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My reasons to pursue financial independence

I have been generally interested in the idea of passive income and investing for a very long time and I have been saving money since I can remember. But I haven’t really done much investing until 2018, when I stumbled upon Mr Money mustache and ideas of Financial Independence Retire Early (FIRE). I got hooked up on the idea and started my FIRE journey.  The recipe for FIRE is simple, but it’s not necessarily easy! Save and invest well Cut your expenses - this will decrease how money you will need to maintain your lifestyle and help with the saving rate Amass enough of investments that working will become optional. A typical recommended amount is about 25 times your yearly spending. You can read more about the math behind it  here . So why did I get hooked and committed to be on this difficult path of a miser? "Miser: a person who hoards wealth and spends as little money as possible."  source Here are my main motivations: Strong need for financial security A desire for freedom
Recent posts

How to pick your investing strategy based on risk and returns

How you should invest depends on your situation in life. If you are young and don't need the money in the next 30 years you should be investing differently compared to if you are saving for a house down payment in 2 years or if you are planning to retire soon. The two most important factors to consider are the risk and the return. Another thing to consider is the liquidity of the investment, but let's assume in this post that we are only investing in liquid assets (ones that are easy to sell). Ideally, everyone would like the highest return with no risk. However, the risk free investments typically have very small yields and will give you poor returns. See an example of Irish bonds , the rates are terrible, but the risk is very small if the inflation is low. The rates on the savings accounts are similarly poor. There is one exception to that, which is paying off debt. Some people say "why should I pay off my debt, while I can make xx% in the stock market". Paying off

What is net worth and how to track it?

I started tracking my net worth at the end of 2018 and since then I updated it about 28 times. It has been very useful to me and in this post I would like to encourage to start doing it too. What is net worth? Net worth can be defined as your assets minus liabilities. Here are some examples of assets: cash stocks house expensive items, e.g. a car, a horse, a boat debts other people have to you And now some examples of liabilities: car loan student debt mortgage Net worth shows your overall financial picture and the changes in the net worth show you if you are on the right track. For example you could see that you accumulating wealth or getting deeper in debt. Why track it? If you start measuring something regularly, you will  instinctively try to make that number go up. You might end up thinking twice before blowing money on an impulsive purchase or tweaking your budgets so you can save and invest more. And since to track your net worth you need to log into all of your

DIY index like portfolio, stock investment alternative to index ETFs that is better tax-wise

There is no doubt that stocks can be a great investment. Compared to other asset classes they are pretty easy to acquire, there is no need for tens of thousands of euros for a downpayment, they don't require debt and are very passive. They give us an opportunity to be invested in businesses without having to create those businesses. Last ten years were great for the stock market, even the coronavirus crisis didn’t depress the market for long. This doesn’t mean that the great returns will continue forever, but still the long term outlook for the overall market is great (long term stocks tend to go up as economies grow) especially if we look globally. The problem is that while picking the individual stocks, you might not be able to capture the overall market trend. You might pick the stocks wrong and the price might drop and never recover, or the company simply gets bankrupt. You might pick up a great company, buy it cheap (below intrinsic value), but still not earn money on it for m

Best resources for analyzing buy and hold real estate deals

If you analyse your investment opportunity poorly or don't analyse it at all you might get very poor return on investment or even lose a lot of your money (potentially your whole down payment!). So, tread carefully, just putting money blindly in real estate will likely not work very well. Luckily there are a lot of resources that you can learn from! I will present you some of my favorite learning resources and tools. I will try to give a variety of examples, some referring specifically to the Irish market, because of the fact that the taxes are much different in Ireland compared to USA. In US the real estate investors pay very little tax, in Ireland it's a different story... Learning resources The analysis is not that hard, but you need to be able to: calculate your total necessary upfront investment (purchase related and renovations) calculate ongoing operation expenses estimate rental income budget for bigger expenses  estimate your taxes Yup, that's a lot of things that

How did I get into real estate investing?

The pressing need for investing I have always been a saver. I would stash away the cash I got for birthdays and other occasions since I can remember. I saved up money through high school, I saved significant parts of my paychecks from all my jobs in Poland (where I come from). Obviously I would sometimes spend some of that money, but I had a solid habit of saving. When I moved to Ireland at the end of 2015, my Polish savings suddenly became much smaller - I got hit by the fact that now the one month of apartment rent was approximately 4.5 times higher (and let's not forget about the deposit!). Even though my salary was much higher than in Poland, the cost of living was also significantly higher and very high taxes surprised me. Proportionally to the cost of living I needed a much higher buffer. Anyways, I spent 2016 and 2017 adjusting to the new job, new country and I continued my habit of savings. The company I work at also gives its employees stock as part of the compensation. In

How to get your spare room rented (contract template included)

You might be forced to rent one of your spare rooms to be able to afford the mortgage or you might use it to build your financial advantage. Renting a room in Ireland can be a fantastic opportunity to drastically improve your finances, because it offsets your housing costs and provides great tax benefits due to rent a room relief . If you are still on the fence about doing this, you might read more about the benefits of this approach in my previous post . Anyway, how do you get this actually done? It is not very hard, but it takes some work to get it done properly and I hope you will find those tips helpful! I break the process into the following steps: 1. Getting the room ready 2. Advertising 3. Viewings and tenant screening 4. Contracts and other documents Getting the room ready You should first start with emptying the room from things that don't belong there and making any necessary repairs, such as painting. Then you should think about what will be required in the room, e.g. do