No, that was not my last summer of vacation!

Hi RIP friends,

good friends are always a source of inspiration. I was chatting with my bloggers friends Emma & Robert White (whatlifecouldbe) and Oli (frugalisten), discussing issues like the next FIWE and few personal updates.

…And then I’ve been enlightened by a clear memory of when I had first glance of what I would call FI epiphany…

I previously said I don’t remember when it was my FI Epiphany and I still don’t consider a single point in time when I realized “I want to be FI”. But now I remember when I put the first brick on this wall and I want to share it with you dear readers 🙂

It was June 1994, end of school year. I was attending the 4th year at my High School in Rome and we were all discussing what we’d do in the following summer! I was 17 and I was eager to enjoy my usual 3 months school vacation, from mid June to mid September. Yes, in Italy it works this way until High Schools. 9 months of “going to school” and 3 months of summer vacation. At that time we were all 16-18 years old and summer vacation meant everything for us! First kisses, beers, sun, the sea… 3 very long months all for us!

image credits: clipartfox.com

It was one of the last day of school, beginning of June. I remember clearly when our Math prof said “guys, enjoy this summer! It will be your last one you can spend this way!

She was sincere and happy for us, but her words sent us down. The electricity you could breathe in the air five minutes before was gone. She was still smiling.

Someone in our class took courage and asked: “Prof… what do you mean by ‘the last one’?

With a bit of bitterness on her voice she said: “Well, next year you’ll have Maturity exam so you won’t have 3 months for you. Maybe one, but then you want to prepare for University entry exams or you’ll go looking for a job or you depart for your Military service. Next summer won’t be the same. And from then it’s every year worse. You’ll work, i.e. 4 to 5 weeks of vacation spread across the entire year, or you’ll study, which means you have exam in June-July and in September-October and you have to study for them. You may not have realized yet, but this one, the 4th high school year summer, is your last light-hearted summer. Enjoy it as such!

She was sincere, she didn’t mean to be mean. Energy level of the room dropped but I was still on the fence. I remember scanning everyone’s eyes to see how they were taking this truth.

Despair, disbelief, a bit of anger… but soon, too soon, acceptance.

A random friend relaxed the atmosphere saying something like: “Yeah, it’s true. I never thought about it… so then if that’s the last one we should partyyyyyyy

Everyone switched to an inferior level of happiness. I was still waiting for something. My brain scanning all the other options finding none. Well, I didn’t know that life at University wasn’t that different from continuous vacation, but the point is: I didn’t know that I didn’t know enough to judge this prison sentence.

Ok, next year maturity exam, then uni, then job, family… pension at age 65-70… holy sheet what the hell is happening??

And then I mentally said NO. This is not true, this can’t be true. I will have a lot of similar summers! I don’t know how, but the rule is: “if I don’t have other options, I only have other options“.

I was not thinking about FI at that time, obviously. I still dreamed about “going to America” to work in Microsoft or somewhere else. Or founding my own software company or whatever. But I couldn’t accept I won’t have had the freedom of taking a summer off whenever I wanted.

The Freedom seed was planted.

Fast forward 23 years.

What happened? Did I took some summers off? Let’s see:

1999Third year at Uni, perfect curriculum so far. Took a lightweight year to recover from a sentimental failure. Mid July – Mid September free to enjoy the sea and the sun.

2004 – Before starting my PhD and after 2 years of Robotic Research I’ve thrown everything away and went skiing in April. Took the full month off and some spare days in March before rejoining.

2007 – After quitting academic career and before joining Videogame Company, why not take a couple of months off? May – June.

2009 – Negotiated a raise and a sabbatical at Videogame Company, took ~50 days off Mid July – Beginning of September. Bike traveled on south of France and spent time in Rome.

2010 – Almost burnout at Videogame Company, quit end of December 2009 and rejected an offer from a very famous company in UK. Finally free! 2 months off trying to figure out what to do next. January and February.

2010-2011 – Well, jobs started to hunt me during my Freelance days. I tried to only take enough to make me a decent salary and reject the others. These whole 2 years have been a big well paid part time job, I’d say 50%, but earning double compared to Videogame Company.

