There is no reason to call it “Weekend Reads” since we all are home during the pandemic. But we should have lots of time to read and watch some inspirational stuff.
Here is what I have read and watched and found entertaining or educating. I hope you will enjoy it.
Walden, The Video Game! – Budgets Are Sexy, by J. Money. A review of the video game “Walden”. A video game about a man who wanted us to live in nature. Seems weird. However, the blog is awesome. One of the best in my opinion. And hey, he gave me a shoutout. 😉
Measuring our finances is one of the best habits we can develop.
And to be honest, I’m not very keen on it. Living in Asia for a couple of months is not necessarily that cheap. So when I couldn’t figure out where all of my money was going, I decided to start tracking it.
When I was on the boat in the Philippines I was listening to the audiobook of “Your Money Or Your Life” (for the third time). They suggest that you track every cent there is going in and out of your life. By doing so. You should be able to reduce your spending by a minimum of 20 % in three months.
That was my call.
When I asked the big old fellas Google on how I should do it, the answer was the following:
KAKEIBO. (Pronounced Kah-Keh-Boh)
What Is Kakeibo?
Kakeibo was invented by the first Japanese female journalist Motoko Hani, in 1904. I fell in love with Kakeibo because it is so simple. It is like a bullet journal for your finances.
How To Do It
Kakeibo suggests that you use a pen and paper to write down your finances. And I really like that. It makes every transaction more mindful. You have to put it down on a paper, with your own handwriting, which makes you think about that transaction more than if it showed up on an app.
What I do is that I have a note on my phone, and every time I buy something I write it down in the note. So when that list starts to creep up. I write them down in a notebook and delete them from the phone.
The Start of Every Month
The first thing you do when the month starts is to have a look at fixed income and expenses, and list them up.
It could look something like this:
Work – 2.500 $
Sold my old PC – 200 $
Phone – 10 $
Internet – 20 $
Insurance – 200 $
Gym membership – 20 $
And so on.
During The Month
From there, I write every purchase down on my notebook on the phone. And when it creeps up, I transfer them to my notebook.
In the notebook, I also give the transactions a category.
The normal Kakeibo categories look like this:
I didn’t like the fourth category, and I think it belongs to the “Optional/Wants”, and I think there is a category missing for saving/investing. So I created my own categories.
Loui’s Kakeibo Categories:
From Hate to Enjoyment
I really hated starting on this project. I just didn’t feel like the idea of a habit that was so ongoing all of the time.
And at the start I hated it. Whenever I had made a purchase I thought it was super ignoring that I had to write it down. But as days went by, I kind of like the filled out notebook. I started to feel like I was in control.
My March Month
March was a hectic month. I was in the Philippines about to go back on the boat I was sailing in November and December. But this time as a skipper. I started to get a bit bored where I was, so I decided to visit a friend from Copenhagen who was on a vacation in Bangkok.
All that was in the middle of this Corona pandemic. So there was a lot of talking back and forward on whether we should go home or not.
The numbers total numbers in March looks like this:
Category = 5.713 DKK (836 $)
Category = 7.889 DKK (1.155 $)
Category = 558 DKK (81 $)
Category = 0 DKK
Total 14.160* DKK (2074 $)
As you can see, category two is the biggest of them all. Which is the “Optional/Wants” category. This category is the one I would like to be zero each month. Whenever there is a dollar in that category it means that I have spoiled myself in some way. Which I most of the time doesn’t think is worth the money.
* This is ONLY my spending during the month. It does not include my apartment rent.
My Criteria for Success
I have promised myself to do it for at least three months, but I kind of like so much already that I can imagine myself doing it for the rest of my life. It is such a good feeling to know exactly where your money is going.
But I have made some statistics on how a typical spending day look for me. By doing that, I can easily set myself up for doing better the next month, because I know how many transactions I make in a day, what the average transaction is and how much I have spent on an average day.
The statistics look like this:
Average Spending on a day = 456 DKK (68 $)
Average spending per transaction = 186 DKK (27 $)
Average transactions a day = 2.45
Then it should be super easy for me to make progress because I know if I can:
Make less than 2 transactions a day
Make the transactions less than 186 DKK (27 $)
I should be good to go!
