My 5 Biggest Financial Mistakes

Fucking Up, Less

This article is about how I could be financial independent today if I had been more wise about my money earlier in my life.

I have always thought that to become wealthy you will need to start a successful company or invent something awesome. 

It will be easier to become wealthy if your salary is big. But if you don’t follow the basic rules of personal finances, it doesn’t matter how big of a salary you have. 

You will still be broke. 

That is what I call “Fucking Up, Less”.

If you just “Don’t fuck up that much”, by not spending money on glamorous things. You will come ahead. Without a doubt. 

This how you unfuck yourself:

  • Pay yourself first
  • Never get a loan to consume
  • Invest simple
  • Don’t keep up with the Joneses

I know many people who have worked hard their entire life, and in their 60’s have nothing to show for.

I still don’t get how people manage to spend +20.000 DKK/month without flushing them down in the toilet.

But they do. 

My Financial Upbringing

When I was three years old my parents got divorced. 

Not that has anything to do with my financial upbringing, but my parents had a different approach to finances. 

My mother worked part-time so she would have more hours with me and my sister. So she didn’t have a tremendous amount of money. The ones she had did go to spoil me and my sister. 

My dad worked full-time but mentioned often how he always had debt. I thought that it was normal to have a big amount of debt because of that.

No one in my family invests in anything. I never had a rich uncle. 

So it was never something that we discussed. 

Both of my parents got a car when I was in my early teens, and my dad always had a boat. 

So we were the perfect middle-class family.

Both of my parents are about 60 years old, and they are dreaming about quitting the rat race and doing something they are passionate about. 

But both of them have to wait for their “normal” retirement to hit.

Looking at them only confirms the plan that I’m doing now. 

Having enough saved and invested so I later in life can do more what I’m passionate about, and less of what I’m not. 

The Calculations

In the following headlines, you will see two calculations.

They are called: 

  • Total fuck up
  • If I invested the money instead

The total fuck up is an estimate of how much money I have spent or lost.

If I invest the money instead, is what the money could be worth today, if I had invested the money in a global index stock portfolio. 

I use the tool Portfolio Visualizer. 

So the returns will vary according to when I did the fuck up. 

If I made the fuck up in 2008, then I have made the calculation like an investment in 2008 till this date.

Confirmation Gift Presents

Total fuck up: 12.000 DKK

If I invested the money instead: 45.800 DKK

I got baptized back in 2004. Which is something that I regret to this very day. 

I don’t see anything good in religion (except for Buddhism), but I got the ultimatum from my parents. 

It was either confirmation or nothing. 

That is the same as asking a teenage kid,

“Do you want 10.000 DKK and many awesome gifts or nothing?”

Of course, I chose the confirmation. 

This is the first time in my life that I can remember where I screwed up with money. 

There is a tradition in Denmark that you give big presents to a confirmation. 

It was not uncommon among my friends that you received +10.000 DKK and many huge presents like vacations or a diving license (like I got). 

As I can remember I received about 12.000 DKK in presents. 

Straight after my confirmation I went to the bank and exchanged all the big bills into small ones. 

Then they would seem like more. 

I carried that money in my jacket everywhere I would go. 

And I wasn’t shy about showing them to some friends or a cute girl. 

As a year passed by 90 % of the money went to cigarettes and pizza slices for me and my friends. 

I can’t remember that I bought anything that would make sense. 

Taking Investment Advice from my Bank

Total fuck up: 6.000 DKK

If I invested the money instead:14.700 DKK

After several years of successful archery, I decided to “retire” as an archer in 2006.

It was because one of my best friends decided to quit the sport. And it was not the same without him. So I lost my passion.

I had a very nice longbow my parents had bought from the US. 

When I quit I sold the bow to one older member in my club for 6.000 DKK. 

It was a lot of money, and I did start to regret how all my confirmation money was gone. 

So I did the only responsible thing I could think of. 

I went to my bank (Nordea) and asked the lovely lady at the cashier what I was going to do if I had 6.000 DKK that I wanted to buy stocks with. 

“Invest in Nordea! We are a good bank. And our stock is super good!”, she told me. 

So I did. 

That is the worst financial advice you could ever give someone. 

It would be the same as if I asked my local pizza man the following:

“Hey, Pizzaman. What is the healthiest food I can eat?”

And he would answer.

“My pizzas of course!”. 

A couple of months after I bought 6.000 DKK of Nordea stocks, the stock market crashed, and my 6.000 DKK was now worth 2.0000 DKK. 

Every day for two years, on my way to work as a mason apprentice. I would collect the free newspaper at Roskilde station to see what the price of Nordea was. 

I promised myself when the stock was back to normal, I would sell it and NEVER buy Nordea stocks again. 

After a couple of years, they did go back to normal. And I sold them.

I can’t remember what I did with the money after I sold them. 

Living a Glamorous Mason Apprentice Life

Total fuck up: 100.000 DKK ish

If I invested the money instead: 372.000 DKK

I started as a mason apprentice when I was 16 years old. 

It wasn’t until I was 18 years old, that I moved from Roskilde to Copenhagen to be closer to my work. 

I was at two companies in my apprentice period.

The first one was horrible and I quit the job after three months because the owner of the company was out of his mind. 

The second one was awesome! It was bigger than the previous one and it was in Copenhagen. I got to know many new nice people and I liked it there. 

A couple of months into the second job the owner approached and said the following:

“You are doing a great job Loui! Showing up on time, and you keep a good spirit. What do you think about getting 100 DKK/hour instead of your 60 DKK/hour”.

That was a no-brainer. 

From that moment I got +10.000 DKK/month after taxes and was still living home with my parents. 

As the irresponsible kid I was I didn’t manage to save or invest a single cent of that money.

Instead, the money was spent on cigarettes, weed, beer, pizzas, and drinks for people I didn’t even know. 

It was cool to brag about how much money I earned as a mason while all my friends were studying in high school and didn’t make 1:10th of what I was doing. 

This lasted for two years until I moved to Copenhagen. 

Moving away from my parents meant that I have to pay the rent, food, and transportation by myself, which made me more responsible with my money. 

At last.

Buying a Small Speed Boat

Total fuck up: 17.500 DKK 

If I invested the money instead: 46.500 DKK

I finished my apprenticeship in 2011, and I got my first real job right after I finished the final exam. 