2011 – Freelance, but I still wanted more time for me, with no restrictions. Mid June – End of September. 4 months, more than school vacation! I took these 4 months to stay in contact with people. Friends in Rome and Tuscany, family, theater playing, tango dancing. I met future Mrs. RIP at the end of this extended time off. I still remember that one as the best summer of my life!

2012 – After having received the life changing offer from Hooli in June and before actually joining the company in November, why not take Mid July – End of October off? 100 days off seems the best way to celebrate! Bike traveled The Donau, Brenta, Mincio, Adige and Adda rivers and why not visit Croatia and Spain?

2016 – 4 years in the same place, never happened so far in my career. Time to take a break and take Mid April – End of May off and go hiking Italy Coast2Coast.

2017 – Started working 80%. It’s not a sabbatical, but it feels good. It’s not a school summer, but it’s 52 more days of vacation spread across the whole year. It feels good 🙂

202X – FI date is coming, how many summers are there?

Dear teacher, I’d love to tell you that you were wrong.

There’s always another option!

A book about Financial Independence (in German) featuring… me!

Hi RIP’s friends,

few months ago I’ve been contacted by Gisela Enders (klunkerchen.wordpress.com) for an interview about my Financial Independence journey. She said “I’m writing a book about FI and I’d like to share your story”. Wow, will my words be printed on an actual book? A paper one? One I could brag about for the rest of my life? Something I could go to mama and tell her “hey mom look here, I’m on a book”? So I replied to her showing my willingness to answer her questions and then patiently waiting for the book to come out.

That time is now! The book is ready and my interview is there! Look mom! What? You don’t understand English? Ahem, that’s not even English mom…

Here it is: Finanzielle Freiheit

The book is in German – meaning I can’t actually read my own interview 🙁 – but apparently an English translation is planned.

First part of the book is an explanation of what is FI, followed by a second part with interviews to those who’ve already made it, including the White Family (whatlifecouldbe) – member of the special circle of RIP’s bloggers family – and a third part with interviews to those who are on their way uphill, including me and Oliver (frugalisten), another member of RIP’s bloggers family 🙂

You can buy it on Amazon for 9.99€ but but but till February 26th special price ‘only for you’: 4.99€! (holy sheet how much I hate commercial speak)

If you want to help children in Transylvania (who doesn’t want??) you can buy the book using this affiliate link from the White Family.

So, what are you waiting for?

Tools Of Titans book review part 0 – Habits

Early to bed and early to rise makes a man healthy, wealthy and wise.

Benjamin Franklin

Hi RIP friends,

Few weeks ago I’ve told you that I started waking up early, thanks to several input signals last of which was reading first pages of Tools of Titans by Tim Ferriss. I’m still waking up early, finally made the switch to 6am (still aiming to 5am) and it’s been great so far. It’s amazing how things go smoothly and quality of life improves once you overcome initial costs of installing a new habit.

I kept reading ToT as one of my daily routines. Essentially, the whole ToT book is about offering you a vast amount of options in terms of new habits to install. Tim says he wrote this book as a collection of life gems / advices / habits given by successful people he had as guests on his podcast: The Tim Ferriss Show. I truly love the idea of squeezing roughly a hundred of two-hours long interesting interviews in a sort of “collection of life directives“.

I knew little about Tim Ferriss before buying this book. I heard about the 4 hour workweek, of course, but neither I purchased it nor I researched about the author and the messages he wanted to communicate.

Then I saw this book recommended by so many people I follow, including James Altucher (James’ podcast with Tim, Tim’s podcast with James), and I wanted to try it out. I knew I loved the format, the interviewees and the topics: how to become healthy, wealthy and wise.

So that’s my Christmas gift to myself: 700 physical pages of amazing life lessons!

I’m a scientific person who does things in the most structured way possible. When I read a book I want to know everything about the author, the story behind, related works and so on. I want to explore further concepts I liked, I want to build on top of the ideas I’ve read about. This book is a gold mine for a person like me. It could keep me busy for a century. Read a chapter, get interested about the topics, go listen the whole associated podcast, get to know the podcast guest more, repeat with next chapter.

Trying to read between the lines of Tim’s comments within each podcast, it seems he did almost the same, but at the next level. Listen, interact with the guest, ask questions, experiment techniques on himself, repeat with next guest. It’s like cooking: once you have so many ingredients you can then start to mix them up for unique recipes. A lot of them won’t work – who cares – some of them will rock. I love Tim’s experimental approach to life!

