was able to collect a little over 120k Euro that way with which I can start my new frugal life.
Do it yourself
After leaving Paris to move in to my new cottage with just a few suitcases, I decided to make my interior country decors with recycling material as well as wooden pallets to build my new furniture. At the villages’ flea market, I found a second-hand stove, that allows me to cook for myself as well as a wood-oven to heat the property. For the laundry I also found a used washing machine and clothes dryer at an auction that allows me now to manage my household in a self-sufficient way.
Compared to my city lifestyle with a maid who managed my menage including groceries for me at a monthly budget of four thousand euro, starting this year I do it all myself. This new way of going allows me to have all the necessary utilities, furniture and interior decoration at my new home to live comfortably by investing less than five thousand euro for it all into my new frugal lifestyle. This leaves me with a remaining positive balance of more than 115k from my sales.
My food will also for the main part be produced by myself in my organic permaculture garden as well as my new greenhouse, which I negotiated as part of the rental agreement with the cottage owner at no extra costs for me, which allows me to reduce my monthly costs of living even more considerably and makes me become even more self-sufficient as I decided to go on a fully plant-based diet too.
Everything considered in a first step I should be able to keep my monthly costs of living below 2k to start including food, groceries, haulage, leisure time, rent plus extras like power, water as well as internet connection which is necessary for me to continue working from home and generate additional income.
Put the money at work
To make the generated funds balance from garage sale as well as car sale work for me I also decided to make a few investments that I believe will help me reach my goal of financial independence to be able to retire early.
For that purpose, I created a legal entity on January 4th that allows me in a cost-efficient way to manage all my assets as well as financial market investments in a way that I don’t have to worry much about taxes in the meantime personally.
Financial market investment
On January 10th I invested 45% of the funds into a German fund called “Dirk Müller Premium Aktien Fond” (ISIN: DE000A111ZF1) to acquire 500 parts in this investment fund that I stumbled upon during my research and which attracted my attention right away for the following reasons.
I took a close look at their portfolio which is pretty diversified and, in my opinion, includes a few interesting stocks with great growth potential in the future. But the real benefit and true argument to me that reinforced my decision to invest in this fund was the fact that the fund manager told me that they have safeguards in their investment strategy against falling markets.
I believe that a new big economic crisis and financial crash is looming around the corner and even though I am investing into the financial markets with a long-term yield strategy I don’t want to see my portfolio value take a huge dump during such a crash. This fund invests also in financial tools like “Futures” that allows them during a crash to absorb the shock-waves in their investment fund performace that will hit and impact the financial markets negatively.
On January 23rd I took advantage of a deal that allowed me to acquire an almost 20-year-old man-made tropical forest lot of 15 acres that includes between six and seven thousand Mahogany trees with 50% of my available liquidity.
These trees when harvested in 2025 or 2030 will, at todays’ market value of such a tropical noble wood as well as depending of the timbers’ quality, generate a yield between $80 and $160 per tree which doesn’t include the value of the lot at that time.
But I am sure that in ten years’ time the market prices for such noble woods will increase even more in value as well as the property itself.
I will keep the remaining 5% of my proceeds from sales as ready cash at the bank for new investment opportunities that will probably arise in the coming months. These funds will grow with the monthly savings coming between the difference of my monthly income and my drastically reduced costs of living.
So far this is all I have to share with the F.I.R.E. (financial independence, retire early) community after one whole month into my new frugal lifestyle. I hope by sharing my experience and how I do it will help other frugalists around and maybe inspire other folks to go on their very own F.I.R.E. journey now! Feel free to comment and share your thoughts in the comment box below – thank you.