Being 20 years old and making about 20.000 DKK/month was a blast. 

I couldn’t figure out what to spend all my hard-earned money on. 

One day my rowing club had their old coaching boat for sale for 3.000 DKK, and I thought it was the coolest looking little boat. 

I had convinced one of my good mason friends that it was the world’s best idea, so we would split everything. 

Luckily for me. 

There was no engine on it. 

But that wasn’t a problem.

I found the biggest engine the boat could handle, which was about 20.000 DKK. 

The marina fees for a year of having the boat there was about 4.000 DKK.

One day I got a phone call from the harbormaster: 

“Your boat has sunk! Come down to the harbor quick and get it fixed. The engine is leaking gasoline into the water!”.

Whoops.

“How do I get the boat up again?”, I asked the harbormaster.

“Hire a crane!”. 

So I did.

The price for a crane was 2.000 DKK. 

Whenever it was raining we had to drain the boat for the water. 

Which we never did. 

So I got a phone call like that two times more.

The third time it happened I’m sure the harbormaster could have ripped my head off. 

After it happened the third time we decided to sell the boat. 

The problem is that the motor had been underwater three times, which is far from ideal for a motor. 

So the 20.000 DKK we paid for the motor was now decreased to close to nothing. 

We sold it to a guy and told him the whole story. 

He thought that he could fix the motor, he got both the motor and boat for about 5.000 DKK. 

Started Studying as a Building Constructor

Total fuck up: 350.000 DKK (10.000 DKK/Month for 3.5 years)

If I invested the money instead: 978.000 DKK

This “Fuck up” will be a controversial one. 

Starting to study as a building constructor is one of the worst financial decisions I have ever made. 

The normal logic about “leveling up” in education is what seems rational and responsible.

In my case where I don’t plan to work from 9-5 at a “normal job” for the rest of my life. 

It wouldn’t have been such a big sacrifice to keep working as a mason since I’m not planning to work full time till the day that the public retirement will come my way at age 72.

I’ve had many mason co-workers in their +60 years, and it is not a pretty sight. 

Carrying heavy bricks for your entire life is not good for you.

The building constructor study lasts 3,5 years. 

Those 3,5 years are a period where I could be out working as a mason instead of studying, where my income is close to nothing. 

In general, we all would be way better off if we focus early in life to make a good nest egg of money, and if we want to study another thing we can do it in our 30’s instead. 

I have made an entire article about how I’m probably never going to catch up by studying early in life. 

Even though my salary might be higher as a building constructor.

And the bonus fuck up during my studies was a student loan. 

100.000 DKK spent on nothing but miscellaneous consumption. 

Summing it Up

These are the financial fuck ups I have done in my grown-up life so far. 

The “Fuck Ups” are totaling in: 

Confirmation = 12.000 DKK0
My Bank = 6.000 DKK
Living glamorous = 100.000 DKK
Speed boat = 17.500 DKK
Building Constructor = 350.000 DKK

Total = 458.500 DKK

The “If I invested the money instead” are totaling in: 

Confirmation = 45.800 DKK
My Bank = 14.700 DKK
Living glamorous = 372.000 DKK
Speed boat = 46.500 DKK
Building Constructor = 978.000 DKK

Total = 1.457.000 DKK

As I’m writing this I have about 600.000 DKK invested. 

If we take what I have now + what I could have had, that would be:

600.000 DKK + 1.457.000 DKK = 2.057.000 DKK

That is the difference between a financially independent Loui Lam, and the current Loui Lam who is sitting as his office is still chipping away on his financial independence goal. 

Don’t let that be you. 

How to Be a Minimalist and Become Wealthy

Find Your Why to Be a Minimalist

You can’t consume your way to happiness

Pete Adeney, (Mr Money Mustache)

That is mine why. 

This is a huge relief since I don’t have anything to chase anymore.

I know that my happiness can’t be bought, traveled to, or attained by doing some shopping.

Happiness for me is training and hanging out with friends and family. Things that are super cheap or even free. 

Minimalism makes room for me to do more of that stuff and less boring maintenance of things I don’t enjoy. 

But that is mine why. 

You need to find yours. 

This is what I hear people say about their why on minimalism: 

  • “I like to live clutter-free”
  • “I want to be financially independent”
  • “I want to be environmental”
  • “I want to worry less”
  • “ I want to have time for the important stuff”

How to Simplify Your Life

Throwing out that broken pencil at the bottom of your messy drawer is a good thing to do. 

But it won’t be the most effective thing we can do if we want to simplify our lives. 

We need to see the big picture.

Five major things will make the whole difference. 

These things are:

  • Your home/Stuff.
  • Transport
  • Food
  • Housing
  • Your thoughts

Minimizing in these areas will make all the difference. 

Forget about the “100 things challenge”. 

Simplifying is a relative thing. Don’t compare yourself to anyone. 

What seems simple for you, might feel like a huge burden for me. 

And vices versa. 

In all of these categories, there is a hierarchy. 

And going down that ladder can be a huge relief for you.

In the following sections, I will show the hierarchy.

The higher numbers are the maximalist way of doing things, and the lower numbers are the more simple way of doing things. 

Going a single step down in every category can be a game-changer in your life. 

The Law of Diminishing Returns

When you read the hierarchies and start to sweat about that you are at the top of every category. 

Then we can define you more as a maximalist. 

You are in for a treat if that is the case. 

Going from being a maximalist to a mindful consumer can have a huge impact on your wellbeing and financials. 

While going from being a minimalist to an extreme minimalist can have benefits, but not as big as you are in the higher end of the minimalist hierarchy. 

Being an extreme minimalist without a bike or furniture can have benefits, but it will start to become more like a spiritual religion rather than making life easier.

And can harm your social life since many of your friends and family won’t understand you. 

Transport

We need to commute. There is no way around it.

Here is the hierarchy of transportation: 

  1. Walking.
  2. Biking.
  3. Public Transportation.
  4. Car with no loan
  5. Car with a loan. 

Walking is in the more extreme way of being a minimalist. It will take a good amount of time compared to biking. But you won’t have to buy and maintain a bike. And we will probably burn the same amount of calories walking compared to cycling since it takes times longer to walk the same distance as biking. You will only save a couple of hundred dollars by walking instead of biking. A second-hand bike cost close to nothing, and maintenance is close to nothing. 