Things are going great! I’m in the countryside on Langeland (Long Island), and the only spending I do is grocery shopping. That shopping can creep up too since I like to cook a nice dish AND make a pre-dinner whiskey sour. But it is still way less than the last month.
Yearly Passive Income (5 % withdrawal with taxes): 14.300 DKK (1900 $)
% change since last month: – 15 %
Back In Denmark (On Welfare)
Mini retirements in South East Asia and a pandemic doesn’t go hand in hand.
We were working on the boat, doing some repairs on it in Carmen – Philippines. There were supposed to come 8 new guests on board, and everybody did arrive in the Philippines. But 6 of them decided to go home immediately.
So we were me and my first maid, and two guests. We told them that we couldn’t promise them anything. Because we didn’t know how the situation would unfold.
We were optimistic in the beginning, but as days went by. Everything started slowly to close down. It got harder and harder to get a lift into town. And one day they have decided that no one with white skin could leave the harbor. All of the marine traffic was banned as well, so we couldn’t even leave the harbor by boat if we wanted to.
So we were stuck in there. The bar was still open, so I didn’t miss anything. We could still order nice affordable food, and whatever we had a desire to drink was there. So no panic.
About 10 days in this pandemic we decided that it might be smart to go home. We had no idea if the whole country we shut down, and what would that mean to our situation.
We booked not one, but two flights that got canceled.
I wasn’t until the ministry of foreign affairs sent a flight to the Philippines that we could come home.
So right now I have spent more than 2000 $ on flights that got canceled, which I’m going to try to get refunded.
When Shit Hits the Fan
This situation is probably as bad as it can get from my point of view. Which is not even so bad.
I’m back here in Denmark. My flat is still rented out. So I don’t have any spending on an apartment. I will receive about 18.000 DKK/month (2650 $) on welfare (Dagpenge) before taxes, which will net in about 12.000 DKK/month (1800 $).
I can save and invest 50 % of that since my spending only will be determined by my eating and transport.
Even in the shittiest situation, I can be, I’m still able to continue my FIRE journey.
Second Month With Double Digit Drop
This is the second month with a double-digit drop.
I have kind of looked forward to a bear market to see how I would react to one. Because I have always thought that I didn’t really care. Actually, I think I would enjoy a bear market, so I could buy more stocks on sale.
Which is right.
I couldn’t care less that the market is down. The only thing that frustrates me, is that I don’t have more cash laying around to buy a good chunk of cheap shares.
But with the welfare, I should be able to buy some.
Yearly Passive Income (5 % withdrawal with taxes): 14.300 DKK (2100 $)
% change since last month: – 10 %
Where Did My Cash Go?!
The stock market is down.
It is the biggest monthly drop in my portfolio EVER!
When that being said. I have sold shares and spent 8400 $ (54.000 DKK) since I started my mini-retirement in April 2019. (I have spent more money than that, but that “Income” is from my portfolio)
Which is an awesome thing for you guys who are still buying up shares. But not for me who is in a mini-retirement, and sort of dependent on cashing out some shares to get by.
I enjoy selling shares that were almost 40 % more expensive than I bought it.
It meant I got 40 cents for every dollar I invested. Not bad. But now it is more like I get 28 cents for every dollar. Which is still not bad, but it does hurt a bit more to sell a share now.
I still have a good amount of cash, but they might not be sufficient for the next 6 months.
Back In The Philippines
Two days ago arrived back in the Philippines.
What should have been a week in France, ended up being 14 days instead. The boat that I’m going to sail with. Has kept postponing when they are going to leave Indonesia because of bad weather.
That meant I could spend some more days in France. I’m looking forward to the next six months of adventure. But being away from the girl I visited in France is tough. We are not going to see each other for the next six months. It is far from ideal to miss a person that much when I was supposed to have the time of my life.
I’m trying to tell my self that it is possible to miss a person back in Europe, and still have the time of my life here in Asia. But I would lie if I say it doesn’t take a good amount of internal convincing.
I just guess it is a sailor’s life.
