Playing with FIRE

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What is FIRE? 

FIRE stands for Financial Independence, Retire Early. Your first step towards FIRE is acknowledging that retirement is not an age. The age of retirement is a myth. That is just when you qualify for state pension. Retirement is possible when your passive income can pay for your lifestyle; meaning your savings gives you enough income per year to live off of. This can be like a normal pension where you both live off the interest and withdraw approximately 4% per year (Read more about the 4% rule here if you want). OR you can be really ambitious and try to get enough passive income to pay for your lifestyle without digging into the actual investment.

Given that we have no plans of retiring early, as we are workaholics, our focus is on building a passive income, in order to make life less stressful and less cumbersome.

There are many people around the world on the journey to FIRE. And for everyone it means different goals and lifestyle changes. For us, we are aiming for our passive income to pay for our living expenses.

We consider two factors:

  1. The amount you have invested and other forms of passive income (e.g. rental-income, interest, dividends).
  2. Living expenses cost. Decrease your expenses and you will reach your goal faster.

For amount invested, there is only so much you can do. You can get a better paying job (maybe) or start a side hustle. Related posts will be put under the category “money hacks”

For living expenses there is A LOT more you can do. By decreasing living expenses, you not only save more, but you can also further increase your passive-income. So, it’s really a win-win. Related posts will be put under the category “Budgeting”

A potential third factor is investing in yourself. That is, investing time and money in education, as this can lead to getting a better paying job or a more fulfilling job (equally important). For us, we are fortunate to be happy in our chosen fields of study, so for us it is a matter of reading and staying up-to-date with new developments.

There are many blogs out there if you want to know more about what FIRE is and why people do it. But If there are so many blogs and people who have tried this FIRE thing, why are we writing this one?

When we were looking, we found most money saving tips and books on the subject are from people living in North America. Ms Canada, being from North America, can understand how these people achieved their goal. She can see how their tips on saving money work. However, often she can’t see these suggestions translating to Denmark. For example:

Some top tips for saving money in North Amercia:
Big changes
  • Get rid of your car
  • Pay off credit card debt
Smaller changes
  • Stop with to go coffee
  • Buy in bulk

While these are valid tips to save money, for many Danes, these wouldn’t apply. For example geting rid of your car would save a lot of money, in gas, insurance and maintenance. However, a lot of Danes, especially those under 30, don’t have cars.  There is probably only one country that loves cycling to work more than Denmark and that is the Netherlands.  Or stop with the to go coffee, again it is a perfectly good money saving tip but there isn’t a Starbucks on every corner in Denmark like there is in North America.

We are guilty of falling into the mentality of looking at people who have completed their FIRE journey and thinking, “Ah but they started early”, “they didn’t have to pay for university”, “they have a really good job”, “their parents helped them start a business”. Everyone has a different situation but the fact is, it’s no excuse for you not to start. Everyone can do something to get to retirement early, you just need to find your own path. So what if you can’t get to 5 million kr? What about 1 million? At a 6% return, that is 60,000 kr a year in income. What could you do with that extra income?

We are almost 30. We admittedly have some savings to get us started. It is still a long journey to the 5 million. We are thinking about kids at some point in the not so distant future. We are normal people. But we believe we can get there. 

Breaking free of the hamster wheel

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Hi Everyone,

We are Mr. Denmark and Ms. Canada and we are starting this blog to document our journey to financial independence. Meaning to break out of the eternal hamster wheel, as the title of this blog suggests.

What is the hamster wheel? Working at least 40 hours a week, for 40 years, until you go on pension around the age of 67.

The purpose of this blog is to share our experience, good and bad on this challenging journey.

As for us, we are a couple about to turn 30, who love to nerd out about data and personal finances. Ms. Canada worked in a bank for five years in Ontario while studying. Four years ago in 2017, she moved to Denmark to follow her research career in science. Mr. Denmark is a proper Northern Jutlander that first started making money on the side at the age of seven. He loves to mould data both at work and in his spare time.

Keen observers may have noticed that Mr. Denmark and Ms. Canada are not our real names. They are Søren and Emma, it’s not a secret. But we are using the pseudonyms in the posts for two reasons. First, a very practical reason. We have jobs and if seeking new employment we don’t want this being the first thing that pops up, we want it to be our work. Second, given that we are from different backgrounds, we often have very different viewpoints and experiences when it comes to lifestyle and money. We hope to use these different experiences and bring the best of both world to reaching our goals. And we hope that by using these pseudonyms it is a bit easier for others to recognize where our viewpoints are coming from when reading a post.

Alright, we have mentioned we want financial independence, but let’s make a more concrete goal:

We want to have built 5 million kroner in capital in five years.

Now we have written it down, there is no turning back!

The plan is to give some budgeting tips, talk about monthly challenges we have done, provides some informational finance calculators and other thoughts during this journey.

Thanks for visiting our page and we hope you find something you like

– Mr. Denmark and Ms. Canada