A bike is one of the best inventions made to mankind. Since I’m not owning a car, this is the step that I’m in. I can’t think of any other form of transportation that will give you the same benefits as biking. This is going to be a life long form of transportation for me.

Public transportation is something that I will use if I have more than a 20 km commute. It is still cheap compared to having a car. And I really enjoy riding a train. Biking will still be my main form of transportation, even for +100 km trips. But the train is a perfect luxury of not biking. 

Having a car with no loan can be a go-to for many people. I will go as long as I can without owning a car. Whenever I do need one I will rent from a friend or a service like GoMore. Buying a car with no loan is the best way to go if you want to own one. Finding a 10-year-old car that you can pay for cash is doable. 

Buying a car with a loan is a decision I have never understood. The average American car loan payment is about 550 $/month. That money could compound into 105.000 $ in ten years if you invested that money instead. Going from this step to just having a car with no loan can be 100.000 $ in savings. 

Food

Just like transportation, we need to eat. No discussion about that. 

Eating can be a bit more hybrid than transportation. 

I would hate a life where I couldn’t feast once and a while. 

But we can do it way simpler than we normally would. 

Here is the hierarchy of eating: 

  1. Omad
  2. 16/8
  3. No restriction
  4. No restriction + Dining out
  5. No restriction and only dining out. 

OMAD or “One Meal a Day” is having all of your food in one sitting. OMAD is part of a new trend called intermittent fasting. And many scientific papers show that we can be better off eating less regularly. This form of intermittent fasting is the more extreme one. But can save you tons of time, money, and maybe a couple of kilos on your ribs. 

16/8 is another way of intermittent fasting. 16/8 refers to eating and fasting “windows”. So you will eat for 8 hours and fast for 16. This is the equivalent of only having two meals. It can be lunch and dinner, or breakfast and lunch. I often skip breakfast myself. But if I’m sleeping with my friends or parents and they feel like having breakfast, then I will join along.

No restrictions mean what it says. You eat whatever and whenever you want. Three meals a day, and snacking in between. At this step, you can save a good deal of money since you won’t be eating out. 

No restrictions and dining out a couple of times each week is what most people do. It can save you a ton of money by not eating out for a whole month. And if you do it, let it be a 10 $ pizza. Eating out twice a week can easily cost you 75 $/week. Which is not equivalent to the car payment, but it’s close.

No Restrictions and only dining out is pretty rare. But I do know some people where cooking can be a monthly thing. They will eat the majority of their food at work, and after a long day and a good salary they won’t feel like cooking themselves and that is where they grab some sushi. Eating out every day can easily cost you 150 $/week. 

Housing

Housing is without a doubt the biggest expense we all have to face. It can either serve you or be the biggest pain in the ass. 

There are several ways we can be creative. 

We can either ditch the mortgage by living in a Tiny House/boat or a cheap vacation house. 

Or we can buy an apartment/house that is bigger than our needs and rent out some rooms, or a part of the house and make the house expenses way less or even free. 

If we can live for free we will cut our biggest expense (rent) and we will be able to save and invest that money instead which really can accelerate your financial independence journey. 

Here is the hierarchy of housing:

  1. Living for free (House Hacking)
  2. Living mortgage-free (Tiny house, Boat)
  3. 15-year mortgage
  4. Having 35-50 m2 per person
  5. Having +50 m2 per person

Living for free (or even making money) is not that complicated. You will buy a place where there is enough room for you to rent some out. It is difficult to do in downtown Copenhagen but can be done without too much hassle in the suburbs. The key is to find a place where your mortgage won’t be too high so the rent from your tenants can cover it. It can also be done with Airbnb. 

Living mortgage-free often requires being a bit creative. This can scare many people from doing this. It can be done in a less creative way where you just pay the mortgage as fast as possible. Another way of going mortgage-free is to build a Tiny house, or living in a boat. This will cost the fraction of buying a house or an apartment, but will still cost you some money. Since a Tiny house requires some land, and a boat requires a harbor. They will more than likely cost less than rent in an apartment. 

Having a 15-year mortgage will probably mean that you have bought less than what you could. The main interest of the bank is that you buy the most expensive place that you can afford. Going for a 15-year mortgage instead of a 30 year is a kind of sweet spot between going the more extreme way of paying it in five years or less. It will probably cost the same as the 30-year mortgage, but you won’t have the payments for 30 years which is a big advantage. 

Having 35-50 m2 per person in a household is what many would consider “normal”. If you are a family of four and living in a 200 m2 house you have more than enough space. Pay attention to “enough”. The bigger the house the bigger bills and maintenance you will have. If you are in this category, you should consider downsizing your place. 

Having 50+ m2 per person is to me outrageous. Construction is one of the biggest sinners in our global crisis. Building new concrete homes where we have more than 50 m2 per person is nothing but ridiculous. No one needs that much space. The most environmental buildings we can build are the ones that DON’T build. And if everybody thinks they need more than 50 m2 per person in their house, there won’t be room for all of us. 

Becoming Wealthy is Inevitable as a Minimalist

If thou wilt make a man happy, add not unto his riches but take away from his desires

Epicurus

The moment that you start striving for less you will get ahead. 

It’s a counterintuitive thought. When we keep chasing all of the material desires we have, we will realize that this is a never-ending circle.

When we fulfill a desire, a new one comes up.

And it will never stop until the day we think we have “enough” in our lives.   

If you get a normal full-time salary and start striving for less you will inevitably be wealthier. 

Not just in financial but also psychological.

That has been the biggest reward for me. 

If you are at level five in all of the categories and you go to level four you will save at least 1000 $/month. Which can compound into 205.000 $ in ten years. 

Wouldn’t that be life-changing? 

How to Become Wealthy

To make our money work for us we need to invest. 

Investing has never been easier than it is today.

We can invest in a ton of different things. 

But the easiest will be to invest in a global stock index fund you invest in every single month.

Holding it through thick and thin. 

You can download my step-by-step guide on how I (and many others) do their investing. 

It takes ten minutes to set up, and you can spend as little as 30 minutes a year checking it. 

You will actually be better off if you don’t peak at it all the time (like I do). 