Inspired by him, I’m writing my own “Life Directives” doc too. It’s not meant to be a book, just a life cookbook for myself. I’m parsing articles, videos and blog posts I saved in last years and extracting gems from them. Obviously ToT is one of the sources!

Must say that extracting ideas from an already compressed book like his is not simple. It’s like a juice of another juice.

My process is: read a chapter with a black pen on my hand, underline the concepts I want to export, transpose them to my doc once in front of a computer.

I don’t usually like to underline on a physical book, but who cares! That’s not a normal book: it’s a trip, an experience. I want to feel I’m physically consuming the book. I want it shredded at the end of this adventure, like a backpack after a hiking month, as a sign of the fatigue and toughness of the adventure itself.

About the content. The book is divided in three sections: healthy, wealthy and wise. Each section is mainly composed by “podcasts extracts” but there are special chapters written by either Tim himself or someone else that don’t follow the standard podcasts extract scheme. In the healthy section there are two very interesting special chapters on workout and meditation that I took as they are and started implementing straight away.

I’m roughly at 30% of the book, started moving first steps in the wealthy section. I must tell I’m not onboard on every chapter. The healthy section dives into subjects I don’t want to experiment with (for now) but it’s good to know what’s around, which variables one can play with in the game of life. More on this in the next part of this multi-post book review.

Do I recommend the book?

Totally! You won’t agree with everything but I guarantee that, even if you just take the 20% of this book that resonates with you the most, it would be worth 10x the money and time you spent on it.

To whom?

To whomever wants to improve the quality of their life. To those who are struggling to get things done. To those who have a researcher mindset and can’t just sit and repeat meaningless actions for the entire life. To those who want to overcome procrastination and laziness. To those who have an entrepreneurial mindset and want to build something. To anyone who is less than 25 years old.

Is that an affiliate link?

No, not yet. Well, I guess I’ll setup an affiliate account on Amazon,.I think there’s nothing wrong on making few dimes on such heartfelt recommendations!

A case of study: myself

Ok, how has the book influenced me so far? How is it worth the 15 USD I paid for it? I already said I started waking up early also thanks to Tim. Reading thru the pages of ToT I found that many successful persons have some sort of morning routine, usually including some form of meditation and physical activity. So I decided to have one. Reading Tim’s deep personal struggle on one of the special chapter (no spoiler!) I rediscovered the importance of uninterrupted blocks of focused work on a single task. So I decided to organise my time to allow for such blocks.

I’m trying to structure time following a simple pattern which is essentially a variation of what James Altucher suggests in his Choose Yourself book (which I didn’t read btw): trying to make yourself 1% better each day by doing something that improves life on physical, emotional, mental and spiritual levels.

My structure is similar, but my levels are slightly different:

  • Physical: do some kind of workout each day, at least get myself out of breath each day.
  • Social: connect with new people, re-connect with old friends, enjoy the presence of friends, family and my partner, do something that makes at least a relationship better.
  • Creativity: do something that’s expression of my uniqueness. Write, code, play guitar, whatever stimulates my mind and makes me do something.
  • Curiosity: learn something new. Read blogs, watch youtube videos on topic I want to learn more, taking a coursera class, watch a TED talk. Whatever stimulates my mind and expands my knowledge and brain capacity. P.S. I love TED talks! I’d like to host a TED marathon with friends, watching the top25 TEDs of all time plus someone I personally loved, and following up on each one with a discussion within the attending crowd. And obviously one of my dreams is giving a TED talk!
  • Spirituality: I’m no religious but I do consider myself a very spiritual person. My daily spirituality routine includes some form of meditation, journaling exercises (write down your anxieties, what scares you, what you’re grateful for, what’s important for you, how you see yourself in 5 years…), decluttering (both mentally and physically) and finding new ways to improve my happiness baseline.
  • Pleasure: enjoying a videogame, wasting time on Facebook, browsing the internet, watching a movie or a tv series or just doing nothing.

