Our Financial Independence Journey: Monthly Update #41 (May 2020)

Update 41

Hi friends,

I have exciting news this month about a specific financial milestone.

Let’s get started!

Personal life: What happened in April?

Danish society is slowly returning to normal after the coronavirus and so is our life.

I am back in the office and we have started being social again with the restrictions still required by the authorities. We love it! Especially the latter part πŸ™‚

The sun has started to come out in Copenhagen and temperatures have crossed 20 degrees celsius, which means it is SUMMER!

In a week from now, we expect the government to loosen the assembly ban to at least more than 30 people which means we will be able to have a summer hanging out with larger groups of friends outside which is amazing.

The coronavirus pandemic has given me more time to focus on my health and run. This means I am in better shape than I have been for a long time and now being able to run 5 kilometers in less than 5:00 per kilometer. I am pretty excited about that!

Financials: How are we tracking on our FI goal?

Wooohooo! I promised some good news here.

Finally, we have crossed the 3.000.000 DKK (460.000 USD) mark and can now call ourselves triple-millionaires in Danish kroner. Going from being in debt to being a millionaire in less than 7 years is pretty cool considering we have only been on a FIRE journey for a bit over 3 years.

As you will see in the graphs below, two-thirds of that is illiquid as pension and real estate, and one third is liquid as cash, stock, and P2P lending investments.

The stock market is behaving like coronavirus never happened which is alarming, but also good for our investments so far.

We ended up with a savings rate of 38%, which is just below our 12-month average savings rate of 43%. I guess our savings rate dropped a bit this month since we started spending money on going out again and we had to spend some money buying things for our daughter she needed.

Our combined take-home income was at 73,327 DKK (11,281 USD). We managed to save 28,164 DKK (4,333 USD) resulting in the 38% savings rate.

Our net worth increased by 2.4% this month. Finally, that put us above the 3 DKKm mark we have been chasing since October last year!

Our total combined net worth at the end of this month is 3,019,049 DKK (464,469 USD).

32% of our assets are liquid meaning they can relatively easily be converted to cash.

Let’s take a look at our investments.

I am happy we decided to continue investing (and actually invested a bit more) during the coronavirus. Things are looking good at the moment with all our investments having positive returns this month.

Stocks indexes increased by 2.4%Β meaning we are close to pre-coronavirus levels.

Pension investments increased by 6.2%.

Our real estate net worth increased by 0.7%Β even though economists forecast a decrease in real estate value.

Crowdlending increased by 1.0%. I am still curious to see whether more platforms will go bankrupt, but so far, our investments here are still performing.

Lastly, cryptocurrencies increased by 15.3%.

All our three financial independence goals increased this month after a tough last month:

  1. Three years’ expenses in savings: 68.1% (up from 65.4% last month)
  2. Optimistic FI goal: 44.5% (up from 43.1%)
  3. Traditional FI goal: 11.4% (up from 11.0%)

It looks like we are getting closer to the half-way point of our optimistic FI goal (with an SWR of 7% and some passive income).

Blogging: How did key metrics develop on MoneyMow?

MoneyMow decreased slightly last month due to a new Google update (I believe).

The metrics on the blog last month were:

  • Visitors: Number of visitors was 6,743, and decreased by 12% compared to last month
  • Page views: Page views were 10,073 and decreased by 4% compared to last month

Favorite posts of the month

My favorite posts of the month were:

  • Playing with FIREΒ wrote a good post on the thoughts he has had after losing his job – and how FIRE also has played a part in opening his eyes to future plans.
  • Banker on FIREΒ made a great piece on the illusion of passive income. Spoiler alert: it really isn’t passive!
  • Mr. RIP wrote a lengthy, provoking, and fun post about why FIRE as we know it is dead. While I still believe the assumptions used to give the final SWR range in the post are too conservative, there are many good points in the post (e.g. never having to work again ever).

Have a great June until we speak again πŸ™‚




Kim BergstrΓΆm July 18, 2020 - 17:21

Nice content Carl! I especially like the break down on your finances with income and expenses and the visual graphs. Just curious, since the real estate market doesn’t have daily pricing like the stock market. How do you measure monthly returns on your illiquid assets like your apartment?