Mini Retirement and Passive Income

I’m starting a new job in January 2021. 

This means that my mini-retirement is coming to an end. 

It has been 20 months of traveling, learning, frustrations, life-changing happenings, and experiences. 

I thought I would never say this but I’m looking forward to having a normal 9-5 structure again. 

The normal way to do a Mini Retirement

In Denmark, it is quite normal to go for a sabbatical year or two, either before your studies or post your studies. 

While this seems like a convenient time to do so. It is the stupidest thing you can do.

Many will end up in debt by doing so, and it will give you a negative start on claiming your financial freedom later in life. 

Your first 100.000 $

The first 100.000 $ is a bitch, but you gotta do it.  

Charlie Munger

Do whatever it takes to get your fingers on the first 100.000 $ and then go for a mini-retirement. 

There are several reasons why this will help you: 

  1. You will earn money while traveling

If you leave your home country with 100.000 $ invested, chances are that you will come home richer than when you left. 

  1. It will give you flexibility

Do you remember the time where you got picked up in kindergarten by your parents, and the last thing you wanted to do was go home? That is exactly how a mini-retirement can be. 

You can stay away longer, or if a life-changing opportunity shows up, but requires either time or money then you can still do it. 

  1. A cushion when you come home 

Having 100.000 $ (or even 50) will give you a cushion to come home with no stress at all. You can take your time for job seeking and suck in all of the experiences you must have had. 

It can also make room for approaching a whole new career where you have your financials in check and ready to pursue your new career. 

How I did it 

I finished my building constructor studies in January 2016. For there I worked in two different companies for the next three years. 

Some of that period was part-time as a building constructor because I was rowing +15 hours a week. But I did earn about 1.000 $/month doing that, so there was close to no cut in my earnings.

For those three years, I saved and invested about 60 % of my earnings which was about 550.000 DKK. 

I got the opportunity to follow a dream by being a captain on a sailing boat for 10 months, which led me to the sailing school in Oure where I started in April 2019. 

I was 28 years with 550.000 DKK to my name before I went for my sabbatical years (aka mini-retirement). 

There was a misunderstanding between the owner of the boat and me, because of that I had to live in the Philippines for two months on my own. 

With all the money invested, I could make a quick trip to France to visit my girlfriend. 

The two months of living in the Philippines and my trip to France cost me about 40.000 DKK. 

Even with selling shares worth 40.000 DKK, my portfolio still made me 113.000 DKK.

That only happens because I have worked three years before I left. 

Coast FIRE and Mini Retirements

What do you want the most? 

  1. A sabbatical year or two once in your life, or.
  2. A mini-retirement every three years for the rest of your life?

My 12 months of sailing cost me less than 50.000 DKK.

Which is money I could earn in three months as a building constructor.

Working only three months as a building constructor is not an option, but as a Mason, it wouldn’t be a problem. 

I can finance one year of sailing by working for 3-4 months.

In the meantime, my portfolio will compound into +50 years of living expenses when I become 65 years. 

A Mini-Retirement is Cheap

Mini Retirements are way less expensive than a normal vacation. Just like everyday living, going on a trip can be broken down into three major expenses.

  1. Transport
  2. Food
  3. Housing 

Transportation includes flying and going around in the country. When you travel for an extended period, you can choose to go there when the airplane tickets are less expensive than in season.

And when you have several months of traveling you are not in the same hurry as a normal tourist so you can either walk or rent a cheap vehicle to get around. 

Food can be done ridiculously cheap in some countries. In the Philippines, it can be done for less than 100 $/month.

When I was leaving the Philippines I invited three of my local friends out for nice food and all the beer that they could drink. Even that cost less than 100 $. 

Housing can also be super cheap. What is cheap for many people from the west, can be expensive for the locals.

Getting an apartment in major cities can be done for less than 500 $/month. I did a private room in a hostel for the two months I was in the Philippines and paid 500 $/month. 

So if you go to a place cheaper than your home country it will be a lot cheaper being on the road, rather than living your everyday life back home. 

I never spent more than 1500 $/month the two months I lived in the Philippines. And I didn’t pay any attention to spending. 

Be Creative

When you have +3 months to travel another good way to decrease your living expenses is to get a job. 

There are several ways you can do this: 

  1. Get a fun job 

Get a job that does pay something, but the main reason you are doing it is that it is fun. 

It could be:

  • Bartending 
  • Cooking
  • Diving instructor
  • Ski instructor

This can also provide a please or even a free place to live. And if you are into beers, bartending is a great way to eliminate expenses. 

  • Volunteer

Volunteering might be one of the best solutions to cut your housing and food expenses to zero. While it can be the most fulfilling at the same time. 

Doing stuff for free to help other people is underrated. I would encourage you to try it. 

Go for a Mini Retirement in 2021 

If you are new to FIRE and you are still working on saving and investing your first 100.000 $, then continue on that journey. 

If you are a couple of years into claiming your freedom, I will encourage you to go for a couple of months in 2021. It doesn’t have to be outside of the borders of your home country. 

Attend a school where you can learn a new craft. Or if you are into sports, try going “pro” in that for a short period. 

Explore how it feels not to work. It will either make you hungry for more and speed up your FIRE process.

Or it will make you miss your colleague’s and your old work. Which will make your work more enjoyable. 

It’s a win-win! 

Similar Stuff

Coast FIRE – Ever Heard of That?

How Much Money Is Enough? Fuck the 4 % rule.

Why Living On a Boat Is One Of The Cheapest (and Awesome) Way To Live

26# My Monthly Financial Independence Update

12-month rolling expenses: 99.000 DKK (16.000 $)

My Coast FIRE number: 5.787.000 DKK (956.000 $) or 56 years of living expenses.

New Time High!!!

It has taken me 12 months to get a new time high in my networth.

And that has happened without a job. I have been on welfare (A-kasse) since I got back home from the Philippines.

542.000 DKK is the new record.

Mini Retirement is Over

My mini-retirement has been 20 months rollercoaster ride. It has been the most awesome and most frustrating period of my life.

The highest highs and lowest lows.

Sailing and living in South East Asia was the bomb, but I missed people from back home.

The coronavirus made me go home way too early, and it has been the most boring period of my life. Waiting here in Denmark to see if everything would go back to normal so I could leave again has not been a pleasure.