Well, not everything is doable every morning! My goal is to do at least a single step on each ladder each day. So far I’m devoting time to Creativity, Curiosity, Spirituality and Pleasure each morning. Social is tough at 6am, but I see room for improvements: I could write an email to an old friend I don’t see much anymore, connect with a new person, prepare a handwritten letter for Miss RIP (or prepare her breakfast, she’d love it). I’d prefer in-person social things but I could still do something.

Physical, don’t hide. You’re next in line. As soon as temperatures will allow a morning run there would be no valid excuse.

What’s your routine?

January 2017 Financial Update

Hi RIP voyeurs,

January 2017 is gone. It’s been freezing cold here in Switzerland with temperatures below zero all the time.

Anyway, new year new spreadsheets! 2016 monthly reports have been very long full of boring details. I want to simplify from now on. The main NW spreadsheet for 2017 has been simplified and assets in the same class collapsed (except stocks/ETFs investments).

Overview

Before we start, here’s a note about 2017 Net Worth: I won’t take into account virtual earnings, i.e. “vesting” stocks, 13th month, yearly bonus. I used to consider them, a fraction each month. I have quarterly, by-quarterly (semesterly?) and yearly vesting stocks. I used to put into my NW respectively 1/3, 1/6 and 1/12 of the “vesting stocks” each month. I used to account for 1/12 of expected net 13th month and yearly bonus each month. Now I don’t. Those are not guaranteed until the money is on my checking account and the stocks are in my brokerage account.

What does that mean? While NW growth due to earnings used to be regular, it will now be spiky. March, June, September and December will be stellar months while the other eight will look poorer. In the end the yearly delta will not change.

The only credit I allow myself is the yearly bonus credit: issued in December and paid in January. Once issued it’s guaranteed unless you quit the company or get fired between Christmas and end of January. Not a wise decision to quit in January. That’s why January is not a stellar month given that paycheck contains yearly bonus. That’s why I expect December 2017 to be ridiculous in terms of NW delta: 10-12k net vested stocks (4 stocks packages, at today’s stock price), 7k base salary, 6k 13th month, 15k yearly bonus. All net, not gross.

This month NW delta is +6,624 EUR. Not that bad given that the USD dropped 2.5% compared to EUR, and US – where I invest a good portion of my wealth – has been downgraded to a Flawed Democracy.

Till the European morning of January 30th the delta was in the 5 digits world but then Muslim ban’s market reactions, dollar dropped and, yeah, 4K burnt to ashes.

Here are the major wins for January 2017:

  • Market’s still doing good! Well, I started drafting this post before The Psychopath signed the Muslim ban, right before market dropped. Anyway, all our ETFs went up, gold medal being the Tech US ETF (+2.77%). That’s to remind me that I did a stupid move last month by selling 40K of it. Never try to time the market again.
  • (Expected) Ridiculous saving rate, 87.3%. 2016 Yearly bonus + January salary = very high income. As I said, if you wonder why NW delta is small (+6.6K) given 23.8K CHF absolute savings and a favorable market, I already accounted for my 2016 yearly bonus under the “Other” (row 13). Expected 17K net, probably received a little bit less (I can’t tell exactly, but salary + bonus + extras = 24K).
  • Low expenses, less than 3500 CHF. A month below 4K is a good month! Well, there are some wedding expenses not included here, like Miss RIP’s wedding dress (she paid with her account but we will share total expenses). Actually there will be several wedding expenses in the following months that mess up our finances, but that’s how life goes.
  • Another small bonus at Hooli. 500 CHF to be credited in Feb for my amazing performances, cool!

Losses of January 2017:

  • Lower than expected net salary. 26K gross bonus + 10K gross base salary + unknown extras (complicated and boring to explain) = 24K net salary. Who said Switzerland is the land of low taxes??
  • USD dropped 2.49% compared to EUR (and 2.77% to CHF).