Making a FREE Online Course
I have decided to make a free online course on how to reach Coast FIRE in three years or less.
I decided to make it because I think many people will benefit from getting educated on how “little money” can secure your future.
Special young people, who going to choose which education they should do. And maybe go down a route because of the money and “prestige”.
You can reach Coast FIRE in three years or less, with any formal education here in Denmark. And this course will prove it.
It will be short. It will be basic. But it will be efficient as f### !
Let’s be honest. If you are reading this as 20 something years old, and you have just started to make some money. GOOD FOR YOU! You are better off than many other people.
But not everybody is that lucky. Some might just get all these “FIRE information” when they are 30, 40 well maybe even 50+ years old.
Nobody told them they could do what they REALLY wanted if they just saved and invested some money.
BUT! Even if you are stoked about the idea of chasing FIRE, and you are 25 years old. If you are a diligent saver and save 60 % of your income. It will still take you 12 years of working, saving and investing. (7 % annual return)
If you start when you are 25 years old, it means that you will be 37 years old when you have reached your goal of 25 times your annual spending.
That is not bad at all.
But you would still have wasted a lot of time being at a soul-sucking job you don’t like.
Psssst… My Little Secret You Can’t Tell Anyone
I got several new friends by being a part of this FIRE community. And many of them are super badass. The ones that are probably the coolest are the following:
When you meet Pernille she seems to have a very normal/glamorous life with expensive vacations with the entire family. And Jacob is a bit more extreme and is spending less than 10.000 $/year with no kids. Pete Adeney has one kid, he does own a couple of cars but prefers to bike around.
But the thing they have in common is that they have all reached financial independence by having a normal job.
Said in another way. They all have more than 25 times their annual spending saved and invested.
But they have another thing in common.
And here is my “secret”.
Not any of them touches the principal of their portfolio.
Yep, that’s right.
All of them have some sort of new business or job, that covers their expenses. None of them uses the money they have in the portfolio. It is more like a nice cushion if they didn’t feel like making an income.
But FIRE is not about not working. It is about doing stuff you like more, and you decide how many hours you feel like doing it.
So why should you save up 25 times (or more) of your annual spending? To “retire”, but never touch that principal.
Why don’t we just save up 2-5 times our annual spending? Do a bit of work, which is nice. Go for a couple of mini-retirements. And let compound interest do the rest of the work?
Do We Even Need 25 Times Our Annual Spending?
“How much money you would like to retire with??”
It is often the question we hear when we talk about personal finance. But it is the wrong angle to ask the question.
How LITTLE money can we retire with is the right way to ask that question.
The “25 times-your-annual-spending-rule” is based on the thought that we never want to run out of money. And why is that?
What if the day we hit the graveyard, that will be the same day that our accounts are empty. If that is the case. We could change our goal.
So if we want to hit the graveyard with no money. AND we don’t want to have an income from when we are 65 years old. (Which is almost impossible because we have the public retirement funds)
That means we only need to have 16 times our annual spending saved and invested. Because we have only have 16 more years to live.
Even with 16 times our annual spending, and a conservative allocation of 50 % bonds and 50 % global stocks (because we are old and worried about stock market crashes). You only have a 5 % chance of running out of money.*
At the bottom 10th percentile you still end up on the graveyard with 2 times your annual spending to your name.*
And we are more than likely to end up with MORE money than when we started our retirement as 65 years old.
You can have as little as 10 times your annual spending in a 100 % global stock portfolio and STILL only have a 45 % chance of running out of money.
And remember the goal was to have an empty account when we were about to die.
Early Retirement 2.0
So how LITTLE money do we need to retire early?
This graph will show you how much you need to have saved and invested to hit 16 times your annual spending at age 65.
The assumptions are the following:
We spend 25.000 $/year (175.000 DKK) (That is what Pete Adeney is spending, which is not too extreme.)
We invest in a 100 % global stock portfolio
Or we can put it another way.
How many times our annual spending do we need according to our age, to hit 16 times our annual spending at age 65.
So if you read this at 40 years old. And you would like to spend 15.000 $/year when you are 65 years old.