But I have decided to move on, and that is why I’m fortunate to find myself a new job, so I can continue where I left with my FIRE journey.

New Instagram Account

@Wannabewalden is now on Instagram!

I thought it would be fun to make more frequent posts with some fun and educational stuff there. 

Check it out. I think you will like it! 😉

If I Lived in a House Hack…

Photo Credit: baunkjaer.dk

I moved to Copenhagen in 2009, because I had to start as a mason apprentice. The first apartment I lived in was one of my parent’s friends. He told me that I could stay there for three months to two years. So I thought to myself: 

“It must be a bit more than three months, in the worst-case”.

I lived there for three months.

After those three months had passed, I packed everything I had in one of my parents’ car. And I was ready to go live at my parent’s place again. Which was the most horrible feeling.

I didn’t even get to unpack the car before my mama called me and told me that she has just found an apartment for me. First I thought it was a joke. But it was a 50 m2, apartment at Nørrebro (my favorite spot in Copenhagen) for 2200 DKK/month and I could stay there as long as I liked.

It was like winning the lottery.

Still to this day, I freaking love that apartment.

But what if have bought the place?

I have never been a big fan of people who buy their house/apartment, and call it “their best investment ever”. Because they have never done any investing besides buying a property. And they would have been but fucked if they got fired from their job.

But recently I got introduced to the term “House Hack”.

House hacking is where you either buy a house or an apartment, where you live it in yourself, and rent one part of the house out, or rent some rooms out if you have an apartment.

By doing so, we can live cheaper, maybe even for free. Because our tenants/roommates will pay a good chunk of your mortgage and rent.

Three types of returns by House Hacking

If you start to House Hack you will see three types of returns.

  • Saved rent
  • Mortgage payments
  • Appreciation

Saved Rent

If we are capable of living for free in our House Hack we will save some rent from where we previously lived.

By taking me as an example:

I pay 3.000 DKK (500$)/month or 36.000 DKK (6.000$)/year.

This far my biggest expense in my budget, and by eliminating that. I would have 36.000 DKK more every year to invest. My yearly expenses will go down from around 100.000 DKK (16.000 $) to about 63.000 DKK (10.000$).

mortgage payments

The primary reason that I don’t think owning a home is an investment, is because of the mortgage payments. There are two things I don’t like them.

First is that you have to pay them every month. Having such a huge “bill” every month is the same as being in prison if you ask me. There is no room for adventures if you have to pay +6.000 DKK every month. I want a life where I can go away for the next six months without worrying about mortgage payments.

But if you House Hack your tenants will help you pay the mortgage.

This will not only make room for adventure, it means that you will earn money while you are away on an adventure.

Appreciation

Real estate in Copenhagen (Nørrebro, where I’m living) has gone up about 7%/year since 1980.

But appreciation is a random thing. And it will not be the main factor to determine whether or not I’m going to buy a House Hack.

While this is the most powerful return of all because of leverage.

Imagine that you buy a 2.000.000 DKK apartment with 100.000 DKK (5 %) of your own money. If the apartment appreciates 3.5 % (half of what it normally has), the return will be 70.000 DKK and your ROI is 70 %.

Not bad compared to a 7 % ROI in Stock Index Funds.

What if have House Hacked my apartment?

Calculating how much money we could have made if we just had “insert your regret of not investing”, is one of the stupids things we can do.

That is one of the main purposes that this blog and the whole FIRE community exists. To have fewer regrets about how you are dealing with your money, and your future freedom.

But to prove the power of House Hacking, I will calculate how much money I would have made if I have bought a similar apartment, and rented out a room.

Back in 2009, the average price of one square meter apartment in Nørrebro was 19.802 DKK. 

And my apartment is 50 m2, with a living room, bedroom, and a kitchen. You could live with two people there, in your own room.

The price of an apartment like that in 2009 would be:

50 m2 x 19.802 DKK = 990.100 DKK

A quick mortgage calculator will tell me that my mortgage payments with a 5 % downpayment (about 50.000 DKK) would be:

3600 DKK/month after taxes.

Where 2.700 DKK would be the down payment on the mortgage and the remaining will be the interest.

Taxes and similar on an apartment like that will probably be around 2500 DKK/month, which is similar to the average of my monthly rent in the apartment.

You can earn 4.000 DKK/month on a room in Nørrebro post taxes.

Let’s Sum it up

Ingoing: 

Roommate 4.000 DKK

Outgoing

Mortgage: 3.600 DKK

Taxes: 2.500 DKK

Total: 6.100 DKK/month

Outgoing – Ingoing: 2.100 DKK/month

It would cost me 2.100 DKK/month to live there. Which is 900 DKK less than what I pay now. But every month I will earn 2.700 DKK because of the down payment on the mortgage my roommate is helping me to pay off.

So the first year of having a roommate would look something like this.

  1. Saved rent: 900 DKK x 12 months = 10.800 DKK
  2. Mortgage payments: 2700 DKK x 12 months = 32.400 DKK

A total of = 43.200 DKK

And with a 50.000 DKK payment my ROI would look like this:

(42.300 DKK / 50.000 DKK) x 100 = 86.4 % 

Holy smokes! 86,4 % rate of return on your 50.000 DKK. That is more than 10 times the 7 % ROI we calculate with on our index funds.

But it gets better!

What about the appreciation?

From 2009 to 2010 at Nørrebro

Exactly one year later the average square meter for an apartment in Nørrebro has raised from 19.802 to 20.918.

Let’s have a look at what that means in my apartment.

(20.918 DKK – 19.802 DKK) x 50 m2 = 55.800 DKK

So if I sold the apartment the following year I would have made another 55.800 DKK.

So the total return would be:

42.300 DKK + 55.800 DKK = 98.100 DKK

And the ROI will be:

98.100 DKK / 50.000 DKK = 196 %

That’s an insane return! That would take almost 10 years to do with an index fund.

But it gets even better!!!!!

From 2009 till now

It has been 11 years since I moved into my apartment.

And we have calculated how much I would have earned in saved rent, and mortgage payments. Which was 43.200 DKK/year.

In 11 years I would have made:

43.200 DKK x 11 Years = 475.200 DKK

Not bad!

But the square meter on Nørrebro has appreciated too.