Jordan Jay June 6, 2020 - 18:19

Hey there Carl, it’s my first time tuning in to your monthly updates, but I really like the format you use. So many blogs don’t use enough data visualization in their NW updates. I’m jealous of your sweet gains from investing through coronavirus, I let myself get scared of a great depression-like market crash and stopped some of my auto-investments back in March. Now I’m kicking myself for not doubling down while the market was low. Guess it just reinforces that whole time in the market beats timing the market idea. Looking forward to seeing more from you!

Carl Jensen June 6, 2020 - 19:42

Thanks for the kind words, Jordan! πŸ™‚ I make my visualizations in Google Sheets automatically each month when I have filled out my net worth sheet.

Ah, yes, I got really scared too, but I thought I had to eat my own medicine of staying in the market and being greedy when others are fearful – I am happy it worked this time (at least it seems like that) πŸ™‚

I did what you did in the last financial crisis and I learned an expensive lesson. I hope you are going to invest in the next bear market!

Looking forward to following your blog too.

Jordan Jay June 7, 2020 - 02:00

I was too young to have a good handle on investing when the last financial crisis happened, but I will definitely be investing double time on the next bear market! I think Q2 earnings could potentially have a dip in some industries, so I will be trying to put in extra if that is the case, otherwise, I have my automated transfers set back up and won’t be taking them down again EVER!
Thanks Carl, I hope you like it! Let me know if you see anything on my blog that I can do better, I’m always looking for constructive criticism.

Carl Jensen June 8, 2020 - 12:20

Sounds good πŸ˜‰ I will!

Robbert van der Pol June 6, 2020 - 10:11

Nice post again Carl – like your blogs, keep up the good work!

Carl Jensen June 6, 2020 - 19:36

Thanks, Robbert! Appreciate it πŸ™‚

Nick @ TotalBalance.blog June 5, 2020 - 17:53

Congratulations on breaching a big milestone!
Almost half way to the optimistic FI goal πŸ˜‰
What’s your estimate in terms of years these days? When are you gonna reach optimistic FI, and what do you intend to change once you hit that number, if anything? πŸ™‚ You gonna continue to work full time in the same job?
We’ve had talks at the office this week, about going down to 4-day work weeks (it’s becoming more and more common in the IT sector). PFA just allowed all their employees to take 4-day weeks (on 80% pay, so not really that great of an offer – but still, they offer it to everyone now).
I wouldn’t mind a 3-day work week to be honest, but I have a little way to go before I can execute on that πŸ˜›

Carl Jensen June 6, 2020 - 19:36

Thanks, Nick! πŸ˜‰
Ah, that’s a good question. I would like to say 5 years before we reach our optimistic FI depending on the markets. Currently, I am not sure I would change anything since I like what I am doing, but my wife might do part-time work – and I might have changed my mind five years down the road. I might, however, consider exactly the same as you regarding 3-4-day work weeks. I find that much better for recharging my batteries, spending time with family and on hobbies. How long time do you have to go? πŸ˜‰

Nick June 16, 2020 - 16:08

Way too long! Especially now that I’m seriously considering that 4-day work week πŸ˜›

Liz @ Splurging on Freedom June 5, 2020 - 12:00

Hi Carl! Love your blog and been following you religiously for over a year now though I never commented, but I just had to congratulate you on becoming a triple millionaire! It’s such big news, especially after previous months when you came close but didn’t cross the mark. Congrats!! You really deserve it πŸ™‚

Glad that Denmark is returning back to normal, but remember to stay safe! Best wishes from Singapore!

Carl Jensen June 6, 2020 - 19:33

Thanks for the kind words and for following, Liz! Singapore is one of my favorite places in the world πŸ™‚

Looking forward to following your blog too. Stay safe!

Piridoxal June 4, 2020 - 23:05

Congratulations on reaching your milestone!!!

I also live in Copenhagen and fail to understand how can you only save 38% of your salary and spend about 50k a month. Copenhagen is expensive, but I imagine you have quite a high lifestyle (and that is absolutely okay, not judging or anything), Even with a 20k monthly mortgage, which is insane, you still have 20/25k for living…

Don’t get me wrong, 28,164 DKK a month in savings is a lot, that’s more than my income lol

Johan June 6, 2020 - 17:49

We spend the same on a family of three. 10k for food, 4k for daycare, 4k for transportation, 4k for clothes, shoes, repairs, furniture, random things a kid needs and 3k for insurances, a-kasse, tv license, Netflix, internet etc. on top. So that’s 25 without going out or on holidays etc. It’s a comfortable lifestyle but I don’t think extravagant by Danish standards, getting below 20k would be really hard.