Other facts:

  • Wrote my IPS. Took time to write down objectives, strategies and asset allocation.
  • Invested more money. 13th month and Yearly bonus went straight to InteractiveBrokers! I’ve sent 35K CHF to my brokerage account and extracted 10K EUR to my Italian EUR bank account to cope with wedding expenses. A nice side effect of using InteractiveBrokers is the amazingly low currency conversions costs. I can buy EUR on the market at its price (actually buying EURCHF currency pair) and pay between 1.50 and 2.50 CHF trade fee. No costs on deposits to IB and no costs on your first withdraw each month from IB. Beat it if you can!
  • Rebalanced my investments according to the IPS. I didn’t fully adhere to my newly written IPS since it’d require a lot of trades. I’d like to aim to perfect balance with time, with new money being invested in assets lacking funds rather than selling current assets and buying new assets. The more money you move the higher you pay in trading fees. With 40k USD cash sitting on my brokerage account after the sale of half of my Tech US ETF and the extra 35k CHF invested I purchase 50k EUR worth of STOXX600 ETF and 15k USD worth of SWX:CSUSS-USD, an ETF tracking the MSCI USA Small Cap index. Extra 10k have been sent to my Italian EUR bank account as previously explained. My portfolio looks better to me but still not perfect.
  • I started a healthy routine of waking up early. Still not at it’s final permanent stage (and I skipped a morning), but waking up early in a consistent way is bringing more quality time into my life.
  • Free Fridays. 80% is here and it’s awesome! I don’t work on Friday anymore and the life balance of a 4 days workweek / 3 days weekend is a step toward acceptability. I guess 3 / 4 would be even better but in my “Hard Accumulation Phase” working 60% would unacceptably slow my FIRE journey.
  • Health emergencies in both Mr. and Miss RIP family. Both RIP Sr. and Miss RIP’s brother had surgery in Italy. We had to travel at the very last minute to visit our relatives. They’re ok now, but they have both seen better days. So yeah, January nomination to “first month without international trains or planes since I-don’t-even-remember-when” had to be withdrew.
  • Wedding budget finalized. It won’t be a frugal wedding and I’m not happy with that. What makes me happy is that Miss RIP cares about a perfect wedding and I’m doing my best (not much though, just avoid complaining too much with pricey extras) to make her happy. I won’t put many details here, like individual wedding related expenses, because few close friends of mine read my blog. I’m ok with throwing totals here though. Initial budget was 20k EUR, current forecasts say 23k but I guess we’d end up above 25k. It’s a shitload of money, I know. I don’t feel comfortable with it. I made the mistake of showing Miss RIP my yearly bonus… Anyway, wedding expenses will mess up our finances this year. Regular monthly cycles no more apply in 2017 and bills will come at random till June. Combined with spiky income months, I expect expect negative saving rate when the stars align.
  • Finished reading the Healthy chapters of Tools of Titans (Tim Ferriss). Want to blog about it. It’s awesome. It’s very inspiring.
  • Mr DIP found a job and he’s no more unemployed! I guess he needs a new nickname now 🙂

Numbers & Details

Total Income for the month was 27,227 CHF (cell E36).

Income highlights:

  • ~24,300 CHF my Hooli salary + 2016 bonus. Expecting less taxes but it’s ok.
  • ~2,000 CHF my Pillar 2 contribution.
  • 1,000 CHF Miss RIP contribution to shared economy.

Total Expenses for the month were 3,448 CHF (cell E37). Nice one! Anyway, I’m trying to change the way I report expenses. I added an expenses sheet to my NW spreadsheet. I won’t go into details here, take a look at the sheet if you want.

Expenses highlights:

  • New health insurance, costs went up from 426 to 490 CHF.
  • Several Trade fees (64 CHF) for investments. roughly 0.08%of capital moved (70k) plus some currency conversions.
  • Milan condo fees 120 EUR. We pay condo fees in Milan 5 times per year in July, September, November, January and March.
  • Paid 180 EUR as deposit for our next group hiking trip along the Via Francigena! It will be 5 days during Easter with Walden Viaggi a Piedi, an italian social trekking company. Both I and Miss RIP will take this break right after my theater plays and before turning 40 and getting married. Yes, it will be a pretty intense Q2 2017. Anyway, this trip will be a super frugal group hiking with a guide and seeking for hospitality in hostels and monasteries. Have you ever heard about Via Francigena? Canterbury (UK) to Rome? It’s our Camino de Santiago! Well, we’ll just walk 5 days in Tuscany, from Florence to Siena, first time together (I’m used to hiking trips). looking forward!

Total savings are 23,779 CHF (cell E38), very good. Saving rate is 87.3% (cell E39). Do not worry, we’ll be back to normal in February.