The average price on Nørrebro is now 42.942 DKK/m2. And I have paid 19.802 back in 2009. That means the appreciation would be:

(42.942 DKK – 19.802 DKK) x 50 m2 = 1.157.000 DKK

And my total return would be:

475.200 DKK + 1.157.000 DKK = 1.632.200 DKK

Or an ROI on:

50.000 DKK / 1.632.200 DKK = 3.164 %

With a stock index fund returning 7 %/year it will take 52 years to go from 50.000 DKK to 1.632.200 DKK which was made by House Hacking.

And yes. There will be some expenses by having an apartment. But even with 100.000 DKK allocated to refurbishing. And another 100.000 DKK allocated to the real estate agent to sell it. It is still an insane deal, that we all should consider doing.

Is it IMMORAL to house hack?

This is a thing that has been going on my mind. Is it immoral to let someone else help you pay off your mortgage?

And my conclusion is NO.

By House Hacking, you provide with several good stuff to your roommates.

Difficult to find a place in Copenhagen

It is super difficult to find a place where it is affordable to live in. When you arrive at the city, ready to start your studies at 20 something years old. You will probably be like most of us where you can’t afford to buy something.

If we share a room in our apartment we can live more people in the city. Without occupying a ton of space.

Is your boss immoral?

House Hacking is no different from your boss hiring you.

You are probably glad that you get paid every month from your boss. But we are hired to make our boss money. Which we don’t find immoral.

Renting out a room is no different from getting hired at a job.

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25# My Monthly Financial Independence Update

12-month rolling expenses: 100.000 DKK (16.000 $)

My Coast FIRE number: 5.566.000 DKK (907.000 $) or 56 years of living expenses.

Coast FIRE Number is Dropping

Even though I’m nearing a new high in my networth, my Coast FIRE number is dropping. In June 2019 my Coast FIRE number is higher than it is today. Even though my net worth is higher.

Can you guess why? I’m getting older.

In October I turned 30 years old. Which means that I have one year less to let my portfolio compound. I calculate my Coast FIRE number of what my net worth will be when I’m 65 years old, with an annual return of 7 %.

This is a real-life example of why it is super important to start early.

Back to Work

Since I got home from my Mini Retirement in Asia in March 2019. I have been living on my boat, and couch surfing.

But I have concluded that I won’t be going back to Asia to finished what I have started.

There will be a couple of months more with couch surfing, but from January 2021 I’m going back to the office as a building constructor, which I look forward to. It is tough to be in a waiting position.

Mini Meet-Up in Copenhagen

I have been waiting for this pandemic to stop. So I could invite you to a big FIRE meetup. But it looks like that too will last a bit longer than what we like.

That is why I have decided to make a Mini Meetup the 11/12 at 19:00.

We will be grabbing a pizza somewhere in Copenhagen, and maybe drinking a beer afterward.

Write or text me at Loui@wannabewalden.com or at +4571792322 if you want to participate. Looking forward to meeting you!

My 7 Favorite Quotes from Walden

I love old books. And I love timeless books. Walden is both old and is more relevant than ever. Henry embraces solitude, simple living, and nature. And living in a society where we compare ourselves with the biggest and most beautiful houses and the fastest cars. Just one cm behind that façade where everything seems so beautiful, we find stress and pain.

Except for the “Start Here”, I have never mentioned the book Walden too much. It is one of my favorite books. And this article will contain my favorite quotes from it, and why I love them so much.

Books are the treasured wealth of the world and the fit inheritance of generations and nations.

The first time I completed a book was when I was 23 years old. I did try to read Harry Potter and all the other “must-read” fiction books. That everybody seemed to love. But still, to this date, I have never finished a fiction book. As lame as it seems. No one told me that I could learn whatever I wanted from books. Or maybe I didn’t listen at that time. 99.9 % of the stuff we want to do, has been done and the chances that somebody has written a book about their doing or achievement is pretty big.

I loved being a mason apprentice. Because I could just show up and learn from the best. The best ones were expected to teach their craft. And I feel the same way about reading. I can read books from the very best people in their fields, and learn from their mistakes. And books will tell you that stuff is possible because they have done it. No need to worry about your friends or mom who will tell you your idea is insane. Just go and read another book that will tell you it possible.

The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.

I believe that in the western world we are addicts to consumption. We keep buying stuff while we complain about not having enough time during the week. We never ask how we can get more time. And I believe the answer is in our consumption.

Your life can also be exchanged with the maintenance of the thing we buy. And on a big scale, it can be the difference between living a free life or struggling 30 years to pay off your mortgage.

Whenever we choose to go in one direction, we also reject the other path.

When I bought a boat, I also bought into the idea of spending some days of my life maintaining this boat. And if I had three kids, a wife, and a demanding job, it would probably be hard to find time to do it. And not disappointing anyone by choosing to repair on the boat instead of spending time with the family or job would be hard.

A man is rich in proportion to the number of things which he can afford to let alone.

I believe that this quote could be the very start of the FIRE movement. When we are kids we are told that to be “rich” we have to make an insane amount of money. Which is the biggest lie we could ever be told.

In western society (especially in Denmark) it doesn’t need much education before you have a salary of +20.000 DKK post-tax salary. And that education is free, paid for by the government.

If we can afford to “let things alone”, it is quite easy to live off 10.000 DKK/month. And before you know it, you are financially independent.

Every generation laughs at the old fashions but follows religiously the new.

This quoted has saved me a lot of time, money, and frustrations. Fashion is one of the weirdest things I don’t get. The one thing I hate the most is the feeling of being in a hurdle where we just do what everybody else is doing. Just because that is what we are doing. And that is the fashion in a nutshell.

I try to wear clothes that I can wear on every occasion. I want to go directly from my work to a 50-year-old birthday and on a date with my girlfriend in the same outfit.

I want it to be timeless. The outfit that I’m wearing now is something that I can wear 10 or 20 years from now.

If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.

Action > dreaming.

Financial independence can seem like a distant goal. If you save 50 % of your income, you will be financially independent in 12-15 years. Even though it is less than half of the period you normally had to work it can seem like forever.

So take action. I don’t care how small steps you will take. Just take it. Even though you are unsure about the direction. We will never know that we have chosen the wrong path if we haven’t started walking.