You are going to be perfectly fine if you have 51.000 $ saved and invested.
From that point, you can just earn what you are spending. Which is probably something you can earn by working part-time or work for a couple of months each year.
Just continue working, stashing up way more cash than you would ever need.
At the moment I have about 75.000 $ (520.000 DKK) invested, which is about 4-5 times my annual spending. If I just leave that money till I’m 65 years old they will probably compound* into something like 640.000 $ (4.400.000 DKK). (After inflation)
Which is more like 36 times my annual spending.
In that case, I will be 65 years old, but I have money for the next 36 years, without relying on interest there is more than inflation.
So take it easy!
You probably have way more money in your portfolio than you need to!
Passive Yearly Income (5 % withdrawal with taxes): 16.900 DKK (2500 $)
% change since last month: + 0,4 %
So What The F#ck Happen This Month?
Stock Market went up, networth went down
Going to France
Train, eat, sleep and repeat
Spending, spending and more spending
We all know the this simple equation for wealth building:
Spending < Earnings
It is simpelt. But very effective.
I’m doing the direct opposite at the moment. Having no income at all, and spending a ton of money. In many years I have known where my money went. But the last month. I feel like I have spent about a 1000 $, when I have spend closer to 3000 $.
And because of that. I’m going to track my spending. I know many people who has tracked their spending. I have done that myself. But it has been done automatically with apps that uses your bank transactions.
But I don’t feel like you get emotionally attached to that transaction, the same way as if you do it manually.
So that’s where I found the Kakeibo method (pronounced Kah-Keh-Boh). Long story short. Is a simple money management where you write spending and earnings in hand.
I will make a complete blogpost about it someday. So I won’t cover the topic to much now.
“Je Vais A Paris!!!”
In best google translate style.
I’m going to France! And it is not completely random that I have chosen France. The thing that shouldn’t happen, did happen.
When I was back in Denmark, and preparing myself for my mini retirement. One of the biggest bullet points on my “Not-To-Do-List”. Was NOT to fell in love with a girl. And that went perfect back in Denmark.
But then I went away for the first part of my mini retirement. Which was two months in Indonesia on the boat (Orbit) as a skipper trainee. These two months was super awesome.
I got to:
To know the boat quiet good (Thanks to Mathias, the current skipper).
Get four new diving licenses and become a PADI Divemaster.
Get the experience of being on a yacht for two months.
But another thing happen as well.
There was this girl. And without going into to much details. Let’s just say I can’t stop thinking about her. Guess what?! She is currently doing an exchange period with her studies in medicin in……… (Drum roll please)
So I have decided to spent 1500+ $ on a ten day trip to Paris and Lyon.
I think the money is going to be well spent.
Cebu Is Gooooood
My days are looking pretty much the same everyday.
They look something like this:
Sleep as long as I can. Do some writing/reading/meditating or anything else productive. I might watch too much YouTube though.
I’m sitting here in a café in Cebu – Philippines. Trying to look cooperate in my beige wife beater. Sipping the least expensive coffee on the menu (1 $/cup). While I’m scrolling through the investment platform I use.
I’m doing that because I need to open an investment account for my good friends new born child.
This is the fourth time I’m doing so. Whenever one of my good friends are having a kid. I will be the “financial uncle” who helped their parents not to fuck up their financial future.
FIRE… My Kids?! NO!!!!!!
Oh yes. And here is why.
Your kids are not going to worry about money from when they being born till they gotta move away from home.
Well yes. They might start to “worry” about money when they become teenagers. But that will only concern 15 $ for a couple of beers they can hammer. When they have told you they were going to watch some movie at their friends place. (Yes, I have done that)
So from when a kid is born. We have 20 years of undisturbed investing. Which is a good long time span to invest in stocks.
My Mom Tried to Set Me On FIRE
The biggest risk is not taking any risk
My mom did the best thing she thought she could do.
She opened an account for me and my sister. Paying 15 $/month to the account. And in 18 years. That money would be around:
(12 months x 15 $) x 18 years = 3240 $
That is not too shabby when you are 18 years old, and need to buy pots and pans for your new place to live.