Net worth is 558,597 EUR (cell E15). Crap. Delta is +6,624 EUR (cell E16), percent 1.20% (cell E17). Very bad. As explained above it’s mainly due to USD drop and lower than expected net salary.

The progress bar changed accordingly:

With a small step of +0.46% toward the big goal. We were used to 2% jumps, it’s ok. There will be better months. And worse for sure! If Mr. Market will get irritated w may end up reusing some of the old logos…

Forecast for 100% FIRE: 33 months left (+1 months, calm, breathe), i.e. forecast Fire Date is October 1st 2019, (cell U19). What the hell! A month has passed, net worth increased by 6.6K and FIRE date moved away from us by 2 months? Just for fun I tried to play with linear forecasts. What if our NW increased every month by 6.6K EUR during 2017? We’d be doing steps toward FI, I expect to get closer to the goal. Let’s take a look at the FIRE date:

Whaaaaaaat?? If our NW increased by 6.6k per month in 2017 we’d end the year with 56 more months to go. How depressing 🙁

What if it increased by 5 digits per month from now on?

Holy sheet, 10k NW increase per month and at the end of the year we’d still be 34 months far from FI? Carrot and stick. Actually 10k per month is above my expectations for 2017. I don’t think the Market is going to positively surprise us in 2017 and let “exponential growth” or “compounding magic” happen.

All forecasts are linear forecasts over a 12 months window.

Current Monthly allowance: 1,552 EUR (+19 EUR, cell U25). It represents how much I could withdraw indefinitely per month (at my desired WR) in case I decided to call myself FI today.

Current Withdrawal Rate – Real:  9.75% (-0.35%, cell U28). This represents the WR I need to support current spending regime with today’s NW. It got better this month because we increased our NW and reduced yearly expenses compared to previous forecast.

Current Withdrawal Rate – Ideal: 5.97% (-0.05%, cell U31). This represents the WR I need to support my desired spending regime (lower than current, since I plan to retire in Italy and not in Switzerland) with today’s NW. When this number will meet the desired Withdrawal Rate (cell U10) we’ll be FI.

Next Steps & Other Updates

Investing

  • I have extra money to invest in February, roughly 13k USD from Hooli stocks sale. Need to finish rebalancing my investments. I may sell another portion of Tech US (17k) to kick off Emerging Markets and Pacific.
  • Since we’ll do joined tax declaration in 2017, I’m thinking about opening a Pillar 3a for Miss RIP. She holds her Swiss savings in cash, what a waste of money. She’s totally not into investments and I may consider suggesting “safe” investments to her.

Wedding

This wedding project has been so far the most complex project we’ve been involved together. So much effort for “a single day”. I’m talking about the wedding day here, not about the fact we’re starting a family and the long term project. Just the wedding day.

Miss RIP is handling roughly 90% of the details, while I take care of bureaucracy. She’s doing an amazing job with location, invites, hotel for guests, transportation for guests, menu details, church details, flowers, rings, photos, videos… I’m just caring about my dress, whose hunt didn’t start yet while she’s already purchased it.

Anyway, expenses are coming. A lot of trips to Milan are coming too. In February we’ll purchase tons of train/plane tickets to Rome/Milan to cover until end of June 2017. Purchasing in advance lowers ticket costs by up to 90%.

Theater

That’s going great! I’ll be on stage end of March – beginning of April with at least 7 performances. The theater company is amazing and I already love all my new friends! I took over minor IT responsibilities and now maintain the company website and Facebook page. Feb & March will be super intense with full weekends of rehearsals and then it will be “on stage” again!

Milan’s apartment

I was (again) close to rent my apartment starting February but the tenant declined (again) at the very last minute. It’s getting really depressing.

Blog

January has been a page view record month. After few stable months PVs spiked! That’s not due to an “awesome day”, just the daily basis kind of doubled and… it feels good 🙂

Engagement followed the same pattern: more people interacting, commenting and it feels good too! I’m active in Rockstar Finance Forum, which probably helped a little.

Ah, I’m also on Twitter now 🙂

I technically have more time to blog so I may end up writing more. I still love writing but I’m thinking about kicking off a coding project with my free time that might erode time to my beloved blog. I don’t know. No, I won’t switch to full time Stardew Valley farming, do not worry 🙂

That’s all!

How was your January?