However mean your life is, meet it and live it; do not shun it and call it hard names. It is not so bad as you are. It looks poorest when you are richest. The fault-finder will find faults even in paradise. Love your life, poor as it is. You may perhaps have some pleasant, thrilling, glorious hours, even in a poorhouse. The setting sun is reflected from the windows of the almshouse as brightly as from the rich man’s abode; the snow melts before its door as early in the spring. I do not see but a quiet mind may live as contentedly there and have as cheering thoughts, as in a palace.

Happiness comes from within. And no money will make our lives any sweeter. Financial independence is a worthy goal. But don’t expect that every problem of yours is going to vanish.

It will bring us more flexibility and maybe a less stressful life.

But being miserable on the journey and expect everything to be okay on the other side is not worth it.

No matter how bad you are doing, remember that too is going to pass. Everything is.

Stay cheerful.

Things do not change; we change

This very similar to a Stoic and Buddhist quote, that goes like this:

“We cannot control what is happening to us, what we can control is how we respond to the event”.

Which is something that I remind myself about often. In Denmark, we have this thing called the “pyt knappen” which could be translated into “the nevermind button”. It is easy to get pissed when something “bad” happens to us. But the only thing that we can control is how we respond to the event.

We can’t affect it.

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You Want to be Rich? Become a Craftsman

This will go against everything you know about becoming wealthy and your education choice. But if you are just about to leave school. And you don’t know what you want to be. Becoming a craftsman is superior if you want to be wealthy. 

The normal advice would be to have one of the following educations if you want to be rich: 

  • Doctor
  • Lawyer 
  • Engineer 
  • Banker 

These are all high paying jobs. But they are still not superior to be a craftsman and here is why.

It only Takes 3.5 years 

Going directly from primary school to a mason apprentice means that I was done when I was 20 years old. 

At the age of 20, I had a take-home pay of about 20.000 DKK/month and no student debt. 

Because I was a part of the national rowing team I decided to study as a building constructor because it was to tough being a mason and a rower at the same time. 

I finished my building constructor studies when I was 26 years old. Which is a normal age of being done with a normal high paying education. 

If I had Continued as a Mason

As I’m writing this my net worth is about 500.000 DKK but I do have 100.000 DKK of student debt from building constructor studies. My entire net worth is from working as a building constructor. I have never heard of FIRE when I was a mason. 

If I had heard about FIRE as a mason I would have had a 6-year advantage on the constructor me. Which could be a networth of 858.000 DKK, compared to my 100.000 DKK of student debt as a constructor. 

Said in another way, I would almost be 1.000.000 DKK ahead. 

As I’m turning 30 years old in a couple of weeks means that I would have been working as a mason for 10 years. Even though I spend every dime I had. My spending could have been just the same as today. I lived in the same cheap apartment and would eat the same way as I do now. 

If I had managed to save 60 % of my 20.000 DKK/month for the last ten years with a 7 % return on my investments I would have a net worth of 1.700.000 DKK and no student debt. 

Or 3.4 times as much money invested as I’m currently having.

I Will Never Catch Up

On top of my 12.000 DKK/month savings from my work as a mason, I would have a 7 % ROI on my 1.700.000 DKK which is 120.000 DKK. 

144.000 + 120.000 = 266.000 DKK/year

My take-home pay as a building constructor is about 300.000 DKK year. That means my savings rate should be 89 % just to have the same investment as the “mason me”.

With an 89% savings rate, I would only have 2700 DKK/month to live off. I don’t know about you. But I would find it very difficult to live in a big city on 2700 DKK. 

2021 The Mason and Constructor 

This how my 2021 could look like as a mason:

Invested: 1.700.000 DKK
Return on investments: 122.000 DKK 
Saved from salary: 144.000 DKK 
Total networth: 1.966.000 DKK 

And this is how my 2021 could look like as a building constructor: 

Invested: 500.000 DKK 
Return on investments: 35.000 DKK 
Saved from salary: 200.000 DKK 
Student debt: 100.000 DKK 
Total networth: 625.000 DKk 

The mason me is increasing his networth with 266.000 DKK/year and the constructor me is only increasing with 235.000 DKK/year.

Let’s have a look at what my networth would be in 2055 where I will be close to my normal retirement to see if I will catch up. (Both get a 7 % ROI.)

Constructor: 31.800.000 DKK 

Mason: 34.800.000 DKK 

Yep, I was right. I will never catch up.

No Student Debt 

The superior thing to be an apprentice compared to studying is that your pay increases as the year goes. 

When you start as an apprentice you will have similar pay as a student. (If you are Danish, it is even more superior if you have to pay for your education) 

If you come from primary school to an apprentice job, you are probably still living at your parent’s place because you are young. 

But if you are an adult. You will have a higher starting wage due to the reason that you are an adult and have more expenses than a kid. 

But almost everyone I know from my mason school didn’t have a student debt when they were done. 

Compared to my building constructor friends where it was normal to have +200.000 DKK in student debt. 

Not having a student debt to pay is a super advantage to build wealth, but it is also a super nice feeling being debt-free. 

Coast to The 1 % Wealthiest in Years 5

What if I told you that you can become a part of the wealthiest Danish people in just 5 years as a 25-year-old?

The wealthiest Danish people is about 70 years old and have a networth of 14.000.000 DKK.

If you are like me and finished your apprentice when you are 20 years old. You will likely have 20.000 DKK/month. 

If you save and invest 50 % of your salary for five years with a 7 % ROI you will have: 

690.000 DKK 

Not too bad. But it gets better. 

If you just leave that money invested (7 % ROI) from age 25 to 70 you will have no less than: 

14.500.000 DKK 

And you have only worked five years to get there. From that point on you can work part-time, or seasonal for the rest of your life. 

You can only do that because you started early. At age 30 you need to have 1.000.000 DKK invested to have the same results. And I currently only have half of that.

You Can Do Maintenance Yourself 

We are more than likely the end up living in an apartment or a house. And I can’t tell you how much money I have saved on doing stuff myself. 

A small renovation of a bathroom can cost a fortune if you let somebody else do it. But the materials can be bought for a bargain. 

Even if you want to live one a boat. It becomes handy to know the basics of any craftsmanship. 