But what my mom didn’t do. Was to make money do the heavy lifting. And take advantage of those 18 years of undisturbed time.
I was born in October 1990. And I got these money from my mom when I decided to leave home when I was 18. That will be around late 2008.
If my mom would have invested that money in a 100 % world index portfolio. I would have had 5200 $. And that is with the financial crack in 2008. The year before I would have had about 7000 $ to my name.*
The worst 20 year period to invest in stocks the last 50 years was from 1989 to 2009. So despite investing the worst 20 years. My mom would still have a 5,7 % annual return. AFTER taxes and fees are paid.*
It is Not The Parents Fault
The sad thing is. Alot of people are doing this. With the best intentions. They are doing it because nobody has told them that there is a better way to give your kid a head start.
And that is why I’m writing this article.
What you have to do is:
Just do what you normal would. (Like my mom for example)
Transfer them to an investment account
Find the cheapest and broadest diversified stock index portfolio (Preferably an environmental one)
Invest in that
It was a coincidence that I was borned in the worst time to invest in stocks. If I was born in 1974 and my mom would have started invested there. The annual return would have been 12,3 %. (After fees, taxes and inflation*)
Then the 15 $/month would have turned into:
12,150 $ (After fees, taxes and inflation*)
That is almost 4 times more money, than if she just had kept them in cash. Or about 9000 $ just left on the table.
Set Your Kids on FIRE (With Gasoline)
We can take it even further.
Imagine if we swapped that 15 $/month out with 50 $/month instead.
Yes, that would be an awful lot of money your kid will end up having. But who says that these money is for the kids?
Well it is. But if we did saved up 50 $/month on a seperate account for them. We could withdraw from that fund, whenever they had an expensive birthday or similar. It would just be like saving up for the 15 year old birthday.
Let’s take an example.
If we had a kid 18 years ago, and we managed to save and invest 50 $/month from the day it was born. Their account would look something like this*:
If our kid had an account like that. We could easily withdraw a couple of 1000 $ here and there, without it meant that they didn’t have any money when the turned 18.
Passive Yearly Income (5 % withdrawal with taxes): 17.400 DKK (2680 $)
% change since last month: + 1,7 %
So What The F#ck Happen This Month?
Four new diving licenses
Selling shares!!! (Not enjoyable)
Still working on the mobile writing habit.
Indonesia, What a Blast!
I have now been in Indonesia for two months. And it has been a blast.
Even though I feel like I have sailed a lot back home. I have never had the experience of sailing with 8 other people I don’t know.
When you live with 8 other people on a boat there is 15 m long, you will be tested constantly. People who think they might be the most patient people, suddenly see that they might not be that patient after all. Which can fuck up some people’s thoughts about themselves.
And small problems can become the end of the world. This morning one of the girls grabbed an empty milk from the fridge, and she bursted into tears because she couldn’t have her cold milk on her morning cereals.
That is the beauty about sailing.
Because on the other side. We sail during the night. With a sky so full of stars I have never seen in my entire life. And the moon shines so bright that it doesn’t seem like night. And when we anchor the following day. It is the most lovely blue coloured water, with white sand beaches with palm trees, we can climb if we want a coconut to feast on.
Sailing is the highest high and the lowest lows.
When all of your clothes is wet (including your bed). And stuff starts the break on the boat. You have had the hardest night sailing. You ask your self why the fuck you are doing this.
It can change so quickly with the most beautiful anchoring spot. A freshly caught tuna on the grill. And you are about to go on the second (or even third) dive of the day where you see manta rays, sharks or even whales. Then it just feels like you couldn’t live life more than you are doing right now.
4 Diving Licenses in 45 Days
Even though the last two months has been so awesome. They have also been quiet tough.
Some of the days have been four dives a day, with the first one at 5:30 in the morning.
And in between dives I would do some repairing on the boat with the skipper onboard (Mathias). Plus I might do some cooking for nine people to feast on. So some of days has been without a break from early morning, to midnight. Even when I’m only doing awesome stuff, I can be really tired some nights.