Carl Jensen June 6, 2020 - 19:39

I agree with you, Johan πŸ™‚ In fact, your spending sounds like it is actually below the average spending for a Danish household with two adults and kids. Thanks for chipping in!

Johan June 7, 2020 - 09:01

Oh but I didn’t count housing, normally we end up around 36-38. Thanks for posting, looking forward to these every month.

Carl Jensen June 8, 2020 - 12:20

That makes sense – then you spend around average I guess πŸ™‚

Piridoxal June 18, 2020 - 22:41

Very interesting, Johan! I didn’t think about the daycare and the transport. I move with my bike, and I take public transport very rarely in CPH. Maybe I am very naive, but I think 50k for a family of 3 is a lot of money, but definitely will do a bit of research and ask my colleagues with kids πŸ™‚

Carl Jensen June 6, 2020 - 19:32

Thanks, Piridoxal! πŸ™‚

You are right to some degree. First, you have to remember that the spending figures are for our entire household. The average Danish household with two adults and kids spend 36.755 DKK per month. In the last 12 months, we have spent 41.925 DKK per month on average. This means we spend 14% more than average. I do believe Danes, in general, have a high standard of living, but I don’t consider us spending extravagantly compared to the average Dane. We do enjoy life, travel a bit more than average and are not frugal in all senses. The reason our spending is higher than average is because of our relatively large apartment very close to the center of Copenhagen. For this, we probably pay 50% more than the average Dane for housing, but in many other spending categories, I am sure we are spending much less than average (transportation – we don’t own a car, furniture, etc.).

This being said, we are in the top 5% of Danish incomes, and this means we can still save a significant amount of our income (43% on average and increasing) even though we have a lifestyle like the average Dane. Could we save even more if we wanted to? Yes, especially if we moved to the suburbs, but that has not been a priority yet.

Finally, if it had been entirely up to me, we would probably have saved even more, but being married comes with compromises πŸ™‚

Piridoxal June 18, 2020 - 22:49

Carl, thanks for the reply! Very interesting to have more details about your lifestyle to understand better your blog πŸ™‚
Of course, having a baby also comes with a lot of expenses, and being married, you need to make some compromises.
Looking forward to next month!

Mafi July 24, 2020 - 12:42

Hi Carl, can you please tell me where you find the percentiles/histogram of Danish incomes? I am very interested in that, especially the top 5-10% range. All I could find was an average income which does not tell me much.

Also, I noticed that you only have like 35k DKK in cash. What is your strategy for emergencies? Selling stocks + A-Kasse?

Carl Jensen July 26, 2020 - 12:02

Good question. There’s actually a couple of sources, but you can use this tool from “Danmarks Statistik”: https://www.dst.dk/test-din-indkomst.

Our strategy for emergencies could be selling stocks, but my wife and I have very long termination periods with regards to being terminated on the job (and expect to be able to find a similar job relatively easily) – and for serious emergencies, we have insurance.

Paul June 4, 2020 - 13:11

Thanks for the post, looks like you’re really killing it. Just started the journey myself, and am focusing on cryptocurrencies in the start (a bit risky I know, but more potential returns until I start diversifying.) How do you do your cryptocurrency investing and which ones do you hold?
Cheers from Norway

Carl Jensen June 4, 2020 - 14:33

Yes, CCs are very high risk indeed. I am not sure I would recommend it as your only investment asset πŸ™‚

I only hold ETH at the moment. What about you?

Paul June 4, 2020 - 15:26

ETH is nice πŸ™‚ Yes, I hold Ethereum, Cardano, Crypto.com tokens (CRO and MCO). One thing I’m using a lot is interest earning products on Crypto, which means they both increase in value and produce passive income. But yeah, I’ll try to diversify when I reach my first goal πŸ™‚

Carl Jensen June 6, 2020 - 19:21

Sounds interesting πŸ™‚ how do you get interest-earning assets (do you mean like NEO)?


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