Easier to Invest In Real Estate

As I’m writing this I’m about to do my first real estate business. Even with my background as a mason and building constructor, I find it terrifying to take out all of my hard earned money into a real estate deal like that. 

I can’t imagine how it would be to do a real estate investment with no knowledge at all. 

You Will Always Have Work 

Look around you. 

Everybody lives in a building that someday needs some sort of renovation. You will NEVER become unemployed for more than a couple of months. There is no pseudo work here.

And it is one of the easiest places to become self-employed. 

And it is something you can do all over the world. Even philanthropic.

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How I Write Articles from my Phone, And Why You Should Too.

For a year I chose not to have a phone. It all started because I only had a phone which my previous work had provided. And when I stopped there I had to turn it in. I thought to myself that I would be nice without a phone for a couple of days. So I decided to look for a private phone next week.

When next week arrived, I realized have awesome it was not to have a phone. I had no idea that there was so much stress related to that little thing.

For the first time in a very long time, I felt it could be boring to wait for the train. But it felt good. I had nothing to do other than waiting for my train. Just standing there. And look out looking at other busy people.

How I do It

I like to keep as simple as possible:

  • Do five lines of writing a day (which is the equivalent of 50 words)
  • Do it in the note app (it is simple but effective)
  • Send that to myself through messenger or an e-mail.
  • Proofreading in Grammarly.
  • Publish.

Set Pathetic Writing Goals

My “5-lines-day-goal” will seem insignificant for most people. But it is a goal that makes it easy to do. Just grab the phone. Skip social media for 2 minutes and write whatever I feel like. Writing 50 words a day will turn into a 700-word blog post every 14th day.

Often I write more than the five lines. Because I feel like it when I first have started. But the hard part for me is to start. Some days I feel like writing by the computer. But I know that I will never be the writer that I would like to be if I have to sit down at a desk.

3 hours and 15 minutes

That is the average screen time for a smartphone user. Writing on the phone is by no means fast. I write the five lines in 2-3 minutes. Which I could do in 1 minute on my computer.

But I know from myself that if I had to sit in front of the computer to write. I would write much less.

On The Move

Often I get good ideas when I’m on the move. It can be on my bike. Going up some stairs or another thing. When that happens, I can just grab my phone. Start a headline, write a couple of lines on the new idea.

Deadtime = Productive time

It’s normal to see people stand in line, waiting in the waiting room or waiting for your public transportation with their smartphone in the hand. This could be a productive time. But often people just scroll mindlessly through their social media platforms (I do this as well).

But if I instead open the “Note” app on my smartphone. Write a couple of sentences that we have on our minds. And then go on with our lives. I believe that habit can turn your life around. You can start publishing articles on whatever topic you like. And maybe eventually you will be the expert in that field.

Embrace Imperfectionism

I do have days where I don’t meet my pathetic goal of five lines. But that is okay. I would lie if I told you that I hate when I don’t meet my goal.

But instead of getting too pissed. I focus on the goal for the next day. I move on. It is human and inevitable not to fail on your goals. It will be the people who continue to grind who will be what they want.

The avid reader might notice that I do have long periods where I don’t post anything. And that is because I’m human. Everyday life gets in the way.

And don’t be afraid of mipsellings. I use a software called Grammarly. I use that one time. And then publish. Misspellings will occur. But your message will still be there. Don’t worry about the people who can’t see through your tiny mistakes. They are the ones who fear the judgment of their own mistakes the most.

The Inner Resistance

I get many emails from people who wants to start writing but they fear what could happen if they started to do so. The be honest the inner resistance never goes away.

At this moment I’m starting to approach the 100th blog post. And I still feel a bit of resistance whenever I start a new post. I do not expect this feeling to ever go away. And instead, I have started to embrace this inner resistance. And the bigger it is, the more I need to do the thing I fear.

Become An Expert in Anything

By studying 20 hours you will know the basics in any field. 20 hours of studying equals to 2-4 books. Now you know more than 80 % of people. And from this point on you can start to teach others about the basics. You can become a known local expert in any given thing by studying an hour a day in three years or less.

Imagine that you attended a school where you decided what to study and which authors you should read. No one is going to determine that this is the right author to read about. You decide it, and you decide whether or not you liked what you have read. That is a super powerful tool.

No Matter How Old You Are

This how your to-do list would look like to become an expert in any field:

  • Go the library and get 2-4 books on your new topic
  • Start a webpage where you write from your phone 3+ minutes a day
  • Keep reading and teaching about it, and in 100-200 books you will be the expert

No more no less.

The Workshop

I have just made a brand new workshop.

It is for you, if you feel like investing is complicated and overwhelming. It is not.

Check it out here, the early bird tickets are still available!

24# My Monthly Financial Independence Update

This month savings rate: 60 %

12-month rolling expenses: 101.000 DKK (16.000 $)

My Coast FIRE number: 5.598.000 DKK (890.000$) or 56 years of living expenses.

Speaking At Three Schools

The previous month I have been speaking at:

Oure Højskole

Egå Ungdomshøjskole

Brandbjerg Højskole

And it has been super awesome! At every single school, I had to be there an hour or more, because of the curious questions they got.

I do this because I want the danish youth to know that there is an alternative way to life. And there is no one teaching us this stuff at school.

So feel free to write to me, if you want me to come to your school too.

Two Years of Blogging

I hate the word blogging. I don’t see myself as a “blogger”. It has become a negative word of people who are hungry for attention. I think it’s sad.

I think that way more people should start to produce their own content. I don’t care if it is video, recordings, or writing. Just producing stuff is super nice. You get to meet/start a new community of people.

I enjoy it.

Back at Brewing

Today I’m starting as an intern at Bøgedal Bryggeri again.

This time it will be for four weeks. And we will be doing nothing but brewing. The last couple of days we brewed 800 L of and IPA ish beer, and 800 L of what they call a “New Year Nectar”.

The feeling of starting here is just like being a mason apprentice again. And I enjoy the feeling of being with somebody who is super good at what they are doing. But it is hard to learn and listen for 10+ hours. Meanwhile, you are working your ass off with 800 L of boiling water. But it is fun!

My New Workshop

After a long time thinking and hesitating to do a workshop. I have finally made it.

The workshop is for you, if you are into the whole FIRE philosophy, but is intimidated or confused about the investing.

Check it out here.