But today I became a PADI dive master. Which means now have the following licenses:
PADI deep speciality
PADI dive master
I’m out of $$$
I have invested since 2014. And I have never ever sold a share in order to get some money to spent.
The other day I had sell shares worth of 50.000 DKK (7000 $).
I won’t lie. It did hurt to do so.
I had to do it because I still had 20.000 DKK (3000 $) in leverage. But the company change their ratings on their loans for investing. And it wouldn’t be beneficial for me anymore to have that leverage.
The second reason I had to do it is because I’m out of money.
I’m leaving Indonesia in a couple of days from now. Where a girl I met here on the boat, is going to join me for a couple of vacation days in Malaysia.
After that I will leave for the Philippines where I’m going to do jiu jitsu for two months.
And I do not have a single penny on my account.
So the last 30.000 DKK (5000 $) is going to be spent on my Malaysia trip and the Philippines. Hopefully the money will last.
Habits Will Shape Our Lives
And I’m still working on my “writing on my mobile habit”.
The phone I got for free was my sister’s old iPhone 6. After two months of being at sea that phone is about to die. And I blame the condition of that phone for why I haven’t kept up with my writing.
So in Malaysia I did the thing I probably hate the most.
And I bought myself a new phone. I will never pay what an iPhone phone costs. So I ended up with Samsung phone, it was cheap, and an insanely upgrade for any phone I ever had.
My writing habit will be to write at atleast 50 words every morning. Which can end up in 2-3 blog posts a month.
Passive Yearly Income (5 % withdrawal with taxes): 17.000 DKK (2600 $)
% change since last month: – 2 %
So What The F#ck Happen This Month?
Leaving Denmark in order to start my mini retirement in Asia
Spending many $$$
Figuring out how I’m going to write
My Mini Retirement in Asia
My second part of my mini retirement has officially started. I have been looking so much forward for this trip. But it is also the part that scares me the most.
At the moment I’m in Indonesia. I’m here as a co-skipper on the boat Orbit. The main skipper is called Mathias, and he has went to the same school as me. So we know a lot of the same sailor people.
Mathias is the bomb. And I’m taking some weight off his shoulders by doing some of the repairing on the boat. We have spent the last 7-8 days in the marina of Sorong to do some repairing. We do whatever we can in order to leave as fast as we can.
My timeline for my retirement looks like this:
2 months in Indonesia as a co-skipper.
2 months in boracay (Philippines) training Brazilian jiu-jitsu.
6 months as a skipper in the Philippines, Indonesia and East-Timor.
Spending Money Is Awful
Even though the only thing I’m going to pay for is the two months in the Philippines where I’m going to be on my own. I still had a lot of shopping to-do before I had to leave Denmark.
I hate shopping.
It is the worse thing I know. Walking from store to store. To buy loads of shit that I feel like I’m not going to use. On top of that, I feel the inner environmentalist in me screaming.
I don’t do budgets. So I really don’t know what I have spent my money on. But I have been spending 3-4000 $ the last month, in order to get ready to leave Denmark for 10 months and being a skipper.
Writing Without a Computer
Yes I do have have a computer with me. But it is hassle using it. It requires so much more time to charge than my phone. And I’m quite busy all day fixing the boat we are going to sail. So I’m trying to develop a new habit of writing on my phone. It does go a bit slower. But I don’t have to sit down at a desk, and figuring out where I’m going to power my nearly 10 year old MacBook.
By writing on my phone I can do it on the go. I have set my phone up so that the first screen I see when the mobile is open, is writing related apps like WordPress, google docs and mailchimp.
I hate being a slave to the mobile. Interacting too much on social media and stuff like that. And from the moment I got a phone again. I can feel how much useless time I’m spending on it. So if I instead can spend time writing on the phone. I should be able to keep this blog running. Even though I might be 100s of kilometres away from shore.
I’m excited about trying to write 95 % of this blog on my phone!
See Photos of My Trip
My friend Jacob from jiu-jitsu gave me a crash course on how to make instagram stories. So I’m getting pretty good at taking some footage, and share it on instagram.
If you want to see what I’m doing on this long trip, you can go and check me out here: