My Financial Independence Journey: Monthly Update #5 (May 2017)

Early retirement and financial independence


April has been the worst month on my financial independence journey (yes, I changed the name from “financial freedom journey” to “financial independence journey” as it is more used in the PF community). It is fun how I in February wrote an article about why you don’t need things and now have spent more on things to our new house than I had ever imagined… I guess I am still learning, and saving is easier said than done!

What happened in April?

This is not going to be pretty. I am quite embarrased to say that my savings rate for April has been at the lowest point ever at 8%.

The one and only reason for this is costs associated with moving houses. I had agreed to spend some money up front on furniture for our new apartment, so I knew that my savings would take a hit. On top of this, I also made a miscalculation and thought that I had already put some money aside that I had not.

Whatever the reason, I am not going to retire early if I continue with a savings rate at 8%. On the good side, we have almost bought everything for the apartment now, so I will not continue spending money on furniture in the coming months.

This, I did not manage to reach two out of three of my targets from last month regarding:

  1. Blogging frequently (minimum one post per week): I fell one article short, but it is simply not good enough
  2. Don’t let moving costs go out of hand: Furniture and moving costs became far larger than expected, but now I am looking forward

I did, however, succeed in engagaing with the personal finance community. In fact, I found out that there is a lot of people interested in personal finance in Denmark. I’m planning on arranging a meet-up for all of us in the coming months as I believe we can benefit a lot from each other’s experiences.

How am I tracking on my early retirement goal?

My take-home income was 32,953 DKK (4,707 USD), which is a bit higher than usual since I got an extra ‘vacation pay’, and my savings rate was 22%.

My current assets are:

Assets1 May 2017 (DKK)1 May 2017 (USD)1 April 2017 (DKK)1 April 2017 (USD)
Peer-to-peer lending14,8902,12714,7582,108
Stock indexes32,9534,70823,3613,337
Home equity4,560651n/an/a
Total assets198,62228,375191,42827,347

You might notice that I have added a new line item this month; home equity. Since I am now owning a house, I have decided to include all loan repayments (excluding interest and other fees) as a saving. I know that there’s a lot of controversy in the community, but since I am going into my house purchase with the expectation of gaining 0% on the house value, I consider my repayments a less liquid savings account with money I will get if I ever sell the house.

My total assets including pension of 198,622 DKK (28,375 USD) was an increase of 3.8% up from last month.

The total assets excluding pension of 107,284 DKK (15,326 USD) at April 1 was an increase of 2.1% up from last month. This means that I managed to save 2,512 DKK out of my take-home pay of 32,953 DKK, which equals a savings rate of (2,521/32,205) = 8%.

I won’t even start calculating how long time there is until retirement with a savings rate of 8%, but doing the calculations and writing about it here is enough motivation for me to try even harder. My target savings rate is 75%, which will enable me to retire in 7 years and being financially independent.

I guess the road towards early retirement will have ups and downs – this month was definitely a bump on the road, but I am as motivated as ever to get going!

Focus areas for the coming month

For the coming month, I will be traveling quite a while and going to a wedding overseas. This means that I expect costs associated with this (bachelor’s party, wedding present, flight tickets, hotel, etc.). I will do my best to keep the costs low and try to do as many ‘free’ activities as possible. My focus areas for the month will be to:

  1. Write an article once a week
  2. Engage in the personal finance blogger community
  3. Control travel costs

I hope to be able to achieve a savings rate of approximately 40% this month due to the travel costs that will have an impact on it.

Favorite posts of the month

I have managed to read a few masterpieces this month. If you are interested, you should consider checking these out:

  • Becoming Minimalist wrote about the joy of living within your means. There’s a lot of great quotes in there, but I like the summary of what being debt free feels like: “It allows me to sleep better, carry less stress, and live a more calm, relaxed life.”
  • ThinkSaveRetire (Steve) wrote an article about what they are doing post-retirement. I think it is a very interesting read and makes me look forward to retiring myself as well
  • Physician on Fire wrote a great piece on whether you should pay off your mortgage (or other types of debt) or not – and why he did

That’s it! Thanks for following my journey!




frinans May 11, 2017 - 11:31

Don’t beat yourself up, the important thing is staying the course for the long haul and keep getting up every time you fall. There is no way you are going to be doing this the perfect way every month. (Speaking from experience 🙂 )

Interesting point by Anders with regards to the pension. I also don’t include it when tracking Early retirement, because it can only be a part of this at a tax penalty of 60%. I think of it as extra insurance when reaching traditional retirement age. The Trinity Study (FI bible) bases the calculations on a 30 year period. So basically you could think of FIRE as a way to get to the traditional retirement age at which point your pension takes over.

Looking forward to reading your update #6 and seeing a savings rate of 40%, you can do it! 🙂

/Sune –

Carl @ MoneyMow May 15, 2017 - 19:21

Thanks a lot for the kind words, Sune! Much appreciated 🙂 I’ll do my best to keep it this month despite a bit of traveling and rather expensive birthdays etc.

I agree with the pension – also with looking at it as extra security. I might start reporting it separately just to keep track of (the returns on) it.

Anders May 10, 2017 - 14:54

Hej Carl

Hvorfor inddrager du ikke pension i dine beregninger?

Carl @ MoneyMow May 10, 2017 - 20:11

Hi Anders,

Good question. I didn’t include my pension since I see the money as highly illiquid (except if I want to accept a taxation of 60% for taking them out before time). Thus, if I want to retire early, I should not count on my pension for the first many years.

However, you are right, so I have included it now to show my actual total net worth including pension 🙂



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